BusinessDay 18 Jun 2019 by BusinessDay

FMDQ, UNEP, others champion Lagos Financial Centre for sustainability IHEANYI NWACHUKWU

ith the global momentum towards building sustainable financial sys-

…Lagos joins London, New York, Paris, 20 other Financial Centres in FC4S Network tems, the increasing significance of environmental, social and governance (ESG) factors on financial sector development

news you can trust I **tuesDAY 18 june 2019 I vol. 15, no 334 I N300

and the growth in green and sustainable finance initiatives world over, the City of Lagos recently joined 23 other international

financial centres, including London, New York, Paris, Ge-

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Foreign Reserve - $45.16bn Cross Rates - GBP-$:1.26 YUANY-N51.98 Commodities Cocoa

Gold

Crude Oil

US$2,496.00

$1,344.80

$62.01

Financial storm encircles 36 states as FAAC falls steadily MICHAEL ANI

igerian state governors m ay b e i n for a tough time as revenue derived from the federation account continues to decline, largely as a result of falling value of crude oil exports. A slowdown of revenue from the federation account would make it harder for state governments to effectively execute their budgets, especially the capital expenditure side, according to Paul Uzum, managing director, Nigerian Capital Management Ltd. The revenue outlook is negative for state governments this year from two perspectives. One is that even with an increase to $60 per barrel Continues on page 34

Value of crude oil export slides 7.78% in Q1 2019

Delay in Azura II take-off worsens Nigeria’s power woes Olusola Bello

T L-R: Aliko Dangote, chairman, Dangote Cement plc; Cherie Blair, independent non-executive director; Olakunle Alake, non-executive director, and Joseph Makoju, group chief executive officer, at the company’s 10th annual general meeting in Lagos, yesterday.

he inability of Azura Power Holdings to move ahead w ith its planned expansion of its Azura power plants that would have added additional 1,000 megawatts of electricity to the national grid may have compounded Nigeria’s power woes. The phase I of the Azura project, the 461MW open cycle gas turbine Azura-Edo power station, was completed and became fully operational in May 2018. The phase II, which industry stakeholders believe should have started thereafter, is expected to

generate over 400MW. Inadequate power generation and weak distribution and transmission networks have over time meant that power supply in Africa’s biggest oil producer remains epileptic, Continues on page 34

APAPA GRIDLOCK

40 Governor Babajide Sanwo-Olu’s promise: “I will rid Apapa of gridlock in the first 60 days of my government.”

Tuesday 18 June 2019

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news Poor countries pay up to 30 times more for medicines, study shows

but only about a third by cost. Nor was there much competition in the supply of essential medicines in low- and middle-income countries, the report said. These markets tended to be dominated by a single, or small number, of suppliers, directly affecting the prices paid by public bodies or consumers. In some low- and middle-income countries, the largest seller of certain medicines “accounts for upwards of 85 per cent of all sales, such as contraceptives in Zambia,thePhilippines,Senegal, and Kerala; cancer medicines in Zambia and Kerala; diabetes medicines in Zambia; and antiparasitics in the Philippines, Zambia, Tunisia, and South Africa”,the researchers found. Part of the solution, the researchers said, was for poorer nations to sharpen their procurement skills so as to get a better deal. Procurers often bought branded generics in the mistaken belief that they were of a higher quality than unbranded versions of the same medicines. Because regulatory systems were often weak, buying branded generics was one perceived method of screening out the fakes that flood much of the developing world. “A concerted push is needed to professionalise procurement and broaden capacity from the global to national level,” researchers said.

IFC in advanced discussion to sell 14% equity stake in Ecobank

…favours Dutch investment firm Arise B. V Iheanyi Nwachukwu

he International Finance Corporation (IFC) and its asset management company are in advanced discussions to sell equity holding in Ecobank Transnational Incorporated (ETI). The IFC, a member of the World Bank Group, and investment funds managed by the IFC Asset Management Company (AMC), a whollyowned subsidiary of IFC, have entered into a Share Purchase Agreement with a leading Dutch investment firm Arise B. V for the sale of their circa 14.1 percent stake in ETI. Completion of the transaction is expected in the coming months, subject to due dili-

gence, internal and regulatory approvals. The Lomé-based parent company of the Ecobank Group announced the information relating to its ownership structure on the Nigerian Stock Exchange (NSE). ETI stocks were up by 5 kobo or 0.51 percent to N9.85 at the close of trading on the NSE on Monday. IFC and ETI have worked together since 1993 to broaden access to finance, enhance trade liquidity, and strengthen Ecobank. Since 2009, IFC and the funds managed by the IFC Asset Management Company, through their investments, have been supporting Ecobank’s growth strategy across Africa in building a preeminent banking franchise.

L-R: Segun Opeke, directorate head, Lagos Business; Obafemi Hamzat, Lagos State deputy governor; Babajide SanwoOlu, governor, Lagos State; Muhammed Ahmad, chairman, Polaris Bank, and Tokunbo Abiru, MD/CEO, Polaris Bank, when Polaris Bank leadership paid a visit to the governor and his deputy in Lagos.

Inflation rate accelerates to highest level in 2019 as food prices soar OLUWASEGUN OLAKOYENIKAN

igeria’s inflation rate rose at a faster pace in May to the highest level this year as food prices continued to increase, according to data released by the National Bureau of Statistics (NBS) on Monday. The Composite Price Index (CPI), which is a measure of the general change in the prices of consumer goods and services purchased by households over a period, rose by 11.40 percent on a year-onyear basis in May. This represents 0.03 percentage point higher than 11.37 percent recorded in the previous month, and the highest inflation rate recorded by the country since December 2018.

Food inflation accelerated for the second consecutive month by 13.79 percent in May from a year earlier compared with 13.70 percent recorded in April. However, core inflation, which captures all items, but exempts the prices of volatile agricultural produce, moderated to 9 percent to reach its lowest level in over three years. As a result, the high inflationary pressures on household items was largely driven by heightened food inflation on the back of the commencement of rainy season which signals planting season for agricultural products, a development that has left limited farm produce in the market for consumption. The major driver of the “increase in the inflation rate is the increaseinfoodprices,duetothe seasonalityeffecttypicallyassoci-

atedwiththeonsetoftheplanting season”, analysts at Lagos-based FSDH Research, the research armoftheFSDHMerchantBank Limited, said in a note to clients. Besides this, FSDH attributed the fast-paced inflation rate to the security challenges in some food producing regions in the country. This has reduced the supply of food items even as demand persisted, leading to an increase in prices. At the current level, the nation’s headline inflation remains higher than the threshold of 6 percent to 9 percent set by the Central Bank of Nigeria (CBN). The index has remained in the double-digit trajectory since February 2016 when it rose 11.38 percent. “Given current realities, the inflation rate will remain above the CBN’s target in the short-to-

ENDURANCE OKAFOR

hareholders of Dangote Cement were all in high spirits and full of praise to the Board and management of the company during the company’s 10th Annual General Meeting(AGM)heldinLagoson Monday. This was after the sum of N16 was approved as a dividendoneach50koboshareheld. Shareholders through their respective association heads lauded the decision to increase

dividend payout by 52.4 percent from the N10.50 kobo per share that was paid in the corresponding period of 2017. Speaking at the AGM on Monday, Aliko Dangote, chairman of Dangote Cement, described the shareholders and staff as the bedrock of the company. He expressed optimism on the prospect of the company, saying it would be effectively operating in a minimum of 18 African countries in a short while by increasing the

capacity of its Obajana Plant to 16 million metric tonnes, making it one of the biggest cement plants in the world. “All these, surely will translate to an enhanced value appreciation to the shares of Dangote Cement and more money in the pockets of the shareholders,” he told the excited shareholders. Dangote also revealed that the plans of the company would definitely attract $700 million foreign exchange into the Nige-

10 Y 0.00

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14.66

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rian economy through exporting of the products, thereby helping the Federal Government and also the group in its other activities across Africa. “We have a lot of on-going projects aimed at increasing capacity and by next year, we will not only export 1 million tonnes as we normally do now, we will be servicing both the domestic and other African countries from Nigeria. We will have a capacity of about 8 million tonnes to export and that will generate a foreign exchange of about $700 million into the country,” Dangote said in a chat with newsmen after the AGM. He described 2018 as the most successful year for the company as it recorded an increase in cement sales by 7.4 percent to 23.5 million tonnes and 11.9 percent growth in revenues to N901.2 billion.

NGUS may 27 2020 362.28

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Dangote Cement to attract $700m forex, pays dividend of N16 per 50k share

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medium-term,” FSDH stated. “This may reduce the real yield on fixed income securities.” On a month-on-month basis, the country’s headline inflation maintained its upward momentum by 1.11 percent in the review month from 0.94 percent recorded in April. Food inflation jumped by 1.41 percent from 1.14 percent, while core inflation quickened by 0.75 percent from 0.70 percent. The urban inflation rate increased by 11.76 percent on a year-on-year basis in May 2019 from 11.70 percent recorded in April 2019, while the rural inflation rate rose by 11.07 percent in May 2019 from 11.08 percent in April 2019.

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NGUS nov 27 2019 361.38

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NEWS

AXA Mansard supports Children’s Financial Literacy BUNMI BAILEY

n commemoration of 2019 Children’s Day celebration in Nigeria, AXA Mansard Insurance plc, a member of the AXA Group and global leader in insurance and asset management, has collaborated with Best Man Games Limited for the 3rd Children’s Finance Fair. The event, which took place in Ikoyi, Lagos State, aimed at providing an avenue for parents to access financial information as it related to investments for their children’s education, welfare and related products. Speaking on the collaboration, Nkiru Umeh, head, Brand and Communications, AXA Mansard Insurance, says the brand is delighted to associate with children and their parents to commemorate the 2019 Children’s Day. “As a socially responsible brand, we celebrate the Nigerian child and we see the collaboration as an opportunity to educate parents on the importance of making wise financial investment decisions to secure the future of their children. The important legacy a parent can bequeath their children is to be intentional with setting their children up on the right path of financial freedom, stabil-

ity, and the most rewarding financial opportunities. The peace of mind and tranquility that comes with this cannot be overemphasised,” Umeh states. “It is in line with establishing and making available such opportunities that AXA Man-

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sard has launched a financial investment initiative package that simplifies and seamlessly starts off the process of parents prudently providing their children with investment options that ensure long term financial security and empowerment,” Umeh states further.

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Appointment of federal cabinet: When will it take place? STRATEGY & POLICY

MA JOHNSON “There are no secrets to success. Success is achieved as a result of preparation, hard work and learning from failure.” – Collin Powell t is not only in Nigeria that elections took place in the year of our Lord 2019. From January to June 2019, many countries had gone to the polls to elect their leaders. Indonesia, India, Ukraine, Slovakia and Australia had elections. India’s Prime Minister Narendra Modi was inaugurated on 30 May 2019 and the next day he formed his cabinet. In Australia, Prime Minister Scott Morrison’s cabinet was formed three days earlier before his inauguration on 26 May 2019. Others are yet to form their cabinets. In Africa, Senegal’s President Macky Sall, announced his cabinet five days after inauguration in order to get the machinery of government running. In South Africa, President Cyril Ramaphosa was inaugurated on 25 May 2019 and announced his cabinet four days later. Nigeria, the “giant of Africa,” and the largest democracy in the Continent, inaugurated President Muhammadu Buhari’s (PMB’s) second term on 29 May. He has delivered his Democracy Day Speech on 12 June 2019. Many Nigerians have analyzed and debated what they think PMB wants to do, or should sort out, in order to

have a prosperous nation. By the time you are reading this article, it is most likely that PMB would have formed his cabinet. If PMB does, it is a signal that he means business in his second term in office. But if he does not announce a single appointment into his administration, one can only pity the most populous country in Africa and her 200 million citizens. Nigerians do not want a repeat performance of what happened in the first tenure (2015-2019) during which there was an unprecedented six-month delay in appointing a cabinet. You will recall this sluggish action took the nation into recession. Then, most Nigerians thought PMB was looking for saints in politics to be members of his cabinet. Yes, we often think of politicians as corrupt people who lack virtue, and while this can certainly be true, some politicians throughout ages have displayed great virtues, character and faith. Even with the delay, what did we get? We got “saints” who did their best while in office. But their best gave the country a tag as the world’s poverty capital. Overall, their tenure was barely impressive as some of their actions were conflicting with policies of the APC-led federal government. Most state governments are equally waiting for PMB to form his cabinet before appointing commissioners to run their policies. So for now not much is happening in the country. Time is of essence in governance. There is a Chinese proverb, which says that an inch of time is an inch of gold but you cannot buy that inch of time with an inch of gold. It is hard to feel successful when you are staring failure in the face. So why the delay in forming an all-inclusive

cabinet of technocrats? Having been sworn in, it is what PMB does next that counts. Although, from PMB’s homily of 74 verses delivered on 12 June 2019, he promised that over the next 4 years, his government would be committed to assembling a strong team of Nigerians, and allies, to implement his party’s transformative plans and proposals. The transformative plans and proposals appear good on paper but the strategy to drive the plans and proposals are not known. Besides, the cabinet has not been formed after two weeks of inauguration. In spite of widespread criticism which PMB received in his first term over delay in key appointments, one would have expected him to show leadership and direction in appointing a chief of staff, secretary to the government of the federation, chief security officer, spokespersons and other political appointments that do not require senate confirmation. If PMB had named his ministerial candidates ahead of the inauguration of the 9th Assembly on June 11, 2019 may be they would have been confirmed before the lawmakers went on recess. From the quote above, there is no secret to success. This columnist thought PMB has learnt from failures of the past. PMB talks about “Next Level” in his campaign promise. Next Level to this columnist is vague. PMB needs to tell us the strategy that will lift us to the “Next Level”; strategy that is the mode of survival of a nation of about 200 million people; strategy that will deliver 90 million poor people out of poverty. Strategy that will liberate 60 million illiterates cannot be hinged on hope. We have been hearing expres-

‘

Even with the delay, what did we get? We got “saints” who did their best while in office. But their best gave the country a tag as the world’s poverty capital

sions like: “Let’s keep hope alive” and the slogan “change.” But “Change” is not a destination, just as “hope” is not a strategy”. Whatever is the slogan, those who have volunteered to serve us need to work hard to bring life into the economy of Nigeria and to ensure that lives and properties of people are safe and secured. It is good to have hope. The fact however, remains that hope will not reduce housing problems. Hope does not provide food and clothing. Hope will not make the value of the Naira appreciate against other foreign currencies. Hope cannot create jobs. Hope will not improve electricity supply to consumers in their various homes and offices. Hope will not increase economic growth to 2.7 percent in 2019. Hope cannot provide security for those Nigerians who feel insecure currently. Hope cannot raise the drop in the country’s foreign direct investment. That is why hope can never be a strategy for Nigeria. We cannot just wish away our country’s problems. There is need to reduce our challenges and turn them into positive opportunities. Just talking and sitting around thinking about the current situation we find ourselves in is not going to change anything. PMB, state governors, and local government chairpersons must act ASAP. Certainly, hope and prayer can work wonders in the face of a difficult situation, but those who volunteered to serve us must be prepared to do their part in order to achieve national development. So when will the appoint of cabinet members take place? PMB sir, over to you. God bless Nigeria! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Can the government print more money to save Nigeria?

an the government simply print more and more money to solve its economic challenges? Maybe. Maybe not. In January 2015, a powerful but controversial newspaper opinion piece titled ‘The Chance of Prosperity Versus the Poverty of Austerity’, written by Bola Tinubu espoused a radical policy prescription: “Because the federal government has the sovereign power to issue our national currency, this can be done without risking insolvency or further debt. Inflation not insolvency is the constraint. The major concern will be in ensuring that inflation does not rise above limits acceptable to our specific political economy. This can be done by making sure expenditures are limited to those projects that increase productivity and have the positive economic multiplier effect we seek. This will be a hard but not impossible feat. Harder would be to allow the nation to fall into steep recession and cause the masses to suffer unduly.” Tinubu contrasted Nigeria’s fiscal conservatives from the progressives: “Nigeria’s Tories, Nigeria’s conservative Republicans. If the choice came down to the choice between saving money or people, a progressive would advocate saving the people by spending the money. The conservative would say expend the people yet save the money at all costs.” This is the controversial modern monetary

theory or ‘MMT’ for short. A hotly-debate issue in macroeconomics today. MMT theory states that government owns a country’s currency as a public monopoly and the amount of money a government can print is only limited by inflation. So, a government should print more money to deal with unemployment. Accord to MMT theory, large unemployment in a country is enough evidence that financial assets are being restricted in supply. Supply of financial assets are needed for the payment of taxes and the desire for savings, and other issues. MMT’s advocates state that the government must aim for full employment, a sacred responsibility. Once full employment is reached, the threat of inflation can be countered by higher tax rates and by issuing bonds. This would dampen inflation as it would remove excess money in the economy. The first academic textbook based on MMT was published this year by William Mitchell, Randall Wray and Martin Watt. The father of macroeconomics, John Maynard Keynes, during the great depression of the 1930s proposed the then radical idea that a government must spend to stimulate the economy during a downturn. It was Keynes’ revolutionary book ‘The General Theory of Employment, Interest and Money’ published in 1936, that split the field of economics into microeconomics and macroeconomics. Prowww.businessday.ng

ponents of MMT could lay claim as Keynes’ heirs, taking his theory further to its logical conclusion. Some supporters want MMT as policy to help create something like a universal basic income for all citizens in a country. The Democratic Party of America has many strident members devoted to MMT, they cite MMT as the solution to fund the ‘Green New Deal’ to combat climate change and create ‘green’ jobs. Prominent critics of MMT include Lawrence Summers. Summers is a former Vice President and Chief Economist of the World Bank, he was also America’s Treasury Secretary during the Clinton presidency before becoming the President of Harvard University. Summers described MMT as “fallacious at multiple levels” and he accused MMT proponents of promising the public a free lunch. He claimed that MMT has its roots in a “valid idea” but has been “stretched by fringe economists into ludicrous claims.” James Meadway, a former adviser to the UK’s Shadow Chancellor of Exchequer believes that MMT “disorients the Left by peddling simplistic monetary solutions to complex problems of political power.” Paul Krugman, the 2008 Economics Nobel Prize winner stated, “The doctrine behind MMT was smart but not completely right.” Martin Wolf, the influential and highly respected

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Uyiosa Omoregie economics columnist for the UK’s Financial Times (FT) advised, “To the extent modern monetary theory is true, it is unoriginal; to the extent it is original, it is false.” In an apt summary about the pros and cons of MMT, Wolf wrote: “The state is the most important of all our institutional innovations. It is the ultimate guarantor of security. But its power also makes it frightening. For this reason, people sometimes pretend it is weaker than it is. In one area of economics, this is particularly true: money. Money is a creature of the state. Modern monetary theory, a controversial account of this truth, is analytically correct, so far as it goes. But where it does not go is crucial: money is a powerful tool, but it can be abused.” Uyiosa Omoregie is a petroleum economist and management analyst. He can be contacted at uyiosaomoregie@yahoo.co.uk

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Jobs, jobs, jobs (4)

Rafiq Raji

was the keynote speaker at an economic dialogue on Nigeria organised by Konrad Adenauer Stiftung (KAS) and the Delegation of German Industry and Commerce in Nigeria (AHK) on 23 May 2019. Titled “Road to Economic Development: Challenges and Opportunities”, the dialogue was aimed at shaping the priorities of the incoming second administration of President Muhammadu Buhari. The following is the penultimate and fourth part of the highlights of my speech. Scale-up the digital economy The importance of the internet for job creation cannot be overemphasised. Making data, which 116 million Nigerian internet users (about 60% of the population) currently buy expensively, cheap or available for free at ubiquitous wifi hotspots is a simple way by which the authorities could easily scale-up the digital economy. The ministries and parastatals of the federal, state and local governments should all have free wifi hotspots at their various buildings and locations. Instead of sometimes meaningless and self-serving corporate social re-

sponsibility initiatives by the private sector, companies could instead make free wifi hotspots available to the extent they could across the country. If the labour ministry is tasked in tandem with a massive public media campaign on where to find opportunities for digital skills acquisition, abundant digital economy jobs and opportunities to apply them to afterwards, many young Nigerians, who currently engage in fraudulent digital economic activities (“Yahoo, yahoo”, in local parlance) could be diverted towards positive and value-adding activities in the digital economy. Recent research by Jonas Hjort and Jonas Poulsen in the American Economic Review, a highly rated academic journal, titled “The arrival of fast internet and employment in Africa” shows how the arrival of submarine cables to various African countries increased employment and productivity. There were new firm entries into South Africa, for instance. Because fast internet infrastructure enabled firms to sell their wares abroad much easily, exports increased. In Ethiopia, improved firm-level productivity was observed. This is not surprising considering employees were able to get real-time on-the-job training without having to travel abroad and so on. And these are just examples of how the internet enhanced local legacy industries. But tech and the internet are also creating new industries that could very well help Nigeria and other African countries to leapfrog easily into services. In this regard, the experience

of India is instructive. Of course, the downside to this is that the services sector tend not to be as labour-intensive as manufacturing. But put together with the suggestions for building our industrial base, the combined effort could easily reduce the employment rate by more than half. Nigeria could easily be a talent factory; tech talent, especially. One of the abundant resources we are endowed with as a country is people. Intelligent people. And it is the one thing that does not require too much hard infrastructure to develop for what is an increasingly global digital economy. How do I mean? You may wonder about the poor quality of our educational institutions, for instance. True, that is a constraint. But increasingly less so. How so? Anyone who genuinely desires a good education can avail themselves of abundant resources online. It then means that the priority of government should be to ensure that basic education at the primary level, is of high quality, available and compulsory for everyone. As most Nigerians already know how to use a smartphone, regardless of their education level, it is relatively easy for them to get access to these online educational resources, if they choose to. What if they cannot afford data to browse the internet? That is where government comes in. Whereas in the past, the poor went to the library to avail themselves of educational resources, the internet is now where they would be able to similarly do so in today’s digital economy. So the authorities should make available

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Whereas in the past, the poor went to the library to avail themselves of educational resources, the internet is now where they would be able to similarly do so in today’s digital economy

free internet/wifi/hotspots across the country for the poor to go to for such purposes. There should probably also be an aggressive awareness campaign to inform youths about the numerous opportunities on the internet for education, skill acquisition and indeed jobs. Perhaps a second initiative should be to do something about making data cheaper or free. For instance, it is probably more optimal to invest in free wifi spots than libraries at this time. As you are well aware, a sizeable portion of Nigerians now have smartphones; purchased brand new or used. The current numbers range from 25-40 million smartphone users. One forecast (Statista) I am privy to suggests there could be more than 140 million smartphone users in another 5 years. If a diligent citizen has a smartphone, and the knowledge on where to find productive resources on the internet, surely such a diligent citizen should not be handicapped by not being able to afford data to browse the internet. These are relatively easy things to do. Raise power tariffs, create free wifi spots anywhere and everywhere. Together with an imminent boom in the petrochemicals sector via the Dangote et al. refinery, we could be telling a very different but very positive story in just about three years from now. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Success Adegor: The fate of a Nigerian child

n this age and time when proactive nations of the world are thriving on a knowledge-driven economy and have successfully given sustainable and lifelong education a place leveraging on technology, Nigeria as a nation still struggles with providing education at the basic level. It is pathetic to note that issues such as corruption, inefficiency, and lack of accountability have perpetually placed the nation backward. A nation sits on a keg of gunpowder when such a nation loses her sense of manpower development, and is unable to cater for the basic education needs of her citizens. Little wonder, there is an exponential increase in kidnappings and insurgency activities in the country. The United Nations’ Child Right Act stipulates that every child should have access to free basic education. This global law explains the participatory involvement of the likes of UNICEF, UNESCO and UNDP as wrapped in early childhood education program, SDGs as well as the EFA goals. Nigeria as a participant and a beneficiary runs the 9-3-4 educational system with the first nine levels of education being free and compulsory for every Nigerian child under the Universal Basic Education (UBE) Law. Very typical, this seems to be only in principle as the reality on ground explains the case of Success Adegor. Unfortunately, Success Adegor is only but one from millions of the Nigerian children trapped in the mess of the educational sector. Politicians in Nigeria use education as a campaign tool to win elections but the true picture is that many government-owned institutions are a shadow of themselves - dilapidated structures, outdated instructional facilities, poorly remunerated and unmoti-

vated teachers. Basic education is supposedly left in the hands of the state governments who more often than not are sparingly involved, pushing and leaving such foundational, capital intensive project to the local government. This explains why basic education in government-owned schools is as good as dead while those surviving are on the strength of PTA and Alumni collaborations in developed States. Peradventure, the rationale behind private schools proliferation, since more parents have lost faith in the so-called government provided free basic education. It becomes worrisome since some indigent parents who struggle with household involvement and school-initiated fees of public schools may not readily key into the trend. The future is quite bleak with the status quo! Success Adegor became an overnight celebrity, sought after by the elites and those highly placed in political offices giving her scholarship to the University level even when they failed to add value to the state of affairs, in the first place. This is what happens where there is mediocrity. The bad news is, there are so many children in the same shoes as Adegor who go to school on empty stomach; whose schools are structurally dilapidated and have no access to instructional materials. Who will give them scholarships? The state of Success Adegor’s school is a reflection of what has become of public primary education in Nigeria. In 2018, I interacted with two children of basic education school age who were out of school because they had neither chairs to sit in the classroom nor tables to write. They were mandated to come with their chairs and tables before they could be in school and those whose parents were unable to construct theirs were sent home. How free

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is education if the government is unable to provide basic infrastructures in a state that claims to run free basic education and perhaps for a governor who must have enjoyed a luxurious basic education funded by the government? Aren’t we our own demons? Whichwaynaija believes there is a need to revisit the drawing board and overhaul things if Nigeria would ever join the league of progressive nations. No nation can grow beyond the education it has in place. It is a problem that has a multiplier effect on nation-building. Hence, the ways forward include: Commitment: Education at every level in Nigeria needs to have the ‘’State of Emergency’’ declared beginning from the basic level. The UBE Law should be implemented to the letter and if need be, the National Primary Education Commission (NPEC) of 1993, which was replaced with Universal Basic Education Commission(UBEC) in 2004, may be a good point of reference. There was synergy, proper roles coordination and accountability. Development: A nation that progresses is a nation that takes a deep interest in manpower development through action and in deeds. Education in Singapore is run on the exclusive list of the government and today Singapore is a developed nation of the world. Singapore believes in human capital development and at present, ranks as the 4th best according to a world ranking on education and their economy waxes stronger by the day. Whereas, Nigeria who got independence about the same time as Singapore, is plagued with a staggering and bastardized economy. There is a need for the leaders of this nation to show sincerity in really making a difference.

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Gloria Theophilus

Running transparently a knowledge-based economy, as embedded in human capital development, is the way forward. The Nigerian government must invest in her citizens beginning from the basic level of education. The US as a capitalist nation has options that make quality education accessible to her citizens regardless of their social status. Progressive nations of the world have migrated to knowledge-based economies and lifelong education. Whereas, Nigeria has millions of her youth left in the cold with a high rate of push and pull migration factors. No doubt, education is capital intensive and requires the active involvement and participation of the organized private sector. Corporate bodies should do more for the education sector as their CSR and economically buoyant individuals and groups should equally endeavour to truly give back to society. There are many of the ‘Warri Success Girl’ out there and guess what, they all deserve to have quality education. An educated mind is a liberated mind. Gloria Theophilus www.whichwaynaija.com

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Tuesday 18 June 2019

BUSINESS DAY

EDITORIAL Publisher/CEO

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

Bashir Ibrahim Hassan

Crisis of basic education in Nigeria

n 1999, the Nigerian government introduced the Universal Basic Education, as a reform programme to provide 9 year free and qualitative primary and junior secondary education to all Nigerian children. The thinking behind the programme was that no Nigerian child, no matter the location and socio-economic status of the parents, should be denied qualitative basic education. By 1990 primary school enrolment was put at 86 percent, but enrolment dropped to a mere 25 percent by the time the children reached secondary school. Education infrastructure was also decaying without any attention being paid to it by policy makers. The federal minister of education, in 1997, on a nationwide tour of the country’s schools stated that “the basic infrastructure in schools such as classrooms, lab oratorie s, workshop s, sporting facilities, equipment, libraries were in a state of total decay. The physical condition of most schools was reported to be pathetic.” Consequently, the government set about creating structures to overcome the dearth of facilities and create a robust

infrastructure to support basic education. It created the Universal Basic Education Commission (UBEC) to promote uniform, qualitative and functional basic education as well as coordinate all aspect of the programme implementation, and also set up an intervention fund to be accessed by states upon providing their matching grants. Although the programme ran into legal difficulties soon after, it effectively took off in 2004 upon the signing into law of the UBE Act. Results have been mixed. Although there has been noticeable improvement in enrolment since the beginning of UBE, the results have been limited and Nigeria’s educational system still rates poorly in most international rankings. In fact, the failure of states to place a high premium on basic education has found vent in their refusal to access intervention fund from the Universal Basic Education Commission (UBEC).According to the agency, as at August 31, 2018, a whopping N51b was not accessed by states, while as at same date, only 13 of the 36 states and Abuja accessed the 2017 UBE matching grants totaling N18, 008, 804, 569.70. In fact, as politics take centre

stage, stakeholders are worried that the UBEC intervention fund not accessed could jump to over N80b as things may take a while to settle down. For now, some states may be concerned with draining their treasuries to fund election, and it might take a while to stabilise their economies, post-election. UBEC is an intervention and regulatory agency saddled with the task of promoting uniform, qualitative and functional basic education, as well as, coordinating all aspects of Universal Basic Education (UBE) programme implementation. As at 2015, Nigeria ranked 103 out of 118 countries in UNESCO’s Education for All (EFA) Development Index, which takes into account universal primary education, adult literacy, quality of education and gender parity. As a plus UNESCO’s review found that enrolment at primary and junior secondary schools had greatly increased since 2000. However, transition and completion rates remained below 70 percent. But Nigeria’s out of school children remains a huge challenge. A survey conducted by UNICEF and the Nigerian government shows that Nigeria has the highest number of out of school in the world at 13.2

million, an increase from the 10.5 million children a decade ago. This is not to mention the huge infrastructure deficit and depreciating teacher quality plaguing most of the schools in Nigeria. Even with the grim statistics above, a trend has emerged where states fail to access the UBE intervention funds because they could not afford to make their matching grants, and those that access the funds either mismanage them or divert them to other uses aside improving basic education in their states. Feelers from UBEC suggests that as at August 2018, about N51 billion was not accessed by states, while only 13 of the country’s 36 states and Abuja accessed the 2017 UBE matching grants totaling N18, 008, 804, 569.70. This is very sad. No country in the world has been known to develop without developing its human capital. But in Nigeria, despite the efforts made to promote education, some states are showing that educating their people is not their priority. We propose a review of the UBE Act to make it compulsory for states to pay their matching grants, outlaw the mismanagement and or diversion of UBE funds and provide for stiff penalties for violators.

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

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Tuesday 18 June 2019

BUSINESS DAY

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Women are taking on the bulk of domestic labour, not only at home, but also at work

Ozzy Etomi

once worked as a brand manager in a tech firm. During a long meeting with an external consultant and a few team members, the consultant requested a tea break as we expected the meeting to go on for a few more hours. What I didn’t expect, however, was that he would request that I make him coffee. It did not escape my notice that I was the only woman in the room. I firmly but politely declined and joked about not knowing how to make coffee anyway, but I quickly realized he was not going to let it go. I redirected his request to a young male intern who was present. His immediate retort was that he wouldn’t ask a man to make him coffee when a woman was present. I wish I could say that any of this was shocking, but sadly, it was not. Many women in the workplace can attest to the expectation that they will assume the domestic roles assigned to their gender over their male counterparts. It is an extension of the harmful effects of gender stereotypes learned at home ultimately creating a bias in the workplace which usually has negative effects on the professional growth of women. On the 8th of March this year, millions of women and men around the world celebrated International Women’s Day with the theme focused on ‘Balance for Better’, calling for a better balance globally between the genders not only at home or within their communities

but for the good of a thriving economy. In Nigeria, there has been an advent of Women’s Empowerment movements and events heavily focused on the classed demographic of women, encouraging them to balance their life, home, motherhood, marriage and work, the unavoidable hangover from the ‘Lean In’ era. Yet one big part of that conversation which remains ignored is the disproportionate amount of overlooked and often-invisible labour women perform that keeps that so-called balance an unrealistic pipe dream. Aside from the physical strain of domestic work within the home, the cooking, cleaning, caring for kids or siblings, and even parents, there is also the pre-requisite mental and emotional load, which is generally borne by women alone, even in households where men contribute their share of domestic labour. This means that even in societies where privileged women can offload the burden of unhelpful partners unto domestic help, all the thinking, planning, organizing and typically, the worrying, still falls on the woman and is often not taken into consideration when we measure the factors that keep women lagging behind men economically. Men have started to do more at home, performing better than the previous generation, but research has shown that even in more progressive households, where men believe in sharing the domestic work, women still end up doing 2.5 times more work than their partners. What is even more alarming is that this toxic labour imbalance seeps into the workplace. More often than not, it falls on women employees to assume more domesticated roles such as event planning, booking, organizing, tidying up, taking notes, and catering for meetings. The recurrent argument is that women are often occupying lower ranking roles or that these tasks are sometimes tied to more women-dominated

positions such as receptionists, human resources, PR, executive assistants and so on. But it is even more telling that fields that are majorly occupied by women generally command lesser pay grades than those dominated by men, evidence that this sort of labour is inherently undervalued. However, even when women are in the same higher-ranking roles as their male counterparts or occupying male-dominated roles, harmful stereotyping still finds women sometimes being burdened with gendered expectations without acknowledgement of their contributions. I posited this problem to my twitter feed, and was not surprised by the flurry of feedback from women based in varied locations, confirming that they either were expected to or did perform extra (domestic) tasks at work, which were outside of their job description, with no extra compensation or recognition. “I was at a board meeting. I am a member of the board, but I was expected to serve the refreshments” (Nigeria) “In my current place of work, my boss decided not to hire any cleaners because there are many young women in the office. We are expected to sweep and mop at COB every day” (Nigeria) Women can never succeed fully in their careers if they are still expected to take on the major share of domestic duties at home and also take on extra labour at work. While it is encouraging that globally women now make up about 49 per cent of the workforce, and according to the Global Economy Indicator, in 2018 the Nigerian labour force was made up of 45 per cent women, all it means is that women are simply taking on even more work now than ever before. Instead of the constant pressures women are under to juggle multiple responsibilities at the same time without complaining, men must step up and shoulder some of that burden both at home and at work. They

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Instead of the constant pressures women are under to juggle multiple responsibilities at the same time without complaining, men must step up and shoulder some of that burden both at home and at work

need to relieve women from running on the endless hamster wheel of domestic, mental and emotional labour that ends up contributing heavily to the systemic trap that keeps them burnt out and several steps behind. It is critical that we heavily scrutinize gendered labour, starting from how we assign chores to our children, to how we divide tasks between boys and girls at school and further down the line, how we reinforce stereotypes by leaning on our female colleagues to perform certain duties. While some women are lucky enough to be in a position to refuse such ludicrous expectations at work and even at home, the rejected, undervalued, and undercompensated labour still ends up falling to other women who are in lower ranking positions or economically disempowered, which keeps women trapped in a cycle of poverty. While this is a global problem, the weighty role that social and cultural implications play on this issue cannot be ignored. Women are socialized to be nurturing and are considered more valuable when they put their shiny domestic talents on display. Evidently, some women find it difficult to shed this persona while they are at work. This coupled with the natural entitlement to women’s labour that Nigerian men and women are groomed to expect, the cultural bias has an even greater impact on gendered expectations within the Nigerian workspace. If this is something that we want to change, we must all become more conscious and deliberate about resisting gender stereotypes. It is only when we address these issues that we can begin to balance for better and work towards a more equal world for men and women. Etomi is a writer & communications professional based in Lagos, Nigeria. She writes about life & equality and is especially passionate about women’s issues.

Regulations and infringements of asset valuation in Nigeria

ogic follows steps. When steps are not followed, the process becomes illogical, creating confusion and anarchy. The quest by Nigerian Engineers in their attempts to continue delving into valuation of Plant and Equipment and other assets thereby skipping steps is illogical. The definition of who is a valuer, and the process of becoming one are clearly stated by Estate Surveyors and Valuers Registration Board of Nigerian (ESVARBON) established by Decree 24 of 1975 now CAP E13 LFN 2007 which has widened the door for professionals from other fields who are interested in the practice. Why the struggle where the path is clear? The recent back door approach by the signing into law of Gazette No 98 Vol. 105 is very disturbing. However, the setting up of a committee to address the anomalies clearly indicates that there is a perceived challenge with the Gazette. This also calls into question the quality of the legal and public service advice we operate within this country, which in my opinion is fraught with a lack of proper consultations before actions are taken on intricate matters. The world acclaimed afrobeat maestro, Fela Anikulapo Kuti, in addressing people interfering into what they are not trained said in his “Suegbe & Pako” album in 1971; ‘Lawyer wen dey talk like doctor na suegbe’ and also ‘tailor wen dey sew like carpenter na suegbe’. Therefore, the Engineers who intend to be estate surveyors and valuers should follow the due process otherwise ‘Na Pako and Suegbe’. This is happening in a society where Engineering services are desperately required to address our infrastructure and

industrialization challenges. Taking a few courses in public health engineering or building services does not make you an engineer conversely taking courses in costing and valuation will not make you a valuer. The profession of Engineering and valuation entails more than what Nigerian engineers are advocating. Let us lead our society into progress and not into a pit. As professionals we must help to grow and proffer truth. Designing or understanding the component of any item does not make you knowledgeable about its value, market trends and trading patterns locally, nationally and internationally. The crux of the matter is value in exchange for various purposes that we are dealing with. At this point, it is important that we differentiate between Plant and Equipment Valuation and Engineering Assessment. The former is simply ascertaining value in exchange while the latter is ascertaining the integrity and workability of an asset. From the foregoing, Engineering assessment falls within the purview of engineers whilst Valuation of assets in all its ramifications falls within the domain of Estate Surveyors and Valuers. I think it is a lack of understanding that is confusing our engineers and there is the need for dialogue on these issues to end this matter. We might just as well say engineers should also claim to be Business Valuers (BV) an aspect of the valuation profession that requires deep academic grounding and understanding of business studies and valuation, before one could be certified to be a professional in that field. One begins to wonder why this encroachment? A discerning mind’s take on this is that

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our engineers do not know what time it is and or do not understand their profession. A lack of ingenuity or creativity may also be at play. To be a professional of any aspect of human endeavour, you are expected to have been imbued with academic and professional training in that aspect, empowered by law and governed by the ethics and practice of such professional body. This is clearly encapsulated by the definition that describes a professional as “one with the standards of education and training that prepare members of the profession with the particular knowledge and skills necessary to perform their specific role within that profession”. As valuers we need engineering services inputs in some cases to conclude our valuation but this does not mean that the art and science of valuation is engineering. Attention must be paid to international valuation standards such as International Public Sector Accounting Standards (IPSAS), International Financial Reporting Standards (IFRS), International Valuation Standards (IVS) and find out where in any of these standards, engineers are mentioned as Valuers to conduct valuation for any purpose. We are aware that in valuation we require inputs from legal, marketing, Engineering (All aspect), finance and accounting, auctioneering and other fields of endeavour. Collecting of data from professionals in these fields does not mean they are Valuers. Similarly laboratory scientists, pharmacists do not become Medical Doctors for the mere fact that inputs were provided by them in the diagnoses and treatment of an ailment. Why then do we turn logic upside down to convert engineers to

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Paul Osaji become Valuers (and vice versa) without them undergoing the required academic and professional training. To call yourself a professional of any kind in any part of the world, these basic steps must be followed. It is important at this stage to cite an example of a medical doctor becoming an accountant after going through academic and professional accounting programs; The immediate past Minister of Industry, Trade and Investment, Dr Okechukwu Enelama is an example. Also in the USA, people with varying academic qualifications are admitted to become Medical doctors but have to go through medical academic and professional training. Therefore, Nigerian Engineers are welcome to do same in order to become Valuers. With the current clamour and recognition of the role of entrepreneurs and professionals in the growth of our economy we advise that any member of the public intending to be a valuer should go through the proper process of becoming one. That is, acquire academic training, write qualifying exams with the relevant professional body, do tutelage for a required period and be registered with ESVARBON. The process is so simple and engineers are welcome to do that. Paul Osaji is the Founding Partner, PAUL OSAJI & CO, an Estate Surveying and Valuation Firm with Head Office in Lekki I, Lagos.

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Tuesday 18 June 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Company

Gridlock forces NASCON out of Apapa, as company relocates 60 percent of its operations Stories by OLUFIKAYO OWOEYE

addened by the perennial traffic gridlock on Apapa raod, NASCON Allied Industries Plc, a subsidiary of Dangote Industries L im ite d, has ann oun ce d the relocation of some of its operations from Apapa to Oregun and Port Harcourt, the River State capital. Paul Farrer, Managing Director, NASCON, told shareholders at the company’s Annual G eneral Meeting that the Apapa gridlock affected the movement of raw materials to Oregun , timely delivery of finished goods to customers and increased turn-around time of the company’s trucks. “We relocated 60 per cent of our Apapa Plant production capacity to our Oregun

and Port Harcourt Plants to reduce the effects of the gridlock. We also engaged third-party transporters to ensure timely delivery of our finished goods,” he said. NASCON, a refiner of industrial salt and distributor of household food processing, with an installed production

capacity of 567,000 metric tonnes per annum, its Apapa factory, was inaugurated in 2001 with an installed capacity of 275,000MT per annum. The Port Harcourt refinery was inaugurated in 2003 with an installed capacity of 210,000MT per annum, while the Oregun plant was inaugu-

rated in 2004 with an installed capacity to refine 82,000MT of salt per annum. An analysis of the company’s full year 2018 result for the period ended December 2018 shows revenue of NGN25.77bn, which represents a 4.78percent decline from the NGN27.06bn recorded in the previous year. This was due to the weaker contribution from the sales of salt, which constitutes 80.57percent of the company’s topline while its tomato processing and vegetable oil plants lay idle. However, the revenue from its seasoning products and freight business grew by 20.76percent and 5.84percent respectively, with the latter accounting for 15.85percent of total revenue. Its Q1 2019 result for the period ended March 2019 showed some marginal improvement as its revenue grew by 0.77 percent to N6.82 billion rela-

tive to N6.78bn in Q1 2018. The company recorded impressive growth in its Western and Eastern markets’ sales, which rose by 47.26percent and 12.74percent respectively. The recorded growth was driven by its diversification to corporate clients rather than retail customers. However, sales from its Northern market, which currently accounts for 58.90percent as compared to 69.90percent in Q12018 of revenue, declined by 15.90percent (N4.01 billion vs N4. 73 billion). In its bid to increase its product offering, NASCON commenced vegetable oil production at its Ota Plant with locally-sourced crude palm oil, while also planning to resume tomato paste production in 2019. Shares of Nascon traded at N14.80 with its one year return down by 34.40percent.

CONSUMER GOODS

Firm battles Nigerian Breweries with legal action over alleged intellectual property use

ngineering company, Evanpower Engineering Limited, has accused Nigerian Breweries Plc with reneging on payment of services rendered at its Ama, Enugu Brewery and for use of its intellectual property without compensation. The firm has threatened to go to court if NB fails to pay for the services rendered. In a petition written to the Managing Director of Nigerian Breweries Plc, Mr Jordi Borrut Bel, Counsel for the firm, A.U.G Ojinta demanded payment of N750m and N3.7m respectively as fees for a blueprint design and work done respectively at the Ama Brewery in Enugu. Ojinta said on Monday that the brewing company has refused to pay the engineering firm for use of a blueprint it designed to solve a control system challenge at its Ama Enugu Brewery. “Our client instructs that sometime in the month of July, 2014, your company’s Access Control System at Ama was struck by lightning and the Superterm Control Panel at the security room at the entrance gate- 2 was damaged. Your company had advertised for the repair but because it was a highly specialist job, none of your registered vendors/contrac-

tors could handle or bided for it,” Ojinta said. “As at that time, our Client was not registered as a Vendor/Contractor with your Company. She was sought for and she came. She repaired the broken down Superterm panel and got the panel to work with the Turnstile gate and that made history at your Ama plant as, from the information she got later, none of your Company’s registered contractors in Nigeria has ever being able to record such feat in your Access Control System. This particular service was paid for by your Company”. The counsel for the plaintiff said that following the repairs of the Access Control System and payment, NB urged the engineering firm to register as a vendor/contractor with the company which it did on 21 May 2015. Following the registration, the plaintiff was issued a work permit and instructed to work on revamping the Access Control System at the company’s Enugu plant sometime in June 2017. “Our client was issued with work permits which covered the period June 4 to July 31, 2017 duly endorsed by the Automation Engineer, Engineering Manager, Safety Manager and Brewery

Manager which actually was for revamping of the Access Control System and other ancillary work that included laying new cables at the Turnstile Gate at Ama plant. At the end PO was raised dated August 7, 2017 attesting to the fact that my client had been through with what my client was asked to do”, he stated Explaining further, Ojinta noted that, Evanpower Engineering Limited had before then developed a Blueprint for NB which was used in solving the Access Control System at the demand of the beer company’s automation engineer. “The first part was made available to you through your said Automation Engineer in July 2017 while the second was in October 2017”, he said. Ojinta said that Nigerian Breweries has discontinued the services of the engineering firm following completion of the work but without paying for the use of the blueprint. He stated that NB acknowledged the receipt and use of his Client’s Blueprint vide her letter of June 14, 2018. “Unfortunately, in the said letter, your company first claimed that our client never made it clear that she was to be paid for the use of the Blue Print, her intellectual property, by your company.

That we consider very absurd to say the least. Secondly, she chose to confuse our client’s demand for payment of N3, 744, 153. 15 for services already rendered as contained in the technical report she had sent to you with her demand for payment for the use of her Blue Print. It is against the foregoing that our client has instructed us to demand and we demand that your company pay within 21 days from the receipt of this letter”, Ojinta

said. Nigerian Breweries has, however, denied any liability to the plaintiff, noting that there was no record of any transaction of such documented with the company. In a letter by Nigerian Breweries Legal Manager, Operations, Mr Chidubem Aguguo, he stated that there was no merit in the claim by the engineering company. “We reiterate that at no time did we commit to pay your client for any document

(Whether quotation, blueprint or any other document whatsoever) submitted by it in respect of the reactivation of the access control system at our Ama Brewery (“Project”). Moreover, your client was duly paid for the work it did us, including the materials it supplied for the project. “Thus we are not in any way indebted to your client to any amount whatsoever. We found the claim to be without merit and do hereby reject same in its entirety,” he added

L-R Olaniyi Olukitibi, CEO, De Feon Autos Ltd; Etop Ikpe, CEO Cars45; Kunle Kosile, CEO, HCS Global Resources Ltd; Raymond Oladugba, CEO, Oloworay Autos Ltd and Olajide Adamolekun, chief financial officer, Car45, at the launch of the first Carsbazr retail franchise lot with HCS Autos in Ikeja, Lagos at the Weekend

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Tuesday 18 June 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

Tech

Google made $4.7 billion from news content in 2018 Stories by OLUFIKAYO OWOEYE

earch engine giant, Google, reportedly earned a whopping $4.7 billion in 2018 from news contents comprising of the works of news publishers accessed by readers via search and Google News. According to a report by News Media Alliance, a nonprofit organization headquartered in Washington, D.C. said news content make up 40percent of cliks for trending queries on Google search and about 16percent of clicks on most searched results. This amounted to an estimated $4.7 billion in revenues for the search engine company last year. The report also disclosed that Google and Facebook control the distribution of news because 80percent of external traffic is routed through these two companies to various news websites. The report noted that this took a huge cut from the online ad revenue of media houses which lost a crucial source of income, resulting in many of them getting shrunk or closed. News is a significant part of Google’s business, according to a study to be released next

week by the News Media Alliance (NMA) which represents more than 2,000 newspapers across the US. The journalists who create that content deserve a cut of that $4.7 billion, president and chief executive of the NMA David Chavern was quoted as saying by The New York Times. The California-based internet giant made the cash from the work of news publishers last year via search and Google News, it said. That $4.7 billion is nearly as much as the $5.1 billion brought in by the United States news industry as a whole from digital advertising last year, the report said. The NMA cautioned that its estimate for Google’s income was conservative. For one thing, it does not count the value of the personal data the company collects on consumers every time they click on an article like this one. “They make money off this arrangement and there needs to be a better outcome for news publishers,” Chavern said. The study blatantly illustrates what we all know so clearly and so painfully,” said Terrance C Z Egger, the chief executive of Philadelphia In-

quirer PBC, which publishes The Philadelphia Inquirer, The Philadelphia Daily News and philly.com. “The current dynamics in the relationships between the platforms and our industry are devastating,” Egger said. The NMA is making the study public in advance of a House subcommittee hearing on Tuesday on the interrelationship of big tech companies and the media. Some 40 per cent of the clicks on Google’s trending queries are for news. That’s content that Google does not pay for, the report said, although it often presents headlines from news outlets verbatim. Egger said the big tech companies should show some appreciation for the content that news publishers provide. Two giant companies – Alphabet, which is Google’s parent, and Facebook – are major distributors for news publishers. The two of them ferry more than 80 per cent of external traffic to various sites. That is a far cry from the analog days, when media barons controlled how their publications reached the public and collected all the ad income they generated.

L-R :Omobola Johnson, former minister of communication and technology; Tunde Fawler , executive chairman, Federal Inland Revenue Service (FIRS); Okechukwu Enelamah , minister of trade and industry; Wanda Kramer, and her husband Dick Kramer, and Olaleye Adebiyi, managing partner, Andersen Tax Nigeria, at the sendforth for Dick organised by Andersen Tax in Lagos. Picture by Pius Okeosisi

L-R: Stanley Job, chairman, Nigerian Union of Journalists (NUJ), Rivers Council; Sophe Uduma, communication officer, International Committee of the Red Cross (ICRC), Port Harcourt; and Ike Wigodo, secretary of NUJ, Rivers Council, during a workshop organised for journalists in collaboration with ICRC, in Port Harcourt.

Domino’s Pizza opens 100th outlet, invests over N10bn in Nigeria

at’N’Go Limited , the f ra n c h i s e e o p e ra ti n g D o m i n o’s P i z za, Cold Stone Creamery, and Pinkberry Gourmet Frozen Yogurt in Nigeria has invested over N10 billion to grow its businesses. This disclosure was made by the company’s Chief Executive Officer, Patrick McMichale who also confirmed that they are getting closer to their target of opening over 300 outlets in Nigeria. So far, a total of 100 outlets have been opened. During the unveiling of the 100th outlet in Lagos, McMichale stated that the 100TH

store was a reflection of the firm’s commitment to bringing quality and innovative food products to Nigeria’s quick-service restaurants, while also becoming the premier dynamic and unique food operator in Africa. The CEO further stressed that the company will continue to invest in the country, courtesy of its partnership with strong local banks. According to McMichale, Eat’N’Go hopes to have over 300 outlets in the country. According to him; “Right now, we are celebrating our 100th store today,

but we are already up to the construction of 116 stores as we speak and we are still looking for sites, we have a plan to open more than 300 stores across Nigeria in the next five years,” Since its entrance into t h e Nig e r i a n ma rke t i n 2012, Eat’N’Go has maintained a business model of opening its outlets in every major highway in Lagos.with the opening of its first Domino’s and Cold Stone outlet which has grown into 70 stores with over 2,000 indigenous team members spread across the country.

L-R: Michael Carney, deputy economic counselor, US Embassy, receiving a FAAN branded souvenir from Rabiu Hamisu Yadudu, MD, Federal Airport Authority of Nigeria, [FAAN], at the courtesy visit to the General Aviation Terminal, Nnamdi Azikiwe International Airport, Abuja.

Carsbazr partners HCS Autos opens first franchise outlet …targets 50 franchise outlets by Q4 2019

a r s b a z r, h a s a n nounced the opening of its first franchise outlet in Lagos. Etop Ikpe, Chief executive Office, Carsbazr, said the new outlet in partnership with HCS autos is the first of its kind in the history of the company. According to Ikpe, Carsbazr’s mission was to provide reliable used cars to millions of Nigerians at affordable prices,noting that there are opportunities for customers to buy, sell or swap their used cars with a variety of good cars at the mart.

“our goal is to have 50 of this place across Nigeria before the end of this year and we are moving to franchise branches and that is our goal, he said. Kunle Kosile, CEO, HCS Autos said Carsbazr has the potential to expand, adding that it would sell large volume of cars with little profit margin rather than keeping cars for many months because of huge profit. He also advised young dealers to take advantage of its Merchant program. Also speaking at the event, Jide Adamolekun, CFO, Carsbazr said the com-

pany sells affordable and verified cars while helping small businesses to deliver value. Speaking on the sidelines of the event with BusinessDay, Ikpe said the company will continue to be the trail blazer in auto industry in the country. He also said the Carsbazr will maintain its excellence and reputation in the selling of cars. Adeoye Ojuroye, Chief Financial Officer, ProvidusBank, said the bank will continue to support small businesses to scale by providing products that will support their businesses.

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L-R: Shola Adeyemo, public relations/marketing manager, Transcorp Hilton Abuja; Okaima Ohizua, executive director, Transcorp Hotels plc, and Kevin Brett, GM Transcorp Hilton, at the 100 years celebration of Transcorp Hilton in Abuja. Pic by Tunde Adeniyi.

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Tuesday 18 June2019

BUSINESS DAY

Media business Eat ‘N’ Go Limited closes franchise door on local investors Stories by Daniel Obi Media Business Editor

at ‘N’Go Limited operators of America’s Domino Pizza, Cold Stone and Pinkberry Gourmet Frozen Yoghurt brands is not ready for now to extend its franchise agreement to Nigerian players who want to key into the success of the firm in Nigeria. Patrick McMichael, CEO of Eat’N’Go told BusinessDay recently that the decision is informed by the desire to maintain quality and price for the brand consumers. “For now, franchising our business is not an option”, he said.

One of the reasons of franchising, regarded as a good market model is to replicate business success and enable franchisers to grow the brand quickly, but sometimes if

not monitored quality and efficiency are compromised in the process. Meanwhile, in spite of what many people regarded as challenging environment, Eat ‘N’Go

has expanded outlets to 100 shops pan Nigeria within seven years, investing over N8 billion so far. The increase in outlets in Nigeria reinforces the brand’s dedication to bringing the best global food brands and concepts to Nigeria and Africa at large. The company which started operation in Nigeria in 2011 today has over 2000 staff. McMichael believed that its total investment in Nigeria could be more when other factors such as human capital development and other infrastructure are factored in. Patrick McMichael linked the company’s success to his employees, customers, partners and the public for their loyalty and continued support over the years.

Beer accounts for 12% of total liquid consumption in Nigeria, juice 3% - Research … Water 41 %, CSD 21%

hare of beer drink in the overall liquid consumption in Nigeria is 12 percent as at 2017, a report by Tetra Pak West Africa has revealed. Global average of beer consumption of total liquid market is 10 percent. This means that more beer is consumed

in Nigeria. According to the report quoted by Chi Limited, the share of juice consumption in Nigeria out of total liquid market is only 3 percent. The global average is 9 percent. This also explains that less juice drink is consumed in Nigeria.

The low percentage of juice consumption in Nigeria is informed by fear of sugar content, weak category differentiation and price value. In the era of eating and living healthy, there is pervading misconception about some healthy juice drinks without sugar, says Ademola Mafikuyomi, Chivita Brand Manager. For instance, he said Chivita 100% does not contain any sugar or preservative but only pure fruit juice which is good for any class of consumers. The report also showed that Nigerians drink more carbonated soft drink with 21 percent of the liquid market. The global percentage of CSD is 11 percent. Dairy share of the food drink market is 21 percent in Nigeria. Water, with 41 percent of the liquid market has top share. This

also explains that Nigerians drink more water. Global percentage of water consumption is 20 percent. Wine and spirit share is one percent of the liquid drinking market in Nigeria. Juice could enjoy more percentage of the drinking market if education on, especially no-sugar content is mounted by juice producers to demystify perceptions and regulatory controls are strengthened to ensure that manufacturers live up to their claims. Chivita controls more than 50percent of the juice market since it became a major driver of the sector after the ban on importation during Obasanjo’s democratic administration. Chi was early this year fully acquired by Coca Cola with undisclosed amount.

Business repositioning in challenging economy tops Outdoor industry conference Friday

epositioning business in a challenging economy will top Outdoor Advertising Association of Nigeria, OAAN conference this weekend. This topic is perhaps informed by operational challenges businesses in Nigeria are going through especially in the last few years due to government policies and environmental difficulties. In the recent time, Nigerian companies have faced deeper burden of running their businesses and payment of overhead cost principally on account of poor infrastructure and government unfriendly policies that have eroded business margins. The situation seems to have gotten

bad for most companies especially giving the high inflation environment that has eaten deep into consumers’ purse. Data from the National Bureau of Statistics on Gross Domestic Product (GDP) by Income and Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households has been declining at varying pace. This has a far reaching implication for these companies. This development has forced many companies to rejig their marketing strategies by cutting budget which has affected advertising business including outdoor. The President of OAAN, Tunde www.businessday.ng

Adedoyin, said in a statement that this year’s AGM is strategic because it will offer an opportunity for robust deliberation with a view to finding lasting solution to the facing the outdoor industry in Nigeria. He said: “There are number of issues that are very strategic to the future of the industry that are primed for consideration at the meeting. For example, reviews of regulations guiding the body, adoption and upgrade of new members and more importantly, setting the pace for the future of the profession in Nigeria.” The AGM is coming at a critical time for the outdoor industry, which

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has in the last four years struggled for growth as a result of issues like multiple taxation, over-regulation, weak government policies among other challenges. More vexing has been the refusal of the Lagos State Signage and Advertising Agency (LASAA), the state outdoor regulatory agency, to pay debts owed the association, which runs into billions of Naira, for jobs executed for the agency during the 2015 election. This has created a huge liquidity problem that has driven many agencies to the edge, and more notably led to a situation where outdoor services have been over-priced and made unattractive to many advertisers. @Businessdayng

Quadrant MD resigns

che Ajene, Managing Consultant of Quadrant MSL has left the PR company after 16 months stint. Insight Redefini Group announces that in the interim, Anurika Azubuike, Lead

Consultant in the company will act as the Business Lead steering the affairs of the company in conjunction with the Group. Ajene, formerly Director of Marketing & Strategic Accounts at Halogen Security Limited, joined Quadrant MSL, both of Troyka Group, in March 2018 and was instrumental to the transitioning of the business into a Consultancy. Azubuike, who worked closely with Ajene to lead Quadrant MSL’s successful transformation, will continue in her role as Lead Consultant, and will take on the baton in driving the organization’s vision to remain the Leading Public Relations and Strategic Communications partner to varying client portfolios in Nigeria and other parts of Africa.

Indomie Heroes search team hunts for 2019 potential awardees

he search teams for the 2019 Indomie Independence Day Award (IIDA) for Heroes of Nigeria, an annual corporate social responsibility initiative of Dufil Prima Foods Plc, have hit various locations across the country to begin mop up of entries for the next Indomie heroes. The brand has also made story submission easier for members of the general public with the introduction of a dedicated Whatsapp line for members of the public to share heroic stories in their neighbourhood. According to a statement by the company, the search process, targeted at identifying and rewarding Nigerian children aged 15 years and below for unique acts of heroism, it is expected to gather true experiences from designated locations about children, who have at one time or the other performed exceptional acts of bravery. The Group Public Relations and Events Manager, Dufil Prima Foods Plc, Tope Ashiwaju, said the search exercise which kicked-off May 20th 2019, is taking place in 12 locations, which are Lagos, Osun, Ekiti, Kano, Katstina, Jos, Abuja, Kwara, Cross River, Delta, Enugu and Imo. He said the exercise would last for duration of eight weeks ending July, 12th 2019.

Tuesday 18 June2019

BUSINESS DAY

Branding

Addressing waste management in Nigeria’s manufacturing concerns As industrial concerns grow for production to meet up consumers demand, waste management and disposal especially in manufacturing sector, has become more appropriate. This report looks at how some companies; including La Casera Company are engaging proper waste disposal methods through quality control.

adequate attention is paid to the flow of the required materials into the organization to the point where these materials are converted into company’s end product. For finished products to get to the customer, a lot of regulatory control efforts come to play in the production process. This is aimed at reducing the production costs to the barest minimum, while not mortgaging the quality of the products, for the benefit of the customer and the organization itself. The Quality Control System is a basic regulatory medium in production circle. Presently, there is a global tailoring of economies into competitiveness in a customer-oriented fashion. Organizations’ survival now hinges on customer satisfaction. A corresponding management technique –Total Quality Management (TQM) is also in place to meet customer satisfaction. The concepts of Total Quality Management like continuous improvement and the zero-defect call are apt solutions and guides to effective waste management. Total Quality Management guarantees waste eradication, high quality and increased profitability. In The La Casera Company PLC, for instance, strenuous efforts are made to reduce production waste to the barest minimum and also to attempt to

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eradicate it through Quality Control checks. The bottling machines are state of art facilities with high efficiencies that are automated to reduce process waste generation. But how well has the organization achieved its quest in effective waste disposal and management? The concept of treatment engaged by TLCC on disposal management internally involves total inventory of all waste streams, categorization of the waste, recycling or reuse of waste, waste treatments to reduce the risks and safe disposal of the waste. Solid waste management hierarchy ranks the most preferable ways to address solid waste. Source reduction or waste prevention, which includes reuse, is the best approach TLCC uses to manage solid waste. This means reducing the amount of trash discarded by making maximum use of raw materials. Once waste is created, recycling which includes composting is one of the most effective methods of reducing the amount of material in the waste stream. Emmanuel Adeku, Quality Assurance Manager, The La Casera Company Plc, explained that the La Casera Company understands the importance of effective effluent treatment for food and beverage manufacturers, and realizes there are very different

We are taking measures to engage in public awareness campaigns, selective waste collection education and anti-littering campaigns as we believe that littering of our environment is the major culprit in environmental pollution and once this is addressed, our streets, drainages and waterways will be free from by-products

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lobally, carbonated beverages sector is one of the fastest growing sectors with the estimated market worth of $392.6 billion in 2016, according to report by Grand View Research. In the recent past, the industry has undergone major changes regarding product innovations and offerings and the market is expected to reach $ 412.5 billion by 2023, the research forecasts. Europe dominates the global carbonated beverage drink market. North America and Asia-Pacific are expected to witness the fastest growth owing to increased disposable income, growing young population and changing food habit preferences in countries, like China, India, South Korea, and Japan. India and Nigeria have been showing the strongest growth regarding value consumption, in the last five years. Countries have witnessed rapid urban growth globally, increased economic and technological development in the past few years and these have also brought about increasing industrial development coupled with various forms of environmental pollution. Since generation of waste is an integral part of industrial activities, it is obvious therefore, that industrial growth apparently leads to an increase in the production of industrial waste. These wastes are produced in the form of solids, liquids, gases and air-borne particulate matter. The issue of industrial waste has become one of the most crucial matters confronting society in general and industries in particular. Public concern on these issues continues to be expressed daily through the media. Advocates of environmental protection have drawn the attention of the national policy-makers to the health hazards and potential dangers caused by the inadequate management of waste. In Nigeria, many industrialized cities still have inadequate waste management; poorly controlled open dumps and illegal roadside dumping remain a problem. Such dumping destroys scenic resources, pollutes soil and water resources and habitation. This situation is probably a social problem as much as a physical one; many people apparently are simply disposing their wastes as inexpensively and as quickly as possible. Many, in fact, may not see dumping their garbage as an environmental problem. If nothing else, this is a tremendous waste of resources; much of what is dumped could be recycled or reused. During treatment and disposal of Industrial drinks, the biological oxygen demand (BOD), chemical oxygen demand (COD) and its suspended solids (SS) are three functional parameters most regularly monitored and most often used to evaluate the performance efficiency of waste water treatment plant. For industries, one of the greatest challenges facing modern corporate managers is that of the employment of efficiency for the maximum use of available raw materials waste minimization. This is very vital because waste generated during the production process is a silent partaker of dividend sharing without making any contribution to the equity base of any organization. In the management of materials for production,

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challenges in these industries to solve in order to remain compliant and profitable. We have the experience and technologies to address waste disposal and management problems that have helped us achieve all our goals, including regulatory compliance and the reduction of costs. “Comprehensive technologies and experience provide solutions for treatment of our waste water from pre-treatment to directdischarge to the public drain. We ensure that all water returned to the natural environment is treated to the level that supports aquatic life. Treated water released into the environment is suitable for use in agriculture as well as supporting plant and animal life. These turnkey solutions helped us realize longterm efficiencies, stringent environmental compliance and overall positive impact to our bottom lines. Also, we are in collaboration with our dealers in the collection and recovery of post-consumer Best-Before products as part of our extended producer responsibility initiative. We have integrated sustainability and corporate responsibility into every part of our operations, building long-term shared value for our business and stakeholders.” On the external efforts toward environmental safety, the Senior Brand Manager, La Casera, Ruth Ode, explained that TLCC has structured its implementation programmes in three categories: One: Communication and advocacy intervention to educate the populace on proper waste disposal of PET. Two: Partnership with recyclers or off-takers to convert the collected PET to other uses like energy, fibre and textiles. Three: TLCC is also working towards collection of postconsumer waste PET from the environment through designated collectors and placement of bins in strategic locations; “Besides this, we have a plan of activities, which includes collection of PET in partnership with identified collectors to retrieve and clear PET from streets, landfills and waterways. We are taking responsibility for the entire life cycle of our products. We are taking measures to engage in public awareness campaigns, selective waste collection education and anti-littering campaigns as we believe that littering of our environment is the major culprit in environmental pollution and once this is addressed, our streets, drainages and waterways will be free from by-products,” she said. The Senior Brand Manager also revealed that in efforts to better manage plastic waste, TLCC is working on a coalition with other manufacturers in the country and in partnership with the Lagos State Government to develop well-organised collection, sorting and recycling schemes across the state. “As part of this coalition, TLCC would also work with other major industrial companies to integrate sustainable waste management solutions and advocate improved waste management practices in Nigeria” she said. Waste management is thoughtful activity every organisation, especially manufacturing concerns should embrace for cleaner environment and healthy living.

@Businessdayng

Tuesday 18 June 2019

BUSINESS DAY

STEP 6

Making a Match

How will we decide who we want? What if it isn’t meant to be?

The Ball In Your Court nce you communicate the reasons why your company is an attractive place to work, and advertise your open position, the game is on. Basically, you’ve announced to the world that you’re searching for a relationship. And you have put all the mechanics of this future relationship out there for everyone to see. You had anxiety that no one would be interested, but now that fear is gone. People are responding. Their job applications are proof of their interest. You have to look at these people’s relationship profiles (CV and cover letter), decide if they are worth meeting on a blind date (screen applicants for interviews), go on these blind dates (interviews), maybe a few subsequent dates (followup interviews, aptitude tests etc), vet them (check references and verify credentials and skills), decide which of them to commit to (choose candidates) and then propose marriage to them (make an offer of employment). Wawu!

MisAN REWANE Misan Rewane is co-founder and CEO of WAVE, an organization focused on rewiring the education-to-employment system to create a level playing field for every African youth to access the skills and opportunity to become what they imagine.

Winning the Match So how do you do this effectively? You have to ensure that the person you’ve met is actually a match, by ensuring that they have the competencies you need for the job to be done (JTBD). Remember that last week we discussed how a prospective partner seeing the kiosk you built, is more likely to assure them of your entrepreneurial skill than the copy of The Economist on your bedside table? Because your Employee Value Proposition (what you can offer someone) is strongest when it is built on proof points? Think about it in the same way. A credential (like a degree) is the equivalent of someone telling you something. A competency (like demonstrating I can close the monthly accounts using excel) is someone showing you. As we know in Naija, seeing is believing. In some places a credential is proof of a competency. An Accounting degree is a surety of practical accounting skill and experience. However, due to the deficiencies of the Nigerian education-to-employment system and the absence of practical instruction, you can’t use credentials as a proxy for www.businessday.ng

skills. You need to directly and thoroughly check competencies before you make hiring decisions. The current method used in Nigeria goes something like this: We look for the CVs with the highest academic achievement (top schools, “serious” degrees and top degree levels). We look for the most relevant work experience (similar roles, similar companies and highprofile companies). If we are exceptionally thorough, we spend about three minutes reviewing each CV. So, if your business gets 50 CVs per job description posted, you spend about 2 and a half hours for the first round of screening. Of the 50, you might decide that 10 CVs are good enough. But if you really think about it, you only have confidence that 5 of them are really up to snuff. The other 5 are just there so you can see if they will impress you with something that wasn’t on the paper. So, to interview all 10 candidates will take you another 3 hours. That is a total of 5 and a half hours, abi? But think back to all the other steps in this process and how much time you spent on the J.D., the competencies decisions, the self-audit, messaging the EVP… You’ve now gotten to the part of the process that necessitated all that work. Does it make sense to spend the least amount of time and energy on this portion of the recruitment process? Filtering for Failure You’ve already outlined the essential 3-5 competencies this person needs to have, to be able to carry out the things that you

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absolutely need to get done (i.e. the job-to-be-done). Now ask yourself: “If I could ask this person only ONE QUESTION or assign ONE TASK that would confirm whether they have this competency (e.g. the ability to learn new things quickly), what would it be? Would that task be to write a report? To download software x and use it to do assignment y? Or would you use a question like “Tell me about how you would go about learning xyz thing in 15 mins”. Take some time and think up a question. Decide what an ideal answer would be. Decide what the worst answer would be. Decide what answer would be acceptable but not ideal. Then assign the answers values: a 5 answer is perfect; a 3 is average; a 1 is horrible. If you want to check for multiple competencies, come up with a question for each of them. It might seem tedious, but bear with us. Because when you first get your 50 applications and you send these questions to every single one of them, regardless of their CV, only about 25 will bother to answer. You’ll spend 5 minutes assessing and grading their responses. Take the 10 top scorers and then review their CV’s. You might be surprised to discover that they are not the people with the most degrees or the best experience. They are just the people who are the best fit for your particular position at your particular company. Gaining Real Ground If you invite the top 10 scor@Businessdayng

ers to interview, you will know that all of them are at least somewhat likely to give you what you need. Depending on the impressiveness of the answers you might not even need to talk to 10 applicants, 5 might be enough. As you conduct first round interviews and then further rounds, aptitude tests, practical tests etc., you should use the opportunity to check if the observed competency levels match the written answers. These face-to-face interactions also have a hidden advantage. They give you the opportunity to check if you can give the interviewees what they need. Can you supply the things they demand or is your EVP being misinterpreted? Do their top motivators match the things you are offering and align with your workplace/ environment, or is that failure in communication (we talked about last week) happening? If a candidate decides to apply for a position with your company because they want a place that offers a good work-life balance, there will be misalignment when they find out that they are expected to work on weekends. The whole point of the recruitment process is to successfully obtain, train and retain an employee who helps you build a successful business. And to achieve this objective without D&D (distress and distrust). If you are lucky enough to find an ideal candidate, the next step is to make sure they possess both the skillset and the mindset you require. Making a match is not just about finding the right hire, it is about finding the right fit.

Tuesday 18 June 2019

BUSINESS DAY

A brief history of executive burnout How our forebears dealt with stress at work should make us wary of faddish cures

n 1897, Murray Finch-Hatton, 12th Earl of Winchilsea and a pioneering motorist, wrote to fellow board members of the Great Horseless Carriage Company: “Gentlemen — I believe you are aware that about three months ago, as the result of overwork, my health suddenly broke down, and Sir William Broadbent . . . ordered me at once to go to the Riviera.” But the rest cure had failed and Broadbent, an eminent physician, had judged the earl was “not in a fit state of health to undertake any responsible work”. As a result, he would be obliged to step down as a director. Finch-Hatton’s decline (he died the following year, at 47) is a footnote in corporate history, but his admission was not unusual for its time. The Financial Times, which published his letter, was dotted with announcements of forced breaks by overworked corporate directors in the 1890s. That contrasts with the way in which companies today are only beginning to tackle the physical and mental health risks of long hours, and with boards’ continued coyness about admitting when senior staff succumb to burnout. Finch-Hatton’s resignation came towards the end of a period of rising concern about the pace of technological disruption, to

which, in a small way, the motor vehicles promoted by the Great Horseless Carriage Company were contributing. By the 1900s, newspapers advertised products such as Rexall’s Americanitis Elixir to “overwrought business men”, worried that “business conditions today ask more of a man’s vitality than ever before”. A 1907 advert continued: “It’s one continuous drive at high tension, overtaxing the body and brain until a complete breakdown comes.” This worry about the velocity of modern life sounds familiar. A search of the Factiva media database reveals the number of references to the “accelerating pace of change” has doubled since 2014, compared with the preceding five years. We live again in “anxious times” — the title of a new book that features the Rexall’s advert and examines late 19th-century society’s responses to overwork and stress. The internet and social media — today’s equivalent of the telegraph and popular press — contribute to the sense of overload, but also, like the adverts of the 1900s, provide a vector for its treatment. The stressed-out are encouraged to use technology to monitor their physical and mental wellbeing, the quality of their sleep, and their nutrition. www.businessday.ng

Instead of Victorian magnates’ rest cures, 21st-century executives pay for mindfulness and meditation sessions, personal trainers and, in extremis, rehab programmes. Oxford university’s Sally Shuttleworth is a co-author of Anxious Times and leader of a research project, “Diseases of Modern Life”. She told me that “it became very acceptable [in the late 19th century] for business leaders to have mental breakdowns”. Attributing their ill health to overwork was both a badge of pride and an endorsement of their decision to enjoy a period of what one promoter of the Riviera called “legitimate idleness”. From at least the 1860s, British travellers began bigging up the health benefits of resorts such as Mentone, on the Mediterranean, and later Davos in the

Swiss Alps. There, convalescing dignitaries sowed the seeds of the highaltitude, high-level networking that occurs at the World Economic Forum conference. By the 1890s, as British economic prosperity peaked, the trend for captains of industry to take lengthy resort cures was dying out. “It started to be seen as self-indulgent,” Prof Shuttleworth told me. Recommended Health at Work Men urged to seek help for mental health problems at work These echoes of history can help executives today. Our forebears thought they were living in times of unprecedented pressure and stress. Yet they were able to overcome their concern and even advance thinking about how to diagnose and treat the age’s emerging social problems.

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The internet and social media — today’s equivalent of the telegraph and popular press — contribute to the sense of overload, but also, like the adverts of the 1900s, provide a vector for its treatment

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By Andrew Hill, FT

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As the authors of Anxious Times say in their conclusion, “without history, we live in a perpetual present — a domain that, by definition, tends toward the persistently bewildering”. The historical perspective should encourage us to treat with scepticism the most overwrought responses to today’s technological changes. The arrival of the telegraph was even more revolutionary than the internet, reducing the transmission of information from weeks to hours. By contrast, as The Economist detailed in 2015 in an article headlined “The creed of speed”, it is often hard to prove that the pace of business today is much faster than it was in the late 20th century. A long view of our own anxious times ought also to make us more careful about leaping to adopt the latest faddish and costly cures for workplace stress — the equivalent of those turnof-the-century “elixirs”. Yet companies could still learn from Finch-Hatton and others’ candour. By encouraging companies to shed light on the dangers of overwork, convincing business leaders to confess when they are unable to cope, and tackling the problem before it takes a toll, we can at least show we have learnt something from the past 150 years. •Andrew Hill is the FT’s management editor

Tuesday 18 June 2019

BUSINESS DAY

How business schools compete in a disrupted market Schools that can keep their courses fresh and relevant to the digital economy can survive and thrive Jonathan Moules, FT

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No longer is it dominated by classroom learning or executive retreats, but instead digital is to the fore with everything from microcredentials to digital badges to stackable certificates

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xecutive education is now seen as the biggest opportunity for many business schools. Yet technological change and the rising number of providers offering alternatives to traditional institutions have made it one of the most challenging and competitive sectors for providers in which to achieve growth. The expansion in the market for short programmes teaching practical skills in bite-sized courses is driven by the need for employees to retrain to be productive in a digital age. The international university consortium for executive education (Unicon), which represents more than 100 business schools offering this kind of teaching, suggests the total market is worth about $2bn and has grown by 20 per cent over the past five years. A survey by the Chartered Association of Business Schools of UK-based deans and senior managers in late 2018 found that executive education programmes were seen as second only to new online degree courses as a source of revenue growth over the next decade. Demand for executive education is also being helped by the switch in postgraduate education away from two-year MBA courses, covering a broad range of business subjects, to one-year business masters degrees that specialise in management or finance. “Speciality masters degree graduates need to top up their skills in management and leadership as they move up in their organisations,” says Tom Robinson, president of accreditation body the Association to Advance Collegiate Schools of Business. Many are likely to turn to executive education rather than another full-time masters, he adds. This gives these students the ability to reskill in specific emerging concepts, such as fintech and data analytics. The problem for the business school executive education teams is remaining fresh in an age when courses can be taught through apps on a smartphone or immersive role-playing exercises, rather than through classroombased seminars. “The potential market for business schools is vast, but the market for learning and development is evolving rapidly,” says Andrew Crisp, founder of education research company CarringtonCrisp. “No longer is it dominated by

classroom learning or executive retreats, but instead digital is to the fore with everything from microcredentials to digital badges to stackable certificates.” Burgundy School of Business in France currently runs only business degree programmes. But its vision for the future is a network of executive education courses focused exclusively on the wine industry, delivered from hubs in the main wine distribution locations around the world, satisfying demand for the specialist skills needed to succeed in a market growing by about 6 per cent a year, according to Stéphan Bourcieu, BSB’s dean. “We are a niche market, but it is global and expanding fast,” he says. How business schools respond will have a big impact on their future growth. The Wharton School in Pennsylvania is one of a handful of top schools worldwide, alongside Harvard Business School, Insead in France and Switzerland’s IMD, that generate more than $100m www.businessday.ng

of revenue a year from executive education. Mike Malefakis is associate vice-dean at Wharton Executive Education, and has been involved in the executive education market since 1992. He says the sector has changed “radically” in the past five years, in particular due to the introduction of online teaching models. However, he believes that business schools with strong brands such as Wharton have an opportunity to rise above the new competition in the same way that trusted media organisations have succeeded in an age of fake news. “The ‘netflixisation’ of executive education is going to happen,” he says, referring to the way the streaming-media company has challenged the dominance of traditional broadcasters. “But there is a difference between the deep learning we can provide and superficial learning.” Another way for business schools to fend off the competition from other executive educa-

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tion providers is to form partnerships with bodies that need to train senior officials. One example is the partnership established by Georgetown University’s McDonough School of Business in Washington DC and the US Financial Industry Regulatory Authority to run the Certified Regulatory and Compliance Professional programme. This is the first year Georgetown’s McDonough School has been involved, but the programme has been around for nearly 20 years and has an active network of 1,200 alumni. As it is the only such programme for compliance professionals, it attracts people from a range of roles, such as investment advisers, compliance professionals and industry regulators. Although it is focused on US market regulations at the state and federal level, it is also relevant for overseas regulators dealing with that jurisdiction, which in turn adds to the quality of the discussion and depth of knowledge shared in each session, according to the course organisers. The leading schools in the FT’s executive education rankings are hiring separate teams of teaching staff, called professors of practice. Rather than academic credentials, these individuals have practical experience of management. This makes them more valuable to executive education course participants, who want knowledge they can use the next day in the office, says David Asch, quality services director at the European Foundation for Management Development, the busi@Businessdayng

ness school accreditation body. “The academic doesn’t cut it for these courses,” he says. “The key is to make sure you continue to be relevant to the organisations you serve.” There is now a constant need for life-long learning at all levels in organisations, which increases the market for everyone, says Mireia Rius, associate dean for executive education at Spain’s Iese Business School. “Companies are changing thanks to technological disruption and longer working lives, which means that for the first time we can have four or five generations [Generation X, Generation Y etc] in the same organisation,” she says. “This all requires a new type of leadership and means today’s executives and firms need to develop different capabilities and skills.” The challenge for executive education providers is to ensure they are still meeting the needs of clients whose skills needs as well as demand for retraining are changing. “We are constantly researching, experimenting, testing, and working in partnership with our clients to see what works best,” says Rius, questioning the model of topping up knowledge from a business degree later with short courses. “The old idea of episodic learning — ‘I’ll do an MBA, then at a later date I’ll do an executive programme’ — is not realistic, nor optimal for many,” she says. “Instead, there is more need for constant, life-long learning for individuals and at all levels in an organisation.”

Tuesday 18 June 2019

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Why Nigerian universities must embrace grant evaluation system KELECHI EWUZIE

n order to participate more effectively in bids for funding, particularly from international donors, Nigerian universities in particular and African universities need to have effective institutional grant evaluation and accountability mechanisms. A study by Harris Andoh, postdoctoral research fellow at the Tshwane University of Technology in South Africa has revealed. The study which argues that institutional grant evaluation mechanisms are needed in African universities to track the impact of grants on research projects and educational programmes, to improve performance and ensure better value for money. According to the study entitled “Evaluating institutional grants at African universities, “It is now recognised that all countries in the world must significantly increase the funding allocated to their universities in order to enable them to contribute effectively to the implementation of the sustainable development goals at a national level, mainly, through creation of new knowledge via research,” Joshua Attach, the Coordinator of World Bank Projects in National Universities Commission (NUC) while speaking on the importance of funding research says management of the universities can’t keep talking about Research without it being responsible and take into account effects and potential impacts on the environment and society. It is on account of the research that universities engage in that makes them either a leading university or a following university. He urged Universities to work on Interdisciplinary Research and establish Research Data Bank to assess the quality of work done by

Lanre Fagbohun, vice chancellor, Lagos State University (LASU) sitting with Olumuyiwa Odusanya, director, directorate of Research Management and Innovation, LASU in a group photograph with facilitators and participants after a two- day research grant appreciation workshop in Lagos

so doing they can measure the impact of work carried out. Akintunde Adeola, a research fellow at the University of Lagos (UNILAG), Akoka, advised that universities must invest in knowledgebased research because it provides educational, cultural and intellectual enrichment which come with social benefits, development and progress. According to him, social development in the next 50 years, including improvements in living standards, rational utilisation of resources, preservation of ecological diversity and stability, among others, would depend largely on advancements in various academic disciplines, especially science.

NBCC partners Edufirst.Ng to host first EduTech conference in Nigeria

he Nigerian-British Chamber of Commerce (NBCC) in partnership with Edufirst.Ng is hosting the first EduTech Conference in Nigeria in

Lagos. Bunmi Afolabi, director general, NigerianBritish Chambers of Commerce, speaking on the partnership and programme scheduled for Thursday 20th June 2019 with the theme, “Education, Technology & Jobs; A Synergy that Works’ said it is part of the Chambers mandate to support the socio-economic development of Nigeria through developmental educational initiative such as the Edu-tech conference which is providing a platform for the government, relevant regulatory agencies and educational professionals to interact and share experiences on the best ways to forge ahead in revitalizing the Nigeria’s educational system. Afolabi said that, “Beyond the concerted efforts by the chambers in engaging critical platforms and relevant stakeholders in infusing the application of technology and innovation for educational transformation, the Chambers also appreciates the efforts by the Nigerian government in creating an enabling environment that has ensured that these engagements have played a critical role to the success of these endeavours. Edufirst.Ng is an Ed-tech company with visibility in 24 unity schools in the Edu-Tech subsector in Nigeria committed to improving teaching-learning experiences in schools leveraging technology, developing the capac-

ity for the emerging knowledge economy and providing cutting edge technology solutions for the global competitiveness of Nigerian children, youths and adults. “The 2019 African Edu-Tech Conference which has been endorsed by the Federal Ministry of Education would address the challenges faced by Generation Y & Z within the Nigerian educational system and ensure that they are prepared to be fully integrated into the world of work, compete with global standards on Nigerian soil and are relevant in future endeavors. This would cumulatively increase the economic value of the average Nigerian and the nation’s per capita income”, Afolabi concluded. Some key players represented from diverse sectors who will speak to this are: Sunny Echono, Permanent Secretary, Federal Ministry of Education; Abimbola Olashore, chairman, Board of Governors; Olashore International School; Niran Adetoro, director, Academic Planning and Quality Assurance and Research, Tai-Solarin University of Education, Ijebu, Ogun State; Lande Atere, Head, First Academy; First Bank; and Stephen Oluwatobi, Curator, Hebron Lab; Covenant University. Other speakers are Chantal Epie, Dean, School of Management and Social Sciences, Pan African University; Emeka Okoye, Semantic Architect & Consultant (Cymanticks); Kendra Nnachi, Startup and Developers Program Manager, Facebook Nigeria; and Yomi Adedeji – Co-founder, Softcom Limited.

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“The objectives of scientific research, theory and methodology of application are varied. No single discipline can solve these complicated problems. Thus, multi – disciplinary efforts are needed,” Adeola stated. According to him, it is the responsibility of the present generation to forecast the trend of development in science and other disciplines that will drive future generations in the right direction. On his part, David Ezendu, an education researcher, noted that research in any academic field entails a systematic investigation for capital development which has taken centre stage in Western universities. Ezendu precisely noted that the main cri-

terion by which “world-class universities” are ranked was not so much about the volume of teaching or student population, but through research output measured by findings published in award-winning journals and books. He, therefore, wondered why government was short-changing professors and research fellows in Nigeria in the area of funding, adding that with the state of affairs in the nation’s situation, the country stands little chance of getting high ratings in international circles. “Advancements in research work have made knowledge accumulation the most dominant form of today’s capitalist accumulation, responsible for launching the advanced countries to the top of the world,” he said.

Edo varsity gets ICAN nod to award certificate IDRIS UMAR MOMOH, Benin

do University, Iyahmo has received that approval from Institute of Chartered Accountants of Nigeria (ICAN) run ICAN awarding certificate programme. Immediate past president of ICAN, Razaq Jaiyeola was on hand to present the certificate of approval and other authorisation documents to the Vice Chancellor of the university, Emmanuel Aluyor. Jaiyeola said the approval was in recognition of the institution’s meeting all the requirements to run certificate courses in line with the mandate of the professional body. He said the programme is designed for the presentation of accreditation and recognition certificates to accredited tertiary institutions and recognised tuition centres in the country, having been found worthy and certified fit for the programmes. The former ICAN president, who congratulated the university for a well-deserved honour as well as making ICAN proud, added that certificates of accreditation have also been presented to 23 other universities, 14

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polytechnics, 3 colleges of education and 19 tuition centres. He however, charged the recipient institutions to continue to maintain high standard in their accounting programme. He opined that, holding of ICAN accredited certificate is a distinguished hallmark, and an endorsement of the institution’s capability to provide effective training for would-be chartered accountants. In his remark, the Vice Chancellor of the University, Emmanuel Aluyor thanked the leadership of ICAN institute for the certificate and recognition. Aluyor added that the university which was established few years ago had received awards such as the 3rd best universities in the country due to its new learning innovations. Also speaking, Chairman, Students Affairs Committee of ICAN, Hilda Ozor, commended the University and other awardee institutions for their steadfastness in keeping with the quality direction of the institute. She expressed confidence that the recognised institutions are capable of producing students that will be academically, morally and ethically worthy, in character and learning.

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Tuesday 18 June2019

BUSINESS DAY

EDUCATION Educationists urge Corona graduating students to embrace culture of excellence KELECHI EWUZIE

he 2019 graduating students of Corona Secondary School, Agbara, Ogun State have been admonished to uphold the spirit of excellence in all they do, as they advance in their academic pursuit across the world. Peter Bankole, guest speaker and chairman, Board of Trustees, Supreme Education Foundation stated that excellence is not something that happens, rather it is something you plan for, and you do in a very meticulous way, adding that when you do it consistently, it then becomes a culture. Speaking at the 2019 graduation and valedictory service of the school with the theme titled, “Excelencia Como Cultura (Excellence As A Culture), Bankole advised the students to remain focused stressing that once excellence becomes a culture for them, it is very difficult for them to see mediocre and associate with it. According to him, “To achieve culture of excellence is a commitment much more than something else. And I can

L-R: Adeyoyin Adesina, chief executive officer, Corona Schools’ Trust Council; Shalom Emeka, 2019 Valedictorian; Niyi Yusuf, chairman, Corona Secondary School Board, and Chinedum Oluwadamilola, Principal, Corona Secondary School, Agbara, during 2019 Graduation and Valedictory Service of the school.

only admonish you to keep the excellent flag flying as you depart from here today into the rest of your bright futures”. Chinedum Oluwadamilola, Principal of the School in her welcome address at the event said the 2019 graduating Class have demonstrated a propensity to succeed on the biggest of stages. Be it in the classroom, on the competition surface or in the community,

they have displayed their talents, passions, skills, accomplishments and achievements. According to her, “They produced outstanding results in the Cambridge International General Certificate of Secondary Education (IGCSE), with two of them; Anna Adobamen and Shalom Emeka, obtaining A-Stars in all the subjects they had registered for. Also worth savouring is

their imposing Standardised Aptitude Test (SAT) results. Worthy of note over again is the fact that two of the students in The Class of 2019 got 2nd best SAT result in the world and best in the country, scoring 1550 out of 1600”. Oluwadamilola observes that the Class of 2019 are indeed trail blazers, adding that they have exhibited a commitment to the values and culture

upon which everything in Corona school is predicated. “They have led by example and worked incredibly hard to foster, nurture, support, display, and instill the tenets of a positive, safe, and proud school culture and climate. We will be forever grateful for the indelible mark you have left on our learning community, on our hearts, and on me, personally”, she said. Speaking on the theme of the day, the principal opines that culture of excellence lies at the very heart of Corona Secondary School essence. In her words, “Excellence is an indispensable one of a number of core values that provide strong anchorage to the school’s avowed mission and vision. For us, excellence is a culture, our way of life in CSS. We all lead this very life happily, cashing into emergent trends”. “The understanding that excellence is transient harps for us, we therefore, consistently make an onward thrust to the better than the now’s best. We believe that best is improvable. It is this attitude that keeps Corona Secondary School on the top ladder in the

WARIF empowers young girls Human interaction and team building towards attaining success, Rosa Parks who was more with vocational skills working with people is one of subdued and quiet, yet made ANTHONIA OBOKOH

s part of its drive to equip young girls faced with challenges of maintaining a school education with additional skill sets necessary to become empowered and financially independent, Women at Risk International Foundation (WARIF) has trained over 120 Secondary School students on various vocational skills in the first edition of its WARIF Student Empowerment Programme. The training, sponsored by United States Agency for International Development USAID brought together experts in Makeup, Shoe Making, Fascinator Craft, Jewelry, Baking and Soap Making to teach students on how to learn and become experts in such skills, so as to generate an income for themselves. Speaking on the relevance of the training, Kemi Da Silva Ibru, Founder of WARIF said the vocational skills training is one of the key ways of tackling the issue of financial independence of sexual abuse survivors. Ibru said the programme serves to empower young girls and women and to address

the issue of the financial gap that exists with women who are in abusive relationships and situations but may not have a vocational skills set and are forced to remain and make poor choices due to this financial constraint. This initiative by WARIF further enforces the organisation’s commitment to reducing the prevalence of sexual abuse following a sizable record of survivors whose perpetrators are well known and trusted individuals, most of whom survivors are financially dependent upon. In addition to the skills acquisition programme organized by WARIF, the organisation also operates a Sexual Assault Referral Centre, a safe and secure facility, where all can walk in and where trained staff are available to provide support to survivors through free medical care, legal aid, psycho-social counselling and social welfare with the sole purpose of helping survivors overcome and heal from these traumatic events and ultimately live an independent life free from trauma. WARIF since its establishment has collaborated with governmental and non-governmental organisations to provide added services to survivors.

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OYIN EGBEYEMI

eadership and teamwork are nearly inevitable in all aspects of our lives. Therefore it is imperative that we do our best to ensure that we get it right. Having had the experience of working in various teams, I am continuously learning more about their dynamics. This is something that people could very easily take for granted in the work environment, as well as other settings such as social clubs, religious gatherings and even within the household. There are numerous books and guides about working in a team, especially for structured environments where roles are clearly defined. While acquiring specific technical skills in these environments is very important

the greatest challenges of mankind. There may be a plethora of literature on human psychology, but these still attempt to box people up into textbook personalities. While this helps us to understand one another a little better, it does not provide the solution to how we should behave around each other when working in teams to yield the best results. After all, we are human beings and are far from perfect. So how do we figure out this challenge of working effectively with each other? There is no text or research material that would give us the solution to that. Experience helps, but self-awareness also goes a long way. Self-awareness goes beyond just knowing oneself and identifying ones strengths and weaknesses. It has more to do with what we do about them, and how our actions affect the people around us. If we take a look at the world today, we would observe that there are various leaders who have different personalities, but were able to make a mark in history based on where their interests and skills lie. Some leaders such as Martin Luther King had the gift of a charismatic personality compared to other civil rights movement leaders such as

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a mark in history by saying one word, “No”. This goes to show that there is not one stereotype of whom a leader should be or what her or his attributes are. We all have our very own gifts, strengths and weaknesses. So how does this now translate to teamwork? Did you know that Rosa Parks and Martin Luther King worked together, despite their different personalities? What held them together was one shared vision that drove them both. If a team does not have a shared vision or complete buy in from all its members, then the leader and its members have failed. They may never reach a coherent conclusion, may end up just being busy being busy and may not get along (whether or not they actually even liked each other in the first place). This brings me to an interesting analogy that comes up occasionally when people talk about teamwork: There were four colleagues named Everybody, Somebody, Anybody and Nobody. These colleagues had a very important task to carry out, and everybody was asked to do it. However, everybody was sure that somebody would do it. Anybody could have done it, but nobody did it. Somebody became upset about that, be@Businessdayng

educational world,” she said. On her part, Shalom Emeka, Valedictorian of the set who plans to study Product Design Engineering in United Kingdom said during her six years journey through the school, she confronted several challenges, but with the help from the school structure, she triumphed at the end of the day. “In a lot of ways, CSS has impacted my life; the school has been such a lovely community with a very supportive non-teaching staffs and teaching staffs all to ensure our success. For me, it is the best school in Africa if not the world,” she said. The high point of the occasion was the presentation of various categories of awards and endowments to some outstanding students of the 2019 graduands by the school and other professional bodies. Special Awards and Endowments in various subjects were presented to Shalom Emeka; Chizoma Duru; Memunat Abiru and Anna Adobamen with Chizoma Duru bagging most of the special awards categories, winning four out of possible eight.

cause really it was Everybody’s job. Everybody thought that anybody could do it but nobody realised that everybody wouldn’t do it. It ended up that everybody blamed somebody when nobody did what anybody could have done. As a leader, it is important to set direction, communicate with your team, listen attentively, correct mistakes, encourage participation, and identify all members’ strong points so that the vision and objectives of the work are executed in unison, thereby making all members have that sense of achievement when the task is completed. This is, however, easier said than done. As leaders and team members, we have to be mindful of the effects of our words and actions on other people and adjust our behaviour to suit theirs. We cannot expect everyone to think in the same way as we do or do things the way we would. We are not the same, and neither are we mind readers. This takes a lot of patience and emotional intelligence….A positive attitude goes a long way as well. There is no one way of getting it right when it comes to interacting with each other in teams or even in general. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Tuesday 18 June 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE OIL

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POWER

Eland Oil & Gas commence plans to drill five wells on OML 40 in June DIPO OLADEHINDE

land Oil & Gas, Nigeria focused upstream oil and natural gas exploration company and its partner state-owned Nigerian Petroleum Development Company (NPDC) are set to start a five-well drilling campaign this month in OML 40 onshore the Niger Delta. In this month of June, Eland Oil & Gas and its joint venture partner (NPDC) are planning to drill five wells on its OML 40 assets, a development which could lead to gross output of about 45,000 bpd. “We are planning to drill five wells this year, with a rig going to spud two development wells on Gbetiokun beginning in June and a further two wells in Opuama,” Eland’s CEO George Maxwell said in an intelligence report. According to Eland’s CEO, production from this asset, which borders the Gulf of Guinea and flows to Shell’s Forcados terminal, is currently running at about 26,000 barrels per day all from the Opuama field. However, by the end of this drilling campaign, Maxwell said gross output could hit about 45,000 bpd as Gbetiokun field is set to be

exploited by an early production facility with a capacity of up to 25,000 bpd. “In addition, an exploration well is due to be drilled on the Amobe prospect, which could house about 78 million barrels of recoverable oil,” Maxwell said. Eland Oil & Gas, an Alternative Investment Market (AIM) listed oil and gas firm describes Amobe as “a large, clearly-defined structure comparable to Opuama in terms

of structural style and areal extent.” Eland’s other asset is the Ubima licence in northern Rivers State where an extended production test on the Ubima-1 discovery well is due to start “at the end of June,” said Maxwell. Through its joint venture company Elcrest, Eland’s core asset is a 45percent interest in OML 40 which is in the Northwest Niger Delta and a 40 per cent interest in the Ubima Field, onshore Niger Delta, in the

northern part of Rivers State. The OML 40 license holds gross 2P reserves of 82.2 million barrels, gross 2C contingent resources of 50.7 million barrels and a best estimate of 252.1 million barrels of gross un-risked prospective resource while the Ubima field holds gross 2P reserves of 9.3 million barrels of oil and gross 2C resource estimates of 4.2 million barrels. Recall in March this year, a re-

port from Netherland Sewell& Associates revealed following 2018’s oil production of 6.5 million barrels of oil, Eland Oil & Gas had recorded an 8 per cent upgrade to the value of its reserves at OML 40 higher than previous estimates as the license holds proven reserves of 42.9 million barrels. Also, Eland Oil & Gas announced that following a redetermination, the borrowing base amount had increased from $103 million to $134 million and an initial accordion increase of $50 million is being underwritten by The Standard Bank of South Africa Limited and Stanbic IBTC Bank PLC, resulting in the commitments under the facility increasing from $75 million to $125 million. Of the commitments, $50 million is currently drawn. Eland Oil & Gas completed the acquisition of a 45percent equity stake in OML 40 in September 2012 and has been producing oil from the Opuama field since 2014. The Gbetiokun field, which was discovered in 1987 and further appraised in early 1990s, has never been developed, however, Eland had been progressing this field development with a 2018 re-entry into the discovery well for data gathering and a new appraisal well.

Explainer: What is cost reflective electricity pricing and how does everyone benefit? (1) STEPHEN ONYEKWELU

n the last six years, Nigerians have embarked on a quest to make electricity consumption and supply more efficient through privatisation, based on the belief that private sector actors working with market forces of demand and supply would help rectify the ailments in the sector. However, the privatisation process has been slow to produce the desired outcomes in terms of attracting fresh investments across the sector’s value chain of generation, transmission and distribution of electricity. Lack of fresh investments into the sector have brought some electricity distribution companies (Discos) to the edge of bankruptcy and caused investment shortfalls of close to N1.4 trillion. These investment gaps account for the fact that Nigerians do not enjoy the benefits of steady electricity supply. A major function of the Nigerian Electricity Regulatory Commission (NERC) as contained in section 32(d) of the Electricity Power Sector Reform (EPSR) Act, 2005 is to ensure that the prices charged by licensees are fair to

customers and sufficient to allow the licensees to finance their activities and to allow for reasonable earnings for efficient operation. To make the sector self-sustaining without bailouts from the government, cost-reflective electricity pricing has been called for. But what is cost reflective electricity pricing and how will it benefit everyone? Cost reflective electricity pricing requires Discos to introduce tariffs that more strongly reflect their underlying costs. Good tariffs should be efficient, equitable, provide stable bills for consumers and revenue for businesses, and be acceptable to customers. There are several types of cost-reflective tariffs, and each fulfills these criteria www.businessday.ng

to a greater or lesser extent. An average retail electricity price today is N32 per kilowatt hour, for a product that has an average retail price of N80 per kilowatt hour on a cost reflective basis. This includes the debates around gas pricing too, which has been described as uncompetitive. The power generator gives invoices to the bulk trader at an exchange rate of N360/$, the distribution companies are made to charge the customer using an exchange rate of N199/$ because the Multi-Year Tariff Order (MYTO) designed to review tariffs (in light inflation, exchange rate, interest rates, and generation capacity) has missed six reviews. Power generation compa-

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nies bear the biggest pain in this warped pricing system. Egbin Power, Nigeria’s biggest generation company is owed over N160 billion. Other electricity generation companies (Gencos) complain of large debts because invoices are not fully settled by the Nigerian Bulk Electricity Trading Company which can only pay about 30 percent of invoice. The Transmission Company of Nigeria recently said it gets paid only 25 percent of its market invoice. The whole electricity value chain is caught in a web of consequences flowing from the absence of a cost reflective pricing of electricity. Nigeria is not alone in wanting to make its electricity supply industry more compliant with market forces of demand and supply and the use of pricing mechanism to efficiently allocate resources in the sector. In 2014 the Council of Australian Governments’ Energy Council saw tariff reform as the essential next step in the process of providing better price signals to consumers. The Australian Energy Market Commission (AEMC) Approach Paper on the Electricity Network Regulatory Framework Review noted that cost-reflective network tariffs can result in significant @Businessdayng

savings for consumers and creates an essential foundation for future reforms. Electricity networks cost a lot to build but little to use. Erecting power poles and stringing wires is expensive, and a network needs a control centre and field crews to operate and maintain it in safe working condition. Sending electrons (electricity) along the wires doesn’t produce much wear or tear, and so is comparatively cheap; once a network has been built, whether it’s used to 10 percent capacity or 90 percent capacity does not greatly change its costs. Prices significantly below marginal cost of production encourage excessive or “wasteful” consumption, and cost society more than the benefit for which people are prepared to pay. Conversely prices significantly above marginal cost reduce overall value within the economy by causing consumers to forego the enjoyment or benefit that additional consumption would have provided, at the same time only reducing costs (of production) by a smaller amount. In either case, poor tariffs can result in poor investment decisions and significant misallocation of resources.

Tuesday 18 June 2019

BUSINESS DAY

ENERGY INTELLIGENCE Feature

Marginal fields, major headaches Since 2003, Nigeria has awarded 30 marginal fields to local operators but production figures were recorded from only 13 fields by the regulator. ISAAC ANYAOGU highlights the intrigues behind the failed attempts to bring these fields to production and why operating in Nigeria’s upstream space presents a peculiar challenge

he lush greenery stretches miles away before giving way to what looks like water hydrants in the middle of a patch of black earth. On coming closer, it assumes the character of an abandoned industrial yard with gutted pipes, aluminum sheets, iron rods and cans of black liquids. Measuring roughly 20 square kilometers, the Oza marginal field is located onshore OML 11 in present day Abia State, in Southeastern Nigeria. Marginal fields are those that may not produce enough net income to make it worth developing at a given time and therefore abandoned the by International Oil Companies (IOCs). In February 2003, Oza field was awarded to Millennium Oil & Gas Company Limited after a licensing round as the designated operator with 100% participating interest. The Department of Petroleum Resources (DPR), Nigeria’s oil sector regulator handed the asset to the company in 2004. The field had four wells drilled between 1959 and 1964 and a rudimentary production facility to evacuate oil through Shell’s trunk lines to Bonny export facility. At the time, the company said in its field development plan it will take the field to production in three stages. In the first phase, it will re-enter wells 2, and 4, lay a pipeline, install an Early Production Facility (EPF) and hook up the EPF to a neighbouring flow station through a pipeline to enable crude oil production. The second phase, will involve the work over of well 1 and data gathering and studies to optimize selection of up to six additional well locations to fully appraise the Oza concession. Phase III will involve the drilling of additional wells and the installation of additional pipelines. Fifteen years later, the promoters of Oza field have secured licenses and permits, tested the well, acquired seismic reading, ran civil works including building some pipelines and drilled 400 barrels each day in 2016. By the end of 2017, they had run out of steam, suggests the 2016 DPR report. According to the report, no production from the field was recorded in 2018. This is a far cry from an early ambitious plan to drill over 18,000 barrels per day from all four wells including an additional two. But however bad it looks, Oza marginal field is one of the fortunate ones that reached production, no matter how insignificant. Of the 30 fields awarded so far since 2001 when Nigeria began a licensing programme for abandoned fields, just over half has managed to reach first oil. “The government in awarding these marginal fields to indigenous operators hoped to increase oil production by about 1 billion barrels,” Chuks Nwani, an energy lawyer said. One of these 18 fields is the Atala-1 well. First dug in 1982 and lying in OML 46, Atala-1 Well is leased to the SPDC/Agip/Elf/NNPC partnership. The field is located on the Dodo River; northwestern Bayelsa State covering 34 km2.

It was awarded in 2003 to the Bayelsa Oil & Gas Company Ltd, owned by the Bayelsa state government with Hardy Oil and Gas and Century Energy, two local oil companies as technical partners. Hydrocarbons were encountered and the well was cased, that is set a tube inside the drilled well to protect and support the well stream, but it was not tested or completed. The agreement sets an initial five-year period from 27 April 2004, subject to an extension. Two years later, Bayelsa Oil & Gas Company entered into a farm-in agreement with Century Energy and Hardy Oil giving them 35 percent and 20 percent participating interest respectively. Things went downhill when the governor, Diepreye Alamieyeseigha who acquired the field in 2003 left office without significant work done as the project was not funded. It took over 14 months of engagement with the government, first with Goodluck Jonathan and Timipre Sylva before Century Energy returned. In 2014, the company pumped 2,500 bpd in the Atala-1 well and was considering drilling another field but could not proceed due to funding challenges. “There are moves to revive the field but due to lack of funds, this could not happen,” said one company official leading site preparatory work, who requested not to be named since he has no authorization to speak on

the matter. “For now, nothing is being done but I know it will come back to production.” Beyond the government’s inability re-starting the field, it is not clear if there are even substantial finds in the field. A survey done in 2014 by oil sector experts found that the Gas Oil Ratio (GOR) in some of the marginal fields including Atala field were very low. “Some of the fields are truly marginal; they are quite small it may not be as easy to develop them on their own unless they are part of a cluster. It means people have to collaborate more but in Nigeria we haven’t proven to be so good at working together,” said Lekan Akinyanmi, the CEO of Lekoil, who has ramped production of his Otakikpo marginal field to 6,000 barrels per day. The challenge for these fields now is that many are up for renewal when those who acquired them have not even cut overgrown grasses from the fields. Several attempts to speak to the owners of these fields were unsuccessful. Officials who would not speak on record cite, lack of finance and difficult operating environment as key challenges. High hopes According to the DPR guidelines, the core objectives of Nigeria’s marginal field programme is to grow production and capacity of local producers, diversify resources and investment flow. It was also meant to promote

Marginal fields contributes little to Nigeria’s national production. Source DPR www.businessday.ng

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technology transfer, common usage of assets to ensure optimum use of available capacities. As lofty as these objectives were, analysts say the DPR did little to drive compliance from those it granted marginal field licenses. “There are obligations for these companies to fulfill their work programme, there are obligations on

and then we re-entered those wells and built everything from scratch. For evacuation, we built a 6-kilometer pipeline that went underwater so that there is a point where you connect and the shuttle tanker takes it to floating production storage, (FPSO),” said Akinyanmi. To achieve this feat, Lekoil said it collaborated, took the company public, and installed corporate governance structure thereby increasing its chances of securing funding. But collaboration has also been difficult with some local operators. “For many folks that have been awarded these fields, you see a mismatch between expectation and reality,” Akinyanmi said. This has negatively impacted the sector. Bank Anthony Okoroafor, chairman of Petroleum Technology Association of Nigeria (PETAN) at a marginal field conference in Lagos last year said local content in the oil and gas sector is around 28 percent, almost 19 years after the first marginal field was awarded. Okoroafor said that for the oil and gas industry which spends $30billion annually, only $5billion is retained in-country while the rest is used to acquire talent and resources from outside Nigeria means much work needs to be done. Lenders too are wary of lending local producers as debts to oil and gas companies constitute the high-

Oil and Gas sector constitutes biggest NPLs of United Bank for Africa (UBA). Source UBA

how much they should spend, there are even obligations they have to the owners of these fields, but they fail to carry them out and the DPR did nothing about it,” said Ayodele Oni, a Lagos-based partner at Bloomfield Law firm. “The DPR can revoke these licenses but it has failed to do so.” Paul Osu, spokesman for DPR did not respond to a request for the organization’s reaction. However, in a sea of failed marginal field projects, Lekoil is an outlier. Since acquiring the Otakikpo field in 2003, the company has raised production to 6,000 barrels per day and is now planning to take production to 20,000 bpd. “We built the infrastructure from scratch, so a lot of companies who bought assets from an IOC already have the infrastructure there but this place was just swamp, we first started doing civil works, we had to sand fill the entire place, we worked with the communities, sorted everybody out @Businessdayng

est Non-Performing Loans (NPLs) of Nigerian banks. The policy environment has not also been favourable. The Federal Government proposed new royalties and taxes in the fiscal aspect of the Petroleum Industry Bill which could cut royalties local producers pay by 30% but the bill is yet to be passed. Many operators are now playing a waiting game. “At the time they got the fields, oil price was high and they relied on it to bid for the fields, but since then the numbers have dropped significantly. Some who were circumspect, discounted it heavily and even when not breaking even, they are not making losses and they are able to service their loans,” said Nwani. Marginal field operators like Oza are getting bullish about restarting their fields. The company is searching for partners and willing to offer stakes as oil prices recover. Nwani said other operators are partnering with service companies, “one way or the other it is starting to work out.”

Tuesday 18 June 2019

BUSINESS DAY

BDTECH

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E-mail: jumoke.akiyode@businessdayonline.com

‘Artificial intelligence is the future, data is the new oil’ Stories by Jumoke Akiyode Lawanson

ayo Adekanmbi, the chief transformation officer, has reiterated that the days when oil was the dominant global economic trading commodity is coming to an end, postulating instead that data is the new oil. “We need to start seeing data as a productivity catalyst, because data can save lives. Data is the new oil, therefore, the data economy must be powered by data governance. The whole conversation around data economy is the fact that the things that appear seemingly difficult can be made simpler through the application of data,” he said while speaking at a forum organised by the Nigerian Bar Association Section on Business Law to examine the legal issues and challenges in the Nigerian Information Technology and Communications industry in the age of globalisation. Adekanbi who is a seasoned expert in Data Science, Advanced Analytics, Business Transformation, Marketing and Strategy with 19 years

of cognate industry experience from Africa’s two largest economies (Nigeria and South Africa), and is also the convener of Data Science Nigeria, which has a vision to build an Arti-

ficial Intelligence-first society where Artificial Intelligence is effectively deployed to solve local problems, said the world is moving to an industrial revolution phase where “data is

becoming the driver of economy, in the sense that data is now the new money.” The forum which held in Lagos on Tuesday 11, June, was made up of five

sessions, with the fifth being a panel discussion on the challenges and solutions of emerging technologies and services regulation in Nigeria. Painting a graphic picture of the role that the use of data in Artificial Intelligence now plays in our daily lives, ranging from fighting cybercrime to education, shopping and even down to routine things like body grooming, Adekanmbi said, “the future is here”. “Essentially, the whole idea of data being the new money is the fact that if all the various data that sits in certain conglomerates exclusively, become more available to everyday people, they can better plan, deliver services more efficiently and in doing that add more value. So if we liberalise data to catalyse productivity, it will drive up consumption,” Adekanmbi said. Recently, in recognising this pivotal role of data in artificial intelligence, the MTN Group launched the first artificial intelligence powered mobile money payments system in Africa to allow customers get information, engage with the services and make payments through social media platforms like WhatsApp and Facebook Messenger.

Investors seek to fund 10,000 game changing EdTech ideas in Africa

eep pocket investors are beginning to realize huge potentials of untapped opportunities in high yielding technology which is very beneficial to various economic sectors including education. As a result, business angel networks, venture capitals, crowd funding structures are becoming more popular, as they create an avenue for entrepreneurs and startups to connect and collaborate with investors who can fund their innovative business ideas. Investor Magnet, one of Africa’s transformative educational technology company, recently launched its flagship educational platform that seeks to

connect 10, 000 African entrepreneurs with investors. “We are looking for the best of the best ideas that will solve whatever educational problem people face across the continent. The Investor Magnet has an extensive list of investors and we want to use this network to solve one of Africa’s biggest problems which has a direct impact to how sustainably our economies grow,” says Sean Drake, founder, Investor Magnate. Drake who is a Ghanaian awardwinning entrepreneur and Forbes Africa under 30 alumni noted that entrepreneurs, who are looking to start their own EdTech businesses, or already have one but need in-

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vestment opportunities, should visit the IM website to complete a short questionnaire. “Once we hear about these game changing ideas and projects, we will then connect these entrepreneurs with the right investors who will not only finance the startup but will also mentor and guide them along the way to make sure projects are financially and socially impactful. We already have high net worth individuals who are already eager to invest into creative and out of the box ideas.” He said. Quoting a report, Drake noted that 375 million young Africans will enter the job market by 2030, saying, “The problem is, there are no

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jobs; the African educational system is outdated, irrelevant, and broken. The educational system relies on teaching book-based, academic concepts, rather than the real-life skills needed to create the jobs and companies of Africa’s future. That’s where Investor Magnet comes in.’’ He adds: “Inside of a simple question – ‘What If my “failures” in education, entrepreneurship and investing could somehow be the very tools required to reinvent and reimagine an African education system that works for all? What would that look like? And what Impact would it make on the lives of young Africans?’ This is how it came about, and this is the question that keeps my team and I

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empowered and inspired.” According to the company, funding for these 10 000 game changing ideas is targeted and depends on the project and its founders. Funding could be made available in as short as three months and as long as a year. Start-up entrepreneurs who have a game changing educational ideas/projects are urged to submit their proposals on www.investormagnet.io. “The great thing about this platform is that this is only the beginning. Access to trusted and relevant markets and transformative technology allows entrepreneurs to further scale their socio-economic impact,” Drake concluded.

Tuesday 18 June 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

IBM expands quantum computing program to Africa …Nigerian, Kenyan, South African, Rwandan scholars to benefit Stories by JUMOKE AKIYODE-LAWANSON

n a bid to accelerate quantum research and drive educational opportunities in quantum computing in Africa, global technology company, IBM, has collaborated with the University of the Witwatersrand (Wits University) in South Africa to drive expansion of its quantum computing program in the continent. Quantum computing is the area of study focused on developing computer technology based on the principles of quantum theory, which explains the nature and behavior of energy and matter on the quantum (atomic and subatomic) level. Wits University is the first African partner on the IBM Q Network and will be the gateway for academics across South Africa and to the 15 universities who are part of the African Research Universities Alliance (ARUA). “This is the latest outcome of the joint partnership between IBM Research and Wits, which started in 2016 when IBM opened its second lab in Africa in Wits University’s Tshimologong Digital Innovation Precinct in Johannesburg. To expand the IBM

L R: Ephraim Nwokonneya; director, research and development, Nigerian Communications commission (NCC), Funlola Akiode; director, licence and authorisation, NCC, Umar Garba Danbatta; executive vice chairman NCC, Philip Oguntunde; deputy vice chancellor, development, Federal University Technology, Akure, Maryam Bayi; director, human capital administration, NCC, Efosa Idehen; director, compliance monitoring and enforcement, NCC, Muhammed Bashir Mu’azu; chairman, inter-agency committee, during the presentation of award letters to academics with successful proposals for the NCC 2018 research grant on Tuesday, 11 June, 2019 at the NCC headquarters Abuja.

Q Network to include Wits will drive innovation in frontier-technologies and benefit African-based researchers, academics and students who now have access to decades of quantum computing capabilities at the click of a button,” said Zeblon Vilakazi, deputy vice-chancellor: research and postgraduate affairs, Wits University. Quantum computing promises to be able to solve certain problems – such as chemical simulations and types of optimisation – that will forever be beyond the

practical reach of classical machines. IBM first made quantum computers available to the public in May 2016 through its IBM Q Experience quantum cloud service and has doubled the power of its quantum computers annually since 2017. IBM established the IBM Q Network, a community of Fortune 500 companies, startups, academic institutions and research labs working with IBM to advance quantum computing and explore practical applications for business and science.

NCC to launch emergency communication centres across Nigeria ...Centres already operational in 14 states

n line with global practices, the Nigerian Communications Commission (NCC), says it has concluded plans to launch a number of Emergency Communications Centres (ECC) across the country. According to the telecommunications regulator, this is part of its mandate to “promote and enhance public safety through the use of a particular number which shall be designated as the universal safety and emergency assistance number for telephone services generally.” The centres will be launched in various states of the federation and the Federal Capital Territory (FCT). In this regard, Nigerians can now access help from any Response Agency such as the Police, Federal Road Safety Corps (FRSC), Nigeria Security and Civil Defence Corps (NSCDC), Fire and Ambulance Services by simply dialing a toll free number 112 from any network.

The Federal Executive Council (FEC), approved the establishment of the National Emergency Communications Agency (NECA) to set up an Emergency Communications System for Nigeria. Members were drawn from the Ministry of Communication, NCC, Telecom Network Operators, Security Agencies, National Emergency Management Agency (NEMA), and other relevant agencies for the adoption of a three-digit emergency number, 112. In the absence of an Act for NECA, the FEC approved that NCC should push for the establishment of one model Emergency Communications Centre in each of the states in the federation and the FCT. Each state was requested to allocate a suitable piece of land, as its counterpart contribution for the establishment of the emergency communications centre in the state, while NCC was to build, equip and operate the centres for some years before handing over to the www.businessday.ng

states. NCC says it has taken practical steps ever since to ensure that the Centres are established in various parts of the country. “These Centres are specially designed to answer all 112 emergency calls and to direct each call to the appropriate response agency closest to the caller, thereby serving as a communication link between public response agencies and members of the public,” the commission said in a statement. The 112 number is a tollfree line and can be called from any network. This three-digit number will help to provide timely information to relevant agencies for the prevention of crime, rescue distressed persons, mitigate and possibly prevent disasters. Some of the states with operational Emergency Communications Centres are: Anambra, Akwa-Ibom, Benue, Edo, Enugu, FCT, Imo, Kaduna, Kano, Katsina, Ondo, Ogun, Oyo and Plateau.

The company says that researchers at Wits will investigate the use of quantum computing and machine learning in the fields of cosmology and molecular biology with a specific focus on HIV drug discovery. The teams will also jointly study quantum teleportation, a field pioneered by IBM Fellow Charles Bennett. “For Africa to remain competitive for the coming decades we must get the next generation of students quantum ready,” said Solomon Assefa, vice president, emerging market solutions and direc-

tor, IBM research - Africa. As part of the partnership between IBM and Wits, scholars from sixteen ARUA universities including: Addis Ababa University; University of Ghana; University of Nairobi; University of Lagos; University of Ibadan; Obafemi Awolowo University lle-Ife; University of Rwanda; University Cheikh Anta Diop; University of Cape Town; University of KwaZulu Natal; University of Pretoria; Rhodes University; University of Stellenbosch; University of the Witwatersrand; University of Dar es Salaam and Makerere University, will have the opportunity to apply for access to IBM Q’s most-advanced quantum computing systems and software for teaching quantum information science and exploring early applications. To gain access to the IBM Q quantum cloud service, ARUA scholars will be required to submit quality research proposals to a scientific committee of Wits and IBM experts for approval. “Having access to IBM Q is pivotal for Wits University’s cross-disciplinary research program and allows our researchers in quantum computing, artificial intelligence, and in the broad natural sci-

ences, including in laser technology, quantum optics and molecular design, to leverage the next level of discovery research. It’s envisioned that the first results from this collaboration will be forthcoming in the next two years,” said Vilakazi. IBM’s recently unveiled IBM Q System One, is the world’s first integrated universal approximate quantum computing system designed for scientific and commercial use. IBM’s most advanced universal quantum computing systems available through the IBM Q Experience platform. More than 10 million experiments have run on the IBM Q Experience and users have published over 160 third-party research papers. Also, developers can work with Qiskit, a full-stack, opensource quantum software development kit, to create and run quantum computing programs. To further increase skills development, IBM Q is hosting an invite-only Qiskit Camp in South Africa this December for 200 quantum researchers and computer scientists where they will learn in an immersive environment and receive handson training.

Unilever commences product sales on Jumia

nilever, popular fast moving consumer goods manufacturer, has joined the ranks of multinationals leveraging the huge potential of ecommerce to create more visibility for their brands in Nigeria. Unilever has officially launched its ‘Everyday Essentials Store’ on Jumia, Nigeria’s leading online shopping destination. The online store houses some of the company’s fast selling brands, such as Closeup Red Hot and Herbal lines, Knorr, Lifebuoy, Lux, Pepsodent, Sunlight, Vaseline, and Shea Moisture. In a joint media statement released by the two

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companies, Steve Dakayi, the head of key accounts and brand management at Jumia Nigeria, described the development as a strategic opportunity for Jumia to increase the number of unique products listed on its platform, thereby expanding customers’ access to a wide variety of household products. “We are pleased to partner with Jumia to make our products available to our customers and consumers by leveraging on technology through e-commerce channels. This is in line with our commitment to continuously seek innovative ways to make our products available and accessible to shoppers. Our

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message to consumers is that we will continue to live up to the commitment of making sustainable living commonplace through our brands and operations. Apart from our relaunched Lifebuoy soap, newly launched Pepsodent sensitive expert range and Shea Moisture, we have exciting new products planned for the year. Our shoppers on Jumia will be duly informed as we launch,” said Iqbal Farrukh, modern trade director, Unilever. During the official flag off of the store, Unilever also launched the company’s newly acquired Shea Moisture line of personal care products on Jumia’s platform, which until now was 100 percent sold offline. On the first day of the launch, Unilever offered customers 10 percent discount specifically on Shea Moisture product lines, such as Shea Butter Retention Shampoo, beard Balm, Chamomile, Argan Baby Oil, Shea Butter Deep Treatment, and others.

Tuesday 18 June 2019

BUSINESS DAY

property&lifestyle Professional Practice

Estate agents new tick with online pictures deepens challenges in finding apartments Endurance Okafor

ue to the high cost of acquiring properties in Nigerian cities, many have resulted to renting apartments, but getting suitable accommodation has now become more difficult than building one. This is because the fresh tricks by estate agents who post nice pictures of available apartments for rent online without actually having them. Checks by BusinessDay revealed that, most of the time, the pictures posted online by real estate agents are either from the previous apartments they helped a client to rent or it was copied from their colleagues’ gallery. For many, this act by these agents has made it almost impossible to have easy access to accommodation in a country where there is more than 17 million housing units deficit. Mathew Adebowale, a young man squatting with his friend in Lagos, knew that finding an apartment to rent in Nigeria’s commercial centre would be difficult, and so he resorted to searching for a studio apartment online. But he wasn’t prepared for what came next. “After I saw nice studio apartments online, I contacted two of the agents and I was asked to come to their offices. I went there and I was told I had to register before I could go to

check out the apartments,” Adebowale said. He told BusinessDay that he paid the registration fee as he was in urgent need of the apartment. “My friend’s family was already complaining of my continued stay with them because the apartment where seven of us were staying was a studio apartment like the one I was searching for,” he said. The 24-year-old has been living with his friend and his family since 2015 when he left Ogun State for Lagos in search for a white collar job. When Adebowale was taken to view six different apartments, none of them was anything close to the pictures put up online by the real estate agents. “When I asked for half the entire amount I spent in transporting the agents to the various locations and for registering to view the apartments, since they did not meet my expectations, I was told I was not serious,” Adebowale lamented. According to him, he had such encounter for five months until he eventually got an apartment through a friend of his. Checks by BusinessDay revealed that Adebowale was not the only victim of such circumstance. Joel from Abuja, Ada from Port Harcourt and Nwakego in Enugu said they have had similar experiences. This was affirmed when BusinessDay reached out to a real estate agent in Akoka,

the busy area where the University of Lagos is situated. The agent who is fondly referred to as ‘Baba small rent’ had this to say: “them go pay first before I carry them go show them any house, whether them like the house or not, I must collect my money first, abi you no want make I chop?” According to BusinessDay findings, some of the challenges that make apartment renting process difficult in most cities in Nigeria include illegal fees collected by the real estate agents coupled with the fact that most landlords ask for 18 months’ rent

in advance instead of 12. The housing shortage is also aggravated by the luxury but unoccupied apartments in the high-brow neighbourhoods like Ikoyi and Victoria Island where rent typically begins from about N7 million per annum in a country where almost half of the population lives on less than N720 a day. This makes it difficult for many low-income earners who work in these neighbourhoods to rent apartments there, hence they live in areas in the mainland where they can afford the rent. That narrative is even

changing as many apartments in the areas considered low income are beginning to go up, almost wanting to reach the same level as the amount paid for accommodation on the island. This is due to the country’s growing population, and in a city like Lagos, population is said to be growing by 77 people every hour as Nigerians from less industrialised regions seek jobs in the commercial hub and so Lagos is home to about 23 million people and counting, more than double New York and London.

Home-ownership window opens as developers evolve buyer-friendly strategies

s the economy continues to slow with declining consumer purchasing power, property developers are coming up with new buyer-friendly strategies that offer home seekers opportunities to buy and also enable the developers to remain in business. Among the various strategies seen so far in the market, funding engineering, off-plan sales and build-as-you-pay are the most common ones

offered by the developers who are also constrained by lack of credit facilities from the lending institutions. Though property prices have remained relatively stable, demand has dropped considerably and for that reason, “people are being clever on how to fund who wants to buy,” a developer explained to BusinessDay. The developer explained further that, with this strategy, the seller asks the buyer to pay 50 percent of the value of the house and gives him one year

CHUKA UROKO

Housing

CHUKA UROKO

Alaro City makes bold statement in property market with ‘Buy & Build’ plots

to pay the balance, adding that, apart from stimulating demand, this also saves the buyer the burden of looking for huge capital requirement for outright purchase. This is a win-win situation because the seller gets customers who ordinarily would not have come, while the buyer is encouraged to buy at a time he/she would not have bought. For Propertymart Real Estate Investment Limited, pay-as-you-build is a strategy that has helped them attract buyers to the Citiview Estate in Arepo, Ogun State. The strategy is one of three options open to their buyers. The other two are outright and off-plan purchase. A buyer that goes for the payas-you-build option enjoys staggered payment made in the ratio of 30, 25, 20,15 and 10 percent installments. The pay-as-you-build is a very convenient way to own a home. The buyer makes an initial deposit of N30 per-

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cent of the value of the house which takes construction to foundation level; this is followed by 25 percent which is paid when the buyer sees the carcass of the house; then 20 percent when the house is almost finished. 15 percent is paid at fixtures and fittings stage and the final 10 percent is paid when the house is completed and the buyer takes possession. The off-plan sales—a strategy that allows home seekers to buy their houses from the design stage is a way the company funds their developments in the absence of bank loans. Buyers under this strategy have only 18 months to complete payment to guard against inflation. Many of the developers lament that after five years, the original purpose of the Nigerian Refinance Company (NMRC) as a vehicle for affordable housing finance through the provision of liquidity in the mortgage system is not yet seen.

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They not that the company has raised money from International Finance Corporation (IFC), World Bank, Nigerian government, mortgage operators etc, yet nobody sees where the money is. The developers want incoming ministers of finance and housing to be able to ask questions to find out what is happening with the money so far collected or invested in the company. “The wheel of the company is turning very slowly and all the money they have collected may be sitting in bank accounts, earning interest for only God knows who,” they reasoned. According to them, there is long term money in this country contrary to popular belief that the country does not have. They point out that the pension fund is long term money which runs into trillions of naira. “Imagine if that money is given to NMRC, the effect will easily be seen because it will start pulling the wheel”, they argue. @Businessdayng

laro City, the new inclusive city in the Lekki Free Zone, being developed as a joint venture between the Lagos State government and Rendeavour, the largest new city builder in Africa, has made a bold statement in Nigerian property market with 100 percentsell-out all of its first phase of ‘Buy & Build’ residential plots in just six months. The serviced plots were recently fully subscribed and Phase 2 is now open. Alaro City was launched in January this year to boost foreign direct investment in Nigeria and create tens of thousands of jobs. “We expected high uptake of the plots, but the rate at which they sold out has been exceptional,” said Odunayo Ojo, CEO of Alaro City. The new city is situated in a prime location in the Lekki Free Zone, making it one of the most exciting development projects to come to Lagos State. The location and exclusive benefits have undoubtedly been key selling points for buyers. It is an integrated mixeduse, city-scale development with industrial and logistics locations, complemented by offices, homes, schools, healthcare facilities, hotels, entertainment and 150 hectares (370 acres) of parks and open spaces. Asides the residential sales, there has also been a rapid uptake in commercial plots. “The Lekki-axis has been a key driver in residential real estate in recent years. Alaro City offers a unique and valued investment proposition that the market clearly recognises,” said Gbenga Olayinan, CEO, Estate Links Limited, a leading real estate consultancy. “As with any real estate investment, the real trick is to key in early,” he added. Located in the North West Quadrant of the Lekki Free Zone, Alaro City lies in the growth path of Lagos, one of Africa’s fastest-growing cities with a population of over 20 million. The city is adjacent to the future international airport, the region’s largest deep-sea port, and major Nigerian and international companies. Rendeavour is building seven new cities in Africa—in Nigeria, Kenya, Ghana, Zambia and Democratic Republic of the Congo. As a master developer, Rendeavour invests over $250 million in each project, creating the infrastructure and living and working spaces that will help sustain and accelerate Africa’s economic growth, meet the aspirations of Africa’s burgeoning middle classes, and serve as a catalyst for further urban development.

Tuesday 18 June 2019

BUSINESS DAY

property&lifestyle Home Ownership

How tenants cope with rents, landlords as economy struggles Israel Odubola

Developing a new approach for FM

or tenants in Nigeria, it is a daily tale of woes in the hands of their landlords, especially for those landlords whose rented houses are their only sources of livelihood. All these are to be expected, though, in a country where about 80 percent of the population live in rented accommodation on account of high level poverty, high house prices and challenging economy. Nigeria’s status as global poverty headquarters is no news, but the country really faces daunting task to lift about 93 million persons out of extreme poverty, as income per capita has been falling in the last four years. The growth in the broader economy has been lagging population growth for over three years. The same trend persisted in the first quarter of the current year when 2 percent rise in growth failed to keep pace with 2.7 percent rise in the number of Nigerians, an indication that things are yet to get better and Nigerians are getting poorer. It means too that Nigeria is producing less than it is growing. But the average Nigerian, the low-income earners, the common man on the street, are the ones feeling the pains of a tough economy even as they struggle to meet the basic necessities of life. With their disposable income stifled, the poor struggle to cater for their families, pay their children’s school fees, pay rent and other bills, and most times face intense pressure from their landlords and landladies. BusinessDay’s survey on the plight of tenants resident

Infrastructure Maintenance With Tunde Obileye

in the mainland part of Lagos revealed that their woes range from unjustifiable rent increases, outrageous service charge particularly on power supply, disturbance from landlords as a number of them snub existing tenancy law. Muyiwa Adebowale, a teacher in a Lagos private school, told Business Day correspondent that he and his family rented a new apartment in the Ifako-Ijaye area of the state, but his three yearstay was a tug of war with his landlord. “I secured a 2-bedroom flat in Ifako-Ijaye in early 2015 so that I can spend less on transport fare as the house is close to my place of work. The landlord collected a year rent along with agreement and commission”. “My experience there was not rosy. He (the landlord) made us (the tenants) pay for almost every damage/renovation of the house,” he revealed. “One thing that got me irritated was the landlord’s habit of reminding me that my rent would soon be due as if I didn’t know my responsibility. At the third year in 2018, he increased my rent by 30 percent.

I couldn’t cope because my salary could not cope. I eventually left the place,” he said. Another tenant resident in Orile-Agege, Tunji Sulaimon, faces similar challenge. Sulaimon noted that landlords seemed not to be considerate about their tenants’ challenges, saying they were after their own interests. “I work in a small private firm as an accounts officer. My take-home pay is not taking me home. To provide for my wife and three kids, and pay house rent is no joke. “Property owners need to understand what we are going through, which is obvious to them. Frustrating their tenants is not the way out, he said.” From the survey, it was also gathered that most property owners exploit and frustrate tenants by compelling them to pay crazy sums for service charge. Adaobi Benedict, who resides in Ojokoro area of Lagos, poured out her frustration on her landlord’s habit of hiding power bill from tenants in order to make them pay for energy they did not consume. “The landlord lives with the tenants. We (the tenants)

are five in number. We hardly see power bill, yet we would be asked to pay as high as N20, 0000, to be shared between five of us. We have complained to him (the landlord) on several occasions, but he is adamant; he often tells us to leave his house if we are not pleased with the rules,” he lamented. Commenting on why most property owners frustrate their tenants, Damilola Ijalade, broker with PWAN Homes, positioned that most of them are retirees, elderly individuals, who rely wholly on rent to eke out a living. Corroborating Ijalade’s stance, Titus Kolawole, property owner in the Abule-Taylor area of Lagos, said, “if you take a survey on the employment status of landlords in Nigeria, you will realize that about 60 percent are retirees or out of job, who, rely on their lifelong assets (the property) to survive; so landlords’ frustrating behaviour is not intentional”. An average tenant is going through a lot in Nigeria’s rough economic terrain reflected double digit inflation which continues to weigh down on cost of living.

acilities management (FM) continues to generate a lot of interest yet the percentage of those who have fully embraced this concept remains negligible. FM practitioners in the industry have tried and still trying to figure out the best way to overcome the obvious challenges. As we grapple with the challenges, the time may be right for a new, more evolving FM model, one that is broader and offers a more holistic understanding of both buildings and people. The benefits to the industry, and its clients, will be immense. Facilities management has always been recognized as an evolving concept, dynamic in responding quickly and effectively to emerging needs, new opportunities and rising expectations. Facilities managers are in the business of delivering support services in a built environment including organizations and their people. There is no doubt that FM contributes directly and indirectly to the success of their clients even though appreciation is often not given as many still view facilities management as simply a collection of operational services that can be delivered with little or no professional input. We live in a time of remarkable change as new technologies, new commercial realities, new social and economic conditions all combine to shift our views and experiences of what work is and how it is done. An important part of this will be a new focus on sustainability and health &

wellbeing for individuals. All these can be explained to include physical, emotional, intellectual, social, spiritual, environmental and occupational dimensions In today’s ‘new world’, FM has both the opportunity and the obligation to play a full role in many of these vital areas and to take a positive lead in some if not all. FM can be the discipline known for its reliability and effectiveness for these new realities, reinforcing its position in areas such as meeting needs and raising the standard even further. In so doing, there is a chance to make a widely recognized mark as a truly value-adding discipline critical to the success of its clients. People, organizations and buildings will all be required to work towards the same aim to make this new model a success. One of the benefits of this new model will be the wellness it brings to both people and the organizations they work for. It is time to spread the message that FM is not just about buildings but also about the end users of this built environment. There’s a need to move quickly to a more holistic offer that spreads across crucial interactions between people and their buildings to ensure optimal efficiency, effectiveness, comfort, productivity, safety and health. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Real estate firm, Gravitas, encourages environment livability, sustainability in community CHUKA UROKO

ne way or another, the livability and sustainability of an environment translates into the wealth and well being of people in both urban and rural communities which is why Gravitas Investments, a real estate development firm, recently encouraged and even enabled people in a Lagos community to be conscious and sensitive to their environment. The company which, together with Lagos State government, is developing Gracefield Island in Lekki, was at Ajiran, a community in Eti-Osa area of Lagos to sensitise the people on the need for a clean, safe and livable environment which is a major consideration even in their

own new city development. Gracefield Island is an ambitious mixed use city development sitting on about 100 hectares of land reclaimed from the Lagos Lagoon. It offers best-in-class opportunities for living, working and leisure. The environment sensitization programme at Ajiran, which attracted many residents of the community, officials of the Lagos State Ministry of the Environment, other environment enthusiasts, among others, charged the residents to “be the solution (to environmental problems)…reduce waste”. Officials of the company explained to BusinessDay that the programme was part of their community development initiatives and also part of the commemoration of this www.businessday.ng

year’s World Environment Day (WED) held a week earlier with the theme, ‘Beat Air Pollution’. “As part of our community development initiatives, we have done other things in our communities, but this year, because of rising concerns about the environment, we decided to do this sensitisation which we planned as part of the World Environment Day,” Jumoke Owoyeye, the company’s Business Development officer, explained to BusinessDay in an interview on the sideline of the Tuesday event. Ozoemezina Nwafor, the company’s Urban Planner, explained to the Ajiran community the need to have a decent environment free from waste and the resultant air pollution which he said was

hazardous. Nwafor noted that the biggest changes and effects human beings could experience from air pollution were not only real damage to the environment, but also bad changes in the quality of life and severe issues to their health. To reduce these, he advised the people not to burn household waste, explaining that, “by burning plastic, you release horrible toxic chemicals into the environment some of which will be sucked up by our own nose. Recycle your trash instead.” The company went to the sensitization with LasGidisRecyclers—a neighbourhood waste recycling firm that specializes in PEP plastic and satchet water collection and recycles same into other use-

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ful products. “We are building a new waste collection model; we have identified some streets in Lekki, VI and Ikoyi from where we collect PEP plastic bottles. We recycle these collected wastes in Awoyaya in Ibeju Lekki. We hope to crush them and recycle them into T-shirts, fibres and ropes,” Idu Okwuosa, LasgidisRecyclers’ managing partner, told BusinessDay in an interview. Nwafor told the community that proper waste disposal was critical because, according to him, certain types of wastes could be hazardous and could contaminate the environment if not handled properly. He added that improper waste disposal might severely endanger health and immediate environment which @Businessdayng

was why Gravitas provided plastic waste bins running into hundreds that were distributed to the natives who participated in the sensitization programme. The community complained that the Lagos State Waste Management Authority (LAWMA) did not come to their area frequently to collect waste, adding that even when they did, bad roads did not allow them to go near individual houses. They therefore requested that very big waste bins should be provided for them where household wastes could be dropped for easy collection by the waste management authority. Owoyeye assured that they would take their complaints to government and follow them up to ensure that they were addressed.

Tuesday 18 June 2019

BUSINESS DAY

INTERVIEW

‘We deliver solutions that address commercial, industrial power problems in environmentally sustainable manner’ At a time when the business environment in Nigeria is faced with huge operating cost arising from epileptic power supply from distribution companies, Uraga—a power solutions company and subsidiary of Honeywell Group—has developed solutions to these problems. The Managing Director, SEUN FALUYI, in this interview with BusinessDay analyst, MICHAEL ANI, speaks on how the firm is helping companies and industries in providing power that is environmentally friendly. What has been the focus of your organization in the area of economic sustainability? e refer to ourselves as a power solutions company because what we provide is a comprehensive energy solution to customers. We are able to take over the complete spectrum of our customers’ energy requirements. UPSL will finance your solution from conceptualisation through development, and eventually into construction. And we make concerted efforts to deliver power in an environmentally friendly manner. When it comes to the environment, an important aspect to note with regards to power generation is the type of fuel you use to generate power. This has a major impact on the environment. Coal for example has a very big carbon footprint while gas on the other hand has a lighter carbon footprint. For solar or renewable energy alternatives, the footprint is much lighter. For us as a power solutions company, we are helping companies to transit from the use of heavier fuels to lighter fuels with less carbon footprints. We believe that by doing this, we are helping our customers to generate power efficiently and in a more sustainable manner. For instance, gas-based generation is more efficient than dieselbased generation. The reason is because gas has a higher energy content which means you use less gas to generate more power than diesel would. Also, it is a cleaner source of energy with less emission; so the impact on the environment is reduced. But more importantly, not only are we transitioning customers from heavy fuel-based generation to lighter fuel-based generation, we are also adding solar power solution to the services we offer. Solar panels had previously been expensive but the prices are coming down so what we are doing is that we are offering to customers our hybrid solutions instead of the conventional energy sources. What this means is that we are migrating customers so that they can be more environmentally friendly in their operations.

industrial concerns, given their impact on the larger economy. So it is not the case that we are ignoring residential consumers. We are just focused now on making the greatest impact in a short time.

Your services cut across power generation, sales, operation and maintenance; consultancy services; power distribution, emergency power solutions and renewable energy solution. In all these, where lies your core competence? What we provide is power; not just power as a commodity but as an energy solution for commercial and industrial users. A power company may say that they provide electricity but what we offer is energy solution. So we don’t see ourselves as just a commodity company, we see ourselves as

Do you hope to service that segment later in the future? We have plans for residential customers. What we are targeting now are estates where they can aggregate large demand. That way we can deliver energy solutions in bulk to them. But we also believe that if we are able to take the burden of power needs for commercial and industrial needs off the distribution companies, they would be able to serve residential customers better and, ultimately, everybody will be happy for it. Seun Faluyi

a comprehensive energy solutions company which is what we specialize in. We are not saying that we want to solve the power problem in Nigeria; what we are saying is that we want to help commercial and industrial customers attain reliable power, so they can be more productive. By being reliable, we mean predictable power which will be available at levels they require. That is more efficient, reliable and cost-effective power. In terms of your clients, do you service the high end or the low-end consumer or you cut across all? We have a strategic approach to our offerings. Our focus for now are commercial and industrial customers. We decided to focus on customers in the commercial and industrial space for now because of the greater advantage to the economy when industrial and commercial concerns can run efficiently because of reliable power. Power is a major input in production, and when factories and industries are able to secure reliable and costeffective power, then they can produce cheaper. When they produce cheaper their products can also be reasonably priced and consumers are also able to buy these products. The economic cycle will therefore be better for it. For how long have you been in business? We have been in existence for 12 years and we have gathered consummate experience. However, even though we have been in operation for that period of time, we were incorporated as a power solutions company three years ago. Twelve years ago, we started as a utility business. The experience from that time has been very valuable. We were able to understand the real challenges of the power industry. Our grasp of the key www.businessday.ng

issues is what informed the present approach to our business; we have been able to develop solutions to power challenges for industrial and commercial users; which is what we now offer today. How do you assess the purchasing power of your industrial customers? Since 2016, there has been a meltdown in the economy that has put many companies on life support because things have been difficult for them. That is why we develop solutions to offer affordable and reliable power to clients. How we offer our services is that for any of our commercial and industrial customers, we don’t just say they must pay this amount. What we do is to work closely with customers to determine their energy requirements. This knowledge is what we bring to bear in developing practical solutions for them. We are development partners with our clients. Our focus is the growth of their respective businesses; and we partner with them to harness power as a critical input to the productive process. You focus more on commercial and industrial customers skipping residential customers. What is the reason for this? It is a strategic decision based on our understanding of the market. The market can be segmented into commercial, industrial and residential users. The residential users make up about seventy-percent of the users, but in terms of the actual energy that they use, residential users only consume about twenty to thirty percent of generated power, which we believe can be supplied by the public utilities. But the most important consumers for Nigeria’s growth at the moment are commercial and

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How cost reflective is your tariff compared to what these industrial companies get from the discos? What we do is that we partner with commercial and industrial customers to define what the appropriate price will be hence, it is not like a tariff. A tariff is like a table that says this is just what it is. Our engagement with these companies is just like a bilateral agreement and what we do is that we ask how much power these companies need. What we are going to do for you is that we will invest the money but you need to guarantee us that you are going to take power from the asset which could be for fifteen years or more. We will charge the customer an energy charge which is based on the fuel that they consume but in addition, the customer will pay a capacity charge which is meant to recoup the money invested in placing the power assets there. The capacity charge will re-assure us that we will be able to recover the cost of investment over the fifteen-year term. We discuss a capacity charge with the customer based on the load they take. What are the opportunities that you see in the Nigerian power industry? There are a lot of challenges in the power industry. Liquidity is a major challenge which is what Discos are facing. Consumers are facing supply constraints. There are also structural, regulatory and legacy challenges in the industry. But we have identified opportunities even in the midst of these challenges, especially with commercial and industrial customers. What is it that they need? They need reliable power. Because we understand this, we are able to help them take advantage of economies of scale by aggregating demand of multiple commercial customers in industrial clusters. We are helping them transit from heavy fuel-based power generation to lighter-fuel based generation facilities, which are @Businessdayng

even more efficient and with lower environmental impact. What are the challenges you face in proffering this solution? There are challenges we face whilst trying to provide solutions to customers. Truth is the industry is still evolving. Reforms are taking shape gradually. New regulations are being introduced. For many people, their view is that we are connected to public supply, however, there needs to be a paradigm shift from on-grid to off-grid so you can have full control of how you access power whenever you need it for your commercial or industrial process. Generally, the challenges now are some of the things we expect to see when a power market is trying to be more dynamic and competitive. Mindsets have to start changing to how we access, utilize and pay for power. What activities have you embarked on in the last few years and what has been the social impact? Because we are a power generation company, we are trying as much as we can to switch fuels and we have a number of our customers that have switched from diesel to gas. We also have a number of customers that we are putting on solar since the prices are coming down and so with this, we are helping to move the needle in the direction of environmental sustainability. But in addition to environmental impact, we are also contributing to the development of the communities where we operate. What do you think Lagos state can do to achieve full environmental sustainability? For environmental sustainability from an environmentalist’s perspective, the issue is not just about collection but also generation, transportation and logistics, processing and then we can talk about disposal. Also, for environmentalists, there are three Rs; it is Reduce, Re-use or Recycle. It is now being extended to include recover before you dispose. To do this effectively, you need to look at the nature of your waste and how you can treat or handle them. So, the 3Rs is what the environmentalist would explore. There also needs to be a deep understanding of what the eco-system is like. In Lagos for example, the type of waste that is generated are of two types. There is the organic waste and there is inorganic waste. But at the end of the day, environmental sustainability concerns all of us. We all have a duty to reduce impact of our commercial, industrial and even domestic activities on the environment. We need to keep our environment safe and healthy. We can’t leave everything to government. We all must play our respective parts.

Tuesday 18 June 2019

BUSINESS DAY

NEWS

UNICEF urges Nigeria to deepen commitment to Child Rights Cynthia Egboboh, Abuja

he United Nations Children’s Fund (UNICEF) has urged the Federal and State governments to prioritise and deepen their commitments to the actualisation of Child Rights in Nigeria. Peter Hawkins, UNICEF country representative in Nigeria, said in a statement Monday that there was a need to secure commitments from national and state governments to prioritise children’s rights to education in governance agenda, including through budgeting, at the states and national levels. “This engagement creates an opportunity for Nigerian youth to advocate to policy and decision makers and urge them to commit resources to education, without which the substantial number of out-ofschool children in Nigeria will

not be reduced,” he said. He said as the world celebrated the 30th anniversary of the Convention on the Rights of the Child (CRC), it became important to promote the rights of children in Nigeria, as over 10.5 million children lack access to safe and quality education and a secured future. “In Nigeria today, over 10.5 million Children are unable to access safe and quality education, including due to the ongoing crisis in the northeast, which has left schools destroyed, teachers unavailable, and parents terrified to send their children to school due to insecurity – especially for girl children, who have been the victim of kidnapping while at school,” he said. “Schools should be a safe place for children – one in which they can get a quality education that will put them on the path to a secure future,”

he added. According to Hawkins, the Convention is the most widely ratified human rights treaty in history which stipulates that every child has the right to education, adding that it had helped to transform children’s lives, inspired legislative changes to protect children, and enabled them to participate actively in their societies. Nigeria ratified the CRC in 1991. “Supported by UNICEF, about 2000 youth across 10 Nigerian states - including the Federal Capital Territory (FCT), Abuja presented petitions to the governors, parliamentarians, policymakers and other influential persons in a mass effort to draw attention to the need to act on commitments to increasing access to safe, quality education for all children, especially girls,” he said.

NACCIMA calls for capacity development of Chambers across the world Obinna Emelike

n a bid to foster a shared and better future, Saratu Iya Aliyu, national president, Nigerian Association of Chambers of Commerce Industry Mines and Agriculture (NACCIMA), has called for a roadmap on capacity development of Chambers across the world. Aliyu, who made the call at the recently concluded 11th World Chambers Congress in Rio, Brazil, noted that the roadmap would enable the Chambers, as private sector operators, make significant contributions to inclusive economic growth and development amid fostering a shared and prosperous future for countries and people across the world. While addressing delegates, she drew attention to the positive role the Chambers movement had played in Nigeria for the growth and development of the economy in partnership

with government and other stakeholders. She called for rethinking of the educational processes and specifically identified continuous training and retraining to enable Chamber members and future generations meet the challenges and opportunities unfolding in an era of e-commerce revolution, digital trade, start ups all of which were transforming the global. The Aliyu-led Nigerian delegation to the congress included: Babatunde Ruwase, president, Lagos Chambers of Commerce Industry Mines and Agriculture; Ayo Olukanni, director-general, NACCIMA; Toki Mabogunje, Bayo Jimoh, president, Benue Chambers, and the director of education Committee of NACCIMA and the Abuja Chambers of Commerce. The Nigerian ambassador to Brazil also joined the delegation at the Congress. One of the highlights of the congress was the signing of

memorandum of understanding between NACCIMA and the Mauritius Chambers of Commerce and Industry (MCCI). The NACCIMA president and V. Marday, her counterparts from the Mauritius Chambers of Commerce, signed the MoU on behalf of the two countries on June 14, 2019 in Rio, Brazil. The MoU is designed to promote closer collaboration between the two chambers to promote private sector and business services between members of the two chambers. The MoU will also cover cooperation in the area of investment in textile, tourism, fisheries development and financial services. Another major focus of the MoU is sharing of experience and harnessing opportunities under the Africa Growth and Opportunity Act, an area in which Mauritius is known to have excelled by exporting textile and other goods to the US market.

CBN, ACAMB confer to redefine image for Nigerian banking sector

he role of Association of Corporate and Marketing Professionals of Banks (ACAMB) in providing strategic initiatives to redefine the image of the banking industry that resonates withcustomershasbeenemphasised. Speaking at an engagement session during a recent meeting with the the Central Bank of Nigeria (CBN), CBN’s director of corporate communications, Isaac Okorafor, observed that the increasing synergy between CBNandACAMBwouldbebeneficial in championing new ideas to properly manage the image of the banking industry as a potent vehicle for promoting financial systems stability. This was contained in a press release by Matthew Obiazikwor, publicity secretary, ACAMB, sent to the media. Pledging the support of CBN to ACAMB, Okorafor listed frequently reoccurring customer feedbacks that had continued to form perceptions

around the banking industry, such as appropriate pricing andbankcharges, adding that continuous customer engagement would help clarify misconceptions. The regulator used the opportunity to appraise the ACAMB Exco of the objectives of various funding intervention initiatives of CBN such as NIRSAL, Agribusiness, Small and MediumEnterprisesInvestmentScheme, etc. being operated to enable many peoplegetaccesstofundingtostabilise the economy, stating further that: “the next agenda of CBN is how to grow the economy in a non-inflationary manner or at best, grow side by side with moderate inflation”. Earlierwhilebriefingthecorporate communications team of the CBN, Charles Aigbe, president of ACAMB, said the Association’s delegation was attheCBNtopresentACAMB’sstrides having resuscitated the body to drive its visions, programmes and activities aimed at promoting the image of the www.businessday.ng

banking industry. Listing achievements of the new ACAMB to include conducting election to fill positions in the Exco and ratifying same at its AGM, refurbishing and rebranding of ACAMB secretariat to a modern office ambiance, holding stakeholders engagement with colleagues, started quarterly knowledge sharing sessions, facilitating certification of qualified members with NIPR and working out same arrangement currently with APCON, launching ACAMB website and social media handles, to name a few, Aigbe stated that the programmes were with clear intentions of providing a platform to groom a vibrant association of members. TheACAMB presidentprayed the CBN to give it the opportunity to make inputs to policy directions of Bankers’ Committee and also accept invitation to facilitate its 3rd quarterly edition of experience sharing session of the Association slated for July. https://www.facebook.com/businessdayng

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Tuesday 18 June 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 17 June 2019

Top Gainers/Losers as at Monday 17 June 2019 LOSERS

GAINERS Opening

Closing

Change

Company

Opening

Closing

Change

N29.4

N32.3

2.9

DANGCEM

N184

N182.4

-1.6

UNILEVER

N31

N32

N135.6

N134

-1.6

DANGFLOUR

N16

N16.5

0.5

GUINNESS

N47.5

N46.95

-0.55

N14.8

N15

0.2

OANDO

N3.9

N3.7

-0.2

N20

N20.2

0.2

NAHCO

N2.99

N2.8

-0.19

Company O

NASCON ZENITHBANK

MTNN

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

29,936.33 3,360.00 2,864,957,558.00 3.922

Global market indicators FTSE 100 Index 7,357.31GBP +11.53+0.16% S&P 500 Index 2,893.92USD +6.94+0.24% Generic 1st ‘DM’ Future 26,159.00USD +31.00+0.12%

13.192

Investors book N40bn loss as stock market searches for new triggers Stories by Iheanyi Nwachukwu

nvestors at the Nigerian Stock Exchange (NSE) recorded N40billion loss on Monday June 17 as market continues to search for new catalysts to propel growth. At the sound of trade closing gong by 2:30pm on the Nigerian Stock Exchange, it All Share Index (ASI) declined by 0.36percent from 30,046.70 points to 29,936.33 points. Also, the value of listed stocks on the Bourse decreased from week-open high of N13.232trillion to N13.192trillion. Sell pressure on stocks like Dangote Cement Plc, MTNN Plc, Guinness Nigeria Plc, Oando Plc and NAHCo plc aided the southward movement seen on Customs Street equities trading. Dangote Cement share price decreased from N184 to N182.4, losing N1.6 or 0.87percent. MTNN also declined from N135.6 to N134, losing N1.6 or 1.18percent; while Guinness Nigeria Plc dipped from N47.5 to N46.95, af-

ter shedding 55kobo or 1.16percent. Also on the laggards list include Oando Plc which dropped from a high of N3.9 to N3.7, after losing 20kobo or 5.13percent, and NAHCO Plc which decreased from N2.99 to N2.8, losing 19kobo or 6.35percent. “Following last week’s performance and improved investor sentiment, we expect that investors would

begin to cherry pick fundamentally sound stocks as we approach H1:2019 earnings season”, said Afrinvest researchers in their June 17 note. Forte Oil Plc rallied most, from N29.4 to N32.3, adding N2.9 or 9.86percent. Unilever Nigeria Plc was also up, from N31 to N32, adding N1 or 3.23percent. Dangote Flourmills Plc also advanced, from N16 to N16.5, adding 50kobo or

3.13percent. NASCON Plc was up from N14.8 to N15, adding 20kobo or 1.35percent. The share price of Zenith Bank Plc increased from N20 to N20.2, adding 20kobo or 1percent. Wema Bank Plc, Fidelity Bank Plc, Zenith Bank Plc, and Access Bank Plc were actively traded stocks. In 3,360 deals, stock traders exchanged 2,864,957,558 units valued at N3.922billion.

With the dearth of market catalysts to boost the Index back above the 30,000 point mark and into green territory, Vetiva Securities research analysts see the possibility of recording another session of negative trading on Tuesday. “We, however, do not rule out the possibility of bargain hunting on the depressed prices of stocks across the board,” the analysts said.

L–R: Jude Chiemeka, divisional head, Trading Business, The Nigerian Stock Exchange (NSE); Jamie Rixton, chief agronomist, Ella Lakes Plc; Wole Onasanya, chief financial officer, Ella Lakes Plc; Chuka Mordi, chief executive officer, Ella Lakes Plc; Olumide Bolumole, divisional head, Listing Business, NSE; Enot Ogbebor, non-executive director, Ella Lakes Plc; Frank Ellah, non-executive director, Ella Lakes Plc and Kolo Majekodunmi, managing director, MBC Capital Limited during the Listing of Ella Lakes Plc at the Exchange.

SEC, ACMAN to develop benchmark for capital market studies

he Securities and Exchange Commission (SEC) and the Association of Capital Market Academics of Nigeria have entered into collaboration to develop a curriculum for the Nigerian Capital Market Institute (NCMI). The curriculum would enable the commission and the association to set the required benchmark that would be adopted by the National Universities Commission in the accreditation of capital market studies in tertiary institutions. The partnership is the

high point of a meeting between the association led by it’s Interim President Uche Uwaleke, and the commission led by the Acting Director-General, Mary Uduk. Uduk said the commission would work with the association to improve the standards in the NCMI. Uduk said, “Working with this academic body is vital to moving the capital market forward. “Research that comes out of the university must be actionable and should help boost the growth and development of the capital market. www.businessday.ng

“We will partner with you to develop curriculum for the Nigeria Capital Market Institute given where we want to take NCMI to. “This association will make our job a lot easier. We appreciate your coming and we will work together to leverage on your expertise to develop the capital market.” In his remarks, Uwaleke said the idea behind the association is to advance the frontier of capital market research and promote capital market issues in the tertiary institutions. He said being the apex regulator of the capital mar-

ket, there is need for the association to collaborate with the commission to set standard for capital market programme. The university don said the need to set standard for capital market studies was based on the conviction that it would help promote the growth and development of the capital market. Uwaleke said that the association would also be partnering with the commission to create more awareness on the benefits of the capital market in tertiary institutions. He urged the commis-

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sion to leverage on the expertise of the association by allowing it have representation on the Capital Market Committee. He said, “The SEC has done a lot in creating capital market curriculum in secondary school but we feel that the low hanging fruit is in the university because that is where we have more literate people. “We need to emphasise capital market studies in our universities because of the role it plays in economic development. We will do all we can to expand the frontiers of capital market.” @Businessdayng

Deutsche Boerse AG German Stock Index DAX 12,085.82EUR -10.58-0.09% Nikkei 225 21,124.00JPY +7.11+0.03% Shanghai Stock Exchange Composite Index 2,887.62CNY +5.65+0.20%

Ellah Lakes lists additional 1.88bn ordinary shares

llah Lakes Plc has list on the Nigerian Stock Exchange (NSE) additional 1.88billion Ordinary Shares of 50 Kobo each issued to shareholders of Telluria Limited as consideration for the acquisition of Telluria Limited by Ellah Lakes Plc. Recently, Ellah Lakes Plc acquired 100percent equity stake in Telluria Limited. The acquisition which became effective on May 7, 2019 came after the company complied with all the necessary regulatory requirements the acquisition was approved by the Nigerian Stock Exchange (NSE) and by the Securities and Exchange Commission (NSE). A notice to Dealing Members of the Nigerian Stock Exchange on Monday June 17, and signed by Elizabeth Ekpo, for head, Listings Regulation Department, noted that with the listing of the additional 1,880,000,000 ordinary shares, the total issued and fully paid up shares of Ellah Lakes has now increased from 120million to 2billion ordinary shares. The company had said that the primary objective of the acquisition was to strengthen its balance sheet, restore customer confidence, provide access to new markets, improve operations and create organisational efficiencies that will drive profitability and increase shareholders’ value. Ellah Lakes Plc is one of Nigeria’s foremost agriculture businesses, specialising in Fish Farming. It was incorporated on July 2, 1980 and listed on the Nigerian Stock Exchange on January 14, 1993. Ellah Lakes acquired Telluria in order to diversify its product offerings in the AgriBusiness sector. The Board of Directors and Management of Ellah Lakes considered this business combination to be in the best interest of the Company and expect the transaction to; revitalize management; create access to diversified expertise and financial strength; (c) improve administrative and operational and efficiencies of the Company; and strengthen the Company’s market position by aiding access to new products and markets.

Tuesday 18 June 2019

BUSINESS DAY

Markets + Finance

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

Wema Bank Nigeria Plc: Increased interest income underpins profit BALA AUGIE

t is end of free money for banks as the precipitous drop in yields on government securities continues to undermine revenue, as interest income from treasury bills has been growing at a slow pace. Of course, the low yield environment means profit will grow at a snail pace compared to mid 2017 through the third quarter of 2018 when treasury bills yields were high. The tough and unpredictable macroeconomic environment does not encourage lending, as a lot of companies are scaling back on expansion plans. Moreover, it is very risky granting credit to businesses whose cash flows cannot absorb interest payment and deliver strong margins. Data combined by Meristem Securities shows the largest Banks in the country saw cumulative gross earnings grow by a mere 3.75 percent to N1.16 trillion in the period under review. Investors have not been swooping on bank stocks because they are yet to be convinced that President Buhari led administration’s reforms will invigorate the economy. Nigeria’s stock index is down 0.4 percent year-todate while emerging markets are up 2.3% and the MSCI Frontier Markets 100 is up 10.2 percent. Nigeria’s GDP contracted

Ademola Adebise, managing director/chief executive officer, Wema Bank

13.8 percent in the first quarter, wiping out last year’s economic gains. Amid the challenges hindering the growth of financial institutions,Wema Bank Nigeria Plc is thriving, as it leapfrogged its peers, recording the fastest profit and revenue expansion. For instance, Wema Bank’s interest income increased by 26.89 percent to N16.07 billion in March 2019 from N12.64 billion the previous year; this compares with a mere 3 percent increase Fidelity Bank’s interest income; First City Monument Bank (FCMB), (4.85 percent); Sterling Bank, (-3 percent), and Union Bank of Nigeria, (-15 percent). Wema Bank’s net in-

come expanded by 49.79 percent in the period under review, this compares with 5.15 percent growth as at the bottom line (profit) for Sterling Bank; Unity Bank, (4.13 percent); Union Bank, (0.12 percent); Fidelity, (28 percent); First City Monument Bank, (40 percent),and Stanbic IBTC Holdings, (-17 percent). Wema Bank said that it will continue to adopt a conservative stance towards risk management as the economy is still not robust enough to accommodate risk expansion Wema Bank is a pioneer bank in Africa to offer a full digital banking experience. Little wonder noninterest revenue hit N3.77 billion

as at March 2019, this represents a 10.14 percent increase from N3.42 billion the previous year. A breakdown of non interest revenue shows fees and commission income was up 3.92 percent to N1.69 billion in the period under review from N1.63 billion the previous year. Total operating expenses were up 14.47 percent to N7.67 billion in the period under review as against N6.70 billion the previous year; the increase in expense as due to increased investments to develop new capabilities. Wema Bank continues to benefit from improving brand acceptance, resulting in 22.10 increases in deposit to customers to N451.02 billion in March 2019 from N369.20 billion as at March 2018. Loans and advances to customers were up 6.15 percent to N266.34 billion in the period under review from N252.18 billion the previous year. Wema Bank has said that it would leverage on latest technology to drive growth. The strategic plan would enable the lender to realise its goal of doubling the key indices of its assets, deposits and profits within the next two years. “We intend to be a strong retail bank leveraging technology and innovation. For us, what we have said is that in the next two years, we would work to double our key indices of assets, deposits and profits through organic growth,” said Ademola Adebise, Managing Director/Chief Executive Officer of the bank. “Today, we are about N400bn, in the neighbourhood of N500bn in assets, and if we stretch that, we would be shooting for N800bn by the time we double our indices. We want to get to N1tn mark in terms of our assets, @ said Adeise “We have all the right tools in place and we are refreshing our IT, side by side our Alat product, which is doing well out there and what we are doing now is to review it and take it to the next level. It’s not just about

pumping money to excite ourselves; we know what we are doing. Shareholders are interested in returns, so we have to deploy our limited resources in a way that would benefit all stakeholders. We have a clear digital journey we are working on.” Abarise added “To remain competitive in this market, one needs to be very innovative, and for us, we want to be innovative, agile and deploy products that appeal to the

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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needs of the customers. We would leverage technology as much as possible,” Abarise Summed Wema Bank Plc has recommended to its shareholders a dividend payment of three kobo per share for the 2018 financial year, its first dividend payment in 14 years. Adebise said the bank recommended the dividend payment of three kobo per share in line with the board’s approved dividend policy.

Tuesday 18 June 2019

BUSINESS DAY

AVIATION GUIDE

in association with

Accident investigation aims to prevent future air crashes - Ozoka Stories by IFEOMA OKEKE

ormer Head of Accident Investigation Bureau (AIB), Angus Ozoka has said that accident investigation is critical to the overall safety in flight operations because the industry depend on the recommendations made by the agency to prevent future accidents. Ozoka who hosted the International Civil Aviation Organisation (ICAO) team that audited the Nigerian aviation industry as pioneer Commissioner/CEO of the Bureau in 2007, said that accident investigation is a painstaking work, which procedure and processes are not exposed to media propaganda. Ozoka was reacting to the publications in the media titled, “Air Peace Concealed Major Aircraft Incidents from Us – AIB,” which was a press release by the Nigerian Accident Investigation Bureau to the world, notifying the public that the airline did not report an incident to the Bureau but only reported to the Nigerian Civil Aviation Authority (NCAA) and noted that such publication was unprecedented. “After carefully reading the article and as a concerned Nigerian, I have the following observations and comments on the matter. The damage assessment by AIB did not reveal that an accident or serious incident occurred as hard landing does not equate to an accident or serious incident.

“According to AIB, the nature of the damage suggests a high probability of an accident but it is difficult to see how such a conclusion can be reached when a thorough investigation was not carried out. Accident investigation is a painstaking research work, which follows a whole process involving the gathering and analysis of information, the drawing of conclusions after determination of cause(s), and making safety recommendations,” he said. Ozoka who also was former Rector of the Nigerian College of Aviation Technology (NCAT), Zaria noted that after the incident, the operating aircraft (B737-300 with registration 5N-BUK) was kept on ground awaiting hard landing inspection. “The aircraft was not put back into operation and it is not operating at the moment and so; it is difficult to see what wrong Air Peace has committed. If, according to the airline, a Mandatory Occurrence Report (MOR) was filed with the Nigerian Civil Aviation Authority in writing on May 17, 2019 after a notification was made on

May 16, 2019 i.e. within two days of the incidents; the NCAA should confirm whether this assertion is true, and if so confirmed, Air Peace has done no wrong,” he explained. On the reference made by AIB in its statement over an earlier incident involving the aircraft of the airline, he said, “With regard to Air Peace B737-300 with registration 5N-BUO, a malfunctioning Cockpit Voice Recorder (CVR) does not equate to an accident or serious incident and does not ‘make’ an accident. Its primary purpose is to complement i.e. facilitate investigation, and so one is at a loss to see what “sin” the airline has committed. “The assertion that Air Peace lacks full understanding of AIB’s statutory mandates, functions and procedures does not derive from any investigation with recommendations and such a conclusion can therefore not be reached,” Ozoka stated. The former Rector also observed that so far, no accidents or serious incidents were shown to have occurred in the publication by AIB. “If, by chance, Air Peace, which is unarguably the leading airline in Nigeria lacks full understanding of AIB’s mandates etc, then it will be very safe to conclude that other airlines in the country equally lack this ‘full understanding.’ “The AIB should therefore take appropriate action to brief and educate all airlines in the country on such requirements for the wellbeing of the sector as AIB plays a critical role in aviation safety. Nothing stops the Bureau from

charging a fee for their services as it is within their purview to do so,” he said. Detailing on ICAO Annex 13, which deals with accident investigation, Ozoka said, “Aircraft Accident and Incident Investigation” does not provide for the type of Press Release made by AIB and published by the media in which an airline is blamed and castigated even when no accident occurred and no investigation carried out to reveal cause(s) and recommend measures to prevent re-occurrence. He added that press releases are targeted at critical stakeholders such as regulators, manufacturers et al for timely measures to enhance safety. “It is possible that the AIB has other reasons for the allegation of wrong doing against Air Peace but this has not been demonstrated and unfortunately, the whole world has read the publication. In my very candid opinion, and deriving from the information by AIB in the publication, neither ICAO nor NCAA rules and regulations were breached by Air Peace and it is not clear which aspects of AIB’s mandate and procedures, which should be in alignment with ICAO Annex 13 were breached. “Most of the issues in the publication are under the purview of the NCAA and it is believed that they are alive to their responsibilities, as the blame did not originate from them. Certainly, NCAA will not make such press releases because the Agency understands the industry and does not need to shout to lead. It is not the leadership style of its Director-General.

Youth Development: Dana Air partners Soccer Stars ProjectTM with Samson Siasia

s part of its commitment to youth and sports development in Nigeria, Dana Air has announced its partnership with soccer stars projectTM with Nigeria’s ex international, Samson Siasia, scheduled to commence from 15th of July to 15th of August 2019. The project which is scheduled to hold across 13 states of the federation: Lagos, Rivers, Abuja, Enugu, Akwa Ibom, Ondo, Kano, Plateau, Abia, Delta, Sokoto, Imo and Plateau is aimed at discovering and promoting young talented football stars in Nigeria. Speaking at a press conference in Lagos, Kingsley Ezenwa, the Media and Communications Manager of Dana Air, said Dana Air’s commitment to youth and sports development in Nigeria is unwavering. “As you know, we are proud sponsors of two Nigerian Professional league teams – Akwa United fc of Akwa Ibom and Heartland fc of Imo state for the second year running and our sponsorship is just our contribution towards making the league glamorous and keeping the players motivated.

“Our partnership with the soccer stars project is a good opportunity to take a lot of our talented football stars off the streets and empower them with good contracts as Fifa accredited agents will also be around to select from the pool of soccer stars abound in Nigeria.’’ Samson Siasia, the former Super Eagles of Nigeria head coach, while commenting on his reason for the project said, the primary aim is to groom talents in soccer with first hand opportunity to be signed by international scouts. Pre-screening exercise has commenced in some local governments and our desire is to search for upcoming players or professional footballers who can join the European league side on an automatic contract deal signing. Siasia noted that the trials which will be held across 13 states from July to August, will consist of several game practices and exercises designed to show the players’ range of ability, skills, speed and athleticism. Dana Air, one of Nigeria’s leading airlines; is the first domestic airline in Nigeria to unveil

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President Muhammad Buhari in warm handshake with the Mr Jacky Hathiramani Group Managing Director / Chief Executive officer of Dana Air during the June 12 Democracy Day celebration at Eagles Square, Abuja.

a mouth-watering sponsorship deal for two Nigerian professional league sides – Akwa united fc and Heartland fc of Owerri.

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The airline is reputed for its innovative online products and services, superior on-time departures and word –class in-flight service.

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Tuesday 18 June 2019

BUSINESS DAY

news Financial storm encircles 36 states as... Continued from page 1

as average benchmark oil

price in the approved 2019 budget, Brent crude, at $61, is trading below its 2018 levels. The other is that even if revenues manage to trickle in, state government budgets will be squeezed by the 67 percent increase in the minimum wage to N30,000, signed into law by President Muhammadu Buhari in April and set to kick in this year. Many of the 36 states struggle to meet existing salaries, even without the higher wage bills the new minimum wage will bring. Since the beginning of the year, revenue shared from the Federation Account Allocation Committee (FAAC) has taken a beating, declining 5 percent from N649.19 billion in January to N616.19 billion in May 2019, according to data obtained from the state-run data agency, National Bureau of Statistics (NBS). However, unlike in 2018 where in some of the months FAAC allocations were actually higher, for this year, revenue got from the federation account has been continuously falling, leading to concerns on how state governments can sustainably carry on their fiscal operations. The value is even expected to fall further to N600 billion in June, based on estimates by consulting firm, Financial Derivatives, led by economist

Bismarck Remane, and it would be due to the fall in average oil price by 11.8 percent within the period. Nigerian state governments get their revenue from two main sources. These are revenues generated internally by each state government (IGR) and those received from the Federal Government when receipt from crude oil sales, value added taxes (VAT) and excise duties are shared. Data from the NBS show that revenue from crude oil sales declined 7.78 percent from N3.66 trillion in the fourth quarter of 2018 to N3.38 trillion in Q1 2019. On a yearon-year comparison, crude oil receipt fell by 5.67 percent from Q1 in the previous year. A decline in the revenue got from oil would invariably mean that state governments would have less to spend since about 90 percent of states’ income is dependent on monthly allocation coming from the coffers of the Federal Government. As earlier stated, the states could be further overburdened with the N30,000 new minimum wage which is expected to be implemented in July after negotiations of consequential cost with the main union for workers, the Nigeria Labour Congress (NLC). A new minimum wage of N30,000 could mean an additional N2 trillion fiscal burden to the over N4 trillion

FMDQ, UNEP, others champion Lagos... Continued from page 1

neva, Hong Kong, Shang-

hai, Seoul, among others, as a member of the International Network of Financial Centres for Sustainability (“FC4S Network”), a United Nations (UN) Environment Programmeconvened international network that seeks to shift private capital to climate-friendly and green investments. The objective of the FC4S Network is to create a platform for financial centres to exchange experiences and take common action on shared priorities to accelerate the expansion of green and sustainable finance and the long-term vision of the Network is rapid global growth of green and sustainable finance across the world’s financial centres, supported by strengthened international connectivity, and a framework

for common approaches, a vision that closely aligns with FMDQ’s Debt Capital Markets Development’s economic development agenda to reposition and organise the Nigerian Debt Capital Market (DCM) to access a global pool of longterm sustainable capital. This landmark achievement for Lagos, a megacity whose securities exchanges have over 860 listed securities, which now extends the membership of the FC4S Network to three African countries – Morocco, Kenya and Nigeria – was facilitated by FMDQ Securities Exchange plc (“FMDQ or the Exchange”) through the activation of the Lagos Financial Centre for Sustainability (“LFC4S”) in April 2019, following a challenge posed to FMDQ by the UN Environment Programme (UNEP) Inquiry, to provide an advocacy platform that will support policy mak-

Delay in Azura II take-off worsens... Continued from page 1

crippling businesses.

The delay in the take-off of the Azura phase II adds to these woes as it comes as a further setback for Nigeria with a population of about 200 million, which stakeholders say should be adding about 3,000MW to the national grid every year. The Azura-Edo power plant near Benin City already delivers up to 10 percent of the country’s on-grid power, and industry watchers had believed

the phase II would take off immediately. It, however, has failed to take off over a year after completion of the first phase. Edu Okeke, chief executive officer, Azura Power Holdings, told BusinessDay that based on originalplansoftheproject,there was no intention to demobilise the construction crew and that if work had continued immediately after the completion of the phase I in May 2018, work on the phase II would have reached an advanced stage, meaning the www.businessday.ng

recurrent expenditure which Africa’s biggest oil producer plans in the 2019 budget. It would also translate into a 1.1 percent increase in the rate at which prices of goods and services are sold in the country from the current 11.40 percent in May to 12.50 percent in June and cause an uptick in the country’s ballooning unemployment rate to 28 percent from the current 23.1 percent, according to FDC estimates. The only way the country can survive this tsunami coming is either by adjusting Value Added Tax, scrapping petroleum subsidies which is taking a lot from government finances, and possibly adjusting the exchange rate for FAAC disbursement, accord-

ing to Gbolahan Ologunro, equity research analyst at Lagos-based CSL Stockbrokers. Since 2017, Nigeria has taken stance on an exchange rate regime where investors could seek dollars at a marketdetermined rate of N360/$ or an official window where the naira is as strong as N305/$. In a surprise move last week, the Central Bank signalled on its website that the naira is now market-determined. It later said it made no change in naira policy, quashing talks in the mind of analysts who already speculated that the apex bank was ending a system of multiple exchange rate. A market-determined rate of N360 per dollar would mean that the federal, state

and local governments would receive an additional revenue of N54 multiplied by the dollar equivalent of the FAAC when the N306 rate was used. For instance, in the month of May 2019, a total amount of N616.19 billion was shared between the three tiers of government using an exchange rate of N306 per dollar. If the market-determined rate was to be used, it would mean an additional (N360-N306) multiplied by (N616.19/306). This would now give an additional N108.74 billion for sharing. Since mid-last year, the revenue shared to state governments from the federation account has headed south despite oil prices trading as much as $71 that year, a 39.2 percent increase from the $51 price per

barrel benchmark at which the 2018 budget was pegged. In August 2018, the total amount of revenue shared between the three tiers of government from the federation account declined by 13 percent to N714.8 billion from as high as N821.9 billion shared in the previous year. The amount edged up a little to N741.84 billion in the month of September that year only to decline further by 5.8 percent to N698.71 billion in October. It was only in the months of November and December that year that the revenue from the federation account maintained a steady increase, as FAAC stood at N788.13 and N812.76 billion, respectively.

ers in the pursuit to mobilise impact investments and drive standards needed to tackle the state’s socio-economic challenges. With 43 senior representatives from 26 organisations in attendance at the inaugural LFC4S meeting convened by FMDQ, participants approved the constitution of a Governance Board, and unanimously elected Bola Onadele. Koko, MD/CEO, FMDQ, as chairman, and Doyin Salami, CEO, Kainos Edge Consulting Limited, as vice chairman. Furthermore, FMDQ was selected as the LFC4S Secretariat and four Thematic Leads – Farouk Aminu (head, investment supervision, National Pension Commission), Kemi Awodein (managing director, investment banking, Chapel Hill Denham Advisory Limited), Andrew Nevin (partner & chief economist, PricewaterhouseCoopers) and Chidi

Mike-Eneh (head of credit, Infrastructure Credit Guarantee Company Limited) – were appointed to lead the following Thematic Areas – Policy & Regulation; Issuances & Investments; Research, Education & Engagements and Legal & Risk Management, respectively. Recognising the potential of the LFC4S, Satya S. Tripathi, UN Assistant Secretary-General and Secretary of the UN Environment Management Group in the UN Environmental Programme, in his press release announcing the admission of Lagos into the Network, said, “Lagos joining the FC4S opens up new possibilities for Nigeria and countries in West Africa to leverage sustainable finance for social and climate impact. We welcome Lagos into the fold and look forward to doing great things together.” Commenting on the initiative, Babajide Sanwo-

Olu,governor of Lagos State, said, “I am confident that the establishment of the Lagos Financial Centre for Sustainability will contribute significantly to Lagos State’s push to attract sustainable private capital that will complement public resources to address infrastructure and social challenges and enhance climate change mitigation. “We support this initiative and congratulate FMDQ Securities Exchange and the UN Environment Programme for championing this innovative private sector-led solution.” Recognising the need for a dramatic acceleration in green and climate financing, FMDQ, as an agent of change and champion of innovative game-changing financial markets initiatives, has been pioneering the establishment and development of sustainable financing in Nigeria. In demonstrating its commitment to promote invest-

ment in green initiatives and create a framework for climate change mitigation measures, FMDQ, in June 2018, partnered with Climate Bonds Initiative (“CBI”) and Financial Sector Deepening Africa (“FSD Africa”), to establish the Nigerian Green Bond Market Development Programme to create awareness and drive education required to integrate the principles of sustainable financing into the Nigerian DCM, thereby accelerating the development of the green bond market in Nigeria. In December 2018, at the request of UNEP, FMDQ and its Sustainable Finance Sub-Committee of the Debt Capital Markets Development (“DCMD”) Project 2025 supported the development and launch of the 2018 Nigerian Sustainable Finance Roadmap Report.

project would have been completed towards the end of 2020. Azura, Nigeria’s first privately-financedindependentpower project,wasmeanttobeamodel for other independent power plants financed by international investors. However, the difficultiesitencounteredwhenitcame onboard relating to payment for power purchased from it affected the commencement of other projects like the 540MW Qua Iboe plant. Okeke said insolvency in the market, arising from the inability of the industry regu-

lators to work out things with the electricity distribution companies to get a cost-reflective tariff, was responsible for the delay in the execution of phase II of the project. Until the insolvency is over, he said, no investor would like to embark on such a project like Azura. Ayodeji Dada, president, Association of Energy Engineers, said although Azura is a negative to the government at the moment because it is not supported by the market, executing the phase II of the

project would facilitate foreign direct investment (FDI) into the country. It will also increase generation which will enable the government to meet its generation target. He said Nigeria is a big market that investors would like to come and play in. “Nigeria needs 10,000MW. Even though we may not be paying the true price for power, if there is more power generation coming in, the industry shall be able to get the money. We need more generation. Let’s keep generating,” he said.

But some analysts said unless the issues of transmission and distribution networks were sorted out, no investor may want to come into the country’s power sector. John Uwajumogu of Ernst&Young Nigeria said he does not see any negative impact the delay of Azura II would have on the power sector. He said the two critical areas that needed to be sorted were transmission and distribution networks. If these areas are not sorted out, he said, there would not be any project like Azura.

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Tuesnday 18 June 2019

BUSINESS DAY

news

Nigerians decry incessant denial of study visas as US embassy refutes ban reports IFEOMA OKEKE

igerians who have applied for study visas to the United States of America have continuedtocomplainovertheincessant denial by the consulate, especially in recent times. This is as the US Embassy Abuja on Monday tweeted that report on its embassy banning student visas was fake. The embassy’s tweet read, “FakeNews Alert! Be advised, reports of student visa ban for Nigerians is false. If you have seen such manufactured item on Facebook and twitter or received it via What-

sApp, please communicate that it is false.” However, few seconds after the tweet, students who had been denied visas in recent times took to social media platforms, responding to the US Embassy and expressing their dissatisfaction on huge numbers of student visa application denials. Accordingto@nnaezema“My friend was given admission by a school in US and you denied him visa twice. So why shouldn’t we believe the news?” Olayinka Adio, with twitter handle @Yincle queried the embassystating“howcanyouexplain

denying a student who have secured admission with scholarship andalsohaveanuncle,alecturerat the same school he was admitted, who will make his stay and education more comfortable, a visa after two attempts in two months?” “After my interview, I asked the consular why I was refused and he told me ‘that should tell you something’ . I still can’t understand that something,” Folaranmi Saheed, @ Listentoany twitted. Another student with twitter handle @officialflav stated, “But you guys denied my friend USA study visa just last week, just because you think he won’t return to

Nigeria again.” According to @RealOlaudah on twitter, “Many people that apply for American Visa were denied without any justification. I was told thatIwon’tcomebackwhenIonly wanted to stay two weeks. It is immoraltobecollectingVisaFeefrom Nigeriansandactasifitisarevenue sourceforUSA.Thingslikethismay support.” These developments are coming barely one month after the suspension of Drop Box. Since the dropboxsuspension,theinterview waiversystem,bytheEmbassyand Consulate of the United States of America in Nigeria, application

for the US visa has taken a tougher turn, especially with the long visa appointment dates, which many regard as unrealistic. While Nigerian applicants seeking visa reissuance under the B1/B2,F,M,LandHvisaclassesare no longer guaranteed visas across the above classes due to the recent suspension, they are even faced with a much tougher challenge of getting favourable visa appointment dates. Some applicants who were at the Embassy and Consulate recently noted that their visa appointments dates were stretched months after their planned trip

to the US, which implies that the event or prgramme they seek visa to attend in the US would have come and gone before their appointment is due. Maurice Ocheme, a travel and immigration expert, said the suspension of drop-box is a deliberate intention by the US to limit Nigerians that get visa. “They want tolookgoodsotheycanclaimthey did not reject people visa. For diplomaticcases,ifyourejectvisa,you have to give evidence of how. So, what they want to do is to reduce the number of people that apply so that nobody is going to accuse them of rejecting visa.

Mobile transfer volume skyrockets in 5 months on rising use of cell phones, others BUNMI BAILEY

olume of mobile money transfer through mobile devices in Nigeria grew significantly between January and May 2019, buoyed by rising use of cell phone users, increased acceptance by older population, safety and convenience. According to data sourced from the Nigeria Interbank Settlement System (NIBSS), the volume of mobile transfers spiked 114 percent to 6.2 million in the first five months of 2019, from 2.9 million in the same period of 2018. Value of transactions jumped 57.1 percent from N116.8 billion in 2018 to N183.5 billion as of May 2019. Ayorinde Akinloye, a consumer goods analyst at Lagosbased CSL Stockbrokers, says the use of electronic payment systems is the new thing right now in the country, particularly in the financial technological space. “This is attributed to the rising use of mobile phones users,

particularly registered SIM users, and the technology in banking is gradually being accepted by so many people like the older population as they are beginning to use the USSD codes. “Also, the younger population are now going into the labour market and as a result their income level are increasing, which has further led them to do more transactions. Cheque usage is reducing because most people are getting the E-payment systems faster compared to the paper system,” Akinloye states. From the website of the Nigerian Communication Commission (NCC), as of April 2019, the number of mobile subscribers was 173.4 million from 160.1 million in the same period of 2018. Additionally, the volume of Point of Sales (POS) activities via mobile devices increased by 56.7percent to 152.6 million in the first five months of this year, from 97.4 million in same period of its previous year. Also, its value rose by 99.9 percent

NEC receives IRI/NDI reports on 2019 general elections James Kwen, Abuja

ndependent National Electoral Commission (INEC) Monday received the International Republican Institute (IRI) and National Democratic Institute (NDI) joint report on the 2019 general elections. The joint team IRI and NDI were among the 39 foreign organisations accredited by INEC to observe the 2019 general elections and the team reportedly deployed 40 international observers to 16 states of the Federation for the Presidential and National Assembly elections, and 20 international observers to 10 States for the Governorship and State Assembly elections. Chris Fomunyoh, NDI Associate for Africa, with Elizabeth Lewis, IRI Acting Regional Director for Africa Division, presented the report to INEC in Abuja. Fomunyoh, who spoke on behalf of the team, said the report captured findings and analyses of the electoral process and recommendations that, if implemented would help to strengthen Nigeria’s electoral process and promote democracy. While announcing that public presentation of the report holds

Tuesday at Hilton Hotel, Abuja, he said, “it is normal and courteous that we submit to INEC an advance copy of our report and that is why we are here to formally submit to INEC”. “As you are ware, our two organisations joined missions to observe the pre-electoral period as well observed election day both for the Presidential and legislative elections at the national level and state elections as well,” Fomunyoh said. Mahmood Yakubu, INEC Chairman while receiving the report, assured IRI/NDI that the electoral body would study the report and immediately implement the recommendations within its power and use them in the November 16 Bayelsa and Kogi states governorship elections. Yakubu explained that IRI helps political parties to become more issue-based and responsive, assist greater participation of citizens in governance and increase the role of marginalised groups in the political process while NDI strengthen democratic institutions through citizens’ participation, openness and accountability in government,” he said. www.businessday.ng

L-R: Emmanuel Emefienim, executive director, institutional banking, Sterling Bank plc; Omobola Johnson, guest speaker and former information and communications technology minister; Abubakar Suleiman, CEO, Sterling Bank;Tairat ijani, director, Sterling Bank, and Yemi Odubiyi, executive director, corporate and investment banking, Sterling Bank, at the June edition of Sterling Leadership Series titled Winning through inclusion in Lagos.

Fresh Taraba attack claims one life, cars burnt, houses razed … as 30 killed, over 40 injured in multiple blasts in Borno Nathaniel Gbaoron, Jalingo, & Ladi Jossy, Maiduguri

t least one person has been confirmed killed, many cars burnt and houses razed in a fresh attack on ATC, Kasuwan Bera, in Ardo Kola Local Government Area of Taraba State, on Sunday evening, residents said. An eyewitness, Amina Abubakar, who told BusinessDay, “One person was killed” also called on the government to come to the aid of residents. A resident, Isa Muri, told BusinessDay that heavily armed youths invaded Tundiri village via Jauro Yinu ward in Ardo Kola, adding that the settlement came under attack Friday evening. According to Muri, Ardo Kola came under tension as armed herdsmen attacked Wuroru and other villages around the metropolis, shooting sporadically and burning down homes, which triggered the angry youths of Kona to block the Federal highway linking Taraba to Yola. Another resident, Charles Kobo, told our correspondent that the invaders came in

around 4:30pm and started shooting sporadically and burning down houses as the residents scampered for safety. “There were rumours everywhere that the herdsmen were coming to attack us today. We were all vigilant and sent out women and children out to ATC for safety. This evening, they came in and have succeeded in burning down the whole of Wuroru village and are even advancing to Kofai and other villages,” Kobo said. “As at now, we don’t have any news of deaths yet as we are all running for our dear lives, but definitely there would be casualties,” he said. The police public relations officer, DSP David Misal, confirmed the incidence but denied loss of live. Misal told journalists, “Heavily armed bandits on motorcycles invaded Tundiri village via Jauro Yinu ward Ardo Kola LG and set some houses ablaze. “The command immediately mobilised patrol team to the area, but before the arrival the hoodlums have fled to the

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bush.” The PPRO explained that the Kona youths, being apprehensive of the development, blocked the Nukkai, Kasuwan Bera ATC highway Jalingo and set disuse tyres on fire, attacking innocent people. The renewed attack came a day to the commencement of Batch NYSC orientation course. The NYSC camp is located less than one kilometre from the attacked area. In a similar note, Borno Emergency Management Agency (SEMA) on Monday confirmed that 30 persons lost their lives while 42 others were injured when three bombers struck in Mandarari community of Konduga Local Government Area of the state. Usman Kachala, SEMA director, Search and Rescue Operations, who disclosed this to newsmen when he visited the scene of the attack on Monday, said the incident occurred around 8pm on Sunday, when the suicide bombers detonated Improvised Explosive Device (IED) stripped around their bodies. “According to the information, we have received 30 per@Businessdayng

sons were killed and 42 people seriously injured, the death toll was high as result of poor facilities in the hospital, many died as a result continuous bleeding since last night. “When my team arrived Konduga early this morning, the military prevented us from gaining access to the community to assist the victims. They told us they were given order from above not to open the road until 9am,” Kachala said. He said the three suicide bombers, comprising two females and a male, detonated the IEDs in a local tea joint and viewing centre in the community. He said about 17 persons died instantly, adding that the death toll increased to 30 on Monday as a result of lack of immediate medical attention. He said his staff could not reach the spot of the incident as the military had closed the road to traffic and the hospital at Konduga had not enough facilities to handle the situation. Meanwhile, some of the victims are currently receiving treatment at the state specialist hospital in Maiduguri.

Tuesday 18 June 2019

BUSINESS DAY

NEWS UBA Foundation commits to improved financial Dangote Group deploys Freshworks to unify IT service management across 19 subsidiaries literacy of African child KELECHI EWUZIE

BA Foundation, the corporatesocialresponsibility arm of United Bank for Africa (UBA) plc,saysitwillcontinuetoseekways to improve the financial literacy of the African child through education, as it celebrates the International Day of the African Child. The International Day of the Africa Child is a day set aside by the United Nations to celebrate children in Africa, recognising the courage of students who marched for their right to better education in Soweto, South Africa, and is marked annually on June 16. Patricia Aderibigbe, group head, Human Resources of UBA, while speaking on Monday at the bank’s headquarters in Lagos, where the Foundation brought together students from various secondary schools, said the UBA Foundation centred on three key pillars: Education, Empowerment and Environment. According to Aderibigbe, the bank, through its Foundation,

recognisesthehugeroleeducation and indeed a good reading culture play in the lives of the youth. “The UBA Foundation is committed to impacting the lives of the Africanyouthacrossthecontinent. As a pan-African institution, we believe that the future of Africa lies in her youth. For this reason, UBA Foundation is actively involved in facilitating educational projects and bridging the literacy-wide gap on a pan-African scale. “The UBA Foundation is helping rekindle the dwindling reading and literacy culture amongst African youths as they pursue their education. Over time we have worked with various schools andeducationalinstitutionsacross the continent to ensure that the UBA Foundation continues to traverse the continent, contributing positively to the development of African youth, especially in the area of education,” she said. Also, the bank through its Foundation aims to make sustainable improvements in the lives of the needy and under-privileged by supporting entrepreneurship

programmes, such as social entrepreneurship schemes, which benefit the community at large, she said. Franklin Erebor, chief credit officer of the bank, while speaking on financial literacy and the need toplanforthefuture,toldthepupils that it was important for them to manage their funds and finances. Hesaid,“Youarenottooyoung tostarttoplanforthefuture,aswhat you do now when you are young will impact greatly on you later in live. So, it is essential that you have an account, which should be well monitored to ensure that it fulfils the purpose. “You need to be financially literate, as this will help to open your eyes to the opportunities inherent and help you make wise decisions to benefit from the investments.” Some schools represented at the event included Akande Dahunsi Memorial High School, Lagos; Government Senior College, Maroko, Aunty Ayo International School,Ikoyi,andWahabFolawiyo Senior High School, Ikoyi.

he Dangote Group, the largest indigenous industrial conglomerate in sub-Saharan Africa (SSA), has deployed Freshservice by Freshworks, its cloudbased service desk software that helps modernise the IT teams along with other business functions. Integration of Freshservice offers a host of ITILaligned features, workflow automation, and powerful analytics, all accessible through a clean and intuitive interface. Also, Freshservice, ITSM software by Freshworks, streamlines workflow management and improve response time by 38 percent in a year. The Dangote Group is the leading provider of essential needs in food and shelter in SSA with sustained market leadership

in cement manufacturing, sugar milling, sugar refining, flour milling, operation of cement terminals, port operations, packaging material production, and salt refining. The integration with Freshservice allows over 150 IT support agents, to streamline workflow management for over 10,000+ employees across its 19 subsidiaries, enabling them to seamlessly work across geographies. The integration is supported by AI-powered self-service, an employee-facing mobile app, that resolves IT issues swiftly with immediate ticketing of incidents and requests whenever and wherever they occur. Freshservice supports Dangote Group’s IT teams in the following ways: Improved operational efficien-

cies and effectiveness as well as streamline compliance. Increased insights into how service management team are working, map their productivity and effectiveness - letting IT support managers identify areas to focus to improve employee on-boarding and service resolution. Added contextual support- IT service agents can start a remote session to troubleshoot an end-user or customer problem from within Freshservice, where the agent has context about the issue across group companies. Previously, the Dangote Group’s traditional ITSM setup relied heavily on disparate technologies and processes. After implementing Freshservice, immediate gains were achieved:

Lagos to overhaul security architecture … as Sanwo-Olu meets security chiefs JOSHUA BASSEY & Iniobong Iwok

here will be an overhaul of the security architecture in Lagos, the state governor, Babajide Sanwo-Olu, said on Monday after an emergency meeting with heads of security agencies in the state. The aim, according to SanwoOlu, is to address emerging security challenges facing the state, noting that re-organisation of the state’s security template was necessary in order to make the state safe for business and living. The governor, who briefed State House journalists at the end of the meeting alongside commanders of security formations, said security agencies had been placed on alert ahead of the planned overhaul. He said the reform would lead to a new engagement for security operatives and help in achieving efficiency in combating crimes. “Issues bordering on contemporary security challenges, including cultism, kidnapping, armed robbery, pipeline vandalism and indiscriminate driving against traffic were at the top of discussion. All our security for-

mations have been briefed and they are well situated and well informed at keeping Lagos safe and secured,” he said. The governor called for the cooperation of all residents when the security plan was rolled out, noting: “Making Lagos safe is our daily responsibility and all residents must also take up the challenge. I assure that we would begin to see a new deal in security which will further improve safety of lives and property.” The governor said the security overhaul would also focus on activities of motorcycle riders and road regulations, and stressed that his government would embark on advocacy on the existing restriction laws for motorcycles. “That’s one of the things we have agreed to do. So, we will be embarking on a lot of advocacy on all media of communications to tell people about traffic and restriction laws. We don’t want to be making arrest without reminding ourselves of the right things to do and how to do it. It is when we have done that and some of us refuse to be compliant that the full wrath of the law would be applied,” he said.

How ousted Egyptian President Morsi died during trial

gypt’s former Presid e nt Mo ha m m e d Morsi, who was ousted by the army in 2013, has died after fainting in a courtroom, state TV said. A former top figure in the now-banned Islamist movement Muslim Brotherhood, Morsi was in court for a hearing on charges of espionage. He was 67. Morsi was overthrown following mass protests a year after he took office as the country’s first democratically

elected leader. He had remained in custody since then. After his removal from power, Egyptian authorities launched a crackdown on his supporters and the Muslim Brotherhood. The hearing in the capital, Cairo, was related to charges of espionage emanating from suspected contacts with the Palestinian Islamist group Hamas, according to state television. www.businessday.ng

Nasir Ramon, head, external and media relations, United Bank for Africa(UBA) plc; Muyiwa Akinyemi, general manager, corporate bank, UBA; Patricia Aderibigbe, group head, human resources, UBA; Franklin Erebor, chief credit officer, UBA Africa, and Adeniyi Kunnu, professional teacher and guest, flanked by secondary school students, during the special Read Africa session organised by UBA Foundation to commemorate 2019 International Day for the African Child held at UBA House, yesterday.

Edo assures of business boom on back of CBN’s push for self-sufficiency in oil palm

do State governor, Godwin Obaseki, says the Central Bank of Nigeria’s (CBN) push to reclaim Nigeria’s position as a global powerhouse in oil palm production by blacklisting importers of the product would boost the oil palm industry in the state as well as allied industries that rely on the product for sustenance. Edo is prolific for oil palm production, as it lies on the agro-ecological belt suitable for oil palm cultivation in Nigeria. The state hosts two of the biggest companies in the sector in Nigeria. At a recent meeting be-

tween the CBN and oil palm producers in Abuja, Obaseki said 118,000 hectares of land had been earmarked for the oil palm programme in Edo State, adding that 115,000 hectares would be used for the actual cultivation while three hectares would be used for infrastructure, including roads. “Oil palm and other value crops like rubber, cocoa were the base on which the economy of this country was built at independence. If we are going to see real growth, we need to go back to those products where we have relative competitive and comparative advantages. In

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the case of Edo, we have the advantage of being the home of oil palm in the country,” he said. The state government is ready to provide more land to investors with proven financial and technical capabilities to support the development of large-scale oil palm plantations, noting that 70,000 hectares of land are currently being cultivated in the state. The CBN governor, Godwin Emefiele, who announced the Presidency’s directive for the apex bank to blacklist any firm, its owner and top management caught smuggling @Businessdayng

or dumping palm oil into the country, expressed optimism for the revival of the oil palm sector. He said with the help of state governments, Nigeria could reach self-sufficiency in palm oil between 2022 and 2024, and ultimately, overtake Thailand and Columbia to become the third largest producer over the next few years. He noted that to achieve the targets, the apex bank intended to support improved production of oil palm to not only meet the domestic needs of the market, but to also increase exports in order to improve forex earnings.

Tuesday 18 June 2019

BUSINESS DAY

news

Marketing Edge Awards go live on Lagos e-billboards As the multi media panNigeria promo campaigns turn full circle on countdown, Nigeria’s marketing and brands summit/awards, Marketing Edge Awards has gone live on electronics billboards in Lagos. The high-tech innovative billboards are part of the strategic moves aimed at boosting the brand equity of the widely accepted IMC twin event. Some of the strategic locations include but are not limited to Eko Bridge, Ojuelegba, Ogba, Allen Avenue, Victoria Island, Marina, Festac, Apapa, and Surulere, among others. According to John Ajayi, publisher/CEO, Marketing Edge, preparations are in full swing to accord the 2019 edition of the award show all the pomp and pageantry the annual event deserves. “All hands are on deck and preparations are in full swing to make this year’s event a lasting experience for creative and hardworking practitioners and stakeholders. We assure

you it’s going to be one of the most remarkable IMC industry encounters and conversations would be held around it – postevent,” he said. No awards ceremony touches the heart of the IMC industry, celebrates and encourages creativity like MARKETING EDGE annual Awards, he explained. “Ours is no longer a mere awards ceremony. It has become a tradition, and an experience that IMC professionals look forward to. Call it an annual IMC festival of creativity if you like. We are fully and strategically on top of our game to celebrate creative excellence at this year’s event. There’s going to be nothing like it,” he said. The 2019 awards committee reveals it has added more engaging categories for inclusiveness and is ready to take a holistic look at IMC industry. The jurors, it says, will assess every entry professionally and dispassionately.

EU to present final election report to Senate today OWEDE AGBAJILEKE, Abuja

he European Union Election Observer Mission to Nigeria is set to present its final report and recommendations to the Senate today. In a letter to the President of the Senate, Ahmad Lawan, dated June 14, 2019, the EU Mission said the meeting was aimed at urging the National Assembly to work with other stakeholders on the need for electoral reforms ahead of the 2023 general election. It is gathered that the meeting is billed to hold at the Senate President’s Conference Room, Third Floor, Senate New Wing by 12:30pm. The letter seen by BusinessDay and signed by Ketil Karlsen, head of the delegation, reads: “The purpose of the meeting would be to present a copy of the report and recommendations of the EU Observer Mission to you as we work with Nigerian authorities and all stakeholders to be-

Jonathan Aderoju

he Norwegian government has pledged to provide a further NOK60 million (N2bn) to the EU Emergency Trust Fund for Africa, a fund for stability and addressing the root causes of irregular migration and displaced persons in Africa (EUTF for Africa). This funding will be divided between the Sahel, the Lake Chad region, North Africa and the Horn of Africa. This is a substantial contribution towards a common EU solution to the challenges associated with illegal migration. Norway has already provided NOK140 million (N5bn) to the EUTF for Africa, and this new allocation will bring Norway’s total contribution to the Fund to NOK200 million (N8bn). As parts of the Lake Chad dry up, most farmers and cattle herders have moved towards greener areas, where they compete for land resources with host communities. Others have gone to Kano, Zamfara, Borno and other northern states in

… fund to support vulnerable migrants the Nigeria in search of greener pastures. This move by the EU can somewhat try to reduce insurgency in these parts of Nigeria to an extent, as Nigeria has been under threat of Boko Haram insurgents, and various conflicts between farmers and herders for over a decade have forced several Nigerians into IDP camps. Lake Chad is located in the Sahelian zone of West-Central Africa, in the interior basin, which used to be occupied by a much larger ancient sea sometimes called Mega Chad. The lake is historically ranked as one of the largest lakes in Africa. However, its surface area varies by season as well as from year to year. Lake Chad is mainly in the far West of Chad, bordering on northeastern Nigeria. The Chari River, fed by its tributary the Logone, provides over 90 percent of the lake’s water, with a small amount coming from the Yobe River in Nigeria/Niger. According to Norwegian Minister of Foreign Affairs, Ine

Eriksen Søreide, “Norway is participating actively in EU cooperation to address the challenges associated with migration and forced displacement. We will continue to work together with EU countries to provide assistance to the most vulnerable migrants. These efforts will also help to tackle the root causes of migration, such as poverty, a shortage of paid jobs, and poor governance.” Job creation, vocational training, conflict prevention and stabilisation efforts are among the EUTF for Africa’s key focus areas. Priority is given to projects that strengthen the capacity of African countries to deal with migration. With the help of funding provided by the EUTF for Africa, 17,000 vulnerable migrants have been evacuated from North Africa, and 70,000 people have received assistance to support their reintegration into their home countries. The EU is working closely with the African Union (AU)

gin a conversation on how to continue to improve electoral administration in Nigeria. “We also look to use the opportunity to begin to engage with your good self and offices on the wider EU support to the National Assembly on a range of issues including but not limited to institutional building”. Presenting the final report on the February 23 and March 2 general elections at the weekend in Abuja, the EU Observer Mission noted that the last elections won by President Muhammadu Buhari and his All Progressives Congress (APC) were not transparent and were marred by violence and harassment of voters. “The elections became increasingly marred by violence and intimidation, with the role of the security agencies becoming more contentious as the process progressed. This damaged the integrity of the electoral process and may deter future participation,” it noted.

BoI, BENCCIMA, others applaud Obaseki as activities kick off at Edo Production Centre

s business activities officially kick off at the Edo Production Centre, the Bank of Industry (BoI), Benin ChamberofCommerce,Industry, Mines and Agriculture (BENCCIMA) and other stakeholders have applauded the Governor Godwin Obaseki-driven initiative, which has set the tune for industrialdevelopmentandyouth empowermentforwealthcreation in the state. During a visit to the Production Centre located along Sapele Road in Benin City, a representative of the BoI, Ayo Bajomo, said, “This is a very novel initiative. It is one of its kinds I am seeing in this country and I know that Edo is not going to remain the same again after this. This is a model for others to copy. It will create jobs and help driveindustrialisationinthestate.” President,BENCCIMA,Helen

How EU N2bn Africa Emergency Trust Fund may reduce Nigeria insurgency problem

Atekha-Odemwingie, noted that theproductioncentrehadopened a vista foreconomic expansionfor players in the fabrication, fashion designing,metalandleatherwork sectors in the state, as those in the centre now operate with 24-hour electricity. Permanent secretary, Board for Technical Education, Bernard Oigboke, said the government would collaborate with the artisans in the centre to deepen the gains being made. According to Oigboke, “This is a vision that has come to fruition. We have gone around and seen so much that has been put into this place to ensure that it works. We are impressed, to say the least. There are polyethene-making, weldingandfabricationandother production activities going on. We will work with the artisans to ensure they get the right training.” www.businessday.ng

and the UN on these projects. All projects supported by Norway through the EUTF for Africa must ensure respect for human rights and must be in line with Norway’s international obligations. Søreide further said, “It is vital that European countries work with countries of origin and transit to deal with flows of refugees and migrants. We must also fight organised crime and strengthen efforts to combat people smuggling and exploitation, and reduce the number of lives lost on the journey across the Sahara and the Mediterranean.” Most of the people arriving in Europe are economic migrants. At the same time, the number of people fleeing from war and conflict in the world today is at a record high. “Norway is providing a substantial amount of humanitarian support to alleviate refugee crises in various parts of the world. The Government has increased Norway’s humanitarian budget by around 65 percent since 2013,” she said. Yoshihiro Hidaka, president/global CEO, Yamaha Motor Corporation (m) was on a 3-day business trip to the Nigeria subsidiary CFAO Yamaha Motor Nigeria Limited. Boye Ajayi, MD, CFAO Yamaha Motor Nigeria Limited (l), and Saito Nobuhiko, executive general manager, Overseas Market Development Division of Yamaha (r).

Anambra moves to reduce maternal, child morbidity, mortality … as health sector, doctors commence warning strike Emmanuel Ndukuba, Awka

utgoing Anambra State Health commissioner, Joe Akabuike, says the sixday Maternal, Newborn and Child Health Week (MNCHW), which ends June 21, will address some basic healthcare challenges in the state. Akabuike, who gave the explanation in Awka, the state capital on Monday, said MNCHW was biannual event aimed at delivering package of basic interventions required to reduce child mortality while improving mother and child health. He said the weeklong interventions would complement routine health services by en-

suring that basic care reached all mothers and children. According to Akabuike, it is run in conjunction with other routine services aimed at reducing neo-natal, maternal and child morbidity and mortality in the country. “MNCHW has shown improvements to Vitamin A supplementation, immunisation coverage of routine vaccines, Long Lasting Insecticidal Nets and other child survival interventions,’’ he said. The commissioner said Vitamin A supplementation was important for growth of human cells and for boosting of immunity, and stressed that Vitamin A supplementation was usually given at 4-6 months interval to children (6-9 months).

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The week would also feature Anti Natal Care for expectant mothers and information on exclusive breastfeeding, family planning and proper hand washing. Other interventions include de-worming of children, iron foliate to pregnant women, management of childhood illnesses and birth registration. He said the campaign would be carried out in all the primary health centres, selected General and Mission hospitals and other designated posts. He emphasised that all medicament would be free and safe, urging caregivers to avail themselves of the opportunity to ensure that their children receive these interventions. “Pregnant/women of child @Businessdayng

bearing age should visit the health facilities to access healthcare services,’’ he noted. Earlier, executive secretary, Anambra State Primary Healthcare Development Agency, Chioma Ezenyimulu, said the campaign would be an event that would offer services to children (0-59 months) and pregnant women in the state. She said this first round of MNCHW would be sponsored by Saving One Million Lives (SOML) programme for result. Programme manager, SOML, Oby Uchebo said she hoped that every arrangements had been made for successful conduct of this year’s campaign. The flag-off will be on June 18 at Egbu Umuenem, Otolo Nnewi in Nnewi North LGA.

Tuesday 18 June 2019

BUSINESS DAY

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Tuesday 18 June 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 17 June 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 227,489.44 6.40 -0.78 236 10,444,238 UNITED BANK FOR AFRICA PLC 206,906.50 6.05 -1.63 190 8,192,134 ZENITH BANK PLC 634,209.17 20.20 1.00 299 15,637,665 725 34,274,037 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 247,677.52 6.90 -0.72 116 7,634,255 116 7,634,255 841 41,908,292 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,727,504.75 134.00 -1.18 105 7,259,449 105 7,259,449 105 7,259,449 BUILDING MATERIALS DANGOTE CEMENT PLC 3,108,188.55 182.40 -0.87 98 302,162 LAFARGE AFRICA PLC. 157,051.01 9.75 - 57 569,658 155 871,820 155 871,820 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 302,107.44 513.40 - 12 6,022 12 6,022 12 6,022 1,113 50,045,583 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 70,589.34 74.00 - 9 5,607 PRESCO PLC 55,000.00 55.00 - 11 8,335 20 13,942 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,800.00 0.60 - 3 31,000 3 31,000 23 44,942 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 3 27,860 JOHN HOLT PLC. 182.90 0.47 - 3 413 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 46,745.19 1.15 1.77 43 3,200,013 U A C N PLC. 17,431.84 6.05 -2.42 52 1,419,769 101 4,648,055 101 4,648,055 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 28,578.00 21.65 - 26 189,417 ROADS NIG PLC. 165.00 6.60 - 0 0 26 189,417 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,923.58 1.51 - 8 9,400 8 9,400 34 198,817 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 9,395.40 1.20 - 7 66,744 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 102,838.47 46.95 -1.16 45 283,569 INTERNATIONAL BREWERIES PLC. 159,453.24 18.55 - 6 12,750 NIGERIAN BREW. PLC. 463,820.32 58.00 - 62 193,515 120 556,578 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 82,500.00 16.50 3.13 88 1,069,799 DANGOTE SUGAR REFINERY PLC 128,400.00 10.70 0.94 51 402,565 FLOUR MILLS NIG. PLC. 57,405.31 14.00 0.72 47 4,504,592 HONEYWELL FLOUR MILL PLC 8,564.61 1.08 - 7 117,694 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,741.58 15.00 1.35 18 182,369 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 211 6,277,019 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,566.31 10.95 - 14 64,497 NESTLE NIGERIA PLC. 1,133,498.44 1,430.00 - 24 51,174 38 115,671 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,678.16 3.74 - 14 112,386 14 112,386 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 29,183.01 7.35 - 15 34,292 UNILEVER NIGERIA PLC. 183,840.17 32.00 3.23 22 2,754,975 37 2,789,267 420 9,850,921 BANKING ECOBANK TRANSNATIONAL INCORPORATED 183,495.51 10.00 1.52 24 172,008 FIDELITY BANK PLC 49,546.90 1.71 1.79 111 24,643,673 GUARANTY TRUST BANK PLC. 909,423.44 30.90 -0.32 188 4,492,685 JAIZ BANK PLC 13,258.91 0.45 -2.17 8 571,425 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 67,657.48 2.35 - 173 3,960,612 UNION BANK NIG.PLC. 203,845.27 7.00 - 25 129,049 UNITY BANK PLC 8,182.54 0.70 - 14 225,477 WEMA BANK PLC. 24,687.66 0.64 3.23 82 2,695,950,744 625 2,730,145,673 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 1,000,000 AIICO INSURANCE PLC. 4,643.24 0.67 -2.90 22 3,317,837 AXAMANSARD INSURANCE PLC 20,055.00 1.91 - 3 20,801 CONSOLIDATED HALLMARK INSURANCE PLC 1,788.60 0.22 - 0 0 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 2,945.90 0.20 - 1 5,000 CORNERSTONE INSURANCE PLC GOLDLINK INSURANCE PLC 909.99 0.20 - 1 20 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,123.80 0.29 -3.33 11 720,100 LAW UNION AND ROCK INS. PLC. 1,976.31 0.46 - 2 10,850 LINKAGE ASSURANCE PLC 3,840.00 0.48 - 1 30,000 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 - 5 241,890 NEM INSURANCE PLC 10,825.03 2.05 -2.38 8 438,100 NIGER INSURANCE PLC 1,547.90 0.20 - 2 9,614 PRESTIGE ASSURANCE PLC 2,960.40 0.55 10.00 3 1,017,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 1,000 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 - 4 510,580 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 4 26,700 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 300 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 6,022.23 0.45 9.76 30 3,351,726 100 10,701,518

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 2,972.63 1.30 - 7 172,054 NPF MICROFINANCE BANK PLC 7 172,054 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 2 1,147 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2 1,147 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 6,980.00 3.49 2.65 46 558,302 CUSTODIAN INVESTMENT PLC 35,585.28 6.05 -0.82 13 396,501 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 32,674.47 1.65 -1.20 26 840,101 ROYAL EXCHANGE PLC. 1,131.98 0.22 -8.33 9 718,162 435,223.50 42.50 - 17 36,635 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 13,320.00 2.22 -4.72 59 3,266,045 170 5,815,746 904 2,746,836,138 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 5 59,000 5 59,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,575.00 5.05 - 1 2 GLAXO SMITHKLINE CONSUMER NIG. PLC. 10,164.95 8.50 - 9 35,840 4,054.30 2.35 - 12 692,060 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 - 12 370,281 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 34 1,098,183 39 1,157,183 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 816.96 0.23 9.52 32 9,872,840 32 9,872,840 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 346.47 0.70 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,643.62 0.35 -2.78 31 4,284,619 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 31 4,284,619 63 14,157,459 BUILDING MATERIALS BERGER PAINTS PLC 1,854.87 6.40 - 5 25,113 CAP PLC 21,770.00 31.10 - 11 25,437 177,437.26 13.50 - 14 22,513 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 30 73,063 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,465.85 1.40 -1.41 37 1,303,842 37 1,303,842 PACKAGING/CONTAINERS BETA GLASS PLC. 36,847.94 73.70 - 2 1,529 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 1,529 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 69 1,378,434 CHEMICALS B.O.C. GASES PLC. 1,565.08 3.76 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 68.20 0.31 -6.06 7 22,912,845 7 22,912,845 7 22,912,845 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,565.68 0.25 4.17 20 761,345 20 761,345 INTEGRATED OIL AND GAS SERVICES OANDO PLC 45,996.23 3.70 -5.13 82 2,953,527 82 2,953,527 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 58,957.33 163.50 - 26 118,923 CONOIL PLC 15,960.90 23.00 - 21 4,484 ETERNA PLC. 4,694.92 3.60 - 7 4,164 FORTE OIL PLC. 42,070.14 32.30 9.86 211 3,388,209 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 5 1,788 TOTAL NIGERIA PLC. 50,928.28 150.00 - 18 9,894 288 3,527,462 390 7,242,334 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 520 1 520 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 2 5,200 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 3 41,477 5 46,677 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 200 1 200 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 3,014.25 1.45 - 18 1,760 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 6 750 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 24 2,510 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 163.30 0.27 - 0 0 LEARN AFRICA PLC 1,033.74 1.34 - 3 64,288 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 776.54 1.80 - 3 16,806 6 81,094 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 497.31 0.30 - 2 1,400 2 1,400

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Tuesday 18 June 2019

BUSINESS DAY

POLITICS & POLICY Osun: Oyetola, APC, INEC ask Supreme Court to dismiss Adeleke’s appeal … Judgment fixed for July 5 Felix Omohomhion, Abuja

overnor Adegboyega Oyetola, his party, the All Progressives Congress (APC) and the Independent National Electoral Commission (INEC) on Monday, urged the Supreme Court to dismiss the four appeals filed by the candidate of the People’s Democratic Party (PDP) in the last governorship election in Osun State, Senator Ademola Adeleke. Judgment has been reserved till July 5. A seven-man panel of justices of the apex court presided over by Acting Chief Justice of Nigeria (CJN), Justice Tanko Muhammad announced the date after counsel in the matter adopted and argued their brief of arguments in the matter. The Court of Appeal had on May 9 set aside the majority decision of the tribunal which annulled the victory of Oyetola at the September 2018 polls and ordered INEC to issue a fresh Certificate of Return to Adeleke as duly elected Governor of Osun State. Adeleke’s four appeals, marked: SC/553/2019; SC/554/2019; SC/555/2019 and SC/556/2019, are challenging the May 9, 2019 judgments of the Court of Appeal,

Abuja, which affirmed the election of Adegboyega Oyetola of the All Progressives Congress (APC) as the governor of Osun State. The Court of Appeal also set aside the majority judgment of the election tribunal which had allowed Adeleke’s petition and declared him winner of the election. By agreement of lawyers in the appeals, the court took submissions from Onyechi Ikpeazu (SAN) for the appellant and Wole Olanipekun (SAN) for the 1st respondent (Oyetola) in respect of appeal marked: SC/553/2019. The court said its judg-

ment in the main appeal SC/553/2019 - will be applied to two other similar ones, filed by Adeleke against the Court of Appeal’s decision in relation to the appeals filed by the Independent National Electoral Commission (INEC) and the APC, marked: SC/554/2019 and SC/555/2019. The court also took arguments from Ikpeazu (for the appellant), Yusuf Ali (SAN) for INEC; Bode Olanipekun (SAN) for Oyetola and Olumide Olujinmi, for APC in relation to the fourth appeal, marked: SC/556/2019. In their arguments, lawyers to the respondents - INEC, Oy-

L-R: Sunday Makinde, commander, 651 Airforce Ikeja; M.S. Abdulfatai, director of Department of State Security (DSS) Lagos Command; Ali Mohammed, deputy commissioner of Police Operation, Lagos Command; Babajide Sanwo-Olu, Lagos State Governor; Tayo Ayinde, Chief of Staff to the Governor; Nasiru Muhammed, commander 9 Brigade Army Cantonment Ikeja and Ibrahim Shettima, commander NNS Beecroft, during a media briefing after the State Security meeting held at Lagos House, Alausa, on Monday, June 17, 2019.

Sanwo-Olu wins AD, LP at election tribunal Joshua Bassey

he Lagos governorship election petition tribunal sitting in Ikeja, on Monday, dismissed a petition filed by the Alliance for Democracy (AD) and the Labour Party (LP) challenging the victory of Governor of Lagos, Babajide Sanwo-Olu of the All Progressives Congress (APC) in the March 9, 2019 polls. Chairman of the tribunal, Justice T. T Asua, in his ruling, dismissed the petitions, citing inability of the petitioners to file applications for pre-hearing conference after the close of pleadings within seven days as prescribed by law. The three-man panel noted that timely application for pre-hearing conference was a condition to the hearing of the petitions and without the application for pre-hearing conferences, the petition cannot commence or get to the stage of judgment. The panel noted that Sec-

etola and the APC - faulted the appeals and prayed the court to dismiss them for lacking in merit. The respondents prayed the court to uphold the judgments as given on May9, 2019 by the Court of Appeal in Abuja, which affirmed Oyetola of the APC as the winner of the governorship election held in September 2018. In relation to the first set of appeals - SC/553/2019; SC554/2019 and SC/555/2019, Ikpeazu urged the court to set aside the judgments of the Court of Appeal and restore the majority judgment given in his client’s favour by the

tion 285(4) of the fourth alteration to the 1999 constitution was inapplicable because the timely application for pre-hearing conferences was a precondition in election petition matters. Dismissing the petitions, Asua said that inability to serve any of the respondents was not an excuse and that the consequence of failure to apply timely for pre-hearing conference is dismissal of such a petition. The Independent National Electoral Commission (INEC), Sanwo-Olu, All Progressives Congress (APC) and the INEC Residential Electoral Commissioner were listed as respondents to the petitions. Other respondents are -the returning officer for the Lagos State governorship election, Commissioner of Police and the Nigerian Army. Abiodun Owonikoko, counsel to Sanwo-Olu had via a motion filed on May 22 raised an objection based www.businessday.ng

on paragraph 18(1)(4) of the Electoral Act. Owonikoko noted that the AD and LP had not filed applications hearings for pre-trial conference within seven-days after the close of pleadings. Counsel to AD and LP, Bola Aidi, however, in his response dated May 26 had said section 285(8) of the fourth alteration of the 1999 constitution does not permit any electoral petition to be terminated at the interlocutory stages. AD, their gubernatorial candidate l Owolabi Salis and LP alongside Ifagbemi Awamaridi its gubernatorial candidate had in their petitions challenged Sanwo-Olu’s victory on the grounds that he is not competent to run as a gubernatorial candidate in the election. The petitioners claimed that the March 9 polls was marred by violence, voting irregularities and that SanwoOlu cannot vote or be voted for as he has no valid voters card.

election tribunal. In a counter-argument, Olanipekun, Ali and Olunijmi faulted the competence of the appeals and urged the court to dismiss them for lacking in merit. They prayed the court to uphold the May 9 judgments given in favour of the respondents by the Court of Appeal. In arguing the fourth appeal: SC/556/2019, Ikpeazu urged the court to set aside the two concurrent judgments of the election tribunal and the Court of Appeal, in which both courts rejected Adeleke’s request to void the supplementary election held after INEC declared the Osun governorship election inconclusive. Ikpeazu said his client’s contention was that INEC lacked the powers to have cancelled elections in some polling units and order a rerun. He argued that the supplementary election was unnecessary because his client had won the election and met the constitutional requirement to be declared winner. Ikpeazu prayed the court to set aside the Paragraph 44 of the INEC’s Guideline, on which basis the supplementary election was held, on the grounds that it conflicted with the Constitution. Olanipekun’s son, Bode Olanipekun (SAN), argued the fourth appeal for Oyetola, urged the court to disregard

Ikpeazu’s contention that the supplementary election was unnecessary. He argued that Paragraph 44 of INEC Guidelines was not in conflict with the Constitution. Olanipekun, who noted that Section 178(4) of the Constitution provides that the entire state is the constituency for a governorship election. He argued that “where elections have not held in the entire state, the appellant cannot contend that he won the election, as against the 2nd respondent (Oyetola), who won the election as conducted across the whole of the state,” Olanipekun said. He urged the court to dismiss the appeal for lacking in merit. Lawyers to INEC and the APC argued in similar vein, with Ali (for INEC) arguing that Ikpeazu’s submission on reliefs 8 and 9 of his client (Adeleke’s) petition, overlooked the fact that election tribunal are special tribunal with limited jurisdiction to determine whether somebody was properly returned in an election. “The quarrel of the appellant is against a concurrent finding of two lower courts. There is no compelling reason to make this court interfere with the concurrent findings of the two lower courts,” Ali said.

EDHA crisis: 19 members-elect demand immediate inauguration of 7th assembly IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

ineteen members- elect of the Edo State House of Assembly on Monday demanded the immediate inauguration of the seventh assembly by the state Governor, Godwin Obasski. Recall that civil society group under the aegis of One Love Foundation had last Wednesday protested the non-inauguration of the house by the state governor. The president of the foundation, Patrick Eholor, had during the protest, lamented the non-transmission of proclamation letter to the clerk of the house for the inauguration of the seventh house of assembly. The Edo State sixth assembly ended on June 7, while the seventh assembly was supposed to have been inaugurated on June 10, 2019

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The delay in the inauguration of the house has made it the only assembly yet to be inaugurated in the country. But worried by the continued delay in inaugurating the assembly, nineteen members-elect of the 24- member House during a press conference at the secretariat of the Nigeria Union of Journalists (NUJ), Edo State council in Benin-City, noted that there cannot be democracy without legislature. They also accused the state governor, Godwin Obaseki of attempting to truncate democracy in the state. The spokespersons for the aggrieved elected members, Washington Osifo, memberelect for Uhunmwode constituency said: “By virtue of section 105 (3) of the Constitution of the Federal Republic of Nigeria 1999, as amended, the governor is constitutionally required to immediately issue a letter of proclama@Businessdayng

tion for the inauguration of the new assembly to avoid a vacuum. According to him, the tenure of members of the last assembly expired on June 7, 2019. All other states of the Federation of Nigeria have inaugurated their Houses of Assembly; Governor Godwin Obaseki has deliberately refused to allow the House of Assembly to function, thus usurping the powers of the legislators. “It is public knowledge that all the members-elect in Edo State are all of the same political party, the All Progressives Congress (APC). “It is also common knowledge that the governor, no matter how powerful, cannot impose individuals either as Speaker or Deputy Speaker on the legislators. At best, he can only lobby for his preferred candidates as was recently witnessed at the National Assembly”, he said.

Monday 17 June 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper STEPHEN MORRIS AND OLAF STORBECK

eutsche Bank is preparing a deep overhaul of its trading operations including the creation of a so-called bad bank to hold tens of billions of euros of assets as chief executive Christian Sewing shifts Germany’s biggest lender away from investment banking. The plan would see the bad bank house or sell assets valued by the German lender in its accounts at up to €50bn after adjusting for risk. Deutsche’s equity and rates trading businesses outside continental Europe will be severely shrunk or closed entirely as part of the revamp, although the final decision is pending, according to four people briefed on the plan. Managers are also set to unveil a new focus on transaction banking and private wealth management. The proposed bad bank, which is known internally as the non-core asset unit, will comprise mainly of longdated derivatives, the people said. Mr Sewing is likely to announce the changes with the bank’s halfyear results in late-July. Shares in Deutsche Bank rose 3 per cent in early trading to €6.22 on the plans. The final scale of the non-core unit has not been decided and the number “continues to oscillate”, but executives are discussing at least €30bn of risk-weighted assets with an eventual size of €40bn to €50bn most likely, two of the people said. At the upper end, it would account for 14 per cent of Deutsche’s balance sheet. “The cuts need to be radical,” said one senior figure at the bank. “It makes sense for us to put all these long-term, nil-revenue assets in a non-core unit.” The person added: “We now have

Deutsche Bank to set up €50bn ‘bad bank’ as part of overhaul

Germany’s biggest bank will shrink or shut its US equity and trading businesses the capital and liquidity freedom to do what needs to be done; we couldn’t have acted decisively much sooner because we needed to have built up those buffers.” The lender said in a statement: “Deutsche Bank is working on measures to accelerate its transformation so as to improve its sustainable profitability. We will update all stakeholders if and when required.” Deutsche’s investment bank has weighed on earnings in recent years, and made losses in the past two quarters. Along with a series of fines for misconduct scandals, the poor performance of its core business has driven down the bank’s share price to the lowest in its 149-year history. Sentiment darkened in April when a long-rumoured merger with Commerzbank collapsed. The lender is targeting a return on tangible equity — a measure of profitability — of at least 4 per cent this year, below most rivals. But it generated only a 1.3 per cent return in the first quarter. None of the analysts that cover the group forecast it can achieve its goal without major structural changes. “Mr Sewing needs to be decisive,” said one senior European policymaker. “The time for incremental change is over.” Three people familiar with the plan said any perception that Paul Achleitner, the bank’s chairman who had been seen as a gradual reformer,

UBS loses China bond mandate as ‘pig’ row fallout grows

ne of China’s biggest stateowned companies has shut UBS out of advising on a large bond deal amid widening fallout from remarks about swine fever by one of the Swiss bank’s top economists. China Railway Construction Corporation has decided not to hire UBS on a dollar-bond sale after comments last week by Paul Donovan, chief economist at UBS Global Wealth Management, about pigs in China, according to people familiar with the situation. UBS had won a mandate on the $500m to $1bn bond sale by the Chinese group, but was removed as of Monday morning, the people said. CRCC did not respond to a request for comment, and UBS declined to comment. Fees for underwriting Chinese debt deals, especially for state-owned enterprises, tend to be lower than comparable deals in other regions. But the loss of debt capital markets business for the Swiss bank is a new

Now that the bank is sitting on €260bn of cash and similarly liquid securities, it no longer relies on these assets for cashflow and can attempt to run them down or sell them to other banks with lower funding costs and capital pressures, or to private equity investors eager to scoop them up at a discount, one of the people said. The German bank believes it can divest the assets without taking large hits to its profit or capital because the long-dated interest rate derivatives are not toxic and have a predefined run-off plan, one of the people said. The bank will retain its better-

performing bond trading business — which is ranked in the global top-five by industry monitor Coalition — and its currency-trading operation, which reclaimed the second spot in the Euromoney FX survey last year. Shareholders sitting on painful losses have been ramping up the pressure since the stock dipped below €6 for the first time this month, down 40 per cent in the past year. JPMorgan estimated last year that Deutsche’s US operation was losing 25 cents for every dollar of business it does and its global equities business alone loses about €600m annually.

The world’s two largest auction houses are now owned by French billionaires ARASH MASSOUDI, ERIC PLATT, AND HARRIET AGNEW

blow to the reputation of its franchise in Asia, following the suspension of its initial public offering sponsorship licence in Hong Kong last year. Although the bank and Mr Donovan have apologised and removed the comments from UBS’s website, the controversy has grown. “Chinese consumer prices rose. This was mainly due to sick pigs,” Mr Donovan said last Wednesday in comments about the impact of African swine fever in China. “Does this matter? It matters if you are a Chinese pig. It matters if you like eating pork in China. It does not really matter to the rest of the world.” Chinese financial group Haitong International Securities said on Friday that it had cut ties between its Hong Kong unit and UBS across all business divisions, based on “a collective decision made by the senior management”. The Chinese Securities Association of Hong Kong, which represents the brokerage arms of many Chinese banks in Hong Kong, rejected the bank’s response on Thursday and called on UBS to fire Mr Donovan. www.businessday.ng

would be a brake on Mr Sewing’s restructuring was outdated. “We all know it needs to be radical,” one said. While the derivatives destined for the non-core unit still provide some cash flow, all the profit on the deals — and therefore the associated bonuses for those who arranged them — were booked up-front. In the years since the instruments were first arranged, they have become a major drag on the bank’s capital because of their more stringent treatment under new regulations introduced after the financial crisis, said the people briefed on the plan.

Sotheby’s to be acquired by Patrick Drahi in $3.7bn deal

One of country’s largest SOEs shuts Swiss bank out of advising on big bond deal

MERCEDES RUEHL AND DON WEINLAND

Deutsche chief Christian Sewing ‘needs to be decisive’, said one senior European policymaker. ‘The time for incremental change is over’ © Bloomberg

atrick Drahi, the billionaire founder of telecoms group Altice, has agreed to buy famed auction house Sotheby’s in a $3.7bn deal including debt that will return the company to private ownership after 31 years. The transaction will see Mr Drahi’s BidFair holding company pay $57 per share to acquire all of Sotheby’s common stock, a 61 per cent premium to its most recent closing price. The takeover by the FrancoIsraeli entrepreneur will mean the world’s two largest auction houses are both in the private hands of French billionaires. Two decades ago Sotheby’s arch rival Christie’s was bought by Artemis, the holding company of France’s Pinault family, for $1.2bn. Sotheby’s and Christie’s have had a spree of record-breaking art auctions over the past two years, as the art market recovered from a lull that coincided with a broad downturn in financial markets.

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The resurgence of the art market was cemented with the $450m sale of a contested Leonardo da Vinci painting in 2017. After that, records have been set with multimillion-dollar sales of works by David Hockney, Claude Monet and Jeff Koons. While Christie’s was out of public glare, Sotheby’s was thrown into turmoil multiple times by activist interventions. The group attracted a blistering public attack from hedge fund managers Dan Loeb and Mick McGuire, with the latter accusing it of “wilful neglect” in 2015. Mr Loeb’s Third Point hedge fund is Sotheby’s second-biggest shareholder with a 14.3 per cent stake and sits on the company’s board. Sotheby’s worked to reign in costs and diffuse tensions with several of its large shareholders. And as the art market rebounded in 2016 and 2017, shares of the company rallied back towards their all-time high; a peak hit in 2007 that gave the group an equity @Businessdayng

valuation of $3.8bn has still not been hit. Domenico De Sole, chairman of Sotheby’s, said that the board “enthusiastically supports Mr Drahi’s offer, which delivers a significant premium to market for our shareholders.” Mr Drahi is best known for his activity in the telecoms and media sector over the past two decades in which he has used debt-fuelled acquisitions to build Altice, a telecoms and media empire that expanded from its roots in France to the US, Portugal, Israel and the Dominican Republic. In January last year, Mr Drahi announced that Altice would spin off its US business and restructure its European operations after poor results heightened concerns over the company’s ability to keep servicing its then €50bn debt pile. Since then Altice’s US arm has posted solid performance, while the European business is languishing against a backdrop of a highly-competitive environment in its largest market of France.

Monday 17 June 2019

BUSINESS DAY

NATIONAL NEWS

Airtel Africa eyes £3.6bn valuation in London IPO Continent’s second biggest mobile operator sets price range at 80-100p MYLES MCCORMICK

irtel Africa is targeting a valuation of up to £3.6bn as it pushes ahead with a London listing, the continent’s second-largest mobile operator said on Monday. The group has set a price range for its initial public offering at 80p to 100p, implying a market capitalisation of £3.007bn to £3.623bn, excluding an overallotment option. The company operates a telecoms and mobile money business across 14 African countries. It revealed last month it was planning to press ahead with a listing in a bid to cut debt levels. “We have built Airtel Africa into the second-largest mobile operator in Africa and our clear strategy and efficient business model make us well positioned to capture the

growth opportunities across our markets, in voice, data and mobile money,” said Raghunath Mandava, Airtel Africa chief executive. “Our leadership position, positive track record and the exciting growth opportunities in the markets where we operate, have resulted in significant interest in our business.” The listing will see the company float 595.2m-744m new shares, raising a total of £595m, including an overallotment option. The group, which is owned by Bharti Airtel of India, also said on Monday it would pursue a Nigerian listing concurrently with the London IPO. At least 25 per cent of the stock is expected to be freely floated immediately following the IPO. Shares are expected to begin trading on June 28.

Poor countries pay up to 30 times more for medicines

Nations urged to buy more unbranded generics to lower healthcare costs SARAH NEVILLE AND DARREN DODD

he world’s poorest countries are paying some of the highest drug prices, with everyday medicines costing up to 30 times more than in rich nations, according to a study. The Washington-based Center for Global Development examined billions of dollars in spending by developing countries, concluding that low- and middle-income countries were paying 20 or 30 times more for medicines such as omeprazole, for heartburn, or paracetamol, a common pain reliever. Pharmaceutical and healthcare markets “don’t work for the poorest countries, especially in South Asia and Africa”, said Kalipso Chalkidou, one of the report’s authors. The study uncovered a stark disparity in the proportion of poorer countries’ use of unbranded generic drugs, usually the least expensive option. In the poorest nations, branded generics — which command a price premium — make up about two-thirds of the market by volume and value. Unbranded generics are “a tiny sliver”, said the researchers, making up just 5 per cent of the market by volume and 3 per cent by value. By contrast, in the US and the UK, unbranded quality-assured generics account for 85 per cent of the pharmaceutical market by volume, but only about a third by cost. Nor was there much competition in the supply of essential medicines in low- and middle-income countries, the report said. These markets tended to be dominated by a single, or small number, of suppliers, directly affecting the prices paid by public bodies or consumers. In some low- and middle-income countries, the largest seller of certain medicines “accounts for upwards of 85 per cent of all sales, such as contraceptives in Zambia, the Philippines, Senegal, and Kerala; cancer medicines in Zambia and Kerala; diabetes medicines in Zambia; and antiparasitics in

the Philippines, Zambia, Tunisia, and South Africa”, the researchers found. Part of the solution, the researchers said, was for poorer nations to sharpen their procurement skills so as to get a better deal. Procurers often bought branded generics in the mistaken belief that they were of a higher quality than unbranded versions of the same medicines. Because regulatory systems were often weak, buying branded generics was one perceived method of screening out the fakes that flood much of the developing world. “A concerted push is needed to professionalise procurement and broaden capacity from the global to national level,” researchers said. In addition, said Ms Chalkidou, as countries became wealthier and donor money diminished, more of the total expenditure came from people’s own pockets, exacerbating inequalities. “If you’re buying as an individual you can’t get a good deal.” Amanda Glassman, executive vice-president and senior fellow at the Center for Global Development, singled out the lack of competition in markets for essential medicines in African countries, saying there were clearly “high market-entry barriers, and this means high prices for both governments and consumers”. Blaming “flawed drug-buying practices and broken generic markets”, she said: “We’re talking about access to common meds, not the latest cutting-edge cancer drugs.” Ms Glassman added: “It’s not as exciting to talk about procurement as new health technologies or biotech breakthroughs. But drug purchasing is incredibly important, and if it’s done badly you end up with the poorest countries in the world paying some of the highest drug prices.” That undermined progress towards universal health coverage, she said. The report was based in part on the deliberations of a working group consisting of policymakers, representatives from global health institutions and donors, procurement specialists, and academics. www.businessday.ng

Trump’s ‘maximum pressure’ Iran strategy stokes war fears Administration increasingly divided over whether campaign will reduce tensions DEMETRI SEVASTOPULO

S President Donald Trump stoked fears that his campaign of “maximum pressure” on Iran would lead to military conflict after he blamed Tehran for attacks on tankers in the Gulf of Oman last week. Mr Trump has swung like a pendulum on Tehran since he withdrew the US from the Iran nuclear deal a year ago. At times he has warned Iran of “severe consequences” if it threatened the US. But he has also suggested that he wanted to meet the Iranian leadership to negotiate a deal, before saying the time was not right. “I genuinely believe the president hopes that his approach of maximum pressure will lead to talks but . . . the policy that he has approved may lead to the war that he doesn’t want,” said Robert Malley, a Middle East expert who heads the International Crisis Group. Mr Trump hopes economic sanctions will force the Iranian regime to the negotiating table but with an increasingly weak bargaining position. However, there are divisions within the administration and mixed views among experts about whether the policy will reduce tensions with Iran. These have been

mounting since the US withdrew from the Iran nuclear deal a year ago and escalated dramatically recently with a series of attacks on ships in the Gulf that the US has blamed on Iran. Iran underlined its own frustration on Monday by announcing that within 10 days it would exceed limits on its enriched uranium stockpile that were agreed in the landmark 2015 nuclear deal. Trita Parsi, author of the book Losing an Enemy about the Obama administration deal with Iran, said Mr Trump had little interest in military action, but was being misled by John Bolton, national security adviser, and Mike Pompeo, secretary of state. “The advisers are giving him advice that he believes is an effective way of getting to the [negotiating] table, but they know is an effective way of ensuring it escalates into a military confrontation.” Both men have denied that the US policy is regime change. Mr Pompeo last year outlined 12 conditions for any deal with Iran, ranging from measures related to its nuclear and missile activities to ceasing support for terrorist groups. Bill Burns, head of the Carnegie Endowment for International Peace, who served as deputy secretary of state during the Obama administration, said the Trump team were

less interested in pursuing a better nuclear deal and more interested in “capitulation across a range of issues, or the regime’s implosion”. “I don’t think either of those goals are realistic, so we are left with a situation where hardliners in both capitals become mutually enablers and get into a situation that can escalate quickly,” said Mr Burns. The White House counters that Mr Obama was not tough enough on Iran. It argues that the nuclear deal was flawed and did not deal with what the Trump administration describes as Iran’s other malign activities, including its support for regional militias and its ballistic missile programme. “If the maximum pressure campaign doesn’t get them to the table . . . at least it would constrain their resources to the point that they would have fewer options for engaging in the kind of behaviour that we find so problematic,” said one senior administration official. Some critics argue that Mr Trump has failed to back up his hardline approach on Iran with the kind of diplomacy that was applied in tandem with its economic pressure on North Korea. And while Mr Trump has tweeted on occasion about wanting to talk to Iran’s leaders, there has been little outreach to make that a reality.

Iran threatens to breach nuclear deal enrichment limits Tehran says threshold agreed on its uranium stockpile will be exceeded within 10 days MONAVAR KHALAJ AND ANDREW ENGLAND

ran said that within 10 days it would exceed limits on its enriched uranium stockpile agreed in a landmark nuclear deal, a move that will stoke already elevated tensions between the Islamic republic and the west. A spokesman for the Atomic Energy Organisation of Iran told reporters on Monday that the country’s production of uranium enriched to a low level had increased fourfold and its stockpile would pass a 300kg limit by June 27. Iran could also increase its enrichment of uranium above a purity of 3.67 per cent, the level agreed under the accord, the spokesman added. The announcement added to a sense that the nuclear deal Iran signed with world powers in 2015, which has been on life support, is in danger of total collapse. Iran has not previously breached the accord, but last

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month Tehran said it would increase its atomic activity as the Iranian economy reels from the impact of US sanctions — one year after Donald Trump unilaterally withdrew the US from the agreement. The announcement on Monday will increase the pressure on the accord’s other signatories — Germany, France, UK, Russia and China — to come up with concrete steps to counter the impact of US sanctions. In May, Hassan Rouhani, Iran’s president set a 60-day deadline for the signatories to deliver tangible measures to enable Iran to export oil and transact with international banks. The deadline is July 7. The Atomic Energy Organisation spokesman, Behrouz Kamalvandi, said the signatories to the deal had time to save the accord, but added that the “current conditions cannot continue”. He added that Europe “was killing time or wants to do something but cannot practically do” anything to save the deal. @Businessdayng

“We have quadrupled production of uranium. The countdown has begun as of today and Iran will surpass the ceiling of 300kg within the next 10 days on June 27,” he said. If Iran is deemed to be in breach it would raise the risk of EU and UN sanctions being reimposed on the country. Under the terms of the agreement, Tehran agreed to limit its nuclear activity in return for the economic benefit of having many sanctions lifted. But reimposed US sanctions have severely stymied Iran’s ability to export oil and pushed the economy back into recession. Germany, France and the UK, the so-called E3, have sought to save the deal, which they argue was critical to defusing an international crisis and ease the risk of an arms race in the Middle East. This year, they launched a payments channel, Instex, in a bid to keep some trade and financial links open. But it is not yet operational and its initial focus was to be on food and medicine.

Monday 17 June 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Airbus steps up pressure on Boeing with $10bn-plus new orders European manufacturer’s multibillion-dollar booking comes as it launches new model at Paris Air Show

SYLVIA PFEIFER

irbus stepped up pressure on Boeing on Monday, unveiling more than $10bn worth of aircraft orders and launching a new model as it seeks to gain advantage over its US rival grappling with the 737 Max crisis. The European aircraft manufacturer, which together with Boeing dominates the global aerospace market, kicked off the Paris Air Show by unveiling a multibillion-dollar order for 100 single-aisle planes from Air Lease Corporation, one of the world’s largest aircraft leasing companies. The order is a vote of confidence in a new longer range version of the Airbus A321, dubbed the A321XLR, which will fly transatlantic routes from 2023. The new plane will be in the air at least two years before Boeing’s own new planned mid-market plane, which is designed to bridge the gap between the US company’s biggest single-aisle passenger jet and the 787 Dreamliner twin aisle. Kevin McAllister, head of Boeing Commercial Airplanes, said on Monday that Boeing continued to “work on the business case” for a new midsized jet. The plane would be “uniquely positioned for the middle of the market”, he said, adding that “it offers twin-aisle comfort with single-aisle economics and operating costs”. However, he added that Boeing’s key priority was returning the Max, which has been grounded since March in the wake of two deadly crashes that killed more than 300 people, safely to the skies. John Plueger, chief executive of

Air Lease, said he “orders airplanes when the deal is right,” adding that its contract with Airbus, was “completely independent of what was going on with Boeing”. Under the terms of the agreement, Air Lease has committed to buying 27 of the jets and also 50 A220-300s. At list prices, the order is worth around $11bn. The XLR will have a range of up to 4,700 nautical miles, 15 per cent more than its current longest range single-aisle, the A321LR. It will also offer 30 per cent more fuel efficiency compared with an earlier generation of the aircraft. As a result, the plane would let operators open new routes that avoid big transport hubs, according to Christian Scherer, chief commercial officer at Airbus. Sash Tusa, analyst at Agency Partners, said Boeing would struggle to launch a brand new plane to take on the A321XLR in less than six and a half years, the average time both it and Airbus have taken in the past. “This idea that you can launch a new aircraft in five and a half years is wholly unrealistic,” he said. Separately, Airbus also unveiled an order for 14 A330-900s from Virgin Atlantic, worth $4.1bn at list prices. The new jets will replace the UK carrier’s A330ceos from 2021. Shai Weiss, Virgin Atlantic chief executive, said the airline was undertaking its “biggest ever fleet transformation” that promised lower harmful carbon emissions and a significant reduction in noise. By 2024, the average age of the Virgin fleet will be three and a half years, he said, an almost 50 per cent reduction from today.

Deal to increase Thai group’s daily output by 16,000 barrels of oil equivalent

isbon-based philanthropic body the Calouste Gulbenkian Foundation said on Monday it had reached an agreement to sell Partex, its energy holding, to Thailand’s PTT Exploration and Production for $622m. “The transaction marks a reshaping of the Foundation’s asset base, which is invested primarily with the aim of earning attractive long-term investment returns,” Isabel Mota, president of the CGF’s board of trustees, said in a statement. Phongsthorn Thavisin, PTTEP’s chief executive, said the group had signed a share purchase agreement to acquire 100 per cent of Partex in a move that would increase the Thai group’s revenue stream, production and reserves. Partex currently invests in seven oil and gas projects in five countries, with a focus on Oman and the United Arab Emirates. In particular, the purchase would enable PTTEP to become part of the consortium running the largest onshore oilfield in

Oman and pave the way for “future investment opportunities” in the Middle East, the Thai company said in a statement. Overall, the acquisition will add 16,000 barrels of oil equivalent per day to PTTEP’s sales from Partex operations in Oman, the United Arab Emirates and Kazakhstan, the Thai group said. It will also add proved and probable reserves of about 65m barrels of oil equivalent, the statement added. The CGF manages the fortune left by Calouste Gulbenkian, (1869-1955), the Armenian oilman known as “Mr Five Per Cent”, who moved to Portugal in 1942. It has owned Partex for more than 60 years. Ms Mota said “the reconfiguration of the Foundation’s financial portfolio and investments will reinforce its diversification, social and environmental impact and alignment with the philanthropic nature of the Foundation’s activities.” The sale is expected to be completed by the end of this year. Jefferies International Limited is acting as financial adviser to the CGF. www.businessday.ng

European financials stand out as global stock indices drift MICHAEL HUNTER AND DANIEL SHANE

tocks drifted on Monday in cautious trade ahead of a run of central bank meetings, but financial stocks stood out, with prominent gains for Deutsche Bank after an FT report that the German lender was to create a bad bank to house underperforming assets. Deutsche was the top performer on Frankfurt’s Xetra Dax 30, with shares in the company up almost 2 per cent against a slip of 0.1 per cent for the overall index. The Europe-wide Stoxx 600 was 0.2 per cent softer, while the index tracking its banks was up 0.9 per cent. London’s FTSE 100 slipped 0.2 per cent and the CAC 40 in Paris rose by the same margin.

New York’s S&P 500 ticked up 0.1 per cent in initial trade. Attention was turning to a significant roster of central bank meetings scheduled for this week, that are due to test perceptions of the dovish tack taken recently by a series of global monetary policymakers. The US Federal Reserve’s policy statement is due on Wednesday. The Bank of Japan and Bank of England will make their own policy decisions on Thursday, with central bankers in Thailand, the Philippines, Indonesia and Thailand also due to meet the same day. In the meantime, there was a pause in the wider rally for eurozone government bonds after it took yields to a series of record lows last week on demand for the relative safety of the debt,

in line with concern about the outlook for global growth. Germany’s 10-year Bund, seen as Europe’s safest debt, was steady, yielding minus 0.255 per cent, up 1.2 basis points on the session, leaving investors holding it to maturity facing a loss. The US 10-year Treasury yield slipped 1bp to 2.089 per cent. The cautious feel to sentiment lingered as investors also kept watch on the trade dispute and geopolitical tension in the Middle East. Brent crude came off a two-session rally after an attack on two oil tankers near the Straits of Hormuz stoked worries about potential supply disruption. The international marker, which had traded around some of its weakest level of 2019 before the incident, fell 0.4 per cent to $61.71 a barrel.

Stocks to watch: Lufthansa, BAT, Hammerson, Array BioPharma BRYCE ELDER

Gulbenkian Foundation sells energy holding to Thailand’s PTTEP for $622m PETER WISE

Order seen as a vote of confidence in a new longer range version of the Airbus A321

ufthansa led airline stocks lower after warning that competition in Europe would hit full-year earnings. The German flag carrier guided group adjusted earnings before interest and tax for 2019 of between €2bn and €2.4bn, down from €2.4bn to €3bn previously, citing margin pressure from excess industry capacity and weaker ticket pricing. Transatlantic and long-haul demand continued to be strong but short haul had deteriorated, particularly in Germany and Austria, with the Eurowings budget brand expected to report a loss. According to RBC Capital Markets, Lufthansa had created its own problems by increasing capacity faster than economic growth. Yet management still seemed focused on winning market share rather than delivering profit, it said. Kier slipped to a record low after rushing to deliver findings of a strategic review, as well as warning that a crisis of confidence among customers and suppliers meant debt levels would be much higher than previously thought. Andrew Davies, Kier’s new chief executive, set out a plan to sell or wind down non-core divisions, including its residential and property arms, and to cut costs by at least £55m by 2021. Mr Davies said he expected full-year average net debt

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to be between £420m and £450m, up to £90m higher than previous expectations. Liberum said that with Kier trading at little more than two times full-year earnings, the stock was “clearly discounting a lot of bad news. However, there is much to be concerned about.” While group net debt might appear manageable, the planned disposals were likely to be complicated and very dilutive to earnings, particularly given both property and residential arms were structured as joint ventures, it said. Array BioPharma jumped on news that Pfizer was buying the USlisted cancer drug developer. Pfizer agreed to pay $48 a share, a 62 per cent premium over Friday’s closing price, which gave the deal an enterprise value of $11.4bn. Array had been widely considered a takeover target following its publication earlier this month of promising results from a final-stage trial to treat colorectal cancer. “We’d be very surprised if another suitor chose to emerge here at a higher price point, particularly given a perceived lack of strategic fit amongst those remaining suitors with sufficient financial bandwidth,” said Stifel, which did not expect to see interest from previously mooted suitors Eli Lilly and AstraZeneca. The $11.4bn price tag was not out of line with recent oncology deals, at 6.5 times peak product revenues between 2024 to 2026, said Can@Businessdayng

tor Fitzgerald. On oncology sector peers that may now attract attention, Cantor highlighted Matrix Service Company and Stifel named Exelixis, though both brokers cautioned that the companies’ pipeline treatments were riskier than Array’s. Sellside stories Peel Hunt upgraded Hammerson to “add” from “hold” as part of a property sector review. The broker noted that after falling by more than half over the past two years, Hammerson was trading at a 60 per cent discount to net asset value with a 9.1 per cent dividend yield. Progress with disposals could trigger a rally, particularly if they were from the lower yield end of Hammerson’s shopping centre portfolio, Peel Hunt said. Morgan Stanley downgraded British American Tobacco to “underweight” from “equal weight” with a £26 target price. Its move was in response to US Food and Drug Administration agenda documents showing it will probably publish a proposed rule on maximum nicotine levels in October. “Reducing nicotine in cigarettes to non-addictive or minimally addictive levels, in our view, would be a potential game-changer for the US industry,” said Morgan Stanley. “While a proposed rule is not an indication of the likelihood of a final rule, we believe this event may come as a negative catalyst for the tobacco sector.”

Monday 17 June 2019

BUSINESS DAY

ANALYSIS

Rick Caruso and his California dream Developer has an eye on a bigger picture: to be mayor of Los Angeles he past year has been a busy one for billionaire property developer Rick Caruso. He opened one of the most lauded shopping destinations in the US, moved into the luxury hotel business, was drawn into the US college admissions furore by a guest on his nine-bedroom yacht, and let it be known that he might like to be mayor of Los Angeles some day. But right now the chairman of the board of trustees at the scandal-hit University of Southern California is upset about a doormat. Walking in from the well-staffed grounds of his Italianate mansion in the west Los Angeles district of Brentwood to a fireplace-warmed living room, he spots with dismay that the mat is not lined up with the door. His eye for detail is “an uncontrollable thing”, he says as Dodge, his dog, settles in at his feet. It is the same at properties such as Palisades Village, the Nantucket-

plined and more aggressive. “I’d like to double the size in five years,” he says, adding that he sees no need to go public to do so. “There’s no shortage of capital to do our projects and I think it would also inhibit our ability to make very quick decisions.” Caruso values the company’s assets at more than $5bn. He has hired consultants McKinsey and cloud software company Salesforce to put “a little more structure” in the 200-person business, and has been pleased to hear them conclude that its founder’s perfectionism is not what needs to change. “There was sort of a lore in the company [that] the reason we go over budget is because Rick walks around and says ‘move that wall’,” Caruso relates. The consultants obligingly reported back that the inefficiencies were in its design and building process instead. Caruso’s eye has created a lucrative formula. The Grove looks like somewhere between your most rose-tinted recollection of your home town and what you hoped

like cluster of boutiques he opened last year, where executives tell of Caruso ordering flower beds to be replanted to match a nearby cherry tree’s blossoms. Up the coast in Montecito, where the 60-year-old cut the ribbon on the 161-room Miramar resort in April, he has made sure to have a hawk patrolling the skies so guests are untroubled by seagulls. And at The Grove, the 2002 development that made his name with a Hollywood-like take on what a thriving US town centre should be (and that reputedly attracts more visitors each year than Disneyland), he just stopped his team from laying a cement approach to a new booth. It would not have matched the older cement beside it, he shudders. “That would drive me crazy.” All three properties are owned by his 30-year-old eponymous company where, he says, the details make the big picture. He likes to say he doesn’t own a single mall; nor does he call his business — which includes residential, office and restaurant operations — a property company. It is a hospitality group, he says, and its retail outlets’ blend of entertainment, service and nostalgia is a rare winning formula in an industry counting the failures of faceless or faded formats, from Toys R Us to Sears. Caruso’s net operating income has compounded at an average 19 per cent a year over an unbroken three-decade run of growth, building its founder an estimated $4bn fortune. Now, after stretching to complete the Palisades and Miramar projects back to back, he says the company needs to be more disci-

Disneyland would be. A polished double-decker trolley bus conveys smartphone-snapping tourists past a retro theatre whose takings per screen exceed any other in the US and a choreographed fountain by which people like to propose marriage. There is nothing folksy about the business model, however. All that brick and stone puts construction costs 10-20 per cent above industry averages, Caruso says, but the company claims an occupancy rate of 100 per cent. The Grove’s sales per square foot average a lofty $2,200 versus an industry norm closer to $400. At the Palisades, Caruso says some retailers are making more than $4,000 per square foot. One-fifth the size of The Grove, it features an old-world ice cream parlour, a lawn where toddlers pick books from a miniature library, and online fashion brands’ first forays into the kind of brick-and-mortar stores where it took several meetings to agree on the right shade of mortar. From the street, visitors can ogle Caruso’s 1971 green Mercedes. It sits behind glass in a lift that goes to his cavernous office above where a 1929 Duesenberg, a boat-like 1950s Fiat Eden Roc and another dozen vintage cars sit, as polished and pristine as his man-cave’s walk-in wine cellar and one-chair personal barbershop. It is a far cry from Caruso’s beginnings in business. His father Hank, who founded Dollar Rent A Car, pushed Rick to study law, and it was while working for a New York law firm that Caruso made his first investment, by buying a duplex in the LA neighbourhood of Westwood.

ANDREW EDGECLIFFE-JOHNSON

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Trade war: will US espionage fears scupper Chinese rail group?

State-owned CRRC faces claims that its rail cars could be used for spying JAMES POLITI AND TOM MITCHELL

n its 19th century heyday, the city of Springfield in Massachusetts produced the first industrial assembly line, the first gasoline-powered automobile and the first sleeping rail car. Wason, one of its leading companies, made passenger coaches and streetcars for clients across the US and countries as far afield as Egypt. While Wason went out of business in the 1930s, Springfield prospered well into the 20th century before deindustrialisation forced many of its factories to close. So when a Chinese company announced in 2014 that it was investing $95m in a new plant to build rail cars — on a site that once housed a vast Westinghouse factory that closed in the 1970s — many in the region were excited about the prospects. For the past four years, around 200 workers have been employed in a gleaming new factory producing cars for the Boston subway system, with work on similar contracts for Philadelphia and Los Angeles to follow. Yet rather than being celebrated as a symbol of potential regeneration, the plant has found itself sucked into the escalating trade conflict between the US and China. For its critics, the issue is symbolised by the giant Chinese flag flying alongside the stars and stripes at the main gates — a nod to its ownership by CRRC, a Chinese state-owned enterprise that is the biggest manufacturer of rolling stock in the world. Leading US politicians from both parties have accused the company of using its links with the Chinese state to compete unfairly for contracts and of being a vehicle for possible Chinese espionage. Some have called for CRRC’s exclusion from upcoming tenders for the Washington and New York subway systems. Such criticisms have been greeted with bemusement in Springfield. John Scavotto Jr, the leader of the local chapter of the sheet metal workers union, says the CRRC facility is a “godsend” — with high-paying jobs including benefits — but is worried about its future and is angry at the hostility coming from US President Donald Trump and Washington. “This guy wants to have his war with China, let him have it, but leave us alone in Springfield,”

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he says, speaking of the US president. “I beg them to come down here from Washington and see for themselves what they’re trying to hurt, what they’re trying to quash, what they’re trying to make disappear.” The furore over CRRC and its Massachusetts plant is emblematic of the increasingly febrile climate surrounding many Chinese investments in the US, at a time when the world’s two biggest economies are engaging in a process of decoupling that is driven by broader commercial and strategic tensions. Chinese investment in the US has always been fairly controversial, even after the country’s accession to the World Trade Organization in 2001. Oil company Cnooc’s proposed 2005 takeover of Unocal was scuppered in large part because of political opposition, and others have met similar fates since then. Chinese foreign direct investment in the US did, however, increase over the years, hitting a peak of $46bn in 2016. Since Mr Trump came into office, it has dropped sharply, to $29bn in 2017 and just $5bn in 2018, according to Rhodium Group. A key driver of the decline emanated from Beijing, rather than Washington, following capital controls that reined in foreign acquisitions by many private Chinese entities. But perceived US hostility has been another major spur, especially over the past year. Chinese acquisitions of American companies in sensitive technological sectors are now routinely knocked back on national security grounds by the Committee on Foreign Investment in the US. Cfius also recently forced a Beijing-based company to sell Grindr, the gay dating app, over fears of potential misuse of its trove of personal data. CRRC’s initial Springfield investment, agreed after it won a contract in 2014 to supply Boston’s subway system with more than 280 cars, represents a rare instance of a Chinese greenfield manufacturing investment. Such projects have trickled into the US at a rate of about $1bn a year since 2011 according to Rhodium. The Springfield plant was precisely the type of investment that both Washington and Beijing welcomed at the time — a rare infusion of Chinese manufacturing dollars and know@Businessdayng

how in an industrial sector that no longer exists in the US. Kevin Kennedy, the official in charge of Springfield’s economic development, calls the CRRC investment “a return to our manufacturing roots”. After its breakthrough tender win in Boston over Canadian, Japanese and South Korean rivals in 2014, CRRC went on to secure subway car contracts in Chicago, Philadelphia and Los Angeles between March 2016 and March 2017. CRRC won the Boston tender with a bid of $557m, substantially below those of Hyundai Rotem ($721m), Kawasaki ($905m) and Bombardier ($1bn). Those four contract wins, secured during the final years of Barack Obama’s presidency and the first few months of Mr Trump’s, occurred in a markedly different phase in Sino-US relations. Since Mr Trump signalled his intention in late 2017 to take a tougher line on Chinese trade and investment issues than his predecessors had, CRRC has lost at least three bids for railcar contracts, including two in New York and one in Atlanta. China-made components that CRRC assembles in Springfield were targeted in Mr Trump’s first round of trade war tariffs, imposed in July 2018 on Chinese industrial exports worth about $50bn a year. When CRRC applied for an exemption from tariffs on China earlier this year, the request was rejected by the office of the US trade representative — despite dozens of letters of support for its relief petition from politicians, union officials, chambers of commerce and vocational schools in Massachusetts and California. “CRRC’s first North American facility and its success is critical to our city and region’s economy, bringing back manufacturing and skilled labour,” Springfield mayor Domenic Sarno wrote. “I am surprised by the kneejerk reactions in the world of trade that have happened in this country under this president,” adds Mr Kennedy. “The business world wants you to be reliable and predictable and that’s how we, the mayor and I, try to do our business in Springfield . . . CRRC kept its word and created upwards of 200 jobs here in Massachusetts. Most of those are in Springfield and they’re looking at expansion. We have no complaints at all about the relationship.”

Tuesday 18 June 2019

BUSINESS DAY

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BUSINESS DAY Tuesday 18 June 2019 www.businessday.ng

CEO IN FOCUS

Sola David-Borha’s long road to stardom OLUFIKAYO OWOEYE & ISRAEL ODUBOLA

n outstanding female banker, Sola David-Borha, has grown organically in her career, breaking every barrier to become the chief executive officer (CEO), Africa Regions, the Standard Bank Group. Until January 2017, Borha was the chief executive officer, Stanbic IBTC Holdings Plc – a financial services group with subsidiaries in commercial banking, investment banking, pension and non-pension, asset management and stockbroking. Born in Accra, Ghana, to a diplomat father, Borha began her career at NAL Merchant Bank (now Sterling Bank), then affiliated with American Express from 1984 to 1989, before joining a boutique investment banking firm, IBTC, which was merged with two commercial banks to become IBTC Chartered in 2005. Borha undertook her primary and secondary education in Nigeria before completing her studies at University of Ibadan with a Bachelor’s degree in Economics in 1981. She then proceeded to pursue an MBA from the Manchester Business School in 1991. Her executive education includes the Advanced Management Program at Harvard Business School and the Global CEO Program jointly offered by Wharton, IESE and CEIBS. In 2007, Standard Bank Group acquired IBTC and became known as Stanbic IBTC Holdings. Borha served as deputy chief executive of the bank (Stanbic IBTC Bank) and head of international banking coverage in Africa (excluding South Africa), becoming chief executive of Stanbic IBTC Bank in 2011 and chief executive of Stanbic IBTC Holdings in 2012. Her quest for success through hard work is evident in the books of the financial institutions she has chaired so far. Stanbic IBTC Holdings recorded its most profitable year since inception of the bank in 2017 and 2018. Key extracts of the audited report and accounts of Stanbic IBTC Holdings for the year ended December 31, 2017 showed that gross earnings rose by 36 percent while profit after tax jumped by 70 percent. Gross earnings rose to N212.4 billion in 2017 as against N156.4 billion in 2016. Profit before tax increased from N37.2 billion to N61.2 billion while profit after tax rose to N48.4 billion from N28.5 billion in 2016.

Sola David-Borha

Total assets increased to N1.386.4 trillion in 2017, a 32 percent growth on N1.053 trillion recorded in 2016. The growth in the balance sheet size was driven mainly by customer deposits, which recorded a growth of 34 percent to N753.6 billion in 2017, from N561.0 billion in 2016. For the year ended December 31 2018, the financial institution reported net interest income of N78.209 billion as against N83.587 billion in 2017, representing a decline of 6.43 percent. Profit before tax (PBT) of N88.152 billion recorded by the bank in 2018, from N61.166 billion in 2017, represents 44.12 percent increase. The company’s profit for the year 2018 stood at N74.440 billion, as against N48.381 billion in 2017, representing a growth of 53.86 percent. In 2018 financial year. Its basic earnings per share (EPS) stood high at N7.04, from N4.60 in 2017, up by 53.04 percent. Following the group’s gross earnings

increase by 4.67 percent and profit before tax increase by 44.12 percent for the year ended December 31, 2018, the board recommended approval of a final dividend of 150 kobo per share as against 100 kobo per share in 2017. Standard Bank Group, largest African banking group by assets, with a market cap of approximately R289 billion ($20 billion) as at 31 December 2018, offering a range of banking and related financial services across the continent, dug deep into its Nigerian business in 2018 with the acquisition of additional shares worth N61.3 billion in Stanbic IBTC Holdings Plc to increase its majority equity stake in the Nigerian subsidiary to 64.44 percent. This was a year after Borha became the regional CEO of Standard Bank Group. Checks by BusinessDay showed that the Standard Bank Group also reported profit for the year ended 31 December 2018. The group delivered sustainable earnings growth and improved returns.

Borha’s brilliance has earned her several academic recognitions and awards. She currently serves as the vice chairman of the board of the Nigerian Economic Summit Group, a position she has held since 2015. She joined the board of IBTC in July 1994. She has been a non-executive director of Coca-Cola HBC AG since June 26, 2015

Its performance was underpinned by the strength and breadth of client franchise. Group headline earnings grew 6 percent to R27.9 billion and ROE improved to 18.0percent from 17.1percent for the year ended 31 December 2017. The group’s capital position remained robust, with a common equity tier 1 (CET1) ratio of 13.5 percent. Accordingly, a final dividend of 540 cents per share has been declared, resulting in a total dividend of 970 cents per share, an increase of 7 percent on the prior year. Banking activities headline earnings grew 7 percent to R25.8 billion and ROE improved to 18.8percent from 18.0percent in 2017. Non-interest revenue (NIR) continued to record strong growth, driven by retail banking. Net interest income (NII) growth was dampened, and credit impairment charges were lower as a result of the adoption of a new accounting standard. The 2018 group results were less impacted by currency movements than in prior years. On a constant currency basis, group headline earnings grew 8 percent. Africa Regions’ contribution to banking headline earnings grew to 31 percent, from 28percent in 2017. The top five contributors to Africa Regions’ headline earnings were Angola, Ghana, Mozambique, Nigeria and Uganda. Borha’s brilliance has earned her several academic recognitions and awards. She currently serves as the vice chairman of the board of the Nigerian Economic Summit Group, a position she has held since 2015. She joined the board of IBTC in July 1994. She has been a non-executive director of Coca-Cola HBC AG since June 26, 2015. Borha served as a director at Stanbic IBTC Holdings PLC from 1994 to March 25, 2017. She is a member of the governing council of the Redeemer’s University. She is an Honorary Fellow of the Chartered Institute of Bankers of Nigeria (CIBN). In 2016, Borha was singled out as the All Africa Business Woman of the Year at the All Africa Business Leaders Awards in Partnership with CNBC Africa. Former Chairman of Stanbic IBTC Holdings Plc, Atedo Peterside, described her as one of the finest bankers of her generation, a consummate professional and an exceptional human being. Borha is evidence that hard work and consistency pay regardless of gender, background or religion.

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