BusinessDay 18 Sep 2018

Rate hike back on table as markets await CBN decision LOLADE AKINMURELE

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mall businesses, the Central bank, investors, government, households, commercial banks and the economy all feature in an analysis of the winners and losers of Nigeria’s August inflation reading and a possible interest rate hike.

Annual inflation in Ni-

geria quickened for the first time in 19 months to 11.2 percent in August from 11.1 percent in July, according to state data agency, National Bureau of Statistics (NBS), after food prices soared by 31 basis points to 13.16 percent. It was below the Bloomberg consensus estimate of 12 percent.

Since the August reading Friday, more econo-

See BusinessDay Market Monitor on page 4

Funke Opeke, CEO, MainOne, with Jean Luc Vuillemin, senior vice president, International Networks, Infrastructures and Services, Orange, during a contract signing ceremony between MainOne and Orange in France, recently.

MainOne and Orange have signed an agreement allowing for a major investment by Orange in MainOne’s submarine cable system with joint investments in new landing stations in Senegal and Cote D’Ivoire.

mists now expect inflation to accelerate yet again in September, this time to 11.7 percent on waning base effects, taking price growth further away from the CBN’s preferred range of 6-9 percent.

The inflation trend will be of top consideration at the Monetary Policy Committee (MPC)’s September 24 to 25 meeting and it could bring interest rate Continues on page 33

news you can trust I **TUESDAY 18 SEPTEMBER 2018 I vol. 15, no 142 I N300

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Private sector players to battle career politicians in 2019 2019: Why I want CHUKS OLUIGBO

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op private sector players are shaping up to do battle with career politicians in the 2019 elections across all positions from the Presidency

to governorship.

Perhaps, at no time since the country’s return to democratic

rule in 1999 have there been so many professionals taking on the challenge of competing with the

country’s career politicians in governance.

Continues on page 33

…receives Lagos PDP support ... Ambode supporters stage rallies ahead Tuesday party primary

FG begins preparations for N8.9trn 2019 budget ahead of tense election year

JOSHUA BASSEY & Iniobong Iwok

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enate President, Bukola Saraki, has said that the desire to rescue the country from its current precarious position and give hope to the younger generation informed

Conrad Omodiagbe

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he Ministry of Budget and National Planning has reportedly compiled a budget setting government’s spending at N8.9 trillion for 2019 which is set to be a tense election year, Business Day has been informed.

Speaking to Business Day, the Continues on page 33

to rule Nigeria – Saraki

Continues on page 33

Inside L-R: Godwin Emefiele, governor, Central Bank of Nigeria (CBN); Emmanuel Udom, governor, Akwa Ibom State; Bola Tinubu, national leader, All Progressives Congress (APC); Akinwunmi Ambode, governor, Lagos State; Halima Dangote, executive director, Dangote Industries Limited; Kay Ovia, wife of the chairman, Zenith Bank/author of the Book, Africa Rise and Shine; Vice President Yemi Osinbajo; Jim Ovia, chairman, Zenith Bank plc/author, and Christopher Kolade, chairman of the occasion, during the book launch titled ‘Africa Rise and Shine’ by Jim Ovia, in Lagos, yesterday. Pic by Pius Okeosisi

Special Report on Resilient real estate firms in post-recession Nigerian economy

BD SPECIAL REPORT BusinessDay Special Report

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Resilient Real Estate Firms In Post-Recession Nigerian Economy

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Strong investor-confidence and resilience amid daunting challenges CHUKA UROKO

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nvestors in the real estate sector of the Nigerian economy are still confident and frequently demonstrate resilience by developing and putting products on the market amid challenging economic environment and negative growth reports on the market.

With an estimated 300,000 square metres of empty apartments and 200,000 square metres of empty office space in the residential and commercial segments of the market respectively, it is quite easy for anyone to get a clear sense of the situation in an otherwise burgeoning market.

Infrastructure which constitutes over 30 percent of construction cost, regulatory policies which make land acquisition and title registration a nightmare, high cost of funds at over 30% rate, unstable foreign exchange rate, lack of functional mortgage sys-

tem, etc are just a few of investors’ challenges.

Available record shows that since the last quarter of 2016, about 10 consecutive quarters now, the real estate sector has been recording negative growth despite positive growth reports in the wider economy.

Figures from the Nigeria Bureau of Statistics show that the sector contracted by -9.40 percent in Q1 2018, down from -5.92 percent in Q4 2017 and -4.12 percent in Q3 2017. The first quarter contraction was -6.3 percentage points worse than the -3.10 percent reported in the comparable period of 2017.

Though the sector showed signs of rebound in Q2 2018 as shown by figures from NBS, analysts hinge that good but negative figures on a number of factors including improved infrastructure and capital injection into the sector by domestic investors.

The sector reported Gross Domestic Product (GDP) growth of -3.88 percent in Q2 compared to the -9.40 percent rate recorded in the previous quarter, meaning that the sector has been in negative trajectory since the last quarter of 2016. The Q2 figure is 5.52 percent points better than the contraction reported for the sector in the first

Besides realizing that Nigerian market has very strong fundamentals as reflected in demographics, large and growing population, and growing middle class population with strong buying power, investors also understand that real estate is not a trade

quarter, but not enough reason for investors to click glasses.

These negative reports are mainly reflections of the impact of the 15-month economic recession on the sector. Though recovery from the recession by the wider economy has been slow and fragile, at least, there has been a positive change in the narrative buoyed by a significant shift in oil price from the 2017 levels coupled with quantitative easing of headline inflation.

The recovery has impacted positively on other sectors of the economy than real estate. The economy has, indeed, moved without the sector, but some investors are not ready to say ‘die’.

These are those investors that have remained confident, patient and resilient, taking a long term view of the market.

“We are not deterred or discouraged by short term limitations because we are not here for the short term; we are here for the long

haul”, says Fabian Ajogwu, chairman, Novare Real Estate Africa.

This mindset partly explains why many investors have continued to invest.

This also explains why construction work continues uninterrupted on large scale projects such as Lakowe Lakes Golf and Country Estate, RIVTaf Golf Estate, the Landmark Village, Lekki Pearl Estate and also on new urban community developments (new cities) like Eko Atlantic City, Gracefield Island, Orange Island, etc.

Besides realizing that Nigerian market has very strong fundamentals as reflected in demographics, large and growing population, and growing middle class population with strong buying power, investors also understand that real estate is not a trade. It is a long term game where investors look at cycles rather than any moment in time. Because of this, when inves-

Continues on page 8

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Mixta Africa

‘We acknowledge importance of change and always strive to remain a step ahead’

Mixta Africa is a continental real estate firm with operations in six countries across Africa. In Nigeria, it is one of the few large scale developers, playing heavily in the affordable housing segment of the market. It currently has developments across three states with an eye to expand in the nearest future. In this interview, KOLA ASHIRU-BALOGUN, managing director of Mixta Nigeria, speaks on the company’s footprints on the Nigerian market, the economic recession in Nigeria; their strategies and product offering among many more issues. He speaks with CHUKA UROKO, Property Editor. Excerpts:

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ixta Nigeria has been around in the Nigerian real estate market for over a two decades and still counting. What story can you tell of Nigeria, its real estate market and the economy in general?

Amidst the many challenges that have plagued the nation for some years, Nigeria with her teeming population has remained a country with boundless opportunities across all sectors of the economy. The country has continued to attract more Foreign Direct Investments (FDIs) and Foreign Portfolio Investments (FPIs).

Considering the huge housing deficit in the country, the real estate market is as interesting as it is challenging.

Interesting because of the immense socio-economic potential locked up in the sector but equally challenging due to the onerous tasks required to effectively exploit its huge economic potentials.

Generally, in recent years, growth in the economy has been significantly less than previous years. In particular, the decline in oil price has contributed to a slump in growth as Nigeria heavily depends on oil for both exports and government revenues.

What have been the gains of rebranding from ARM Properties to Mixta Nigeria?

How has the new identity impacted your bottom-line?

ARM is a brand which Mixta is proud to associate with. It remains our parent company and we are continuously in strong association with the brand. Our new identity as Mixta Africa has provided a continental platform and made impact with a ripple effect on Mixta Africa bottom line given that ARM remains a conspicuous part of our brand identity till date.

Nigeria successfully exited a crippling 15-month recession.

Our focus in this report is on those real estate firms, which you are one, that are still afloat

Kola Ashiru-Balogun

despite the impact of the recession. Tell us your story in the circumstance.

During the recession, our key focus was on the completion and delivery of our projects. Consequent to our intensified marketing efforts, we achieved a 255 percent increase in sales. We continued to focus on building key strategic alliances and the partnerships required for business expansion and technical capacity building. As a result of this, we successfully executed a bilateral agreement with a

Chinese company to provide contractor financing.

A major problem for developers like you during the recession was credit drought and hyperinflation that eroded consumers’ purchasing power. How did you source funding for your projects?

In addition to our aggressive marketing efforts which yielded over 75 percent of presales across all our projects, we successfully raised some funds through Bond and commercial papers to finance the completion and delivery of our

projects.

For you to have sustained your business till now means you are a resilient company and that, in our thinking, means you must have brought innovation and creativity into your operations. How did you do it?

As a business, we have stayed relevant through the changing economic terrain by simply first acknowledging the importance of change and always striving to remain a step ahead. This comes with a lot of deliberate effort in ensuring our strategic objectives capture all the realities of the economic environment while also accounting for potential disruptions. Our people are our greatest assets and this is evidenced in the quality of human capital we have at Mixta Africa. They constitute the bulk of bringing the strategic visions to operational reality.

The Lakowe Golf and Resort is an ambitious development that seems to be your flagship. What are the take aways for a potential investors, home-seekers and fun lovers in that development?

For potential investors, you only need to make a visit to the property to fully appreciate the amount of thought, best in class technology as well as planning that has contributed to making the development so unique. The story is however far from complete, Lakowe Lakes Golf and Country Estate still has a whole scale of achievements left and the opportunities for returns are clear to any discerning investor.

For home- seekers, we provide a secure, tranquil and modern abode, serene environment to ensure good quality of life, a premium lifestyle for anyone that lives on the property. We have deployed state-of-the-art security systems and living facilities comparable to developments of its type worldwide.

We constantly benchmark our performance on best practice standards and ensure

every home owner gets good value for his investment.

Life in Lakowe is serene and for that period when you are in the comfort of your home on the estate, you are oblivious to the swarming hustle and bustle of the city just a few minutes away.

Lastly, for fun lovers, we currently offer short-let apartments and serviced cottages for anyone looking for a getaway.

We have plans to introduce some water sports activities on so many of the man-made lakes at the development.

Tell us about other developments where you have residential and investment opportunities, especially for young executives and Nigerians in Diaspora.

Mixta Africa has operations in six countries across Africa.

In Nigeria, we currently have developments across three states with an eye to expand in the nearest future. We pride ourselves on the fact that we play heavily in the affordable housing segment of the market.

This is where the bulk of the opportunities lie in the Nigerian industry.

Prospective clients have the option of Fara Park II if their priority is proximity to town as well as the added benefit of living within a secure estate with unique infrastructures such as a man-made recreational lake etc; RDP would excite clients looking for investment buys that have huge potential to increase in value.

The estate is in close proximity to Lakowe Lakes Golf and Country Estate and enjoys the same quality of top notch infrastructures we deliver on within our facilities.

Adiva II offers the uniqueness of living close to nature albeit on a more affordable budget. Lastly, we have on offer, The Cove which is located within the prestigious Lakowe Golf and Country Estate and offers prospective investors the opportunity to be a part of the project.

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15.42

Pandemonium as war plane hovers around National Assembly KEHINDE AKINTOLA, Abuja

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L-R: Abdulsalami Abubakar, conference chairman; President Muhammadu Buhari; Chibuike Amaechi, minister of transportation, and Hadiza Usman, managing director, Nigeria Ports Authority, at the 2018 International Association for Ports and Harbours Conference in Abuja, yesterday.

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Naspers to spin off, list Multichoice on JSE

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aspers, Africa’s largest media group and one of Tencent’s biggest shareholders, will spin off its pay-TV arm as it battles a deep discount in its shares.

In a statement on Monday Naspers said that it planned to unbundle Multichoice and list it on its home market of Johannesburg by the first half of next year.

“This marks a significant step for the Naspers group as we continue our evolution into a global consumer internet company,” said Bob van Dijk, the group’s chief executive. He added that the spinoff will “unlock value for Naspers shareholders.”

Van Dijk also called Multichoice an “African success story.”

Its services, which include sports broadcasting and South Africa’s Dstv, reach 13.5m households on the continent and generated trading profits of 6.1bn rand ($409m) during the last financial year, the company said.

The listing comes as Naspers is under growing shareholder pressure to reduce a steep discount in its share price versus the value of

its stake in Tencent.

Van Dijk hinted earlier this year that Multichoice might be spun off. In March the company sold some of its Tencent shares for the first time since it invested in 17 years ago, raising $10bn through a sale worth two per cent of the Chinese internet giant.

Though regarded as one of the savviest venture-capital bets of all time, Naspers’ Tencent investment overshadows its stakes in social media and ecommerce companies across other big emerging markets such as Russia and Brazil.

Multichoice is also facing a fierce contest in its most mature markets from Netflix, which has launched an aggressive expansion this year in South Africa. The company has lost subscribers in its premium satellite service and it has called for Netflix to come under tighter regulation in the country.

Multichoice is “profitable and cash generative” and will be listed with “limited leverage” to enable it to pursue growth opportunities in Africa, Naspers said.

here was pandemonium at the National Assembly complex and Federal Secretariat on Monday following unprecedented manoeuvring of three military war planes over the complex.

BusinessDay correspondent who witnessed the scene observed that the war planes embarked on acrobatic displays, leading to security agents including policemen deployed to the National Assembly rushing out of the security posts at the entrance leading to the National Assembly.

According to some of the Abuja residents who spoke with our Correspondent, similar war planes were seen hovering around Kurudu area of Abuja on Sunday.

Some journalists also noticed the

jets at about 12.45 pm and 2.05pm on Monday when it flew so close to the ground that they had to run for cover inside their cars.

However, checks by our Correspondent showed that there was no signs of any ceremony at the military arcade in front of the National Assembly Complex.

Meanwhile, indications emerged on Monday that the National Assembly resumption has been postponed by two weeks.

The National Assembly which was slated to resume on Tuesday, 25th September, 2018, will now reconvene on Tuesday, 9th October, 2018.

According to sources privy to the workings of the National Assembly, formal notice will be issued by the office of the Clerk of the National Assembly (CNA) next week Monday.

Banks to pay N10,000 per item for failed NIP transactions HOPE MOSES-ASHIKE

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igeria deposit money banks will have to pay sanction worth N10, 000 per item for a failed NIBSS Instant Payment (NIP) transaction not reversed into customer’s account within 24 hours, the Central Bank of Nigeria (CBN) said in a new guideline.

Also, N10, 000 sanction will apply to banks that delay application of inward NIP into beneficiary’s accounts beyond four minutes. The regulator will monitor these based on complaints of sender and or beneficiary.

The CBN has fixed the effective date of the regulation of Electronic Funds Transfer (EFT) services in the country at October 2, 2018.

Dipo Fatokun, director, banking and payments system department of the CBN, stated this in a circular to all deposit money banks, Microfinance banks, other financial institutions, mobile money operators, development finance institutions, payment

service providers and other stakeholders on the regulation of instant (inter-bank) electronic funds transfer services in Nigeria.

According to the CBN, the regulation covers Instant Electronic Funds Transfer Services in Nigeria on various payment channels and any payment platform that seeks to provide Instant Electronic Funds Transfer Services in Nigeria.

The CBN sets out the rights and responsibilities of all stakeholders to Electronic Funds Transfer under the regulation.

In terms of fees and charges, the CBN said, instant EFT service providers and sending entities shall apply fees and charges in compliance to the approved Guide to Bank Charges. The Receiving entity shall not earn income on funds transferred. However, statutory levies/charges shall apply.

“With the aid of technology, traditional transacting models has given way to a more robust, sophisticated yet comfortable mode of doing businesses electronically,” Olusola

Olodude head, fraud management, Nigeria Inter-Bank Settlement System plc said at a bank – customers forum.

There has been a steady growth in the volume of electronic transactions in Nigeria. The volume of processed transactions in 2017 amounted to over 1.3 billion while the value was over N96 trillion.

The CBN states in the regulation that the instant EFT service provider shall properly document and circulate among Sending and Receiving entities a Dispute Resolution System (DRS) process.

Consequently, all Instant EFT disputes shall be resolved within three working days. But where the Sending and Receiving entities fail to agree, the aggrieved entity shall report to the Director, Consumer Protection Department, CBN within five (5) working days of the failure to resolve the dispute so as to minimize customer pain.

•Continues online at www.businessdayonline.com

Machines to handle 50% of workplace tasks by 2025 – WEF … Job losses to be heaviest in mining, consumer, IT DIPO OLADEHINDE

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achines and automated software will be handling half of all workplace tasks within seven years, a new report from the World Economic Forum (WEF) forecasts.

The WEF however said technologies such as artificial intelligence, robotics, and precision medicine, could create more jobs than they threaten.

In a study of executives and specialists across 12 industries, published Monday, the WEF concluded that this so - called “Fourth

Industrial Revolution” could create 133 million jobs globally, while 75 million workers may be displaced.

Saadia Zahidi, head of the WEF’s Center for the New Economy and Society, said companies had “a moral and economic imperative” to invest in retraining and continuing education for their employees.

“Without proactive approaches, businesses and workers may lose out,” she said.

The report is the latest in a series of efforts by academics, consultancies and governments to assess the impact of new tech-

nologies on employment. Previous studies, including an earlier one by the WEF, have generally forecast automation will destroy more jobs than it creates.

The scale of projected displacement varies enormously between research groups, however.

A Bank of England study in 2015 produced some of the bleakest figures, forecasting that as many as 80 million jobs in the U.S. and 15 million in the U.K., could be lost by 2035.

A McKinsey report in December produced one of the rosier assessments, forecasting jobs lost and created by new technology

might be about equal by 2030.

In its latest analysis, the WEF said the effects of automation may vary substantially across industries, and predicted job losses to be heaviest in mining, consumer, and information technology companies, and less within professional services firms.

Many new jobs may be less secure than in the past, as businesses are increasingly turning to contractors and freelancers, the Swiss foundation said. It warned there’s a significant gap between the skills workers currently have and those that may be required for future new roles.

It estimates more than half of employees at large companies would need significant retraining in order to take advantage of new opportunities created by digital technology. But it said half of all companies plan retraining only for “key roles,” and only one-third say they plan any retraining for atrisk workers.

The WEF said it based its forecast on a survey of senior executives, strategy officers and human resource specialists at 300 global companies, spanning 20 different countries.

It said these companies represented more than 15 million employees and their economies represented 70 percent of global GDP.

BD SPECIAL REPORT 4 BUSINESS DAY Taf Nigeria Homes

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‘We are driven by our vision to build 1 million homes in the next 20 years’ Taf Nigeria Homes, a subsidiary of Taf Africa Homes, is a ‘foreign’ real estate firm making direct investment in the Nigerian economy. The company entered the Nigerian property market with a bang, developing over one thousand luxury but affordable homes at its RIVTAF Golf Estate in Port Harcourt. In this interview with CHUKA UROKO, the Group Managing Director/CEO, Mustapha Njie, speaks on the Nigerian economy, the recession, the real estate market, the potentials, opportunities and challenges in the market. Among other things, Njie also speaks on the company’s future plans in Nigeria. Excerpts

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af Nigeria Homes Limited is, for purposes of definition, a foreign real estate firm making direct investment in Nigerian economy. What was the attraction to Nigeria?

When we came into Nigeria in 2013, Nigeria had an estimated population of about 150 million, a dearth of housing, and an increasing annual population growth rate. These factors made the real estate sector very attractive and the potentials still remain untapped. Our experiences have not been too palatable particularly in view of the economic situation of the country in the last 3 years, but it’s been worth the while as we take pride in delivering a luxury estate with quality homes and seeing our client express satisfaction with our products and services. We are also particularly elated to acknowledge that our project positively impacted the lives of members of the community, individually and collectively.

You have been in the Nigerian real estate market for over five years now and still counting. What story can you tell of Nigeria, its property market and the economy in general?

Prior to being hit by the recession experienced in the country, the real estate sector made certain contribution to the real GDP of Nigeria.

In 2015, the real estate sector was reported to have contributed 8.26 percent to the real GDP of Nigeria (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q1 2015). Unfortunately, the contribution of the real estate sector to the real GDP has reduced over the past years due to the recession.

The National Bureau of Statistics reported that in the third quarter of 2017, the real estate sector contributed 6.79 percent to real GDP, lower than the 7.18 percent reported in the third quarter of 2016 (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q3 2017) and lower than 7.57 percent reported in the third quarter of 2015 (National Bureau of

Mustapha Njie

Statistics: Nigeria Gross Domestic Product Report, Q3 2015). Although the country is said to have come out of recession, the real estate sector is yet to recover from the impact of the recession.

This is evident in the Nigeria Gross Domestic Product Report, Q1 2018 of the NBS which puts the real GDP growth in the sector in Q1 2018 at -9.40 percent and a contribution of 5.63 percent to real GDP (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q1 2018) which is lower than the 6.32 percent of Q1 2017 and the 6.48 percent of Q1 2016 (National Bureau of Statistics: Nigeria Gross Domestic Product Report, Q1 2017).

Nigeria successfully exited a crippling 15-month recession. Our focus in this report is on those real estate firms, which you are one, that are still afloat despite the impact of the recession. Tell us your story in the circumstance.

Without a doubt, the real estate sector attracted investments from individuals, corporates, foreign investors in a large scale prior to the recession that hit the Nigerian economy. It cannot be overemphasised that, just like other forms of constructions, real estate development requires significant capital. Till date, the sector has witnessed limited equity financing, hostile debt financing (particularly in view of harsh lending rates which was reported to have hit 30 percent per annum) and weaker effective demand triggered by inadequate and unfriendly mortgage facilities.

We were not insulated from the situation of the sector as we are a key player in the sector. However, we were resolute to deliver on our promise of delivering affordable luxury estate to our target clientele without compromising the quality and standards which our brand

is known for across the continent. To this end, we decided to take certain strategic steps which I hope to discuss in the course of this interview.

A major problem for developers like you during the recession was credit drought and hyperinflation that eroded people’s purchasing power. How did you source funding for your projects?

The poor state of the economy, worsened by the recession, posed significant barriers on the availability of finance for the real estate sector. This is because the few lending institutions that could ordinarily provide construction financing to real estate players or mortgages to encourage demand for real estate products could no longer provide such facilities. The cost of finance (especially debt finance) during the recession was alarming so we decided to deploy other innovative and

creative means of generating funds outside debt finance.

For you to have sustained your business till now means you are a resilient company and indeed you must have brought innovation and creativity into your operations. How did you do it?

In a bid to navigate the storms in the sector and continue to provide quality products and services to our growing clientele while we remain profitable, we had to deploy creative strategies.

These include introduction of certain value added services to our existing superb customer service experience; redesigning our products to smaller units in order to make them more affordable; introducing new products like serviced plots; evaluating ongoing construction works on defaulting clients’ property and renegotiating sales agreement with a view to handing over such properties “as is”; strategic engagements of marketing agents especially by providing incentives to existing clients who make referrals to us; and ultimately introducing a contractor/ vendor/supplier-financing (C/V/S-F) system.

We are particularly fascinated about the C/V/S-F system which you adopted in the RIVTAF Golf Estate.

What is this system all about and how did it work for you in the marketing and sales of that estate?

The C/V/S-F system is a system wherein certain aspects of the development and infrastructure within the RIVTAF Golf Estate were financed by the contractors/vendors/suppliers themselves. So, rather than paying the contractors/vendors/suppliers for the services provided to us, we issue them with some properties for the contract sum and at negotiated prices. The contractors/vendors/suppliers in turn sell off these properties or collateralise the properties to finance the contract.

This strategy was not limited to new contracts, it was extended to existing contracts that had been partly paid for as well as to contract that

Tuesday 18 September 2018

had been fully performed but with outstanding debts to the contractors/vendors/ suppliers.

As a result of the C/V/SF system adopted in the RIVTAF Golf Estate, the estate is nearing completion.

Work has progressed significantly on our shopping mall and completion is now in view, liabilities have been reduced thereby freeing up funds for other operations and commitments of the company. The C/V/S-F system allowed our company to continue to create value and deliver on the promises made to our esteemed clients while our contractors/ vendors/suppliers remained in business and continued to make profit. It is apposite to also note that this system guaranteed sales of our products. This is in view of the fact that properties given to contractors/vendors/suppliers in place of payment for services rendered are deemed as sales on our accounts as they are deemed to have been paid for by the receiving contractors/vendors/suppliers.

The challenge of the C/V/S-F system was a potential parallel market but this was well managed as the structure of the C/V/S-F system already anticipated this challenge and had ready preventive solutions for such potential challenge. Rather, a viable secondary market was created where contractors/vendors/suppliers became strategic players in the secondary market for our products.

RIVTAF Golf Estate is a project with which you stamped your signature in the Nigerian real estate market. Any plan to replicate that in any other part of Nigeria? Where and when should we expect that to happen?

Yes, we intend to replicate and do even greater projects in Nigeria. TAF Nigeria Homes Limited and its sister companies across the African continent are driven by our vision to build 1million homes in the next 20 years.

Nigeria remains one of the biggest economies for such projects. With an estimated population of over 184 million as at December 2017 (World Bank: The World Bank in Nigeria), a conservative estimate of 17 million units of housing deficit as at 2015, an annual population growth rate of 2.8 percent (National Population Commission and National Bureau of Statistics Estimates), the potentials of the real estate sector remains unimaginable. We are optimistic that the sector would recover from the negative results being reported and start experiencing positive growth. The Nigerian real estate sector can!

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Alpha Mead Group

‘During recession we moderated our growth aspirations and became more innovative’

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he 15-month recession that Nigerian economy went through impacted negatively on every sector of the economy, but more on real estate. How did you manage the impact?

Talking about recession, its impact and how we managed that time, I recall that when it started, we recognized it. If you deny your situation, you won’t have the capacity to provide solution to it. One of the four secrets of success is that you take responsibility for your situation. Don’t look for somebody to blame. Once you get to a bad situation, you must acknowledge it. You must acknowledge that there is a problem on ground.

After that, you begin to identify how that impacts on your industry and also on our company. For us, we had a strategy session where we told ourselves that Nigeria was in recession and tried to figure out the opportunities associated with it and what the risks that would follow were. It became clear that the real estate sector would suffer severely and that would affect both the demand and supply side of the sector. Supply would suffer from reduced liquidity in the system. Low liquidity impacted on developers’ capacity to continue to deliver products.

On the demand side, those who buy some products and services from you have their purchasing power weakened. Therefore, the amount of revenue you can generate is also impacted because there is less demand from the market.

The focus of this report is on companies like yours that went through the recession but come off not badly bruised. What did you do that has kept your business going?

When we realized all these, we told ourselves that the best thing we could do was to sustain our customer base. Any attempt to grow during that period would be very difficult. With that focus, we decided to see how to empathise with the situation

Continues on page 7

Alpha Mead Group is a total real estate solutions provider. The group is, unarguably, the leading light in Nigeria’s facilities management (FM) industry and the most diversified with footprints in the United Arab Emirate (UAE) and select African countries. FEMI AKINTUNDE, the Group Managing Director, in this interview with CHUKA UROKO, speaks on how the group is riding on the gains of the strategic decisions they made during the economic recession. He also offers insights on how technology drives over 80 percent of their operations. Excerpts:

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MBA applications fall at top US business schools FT

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assine Bouzerar was determined to study for an MBA, and like many ambitious young people, the Omanborn, Canadian-educated student wanted to study in the US. He even signed up for a tour of Harvard Business School during his undergraduate degree days. “I like to plan ahead,” Mr Bouzerar says.

But after a few years in the workplace, Mr Bouzerar changed his mind, discard-

FG commits to ongoing procurement reforms SEYI JOHN SALAU

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he Federal Government has reiterated its commitment to the sustenance of ongoing reforms in public procurement in the country, as public outcry by Nigerians over the worrisome spate of abandoned projects across the country.

Boss Mustapha, the Secretary to the Government of the Federation (SGF), while speaking at the Bureau of Public Procurement (BPP) 2018 procurement officers’ conversion training in Lagos on Monday, said the government is aware of the calls for the procurement system to hasten the process of delivering critical services and infrastructure to the citizenry, adding that its office has confidence in the BPP to coordinate implementation of the public procurement reform (PPR).

Mustapha represented by Mbaeri Nnamdi, the director-audit, office to the SGF, said the government’s position is to ensure that procurement processes are perfected to drastically reduce corruption antics in the country, especially in public procurement processes.

“We understand that the government spends so much on projects, contracts and in doing that, it requires a strategy to position the regulatory agency in a manner whereby corruption tendencies are minimized and project abandonment is reduced because if BPP is not well positioned, then the agency will not be in a position to tackle some of the challenges that people naturally see from time to time in procurement processes.”, he explained.

Mamman Ahmadu, DG of the Bureau of Public Procurement (BPP) in his address, said, to ensure a sustainable procurement process that will birth a Nigeria devoid of corruption can better be achieved through a remarkable hands-on capacity development that will bring to fore transparency and accountability needed in the public procurement process.

ing applications for Stanford Graduate School of Business and Wharton in favour of courses in Europe.

“I wanted to have a global career. Canada and the US were just too similar,” he says. This month, the 26-year-old started the MBA programme at Insead’s Paris campus instead.

Mr Bouzerar is not alone in his reappraisal of US business schools. Four of the most prestigious US schools contacted by the FT reported a drop in MBA application numbers for 2018 entry — including Harvard.

Most US courses report-

ed declining numbers of applications for 2017 entry, according to the Graduate Management Admissions Council (GMAC), administrator of the GMAT entrance exam. And this year’s data, to be published by GMAC on October 2, are expected to show a fifth successive year of declining applications for MBAs at most US business schools.

Business schools blame the decline on conditions in the US market, where a combination of fast-rising tuition fees and a lack of employers willing to fund student places has pushed candidates to

target only a few elite institutions. Application numbers at the most prestigious schools were still rising, in some cases to record levels.

But this year, applications to Harvard — which has topped the FT’s global MBA ranking six times in the past 20 years — are down by 4.5 per cent on the previous year to its two-year full-time MBA course.

The picture is similar at New York University’s Stern School of Business, whose MBA programme is ranked 13th in the US by the FT. Applications for its fulltime MBA programme were

down nearly 4 per cent for entry in 2018. Interest from prospective students outside the US — which make up about half the total application number — is down by about 10 per cent.

The decline in US demand is down to a mix of US immigration curbs, a growing number of alternatives and cyclical movements in demand for full-time study, says Bill Boulding, dean of Duke University’s Fuqua School of Business, where applications were down 6 per cent for the class starting this month.

A perception that over-

seas students are unwelcome in the US — fostered by the Trump administration’s curbs on immigration — is part of the problem but not the most significant factor, according to Mr Boulding.

More damaging have been the tightening of immigration restrictions over many years, a rise in the quality of business schools in Europe and Asia and the expectation that business education should be obtainable whenever and wherever students want it in an age of online delivery, Mr Boulding says.

SPECIAL REPORT BD

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Northcourt: Growing on strength of partnerships and resilience

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ctober 2018 marks five years of Northcourt doing business in the Nigerian real estate sector, and while it seems like yesterday that we began the journey, the many moments of pain experienced in birthing the vision remain very vivid and unforgettable.

Northcourt was established with two goals; to create an indigenous world-class professional real estate company and to increase the level of transparency in Nigeria and West Africa’s real estate market. In five years of existence, Northcourt has been constantly recognized for achieving both locally and on the continent.

In today’s fast-paced and hyper-connected society, the customers’ preferences are frequently changing and improving in sophistication. We believe these three paradigms we hold have been good to keep and will be good enough to take us the next five years: Adaptability Barrack Obama credited a good portion of his success at the 2008 Presidential Elections to understanding the “lay of the land”. That is, going beyond the theories associated with politics to thoroughly understanding what the people needed and wanted. As a growing firm, we have endeavored to adjust our service offerings to meet and exceed client expectations. Our standards have also risen quite consistently in lockstep with global benchmarks.

At one point, taking on development projects was a no-brainer. We had (and still have) the competence, margins were good and clients were pleased with our output. However, exchange rate fluctuations experienced in 2016/2017 caused a spike in (largely imported) construction materials prices that few clients could stomach. In the end, we decided to be

Ayo, Tayo and Osagie

more selective in our development engagements, opting to take a more consulting role in most instances.

Resilience Resilience as a mindset has in itself kept us resilient in different economic seasons. Northcourt was birthed during a boom, but we didn’t deem low prices and high demand a constant for a day. In our engagements, we find that client demands increase in tandem with their exposure, usually facilitated by technology and travel. This has raised the bar for what is deemed acceptable service even in real estate.

And while we have introduced some products to increase the convenience enjoyed by our customers, we find that other ideas may prove

unworkable until the right people or resources come into play.

A certain amount of resilience is required to push on while we wait for the necessary factors to align in our favour. We’ve had to keep at it, building the other parts of the business in the meantime, staying true to the vision, being mindful of the opportunities and delivering as much value as we can. Eventually, resilience pays off when stakeholders within and outside Nigeria’s real estate industry acknowledge our efforts.

We find that finance, strategy, active reporting, branding and regulatory compliance standards remain key pillars of any sustainable enterprise. Keeping these standards front and

‘During recession we moderated our growth aspirations...

Continued from page 6 of our customers.

That period also made us to be innovative so that we could continue to provide services to our customers in spite of the cost escalation.

We also had to find ways to maintain our position in the market and the industry. If you checked the industry very well then, you would see that many companies went down; some were downsized and sent some staff away, but that did not happen here.

So over all, we moderated our growth aspirations, focused on customer retention and became more innovative to serve them more; we also put value on the table and continued to manage with available resources and customers. However, some customers over-dramatised and amplified the impact of the recession on their business. Everybody capitalized on that. Even those that were not so much affected, were using that to force prices down in their favour.

Another thing we did was not to allow ourselves to reach a point of desperation under any project. If any project got to a point we saw a conflict between our service orientation in terms of what we can deliver to the customers and the interest

of the customer, we were willing to step outside. We did well to meet customers’ expectation and also to protect our brand strength and perception in the market place. Some people thought we were not flexible, but we saw that as the only surviving strategy.

Analysts say the recession could have been better managed and the impact less severe. Where did the government get it wrong and, if you were to offer advice, what would you tell government?

A couple of things happened that aggravated and accelerated the country’s move into recession. One was the global drop in oil price and because we have not done well in terms of diversifying our economic base, we were hit by the impact of that drop.

The second thing was that around that time, crises were arising from the activities of Independent Peoples of Biafra (IPOB) and militant activities in the Niger Delta that threatened and impacted on the oil production level. So, we were losing money from price drop and also the volume was dropping. Government’s capacity to earn and spend reduced.

Another factor which we could have managed care-

fully but were not sensitive to it as a nation was the issue of brand management.

I think we over-exposed our limitations to the international community. What we were hearing was that our country was “fantastically corrupt” and our leaders went out there to reinforce it.

Internally, democratic institutions were at loggerheads with one another and the political structure was having overbearing influence on the economy. Institutional

Femi Akintunde

investors who invested in the economy, especially in the capital market, were worried and so withdrew their money.

What do you think government ought to do now to guard against a repeat of that experience?

The government must do everything possible to stimulate the economy. The government has to focus on foreign direct investment and also concentrate more on foreign debt than domestic. If

centre of our activities has commended us in good and bad times. Resilience for us has also meant embracing the costs of progress, one of which is letting go of old ideas and taking on new ones.

Partnerships Building anything of value takes a team following a well-defined vision. It also means recognising that while attainment may cost more than one is willing to give, it will reward in more ways than one expects. This also requires responding quickly to the ever-changing realities of the services industry. The firm has grown on by being lean which has meant a special appreciation for working smart and efficiently.

This would have been impossible without our strong partnerships.

The partnership that exists amongst the executive leadership has been a single most powerful weapon. It takes skilled individuals with the right mindset to consistently deploy organisational systems and develop new ones.

That is, individuals willing to take on the culture and values shared by the firm. Building a team with similar core attributes is critical to steering the ship in the right direction. The firm is on a drive to raise the bar of excellence in service delivery which has led to the introduction of new service lines and the opening of our Abuja office. By and large, the sustained patronage of good customers is a fair indicator of market acceptance – and such customers are central to the growth of any enterprise.

We consider ourselves yet to have scratched the surface of our vision– increasing the transparency of Nigeria’s real estate market, and are in no doubts as to the enormity of the journey ahead of us. There are standards to raise, products to deliver and fresh perspectives to introduce.

China is giving us something, let us consider that, but we should be mindful of what they are demanding from us in terms of conditions such as employment and what we should be buying from them.

The conditions attached to loans should be of more concern to us than the interest rate they are demanding.

Another thing to do is that government should not depend on oil money alone, but should continue to emphasise the diversification of the economy. What government is doing with agriculture is good because contribution from that sector to the GDP is rising. Same thing for technology and the the service sector. The government should also increase efforts at developing alternative sources of foreign income.

The Dangote Refinery is a good start.

Technology is, increasingly, changing the dynamics and the way businesses are done. To what extent has Alpha Mead deployed this in its operations?

Alpha Mead is not just a development company; it is a total real estate solutions company. Our development strategy stands on a tripod.

It is about our people, processes, systems and technology. We have a policy which ensures that 70-80 percent of our operations are automated. So, every segment of our operations is automated because that is the only way we

can have scalable processes.

We have embraced technology as a process enabler.

We ensure that every department makes quality delivery sustainable and repeatable.

Technology penetration and application is a business strategy in this company. It sits in the core of our business.

There are two angles to this application. We have technology that drives what we deliver to the customer and another that drives our internal processes.

You are also into real estate development. Tell us how you deploy technology in your developments?

Our real estate development rides on the back of formwork technology. This is not prefabrication but concrete cast in-situ. This allows us to leverage speed such that we can produce a housing unit in 10 days. But both land and infrastructure must be in place before this can happen.

As a facilities management company, we also deploy technology. Our operation and management are also automated through a robust computerized management system. That gives us an advantage of being able to plan effectively such that every asset under our responsibility is maintained to the highest level of professionalism by ensuring that we keep track of what needs to

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Future of real estate exciting as technology takes offline transactions online CHUKA UROKO

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echnology is increasingly creating a new world of real estate market, taking offline real-estate search and transaction processes online and making the future of this market not only exciting but also promising.

Experts say new features such as pro-tech (property technology), real estate fin-tech (financial technology), blockchain, sharing economy, co-working, crowd-funding, unmanned and robotic buildings, etc offer great insights into the exciting future of real estate in Nigeria and other major property markets.

“Technology shall either improve or replace status quo”, said Luqman Edu, CEO, Filmo Realty, who spoke at Real Estate Unite Summit, an annual real estate event organized by 3Invest Nigeria Limited in Lagos.

Edu offered insights into the future of real estate and the role technology is already playing in places like US, UK and other mature markets, insisting that it was the new face of real estate as it is in other fields of human activity.

Traditionally, real estate is one of the last industries to adopt technology even with its inefficient processes and unnecessary transaction costs. There exists a clash of generations where start-ups with protech are generally driven and aimed at millennials while real estate leaders are generally from an older generation Traditional real-estate firms are not naturally given to rapid digital innovation and this is understandable because there are concerns that chances of job losses are high. Already, proptech companies are starting to develop solutions that solve problems that the real-estate market wants solutions for.

Whereas Blochain has the potential to be used for

land registration, real estate transactions, title ownership, due diligence and building maintenance records without need for human interface and intermediary costs, fin-tech comes in as platform which supports transactions (sales or leasing) of real-estate; gives more information; is transparent and faster.

This means that in Lagos State, for instance, where land transaction is not only tortuous, but also expensive, the introduction of the Blockchain in its land administration will make a clean sweep of the many exploitative ‘tables’ that registration files have to pass through.

“Transactions will be direct, properties will be smart buildings, there will be flexible use and flexible ownership of such properties where technology drives real estate”, Edu noted, recalling that in Q4 2016, Trulia, an online property platform, had an average of 140 million monthly unique users and “45 percent of these visitors, in the last 12 months, are planning to buy/sell a house in next 12 months”.

According to him, 3-6 percent of the cost of real estate goes to legal, valuation, structural due diligence, contracts, advisory, and agency fees, adding that efficient storing of lease information opens possibility of greater liquidity.

The future of real estate anticipates unmanned, robotic buildings such as in 3D printing and warehousing.

“There will be smart buildings that will be able to run wholly remotely such as in driverless cars and delivery vehicles or bots for logistics and real-estate”, Edu said, adding that smart cities which will be driven by technology will integrate multiple information, communication technology and internet of things (IoT) solutions for a whole city.

L-R: Doris Akpovwa, vice president, Nigerian Association of Petroleum Explorationists (NAPE); Andrew Ogaga Ejayeriese, president, NAPE; Chike Onyejekwe, group managing director, Aiteo Group; Chizoba Sabina Ugwuagbo, assistant general secretary, NAPE, and Victor Okoronkwo, senior vice president, Aiteo Group during the courtesy call by the executives of NAPE to the head office of Aiteo Group in Lagos.

Buhari calls for efficient cargo evacuation policies for African seaports AMAKA ANAGOR-EWUZIE

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resident Muhammadu Buhari has urged African nations to formulate policies that would enhance seaports efficiency and smooth evacuation of cargoes.

Speaking on Monday in Abuja while declaring open, the ongoing conference of the African region of The International Association of Harbour and Ports (IAPH), President Buhari observed that seaports in the continent were faced with the same developmental challenges, pointing to the need to work together to develop infrastructure, particularly those related to waterway transportation.

The president said he has directed that all the country’s seaports be connected by rail for improved evacuation of cargoes to the hinterland. He also mentioned that his administration was presently constructing 25 major highways and 44

roads across the six geo-political zones of the country.

“Nations in Africa are also largely connected by the same developmental challenges as well as large human capital and natural endowments. It behooves on us to work together and deploy our resources towards solving those issues that militate against efficiency of our ports,” he said.

Continuing, the president said: “Now, one of the resources that we can proudly speak about as Africans is our maritime endowments. A situation in which at least 39 of the 54 countries on the continent are either littoral or island states makes the formulation of policies for the effective utilisation of our waters for the growth of our economies expedient” he stated.

Listing other challenges facing African ports, Buhari said that besides the issues of adequate security and transparency, one other important factor deciding the competitiveness of ports in

Africa is the efficiency with which cargoes are evacuated to and from the ports.

He said port operations in Africa needed a lot of intervention in this area.

Recall that the African Development Bank had recently identified an infrastructure funding gap of between $130 and $170 billion within the continent.

According to Buhari, the continent can only overcome the challenge, if African governments put the issues in proper perspectives and generate ideas that would aid formulation of effective policies.

He therefore assured of his administration’s commitment to building infrastructure that supports multimodal means of transportation from the ports to the hinterland.

“We understand that this interconnectivity will improve the country’s economic competitiveness as targeted under the Economic Recovery and Growth.

‘Capital market key to Nigeria’s economic growth’

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oniface Okezie, president of Independent Shareholders Association of Nigeria (ISAN), on Monday described the capital market as critical to economic development and wealth creation.

Okezie made the observation while speaking with journalists in Lagos just as he emphasised the need to effectively explore the capital market for economic development. “In spite of the challenging economic conditions in Nigeria, the capital market still remains one of the main vehicles for economic development and wealth creation,” he said.

Okezie added that the down turn being experienced in capital market were due to economic uncertainties, profit-taking by investors and endof-year factors, among others.

“It is in the nature of capital market to fluctuate. When we talk about market data, we refer to the pre and post traderelated data of the financial instruments traded on the Nigerian Stock Exchange (NSE).

Ovia seeks digitisation of economy as Ambode extols him PenCom releases N86.7bn to over 275,000 sacked workers HOPE MOSES-ASHIKE & GBEMI FAMINU

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im Ovia, founder and chairman of Zenith bank plc, has called for digitisation of the Nigerian economy and the use technology to drive the manufacturing process, agriculture and healthcare, for sustained growth.

This is as Governor Akinwunmi Ambode of Lagos State has acknowledge the contributions of Ovia to the nation’s economic development, and also called on successful entrepreneurs to encourage and guide the younger generations to success.

Both spoke at the public presentation of ‘Africa Arise and Shine’, a book written

by Ovia.

According to Ambode, it was important for successful entrepreneurs like the author of the book to tell the story of how they were able to navigate the business climate to inspire others who look forward to be like them.

Speaking at the event which held in Lagos, on Monday, Ovia said “for us to blossom the Nigerian economy, let’s start to digitise the economy. If we digitise the economy, it will continue to grow.”

He noted that today, the GDP per capita of many African countries is well above $1,000, whereas about 20 years ago, it was below $500.

The book launch was graced eminent personalities including Vice President Yemi Osinbajo, Bola Ahmed Tinubu, former governor of Lagos State, Godwin Emefiele, governor of the Central Bank of Nigeria, Akintola Williams, doyen of the accounting industry, Babtunde Fowler, executive chairman, Federal Inland Revenue Service (FIRS), traditional rulers among others.

Osinbajo commended Jim Ovia saying his life was worthy of emulation for a man whose father died when he was just five years old, but struggle to rise from nothing to being worth six trillion naira and successful entrepreneur in Africa.

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he National Pension Commission (PenCom) says it has released N86.7 billion to sacked workers of various companies who had been into Contributory Pension Scheme (CPS).

Aisha Dahir-Umar, the acting director-general of the commission, who disclosed this in Lagos, on Monday, said the amount was for the settlement of 275,172 disengaged workers.

The figure, according to Dahir-Umar, represented the total paid from 2004, when the CPS came into effect, to June 2018.

She also said the amount was about one per cent of the N8.23 trillion pension assets, adding that the loss of jobs

in both public and private sectors have been on the rise since recession because employers controlled expenses.

She said in order to fulfill its promise, the commission had allowed the sacked workers accessed 25 per cent of their pension contributions, especially if they were unable to get new jobs.

“The lean prospect of finding a new job after the loss of an earlier job was responsible for increase in demand to access 25 per cent of pension contributions.

“The PRA 2014 allows contributors, under the age of 50 years, who were disengaged from work and were unable to secure another job within four months of disengagement, to access 25 per cent of

their respective Retirement Savings Accounts (RSAs) “The commission also recently reduced the assessment time after dissengament to four months from six months,” Dahir-Umar said.

She explained that in the second quarter of 2018 about 12,854 workers have been disengaged, disclosing, however, that disengaged workers have been able to access N5.6 billion from the pension assets within the timeframe.

“Of the entire disengaged workers who accessed their pension contributions, about 93 per cent were from the private sector.

“Some of the beneficiaries, invested the money in business ideas in order to be selfemployed.

BD SPECIAL REPORT 8 BUSINESS DAY Landmark Village

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West Africa’s premier business, leisure and lifestyle destination

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et on a 4-hectare site along the Atlantic Ocean beachfront in Victoria Island, Lagos is Landmark Village, West Africa’s premier business, leisure and lifestyle destination developed by the Landmark Africa Group.

The site is being developed into an ultra-modern business, hospitality, leisure and lifestyle destination over the next 5 years. The whole concept is to create a node for domestic, regional and international businesses and people that guarantees convenience, simplicity and efficiency in one place. This one-stop shop destination is being designed in similitude of major mixed-use developments like the Rockefeller Centre in New York, Canary Wharf in London, and the Melrose Arch in Johannesburg.

The destination has been noted as the most visited leisure destination in Lagos, with a footfall of up to 60,000 visitors weekly. The first phase of the Landmark Village scheme is complete with the Landmark Events Centre (the largest purposebuilt event centre in Lagos), Casper and Gambini catering, as well as the first and only Hard Rock Café in West Africa and the Oriental themed Shiro restaurant.

O nce the Landmark Village is fully completed, the development will include The Leisure Beach, The Landmark Waterview Residential Apartments, a 4* Renaissance Hotel by Marriott International, Marriot

Paul Onwuanibe

Executive Apartments, over 20,000 square metre of office space and the noteworthy Landmark Retail Boulevard.

There are various projects at the Landmark Village with prospective offerings. These include: Th e p re m i e r re ta i l and entertainment highstreet in Lagos: Soon to be launched is the Landmark Retail Boulevard with over

6,000 square metres of retail space. The retail high-street provides a Cinema, a Family Entertainment Centre, retail stores and more hospitality option within the Landmark Village. Upon completion, the Landmark Retail Boulevard expects to welcome over 100,000 visitors a week by 2019.

Landmark is already seeking strong brands that

‘During recession we moderated our growth...

Continued from page 7 be done to prolong asset lifespan. We have also deployed technology that has enabled us to track the performance of everybody on our employ.

Nobody can stay in his bedroom and give us report on what he is supposed to be doing on site.

We will be launching two new systems any moment from now. We are planning to launch a 24/7 call centre that will take facility management to retail level. With this, customers will sit in their houses and subscribe to our services by just dialing the call centre.

Through this, we will be able to coordinate requests from anywhere. For us technology is an integral part of our systems and processes. We know we cannot do what we are doing without a sound technology support base and we

are not resting on our oars.

A s c o m p a ny , c o u l d there be things that limit your growth aspirations; in other words, what are the challenges you face in the course of your operations?

I think funding is always an issue because it limits the extent to which you can grow and even carry out your initiatives. We should have completed our projects long ago, but we cannot because all the sources of funding that we have been expecting are not forth-coming. Some of the customers that bought from us are defaulting. Some have lost their jobs.

Even if half of them are meeting up their obligation, the remaining half is still a huge challenge. We try as much as possible to engage our customers, telling them what we want. Nothing is

coming from the banks by way of debt; contractors are not able to get money from the banks too and all these are affecting capacity to roll over and build more capacity.

In the FM space, the story is not different. Tenants are owing rents and serve charge.

Clients are not helping matters. Services they were supposed to do three to four times, they will tell you they can do just once so far as the asset is functioning. People are beginning to compromise on maintenance, but they don’t know that it is far more expensive than the cost they are trying to cut back.

Another challenge is that people are still fixated on low cost services without looking at value erosion. People’s orientation towards quality is being affected because of financial constraints.

align with their vision of creating an international standard destination. The highstreet presents a unique opportunity for retailers to not only position themselves within the premier retail and entertainment high-street in Lagos but will also allow them to benefit from the site’s organic foot traffic, as well as the residential population in and around Victoria Island and the wider Lekki axis.

Shiro Restaurant: The stunningly designed Shiro Restaurant, opened in 2016,offers patrons an exceptionally authentic fine dining experience. The menu offers an eclectic mix of Korean, Vietnamese, Chinese, Japanese and Thai cuisine that includes sushi, sashimi and Cantonese dim sum can tempt even the most discerning of palates.

With a beautiful beachfront bar, and dramatic soaring space, Shiro remains the ideal gastronomic experience.

Hard Rock Café: Opened at the Landmark Village in 2015, this world-renowned American Rock ‘n’ Roll themed restaurant offers entertainment at its best with live music, great drinks and delicious food. Hard Rock Cafe is, therefore, a haven for fans of music, food, and great times.

Landmark Centre: Recently declared PYNE Awards 2018 Event Venue of the Year, the 4,000 square metre events centre opened in 2014 and has played host to a wide range of prestig-

ious functions, conferences, sporting events, and exhibitions. The 3,000-person capacity centre continues to be in high demand, and a click on the ‘upcoming events’ button on www.landmarklagos.com reveals an impressive list of events. From the annual Google, Facebook and Social Media eekconferences, to some of the largest expositions including the Nigeria Build EXPO, AGRA Innovate West Africa, Design EXPO amongst many others. The Landmark Centre has changed game for event hosting in Nigeria and Africa by extension.

The Art of Exceptional Living at its Finest: The Landmark Waterview Apartments is a 20,000-square metre, 25-storey luxury residential apartment building to be developed within the Landmark Village, and available for off-plan sales to discerning buyers and property investors in Lagos and in the Diaspora.

These stunning ocean view apartments will offer residents the luxury to enjoy lounging on the beach, water sports, or simply dining with friends and family in the compound’s neighbouring international restaurants.

With the Landmark Waterview Apartments, you have the unique opportunity to purchase your space as a ‘Grey Shell’, giving you the freedom to tailor your home to suit your taste.

The Landmark Leisure Beach: Designed to complement the lifestyle of the visitors to the Landmark Village

Tuesday 18 September 2018

is the 20,000 square metres of beachfront spanning the distance of Landmark Village, the Landmark Leisure Beach. This will be Lagos’ premier private beachfront for leisure and entertainment.

The beach features one of West Africa’s first pedestrian and cycle path board walks along the Atlantic coastline. It combines a myriad of leisure and recreational activities which caters to a vast demographic. A day at the Landmark Leisure Beach can be as relaxing or adventure-packed as one wishes. Activities include water sports, high octane outdoor adventure course, beach soccer and other sports, paintball and the kids play area.

Business. Leisure. Lifestyle, all within one secure location As the clientele in Lagos grows ever more cosmopolitan, there is an undeniable demand for destinations with international standards.

With intriguing developments in the pipeline, the development firm is certainly one to watch. With a track record that includes the iconic Landmark Towers and Landmark House, we are keen to see what this versatile firm will do next.

Having already raised the bar for real estate development within West Africa, they are well deserving of their accolades from noteworthy bodies such as Euromoney & the London Stock Exchange. Landmark is pioneering the creation of these business, leisure and lifestyle destinations set to be an iconic one-stop shop and a ‘landmark’ in the city of Lagos as a whole. In the words of Paul Onwuanibe, CEO Landmark Africa Group, “we are doing small things in a great way!”

Strong investor-confidence and resilience amid...

Continued from page 1 tors plan their projects, they usually do so across both cycles—boom and recession because it is not common in any environment to have both boom and recession happening the same time.

The good news coming out of many development sites is about great innovations and creativity that have gone into these developments as means of sustaining them and enabling the developers to remain afloat. During and after recession, many of these developers adopted strategies that have worked, and still working, well for them both in the delivery and marketing of their products.

Strategies bordering on customer retention and capacity building, introduc-

tion of value added services to existing customer service experience; redesigning products to smaller units in order to make them more affordable; introducing new products like serviced plots; evaluating ongoing construction work on defaulting clients’ property and renegotiating sales agreement; engagement of marketing agents and providing incentives to existing clients were quite common.

Close watchers of this sector are of the view that investors will always take position in the Nigerian market for obvious reasons. According to them, Nigeria has a large number of people who are very aspirational. This is a country where the median age is just 19 years while the average

age is 27. So, there is about 75 million people between the age of 16 and 27.

The implication of this is that, in spite of the challenges of the moment, the future looks bright and promising for investors with long term view of the market. This is because 75 million young population of the country will have to live, work, eat and play; they will go to school and hospital somewhere and real estate envelopes all these.

This means that provisions have to be made for them and this translates into investment opportunities. This means too that, eventually, the real estate market, with the right government enablement and right financial dynamics, will always prevail.

Tuesday 18 September 2018

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Tuesday 18 September 2018

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Restructuring Nigeria may not be enough! ‘

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

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ecently, it was reported that Vice President Osinbajo (VPO) had a different view from former Vice President Atiku (FVPA) concerning the type of restructuring that Nigeria needed. While VPO only wanted fiscal restructuring, FVPA wanted both fiscal and geographical restructuring. I must say at the outset, that it is a good thing that both political leaders are agreed that Nigeria needs restructuring, unlike some other political leaders who say all is well and do not see any need to restructure.

For me, I do not only agree that Nigeria should be restructured geographically and fiscally but I believe that Nigeria should be reinvented.

This is because a broken bottle cannot be repaired, patched or amended. It just has to be remoulded. The breaking of the country did not start today.

It did not start with this government, nor the one before, not even the one before that, though some elements in these governments have contributed in some way in the breaking of the country. In my view, the breaking process started when the military led Nigeria to destroy the foundation on

STRATEGY & POLICY

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

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nyone with interest in the affairs of Nigeria - the most populous black nation in the world - would wonder why politics have dominated the polity in the past few months at the detriment of the nation’s economy.

It is the scramble for political power ahead of the 2019 general elections that has generated the rat race among all politicians. What is trending in the society today is the contest for supremacy between political party interest and national interest.

A country crying for investment, with millions unemployed and weighed down by both internal and external debts is not in a good position to allow political party interests to be on a collision course with the country’s national interest.

which modern Nigeria was built.

My Bible asks: “If the foundation be destroyed, what can the righteous do?” Nigeria was clobbered together by the British, not for the love of the different nationalities that governed themselves, before their arrival but for their commercial advantage and administrative convenience, in some cases applying force. They held the disparate nationalities together by guile and subterfuge and when they were preparing to depart, they feared that the whole arrangement could unravel. Thanks to the wisdom of our foundational leaders who painstakingly worked out an arrangement that gave the nation the best chance of survival. They accepted strong regional geographic structure as the federating units. The semi-autonomous regions ceded some limited power to a federal government. From 1956 when regions began to obtain regional autonomy and self governance status, Nigeria’s growth in the global community assumed accelerated growth and significance. The arrangement was not a perfect one but it was the best in the circumstance.

But when the military came on the scene in 1966 and until they left in 1999, they broke down all the covenants and structures that held the Nigerian federation together and substituted them with their unitary structure that fitted their “command & control” set up. They dissolved the federating units and the foundation of a stable federation and later began to create a new set of federating units, ceding limited powers to these new ‘creatures’. We then ended up with an inverted federal structure that has been wobbling since 1999.

When Obasanjo came to power

Many states are insolvent and most depend on the federation account while concurrent expenditure consume over 70% of total national budget...

We need a total reinvention of Nigeriadrastic overhaul and rearrangement of Nigeria’s political, geographic, economic, fiscal, educational, cultural and social structures and practices

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in 1999, he was embarrassed by signs of an unstable federation which the military (which he was part of ) left behind. First he ignored the symptoms; when the signs got worse and could no longer be ignored, he tried the strong man military tactics. The symptoms exaggerated and in 2005, he was” compelled” by reality to call a national political conference and requested it to fashion out the way to restore stability to Nigeria. Unfortunately, the National Assembly under the leadership of Senator Ken Nnamani refused to con-

sider the report for sundry reasons, including self-survival.

Yar’adua and Jonathan came to power and concluded that some good gestures to the Niger Delta would solve the problem. The gestures gave some respite but soon after, the vibrations started and soon escalated to tremors, threatening earthquakes.

Jonathan was “forced” to call the 2014 national conference. Again, the 6th National Assembly failed to look into the report and recommendations before it wound up its session. Then came President Buhari’s APC government promising to restructure the nation. They forgot this promise on coming to office. Then the vibrations returned and soon the tremors. Like Obasanjo, Buhari adopted the strong arm tactics employing operation python dances, crocodile tears etc.

The National Assembly called for the 2014 report. Temporary relief. Buhari refused to send it, but someone did.

Soon the political battles for the senate leadership eclipsed everything.

And the vibrations returned with stay at home orders by IPOB last week.

The leaders of Southern Nigeria issue statements about DSS appointments and the continued lop-sided appointments. Meanwhile the Boko Haram insurgency remains active, so also the herdsmen killings (with reduced frequency) and the Niger Delta militants issuing threats.

Many states are insolvent and most depend on the federation account while concurrent expenditure consume over 70% of total national budget. On all scales of measuring human development index, Nigeria seems to have peaked in 1966 and seems to be on continuous rollercoaster ever since. Many Nigerians and good friends abroad agree that

current Nigeria’s political and fiscal structures are unsustainable and are responsible for holding the country down and chronically preventing it from rising up and achieving its full potentials. Truly, Nigeria needs to set itself free and indeed needs to reinvent itself. A new foundation is indicated in line with the former destroyed foundation.

But as has been shown over and over, those in power have often failed to accept reality and do the needful.

It is certain that self or group survival has been the main hindrance. Politicians in power who often do not feel the pain of the people and most times are consumed with selfish ambitions have been most reluctant to take the bull by the horn. Because the needed restructuring or reinvention will lead to job and privileges losses, they have continued to deny or delay this panacea to save Nigeria and return it to a peaceful and ordered growth and development. Certainly the piece-meal amendments of the 1999 constitution with token yielding of fiscal privileges to the beleaguered states, which VOP seems to prefer will not solve Nigeria’s problem. We need a total reinvention of Nigeria-drastic overhaul and rearrangement of Nigeria’s political, geographic, economic, fiscal, educational, cultural and social structures and practices, captured in a new truly federal constitution truly drawn up by the true peoples of Nigeria. I am not quite sure Atiku’s concept of restructuring is as deep, holistic and wholesome as my own concept - hence I am standing with him half-way.

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What does Nigeria need? Investment or tax For crying out loud, those in the government must always remember that they are managing the affairs of a country with a population of about 200 million. Given the excruciating debt crisis, inflation, skyrocketing unemployment and other manifestations of a battered economy, it is only right for governments at all levels- local, state and federal- to accord national economic interests top priority in the conduct of their affairs. So, what does Nigeria need at this point when her economy is still fragile? Is it investments or taxes? Without investments in the economy, unemployment will skyrocket, poverty will rise, and only few people will pay tax. But bearing in mind current economic challenges the country is going through, Nigeria needs both investments and taxes.

Talking about investment, Nigeria needs investors to invest in the economy. But this is quite challenging. Why so? One obvious answer is the poor business conditions and harsh treatment of both local and foreign investors too numerous to mention in this piece. Is it due to political interests that economic diplomacy mainly to woo foreign investors into the country is being jettisoned by the current administration? If economic diplomacy was not jettisoned, it is not skillfully and tactfully executed to project Nigeria as a country with good investment climate to the world. However, those

in the government have the onerous task to convince would-be investors about numerous incentives and infrastructure which Nigeria has put in place to encourage and induce inflow of capital to the country for profitable investments. So, when words are being exchanged on the pages of newspapers about who paid tax and who did not, foreign investors are discouraged. This calls for urgent actions on the part of the government to implement faithfully its economic diplomacy by amplifying same at home and abroad that an improved investment climate exists in Nigeria despite having the ease of doing business at a subnormal level.

With respect to tax, there are two sides to it. On one side are tax payers and on the other side is the government. Both have statutory responsibilities. Tax payers must benefit from the mandatory financial charge imposed upon them by the government. The government must ensure that taxes collected are transparently and prudently used to finance services and programs that would benefit the people. To drive home this point, tax should be fair, proportional to the ability to pay, or the benefit received, while it must equally be predictable, convenient to pay, and efficient to collect. Taxes, levied on the income, property of individuals and firms must be reasonable, and they are to be used to finance government programs and projects.

Now to the main issue. There is, in the Nigerian press, a barrage of contro-

versies regarding the Attorney General’s (AG’s) office demanding tax payments from corporate organizations in Nigeria. What is wrong with that, you may ask? This move is politically motivated and untimely. The politics in it is to score political advantage and it is untimely because the tenure of the government would soon expire unless Nigerians say otherwise. The CBN is also accusing a few banks and MTN for illegal capital repatriation for almost eight years (2008-2015). It is surprising that CBN is just knowing this. It equally, beats one’s imagination that the FIRS is just knowing that 6772 billionaires have been evading tax. So, is Nigeria going through a season of witch hunting or the failure of corporate governance on the part of these government-owned institutions and firms involved in this saga? These are tough questions. Notwithstanding the ineptitude and bureaucratic challenges in our public institutions, this writer supports the prompt payment of taxes by individuals and corporate organizations.

Why should firms in Nigeria not pay tax? Why should a billionaire not pay tax in a country where cleaners on a minimum wage of N18000/month pay tax monthly? Or, why should a multinational corporation flout the rules and regulations of host countries on tax and capital repatriation?

Let us get it straight, there should be no excuse why any individual or firm will not be favorably disposed

to complying with laid down rules and regulations on tax matters. Also, government institutions responsible for regulating financial activities of local and foreign investors should be alive to their responsibilities.

According to reports, the AG has served a payment demand of US$2 billion to MTN which the latter claimed was incorrect. MTN claims that the sum of over N2 trillion has been paid in taxes and fees to the authorities in Nigeria since 2001 that it started operations. The tax confusion has gingered analysts to ask whether the tax administration process in Nigeria has been delegated to the AG’s office to handle at state and federal levels respectively. Well, the matter is for the courts to determine.

This is one of the reasons why wise men say that it has to be the rule of law that prevails in a sane society, not the rule of rulers. But regulatory agencies need to be very cautious with the method applied to supervise and regulate local and foreign firms domiciled within the country.

If it was true that MTN has followed due diligence in the payment of taxes and other levies, the image of the government and the country would have been dented globally. This writer hopes that the economic diplomacy of the government is not a potential agent of corruption.

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Tuesday 18 September 2018

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[#StopTheKillings]Kenya: Recent banking trends & outlook (1) mid-September, when the suit would be formally heard. More pertinent is how this is just one of quite a number of constraints weighing on the Kenyan banking industry at this time.

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

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n July, a court temporarily suspended the implementation of a new 0.05 percent tax on bank transfers above 500,000 shillings ($5,000); a victory for the Kenya Bankers Association (KBA), which took the matter to court. Widely dubbed a “Robin Hood” tax, it was introduced in the 2018-19 budget by treasury secretary Henry Rotich in June 2018. In the first week of its implementation from 1 July, interbank transfer volumes halved to 11.2 million shillings, from 26 million shillings only the week before. Time will tell whether the reprieve would be permanent, perhaps as early as

Stifling regulation, tense labour relations There remains the vexing issue for Kenyan bankers of the cap on interest rates on commercial loans at 4 percentage points above the central bank rate instituted in September 2016. Indication that the law might be reversed is gratifying but increasingly frustrating with every delay. Even so, Kenyan banks have not been particularly endearing themselves to the government and wider public in some spheres. Ten of them are being investigated in the ongoing corruption probe of the pilfering of the National Youth Service to the tune of about $100 million, for instance. The bad press would certainly make it difficult for them to stop a proposed financial markets conduct authority. Currently a bill in parliament, once passed into law, the central bank’s powers to rein in erring banks would be passed to it. The consequent duality is likely to slow the oversight process, certainly. And even

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And even as any central bank or institution would ordinarily resist any emasculation of its powers, Central Bank of Kenya governor Patrick Njoroge’s worry and view that his institution “is under attack” should be taken seriously

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as any central bank or institution would ordinarily resist any emasculation of its powers, Central Bank of Kenya governor Patrick Njoroge’s worry and view that his institution “is under attack” should be taken seriously.

Besides, the financial markets conduct bill was a disappointment for bankers in other ways.

After earlier signalling that the bill would include the repeal of the rate cap law, its absence in what was eventually published and the silence of The Treasury afterwards, dashed hopes in the industry. If Reuters’ sources are right, treasury secretary Henry Rotich might not be entirely to blame. There was a worry that including the rate cap repeal in the bill might jeopardize its passing. Why? The rate cap law emanated from the legislature, not the executive. And a lot of lawmakers, those from the ruling Jubilee party at least, remain fervently opposed to any attempt to repeal it.

Suggestions about a compromise range from increasing the cap to allowing banks charge differential interest rates depending on the customer segment. Some banks have chosen to play the waiting game. At an investor briefing in March, James Mwangi, chief executive of Equity Group, Kenya’s largest bank by value, says his bank has more than $2 billion available for lending in the event the rate cap is abolished: “There are no trade-offs because it’s not about us, it’s about the market”, he added for good measure. Other

banks might be more accommodating if the cap is raised, though.

Labour relations have also been tense lately. Most recently, the sector’s union attempted to block the payment of bonuses to more than 2,000 managers at KCB Group, the largest bank in Kenya by assets. Their argument was that quite testing quarterly reviews, the basis upon which the bonuses are paid, are discriminatory. A court ruled otherwise in about midApril. Even so, it highlights how global pushback against what are widely considered to be disproportionately high remuneration for bankers despite their many misdemeanours, is closer to home in the Kenyan case. In a country where about 40 percent of its almost 50 million population live below the poverty line and at a time when a multitude of depositors are still scrambling for their money in at least three failed banks, a bank chief executive earning $1.5 million in bonuses alone, is hardly endearing.

• An edited version was published in the Q3 2018 issue of African Banker magazine

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Trading the global future (III): Bad consequences

DAN STEINBOCK Dan Steinbock is the founder of the Difference Group and has served as the research director at the India, China, and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more information, see http://www.differencegroup.net/

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his summer, the Trump administration’s tariff war penalized $50 billion worth of goods traded between the US and China.

The next stage of White House escalation will impact up to $200 billion of Chinese imports, and result in proportionate Chinese retaliation.

If the White House opts to expand its tariff wars even further, collateral damage is likely to spread from goods to services and advanced technologies.

Damage spreading from goods to services Not so long ago, there was still serious talk about the US-China Bilateral Investment Treaty (BIT).

Chinese foreign direct investment in the US soared to a record $46 billion in 2016, creating American jobs and injecting capital into the US economy.

Yet, last year Trump threats caused Chinese investment in the US to plunge to $29 billion,

due to deleveraging in China and stringent US regulatory reviews of inbound acquisitions. After months of trade wars and asset divestitures, China’s net US direct investment was negative in the first half of the year.

Historically, advanced economies have tended to enjoy service surpluses and goods deficits in trade. US-Chinese trade is no exception. Since 2001, US services surplus with China has increased nine-fold. Last year, US goods exports to China totaled $130 billion, whereas imports from China equaled $506 billion. However, US services exports to China amount to $58 billion, while services imports from China are $17 billion.

Consequently, while the US runs a goods deficit of $375 billion with China, it runs a service surplus of $38 billion.

As China exports far more goods to US than vice versa, Chinese retaliations already cover more US goods (85%) than US tariffs cover Chinese imports (50%). Consequently, the ongoing trade war is shifting from goods tariffs to nontariff actions in services. While China has tried to avoid escalation, US battle over services trade has already begun, but with Brussels. As German Chancellor Angela Merkel has noted, it is misleading to focus on goods trade, in which the US has deficit with the EU, when the US excels in services trade, in which it has a surplus with the EU. Together with other EU leaders, Merkel is backing a “digital tax” against US multinationals including Amazon, Facebook and Google – companies that have come under fire for shifting earnings around Europe to pay lower taxes.

Trump’s tariffs have potential to

undermine America’s most important competitive advantage in the postwar era: high-value, high-margin services, which range from advanced technology to pharmaceuticals. As collateral damage spreads, so will the costs. As US metropolitan centers take severe hits, the stakes will be much higher for US states, particularly California. And if trade wars continue to spread, neither Silicon Valley nor Hollywood will remain immune. Global economy does not thrive in insulated fortresses.

Chinese responses For now, the full impact on Chinese banks and corporations is still likely to be limited. The US accounts for only 15% of China’s goods exports, and China’s domestic activity now fuels its economic growth, not its net exports as in the past. However, since there are no winners in trade wars, China, too, is beginning to feel the pain.

How is Beijing responding to the Trump tariff wars? The simple answer is that the White House has left Beijing few alternatives but to target those US export sectors that will suffer the most. In 2017, US exports to China soared to $130 billion. Only ten export groups accounted for more than half of the total, starting with civilian aircraft and engines ($16bn), soybeans ($12bn), passenger cars ($11bn), and semiconductors ($6 bn).

To protect its interests, China has resorted to the WTO dispute settlement mechanism but has also taken measures of equal scale and strength against US products. Current tit-fortat responses include targeting soybeans in farm states. US agricultural exporters supported Trump’s social policies, but their livelihood relies on free trade. Meanwhile, decades

of trust have diminished in a matter of months. To China, the US is just one agricultural exporter among others; to US farmers, China is the key importer. In negative scenarios, they face a permanent loss of market share in China.

Moreover, China can raise the stakes by banning the import of genetically modified products from the US, which are already opposed by many countries. China can – and has – deferred trade and investment deals that were signed during Trump’s previous visit to China.

As the Trump administration is obstructing Chinese investments in the US, China could resort to tougher measures as well, including by enacting restrictions on imports of US services.

Further measures would include Chinese currency valuation, although that could undermine the ongoing internationalization of the Chinese renminbi and revive the dated “currency manipulation” debates. Far more consequential would be a Chinese move to sell part of its US Treasury bond stockpile. Things could get even worse if the relatively rapid increases of gold reserves in Russia, China, and other economies herald new challenges against the US dollar hegemony at the time that concerns over US stability are mounting worldwide.

As stakes are upped, China is running out of US imports for penalties in response to Trump’s tariff hikes. Consequently, Beijing is now putting off accepting license applications from US companies in financial services and other industries until Washington makes progress toward a settlement. That’s how the trade pain is now spreading from farmers in Iowa to US Chamber of Commerce and US business

groups in China. If tariff wars prevail, the nightmares have only begun.

Despite retaliations, China continues to push for diplomatic negotiations, along with efforts to import more American cars, aircraft, and natural gas, while promoting reforms in its financial sector.

Moreover, a bilateral compromise could also pave the way to new talks if Republicans lose their dominant Congressional position in this fall’s midterm elections.

Toward new globalization?

Today, as US-led globalization by advanced economies is winding down, China-fueled globalization, which is driven by emerging and developing economies, has emerged as a complement. This is illustrated

by Chinese longer-term efforts to achieve free trade in Asia Pacific, the creation of new multilateral development banks targeting the needs of emerging economies, and Chinasupported globalization.

While Trump favors bilateral trade talks to maximize US leverage, most nations today believe in multilateralism and regional trade negotiations. Ironically, the Trump trade war has intensified efforts at more inclusive trade in Asia Pacific. This has inspired even advanced economies in the region to take another look at trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), which were initially designed for emerging and developing economies.

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

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Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya

EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

EDITORIAL ADVISORY BOARD

Tuesday 18 September 2018

FDI and economic growth

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here is now unanimity among economists that Foreign Direct Investment (FDI) is a key part of private sector investment which is needed to drive economic growth in developing countries. FDI is particularly needed to complement the level of domestic investment, as well as “securing economicwide efficiency gains through the transfer of appropriate te chnolo g y, management knowledge, and business culture, access to foreign markets, increasing employment opportunities and improving living standards.” What is more, studies have consistently shown a strong relationship between foreign investment and economic growth. Examples also abound. For instance, Singapore, a poor, inconsequential former British crown colony with a meagre population of 1.6 million in 1960 and with no natural resources, was able to transform itself to one of the richest countries in the world with the third highest GDP per capita partly through attracting foreign investment into the country. To put it simply, large inflows of FDIs are now a sine qua non for developing countries to achieve a sustainable high trajectory of economic

growth. It therefore goes without saying that developing – and even developed – countries are always in competition to attract FDIs into their countries.

Central to a country’s ability to attract FDI is its ease of doing business. Besides the more technical requirements, which consist of infrastructure and access to raw materials, communication and transport links, and skills and wage costs of labour, there are much more central requirements of security, political predictability, social cohesion and upholding the rule of law, part of which must consist of a strong and independent judiciary that will adjudicate promptly and impartially on trade disputes. Besides being prerequisites for attracting FDIs, these are actually preconditions for sustainable development in any society.

Sadly, Nigeria is doing badly all of these scores. Besides its macroeconomic instability, dilapidated or absent infrastructure and lack of social cohesion, it has a much more debilitating problem of insecurity, political unpredictability and a culture of trampling on the rule of law.

Of course, Nigeria naturally has the potentials to attract lots of FDIs because of its size, population, natural and human resources; and investors are willing to overlook its unstable macroeconomic environment, the underdeveloped

infrastructure and social tension and still invest in the economy.

Sadly however, what most investors are unwilling to accept is political unpredictability and a culture of impunity. Sadly, it is these two instances that Nigeria is most notorious.

The history of FDIs in Nigeria is a history of government recklessness, unilateral and illegal termination of agreements, contracts and projects, often without any compensation. That has not ended even with the return to democratic governance and has continued to this day. Take for instance, the recent travails of successful foreign businesses in Nigeria like the South African telecommunications giant, MTN and pay TV firm, Multi Choice. Another shameful example was the attempt by the National Assembly, last year, to illegally, unilaterally and surreptitiously amend the Nigerian Liquefied Natural Gas (NLNG) Act to force the company to remit 3 percent of its annual budget as funding to the Niger Delta Development Commission (NDDC) against the contract willingly entered into by Nigeria and the other stakeholders of the NLNG covered by Bilateral Investment Treaties (“BITs”) with France, The Netherlands and the United Kingdom to retain agreed fiscal and security regimes of the investment and not to levy any tax inapplicable

to companies nationwide.

Regrettably, it is always the case in Nigeria that once investors come in and their investments begin to flourish, Nigerian regulatory agencies or even governments begin to heckle these businesses, resurrecting hitherto forgotten infractions, seeking to extort money or subject them to hitherto unknown, un-agreed, hurriedly enacted and ultimately unjust laws and regulations in the name of protecting national interests.

This is giving us a bad name, making the country unpredictable and thus, unattractive for investments. Yet the song on the lips of every government – and they are known to travel to the ends of the earth soliciting for it – is that of seeking for foreign investments.

The most depressing part is now the attitude of Nigerian public officials, which suggests calling the bluff of foreign investors and telling them to keep their FDIs. Meanwhile, virtually every knowledgeable person in the country knows the country does not have the resources to provide the necessary infrastructure, amenities and jobs needed to revamp the economy and assure sustainable economic growth.

The government must begin to reset its priority and rein in its overzealous officials who appear to know nothing about the fundamentals of growing an economy.

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Tuesday 18 September 2018

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Kantar identifies key driving elements for brands growth in Nigeria … Leverages marketing research insight and facts to recognise exceptional Nigerian brands Stories by Daniel Obi Media Business Editor

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recent study by Kantar World Panel, a division of WPP, one of the world’s largest insight, information and consultancy groups has identified key elements that drive brands’ growth across categories including FMCG, banking and service sector.

Top among the elements is brand penetration, ability of the brand to adapt quickly to shoppers choice such as pack size and price point, thirdly is volume of spend for the brand and fourthly, consumer frequent interactions on the brand.

For instance and unfortunately, local brands have continued to chip away from global brand spend. In 2016 and 2017, local brands spend 35.8 % and 35.4 % respectively against global brands spend of 64.2% and 64.6%.

The report notes that in Africa, traditional trade is still very high accounting for 76% of trade against 10% in USA, 9% in Western Europe, 41 % in Asia. E-commerce accounts for 2% in USA, 6% in Europe, 7% in Asia while it is almost non-existent in Africa.

Africa accounts for 24% of modern market against 88% in USA, 86% in Europe and

L-R: Tayo Oyedeji, chief operation officer, Native Digital; Aggrey Maposa, CEO, Kantar Nigeria, Stella Okpala, managing director Deep Dive Research and Doyin Salami, Adjunct Professor at Lagos Business School/Partner, Kainos Consulting, at the Marketing Research Academy stakeholders forum in Lagos recently.

52% in Asia.

On how to set penetration target, the report advised brands to set country specific targets, be more ambitious and be realistic if recovering from decline.

The study, Brand Footprint tracked the most chosen and fastest growing global FMCG brands based on behavioural purchase data collected from more than 40 countries worldwide, among them six African countries including Nigeria. The report provided a comprehensive, up-to-date

picture of the most important consumer trends and the strategies deployed by winning FMCG brands—at both global and local level.

According to the report, Indomie continues to be the most chosen FMCG brand by consumers in Nigeria. The brand was followed by Maggi and Cowbell. Others are Peak (#4), Milo (#5) and SoKlin (#6). Dano gained presence in Nigerian households and manages this year to climb 7 positions and become the tenth most chosen brand in

the country. The rest of the Top 10 positions are secured this year by Golden Penny (#7), Aji-No-Moto (#8) and Onga (#9).

Speaking at the presentation and awards for the top brands recently in Lagos, Aggrey Maposa, CEO of Kantar business in Nigeria said the Kantar awards for brands in Nigeria are conducted through an empirical study by the group. “Having been in Nigeria for over 35 years, we feel it is our responsibility to introduce credible awards

that are based on information collected from consumers.

We realized that in the market there are quite a number of awards that are given for various reasons but most of these awards are not empirical and not based on facts,” said Maposa. Ours is data and insight driven nothing less is expected of the Kantar companies.

Ugo Geri-Robert who leads Kantar Millward Brown Nigeria in her presentation, “Using brand communication to build brand imprint for success,” said brands need to maximise salience and come readily to mind when consumers are prompted by a relevant need.

According to Geri-Robert a seasoned marketing research consultant and a fellow of the National Institute of Nigeria (NIMN) brand assets are established in a positive feedback loop between marketing and brand experience, while a strong imprint boosts brand equity by increasingsalience.

“One of the key measures we track is the brand equity and that is the reason for the award. Brand equity represents the strength of the brand as seen by consumers and other stakeholders,” she stated.

The winners according to Geti-Robert in the Equity Award phase are : Brand with power score Gala , followed

Organisations urged to embrace digital transformation to tap into $100trn global digital value

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o u n t r y Ma n a g ing Director of Accenture, Nigeria Olaniyi Yusuf has told organisations to quickly embrace digital transformation in order to tap into the estimated $100 trillion value expected globally to be unlocked by business and society keying into digital process in the next 8 years.

Citing World Economic Forum/Accenture recent analysis, Yusuf who examined how to achieve operational excellence in a digital world said digital transformation by businesses will result in estimated 120 % increase in revenue per employee and three times productivity increase realized when technology is deployed.

The Accenture country managing director, who was represented by his senior manager, technical, Joe Ujoh, at the recent induction and unveiling of International Business Process Management summit and excellence awards coming up June next year said presently there are eight billion devices connected to the internet; and this number is expected to grow to 50 billion by 2020 and one trillion by 2030.

Today, the advent of technology and internet of things is re-shaping the way people look at business and it is has disrupted the way business is done.

In Nigeria, he said digital adoption has continued to soar, providing greater opportunities for business to

consumer interactions. Presently, Nigeria population is about 190 population with median age of 17.8 years.

Nigeria has the 8th largest number of internet users (63 million) in the world, up from 11th in 2012. 32%

of Bank customers access their accounts using virtual channels, 23% from 2012.

67% of Nigerians with internet access, spend 1-3 hours on the internet daily. 40% of Nigerians with internet access are very active on social

media. Yusuf said digital transformation provides job opportunity, customer segmentation and digital skills.

While inducting some members and fellows in to the Business Process Management Institute, the Vice chairman of the institute, Debo Adebayo explained why the institute is organisaing international summit next year. He said it is aimed at bringing practitioners and business process management together to look at the state of the practice and to tap into global happenings around the world as all these can assist in the development of business management process in Nigeria. “We will be looking at enhancing operational excellence in a digitalised world”.

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Music is Nigeria’s greatest PR tool – practitioner

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he Nigerian music, film and entertainment industry with its present state has been said to be the greatest Public Relations (PR) tools for the country with the capacity to create jobs for its teeming youth population and rebuild the nation’s image on the global stage.

This position was made by one of Nigeria’s leading PR and advertising practitioner, Steve Babaeko, the CEO of X3M group at a recently held International EMBA week organised by the Lagos Business School in Lagos.

According to Babaeko, “There is nothing that gives the government of any country the opportunity to create mass employment like the music and entertainment industry; unfortunately our government has not looked into that area,” he regretted urging government to invest in the entertainment industry.

The international EMBA week was created by the Lagos Business School to celebrate the creative industry in Nigeria and discuss its implication to the rest of Africa.

MTN, Google train over 40 SMEs on Digital Marketing in Port Harcourt

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n its bid to continually empower Small and Medium scale entrepreneurs with practical skills to implement effective digital marketing strategies, over 40 SMEs recently benefited from the digital marketing training provided by MTN Nigeria in collaboration with Google.

The group consisting of dynamic SMEs who run businesses in various sectors, were empowered in a 4-hour session to gain first-hand experience on how to use digital tools to maximize their businesses. The facilitators enlightened them on how they can effectively promote their businesses using various digital tools with a focus on owning business websites, running business ads, leveraging social media amongst others. Speaking on the experience, one of the entrepreneurs, Deekor Legborsi, CEO of Squirrel Technologies said, “This was a really rewarding experience.

I speak for the other partners when I say that being a partner of MTN has not been a let-down as it has opened the airways to other business owners and prospective business opportunities.”

MTN Nigeria continues to seek ways to contribute to the Nigerian economy by extending its partnership capabilities to brighten the lives of small business owners within the country.

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2019 Elections: APCON moves to nip hate speeches, Ads in the bud Soft-spoken but firm Ijedi Iyoha is the acting CEO of Advertising Practitioners Council of Nigeria, APCON. In this interview with Daniel Obi and Jeremiah Mbata, the regulator of the multi-million Naira Nigeria’s advertising industry spoke on a number of issues including funding of APCON for effective regulation of the industry, non-existent of APCON council and its impact, preparedness against hate speeches, Ads in 2019 elections and digital advertising regulation. Excerpts When you took over as CEO few months ago, what are those things you saw that you were not aware of? have been in APCON for about 25 years and I have been part of administrative process.

There was really nothing too hard for me to handle. The only area I was not directly involved was meetings with National Assembly and Ministry of Information officials but I have bridged the gap now. There were places I joined the former chief executive, Bello Kankaroffi for discussions but not all areas. There is no missing gap as Kankaroffi is always available for me to ask questions.

How would you describe the administration of former CEO, Bello Kankaroffi It was wonderful and amazing as he brought APCON to limelight with his sales skills. With that, he was able to sell APCON to the world.

He did a lot for APCON in terms of structures, facilities and manpower development.

Are there some structures you want to put in place?

The most challenging structure has to do with APCON enforcement; we need equipment for effective enforcement functions. Now APCON is doing manual monitoring and that is why we can’t capture everything. We need monitoring and archiving equipment that will enable digital capturing of activities pan Nigeria. The cost of the equipment is about N500 million. We are appealing to government to assist us in this regard.

It has often being said that APCON can only bark , what is your comment?

It is not true. The challenge is that we don’t publicise what we do.

In the past we have made some arrests of some practitioners but we don’t tell public about it. Some-

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Ijedi Iyoha

times we want to dialogue with them to get it right as our intention is not to be confrontational. The dialogue has been effective in regulating the industry.

For about three years, government has not appointed a council for APCON, what are those functions APCON cannot perform without such a council?

The issue of installing new fellows has not been done and there are so many people on the queue, APCON has not held Advertising Day which is a big forum for all stakeholders in the advertising industry. The day involves lecture by renowned practitioners and awards. Again there are no disciplinary committees to sit on the cases of practitioners. What we do in this instance is to write to the defaulting members.

What is the implication of all these to the industry?

The implication is that the industry is not moving the way it supposed to move. There are some reforms that probably would have come on board by now and there are some that would have been enforced, but all these are not happening.

Why do you think government is delaying in appointing a council?

My thinking is that government appears not to understand what APCON is all about. Apart from that, APCON is a parastatal under government, in that regard; there is no way government will not like to have an input on what is happening in the council. Therefore, government wants to have representative in the council, but this

Eat’N’Go , firm behind Dominos Pizza marks six years of doing business in Nigeria

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at’N’Go, the local company behind Dominos Pizza , Cold Stone Creamery among others has celebrated its 6 years of doing business in Nigeria with array of success stories and achievements. The Eat’N’Go story started in 2012 with the opening of the first Dominos and Cold Stone which has grown into 70 stores within 6 years by a hardworking local team.

According to Pat McMicheal the company’s CEO in a statement , “Eat’N’Go is a proud Nigerian company with over 2,000 Nigerian team

members spread across the country.

These men and women are a major part of the success the company has enjoyed over the past 6 years” Olusola Adeeko, Eat’N’Go’s HR Head shed more light on the company’s strategy for staff retention with the “above award salaries”. We are proud to make sure that we pay our team well to retain our team.

There are special incentives given to store teams who go above set targets.

This builds a culture of “ we all win at the same time” He stated further that “the staff at Eat’N’Go get the best of training

both within and outside the country.

Our pioneer managers were trained at the international headquarters of our various brands (Domino’s Pizza, Cold Stone Creamery and Pinkberry Gourmet Frozen Yoghurt) and members of the team also have the opportunity to go for bi-annual competitions in the United States and other countries chosen by the International Franchisor. The company has a heavy emphasis on continuous development and employees at all levels attend regular trainings to enable them to grow in their position.

runs against the APCON law. But I think government is looking into it now to appoint professionals to the council. But if the law can be amended, it would help the industry. The industry is pushing for both amending the law and bringing back the council.

But would you suggest an industry-led apex regulatory body?

Not now. Not much is on ground for that structure to take place. Now, our salaries, capital projects and other over- heads come from government. This is what we need to sit down and discuss whether the industry can carry the burden.

What are the results of your effort so far on licensing agencies?

This has been happening but I continued the process. We have a committee that checks those who are qualified for licensing. This year we have registered over 60 agencies.

Why does registration among agencies need APCON enforcement?

In this part of the world, we need enforcement to get things done right.

Again some clients are patronising some unregistered agencies, therefore the agencies don’t find need to register. But we have written to advertisers, seeking their collaboration that they should deal with only registered advertising agencies.

Ad for vetting is not accepted if the agency is not registered and exposure of un-vetted Ad is an offence.

APCON has time- belt for alcohol advertising but some cable networks advertise alcohol outside the time belt, what is your comment?

During football, what we allow is sponsorship; flash the product packs and the logo. This is not commercial in both local and cable networks. We are on top of the game to monitor violations especially during football matches.

Even with presence of APCON,

elections in 2015 witnessed hate speeches and Ads, what happened?

Most of the Ads did not pass through APCON. Those that passed through APCON were not approved. For electronic media, APCON and Nigerian Broadcasting Commission sanctioned them.

For the press, we found it difficult identifying who placed the hate speeches and Ads. But we wrote to political parties and the media and some media stopped exposing the materials. We are always appealing to media houses not to prioritise money above ethics.

Then, 2019 elections is fast approaching, how are you equipped and prepared against such hate speech and Ads? What we are doing now is collaboration with stakeholders, enlightening them. We have been holding such seminars, talking to political parties, politicians and advertising agencies. We have organised such forum in Katsina, PortHarcourt and we are planning another one in Abuja. We are inviting politicians, National Assembly members and the public on the dangers of hate speeches.

Digital advertising is gaining ground, how are you prepared for the regulation?

When we had a council, there was a committee working on that to develop administrative and legal framework to assist the enforcement on digital Ads. The dissolution of the council stopped the committee’s work. It is a difficult challenge for us now but the only thing we do is look at the social media and those we know we write to them on any infringement. When we have a council, we will push for the review of APCON law, specially the Code to accommodate digital space into it.

Internally we are doing something already but not on the larger scale.

Malta Guinness partners LASPARK on ‘Fair in the Park’

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alta Guinness in partnership with Lagos State Parks and Gardens Agency, LASPARK, refreshed Lagos residents at ‘Fair in the Park’ celebration that held at Kanu Ndubuisi Park, Alausa, Lagos recently. ‘Fair in the Park’, a brainchild of LASPARK is a weeklong activity to mark the past Sallah holiday. It was an exciting week for Park lovers who

came out in their numbers to celebrate together.

Speaking at the event, Omotola Bamigbaiye-Elatuyi, Marketing Manager, Malta Guinness and NonAlcoholic Drinks, said: “Malta Guinness has partnered with LASPARK to promote made in Nigeria products, and to encourage Lagos residents to spend more time outdoor, by visiting parks and gardens across the state.”

Bilikiss O. Adebiyi-Abiola, General Manager, LASPARK, said that in addition to the agency’s vision of promoting Made in Nigeria Products, the agency decided to partner with Malta Guinness to energize and refresh participants who were present at the Fair.

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NAICOM denies receiving court order on Tier-Based Minimum Solvency Capital Modestus Anaesoronye

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nsurance regulator, the National Insurance Commission (NAICOM) said it was yet to be served any court order restraining it from carrying out its ongoing Tier Based Minimum Solvency Capital policy in the industry.

The Commission also said that while no legal action will stop regulator from embarking on regulations to product consumers and investors in any industry, the legal action will only cause hiccups.

Mohammed Kari, commissioner for Insurance made the remark in Abuja during a Media Retreat organized for insurance journalists in Nigeria.

A federal High Court in Lagos had last week ordered NAICOM to stop the implementation of its proposed minimum solvency capital policy scheduled to take effect pending the expiration of a 30day pre-action notice.

Justice Muslim Hassan gave the order in a class action brought by some shareholders of insurance companies in Nigeria, challenging the new minimum solvency capital policy proposed by the NAICOM. At the hearing, counsel to the applicant, Bert Chucks Igwilo, told the court that they

had filed and served the NAICOM a pre-action notice on Sept 6. Justice Hassan gave the order and adjourned further hearing to Oct 8.

Kari said that going back to history, it has been in the character of insurance companies to resist recapitalization whenever it is introduced, stating that this was the reason the sector refuse to grow.

“Each time, recapitalization was introduced to the banks, they followed along, when it is introduced to insurance industry they will always resist, and that is why the industry is backwards today, Kari said.

He noted that while customers and investors in insurance who have been denied dividend over a long time are happy with the policy, some association groups who have other ways they get compensated rather than the divided are not happy.

He further that the responsibility of the Commission is not to punish operators, but to nourish them, adding that the regulator is poised to ensure that insurance industry is isolated from future financial crisis. Kari said since the introduction of the policy in July, insurance stocks were beginning to pick up because investors who have foresight are taking not of developments of a bright future for insurance

L - R Tinuade Awe, executive director, regulation, Nigerian Stock Exchange (NSE); Kamarudeen Kareem Oladosu, National Council Member, NSE; Austin Ani, StanbicIBTC, Winner of the 2018 NSE Corporate Challenge; Titi Ogungbesan, chief executive of Stanbic IBTC Stockbrokers Limited and Daniel Ogunboten, Sales Executive, Rwanda Air; and Patrick Adebayo Ajayi, National Council Member, NSE during the 2018 Corporate Challenge at Muri Okunola Park, Adeyemo Alakija Street, Victoria Island, Lagos .

companies.

Barineka Thompson, director, Supervision, NAICOM on the benefits on the policy said the TBMSC Model – is a regulatory model designed for the application of proportionate solvency capital that support the nature, scale, complexity and risk profile of the business conducted by insurers, stressing that classi-

AG Mortgage Bank enables 89 NHF subscribers to become home owners CHUKA UROKO

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G Mortgage Bank, one of Nig er ia’s foremost primary mortgage banks, has enabled 89 subscribers to the National Housing Fund (NHF) Scheme to become home owners in Enugu, South East Nigeria.

This is a major development in the history of the NHF scheme which is ‘famed’ for not delivering on its original intentions as a gateway for acquiring homes with single interest rate on housing finance.

It is also to the credit of AG Mortgage Bank for successfully facilitating this homeownership by the subscribers.

A lot of other subscribers who

have not been as lucky have stories to tell about the NHF scheme. AG Mortgage has, by this singular action, changed that narrative.

The happy home owners collected keys to their new homes developed by the COPEN Group, a reputable property development company with projects across the country. All the houses are within the Jedidiah Gardens Enugu which provides a good ambience for home owners.

“AG Mortgage Bank is an active operator of the NHF Scheme, and has disbursed in excess of N3 billion to over 390 NHF beneficiaries”, said Ngozi Anyogu, the mortgage bank’s managing director and chief executive officer, at an elaborate event that marked the

handing over of the houses.

NHF Scheme is supervised by the Federal Mortgage Bank of Nigeria (FMBN), the apex mortgage bank in the country.

Ayogu explained that access to mortgage loan under the NHF scheme was open to all Nigerians with verifiable stream of income who are contributors to the scheme.

He urged Nigerians in all spheres of endeavor to take advantage of FMBN/NHF scheme and AG Mortgage Bank’s other mortgage products including the Tenant - Owner -Mortgage (TOM) which is a rent-to-own programme; Leap into Mortgage (LIMO) product, which is an incremental mortgage arrangement that fits home buyers at different income levels.

fication of business according to the present level of capital that an insurer possesses in relation to the risks that the capital can effectively be deployed to.

He said the policy will enable soundness and profitability of insurers through optimal utilization of capital; encourage insurers to focus on the area of their strengths,

encourage innovation and deepen market penetration, build investors’ and public confidence in the industry.

Other benefits according to him, include, creating capacity for bridging insurance gap, optimizing local retention and minimizing capital flight ; limiting significant systemic risks and building confidence in the insurance

industry; supports the stability of the financial system and increase insurance contribution to the nation’s Gross Domestic Product.

He posited that all the aforementioned will be achieved without a mandatory injection of capital and no cancellation of licence, but insurers will be subject to solvency control level.

‘Investment in power sector will ensure affordable electricity supply’ ANIEFIOK UDONQUAK,

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he investment in the power sector made by the Akwa Ibom State government is to ensure affordable and sustainable electricity supply that will fasttrack its industrialisation drive.

Though power generation is in the exclusive legislative list in which only the federal government has powers to legislate and implement projects in the sector, Akwa Ibom has had its power generating turbines in place and is supplying electricity to the national grid In addition, it has recently in partnership with the Transmission Company of Nigeria (TCN) and the Port Harcourt Power Distribution Company inaugurated a 2x15 MVA injection substation in Uyo, the state

capital to ensure regular power supply within the state capital.

Currently, it is erecting a 2x60 MVA substation in Ekim, Mkpat Enin local government as part of the strategic investment to boost electricity supply in five local government areas of the state including the Ikot Abasi industrial hub.

The local government areas to benefit from the Ekim power substation include Oruk Anam, Ikot Abasi, Onna, Mkpat Enin and Eastern Obolo .

In an interview in Uyo, the Akwa Ibom State capital, Etido Inyang, chairman, Ibom power company, a wholly owned firm by the state government, he said the vision of the state government is to encourage industrialisation adding that the investment in the power sector has enabled the state government to attract many industries

to the state.

“The governor has the vision of providing quality, sustainable and affordable power supply, Akwa Ibom is the only state in the federation with investment in the power sector that stands out ,’’ he said.

Inyang said the state government in the process of fixing one of the broken down power turbines at the Ibom power plant in Ikot Abasi explaining that another 30KVA transformer was being provided to facilitate power supply to Ikot Abasi town which had been without electricity for years.

According to him, there has been no investment in the power sector in the state before the present administration came into office adding that Akwa Ibom State had only two substations provided by the federal government since 1994.

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COMPANIES & MARKETS MainOne and Orange ink deal to boost internet access into Francophone West Africa

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rench Telecoms company, Orange and leading West African Connectivity and Data Centre services provider, MainOne have struck a partnership that will see the French telecoms giant co-invest in two new cable landing stations in Dakar, Senegal and Abidjan, Cote D’Ivoire while the broadband infrastructure provider will provide additional capacity via its 7000km cable system from Europe to Africawith landing stations in Nigeria, Ghana and Portugal, reinforcing the position of both companies in the African telecommunications ecosystem.

Thanks to this new cable connection, several countries in West Africa will benefit from better connectivity, lower prices and access to new services. Orange will benefit from multiple Terabits per second of additional bandwidth for the development of fixed and mobile data in Africa to meet the increasing demands for Internet access via 3G and 4G network. More specifically, this cable extension is an opportunity to improve connectivity and offer a broader range of services for both Orange Côte d’Ivoire &Senegal’s Sonatel. In addition, neighboring countries of Burkina Faso, Mali and Mauritania will benefit from enhanced capacity.

For MainOne, the partnership underscores the company’s vision for a better connected region, its chief executive officer, Funke Opeke says “MainOne continues to lead the digital

transformation of our subregion by investing in affordable connectivity to drive economic development. Our objective is to bridge the digital divide between and within West Africa and the rest of the world. We are committed to deepening broadband penetration across West Africa and believe our investments in technologically advanced subsea infrastructure will continue to liberalize the international bandwidth market, further support Orange and other wholesale customers, and ultimately result in improved digital services in the region”.

Speaking on the strategic deal, Chief Executive Officer of Orange Middle East and Africa, Alioune Ndiaye says “The development of new digital services in Africa has fostered huge social and economic developments over the past few years. As barriers to access continue to fall with improved networks and more affordable equipment, Orange, as part of its multi - service strategy, is seeking to position itself as an important partner in the continent’s digital transformation Through this new partnership, Orange is set to secure and improve direct access to high - speed broadband services

in two of its most important countries, Senegal and the Côte d’Ivoire.”

The MainOne Submarine Cable System links West Africa with Europe, bringing ultra-fast broadband in the region. It runs from Seixal in Portugal through Accra in Ghana to Lagos in Nigeria, with capacity to land branches in Morocco, Canary Islands, Senegal, and Cote D’Ivoire.

The cable system, which now has an upgradable capacity of over 10 TBPS, first went live in July 2010, becoming the first private subsea cable to bring open-access, broadband capacity to West Africa.

L-R: , Iya Traore, three times Guinness World Record holder ; Peter Kajovo , Sponsorship and Promotions Analyst, MTN Nigeria, and Valentino Ozigbo, chairman Feet and Tricks Nigeria, at the opening ceremony of the African Freestyle Football Championship in Lagos

AFDB releases new tool to assess resilience, fragility in countries

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he African Development Bank has created and refined a new tool to diagnose fragility in countries, taking into account their capacities and pressures they may be under.

Called the Country Resilience and Fragility Assessment (CRFA), the tool offers a completely new method of assessing resilience and fragility using seven key criteria: political inclusiveness, safety and security, justice, the economy, social cohesion, the regional contagion effect,

and climate change. “ The creation of the CRFA represents a significant advance in the assessment of fragility, which is a reality that it is not always easy to pin down or discern. By introducing, for the first time, the concepts of ‘capacities’ and ‘pressures’, this new tool brings much more rigour and effectiveness to the assessment of resilience and fragility, especially since it takes greater account of the national context,” explained Sibry Tapsoba, director of

the Transition States Coordination Office (RDTS) .

Before its approval by the Bank Board on 11 September, the CRFA, was subjected to a range of checks for reliability and effectiveness, conducted under the supervision of the Transition States Coordination Office, with support from the Bank’s statistics and resource mobilization departments.

In addition to assessing resilience and fragility, the new tool should also be useful for advocacy and communication and improving

and strengthening dialogue between the Bank and its regional members. It should also help to anticipate crises, thanks to an early warning system.

“What we have here is an assessment tool of unquestionable rigour. It is easy to use, it is reliable and it is accessible to all. It brings an undeniable added value to existing techniques for the assessment of resilience and fragility,” said Riadh Ben Messaoud, from the Bank’s Resource Mobilization department.

New impetus for policing as Academy Halogen rebrands, graduates 88 officers CHUKA UROKO

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olicy for security received a boost and new impetus recently as Academy Halogen, registered in Nigeria as Halogen School of Security Studies & Technology graduated 88 police officers in Professional Executive Diploma in Crime Prevention and Community Safety.

The company which is, a subsidiary of Halogen Security Group, used that occasion to formally unveil its new brand identity as an institution for capacity development, research, thought leadership and advancement of enterprise security risk management.

The Crime Prevention and Community Safety course, which is in line with the United Nations Office on Drug and Crime (UNODC), was jointly facilitated by Academy Halogen, the Association of Certified Forensic Intelligence and Crime Analysts (ACFICA) and Elizade University, to equip Men of the Nigerian Police with requisite skills to prevent and respond to emerging crime and community safety issues.

By the graduation of 88 police officers as professionals in crime prevention and community safety, the society will benefit immensely especially now that security challenge is threatening the very foundation of Nigeria as a corporate entity.

Ibrahim Idris, the inspector general of Police, who was the special guest at the event, commended Academy Halogen and its co-facilitating organizations for initiating a training programme targeting the police at a time like this.

Represented by Alli Mu-

hammed, the deputy commissioner of Police (Operations), Lagos, Idris charged the graduands to deploy the newly acquired knowledge to boost Nigerian police crime prevention capacity nationwide.

“I commend the team of academics and faculty members who made this training a reality.

I enjoin our officers and men to use all the knowledge acquired here towards tackling issues of crime and community safety in our country’’.

Theophilus Fadayomi, ViceChancellor, Elizade University, observed that series of violent and social disruptions across Nigeria put the survival of everyone at risk. “The 2017 Crime Incidence Matrix showing high rate of offences against property, persons and assets confirms that the present policing strategy needs to be revisited in order to ensure that crime incidences reduce with inclusiveness of the community and other stakeholders”, he noted.

Fadayomi, however, expressed optimism that these issues have been properly addressed under the Professional Executive Diploma programme. “It is our hope that this training will make a difference to the status quo, as we intend to engage law enforcement officers in higher levels of security training even at post-graduate levels, in order to build a new crop of officers with the capacity for forensic intelligence, crime analysis and investigation’’, he noted Wale Olaoye, group managing director of Halogen Security Company Limited, commended the leadership of the Nigerian Police for allowing its men to be trained for the professional enhancement programme.

FBNInsurance promotes literacy amongst needy children

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n celebration of the International Literacy Day and in line with the FBNHoldings Group Corporate Responsibility and Sustainability initiatives, leading life insurer, FBNInsurance has lent her support to the provision of complete back-to-school kits to hundreds of needy children in Lagos.

At the event organised by a non-governmental organisation, Jakin NGO, 500 school children from various homes and hospices were provided with school bags, uniforms, notebooks, sandals and socks amongst others.

In her welcome address, the convener, Jakin NGO, Bukola Adebiyi, expressed gratitude to the management of FBNInsurance for their continued support for the programme. She stated that the insurer has been

key sponsors of the Jakin NGO Dress-A-Child-for-School event for a number of years.

I n h i s r e s p o n s e Va l Ojumah, managing director/ CEO who also doubled as the chairman of the event, praised Jakin NGO for its commitment to the cause of the less privileged. “At FBNInsurance, we take education seriously. This is why our best selling product, FlexiEdu, is designed to help parents and guardians ensure their children and wards enjoy the very best of education, come what may,” Ojumah said.

FBNInsurance’s strides in the area of education is well documented. Earlier in the year, the firm refurbished two blocks of classrooms and sunk boreholes in two schools at a rural community near Abraka, Delta State.

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COMPANIES & MARKETS ‘Embracing ride hailing could be a cheaper alternative to vehicle ownership’

Business Event

The Country Manager of Taxify, Uche Okafor, speaks to BALA AUGIE on making transportation more accessible and getting more Nigerians to appreciate the value of ride-hailing

Uche Okafor

Taxify is already a huge success in Nigeria, how did you achieve this? axify was launched in 2016 at a time when the Nigerian market was desirous for a safe, affordable and reliable way to move. From 2016 till date, we’ve seen remarkable market growth and more importantly a paradigm shift in the way that people think about transportation.

We see that people, particularly young people, prioritizing access over ownership and moving from desiring to purchase vehicles to wanting affordable rides at the tap of a button. This is what Taxify has been about and will continue to be about: delivering best in class ride-hailing services to people across Nigeria.

Convincing people to make the switch from driving their own cars to a whole new “alien”

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method of transportation must have proved challenging, what’s the story?

What we have found is that all people need is the chance to experience Taxify. Ultimately, they realise on their own that using Taxify allows them to really enjoy other experiences. Time is am luxury and in most of our major cities in Nigeria, we spend a great deal of time commuting.

Commute time can be so much more productive if we aren’t spending it navigating traffic. The value of your time is something that I don’t think most people account for at all when it comes to transportation, people might understand it in the sense that they realize how long it takes them to get to work, but we’re not really internalizing what an alternative might be and whether or not it would save them money.

Excitingly, every day, we’re working to make Taxify even

more affordable and accessible to Nigerians so that riding Taxify is cheaper than owning a vehicle when you factor in everything from the value of the car to fuel prices and maintenance.

The non-intuitive thing about our business model is that the cheaper the service gets, the better the service experience is.

Again, time is a luxury and when the price goes down, you have more riders because more riders can afford it. But it also means that more driver-partners come on the platform and that pick up times get even shorter.

From a safety point of view, what assurances do you give riders?

Taxify is dedicated to keeping people safe on the roads. Our technology enables us focus on rider safety before, during and after every trip. Before the trip, our priority is first making sure that you get a safe and reliable ride. This means that every driver goes through an on boarding process before coming on the platform and as such, when you’re paired with a driver, you see their name, licence plate number, photo and rating- so you know who’s picking you up ahead of time. Even after the trip, you’re able to contact your driver if you forget an item in them vehicle. During the trip, you can share your estimated time of arrival with your loved ones so they know exactly where you are and when to expect you. After the trip, you can leave a rating to your driver-partner anonymously and provide feedback on your ride experience that we regularly review and use to improve quality. We also have best in class support trained to respond to any questions you have about your trip and help retrieve forgotten items.

Dangote Cement boosts access to higher education in Ogun, grants N25m scholarship to 115 students RAZAQ AYINLA & IFEDAYO OGUNYEMI, Abeokuta

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s part of efforts to contribute to the educational development of Ogun State, Dangote Cement PLC has awarded a sum of N25 million in scholarship to 115 indigent students of host communities of the Ibese plant in the Ewekoro and Yewa North Local Government areas of the state.

The beneficiaries include 100 students from tertiary institutions from across the coun-

try and 15 secondary school students in the 15 host communities.

Speaking at the event, Plant Manager of the Ibese Plant, Amando Martinez, said the gesture is part of the resolve of the organisation to encourage young ones to go to school and in return to build the communities.

“We cherish education and one of the ways through which we can impact our society is to give unfettered access to education which is why we are giving them scholarship.

“This is an opportunity that every beneficiary should make

use of. We have decided to award scholarships to a total of 115 students from 15 host communities. They include 100 tertiary institution students and 15 secondary school pupils.

General Manager, Human Asset Management and Admin of Dangote, Abdulmalik Shehu admonished the recipients of the scholarship to desist from all societal vices.

“Don’t do drugs. Don’t give your parents sleepless nights.

Be a pride to your parents. Work hard and be good ambassadors of Dangote Cement, these host communities and your families.

L-R: J.S Orediyi, deputy vice-chancellor, Federal University of Technology Owerri ; Dennis Okoro , director, MTN Foundation , Emenalo Chizoba, Commissioner ,for Primary and Secondary Education, Ayo, Aikpohio, Nigeria Communications Commission representative, and Abasi-Ekong Udobang, senior manager, program implementation, MTN Foundation, during the MTN Foundation Scholarship Alumni induction and award ceremony in Owerri, Imo state.

L-R Collins Oluyomi, assistant director of environmental services, Lagos State Ministry of Environment; Edem Vindah, sustainability and regulatory relations manager, Nigerian Breweries Plc; Ifeoma Okoye, public affairs manager, Nigerian Bottling Company Limited; Tolulope Adeyo, assistant director of environmental services, Lagos State Ministry of Environment; and Yinka Bolaji, pollution control safety manager, Seven Up Bottling Company Limited, at the cleanup exercise by member-companies of the Food and Beverage Recycling Alliance (FBRA) at the Arena Market, Oshodi, Lagos.

Faculty, University of Stellenbosch, South Africa, Marivs Ungerer (left); director, Lagos Business School (LBS), Uchenna Uzo; director, executive education, LBS, Lilian Uwaeme; chief executive officer, X3M Group, Steve Babaeko and Faculty, Lagos Business School, Francis Okoye, at the dinner with top players in Fashion and Entertainment Business marking the International Executive MBA Week in Lagos.

L-R: Nuhu Yakubu , president, Nigeria Liquefied Petroleum Gas Association (NLPGA); Krona Uti; Dada Thomas, president, Nigerian Gas Association (NGA) during the send forth ceremony for Krona Uti on his retirement from DPR as deputy manager,LPG/CNG Operations.

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Tuesday 18 September 2018

in association with

‘Newer aircraft will save airlines money on maintenance’ Adamu Abdullahi, is the director, Consumer Protection Directorate of the Nigerian Civil Aviation Authority (NCAA). In an interview with Ifeoma Okeke, he assured that all aircraft operating in Nigeria’s airspace are airworthy. He also spoke on the need for airlines to interline, amongst other issues.

Let’s start with your evaluation of the airlines’ relationship with the passengers, do you think it has improved? t has improved tremendously.

What is happening now is unprecedented. You have seen what happened to Medview Airline. It sent most of its aircraft on checks. At some stage, it didn’t have any aircraft on ground. But it continued to operate. It was operating because it entered into interlining arrangement with Dana Air and Arik Air and so passengers that come to the airport, who had already bought tickets, as Medview did not envisage it would send out its aircraft, it endorsed these passengers to other airlines.

Most times we say as long as the passengers do not complain, we don’t have any issues, and passengers did not really complain. It is only when passengers become choosy and say that I bought the ticket from this airline, why are you asking me to use this other airline that we explain to them that every aircraft flying in Nigeria is airworthy, as far as NCAA is concerned. If the airline you bought the ticket from endorses you to fly another airline, you go ahead and take that flight.

I will say the situation is encouraging. In the same instance, when airlines lose aircraft without notice, it is good to acknowledge that they are dealing with machines and machines can be fail at any moment.

A particular airline has three AOGs (Aircraft on Ground) in one day, but all the same, it went ahead, merged flights; gave all the things to the passengers, according to the regulator; such as the refreshment that is needed after two hours of delay; they refunded those that want their tickets refunded and merged flights to ensure that passengers were taken from point A to point B. Does this mean that NCAA is strongly in support to the ongoing plan for domestic airlines to interline?

This is something NCAA has always encouraged and it was part of the meetings NCAA has held with all airlines, stakeholders in which

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Adamu Abdullahi

we encouraged them to go into this interlining arrangement. Come to think of it, it does not make sense for three airlines to leave at the same time to the same destination with each aircraft having few numbers of passengers. Rather than that why not put all the passengers in one aircraft and have a full load? In that way you maximise your profits. Once you have a flight form you will know who flies who, where the money goes to and this is cleared at the clearing house that will be established.

We have always encouraged airlines to be part of the International Air Transport Association (IATA) Billings and Settlement Plan (BSP).

If domestic airlines will do that we will be most glad. They are now in the process of doing that. I know they are holding discussions among themselves and IATA is spearheading it and let’s see if it will work out; if it does it will be very good for the industry and it will be very good for

the airlines themselves as well as passengers. This is because this issue of passengers getting stranded and all the delays and cancellations will be a thing of the past. This is possible because at any given time you will have one of the airlines that is going to one of the three major destinations of Abuja, Lagos and Port Harcourt. So we are looking forward to the interlining.

Recently there were text messages being sent to people, warning them not to fly some airlines because if they do they might be involved in accidents. One of the messages was attributed to a wellknown pastor. What was NCAA’s reaction when they saw the messages?

It was a desperate de-marketing strategy, caused by this intense competition among the airlines.

We believe that it is the airlines that were fighting themselves to the extent that they go ahead and damage

each other’s name. There were even posts on social medium, Whatsapp by pilots, telling you not to fly an airline they just left; that they left the services of that airline because they don’t maintain their aircraft. But that is not true because all the pilots and crew of the accused airline would have left if there is any of such danger. People should think twice about all these fake news that goes on air.

NCAA has given assurances that any aircraft you see in Nigeria’s airspace is safe and airworthy.

We have warned all the airlines and we are warning them again to desist from such practices and as I said earlier, this interlining arrangement will encourage them to be collaborating with each other rather than be on each other’s neck. So I suggest and I strongly recommend that people should not worry about such postings because our airspace is safe and our aircraft are safe to fly.

Nigerian airlines are complaining that some countries in the West Coast use high charges to discourage them from flying to those destinations, while they are not charged as much when airlines from those countries come to Nigeria. What do you think the domestic airlines should do?

Most of these complaints have to do with ASECNA and ASECNA is the body that has solid control over the airspace of these French speaking countries in West and Central Africa.

Our own carriers keep complaining that our charges are too high and that they are discriminatory in what they charge airlines from English speaking countries and French speaking countries. While they charge the former highly; they charge the later low.

This is really out of my purview but a complaint from airline operator that comes to me certainly will be investigated because consumer protection does not begin and end with passenger. It covers everybody that uses the service of aviation. The airlines can lay their complaints if they have. This issue is currently under discussion. The DirectorGeneral of the Civil Aviation Au-

thority of these countries meet and the matter has been raised by the Director General of NCAA. This matter has been discussed and that is why our airlines are getting a better deal now. That explains why our airlines are now operating to some of those destinations, especially the West Coast countries. This means that things are looking up.

What is your view about fares charged on domestic flights?

Civil aviation authorities also act as consultants to airlines. Low cost carriers have been success stories all over the world because there is less cost associated with their flights. If the captain in command, the flight officer and engineers are the only ones operating a flight without air hostesses, you are cutting cost because you won’t pay cabin crew per se. Low cost carriers cut off refreshments. It is no frills flights. You just take your light bags and jump onto the flights. No air hostess to serve you refreshments on the flight. Nigeria can adopt this and because most of the domestic flights are one hour, passengers can manage.

So if Nigerian airlines can change their business plan and start thinking in those terms of low cost flights they would spend less on cost of flights.

But come to think of it, the average cost for one hour flight worldwide is 100 dollars. 100 dollars is about N36, 000. Most flights in Nigeria are about one and if you check well you will see that the cost of ticket is around that N36,000, unless you booked your flights in time. So what this is telling us is to book our flights in time so that we can pay less. The less the ticket cost the more people that will fly, but the fact remains that we don’t have enough aircraft in our airspace.

We have many aircraft that have gone for checks and the average age of our aircraft makes maintenance a major issue.

If we can get new aircraft in our fleet, airlines will save more money on maintenance and make more money. Maintenance is a no go area.

There is no way you can cut corners on that and the older the aircraft the more maintenance that you do.

BDTECH

BUSINESS DAY

Tuesday 18 September 2018

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In association with

‘Cybersecurity should be an essential investment in every organisation’ Rick Rogers, the regional director for Africa at Checkpoint Software Technologies, talks to BusinessDay’s Jumoke Lawanson about the current cyber threat landscape from a worldwide and African perspective. He also discusses various forms of attacks and why it is necessary for people and organisations to protect their digital environment. Excerpt.

What are the specific solutions that Checkpoint has used to help address cyber security issues in Nigeria? e have the Next Generation Firewall, UTM are the typical solutions, virtualisation, our cloud guard solution all underpin by our solution for detection and prevention. Prevention is a Checkpoint ethos because we strongly believe that prevention is better than cure and once malware is inside a network, it propagates and may be too late to rescue. We have a range of appliances, but we have a consistent software suite across our range of hardware and this is the full suite of firewall, all the intermediate steps of intrusion prevention, URL filtering and all the different components to secure data centres, small businesses and large enterprises right up to advanced threat prevention.

has proven to be able to provide that security.

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What global security threats should enterprises be more worried about?

What Checkpoint, as a leading cyber security solutions provider is positioning is Generation five (Gen V). we are moving into an era of massive attacks that spread such as the Wannacry ransomware attacks that spread globally. We believe most organisations are not investing enough to secure their environments to prevent this. A lot of organisations are still deploying Generation one techniques with the firewall, when we are really sitting with generation five attacks. You can’t ignore the relevance of generation one because firewall is an important component, generation is maybe some URL filtering, IP intrusion prevention with firewall and so that is how you move up, and now, we are facing massive global attacks where we need the end to end architecture and analytics and threat prevention of generation five. From end point, meaning, computer, desk top device end points; servers, data

Rick Rogers

centre virtualisation, cloud security, mobile security. The major threat is that organisations are not protecting themselves for the onslaught of nationwide and mega attacks.

Apart from large enterprises and banks, we also know that government agencies hold a lot of vital data, how is checkpoint working to help protect national security in the cyberspace?

Checkpoint looks at every market holistically, so we don’t come into a market and say that we are only focusing on enterprises. We talk to the entire system that needs security including the public sector organisations, revenue services, central banks and entities that really understand the need for digital security.

We undertake some ground work to ensure that certain institutions and organisations are educated on the need for security. Our sandblast solution is our trade mark for threat prevention on malicious attacks. We have the full suite from end point to mobile devices to core network to virtualisation to cloud, to provide a consistent security approach.

A lot of Nigerian business are still

sceptical about moving to the cloud, do you think security risks in the cloud could be reason for low cloud service adoption?

Cloud is definitely here to stay because it provides agility, flexibility, pay as your grow, scale down as you need to, etc. So, it is certainly the adoption of the future, depending on a few things such as in-country resources. We do a testing/ proof of concept with customers where we run trials with them and test the security and visibility, because there is a business drive and there is also a concern about security so we offer the security solutions and talk to customers to ensure that if they have the business desire, they can be protected going into this space. Resources, bandwidth, infrastructure and other components need to be in place for cloud to really become attractive. Cloud security should be a shared responsibility between the customer and the provider because providers say they are secure but mostly, they are not secure so it is not far farfetched that a customer is sceptical about cloud, because they need to be sure that their data is secure, the infrastructure that they use is secure and Checkpoint

Checkpoint is particular about creating awareness on the need for mobile security. How would you rate Africa’s use of mobile phone security?

We are starting to make progress and get traction in the areas of mobile security. A lot of organisations are still deciding on the BYOD (bring your own device) strategy. If you look at it from an enterprise perspective, the clear strategy on management security is not there yet. We obviously do take the time and the effort to make sure that organisations understand that mobile devices are very critical components that they need to secure. We also have a separate strategy when it comes to the consumer element of securing mobile devices, meaning that a mobile operator can actually take our security application and resell that to their subscribers. Although we don’t have figures to quantify mobile security adoption rate in Africa, if you look at it from a checkpoint perspective, we have made it clear that mobile is very important, threat prevention is very important and the whole infinity architecture is very important to us. So when we go into a market like Nigeria, where we have operated for over 10 years, with over 300 customers and over 30 certified resellers, we can proudly say that we are part of the security landscape.

In my opinion, we are the leading digital security vendor in Nigeria.

On a global context, online usage through the use of mobile devices is very dangerous, especially without security. Hackers are given the ability to penetrate corporate environments and compromise critical data when there is no strong mobile security application put up to guard against attacks. Checkpoint is doing a business case around the entire digital environment but mobile is one of those key elements that we need to position with our enterprise customers that it is critical for them

to adopt.

As you may already know, security is one of the major issues that is hindering the growth of telecoms operators led mobile money service in Nigeria. Is checkpoint in any way working with telcos in Nigeria to secure infrastructure?

There are a couple of ways that we work with mobile operators. One area is that we protect the IT infrastructure of telecoms service providers as large enterprises. As we protect banks data centres and IT environment, we do the same for the telcos. As I mentioned earlier, we have the technology available for a mobile operator to offer security to their customers.

What is the risk level in Africa for breach and attacks on enterprises and organisations?

Checkpoint usually publishes research findings on risks and actual attacks in different countries every year. As at last month, Nigeria was number one in terms of risk for actual attacks, it is now positioned at number eight. With our threat cloud, we pick up attacks that are taking place, whether they are ransomware or any other cyber attack and we come up with an index rating and from this index, we can actually rate countries. This is obviously a good way to measure where a country sits in general and to know the amount of specific attacks that have been targeted at a country. The security in Nigeria is sitting with the customers that we have here and we have got over 300 customers, including a lot of banks, multinationals, government agencies and the telcos, where MTN is one of our biggest customers. We even bundle security with ISPs (Internet service providers), so instead of ISPs just providing internet access service, they can now provide internet access with security, and we do that in Nigeria. What we have in our index report are actual attacks and not necessarily breaches.

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BUSINESS DAY

Tuesday 18 September 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Airtel highlights impacts of its touching lives CSR program …Wraps up fourth season with media viewing Stories by JUMOKE AKIYODE-LAWANSON

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irtel Nigeria premiered the fourth season of its flagship corporate social responsibility (CSR), Touching Lives on the 3rd of June 2018, in an event aimed at recapitulating the efforts of Airtel through the award wining initiative which was launched three years ago.

The company used the opportunity to reaffirm its commitment to promoting corporate philanthropy.

Speaking at the season 4 Premiere, Segun Ogunsanya, managing director and chief executive officer of Airtel Nigeria said the company is committed to helping the less privileged in the society in line with its vision of creating empowerment opportunities and making life better for Nigerians.

“Together, we all can make our society a better place, if we join hands and collaborate to uplift the downtrodden around us. True, we knew we lacked the resources to solve every problem, but we also knew that if we did our best and also encouraged our friends to do their best as well, we can go a long way in making an impact – in touching lives. And that is what we have done in the last three years,” Ogunsanya said.

Prior to the premiere, Nigerians were called upon to nominate less privileged individuals, groups and communities in dire need of support.

And out of over 10,000 entries; 12 beneficiaries whose stories truly require urgent support were eventually selected by a committee put together by the telco.

The airing of Episode 1 of Airtel Touching Lives season 4

R-L: Olabiyi Durojaiye; Chairman Nigerian Communications Commission (NCC) Board of Commissioners, Nkechi Ejele; Permanent secretary ministry of communications, Houlin Zhao; Secretary General International Telecommunications Union (ITU) and Umar Garba Danbatta; Executive Vice Chairman/ CEO of NCC during the spotlight on Nigeria Investment/opening of the Nigeria Pavilion at the ITU Telecom World 2018 Durban South Africa on Monday September 10, 2018.

was a summary of season 3 – highlighting the unforgettable story of the Olusegun Aina family, who recently gave birth to a set of twins (a boy and a girl) after losing three children to an inferno and became homeless through the incident.

During Episode 2 of Season 4, the struggles of Olanrewaju Komolafe, a barber and commercial motorcyclist who was involved in an accident that almost cost him his life was aired. Although he survived, Olanrewaju had to spend a protracted period in the hospital as he had fractured bones and had also contracted tuberculosis from a co-traveler.

The telecom company donated N500, 000 as educational support for the children and presented a fully stored ultramodern shop to them.

In Episode 3, Folashade Adefioye, a mother of three boys, became a victim of paralysis without any prior accident or sickness. Airtel in-

tervened in her situation by providing two scholarships for her youngest children, a fully paid for and wellfurnished barbing salon for Temitope, her eldest son and a rented shop with food supplies for her.

In Episode 4, She Writes Woman, which focuses on providing care, support and advocacy platform for Nigerians with mental health disorder was the guest on the show.

To kick off her initiative, Airtel handed over a fully furnished center for mental health care.

The company also provided the center with 32’ inch television sets, air conditioners, refrigerator, projector and screen, standing fans, white marker board, water dispenser, inverter, tables and chairs amongst other items.

During Episode 5, the show anchor, Wana Udobang, met with community leaders of Imodi-Ijebu to discuss how the company could support

and up-skill youths in the area through the ICT facilities provided by the telco. The community which has over 25,000 people with 70 per cent as youths and students were provided a world-class ICT centre fully furnished with computers and other gadgets.

In Episode 6, Omowunmi Sasere, a widow who lost her husband in a fatal accident while on duty as a police officer was given a furnished two-bedroom apartment in Magboro, Ogun State. Airtel also provided her with professional kitchen equipment so that she can start a catering business. Other items donated to her include a 3.5 KVA generator, freezer, television set, catering utensils, gas cooker and cylinder, pots, among other appliances.

ATL 4 Studio had the Executive Director of St. Cyril Cancer Treatment Foundation, Mojisola Animashaun and one of the beneficiaries of

the foundation, Joy Ibudu as a guests in Episode 7.

Lukmon Oreniwa, a deaf and dumb caterer in Lagos was invited to the Airtel Touching Lives studio in Episode 8. Airtel provided a space for a catering business for two years and also provided industrial gas, cooking utensils, 3.5Kva generator, table and chairs, industrial fan, deep freezer, oven (mini with electric and gas), serving plates and other kitchen utensils. Other items provided include chopping table, baking pan etc. The company also consulted an E&T doctor to offer advice and provide a hearing aid to Lukmon.

In Episode 9, Airtel met with community leaders and members of Ajah-Ilaje community to discuss their state of living, needs and how Airtel can support in making their community a better place to live. Airtel promised to donate a borehole water to provide accessible drinkable water to the community.

In Episode 10, Precious Ginikachi who lost her right hand in a factory accident was invited to the show. Having narrated how challenging life has been for her since the accident, Airtel empowered her with her dream business – a well-furnished boutique, stocked with different outfits including: gowns, blouses, skirts, exotic bags and other accessories. A 3.5 KV generator was also provided to run the store.

Three members of Agbede Omolaiye Community were guests at ATL 4 studio during Episode 11 to speak on the condition of their health centre which was actually constructed by the community. Considering their population and the urgent need for

health care, Airtel donated 14 hospital beds, chairs, tables and drugs to Agbede Community Health Centre at Omolaiye Covenant Estate Phase 1, Ikorodu. This has enabled the centre to begin providing health care services.

In the final Episode (12) of the show, Airtel Nigeria, restored hope of a neglected bomb victim, Joy Musa who lost her husband, four children and her brother in a 2013 attack on Dogo Nahawa in Jos, Plateau State. Despite several attempt to commit suicide due to poverty, the telco recently came to the rescue of the 42-year-old window after her nomination for Airtel Touching Lives season 4 by a member of her community, Omolara Reuben.

To Joy Musa, Airtel presented the keys of a well-furnished two-bedroom apartment rented for two years to her, a cheque of N500.000 for her children’s schooling and the sum of N500, 000 was also given to her to start a business. Other items also donated to Joy Musa include a 3.5 KVA generator, freezer, water dispenser, television set, DSTV Set, kitchen utensils among other appliances.

Airtel Touching Lives is an inspiring corporate social responsibility initiative that seeks to offer practical relief, succor, hope, opportunities and credible platforms to liberate and empower the underprivileged, disadvantaged and hard to reach persons in the society.

The telco hosted a Media Viewing of last episode in Lagos, sharing the company’s vision and commitment to the project. According to the telco, the CSR initiative is part of its way of making a social impact in Nigeria.

ers of the event, noted that under his leadership “Smile Communications is actively transforming the nation’s economy by providing universal access to high-quality, reliable, easy-to-use and affordable communication services across Nigeria.”

They further observed that “the impact his leadership has made on Smile’s operations demonstrates what is possible with a team dedicated to making a difference.” They added that under Efeurhobo’s watch “the company has grown from an ISP to a full-fledged communications services provider.”

An alumnus of the London Business School and

Harvard Business School among other prestigious institutions, Efeurhobo is a dynamic professional with experience, skills and exposure spanning across strategy and planning, operations management, sales and distribution, corporate advisory services, stakeholder management, legal consultancy, corporate governance and project management.

Efeurhobo was also recently awarded Business Integrity Award by the African Child Foundation and was listed among the top 100 Telecoms Professionals in Nigeria by Association of Telecommunication Companies of Nigeria (ATCON).

Smile communications adjudged most innovative data company of 2018

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mile communications, leading provider of 4G LTE mobile broadband service has been given an award for the 2018“Most Innovative Data Company of the Year” at the African Entrepreneur Merit Awards held in Abuja recently.

Godfrey Efeurhobo, the managing director of Smile was also conferred with the ‘Titans of Tech CEO of the Year Award’ at the recently held Titans of Tech awards ceremony held in Lagos.

According to the company, both awards attest to the corporate vision and individual ingenuity that have propelled Smile to the broadband leadership

echelon of the nation’s telecommunication sector.

The African Entrepreneurs Merit Award is a platform that recognizes African Entrepreneurs and corporate institutions that have distinguished themselves in their contributions to the growth and development of MSME, s in Africa.

The organizers of the awards ceremony say that the award was bestowed on Smile for its knack for innovative products and consistent provision of innovative services. The company was also commended for its massive investments in authentic 4G Long Term Evolution

(LTE) technology.

On hand to receive the 2018 African Entrepreneur Merit Awards on behalf of Smile was Nonye Obianwu, the Ag. regional sales manager, Abuja, who thanked the organizers for giving honour to whom honour is due.

Obianwu dedicated the award to all Smile customers for their steadfast support and loyalty. She assured that the company’s commitment to the provision of best-in-class Internet services will endure so as to continue to serve the needs of its teeming customers.

A similar sentiment was echoed at the Titans of Tech

Awards in Lagos. On being bestowed with the ‘Titans of Tech CEO of the Year Award’ Smile Nigeria’s helmsman Godfrey Efeurhobo reiterated that Smile Nigeria has been consistent in the provision of valuable products and innovative services.

“Our vision of becoming the broadband internet provider of choice in Nigeria has guided us in everything from selecting our people and partners to choosing the best technologies and creating innovative and relevant products and services” he added.

Explaining the choice of Efeurhobo as the ‘Titans of Tech CEO of the Year’, Technology Africa; the organiz-

Tuesday 18 September 2018

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BUSINESS DAY

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EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Stakeholders to address Nigeria’s basic education challenges, solution at FEF conference Stories by KELECHI EWUZIE

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oncerned academia and stakeholders will be addressing the challenges stifling the progress of Nigeria’s Basic education at the second Fafunwa Educational Foundation (FEF) National conference in Lagos.

The conference which will serve as a platform for scholars and intellectuals from across different disciplines to share interdisciplinary knowledge and experience that will reflect not only the truly diverse manifestations and implications of basic education in Nigeria but also give plausible, pragmatics and policy impacting solutions.

Oyenike Adeosu, Member FEF Local Organising Committee of the foundation while speaking about the conference in Lagos as part of activities of the FEF annual lecture series and award disclosed that the theme of the conference will be “Nigeria’s

L-R: Tani Fafunwa, Managing Director, Resourcery Plc; Bimpe Bolarin, Professor of Educational Psychology, Lagos State University and Member Academic Committee, FEF and Oyenike Adeosu, Member FEF Local Organising Committee at a press briefing in Lagos.

Basic Education” How Functional? adding that the theme of the conference is topical based on the conviction that education should meet the needs, yearnings and aspirations of the nation, in terms of enriching the individual’s knowledge and personality, and equipping him/ her

to undertake specific task and employment functions essential to sustaining and transforming the nation.

Adeosu observes that eighteen years after the lunch of Universal Basic Education, there are still serious concern about the functionality of skills and knowledge ac-

quired in schools.

According to her, “The conference hopes, through sharing of knowledge, experience and workable ideas, to undertake a critical appraisal of the Nigeria’s Education System, and review its functional roles and relevance to the sustainability and development

Edusko, British High Commission host Nigerian scholars admitted into UK universities

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dusko Africa in partnership British High Commission in Nigeria and Chevening Nigeria recently hosted the first unified reception for scholars who are recipients of the prestigious scholarships.

The unified pre-departure orientation programme and reception for Nigerian scholars admitted into UK univer-

sities was the first of its kind.

Jide Ayegbusi, founder, Edusko Africa, the organisation behind the initiative in his remarks, said the primary objective of the event was to celebrate young Nigerians who have been given scholarships to study in top UK Universities.

Ayegbusi observes that every year, more than 10,000

Nigerians are admitted into universities in the UK for undergraduate and postgraduate degree courses.

According to him “Edusko Africa, the organisation behind the initiative, is poised to promoting UK universities across Africa and helping thousands of young Africans get quality higher education in the UK and beyond. We are

Association of Business School Netherlands Alumni in Nigeria recently inaugurated a new set of executives: Ugochukwu Ogbodo (Public Relations Officer), Adebola Oyefeso (Vice President), Oluyomi Martins (President), Oladapo Akinloye (General Secretary), and Olufunke Jones (Treasurer)

also excited about the commitment of the UK to investing in the Nigerian knowledge economy as part of its wider interest to contribute to the Nation’s economic growth.”

Tosin Adebisi, senior International Officer at the University of Sussex speaking on behalf of participating universities, said, “I am delighted by this joined-up approach that does not only serve to celebrate these remarkable scholars but also to promote Study in the UK and showcase the range of scholarships offered by universities and the Foreign Commonwealth Office, thereby, countering common misconceptions about the limited scholarships available in the UK”.

This year, more than 10 top UK universities sent 2 scholars each to attend the reception. Among them are: University of Sussex, Birmingham University, University of Warwick, University of Northumbria, Leeds Beckett University, University of Central Lancashire, De Montfort University.

challenges being experienced in recent times”.

She said the conference will run through from September 25-28, 2018 adding that the key note speaker will be Omaze Anthony Afemihe of the Institute of Education, University of Benin.

While the Chairman of the occasion is PAI Obanya, International Education Strategist (The Grand Sage of Education in Africa) and Hamid Bobboyi, the Executive Secretary, Universal Basic Education Commission (UBEC) who will be the special guest of honour at this opening ceremony.

The conference will also have Oluremi Tinubu deliver the Keynote Address/Memorial Lecture, Presentation of Doctoral Seminar and Award and Public Presentation of Fafunwa Journal of Contemporary Education.

She further pointed out that the promotion of excellence practice in key sectors of the Nigeria education industry is the major objective of the Fafunwa educational foundation annual Doctoral Seminar

and Award in Education.

The award she said is a brainchild of the Academic Committee of the Foundation headed by Late Emeritus Professor Ayotunde Yoloye and assisted by Late Professor Akin Osiyale.

“It was conceived among other objectives to reward excellence in the field of education. The Doctoral candidates are from the Faculties of Education in ten selected Universities in Nigeria namely: Bayero University, Kano, University of Ibadan, Ibadan, Obafemi Awolowo University, Ile-Ife, Lagos State University, Ojo, Lagos, University of Calabar, Calabar, University of Benin, Benin, University of Ilorin, Ilorin, Ahmadu Bello University, Zaria, University of Lagos, Yaba, Lagos, University of Nigeria, Nsukka”, she said.

Other highlights of the programme will be a “wrap-up talk” on the theme of the conference by Rashid Aderinoye of the department of Adult Education, Faculty of Education, University of Ibadan.

KCOBA unveils activities to mark 109 years of Alma mata

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ing’s College Old Boys Association (KCOBA) has rolled out programmes as part of activities to commemorate the 109 Founders Day anniversary of King’s College Lagos.

At a press briefing organised by KCOBA in Lagos, Rotimi Aladesanmi, vice president, KCOBA said the KINGSWEEK is the high point of the old boys’ celebration every year adding that serves as a reminder of the status and history behind the college.

Aladesanmi noted that the celebration always has an intellectual slant to it. “We always have a Founders’ Day lecture which would be on a topical issue that is relevant to the Nigerian society and we also use it as an avenue to socialise and share experiences”.

Mustapha Chike Obi, Chairman KCOBA KINGSWEEK 2018 planning committee said this year’s founders day anniversary is being put together to celebrate historic excellence of the college.

The Founders’ Day activities will run from the 18th of September 2018 till the 23rd September.

Activities to mark the KINGSWEEK include a lecture on the September 20th with the theme “Reforming Education: An imperative for National Development” to be delivered by Muhammadu Sanusi, The Emir of Kano.

He said a Jummat service will take place on the September 21st, while a dinner on the 22nd would host foremost economist Bismarck Rewane as its keynote speaker as he talks about the economy of Nigeria.

According to Obi, “The KCOBA takes great pride in this institution; we’re very emotional and passionate about our school. It may not be where we want it to be today but we are trying our best to get it back to the days of glory it used to have”.

Aladesanmi also highlighted that the school would be acting the play “Festac 77 Langudo” which would be directed by its original director at the Festac 77 as part of its activities to celebrate its Founders ‘ Day, adding that KCOBA would be collaborating with the school as one mighty whole to make this year’s celebrations a success.

23 INSIGHT

BUSINESS DAY

Tuesday 18 September 2018

EDUCATION

Are you ready for the new school session?

OYIN EGBEYEMI

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he summer holiday is over!

Believe it or not, what seemed l i k e a n e v e rending 10 –12 week break from school is gone. Children will soon return to early morning wake up calls, strict schedules, structured learning activities and limited play time.

It is commonly said that it takes about 21days to break or create a habit…So now that the children have been out of school for over 70 days, saying that getting them fully prepared for a new session is a challenge may be a bit of an understatement. Parents may find

themselves getting a little anxious around this time, especially those who have children that are moving to new schools. Children may find prospect of a new session exciting or nervewracking, depending on their disposition, age and stage of learning. However, a few key things need to be done to ensure that children start the session properly and are not left behind or out of sync with school activities early on.

Here are a few tips that might help prepare children for the new session: Ease into routine.

Given the amount of time that children have spent out of school over the summer holiday, it is only natural that their bodies may have gone out of sync of the daily routine during term time.

Over the summer, maybe they would have had a few lazy days, been waking up a little late or going to bed whenever they want. This is okay for their restful pe-

riod. However, to make it easier for children to start to wake up early when school starts, parents need to enforce earlier and stricter bedtimes during the days approaching the start of the term. This way, children’s body clocks start to readjust back the routine of waking up earlier and it becomes less of a chore when they eventually resume school.

Modify activities.

Over the summer holiday, children would have spent quite a lot of time resting and recovering from their hard work during the previous session. While rest is important, it is also imperative that children begin to get more mental stimulation ahead of the start of the term. Mentally engaging activities such as reading, writing and solving puzzles will provide that kick that would wake them up and prepare them for the work ahead of them when the term begins.

Overcome first-day Jitters.

The first day of school could be daunting, especially for children who move to a new school. There may be some fear of the unknown, unclear expectations, new friends to make, new academic challenges, new teachers, and so on.

To overcome this, it is advisable for children to take some time to reflect on the previous session with a view of what is to come in the new session. They should think as far back as their first day up until the last day of the last term; taking note of all their achievements inbetween. This would serve as a good confidence boost that reminds them of the challenges they overcame in the past; and therefore prepares their mindset for those ahead.

Dig up the School Calendar.

After a long break from school, parents and children may forget the new term’s activities. In order to adequately prepare, parents should retrieve the school

‘Youth need proper mentoring to succeed in leadership’ KELECHI EWUZIE

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ohn Nwodo, President General Ohanaeze Ndigbo says youth need proper mentoring by parents in order to take their rightful positions in governance.

He blamed the youth for not actively participating in politics saying in the past leaders came into politics in their 20s and 30s and call for a change in character if they want to successfully contribute to the growth of the country.

In his address as chair-

man of the occasion at the 19th Mike Okonkwo annual lecture titled, ‘Nigeria’s Unity: Matters Arising’ to mark the 73rd birthday of Mike Okonkwo, The Redeemed Evangelical Mission at Muson Centre, Lagos said the unity of Nigeria should not be left to the ruling class adding that it should be a collective effort from all more especially the youth.

He advocated institutional reforms that can attract more youth participation in the leadership to contribute to the economy.

Akinwunmi Ambode,

Lagos State Governor who was represented by his deputy, Idiat Adebule reiterated the importance of detribalised citizens on the development of the country saying if Nigeria must grow then the importance of unity cannot be eroded or overemphasised.

The convener and celebrant, Bishop Mike Okonkwo said Nigerians must divorce their minds from tribe when it comes to national issues adding that there should be no party affiliation or religion and that the President must be President for all.

L-R: Patrice Oloko, representative of the Chief Examiner; Femi Falana, Speaker; Peace,Okonkwo; Mike Okonkwo, Bishop of The Redeemed Evangelical Mission (TREM); Onitilo Deborah, the winner of Mike Okonkwo Education and Youth Initiative (MOEYI), Essay Competition and John Nnia Nwodo, Chairman of the Occasion and President General Ohanaeze Ndigbo during the 19th Mike Okonkwo Annual Lecture theme’ Nigeria’s Unity ,Matters Arising held in Lagos.

Femi Falana, senior Advocate of Nigeria (SAN) in his lecture at the event urged state governors to fight for their freedom stressing that he is in support of state policing saying if a new Nigeria must emerge, then there must be community policing.

“Nigeria is not a united country and we can’t have a unity of the oppressor and the oppressed, elites do not fight for the people and professional bodies are now run on the basis of ethnicity “, he said.

Falana said before Nigeria can have peace, the issue of collective wealth must be addressed and unless distribution of the country’s wealth is revisited, there can be no unity.

In addressing the on-going debate on restructuring, Falana said restructuring without the equitable redistribution of the Commonwealth will not promote unity or political stability.

“If the government genuinely wants to fight corruption it has to review the wages of workers, ensure prompt payment of salaries and pension, furthermore, the government should implement other welfare laws and institutionalise the rule of law and respect the human rights if citizens “, he said.

Highlight of the event was the presentation of prizes to winners of the 15th Mike Okonkwo National Essay competition for Senior Secondary School students.

calendars (if they do not have them already), review them and prepare for activities holding over the course of the term, some of which may require advance planning or purchase of special items.

Go to the Doctor.

To ensure that the children are physically prepared for the new term, it is important that parents take them for a general check up with their doctors. This way any illnesses that may have not been noticed early enough will be nipped in the bud, thereby giving the children a healthy start to the term/session.

Kit Up. Over the summer holiday, some children may experience a growth spurt.

So parents need to ensure that their uniforms still fit (for those who are returning to the same school/tier of school). For those changing schools, parents must make all arrangements to ensure that they purchase new uniforms on time. In

addition to uniforms, other materials that parents need to ensure that their children are equipped with include stationery, sportswear, bags and books.

Do Not Skip the First Day. Following a long and relaxing holiday period, there is some temptation to take it just a little further and skip one or two days of the beginning of the term. Missing out on school in any way is not advisable because the children and parents would have to play catch up to get back on track. This could destabilise the children, thereby laying a weak foundation at the beginning.

The beginning of a new session is nigh. This requires a great deal of thought and preparation. But with careful and deliberate planning, parents and children would be ready to take on the entire year!

Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Educationist canvasses for adoption of practical learning method in schools Angel James

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he director of Goseld Nursery and Primar y school, Kelicha Ochonogor has called for the adoption of more practical pedagogic method with less theory in schools to improve the standard of education in Nigeria.

Ochonogor stated that illustrative and demonstrative methods of teaching remain the best for early learners because it will enable children understand and remember.

Speaking on the vision behind setting up Goseld Nursery and Primary school, Kelicha stated that owning a school has opened an opportunity to share ideas with other private owners to improve learning across the country.

According to her, “I believe I will be able to contribute a lot to make education system easier and more effective, I am not satisfied with the education system, we don’t have to be rigid, we have to bring in the Montessori and harmonise different system of teaching” She further said the newly established school has taken steps to build more

on practical but less theory.

“Children like to practice what they have seen and learnt, the school is working on comparative education, a little of British and Montessori curricula in a harmonised format, we consider the weakness and strength of every child, we

want to lay a good primary foundation before going to the secondary, we want our primary children to be well educated”, she said.

Adedipe John, supervisor of the school opines that Goseld nursery and primary school is the best in the environs having done rigorous research and his experience in teaching, adding that the school has a policy for every child, to make sure that every child right is protected so as to ensure 100 percent security attention.

“We are established to see that quality education is given to every child, they have moral character and can stand anywhere to impact positively”, he said.

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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.’

Dangote Cement Plc: Revenue growth adds impetus to profit BALA AUGIE

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he most capitalized company in Nigeria Cement Plc just released its half year financial statement that showed improvement in key performance metrics as the company continues to increase its market share.

The company has been growing cement sales volume, a stellar performance that shows management and board of directors of the company are working assiduously to ensure that shareholders get a high return on investment.

Strong growth in sales underpin gross margin The cement maker in its released unaudited half year result for June 2018 showed a double digit growth of 16.90 percent in revenue to N482.43 billion from N412.67 billion the corresponding year.

Drilling down the top line figure shows sales from Nigeria operations-which represents 71.23 percent of Group top lines-, was up 18.08 percent to N344.10

billion in the period under review from N291.39 billion as at June 2017.

Revenue from Pan Africa operations increased by 11.44 percent to N138.68 billion in June 2018 from N124.44 billion as at June 2017.

The impressive performance of the producer of the building material can be attributed to its focus and market penetration strategy amid a tough and volatile macroeconomic environment.

Cement sales volume moved by 7.47 percent to 12.36 million metric tonnes in June 2018 from 11.51 million metric tonnes the previous year. It is expected that Federal Government proposed infrastructure spend will add impetus to sales volumes.

An acceleration of construction activities will also help underpin future revenues as the demand for cement will increase.

Cement production capacity was up 3.52 percent to 44.05 million metric tonnes in the period under review from 42.55 million metric tonnes.

Cost of sales grew by 11.29 percent to N197.59 billion in June 2018, the lowest growth in input costs among peers,

Aliko Dangote, GCON chairman

according data gathered by BusinessDay. Dangote Cement’s cost of sales ratio fell to 40.95 percent in June 2018 from 43.02 percent the previous year. This means the company has spent less on input cost to produce each unit of product.

The largest producer of the building has succeeded in diversifying its energy mix away from Low-pour-fuel-oil

and gas to other fuel sources such as coal, biomass and other alternative fuels.

Gross profit increased by 21.11 percent to N284.84 billion in June 2018 as against N235.12 billion as at June 2017.

Gross profit margin increased to 59.04 percent in June 2018 from 56.97 percent the previous year. This means the firm is able to sell its product at a premium in the market. It also means that Dangote earns N0.59 on the Naira in gross margin.

Growth in net income despite reduction in finance income Operationally, Dangote Cement recorded a 22.64 percent increase in operating profit to N200.51 billion in June 2018 from N163.49 billion the previous year.

The company was able to grow its operating profit despite a 16.14 percent increase in total operating expenses to N86.86 billion in the period under review from N72.84 billion as at June 2017.

Finance income declined by 78.25 percent to N3.58 billion in the period under review from N16.48 billion as at June 2017. The decline can be attributed to the reinstatement of interest accrued for Zambia and Ethiopia subsidiaries which was reversed as it was incorrectly charged.

Despite the current challenging operating environment leading to consumer downward spending, rising inflation,

BD MARKETS + FINANCE Analysts: BALA AUGIE

and increased cost of financing among others, the company was able to grow pretax profit by 19.25 percent to N185.53 billion in June 2018 from N155.58 billion the previous year. Net income grew by 3.14 percent to N113.16 billion in June 2018 from N109.71 billion June 2017.

Earnings Before Interest, Taxation, and Depreciation (EBITDA) increased by 20.78 percent to N246.0 billion in the period under review from N203.67 billion as at June 2017.

Dangote Cement was able to utilize each Naira invested in sales in generating higher profit while utilizing the resources of shareholders in bolstering bottom line.

The company’s EBIDTA margins increased to 51.03 percent in June 2018 from 49.35 percent as at June 2017.

Pretax margin increased to 38.45 in June 2018 from 37.70 percent as at June 2017.

However, net margin fell to 23.45 percent in June 2018 from 26.45 percent the previous year.

Going forward, ongoing investments in alternative fuel sources such as coal mines, aimed at de-coupling costs to US$, should help preserve margins and support earnings growth.

Bond Issuance to help reduce debt Dangote Cement’s finance costs fell by 23.92 percent to N18.56 billion in June 2018 from N24.40 billion as at June 2017.

What’s more, the company has a time coverage ratio of 10.77 times, which means its operating cost can cover interest expense.

Total financial liabilities or total long term loans increased by 11.27 percent to N436.92 billion in June 2018 from N387.67 billion as at June 2017. Banks loans, a component of financial liabilities, spiked by 49.78 percent to N219.96 billion in June 2018 from N146.85 billion the previous year.

Debt to equity ratio increased to 60 percent in June 2018 from 49.55 percent as at June 2017.

The Nigerian cement giants has got approval from Nigerian regualator to issue N300 billion ($833 million) in local currency bonds as it

seeks to fund expansion plan and refinance debt.

It will also seek to raise $500 million via the issue of a Eurobond, which is on top of the local currency bond, as it considers London listing.

In order to increase its share of Nigerian market, the producer of the building material has earmarked N350 billion as capital expenditure.

The company has slowed on capital expenditure spending since the economic recession of 2016 as acquisition of property plant and equipment fell by 67.79 percent to N40.16 billion in June 2018 from N107.95 billion as at June 2017.

Asset Quality The company’s key performance metrics remains strong, which validates management’s focus and market penetration strategies.

Current ratio increased to 81 times in June 2018 from 78.88 times as at June 2017.

Return on equity (ROE) increased to 15.54 percent in the period under review as against 14.05 percent as at June 2017.

Company History Dangote Cement Plc is a producer of cement, and operates plants for the preparation, manufacture and distribution of cement and related products. The Company operates through two segments: Nigeria and Pan Africa. The Company, through its subsidiaries, is engaged in exploration, coal production, cement grinding, power production and limestone mining operations, among others. Its Nigerian operations include its three manufacturing plants in Nigeria: Obajana Cement Plant in Kogi State, Gboko Cement Plant in Benue State and Ibese plant in Ogun State. Its Pan African operations include its factories or import facilities in Cameroon, Ethiopia, Ghana, Senegal, South Africa, Tanzania and Zambia. It is also focused on operating in Congo and Sierra Leone. Its subsidiaries include Dangote Cement South Africa (Pty) Limited, Dangote Industries (Ethiopia) Plc, Dangote Industries Limited, Tanzania, Dangote Cement Cameroun S.A and Dangote Cement Senegal S.A.

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Energy Report Oil & Gas

Power

Renewables

Environment

Nigeria not positioning to maximise advantages from sanctions on Iran OLUSOLA BELLO

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n i t e d St a t e s of America’s sanctions on I ra n k i c k i n November but Nigeria does not seem to be positioning herself such as to derive the maximum benefits from the situation.

But rather it has taken actions that have further threatened her precarious position in the world supply chain for global crude oil market by refusing to take the necessary steps that would bring the much desired investments or calmed down tension in the Niger Delta so that there could more production.

The refusal of President Muhammadu Buhari to sign the Petroleum Industry Governance Bill (PIGB) is a clear indication of the lack of seriousness this present government has attached to improving the investment climate for the oil and gas industry.

Godwin Izomor, managing director, MG Vowgas Limited, an oil and gas servicing company has however appealed to president Muhammadu Buhari to reconsider his position on the PIGB and sign the bill into law because of the obvious benefits it

would bring to the country.

According to him, if the bill is signed would facilitate the much desired investments which would lead to job creations which is one of the cardinal objectives of this government. It would also allow for conducive environment for oil companies to operate and make more productions which is badly needed for the economy to develop.

He said with the increase in oil prices the country should begin to invest in all the assets that are positioned to be developed so that she can increase her production volume.

“Within three years all the projects such as Zaba Zaba, Bonga South West and others should be made to come on stream”.

Nigeria he said should not be exporting all her raw crude but rather refine it and make more money, adding that the country should be self sufficient in refined products and stop looking for easy way out. “We should double our production so that filling the gaps that would be created by the sanctions against Iran would not be challenging.

He however commended President Muhammadu Buhari for continuing former president Goodluck Jona-

Muhammadu Buhari

thans administration’s works but urged him to make efforts to stabilise the oil and gas n industry.

Currently the country produces about 2.1 million barrels of crude including condensate. But it has the capacity to produce about three million barrels per day which it has not been able to achieve because of the militancy and other sundry crisis in the Niger Delta region.

Meanwhile oil prices pulled back weekend on concerns that additional U.S. tariffs would be placed on Chinese imports; after an earlier rally triggered by worries that more sanctions on Iran might constrict supply.

Crude futures ended the week up more than 1.6 percent. Traders said an early rally on Friday was sparked by reports U.S. Secretary of State Michael Pompeo was going to announce new sanctions on Iran.

“It increases the odds that there will be less oil coming out of there,” said Phil Flynn, an analyst at Price Futures Group.

The gains were curbed though by reports U.S. President Donald Trump instructed aides to proceed with tariffs on about $200 billion more of Chinese products.

Brent crude oil futures pulled back on the reports of additional tariffs, dropping

Power sector loses N370.7bn to poor infrastructure, gas

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he power sector has lost about an estimated N370,727,000,000 to insufficient gas supply, distribution, transmission and water reserves to date in 2018.

On September 14, which was last weekend alone the sector lost an estimated N1,479,000,000. The reason for this humongous loses according to analysts has been attributed to ranging from lack of reflective tariff for the industry which has denied investors to make the much desired investment that would have improved the lot of the infrastructure that are required for improved and steady power sector.

The average energy sent out was 3,739MWh/hour on September 14 2018, this was just about 166.64MWh/h up from the previous day.

About 1,032.5MW was not generated due to unavailability of gas and 112.5MW because of transmission infrastructure.

While high frequency resulting from unavailability of distribution infrastructure was responsible for 1,936.7MW not generated.

Only last week, the Nigerian Electricity Regulatory Commission, NERC, in its Quarter 1 2018 Report, disclosed that the 11 DISCOs’ debts to the Nigerian Bulk Electricity Trader, NBET and Market Operator, MO, was a staggering N112billion.

In that quarter, the DISCOs, out of a total indebtedness of N163.1billion to NBET and MO, was able to pay only N51.2billion, an amount a little above 30 percent of the total owed.

NERC attributed DISCOs liquidity challenge to noncost reflective tariffs, high technical and commercial losses as a result of consumers’ apathy to payment owing to their disdain for estimated billing and poor quality of supply in most Load centres.

NERC painted the grim picture thus: “of the

N171.1billion billed to customers in the first quarter of 2018, only N106.6billion was recovered, representing 62.3 percent collection efficiency.

Therefore, of every N10 worth of electricity sold during the quarter under review, N3.8 is uncollected.”

Power sector insiders however painted a grimmer scenario, insisting that the NERC figures did not capture the total picture of DISCOs pathetic predicament.

“The situation is more serious than NERC has presented it. When you add the high interest charges on facilities these DISCOs were availed by their banks, huge CAPEX requirement for capital projects, recurrent expenses, other deductions etc, you will appreciate the frustration of these investors and why they are asking the federal government to come take back their assets,” a retired Director at Power Holding Company of Nigeria, PHCN,said..

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

He said further: “No nation treats its investors as these investors have been treated. To expect them to perform optimally is not only unrealistic but totally impossible.”

Take the indebtedness NERC is talking about in respect of NBET. It defies logic. You deprive a distributor the opportunity to sell her product at cost reflective prices, contrary to the contract you signed, you now started billing her actual cost of the product from the factory. You now go ahead to record the difference between the actual cost and the price you approve for him to sell as debt for him in the books. Unless something fundamental happens to break the cycle, the indebtedness can only continue to grow in the books.”

To break this cycle of indebtedness, consensus among industry operatives is that NERC, the regulatory authority must give a nod to a cost reflective tariff.

9 cents a barrel to settle at $78.09.

U.S. West Texas Intermediate (WTI) futures settled up 40 cents at $68.99 a barrel after dropping 2.5 percent.

After a volatile week, Brent was set for a 1.6 percent weekly rise and WTI 1.8 percent.

Brent which is the equivalent of Nigeria’s Bonny Light reached a session high of $78.94 a barrel, as speculators attempted to push the price above the $79.00 level.

Brent crude futures have reached a high around $80.00 a barrel three times this year before pulling back.

“The price action confirms $80.00 a barrel as a strong resistance line in Brent,” consultancy Petromatrix said in a research note.

“There has been a lot of speculative interest searching for Brent above $80.00 a barrel on the back of the U.S. sanctions on buyers of Iranian crude oil, but so far this year any buying of Brent above $79.00 barrel did not have a long shelf life.”

The United States is renewing sanctions on Iran after withdrawing from a nuclear deal forged in 2015 between Tehran and world powers.

Washington re-imposed some of the financial sanc-

tions from Aug. 6, while those affecting Iran’s petroleum sector will come into force from Nov. 4.

Refiners in India, traditionally major buyers of Iranian crude, will cut their monthly loadings from Iran for September and October by nearly half from earlier this year.

But Iran’s OPEC Governor Hossein Kazempour Ardebili, said in comments to Reuters that a “supply shortage” meant the United States would not be able to meet its zero export targets.

The world’s supply of oil hit a record last month, yet another sign of oil’s dominance over the energy landscape.

The International Energy Agency said Thursday that the global oil supply reached 100 million barrels a day for the first time ever, boosted by rising production in the U.S. and several OPEC nations.

Much of the increase in production is coming from OPEC and the United States, according to IEA, which advises oil-consuming nations.

U.S. production has returned to 2014 boom levels, but the energy agency said U.S. output will grow more slowly next year due to bottlenecks in getting oil to markets.

NCDMB and EFCC to collaborate on infractions by oil companies

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he management of Nigerian Content Development and Monitoring Board (NCDMB) and the Economic and Financial Crimes Commission (EFCC) plan to forge more effective collaboration for quick investigation of serious infractions by oil and gas companies in Nigeria.

Simbi Wabote, the executive secretary, NCDMB, who led the management of Board, dropped this hint during a courtesy visit to the acting chairman of the EFCC, Ibrahim Mustafa Magu at the Commission’s new Head Office Building in Jabi, Abuja According to him, “we plan to refer serious fraudulent discoveries from the audit to the Commission for further action”, he intimated.

On the essence of the visit, Wabote stated “the Board will like to initiate the development of a MoU between the two agencies to enable quick deployment once the services of the Commission are required”.

He pointed out that “we regular-

ly receive alerts via the whistleblowing portal on our website.

We do our bit to investigate such alerts and believe some of the major findings may be candidates for referral to EFCC”.

Wabote noted that the EFCC is “one of the key agencies driving one of the core programs of His Excellency, President Muhammadu Buhari”, adding that the Commission “ has succeeded in building a reputation for itself locally and internationally as a fearless fighter in the war against corruption”. Thus, his Board is fully aligned with Mr. President’s fight against corruption. Which is why the Board attends to requests for information or clarifications about contract and oil and gas transactions under EFCC investigation expeditiously.

He stated the Board has put in place an Anti-Corruption and Transparency Monitoring Unit, headed by a senior member of the management team, to promote anti-corruption and ethical behavior and to investigate any internal infractions.

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

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Energy Report

Nigeria’s active oil rig count falls by 5.71% STEPHEN ONYEKWELU

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igeria’s active oil rig count d ro p p e d by 5.71 percent, from 35 in July to 32 in August signaling reduction in exploration and production activities in the oil and gas sector but oil producing peers are increasing E&P activities.

In July, Africa’s largest crude producer had seen its active rig count increase by 9.38 percent, from 32 oil rigs in June to 35 in July, according to OPEC’s August Monthly Oil Market Report (MOMR).

Rig count is a function of the level of exploration, development and production activities occurring in the oil and gas sector. A drop in active rig count means oil exploration and production activities in Nigeria have decreased month-on-month.

Nigeria’s active oil rigs had remained static at 32 since the first quarter of the year. In 2015, Nigeria had recorded 30 oil rig counts. In

2016, it decreased to 25, and later to 28 early 2017.

Other OPEC members such as Algeria have increased the number of their active rigs from 45 oil rigs in July to 49 in August, Angola still has four, Ecuador from 8 to 10 active rigs but Equato-

rial Guinea still has one.

Active oil rigs in Gabon fell from four to three, Iran still boasts of 61, Iraqi’s fell from 59 to 57, Kuwait 50, Libya moved from 5 to 8, Qatar 9, Saudi Arabia has the highest with 152 rigs up from 148, the United Arab

Emirates moved from 55 to 57, and Venezuela currently fell from 70 to 69 rigs.

However, the Organisation of Petroleum Exporting Countries’ (OPEC) OPEC-15 crude oil production increased by 278 thousand barrels per day (tb/d) on

Nigerian content development – Chevron’s success story IBE OJO

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efore the enactment of the Nigerian Oil and Gas Industry Content Development(NOGICD) Act in 2010, only a few International Oil Companies (IOCs) had deliberately put in place policies to build, enhance and sustain the capacity of indigenous companies and contractors to enable them to fully participate in Nigeria’s oil and gas industry.

Eight years after the Act was enacted, the situation has changed significantly as recently emphasized by Simbi Kesiye Wabote, the Executive Secretary, the Nigerian Content Development Monitoring Board (NCDMB).

According to him, “Before the NOGICD Act, only 3 per cent of the marine vessels used in the industry belonged to Nigerians, but today, Nigerians control and own 36 per cent of vessels. From a zero active dry-dock facilities for vessels, the country now has four active dry-docking facilities and over 35,000 jobs have been created as a result of the NOGICD Act.”Also, local businesses have been empowered to handle fabrication of more than 60,000 tons; manufacturing of cables bolts, nuts and flanges and assembling of offshore Christmas trees as well as infrastructure for integration of Floating Production Storage and Offloading (FPSO) facilities.

Chevron Nigeria Limited (CNL), with its affiliates in the country, is one of the IOCs that had a pre-NOGICD policy in place and has in the

post-NOGICD era remained committed to Nigerian Content Development (NCD) by partnering with the NCDMB to significantly grow Nigerian Content in the oil and gas industry. In its 2017 Corporate Responsibility Report, CNL states that the company’s investment in NC was approximately US$2 billion while procurement of materials through Local Community Contractors (LCC) and cost of services provided by indigenous companies were $74 million and $284 million respectively. CNL’s four-prong approach to NCD includes: selection of qualified local contractors; facilitation of partnerships and alliances between indigenous companies and foreign firms; capacity building; and development of local competencies.

Jeff Ewing Chairman/Managing Director, CNL, explains the company’s stance on NCD thus: “At Chevron Nigeria Limited, we demonstrate our commitment to the socioeconomic development of Nigeria by building mutuallybeneficial partnerships, and supporting the policies of government on Nigerian Content Development. We have helped in building the capacities of several Nigerian businesses by allocating substantial scopes of our major capital projects to Nigerian companies. Chevron is also helping to grow the Nigerian economy by contributing to the development of communities in the areas of our operation. We do all this, not just because it is required by the law, but because it is the right thing to do.”

The various areas in which

Chevron implements the NOGICD Act in Nigeria include human capacity development, facility fabrication, construction and installation.

Others include support for facility acquisition, facilitation of partnerships between local and foreign contractors, and provision of opportunities for local community contractors through work scope allocation in Chevron’s major capital projects in Nigeria. Some of the highlights of CNL’s Nigerian Content success stories include the patronage of Oando Energy Services (OES) Limited and SOWSCO Well Services Nigeria Limited for cementing and pumping services for well drilling contracts. The company also supported Jemtech Global Engineering Services Limited, a local community contractorto fabricate the wellhead jacket for the Abiteye NonAssociated Gas (NAG) Development Project and procured locally assembled desktops and laptops worth millions of Naira from Task Systems Ltd and Zinox Systems.

On human capacity development, the company in partnership with the Nigerian Content Human Capacity Development Initiative (NCHCDI) has continued to train and equip Nigerians to deliver value through executive and management training, technical and professional skills training, and on-the-job training during project execution. CNL in partnership with NCDMB and Idmon Engineering Services Ltd trained 26 Nigerians on its Sonam - Okan Pipeline Pig Receiver Fabrication Project.

The 12-month classroom and on-the-job training covered Health, Environment and Safety (HES); Information and Communication Technology; Project Management; Quality Management; Fabrication and Assembly processes; Fabrication Engineering; Welding/Fitting/ Rigging/Scaffolding processes; Entrepreneurship; and Material Management. In addition, CNL awarded a contract to local consulting firm, Lonadek, to develop and pilot a Human Capacity Development Initiative training plan for CNL’sDrilling and Completions Unit.

Chevron supported Marine Platforms Limited (MPL), to become a major player in the Subsea industry, an area previously dominated by international companies. MPL handled the Subsea Installation of flowlines, umbilical’s and jumpers on Agbami Phase 3 project.On fabrication, construction and installation, Chevron facilitated the delivery by FMC Technologies of the first assembled-inNigeria Subsea Horizontal Xmas Tree, and the fabrication in Nigeria of Agbami production manifolds for the Agbami Phase 3 Project by FMC Technologies/Aveon Offshore Nigeria Limited.

Chevron also facilitated the safe, timely and successful installation of subsea equipment such as flexible flowlines, umbilicals and jumpers on the Agbami Phase 3 project by a Nigerian Contractor – Marine Platforms Limited.

Ibe Ojo works with Chevron Nigeria Ltd.

crude grades from Iraq, Libya, Nigeria and Saudi Arabia, according to its monthly oil market report for September.

OPEC’s crude oil production averaged 32.56 million barrels per day (mb/d) in August. But production declined in the Islamic Republic of Iran, Venezuela and Algeria.

Nigeria’s crude oil production increased marginally by 4.54 percent monthon-month (m-o-m) in August, from 1.651 mb/d to 1.725 mb/d. In Libya, crude oil production grew by 38.20 percent, from 670, 000 tb/d to 926, 000 tb/d. Iraqi crude production increased by 1.93 percent from 4.559 mb/d to 4.649. Saudi Arabia’s crude oil production moved by 0.36 percent from 10.363 mb/d to 10.401 mb/d.

July’s active rig count growth was attributed to “an atmosphere of expectation that the Petroleum Industry Governance Bill (PIGB) was going to be signed into law.

Oil prices have been stable in the last six months or so. Then there is First E&P

Limited that received a final investment decision (FID)” Wumi Iledare, professor of petroleum economics and member of the PIGB drafting committee told BusinessDay, on phone.

However, this progress is being rolled back since Muhammadu Buhari, president of the Federal Republic of Nigeria withheld assent to the PIGB, because he claims his powers as petroleum minister will be whittled down.

Contrary to the Federal Government’s target of increasing crude oil reserves, Nigeria recorded a decline of 961.47 million barrels in the four years to 2016 on the back of low investment in exploration by oil companies.

Nigeria’s oil reserve decreased to 36.247 billion in 2011 from 37.200 billion recorded in 2010, while in 2012 there was relative improvement to 37.139 billion but went down again to 37.071 billion in 2013. In 2014, it stood at 37.448 billion before sliding down to 37.062 in 2015 while in 2016 it stood at 37.453 billion.

Communities urge Ikeja Electric to expedite action on meter roll out …as Disco cautions against meter bypass OLUSOLA BELLO

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n apparent reaction to the ongoing metering exercise across its network, customers of Ikeja Electric Plc (IE), have commended the company, for redeeming its promise to bridge the metering gap, while also expressing delight at the improvement in supply within its area of coverage.

The commendation amidst massive deployment of meters to Shomolu and environs, which they have described as a laudable achievement and urged IE to ensure that all houses in the environs are provided with prepaid meters.

O d u gu wa Ad e dap o, Chairman of Shomolu Community Development Committee (CDC) while commending the company, also advised it to ensure that migration of customers to the prepayment metering is made a lot easier by looking into the contentious issues relating to outstanding electricity bills. He said this will enable customers migrate immediately to recharge after exhausting the initial token in the meter.

In a similar vein, Babajide Mark Anthony, President of the Co-operative Society of the Association of Printers in Shomolu, who also expressed his joy at the new development assured that the association would be ready to cooperate with IE to ensure smooth operation.

He further advised the Disco to fast-track the installation

of meters and also attend to minor complaints on time, in order to build more trust and instill confidence in the customers.

Felix Ofulue , IE’s Head of Corporate Communications while reacting to the remarks, reiterated IE’s position to sustain the metering exercise in an equitable manner such that all category of customers in IE’s network that are yet to be metered will definitely benefit from the roll out plan.

He however, expressed concerns about the way the assets are being compromise as is being witnessed in some the areas that have already been metered.

According to him, “Our records reveal that a lot of customers who were recently metered, especially in Shomolu and environs have not vended or purchased units on their meters, several weeks after exhausting the initial token. Typically, this is the process that should follow after the complimentary units on the prepaid meter have been exhausted. This is a worrisome.

He then called on metered customers to resist the urge to bypass meters, rather calling on them to manage their energy consumption prudently.

He also warned that IE would apply the authorized sanctions against any customer who engages in the act of meter bypassing Responding to comments relating to improved supply across its network coverage area, Ofulue pointed out that IE customers will continue to experience improvements in

Tuesday 18 September 2018

C002D5556

BUSINESS DAY

27

In association with

Housing deficit: How developers, home seekers can tap inherent opportunities

The case for choosing quality over cost in FM

ENDURANCE OKAFOR

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hough it has become a subject of debate and contestation, Nigeria has a housing deficit estimated at 17 million units arising from high cost of property acquisition, mortgage rate, and lack of incentives for housing suppliers to enable them to put more products on the market at affordable prices.

In spite of its large size population, ‘robust’ economy and big-brother-status, Nigeria is almost always playing a catchup in Africa as other countries, especially South Africa, which is considered the second largest economy in the continent, are ahead in many aspects of national development.

For South Africa’s 2-3 million housing units deficit and Ghana’s 1.5 million units, Nigeria is burdened with 17 million units which experts and other stakeholders say is no longer tenable for reasons of population growth and lack of verifiable data.

The federal mortgage bank of Nigeria (FMBN), the country’s apex mortgage bank, recently estimated the deficit at 17-20 million units with potential cost (value) of N6 trillion ( about $16 billion) and 900,000 annual unit deficit increase.

But “the 17 million units deficit is no longer tenable”, the Nigerian building and roads research institute (NBRRI) insists, quoting findings

by Worldometer, 2017, which notes that from 2012 to date, Nigeria’s population has increased from 168,240,403 to 191,835,936, showing a significant increase of 23,595,533 people to the population.

“The housing deficiency has, therefore, climbed and is likely to worsen in the nearest future if urgent steps are not taken by the government in conjunction with all stakeholders to address the problem”, Danladi Matawal, DG/CEO of the institute, said warns.

This is a huge challenge, no doubt, but industry experts see in that challenge low hanging fruits for potential home owners, investors and the economy at large, explaining, “property developers, investors, potential home owners and the Nigerian economy will benefit hugely in the course of bridging the housing gap

Infrastructure Maintenance With TUNDE OBILEYE

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which has made property acquisition a luxury in the country.

“There is a big opportunity for real estate developers and off-takers as the deficit shows the industry is one with huge demand. Developers can tap from this housing demand by building smart and affordable houses compared to the conventional building,” Hakeem Sodiq, CEO of Zama, a real estate advisory firm, said.

Another industry expert who pleaded anonymity said the opportunity resulting from the deficit in the country is the type that can benefit average Nigerians, investors and the economy at large.

“If developers are able to provide smart houses at affordable cost, they will be able to make a lot more profit than they are making now. For the potential homeowners, which mainly fall under the middle and low income earning class, an affordable house with flexible payment plan will make it easy for them to actualise their dreams of owning their own houses,” the expert said on phone.

“When both developers and potential homeowners are able to achieve their dreams, it will rob off on the economy and thus contribute more to the country’s GDP,” he added.

The World Bank recommends that in order for Nigeria to keep up with the demand for housing, 700,000 houses are required annually to

match growing population and urban migration. But Erejuwa Gbadebo, CEO, International Real Estate Partnership (IREP), says Nigeria needs dependable data on its housing sector.

“One of the biggest problems that we have is lack of data. People still quote 17 million units because there is no other data to prove or disprove it. We talk of homes demolished, burnt or new ones built, but the question is who is taking record of the number of houses that are being built and the ones we are losing?”, she queried in an interview.

One of the first things the industry should do, she advised, is to start taking stock of what is available—what house-types are there and what they change hands for.

“There should be a central system either online or from bodies such as Nigerian institution of estate surveyors and valuers (NIESV) that should guide investors and potential home owners.

Meanwhile, the property industry in the second quarter of 2018 contributed about 7 percent to the nation’s Gross Domestic Product (GDP) compared to its 5.63 percent contribution in the first quarter.

This is an appreciable improvement but could have been more if the policies were right and the challenges were less. Sodiq said the federal government has a role to play

in helping to solve the challenges of the industry.

“The government can help through reduction in the cost of developing properties.

Government can make provision for low land acquisition cost or even have a subsidy on land rate in some specific areas in the country. This will go a long way in incentivising investors and developers who, on their own part, will make properties available to the end users at an affordable rate,” he explained It could be could be argued, however, that the government and other stakeholders seem to have been paying attention to the sector this year through capital injection, collaboration and through setting up of initiatives. But not much has been said about the legal framework which many see as a major setback in the market.

The government attention to the sector may have started impacting marginally on the property industry, even though it is still in contraction mode, the rate of contraction slowed in the first half of the year, through to June 2018, as compiled from the figures by the nation’s Bureau.

At the end of the second quarter of 2018, the real estate sector reported GDP growth of -3.88 percent compared to the -9.40 percent rate reported for Q1 2018. That slowdown in contraction rate by 5.52 percent points is lower than the previous quarter figures.

or many, the argument continues to rage on whether cost should be a determining factor over quality when deciding their approach to facilities management. Cost continues to be a major factor when services are required as decision makers often fail to see the need to pay attention to the quality of service that will be delivered.

Many clients make the mistake of choosing FM services providers based on cost alone.

However, the old adage often rings true: you get what you pay for.

Selecting FM services providers based solely on cost may drive up the bottom line, but that does not guarantee an improvement in the quality of the facility. Making a solid case for quality over cost can most times be a tedious exercise simply because cost is apparent and quality is uncertain in the circumstances.

However, quality-oriented FM services providers help in achieving goals such as sustainability and end-user satisfaction, it can also help keep costs under control.

By delivering best practices in human capital utilization, efficient processes, and robust end to end systems, unexpected expenditure and accidents that could be costly in the long run are avoided.

Quality-oriented FM services providers will deliver value through the following: Expertise:FMservicesproviders with proven expertise guarantee a minimum level of quality service thatwillensurevalueformoneyand client’s objectives achieved.

Efficiency: The resulting impact of a lack of expertise is the inefficiency of services rendered. FM services providers, selected on the basis of low cost, are likely to cut corners in the discharge of their duties which may include inadequate training in order to squeeze a profit out of their low prices.

As a result, higher costs are incurred due to poorly functioning equipment and unsafe practices.

On the other hand, an expert has knowledge and experience, using standard operating procedures (SOP) that reduce labour expenses and prevent accidents.

Customer Service: Partnering with FM services providers with an appreciation of good customer service ensures a positive experience for end-users.

Innovation: Working with quality-oriented FM services providers bring benefits from their creativity to explore new trends.

A proactive approach from such providers ensures result-oriented

performance.

Easeofdoingbusiness:Qualityoriented providers maintain established protocols for administration and quality control, making it easier to do business with them.

Whilstitisimportanttopayattention to cost for the purpose of budgetary control and accountability, the use of cost as the sole or main reason for relegating quality in selecting FM services providers can hurt the client in the medium to long term.

The following five factors clearly make a case for looking at the quality aspect of service delivery against the cost element on its own.

Experience: Expertise is invaluable. Whether the issue is to reduce labour expenses or navigate complicated lighting upgrades, knowledge is crucial in achieving long-term goals.

Established procedure: Experienced, quality-oriented FM services providers have established standard operating procedures (SOPs) for each service they perform. These SOPs include a detailed breakdown of each task, when and how it should be performed. They also have established protocols for safety, quality control, and work order management.

Training: Quality-oriented facility services providers train their staff to be effective in their jobs including facility-specific protocols, safety, and customer service. They have documented training programmes covering a wide range of topics.

Proactiveness: A low-cost provider may claim to save money for you but may not help control costs.

Quality-oriented providers prevent unplannedexpensessuchasout-ofscope work that add up on monthly bill. You also benefit from their staff, trained to spot and report potential maintenance issues before they become serious problems.

Stability: Choosing cost over quality can lead to choosing FM services providers that are unstable which may lead to finding a replacement. An established provider offers you a stable workforce that brings peace of mind Whilst choosing the lowest bidder to provide FM services is tempting, it can have a negative impact on the lifespan of assets and end-users. Choosing providers that put quality and value first enables cost control and longterm goals being achieved.

Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

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BUSINESS DAY

Tuesday 18 September 2018

Why risk management should be of priority consideration for construction companies

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Stories By CHUKA UROKO

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esides being an effective control mechanism, managing risk should be of priority consideration for the construction industry as a whole and for construction companies in particular.

Risk, like challenges, are inseparable from existence.

So, all businesses and organizations face the risk of unexpected events such as natural disasters, machinery failure, staff and third party accidents, or loss of funds through theft.

Many organizations disregard or under-estimate the importance of a proper risk management culture.

It has been observed that majority of businesses lack a formalized risk management assessment and control procedure even as risk management is a necessary element for organizational effectiveness.

Risks are generally unforeseen events that cost organizations a lot of money or disrupt the smooth running of activities in those organization. The process of identifying the sources of these risk factors, analyzing, controlling, tackling, dealing with and managing the uncertainties in a manner that minimizes negative outcomes is known as risk management.

A proper understanding of the risks facing a business can be the difference between continuity and failure. Reputable and thriving organizations, especially construction companies don’t take this aaspect of their operations for granted. They believe that risk management protects the operations of an organization at a global and local level.

Experts explain that this is why it is essential that organizations create proactive measures that will help them

Operational effectiveness, others earn global certification for Artec

avoid or minimize potential crises, noting that when organizations adopt risk management procedures, the safety of valuable resources such as time, income, assets, people and properties is guaranteed.

Historically, the Nigerian construction industry has been prone to risks ranging from poor record of completion, high cost and extended time to high levels of disputes and litigation, pressure on health and safety provisions, low margins and profit risk, and poor safety and occupational health record.

Expectation is that the high-risk nature of this industry would make the stakeholders adopt a standard risk control and management procedure, but sadly, this is not the case in most companies.

There are, however, a few companies making efforts to establish procedures to minimize risks and reduce its detrimental effects; and one of such companies is ITB Nigeria Limited which, according to its officials, strives to achieve ‘zero accidents’ by instilling a strong safety culture in its workers.

Part of this safety culture

is the risk assessment of all areas of construction work which, in turn, provides sufficient information, instruction, training and supervision to its workers. It also leverages technology to ensure that work between the office and project sites are properly coordinated.

To further control risks, ITB Nigeria instills a strong safety culture through the exemplary leadership of site management, full participation of workers in HSE and clearly defined roles and responsibilities. The Company makes effort to minimize the impact of its activities on the environment through pollution prevention, reduction of natural resource consumption and emissions and reduction of waste. ITB has an HSE management system that is continually being strengthened through improved procedures and through total compliance with applicable laws and regulations.

Like anywhere else in the world, the construction industry in Nigeria is highly risk prone, with complex and dynamic project environments creating an atmosphere of high uncertainty and risk. The industry is vulnerable to vari-

ous technical, sociopolitical and business risks.

As a result, the people working in the industry bear various failures, such as, failure of abiding by quality and operational requirements, cost overruns and uncertain delays in project completion.

In the light of this, it is important that every construction company sets up an effective system for risk assessment and management.

Officials of ITB Nigeria are of the view that the effects of a poor or non-existent risk management culture on business reputation and integrity is quite overwhelming. Therefore, organizations must ensure that they carry out the four common steps in the risk management cycle which include assessment, evaluation of risk, risk management and measurement of impact.

“Risk management is an integral part of managing a business. Companies that have active risk management programmes in place are better poised to deal with crises than other companies that have not yet embraced the advantages of risk management”, they maintained.

or its operational, management and organisational effectiveness which aligns with international best practice, Artec Practice Limited, a Nigerian firm of professional architects and project managers, has earned the global ISO 9001:2015 certification.

The growing sophistication of the Nigerian consumer, his wide exposure and consistent demand for the highest quality is, increasingly, challenging products and service providers to improve on the quality of their offering.

Artec was awarded the certification by the internationally-acclaimed DQS, a Germany-based Management Systems Solutions organisation that certifies organisations and operates through over 80 offices in 60 countries worldwide also in recognition of its commitment to global best practice.

T o a t t a i n DQS’certification, the certifying organisation will evaluate an organisation’s practices against its internal expectations, with the aim of identifying good practices and possible shortcomings in the organization’s processes. Upon confirmation of high compliance of such an organisation with the

International Organisation for Standardisation (ISO) processes, DQS will subsequently certify it.

The lead auditor and representative of DQS attributed Artec’s attainment of the global certification to its strong commitment and professionalism as well as operational, management and organisational effectiveness.

Taofik Popoola, managing principal of Artec Practice, explained in a statement at the weekend that the firm was determined to undergo the rigorous certification processes so as to boost the professional capability of the staff members, achieve world-class operational standards and improve clients’ satisfaction.

Popoola, who is also a member of the Association of Consulting Architects of Nigeria (ACAN), a Fellow of the Institute of Management Consultants of Nigeria and Certified Management Consultant from the International Council of Management Consulting Institutes, said the consistent demand for the highest quality by the numerous clients of Artec has also challenged the firm to improve on the quality of its service.

L-R: Samuel Alonge of Artec Practice; Taofik Popoola, managing principal of Artec; Franklyn Nlerum of Yatsar Dev-isory Ltd and Seyi Oni of Artec, at the ISO 9001:2015 certificate presentation to Artec by DQS, a Germany-based international certifying organisation in Abuja recently.

Right of Way professionals want construction traffic control plans reviewed

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rofessionals who constitute International Right of Way Association (IRWA), Chapter 84, Nigeria, have said that the construction traffic control plans should be reviewed along with the enforcement of the law against illegal encroachments on highways.

The professionals explain that the purpose of the right of way management is to provide appropriate traffic planning and coordination of all activities in the right of way acquisition processes.

Though the global body, which has over 10,000 members from over 15 countries around the world, is T not as popular as professional bodies in the built environ-

ment in Nigeria, its members have been involved in most infrastructural and real estate projects in Nigeria.

Members are drawn from various professional associations, like the Nigeria Institution of Estate Surveyors and Valuers (NIESV), Nigeria Institution of Surveyors (NIS), Nigerian Bar Association (NBA) and Nigeria Environmental Society. This is the first time IRWA Chapter 84 Nigeria is bringing professionals in the right of way practice under one roof.

Emmanuel Mark, the new president of the association, assured that he would unite efforts of members towards individual development, improving service to the employers, the public, and

advancement in the body of knowledge related to the professional tasks of members.

“The association comprises a dynamic global community of dedicated professional members. Our members will also have certification opportunities in appraisal, asset management, negotiation and acquisition. IRWA is a platform for our members to have global industry-wide recognitions, designation and certifications and to elevate the role of right of way professionals by strengthening their industry relevance,” he said The association urged the government to amend relevant sections of the Land Use Act to conform to the generally ac-

cepted standard of acquisition and compensation instead of complete abrogation.

Mark cited section 29(4)(a) which allows for an amount equal to the rent paid to the government as well as cost of improvements to the land.

“This ignores the fact that the allottee could have acquired the land from its original allottee at a huge cost in the open market,” he said.

“Right of Way acquisition and compensation is usually a challenging exercise. Global diversity of right of way acquisition and compensation has brought the issues of best practice to the front burner.

“Issues of right to legitimate process; to notice; to be

heard; to appeal; to transparent procedure and equivalent compensation, among others, constitute the best practice in ROW acquisition,” he said.

Mark, who is the principle partner, Nuel Mark and Partners, a renowned firm of estate surveyors and valuers, revealed that the dual objective of every Right-Of-Way activity are to ensure security of the assets and to guarantee that the assets can be sustainably managed.

“We ensure that our clients received cost-effective right of way services to guarantee income to finance cost of capital.

It is also to note that capital is, of course necessary, it is not sufficient to ensure success.

Capital has to be focused on

the right projects and then spent judiciously.”

On communities and property owners shortchanged in course of governments’ acquisitions, Mark restated the responsibility of the right of way profession to the people and businesses. “We encourage and foster high ethical standard in our profession. “ We adopt a code of ethics for our constant guidance and inspiration predicated upon the basic principles of professional competence, character, integrity, fairness, commitment and trustfulness. These principles provide the foundation for establishing and maintaining all professional relationship.

Tuesday 18 September 2018

C002D5556

BUSINESS DAY

Tips & Talking Points

Harvard Business Review

To connect with your audience, share personal stories

TALKING POINTS Playing Office Politics 90%: In a poll of managers in the United Kingdom, 90% of respondents expressed that political skills are essential to achieving career success. + Change of Scenery 75%: An NBC News survey reports that 75% of workers under the age of 34 view job-switching as advantageous to their careers. + Social Forecast $37 billion: U.S. companies are anticipated to invest about $37 billion on social media marketing per year by 2020. + Top Spot 2018: This year, French retailer Decathlon was ranked the country’s No. 1 workplace by the organization Great Place to Work for the second year in a row. + Time on the Table 52%: Around 52% of American employees fail to use up their vacation time, according to Project: Time Off.

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eaders often shy away from sharing personal stories in their talks and presentations, because they’re afraid of revealing their struggles or appearing unprofessional. But this is a missed opportunity to connect with your audience: Stories that expose our human flaws and vulnerabilities are often what inspire people. To unearth your inspiring stories, think through the nouns that are important to you — the people, places, and things that have shaped your life.

Some of your experiences may be too personal to

share, but you may uncover anecdotes that will become the basis of a great story. Write one-line summaries of your best anecdotes, and catalog them; you could sort them by situation, theme, mood, or moral. When you’re planning your next talk, look through your catalog of stories and consider who’s in your audience and what they care about. Choose a story that fits their values, goals, and interests, and that will send the message you want to convey.

(Adapted from “How to Identify and Tell Your Most Powerful Stories,” by Nancy Duarte.)

back-to-school season

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be patient in those early days: Colleagues may need time to adjust to your position on the team. Listen to and learn from others rather than charging ahead with your ideas. Project competence and confidence — along with a healthy dose of humility. You don’t want to be seen as too focused on your own success.

(Adapted from “How to Prove Yourself After a Promotion,” by Rebecca Knight.)

or working parents with school-age children, this time of year is especially chaotic. But it is possible to manage the (often overwhelming) demands of back-to-school activities while still delivering at work. Start by thinking about what’s realistic for you. Even with a flexible job, it’s unlikely that you can make it to every bake sale, library fundraiser, and field trip. To do your fair share, try to do it all at once. For example, you can use a personal day entirely for school volunteering: Be the “reading helper” in your daughter’s second-grade class in the morning, walk with the school’s neighborhood safety

patrol in the afternoon, and take the minutes during the PTA meeting in the evening.

And don’t try to hide why you’ll be out of the office.

Tell your colleagues what you’ll be doing and why it’s important to you. That will make it easier for them to understand, and to help if needed.

(Adapted from “How Working Parents Can Manage the Demands of School-Age Kids,” by Daisy Wademan Dowling.)

When a high performer on your team burns out, you might think it’s their problem to solve. But as a manager, it’s your job to help employees keep their stress under control. You can protect your stars from burnout by giving them some autonomy in choosing their projects. Don’t just put them on your toughest tasks; letting them choose ensures they’re working on assignments that excite them. You can also pair the person with another high performer on a hard project, which will help the two employees challenge and push each other.

(You may be tempted to group high performers with low performers, but that’s likely to increase the high

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

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If your boss doesn’t advocate for you, find a sponsor who will A boss who doesn’t advocate for you can stunt your growth and limit your career opportunities. But rather than getting frustrated by the situation, take matters into your own hands. Start by letting go of whatever anger or hurt you feel toward your boss. You can’t shame someone into helping you, and it’s likely that your negative feelings will only make the situation worse. Then try to find a senior leader who will advocate for you. The ideal sponsor is a powerful, high-ranking person in your organization. Sponsors typically choose their protégés, so you’ll want to increase your visibility to help the person notice you. Raise your hand to participate in organization-wide task forces and cross-functional teams. By contributing to important strategic projects, you’ll build your skills and interact with new people.

Working for a boss who doesn’t recognize your potential isn’t necessarily a career-killer — as long as you find others who do.

(Adapted from “What to Do When Your Boss Won’t Advocate for You,” by Nicholas Pearce.)

Managers, protect your high performers from burnout

After a promotion, recalibrate your work relationships How working parents can survive h e n you’re p r o moted to a new job, a lot of your relationships at work will change.

People who used to outrank you may be your peers now, for example. Take some time to think about the new dynamics and how you should reset co-workers’ expectations. Then schedule a series of one-onone meetings with your colleagues and ask how your role can help them.

Your objective is to become a good partner to your peers. Asking for their input shows that you appreciate their counsel and value collaboration. And

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performers’ workloads and sap their morale.) These pairs should consist of employees at similar levels. Placing a talented entry-level employee with a high-performing leader won’t have the same effect.

(Adapted from “How Are You Protecting Your High Performers From Burnout?” by Matt Plummer.)

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BUSINESS DAY

C002D5556

Tuesday 18 September 2018

Live @ the Stock exchange Prices for Securities Traded as of Monday 17 September 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 234,316.57 8.10 3.85 127 24,009,373 UNITED BANK FOR AFRICA PLC 246,235.83 7.20 -2.70 153 6,081,100 635,779.00 20.25 1.00 261 10,326,366 ZENITH BANK PLC 541 40,416,839 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 294,341.40 8.20 0.61 200 6,911,660 200 6,911,660 741 47,328,499

BUILDING MATERIALS DANGOTE CEMENT PLC 3,578,506.56 210.00 - 23 10,927 LAFARGE AFRICA PLC. 179,539.96 20.70 - 46 138,384 69 149,311 69 149,311

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 357,009.32 606.70 - 4 41 4 41 4 41 814 47,477,851 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,217.41 79.90 - 11 9,455 OKOMU OIL PALM PLC. PRESCO PLC 60,000.00 60.00 - 10 10,073 21 19,528 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 5.00 4 679,000 4 679,000 25 698,528

DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,058.92 0.40 - 2 1,146 206.25 0.53 -8.62 2 166,632 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 1 100 49,997.03 1.23 -1.63 95 6,264,913 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 28,812.97 10.00 -1.48 76 4,379,990 176 10,812,781 176 10,812,781

BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 33,000.00 25.00 - 10 10,848 165.00 6.60 - 0 0 ROADS NIG PLC. 10 10,848 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,079.48 1.57 - 28 533,050 28 533,050 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 2 1,000 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 24,014.43 9.00 - 1 230 UPDC REAL ESTATE INVESTMENT TRUST 3 1,230 41 545,128

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,683.78 1.62 -10.00 11 377,421 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 188,372.92 86.00 -2.16 22 172,357 INTERNATIONAL BREWERIES PLC. 275,067.58 32.00 - 13 6,911,767 735,714.99 92.00 -0.54 75 2,317,192 NIGERIAN BREW. PLC. 121 9,778,737 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 38,000.00 7.60 - 21 51,247 DANGOTE SUGAR REFINERY PLC 166,800.00 13.90 - 36 113,121 FLOUR MILLS NIG. PLC. 78,522.27 19.15 0.79 40 330,006 HONEYWELL FLOUR MILL PLC 11,736.69 1.48 6.47 19 751,900 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 3 23,194 NASCON ALLIED INDUSTRIES PLC 51,001.69 19.25 - 13 104,890 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 132 1,374,358 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 17,655.10 9.40 - 21 97,324 NESTLE NIGERIA PLC. 1,070,085.94 1,350.00 -1.46 32 121,174 53 218,498 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,439.82 3.30 - 10 187,748 10 187,748 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 53,601.44 13.50 - 15 35,070 UNILEVER NIGERIA PLC. 247,035.23 43.00 - 22 64,957 37 100,027 353 11,659,368

BANKING DIAMOND BANK PLC 30,108.51 1.30 0.78 39 2,526,971 ECOBANK TRANSNATIONAL INCORPORATED 330,291.92 18.00 - 30 92,200 FIDELITY BANK PLC 48,677.66 1.68 2.44 56 3,280,883 GUARANTY TRUST BANK PLC. 999,188.53 33.95 -2.30 216 23,691,142 JAIZ BANK PLC 15,616.05 0.53 - 1 17,000 SKYE BANK PLC 9,299.80 0.67 -8.96 109 14,995,036 STERLING BANK PLC. 41,746.11 1.45 - 115 2,563,380 UNION BANK NIG.PLC. 145,603.76 5.00 - 40 339,338 UNITY BANK PLC 9,935.94 0.85 -8.60 17 1,084,000 WEMA BANK PLC. 21,987.45 0.57 -5.00 23 1,034,479 646 49,624,429 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,544.16 0.80 -5.00 27 1,976,631 AXAMANSARD INSURANCE PLC 23,940.00 2.28 -0.87 6 294,922 CONSOLIDATED HALLMARK INSURANCE PLC 2,240.00 0.32 - 1 1,000 CONTINENTAL REINSURANCE PLC 14,936.75 1.44 - 2 50,500 CORNERSTONE INSURANCE PLC 3,387.79 0.23 -4.17 4 206,973 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,964.80 0.32 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,270.26 0.31 -3.12 14 277,749 LAW UNION AND ROCK INS. PLC. 2,749.65 0.64 - 4 91,000 LINKAGE ASSURANCE PLC 4,720.00 0.59 - 13 474,589 MUTUAL BENEFITS ASSURANCE PLC. 2,080.00 0.26 -3.70 9 453,510 NEM INSURANCE PLC 15,841.51 3.00 0.33 15 290,459 NIGER INSURANCE PLC 2,399.24 0.31 -6.06 6 211,012 1,985.05 0.52 8.33 3 166,422 PRESTIGE ASSURANCE PLC REGENCY ASSURANCE PLC 1,467.13 0.22 - 2 541,250 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 4.35 7 1,470,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,969.54 0.23 -8.00 1 500,000 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 2 145,800 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 4,000.00 0.25 - 0 0 VERITAS KAPITAL ASSURANCE PLC 3,605.33 0.26 - 0 0 WAPIC INSURANCE PLC 5,085.44 0.38 2.70 30 2,432,275 146 9,584,092 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,544.29 1.55 6.16 8 3,556,753

8 3,556,753 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,480.00 3.74 -0.27 55 1,363,854 CUSTODIAN INVESTMENT PLC 32,350.25 5.50 - 15 186,695 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 31,684.34 1.60 -3.03 54 2,919,055 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 1,080.53 0.21 -8.70 12 2,038,361 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 419,717.49 41.50 -1.78 45 553,278 16,920.00 2.82 0.36 99 2,590,704 UNITED CAPITAL PLC VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 280 9,651,947 1,080 72,417,221

HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,137.00 0.32 6.67 8 753,516 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 8 753,516 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,000.00 6.00 - 4 1,550 17,101.03 14.30 - 15 58,557 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,244.20 2.29 - 9 113,001 1,070.43 0.62 - 10 189,599 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 411.96 1.90 - 0 0 38 362,707 46 1,116,223

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 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. 680.40 6.30 - 0 0 381.11 0.77 - 2 4,520 TRIPPLE GEE AND COMPANY PLC. 2 4,520 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 0 0 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 1 454 1 454 3 4,974

BUILDING MATERIALS BERGER PAINTS PLC 1,898.34 6.55 - 7 14,819 19,845.00 28.35 - 23 283,038 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 28,400.92 22.60 - 48 260,278 FIRST ALUMINIUM NIGERIA PLC 633.11 0.30 - 3 101,000 361.24 0.68 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 2,364.38 2.98 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 81 659,135 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,522.64 4.00 - 13 114,029 13 114,029 PACKAGING/CONTAINERS BETA GLASS PLC. 38,997.82 78.00 - 2 150 GREIF NIGERIA PLC 388.02 9.10 - 0 0 2 150 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 96 773,314

CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 2 7,497 2 7,497 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 1 265 1 265 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 74,000 2 74,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 5 81,762

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,503.05 0.24 4.35 24 1,235,435 24 1,235,435 INTEGRATED OIL AND GAS SERVICES OANDO PLC 62,157.06 5.00 1.00 65 1,092,377 65 1,092,377 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,546.55 179.00 -0.56 20 51,316 CONOIL PLC 15,197.55 21.90 - 14 23,142 ETERNA PLC. 7,890.08 6.05 - 9 15,549 FORTE OIL PLC. 24,747.14 19.00 8.57 35 304,779 MRS OIL NIGERIA PLC. 8,701.65 28.55 - 0 0 TOTAL NIGERIA PLC. 64,407.29 189.70 - 18 8,967 96 403,753 185 2,731,565

ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,818.75 1.93 - 1 1,015 1 1,015 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 541.12 0.46 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,918.01 4.95 -9.17 7 2,320,667 TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 0 0 7 2,320,667 HOSPITALITY TANTALIZERS PLC 674.44 0.21 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,718.87 2.27 - 2 51,211 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 51,302.73 6.75 - 0 0 2 51,211 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0 LEARN AFRICA PLC 848.60 1.10 - 6 52,015

Tuesday 18 September 2018

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Tuesday 18 September 2018

STRATEGYBRIEFING IDEAS THAT POWER HIGH PERFORMANCE

Nigerian companies rarely have strategy

C

onsidering the more than 70,000 management books on the subject according to Kiechel, strategy is an issue of great interest to business.

No enterprise can survive without a strategy. You’re probably acquainted with the stories of companies like HiTv and Konga of late. Sad as those cases may be they clearly illustrate the fact that Nigerian companies as with their counterparts elsewhere still struggle with the understanding of what strategy really is. So what makes a decision strategic? How do you determine whether some set of decisions constitutes a strategy? And why does strategy matter?

I speak to thousands of business executives in Africa annually on the subject of strategy and the unfortunate truth remains that Nigerian business leaders still have a hard time distinguishing strategy and operational effectiveness. Some that seem to make strategic moves struggle with operational effectiveness which apparently impedes the effectiveness of the strategy. Many others confuse operational effectiveness with strategy and wonder why their efforts did not pay off. As usual they blame their failure on the Nigerian circumstances.

Before you run off and endorse

that idea let me quickly remind you that the very purpose of strategy is to master the environment. Is is it the job of the strategist? Famed British banker and financier, Nathan Rothschild affirmed this when he said, ‘great fortunes are made when cannon balls fall in the harbour not when the violin play in the ballroom’.

Strategy is a serious thing. It is the act of a general in the battle front. If you can imagine how the President of a nation will look at a General who excuses loosing a battle to harsh battle field, you will understand what it looks like when a business general blames his failure on external issues.

This is serious because businesses that ought to create jobs, pay taxes and develop the economy are failing everyday and who knows which will follow tomorrow. After all from outside everything seemed okay with Konga but here we are now. So I will like to provide a working definition of strategy but first let me clarify some dark issues around strategy.

First, strategy can not make you the best. I know this will come as a shock since many executives are simply trying to be the best. The focus on being the best is a pretty dangerous one since by the way that’s something impossible. Superior performing companies do not

compete to be the best. Their strategic focus is rather on being unique.

Providing a unique set of values to target segment of the market.

Consider Netflix, Reed Hastings did not start out trying to be the best video on demand company. Instead the competitive strategy employed by the company was to deliver movies to the consumer in the easiest, most cost effective and convenient way possible. That’s seeking a unique position, not trying to be the best. You see, the drive to be the best locks companies in on competing on the same dimensions and nothing kills a company faster than that.

Competing on the same dimensions means targeting the same group of customers and trying to create the same values to satisfy the same set of needs through the same channels at the same or slightly different price points. That’s strategic myopia and the path to corporate suicide. Don’t try to beat your competition on the same dimension especially if you’re trying to take on a well established business with a robust financial base. Blockbuster LLC, though began operations before Netflix began competing with Netflix on thesame dimension in 2004 because at this time they understood Netflix has become a threat to their business, they paid for that costly mistake by

filling for bankruptcy in 2010 Next is that operational effectiveness is not the same as strategy. Operational effectiveness means adopting industry best practices and using the latest technology. Now the best this can do for you is improve short term results. Operational effectiveness also include reorganisation. Reorganisation involves adjustmens in the legal, operational, ownership and other structures of a company for the purposes of making it more profitable or organising it better to suit it’s circumstances. But if your strategy needs adjustment or you don’t even have a strategy at all, improving your operations is even a faster way to fail.

Sadly this just doesn’t register in the mind of many executives.

In the case of Kodak, they opted to reorganisation in the face of digital photography threat- a total of seven reorganisations in ten years! That

didn’t save them and you will be unwise to follow thesame route.

Thesame thing goes for operational efficiency. You see this when firms turn to overhead cost reduction programs. What this means is to do the wrong thing more efficiently.

Again that’s suicidal.

Operational effectiveness and efficiency may improve short term results, but the real danger is that it turns the firms focus away from outside where the real issues are to inwards, and make them even more blind to the need for strategic adjustment. Strategy is not about improving operations, it’s about being unique and distint.

To get the rest of this article or to request FREE strategy assessment and advise by Brian Reuben write brianreubenmentoring@gmail.com

Brian Reuben is an author, advisor to business leaders, keynote speaker and an entrepreneur.

He has trained and advised senior executives at several organizations including Africa Reinsurance Corporation, UAC, United Securities Limited, Globacom, BusinessDay among others.

He is the Director of Brian Reuben International, a strategy and leadership advisory firm based in Lagos Nigeria and sits on the board of a number of organizations in Africa.

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This Page Is Open For Sponsorship, for details call 0708 234 5251.

Tuesday 18 September 2018

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NEWS Private sector players set battle career politicians...

Continued from page 1

Watchers of the political space say it is a good sign and an indication that the professionals no longer want to be bystanders in the decisions that shape the political and economic future of the country.

“Increasingly the professionals or the technocrats have gone into government and realized that they have no control over decision making. They only advise but the career politicians always have no obligation to listen to them. So their impact on governance is often insignificant. Now they want to be the decision makers,” a CEO who is considering joining the political race in the country told BusinessDay. Kingsley Moghalu, former deputy governor of the Central Bank of Nigeria and a professor in two top global business schools is one of those who has thrown his hat in the ring. His issue focused campaign has caught the attention of many youths in the social media space.

“My economic vision is one that is not based on oil or natural resources, but on innovation and human capital,” Moghalu said in an exclusive interview with BusinessDay. “My government will take on unemployment through the creation of a N500 billion venture capital fund to boost SMEs access to finance and create jobs. A competent government does not create jobs; rather it creates an enabling environment for jobs to be created. We will subsidise production but we will never

subsidise consumption. That will stimulate the economy while creating jobs at the same time,” he said.

Adamu Garba II is another presidential candidate that stood in the race seeking to contest the presidency on the platformoftheAllProgressivesCongress (APC) but had to withdraw from the race due to the steep N45 million cost the party decided to sell the presidential nomination forms. And that is one of the issues most of the professionals who have gone into politics are facing. The costofwinninganelectioninthecountry issteepanditoftenputspressureontheir financial position which is usually their life time savings.

Career politicians often have access to the public funds stashed over the years or because of connections to public officers. While Adamu Garba II dropped out of the APC presidential race, political associates bought the nomination form for President Muhammadu Buhari the incumbent president.

Some professional have attempted to crowd source their campaign but have been largely unsuccessful.

Nigerians are more eager to donate money to charitable causes, churches and mosques than support the political ambitions of politicians no matter how much they believe in their ideas.

Despite the challenges, the 2019 elections is going to be a watershed in the number of professionals itching to do battle with the career politicians.

Top on the list include Adebayo Adelabu, who resigned as deputy gov-

ernor (Operations) of Central Bank of Nigeria in July; Chidi Okoro, a former managing director/CEO of UAC Foods; Opeyemi Agabje, CEO, RTC Advisory Services Ltd and founder/ CEO, The Opeyemi Agbaje Institute Ltd/Gte; Frank Nneji, chairman/CEO, ABC Transport Plc, and Joseph Tegbe, partner & head, Technology Advisory & Markets, KPMG Nigeria.

Others are Tonye Cole, co-founder and CEO of Sahara Group; Kyari Abba Bukar, who just resigned his position as chairman, Board of Directors, Nigerian Economic Summit Group (NESG) to contest for the governorship position in Borno State.

Femi Otedola, chairman, Forte Oil Plc is reportedly looking to join the Lagos governorship race and Eyo Ekpo, former executive, Business Development at General Electric is doing battle in Cross Rivers.

However, this is not the first time successful private sector people have left the ‘comfort’ of the private sector to swim in the murky waters of Nigerian politics, observers say the number this time around is unprecedented. https://ssl.gstatic.com/ui/v1/ icons/mail/images/cleardot.gif Alex Otti, a former group managing director/chief executive officer, Diamond Bank Plc, led the pack when in 2015 he contested the governorship election in Abia State under the auspices of the All Progressives Grand Alliance (APGA), but lost to Okezie Ikpeazu of the People’s Democratic Party (PDP).

Continues on page 35

2019: Why I want to rule Nigeria...

Continued from page 1

his decision to contest for the Presidential ticket of the main op-

position People’s Democratic Party (PDP) so he could rule the country.

Saraki who recently defected from the ruling All Progressives Congress (APC) on whose platform he was elected as the Senate President, stated this yesterday at the Lagos PDP secretariat, along Adekunle Fajuyi way, Ikeja.

Saraki was on a consultation visit to the party leaders ahead of the presidential primary of the party.

He stressed that he would focus on creating jobs for the youths and providing infrastructure for small scale enterprises to thrive if elected President of the country after next year’s election.

Saraki who was a former governor of Kwara State, between 2013- 2011, lamented the incessant killing of Nigerians across the country without any proactive response from the government, added that the country needed urgent intervention.

“Today Nigeria is at a cross road; we have to save the soul of this country, it is the responsibility of all of us. The country has not been this bad, with the killings across the states and no one havebeenbroughttobook,”Sarakisaid.

“We need a young President and across the world that is the trend I appeal to you to make it happen.”

Speaking further, the Senate President promised to restructure the country, but warned that restructuring of the country was a gradual process, while pledging to support Lagos PDP towards their electoral success in next year’s general election.

“I would restructure the country, I have the capacity to do that, but in doing this you need someone who understands the system, don’t mind those promising instant restructuring; restructuring cannot just happen withouttheappropriatelawsbeingchanged.

“Lagos is like my second home; my primary and secondary school were here, my wife is from here and my father has his hospital and house here.

“My mother is from Ondo; I was in Ondo the other day and I told them

your son want to contest you don’t have alternative than to support me.

This Lagos is for us that is why one of my promises is to work and deliver the State for PDP I want to appeal for your support,” Saraki added.

Responding the acting PDP chairman in the State, Waliu Hassan, said that the country would benefit immensely from the leadership experience of the Senate President if elected President, stressing that state chapter of the party would support his Presidential ambition.

Speaking earlier the Director of mediaofSaraki’sPresidentialcampaign Organisation, Doyin Okupe, said that theoverwhelmingacceptanceofSaraki across the country was an indication of his popularity and selfless service to the masses in despite his comfort.

“Everywhere we go across the country he is welcome and people are rejoicing about Saraki’s candidacy. He is loved; Saraki is competent to rule the country and has all the attributes of a great leader.

“Despite the comfort he enjoys, he put the welfare of the masses at heart. 2019 is about capacity and not jogging,” Okupe said.

The Senate President was accompanied on his visit by the Director General of his Presidential campaign organisation and former Minister of Power, Mohammad Wakili, Kogi West controversial Senator, Dino Melaye, former Kogi Governor, Idris Wada, and Kawu Baraje.

Meanwhile Governor of Lagos State, Akinwunmi Ambode is under intense pressure to withdraw his nomination before next Tuesday when the three governorship aspirants will slug it out in a direct primary to clinch the All Progressives Congress (APC) ticket for the 2019 governorship election, a source told BusinessDay. Ambode, it was learnt, has also been strongly advised by party stalwarts to turn in support for Babajide Sanwo-Olu, his co-aspirant who is believed to be the anointed of the leadership of the APC in Nigeria’s richest and most economically vibrant state.

•Continues online at www.businessdayonline.com

FG begins preparations for N8.9trn, 2019 budget...

Continued from page 1

Special Adviser Media to the MinOlukunle Iyanda (2nd l), president and chairman of council, Nigerian Institute of Management (Chartered), presenting the Fellowship plaque of the Institute to Rilwanu Suleiman Adamu (2nd r), Emir of Bauchi; Muhammad Sanusi II (r), Emir of Kano, and Tony Fadaka, registrar/ chief executive, NIM, at the opening ceremony of the 2018 annual national management conference of the institute in Kano, yesterday.

Rate hike back on table as markets await CBN...

Continued from page 1

increases closer.

Though there was a month-onmonth decline, the pick-up in annual inflation may strengthen the resolve of some committee members to push for a rate hike after two years of keeping it unchanged at 14 percent to manage high inflation and exchange rate pressures.

Citing inflationary pressures from election spending and the 2018 budget implementation, three members of the 10-man MPC voted in favour of a rate hike at the July 23 to 24 meeting, marking a dramatic turnaround from the previous meeting when a potential rate cut was on the cards.

Joseph Nnanna, the central bank deputy governor said last month that the MPC was in the mood for tightening and will raise its key rate if inflation doesn’t slow; which brings us to the first losers from the uptick in inflation- Small businesses.

A rate hike would take bank credit further away from the reach of small

businesses who already cough up 25 to 30 percent in interest rates on commercial bank loans.

They will struggle to attract bank loans because lenders could be swayed to lose appetite for private sector lending when they can pile cash in high yielding and risk-free government securities.

For publicly listed companies starvedofcash,opportunitiesareopening up in issuing commercial papers or rights issues in search for cheaper financing alternatives while start-ups could position for venture capital.

Commercial banks came up short in growing their loan books in the first six months of 2018, following an average contraction of 6 percent that is despite largely forecasting 10 percent growth.

A fragile economy and heightened political tensions are dissuading lenders from creating loan assets, even as they balk at extending fresh loans amid efforts to rid their books of Non-performing loans which

surged to a record in 2016.

The banks would benefit from a high yield environment. Only last year did they notch bumper gains by simply investing in high-yielding government securities.

Increased lending to government at the detriment of the private sector can do no good for the economy, still licking its wounds from a scathing recession in 2016 and is growing at an underwhelming rate (1.7 percent in the first six months of 2018) which is lower than annual population growth rate of 3 percent.

Certainly, the economy will struggle to create new jobs for a ballooning youth population, if the banks bypass the real sector and lend instead to government with expectations that yields will rise alongside higher inflation.

Yields on government securities have trended upwards in the past week as the market seems to have priced in higher inflation expectations before the release of the August reading.

•Continues online at www.businessdayonline.com

ister of Budget and National Planning, James Akpandem confirmed that the Ministry had indeed started the process of preparing the 2019 budget although he declined further information on the ongoing process.

However, details obtained from the Fiscal Strategy Paper of the Federal Government, has shown that government intends to spend N8.9 trillion for the 2019 fiscal year.

The new budget is a reduction of N220 billion from the 2018’s N9.12trillion which took a long 171 days before being signed into law, and is yet to be implemented as capital expenditure has not been disbursed.

Questions have been raised by analysts on the chances of the new budget sailing through smoothly into implementation, taking into consideration, the hiccups encountered by the 2018 budget and even previous ones.

Explaining the impact the current political climate might have on the budget, Johnson Chukwu, Chief Executive Officer, Cowry Assets Management Limited, noted that passing the budget on time doesn’t seem feasible taking into consideration factors such as the recent move by the Senate President Bukola Saraki to the opposition party PDP which has caused a strain in the relationship between the National Assembly and the Presidency.

“The National Assembly will be on recess for a while and most of them will be focused on campaigning for both their primaries and general elections, so the chances of them attending to anything seem slim,” Chukwu said.

As contained in the FSP, Federal government targets to raise about N6.33 trillion to fund the 2019 budget, indicating an N840 billion reduction from 2018’s N7.16 trillion.

Fiscal deficit for 2019 is estimated at N2.59 trillion, showing a rise from N1.95 trillion estimated for 2018.

The paper also revealed that capital expenditure as a percentage of non-debt expenditure is estimated at 41.28 percent, while capital expenditure as a percentage of government spending is estimated at N2.38 trillion. Recurrent expenditure is also to rise from 68.5 percent to 70.43 percent next year.

Debt service to revenue ratio might also rise in 2019 to 36.53 percent from 30.76 percent, while debt servicing as a percentage of total federal government revenue could increase from 27.22 percent to 40.95 percent.

An estimated N2.31 trillion is expected to be utilized for debt servicing in 2019 which is higher than N1.95 trillion proposed for servicing debt in 2018, while recurrent expenditure is estimated at N3.16 trillion.

•Continues online at www.businessdayonline.com

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BUSINESS DAY

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Tuesday 18 September 2018

Live @ The Exchanges Top Gainers/Losers as at Monday17 September 2018 GAINERS TOTAL FO

Market Statistics as at Monday 17 September 2018

LOSERS N177.6

N181

3.4

Company

Opening

Closing

Change

N17.5

N19

1.5

NESTLE

N1370

N1350

-20

ACCESS

N7.8

N8.1

0.3

GUINNESS

N87.9

N86

-1.9

CILEASING

N2.9

N3.15

0.25

MOBIL

N180

N179

-1

N20.05

N20.25

0.2

GUARANTY

N34.75

N33.95

-0.8

N19

N19.15

0.15

STANBIC

N42.25

N41.5

-0.75

ZENITHBANK FLOURMILL

ASI (Points) DEALS (Numbers)

T

he Nigerian stock market remained pressured in the first trading day of this week due to the absence of positive triggers, defying earlier expectations that there will be increasing bargain hunting this week.

The value of listed stocks on the Nigerian Bourse decreased by N46billion at the close of trading on Monday September 17, 2018 while the All Share Index (ASI) was down by 0.36percent.

In their September 17 equity research note, Vetiva Research who noted that bargain hunters supported a 95bps recovery on the equity market last week, said they anticipate another bearish start to trading “as market sentiment remains evidently

weak and sell-pressure persists on blue-chip stocks across all key sectors”.

The NSE ASI depreciated to close at 32,201.98 points as against the preceding day level of 32,327.59 points while the value of listed stocks decreased from N11.802trillion, from N11.756trillion the preceding trading day. Forte

160,665,203.00

VALUE (N billion)

2.152

MARKET CAP (N Trn

…Investors on Custom Street book N46bn loss Oil Plc led the basket of 18 gainers as against 23 losers led by Nestle Nigeria Plc. “Considering that the market is currently in an oversold region, according to technical indicators, we expect investors to hunt for bargains on cheaply valued stocks”, said United Capital research analysts in their September 17 note investment view.

In 2,935 deals, stock traders exchanged 160,665,203 units valued at N2.152billion. Access Bank Plc, GTBank Plc, Skye Bank Plc, Zenith Bank Plc, and C&I Leasing were actively traded stocks on the Lagos Bourse.

Nestle Nigeria Plc recorded the highest decline of N20 or 1.46percent, from N1370 to N1350; Guinness Nigeria Plc followed from N87.9 to N86, down by N1.9 or 2.16percent; while Mo-

2,935.00

VOLUME (Numbers)

Nigerian stock market defies bargain hunting expectations Stories by Iheanyi Nwachukwu

32,201.98

bil dipped from N180 to N179, down by N1 or 0.56percent.

On the gainers table, Forte Oil Plc increased from N17.5 to N19, up by N1.5 or 8.57percent; Access Bank Plc stock price increased from N7.8 to N8.1, up by 30kobo or 3.85percent; while C&I Leasing plc rose from N2.9 to N3.15, up by 25kobo or 8.62percent.

In their recommendation, Afrinvest Research analysts anticipate bargain hunting in some stocks this week “as investors position for a rebound in the medium term”.

“Performance of stocks on our equity watch-list from track period till date are as follows; Zenith Bank (-15.9percent), Nigerian Breweries (-10.2percent), Custodian (+4.8percent), Dangote Cement (-8.3percent) and Okomu (+5.1percent),” Afrinvest added.

11.756

LASACO to seek shareholders’ approval for share capital raise

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ASACO Assurance Plc has informed the Nigerian Stock Exchange (NSE) that the Extra-Ordinary General Meeting (EGM) of its members will be held at NECA House, Alausa, Ikeja, Lagos on Wednesday October 10, 2018.

As part of the special business of the EGM; the directors will seek shareholders’ approval for the Authorized Share Capital of the Company to be increased from 10billion to 50billion by the creation and addition thereto of 40billion Ordinary Shares of 50 kobo (fifty) each. Such new shares will rank pari passu in all respects with the existing Ordinary Shares in the capital of the Company.

LASACO Assurance Plc share price declined by 1kobo or 3.12 percent

on Monday to 31kobo.

The company currently has 7.323billion outstanding shares and market capitalisation of N2.270billion.

Also, the directors will seek approval for clause 6 of the Memorandum of Association and Article 43 of the Articles of Association respectively to be amended to reflect the new Authorized Share Capital of N25billion divided into 50billion Ordinary shares of 50 kobo each.

The Board of Directors will also require shareholders to authorize subject to the approval of the relevant regulatory authorities, to raise additional capital through the issuance of up to 40billion ordinary shares of 50kobo each by way of public offer, private placement or preference shares.

Stanbic IBTC, Vetiva, PZ win big at 5th NSE Corporate Challenge

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he Nigerian Stock Exchange (NSE) annual 5km race, NSE Corporate Challenge, themed “eRace Cancer” held on Saturday, September 15, 2018, at Muri Okunola Park, Lagos, with the purpose of raising funds and creating awareness on the fight against cancer.

In the keenly contested race, Austin Ani of Stanbic IBTC emerged the overall winner with a completion time of 18.45 minutes, after coming second in the 2017 edition. Paul Alabi of Aluko & Oyebode and Danladi Verheijen of Vetiva came second and third, finishing the race in 19.57 minutes and 20.04 minutes respectively. Paul, who is also not new at the NSE Corporate Challenge, was the overall winner in the 2016 edition.

Ngozi Dozie-Madubiuke of Vetiva, with a com-

pletion time of 22.48 minutes, emerged the Fastest Female while Sadhisha Dave of PZ Cussons, also female, emerged the winner of the Senior Citizen category for runners aged 50 and above, with a race time of 29.10 minutes.

The over 500 runners at the race were joined by outstanding race ambassadors such as Ikechukwu Onunaku, Immaculate Dache, Monica Ogah, Wole Arole the Prophet, Asiri Comedy to mention a few.

Explaining the NSE’s rationale for throwing its weight behind the race, Oscar N. Onyema, CEO of NSE, who was represented by Tinuade Awe, Executive Director, Regulations, NSE, said during the event that “the can-

L-R: Tinuade Awe, executive director, Regulation, The Nigerian Stock Exchange (NSE); Kamarudeen Kareem Oladosu, national council member, NSE; Austin Ani, StanbicIBTC, winner of the 2018 NSE corporate challenge; Titi Ogungbesan, chief executive of Stanbic IBTC Stockbrokers Limited and Daniel Ogunbote, sales executive, Rwanda Air; Patrick Adebayo Ajayi, National Council Member, NSE and Felicia Obozuwa, divisional head, corporate services FCMB during the 2018 Corporate Challenge at Muri Okunola Park, Adeyemo Alakija Street, Victoria Island, Lagos.

cer epidemic in Nigeria is huge and is set to rise if urgent actions are not taken to raise awareness about early detection of the disease, and to develop practical strategies to address the increasing cancer burden. The NSE Corporate Challenge was birthed to minimize cancer and maximise life by stimulating additional awareness about cancer, advocating for the importance of early testing/detection and more importantly raising funds towards the purchase of Mobile Cancer Centres to provide free screening and treatment in Nigeria”.

Started in 2014, the NSE Corporate Challenge is a one-day competitive and fun-filled 5 kilometre walk, jog and run event aimed at promoting health and wellbeing in the Exchange’s operating environment. It is a pro-

fessionally organized and volunteer-driven initiative involving companies listed on the Exchange, broker dealer firms, nonlisted companies and individuals who identify with the initiative.

Some of the corporate sponsors of this 5th edition include, Dangote Cement, Stanbic IBTC, Beta Glass Plc, FCMB, FBN Holdings, Unilever and IHS Towers, while in-kind contributions and media support were received from Aquadana Water, Emergency Rescue, Bodyline Fitness and Gym Ltd, Airtel Nigeria, Duracell, Lotus Fitness and Spa, PZ Cussons, LASAA, Channels Television, CNBC Africa, Business Day Newspapers, Federal Radio Corporation of Nigeria (FRCN), Television Continental (TVC), AIT, Raypower 100.5 fm, Proshare, KaftaTV and Plus TV .

Tuesday 11 September 2018

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Not convinced that he lost the election, Otti had gone to the Elections Petitions Tribunal in protest.

The case later went to the Court of Appeal, and then the Supreme Court, but Otti’s bid to wrest power from Ikpeazu failed as the apex court ruled in Ikpeazu’s favour. Otti is staging a comeback ahead of 2019.

Otti, at the launch of ‘Dynamics of the Nigerian Financial System: Essays in Honour of Phillips Oduoza’ in 2016, spoke on the need for private sector professionals to go into politics and use their wealth of professional experience to get Nigeria working again or sit back and watch the country further descend into a cesspool.

“When you go out there and see the quality of people who make decisions that affect you and me, you will be ashamed,” Otti said.

“Quite frankly, we need to get involved in how this country is run, and the more of us that get in there the better. Otherwise we will be left with nincompoops, mediocre people who will be answering governors, deputy governors, House of Assembly members.”

The launch of the book was part of the events to honour Oduoza, the then

outgoing GMD/CE O of United Bank for Africa Plc. The increasing number of private sector professionals joining the fray ahead of 2019 may signal a response to that call, a sudden awakening to the reality of the assertion by Charles de Gaulle, 20th Century French general and statesman, that “politics is too serious a matter to be left to the politicians”.

Opeyemi Agbaje Opeyemi Agbaje, CEO, RTC Advisory Services Ltd and founder/CEO, The Opeyemi Agbaje Institute Ltd/Gte, on July 2 declared his intention to contest the 2019 governorship race in Ogun State on the platform of the Social Democratic Party (SDP).

Agbaje, 53, told the Ogun State Executive Council and Steering Committee of SDP at the party secretariat in Abeokuta that he does “not seek this position for self-aggrandizement but to fulfil an innermost passion for development, emancipation of our people and good governance” and “out of compassion for our suffering masses and out of the conviction that what we seek to do has been done in other places and it can be done in our state too”.

He spoke of Ogun State Vision 2035, which envisag-

es the state as “a developed, first world region with human capital, quality of life, infrastructure, economic development, institutions and governance standards comparable to leading regions in developed countries”.

Educated at Obafemi Awolowo University, Ife (LLB), Nigerian Law School (BL), University of Lagos (LLM with specialisation in Comparative Company Law; Secured Credit Transactions; International Economic Law; and Comparative Constitutional Law), IESE Business School, Spain (MBA), and Lagos Business School (Executive MBA), Agbaje practised law briefly before going into the banking sector. He worked as an officer in First Bank; assistant general manager (Financial Institutions and Correspondent Banking), and later AGM (Institutional Banking) in Guaranty Trust Bank Plc; and executive director, Metropolitan Bank Ltd. In 2004, he founded RTC Advisory (formerly Resource and Trust Company), which has grown into a prominent indigenous Nigerian brand in strategy, economy and policy, and business advisory services with clients in diverse sectors.

Continued on www.businessdayonline

The Nigerian Century Continued from back page Entertainment and fashion: The Nigerian government released data in 2014 showing Nollywood as a $3.3billion sector, with over 1800 movies produced in 2013. This industry continues to grow, and is engaging in strategic partnerships across the continent of Africa. Similarly, the Nigerian music industry according to Price Waterhouse Coopers, is growing and is expected to double from its 2015 figure of $47million to $86million by 2020. While precise data is currently unavailable for the value and size of the Nigerian fashion industry, it is estimated to be about $10-20 billion against the global market valued at about $3trillion.This sector of the economy is in its early stage of growth, and shows potential of occupying a good position in the global e!conomy.!

Agriculture: This sector has not reached its full potential as small scale farmers still dominate the sector, and their potential has not been harnessed to unlock the potential that the size of arable land and favorable climate available Nigeria.

This can be said to be due to some extent to a lack of infrastructure, and also a lack of a deliberate focus on ensuring that established pol- icy is adhered to and

promoted for growth. While this is the reality on ground, changes are in the horizon as there is an introduction of several solutions which include tractor and other equip- m!ent sharing, as well as the push to reduce cost of fertilizers.!

Financial services: The Nigerian financial services sector has shown growth and depth, and is one in which a culture and brand are identifiable. While this sector has shown growth and identi- ty, the World bank says that less than 40% of Nigerian adults have access to formal bank accounts. The unbanked are utilizing locally developed solutions that enable them have access to financial services within the economy, and the challenge for the banks is build confidence in the populace and then integrate these solutions and make them accessible to the part of the popu- l!ation that remains weary of banks and other financial institutions!

NYSC: The National Youth Service Corps which was developed and became compulsory for every Nigerian university graduate, who completed their education ahead of turning 30 in the early 1970, is in my opinion as envisioned a great program that should not be allowed to wither. It

brings together young people from around Nigeria, to regions of the country they are not likely to visit or live in in their lifetime. They spend a month together at “camp”, and then spend the rest of eleven months of service working in relevant areas of the economy particularly education and healthcare.

This scheme has suffered significant set backs over the years, but the spirit of the program is great! It is one that brings people of diverse socio economic, religious and ethnic backgrounds, and puts them in a bubble. I had my NYSC year between 1990 and 1991. The money was little, but the spirit of comradeship was great, and I can attest that it helped among many things shape my enduring positive view of prospect for growth in Nigeria.!

As I mentioned at the start of this write-up, I was in a class at Harvard Business School early 2018, and in my GMP class there were 109 participants from 37 countries. Seven of these par- ticipants were Nigerians. Most of whom did not know each other ahead of attending this pro- gram, and while acknowledging that perfection in anything does not exist, we, as a group func- tioned as a team, and a force to be reckoned with in various aspects of the program.!

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Base10 fundraising is largest for a black-led venture capital fund

Supreme Court nominee’s accuser willing to testify, lawyer says Page A2

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World Business Newspaper

How US banks took over the financial world Ten years after the global financial crisis, Europe’s banks are in retreat MARTIN ARNOLD

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hree days before Lehman Brothers filed for bankruptcy in September 2008, Bob Diamond was ushered into a large conference room with “buyer” handwritten on the door at the New York Federal Reserve Bank in Manhattan.

As the Barclays boss closed on a deal for Lehman, Mr Diamond says that the opportunity looked “wonderful” — even if he remains frustrated that he could not reach agreement before it collapsed which, he says, may have saved the world from the worst of the financial crisis.

In the end, Barclays bought much of Lehman’s US operations out of bankruptcy.

At that time, Barclays was among the European banks riding high even as the US banking system went into meltdown, with ambitions to be among those left to pick over what was left after the subprime crisis had run its course.

A few months earlier, Royal Bank of Scotland had become the world’s biggest bank by assets by outbidding Barclays to acquire Dutch rival ABN Amro.

But as shares in the biggest US banks were being pounded by waves of panic about which might collapse next, few could imagine then how the implosion of the debt-fuelled housing bubble would ultimately result in the US financial sector surging back stronger than ever.

Over the next decade, Wall Street’s top groups would go on to establish a seemingly unshakeable dominance in global corporate and investment banking.

European banks, meanwhile, have been forced into a steady retreat — weakened by the subsequent eurozone debt crisis and overtaken in the global rankings by resurgent US rivals as well as the even faster growing Chinese state-owned banks.

According to figures compiled by the Financial Times, the top five European banks — HSBC, RBS, BNP Paribas, Barclays and Deutsche Bank — made close to $60bn of combined net profits in 2007. This was a fifth higher than the earnings of their main US rivals: JPMorgan Chase, Bank of America, Citigroup, Morgan Stanley and Goldman Sachs.

By 2017, the picture had changed drastically. The net profits of European groups had shrunk over two-thirds to $17.5bn, more than a quarter below the $24.4bn that JPMorgan earned on its own last year. Indeed, JPMorgan’s $380bn market capitalisation exceeds that of its five European rivals combined.

Between 2006 and 2016, the top five US banks gained 6 percentage

points of market share in global wholesale banking revenues, while the top five Europeans have lost 4 percentage points, according to research by Oliver Wyman and Morgan Stanley.

Senior bankers trace the contrasting fortunes back to the different responses to the crisis on each side of the Atlantic.

The US, led by Treasury secretary Hank Paulson, forced its big banks to go on a crash diet by forcibly injecting government funds and blocking them from repaying it — or from paying dividends and bonuses — until they had passed a stress test.

“It totally stabilised the US system,” says Paul Achleitner, Deutsche Bank’s chairman and a former colleague of Mr Paulson at Goldman. “It allowed them to radically write off all kinds of stuff that they had there, and yes, they replenished. Over here [in Europe], you couldn’t possibly do any of the above.”

Bankers such as Mr Diamond and Mr Achleitner say Europe is now making a big strategic mistake by leaving itself exposed to increasingly blatant US economic nationalism, particularly under Donald Trump’s presidency.

“As American banks have shown through history, they go hot and cold on commitment to markets outside the US,” says Bill Winters, the former JPMorgan executive now running the emerging markets lender Standard Chartered.

“So I think it would be imprudent for Europe to find itself in a position where their conduits to international capital markets are entirely companies that do not have a vested interest in the local economy.”

Others share the mounting concerns that US banks will retreat in the next crisis, leaving European companies with less access to funding.

“For European industry to have to rely on American banks for the raising of capital, for mergers and acquisitions, for intermediation of equity and investment is geopolitically somewhat challenging,” says Andrea Orcel, head of UBS’s investment bank, which has retrenched significantly since the crisis.

He describes UBS as a “little” David against Goliath. “David can win, but your challenge is a little bit steeper.”

European politicians, however, mostly seem untroubled, showing little sympathy for the continuing struggles of regional banks that are still considered politically toxic. Even the companies that rely on bank finance seem unfazed. Corporate treasurers point out that banks are queueing up in Europe to provide Continues on page A2

Jim Mattis, US defence secretary (right) and Zoran Zaev, Macedonian prime minister, in Skopje. Mr Mattis warned Russia might attempt to spread disinformation in the run-up to Macedonia’s name change referendum © AFP

Jim Mattis urges ‘yes’ vote in Macedonia name-change referendum US defence secretary backs deal that opens way for Skopje to join Nato and EU VALERIE HOPKINS

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he US has urged Macedonians to back a deal on changing the country’s name that will open the way for the Balkan nation to join Nato and the EU. Jim Mattis, US defence secretary, arrived in Skopje on Monday in a show of support for the government ahead of the September 30 referendum on a deal between Athens and Skopje that would change the country’s name to the “Republic of North Macedonia”.

The vote was the “most important” in Macedonia’s history, Mr Mattis said at a joint press conference with Zoran Zaev, Macedonia’s prime minister, and Radmila Sekerinska, defence minister. It would spur “economic prosperity and increased foreign investment”, he added.

“The agreement, alongside key reforms you are implementing under strategic defence review, unlocks the Nato accession process and al-

lows you . . . to determine your own future in institutions made up of likeminded countries,” he said.

Greece has blocked the country from progressing towards EU and Nato membership for almost three decades, saying the name Republic of Macedonia, which it has used since seceding from the former Yugoslavia in 1991, implied territorial aspirations to the Greek region of the same name.

Mr Mattis is the latest western official to visit Skopje to lobby for a yes vote. Federica Mogherini, EU foreign policy chief; Jens Stoltenberg, Nato secretary-general; Angela Merkel, German chancellor; Sebastian Kurz, the Austrian chancellor; and a number of European foreign ministers have also made the trip.

Macedonia and Greece map Mr Mattis said Russia was likely to become involved in a disinformation campaign ahead of the vote.

Moscow opposes Nato expansion and its ambassador to Macedonia

said recently that the Balkan country could become “a legitimate target” if Skopje proceeded with its plans to join the organisation.

“No doubt that [the Russians] have transferred money and they are also conducting broader influence campaigns,” Mr Mattis told reporters travelling with him to Skopje. “We do not want to see Russia doing there what they have tried to do in so many other countries.”

While the new name is unpopular, with even the country’s president opposing the compromise, the ruling Social Democrats hope the carrot of Nato and EU accession will be enough to convince voters.

Nato has invited Macedonia to start accession talks but it must implement the terms of the agreement, including changing its name and adopting constitutional changes, in order for Greece to withdraw its veto.

Brussels has pledged to decide in June 2019 whether to start accession talks if reforms are implemented.

China prepares for new phase of Trump-led trade war Officials in Beijing question merit of further talks before US midterm elections LUCY HORNBY

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hinese leaders have begun to doubt the Trump administration’s desire for a deal to end the worsening trade war amid signs that the US is preparing to impose new tariffs on $200bn of imports from China.

In meetings over the past four days, two senior Chinese officials have been asking bankers and advisers from both countries about strategy for negotiating on a trade deal before the US midterm elections in November.

Wang Qishan, vice-president, and Liu He, China’s top economic official, were seeking views on what would be the most effective timing for Beijing on any offers to the US on trade.

Reform-minded Chinese participants argued that China should adopt long-heralded economic reforms in its own interest rather than seek to time the US election cycle, people briefed on the meetings said. Some American participants, on the other hand, argued that there was no point in China offering

any concessions before the midterm elections.

The anticipated new tariffs have overshadowed plans for another round of talks led by Mr Liu in Washington.

Wang Shouwen, the vice-minister of commerce who planned to travel to Washington this week to prepare the round, is likely to delay or cancel his trip if the tariffs are finalised first, said sources in Beijing.

The Chinese side twice thought it had deals — with US commerce secretary Wilbur Ross and Treasury secretary Steven Mnuchin — only to have them rejected by President Donald Trump.

Mr Liu’s personal political capital would suffer if he came back empty-handed a third time, people in Beijing said, adding that the leadership in Beijing had now realised that only Mr Trump could plausibly commit the US to a deal.

“They have to realise Trump is the chief China desk officer,” said one American businessman.

Mr Trump’s latest comments on the trade war underlined his dominance of the trade issue. He wrote on Twitter:

“Tariffs have put the US in a very strong bargaining position, with Billions of Dollars, and Jobs, flowing into our Country — and yet cost increases have thus far been almost unnoticeable. If countries will not make fair deals with us, they will be “Tariffed!”

China’s leadership is increasingly anxious to find a way to ease the trade tensions. The country’s public sentiment has turned noticeably darker in recent weeks, thanks to a softening economy, tight political controls and the sense that the relationship with the US is breaking apart.

The Shanghai stock market closed on Monday at its lowest level since November 2014, on trade war worries and a worsening economic picture.

“Economic data out of China last week was not particularly good . . . a little lower than expectations, so you’ve already had some investors trading prices lower,” wrote Hannah Anderson, analyst at JPMorgan Asset Management in Hong Kong. “Then over the weekend there was a hit to sentiment from negative trade war headlines.”

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How US banks took over the financial...

Saudi sovereign wealth fund to invest $1bn in Tesla rival Lucid Motors

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access to cheap funding.

Multinational companies typically have a stable of at least a dozen banks — a mix of local and international lenders that can support global operations — to meet financing needs. “European banks have retrenched, but others have stepped in to pick up the slack,” says Sarah Boyce at the UK’s Association of Corporate Treasurers.

But Ms Boyce, the former director of treasury at British chocolate maker Cadbury, says there is risk of complacency when banks are queueing up to service companies as they are now.

“In the last crisis everybody took their ball home and retrenched to their domestic market,” she says.

“There is a real risk the American banks will do exactly the same in the next crisis.”

In the past decade, the five European banks tracked by the FT have shrunk their revenues by 20 per cent, their assets by 15 per cent and their workforce by almost 30 per cent.

Meanwhile, their five Wall Street rivals have grown their revenues by 12 per cent and their assets by 10 per cent, while their headcount has shrunk by less than 10 per cent.

There are some who believe that Europe’s shrinking banks should be celebrated. Sitting in the peaceful courtyard of Oxford university’s All Souls College, where he is warden, Sir John Vickers says: “You had in effect a huge taxpayer-backed subsidy for risk-taking and that ended in tears. So pulling back from that is directionally a good thing.”

“The [banks’] balance sheets got so overblown with a lot of activities which I believe were completely unproductive so there is no social loss or economic loss in their disappearance,” says Sir John, who chaired the commission that drafted Britain’s policy response to the 2008 crisis.

RBS remains the most extreme example of a European bank in retreat. For a spell in 2008, it was the world’s biggest bank by assets until being bailed out by Gordon Brown’s Labour government a month after Lehman collapsed.

Since then, RBS has been engaged in a drawn-out restructuring, shedding more than 60 per cent of its assets and 70 per cent of staff.

Ewen Stevenson, finance director at RBS, says the European corporate and investment banking market suffers from “an excess of capacity” that drags the profitability of most banks in the region down below their cost of capital, meaning that they are destroying value.

“So it is a concern, but it is a multi-faceted problem that I don’t think would get solved just by insisting that European investment banks continue to exist at scale,” he says.

As well as being slower to flush toxic assets out of their balance sheets, European banks have also suffered from the political stigma around the sector in the aftermath of the crisis.

“Across much of Europe you saw almost the application of biblical justice, which is if you’re a bank, you’re bad, so let’s penalise you, as opposed to let’s make you healthy again,” says Mr Diamond, who was pushed out by regulators as Barclays chief executive in 2012 and now runs private equity funds that buy assets from banks.

Tuesday 18 September 2018

Deal help Silicon Valley-based company launch first electric vehicle in 2020 ARASH MASSOUDI AND ANJLI RAVAL

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Brett Kavanaugh was nominated by US President Donald Trump to fill a vacancy on the Supreme Court. © Getty

Supreme Court nominee’s accuser willing to testify, lawyer says Allegations from high school threaten to delay confirmation vote KADHIM SHUBBER

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he woman who accused Donald Trump’s Supreme Court nominee of attempted sexual assault is willing to testify about her allegations in front of a Senate committee, her lawyer said on Monday.

Christine Blasey Ford has alleged that Brett Kavanaugh, a federal appeals court judge, pinned her to a bed at a high school party,

tried to undress her and put his hand over her mouth when she tried to scream. Mr Kavanaugh has denied the allegations.

On Monday, Debra Katz, who represents Ms Ford, told CNN her client is willing testify publicly about the alleged events, which Ms Ford believes took place in 1982.

The Senate Judiciary Committee was due to vote on Thursday about Mr Kavanaugh’s nom-

ination, ahead of vote by the full Senate later this month. Two Republican senators, Bob Corker and Jeff Flake, who also sits on the Judiciary Committee, have said the vote should be delayed until the accuser can speak to senators.

Kellyanne Conway, an adviser to Mr Trump in the White House, told Fox News: “This woman should not be insulted and she should not be ignored.”

US port weighs cost of Donald Trump’s trade war Businesses at Baltimore hub fear impact of tariff battle with China on their livelihoods JAMES POLITI

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s container trucks rolled by under his office window near the Port of Baltimore, Cono Bucolo, a 68-year-old customs broker, described the reality of operating on the front lines of US president Donald Trump’s trade war.

One client recently forked out $18,000 in duties for a shipment of galvanised wire from China worth $84,000 — taking a big hit because of the tariffs imposed by the US on steel imports this year. Another importer was so panicked about Mr Trump’s threat to slap 25 per cent levies on a further $200bn of Chinese products this autumn, potentially targeting a key product and wounding his business model, that Mr Bucolo’s staff worried for his health.

“We’re afraid he’s gonna have a heart attack,” said Luanne Ciaccio, vice-president at Mr Bucolo’s company, Pride International.

The Port of Baltimore — one of the main hubs on the US east coast for car and light truck shipments as well as farm and construction machinery — is on track for a record year, partly a reflection of the expanding US economy. But the activity is paired with growing anxiety over the disruption to business triggered by Mr Trump’s protectionism — even if Baltimore handles a much smaller share of US trade with China than ports on the west coast such as Los Angeles and Long Beach.

Businesses and shipping companies — as well as customs brokers, a vital cog in the machinery of international trade — are trying to understand what it will mean for their livelihoods. Local politicians are concerned.

“If you know something about trade, you can’t taunt your trading

partners and not think there will be repercussions. There will be, and it’s happening right now,” said Dutch Ruppersberger, the Democratic congressman who represents the area including the port of Baltimore.

“The president is not necessarily completely wrong when it comes to trade deficits and the unfair trade practices like currency manipulation but you have to go about it the right way — you need the best people around and you need to make sure our constituents won’t be hurt, and that our plan is a winning plan,” he added.

Last week, Steven Mnuchin, the US Treasury secretary, sought new talks with Beijing to resolve the trade dispute, lifting hopes of a deal between the giants of the global economy. But the plan appeared to be thwarted by Mr Trump when on Thursday he tweeted that the US felt “no pressure” to reach a deal, leaving hopes of a compromise in limbo.

Meanwhile, there is still widespread uncertainty over the fate of US trade with traditional partners such as the EU, Canada, Mexico, and Japan.

Mr Trump is dangling the possibility of a national security-based levy on foreign cars, which could inflict serious damage on the Port of Baltimore because of its heavy exposure to the sector.

“This is like nothing we ever lived through before,” said Margie Shapiro, a 54-year-old customs broker based in Locust Point, across the water from Baltimore’s inner harbour, who took over the 100-year-old family business from her father.

She said customers wanted advice on how to shift their supply chains out of China, and classify or redesign their products to avoid the tariffs. “There’s an urgency of people saying: ‘Is this on the list? Why is this on the list?’” said Ms Shapiro. “I don’t think they

are alarmed, they are pissed.”

It is not just the levies complicating life for US importers. Ms Shapiro has noted shipping companies have raised sea freight prices, responding to higher demand as customers rush to beat the wave of tariffs. In addition, there has been a crackdown on incoming shipments by customs enforcement officials, who are scrutinising paperwork and the contents of containers much more assiduously — particularly merchandise from China.

“They are starting to police the rules with China,” Mr Bucolo said of Pride International, citing a recent case of an improperly labelled and packed shipment of hazardous chemicals that was held up at the port, with the importer forced to pay a big penalty to clear it. “We should have been on them a long time ago,” he said.

Mr Bucolo mostly agreed with Mr Trump’s brinkmanship with Beijing — echoing some of the president’s rhetoric on the subject, arguing that China has “taken advantage” of the US for years. “It’s a worldwide economy but that doesn’t mean we have to give away and give away,” he said.

He compared the short-term pain of the tariffs to “Florence” — the storm that battered the US east coast at the weekend. “You know this hurricane that’s going on? It’s gonna delay business. But we’ll be here. And the same thing with these tariffs. This will be a period, but it will work out,” he said.

Some of the bigger companies in the Baltimore area are watching the trade upheaval closely. Stanley Black & Decker, the tool maker, told investors in July that the first round of tariffs would cost it $35m and said it had “initiated price increases” to mitigate their effect. If the $200bn in products were also hit, the adverse impact would be an additional $70m to $80m, the company said.

audi Arabia’s sovereign wealth fund has made its second major investment in a US electric vehicles maker, striking a $1bn deal to provide much-needed financing for Tesla-rival Lucid Motors on Monday.

The move comes just weeks after the Financial Times revealed the Saudi Public Investment Fund, the state vehicle being used by Crown Prince Mohammed bin Salman to overhaul his nation’s economy, had built a near 5 per cent stake in Elon Musk’s car group Tesla.

The PIF said the deal would provide funding to help Lucid launch its first electric vehicle in 2020, ending months of speculation over whether the private Silicon Valley-based company would be able to secure the backing needed to allow the further development of its products.

Lucid, which was founded in 2007 as Atieva but has yet to deliver a single car to market, says its mission is to “inspire the adoption of sustainable energy by creating the most captivating electric vehicles, centred around the human experience”. Its chief executive and co-founder Sam Weng was formerly an executive at software company Oracle.

The PIF funding will be used to complete the engineering development and testing of its vehicle the Lucid Air, as well as construct a factory in Arizona to help with its production.

“By investing in the rapidly expanding electric vehicle market, PIF is gaining exposure to long-term growth opportunities, supporting innovation and technological development and driving revenue and sectoral diversification for the Kingdom of Saudi Arabia,” the $250bn fund said.

It added: “PIF’s international investment strategy aims to strengthen PIF’s performance as an active contributor in the international economy, an investor in the industries of the future and the partner of choice for international investment opportunities. Our investment in Lucid is a strong example of these objectives.”

Saudi Arabia, the world’s largest oil exporter, is investing in new industries to diversify the kingdom’s economy away from its vast hydrocarbon resources, in preparation for a time when global demand for its barrels could peak.

While Saudi Arabia is investing in a sector that is primed to erode oil’s dominance in transportation, the kingdom still sees growth in vehicles powered by traditional fuels led by fast growing emerging economies in Asia and Africa.

However, the decision to invest in Lucid was the source of major debate within the PIF unlike its move to purchase a stake in Tesla, according to people with direct knowledge of the matter. That was partly due to the troubled financial position of Lucid, one of these people said. Part of the company’s backing came from China’s LeEco, which sold its stake last year as its own financial position deteriorated.

Details of the PIF investment, including whether the Saudi fund would effectively take control of Lucid’s equity or whether the deal would require approval from US national security regulators, were not immediately available.

Tuesday 18 September 2018

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FINANCIAL TIMES

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COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Base10 fundraising is largest for a black-led venture capital fund San Francisco-based vehicle co-run by Nigeria-born Adeyemi Ajao raises $137m RICHARD WATERS

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venture capital fund co-led by a black investor has raised more than $100m for the first time, in a sign of Silicon Valley’s belated efforts to back more minority investors and entrepreneurs.

The new investment vehicle, managed by San Francisco-based Base10 Partners, follows a spate of smaller funds raised by black VCs in the US in recent months — though these have made only a very small dent in the racially skewed nature of start-up investing.

The huge racial gulf in Silicon Valley, both among investors and entrepreneurs, has received relatively little attention amid wider criticism recently of the tech world’s significant gender disparities.

Only 4 per cent of US start-up investors are black or Hispanic, according to a study of 1,500 venture capitalists by Richard Kerby, a partner at the firm Equal Ventures. By comparison, about 13 per cent of the US population identify as black, and 16 per cent as Hispanic.

Base10 was co-founded by Adeyemi “Ade” Ajao, a serial entrepreneur and angel investor. He was born in Nigeria and brought up in southern Spain, where his first start-up, a social app called Tuenti, was bought

by Telefónica. Like many successful European entrepreneurs he then set his sights on Silicon Valley, taking a place at Stanford University and starting another venture that was sold to business software company Workday.

Base10 said on Monday that it had closed its first fund after raising $137m, a sizeable amount for a socalled seed-stage fund that provides small amounts of capital in the very early stages of a start-up’s life.

Mr Ajao, who grew up in a mainly white region, said he had little sensitivity to racial politics when he came to the US, but had since come to understand the significance of his position as a rare black figure in VC. “I have an obligation to foster that network to make sure others succeed,”

he said. “The more the story is told, the more we can create role models.”

Critics of Silicon Valley’s start-up system say the lack of diversity among VCs has starved minority entrepreneurs of capital, in turn producing fewer black company founders who can later move into investing — a chicken-and-egg problem that perpetuates the imbalance.

“So much of venture investing at the early stage is about trust and judgment and that means you are likely to invest in people who are more like you,” said Charles Hudson, another black VC who raised a $15m venture fund in late 2016 and has since made 75 investments.

Silicon Valley’s start-up world is also driven by a number of overlapping networks, making it hard for outsiders to break in. For instance, about 40 per cent of VCs came from just two universities — Harvard and Stanford — according to Mr Kerby’s study.

“If you’re plugged into one of these [university] networks, gender and race are still an issue, but you’re afforded access others aren’t,” said Mr Hudson, who also attended Stanford before taking a job at Google.

Among other black-led VC firms, Los Angeles-based Backstage Capital raised $36m in May, while 645 Ventures, a New York fund with two black partners, completed a $40m fund last year. Late last year, Unilever announced a $100m fund to back minority female entrepreneurs after buying Sundial Brands, a beauty products company whose goods are aimed at women of colour.

Investors such as Arlan Hamilton, founder of Backstage Capital, and Richelieu Dennis, the founder of Sundial Brands and the brains behind Unilever-backed New Voices Fund, aim to invest exclusively in minorityfounded businesses. Others, such as Mr Ajao and Mr Hudson, have more general investment criteria, but say they hope their personal backgrounds and investment philosophies will lead them to a wider group of entrepreneurs.

Aurora Cannabis shares jump as Coca-Cola eyes cannabis drinks MAMTA BADKAR

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urora Cannabis shares wafted higher after Coca-Cola said it was “closely watching” the cannabis drinks sector.

US-listed shares in the Canadian company, which Coca-Cola has reportedly held talks with, jumped as much as 22.7 per cent, before trimming those gains to trade 15 per cent higher at $7.50.

Amid slowing soda consumption Coca-Cola has said it is eyeing the cannabis drinks sector, which uses the non-psychoactive chemical in marijuana as an ingredient for wellness drinks.

Aurora shares surged following a BNN Bloomberg TV report that the fizzy drinks maker is in talks with Aurora. However, a spokesperson for the Atlanta-based company told the FT that no decision had been taken about a deal yet.

The report also lifted shares in

other pot stocks. US-listed shares in Tilray were up 6.8 per cent at pixel time. Shares in Green Organic Dutchman climbed as much as 7.7 per cent before paring back its gains to trade 3.5 per cent higher. Shares in Organigram rose as much as 8.1 per cent before trimming its advance to trade 0.9 per cent higher.

Aphira shares climbed as much as 4.9 per cent before reversing those gains to trade 1.3 per cent lower, while Cronos shares rose as much as 3.8 per cent before turning negative and slipping 1.5 per cent lower. Canopy Growth shares jumped as much as 6.4 per cent but were trading flat at pixel time.

News of Coca-Cola’s interest follows interest in the sector from Constellation Brands, the company behind Corona Beer, which earlier this year said it has invested under $4bn into Canadian cannabis group Canopy Growth. Diageo has also been exploring investment opportunities in the sector.

Base10 founders Adeyemi Ajao, left, and TJ Nahigian

US 10-year yield above 3% as Wall Street dips Italian stocks rally on finance minister’s remarks while pound tops $1.31 AIME WILLIAMS AND HUDSON LOCKETT

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nvestors are waiting to see whether the White House will impose new tariffs on $200bn of imports from China. The Shanghai stock market closed on Monday at its lowest level since November 2014, on trade war worries and a worsening economic picture. ‘’We think some modest escalation of tariffs is expected, with 10 per cent on $200bn of imports from China anticipated. Anything higher would probably affect EM badly, but may spill back into US markets as well,’’ noted Steve Englander, head of global F/X strategy at Standard Chartered Bank. ‘’We could see a relief rally if tariffs come in on the low side, and US-China discussion continues.’’

Equities Wall Street opened broadly lower, with the S&P 500 index down 0.2 per cent in early trading. Milan was the best performing European market, with the FTSE MIB index up 1.2 per cent, led by banking and telecom stocks.

Ahead of this week’s Brexit summit of EU leaders, sterling was above $1.31 level, while the FTSE 100 struggled for traction, weighed down by miners as industrial met-

als fell.

In Asia, a super-typhoon that wreaked destruction in the Philippines over the weekend sent Hong Kong stocks lower.

Hong Kong’s benchmark Hang Seng index dropped 1.6 per cent, led downwards by Macau-based casinos as super-typhoon Mangkhut reached landfall in China late on Sunday morning. Mainland Chinese markets fell as well, with the CSI 300 index of stocks in Shanghai and Shenzhen down 1.1 per cent.

Tokyo traders were off for a market holiday.

Forex and fixed income The Turkish lira fell 2 per cent to TL6.28 against the US dollar following last week’s rally after the country’s central bank raised its benchmark lending rate. It is now down 40 per cent against the dollar over the year to date.

The Indian rupee weakened as much as 1.1 per cent to Rs72.67 per dollar in Asian trading, taking the currency back within reach of the all-time low of Rs72.9 it hit last week. That came despite government measures to curb the import of “non-essential items” imposed to reduce India’s current account deficit.

South Korea’s won fell 0.3 per cent to Won1,123.71 per dollar ahead of a three-day summit between the two Koreas meant to break the deadlock in talks over Pyongyang’s nuclear weapons programme.

The benchmark US 10-year Treasury note rose above 3 per cent in early New York trading.

Italian 10-year bond yields fell by 11 basis points to 2.87 per cent on Monday following reports in the Italian press that finance minister Giovanni Tria said the country’s budget deficit would be 1.6 per cent of GDP in 2019. Separate news pieces over the weekend reported that the League and Five Star Movement were prepared to delay tax reforms.

Commodities Oil prices were firmer on Monday with Brent crude, the international benchmark, up 0.9 per cent at $78.78 a barrel and West Texas Intermediate, the US marker, up 0.9 per cent at $69.59.

The Bloomberg industrial metals index, consisting of cooper, aluminium, zinc and nickel fell to a new low for the year and has dropped nearly 20 per cent from its April high.

Gold was up 0.9 per cent at $1,203 per ounce.

US stock futures slip amid trade fears MAMTA BADKAR

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all Street is poised for a lower open on Monday amid concerns about a trade war between the US and China, while the yield on the 10year rose above 3 per cent.

Having notched their biggest weekly gain in two months last week, futures trading was downbeat at the start of the week. S&P 500 futures were down 0.1 per cent to 2,907.75, Dow futures slipped 0.1 per cent to 26,160 and Nasdaq 100 futures declined 0.3 per cent to 7,553.75.

The moves come as Chinese leaders have begun to doubt the Trump administration’s desire for a deal to end the trade war amid signs the US is readying to impose new tariffs on $200bn of imports from China.

US futures also appeared to track European and Asian markets lower. Hong Kong’s Hang Seng fell sharply overnight following a typhoon that hit the Philippines over the weekend, while mainland Chinese markets slipped as well. Meanwhile, markets were also trading modestly lower in the Europe, with the Cac 40 off by 0.1 per cent, the FTSE 100 down 0.2 per cent and the Xetra Dax down 0.4 per cent.

“Asian markets continue to bear the brunt of the tariff battle (Shanghai comp closed at the lowest level since November 2014) with smaller collateral damage in Europe and whistling in the US,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “Keep in mind that if US businesses and/ or consumers cannot source product from an alternative supplier to

China for these goods, it is US businesses and consumers that end up paying this tariff via higher prices.”

Elsewhere in markets, the yield on the 10-year rose 1.5 basis points to 3.01 per cent, while that on the two-year rose 0.4 basis points to 2.782 per cent. Yields move inversely to price.

The dollar index, a gauge of the buck against a weighted basket of peers, slipped 0.3 per cent to 94.62.

The US economic calendar is light this week with investors eyeing updates on the housing market. They also await the biggest shake-up of the GICS— a key classification system — since its inception in 1999. At the end of the week, index provider S&P renames the telecoms services sector to “communication services” including telecom, tech and consumer discretionary names.

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2019: Why I want to rule Nigeria - Saraki …Receives Lagos PDP support INIOBONG IWOK

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enate President and presidential aspirant on the platform of the People’s Democratic Party (PDP), Bukola Saraki, has said that the desire to rescue the country from its current precarious position and give hope to the younger generation informed his decision to join the race.

Saraki, who recently defected from the ruling All Progressives Congress (APC) on the platform of which he was elected the Senate President, to the main opposition PDP, stated this yesterday at the Lagos PDP secretariat, Ikeja, while on consultation visit on his presidential ambition to the party leaders ahead of the forth-coming presidential primary of the party.

He stressed that he would focus on creating jobs for the youth and providing infrastructure for small scale enterprises to thrive if elected president of the country.

Saraki, who was a former governor of Kwara State, lamented the incessant killing of Nigerians across the country without any proactive response from the government, added that the country was at a crossroads and needed urgent intervention.

“It is time to turn around the country; this is the time to elect a president who has the capacity to do that. A president who would create jobs for our youths and provide infrastructure for small businesses to grow.

“Today, Nigeria is at a crossroads; we have to save the soul of this country; it is the responsibility of all

Saraki

of us; the country has not been this bad, imagine the killings across the states and no one has been brought to book.

“I am the only aspirant who has the vision to lead the country; this is the time to turn around the country.

This is the time to elect president who has the capacity. We need a young President and across the world that is the trend I appeal to you to make it happen,” Saraki said.

Speaking further, the Senate President promised to restructure the country, but warned that restructuring of the country was a gradual process, while pledging to support Lagos PDP towards their electoral success in next year’s general election. “ I would restructure the country, I have the capacity to do that, but in doing this you need someone who understands the system, don’t mind those promising instant restructuring; restructuring cannot just hap-

pen without the appropriate laws being in place.

“Lagos is like my second home; my primary and secondary school were here, my wife is from here and my father has his hospital and house here.

“My mother is from Ondo; I was in Ondo the other day and I told them your son want to contest you don’t have alternative than to support me. This Lagos is for us that is why one of my promises is to work and deliver the State for PDP I want to appeal for your support”. Saraki added.

Responding the acting PDP chairman in the State, Waliu Hassan, said that the country would benefit immensely form the leadership experience of the Senate President if elected President, stressing that state chapter of the party would support his Presidential ambition.

Speaking earlier the Director of media of Saraki’s Presidential cam-

2019: Mustapha declares to replace Ahmed, unveils agenda to fix Kwara SIKIRAT SHEHU, Ilorin

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aliu Mustapha, governorship aspirant on the platform of All Progressives Congress (APC) in Kwara State on Monday affirmed his determination to offer inclusive governance to collectively fix Kwara and make it one of the leading lights in Nigeria, boasting that he will succeed incumbent Governor Abdulfattah Ahmed.

Mustapha, who made this known when he formally declared his intention to run for governorship seat in Kwara State in the forthcoming general election, promised that his government would ensure that the tax payers’ money is judiciously utilised and would avoid tax duplication as currently experienced.

According to him, “It is still baffling that the lofty vision of the founding fathers of our darling State of Harmony is yet to be achieved in spite of resources available in quantum.”

Mustapha said: “It is against this background that we have critically and holistically assessed our situation with the belief that all hope

is not lost, hence the need to let us collectively fix Kwara come 2019.

“Having identified our challenges, we have articulated how we intend to frontally offer solutions in the areas of Education, skill acquisition/entrepreneurship, Health from basic to tertiary level, Infrastructure deficit, civil servants welfarism, youth development, agricultural empowerment which we tagged ‘The 6-point agenda’”.

Mustapha, a former deputy National Chairman of Congress for Progressives Change ( CPC ), pointed out that he remains in APC because he believed in political ideology of President Muhammadu Buhari.

“We in APC, we want better and productive leadership. We believe in leadership by example of President Muhammadu Buhari. I have always shared his ideological conviction. If given the opportunity, we will deliver our promises.

“We have a strategic plan; short term, mid-term and long term on how to address some of the issues identified. The man power is there.

It is not everybody that must have a white collar job. We are appeal-

ing to people that all hands should be on deck to achieve the best for ourselves.

“As I can not do it alone, we are appealing to the good people of Kwara to give us the necessary support to serve and fix Kwara.

Because, I strongly believe that, together we can fix Kwara.”

The governorship hopeful noted that no society or nation can develop beyond the level of its reasoning or intelligentsia.

His six points agenda reads: EDUCATION, SKILL ACQUISITION/ ENTREPRENEURSHIP: Quality education is the determinant of success in life. This attests to the fact that quality of mind is directly proportional to the quality of education acquired. Fixing education in Kwara State is an automatic ticket for bettering condition of our dear state. We shall provide free education for our people, fix the decay infrastructure in our schools, ensure teachers are well paid and restore the lost glory in our public schools.

I want to assure you that if you give me your mandate, I will make the educational fees affordable in our tertiary institutions.

paign Organisation, Doyin Okupe, said that the overwhelming acceptance of Saraki across the country was an indication of his popularity and selfless service to the masses in despite his comfort.

Okupe added that the 2019 Presidential election would be focus on competent to deliver the country from its current woes, rather than physical exercise.

“Everywhere we go across the country he is welcome and people are rejoicing about Saraki’s candidacy. He is loved; Saraki is competent to rule the country and has all the attribute of a great leader.

“Despite the comfort he enjoys, he put the welfare of the masses at heart.2019 is about capacity and not jogging”. Okupe said.

Leaders of Lagos PDP present at the visit includes; Lagos PDP governorship aspirant, Deji Dorherty, former State chairman, Tunji Shelle, a former member of the House of Representatives and former State chairman of the party, Setonji Koshoedo, Dele Ashiru , Ade Dosunmu, Nike Adebanjo who is a Senatorial aspirant for Lagos Central, Mutiu Okunola, Sunday Olaifa.

Others are former Deputy Governor of the State, Senator Kofoworola Burknor, a member of the Lagos State House of Assembly, Dipo Olorunirun , House of representative member, Olayinka Soyinka.

While the Senate President was accompanied in his visit by the Director General of his Presidential campaign organisation and former Minister of Power, Mohammad Wakili, Kogi West controversial Senator, Dino Melaye, former Kogi Governor, Idris Wada, and Kawu Baraje.

Tuesday 18 September 2018

Dickson cautions presidential aspirants on disparaging remarks against governors, party SAMUEL ESE, Yenagoa

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overnor Henry Seriake Dickson of Bayelsa State has called on the 12 presidential aspirants of the Peoples Democratic Party (PDP) to avoid disparaging remarks as they campaign ahead of the party’s national convention.

A statement by Dickson’s Special Adviser on Media Relations, Fidelis Soriwei on Monday said it was pertinent for the presidential aspirants to avoid the use of words that could inflict injury on party cohesion and strength as the country moves closer to the 2019 elections.

Dickson who was chairman of the PDP Reconciliation Committee noted that utterances seemingly targeted at critical organs of the party and governors should be avoided in the interest of repositioning a formidable PDP to wrest power from the All Progressives Congress (APC).

He maintained there was no division within the organs of the party and governors as all the critical stakeholders were engrossed in the moves to produce a viable presidential candidate through a credible convention acceptable to all members of good conscience in desire of the party’s victory in the general elections.

The governor urged stakeholders to totally discountenance publications in some quarters depicting division within the PDP, its organs and governors saying they were untrue.

Dickson stressed that the governors, the BOT, the National Working Committee were part of the committee that was saddled with the responsibility of producing a candidate for the party in a free, fair and credible process.

Six Akeredolu’s aides resign in Ondo for 2019 general election YOMI AYELESO, Akure

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head of the 2019 general election, six cabinet members of Governor Oluwarotimi Akeredolu of Ondo State have resigned their appointments in order to contest in the party’s primaries.

The six aides resigned following a directive by Governor Akeredolu that all his political appointees who have obtained nomination forms for the All Progressives Congress (APC) primary for the 2019 general elections should resign from his cabinet.

Governor Akeredolu had through a press statement on Friday night signed by his Chief Press Secretary, Segun Ajiboye, directed his appointees seeking elective positions to resign latest Monday, September 17, 2018.

BusinessDay reports that those who have tendered their resignation letters as of Monday morning included, Gboyega Adefarati, the Commissioner for Agriculture; Donald Ojogo, Commissioner for Lands and Housing and Omowumi Olatunji, Commissioner for Women Affairs and Social Welfare.

Others were, Timehin Adelegbe, Commissioner for Commerce; Victor Olabimtan, Special Adviser on Rural Development and Jibayo Adeyeye, Special Adviser on Health.

Olabimtan is contesting for a slot in the senate to represent Ondo North senatorial district, while the other five, Adefarati, Ojogo, Olatunji, Adelegbe and Adeyeye are vying for seats in the House of Representatives to represent Akoko South West and East , Ilaje/Ese-Odo, Akure South/North, Owo/Ose and Ondo East/West Federal Constituencies, respectively.

Meanwhile, the Ondo State government has expressed his appreciation to those that resigned for their dedication and efforts in contributing to the development of the state.

Yemi Olowolabi,the commissioner for Information in a chat with our correspondent said their resignation was in accordance with the law. “ It is correct. They are going to contest for Senate and House of Representatives and the law is clear if you are contesting,you should resign.

BUSINESS DAY

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NEWS YOU CAN TRUST I TUESDAY 18 SEPTEMBER 2018

INSIGHT/INNOVATION Peeling off the layers of President Buhari’s brand of socialism

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

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ne of the most admirable things about President Muhamadu Buhari’s ascent to power in 2015 was the sustained support from the millions of Talakawas in the North. The admiration of these courageous Nigerians for the President is perhaps second to none. I have met few of them. Their support borders on fanatical and it is unchanging. By late 2014, following the emergence of the All Progressive Congress (APC) and the President as the party’s flag bearer, they have managed to add another set of Nigerians, now especially in the West, that were prepared to do all they could for the emergence of the President’s political aspirations. This new set of Nigerians contributed both time and money towards the victory of the President in the 2015 poll.

These Nigerians, many of them also voting for the first time, were convinced by the rhetoric against corruption, and donated their resources for the success of the campaign. The aspiration of these Nigerians was noble and simple. They see the 16 years of People’s Democratic Party (PDP) as responsible for the rise in corruption, and the corruption has led to poor economic

performance and gross inequality. So, for many of these Nigerians, they reluctantly reconciled the economic performance of the first coming of President Buhari and the promises made by the APC. The admiration for the President was that, as one of past Nigerian Presidents, he did not enrich himself through the public purse,

However, almost four years of the Buhari presidency, the first thing any keen watcher of Nigeria’s politics will notice is that the support for Mr.President has reduced significantly amongst the later set of converts to the President’s political aspiration. Many in the APC will deny that. What is not deniable is that the support for Mr. President amongst every level of support received in 2015 has dropped, become lukewarm, and or simply unexcitable. Many of these Nigerians have been left disappointed, in despair, and in worse economic conditions than they were in 2015.

It is in this context that one should view the recent purchase of the All Progressive Congress (APC) presidential nomination form for the President. A day after the leadership of the APC announced the timetable for the party’s primaries and the costs of its forms for the different positions, a group christened Nigeria Consolidation Ambassadors Network (NCAN), led by its leader Sanusi Musa boughtthe party’s presidential nomination form for the President for N45 million. According to this group, since Mr. President has not stolen from the public purse, it is left to Nigerians such as the group to buy him the nomination. Ironically, it means every other aspirant buying the forms are corrupt individuals.

But this smacks of gross hypocrisy at many levels. Adams Oshiomole may be the chairman of the APC but the President is by all means the leader of the party. So why did he allow the form to be sold at that price? Having succumbed to the hypocrisy of denying others the possibility of contesting against him in the APC presidential nomination process or using the process to raise money for the party, and given the impression it was a party decision, even carefully arranged to

mr. president has inadvertently lost the generation of nigerians that believed he was different. they had supported him on social media, and more importantly, paid into the coffers of the party for the president to emerge victorious in 2015. ahead of the 2019, this group of nigerians are missing, their voices silent, both on facebook and twitter happen while the President was away, the only way to achieve the full hypocrisy is to arrange a group to buy nomination forms on the behalf of the President. Meanwhile, the whole media was there. How did they get to know which and when the group was going to buy the form? It’s no different from the President playing ignorance regarding the funds for the 2015 elections, and the forthcoming 2019 campaigns. Others can spend on behalf of the president as long as the president keeps the job of fighting corruption.

To understand and appreciate President Buhari’s fight against corruption, one needs to take a cue from the history and behaviour of socialism.

And this history teaches us that the most critical underlying notion and concept of socialism is sharing, following the argument that individual liberalism failed to address social concerns during the industrial revolution, including poverty,

social oppression, and gross inequalities in wealth.

Socialism was thus an alternative to liberal individualism based on shared ownership of resources.

Having met two people with such tendencies at close quarters, I have no doubt that their interest is in the final product and not the process, both as a beneficiary and as an allocator. They hate profits, but like the taxes paid by profits makers, they hate profits but like the jobs created by profit takers. It is common for them to push salary increases but not work ethic, living wages but not dedication to work.

In the case of the allocator, it is also important that the poor continues to believe they are one of them.

So, having this understanding, back to President Mohammadu Buhari. He is not interested in personal wealth. Oh no, he is not. It is the reason many continue to tout his credential against corruption. According to this behaviour, he is more interested in aligning with the struggling poor, and their problems traced to the elite, but not bad economic policies. The president fits into the characterization and behaviour of leaders of every kind of socialist movement. They tout their representation of the poor, but exhibit the symptoms of the wealth on behalf of the poor, either as representatives of their union, or at the expense of the State, as the President. No, I am not suggesting the President is particularly enjoying the perks of office more than his predecessors. No he is not, but he has not reduced them, either.

In conclusion, Mr. President has inadvertently lost the generation of Nigerians that believed he was different. They had supported him on social media, and more importantly, paid into the coffers of the party for the President to emerge victorious in 2015. Ahead of the 2019, this group of Nigerians are missing, their voices silent, both on Facebook and Twitter. Though not convinced about the aspirations of the PDP yet, have realised that all leaders are elites, only in different ways. Some pursue power for the purpose of wealth, while some are contented with just the power for the sake of it.

I thank you.

The Nigerian Century

VIVIAN AKU AKU has spent over 28 years in the financial services industry where she serves as CEO of Marathon Asset & Fund Management, Lagos and is an alumnus of Harvard Business School

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arlier this year while in attendance at the Harvard Business School GMP24 Executive Educa- tion Program, I had the privilege of analyzing Nigeria along with twelve other countries. This was from a macro economic perspective, and a question was asked of the participants in class at the e!nd of the class discussion, it was: “Are you bullish or bearish on Nigeria?”!

My response was Bullish. On the face of it, my choice might have come across as the conse- quence of patriotism, and while there will probably always be an aspect of this, I know that the fundamentals are in Nigeria’s favor, as long as we actively focus on the “engine” that will power o!ur growth and progress. !

As I made my point in class that day, my mind went back to the summer of 2010, when my youngest child Dara, who had switched from soccer earlier in the year to swimming was strug- gling to make the cut off time for the 50 yards backstroke, so she could make it

to the state championships at the end of the summer. She had signed up for several 50 yard backstroke events at swim meets, and she seemed to have hit a plateau, which kept her two seconds shy of qualifying time. This was very frustrating for her, and at some point we both decided to google “how to improve your backstroke time”. We made an interesting discovery, as a non swimmer, I always saw backstroke as an arm propelled stroke.

To my surprise, the fist words I saw were that the engine of the backstroke are the legs! kick fast kick strong, and you will move much better with less resistance in the water. So at the next swim meet, she put in additional effort with her kicks, and as expected her time improved by ten seconds that day. She has come a long way from that period, and I share this here, because I know we have all we need in Nigeria to efficiently and effectively occupy an enviable position in the committee of nations. So the ques- tion we need to address would be, what are the components of our engine of growth that we n!eed to deploy to ensure we make it to the “State Championship?”!

Population: Nigeria currently has an estimated population of 195 million, with the average age standing around 18. That says two things on the face of it. We have an established market, and it should be a productive population. It also means that the population is likely to double in 50 years, and this can position us with the right education policy and infrastructure to be an emerg- i!ng world power by the end of the century. !

Education: As a people we have deep appreciation for education. While not strictly enforced, education is compulsory

for fifteen years through the 6-3-3-4 system. There are currently 138 universities, a significant growth from the initial number at independence which stood at 5. In my experience, while the populace values education, we would probably do better as people if edu- cation is sold and funded to provide adequate attention to technical and vocational education as was envisioned when federal polytechnics were established across the country. There is cur- rently no technology in the world today that can be identified as Nigerian, and this in my opinion is a component of the engine of growth that has not been nurtured to help us grow. A look at his- tory of the world, and the current economic success we see in the world was powered by the industrial revolution. We have the skeletal structure, ( polytechnics) it is my hope that we will deploy this component to ensure that we develop technology, and consequently drive manufac- t!uring growth in Nigeria.!

Infrastructure: While infrastructure is woefully inadequate, our total infrastructure stock repre- sents only 35% of our GDP, as against South Africa’s 87% of GDP, and the emerging economy average of 70%, we have the “skeletal” structure in place. We have a rail system that traverses the country, it just needs to be upgraded over time to ensure the efficient movement of goods.

Our waterways should also be viewed as as one of the means of efficient movement of goods across the country. We are currently heavily dependent of our roads, that are currently inade- quate and under pressure. A lot can be done to improve this, and investments are been made to address

the upgrades required. Power in my opinion is the biggest impediment to the required growth trajectory, as no business entity within our borders currently functions without indepen- dent power generation. This puts additional cost pressure on businesses, along with the envi- ronmental degradation that the continuous diesel fumes that are spewed to power our genera- tors. In the last ten years, the government “divested” from power selling, generation, transmis- sion, and distribution aspects of electricity to private businesses. This has unfortunately not de- livered the growth that was expected.

Power is capital intensive. It is a national security issue, and I believe that significant growth can be achieved if some funding is provided to these private entities with some local, state and federal government providing loan guarantees that will enable these power companies access low cost long term funding required to make adequate investm!ent in ensuring that Nigeria’s power needs are adequately addressed.!

Manufacturing: While I mentioned earlier that there is currently no technology that can be identi- fied as Nigerian, light manufacturing is on the rise. According to Deloitte, we currently have a potential to substitute imports in electronics, appliances and basic automative components.

On electronics, phones - $334million, TV equipment $121million. On appliances, about $235 mil- lion, and basic automative components, $113million. We have a potential to reduce our import b!ill in these areas by $11billion, with the growth of manufacturing in Nigeria.

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