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Palm oil makers in aggressive expansion to close N152bn supply gap …but smuggling hurts industry ODINAKA ANUDU

N L-R: Segun Opeke, head, Lagos directorate, Polaris Bank; Chantelle Abdul, MD, Mojec International; Abdullahi Mohammed, executive director, Abuja/Northern region; Mojisola Abdul, chairperson, Mojec International, and Innocent Ike, executive director, technology and services, Polaris Bank, at the MoU signing ceremony between Polaris Bank and Mojec International on retail financing scheme for MAP meter acquisition scheme for Nigerians, at the bank’s corporate headquarters in Lagos.

Nigerian insurers bleed on Egina FPSO loss claims $40m paid as interim claims Largest in history

MODESTUS ANAESORONYE

laims expense by insurers on the Egina FPSO Oil Field has been described as the largest ever recorded in the Nigerian insurance industry.

Broken into tranches according to loss valuation, the industry has paid out an initial $40 million (equal to N14.4 billion) as interim claims, while the final figure was still being expected. The facility, insured by Leadway Assurance Company Limited as lead insurer and over 10

other co-insurers, was said to have suffered damage in 2018 following a break and falloff of some part of the deepwater platform. The size of the claim underscores the capacity of the Nigerian insurance industry to meet claims obligations, and the need

for operating companies to have adequate reinsurance treaty to meet claims obligation when they crystallise, analysts said. “The claim is very big but with adequate reinsurance we will be able to pay our portion,” said a Continues on page 38

igeria has a demand-supply gap of 800,000 metric tonnes in the palm oil market, which translates to N152.3 billion ($423.3 million) using Wednesday’s price of N190,440 ($529) per tonne. This opportunity is forcing the likes of Okomu, PZ Wilmar, Presco and other palm oil millers to expand plantations and acquire new facilities. PZ Wilmar has acquired a palm oil mill (POM) and kernel crushing plant (KCP), while Continues on page 38

Inside Zenith Bank profit surges 6.7% to N50bn in Q1 2019 P. 2

Thursday 18 April 2019

BUSINESS DAY

NEWS Pressure back on Buhari as Senate passes PIGB ... after addressing president’s concerns OWEDE AGBAJILEKE, Abuja, & DIPO OLADEHINDE, Lagos

T Babajide Sanwo-Olu (2nd l), governor-elect, Lagos State; Kennedy Uzoka (2nd r), GMD/CEO, United Bank for Africa (UBA) plc; Ayoku Liadi (l), executive director, UBA, and Abolade Cole, business manager, business office, UBA, at the congratulatory visit of UBA management to the Lagos State governor-elect.

Zenith Bank profit surges 6.7% to N50bn in Q1 2019 OLUFIKAYO OWOEYE

ier-1 bank, Zenith Bank recorded a 6.7 percent surge in after-tax profits in its Q1 2019 financial results to N50 billion, from N47 billion in 2018. Highlights of the results show that the bank’s gross earnings hit N158 billion in 2019, as interest income grew 4.9 percent to N122.48 billion. Profit before tax also jumped 6.1 percent to N57.2 billion, from N54 billion in 2018. The bank’s net assets also grew by 6.2 percent to N780.89bn. Analysis of the report also shows a drop in impairment charges and operating expenses by 54 percent and 15

percent, respectively, while net fee and commission expense rose by 14.35 percent. The bank’s cost of funds also improved, declining by 25 percent from 4 percent in Q1 2018 to 3 percent at quarter-end, supported by a 22 percent decrease in the bank’s interest expense of N10 billion over the same period. “Our prudent cost management led to a 5 percent decline in our cost-to-income ratio by 5 percent from 53.3percent in 2018 to 50.9percent in the period with an absolute reduction in operating expenses by N2.3 billion yearon-year,” the bank said. The bank’s earnings per share increased marginally by 6.65 percent to N1.60 from N1.50. Return on average equity increased 4 percent to

25.2 percent, while return on average assets also increased by 4 percent to 3.4 percent. The Group’s retail franchise continued to increase as retail deposits grew by N80 billion between December 2018 and March 2019, equivalent to a 9 percent growth, notwithstanding the fact that total customer deposits dropped marginally by 3 percent. According to the bank, the drop in customer deposits was as a result of the rebalancing of the deposit mix as expensive deposits were forgone in favour of cheaper and stickier retail deposits. The bank’s volume and value of transactions across its electronic and digital platforms surged as new customers are being acquired. “Our balance sheet contin-

ues to strengthen as liquidity ratio is at 66.7 percent, loan to deposit ratio closed at 43 percent, and capital adequacy ratio ended the period at 25 percent respectively and remain above the relevant regulatory thresholds as at 31 March 2019,” the bank noted in a statement. The bank recently announced the appointment of Ebenezer Onyeagwu as its group managing director/CEO. Prior to his appointment, Onyeagwuwasthedeputymanaging director of the bank since October 28, 2016, and has close to 30 years’ cognate banking experienceofwhich17yearshas been with Zenith Bank. Shares of Zenith Bank closed trading at N20.90 on the floor of the Nigerian Stock Exchange on Wednesday.

Oil seen hitting $100p/b on compliance with lower sulphur marine fuel STEPHEN ONYEKWELU

espite prevailing conservative agreement in the oil market, there are chances that oil price will jump to higher price level this year driven by race to comply with new marine fuel regulation, according to a new report from Bank of America Merrill Lynch. The bank said that the Brent options market only implies a 2 percent chance that Brent spikes to $100 per barrel. It, however, believes everyone might be underestimating these odds. The “massive surge in distillate demand” later this year could “potentially push oil prices above $100 per barrel”, the bank projected. The potential price spike, even though it may be temporary, is good news for Nigeria which relies heavily on oil revenue. But the country can

only benefit if it can pump more oil and grow its refining capacity, analysts say. “Prices can spike due to the new marine fuel regulation but Nigeria may not reap much benefit and such spikes are short-lived,” Ayodele Oni, energy partner at Bloomfield Law Practice, said. The oil market has been narrowing thanks to OPEC+ supply cuts, which took off 1.20 million barrels per day from the oil market, outages in Iran and Venezuela and a slowdown in the United States shale production. Another straw due to the forthcoming regulations from the International Maritime Organisation (IMO) could provide an additional jolt, particularly as global inventories decline against the backdrop of a tightening market. “With distillate inventories at the low end of the range, we see an analogy to 2007/08 when the world run out of diesel refining capacity,” Bank of www.businessday.ng

America Merrill Lynch wrote in a note. “Still, unlike the gradual tightening in diesel markets of 2007/08, the world faces a major one-off jump in distillate demand,” the bank argued, referring to worldwide regulations on marine fuels set to take effect at the start of 2020. The IMO2020 rules lower the limit of sulphur concentration in marine fuels from 3.5 percent to just 0.5 percent, which will force ship owners to switch away from heavy fuel oils. Instead, the alternatives include scrubbing technology and a greater use of low-sulphur fuels, including distillates. Bank of America projects that the regulations could push up distillate demand by 1.1 million barrels per day year-on-year, which comes on top of the 0.5 mb/d annual trend growth rate, and also on top of the cyclical high during winter.

Higher distillate demand could push up crude oil prices as refiners race to turn crude into distillates. “About 60 percent of the average crude barrel can be turned into distillate with the right refining toolkit. But that figure drops below 50 percent for heavy oil, potentially curbing supply,” Bank of America wrote. “The 2020 fuel challenge is geared towards energy efficiency, environmental pollution control, and health as well as core regulatory enforcement issues,” Dakuku Peterside, director-general, Nigerian Maritime Administration and Safety Agency, at the 73rd meeting of the International Maritime Organisation in November 2018. “As a maritime nation, we cannot afford not to comply with the IMO standard which will also do a lot in mitigating global warming and other related environmental issues,” Peterside said.

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he pressure is back on President Muhammadu Buhari to sign the Petroleum Industry Governance Bill (PIGB) into law as the Senate on Wednesday passed a revised version of the bill that addressed the president’s concerns. The PIGB is one of four parts of the proposed Petroleum Industry Bill (PIB), which seeks to update the outdated provisions with a more comprehensive and current petroleum industry law that aligns with global standards. President Buhari rejected an earlier version of the bill in July 2018. The Senate also passed six other bills earlier rejected by the president. “The Senate has responded to the issues the president raised, it’s very important that he signs this bill because the

sector outlook and economic outlook have revealed we won’t be doing well if we don’t sign the bill,” Ademola Henry, team leader at the Facility for Oil Sector Transformation (FOSTER), said. In withholding assent to the PIGB last year, Buhari had kicked against the provision permitting the Petroleum Regulatory Commission to retain as much as 10 percent of the revenue generated and expanding the functions of the Petroleum Equalisation Fund (PEF). In the new bill, the Senate agreed with Buhari’s submission and reduced the revenue generated by the regulatory commission from 10 percent to 5 percent. It also expunged the Petroleum Equalisation Fund (PEF) from Part IV of the new bill. “His (Buhari’s) concerns surrounding his power as minister, revenue loss by the

Continues on page 38

Apapa: Hitech begins reconstruction work on Liverpool Road CHUKA UROKO

otorists and residents of Apapa GRA in Lagos, Nigeria’s commercial capital, will soon heave a sigh of relief as reconstruction work has started on the terribly dilapidated Liverpool Road which links Apapa-Wharf Road to the ports and Apapa-Oshodi Expressway through Point Road. Liverpool Road, which begins from Point Road and terminates at Liverpool Roundabout, has been rendered impassable by trailers and tankers, creating ditches and craters, cutting the road into two in some cases, and shutting out residents, especially those living on Child Avenue and other adjoining streets. Most residential and commercial buildings along this road have estate agents’ ‘To Let’ board on them, meaning that the owners or former occupants have vacated and taken residence in saner parts of town. This also means more pressure on family income or company bottomline that could have served other purposes. @Businessdayng

When BusinessDay visited the reconstruction site Wednesday morning, Hitech, the contractor on the project, was seen along with its sister company, ITB Construction Company, fully mobilised and scraping the road in preparation for resurfacing it with concrete pavement to be supplied by ITB. A construction worker on site, who did not want to be named, explained to this reporter that what they had just started would take about three months to complete, adding that the project was part of the bigger project involving the reconstruction of the entire stretch of Apapa-Oshodi Expressway to be undertaken by Dangote Group at the cost of N72 billion. Residents of Apapa GRA have hailed the reconstruction of the Liverpool Road which has been closed to traffic to enable the contractor create one lane that will be used by trucks coming from the Apapa-Ijora bridge to access the ports. “This is a welcome development, but a lot of havoc has been done to our properties and the en-

Continues on page 38

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comment Nigeria: A country in the grip of bloody violence

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Chiedu Uche Okoye

ord Fredrick Lugard, a one-time governor general of Nigeria, didn’t get the consent of the people(s) of Nigeria before he cobbled the northern and southern protectorates together. And, his wife, Christine Shaw, christened the geographical space Nigeria. That’s how the disparate ethnic entities came together to become Nigeria. So, owing to our country’s heterogeneous nature, we embraced and adopted the federal system of government. Federalism is thought to be suitable for countries with heterogeneity. However, today, not a few federal nation-states have collapsed. The USSR that was made up of fifteen republics dismembered irrespective of its implementation of the policy of perestroika and glasnost. Yugoslavia broke up, too. And some countries emerged from Czechoslovakia after it had disintegrated. On the African continent, Eritrea pulled out of Ethiopia while Somaliland emerged from Somali. After suffering years of bloody conflicts, Sudan was bifurcated with South Sudan emerging from it. Till now, countries on the African continent with heterogeneity are still being buffeted by bloody conflicts. In Kenya, the Lou and Kikuyu people(s) who are acutely aware of their differ-

ent ethnic origins are still locked in the battle for political dominance and supremacy. In Cameroun where Paul Biya is in the saddle of power for a very long time, the English-speaking people there are ceaselessly agitating for state-hood .Like the afore-mentioned African countries, Nigeria has had its fair share of violence and ethnic troubles dating back to the colonial era. In 1953, the northern people threatened secession in their nine point programme. Adaka Isaac Boro declared the Niger-Delta republic in 1963; however, it was short-lived. And, the Nigeria- Biafra war raged between 1967 and 1970 with its calamitous and devastating consequences. Millions of human lives were lost on both sides in the senseless fratricidal war. Since the end of the Nigeria-Biafra civil war, Nigeria hasn’t known true peace, as ethno-religious and political troubles have become features of our national life. After the cancelled June 12, 1993 Presidential election, Sani Abacha shoved aside Ernest Shonekan, the interim President then, and instituted a reign of terror in Nigeria. Members of NADECO like Alfred Rewane, Kudirat Abiola, and others were killed. And in the past, the north would erupt in a religious frenzy. So, Gideon Akaluka was decapitated by Islamic fundamentalists for allegedly desecrating the Koran. His head was hoisted on a pole. Till now, waves of religious violence have been sweeping through the northern part of Nigeria resulting in needless deaths of people. Today, Boko Haram, a deadly insurgent group, has emerged in the north. Their hatred or distaste for western education underpins their philosophy. Brainwashed and indoctrinated with distorted version of Islamic teachings, they’ve embarked

on a mission to establish Islamic theocratic government in the north of Nigeria, and beyond. The crazed and murderous insurgents have seized the north-east of Nigeria by the jugular, killing people and taking female students captive. Some years ago, the Boko Haram group raided Chibok Girls’ Secondary in Borno state and took many school girls captive. It took intense negotiations between the federal government and members of the Boko Haram group before the girls were released from captivity. Lately, the insurgents raided Dapchi Girls’ Technical College, Yobe and abducted school girls. While other girls who are Moslems had been released and united with their families, Leah Sharibu is still in captivity for holding fast to her Christian faith. Leah Sharibu has become a symbol of resilience and resistance to the Boko-Haram’s act of forceful proselytizing of people. Her non- release from captivity by the Boko Haram group has outraged the peoples of the world. But is the Nigerian government making concerted efforts to eradicate insurgency in the northern-east of Nigeria? While the Boko-Haram insurgency has remained unabated, the Fulani herdsmen are causing havoc in every nook and cranny of Nigeria. The Fulani cattle herders, who have encircled proprietary hands of kinship around Aso rock, the seat of power, are emboldened in their despicable acts of homicide because of the indifference and inaction of President Buhari, a Fulani man. From Lafia to Taraba, and from Enugu to Anambra, the Fulani cattle herders have run amuck, killing people and destroying the farmlands of farmers in their host communities. In the past week, they

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Nigeria has returned to the hobbessian state of nature where life is short, brutish, and nasty

raided a community in Anambra West Local Government in Anambra State and killed six people. Where are the killers? Have they been arrested and arraigned as demanded by the law? In addition to this, in Zamfara State where governance is on recess for many years, the state government is conceding the state to the rampaging bandits. In Zamfara, anarchy reigns while Governor Yari, a globe-trotter, is keen on satisfying and fulfilling his wanderlust desires. In other states like Kastina and Kaduna, pockets of violence do erupt there causing loss of human lives and property. Nigeria has returned to the hobbessian state of nature where life is short, brutish, and nasty. In today’s Nigeria, we do not place high premium on human lives. That’s why a trigger-happy policeman shot and killed Kolade Johnson, recently, for violating no laws of Nigeria. Now, teenage school boys, who are cultists relish listening to mordant tales instead of imbibing the habit of reading. They kill one another in the name of rival cult fights. Now, the entire south-east is suffering from the infestation of cultism with its attendant deaths of young people. However, it is our political leaders at different levels of government who arm and sponsor the cultists to unleash harm on their political opponents and rivals during electioneering and on election days. But he who sows wind will reap whirlwind. Nigeria has now become an infinity of unsolved murder cases because our political leaders are complicit in the deeds. Okoye is a poet and writes from UruowuluObosi, Anambra State 08062220654

The rebound of Golden Guinea Okechukwu Keshi Ukegbu

t is cheering once again for Abians to hear that their darling breweries ,Golden Guinea, is bouncing back to life. Barring unforeseen circumstances, the projection is that in few days ahead, the brands from the stable of the breweries: Golden Guinea beer, Malt, Eagle Stout or Bergedoff Beer will grace beer parlours and other drinking joints across the state and beyond. This feat marks Gov. Okezie Ikpeazu out as a man of his words. Part of his campaign promises was that “with the extent of work already done at the industrial facility, he expected Abians to drink Golden Guinea beer before May 29, 2019”. Unarguably, the governor has demonstrated strong resolve to fix ailing industries or those that have gone under in state. It will be recalled that when Gov. Ikpeazu met with the Umuahia Branch of the Nigerian Society of Engineers early in this administration, he said that his administration has already taken an inventory of ailing industries in the state with a view to revive them. While the governor described as unfortunate the fact that some Resident Engineers of

industries just sit back and watch obsolete equipment being ordered into such firms, he explained that this has been the bane of moribund industries in the country, including the Ajaokuta Steel Industry and the Modern Ceramics, Umuahia. Reviving Golden Guinea attracts numerous benefits. The new production line of the breweries would be doubled when productions resume in few swing . This is a far cry from the old production line which capacity was 24,000.The capacity of the breweries has been doubled both in production and equipment. Its equipment is of the latest technology in Nigeria and doubles the capacity of both Ama Breweries in Enugu and SAB Miller in Onitsha. At the peak of its operations before it closed shop over a decade ago, the firm had about 5000 workers in its employ and when it commences operations this time around, the staff strength is expected to double. The management of the breweries had given strong assurances of sourcing bulk percentage of the staff locally. With this, the unemployment situation in Abia will soon witness a turn around. When the breweries comes on stream everything will be affected from the distribution networks to support services and the ancillary services of the food vendors, plumbers, among others. Golden Guinea, established by the Premier of the defunct Eastern Region, Dr.

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Michael Okpara was shut down in 2003 following fire outbreak that engulfed during the administration of Orji Uzor Kalu . Efforts were on top gear to revive the facility during the administration of the immediate past governor now Senator representing Abia Central, Sen. Theodore Orji. The former governor gave strong promises of reviving the breweries and the administration set up a committee after it was discovered that the company which was earlier said to have been sold to a private company was not actually sold to anybody. The committee was saddled with responsibility of finding a lasting solution to the problems of the company. According to Orji,’’ What happened was that when the company had financial problem, it was bailed out by the people now occupying the place because the management of the brewery was unable to repay the loan, warranting the new management to take over the place although they could not move the company forward”. Golden Guinea was engaged in the brewing, bottling and marketing of Golden Guinea lager beer and Eagle Stout, as well as producing and marketing Bergedorf premium Lager beer and Bergedorf Malta under a franchise from Holsten Brauerei AG of Hamburg. On this note, as Abians are waiting earnestly for the various brands of Golden Guinea to hit their beer parlours and drink-

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ing joints soon, there is a passionate appeal to our dynamic governor. Just like the Chairman of the Nigerian Society of Engineers, Umuahia Branch, Victor Ihediwa decried the dwindling fortunes of modern ceramics industries and the Golden Guinea Breweries and appealed for a radical turnaround of the outfits to beef up revenue earnings of the state and create employment opportunities for the youths, we are also appealing that actions be expedite on the revival of Modern Ceramics. The factory was distressed during the civil war, reactivated in 1972 but collapsed and shut down in 1996 due to the problems of obsolete technology, vandalisation and destruction of the major components of the production lines during the successive military era. The firm was handed over by the Abia State government to UCL Resources and Investments Ltd (UCL), Umuahia on 9 May 2003 and was called UCL-Modern Ceramics Industries Ltd (UCL-MOCERAM). Under that arrangement, UCL owns 80%, Abia State government 5%, with the remaining 15% reserved for undisclosed investors .It was then projected that the firm, when fully operational, will employ about 1,000 people directly while providing thousands of jobs indirectly. While we hail the people’s governor for going this far, we will always ask for more like Oliver Twist did.

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comment “Corruption” is a meaningless word

David Hundeyin

ince the emergence of Muhammadu Buhari as the ‘integrity’ candidate in contrast to Goodluck Jonathan’s perceived malfeasance in 2014, the word “corruption” has become one of the most abused and misused words in Nigeria’s political vocabulary. Instead of being used as a descriptor of specific actions and behaviours, “corruption” now basically means whatever a politician wants it to mean in the battle for winning electoral office. Where did this obsession with the word “corruption” come from, and why is it so effective? Is it dangerous, and how so? The basic misconception behind “corruption” obsession The bulk of Nigeria’s political elite were in the prime of their lives during the post-independence period stretching from the mid-1960s to the early 1980s, characterized by an oil revenue boom. General Yakubu Gowon famously remarked during this period that Nigeria’s problem was not money, but how to spend it. Unsurprisingly, most people from that generation subscribe to the fundamentally mistaken belief that Nigeria is “rich.” This assumption that Nigeria is a “rich” country logically leads to a belief that the country’s economy suffers from distorted allocation of resources, because surely in a “rich” country, there can only be this much poverty if some people are taking what belongs to others. The numbers however, tell a very different story about Nigeria,

which now hosts the world’s largest population of people living in extreme poverty. Approximately 95 percent of the country’s export earnings come from crude oil sales, which also make up the bulk of government revenue. The government is burdened with a plethora of subsidies, civil service expenses, subventions and interventions that it increasingly struggles to fund as Nigeria’s population continues its alarming growth. In the period between the oil boom and now, Nigeria’s population has at least doubled, placing further stress on government budgets in our state-dominated economy. Despite the numbers, many still believe that Nigeria should run a petroleum-financed sugar daddy government like Saudi Arabia, unaware that the Saudis themselves understand that they run an unsustainable system, which they need to modernize before oil loses its value. Every major oil economy outside Africa in fact, is trying to use oil revenues to fund modernization – they do not intend to run their countries indefinitely on oil revenue. In Nigeria however, a significant number of us believe that the country does not have an economic problem, but a greed problem. According to this worldview, what Nigeria needs is not necessarily economic growth to lift people out of poverty, but a firm and ruthless hand that will manage resources fairly and“eliminate corruption.” The national crude oil cake after all, is already big enough for everyone. How true is this belief? Weaponising the c-word One of the terrible things poverty does is that it removes nuance and turns important economic conversations into simplistic, reductionist narratives. Thinking rationally, Nigeria’s $20 billion federal budget is outrageously inadequate for the purpose of servicing 150 million+ people, because it averages out at about $133 (N48,000) per head per annum, or about N133

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($.037) per head per day. Clearly N48,000 worth of law enforcement, public infrastructure, legal protection, healthcare, education and municipal services for an entire year is woefully insufficient to provide any of these things at an acceptable standard. To a poor person however, $20 billion is simply $20 billion – a literal pile of banknotes that is stashed under someone’s mattress. Instead of thinking about Nigeria’s federal budget as the shameful embarrassment that it is for a country of this size, they instead think of it as a pot of dollars being ‘shared’ by an undefined group of “treasury looters” somewhere. Poverty robs people of the ability to think at scale and reason beyond hunger and petty envy, which is probably why the people who get sucked into this narrative are often the most economically disadvantaged. Political figures in Nigeria are all too aware of this, and they cynically exploit this widespread lack of nous to push irrational narratives and conspiracy theories for political ends. Shortly before the 2015 elections for example, former CBN governor Sanusi Lamido Sanusi issued the fantastical claim that $20 billion (that figure again) was missing from the NNPC. To preserve his credibility, Sanusi did not claim that this sum was actually stolen, just that it was missing, knowing full well that the majority of Nigerians would conflate the two terms. Fishing with the c-word to catch Nigerian voters Large scale graft within the NNPC is very much a fact, but what is also a fact is that moving a literal sum of $20 billion without detection across any kind of recognised financial system is fundamentally impossible. For one thing, any large bank transaction denominated in U.S. dollars comes under the legal jurisdiction of the U.S. government, whichhas to give its approval before the transfer can happen. In any case, a subsequent audit carried

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… Nigeria can be fixed by looking 100 million desperately poor people in the eye and telling them, “I have no solution for your condition, but at least I’m not a thief

out by KPMG revealed that the claim was a hoax. Regardless, the damage was done and to this day, many still believe that former president Goodluck Jonathan has $20 billion “looted from NNPC” buried under his house in Otuoke. An even more egregious example was the crackpot claim that former petroleum minister Diezani AllisonMadueke “looted $90 billion.” Again, the idea that a sum equal to one-fifth of Nigeria’s GDP was lying around somewhere, and could be transferred into the custody of a single person is possibly grounds for admission to a mental health institution, but that did not stop this conspiracy theory from making the rounds, complete with a photoshopped news headline purporting to confirm the brazen lie. What these examples show is that Nigeria has developed a new type of destructive and dangerous politics where politicians use allegations of corruption as juicy baited hooks to catch impoverished Nigerian voters who do not know any better. Instead of making promises to the electorate and being elected based on their belief in one’s capacity to deliver, Nigerian politicians now use words like “corrupt,” “looter,” and “thief,” to smear their opponents and get into office by default. In other words, these politicians are getting elected for not being perceived as “the corrupt treasury looter,” which means they do not have to perform in office. When the economy and insecurity bite the electorate, they can simply go fishing again with the C-word, reminding voters that “at least they’re not that corrupt thief.” The only thing that is expected of them is to maintain their projected sainthood. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng/ David Hundeyin is a writer, travel addict and journalist majoring in politics, tech and finance. He tweets @DavidHundeyin.

Sales management: Who’s in the driver’s seat?

Ogechi Adeola

actical or strategic? Which leadership stylebetter prepares today’s sales manager for success? Tactical leadership focuses on doing precisely what is required, following well-established processes, aka tactics, to get a job done. Strategic leadership, on the other hand, focuses on the big picture and considers the implications of plans that are not tied to policies and processes best defined as “this is the way we’ve always done it”. There is, therefore, a clear difference between a strategic sales leader and a tactical sales leader. The current business environment suggests that successful sales managers will lean more towards the strategic leadership style than follow the tactical leadership approach. The extent

to which they do so depends on the nature of theorganisations they represent and, to a large extent, personal interpretations of theirleadership roles. The tactical sales leader sees him/herself as being responsible for turning plans into action, continuously driving the sales team towards the attainment of organisational goals.To meet those goals,the tactical sales leader works closelywith the sales team to ensurerealistic alignment between sales targets and business goals. This operational effectiveness is achieved by constantly monitoringperformance, detecting sales gaps, and providing the leadership required to correct lagging sales by ineffective sales staff or waning consumer response to a particular service or product.Tactical sales leaders are going to focus on sales. Their perceived role is to manage the ‘hows’ of the job, not the ‘whats’ and ‘whys’. As management leaders, they are more ofmanagersthan leaders. In contrast, the strategic sales leader has his/her eye on the entire operation. Strategic sales leaders will first analyseavailable marketplace data: economic indices; government policies;the competition; feedback from customers, collaborators and other external stakeholders; and requirements for human and material resources, then apply that knowledge to theirorganisations’ “big picture”. The strategic leader provides information needed to guide the formulation of policies that shape business

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strategies essential to the survival of his or her business. The primary strength of successful strategic sales leaders is their ability to provide timely, accurate information gathered from the sales teams, the market and the external environment to all levels oftheirorganisationsin ways that offer support for comprehensive strategies and performance. Strategic sales leaders go beyond implementation; they contribute to the formulation of corporate goals and aspirations. Sales strategiesoriginate with individuals at the top of the sales department organisational chart. They are expected to bring ideas to the table that are uniquely formulated by their sales insights and experience. Their longevity in that role depends on their ability to forecast market trends and translate strategies into actionable milestones. Effective managers need to do more than meet sales targets. Theyneed to play an integral role in policy creation, strategy formulation and operationalisation of frameworks that other departments of the organisation can reliably act upon. The nature of strategic sales leadership tasks, roles and functions differs from tactical sales leadership. Strategic sales leaders have the potential to influence the organisation’s overall strategy and performance. They have adirect impact on firm-level strategies and outcomes. The success of any enterprise depends on effective leadershipthroughout the organisa-

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tion. Strategic leaders are visionaries – they have an important role to play in the short- and long-term vision of the business. Astrategic sales leader articulates a sales vision, monitors policies and strategies,making adjustments as necessary, and creates an imitative leadership style that communicates key values to nextgeneration leaders. Two qualities stand out as being characteristic of the strategic sales leaders: they are organisation-centred and, at the same time,committed to people-development. Finally, even though this commentary advocates strategic sales leadership, it should be pointed out that no one can succeed as a strategic leader without possessing some key traits of tactical leadership. Both are needed – a focus on meeting immediate sales goals and concern for the future – but the degree to which a leader leans towards one more than the other is what makes the difference.Knowing when to utilise one skill set over the other – tactical execution or strategic planning – is the mark of personal and professional leadership success in the field of sales management. This article was originally published by Dr Ogechi Adeola and has been adapted for the Christopher Kolade Centre for Research in Leadership and Ethics (CKCRLE) at Lagos Business School. CKCRLE’s vision is creating and sharing knowledge that improves the way managers lead and live in Africa and the World. You can contact CKCRLE at crle@lbs.edu.ng.

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Beyond influence and result, leadership is behaviour Positive Growth with Babs

Babs OlugbemI

t was another new call from an ardent reader of this column on Monday. The call turned out to be one of the most interesting responses I have received from the readers of this column. The caller wants me to focus on leadership and organisational development topics. He was surprised I wrote on INEC and business process continuity, on the job for Asiwaju Bola Tinubu, and the lessons from Rwanda. Babs, don’t be distracted, focus on your core area as a leadership and organisations’ culture consultant and expert he advised. He concluded by making a demand. He asked, what’s leadership in one word? That’s what I want you to write on this Thursday. I replied with the word ‘yes sir’. I appreciate the time and the opinion of Mr Bashir Mohammed. It’s good to know that people who read your column have something to say to you even if they are shy from writing their comments. I run a blog, and most of the hundreds of comments in response to my articles are from readers outside Africa. I wonder if Nigerians or Africans, in general, appreciate the fact that sharing their views based on the author’s position is invaluable and goes a long way to enriching the knowledge base of the topic of the discussion. My assertion is not the same for gossip news on print and social media platforms. Just like Mr Mohammed, I equally

love my article on the culture where I positioned that culture eats strategy for breakfast or lunch. I love the result-oriented leadership, culture-the executive integrity under audit, the anathema in the workplace and a host of businessrelated topics published in this column. I strayed into writing on Nigeria and the sustainable development goals, INEC, the culture of Sycophancy and others in an attempt to be a social commentator and contribute to trending issues. Perhaps, someone might learn from my messages and apply their contents to improving our public organisations and make them sustainable institutions. Be that as it may, I appreciate the fact that organisation and leadership development is my strength based on the call from Bashir and other dedicated readers of this column. I have worked and consulted for organisations with one view in mind. To make an institution of every organisation by engaging and developing people who are capable of producing sustainable results within a short time. Leadership is a broad topic with many people claiming to be experts or coaches in it. We have heard many views on leadership: what it is and what it is not, the type or level of leadership and how to be a good leader or what not to do as a leader. I have followed some schools of thought which claimed leadership is all about influencing others. Some claim it is about results or the legacy that leaders leave behind. I agree with all these opinions on leadership. To be a leader is, however, a journey, not a destination. Anyone who sees leadership as a destination is likely to be seeing the act of leadership as positional. Leadership is an influence on others. The starting point to having followers is your ability to make them believe in your ideology and reason with you in the pursuit of a worthy goal. Influence is

an essential part of leading especially for leaders who are in the front of volunteers. Volunteers are the most difficult people to lead. If you can lead a voluntary organisation successfully, you can run any organisation as you would have developed a high ‘influence quotient’ in the process of leading volunteers. Influence in a business organisation can be gained by what the followers’ stands to gain or lose if they do not follow the leaders. The fear of sanction or failure to get rewarded can make people adhere to the dictates of the leaders at the expense of their will. If your influence as a leader is based on fear or for the sake of compliance, then you are leading by a borrowed influence. Real influence is gained when people follow you voluntarily. A resulted-oriented leader will focus on the result and mostly use the official influence to attract followers. In a few rare cases, followers are motivated by the impact of the leaders. Voluntary and committed influence is prevalent where the people see the financial, emotional or other associable benefits of achieving result together with and through the leaders. For example, where a profit target is given to leaders and the reward shared with the team base on contributions or other parameters perceived as fair or equitable, the team members are motivated to fight for the outcome and submit to the leaders’ direction in the quest to achieve the set target. The team tends to behave like lions going on the same mission in a row and with the determination to crush any opposition on their way. Influence is essential. It can be ‘gained or borrowed’ as noted in the above analogy. Influence is the starting point for leaders who are to produce results. The results leaders produced can be short-term or sustainable results. Where leaders produce results to meet

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To be a leader is, however, a journey, not a destination. Anyone who sees leadership as a destination is likely to be seeing the act of leadership as positional

their expectations and get rewarded for the teams’ efforts without a sense of worth or belongingness to the followers, the result tends to be difficult to sustain. The scenario is reflected in the financial performance some organisations delivered compare to their peers in the same industry. A company might have employed some staff, with more branches and advertising costs but have a profit before tax (PBT) lower than another company with a smaller but highly productive teams within the same sector. The staff productivity ratio is an indicator of whether the influence quotient in a company is voluntary or compliance based. In between influence and result is behaviour. To me, leadership is about behaving in a certain way to influence people toward making progress in the realisation of a worthy idea or objective. Whether the leader is gaining positive influence or not is a function of his or her behaviour. If the result is going according to plan, the action of the leader and the team is in sync with the strategy for the business. If the strategy is appropriate for the market segment and the leader’s behaviour is not influencing the people to implement the key strategic actions, the result will show the lack of synergy in the people’s emotions and the potency of the strategy adopted. Leadership is influence and result but more importantly, is the behaviour of the leaders and his team in a given scenario to enforce the desired outcome. Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng/ Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

Contending with changing phases of motherhood

OSA VICTOR OBAYAGBONA

peaking on the role of mothers, Theodore Roosevelt, the 26th President of the United States once said, “It is the task of humanity… if the mother does not do her duty, there will either be no generation, or a next generation that is worst than none at all.” Sincerely, mothers are essential to human life, and their roles go beyond childbearing. Let us think about the roles of an African mother, especially when the husband is not around. She is responsible for shaping each child’s emotional stability, personality, character, and becomes the primary protector of his health and education. The story of Osato, a mother of three, in her early thirties, is quite interesting. In all of her seven years of marriage, she concentrated her energy on catering for the children; taking them to school and bringing them back, while also running a shop in the locality. Her husband, Osariemen, who works in the Ministry of Defence, was the family breadwinner. Just a few years ago, he lost his job, throwing the family into near economic crisis. Osato, a Banking and Finance graduate, was compelled to dust her credentials and go job-hunting, eventually landing one as a

customer service executive in a bank. Like Osato, many women today are constrained by the economic situations in their families to join the workforce so as to earn income to supplement their husbands’ earnings. The entrance of more women into the labour force has changed the family environment drastically. In more desperate moves today, most married women who find jobs in multinational companies, including banks, are strictly warned not to get pregnant until maybe after two years of service, as alleged. Those that turn deaf ears by getting pregnant within the two years of probation are shown the way out; those that obey retain their jobs at the expense of the future. Due to various preventive methods employed to prevent pregnancies, most women end up having difficulties in becoming pregnant later, when they now want to, because the body is used to a particular mode. They end up with lots of money in their bank accounts but no child to call their own. The trend is a recent development, but should it be allowed to continue? Let us also imagine another set of mothers, who have no restriction at the workplace concerning child bearing, goal- oriented, goalgetters, career women, who work nine to twelve hours each day. Their schedule is always busy, even to the detriment of their health. They are rich, comfortable and find it adequate to get two house helps and a lesson teacher to assist the children at home. Most of these mothers leave home at dawn before the children wake up and come home when they are already asleep. The saddest part is that some of their husbands can afford whatever

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they want, but they end up training house-helps rather than training their children. Robert Shaw, a medical doctor, once said: “I believe the parenting trends that have evolved over the last 30 years promote the development of unattached, uncommunicative, learningimpaired, and uncontrollable children. This, in my opinion, is quite true to our society today, it should be discouraged for the future of our world.” If this trend is not discouraged, Africa and Nigeria will drift to the edge just as in Germany, where citizens are no longer interested in childbearing. Few years ago, the German government passed a legislation removing taxes from any item that had to do with childbearing and upbringing, in order to encourage its citizens to bear children. Imaging if this trend continues in the next 20 years to 50 years, Germany would be taken over by foreigners with its negative implications. One is not advocating that women should not join the labour force and become independent, especially in the face of continuing economic recession all over the world, but the fact is there should be moderation to being an ambitious career mother. This can be made worse in this era of gender mainstreaming in the workplace. As a mother, you should know when to stop, when to move and when to continue. After bringing up children, one can afford to do anything without making the children go through tough times. Otherwise, they would have laboured in vain because these children will grow up to scatter the wealth that had been painstakingly acquired over the years.

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A young Brazilian called Juliano once said about his mother: “When I was five years old, my mother had a promising career. With the birth of my sister, however, she decided to leave her job in order to care for us. Counsellors at work tried to dissuade her from leaving, saying that after her children married and left home, everything she had done for them would be lost – that she was investing in something that would bring no return. But I can say that they were wrong, I will never forget her demonstration of love.” (This proposition may not appeal to all women, for various reasons. But certainly some will consider it after going through this piece; indeed, some are even practising it, and its benefits may even be evident to them now.) When as a mother you do what is right now, your children will not forget and you will have peace at old age. When you don’t, your guess is as good as mine. Our mothers in legislative houses should intensify bills that would bar organisations and institutions from erecting imaginary barriers against young mothers bearing children. On March 8, 2003, Kofi Annan (late), a former UN secretary general, summed up the role of a mother thus: “Study after study has shown that there is no effective development strategy in which women do not play a central role. When women are fully involved, the benefits can be seen immediately; families are healthier and better fed, their income, saving and re-investment go up. And what is true of communities and, in long run, of whole country.” Osa Victor Obayagbona is assistant News Editor, BusinessDay

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Thursday 18 April 2019

BUSINESS DAY

Editorial Publisher/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

The Dangote agenda for Northern Nigeria

frica’s foremost entrepreneur an d busin e ss leader Alhaji Aliko Dangote issued an outline of a development agenda for Northern Nigeria April 4 at the Kaduna Economic and Investment Summit. While attention has focused on his criticism of the governors of the region, Nigeria should pay closer attention to the issues Dangote raised concerning both the content and direction of economic and social development as well as the leadership challenges facing a significant portion of Nigeria. Such attention has become imperative given the seeming inexorable descent into anomie in the region. Dangote spoke as a son of the soil and socially responsible leader. He asked the governors to combat extreme poverty while calling for inclusive government and better governance of the region. He decried the weak contribution of the area to the Nigerian economy in absolute terms and about its physical size. Dangote expressed his concerns while delivering a keynote address at the 4th edition of the Kaduna Economic and Investment summit (KADInvest 4.0). He noted that 60 per cent of northerners lived in ex-

treme poverty, saying it was unacceptable for a people with vast arable land for agriculture to live in poverty. The billionaire urged the governors to wake up and pull the region out of its current economic woes. Leaders are visionaries, managers and problem solvers. In speaking to the challenge of the North, Dangote defined a visionary path and identified how to solve its problems. He said, “The North must focus on harnessing its massive agricultural potential in terms of both production and processing. No region with such high agricultural potential should be this poor. We have what it takes to turn around our fortunes, and I pray all the 19 governors of the northern states will wake up and follow the footsteps of the Kaduna State Government. Given the vast arable land and favorable condition, I think in the next ten years, agriculture can generate more revenue and prosperity than oil that we have now if we have the right commitment. Other tasks for the governors include identification of the comparative advantage of their states and generation and provision of data. They should then encourage local investors because they would, in turn, attract foreign investors. He had kind words for Kaduna State Governor Nasir

El-Rufai. Dangote stated, “Nigeria is ranked at 157th out of 189 countries on the human development index. While the overall socio-economic consideration in the country is a cause for concern, the regional indicators are very alarming. In the northwestern and north-eastern parts of Nigeria, more than 60 per cent of the population lives in extreme poverty. It is instructive to know that the 19 northern states, which account for over 54 per cent of the country’s population and 70 per cent of its landmass, collectively generated only 21 per cent of the total subnational internally generated revenue in 2017.Northern Nigeria will continue to fall behind if the respective state governments do not move to close the development gap”. Dangote also advocated for greater involvement of the private sector for its efficiencies as well as the ability to raise capital. He affirmed, “Closing the gap requires multi years investment, and the government will not be able to raise the necessary capital funding. Only the private sector can raise the capital to fund the level of investment that this country needs. Therefore, the government must create the conducive environment that will trigger a huge inflow of private capital into attractive

sectors of the economy.” For Northern Nigeria, Alhaji Aliko Dangote is a fitting example of a leader without title (LWT). He leads in practical terms with investments in the economy as well as in developing human and social capital. He is a strong pillar of the region. Dangote Group is collaborating with Automobiles Peugeot of France and the Kaduna State Government to establish a vehicle assembly plant in Kaduna. Dangote Group is also exploring investment in dairy production in Kaduna State aside its investment in tomato processing and other value-added agricultural schemes in Kano and other states. Bayero University Kano commissioned in 2018 an N1.2b edifice housing the Dangote Business School. The school represents a significant investment in human capital development in the region. Dangote’s clarion call is timely, necessary and critical. Crises roil Northern Nigeria. It ranges from security failures to defects in education, health, agriculture. Northern Nigeria is the laggard that pulls all indices of the country down. L eaders of the North should spend time to digest Dangote’s message and set to work on new paths. What happens to the North is critical to the rest of Nigeria.

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BUSINESS DAY

COMPANIES & MARKETS

SIFAX Group diversifies investment portfolio with launch of Sky Capital

COMPANY NEWS ANALYSIS INSIGHT

Pg. 15

CONSUMER GOODS

FMCGs: Improved earnings fail to entice investors ISRAEL ODUBOLA & SEGUN ADAMS

eview of the financial statements of key players in the fast-moving consumer goods space – Nestle, Unilever and Cadbury, revealed that these firms reported improvement in their top and bottom-lines in 2018, but these failed to rub-off on their market performance. Key metrics such as operating margin, profit margin, return on asset & equity, cost-of-sales to revenue ratio, price-toearnings ratio and share price movement were

employed to assess the financial health of these companies. Operating Margin Nestle outshines peers by making enough money from its operations to pay its variable cost. While Nestle retained N23 from every naira of revenue, Cadbury and Unilever kept N5 and N10 respectively as profit before settling interests and tax. According to Gbolahan Ologunro, research analyst at CSL Stockbrokers, this is so as Nestle source a large chunk of its raw materials like sorghum, maize, soya beans, sugar, cassava and cocoa locally, which minimizes the adverse impact of currency depreciation which bodes well for operating margin. O p e rat i ng ma rg i n measures what percentage of revenue is made up by operating income. In other words, it demonstrates the strength and profitability of a company’s operations.

Going year-on-year, only Cadbury saw bettered operating margin of 257 points to 4.72 percent in 2018 against 2.15 percent a year earlier, Nestle’s margin pared slightly to 22.77 percent in 2018, masking 4 basis points decline from 22.81 percent in 2018. Unilever got the worst hit among three as margin dropped some 446 basis points to 9.9 percent in the review year compared with 14.36 percent in 2017. We discovered this was an aftermath of operating profit dipping nearly a quarter to N9.2 billion in 2018 from N12.2 billion in the prior year on elevated operational

year on year respectively. Return on Asset (ROA) The three firms posted improvement in their capacity to earn profit from

assets. The ROA gives investors an idea of how effective the company is in converting the money it earns. The higher the ROA figure, the better, because the company

earns more money on less investment. Our analysis showed that Nestle generated more profit per naira assets than Cadbury and Unilever. Nestle converted N260

to profit from every thousand naira invested in assets in 2018, compared with Unilever (N80) and Cadbury (N30). ComparContinues from page 14

expenses. Profit Margin Growth investors picture this metric to assess the profit-generating capacity of firms. Profit margin represents how many naira of profit the businesses generated for each naira of sale. The three firms grew their profit margin in the review period, with Unilever leading the 2.58 percent points rise, trailed by Nestle (2.34pcts) and Cadbury (1.38pcts). Nestle and Unilever kept N161 and N110 respectively from each thousand naira of revenue in full year 2018 compared with N138 and N87 retained in 2017. We found that the firms were able to grow their profit margin given their improved top and bottom lines in 2018. Cadbury’s after-tax profit surged buoyed by reduced expenses. Unilever and Nestle’s bottom-line grew 28 percent and 40 percent

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

Thursday 18 April 2019

BUSINESS DAY

COMPANIES&MARKETS FMCGs: Improved earnings fail to entice investors Continued from page 13

ing 2018’s ROA with that of previous year, Nestle led the pack with 3.52 percent points, followed by Cadbury (1.93 pcts) and Unilever (1.83pcts). Return on Equity (ROE) Our analysis revealed that the three firms recorded improvement in their ability to generate profit from equity financing, with Nestle leading the pack with 10.3 percent points, Cadbury (3.94 pcts) and Unilever (2.89 pcts). ROE provides investors with insight into how efficiently a firm is handling the funds that shareholders have contributed to it. Nestle generated 86 percent in profit for every naira of shareholders’ equity in the review period, and this compares with Unilever and Cadbury that made N13 and N7 respectively. Nestle’s high ROE figure is due to the fact that its 69 percent of its capital is majorly financed by debt, implying that it uses less shareholders’ equity (31 percent), compared with Cadbury and Unilever in which equity accounted for 46 percent and 63 percent of their capital structure. A high level of debt can artificially boost ROE because the more debt a company has the fewer shareholders equity, and the higher its ROE. Cost-efficiency We used cost-of-sales to revenue ratio metric to capture cost-efficiency. This metric measure how productive or efficient a company’s sales operation is. Nestle was more cost efficient than peers in the review period, as production cost accounted for 57 percent of revenue, compared with Unilever with 70 percent and Cadbury, 78 percent. “In terms of cost-efficiency, Nestle enjoy economies of scale from their wide range of products that gets to the market, underpinned by their route to market strategy”, said Ologunro. Year-on-year comparison showed that Unilever recorded the biggest decline in the share of production cost in revenue from 67.7 percent to 69.62 percent in 2018, that of Cadbury declined by 0.36 percent points from 77.88 percent in 2017, while Nestle posted 1.47 percent. Stock Performance Cadbury got the heaviest blow among peers in the 2018 bear rout, which saw the entire equities market decline some 17 percent as a result of massive foreign outflows driven majorly by policy normalization by the Federal Reserves and heightened political risks related to 2019 general election. Nestle and Unilever lost 4.56 percent and 2.21 percent in value respectively in 2018. Cadbury’s year-to-date return which stood at 10 percent after Tuesday’s trading, outperformed peers, and the benchmark index, which lost some 5 percent since the start of 2019. However, the improved figures posted the firms in the review period failed to reflect in their stock performance, an indication that investors want more than

better scorecards before taking positions. Price to Earnings ratio Among the three fast moving consumer goods, price to earnings ratio was lowest for Cadbury at 0.23x compared to Nestle (27.31x) and Unilever (20.11x) in 2018, indicating that Cadbury is the cheapest among peers. The price to earnings ratio is a valuation metrics that show how much investor are willing to pay for one naira of a company’s earnings. It is computed by expressing the company’s share price as a proportion of its total earning. A high P/E compared to peers and the industry means that a stock is overvalued while a low P/E ratio is undervalued. A high ratio also means investors expect a higher growth in future. Nestle traded 27 times its earnings, compared with Unilever in which investors were willing to invest 20 times in its stock for each naira of earnings, an indication that both stocks were overpriced in the review period. Price to Book ratio Price to Book is a valuation metric used to www.businessday.ng

determine whether a stock is overpriced or underpriced. It is arrived out by comparing the company’s stock price, which indicates what the market think the company’s is worth, to its net asset. A ratio of above 1 indicates that the market is willing to more than the company’s net asset is actually worth. This is usually an indication of confidence in the

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company’s ability to generate more profit in the future. Conversely a ratio under 1 show that investors are paying a discount for the company below its net asset. Our analysis show that Investors are willing to pay a premium 23x of what Nestle net assets are worth, while they pay 1.48x for Cadbury and 2.57x for Unilever.

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Thursday 18 April 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

MARITIME

SIFAX Group diversifies investment portfolio with launch of Sky Capital AMAKA ANAGOR-EWUZIE

etermined to take full advantage of the emerging opportunities in Nigeria’s and West African financial sector, SIFAX Group has diversified its investment portfolio with the launch of a new subsidiary called Sky Capital and Financial Allied International Limited. Sky Capital, is an investment and asset management firm that offers wealth creation opportunities through a unique blend of traditional investment management and alternative investment services. The company is expected to offer services that include strategic financial planning advice to SMEs; investment portfolio/funds management; bureau de change opera-

tions (BDC); foreign exchange (FOREX), and insurance brokerage and credit assessment & analysis. However, in the second phase of its growth, the company will also offer services like microfinance/consumer lending and corporate funding after the licensing by relevant regulatory agencies has been finalised. A statement by Muyiwa Akande, Corporate Affairs Manager of SIFAX GROUP disclosed that Sky Capital and Financial Allied International Limited will also oversee the management of the commercial banks, recently acquired in The Gambia and Sierra Leone by the Group. Adekunle Oyinloye, Group managing director, SIFAX Group, said the decision to invest in the financial sector was part of the company’s ongoing restructuring and

strategic growth planning, aimed at diversifying the investment portfolio of the organisation. To drive this new business, the Group has appointed Olubukola Abitoye, a seasoned banker and financial strategist, as the general manager of the company. Abitoye, who has worked at Skye Bank Plc, Stanbic IBTC Bank, United Bank for Africa and Keystone Bank Limited, holds a Master’s degree in Business Administration from Charisma University, Turks and Caicos Island, North America and a Bachelor’s degree in Management and Accounting from Obafemi Awolowo University Ile-Ife, Osun State. She is an associate member of the Nigerian Institute of Management (NIM) and Institute of Chartered Accountants of Nigeria (ICAN).

Mansur Ahmed, president, Manufactures Association of Nigeria (MAN) (l), with Muhammadu Sanusi, emir of Kano, At the MAN roundtable discussion on Leveraging on China-Nigeria Economic Relations To Re-Industrialize The Economy in Kano.

ENERGY

Mojec partner banks on retail financing for mass meter acquisition KELECHI EWUZIE

subsidiary of Mojec International Limited, Mojec Meter Assets Management Company has partnered with some leading Banks in Nigeria to provide Retail Financing for electricity customers as it plans to roll out prepaid meters within the coverage area of its partner Distribution Companies (DISCOs) across the country. This partnership according to the company represents a major step ahead of the commencement of the much anticipated Meter Asset Providers (MAP) scheme approved by the Nigerian Electricity Regulatory Commission (NERC). Chantelle Abdul, managing director/ Chief Executive Officer, Mojec International Limited speaking at a Stakeholders Forum and Memorandum of Understanding signing ceremony with the banks in Lagos, said the company is determined to bridge the metering gap in the power sector by ensuring provision of top quality electricity meters to customers in Nigeria. The Memorandum of Understanding was signed between Mojec and Polaris Bank, First Bank, Wema Bank, Unity Bank, Keystone Bank, Zenith Bank, Sterling Bank and First Option Micro Finance Bank. Abdul further explained that Mojec would be partnering with 8 Discos including, Ikeja Electric, Eko DISCO,

Abuja DISCO, Kano DISCO, Enugu DISCO, Jos DISCO, Ibadan DISCO and Kaduna DISCO covering about 20 states of the federation. On his part, James Momoh, the Chairman/CEO of Nigerian Electricity Regulatory Commission, NERC, commended Mojec for its leadership in the metering sector in Nigeria demonstrated by its efforts towards the full scale implementation of the MAP Scheme which allows all customers easy and direct access to meter assets. In his remarks after the MoU signing, Tokunbo Abiru, the Chief Executive Office, Polaris Bank, explained that Polaris Bank is very pleased to partner with Mojec by providing financing support to customers on the meter acquisition scheme. “Our Bank is glad to be facilitating the acquisition of these meters by granting loans to eligible customers under the Program,” he said. The Divisional Head, Retail and Consumer Banking, Sterling Bank, Shina Atilola represented by Ayodele Odulaja, Head of Power and Telecoms Team also stated, “We are excited to be a key driver of the pre-paid meter acquisition programme which will eliminate the inefficiencies associated with estimated billing and inaccurate post-paid meter readings. Leveraging technology, Sterling Bank is reputed for providing Nigerians with a convenient way to access loans ranging from N10,000 to N5,000,000.00 in five minwww.businessday.ng

utes through the Specta online lending platform. Electricity consumers will benefit from the speed of this solution under this partnership without the attendant delays of traditional lending.” While commenting on the importance of energy to the growth of businesses and for the livelihood of homes in Nigeria, Abubakar Sule, acting Chief Executive Officer, Keystone Bank, said that “Energy cost is by all standards the major cost line in most homes and businesses. The scheme is set to eradicate the unnecessary prevalence of estimated billing which deprived the national economy of funds which otherwise could be deployed into other productive use. We are therefore excited to be part of this initiative to bring electricity to homes and businesses at the most prudent cost, putting households and business in control of their expenditure pattern.” Tomi Somefun , managing director, Unity Bank Plc, said that this new development reinforces the long standing mutually beneficial relationship and business commitment it had maintained with Mojec International Limited for well over two decades, adding that the partnership will create beneficial impact on electricity customers, further drive financial inclusion through consumer banking, restore customer’s confidence, increase transparency and thereby replacing the opaque estimated billing system that had prevailed.

L-R: Egberipou Idonbaa, health safety and environment manager, Century Group; Ken Etete, chief executive, Century Group; Tonya Lawani, founder, iSucceed Series, and MD, VOO Communications Limited, Vanessa Oghomwen Ogida, at the Health, Safety and Environment workshop in Lagos.

L-R: Ifeoma Okoye, public affairs and communications manager, Nigerian Bottling Company Limited; Aderemi Adewoye, plant manager, Nigerian Bottling Company Limited; Bode Fanimo, representative of the MD of Lagos State Waste Management Authority, and Adeleye Mojisola, chief scientific officer, Lagos State Waste Management Authority (LAWMA), during a courtesy visit recently paid by LAWMA to the Nigerian Bottling Company (NBC) Limited, Ikeja plant in Lagos.

L-R: Segun Adebutu, chairman, Petrolex Oil & Gas Limited; Bekeme Olowola, chief executive CSR-in-Action/GRI board member and Ndidi Nnoli-Edozien, group chief, sustainability and governance, Dangote Group, during a reception in honour of Bekeme Olowola, on her appointment to the board of the Global Reporting Initiative, Amsterdam, recently.

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Thursday 18 April 2019

BUSINESS DAY

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Thursday 18 April 2019

BUSINESS DAY

Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open 05 – 04–19)

31,924.51 29,616.38

11.124 trillion

2,129.71

Week close (12 – 04–19)

29,560.47

11.103 trillion

29,560.47

Year Open

Percentage change (WoW)

-0.19

Percentage change (YTD)

-5.95

2,241.37

The NSE-Main Board

NSE ASeM Index

NSE 30 Index

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

NSE Banking Index

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

130.95

723.46

801.09

1,438.19

426.64

1,345.22

806.54

121.12

656.29

283.50

2,154.71

1,159.38

1,123.20

803.13

806.54 1,324.04

121.12

1,332.80

378.38

117.39

653.54

284.46

2,143.00

1,151.40

1,131.36

1,456.29

0.87

-0.92

-0.42

-2.14

-7.43

1.17

0.00 -6.57

-0.26 -5.15

-3.08 -7.19

-0.42

0.34

-12.73

-5.88

Mixed sentiments trail equities market

-4.07

the preceding trading day as many investors chose to take profit in some bellwether stocks. Ma rk e t w at c h e r s n o t i c e d how late session dip in Dangote Cement Plc reversed earlier session gains, causing the stock market to retreat after gaining for the three consecutive sessions at the end of last week. “Looking into the new week, we expect bargain hunters looking to take advantage of cheaply priced stocks to guide sentiments in the near term as RSI hovers below its oversold region”, said United Capital research analysts. “We expect to see profit taking activities in some bellwether stocks which could potentially drive negative returns in the NSE ASI. However, we maintain a cautiously optimistic outlook as

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investors’ sentiment show signs of improvement,” Afrinvest research analysts said. Vetiva research analysts who foresaw the index gaining at the beginning of this week “in the absence of unforeseen events”, also expect market activity to remain low to average “as market players remain cautious”. In their outlook for the month of April, FSDH research analysts expect some factors to drive performance of the equity market in the short-term. They include: portfolio realignment in favour of the equity market on account of the drop in yields on fixed income securities; stability in the foreign exchange (FX) market; inflow of FPI; and rising crude oil price. FSDH Research expects portfolio allocation in favour of the equity market very soon,

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adding that “this may lead to an appreciation in the equity market in April”. The analysts want investors to position in stocks that have good fundamentals that are currently trading below their fair value. They also expect investors to take position in stocks that have a history of good dividend payment; as well as see opportunities in the banking, consumer goods, building materials, and oil and gas sectors of the equity market. Meanwhile, Cordros Research analysts had in their April 10 update noted that in the absence of a positive catalyst, “we guide investors to trade cautiously in the short term”, adding that stable macroeconomic fundamentals and compelling valuation remain supportive of recovery in the mid-to-long term.

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-0.69 -6.99

0.73 -6.30

Stockbrokers endorse Lagos Commodities Exchange

Iheanyi Nwachukwu

mid declining yields on fixed income securities which have increased the attractiveness of the equity market, the market is still awash with diverse views from research analysts. Their mixed sentiments follow a record 2.14percent decline in March 2019, and an observed drop in market activity despite the release of impressive earnings and corporate actions. Barely three weeks into the second quarter (Q2) most analysts expected that bargain hunters should begin to take advantage of cheaply priced stocks while others guide investors to trade cautiously in the short term in the absence of positive catalysts. “Most of the stock markets that we monitored appreciated in Q1 2019 except the NSE All-Share Index and GSE Composite Index (Ghana)”, FSDH research said. In the trading week to April 12, the Nigerian Stock Exchange (NSE) All-Share Index (ASI) and Market Capitalisation depreciated by 0.19percent to close the week at 29,560.47 points and N11.103trillion respectively. Summary of price changes show that 35 equities appreciated in price during the review week, higher than 14 in the preceding week. Thirtyone (31) equities depreciated in price, lower than 55 equities in the preceding week, while 101 equities remained unchanged, higher than 98 equities recorded in the preceding week. At the beginning of trading this week, Nigeria’s stock market was unable to sustain gains recorded

-0.54

n what amounted to collective endorsement of the Lagos Commodities and Futures Exchange (LCFE), stockbrokers at the weekend commended the Association of Securities Dealing Houses (ASHON) for establishing the specialised exchange, describing it as an initiative that would expand investment opportunities for all stakeholders in the financial market. They however urged the board and management of the LCFE to put capacity building on the priority list in order ensure professional dealings by the commodity traders and other intermediaries in the capital market ecosystem. Commenting at the stockbrokers’ On - the-Spot assessment of the facilities of the LCFE at the Exchange’s corporate office in Lagos, a Financial Engineer and Chief Executive Officer of Wyoming Capital and Partners, Tajudeen Olayinka, described LCFE as a step in the right direction in view of the global developments in the commodities exchanges. Olayinka who expressed optimism that the new exchange had potential to operate optimally, however urged the management to stimulate activities in the spot market by establishing relationship between the banks and the commodities merchants so that the banks can support the traders. According to him, spot market has already existed and the ultimate goal is how to make transaction active in the market to enable seamless trading on the Commodities Exchange. Corroborating him, the Chief Executive Officer, Highcap Securities L i m i t e d , D av i d Ad o n r i a l s o congratulated ASHON for establishing LCFE and urged the management to put in place necessary facilities for trading in derivatives in order to boost investment opportunities associated with commodities products.

Thursday 18 April 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment View

Investor’s Square

Bears soften hold on equities

a r k e t performance last week was characterised by a tussle between the bulls and the bears. The local bourse started bearishly and rebounded by mid-week, closing higher in the last three trading days of the week. Although it could not offset the losses that were initially recorded in the first two trading sessions in the week ended April 12. Overall, the Nigerian Stock Exchange (NSE) All Share Index (ASI) shed -0.2percent to close at 29,560.5 points while market capitalisation declined by N21billion to end at N11.1billion. Also, yearto-date (YtD) return stood at -5.9percent, while average value and volume of stocks traded fell by -25.1percent and -50.1percent to finish at N3billion and 353.7million units respectively.

looking to take advantage of cheaply priced stocks to guide sentiments in the near term as RSI hovers below its oversold region. Money Market: System liquidity stays tight Similar to the previous week, overall market liquidity in the week to April 12th stayed tight as outflows in the form of wholesale and retail FX funding, outstripped the minute inflow via OMO, worth N33.0bn. Additionally, activity at the interbank market remained largely buoyant as some banks turned to the CBN’s Standing Lending Facility (SLF) to satisfy their funding needs. Meanwhile, in a bid to ease further pressure on the already tight liquidity levels, the CBN held off from floating any OMO auction during the week amid muted activities at the primary bills market. Hence, banks with excess cash invested in the Standing Deposit Facility

Performance across sectors was bearish. The Insurance (-3.1percent), Industrial Goods (-0.7percent), Consumer Goods (-0.4percent), and Banking (-0.3percent) sectors were the week’s laggards owing to price declines in NEM (-13.7percent), CCNN (-5.9percent), GUINNESS ( - 3 . 9 p e rc e n t ) , a n d E T I (-7.8percent). On the flip side, the Oil & Gas (+0.3percent) sector was the lone gainer for the week, buoyed by price gains in MOBIL (+4.7percent). Meanwhile, the Agricultural sector remained flat. In terms of earnings, FBN Holdings released its FY-18 earnings (Revenue down 1.5percent to N589.1billion; PAT up 31.4percent to 59.7billion) and declared a proposed dividend of N0.26kobo. Investors’ sentiment as measured by market breadth was upbeat as it closed at 1.2x (34 stocks advanced over the week against 28 decliners). Looking into the new week, we expect bargain hunters

(SDF). In all, average interbank funding rates (Open Buy Back and Overnight rates) trended higher to 20.5percent from 15.7percent in the week before. In the secondary market, average treasury bills yield declined week-on-week (w/w) by 7basis points (bps) to close at 13.4percent and we believed this was buoyed by CBN’s refusal to float an OMO auction during the week. This week, we expect the outcome of the Mar19 inflation report, scheduled to be released today, to guide early trading sentiments. A sharper than expected moderation in the inflation number will be positive for money market players as real yields widen. In terms of maturity profile, OMO and NTB maturities are scheduled to hit the system and we expect the sizable nature of the former, N146.3billion, to prompt a resumption in CBN’s OMO mop-ups. Bond Market: ETI issue a debut $450million Eurobond In line with our outlook for the week, yields at the

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secondar y bond market trended higher as market players remained expectant for new issuances at the April 24th bond auction. Additionally, we saw persistent sell-off on short to medium term bonds as clients (Pension Fund Managers and Life Assurance Companies) with long-term investment horizon, a position for the debut 30-year bond. On a w/w basis, the bears outweighed the bulls as average bond yield inched higher by 11bps to close the week at 14.2percent. Elsewhere, in the secondary Eurobond market, concerns from both the World Bank and IMF about sluggish growth in Nigeria and its rising debt profile spurred another round of selling pressure in FGN Eurobonds. Accordingly, the average yield on FGN Eurobond trended northwards by 12bps to close the week at c. 6.9percent. Similarly, sentiments for Corporate Eurobond turned bearish as average yield spiked by 49bps to close the week at c. 8.4percent. In primar y Eurobond market, Ecobank Transnational Incorporation (ETI) successfully issued a 5-year Eurobond, worth $450.0mn, to refinance a portion of the bank’s existing debt and for general corporate p u r p o s e s. D e m a n d f o r the bond was in excess of $660million as yields cleared at 9.75percent. This week, we expect activities in the secondary bond market to remain muted as players continue to look to new issuances at the April-19 bond auction. Meanwhile, w e a n t i c i p a t e re n e w e d buying interests for FGN Eurobonds, especially if oil price maintains its current upward trajectory. FX: Rates close flattish; I&E window sheds 1bp w/w FX rate stayed flat at the parallel and official Windows, closing the week at N359/$1 and N307/$1 respectively. On the other hand, the I & E Window depreciated by a marginal 1bp w/w to N360.3/$1, rates traded at N360.7/$1 earlier in the week, before settling at N360.3/$1. Turnover at the window declined by 12.7percent w/w as at Thursday April 11 to $190.4million dollars, with Wednesday featuring the highest daily turnover of $335million, despite a dearth of OMO auctions.

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators? Let us know and investor will help you investigate and report back. E-mail: iheanyi.nwachukwu@businessdayonline.com

Fixed Income, Currency market turnover up 85% year-on-year to N28.98trn Iheanyi Nwachukwu

urnover in the Fixed Income and Currency (FIC) markets for the month ended March 31, 2019 was N28.98trillion, the OTC market summary released recently by FMDQ OTC Securities Exchange shows. The record FIC turnover as at end of March 2019 represents 51.09percent or N9.80trillion month-onmonth (MoM) increase on the turnover recorded in February 2019 which was N19.18trillion. Likewise, it represents 84.47percent yearon-year (YoY) increase from N15.71trillion recorded in February 2018. The report shows that Treasury Bills (T.bills) and Foreign Exchange (FX) market segments remain the major drivers of turnover in the FIC markets, jointly accounting for 75.71percent of turnover in March 2019, which was 2.17 percentage points (ppts) lower than their contribution in February 2019 (77.88percent). FX Market Total FX market turnover in March 2019 was $33.26billion (N12trillion), representing 127.92percent ($18.67billion) MoM increase from the turnover recorded in February 2019 ($14.59billion). Analysis of FX turnover by trade type indicates an increase across all three (3) segments, as FX turnover for Inter-Member, Member-Clients and MemberCBN trades increased by 76percent, 107.41percent and 221.49percent respectively. The increase in FX turnover for Member-Clients and Member CBN was driven by the increase in turnover in OTC FX Futures market segment which is largely attributable to increased Foreign Portfolio Investor (FPI) inflows. Conversely, turnover at the Investors & Exporters (I&E) FX Window in March 2019 recorded 18.04percent ($1.65billion) MoM decrease to close at $7.48billion from the $9.13billion recorded in February 2019 and a 65.85percent ($2.97billion) YoY increase from the $4.51billion recorded in March 2018. Analysis of FX turnover by product type showed an increase in both FX Spot

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and FX Derivatives, with FX Spot recording a MoM increase of 144.68percent ($12.69billion) and accounting for 67.98percent of the total MoM increase in FX turnover. The MoM increase of 102.64percent ($5.97billion) in FX Derivatives was driven by increases in FX Forwards, Swaps and Futures turnover by 76.61percent, 73.60 percent and 282.28percent respectively. In March 2019, the 33rd Naira-settled OTC FX Futures Contract (NGUS MAR 27 2019) with total open contract size of $505.25million matured and was settled, bringing the total value of OTC FX Futures contracts settled on FMDQ since inception to c.$14.84bn; out of FX Futures contracts worth $22.05billion traded to date. A new 12-month contract (NGUS MAR 25 2020) with a notional principal of $1.00bn and price of $/N362.29 was listed on FMDQ In March 2019, the Naira appreciated against the US Dollar at the I&E FX Window N0.31to close the month at $/N360.68 but remained unchanged in the parallel market at $/N360. Conversely, the CBN Official Spot rate depreciated by 10 kobo to close at $/N306.95 (from $/ N306.85 recorded in February 2019). Fixed Income Market (T.bills and FGN bonds) Total T.bills (including OMO7 bills) outstanding recorded a MoM increase of 4.31percent (N0.69trillion) to close at N16.80trillion, with OMO Bills accounting for 100percent of the MoM increase while actual T.bills outstanding remained unchanged, as the CBN continued its liquidity mop up via OMO auctions to curtail build-up of inflationary @Businessdayng

pressure.Similarly, FGN bonds outstanding value increased MoM by 1.43percent (N0.12trillion) to close at N8.64trillion as at March 29, 2019. Furthermore, the split in sovereign debt between long- and short -term debt as at March 2019 was 77:23 (longvs. short-term), slightly higher than the target ratio of 75:25 outlined in the FGN’s Debt Management Strategy Trading intensity in the T.bills and FGN bonds markets increased from 0.54 and 0.12 in February 2019, to 0.60 and 0.18 in March 2019 respectively. Trading intensity in markets sto o d at 1.60 and 0.38 respectively compared to 1.27 and 0.33 as at the same period in 2018, due to the 52.61percent (N9.65trillion) growth in T.bills and FGN bonds YTD turnover. T.bills within the 6-12 months maturity bracket remained the most actively t ra d e d i n Ma rc h 2 0 1 9 , accounting for 59.89percent of the total FI market turnover. In March 2019, the weighted average rate of yields on shortand long-term maturities o n t h e s ov e re i g n y i e l d curve increased by 0.47ppts and 0.26ppts respectively. Conversely, weighted average rate of yields on medium-term maturities on the sovereign yield cur ve declined by 0.91ppts. Yield spread between the 3-month T.bills and the 10-year FGN bond declined by 65 basis points (bps) to close at 3.07ppts in March 2019 (3.72ppts in February 2019) with the yield on the 3-month T.bills and 10year FGN bond increasing by 1.42percent and 0.77percent respectively, suggesting lower prices and more sell-offs at the shorter end of the curve.

Thursday 18 April 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Chams has capacity to handle electronic voting for Nigeria – Williams In this interview, Femi Williams, Group Managing Director and Chief Executive Officer Chams Plc speaks to select journalists including Iheanyi Nwachukwu. Excerpts Recently, you informed the investing public that Chams Plc’s restructuring has put the company on the path of sustainable profitability. Can you shed more light on this? hrough the restructuring, Chams Plc was able to write off its accumulated losses using our share premium as seen in our year 2018 audited financial statement. We now have a profit of N380 million against the losses of previous years. What led to the company’s restructuring? The need to remove recurring losses in our books, grow shareholders’ funds and lay a foundation for better performance and improve Chams’ competitiveness in its industry. It will also improve the company’s potential to pay dividends to its shareholders and assess other funding options available in the future. What are the components of this restructuring? We had earlier restructured our operations for global competitiveness, including a change in business model. We now place premium on identity management and we have introduced a good number of innovative products and services. The repositioning exercise that we carried out, through the injection of seasoned human capital has begun to pay off despite the harsh operating environment in Nigeria. The company’s financial fortune has been turned around to put smiles on the faces of our stakeholders. This can be seen from the result. We recorded a growth of 54percent in Revenue Year- on Year, while we grew Profit before Tax by 124percent. I would like to assure all our investors and shareholders that we would not rest, but shall continue to work assiduously to surpass this performance by the end of the fiscal year 2019. A court approval as well as approval of relevant regulatory bodies was received to achieve our restructuring exercise. What message do you have for the shareholders ahead of your impending Annual General Meeting (AGM)? The message is that the company has returned to profitability. We do believe this trend will be sustained to benefit all stakeholders going forward. Chams Plc is believed to have blazed the trail as the first home grown ICT company to develop some unique products for ease of doing business. Can you explain them? Chams Plc, is a brand to reckon with in identity management and identity solutions provider. As a result of our experience and expertise garnered over the years, we have built robust, secure and adaptable platforms to further drive the provision of intelligent business solutions to private and public sector. Incorporated on September 19, 1985, Chams started as a Computer Hardware And Maintenance Service provider in Nigeria. Between 1987 and 1991, the company pioneered major computer networking in Nigeria with laying of LAN and WAN network connections for various public and private organizations. Over the years, we have evolved into an innovative company providing intelligent business solutions. Chams started smart cards, ID Management and e-payment systems and solutions in Nigeria. This later gave way for other ID management and e-payment solutions company to come into the industry. In 2011 to 2017, the country witnessed a major surge in Identity related solutions and Chams was a key player to this. During this period, we singlehandedly produced and delivered 70m voters’ card within a very short period for the Federal Government of Nigeria. In fact, former President, Olusegun Obasanjo, who was in power at that time, asked the “Committee of Former Heads of State” to visit our Abuja card plant. It will interest you to know that among the delegates was our General Muhammadu Buhari who is now President of

Femi Williams

Nigeria and General Yakubu Gowon to mention a few. The project was formerly contracted to a foreign organization who at the last minute could not meet up, hence, the invitation of Chams to carry out the production and delivery of the cards. The successful commencement of the JAMB CBT cannot be written without mentioning Chams. We pioneered the first ever Computer-Based Test for JAMB in Nigeria. At that time, the then head of JAMB, Prof. Adedibu visited each of our centres in Lagos and Abuja and gave satisfactory nod to the professionalism and excellent delivery of the project. The Bank Verification Number (BVN) project is among others, a highly successful project implemented by Chams across all the bank branches in the 36 States of the Federation. Chams Plc delivered successfully within the timeline stipulated by the Bankers Committee. The BVN project was reported to be a huge success and as you can see, it has transformed financial accountability in Nigeria. Chams is fast becoming a company to watch after it successfully conducted electronic voting for some reputable organisations, using a new solution. How far is this true? Chams Plc has successfully deployed its e-voting solution (VOTA) for over 7 years now to various organizations of national and international repute with commendable results. This has been tested, can now be trusted at the national level. We have successfully deployed the our VOTA for the Nigerian Bar Association (NBA) and Chartered Institute of Bankers of Nigeria (CIBN) among others. We have the technical know-how, professional competence, skills and track records to handle electronic voting in Nigeria What is your appraisal of the e-voting in those organisations in terms of the cost-benefit analysis? VOTA has been proven to reduce organizational cost of election by at least 50percent, because it completely eliminates the travel, accommodation, feeding costs of delegates, stationeries expenses (prints and press), as well as excessive cost on election venue and other logistics . As a frontline company in the technology sector, does Chams have technical and op-

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erational capacity to deploy the solution for Nigeria’s electoral system, especially, with the general complaints that Nigeria’s electoral system is not only expensive and time consuming but highly vulnerable to controversy? Chams Plc deploys state of the art modern technology to ensure performance and cost is optimized with the most secure technology available, constantly reviewed by standardized processes in conformity to our ISO quality management guidelines. One of such processes put in place to avoid controversies identified over our years of experience is role separation, which clearly defines every stage, tasks and responsibilities to ensure transparency among all the stakeholders. Electronic voting automatically avoids duplicate and invalid votes by design, these have been proven to be also major sources of election controversies. Is Nigeria actually ripe for electronic voting against the challenges associated with Information and Communications Technology (ICT) in the country, notably in the power sector? There is no better time for Nigeria to cross over to the electronic voting than now, Nigeria has indigenous tier 3 cloud service providers to host the e-voting application successfully with 99.9percent availability comparable only to the likes of AWS, Microsoft Azure, and Google. Your question reminds of when we completed our ChamsCities with Guinness Book of records certification and engaged Prof. Dibu Ojerinde on Computer Based testing for JAMB. We pioneered it, today it is history. Is there any plan by Chams’ Management to contact the government on the option of electronic voting as an antidote to electoral cost, stress, violence and credibility in the nearest future? Currently, we are putting together our proposition to the Presidency. And we are very ready to carry out a demo of the platform when invited. At the basic level, what are the benefits and challenges of electronic voting? Electronic voting has a huge benefit of convenience which in turn increases voters’ participation by huge margins. We have had a testimony of voters’ participation increased by 35percent

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while providing e-voting service for some majority of our client using VOTA. Avoidable deaths by election violence, road travel hazards, excessive costs of stationeries and other logistics are eliminated by electronic voting system. Collation of results is instantaneous with electronic voting. In a similar vein, the issues, suspicion associated with Manual collation will be a thing of the past. One major challenge observed generally is user acceptance and migration. A solution is only as good as how widely accepted. However, awareness programme is required to inspire the public on its benefits. The public has come to accept the Card readers. This is just a way of saying let us digitize the voting papers and collation processes. Nigerian youths are generations of ICT. Can the old people who are not computer literate vote seamlessly under electronic voting model? Chams has variants of VOTA available for ease of usage. The web version to meet general internet user demands that the mobile version should meet up with the younger generations enthusiasm on android and mobile devices. Also, the Kiosk version which concerns older generation and functions like regular ATM machine are variants of our e-voting solution poised to serve all and sundry. What should be the first step in the event that the government is ready for e-voting? Electronic voting requires a valid database of eligible voters which incidentally can be obtained from INEC Voters Register, NCC Database, Nigeria’s BVN and NIMC database among other sources of digitized data in the country. This database will be leveraged on. Government is the biggest spender in Nigeria and ICT is capital intensive. But it appears Chams Plc places premium on the private sector clients rather than government in its service delivery. Why? Well, the experience we had in the past with dealing with Government actually brought us to where we are today. The popular ChamsCity was a large digital mall that brought Nigeria into the Guinness Book of Record as a place where the largest digital mall in the world was established. Though Chams still retains that record, the centres had to be closed down as it brought huge losses to the company due to the cancellation of the NIMC project for which we built the ChamsCities as centres where people can walk in and perform their registration for the national ID. This was why we have had to refocus our business on building Intelligent Business Systems that resolves industry issues like we did with the BVN. Are there other comments you want to make? Aside our e-voting solution, Chams has also built robust, innovative and intelligent solutions suite that can be integrated into various facets of government’s administrative systems and processes as well as usable for private organizations. ConfirmMe is a verification solution platform that allows the government to easily verify beneficiaries, - for grants, pensions, bursary, subsidies, etc., for fraud prevention, ghost worker elimination etc. The verification service allows you to check your enrolled wards against the data that has been provided. Payroll Solution – A complete financial solution for managing and engaging your diverse workforce. Residency & Citizenship Solution – an automated enrollment solution that allows government of a state or a nation have an overview of number of residents for appropriate allocation of funds and resources. Time and Attendance Solution - time and attendance solution allows organizations to effectively manage their employee’s day to day activities for office productivity and efficiency.

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Thursday 18 April 2019

BUSINESS DAY

RESEARCH&INSIGHT

In association with

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

briu@businessday.ng

08098710024

Why smart investors should make buy decisions now ADEMOLA ASUNLOYE

an expected ROE of 16 per cent) because of the overweight (OW) rating with a TP of N48, N32 and N11 respectively, on a riskadjusted basis over the next 12 months with potential upsides of 41 percent, 59 percent, and 79 percent respectively from the current levels. While FBNH (equal-weight (EW), TP: N9) is a stock to watch based on observable milestones relating to AE credit resolution with further upside from the sale of Ontario downstream assets. banks currently trade on an average of 2019e P/B of 0.9x with an average 2019e ROE of 21 per cent. This trails the Kenyan banks’ valuation (2019 P/B of 1.2x, ROE: 19 per cent) and Middle East and Africa (MEA) banks (2019 P/B of 1.3x, ROE: 18 per cent) by 25 per cent and 31 per cent respectively. Valuation of Nigerian bank in comparison to Kenya’s and MEA Using ROE as the major driver of valuation, analysis revealed that banks trade at a discounted 38 per cent and 29 per cent to fair value based on MEA and Kenyan banks’ ROE-adjusted valuations. Analysis from the table above revealed

that the most undervalue banks are FBNH at -60 per cent discount, UBA at -64 per cent discount and Zenith at -48 per cent discount. On the assumption that the risk-free rate of Nigerian and Kenyan markets are similar, the analysts believed that Kenyan banks are closer comparable to the Nigerian banks with both countries having a 10-year bond yield of about 13 per cent and 14 per cent respectively. This informed the conclusion that the Nigerian banks remain cheap from relative standpoint, despite the headwinds. Preferences are made on GTB (trading at a 2019e P/B of 1.5x with an expected ROE of 28 per cent), Zenith(trading at a 2019e P/B of 10.7x with an expected ROE of 21 per cent) and UBA(trading at a 2019e P/B of 0.4x with

RMBNS Nigeria banks’ coverage The current valuation prices of these banks are attractive as potential total returns inclusive of dividend yield on GTB hovers about 8 per cent; Zenith, 14 percent, and UBA with dividend yield of 11percent translated to 49percent, 73per cent and 92per cent respectively. FBNH (EW, N9) is a stock that investors should keep an eye on given its potentially strong earnings growth and profitability contingent on the resolution/ write-off the AE loa. Although the three banks are OW, GTB has strong profitability despite normalising income; Zenith is under-priced with decent yields and UBA African subsidiaries are expected to drive strong loan growth in 2019. 12734BDN

s of today the nation’s capital market is in the negative territory as bearish sentiment hovers around investors’ decisions. Despite the uncertainties in the capital market, some private and institutional investors are taking strategic positioning because they anticipate a future rise in prices. According to the alpha capture on 10th of April 2019 from Rand Merchant Bank (RMB) Nigeria Limited—a leading African corporate and investment bank, the report focused on the key elements that will tip the balance of their banking coverage for investors to leverage on, particularly in 2019. The bank which has over 10 years of transactional experience outlined 4 major factors that might affect stability in the equity market: • declining yields on government securities • the recent 50bp cut in the central bank’s Monetary Policy Rate (MPR) • the outlook for cost of risks for our coverage and • regulatory uncertainty Although it is believed that the current valuation of Nigerian banks is unjustifiably cheap. In contrast to Kenyan banks at 1.2x and 19 per cent of return on equity (ROE), RMB’s 5 coverage banks (First Bank of Nigeria Holdings (FBNH), Guaranty Trust Bank (GTB), Stanbic IBTC, United Bank for Africa (UBA) and Zenith Bank) remain attractive at 0.9x 2019e Price to Book ratio (P/B) and 21 per cent ROE even as it anticipates an average total return of 53 per cent (inclusive of a 10 per cent dividend yield). Opportunities are in the pipeline for investors as the coverage banks have a P/B range of 0.3x (FBNH) to 1.7x (StanbicIBTC), especially in FBNH (EW, target price (TP): N9) subject to the resolution of Atlantic Energy (AE) credit. RMB’s Analysts forecast showed that the valuation of assets appreciated to N11 when the cost of risks was reduced from 6 per cent to 4.5 per cent; and even to a higher N13/share when the cost of risks was normalised at 2.5 per cent over the forecast period. Treasury and asset yields environment have already been priced lower in 2019e as a 100bp year-on-year (YoY) decline in average yields to 14.7 per cent was modelled even as treasury assets accounted for 53 per cent of the coverage banks’ interest-bearing assets. In 2019e, the cost of risks is expected to be higher by circa 40bp to 1.6 per cent, normalised earnings showed 10 per cent growth and 2 per cent decline in earnings is expected with exclusion of FBNH and Access Bank within the coverage universe. The aforementioned

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Thursday 18 April 2019

BUSINESS DAY

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

briu@businessday.ng

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Why states need to enhance efficiency of MDAs for IGR generation ...as Kwara, Taraba set the pace for others TELIAT SULE

wara and Taraba states are the sub national governments with the most efficient MDAs based on the analysis of the revenue generated in the third quarter of 2018. In the first three quarters of 2018, the internally generated revenue (IGR) of the two states from ministries, departments and agencies surpassed the national average. Kwara State generated 59.4 percent while the Taraba made 54.81 percent of their IGR through MDAs’ activities. For the entire nation, 18 percent of the IGR realised by the 36 states and FCT Abuja came in through their MDAs as at Q3 2018. The 36 states of the federation and FCT Abuja realised N843.9 billion as internally generated revenue (IGR) in the first three quarters of 2018, that is, from January to September of last year. As usual, the data still shows that 34 percent of the IGR generated by all the states and Abuja came from Lagos, which realised N283.5 billion during the period. The interest of this write up is to evaluate the sources of the IGR for states, evaluate areas states have more comparative advantages over one another and where there could be improvement for IGR generation. Disaggregating the data along the sources of IGR which are PAYE, direct assessment, road taxes, other taxes and those IGR realised through states’ ministries, departments and agencies (MDAs), for the entire nation, 61

Source: NBS, BRIU

percent of the collective IGR by all the states came from PAYE, 4 percent from direct assessment, 2 percent from road taxes and 14 percent from other taxes. In all the taxes through non-MDA sources amounted to 82 percent or N688.5 billion of the total IGR generated during the period. Revenues from MDAs amounted to N155.4 billion, representing 18 percent of the IGR realised by the state governments and FCT in the first nine months of 2018. What this implies is that all the MDAs of the state governments as many as they are across the federation could only generate N18 out of every N100 state governments need without having to rely on FAAC. While the above percentages represent the national performance, there are a lot of discrepancies among states

Source: NBS, BRIU www.businessday.ng

in their capacities to generate revenues from all the aforementioned sources. For instance, Nassarawa State generates 93 percent of its IGR from PAYE, implying that others sources are more or less unimportant. During the reference period, Nassarawa State realised N5.04 billion from PAYE out of N5.31 billion total IGR it made in Q3 2018. Bayelsa State made N8.70 billion IGR from PAYE out of N10.07 billion total IGR it made in Q3 2018, indicating that the state is sure of 86.4 percent of its periodic IGR coming from PAYE. Bauchi State made 81 percent of its IGR from PAYE; Akwa Ibom realised 77.8 percent from PAYE; Rivers and Ekiti states, 76.2 percent each; Niger and Katsina states, 76 percent each; Delta, 74 percent; Benue, 68 percent; Lagos ,Adamawa and Gombe, 62 percent each; Kogi, 59 percent; Osun, 58 percent, while Ebonyi, Kebbi, Yobe, Borno, Zamfara, Anambra and Sokoto states generated between 51 and 57 percent of their IGR from PAYE. From other sources, Kebbi State generated 27.8 percent of its IGR from direct assessment, and hence topped the states with the highest source of their IGR from direct assessment. Oyo was second at 18.62 percent while Imo, 16.95 percent; Zamfara at 10.9 percent; Osun, 8.05 percent, and Abia at 7.13 percent. Other states that generated IGR from direct assessment higher than the national average of 4 percent include Borno, 6.92 percent ; Ogun, 6.81 percent; Kwara, 6.48 percent ; Kano, 6.09 percent ; Katsina, 4.87 percent ; Lagos,

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4.76 percent ; Anambra, 4.32 percent; Benue and Edo states at 4.30 percent and 4.14 percent respectively. Unless the direct assessment taxes are captured as other taxes in the largest state economies such as Lagos, Kano, Rivers and Kaduna, it beats the imagination of analysts that Kebbi and others could top the IGR sourced from direct assessment taxes because of the fewer SME clusters in those states. Based on the SME distributions across the states of the federation as released by the National Bureau of Statistics (NBS), Kebbi State has just 692,104 micro enterprises, 898 small and 91 medium enterprises. Its SMEs are among the least in the federation when compared with some other states. If Kebbi could generate this much, it then means that other states with higher SME concentration have the potential to generate even more IGR through direct assessment. From the practical point of view, the total IGR from direct assessment in Kebbi amounted to N883, 145,964.62. This is a state that has MSMEs from micro to medium equalled 693,093. We assumed that only 35 percent of these MSMEs are active, and that brought their number to 231,031. Assuming these were the only MSMEs the Kebbi State Government taxed between January to September 2018, an average MSME paid N424.74 per month or N3, 822.63 in nine months. This leaves for improvement for more IGR generation. @Businessdayng

While Kwara and Taraba generated 59.40 percent and 54.81 percent of their IGR from MDAs, others performed less than 50 percent, indicating that those two states have the most efficient MDAs in the country. The worst MDA ratios came from Bauchi, 8.02 percent ; Sokoto, 7.61 percent; Rivers, 5.66 percent; Akwa Ibom, 4.06 percent; Bayelsa, 3.62 percent ; Niger, 2.68 percent and Nassarawa State, 1.69 percent. Is this the best the state governments can get from their MDAs? Most analysts believe that states’ MDAs could do more, but the onerous task rests on the executive arm to use their political will to drive transformation that will make MDAs deliver good results. One of the ways efficiency of MDAs can be enhanced is for the executive arm not to be a clog in their wheels of progress. “Not all the MDAs can generate revenue. For those that have the mandate for revenue generation, the executive arm should not interfere in their operations. In some cases, the governor will tell some MDAs not to generate revenue from certain businesses or economic agents for fear of reprisal at the poll”, an analyst who is well familiar with MDAs’ operations said. Another way is for the government to employ technologies to drive revenue generation. In some MDAs, things are being done in the manual ways. This applies to files, documentation, and registration, among others. “Businesses are ready to cooperate with the governments provided they see value in the taxes they are paying. In most cases, the money go down the drains”, another analyst said. Getting revenue from sources other than over reliance on FAAC has become pertinent nowadays in view of the high volatility that characterises the international oil and gas market, where the national government generate proceeds which determine the level of the fiscal healthiness of most Nigerian states. In years when the crude oil fell below the budget benchmark, many states of the federation found it difficult to meet their basic obligations such as the payment of salaries, wages and fees to contractors.

Thursday 18 April 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

CONSUMER SPENDING

Nigerian consumers to open purse string during Easter season on improved confidence BALA AUGIE AND BUNMI BAILEY

igerians could increase their spending during the Esther s eas on than they did last year, thanks to a reduction in prices basic food items as improving economy boosted confidence. Emeka Ike, 45, a medical practitioner with a family of four is optimistic that his family will be able to celebrate this year’s Easter much better than the previous year. Last year, he was not able to afford a bag of rice or a live chicken, nor was he able to take his family on outings to mark the celebration. But now with food prices gradually reducing, he can afford those items he could not afford last year. Analysts are of the view that the relative cost stability, receding inflation, a benign political environment, and expectation of a wage increase will make consumer open their purse springs. “There was no market last year because we just came out of recession gradually, and people were still battling with prices from the companies because most of

them increased their prices due to devaluation of naira so consumers were still trying to adapt,” Yinka Ademuwagun a consumer analyst at United Capital. “But I feel this year should be a better year than last year, because most of the companies have been able to readjust prices and consumers have already adjusted to the prices,” said Ademuwagun. In the fourth quarter of 2018, Nigeria’s Gross Domestic Product (GDP) grew by 2.38 percent in real terms (year-on-year). This represents an increase of 0.27 percent points when compared to the fourth quarter of 2017 which recorded a growth rate of 2.11 percent. Inflation stood at 11.25 percent in March, compared with 11.31 percent in February, albeit lower than the 6 percent and 9 percent central bank range. There has been a slight improvement in business confidence on the back of the successful conduct of the elections that buoyed spending. The Business Confidence Index (BCI) for the month under review stood at 28.2 index points compared to 22.1 points in February. The major drivers of the optimism for the cur-

rent month were services (37.0 points), industrial (19.4 points), wholesale/retail trade (6.2 points) and construction sectors (2.2 points). Similarly, businesses outlook for April 2019 showed greater confidence in the macro economy. “Petrol prices and CPI has been treading down and this is showing positive movement in economic activities. Mostly, you would see some sort of improved demand compared to what we had last year. Looking at last year, there was not too much celebration.

A couple of retail stores that I visited said that they are running prom unlike when they could not this last year,” Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers said Some consumers are also sharing similar view. Kayode Oseni, a photographer, said that last year was boring for him and his family as there was no money and could not afford to buy food items but that this year was different as price are lower compared to last year. However, some consum-

ers say there has not been an improvement in economic activities as their wallets remain squeezed. “For me this year is dry. There is no money in circulation. If I want to enjoy my Easter, my company should my salary before Easter so that I can enjoy it,”Taiwo Bolaji, an accountant complained. Busola O lamenin , a purchasing manager said that she does not fuss about Easter and she celebrates it with just drink. “There is no much difference for me because a pack of pespi was N950 last year and it

is still the same this year,” She said. “For now, I can’t say how celebration will be for me because businesses are just picking up from the election activities that concluded in February,” An anonymous woman said. Nigerians are getting poorer and a lot of people cannot afford consumer products as they used to, even as the country existed a recession. The country’s population is growing faster than the economy as evidenced in low per capita income, validating the poverty rates and low purchasing power among consumers. A report by Steve Hanke, an economist from John Hopkins University in Baltimore, United States, has listed Nigeria, Venezuela, Iran, Brazil and others among the first 10 miserable countries in the world with Nigeria assuming the sixth position. Easter, also called Pascha or Resurrection Sunday, is a festival and holiday celebrated once a year by Christians to commemorate the resurrection of Jesus from the dead, described in the New Testament as having occurred on the third day after his burial following his crucifixion by the Romans at Calvary c. 30 AD.

COMPANY

DHL new e-commerce platform set to ignite competition OLUFIKAYO OWOEYE

ogistics giant, DHL has made an entry into the continent’s ecommerce space with the launch of a new e-commerce app called DHL Africa e-Shop. According to DHL, the new platform is aimed at improving the online shopping experience for Africa-based consumers and enable global retailers to sell goods to Africa consumer markets. Hennie Heymans, CEO of DHL Express Sub Saharan Africa, noted that the DHL Africa eShop app offers African consumers much greater access to international retailers on an easy-to-use platform. “DHL Africa eShop provides convenience, speed and

access for online customers in Africa. As the global leader in express logistics, DHL is well positioned to connect African consumers with exciting global brands. This is yet another opportunity for DHL to reaffirm its commitment to supporting the growth of e-commerce in the region,” he said. Could this be a threat to Jumia and the likes? Currently, despite the growing demand by consumers on the continent, many U.S and UK-based retailers do not offer to ship to African countries, largely due to the perceived logistics challenges which results in high delivery costs and fraud concerns. Knowing the knack Nigerians have for foreign designers and products the entrance of DHL-backed e-commerce www.businessday.ng

platform could portend a threat to already existing players in the e-commerce ecosystem. A report by McKinsey Global Institute titled “Lions on the move: Growth in Africa Consumer sector” the demand for world-class online shopping opportunities is growing exponentially in Africa’s lead-

ing economies, as urbanisation and incomes continue to rise. According to McKinsey, consumer spending across the continent amounted to $1.4 trillion in 2015, with three countries South Africa, Nigeria, and Egypt contributing more than half of that total. It also projected that consumer

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spending on the continent will climb $2.1 trillion by 2025. E-commerce platforms on the continent have had their own share of economic challenges and decrepit infrastructure, which has forced some such as Dealdey to shut down operations while investors pull out on some platforms, acquisition of distressed Konga by another e-commerce platform Yudala and last week listing of e-commerce giant, Jumia on the floor of the NYSE, the first by any startup from Africa, offers a ray of hope for other platforms However, there are obstacles that have hindered the growth of e-commerce on the continent part of which is the trust issue as there is little trust towards online businesses on the continent. The lack of trust could be traced back to @Businessdayng

various internet scams and the uncertainty of ever seeing whatever is ordered online which is linked to logistics and infrastructure challenges. The new DHL Africa eShop is expected to bring a unique value propositions-on a transaction cost basis (i.e. the cost of delivery) given it is in partnership with one of the biggest names in global logistics, DHL. Also at the moment, payment by cash on delivery is the most common payment method on the African market; 90 percent of online purchases are paid by cash. This payment model is to reassure the customers that they will receive their orders. Financial inclusion is another major challenge on the continent as many Africans still don’t have access to bank accounts.

Thursday 18 April 2019

BUSINESS DAY

Retail &

consumer business

CONSUMER SPENDING

Retailers woo consumers with Easter promo BUNMI BAILEY

s Easter kicks off this weekend, the atmosphere is getting busy as retail outlets and stores are wooing consumers with promotional offers and pushing out affordable items for shoppers. Some of these retail stores reviewed by BusinessDay include SPAR, one of the largest chains of hypermarket stores in Nigeria, Panasonic and Samsung electronics stores and Startimes, a TV station provider. SPAR store at Opebi, Lagos state Easter promo sales is currently showcasing discounted items like a 2.6 litres Power oil pure vegetable sold at N2, 065 from N2,150, Spar classic bread for N350 from N370, Fresh frozen chicken for N1,095 from N1,246, a 750ml Ocean Breach Californian red wine for N1,220 from N1,650, a 900g Ariel brilliant strain removal for N655 from N685, and Honeywell spaghetti 500gm for N185 from N200, Also, a 300ml Vitamilk soy milk bottle which is sold for N300 now sells for N260 and a special offer of collection of items such as Mama’s Pride rice 10kg, a 4.5 litres Sunola Soyabean, knorr Chicken cubes 50x8g 400g and 6 sachets of Vitali gold tomato paste weighing 70g each for N7, 990 from N9,680. It is also doing a shop n’ Get free gifts promo where you buy items for N3, 000 and above and get a gift. The store promo is valid from March 22, 2019 till April 30th, 2019. In the satellite television services seg-

ment, Startimes is offering an upgrade on all its bouquets for subscribers starting from April 1st to May 15th.This will give customers the opportunity to pay for subscription package on Nova, Basic, Smart and Classic bouquets and get an instant upgrade to view a higher bouquet within hours of activation. If subscribers pay N1, 800 for two

months on Nova bouquet, they get to enjoy all Basic bouquet channels for 2 months, if they pay N2, 600 for two months on the Basic bouquet, they enjoy all Classic bouquet channels for 2 months and if they pay N2, 850 for one month and half on the Classic bouquet, they enjoy 2 months subscription. In the electronics market, Samsung is

selling its LED television set of 40N5000 series for N115,000 from N146,000, Panasonic LED television 40F336m series for N98,500 from N104,000, Samsung washing machine WA75 for N139,00 from N147,200, its refrigerator RT32 series for N190,000 from N208,500 and Panasonic 2HP Air Conditional RC18RKD series for N205,000 from N215,000.

LUXURY

FG targets tax increase on luxury goods, amid dwindling revenue OLUFIKAYO OWOEYE

he Senate has appealed to the Federal government to consider increasing taxes on luxury goods and services to shore up its dwindling revenue available to finance government spendings in the country. In recent times there has been an increased effort by the government to raise revenues in the face of fluctuating oil prices after the country recovered from an economic recession that slashed public finances, weakened its currency and cut spending on capital projects. Nigeria currently has one of the lowest tax rates on the African continent, and relies on crude oil sales for much of government revenues. In the past, the government had mulled the idea of raising taxes on luxury goods to 15

percent from the current rate of five percent, to boost its tax to GDP ratio to 15 percent from six percent which is significantly lower than Ghana and Egypt at 16 percent, Morocco at

22 percent and South Africa at 27 percent. The last economic contraction in the country has seen a reduction in the acquisition of luxury goods by Nigerians. The

shrinking consumer wallet and unfriendly economic policies of the government have seen a depletion in the number of high end consumers, wiping out the middle class and an alarming number of lower class in the country. Femi Adeyemo, a financial analyst believes the plant to increase the tax on luxury goods by the government can be likened to chasing the air. Instead, the government should focus more on revitalizing the economy and bringing more people into the middle and high-end consumer segment. “The first question we need to ask is how many Nigerians buy luxury goods” he queried. According to Adeyemo, Nigerians are getting poorer and can no longer afford the luxury items again. “This is not the right time to introduce such a tax increase on luxury goods, “he said.

Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous www.businessday.ng

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Thursday 18 April 2019

BUSINESS DAY

BUSINESS TRAVEL Namibia opens visa office in Lagos, providing more options for travellers …over 700 Nigerians travelled to Namibia in 2018 IFEOMA OKEKE

he Namibian High Commission in Nigeria, this week commissioned a Visa processing office in Lagos with a view to reducing to the barest minimum, the hassles being experienced while trying to get a visa from its office in Abuja. Speaking at an event to showcase the tourism potentials of Namibia and the capacity of its airline, Air Namibia, to the world, Humphaey Geiseb, Namibian High Commissioner to Nigeria, said based on enquiries and research, the country decided to open a via processing office in Lagos in partnership with Air Namibia since over 60 percent of people travelling to Namibia reside in Lagos. While disclosing that Namibia has a population of 2.4 million, he said with the on-going expansion of Walvis Bay in Namibia, the country is positioning itself as a gateway to the more than 240 million people in the broader Southern, as Namibia enjoys one of the most stable, peaceful political environments in Africa. “Namibia is a major tourists’ attraction in Africa with

Samson Davies, CEO True Nigerian Experience Limited; Primus Odili, chief of staff to the Governor of Anambra State; Charles O’Tudor, principal consultant/founder Adstract BMC Ltd; Oluwakemi Areola, special assistant New Media to the minister of Communications; Uche Nworah, MD/CEO, Anambra Broadcasting Service (ABS) and Uchenna Okafor, commissioner for Transport, Anambra State, at the the first Glocalisation and Branding Summit in Abuja.

tourism accounting for over $500 million contribution to the Gross Domestic Product (DGP). Our decision, therefore to open a visa processing centre in Lagos in partnership with Air Namibia is a strategic move aimed at easing the burden of having to travel to Abuja before getting a visa thereby further boosting diplomatic ties and trade between Nige-

ria and Namibia and offering choices and easy access to our highly esteemed visitors and would-be visitors”, he said. Speaking further, he said that in an effort to maintain the highest standards of professionalism and protect the integrity of the High Commission, a team of highly professional staff have been trained extensively and charged with

Battle of the Brands: British Airways takes top spot for Britain IFEOMA OKEKE

ritish Airways has been voted the number one British brand in both the consumer and business Superbrands lists for 2019. Over 1,500 brands were included in both surveys and British Airways was voted in fourth place in the Business Index and fifth place in the Consumer Index. The airline also secured the number one spot in the ‘Travel – Airlines’ category in the consumer survey, ahead of 18 of its competitors from the UK and internationally. Alex Cruz, British Airways’ Chairman and Chief Executive said: “It’s our centenary year and we couldn’t be more proud to be flying the flag for Britain. We’re thrilled to be featured as one the top five Superbrands alongside some incredible global organisations. We’re investing more than £6.5 billion to ensure British Airways offers a world-class

service - but we’re never complacent and we will continue to strive to ensure we meet and surpass our customer and colleagues’ expectations.” Voters were asked to judge brands against three core factors inherent in a Superbrand: quality, reliability and distinction. According to the experts at Superbrands, brand perception and voting by individuals is also influenced by a range of both short and long-term factors, from the brand’s current profile to its latest marketing activities and new product and service developments, giving a holistic picture of how brands are currently perceived. The business Superbrands voting process involving 2,500 UK business professionals, supplemented by an expert council comprising 24 senior business-to-business marketing leaders. In addition to the British public vote in the consumer Superbrands survey, which was weighted to reflect the breadth of opinion across www.businessday.ng

the whole country, all brands awarded Superbrand status were also highly rated by an objective and voluntary council of senior industry experts to provide a secondary quality control mechanism. Brands do not pay or apply to be considered - in order to provide a broad review of the market and identify the strongest brands in each category, all the key players in each sector need to be voted on. The research process was managed by The Centre for Brand Analysis (TCBA) in partnership with Dynata, one of the world’s leading data research companies. The Superbrands organisation identifies and pays tribute to exceptional brands throughout the world. The UK programme is run under license by The Centre for Brand Analysis (TCBA). A selection of identified Super brands are celebrated in the Super brands Annual, first published in 1995 and now in its 20th volume in the UK.

the responsibility of offering the same level of visa processing services as done at the Embassy in Abuja while also doing our level bests to ensure that visas are processed within a reasonable time frame. Earlier, Wimpie Van Vuuren, acting general manager, commercial services, Air Namibia, said the airline began flight operations into

Nigeria in 2010 but has been in existence for 70 years. While disclosing that it has one of the youngest fleet in the world with 10 aircraft, he said the airline offers world class services in its entire cabin on all routes. Van Vuuren added that Air Namibia employs only Nigerians for its Nigerian operations, adding, “we are confident that Nigerians are capable of doing the job, we are also marketing Nigeria. We want to establish a good mutual relationship with Nigeria, we are here to work with Nigerians, Namibia is a big attraction for tourists, we want to promote tourism and establish connections with other worlds”, he said. Speaking on why Namibia is the best place for tourists, Geiseb, the High Commissioner, who disclosed that 700 visas were issued to Nigerians in 2018, added that primary infrastructure in Namibia are well developed, saying that the World Economic Forum ranks Namibia as the country with highest quality roads in Africa. “Tourism is one of the country’s fastest growing industries and provides significant employment opportunities, Namibia is a nature

based tourism destination with spectacular scenery, including a wide variety of wild life, the world’s oldest desert, the world’s tallest sand dunes and community based nature conservations. “Namibia has great potential for renewable power generation, including from Solar wind and biomass sources. It has a wealth of natural resources including uranium, diamond, gold, zinc and copper which are primary sources f foreign exchange earnings, Namibia is the fifth largest producer of Uranium Oxide so there are opportunities for companies that provide equipment and services to mining operators. Also speaking at the occasion, Akinwumi Ambode, Lagos State governor, represented by Steve Ayorinde, Commissioner for Tourism, praised the decision to open a visa processing desk in Lagos. He said that for many African countries struggling with issuing visas seamlessly, this is the way to go. Ambode said there are a lot of things and attractions that can bring the two countries together, urging Nigerians to also market her natural sites and resources to Namibia.

Mbr Signature, Stallion Group partner to manage car display across airports Josephine Okojie

n line with the growing desire for new frontiers in ambient advertising, Mbr Signature, a leading communication and PR firm and Stallion Group have collaborated to manage the Federal Airport Authority of Nigeria (FAAN) car display projects across airports in the country. Mbr Signature has been appointed as one of the concessionaires by the airport governing body to manage car displays across Nigeria, a statement made available to BusinessDay states. According to experts, the need to re-invent the ambient landscape in Nigeria has been an on-going conversation that has continued to compel players to consistently invest in innovation and creativity in order to initiate new and engaging brand engagements.

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Stanley Ezeani, managing director, Mbr Signature said that the organisation’s vision is to bring more interesting dimensions to ambient branding. “We are delighted we have the capacity, platform and initiative to create legendary stories in this regard. The automobile sector deserves an exclusive ambient display culture and we are responding to this in ways that help to beam spotlight on cars showcased at @Businessdayng

airport locations across Nigeria where we enjoy the FAAN concession.” Ezeani said in a statement. “Even at this rate, we are not there yet as we are poised to make more competitive inroads,” he said. He added that disruption is vital in everything that Mbr Signature does and that it has continued to inspire them to re-imagine automobile ambient advertising across airports in the country.

Thursday 18 April 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

At the end of the day, corporates can only do so much ONUWA LUCKY JOSEPH

igeria is hemorrhaging, bleeding. Its people, its life blood, are leaving in droves. Granted, some are traveling out of a sheer need for change of scene, but for the majority, it’s strictly and solely about survival. Having scanned the landscape and seen nothing remotely akin to hope, they have decided to make a run for it. Through the desert, the mountains, by road, by air, by any means possible. This was not the story just a few short years ago, when Nigeria was bursting with hope and lots of folks in the Diaspora were trooping back, not as a result of any targeted government communication, but they saw the stats, Nigeria’s GDP growth which reached an all-time high of 6.9% in 2011, and as well the rebasing which gave us a much needed psychological elevation – the largest country in Africa (by population) now having the largest economy as well. Today, that hurrah moment seems like decades ago. All one hears now is folks leaving for Europe, for Canada, (Donald Trump having made America not so attractive anymore), for Asia, the Middle and Far East and to lots of other countries right here in Africa. The xenophobic attacks in South Africa have Nigerians disproportionately targeted. Aside it being due to our success as a people over there, as in fact anywhere outside Nigeria, it is no doubt because we constitute a massive target, Nigerians being one of the largest immigrant groups in South Africa. Government communication will dismiss all of these, arguing that those who leave may not be as patriotic as they ought to be, preferring, so to speak, the lettuce and onions in Egypt to the prospect of freedom in Nigeria. And the question the guys who leave never fail to ask is: “freedom at what price?” And what kind of freedom, should we stretch that analogy. Even as we stridently encourage corporates to do their bit and help free up more communities and individuals from poverty, help shine

the light so that more people can find their way, the fact remains that most of the work is in government domain. Government holds the yam, and holds the knife as well. If corruption is still rife in the polity it’s because there is widespread corruption in government. If poverty is as pervasive as it has now become with Nigeria being the world’s undisputed capital of poverty, it’s because there’s a poverty of ideas in government. If educated and ambitious Nigerians leave for greener pastures, it’s because meritocracy has been relegated and nepotistic considerations now the main factor for elevation. Those who go to equity with soiled hands cannot act surprised that nobody believes them. The evidence is in clear view. Corporate organisations will thrive under the right conditions as enabled by government. But be it known that corporates do not have the capacity for ending militancy. Even as they struggle to generate wealth, government railroads them with an ever complicated regime of multiple taxes paid to different layers of government. The young men and women who have heeded government call to till the land are subjected to unending attacks by herdsmen and with no solution in sight as the

President himself insists on cattle grazing routes that were mapped out generations ago. Government position is clearly anachronistic and anti-21st century thinking. Stasis seems to be the unuttered policy of government. And since man, especially the Nigerian variety of man (and woman) is not built for standstill; our people have been compelled to run off to other places that work. The Nigerian government must get Nigeria working. Corporates can only complement what government does. They do not have it in them to make and execute national policies. They only run or are set back by policies made by the government of the day. We salute the efforts of those corporates that sacrificially stand in the gap, helping to give hope and to lift folks out of poverty. However, even those folks lifted, we are in danger of losing if Nigeria stays unreformed and unprogressive. It’s time government fessed up to its weaknesses and woke up to its duties. Nigeria needs a conscious government, alive to its responsibility and intent on delivering to generations unborn a country that leaves them no desire to flee. “…the Nigerian variety of man (and woman) is not built for standstill”

Building a sustainable wardrobe

ow you can make your wardrobe more sustainable? Start by making informed choices. Buying quality clothes that last reduces your environmental impact and saves you money. Buy from brands that manufacture ethically by offering good conditions for workers and are transparent about the environmental impacts of their products. Find out about the people behind

the garments you buy, where they are, and in what conditions they work. If a brand cannot give you these anwww.businessday.ng

swers, look for brands that can. Be creative with the clothes you already own. Pair with something new or accessorise to create different look. Buy clothes that you’ll keep longer. Choose timeless classics that don’t go out of style. (Courtesy genuine responsibility.com)

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Milo Basketball championship season commences ONUWA LUCKY JOSEPH

keem The Dream played in the NBA same time as Michael Jordan. And The Dream still found a way to stand out, winning two NBA titles with the Houston Rockets in 1994, 10 years after joining the league, and also in 1995. Since then, other notable Nigerian hoop stars like Ike Diogu, Michael Olowokandi, Olumide Oyedeji, Ime Udoka, Michael Gbinijie, Michael Ochefu, AL-Farouk Aminu, Emeka Okafor, Josh Okogie as well as Giannis and Thanasis Antetokoumpo, amongst others, have kept the Nigerian presence aloft in the NBA.

Mauricio Alarcon, Nestle CEO

Over here in Nigeria, Nestle Milo has played a pivotal role in ensuring that more kids are exposed to the nuances of the game and that they find a platform for expressing their budding talents. Which was why on April 4th, 2019, as the company announced the 21st MILO Basketball Championships (MBBC), it was time to talk about how for over 20 years, MILO has been at the forefront of grassroots sports development, and helping to promote an active lifestyle that helps children stay healthier. The company says that over 1.5 million children have participated directly in the Milo Basketball Championship now in its 21st year. And in the past six years alone, 140,000 students have participated annually. From 500 schools, MBBC now reaches nearly 10,000 schools across Nigeria every year. You will agree that those numbers are big and the logistics involved, quite intimidating. At the press conference organised for the launch, Nestle Nigeria’s Managing Director and Chief Executive Officer, Mr. Mauricio Alarcon confirmed the company’s position that “Good nutrition and an ac@Businessdayng

tive lifestyle are two important elements to living a healthier life. In line with our purpose, which is enhancing quality of life and contributing to a healthier future, we therefore encourage children to be active through sports.” Mr. Alarcon said, further, that “Nestlé Milo Basketball Championship provides a platform to help children imbibe life skills and values, which enable them to be successful in any area of their lives, on or off the court. These values include perseverance through hardship, courage to overcome fear, ability to work in a team, self-belief, respect and leadership. We believe that sports provide op-

Nkechi Akachili

portunities for the development of qualities that set the foundation for a child’s future.” The regional conferences of the 2019 MBBC will run from the 8th to the 29th of May. The qualifying schools from these conferences in the Savannah, Central, Equatorial, and Western regions will converge in Lagos for the national draws on the 27th of June 2019. Winners of this stage will play in the finals on the 4th of July 2019 in Lagos, Nigeria. Nestlé Milo Basketball Championship has been a training ground and building block for many champions who now play professional basketball. One of such is Nkechi Akashili who played in the 2006 African Cup for Women Champion Club, and the 2017 FIBA Women’s Afrobasket. She has been named Most Valuable Player five times in the course of her career.” The State Ministries of Sports, Youth Development and Education support Nestlé Milo Basketball Championship, the only private company sponsored school sports championship. It is run in collaboration with Nigeria School Sports Federation (NSSF), National Collegiate Schools Foundation (NCSF), and Nigeria Basketball Federation (NBBF).

Thursday 18 April 2019

BUSINESS DAY

Corporate Social Impact

Book Review

The Charming Gardeners by Data Jaja ONUWA LUCKY JOSEPH

ata Jaja is a CSR practitioner whose tilt is towards children and their welfare. It’s no surprise therefore that her new book is written with youngsters in mind and with them as her primary audience. The message, however, is one that, in view of its currency and treatment, is bound to resonate with all age groups. That, precisely, is why we chose to talk about it today. The book has quite a charming title ‘The Charming Gardeners’, and it’s a tale artfully woven with the best of intents primarily to sensitise its audience about the need for a mass adoption of clean energy both for cooking and generally as a way of life. As the book shows, following Ameena’s health condition as it steadily deteriorated, there are consequences for sticking with the old ways when there is a better new way. And this is not an issue of values but rather of outmoded thinking that needs some tinkering. Our traditional and cultural ways is how we’ve been socialized and how we would rather remain. However, our forefathers resort to those ways was consequent on the knowledge and resources available at the time. But the modern beckons. And when it’s lean and clean, it is a good idea to run with it even if in the beginning, it does not evoke the same feelings as the old. It’s funny how not many of us would insist on firewood-cooked jollof rice for instance rather than one that was cooked on a gas burner. The firewood

flavor is so distinct and is stamped on our palate as the gold standard for jollof rice. Why do you think many people steal or corner enough jollof rice from parties? However, if we’d spare a thought for the cooks, what is that great flavor notwithstanding, recurrent cooking with firewood and the attendant smoke extracts a huge toll from the women who do the cooking. Ameena, the gentle, dutiful wife of Haruna Gborigi in this well-crafted story, has a bad cough problem occasioned primarily by her prolonged exposure to firewood which is the only way she knows how to cook for her be-

loved family. They live in the small town of Salka in the Middle Belt of Nigeria. The cough exacerbates, causing her serious pain. And then the door opens for her to travel to Lagos via an invitation from her brother in law who lives there with his family. Anyone who grew up outside Lagos in the 1960s, 70s and 80s understands the lure of that enchanting city of which fantastic tales have been woven that have no bearing with what obtains for real. Ameenah had been doing her bit to manage the cough, using honey and bitter cola. Her husband had done his best with the knowledge he had. But she was

getting worse rather than better. And so, when they went to Lagos, her brother in law who is an engineer scheduled an appointment with a doctor who ran the appropriate tests and found out the cough was caused by her exposure to firewood. Her in law, Joseph Gborigi, older brother of her husband, meanwhile, runs a gas company, and sees in the situation an opportunity to deepen this business reach while also helping to extend the adoption of clean energy by people in the rural areas. Via a network of carefully planned reach-outs and contact with grassroots influencers, the company was able to get some critical buy-in that enabled it expand the frontiers of clean energy while at the same time empowering a new crop of entrepreneurial minded individuals who were able to adopt the technology while also profiting off of it. The lessons are many. Adoption of new ways need not be at the expense of the profits that the old ways provided. As well, the whole arrangement tapped into the network already built from the old days. Teach people the new ways and teach them using people that they believe in. It works like magic. The sense of community was the other sub-theme in The Charming Gardeners. How peace, security and a sense of we-are-in-this-together enables the well-being of individuals in the society. Children don’t need any incentives to bond with others irrespective of the creed, culture or colour of those in their immediate environs. When encouraged and guided by grown-ups, such attachments can flourish and help in building

a cohesive and well-adjusted society. Effort was made by Jaja to showcase how Nigerians have intermingled and intermarried over time, gradually evolving and becoming one people despite the numerous efforts by politicians and other outsiders to isolate and trumpet our differences. Baba’s (Ameenah’s husband) older brother became assimilated in the Yoruba culture. Marrying a Yoruba wife, all the kids had Yoruba names. Reminds you, maybe not quite in the same way, but how the great Mathematician Chike Obi sired a son called Mustapha and another called Balogun. He was an Ibo man by the way. That’s how we’ve rolled as a nation. It’s not announced with a bell, but our melding has gone on quietly and without fuss. Politicians stay away! Let the people be one people. Leave your divisive ways. CSR was a big part of the story and why not, coming from a reputable practitioner. The gas company, realizing the environmental, health and profit potential of switching firewood for gas, found a way to provide free gas burners and cylinders to the early adopters. So you can imagine what became of Salka as smoke stopped billowing incessantly into the atmosphere. The Charming Gardeners is highly recommended for its fluid writing and excellent story line. Bits and pieces of the author show up here and there, but these are things she would be willing to divulge maybe at public reading sessions or while pitching it at the Ministries of Education for adoption as a textbook. We at CSI wholeheartedly give it our highly coveted thumbs up.

Sahara Energy Boosts South Sudan Peace Process with $600m

hen South Sudan got its independence from Sudan in 2011, it was joy in most parts of Africa, the thinking being that South Sudan being predominantly Black would now self-actualize and develop faster as it was now free from the domination of the Arabs who made up the majority in Sudan. Unfortunately, things have not played according to expectations. Despite the absence of the feared Janjaweed rebels hitherto contracted by the government of Sudan to terrorise the South, the South Sudanese turned on one another and have since made peace a rare commodity. Pope Francis, at the Casa Santa Marta, and in a clearly frantic bid to see the fragile South Sudan peace hold up, kissed the feet of President Salva Kiir Mayardit and Vice President designates, Riek Machar and Rebecca Nyadeng De Mabio. The prayer from the Papal See was “Peace be with you….You have started a process; may it end well”. To which we all say Amen! However, outside the spiritual arena, the brass tacks of nation building have to go on. The people have to survive. Infrastructure needs to be built. And it is heart-warming to see Sahara Energy DMCC, Dubai, a member of the leading energy and infrastructure conglomerate, Sahara Group, commit $600million to seeing

these things fruiting. The company being one of those indigenous entities that do business with South Sudan, a country dubbed the most oil dependent nation on earth, saw it fit to extend this goodwill facility in the hope that it will to help boost resurgent hope for peace in the world’s youngest democracy thereby strengthening the process of nation building. Commenting on the gesture during a meeting with President Kiir in South Sudan, the Executive Director, Sahara Group, Temitope Shonubi, said “Sahara Group is passionate about spearheading sustainable development in Africa and remains unwavering in its resolve to support peace and trade integration on the continent to promote shared proswww.businessday.ng

perity.” Shonubi said Sahara Group, working in concert with various stakeholders, would support infrastructure development and youth empowerment in South Sudan. “Following the end of the conflict and the reconciliatory efforts made by the Leaders of the country, we are delighted to partner with the government and people of South Sudan as well as support regional and global initiatives geared towards transforming the nation. Sahara Group has consistently advocated increased commitment to intra-Africa interventions through collaboration of all stakeholders. This, for us at Sahara, enhances the cause of giving wings to the aspirations of the continent’s over 1.2 billion people,” Shonubi said.

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Shonubi had during the 2019 African Refiners Association (ARA) meeting in Cape Town reiterated the urgent need for intra-regional trade in Africa and the commitment of Sahara Group to promote the cause. He told delegates at the meeting that Sahara Group, in keeping with its vision of a harmonised Africa, was building an integrated energy business across Africa to harness the potential of intra-regional trade. “We are delighted to be one of the first African companies to carry out full cycle crude and product trade transactions using only African resources within the continent. All transactions were carried out by Africans for Africans using African resources. The future of our business depends on how well we can work together across Africa,” Shonubi told the gathering of the continent’s leading energy sector players. Working through the Sahara Foundation, Sahara Group has since renovated and upgraded the University of Juba Computer Center in South Sudan with brand new computers, central UPS and server, air conditioners, roof mounted projector and furniture. The facility will boost ICT penetration within and outside the university community and ultimately inspire the emergence of more “techpreneurs” in South Sudan. Sahara Foundation has @Businessdayng

also provided farm equipment to cooperatives in a bid to boost crop production and self-sustainability in the region. The World Bank reports that South Sudan is the most oil-dependent country in the world, with oil accounting for almost the totality of exports, and around 60 per cent of its gross domestic product (GDP). The cost required to help six million South Sudanese – half of its population – cope with the effects of the country’s economic situation was put at $1.7 billion in 2018, according to the United Nations. The huge funding challenge of transforming South Sudan makes the Sahara Energy facility and continuing global support inevitable. In line with the governance requirement and need to preserve the integrity of South Sudan’s oil resources, the facility provided by Sahara Energy will be managed by the nation’s Central Bank under the watch of a United Nations led committee. “Sahara Group is passionate about spearheading sustainable development in Africa and remains unwavering in its resolve to support peace and trade integration on the continent to promote shared prosperity.” (Temitope Shonubi, E.D. Sahara Group)

Thursday 18 April 2019

BUSINESS DAY

ENERGYREPORT

Oil & Gas

Power

Renewables

Environment

OPTS enumerates key challenges, solutions to unlocking Nigeria’s gas potential …says gas price does not cover development cost

Stories by Olusola Bello

he Oil Producers Trade Section (OPTS), of the Lagos Chamber of Commerce and Industry (LCCI) has said that for Nigeria to realise the full benefits of gas as a catalyst for economic growth and diversification, several challenges across the entire gas value chain need to be resolved. The group also gave conditions that could help to fast-track the development of these resources, government policy needs to focus on developing adequate infrastructure, providing enabling commercial terms, settling and preventing future debts related to gas and power supply, and improving the business environment. It however said it is well positioned to collaborate with the government and other stakeholders in this regard. According the chairman of the group, Paul Mcgrath who is also the managing director of ExxonMobil there four main challenges which are related to the development

Lorenzo Fiorillo, vice chairman and managing director of Nigerian Agip Exploration Limited, handing over certificate to one of the 10 young Nigerian graduates that were trained in highly specialized Subsea Engineering course as part of the Company’s programmes to close existing skill gaps of Nigerians in the oil and gas industry. With him (R-L) Rabiu Bello, chief operating officer, Upstream of NNPC; Solomon Adeola, chairman senate committee on Local Content; Patrick Obah, director, research and planning of NCDMB; and Vincent Adegbotolu, managing director, Deepwater Concession Limited.

and production of gas as; inadequate infrastructure along the value chain; regulated low prices; legacy debt related to gas and power supply and the challenging business environment. The OPTS chairman who was evaluating the place of gas as a prioritised enabler of Nigeria’s economic diversification agenda at the 2019 Business Forum and annual general meeting

of the Nigerian Gas Association (NGA) said it is no longer news that infrastructure along the gas and power value chain remains inadequate. Particularly, Nigeria lacks sufficient pipelines to deliver gas from the fields where it is produced to the current and potential off-takers (e.g., power plants, manufacturers). In addition, the transmission and distribution systems lack the

capacity to deliver the generated electricity to businesses and other consumers. Building infrastructure he said, requires a sustained joint effort of the stakeholders led by government. “Active government support will help enable a stable investment climate, acceptable commercial terms and contractual risks. The above elements will help in attracting the required private investments which

Stakeholders cautious over NNPC’s claim on contracting cycle

ndustry operators have cautiously welcomed the pronouncement by the Nigerian National Petroleum Corporation (NNPC) that it has successfully fast-tracked contracting cycle for Upstream operations from 24 months to 9 months with a strong commitment to further reduce the process to less than six months in the months ahead. While the operators saws it is a good development they however said that they would watch the development with utmost caution so as not to be caught off guard by government policy inconsistence which has caused many investors to lose money. Edina wikinna, former External Relations Manager for Shell Nigeria Exploration and Production Company (SNEPCO) said there is nothing difficult about ensuring that there is a reasonable contracting circle for businesses in oil and gas industry. “It is doable. What was the problem before, he asked. Another operators who Olusola Bello, Team lead,

wants to be anonymous said it would be good if it can happened as said by NNPC as it would enable investors to confidently plan and budget. It would also eliminate potential risk and changes in the economy. In a presentation at the 12th Annual International Conference of the Nigerian Association for Energy Economics/International Association for Energy Economics (NAEE/ IAEE), Maikanti Baru, group managing of the NNPC, said reducing the contracting circle to nine months is a process would allow for free flow of investments into the industry with far reaching effect across all tiers of its operation. The NNPC boss who was represented by Victor Babatunde Adeniran, NNPC Chief Operating Officer (COO), Ventures, stated that NNPC had also been able to automate crude oil marketing process in the country. He said: “This process has helped to evaporate the mystery around the management

Graphics: Joel Samson.

and sale of Nigeria’s crude oil grades with introduction of innovative solutions triggering an ambiance of transparency and stakeholders’ confidence in the operations of the COMD. I can state without equivocation that, today at a click of a button, we can tell you how much crude is sold, at what price, who bought it and where it has gone to”. Maikanti Baru listed other achievements of the corporation to include: transparency and accountability, increased crude oil production, improved nationwide fuel supply, joint venture cash call exit, renewed frontiers exploration and revamp of critical downstream infrastructure. Others, he said, included sustained gas supply to power which led to stable domestic gas supply capacity of 17000 million standard cubic feet of gas per day (mmscf/d) with an average of 1.3 billion standard cubic feet per day (bscf/d) supply to the domestic market. Providing a long list of recipe that could be deployed

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to achieve energy efficiency, the NNPC’s helmsman noted that within the last three and half years the corporation had adopted a cocktail of practical approaches at achieving sustainable cost reduction in everyday business anchored on penetrating reforms across the entire value chain of its operations. He advocated sync between energy efficiency and sustainable development while harping on the need to always strike the delicate balance between commitment to social development and economic growth to achieve a win-win scenario. Earlier in his address, the President of the Nigerian Association for Energy Economics, Prof. Wumi Iledare, commended NNPC for its remarkable support in the past 12 years and appealed that the relationship be sustained to enable the professional body contribute meaningfully in generating solutions that the industry needs to grow the nation’s economy.

would strengthen existing off-takers and ultimately lead to emergence of new buyers and suppliers”. On regulated low prices, he stated that to date, Nigeria’s domestic gas prices are kept at a regulated low price, which does not cover the cost required to fully develop its gas resources. Of the 162 TCF reported gas reserves, about 75% will require the building of new infrastructure to deliver these gas resources to the domestic market. The current regulated gas price of USD 2.50/mmbtu he explained falls short of the price required to attract investment for these new gas developments, adding that the gas sector should transit into a liberalized market based on the ‘willing buyer, willing seller’ principle and ensure the existence of a competitive fiscal regime to support upstream gas development. As regards legacy debt related to gas to power, he said the commercial and financial structures of the gas-to-power commercial value chain remain weak with growing arrears and uncertainty in

Implications of acquisition of Anadarko Petroleum by Chevron

ith Chevron agreeing to buy Anadarko Petroleum in a $33bn (€29.1bn) deal that adds US shale oil and African liquefied natural gas the company is now puts it in the top ranks of the world’s largest energy companies. The takeover, the in dustry’s sixth-largest, puts Chevron neck-and-neck with the oil and gas production of Exxon Mobil and Royal Dutch Shell, both of which have dominated Big Oil over the past decade. Measured by cash flow, Chevron said it would have generated a combined $ 3 6 . 5 b n w i t h A na d a rko last year, slightly ahead of Exxon’s $36bn. “Chevron now joins the ranks of the ultra majors,” Roy Martin, an analyst at Wood Mackenzie, said in a note. The $65 per-share stock-and-cash deal sees

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

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the payment system which disincentivises gas investors. A conducive business environment he explained is essential towards achieving a diversified economy. Critical elements of a conducive business environment he said include: security of life and property, improved efficiency of regulatory bodies and stability of laws and policies. “OPTS believes that improving the regulatory, judicial and legislative framework in line with global standards (dispute resolution, contract sanctity) would promote investor confidence and significantly improve Nigeria’s ease of doing business towards growing and diversifying the economy”. “Gas has a leading role as a key enabler to the diversification and growth of Nigeria’s broader economy through adequate power generation, provision of feedstock for value-adding manufacturing, and increased FGN revenue from LNG. Therefore, the development of Nigeria’s vast gas resources and strengthening of the gas value chain should be a national priority”, he said.

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Chevron doubling down on its expansion into the fastexpanding Permian Basin o f West Tex as an d New Mexico, while also increasing its exposure to liquefied natural gas with Anadarko’s project in Mozambique. The new company will sell $15bn to $20bn of assets from 2020 to 2022 to re duce debt and return cash to investors. Chevron s hares fell o n t he d eal, dropping as much as 5.4pc in New Yo rk on Fr iday. Anadarko rose as much as 35pc to $63.23. CNBC reported that Occidental Petroleum had bid more than $70 a share for Anadarko, citing unidentified people, and is now considering its options. The transaction is the biggest strategic move yet for Michael Wirth, the 58-yearold chemical engineer who became Chevron’s chief executive officer just 14 months ago.

Thursday 18 April 2019

BUSINESS DAY

ENERGYREPORT

Oil marketers take proactive steps to improve customer services tics opportunities and lead the industry in raising and meeting international standards and make meaningful contributions to the society”. A few of which are stated below: Efficiency Driven Initiatives Internal Actions: • Driver Training • Self-Assessment & Standard Development • Technical Evaluation of Tanks and Tractors • Deployment of up-todate IT tools (On-Board Computers, Cameras and Route Survey by GPS) • Self-Regulation

Olusola Bello

he unethical and unprofessional practices currently being witnessed in the downstream sector of the oil and gas industry is about end if the plans rolled out by the Major Oil Marketers of Nigeria (MOMAN) are meticulously implemented. What this means is that there would be no under dispensing of fuel at the filling stations, there would be proper calibration of the equipment at the filling stations that would ensure customers get satisfaction from petrol attendants. Other unwholesome practices engaged by both the attendants and dealers at the various filling stations would be seriously curtailed. MOMAN is repositioning itself to be in line with international best practices; to be the industry reference and to lead the industry back to professionalism. More than ever before Nigerian customer would be the centre piece of MOMAN’s new strategy. To achieve this, the association has developed guiding principle/statement of intents through which it plans to be a reliable partner to the Federal Government of Nigeria in the actualisation of the National Petroleum Policy. Specifically, to drive and support the vision and mission of the policy as well as its strategic policy objectives which are: “To become a nation where hydrocarbons are used as a fuel for national economic growth and not simply a source of income, maximize production and processing of hydrocarbons. The Strategic Policy ob-

jectives of the association includes creating a marketdriven oil and gas industry, cost efficient storage, transportation and distribution of petroleum products, move away from oil as a source of income to oil as a fuel for economic growth; and managing the balance between oil resources versus renewable energy. Pace setting and deployment of international best practices in the business of Nigeria’s petroleum downstream sector is one of the foremost objectives of reformed MOMAN and this will entail the following: Promoting the development of institutional capacity as well as a sustainable viable downstream petroleum industry thereby fostering the economic and social growth of Nigeria, development and compliance with an industry self-regulatory regime to support regulators and raise Nigeria’s safety, technical and quality standards in fulfilment of the government’s national petroleum policy.

Others are: Enhancing conditions which results in only professional and responsible organizations, participating in the petroleum downstream sector in Nigeria, compliance with corporate governance code of conduct by participants in the petroleum downstream sector in Nigeria, adherence to international industry best practices in Health, Safety, Security, Environment and Quality Standards (HSSEQ), improving customer service by amongst others the deployment of technology in the protection of the Customer and ultimately the business. The associations is not done yet as it said it would enhance the optimization of the supply value chain to increase efficiency and reduce cost, promote Nigerian content and ensuring compliance by participants in the petroleum downstream sector in Nigeria, training and development of Nigerians in important disciplines such as engineering, management, strategy and

establishment of a thinkthank of professionals to tackle industry issues and proffer workable solutions to identified problems. Major oil marketers group is made up of 11 Plc (formerly Mobil), Conoil Plc, Forte Oil Plc, MRS Oil Nigeria Plc, OVH Energy Marketing Limited and Total Nigeria Plc. According to Clement Isong, chief executive officer of the association, MOMAN is committed to helping drive best practices and create the right policy environment for the achievement of market objectives and the delivery of optimal value to the Nigerian energy consumer by partnership with stakeholders including government and industry regulators. Since its inception, MOMAN has progressively gained a solid and enviable reputation in the Nigerian petroleum industry. MOMAN began in the early 2000’s as ‘cordination’. The lack of investment in the country’s infrastructure, the quality of the distribu-

tion network, the changes in international petroleum economics, or simply the inability to keep abreast with Health, Safety, Environment and Quality (HSEQ) developments in other parts of the world, (including other African countries) have plagued the Nigerian petroleum industry, resulting in an unsustainable business model. “MOMAN members have started imbibing selfregulation, international best practices & shall propose national initiatives as part of its contribution to the country. With MOMAN’s collective depth of expertise, access to technology and intellectual resources (locally and internationally), we are best positioned to correct the downward slide the petroleum sector has suffered in partnership with MDAs such as NNPC, PPMC, DPR, PPPRA, FRSC, through several programs, to develop and promote HSSEQ standards in the industry, drive business efficiencies, identify logis-

External Actions: • Collaboration with FRSC on safe-to-load checks • Collaboration with the Apapa Grid Lock Taskforce • Partnership with the Lagos State Safety Commission MOMAN believes that a safe operation using the correct norms and standards will guarantee the long-term sustainability of the industry. Majority of MOMAN’s successes in 2018 were as a result of a deliberate and conscious strategy to restructure the Association. “MOMAN is constantly striving to improve by being much more than an ‘operations based’ organization that works tirelessly to ensure depot, jetty and logistics efficiencies. It has evolved and is evolving into a more ‘knowledge-based organization. We recognize that there are gaps along the supply chain and are investing in technology to plug these loopholes. The Nigerian customer shall get quality service as well as the right quantity of whatever they pay for from MOMAN retail outlets”, Isong said.

Shell delivers N150m capacity development programme for Bonny youths

o fewer than 12 young entrepreneurs from host communities to the Bonny Oil and Gas Terminal in Rivers State have benefitted from a N150 million capacity development and empowerment programme by The Shell Petroleum Development Company of Nigeria Limited (SPDC). Igo Weli, SPDC’s general manager, external relations, who handed over the ser-

vice entry and final settlement to the beneficiaries in Port Harcourt described the initiative as a product of continuous effort by SPDC and its joint venture partners to empower youths, promote Nigerian content and support community participation in Nigeria’s oil and gas value chain. Weli said, “Developing local skills, talent and contracting capacity in the Nigerian oil and gas industry is very important to SPDC and www.businessday.ng

its partners. That is why we have continued to embark on programmes and projects that have sustainable impact on our host communities and the Nigerian economy. “This is a demonstration of how much benefit a conducive business environment and cordial relationship between host communities and industry players can bring to the people.” Weli commended the beneficiaries for their industry and determination to

champion entrepreneurial rebirth among youths on Bonny Island. He encouraged the beneficiaries to always keep an optimistic business mindset and to translate the opportunities into further empowering others. The capacity development initiative included one-year vocational training, and obtaining Level 1 City and Guilds certification. The beneficiaries also received equipment and materials worth over

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N50million in addition to start-up grants. One of the beneficiaries, Christopher Irimagha, described the opportunity as ‘life-changing’. “The training has been beneficial in positioning us for success in our community,” he said. This initiative is in addition to SPDC’s 16-year-old Shell LiveWIRE, a flagship enterprise development programme designed to help young people explore the option of starting their @Businessdayng

own business as a real and viable career option. It provides training, finance, and business mentorship for young entrepreneurs. Launched in Nigeria in 2003, Shell LiveWIRE has produced thousands of Niger Delta entrepreneurs most of whom are now employers of labour. Some of the beneficiaries are also given the opportunity to play in SPDC’s supply chain as vendors and are provided with access to growth capital.

Thursday 18 April 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

National Housing Fund (Establishment) Act, 2018: Analysis and Recommendations for Legislative Review

n a letter dated March 19, 2019, addressed to the leadership of the National Assembly and read at Plenary on the floor of the Senate on Tuesday, April 2, 2019, President Muhammadu Buhari declined assent to eight Bills earlier passed by the federal parliament, one of which was the National Housing Fund (Establishment) Act, 2018 (“the new NHF Act”). Predicating this decision on his powers under Section 58(4) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), the President specifically attributed his decline to give assent to the new NHF Act to the various levies it imposes on Nigerians and business entities, which as have been argued by relevant industry stakeholders, would have negative impact on Nigerian workers and also be disruptive and punitive to industries and other sectors of the Nigerian economy, if allowed to take effect. The new NHF Act was passed by both Chambers of the National Assembly to repeal and replace the National Housing Fund Act, 1992 (“the 1992 Act”). This article reviews the controversial provisions of the new NHF Act with respect to the statutory contributions required to be made to the National Housing Fund (“the Fund”) as well as the mandatory investment required to be made in the Fund by banks, insurance companies, pension funds and cement manufacturing companies/importers for the purpose of growing the Fund. Analysis is also made of the negative socio-economic impacts which the forceful diversion of funds from the affected individuals and corporates, to the Fund, would likely have on the larger economy. From a comparative analysis of the new NHF Act to the 1992 Act and an evaluation of the lackluster performance of the Fund since inception in 1992 to an overview of the moribund mortgage sector in Nigeria, it is submitted that the Fund needs to be grown and the mortgage sector needs to be deepened through an inclusive and incentivizing legal framework. In order to successfully build Nigeria’s mortgage market without causing harm to the other equally vital sectors of the econ-

omy, it is recommended, besides the other suggested policy reform initiatives, that the new NHF Act be returned to the National Assembly for a new round of legislative action geared to-

wards addressing its identified contentious provisions. Whilst the new NHF Act retains the objectives of the Fund under the 1992 Act, the primary purpose of the re-enactment was to “provide for additional sources of funding for effective financing of housing development in Nigeria”. THE FUND The statutory sources of contributions to the Fund as well as investments in same by affected entities are as follows: Contributions by Nigerians – both in the public and private sectors: The new NHF Act provides that 2.5% of the monthly income of an employee earning the national minimum wage and above, either in the public or private sector, shall be contributed to the Fund. Same rate of contribution is prescribed for a self-employed person with equivalent monthly income. The contributions to the Fund by the targeted Nigerians shall attract an interest of two percent (2%) per annum or any other interest rate as may be determined by the Federal Mortgage Bank of Nigeria (the “FMB”). It should be noted that under the 1992 Act, self-employed persons are not covered and that the interest payable on contributions to the Fund by Nigerian employees is four percent (4%). This is significantly higher than the 2% rate provided in the new NHF Act. Also, the contribution of 2.5% of monthly income under the 1992 Act is applicable only to workers earning an income of Three Thousand Naira (N3,000) www.businessday.ng

and above while the new NHF Act is expected to cover workers earning the minimum wage or its equivalent and above. Investment in the Fund

by Banks (Commercial & Merchant): Commercial and merchant banks are required, by the new NHF Act, to invest a minimum of ten percent (10%) of their profit-before-tax (“PBT”) in the Fund at an interest rate of one percent (1%) above the interest rate payable on current accounts by banks. The new NHF Act empowers the CBN to apply sanction on any erring bank which may include cancellation of the operating licence of the bank. We note that the proposed statutory contribution by banks is a clear departure from what is currently applicable. Under the 1992 Act, banks are only required to invest in the Fund 10% of their loans and advances at an interest rate of 1% above the interest rate payable on current accounts by banks. Also worthy of note is the fact that no sanction is contained in the 1992 Act in respect of failure of a bank to comply with the provisions on contribution to the Fund. Investment in the Fund by Insurance Companies registered under the Insurance Act: Similar to the prescribed investment by banks, every registered insurance company is required by the new NHF Act to invest a minimum of 10% of its PBT in the Fund, at an interest rate not exceeding 1% above the interest rate payable on current accounts by banks. NAICOM is empowered to apply sanction on any erring insurance company which may include cancellation of the operating licence of the insurance company.

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Worthy of note is the fact that under the 1992 Act, insurance companies are only required to invest a minimum of 20% of their non-life funds and 40% of their life funds in real property

development (of which not less than 50% shall be paid into the Fund through the FMB) at an interest rate not exceeding 4%. Also, we note that, save for application of sanction on erring insurance companies, NAICOM plays no role under the 1992 Act with respect to the collection and onward transmission to FMB the contribution by insurance companies for investment in the Fund. In other words, under the extant regime, the FMB determines the contribution by insurance companies for the purposes of investment in the Fund and issue a Demand Notice to this effect, after a careful examination of the audited annual accounts of each insurance company. Investment in the Fund by Pension Fund Administrators: Every registered Pension Fund Administrator (“PFA”) is mandated by the new NHF Act to invest a minimum of 10% of its PBT in the Fund, at an interest rate not exceeding 1% above the interest rate payable on current accounts by banks. The new NHF Act empowers PenCom to apply sanction on any erring PFA, which may include cancellation of the operating licence of the affected PFA. Notably, pension funds were not included in the “Resources of the Fund” under the 1992 Act. The National Insurance Trust Fund, the old pension administrator in Nigeria and precursor to the PFAs, was not under any mandate to invest the assets under management in the Fund. Financial contributions by the Federal Govern@Businessdayng

ment for long-term housing loans: As contained in the 1992 Act, the new NHF Act also provides that the Federal Government (“FG”) may make any grant of money to the Fund as it may determine or deem necessary. Specifically, the FG is required to make adequate financial contributions to the Fund for the purpose of granting long term loans and advances for housing development in Nigeria. Sustainable Development Levy on locally produced or imported cement: The new NHF Act imposes a fresh tax called Sustainable Development Levy (the “Levy”) on the production and importation of cement in Nigeria. The Levy is to be paid and credited into the Fund and is calculated at the rate of 2.5% ex-factory price before transportation cost for each bag of 50kg or its equivalent in bulk. After proper assessment of the Levy due to be paid by a manufacturing company or importer in a year, the FIRS is to issue a “Notice of the Assessment” to the affected manufacturer/ importer. Any cement manufacturing company or importer that fails to pay the Levy imposed within the specified periods commits an offence and liable on conviction to a fine not less than One Hundred Million Naira. In addition to this, a CEO, director or officer purporting to act in the capacity of the company/ importer shall be liable, upon prosecution and conviction, to a fine of Ten Million Naira or imprisonment for a term of three years or both; unless it is proven that the act or omission constituting the offence took place without the knowledge, consent or connivance of the CEO, director or officer. To be continued next week This is an abridged version of the authors’ article. The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm or serve as legal advice. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

Thursday 18 April 2019

BUSINESS DAY

INDUSRTYFILE

LegalBusiness

The NLNG train 7 project

globally.

he Nigeria LNG Limited (NLNG) and the Nigeria Content Development Monitoring Board (NCDMB) have, on Friday 22nd March 2019, signed the Nigeria Content Plan for NLNG Train 7 project. The NLNG Train 7 Nigerian Content plan will form the operating guide for the execution and monitoring of the Train 7 project. The NNPC is of the view that the signing of the Nigerian Content Plan for the Train 7 works will strengthen the NLNG’s commitment to further contribute to the advancement of growth in the Nigerian economy. It would also aid the maximisation of Nigerian content deliverables in the project, as envisioned in the Nigerian Oil and Gas Industry Content Development Act, 2010. The sign off ceremony was witnessed by major stakeholders in the energy sector, who are also partners in the project - NNPC (with 49 % stake) on behalf of the Federal Government, Shell Petroleum Development Company (25.6% stake), Total (15% stake) and ENI (10.4 % stake). According to the NNPC, the NLNG Train 7 project is aimed at increasing the NLNG’s production capacity by the expansion of the existing Trains 1 - 6 and associated infrastructure at an estimated cost of $4.3bn. The Managing Director of NLNG, Mr. Tony Attah at the ceremony stated that the Train 7 project is the biggest project that will unluck Nigeria Gas potentials.

BENEFITS Some of the many benefits of the Train 7 NLNG project from local content perspective include: • giving first consideration to indigenous goods, services and human resources; • local procurement of low and high voltage cables; civil engineering works on roads, piling and jetties; • fabrication of the condensate stabilisation unit, piperacks, flare system, etc; • provision of logistics services, equipment leasing, insurance, hotels, office supplies and consumables; • aviation services, haulage services.

The Train 7 project is expected to ramp up NLNG’s production capacity from 22 million tons per annum to 30 million tons per annum. Nigeria is one of the top 10

countries in the world, with huge natural gas reserves. Despite these huge deposits, Nigeria is not regarded as a major international gas hub due to its low gas export, compared

to its huge oil exports. It is anticipated that the Train 7 project will catapult Nigeria from being mainly an oil-based country to both an oil and gas-based economy to be reckoned with

Key Contacts Jackson, Etti & Edu is a fullservice law firm with a sector focus, rendering legal services to Nigerian, Pan-African and International clients in diverse jurisdictions. We have earned a reputation for delivering commercial advice across all the key sectors: energy & natural resources, fast moving consumer goods (FMCGs), financial services, health & pharmaceuticals, real estate & infrastructure, and technology, media & entertainment. Further information about the firm is available at www. jacksonettiandedu.com. This is a publication of Jackson, Etti & Edu and is for general information only. It should not be construed as legal advice under any circumstances.

A publication by the law firm, Jackson Etti & Edu.

DOA advises TeamApt on US$5.5 Million Capital Raise

merging global law firm, Duale, Ovia & AlexAdedipe has acted as transaction counsel in connection with US$5.5 Million capital raise by TeamApt, a Nigerian fintech startup in a Series A funding led by Quantum Capital Partners. The company will use the funds to expand its white label digital finance products and pivot to consumer finance with the launch of its AptPay banking app. TeamApt plans to develop more business and consumer based offerings. “We’re beginning to pilot into much more merchant and consumer facing products where we’re building payment infrastructure to connect these banks to merchants and businesses,” CEO Tosin Eniolorunda said. Part of this includes the

Adeleke Alex-Adedipe

launch of AptPay, which Eniolorunda describes as “a push payment, payment infrastructure” to “centralize… all services currently used on banking mobile apps.” The company recently rewww.businessday.ng

ceived its license from the Nigerian Central Bank to operate as a payment switch in the country. On new markets, “Nigeria comes first. But we’re also looking at some parts of

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Europe. Canada is also hot on list,” said Eniolorunda. He wouldn’t specific a country but said to look for a TeamApt expansion announcement by fourth quarter 2019. Duale, Ovia & Alex-Adedipe transaction team was led by the firm’s Partner, Adeleke Alex-Adedipe.Duale Ovia & Alex-Adedipe has over the years established a reputation as the leading Nigerian law adviser for Telecommunications media and Technology having acted for such Firms such as The Terragon Group in its Series A funding and Arca Payments Company a frontline Nigerian Financial Technology company. DOA is a bespoke full-service commercial law firm in Nigeria that provides a wide range of expert legal services @Businessdayng

to a highly diversified client base both local and international operating in various sectors of the economy. The firm was named the Telecommunications and technology firm of the year 2018 a recognition it achieved in 2017. It would be recalled that in 2018 the firm advised Africa’s fast growing Nigerian investment startup Piggybank.ng in its $1.1M seed funding round. Piggybank had announced a new product — Smart Target, which offers a more secure and higher return option for Esusu or Ajo group savings clubs common across West Africa. The financing was led with a $1 million commitment from LeadPath Nigeria, with Village Capital and Ventures Platform contributing $50,000 each.

Thursday 18 April 2019

BUSINESS DAY

PHOTOFILE

ALP Partners, Shasore and Rimi at inaugural meeting of Nigeria International Advisory Council of CWEIC ALP Partners, Olasupo shasore, Chairman of the Nigeria International Advisory Council of the Common Wealth Enterprise & Investment Council (CWEIC) and Aisha Rimi with Jide Sanwoolu at the inaugural meeting of Nigeria International Advisory Council of CWEIC held recently at Eko Hotel, Lagos.

GLOBALREPORT

representation of women in the partnership had increased by 53% since 2014 (81 to 124) and that the firm was still working to achieve the goal. The latest promotions span 13 offices. Four new partners are in London, six are in Asia and six in Australia. Mark Rigotti, chief executive, said: ‘These new partners are outstanding lawyers and have built deep relationships with clients, developed a wealth of expertise, and demonstrated a real understanding of our firm values and culture. Their diverse skills and experiences will further enhance the strength of our global network.’

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LegalBusiness

Law firm sacks partner for ‘inappropriate conduct’

UK law firm has become the latest legal practice to dismiss a partner following allegations of inappropriate behaviour. Capsticks Solicitors LLP, an specialist in regulator y law, confirmed on Tuesday it had terminated a partner’s employment for ‘inappropriate conduct’. The firm has neither named the individual nor described the conduct. Rachel Heenan, senior partner, said in a statement: ‘No firm or employer is immune from these circumstances and as soon as we learned about the allegations we took swift action.’ Capsticks is the SRA’s preferred panel firm and is regularly selected to run disciplinary cases against solicitors accused of misconduct. An SRA spokesperson said: ‘We cannot confirm or deny if we are investigating a firm or individual. ‘When the contract was

agreed, we made contingency plans for scenarios involving a potential conflict of interest. In order to ensure transparency and fairness, we would approach an independent third party to assist us in our work.’ The issue of inappropriate behaviour in the workplace has taken on greater importance in the legal profession with the growing influence of the #metoo campaign. One City firm has created a ‘safe word’ for staff to come forward when they are uncomfortable with something a colleague has said. A London firm dismissed one its partners last year following allegations of inappropriate behaviour, while another firm’s global chair stood down after admitting to inappropriate ‘communications of a sexual nature’. Another firm said it regretted ‘a number of shortcomings’ in the way it handled a historic sexual misconduct complaint.

Giuliani: Trump lawyers finishing Mueller report rebuttal

Herbert Smith Freehills misses five-year gender diversity goal nternational firm Herbert Smith Freehills is set to just fall short of a gender diversity target set five years ago which sought to increase the number of women partners. The firm’s latest promotion round has resulted in 22 lawyers being made partner, of whom eight are women. In 2014, the firm said it wanted 30% of its global partnership to be female by 2019. After the latest promotion round, effective 1 May, the partnership is set to be 26% female. A spokesperson for the firm acknowledged the target had not been met but noted that

resident Donald Trump’s lawyers are putting the finishing touches on a rebuttal to the forthcoming report by special counsel Robert Mueller. Rudy Giuliani, one of the president’s attorneys, said Tuesday that their document will be dozens of pages long. Giuliani says it will be published in the hours after the release of Mueller’s report on Russian interference into the 2016 presidential election. The Justice Depart-

ment says it expects to unveil a redacted version of the

400-page document today, Thursday.

Firm associate banned after logging false calls on system

former law firm associate who doctored entries into the case management system has been barred from working in the legal profession. Lianne McDonald, a non-solicitor associate with Plymouth firm Russell Worth Limited, logged more than 90 false entries onto the system over more than two years. McDonald’s duties had included making calls to assist file handlers in the personal injury department, the duration of which she had to record. After she was reported to the firm by a colleague, an investigation uncovered nine instances of phone calls being logged that had not taken place.

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At a disciplinary interview, McDonald, who had been with the firm for nine years, admitted fabricating the entries on the case management system and was dismissed for gross misconduct. A detailed investigation subsequently found she had made a total of 93 false entries. A regulatory settlement a g re e m e n t p u b l i s h e d by t h e @Businessdayng

Solicitors Regulation Authority said the false entries recorded calls that had not been made. It was stated McDonald made the entries between June 2016 and August 2018 ‘to increase her time recording to meet targets set by the firm’. McDonald admitted that her conduct had been dishonest. The regulator described a ‘pattern’ of dishonest behaviour which was repeated over two years. She will be prevented from working for any authorised firm, without having secured SRA permission. She must also pay £300 costs. Russell Worth Limited has been approached for comment.

Thursday 18 April 2019

BUSINESS DAY

Garden City Business Digest Akasemi Ollor: The Rivers female young lawyer making waves in Ghana

Nigerian girl in the womb of the emerging oil industry in Ghana says hard work and merit would stand you out any time anywhere. Her exploits are putting Nigerian girls on top scale in Ghana, UK, and elsewhere, as she propels a work ethic that brings out the best in women professionals. Her exploits have broken into the media in Ghana. (See details from the Business & Financial Times of Ghana; with editing by Ignatius Chukwu) Women’s participation in the workforce is a huge concern for development. The topic ignites passionate conversation during women’s history month each year. In the oil and gas industry, the issue of gender parity is especially acute. Globally, women account for only 22 per cent of the workforce in oil and gas and their numbers dwindle as one approaches senior management. But it is in this heavily maledominated terrain that 29-year-old Akasemi Ollor has staked her claim. Born in Port Harcourt, Nigeria, the voracious reader and lawyer negotiated, under the auspices of George Etomi & Partners, for the acquisition of West Cape Three Points Block 2 for Springfield, the first independent Ghanaian company to acquire a major interest in an oil block. Ollor, who currently works as the Compliance & International Business Practices Manager at Springfield, knows that her gender and her age could hinder her professional progress in a society where old-age gender norms dictate that women and young people are quiet and default to older men. But it is for this reason that she works extremely hard, knowing that no one can dispute the results of hard work, irrespective of gender and age. In fact, Ollor’s work ethic was developed at a young age. Many people do not remember the book they read just five weeks ago, but Ollor remembers, growing up in an academic family, that not only were her early memories filled with a love for reading but, “I remember I read my first book at age five; it was called Koku Baboni”. “From then on, I read everything

I could put my hands on and books became a huge part of my life,” she recounts. On that premise, Ollor decided to pursue a law degree to combine her abilities and interests. At a young age, she recalls being around her dad and granddad that had a lot of active court cases on land and chieftaincy matters. “I saw firsthand how they used the law to protect their rights when it was infringed on and I also loved and grew to appreciate how logical the law was on peoples’ rights and obligations.” Coupled with an aptitude for English literature, Government and Commerce subjects in secondary school, law school was a natural fit. She worked in Lagos, Nigeria, for a couple of years as a young lawyer with the renowned law firm, George Etomi & Partners. At the firm, she worked on various transactions including advising the majority interest purchaser of Eko Electricity Distribution Company in the privatization process of the Power Holding Company of Nigeria (PHCN). She decided to move to the UK to complete her master’s degree as an NLNG and British Council fully sponsored scholar. Being the commercial, financial, trade and maritime hub, she knew an education in the UK would set her at par with the best commercial minds in the world. She immediately moved back to Nigeria upon completing her Master’s degree in Maritime Law. “It was never my intention to live in the UK as I always believed there was a lot of work to do on the continent in terms of development and Africa was the place I could make the most impact”, she says. Upon her return and whilst still at George Etomi & Partners, She began providing consulting and transactional advisory services to various firms in Nigeria including advising on the successful merger and integration of two nationwide banks, Heritage and Enterprise Bank, as well as providing advice to international companies on regulatory compliance, corporate governance procedures and international best practices. Ollor also led research and publications at the firm author-

Akasemi Ollor

ing Nigeria’s 2016, 2017 and 2018 submission on Public Private Partnerships in “Getting the Deal Through” as well as Nigeria’s submission on “Enabling the Business of Agriculture: 2017 Report” for the World Bank Group. She was ultimately called on to provide advice to Springfield on the negotiation and acquisition of West Cape Three Points Block 2. This would make history; positioning Springfield as the first independent Ghanaian Company to acquire a major interest in a block. She proceeded to join Springfield in 2016 due to her key role in the WCTP2 negotiations and was tasked with setting up the compliance programme and corporate governance structure for the Group. She has also helped the company to negotiate other historic transactions, including the acquisition of 3D seismic survey from PGS, as well as the lifting of the first two cargos of the Government of Ghana’s crude oil

entitlement from the TEN field. In her role, Ollor ensures that the business is conducted according to international best practices and that risk factors in potential business transactions are identified and properly mitigated. She highlights, “I enjoy negotiating and reviewing draft documentation for business transactions to identify risk factors in potential contractual obligations, advise on mitigation strategies as well as provide risk management advice to the board of directors and senior management”. She also enjoys conducting trainings that inform employees on the company’s compliance policies and best practices. But the joy she experiences from work is met with an equal challenge: being underestimated because of her gender and age. “Gender norms dictate that women should be humble and soft-spoken so whenever a woman speaks up for herself she may be seen as aggressive meanwhile the man in that same position would be seen as assertive. Society conditions women to be people-pleasers. If you give in to this, you may even find that men end up taking credit for your ideas, contribution and labour because you feel the need to please or avoid seeming conflict.”, she explains. On how she addresses it, she mentions that “I have faced these challenges by being the best I can be and by speaking up about my ideas and contribution. Thankfully, I have always worked, and still work, for companies and bosses that are avid promoters of women empowerment and gender balance in the work place. This support has propelled me and strengthened my confidence and resolve to always stand tall in my career.” In a society and industry that still largely operate by the old boys club, Ollor tells other young women to “be the best that you can be. People may underestimate you but prove them wrong every time. You can never argue with hard work and merit as the work product would ultimately speak for itself. Finally, do not be afraid to own your achievements and be proud of every single one”.

Mass rape after JAMB exams and the anger of Pastor Eric Port Harcourt by Boat

IGNATIUS CHUKWU

orshippers were amazed this last Sunday at a rural church in a part of Imo State when the head of pastors angrily lambasted Nigeria as a country without governance, a country without leadership. His anger was that female candidates who wrote JAMB (Joint Admissions Matriculation Board) exams last Thursday in a part of Mbaise were raped by hoodlums after the exams. The exams ended late in the night. Some made their way to the place they kept their belongings as late as after 8pm. This is a state where parents don’t allow their wards (especially females) out after 7pm. Now, for the sake of exams, their girls were late out there with the wolves. The next thing that happened was that bad

boys waited for them at the holding centre and rounded them up; rape. The news caused angst in northern Mbaise areas where women wept and cursed the hoodlums. Pastor Eric Onunji, the General Overseer of True Believers Church, with headquarters in Nnorie, Ngor-Okpala local council area of Imo State, is the man of God who accurately foretold of the emergence of Emeka Ihedioha as next governor of Imo State. He was visibly angry. His second daughter wrote the JAMB this year and this made him to have interest in the proceedings. The man of God lamented over and again, saying Nigeria was drifting and that nobody seemed to be doing anything about it. How would girls that wrote a hectic examination be subjected to further trauma and agony late in the evening by men who ought to protect them? How is it that young persons are no longer protected in their country? His anger shot in many directions. First, why is law and order so broken down that hoodlums and criminals no longer gave a hoot? How come no arrests are usually made and why no successful prosecutions are recorded as hoodlums daily dictate what happens in Nigerian communities these days? His next anger is; why should any examination body allow exams to stray so late into dark hours in a country without power supply nor

security guarantees? Exams should end latest by 5pm. It is about planning. By allowing exams to stretch into or beyond the 8pm mark, children are exposed to danger. The next cause of anger is why JAMB is doing exams on week days when WAEC is also on. By this alone, candidates writing both exams have been badly affected. According to Pastor Eric, you would be faced with which of the exams to skip. This has one full year implication for such candidates. His anger is the fact of apparent lack of planning by the authorities and lack of oversight

concern by the Federal Ministry of Education and the Education Committee of National Assembly. These are government departments that claim billions of naira every budget year with which they ought to be implementing government policies. If something as fundamental and simple as scheduling different exams and making sure exams ended early in the day could pose such difficulty, it means that Nigeria is drifting. If government cannot schedule exams seamlessly, and would allow WAEC to clash with JAMB, then, we have returned to the primitive era. His worry is that most Nigerians parade high degrees. To be employed, the authorities insist on first class and 2.1 grades but when those persons get into the jobs, they behave like illiterates. The common man would hardly feel the impact of the high education that is demanded of employees. In the far past, persons who worked with Primary Six Certificates and later with School Certificate education in companies such as John Holt, UAC, ECN, Kingsway, banks and P&T were known to be dedicated to duty and strove for excellent delivery of tasks. Not anymore! The cleric demands for stiff penalty to abusers of women. He does not understand why society looks on as the weak and minor are decimated and abused in our country. He Eric Onunji, general oversser, True Believers angrily prescribed life jail for rapists and abusers. Maybe! Assembly

Thursday 18 April 2019

BUSINESS DAY

Investing in Rivers State NDDC in fresh push to boost tertiary education in oil region Ignatius Chukwu

ne of the early signs of boost since the coming of the professor, Nelson Brambaifa, as the agting CEO of the Niger Delta development Commission (NDDC) is a push in the education sector, especially the tertiary level which had witnessed some lull, if not scandals and crisis. Three major steps have been taken; reaffirming support for education, visit to the UK, and the upcoming signing of deals to expand the scholarship scheme abroad and break new grounds. NDDC reaffirms support for education in Niger Delta The NDDC Acting Executive Director Finance and Administration, Chris Amadi, reaffirmed the Commission’s resolve during the 32nd Convocation Ceremony for the 2016/2017 and 2018/2019 academic sessions of the University of Port Harcourt, UNIPORT. At the ceremony, he received the Doctor of Philosophy degree (Ph.D) in Trade and Development Finance alongside another NDDC Director, Ibitoye Abosede, who received the Doctor of Philosophy degree (Ph.D) in Communication Studies. Amadi said that NDDC had sustained a healthy partnership with the universities across the Niger Delta region including the UNIPORT, which had benefited in so many ways. He recalled that in 2018, the NDDC, endowed a professorial chair in malaria research for the Centre for Malaria Research and Phytomedicine, CMRAP, at the UNIPORT for the sum of N25 million per annum. He said that the Commission had executed several projects in universities and polytechnics in the NDDC mandate states. According to him, “several roads were completed within the universities for the benefit of both staff and students. We have also built ultra-modern 522 bed-space hostels in several universities in the region. “Under the new management team led by the Acting Managing Director, the professor, Brambaifa, we are currently rehabilitating the internal roads in the Choba campus of the university. All these efforts are geared towards making learning easy for our people.” According to him, “I have acquired more expertise, new skills and knowledge on how to handle the needed finance for the development of the Niger Delta region.”

In his address at the convocation, President Muhammadu Buhari called on the private sector to invest in research and development in the nation’s universities. The President, who was represented by the Minister of State for Education, a professor, Anthony Onwuka, said that tertiary education in the country had undergone progressive transformation in the last four years. Also speaking, the Vice-Chancellor of the university, Ndowa Lale, said that UNIPORT had witnessed immense infrastructural and academic development since he assumed office in 2015, including the focus of making UNIPORT a world class university in academics, research, and development. This has resulted in several breakthroughs that earned UNIPORT local and international recognitions. He said: “To this end, our colleagues in the Department of Obstetrics and Gynaecology at UNIPORT Teaching Hospital recently celebrated the delivery of their first baby through In Vitro Fertilisation method. Also, the cost of carrying this out in UPTH is far cheaper than what is charged elsewhere.” UK University to sign new deal with NDDC The University of Coventry in the United Kingdom will next month sign a memorandum of understanding with the NDDC to boost education in the Niger Delta region. Speaking at the Port Harcourt International Airport, shortly on arrival from a five-day working visit to some universities in the United Kingdom, Brambaifa said the Commission had reached some landmark agreements in the area of human capital development. He said that there was an urgent need to resolve all outstanding issues with the NDDC-sponsored post graduate students and their www.businessday.ng

host institutions, adding that “it became expedient because we realized that most of the schools have not been paid. We needed to address some of the issues that border on our relationship with the schools, as well as the students. Brambaifa, who led the NDDC delegation which included the Acting Executive Director, Finance and Administration and other directors of the Commission said the visit was an opportunity to deepen the existing relationships with foreign universities and take advantage of other mutually beneficial programmes. The NDDC CEO said that the team visited the scholars benefiting from the Commission’s Foreign Post Graduate Scholarship Scheme in the University of Coventry, University of Derby, University of Salford, University of Birmingham, University of Hertfordshire and University of Huddersfield. He stated that the Commission was very serious with its humancapacity building programmes, noting that it had reached an agreement that would allow some

‘‘

We have a commitment from Coventry to grant additional scholarships to students who excel at first degree level. By this arrangement, first class students from the region will be granted scholarship by Coventry University

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of the lecturers from the UK universities to come to universities in the Niger Delta region on exchange programme. Also speaking at the airport, Amadi stated that the Foreign Post Graduate Scholarship Programme had been running for the past 12 years. He observed that this was the first time the monitoring and evaluation of the scheme was done at the highest level involving the top executive of the Commission. He said: “In the course of the visit, we were able to resolve some of the outstanding issues that were lingering before we came on board. We also leveraged on the opportunity to foster new areas of partnerships. I am happy to announce to our people that in addition to what we are currently doing with the universities. We got some new deals that will benefit students and people of the region. “We have a commitment from Coventry to grant additional scholarships to students who excel at first degree level. By this arrangement, first class students from the region will be granted scholarship by Coventry University.” As part of the collaboration, he said, there was an agreement for the establishment of specific Master’s level scholarships for best graduating students from universities in the Niger Delta region, as well as an arrangement for the establishment of a Doctoral Training Centre. Amadi said that the collaboration would include the establishment of an e-library system which would allow researchers and scholars from the Niger Delta region to have access to materials published from top journals and electronic databases. He added: “We expect that this opportunity will open a new vista for more things to come to our region.” @Businessdayng

NDDC Records milestone partnerships with UK varsities The NDDC also says it is consolidating its existing partnerships with universities in the UK to ensure that the Commission gets more value for its human capital development programmes. Speaking after a five-day working visit to some universities in the UK where NDDC scholars are undergoing post-graduate studies, the CEO said it was important “to find out the challenges scholars are facing in their various institutions in order to resolve them.” Brambaifa said the visit afforded the team the opportunity to explore the prospects of deepening the relationships with foreign institutions, to ensure we take advantage of other mutually beneficial programmes. The professor said that the NDDC delegation interacted with the scholars benefiting from the Commission’s Foreign Post Graduate Scholarship Scheme in the University of Coventry, University of Derby, University of Salford, University of Birmingham, University of Hertfordshire and University of Huddersfield. The NDDC Chief Executive Officer said his team had a fruitful meeting with officials of the University of Coventry, which included two Deputy Vice Chancellors, David Pilsbury and Richard Dashwood and a staff of the International Centre for Transformational Entrepreneurship, Prof. Gideon Mass. He added: “The third area is to establish a platform for the promotion of innovation and enterprise. The fourth is to establish an e-library system which will allow researchers and scholars from the Niger Delta region to have access to materials published from top journals and electronic databases. The NDDC boss stated that the Commission was very serious with its human capital development programmes, noting that it was pursuing improved investments in the educational sector as part of plans to ensure that the youths get the right employment. At the University of Salford in Manchester, the University management led by Kaffo Yusuff thanked the NDDC delegation for the visit. He said the university was ready to partner with the Commission to offer additional scholarships and offer fee reduction to deserving students. Speaking during an interactive session with the scholars, the Acting Executive Director Finance and Administration, Chris Amadi, assured the students that all their complaints would be addressed.

Thursday 18 April 2019

BUSINESS DAY

BOOK SERIALISATION

W H Y N OT Citizenship, State Capture, Creeping Fascism, and Criminal Hijack of Politics in Nigeria

Continued from Wednesday

Chapter IV The Complicit Middle Entrepreneurship Wealth creation depends very much on creative energies that imagine a better tomorrow and organise resources to make that future come about. Thus, making the atmosphere that encourages a flowering of the enterprise culture. This is a major part of the remit of the modern state and civil society. The soul of the Raghuram Rajan and Luigi Zingales discussion of Saving Capitalism from the Capitalists was essentially how the conditions that facilitate creative destruction are created where higher value supplants yesterday’s great value. In “Why Nations Are Poor” (2006), I try to link this process of venturing with the other variables of the growth driver’s framework and how they collectively advance man’s material progress. For a long time, I held high Japan’s Ministry of International Trade and Industry (MITI) as a model of how the state helps advance enterprise and brings prosperity to the nations. I therefore feel that ignorance of these known and available principles amount to a matter of choice. That choice is the pursuit of poverty. Culture When Daniel Patrick Moynihan’s, Two Truths, inspired a Harvard colloquium on how values shape human progress, the organisers may not have realised the impact it would have. But the gathering and the volume edited from papers by Lawrence Harrison and P Huntington Jnr. at that colloquium (values like those on the work ethic, deferred gratification, respect for the dignity of others and human solidarity and thrift as against conspicuous consumption, etc) help shape progress. It is not difficult to see that part of the challenge of progress in Nigeria. An example can be traced to what I have often called the collapse of culture in Nigeria. As values went south, effectiveness in many spheres declined. Key ingredients of this collapse have been corruption, instant gratification, nepotism and cronyism that make injustice pervasive and erode the legitimacy of the state in the consciousness of the ordinary citizen. Ultimately, these new ways add up to challenge the rule of law which damages institutions and cripple progress. It is my opinion that as culture shapes human progress it is an area in which the media can have profound impact. If the agenda setting and the café keeping consequences can leave a halo effect on the appropriate role models then those worthy in character can contribute to the common good and be the ones to en-

joy the benefits of the status conferral function of the media. This is because if it is them, rather than people who have net worth that cannot be explained, who dominate the headlines, we could see a media play beyond the ideals of the social responsibility of the press regime. Leadership Leaders are particularly important because leaders shape culture. We could dwell long on how leadership when it fails, does the most for the pursuit of poverty. This is documented in more details in my last book “The Art of Leading”. To envision the future based on a burden and pull others together to make what was yesterday’s impossible, tomorrow’s routine, in the face of the drag against the wind of change, is really what progress is about. Conclusion If the media can help enhance vigour in policy choice, they can encourage a culture of reasoned public conversation on policy matters. This can lead to an increase in the activities of civil society resulting in stronger institutions with more effective investment in human capital. As a result, we can expect to see much more virile entrepreneurship and enhanced economic growth. With culture aligned to progress to a social responsibility orientation media, the developmental press, driven by visionary leadership in Nigeria can reach the heights its founding fathers dreamt. The Nehemiah syndrome should spur the media towards shining their light so that Nigeria can rise to great lofty heights like a phoenix. This being attained at home and on the global

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For a long time, I held high Japan’s Ministry of International Trade and Industry (MITI) as a model of how the state helps advance enterprise and brings prosperity to the nations. I therefore feel that ignorance of these known and available principles amount to a matter of choice. That choice is the pursuit of poverty www.businessday.ng

stage. The media can make a major contribution to the healing of many wounds that currently define Nigeria. It can help construct a melting pot with the recruitment of quality political actors, propel a strong sense of the mission to the generations and power a new consciousness for progress. But it will take a revision of the business models of media enterprises and a realignment of the thinking of journalists to understand how the media exerts influence and who also see themselves as Nehemiahs, in order to make things happen. The ball is in our courts: the teachers who prepare the next generation of journalists, the political actors who better understand the mission of the media and the society desirous of raising the dignity of the human person. We must together seek to do what we repeat the most here at the UNN – seek to vrestore the dignity of man. This lecture at UNN as part of Alumni lecture series in Mass Communication captures well my view of the media stakeholder. Waking Up the Complicit Middle This huge middle which has the most to lose if Nigeria goes down but somehow appears helpless and acts

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with disinterest towards power, is key to redeeming Nigeria. The first step, in my line of action would be to reform the attitude which sees politics as the arena for only people pursuing their narrow selfinterest. This same attitude believes that politicians should be mocked, poked fun at and generally dismissed as having no redemptive value. The result is that the typical Nigerian youth of today feels hopeless and wants out. Those who can seek to emigrate legally, seem to have everything going for them whilst those not so privileged risk life and limb to get out. If they could have faith that their effort to upturn the house of capture and make their country provide them the opportunities it has were far greater than those for surviving on the margins of the countries, they are so desperate to escape to. So, the idea of fighting for your tomorrow is a better deal than escaping from your today, needs to be the social engineering issue for civil society of today.

Chapter V A Few Good Men

In a country scorched by eco-

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nomic rent seeking behaviour and an entitlement mentality from an oil economy with its natural resource state of affairs, it is easy for most illustrations to be negative. But my run teaches that there are a few good men (people) out there. My first encounter with a few good men was at a time of crisis and un- reason in Nigeria. It was during the annulment of the June 12, 1993 elections by the Babangida Military Government. I discovered then, that goodness can be in a latent state and desiring to be activated, but I was uncertain about the how to. I found then that it took my challenge of the extant order to bring many of these good men out of their comfort zones. We founded The Concerned Professionals group, which put up a spirited fight to restore Nigeria to democracy. When I heard, in faraway Boston, that the elections I voted in on June 12, 1993, had been annulled, I reacted with an op-ed opinion piece titled “We Must Say Never Again.” That essay called out the silent, often complicit middle. It called for action. Many wrote to ask how. I came up with another write-up, and to be sure that I was not alone in my thinking, I invited Sam Oni and Atedo Peterside to sign the new article with me. That piece called for a town hall meeting which was oversubscribed in attendance at the Engineering Building Auditorium in Victoria Island, Lagos. At that standing room only meeting The Concerned Professionals was born. As the crisis of 2018 brewed, one of the more active of those concerned professionals, who was our emissary to NADECO (National Democratic Coalition), said to me that he advises me to leave the politicians to carry on with their mess of ruining Nigeria. He felt that I should focus on a more effective strategy of redemption through business enterprise, in the way post World War II Italy was redeemed. He then added, for effect as we watched history being rewritten over June 12. I had to remind him that the heart and conscience were more important for service than worrying about imposters giving credit to themselves for the sweat of others. In The Concerned Professionals, Asue Ighodalo, led the team of our liaison people and probably did more to keep alive the real NADECO in which people like Ebitu Ukiwe, Ndubuisi Kanu, Abraham Adesanya, Ayo Adebanjo and company were active. Today, those who were in comfortable “exile” abroad are taking credit for the June 12 fight, almost to the exclusion of those of us who were physically manhandled by police on

Thursday 18 April 2019

BUSINESS DAY

BOOK SERIALISATION varied occasions in Lagos. The most celebrated and reported ones were being in front of Western House on Broad Street, Lagos and the other one in front of St Peter’s Ajele Street when we had tried to convene another town hall meeting. In addition, we had survived several assassination attempts. Those attempts on my life form part of court records in the trial of those who killed Kudirat Abiola. These facts did not stop those taking credit for June 12 from, in 2018, organising a June 12 resurrection in the Villa without mentioning of any of us. It took the nobility in spirit of Segun Osoba, the veteran journalist and former Governor of Ogun State, in his remarks to note that, wait a minute, the heroes of that struggle like, Pat Utomi, are actually in the hall here. The others had manged to celebrate themselves. In my Delta run it was clear that a number of the good men were not in it for the name they would make, the credit they would get, nor the benefit that would accrue to them. They were few but they mattered. It was not once or twice in the unfolding drama of being dragged unto the gubernatorial race did I question what I was doing and why God even chose to have me born in Nigeria. Surely, I wondered, some small country like Mali, Rwanda or even troublesome Kenya, could have been a better place for me to struggle to improve the human condition. However, I am usually quick to recover and remember that He is a God of purpose and that there is a purpose for my being born in Nigeria. More importantly, every time I get to the edge of despair on Nigeria, I remember the few good men I have met in the course of struggle. On this particular drive, I have met a few that make you feel better about humanity. One of them, Moses Kragha, could have been the Governor of Delta State at the dawn of civil rule in 1999. Had his run not been thwarted by abuses of the electoral system, the history of Delta State could have been completely different. Kragha is an oil industry technocrat of culture and decency. Most well-informed people believe he won the Governorship race in Delta in 1999. In the years following that, he focused on issues around raising the Nigerian content of the oil and gas value chain. This coincided with my interest in promoting growth in certain sectors of the Nigerian economy which I drove from my position running the Centre for Applied Economics at the Lagos Business School. Annually, for several years, I worked with him and an energetic lady, also an oil industry engineer, Dr Ibilola Amao, to organise a conference and a workshop on Nigerian content in the oil and gas sector. When he heard that I was considering a run for the same position, he was quick to offer moral and material support in cash and kind. He also volunteered to go with me to the people, especially his own Urhobo people. In many ways, his embrace reminded me of my friendship with the very first civilian Governor of Delta State, Olorogun Felix Ibru, who considered me a fellow Awoist. I had a history of close friendship with much older people, beginning

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...those who were in comfortable “exile” abroad are taking credit for the June 12 fight, almost to the exclusion of those of us who were physically manhandled by police on varied occasions in Lagos

with my great post-doctoral informal educators, Dr Pius Okigbo and Ajie Ukpabi Asika. With Ibru and Kragha I found a peculiar dimension; we had a shared commitment to human dignity and public life as an elevation plan. When Kragha provided his building in Warri and promised some furnishing for it for our campaign secretariat, it gave me new meaning. It was particularly lifting because at that moment I was not sure where to place my friends of many years. He was the Minister of State for Petroleum Resources and I did not know where he stood on the issues and his willingness to support what we were trying to accomplish. There were always stories of what he was doing to support the party and some individuals in the Delta APC, including those who get the support and shortly after “decamp” as we like to say in Nigeria the ‘political speak to another.’ Whenever I raise the issue of support, I get a promise for next week and next week quietly disappears. Not being sure if the support puts pressure that could affect integrity, I usually just let it slide. This often led to my being literally bludgeoned by my core team as being too shy to ask for support and end up relying almost solely on my private resources. They would remind me that nobody should spend his own money in running for office. But it never stopped them presenting budgets they knew were bleeding my private resourced. In truth, I am shy of asking for support not because it is wrong but because of the nature of my experience with people who have money in Nigeria. From my NGO work, I find that when I approach my rich friends to support a public good initiative as philanthropy, they spend more time telling me about all that they have been acquiring all over the world and then find clever ways of avoiding contributing $5,000 (five thousand US dollars) to a cause to help poor widows or destitute children. www.businessday.ng

I prefer to ask $50 (fifty US dollars) of ordinary middle-class people than to ask for money from Nigeria’s rich. That reluctance made the exercise put severe pressure on my own personal finances and made me feel I was being unfair to my immediate family. The story that touched my soul though was of an old friend, Chris Onubogu. When he heard of what happened at the APC Primaries in Asaba, he called, incensed, and offered to help in any way material, physical or financial to fight what has gone wrong in Nigeria. Nothing was more rewarding in terms of the few good men out there than the shattering of the myth of ethnicity. Each time I was asked to send a trusted member of those in our team, I found the person that would always come to mind was Urhobo. That person was Air Vice Marshal Frank Ajobena (Rtd), the pioneer Governor of Abia State. A decent man, upright and committed to change in advance of the common good and was always there to be counted on. I met men like Yemi Cardoso, Charles Anudu, Chike Nwanze, John Momoh and many more who were genuinely desirous of advancing society for good. A few really good men with a social heart and conscience. Each time I wondered what I was doing in the middle of sharks and small-time hustlers, a look at him calmed me. There are the ones who call every time wanting a few thousand naira here and there but then, I would recall the few good men still out there like in the story of Sodom and Gomorrah, despite the feeling that the time was ripe to walk away from the scandal that Nigerian politics had become. Just like Abraham’s effort to intervene in order to spare the city of Sodom, if only some just men could be found, I would count the people of character I met along the way and deepen my commitment to the project. On many occasions I would also think of other options. My wildest fear was that as Nigeria descended further into state capture and criminal capture of political parties, there was a chance that we could wake up one day to find that a foreign power had invaded and captured our President. He would then be subjected to trial abroad as was the lot of Panama’s Manuel Antonio Noriega during the US Presidency of George W Bush. The shame of that possibility in the time of my children was impetus for me in the continuing search for a few good men. I did meet more than the few that I earlier mentioned, but I cannot mention their names because they prefer to remain anonymous.

Chapter VI The Gideon Project Finding Grass and its Roots

One of the first public events in Lagos in 2009 that was attended by the new Edo State Governor, was the CVL Annual lecture. Adams Oshiomole had just been declared the rightful winner of the Edo State Governorship contest by a court ruling. Professor Oserheimen Osunbor who had been declared winner of the 2007 Gubernatorial elections in Edo State had been ruled against by the courts who ordered the swearing-in of the

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former labour leader as Governor of Edo State in November 2008. I had invited the new Governor to give the keynote address at the February 2009 Annual Lecture. The annual lectures held on the 6th of February, my birthday. Adams Oshiomole had joined Most Reverend Dr Mathew Hassan Kukah and some other foreign and local speakers on the panel in 2006. His being invited again for the 2009 edition was to provide us (his friends) the chance for a victory lap and mark the triumph of democracy over impunity. After the lecture we stopped at my home for drinks. As we chatted about experiences in the 2007 campaigns when he ran for Governor of Edo and I for President, he confessed that he was pleasantly surprised at my stamina. He said he had this view of an easy touch idealist who lived in the comfort zone of his intellect but who could not live with the troubles of grassroots canvassing. My countrywide grassroots canvassing had amazed him and quite a few others, he said. I had teased him saying my appearance was a strategic design to mislead, noting that I visited more states and communities in the country than any other candidate especially those of the ruling PDP, the ANPP and AD. The will and sustaining source of strength to pursue the kind of campaign I ran in 2007 with town hall meetings in as far away as Damaturu and Oloibiri as well as in Ado Ekiti did not manifest from a void. Several passions set the tone and commitment. One of them, which is hardly spoken of, for obvious reasons, is a deep desire for an authentic Christian witness in public life. As I remark frequently to my students, Europe is probably postChristian with so few people going to church on a regular basis. But Europe is a functional trust-based society because European culture is Christian even if the people are not confessional practicing Christians. It is that Christian culture that sustains the material progress that has achieved the great escape from misery. I was an ardent follower of the man who was witness to hope, Pope John Paul II, and watched how he stayed in solidarity with his native Poland as the solidarity movement liberated Poland. I read with glee, his admonition

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....Whenever I raise the issue of support, I get a promise for next week and next week quietly disappears. Not being sure if the support puts pressure that could affect integrity, I usually just let it slide

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of the lay faithful to be active in the marketplace and to work for culture to have the leaven of Christ. He would leave this call a lasting legacy with the doctrinal note, on the participation of Catholics in politics, he sent to the congregation of the propagation of the doctrine of the faith on the last feast of Christ the King he would celebrate. Having adopted St Thomas More who gave dignity with his martyrdom to ‘the inalienable dignity of the human conscience’ as a personal patron, I have desired to see many more influenced in the arena of public life by the values of this man who has been erected as Patron Saint of Statesmen and Politicians. After the 2007 elections, which were so fraudulent, former Canadian Prime Minister Joe Clark, and US Secretary of State, Madeline Albright, were stunned to speechlessness. So, I decided I should take a fundamental look at Nigeria’s democracy. It seemed pointless to run for office if the outcomes could either not reflect the wish of the people or basic honesty. I recognised then that society of mostly illiterate and poor people made for a lousy democracy. The votes could be bought for peanuts or manipulated. It was clear to me that year that politicians had a vested interest in the people being poor and destitute. It made getting elected easier. Education and entrepreneurship seemed to me the path to saving the people. It will be hard to get a true democracy until most of the people are educated, less dependent on patron-client networks, or are employed outside of government. This throws up the imperative of an elite driven by enlightened self interest and a sense for the long term Common Good. The examples of Deng Xia Ping in China, Mahathir Mohammed in Malaysia and Lee Kuan Yew in Singapore. I then put on the garment of delayed gratification and focused on building entrepreneurs, teaching entrepreneurship and thinking of ways to achieve mass literacy. I was quiet on my work there when Chief Anthony Enahoro sent for me and tried to sell to me the idea of a uniting movement for progressives. This is how a series of events led me to the 2011 experience. Fast forward … 2017. After the group of “old boys” persuaded me that running was a zone of great impact possibility, I knew the first thing I had to do was establish that I was a grassroots person not just some policy wonk pitching his ideas at levels beyond the comprehension of ordinary people. All my adult life, I have been passionately engaged in activism and advocacy advancing the well-being of ordinary citizens. I had done so in weekly newspaper columns, on weekly television shows which I hosted and produced at significant personal cost and on the street marching for one cause or the other. How could anybody imagine that I was detached from the grassroots? It was obvious to me that politicians had reduced the idea of grassroots to either the imagery of banalities such as eating corn in a mammy market, or the buying and selling of the loyalty of local thugs popularly called Continues on Friday

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Thursday 18 April 2019

BUSINESS DAY

Thursday 18 April 2019

BUSINESS DAY

INTERVIEW

‘Nigeria needs a healthy, educated, skilled population to attract investors’ Muhammad Sani Abdullahi is the commissioner of planning and budget in Kaduna State. He is a member of the World Bank Expert Advisory Council on Citizen Engagement. Ahead of the fourth Kaduna State investment summit, BusinessDay’s, Jumoke Lawanson caught up with Abdullahi who discussed how policies and investments can boost the economy and get Nigeria’s teeming unemployed youth back to work. Excerpts: Nigeria’s economy is experiencing a slow growth and consequently 21 million Nigerians are presently unemployed, the bulk of them being young people. What is responsible for this and what’s the way out of the unemployment crisis? ell, even when Nigeria was growing at seven percent, unemployment rates have always been high. What we’ve always had in the country is sort of jobless growth and the challenge for policy makers has always been to try to link growth with poverty reduction, with job creation and that is only when you focus on non-oil sector growth. I believe what we have seen in the past two and half years is non-oil expanding across our revenue streams and social programmes have also been expanded. It must necessarily follow a very private sector investment path, in the sense that we bring big -icket players that can hire 10,000, 20,000 and 30,000 people at a go. We hardly have companies in Nigeria today who on an annual basis can absorb 10,000 young people. This is where we need to get to; we need to push for inclusive growth, something that has been missing in our economic growth architecture.

Can you take a deep dive into how this should work in terms of creating jobs? In what ways, using a policy approach, should government invest that can create more opportunities to get people working? Government’s job is multi-dimensional in this regard. I think that in Nigeria we are blessed with population. But that population can easily become a curse if we do not capacitate it. We need to ensure that our population is healthy, educated, and skilled. If I were to pick out a first step, it would really be: empowering our people with the necessary health, education and skills set to be able to compete. The second thing is the business environment, ensuring that big-ticket players can come in and rely on this population to be able to provide huge amount of skilled labour and also provide that absorption for goods that are startercreated. Our population, once we are skilled and have income, can absorb significant amount of economic products that can make the country grow. So I think government needs to focus on ensuring that its people are healthy, are educated, and are skilled and that the business environment and the incentives necessary to put in large scale, long-time investments that employ these people are there.

How has this worked in Kaduna? Can you share specific details and impact of any of your investments that brought about significant impact on employment in the state? Well, for Kaduna, I’m quite excited that we have embarked on unprecedented human capital development programmes at every level of skill, right from our public primary schools where we are taking very tough decisions to ensure that the children of the poor can also have good quality education and move up the social ladder, to various vocational skill programmes from Kaduna start-up entrepreneurship programmes, Kadia, KadICT. There are so many things we are doing to give young people and older people in Kaduna an opportunity, a second chance to be able to say, ‘listen you were not able to go to school, you are fleers, let’s train you free, these are all done free.’ We have partnered with a number of local and international organisations to be able to deliver these trainings and you can see some of the impacts already manifesting. There is a huge number of entrepreneurial young people in Kaduna today; 5-10 years ago these very young people were just staying at home, waiting for a white-collar job. But today, they are doing businesses from food and confectionary to manufacturing, to transportation. There is so much entrepreneurial spirit now being built in Kaduna. In terms of the business environment, we have done a significant amount. We have moved on the ease of doing business index from number seventeen the worst in the north, to number one. Today in Nigeria, we are better than every single state that you have across the country in terms of setting up businesses; in terms of contractual, enforcing contracts, we are working on other parts. But we are cutting- edge leaders not only within Nigeria but internationally we are now recognized. We have been able to attract over five hundred million dollars ($500,000,000) of investment into Kaduna that are employing huge numbers of people, hundred thousand direct jobs and almost five hundred thousand indirect jobs, and so we are working on this incrementally. We are quite proud of what we have done so far, and our plan is that over the next couple of years we’ll hit 3.7 million jobs in industry alone across the various sectors. A lot of people are highly critical of investment summits and events. You just had the 4th of its type in Kaduna state, could you share the www.businessday.ng

noteworthy outcomes of previous summits and how have they benefited the state? For Kaduna, right from when we started our investment forum in 2016, our meetings have always tried to ask: how do we ensure that these summits do not become talk shops? How do we ensure that they are actionable, that they become something that draws investment in for the state, and the results are there to show? Since we started Kaduna investment summit, there are a number of companies that have come into Kaduna that were not there before. If you drive into Kaduna today for example, you are passing what was once a barren land that now is home to “Olam factory in Chukun”. “Olam” is a $150 million investment that we initiated. It’s the largest poultry feed mill in sub-Sahara Africa. Already, there is a village, a small town developing around Olam because of the multiplier effects of its businesses. You have to slow down in your car when you get there because there are huge trailers there, there are restaurants, there are people that are making money off of Olam, and that’s just one. Across the street from Olam, is the space for the new Dangote Peugeot which is also in partnership with the Kaduna State government. Dangote just put in his equity last week and that project is about to take off and we expect huge amount of jobs from this. That came from KadInvest, and if you go into the city we have Mohindra chapter, a new chapter assembly plant that is really going into mechanised farming across Nigeria. We have blue camel energy that is into solar panels and also capacitating our young people to be able to repair and fix solar systems. If you go into the middle of Kaduna, it’s ICT hubs all over, digital skills been done all over, tomato factories opening up, So there is really so much that we have seen over the last four years doing KadInvest, and like I said, five hundred million dollars ($500,000,000) investments, a hundred thousand jobs is not theory. How instrumental has the state statistics agency which is under your supervision, been in ensuring that jobs are created in the state. Would you say your administration has been successful in this regard? I think we have been successful. Data have been the life blood of our policy making, our formulation processes and our monitoring and so we have relied a lot on data. We have done a lot of surveys across data to be able to share with our business partners

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we do have other; for example, our business apprenticeship centres’ that go to the local communities and pick up people from disadvantaged backgrounds that may not have gone to any school, then teaches them how to do pop, electrical work, mechanics work, and all these other things that can lead to better income. That really for us is critical to be able to identify for every level of skill we can design a programme around it and we are quite proud of what we have done so far.

Muhammad Sani Abdullahi

when they come; so you don’t have to spend a year doing surveys about your market; we already know for example, through our population dynamic surveys; what the population is projected to be over the next 20-30 years; how the structure of the population is and what their habits are. We have deep research on agriculture and the structure and how many households are involved and what they are doing and where the output is taken, schools, hospitals. There is a lot of numbers in Kaduna. We have very fresh up-to-date GDP figures that have allowed us to really plan and so what we have done is for you to be able to focus on those things that matter and to be able to use data actionably and to share this with our investors in a way that they can also make better decisions. @Businessdayng

Kaduna state’s entrepreneurship program, KADSTEP, is seen as one of the initiatives of the government to great jobs but it has been criticized as impacting only a few people. Do you as a policy maker think that entrepreneurship can solve the unemployment problem? Definitely, I think what cannot solve the unemployment problem is government thinking it can hire everybody in its ministries and create those jobs. We have to rely on businesses setting up and employing people and so we have to set up businesses at all levels; from the large businesses, the Olam that can put one fifty million dollars ($150,000,000) to the small ones that can start off with ten thousand naira (N10,000), a hundred and fifty thousand naira (N150,000), a million naira (N1,000,000). This is what we are doing with KADSTEP. KADSTEP is a start-up entrepreneurship

programme for people that have just started their businesses or are about to start and we force them, we take them through a twelveweek course in Kaduna Business School where they learn design thinking, breaking barriers, how to manage your accounts, how to put together a ledger, how to deal with banks, how to attract funding and it has been really good because over the past four years we have trained over six thousand people and you can see some of them setting up businesses in Kaduna that are hiring 5, 10, 15 people. Now people could criticize it and say ‘Okay look it’s targeted to quite a number of people’ and I think what we just need to understand is that for every job that is setup in Kaduna that takes ten people off the street. For us it’s a success and we will continue to meet people at different levels of skill. KADSTEP for example focuses on people that have some level of education,

Human capital remains a big challenge in Nigeria as young Nigerians lack workplace skills. How can Nigeria fix this issue? Well, I’m quite happy you know the country has taken up a new human capital development programme. The president himself has appointed a special adviser on human capital development and I think that over the next two to three years, we are going to see some huge movements around that. The vice president has visited on a number of initiatives and human capital is multi-faceted. It’s around a healthy and educated population, a skilled population, a population that has opportunities, and we have worked with the Federal Government on these frameworks and I’m quite optimistic that over the next few years there would be some major shift in human capital. The only problem is that there is always a lag between implementing these programmes and the impact you start to see. For example, training someone for four years, it might take the next two to three years for you to be able to identify that it’s your training that actually helped him. But I think there would be general movements, the government is very serious about this, the social investment programs have already kick-started those basic income-generating facets that need to be taken care of; programmes like the GEEP, the Nbill, the Npower are all human capacity programmes, but we need to do more, we need to do it at scale, because although those programmes are impacting, they are still not at the scale that the problems in Nigeria would require to be solved. So there is also the issue of infrastructure. Can you talk about that too? Infrastructure is critical in providing access to opportunities, in boosting economies and the deficit in infrastructure across Africa is huge. For us in Kaduna, we have invested a lot of time in understanding our infrastructure deficit. We launched an infrastructure master plan last year; a 32-year plan that ends in 2050, www.businessday.ng

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We started from a low of about N13 billion – that was the highest Kaduna had ever made before and today we are at N29 billion; We are looking to get to about N40N45billion in the near future and we looked within that infrastructure plan around gaps in school infrastructure, education, health infrastructure, water infrastructure, transportation (roads) to see the gaps and where we need to get to if we are going to build an economy that is going to compete locally and globally in the next 30 years, And the amounts are huge and we are looking at how to fund it. Definitely public sector finance is not going to be enough, we have to crowd in as much as possible the private sector through investments and how do we get bankable projects around social investments? That’s really difficult. That’s what we are trying to crack right now and so really this for us, is going to be the future. Funding has become a major handicap to the ability of government to make critical investments that could boost the economy. Already, Nigeria has a debt to revenue ratio of about 60% which has triggered warnings from the IMF. How is your government looking to finance growth? I think the future of finance is to continue to look at it as a big pile of which public sector financing is just a small part of it. Public sector financing would probably amount to 15-20% of what is actually required in building states. So we have to be able to look at how do we crowd in other sources of financing and from the private sector, from our international partners, debt financing, other sources of innovative financing that we can create, land swaps, equity deals. I mean, we really need to get more creative and imaginative around the area of financing. We cannot continue to rely on those traditional sources that are not just going to be able to cut it. If you look at the pension funds for example, there are trillions of naira that are lying there. How do we unlock it in a way that is safe and secure for those pensioners but can also be used to fund critical infrastructure across the country.

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that in terms of jacking up those growth rates we need to do massive investments in infrastructure in a way that the multiplier effect builds out the economy, we need to look more deeply at the way that we are managing our currency. I think that we need to be able to link Nigeria to the global economy much more and be able to look at non-oil sector growth.

If you were asked to advise the national government on the present fiscal crisis and economic slowdown, what solutions would you offer? I would say first of all, that you know we have emerged from the burns of it, but we now have to move to beyond 3.8% growth to be able to sustain any positive growth because the population growth is also an issue that we need to look at. If we are growing lower than our population

Start by looking inward first. What is your state doing to diversify its economy post-oil and what should Nigeria do at this time? Well, we have always wanted to take Kaduna away from the dependence on federal allocations. When we came in 2015, about 85% of revenues in the state were federal revenues and for us that was very dangerous and so we wanted to build out our domestic resource mobilisation, our IGR and we have been able to do that. We started from a low of about N13 billion – that was the highest Kaduna had ever made before and today we are at N29 billion. We are looking to get to about N40N45billion in the near future. We think that is one critical way that we are diversifying and it’s by expand-

growth rate annually, then actually we are not growing. So right now, we are at less than two percent of growth and our population is going at over three percent, and so we are still at a negative growth, but I think

ing tax base, getting more effective in collections and other things. But also, we are working actively to grow the Kaduna state economy by having these massive investments from all these private sector players.

We have talked about this for a long time, but we still haven’t been able to crack the nut.

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Thursday 18 April 2019

BUSINESS DAY

NEWS Nigerian insurers bleed on Egina FPSO... Continued from page 1

chief executive officer in the industry who did not want to be mentioned. According to him, premium on Egina was paid five years in advance and the loss happened three months to the end of the tenure.

He noted that with the support of reinsurers, a lot of the companies were able to pay their initial share and got refunds from their reinsurers, whereas those who were greedy to take premiums higher than their capital adequacy will suffer heavily. The CEO said an initial

interim payment was to commence repairs before the final claims adjustment will come. Located some 130km off the coast of Nigeria at deepwaters, the Egina oil field is one of Nigeria’s most ambitious ultra-deep offshore projects. Primarily developed locally to accelerate the pace of Nigeria’s industrial fabric and

the transfer of technology, the project is expected to produce 200,000 barrels of oil per day, i.e., close to 10 percent of the country’s total oil production. Discovered in 2003, the Egina field is located at water depths of between 1,400 and 1,700 metres, 200km offshore from Port Harcourt. It is operated by Total, which has a 24 percent stake, in partnership

with NNPC, CNOOC, Sapetro and Petrobras. The project is based on a subsea production system connected to a FPSO (floating production, storage and offloading vessel) designed to hold 2.3 million barrels of oil. The FPSO is connected to 44 subsea wells 1,600 metres deep and will produce 200,000

Palm oil makers in aggressive expansion... Continued from page 1

investing around N20 billion in an oil palm refinery

in Lagos. With approximately $150 million, PZ Wilmar, a subsidiary of PZ Cussons, has bought 26,500 hectares of palm oil plantations in Cross River State. About 5,549 hectares (ha) of oil palm plantation are located in Calaro Estate, while 2,369 ha are in an area known as Calaro Extension. The firm also acquired Ibiae plantations with 5,595 ha, Ibad plantations in Akampa with 7,805 ha, Kwa Falls in Akampa Akpabuyo with 2,014 ha, and Oban plantations, also in Akampa, with 2,986 ha. “We are determined to continue with these investments and looking for opportunities to expand our plantations in the state. We have also invested around N20 billion in an oil palm refinery in Lagos,” Santosh Pillai, managing director, PZ Wilmar, told BusinessDay. Okomu, another big investor in the industry, is planting 11,400 hectares at a new Extension 2 Plantation in Ovia North East Local Government Area in Edo State. The palm oil maker acquired new mills, being built at a cost of $50 million.

“Currently, the company operates two 30-metrictonnes-per-hour mills and has commenced the building of another two 30-metrictonnes-per-hour mills, which will be commissioned from 2020,” Gbenga Oyebode, chairman of Okomu Oil Company plc, said. The miller plans to move production from 40,000 tonnes to 80,000 tonnes with its current investment, said Graham Hefer, managing director of the company. Presco plc is another major player that is plugging the huge gap in the industry. Located in Edo State, the firm has total land bank of 40,000 hectares of which planted areas are 20,136 hectares of oil palm and 138 hectares for rubber. Presco’s investment is valued at N75 billion. Its capacity is 63 percent in the peak season and 24 percent in the lean season. The firm’s estimated production for 2018 was 47,000 MT of CPO. “Included in our longterm business plan is capital expenditure (capex) investment of N46 billion over the five-year period of 2018-2022 in plantations development, processing facilities, energy

Pressure back on Buhari as Senate... Continued from page 2

federation and many other issues have been addressed; he has no choice than to sign it,” Henry said. On whether the PIGB will still have impact on the sector, Henry said it will still achieve its objectives. “Something is better than nothing. Secondly, it will take some time before it has impact because it has been in the works for 18 years,” he said. One of the major stakeholders who worked on the drafting of the PIB, Wunmi Iledare, said if President Buhari doesn’t sign the PIGB after all this, he is only playing politics and does not have the interest of the oil and gas sec-

tor at heart. “PIGB will solve most of leakages and problematic structures in Nigeria’s oil and gas,” said Iledare, who is Ghana’s National Petroleum professor and chair, University of Cape Coast’s Institute of Oil and Gas. “I am not sure he is listening to experts because if he is, he won’t be playing politics with the industry that is feeding the nation. If we don’t do this PIGB now, in the next five years we will end up like Venezuela,” Iledare told BusinessDay. Beyond the PIGB, Ayodele Oni, energy expert at Bloomfield Law Practice, was more concerned about having the right personnel with the right mentality to make NNPC run

Apapa: Hitech begins reconstruction... Continued from page 2

vironment as a whole,” said Ayo Vaughan, chairman, Apapa GRA Residents Association, in a telephone interview. Vaughan lamented that

the manual call-up system which was put in place by the Nigeria Ports Authority (NPA) and other stakeholders to regulate and control movement of trucks in and out of the ports has colwww.businessday.ng

barrels of oil per day. Weighing close to 220,000 metric tonnes and measuring 330 metres long by 60 metres wide, the Egina FPSO is one of the largest ever operated by Total, Jean-Michel Guy, executive general manager of the Egina project, said. “The water depth posed a challenge for the development of Egina,” Guy said.

infrastructure and other supporting machinery, equipment and infrastructure,” Felix Nwabuko, managing director of Presco, told BusinessDay. Nigeria produces 900,000 metric tonnes of palm oil, but national demand stands at 1.7 to 2.1 million tonnes. The country had 45 percent share of the global industry in 1960

but now its market share has fallen to only 1.5 percent. If Nigeria had maintained its 45 percent share today, it would have been earning $14 billion annually from palm oil. Experts attribute loss of market traction in palm oil to crude oil curse of 1970s, which made most flagship non-oil export products to deteriorate.

Henry Olatujoye, national president, National Palm Produce Association of Nigeria (NIPPAN), said large and established palm oil firms need to cultivate up to 2 million hectares to plug the gap. Sugarcane, for instance, contributes $43.8 billion to Brazil’s gross domestic product (GDP) – equivalent to

almost 2 percent of the entire Brazilian economy. In 2016-2017, the garment industry generated $28.14 billion for Bangladesh, which was 80.7 percent of the country’s total export earnings and 12.36 percent of the GDP. As the European Union takes measures to restrict palm oil from Malaysia and Indonesia from entering Europe due to environmental concerns, the two giants are looking to Nigeria’s market. Traders are smuggling their oil into the country through Benin Republic and Kano. “Visit any supermarket or traditional market in Nigeria and you see that plenty of imported vegetable oil, which is banned in the country, is easily available,” Pillai of PZ Wilmar said. “The current policies are only aiding cross-border trade and smuggling. The leading domestic refineries in Nigeria are facing a crisis and many in the country are not operational.” In 2018, the annual profit of Okomu Oil Palm Company plc fell 8.72 percent from N9.3 billion to N8.5 billion in 2017, while its profit before tax declined to N10.3 billion from N11.1 billion. Revenue marginally dropped to N20.258 billion from N20.262 billion. Presco’s margins are also expected to drop.

efficiently. “There are other major issues surrounding fiscal bill and tax royalties that need to be addressed,” Oni told BusinessDay. 10 years after the Petroleum Industry Bill was introduced, Africa’s biggest oil producer still does not have a set of laws to guide the governance of the oil industry at all levels and provide the clarity and certainty that are necessary to attract foreign and domestic investment to grow the sector, as well as enshrine good governance and global best practices. Nigeria is not the only oil-producing country, and other investors have moved elsewhere to engage with more serious nations. While Nigeria is still playing politics with its major

source of revenue, other countries are growing in leaps and bounds. Ghana, for example, passed its Petroleum Exploration and Production Act in 2016, Tanzania passed its Petroleum Act in 2015, Mozambique passed its Petroleum Law in 2014, while Uganda passed its own reforms in 2013. For some strange reasons, no Nigerian president has been courageous enough to sign the PIB. To remove all the stumbling blocks against the bill, the National Assembly decided to disaggregate the bill into four parts: The PIGB, the Petroleum Industry Fiscal Bill, the Petroleum Industry Administrative Bill, and the Petroleum Industry Host and Impacted Community Development Bill.

PIGB seeks to create efficient and effective governing institutions with clear and separate roles for the petroleum industry, establish a framework for the creation of commercially-oriented and profit-driven petroleum entities to ensure value addition and internationalisation of the petroleum industry, promote transparency and accountability in the administration of petroleum resources of Nigeria, and foster a conducive business environment for petroleum industry operations. Recall that the Senate had recently adopted the report of the Technical Committee on Declined Assent to Bills, which worked on Mr President’s observations and redrafted the affected clauses in the bills.

The six other bills passed by the senate on Wednesday include the Stamp Duties (Amendment) Bill, National Institute of Hospitality and Tourism (Est.) Bill, National Research and Innovation Council (Est.) Bill, National Agricultural Seeds Council Bill, Agricultural Credit Guarantee Scheme Fund (Amendment) Bill, as well as the Independent National Electoral Commission (INEC) Act 2010 (Amendment) Bill. President Buhari had declined assent to the bills passed by the National Assembly citing several grounds ranging from financial constraints, negative impact on Nigerians, duplication of responsibilities of existing agencies, violations of extant laws to lack of consultation with relevant stakeholders.

lapsed because of the largescale extortion going on at the various checkpoints manned by members of the taskforce who are supposed to enforce the call-up system. “The taskforce is working but their best is not

good enough; they make a lot of money from the truck drivers using proxies who collect money from the drivers on their behalf,” he said. He recalled how he had to monitor the activities of the taskforce and

discovered that a truck driver spends upwards of N80,000 before he gets into the ports. Traffic congestion in Apapa and environs returned forcefully in the last couple of weeks, making commuting to the premier

port city a very difficult venture, increasing journey time and cost by over 100 percent. Economic activities have almost been paralysed while residents remain indoors for fear of going out and finding it difficult to return.

L-R: Temitope Shonubi, executive director, Sahara Group, and Ahunna Eziakonwa, regional director for Africa, United Nations Development Programme (UNDP), signing the Memorandum of Understanding to Promote Sustainable Energy and the SDGs in Africa in the presence of Tijani Muhammad-Bandé (l), Nigeria’s permanent representative to the UN, and Achim Steiner, administrator, UNDP, in New York, USA.

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Thursday 18 April 2019

BUSINESS DAY

NEWS FEC approves fresh $247.3m for new projects ... says it is yet to develop effective formula for subsidy removal Tony Ailemen, Abuja

espite controversy trailing Nigeria’s debt profile, Federal Executive Council (FEC) on Wednesday, approved a fresh $247.3 million loan for execution of various projects across Nigeria. Minister of Finance, Zainab Ahmed, disclosed this after the FEC meeting presided over by President Muhammadu Buhari. The FEC also approved negotiation of variation of $3 billion component of an initial $8.7 billion rail transportation loan at commercial terms. Minister of Transportation, Rotimi Amaechi, disclosed that the Federal Government had initially approved the loan but the financiers agreed to provide $5.7 billion, while FEC approved that the balance be negotiated at commercial rate. But Minister of Finance said the loans approved consist of $150 million loan facility from African Development Bank and $50 million loan from African Grow Together Fund to finance the Nigeria electrification project. The project is a nationwide initiative to be implemented by the rural electrification agency, to

align with the strategy of Federal Government on electrifying rural community. The project has four components, including a solar hybrid mini-grid for rural economic development, productive appliance equipment for off-grid communities, energising education, as well as institutional capacity building. The project is expected to impact about 500,000 people with access to electricity for about 105,000 households. “The maximum power that will be generated will be 76.5 megawatts installed generating capacity part of which is 68,000 megawatts of solar. “Eight universities will benefit from this scheme and about 20,000 small, micro, medium enterprises across different communities in the nation.” The Council also approved the North Core Dorsal Regional Transmission project for the pipeline for the West Africa power pull priority projects. The intention is for the creation of regional power pull in the region of West Africa. “The project aims to connect Nigeria, Niger, Benin Republic, Togo, Burkina Faso with a high voltage 330 kilowatts transmission line, to facilitate energy trade amongst participants.

Senate passes Gas Flaring Bill, proposes N10m fine for offender OWEDE AGBAJILEKE, Abuja

icensees who supply inaccurate data to the Department of Petroleum Resources (DPR) will be liable to a fine of N10 million, the Gas Flaring (Prohibition and Punishment) Bill passed by the Senate has prescribed. The bill, which passed Third Reading at the Senate on Wednesday, however, proposed a six-month imprisonment for offender or both. Approval of the bill followed the clause-by-clause consideration of the report of the Com-

mittee on Gas at Wednesday plenary. Among others, the bill seeks to ensure that natural gas shall not be flared or vented in any oil and gas production operation, block or field, onshore or onshore, or gas facility which shall commence operations after the commencement of the Act. The bill also seeks to ensure that no operator shall establish an oil and gas facility in Nigeria without obtaining authorisation from the Minister of Petroleum for the design phase, the commissioning and the production phases.

L-R: George Pearson, director, Afrocet Montgomery; Davidson Akhimien, president, Association of Licenced Private Security Practitioners of Nigeria (ALPSPN); Victoria Ekhomu, MD, Trans World Security Systems Limited; Adebisi Adeyemi, commander, zone A, NSCDC; Oba Olusegun Aderemi, and Joel Unuigbe, major general of Ordnance Corp; Abalti Barrack, Nigerian Army, at the opening of 2019 Two Day Securex West Africa Conference, organised by Afrocet Montgomery, in Lagos. Pic by Pius Okeosisi

Senate moves to override Buhari’s veto on budget timeline bill S

OWEDE AGBAJILEKE, Abuja

enate has commenced the process of overriding President Muhammadu Buhari’s veto on the budget timeline bill. The bill, earlier rejected by President Buhari, seeks to amend the 1999 Constitutional by making it mandatory for the President and Governor of a state to lay the annual budget estimates before Parliament, three months to the end of a financial year. It also compels the Parliament to pass the annual budget before the commencement of the next financial year. Tagged: SB. 733, the Constitution of the Federal Republic of Nigeria, 1999 (Fourth Alteration, No. 28) Bill, the proposed legislation, which scaled First Reading on Tuesday, passed Second Reading during Wednesday plenary.

Anambra announces N5m reward for information on killers of former lawmaker Emmanuel Ndukuba, Awka

nambra State government has announced a N5 million reward to any person who can provide useful information on the identity of the killers of one-time lawmaker and President General of Nimo community, Frank-Anthony Igboka. Igboka was shot dead on Tuesday night by persons suspected to be assassins at Oye Nimo market square as he drove by. Governor Willie Obiano, who announced the reward Wednesday morning, described Igboka’s death as a shock. Nigeria, Africa’s most populous nation, is experiencing a rising wave of insecurity, with attacks by armed gangs occurring in different parts of the country.

C. Don Adinuba, commissioner for information and public enlightenment, who signed the press statement on behalf of the governor, said he was briefed on the murder by the Commissioner of Police in Anambra State, Mustapha Dandaura, shortly after the killing. He said the governor had directed the Police chief in the state to “personally lead a team to apprehend the killers immediately. “He has, in addition, directed the Department of State Security, intelligence officers in the Nigerian Army and the Nigerian Navy as well as the Nigerian Security and Defence Corps to join the Nigeria Police Force in the task to bring the culprits quickly.” The governor described the killing as utterly heartless, noting that Chief Frank-Anthony’s elder www.businessday.ng

brother, Charles Igboka, a former Nigerian diplomat in Europe, died only two weeks ago and was yet to be buried. “It is a shame that the killing of Chief Igboka should take place in the week leading to Easter when men and women of goodwill throughout the world are reconciling themselves with God and fellow human beings,” he said. Obiano asked the intelligence and security officers to re-enact the same level of enthusiasm and competence they exhibited in the arrest two weeks ago of Ikechukwu Udensi, whom he described as the most-wanted murder suspect in Anambra State. “You have to display the same commitment and competence this time in tracing the killers of Chief Igboka,” the governor affirmed.

The bill is sponsored by the deputy Senate president, Ike Ekweremadu (PDP, Enugu). It would be recalled that President Buhari had in 2018 declined assent to the Constitution Amendment Bill on the grounds that Section 2 (b) and 3 (b) of the proposal ‘appear not to take full cognizance of the provisions of Section 58 (4) of the 1999 Constitution’. However, the Senate recently adopted the report of its Technical Committee on Declined Assent to Bills by the President. While rejecting the President’s submission, the David Umaru-led panel had posited that the bill was not in conflict with the 1999 Constitution, as claimed by the President. The purpose of the bill, the Committee had explained, was to ensure that Nigeria reverted to the January to December budget cycle.

“It should be understood that this Bill seeks to make it mandatory for Mr. President and Governor of a State to cause to be prepared and laid before parliament, estimates of the revenues and expenditure of the Federation for the next following financial year, not later than ninety (90) days to the end of a financial year. And for the parliament to pass the Appropriation Bill before the commencement of the next financial year. “The legislative intent behind this Bill Is to ensure that we run a normal financial year. From the wordings of the provisions, there was no stipulation that Mr. President must assent to any Bill within a specified period. “Therefore, the provision of section 58(4), which Mr. President made reference to, does not apply in this regard. On the whole, we respectfully submit

that the Bill is not in conflict with the provision of section 58(4) of the Constitution as implied by Mr. President. “It is therefore, our concerted view that the Senate should override Mr. President’s veto,” the report read. Five other constitution amendment bills earlier rejected by the President also passed Second Reading on Wednesday. Unlike the budget timeline bill, which will not require presidential assent if it scales through in both Senate and the House of Representatives, the five other bills will be re-presented to the President for assent if approved by the National Assembly. Section 58 (5) of the 1999 Constitution provides that twothird of both legislative chambers of the National Assembly (73 senators and 240 members of House of Representatives) are required to override the President’s veto.

BDCs seek FG’s radical implementation of power sector reforms Hope Moses-Ashike

ureau De Change (BDC) operators have called for radical implementation of the power sector reform programme to ensure access to stable electricity supply for households and businesses. They made the call through the Association of Bureaux De Change Operators of Nigeria (ABCON) while also encouraging members to apply the principle of currency diversification to mitigate the risk of currency fluctuations arising from uncertainties from socioeconomic and political development in the United States and in Europe. In its Quarterly Economic Report for the first quarter of 2019 (Q1’19), the Association notes that

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Nigeria’s score of 35 in terms of ease of getting electricity, as indicated by the World Bank Ease of Doing Business report, is lower than the average for sub-Saharan Africa and much lower than other comparable middle-income countries, with South Africa having a score of 63 and India a score of 85. It stresses that access to stable electricity is one of the key challenges and constraints for doing business in Nigeria and hence a critical area of focus for the government in order to sustain ongoing economic recovery. “Weighing on the emergence of Nigeria from a recession in 2017, the country’s continued economic recovery will be slow, according to a new economic analysis. However, the analysis showed, labour-intensive sectors @Businessdayng

remained weak, which contributed to an increase in the rate of unemployment and underemployment throughout 2018 into Q1 2019. Level of poverty is also believed to have increased notwithstanding the exit from recession,” ABCON states in the report. “The reviews have identified the power sector as a critical area that government should focus attention to sustain the economic recovery. With the electoral victory of the incumbent government, ABCON review is recommending attention in the following sectors for full recovery from the recent recession: Radical implementation of the power sector reform program to ensure access to stable electricity supply for businesses and comprehensive diversification of the economy.”

Thursday 18 April 2019

BUSINESS DAY

NEWS

More troubles ahead over fuel supply ... as importers abandon PMS for AGO Olusola Bello

L-R: Dirk Karl, MTN group executive, Global Sourcing and Supply Chain; Frank Li, president of Huawei MTN Key Account Group, and a staff of the company, -as Huawei bagged award for Supplier of the Year 2018 and Best Innovation 2018 at MTN’s annual Supplier Award Ceremony in Dubai.

Afreximbank, AU to create digital ecosystem for trade finance flows Hope Moses-Ashike, Washington DC

frican Export-Import Bank (Afreximbank) is working with the support of African Union (AU) to create a digital ecosystem that will eliminate major bottlenecks to trade finance flows within Africa, Benedict Oramah, the bank president, says in Washington DC. Delivering an address on April 11 at the IGD Frontier 100 Forum organised by the Initiative for Global Development (IGD) on the sidelines of the World Bank/IMF Spring Meetings, Oramah said one of the major constraints to intra-African trade was lack of information to support intraregional trade and investments. That was why many African

countries were importing products from outside the continent while neighbouring countries were exporting the same products at a much lower cost. In addressing the challenge, the Afreximbank and the AU are working to use digital technology to improve access to trade information and facilitate the use of African national currencies via intra-African trade settlements, he said. Afreximbank is developing a focused programme to support small and medium enterprises (SMEs) across the continent, recognising that SMEs are a vital component to unlocking intra-African potential, he said. In his opening remarks, he had noted that IGD had been facilitating discourse on

important African issues over the years, saying that Afreximbank identified with the efforts and achievements of the IGD, hence its close partnership with the initiative. Also speaking, Leila Ndiaye, president/CEO of IGD, said the initiative’s work was aimed at supporting Africa’s growth and development agenda and at pushing to unlock intra-African trade through SME growth and development. Oramah and Hippolyte Fofack, Afreximbank Chief Economist, who accompanied him to the event, also participated in two panel discussions, on “Supporting Africa’s Growth and Development Agenda” and “Expanding Regional Trade and Investment for Africa’s future”, respectively.

here are more troubles ahead for Nigeria as it may continue to experience intermittent shortage of fuel supply because of high prices of crude oil at the international market. This has made participation in the NNPC’s direct supply and direct purchase (DSDP) scheme unattractive for some of the companies engaged in the programme. Information reaching BusinessDay indicates that some of the companies that engage in DSDP, a programme put in place by NNPC to ensure uninterrupted fuel supply are beginning to have issues occasioned by the upward movement of the price of crude oil at the international market. The price of crude oil is $71.64 per barrel and this could be higher because of the ban on exportation of Iran crude and the crisis in Venezuela, which has led to a slip in supply to the international market and consequently push the price of crude oil. An industry source tells BusinessDay that some of the companies are finding the scheme, especially as it affect fuel supply,

unprofitable and consequently preferred to import diesel without NNPC raising objections. This is the major factor responsible for the recent slip in supply that led to queues resurfacing at filling stations in some parts of the country. The source says the country is yet to see the end of the situation as long as the price of crude oil continues to rise and the country’s refineries are not working. This situation is said to have put pressure on NNPC, as it has to go to spot markets to source for fuel at a premium. This would certainly lead to rise in subsidy claims for fuel. Already, the minister of State for Petroleum Resources, Emmanuel Ibe Kachikwu, has said landing cost of petrol is N35 higher than the pump price of N145 per litre. The rise in global crude oil prices after the 2016 hike in petrol price, the minister says, brought back subsidy. Recalling the experience of 2016, when the government increased petrol price from N86.5 to N145 after months of severe scarcity, he describes fuel subsidy as an emotive issue. According to Kachikwu, even when there was a consensus on how stakeholders were going to do it, there were still issues at

BIG tackles dearth of professional bakers with training SEGUN ADAMS

akery Initiatives Group (BIG), a Dutch bakery consulting firm, has rounded off its three-week intensive training programme in Surulere, Lagos, with over 50 participants benefitting. The training is aimed at addressing the dearth of wellgroomed and professional bakers in Nigeria, according to Ephraim Mbanaso, country representative and chief executive officer, Bakery Initiatives Nigeria. Mbanaso said his company identified this vital area of need in its interactions with bakery operators in Nigeria over the years. The training programme, a continuation of BIG’s intervention in Nigeria, began last year with a train-the-trainers programme with the objective to increase the theoretical and practical knowledge of participants in the bakery and confectionary industry.

The programme is in line with BIG’s philosophy that identifies well-trained and grounded people as one of the essential pillars for the success of any bakery business, Nike Richie-Ogbodu, director and head of BIG Training, said. She added that the idea behind the training is centred on skill acquisition for all categories of human resources needed for the effective and efficient running of bakery businesses. The training programme saw the participants trained on various aspects of bakery, such as technology and practice of baking of bread, cakes and pastries with special emphasis on recipes, effects of basic ingredients, cost calculations, among others. With support funding from BMZ/develoPPP.de, BIG put together the programme to train and re-train bakers in Nigeria with a view to equipping them with the requisite knowledge www.businessday.ng

to succeed in bakery business. The programme acquainted participants with baking skills and other necessary knowledge needed to run bakeries profitably, while also exposing them to international best practices and emerging trends in the bakery industry. And participants have described the programme as valuable beyond their expectations. “I was introduced by someone who participated in the programme earlier and I could not believe that an organisation can give out so much in so short a time without collecting money, but being here today, I have seen for myself and I am wowed,” said Djebah Omolara, one of the trainees. Another participant, Uduak Akpan, said, “The experience and knowledge gained about baking various kinds of products and bakery business in general within the one week of the training is unimaginable.” https://www.facebook.com/businessdayng

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the very tail end of the moment; NUPENG and PENGASSAN supported but, of course, the other members of the trade unions pulled out. Nigerians, he says, saw through what the government was trying to do and let it happen. “When you look at the gap today, the landing cost is about N180 per litre and sale price is N145. Imagine if it (pump price) was N90 - something; we will literally be a bankrupt country,” he says. He states that dealing with subsidy requires a very efficient management of information – getting everybody who is stakeholders to tie into it, noting that the government had not paid marketers all the outstanding subsidy arrears. There is need to find a way of fixing refineries quickly, whether it is government-funded or whatever – my preference is always private sector funding, he says. The labour unions have never really said they would not be supportive of an attempt to take away this subsidy element; the unions have always said, ‘If you are doing it, show me what you [will] do with those new receipts of income. Two, what do you do with the refineries?’ Therefore, we need to address those to even get their buy-in.

BUSINESS DAY

Thursday 18 April 2019

NEWS

BusinessDay reporter wins Nordica Media Award

nthonia Obokoh, a BusinessDay Newspapers journalist, has emerged the winner of the 2019 Nordica Media Merit Award (NMMA) – Online category for merit in fertility reporting. Obokoh, who won with her entry “How poor regulation threatens Nigeria’s booming N17bn IVF market,” was announced as one of the three winners of the annual awards organised by Nordica Fertility Centre in Lagos on Wednesday, April 17. The story emphasised on how more Nigerian families are turning to the In-Vitro Fertilisation (IVF) procedure and the development

that has led to a boom in the market, as improved awareness fuels greater patronage. Other winners are Martins Ifijeh of Thisday Newspapers and Olasumbo Modupe of Lagos Television. They won in the print and electronic category, respectively. Abayomi Ajayi, managing director, Nordica Fertility Centre, said the award process was well verified and a full prove method of choosing winners applied, but we wish and hope to get many more participants for this award. “As part of the organisation’s efforts at rewarding excellence in fertility reporting in Nigeria, the quality stories will help raise more awareness on reproductive health issues. “The winners of each of the categories were given plaques and N250,000 cash prize, and the organisation has been doing this since the past 16 years and we will continue to make progress because there is still a great room for improvement in what we are doing in the nearest future,” he said.

L-R: Anita Otubu, head of energising education programme, REA; Lolade Abiola, head, mini grids, REA; Stella Abimbola Shopeju, deputy managing director, Lumos Nigeria, and Ifunanya Nwadu-Dozie, head, solar home systems, REA, at the recently concluded REA-World Bank workshop on the Nigerian Electrification Project (NEP), in Abuja.

Huawei profit jumps 25% on investment in R&D

Benin River Port: Edo awards N6.8bn contract for dualisation of Ekehuan Road, others

… emerges MTN’s best supplier

o provide needed infrastructure to fast track the development of the Benin River project and accelerate sustainable development in the state, Edo State governor, Godwin Obaseki, has awarded a N6.8 billion contract for the dualisation of Ekehuan Road and construction of underground drainage system on Uwadiae Street. The contract was awarded during a recent Executive Council (EXCO) meeting held before the governor proceeded on his annual leave. The project was awarded at a cost of N6,812955739.70. On completion, it will “enhance the state government’s desire to transform Benin into a modern City and serve as a booster to the development of the Benin River Port,” a document on the contract said. The Benin River Port is one of the big-ticket projects of the Governor Godwin Obasekiled administration in the state aimed to drive industrialisation and boost export earnings. The port project, which is

SEGUN ADAMS

being developed in partnership with China Harbour Engineering Company Limited (CHEC), would serve as a conduit for products to be manufactured at the Benin Industrial and Enterprise Park; Benin Auto Park; Benin Production Centers and other industrial clusters across the state. Preliminary work on the project has been completed by the Chinese Company, even as the Federal Government has approved for a Marine Police Post at the site of the port project. It will also serve as a sister port to the Lekki Deep Sea Port being developed by CHEC. Residents in Ekehuan Road and Uwadiae commended the governor for the projects and noted that the projects would reduce traffic logjam and curb flooding. The project follows closely behind the award of contracts for the construction of Textile Mill Road; Iyoba, Iyobanosa and Omozogie Streets; Benin-Abraka Road; St. Saviour, Oba-Obazagbon, PZ-Okabere Roads and Ugbor-Amagba Road, which was hailed by Benin City residents.

uawei Technologies Co. posted 25.01 percent jump in annual profit, thanks to copious investment in research and development (R&D) as the Chinese telecoms firm won customers for its smartphones and networking gear. China’s largest tech company by sales posted net income of CNY59.30 billion (N3.18bn) in 2018 as its 5G business continues to garner traction. Revenue for the year round jumped 19.50 percent to CNY721.20 billion, as the company battles with Apple for number 2 spot in the industry. Huawei, according to its 2018 annual report, invested CNY101.5 billion (14.1% of its sales revenue) in R&D, ranking fifth globally in the 2018 European Union Industrial

R&D Investment Scoreboard. Guo Ping, Huawei’s rotating chairman, spoke at the release of its annual report, noting that over the last 10 years, Huawei’s R&D expenditure had reached more than CNY480 billion. Financial statements in the 2018 Annual Report are independently audited by KPMG, an international Big Four accounting firm. According to official data released by the World Intellectual Property Organisation (WIPO), Huawei filed 5,405 patent applications in 2018, ranking first among all companies globally. The same year, Huawei bagged the award for the Supplier of the Year 2018 and Best Innovation 2018 at MTN’s annual Supplier Award Ceremony in Dubai, according to a statement by the company. Huawei got the awards after emerging top with performance metrics such as quality,

delivery and support, account performance management, innovation and meeting MTN compliance and risk requirements. The Best Innovation Award focuses on suppliers who demonstrate and share best practice, market insights and generate the most innovative ideas and solutions. “MTN has worked extensively with Huawei to ensure MTN continuously stays at the forefront of the telecoms industry, and consistently delivers the most innovative products and services to its customers,” the statement added. “As a supplier with leading products and solutions and with a team of dedicated professionals, Huawei has been a part of our success for a very long time and we recognise their partnership with confidence towards a bright future,” said Dirk Karl, MTN group executive, Global Sourcing and

Supply Chain, as he presented the awards to Huawei. “Hand in hand, both MTN and Huawei teams have been working together and conquered numerous difficulties in the past. We look forward to continuing our collaboration and overcoming any new challenges we may face in the future,” the president of Huawei - MTN Key Account Group, Frank Li, said. Speaking on the role of ICT in socio-economic development, Guo Ping, Huawei’s rotating chairman, said, “Information and Communications Technology is rapidly working its way into every industry. This has triggered a digital, intelligent transformation – the driving force behind our digital economy. Through heavy, consistent investment in 5G innovation, alongside largescale commercial deployment, Huawei is committed to building the world’s best network connections.

NDIC romances 9th Senate for adequate insurance of Glo, Bovi’s Man on Fire put Warri financial institutions against liquidation indigenes in Easter mood

... moves to address issue of NPLs to boost liquidity

he 2019 Easter festival for residents of oil-rich city of Warri and environs promises to be memorable as Globacom, the grandmasters of data, in conjunction with Bovi Man on Fire, is powering a comedy ensemble packaged by iconic humour merchant, Bovi Ugboma, to kickstart celebrations this Thursday. Globacom in a release issued in Lagos said the event would be held at Brownhill Ultra Modern Hall, Warri, Delta State. The company, which has over the years been the greatest corporate supporter of arts and entertainment in the country with its endorsement of entertainers as brand ambassadors, explained that it is supporting the comedy show “so that people in

RAZAQ AYINLA

Warri axis and the entire Delta State can also have a feel of the fun the show is associated with”. “Bovi Man on Fire” has enjoyed tremendous success in Lagos over the years. When the organisers decided to hold the first edition of the show outside Lagos in Warri, we decided to support it to give our subscribers in the city a memorable Easter celebration”, the statement added. Apart from Bovi, other comedians billed to perform at the show include Kelvin Sapp, Young Chief and Mr. Flexy. The event promoters, Messer Brownhill Event Limited, have also contracted popular Nigerian music raves like Zlatan, Victor AD, Erigga and D’Banj to serenade the audience with world-class performances. www.businessday.ng

s part of effort to ensure that the Bill seeking amendment of the Nigeria Deposit Insurance Corporation (NDIC) Act pending before the 8th Senate is given a speedy passage when the 9th Senate is inaugurated in June, chairman and Board members of the NDIC has begun move and romance with the senatorselect to achieve the mission. BusinessDay gathers that the chairman and members of the Board of the NDIC have embarked on intensive work-

ing visits to some influential senators-elect ahead of the inauguration of the 9th Senate to explain the benefits and the prospects the speedy passage of NDIC Bill currently pending, before the Senate holds for the banking industry. Ronke Sokefun, the Board chairman, has led the managing director, Umaru Ibrahim, and some members of the Board, including Festus Keyamo, Lola Abiola-Edewor, among others, to one of the senators-elect, who doubles as the governor of Ogun State, Ibikunle Amosun, to solicit earnestly, the passage of the NDIC Act, which Bukola Sa-

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raki-led 8th Senate may not pass before the end of the 8th Senate. While briefing Governor Amosun on the NDIC Board’s mission at Oke-Mosan Governor’s Office in Abeokuta, Sokefun said the early passage of the Bill would empower the Corporation to effectively supervise insured financial institutions for a safe and sound banking system in the country. Sokefun, who noted that the Corporation was saddled with the responsibility of supervising deposits in banks and ensure adequate and effective covers for the financial institutions operating in @Businessdayng

the country, assured Nigerians that NDIC was working diligently to address the issue of non-performing loans in the banking industry to boost financial liquidity in the economy. Responding, Governor Amosun emphasised the need for financial institutions and banking industry to follow due process and diligence in their operations for the growth of the economy, saying such efforts would help boost the confidence and socioeconomic status of the people as well as, indirectly, increase the gross domestic product of the country.

Thursday 18 April 2019

BUSINESS DAY

NEWS NPA, works ministry working to cushion pressure on Apapa roads - Board AMAKA ANAGOR-EWUZIE

ollowing the negative impact of persistent gridlocks on roads leading to Apapa, the Board of Directors of the Nigerian Ports Authority (NPA), has assured ports users including terminal operators of the authority’s commitment in addressing the gridlock. According to them, the NPA is synergising with other government agencies such as the Federal Ministry of Power, Work and Housing (FMWH) to cushion the pressure on the roads leading to the ports. Emmanuel Olajide Adesoye, chairman of the Board, gave the assurance after the tour of terminals in the Western zone, consisting of Lagos Port Complex (LPC) and Tin-Can Island Port at the weekend. The management of the NPA is very much aware of the challenges faced by terminal operators and other port users in assessing the ports due to the persistent gridlock, he said. According to Adesoye, the authority is keen on rejuvenating the rail lines in the port, introducing call-up system as well as expanding the port access roads, “We are conscious that badges are currently being used to trans-

fer cargoes from Tin-Can and Apapa ports to Ikorodu and Kirikiri Lighter Terminals.” This, he said, has drastically reduced the clog on the wheel of progress on the lane to greater service delivery at the nation’s seaports. “The completion of the Lekki Deep Seaport, which is a product of Private Public Partnership, and great collaboration, would help in the efficient movement of cargo. We believe that the port would be a reference point within the Gulf of Guinea. However, we are committed to providing modern port infrastructure in all seaports in the country, in order to encourage efficiency in the system,” he assured. Earlier, Emmanuel Akporherhe, port manager, Tin-Can Island Port Complex (TCIP), who said some existing infrastructure in the port was over 40 years old, solicited for the rehabilitation of the infrastructure round the port to facilitate greater customer satisfaction. According to him, Tin-Can has received 213 ships with a tonnage of 6,778,397 and cargo throughput of 4,790,282 in the first quarter of 2019. Aishat Ibrahim, port manager, Lagos Port Complex Apapa, told the board members of the business activities at the port as well as the feats it has attained in its operation.

Leadership critical in tackling security issues in Nigeria, other nations - US Consul General Daniel Obi

nited States’ Consul General in Lagos, John Bray, says leadership is critical for Nigeria and other nations to tackle the present threatening security challenges and other socio-economic issues. These challenges, he says, are characterised by volatile, unpredictable, complex and ambiguous (VUCA) issues. Bray, who spoke at the ongoing ninth edition of Securex West Africa, a dedicated security and public safety event in Lagos, identified some factors that contribute to instability to include: corruption; violent ethnic conflict; population movements; exploitation of natural resources; proliferation of small arms and light weapons; state-sponsored denial of political and legal rights; economic and political instability, among others. To deal with the issues, he put it succinctly that “the critical skills set to accomplish any strategic

objective is leadership. Leadership is critical.” He recalled an acronym he learnt in the military that helped to remember important actions, which is . J.J. DID TIE BUCKLE. This stands for: Justice, Judgement, Dependability, Initiative, Decisiveness, Tact, Integrity, Enthusiasm, Bearing, Unselfishness, Courage, Knowledge, Loyalty and Endurance.), saying, “I continue to use that acronym to help guide me in my position of leadership.” He also identified other tools such as Patience, Persistence and Perseverance in dealing with security and other socio-economic challenges. Under patience he said things do not change quickly; “we will not achieve our objectives overnight; we cannot rush success or we risk impeding our own progress; and small steps forward will lead us to our ultimate goal.” With persistence, he said leadership must keep moving the ball forward down the field, because even the smallest step forward would help achieve goals. Under

perseverance, he said, “We cannot allow slow progress to get us down; we must persevere even when our progress is difficult.” He also said in dealing with security issues, all aspects of culture must be brought to bear. “If minds need to be changed in order to stem the tide of instability, if there is a culture of violence, or apathy, or corruption, the situation must change. We can effect these cultural aspects through education programs, information programs, direct contact with thought leaders and political leaders and indirect content through them with the broader population at large.” Identifying other tools such as Communication, Cooperation and Collaboration with all stakeholders: international organizations, the international community of nations, host nations, host nation institutions and partners abroad, he said, “Just as we must approach security challenges by applying a cultural lens, we must integrate all efforts into one coor-

dinated strategy.” He also believed that Nigeria must seriously address the population growth, unemployment, corruption, economy, as the country was in sore need of economic diversification and the civil society must insist on transparency to tackle insecurity. Also speaking at the event, George Pearson, the event director and regional director, Afrocet Montgomery, said Securex West Africa was the leading security and public safety event serving the West African sub-region. “It is a platform that brings together decision makers and influencers from the public and private sectors, as well as other stakeholders, to address the challenges to safety and security,” he said. He further said Securex West Africa also provides a platform for suppliers and service providers in the Security sector to display their cutting-edge product and service offerings, and showcase the latest technology in safety and security management.

Human trafficking: We are learning from Edo’s successes - UK

do State governor, Godwin Obaseki’s relentless campaign against human trafficking and illegal migration has received the backing of the United Kingdom’s (UK) Department for International Development (DFID), which is reviewing the successes of the government’s strategy in containing the menace. During a courtesy visit by a UKAID delegation to the Government House, in Benin City, a senior adviser with the UKAID, Richard Sandall, said the delegation visited the state to acquaint themselves with challenges, opportunities and progress recorded in the fight against human trafficking and illegal migration, which would enable the agency commit more resources to support the Edo State government. Sandall commended the Edo State Taskforce Against Human Trafficking for the work done in the last 18 months, noting that the impact of the taskforce’s operations was exceptional. “The Taskforce has brought together stakeholders from different MDAs, Civil Society Organisations (CSOs) and churches to work together to curb the scourge. We are learning from you. Your success is an example for us to follow. We are

also here to learn about the Genius Hub campaign,” he said. While commending Genius Hub in its contribution to curbing irregular migration, Sandal noted, “We want to hear about your challenges, opportunities and progress to help us know how to come in to support the fight against human trafficking.” President, Federation of Muslim Women and member of the Edo State Taskforce Against Human Trafficking, Miamuna Momodu, said the Obaseki-led administration had worked hard to change the narrative and negative perception of the state being the epicentre of human trafficking. Momodu noted, “Before the establishment of the Taskforce Against Human Trafficking, the image of the state was in a bad light but the Obaseki administration fought hard to change the negative perception. “Rather than lament, the government fought headlong to change the narrative and a lot has been done in two years of accepting returnees and giving them a lifeline through skills acquisition.” She said the campaign ‘I am not for sale’ is close to Edo peoples’ hearts as human trafficking is modern-day slavery, which must be fought to a standstill. www.businessday.ng

L-R: Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI); Babatunde Yusuf, dean, faculty of management sciences, Lagos State University (LASU); Babatunde Ruwase, president, LCCI, and Akin Onafalujo, head of department, insurance, LASU, during a courtesy visit of the Lagos State University to LCCI in Lagos.

Customs FOU Ikeja intercepts N2bn worth of contraband in Lagos AMAKA ANAGOR-EWUZIE

he Nigeria Customs Service (NCS), Federal Operations Unit (FOU) Zone ‘A’ Ikeja, on Wednesday, said it seized smuggled items worth over N2 billion within the last three months. The seized items include banned items and regulated drugs such as Tramadol, Codeine and Diclofenac, paracetamol injection that were brought into the country without National Agency for Food and Drug Administration and Control (NAFDAC) approval number, chest and lung tablets, and 13,810 bags of foreign smuggled rice.

Speaking with newsmen in Lagos on Wednesday, Mohammed Aliyu, area comptroller of the unit, who said the command was motivated to fully pursue the enforcement of the Federal Government’s import prohibition law against drug bandits and smugglers, said the command and it management were recently given recognition by the NAFDAC. According to Aliyu, the command also intercepted items that include 113 units of exotic vehicles with Duty Paid Value (DPV) of N1.4 billion; 600 cartons of codeine syrup valued at N240,000,000; 49 cartons of paracetamol injection with duty paid value of N39,200,00; 13,810

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bags of foreign rice with DPV of N190,961,320; Indian hemp; vegetable oil; frozen poultry products; tomato paste; used tyres, among others. He called on the owners of the seized vehicles to come forward with their proper vehicles documents to claim their vehicles. “Most of these vehicles were intercepted in the bush; some along the roads while others were intercepted at car mart, through intelligence report. Whoever appears to claim ownership of the vehicle without proper papers or documentation will be arrested and prosecuted,” he warned. He reiterated that the command would fight tooth and nail @Businessdayng

in ensuring that smugglers are eradicated. “The command is not sleeping. We are also aware of the tactics of smugglers, and we are ever ready for them.” Responding to stakeholders call for the removal of FOU from port roads, Mohammed said the unit has made considerable number of remarkable seizures by being on the port roads. “If we leave the port road, only God knows what would be allowed into the country.” He however warned that Customs would henceforth start intercepting trucks and vehicles used for the smuggling, and would be confiscated and auctioned.

Thursday 18 April 2019

BUSINESS DAY

POLITICS & POLICY INEC set date for supplementary election in Ajeromi/Ifelodun Iniobong Iwok

he Independent National Electoral Commission (INEC) has declared the February 23rd election for the Federal House of Representatives seat for Ajeromi/ Ifelodun federal constituency in Lagos State inconclusive, while setting Saturday, 27th April 2019 for a supplementary election in the constituency. The election for the House of Representatives seat for the constituency became inconclusive because no candidate emerged clear winner as a result of cancelation of election in 71 polling units affected by violence and over-voting. Sam Olumekun, Lagos State Resident Electoral Commissioner (REC), in a statement to journalists in Lagos, Wednesday, said: “Sequel to the order of the Federal High Court sitting in

Mahmood Yakubu

Kubwa, Abuja on 7th day of March, 2019 in respect of the Ajeromi/Ifelodun Federal Constituency election held on 23rd February 2019, the Independent National Electoral Commission has today, Wednesday 17th April 2019 declared the result of the election inconclusive. “Consequently, Saturday, 27th April 2019 has been fixed for a supplementary election to conclude election in the affected constituency areas.” The INEC commissioner added that the date for the supplementary election was made at the Federal Con-

stituency Collation Centre, Ajeromi/Ifelodun Local Government Area office of the Commission in the presence of leaders of political parties, candidates and their agents. He stressed that the supplementary election is to hold in 71 polling units and 18 voting points with a total number of 43,660 registered voters, enjoining all registered voters in the Federal Constituency to come out in large numbers to cast their votes. Olumekun further charged residents of the affected Constituency to conduct themselves in a peaceful manner to ensure the success of the election It will be recalled that seven states were affected in supplementary elections after the February and March 2019 General Elections in the Federation. The Ajeromi /Ifelodun Federal Constituency election is the last in the series of supplementary elections.

Why INEC should nullify Melaye’s victory – Adeyemi Victoria Nnakaike, Lokoja

mart Adeyemi, candidate of the All Progressives Congress (APC) for Kogi West senatorial district seat in the National Assembly, has asked the National and State Assemblies Election Petition Tribunal to nullify the outcome of the election and order a fresh one. He contended that the election was marred by irregularities and was not conducted according to the provisions of the Electoral Act. Adeyemi had in the petition filed before the tribunal sitting at the Magistrate Court, Wuse, Abuja by his counsel, Adekunle Otitoju, averred that Dino Melaye, who was declared winner by the Independent National Electoral Commission (INEC) did not score the highest number of lawful votes cast during the election. The petition filed before the tribunal headed by Justice O. A. Chijoke, prayed the tribunal for a total cancellation of the result in the six local government areas won by Melaye as declared by the commission as nobody should benefit from the irregularities. The petition argued that the Kogi west senatorial election was conducted contrary to the provisions of the Electoral Act and the ruling of a federal high court. The petitioner also said that

the Federal High Court, sitting in Lokoja had ruled that the collation and announcement of result of the election should be done in Kabba, which is the headquarters of the senatorial district. He, however, said contrary to the ruling which was obtained by the PDP and its candidate, the commission went ahead to collate and announce the result of the election in Lokoja after the result had been manipulated. Adeyemi, who represented the senatorial district between 2007 and 2011, also told the tribunal that there was a massive irregularity in the number of vote cast when compared with the total number of Permanent Voter Cards (PVC) issued by INEC. The petition equally argued that it had been established that in many of the local government areas, the total number of votes recorded were far higher than the number of PVC that the record of INEC showed to have been issued out. Speaking with newsmen after the pre-hearing sitting of the tribunal, Adeyemi disclosed that he had approached the tribunal to expose the alleged irregularities and manipulations that characterised election in Kogi west. “We have about four issues that we want the court to determine for us, the first one is that there was court ruling based on the case filed by my opponent that the collation of result should be at the senatowww.businessday.ng

rial headquarters, unfortunately for them they went to a different venue which was the state capital, Lokoja to collate the result, which is contrary to the provisions of the electoral law and the constitution. “Kabba is our senatorial headquarters but they collated in Lokoja, in the process they stopped over along the way and they manipulated the result and changed figures, they changed the result in such a manner that one could see that something went wrong. “The second issue is that we made a request to INEC for the record of PVC distribution which will determine the number of votes, the PVC determines who votes but to our dismay, based on the INEC documents they gave to us we discovered that in some of the local governments the votes were three times more than the number of the PVCs distributed, so the question is should the votes be higher than the PVCs? “We care also at the tribunal to let the world know that PDP didn’t win the election, what they succeeded in doing is to manipulate the system, while we were waiting in Kabba, the senatorial headquarters, which was part of the ruling of the federal high court, they took the bypass and went to Lokoja to collate, on their way to Lokoja they stopped over and manipulated the result,” he said. https://www.facebook.com/businessdayng

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Thursday 18 April 2019

BUSINESS DAY

Live @ The Exchanges Stock investors caught in web of over N460bn loss year-to-date Iheanyi Nwachukwu

tock investors at the Nigerian bourse who chose to hold their equities till date have booked losses in excess of N464billion, BusinessDay trend watch reveals. Ahead of the expected recovering in this second-half (H2) of 2019, many smart investors are buying value stocks following recent bear reign in the market which pushed many equities to new lows. The stock market opened this year 2019 with record value of N11.721trillion but stood at N11.257trillion at the close of trading on Wednesday April 17. Year-toDate (YtD) returns currently stands at -4.64percent. The market looks not good enough to recoup this huge loss in one day as trading closes on the Nigerian Stock Exchange (NSE) today preparatory to Easter celebration. The NSE All Share Index (ASI) extended gains on Wednesday April 17, 2019 by 0.76percent to 29,970.86point from 29,

746.24 points recorded the preceding trading day. The value of listed equities on the Nigerian Bourse advanced on the review trading day by N84.37billion. The session was characterised by the publication of first-quarter (Q1) 2019 results of three of the Tier-1 banking names (Access Bank Plc, Zenith Bank Plc, and GTBank Plc) indicating that earnings season is in full swing. No fewer than 16 stocks gained as against 17 losers. Despite extended gains seen Wednesday on the NSE, some analysts expect the Nigerian stock market activity to remain low. Recently, Jumia became first African start-up to list on New York Stock Exchange (NYSE), raising $200million on first day of its listing. Now valued at $1.5billion, Jumia Technologies AG, is founded in Lagos, Nigeria by two ex-Mckinsey French entrepreneurs in 2012 with MTN, Africa’s biggest telecoms company. In 4,025 deals recorded on Wednesday April 17, stock traders exchanged 216,012,863 units valued at N3.227billion. Access Bank Plc, UBA Plc, Lasaco Plc, Zenith Bank Plc, and FCMB Plc

were actively traded stocks on the NSE. Nestle Nigeria Plc stock price recorded the highest advance from N1500.3 to N1580, adding N79.7 or 5.31percent. Dangote Cement Plc followed from N186 to N188, adding N2 or 1.08percent. Nigerian Breweries Plc rose from N64 to N64.85, adding 85kobo or 1.33percent. Access Bank Plc increased from N6.05 to N6.65, adding 60kobo or 9.92percent. Dangote Flourmills Plc increased from N10.1 to N10.4, adding 30kobo or 2.97percent. On the losers table, Seplat Petroleum Development Company Plc dipped from N590 to N570, losing N20 or 3.39percent. GTBank Plc declined from N35.6 to N34.75, losing 85kobo or 2.39percent. Cement Company of Northern Nigeria Plc also dipped from N16.9 to N16.3, losing 60kobo or 3.55percent. Africa Prudential Plc was also down from N4.18 to N4, losing 18kobo or 4.31percent; while UACProperty Development Company Plc declined from N1.66 to N1.5, losing 16kobo or 9.64percent.

CBN, SEC, NSE, others emphasize on compliance of Nigerian code of corporate governance ...As Deloitte engages market operators MICHAEL ANI

egulators in the capital, money market as well as counterparts in other sectors of the economy, have stressed on the need for companies to ensure maximum compliance of the Nigerian code of corporate governance. In a Stakeholders session organized by Deloitte—an indigenous accounting and auditing firm—in Nigeria’s commercial hub, Lagos, the Central bank; Securities and Exchange Commission, the Financial Reporting Council as well as market operators brainstormed on the benefit of a strict implementation of the code in the different sectors of the economy as this would help in driving transparency and sustainability in the Nigerian business environment. “In terms of monitoring compliance, it is not a responsibility that the FRC will carry solely; it must be a shared responsibility between the FRC and the different regulators. Also, I think stakeholders

have a role to play”, Daniel Asapokhai, Executive Secretary/CEO of FRCN The new Corporate Governance Code 2018 would serve as the apex regulatory code in the country, according to the Financial Reporting Council of Nigeria (FRCN)— an agency under the supervision of the federal Minister of Industry, Trade and Investment. Consequently, the existing code of governance under the laws establishing regulatory bodies like the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), among others, would

serve as guidelines of operations for public and private businesses. “If the code is diligently and faithfully implemented by corporate Nigerians over the coming months or years, the results would be economic transformation, resilience and widespread prosperity for our country and all its people including all those outside our country that chose to invest in Nigeria and its institution”, Asapokhai added. In 2018, the regulatory agency drafted a new code that consolidates the code for private and public companies while the code for Not-for-profit companies remain suspended

Thursday 18 April 2019

BUSINESS DAY

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Thursday 18 April 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 17 April 2019 Company

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Market cap(nm)

Price (N)

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Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 207,939.57 5.85 2.63 288 37,561,279 UNITED BANK FOR AFRICA PLC 215,456.35 6.30 2.44 268 19,569,979 ZENITH BANK PLC 646,767.77 20.60 2.23 314 11,672,261 870 68,803,519 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 263,830.40 7.35 2.08 282 22,217,042 282 22,217,042 1,152 91,020,561 BUILDING MATERIALS DANGOTE CEMENT PLC 3,169,534.38 186.00 0.54 92 1,149,467 LAFARGE AFRICA PLC. 186,045.04 11.55 - 31 126,238 123 1,275,705 123 1,275,705 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 347,182.29 590.00 - 10 28,950 10 28,950 10 28,950 1,285 92,325,216 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 1 9,447 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 1 8,500 2 17,947 2 17,947 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 2 17,947 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,312.80 80.00 - 8 3,317 OKOMU OIL PALM PLC. PRESCO PLC 62,750.00 62.75 - 4 2,193 12 5,510 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,650.00 0.55 10.00 14 401,000 14 401,000 26 406,510 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 - 8 10,194 202.36 0.52 - 4 7,267 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 3 7,332 TRANSNATIONAL CORPORATION OF NIGERIA PLC 47,151.67 1.16 3.57 102 174,548,567 20,169.08 7.00 -2.10 53 1,458,012 U A C N PLC. 170 176,031,372 170 176,031,372 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 29 151,652 ROADS NIG PLC. 165.00 6.60 - 0 0 29 151,652 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,313.34 1.66 - 11 135,003 11 135,003 40 286,655 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,334.94 1.32 - 4 22,730 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 131,422.97 60.00 - 32 45,360 INTERNATIONAL BREWERIES PLC. 202,002.76 23.50 - 2 7,180 NIGERIAN BREW. PLC. 481,413.50 60.20 - 86 282,364 124 357,634 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 40,000.00 8.00 -5.88 52 701,157 DANGOTE SUGAR REFINERY PLC 162,600.00 13.55 0.74 53 892,148 FLOUR MILLS NIG. PLC. 69,706.45 17.00 - 32 134,680 HONEYWELL FLOUR MILL PLC 9,119.73 1.15 4.55 21 563,744 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 2 2,399 NASCON ALLIED INDUSTRIES PLC 50,471.80 19.05 - 20 4,960 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 180 2,299,088 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,969.84 10.10 -3.81 20 115,365 NESTLE NIGERIA PLC. 1,149,351.57 1,450.00 - 35 60,282 55 175,647 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,815.75 3.85 - 12 95,606 12 95,606 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 35,138.72 8.85 -9.69 11 107,020 UNILEVER NIGERIA PLC. 195,330.18 34.00 -2.86 69 1,474,335 80 1,581,355 451 4,509,330 BANKING ECOBANK TRANSNATIONAL INCORPORATED 194,505.24 10.60 0.95 74 1,144,411 FIDELITY BANK PLC 53,313.63 1.84 -0.54 96 5,785,976 GUARANTY TRUST BANK PLC. 987,416.06 33.55 -1.32 280 22,888,777 JAIZ BANK PLC 14,142.84 0.48 -4.00 10 583,910 SKYE BANK PLC 10,687.83 0.77 - 0 0 74,855.09 2.60 - 55 48,808,587 STERLING BANK PLC. UNION BANK NIG.PLC. 189,284.89 6.50 - 35 70,613,215 UNITY BANK PLC 8,533.22 0.73 - 16 189,968 WEMA BANK PLC. 27,002.13 0.70 1.45 24 806,586 590 150,821,430 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,712.54 0.68 4.62 21 736,247 AXAMANSARD INSURANCE PLC 21,000.00 2.00 - 5 3,611 1,869.90 0.23 -4.17 2 240,000 CONSOLIDATED HALLMARK INSURANCE PLC CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 -4.76 7 512,292 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 487.95 0.38 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC LASACO ASSURANCE PLC. 2,197.03 0.30 -3.33 8 3,495,100 LAW UNION AND ROCK INS. PLC. 2,320.02 0.54 5.88 9 1,422,000 LINKAGE ASSURANCE PLC 4,000.00 0.50 - 1 2,000 MUTUAL BENEFITS ASSURANCE PLC. 1,760.00 0.22 - 7 594,166 10,561.01 2.00 -4.76 8 250,610 NEM INSURANCE PLC NIGER INSURANCE PLC 1,547.90 0.20 - 8 219,758 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 0 0 REGENCY ASSURANCE PLC 1,533.81 0.23 - 7 349,102 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 -4.17 52 8,101,708 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 2 21,833 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 500 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 2 1,050 WAPIC INSURANCE PLC 5,353.10 0.40 - 19 171,836 159 16,121,813 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,361.36 1.47 8.09 5 254,780 5 254,780

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 2 100 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 100 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,440.00 3.72 2.76 55 616,880 CUSTODIAN INVESTMENT PLC 39,408.49 6.70 9.84 12 136,616 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 37,229.10 1.88 2.17 120 5,569,045 ROYAL EXCHANGE PLC. 1,389.25 0.27 -6.90 6 337,891 STANBIC IBTC HOLDINGS PLC 469,017.32 45.80 -0.43 16 2,045,302 UNITED CAPITAL PLC 15,600.00 2.60 1.17 44 583,794 253 9,289,528 1,009 176,487,651 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 817.22 0.23 - 9 1,650,945 9 1,650,945 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 1 760 1 760 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 6,375.00 4.25 4.94 8 152,750 GLAXO SMITHKLINE CONSUMER NIG. PLC. 10,224.74 8.55 -10.00 55 2,336,652 MAY & BAKER NIGERIA PLC. 4,313.09 2.50 5.04 22 657,444 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 - 7 9,755 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 92 3,156,601 102 4,808,306 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 1 100 1 100 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 3.57 65 20,944,982 E-TRANZACT INTERNATIONAL PLC 11,088.00 2.64 - 0 0 65 20,944,982 66 20,945,082 BUILDING MATERIALS BERGER PAINTS PLC 2,622.90 9.05 - 12 7,443 CAP PLC 23,625.00 33.75 0.15 14 78,805 CEMENT CO. OF NORTH.NIG. PLC 210,296.02 16.00 -5.88 21 175,655 FIRST ALUMINIUM NIGERIA PLC 675.31 0.32 - 6 66,115 MEYER PLC. 286.87 0.54 - 4 10,497 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 2 150 PREMIER PAINTS PLC. 1,279.20 10.40 - 1 55 60 338,720 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,853.34 1.62 -10.00 22 612,920 22 612,920 PACKAGING/CONTAINERS BETA GLASS PLC. 29,173.37 58.35 - 1 295 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 295 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 83 951,935 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 6,200 1 6,200 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 1 6,200 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 4 506,802 4 506,802 INTEGRATED OIL AND GAS SERVICES OANDO PLC 60,292.35 4.85 2.06 82 760,012 82 760,012 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 61,661.79 171.00 - 13 13,992 CONOIL PLC 15,960.90 23.00 - 12 12,880 ETERNA PLC. 5,673.03 4.35 2.35 25 862,024 FORTE OIL PLC. 35,101.87 26.95 - 36 114,907 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 2 1,710 TOTAL NIGERIA PLC. 66,546.28 196.00 - 35 62,622 123 1,068,135 209 2,334,949 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 3 252 3 252 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 100 1 100 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 376.43 0.32 - 2 4,570 2 4,570 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 7 129,800 TRANS-NATIONWIDE EXPRESS PLC. 351.64 0.75 8.70 8 321,624 15 451,424 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 2 220 IKEJA HOTEL PLC 4,261.53 2.05 -9.29 6 119,776 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 41,042.18 5.40 - 3 9,020 11 129,016 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 199.58 0.33 - 4 141,800 LEARN AFRICA PLC 1,126.32 1.46 8.96 6 201,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 780.85 1.81 - 7 413,982 17 756,782 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 795.70 0.48 - 0 0 0 0

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Thursday 18 April 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Trump fights back as he braces for Mueller report

Attorney-general to release redacted version of document into Russia election interference KADHIM SHUBBER AND DEMETRI SEVASTOPULO

lmost a month after US attorney-general William Barr declared that Donald Trump had not obstructed justice in the federal probe into alleged Russian interference in the 2016 election, the president was still trying to defend himself. “No Collusion — No Obstruction!” Mr Trump tweeted twice on Tuesday as he geared up for the release of the report produced by special counsel Robert Mueller following his two-year investigation. Mr Barr will issue a redacted version of the Mueller report on Thursday — following intense pressure to release the full document in the wake of his initial four-page summary to Congress last month. Democrats are preparing for a protracted fight over the report and have urged the attorney-general to keep redactions to a minimum. In his summary, Mr Barr said Mr Mueller had not established that Mr Trump conspired with Russia to influence the 2016 election. On the question of whether the president had tried to obstruct justice, however, he noted that Mr Mueller said his report did not conclude that Mr Trump had committed a crime but also “did not exonerate him”. Supporters and opponents of Mr Trump are preparing to scour the document for any details that would help them give the upper hand in the battle to frame its contents. Mr Barr has said the report is

divided into two sections — one on conspiracy and a second one on obstruction. Legal experts said much of their focus on Thursday would be on what Mr Mueller had written about the obstruction issue, given the disclosure by Mr Barr that the report “sets out the evidence on both sides of the question”. “Barr said there’s a bunch of acts essentially that could be considered obstruction and Mueller has laid out [the] arguments both ways,” said Solomon Wisenberg, a former prosecutor who worked on the independent counsel investigation into Bill Clinton. “It’s going to be quite damaging to Trump and there’s going to be quite a lot of meat on the bones.” US media reported that some White House staff were nervous that the report would expose critical statements about the president that they had made to Mr Mueller’s team. Mr Trump initially welcomed the release of the full report, but has recently suggested that the Democrats just wanted the document to attack him. Mr Trump has faced constant suspicions over his Russia connections. Those were reinforced recently when Michael Cohen, his former lawyer, told Congress that he had held negotiations on Mr Trump’s behalf during the presidential race to build a Trump Tower in Moscow. Mr Mueller did not make a traditional prosecutorial decision on obstruction and instead laid out the evidence on both sides, according

Morgan Stanley hit by trading and investment banking slump Results bring the curtain down on a mixed season for US bank earnings LAURA NOONAN

organ Stanley reported a 9 per cent drop in profits in the first quarter of the year, as the last of America’s big banks to report earnings was haunted by the same falling trading revenues that assailed rivals and also suffered a sharp decline in investment banking fees. The bank’s net income for the first quarter came in at $2.47bn, down from $2.7bn in the first quarter of 2018, while earnings per share of $1.39 was worse than the $1.45 in the first quarter of 2018 but better than the $1.17 expected by analysts. Revenues across the group were down 7 per cent to $10.3bn, including an almost 15 per cent fall in revenues at Institutional Securities — the division which houses Morgan Stanley’s investment banking and trading businesses. “We delivered solid earnings despite a slow start to the year following the turbulent markets in the fourth quarter,” said chief executive James Gorman. “Even though risks to the global environment remain, markets have recovered and we are well positioned to serve our clients and invest in our businesses.” Morgan Stanley’s investment banking revenue fell 24 per cent,

to Mr Barr. This part of the report is expected to include at least one possibly obstructive act by Mr Trump that has not been reported. The report could intensify criticisms of Mr Barr over his conclusion last month that Mr Trump had no criminal case to answer on obstruction, an assessment that others will be better able to judge once the document is released. The Mueller report will include blocks of black ink that conceal some information, but it remains to be seen how extensive the redactions will be. Mr Barr has said that readers would get “more than the gist” of the report. Mr Barr has said the redactions

would cover sensitive intelligence, material covered by grand jury secrecy, information that could affect ongoing investigations and anything that affects the privacy or reputations of third parties, which he told Congress did not include public officials. Justice department policy is to avoid criticising individuals who are not being charged. “My guess is there’s going to be enough meat on the bones for people to really have a pretty strong grip on what this investigation found, what people were telling them and most importantly what their legal assessment was,” said James Trusty, a former federal prosecutor and partner at Ifrah Law.

The conspiracy section of the Mueller report will lay out reasoning behind the prosecutions that Mr Mueller brought. They included indictments of Russians for hacking and propaganda, as well as charges against six Trump associates for lying, including about their contacts with Russians. It will also include his explanations for why he declined to bring other cases, though it is unclear how much detail there will be and whether it will be redacted. The justice department is planning to release the report on Thursday morning. It is unclear if it will come in a word-searchable format, which was not the case for Mr Barr’s summary of the Mueller report.

China GDP grows faster than expected in first quarter Expansion of 6.4% follows stimulus efforts and US climbdown on threat to escalate trade war

worse than the average 6.5 per cent rise recorded by its four big rivals in the same quarter. The biggest fall was in Morgan Stanley’s advisory revenues, down almost 30 per cent per cent, which the bank said reflected “the impact of lower M&A fee realizations”. Trading revenues were down around 15 per cent, while revenues were roughly flat at the wealth management division that makes up around 45 per cent of Morgan Stanley’s business. The bank said the fall in expenses reflected its “controlled focus and discipline” on costs. The results bring the curtain down on a mixed season for US bank earnings. JPMorgan Chase’s results won the warmest reaction from shareholders, with the bank’s stock rising 4.5 per cent as investors rewarded the highest ever quarterly profit at a US bank and took comfort in executives predictions of continued revenue growth even if the Fed keeps interest rates lower for longer. Goldman Sachs shares fell almost 4 per cent on its results announcement, partly because the bank missed out on the interest-rate led retail banking boom that helped the likes of Citi and JPMorgan, and also after the bank deferred its long-awaited strategic update until next year. www.businessday.ng

TOM MITCHELL AND NIAN LIU

he Chinese economy grew at a faster-than-expected rate during the first quarter of this year, after US President Donald Trump last month backed down from a threat to escalate his trade war with Beijing and government stimulus measures began to take hold. On Wednesday the National Bureau of Statistics estimated that the world’s second-largest economy expanded 6.4 per cent in the first quarter, compared to the same period last year and ahead of the 6.3 per cent expected according to a Reuters poll. The figure matched the 6.4 per cent growth posted in the final quarter of 2018, but was significantly below last year’s first-quarter growth figure of 6.8 per cent. “Q1 is expected to mark the low point of China’s growth cycle,” said Tai Hui, chief Asia Pacific market strategist for JPMorgan Asset Management. “Recent data indicate that government policy to stabilise the economy is taking effect.” Eswar Prasad, economist at Cornell University, took a similar view: “There are signs that policyled stabilisation of growth is beginning to take hold, aided by the abatement of trade tensions with the US.”

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Surging industrial production in March provided a big boost to China’s economy, rising 8.5 per cent year-on-year compared with just 5.3 per cent in the JanuaryFebruary period. Year-to-date fixed asset investment was also strong in the first quarter, rising 6.3 per cent over the same period in 2018 and up from 5.3 per cent last August. The outlook for the world’s second-largest economy had appeared far gloomier as recently as February. Chinese industrial profits fell 14 per cent in January and February compared to the same period last year, the largest drop in more than a decade. But Mr Trump’s decision not to increase the punitive tariff rate currently assessed on about half of all Chinese exports on March 1, as he had previously threatened, dissipated much of the negative sentiment that had been weighing heavily on China’s stock markets and private sector companies late last year. “The national economy enjoyed stable performance and growing positive factors, stronger market expectations and confidence,” said NBS spokesman Mao Shengyong. “However, at the same time we should also be aware that …the task of reform and development is arduous and downward eco@Businessdayng

nomic pressures still persist.” The CSI 300 Index, which tracks the biggest companies on the Shanghai and Shenzhen stock exchanges, has risen more than 35 per cent this year. China and other major regional stock indices were little changed on Wednesday after the release of the data. The renminbi and Australian dollar, however, strengthened while oil prices hit a 2019 high. The Australian dollar, which serves as a proxy for regional trade, climbed as much as 0.5 per cent to a high of $0.7174 against the dollar, swinging back from an earlier fall. Oil prices rose above $72 a barrel for the first time since November to a high of $72.08. The onshore renminbi was up 0.1 per cent at Rmb6.7057 to the dollar. China’s central bank said in a statement earlier this week that “economic growth is resilient”, and repeated earlier assurances that it would not resort to “flood-like” monetary stimulus measures that sent overall debt levels soaring in the wake of the 2008-09 global financial crisis. In their effort to bolster economic activity, Chinese officials last month unveiled an Rmb2tn ($298bn) tax-cut package. Lending by the state banking sector hit a quarterly record of Rmb5.8tn.

48 BUSINESS DAY

Thursday 18 April 2019

NATIONAL NEWS

Sudan’s new regime has still to prove its sincerity Police try to disperse demonstrators for second day with water cannons and tear gas

HEBA SALEH

lgeria’s army chief warned protesters that they were making “impossible demands” in his first public address since the appointment of an interim president to lead a three-month transition period. Ahmed Gaid Salah, the army chief of staff, issued the warning on Wednesday as mostly student demonstrators filled the streets of downtown Algiers and other cities to protest against the appointment of Abdelkader Bensalah as interim president. Mr Bensalah is part of a trio of officials put in charge of state institutions, who will oversee preparations for a presidential election within three months. A statement from the interim presidency on Wednesday night said the election for head of state would be held on July 4. There were no other details given. Demonstrators are calling for the Algerian regime, which they consider to be corrupt and autocratic, to be swept away and replaced by a new government. They reject plans for the transition to be overseen by institutions headed by regime insiders because they fear this will merely perpetuate autocracy and halt reforms. Police responded by arresting protesters and firing water cannon and tear gas for the second

day to disperse the students. The police crackdown suggested that the military-backed authorities’ patience was running low after two months of protests. Those protests spurred Gen Salah to force the resignation of Abdelaziz Bouteflika, the ailing president who had ruled Algeria since 1999 and was seeking a fifth term in office. Speaking at a televised military gathering, Gen Salah accused foreign “parties” of trying to impose certain individuals to lead the transition and of being behind demands that would “lead to a constitutional void and the destruction of state institutions”. He said it was “unreasonable” for a transition to be conducted without following the constitution and warned that it would lead to “grave consequences”, including the destruction of the country’s achievements since independence. The protest movement is leaderless and mobilised through Facebook, but some opposition politicians and activists are proposing selecting a consensual figure to lead the transition. In an effort to placate demonstrators, Gen Salah said the judiciary, “which has recovered its prerogatives and will work freely and without pressures or diktats”, would investigate “the whole gang”. The chief of staff has previously described Mr Bouteflika’s entourage as a gang.

Boring banking is exciting again in the US Analysts wonder whether retail profits can keep growing in a low-rate environment ROBERT ARMSTRONG

oring banking is exciting again. The stars of the firstquarter earnings season at the big US banks were not high-powered dealmakers, brilliant bond traders or wizards of corporate finance. They were tellers, mobile apps and credit cards. As investment banking and capital markets operations stumbled, retail units pushed profits higher. At JPMorgan Chase and Bank of America, bank deposits and loans grew and lending margins widened. Retail net interest income rose 11 per cent at Chase and 10 per cent at BofA, to $9.4bn and $7.1bn, respectively. Growth at Wells Fargo and Citigroup was not as strong — Wells is still managing the fallout from its fake-accounts scandal and Citi’s US card business has struggled — but retail was still a source of stability as institutional banking businesses floundered. “Look at the banks’ different businesses — corporate and investment banking is not a source of growth, and asset management is not [either]. All the growth is coming from the retail banks,” said Charles Peabody of Portales Partners. Investors’ enthusiasm for stable retail banking businesses is reflected in the performance and valuation of bank shares. Over the past 12 months, shares in Morgan Stanley, which has no retail unit, and Goldman Sachs, which has only a tiny one, are the worst performing among the six big US

banks, having fallen 11 per cent and 21 per cent, respectively. Conversely, JPMorgan and BofA, with the strongest retail units, trade at the widest premiums to tangible book value in the group. The question is whether retail banking’s moment in the sun will last much longer. Analysts note that US banks have been able to hold deposit rates low while reaping the benefits of Federal Reserve rate increases in the form of higher loan yields. With the Fed now holding its position and the difference between shorter-term and long-term rates narrowing, they wonder whether net interest income — which makes up more than half of total lending revenue at the big banks — can keep growing. “Over the past two years, 80 per cent of revenue growth [for banks] was net interest income and 80 per cent of that has been from rate hikes, not [loan] volume growth,” said Richard Ramsden, bank analyst at Goldman Sachs. “That’s over now” that the Fed has stopped increasing rates. Mr Ramsden added that “the flattening of the curve really also affects reinvestment income on securities portfolios” — since banks, like other investors, might have to settle for lower yields on new fixed-income instruments as older ones mature. The rate environment’s impact on retail bank earnings is reflected in the big banks’ expectations for net interest income in 2019. Last year aggregate net interest income at JPMorgan, BofA, Wells and Citi rose by more than $10bn, or about 5 per cent. This year their forecasts imply growth of just 1.5 per cent. www.businessday.ng

Saudi Aramco in talks to buy Reliance Industries stake Energy giant eyes refining and petrochemicals investment with Indian group ANJLI RAVAL AND SIMON MUNDY

audi Arabia’s state energy group is in talks with Mukesh Ambani’s Reliance Industries to buy a minority stake in the Indian company’s refining and petrochemicals business, according to three people familiar with the discussions. Saudi Aramco, the world’s largest crude producer, has ramped up investments in foreign refineries in recent years, particularly in fastgrowing Asia. It has long sought a foothold in the Indian market as it banks on the country’s rising oil demand to lock in crude sales. Reliance, which has for a long time been in discussions with Saudi Aramco, offered the company a 10 to 20 per cent stake but the kingdom was seeking a greater share, one person briefed on the matter said. A Times of India report said that Saudi Aramco was in talks

to buy up to a 25 per cent stake valued at around $10-15bn, which could value the company’s refining and petrochemicals businesses at nearly $60bn. However, Reliance was seeking a higher valuation of upwards of $80bn for the division, according to one person close to the talks. The person said the company had also initiated discussions very recently with the Abu Dhabi National Oil Company (Adnoc). Mr Ambani, the richest man in Asia, visited Saudi Aramco’s headquarters in Dhahran in February. Saudi Crown Prince Mohammed bin Salman and officials from the kingdom, including energy minister Khalid al-Falih, have also made trips to India in recent months. Reliance owns India’s largest refining and petrochemicals complex in the state of Gujarat. The refinery processes 1.4m barrels a day and the company is planning a large expansion of its capacity in

the coming decade. Last year Saudi Aramco announced it would jointly develop a $44bn refinery and petrochemicals complex in the state of Maharashtra with a consortium of Indian companies, but the project has been plagued by delays. Saudi Aramco raised $12bn in its first international bond sale this month after drawing a recordbreaking $100bn in orders. The launch marked a landmark moment for the oil company that disclosed its financials for the first time in its 86-year history, showing it to be the world’s most profitable company. Saudi Aramco did not immediately respond to a request for comment. Reliance said: “We do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis.” A spokesperson for Adnoc said it did not comment on speculation.

Apple and Qualcomm sign peace deal to end litigation Intel quits race to build 5G chips as rival is welcomed back as supplier to the iPhone CAMILLA HODGSON

pple and Qualcomm have agreed to put an end to one of the longest-running and most expensive disputes in the tech industry, settling their numerous multibillion-dollar legal fights and paving the way to bring Qualcomm chips back into the iPhone. The deal was quickly followed by an announcement by Intel, whose modems replaced Qualcomm’s in the most recent generation of iPhones, that it was abandoning its plan to design chips for next-generation 5G smartphones. Rumours had circulated for weeks that Intel had experienced delays and would not meet Apple’s 2020 deadline, although until Tuesday it had said its plans were on track. In a joint statement, Apple and Qualcomm said “all litigation between the two companies worldwide” had been dropped and that they had reached a six-year global patent licence agreement and a multiyear chip set supply agree-

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ment. The deal also included a one-time payment from Apple to Qualcomm of an undisclosed amount. Shares in Qualcomm climbed as much as 24 per cent on the news, the biggest single-day gain since December 1999. It said the deal was expected to increase its earnings per share by around $2 per year — a total of $2.4bn. “The multiyear deal is a huge vindication for Qualcomm and likely an acknowledgment by Apple that it had run out of options, particularly when it comes to 5G,” said Ben Wood, analyst at CCS Insight. “There was a growing body of evidence that Intel, its current chip set provider, was struggling to deliver a 5G solution in a timely manner.” Intel chief executive Bob Swan said the company would continue to invest in its 5G network infrastructure business, but review production of 4G and 5G modems in PCs and “internet of things” devices. “We are very excited about the @Businessdayng

opportunity in 5G and the ‘cloudification’ of the network, but in the smartphone modem business it has become apparent that there is no clear path to profitability and positive returns,” Mr Swan said. Apple and Qualcomm had been embroiled in a range of high-profile intellectual property and contract disputes around the world, with potentially severe implications for both companies. While the feud had made Apple reliant on Intel modems, Qualcomm relies on its licensing division for around twothirds of its annual earnings before tax, and a ruling that the prices it was charging were monopolistic could have had lasting implications for its business model. The legal cases included a $30bn licensing dispute that went to trial on Monday, in which Apple was joined by four of its contract manufacturers in a suit against Qualcomm in San Diego. News of the settlement came while Qualcomm’s attorney, Evan Chesler, was still standing up in court delivering his opening argument.

Thursday 18 April 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Hedge funds realise going long has its rewards

High-flying funds are finding the fastest growth coming from an unlikely part of their business LINDSAY FORTADO AND LAURENCE FLETCHER

uying stocks and hoping they gain in price was once considered the poor cousin of hedge fund investing. But as the industry looks to recover from its first annual drop in assets since the financial crisis, high-flying fund managers are being forced to think again. One of the hottest areas of growth for some of the world’s largest hedge funds, including CQS, DE Shaw, and Man Group, is now the long-only funds where the formula simply echoes that of the stockpicker more often found in the traditional asset management industry. It is far removed from the popular image of a hedge fund manager who promises to trounce the market thanks to being able to bet that securities will fall, as well as rise. The trend is being partly driven by investors such as pension funds who, after a decade-long bull market on Wall Street, are less willing to allocate money to strategies that wager on prices falling. Xavier Rolet, the former head of the London Stock Exchange and now chief executive of CQS, says that whereas many institutional investors hold less than 10 per cent of their portfolio in a bucket of alternative investments, which includes hedge funds, most have a much larger amount of money to allocate to long-only strategies. “Our clients were coming to us – and they still do – saying we’re pleased with your performance in your credit area or whatever the strategy might be, but we have other needs from an asset manager like you,” he said. “The traditional boundaries of what a hedge fund is are fading.” Long-only funds now account for more than half the assets at CQS, which manages $18bn, up from about a quarter five years ago. The assets in the firm’s longonly funds rose by 40 per cent last year alone, with the bulk coming from new investments. At London-based rival Man Group, long-only funds now make up about 40 per cent of the money it manages. Most of DE Shaw’s flagship vehicles have been closed to fresh investments for years, but the New York hedge fund has enjoyed robust growth in its long-only business. Those funds managed only $5bn at the beginning of 2011, but that doubled to $10bn by 2015 and now stands at $24bn, making it a major part of DE Shaw’s overall $50bn of assets. Such funds were once largely the preserve of established asset managers, but as hedge fund managers increasingly muscle on to their turf, it is also bringing consequences for the latter’s pay. Long-only funds almost always

charge lower fees than traditional hedge funds strategies, which can short stocks and bonds. The average fees hedge funds charge now consists of a 1.43 per cent cut for management and another 16.9 per cent based on performance, according to Hedge Fund Research. The equivalent for actively managed long-only funds was just a 0.76 per cent management fee in 2018, according to ICI, an industry body that represents regulated funds around the world. Most do not charge a performance fee at all. At Man Group, its long-only funds have been growing since it acquired smaller competitor GLG in 2010. In 2014 it bought Numeric, whose algorithm-based investing largely avoids shorting securities. “If you go back to 2010, there’s no doubt that within GLG, longonly was viewed as this sort of second-class citizen, and that was a false way of thinking,” said Luke Ellis, chief executive of Man. The bull market in both stocks and bonds has accelerated this shift in attitude given that making money from shorting securities has been tougher. In contrast, portfolios of long-only funds have benefited from the broader rise in markets while still promising investors access to the hedge fund managers’ ‘secret sauce.’ A third of the industry’s overall drop in assets last year — they slipped to $3.1tn last year from $3.2tn 2017 — was due to investors’ redemptions, according to data from HFR. Those figures do not include long-only funds. Although hedge funds last year managed to beat the S&P 500 for the first time in a decade, and have been helped this year by the recovery in equities, the pressure is still on. Now, “there are more assets available in long-only,” said Mr Ellis. “In the hedge fund industry, AUM is struggling not to shrink at the moment.” Others argue that part of the reason the hedge fund industry is beginning to look more like the rest of the asset management industry is simply down to it maturing. The largest funds are getting the lion’s share of new investments, while the reliance on star traders is fading in favour of stability and a lasting brand. “For so long, even with billions of dollars in assets, hedge funds were still being run like the corner grocery store,” said Ron Biscardi, chief executive of Context Capital, a hedge fund advisory firm. “Now they are trying to build a business that outlasts the founder.” At the same time, university endowments and charitable foundations often have a longer-term investment horizon than a pension fund, so can accept more volatility. As a result, said Mr Biscardi, they opt for funds that are cheaper and don’t hedge. www.businessday.ng

UK house price growth falls to weakest level in seven years Values in south-east drop for first time since 2011, with London down 4% DANIEL THOMAS

nnual house price growth in the UK has fallen to its weakest level in almost seven years as the slump in Britain’s residential property market spreads beyond London. House prices in the south-east of England fell for the first time since 2011, the Office for National Statistics said on Wednesday, while London prices dropped almost 4 per cent in February on a year earlier, their heaviest fall since the end of the financial crisis. UK house values dropped 0.8 per cent in February compared with the previous month, dragging prices to their weakest annual rate of growth since 2012. British house prices were just 0.6 per cent higher in February than a year ago, slowing from 1.7 per cent growth in January. Evidence of a wider slowdown in prices outside London, where home values have been under pressure since last summer, will raise concerns that the UK’s post-financial crisis housing market boom is fast coming

to an end. House prices in the south-east of England dropped almost 1.8 per cent on a year earlier. Estate agents reported that buyers had become more cautious because of uncertainty around the end of the Brexit negotiations, with the UK’s plans to leave the EU also deterring buyers from overseas. House prices also remain at a relatively expensive level on a long-term basis compared with earnings. Anne Bowden, housing partner at law firm Pinsent Masons, said the “death of buy-to-let, increased stamp duty and the prospect of interest rate hikes combined with Brexit instability makes the downward trajectory of house prices predictable. This decline looks set to continue for the foreseeable future.” The average UK house price was £226,000 in February after peaking at £232,000 in August 2018, from when monthly declines began to occur. In London, the average house price was £460,000, almost four times the price of the average home in the north-east of England at £125,000, but down about £24,000 from the previous peak

in July last year. The ONS figures showed that the prices of flats and maisonettes were the weakest on average across the UK — compared with other sorts of properties such as detached homes — with values starting to fall on a yearly basis at the end of last year and accelerating in February. Henry Pryor, a house buying agent, said developments in the London market would “ripple out over the next 12-18 months. Whilst the party may be over in the capital the drink is still flowing in places like Manchester and Leeds. But beware, the hangover will be just as severe.” There was better news for the north-west of England, which showed the highest annual growth in February, according to the ONS. Prices rose 4 per cent in the year to February. Mike Hardie, head of inflation at the ONS, said: “Growth in Wales and the west of England was offset by a sustained fall in London and falling prices in the South East for the first time since 2011.” The figures are compiled by the ONS from Land Registry data.

Stocks hold ground as investors measure earnings and China data MICHAEL HUNTER AND ALICE WOODHOUSE

o s i e r- t h a n - e x p e c t e d growth figures from China boosted the renminbi, supported stocks and helped oil prices hit a 2019 high as the country defied forecasts of a deepening slowdown in the first quarter. But momentum ebbed from global stocks into the start of US trade as investors measured mixed set of earnings news. Updates from IBM and Bank of New York Mellon looked downbeat, while PepsiCo beat forecasts. Futures trade expected Wall

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Street’s S&P 500 to tick up 0.2 per cent. The Europe-wide Stoxx 600 inching back from an eightmonth high, slipping 0.1 per cent. But some of the sectors seen as most directly exposed to the outlook for global growth outperformed, encouraged by the resilient China data. The Stoxx index tracking Europe’s industrial metals sector was up 1.2 per cent. The equivalent benchmark for carmakers rose over 1 per cent to its highest reading in seven months. Oil prices also received a boost, climbing above the $72 a @Businessdayng

barrel line for the first time since November, up 0.7 per cent to $72.22 a barrel. China’s economy expanded 6.4 per cent year on year in the first quarter, against a Reuters poll expecting 6.3 per cent growth as government stimulus measures took hold. The onshore renminbi, which is permitted to trade 2 per cent either side of a daily mid point set by the People’s Bank of China, strengthened by 0.1 per cent to Rmb6.7034 per dollar, its strongest in almost a month. The offshore renminbi was also 0.1 per cent stronger at Rmb6.7046 following the data.

Thursday 18 April 2019

BUSINESS DAY

ANALYSIS

FT Flood relief reveals complex role of Iran’s Revolutionary Guard

Disaster effort highlights widening social activities of group branded a terrorist organisation by the US NAJMEH BOZORGMEHR

n the week that the Trump administration labelled Iran’s Revolutionary Guard a terrorist organisation, volunteers from the elite force showed a different side as they pitched up in rural Khuzestan province to provide aid to victims of the recent floods. Abbas Parsaei, who runs a medical facility in the city of Mashhad, travelled more than 1,000km across Iran to the stricken village of Dehlavieh, joining dozens of other volunteers from the guards to dig trenches and deliver supplies to families in need. “We prepare breakfast, lunch and dinner for 600 people and take it by boat to villages that are under water,” Mr Parsaei told the

tactics to put down street protests, including during the mass unrest in 2009. The force’s intelligence service have also arrested social and political activists citing national security. Their role following natural disasters is also well established — even if their efforts this time have been more high-profile. When a massive earthquake hit the western province of Kermanshah last year, a group of Iranian film stars and sporting celebrities came to the fore to raise money for the relief efforts. This time it was the guards who took the lead, which also meant sidelining the government of Hassan Rouhani with which they are often at odds. “Solidifying the social role of the Revolutionary Guards is a guarantee of our national security,”

Would-be students — with parents in tow — on a tour of Duke University, in Durham, North Carolina. Tough competition for entry to top US universities has recently given rise to allegations of wealthy parents attempting to bribe college admissions officers © Eyevine

My American college road-trip Seven days, nine states, 10 campuses — how far would you go to get your kid into college? BROOKE MASTERS

Financial Times as he assembled food parcels. Like more than 10m others volunteer members of the guards, his efforts are unpaid. “What Trump doesn’t understand is that money isn’t part of my ideology,” Mr Parsaei said. “The revolution survives because of the dedication of its supporters.” The guards’ lead role in the relief efforts following devastating floods that claimed 76 lives and caused more than $8bn worth of damage shines a spotlight on the group’s widening role in Iranian society. Branding the guards as a foreign terrorist group was part of Washington’s continuing efforts to hurt Tehran by depriving the organisation of vital funding. Donald Trump’s administration views the guards, and in particular the expeditionary Quds force led by General Qasem Soleimani, as instrumental in sowing instability in the Middle East, from Syria to Yemen. But in Iran, the role of the guards in public life is more complex. The organisation was established after the 1979 revolution in parallel to the conventional army to protect the Islamic establishment from domestic and foreign threats. The 120,000-strong force, and its millions of devoted volunteers, has used its mandate to turn itself into a commercial powerhouse, building a significant presence in the energy and construction industries and the importation of consumer goods. Pro-democracy groups say the guards also play a leading role in suppressing dissent in Iran, and accuse them of using brutally

said one regime insider close to hardliners who are critics of Mr Rouhani. “If we wake up tomorrow and face a crisis, the guards needs to be able to rely on a strong network.” Mr Rouhani and his team gambled on the 2015 nuclear accord — which in return for abandoning the country’s nuclear ambitions led to a lifting of many sanctions — to lure much needed investment and tentatively open the country to the outside world. But the decision by the US last year to withdraw from the landmark agreement and reimpose crippling sanctions was a severe blow. The new restrictions rolled back the economic achievements of the Rouhani government, pushed inflation above 25 per cent and led to an economic contraction of 3.8 per cent from March to November, according to official figures. The US’s belligerence also emboldened the hardliners, including the guards, that have long claimed that the west could not be trusted and that Mr Rouhani had signed up to a bad deal that offered few benefits to the Islamic republic. And for the guards, the recent floods provided an opportunity to bolster its social role and strengthen its network of supporters. In Hamidiyeh, a village in Khuzestan where both the Dez and Karkheh rivers burst their banks, the volunteers were joined by a group of young clerics as they prepared dishes of rice and chicken to be delivered by boat, along with ladders and spades to aid the relief effort. www.businessday.ng

ast week I embarked on a peculiarly American rite of passage: the college tour. My husband, daughter and I logged more than 1,200 miles, nine states and 10 university campuses in seven days, from sunny Washington, where students at Georgetown University sported shorts, to Brunswick, Maine, where the central quadrangle of Bowdoin College was covered in snow. Our odyssey was far from unusual, thanks to the unpredictable and highly competitive nature of the US admissions process. (Stanford accepts under 4 per cent of applicants, and seven of the eight Ivy League schools take below one in 10). The same instinct that allegedly drove parents in the “Varsity Blues” scandal to pay $25m in bribes to help their children win places leads more law-abiding families to visit a dozen campuses or more in the hope of gaining a leg up. That often translates into a family road trip. We had a rental car; others hire private jets. In one memorable episode of The Sopranos, Tony multitasks and kills a snitch while taking his daughter on a college tour. Unlike the more leisurely process in other countries, the US approach requires individual applications to each college. Many students apply to as many as a dozen; as we raced from place to place, a story broke of a teenager who had been accepted by more than 50. We tried not to freak out about potential competitors. We watched as dozens of Chinese students spilled out of a bus on what seemed to be an organised tour. A student at Yale took us to the university’s rare books library, where translucent marble walls protect one of North America’s few intact copies of the Gutenberg Bible. The relevance of that to an 18-year-old wanting to study science escaped us, but I suppose it underlined the school’s claim

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to have extraordinary resources. Bowdoin made sure we knew the state of the art fitness centre was open to ordinary students, not just varsity athletes. It featured a museum-worthy stuffed polar bear (the college mascot) and a plaque noting that the building had been donated by the founder of the Subway sandwich chain. At Amherst, small and exclusive, the admissions officer made a point of asking every student’s name. At Yale, the parents took charge with a barrage of questions on everything from research opportunities and study abroad to — in a nod to the bleak reputation of the surrounding community of New Haven — crime. When Swarthmore explained it damped down competition by banning grade-point averages and class ranks, an anxious father raised his hand. “How do they get jobs?” he asked. There were also attempts at humour. “Welcome to Tufts. You do know you’re at Tufts, right?” said one admissions officer outside Boston. But the audience sat up and started taking notes when she wearily described wading through thousands of application files and offered hints on how to make one stand out. That’s because the US admissions process, which is unfailingly described as “holistic”, is frankly crazy-making. Everything matters, from standardised test scores to extracurricular activities to athletic prowess (applications in the Varsity Blues scandal were filled with false claims of sporting feats, complete with Photoshopped “proof ”). Above all, the “personal essays”, we were repeatedly told, are where students can make their case to admissions committees. But how to impress them? For every admissions officer who warned against writing about a favourite activity, another said she wanted to hear all about it. Don’t write about your family because we aren’t evaluating your grandma, one said. Another countered that the best essay of @Businessdayng

the previous year came from an applicant who wrote about being an older sibling. “So who gets stressed about the college essay?” the Tufts host asked. “Raise your hands.” When only a few tentative arms went up, she became stern. “If you aren’t, you’re lying.” Fearful of annoying the allpowerful admissions officers, everyone shied away from direct questions about the admissions scandal. But at Georgetown, where prosecutors allege a former coach took $2.7m in bribes, the admissions officer explained that students must submit every single SAT score so students who can afford to take it repeatedly (or pay to cheat after they do badly the first time) don’t benefit from reporting only their best result. By the end of the trip, we were cooked. At the last stop, which will remain nameless to protect the guilty, the info session came first. As the admissions officer wrapped up his pitch, my daughter turned to me and said, “I’m tired. Can we go now?” The college trek started in Washington, so we took time out to wander past blooming cherry trees and visit some of the US’s best-known sites, including the Vietnam Veterans Memorial and the new (to us) museums about African-American and AmericanIndian history. Between the slave manacles, lists of broken Indian treaties, and the names of tens of thousands of dead soldiers, it felt like I was taking my expat daughter on a beautifully illustrated tour of everything America has done badly. The difference between our perspectives came home to me at the memorial to veterans of the Korean war as we stood in front of a granite block engraved with the toll: Dead — United States: 54,246, United Nations: 628,833, Wounded — United States: 103,284, United Nations: 1,064,453. Captured — United States: 7,140, United Nations: 92,970. “Where are the Koreans?” my daughter asked.

Thursday 18 April 2019

BUSINESS DAY

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Thursday 18 April 2019

BUSINESS DAY

MADE in aba

Aba furniture maker gets export orders from USA, Japan, others …thanks NEPC for exposure

GODFREY OFURUM

a m m e rh e a d Integrated Company, a furniture

manufacturing firm based in Aba, the commercial hub of Abia State, says it is finalising plans to export its products to the United States of America, Japan, United Arab Emirate and the United Kingdom, having got orders from those countries. The company said it generated orders at the inaugural Intra-African Trade Fair in Egypt, tagged ‘Egypt 2018’. To n y A k u d i n o b i , managing director of the firm, who disclosed this while hosting officials of the Nigerian Export Promotion Council (NEPC), Export Assistance Office, Aba, on a courtesy call on his factory, situated along Aba-Owerri road, observed that more orders would have been generated if his firm was adequately promoted before

the fair. Hammerhead boss expressed gratitude to the NEPC-led by Olusegun Awolowo, chief executive officer of the council, for selecting his company to participate in the fair and applauded the council for their unalloyed drive in promoting non-oil export. Hem however, stated that one of the challenges his firm encountered at the show was late arrival of their exhibits and damages to some in the course of moving them to the fair ground, noting that the issue took him time to start a process of repairs on them. “Most of our products w e re d a m a g e d i n t h e process. Also, owing to the short notice given to us, we had no time to adequately prepare for the fair.” Despite the shortcomings, Akudinobi explained that his company had an impressive performance and attracted investors from all around the world, but could not make on-the-spot-sales due to the embargo placed on sales at

the fair. He revealed also that he received rare commendations from officials of the federal government, especially Vice President Yemi Osinbanjo, who commended his products. He stated also that by participating in the fair, his firm received direct invitation from the Egyptian Ministry of Commerce to attend a trade exhibition,

tagged ‘Egypt Expo and Convention Authority’ (EECA), which took place on March 20 -29, 2019. “We also received an invitation to participate at the African Pavilion in’ Global Village -24th Season Event 2019-2020, which will commence in November this year,” he added. Hammerhead boss, who was elated at the visit by NEPC, thanked the CEO for

the honour done to him, saying that the council has taken his company to various trade fairs in the past. He used the opportunity to announce plans by his c o mp a ny t o c o mp l e t e production to enable him deliver the orders arising from the fair in Egypt and pleaded on the council to assist the company to convey his exhibits left unprotected in Lagos and also to assist

them with funds to enable quick delivery of the export orders arising from their participation at the fair. Relicx Shiolban, trade promotion adviser, NEPC, Aba area office , observed that the inaugural intraAfrican Trade Fair Egypt 2018 provided a veritable opportunity for participating countries to share ideas, investments and market information, thereby enabling buyers and sellers, investors and countries to meet, discuss and conclude business transactions. Shiolban, who was accompanied on the visit by Amaechi Okechukwu, head, product and market, stated that Hammerhead has carved a niche in the furniture world, which p ro mp te d th e cou n ci l to select it as one of the participating companies to represent Nigerian at the fair. He said the company’s participation at the fair was of immense benefit to it, as it exposed it more to the global market.

in terms of quality, you have to sell around $35 to $50, which might be considered expensive considering that middle-class shoes from China go as low as $15 to $25,” he said. Ken Anyanwu, secretary of the Association of Leather and Allied Industrialists of Nigeria (ALAN), who produced Nigerian armed forces shoes in 2016, said Aba shoemakers produce s h o e s that r i va l ma ny countries, and can conquer the market if only they have good machines. “ This is where the problem lies. We in Aba have no good machines,” We are already struggling to meet demands,” said Ken Anyanwu, secretary of the Association of Leather and Allied Industrialists of Nigeria (ALAN). He said this is why the majority of Aba shoe makers are not meeting demands and are over working themselves once orders are placed. “It is a problem already for us because if a customer comes and we can’t meet demand, he will go elsewhere. The industry needs retooling,” he said. One million pairs of shoes are produced by

more than 80,000 leather makers in Aba each week. With 48 million pairs produced each year at an average price of N2,500 a pair, the industry is said to be worth up to N120 billion. T r a d e r s f r o m We s t African neighbours storm the industrial city every w e e k t o b u y d i f f e re nt product designs, just as Southern African schools are beginning to place orders directly from the shoe makers. Canadians, Europeans and the Chinese are also in the party, placing orders themselves directly or through their Nigerian proxies, BusinessDay was told in Aba. The Abia leather industry i s m a d e u p o f s h o e s, trunk boxes and belts. It provides employment for tens of thousands, with many specialising in different stages such as designing, patterning, cutting, skiving, stitching, peeling and finishing. It is made up of clusters such as Powerline, Imo Avenue, Bakassi, Aba North Shoe Plaza, Omemma Traders and Workers, ATE Bag, and Ochendo Industrial Market, comprising input supplers, among others.

Aba shoe industry needs Arezzo-type risk takers ODINAKA ANUDU

hen Arezzo & Co stormed the United States and opened a flagship Los Angeles store in 2016, many of its shoemaking peers in Brazil were still fighting for shares of the local market. Arezzo& Co, a Brazilian shoe company, came into the US market with welldesigned shoes sold at competitive prices. Its Schutz brand gradually began to rival Chinese and European imports and became a household name in the US. “In clothing, there’s no way Brazil can compete with China, but we’ve got a shot with shoes,” Alexandre Birman, chief executive, Arezzo & Co, told Business Insider in 2016. “In fashion footwear, we’re competitive with China at 3.50 per dollar,” he added. When Birman was 18, he had launched his own shoe company, the original Schutz, and within a decade started exporting about half of its output from a factory in southern Brazil, much of it as private-label

production for the Aldo Group, Business Insider said. On November 29 of 2016, Footwear News hosted its 2016 Achievement Awards in New York, honouring what it described as ‘the best and brightest in the industry, including Brand of the Year winner Schutz’. Many shoemakers in Aba have the capacity to move into new markets and conquer them. Like Arezzo & Co, a number of firms in the industrial city have

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designs that are sought after, some of which come from abroad. Yet, many of the manufacturers are not the ones enjoying the traction. “It is important that we explore the markets around us,” Chiji Okeke, a market analyst, said. Samuel Okere, a trunk maker, explained that China should not be leading the West African shoe market when Aba can rival them. “We need risk takers.

Most of us are only waiting from Cameroonians and Ghanaians to come here,” he said. “But this requires huge funds,” he added. Fo r To c h u kw u E k e, a shoemaker in the industrial city, a number of shoemakers would like to conquer markets to earn foreign exchange, but cannot be competitive in many markets due to high cost of production in Nigeria. “To meet the standards

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Thursday 18 April 2019

BUSINESS DAY

CITYfile NDLEA nab 182 drug trafficking suspects

Ahmad Abdurrahman, Kaduna State commissioner of police, (4th-r) and some Police officers, during the launching of confidence building campaign on Kaduna/Abuja Road in Kaduna. NAN

Herders-farmers’ clashes: Katsina demarcates 178km cattle routes

n a move aimed at averting farmersherders’ clashes and attendant loss of lives and properties, the Katsina government has demarcated 178 kilometres of cattle routes across the state. Government believes that the route demarcation will prevent bloody clashes between farmers and herdsmen as well as ensure harmonious co-existence among them. Abubakar Yar’adua, chairman, Katsina State Standing Committee for

Farmers and Herdsmen Cooperation, made this known while addressing hundreds of farmers and herdsmen in Maidua local government area of the state. Yar’adua attributed clashes between herdsmen and farmers to indiscriminate encroachment into cattle routes and farmlands by both sides, stressing that the committee’s effort was to prevent the clashes. He added that his committee was working in collaboration with the authorities in Maradi, in the neigh-

bouring Niger Republic, to improve relationship between farmers and herdsmen in border communities. He called on the 34 local councils in the state to establish similar committees in their locality to achieve wider coverage and ensure lasting peace and stability. “The local committee shall comprise of traditional rulers, farmers and herders associations and community leaders as members,’’ he said. Chairman of Maiadua local government, Salisu

Na-Allahu commended the committee for its relentlessness in ensuring peace and stability between farmers and herdsmen. He assured that the local council would continue to support the committee in achieving its mandate of with a ensuring lasting peace in the state. Also, Ahmad Diddiri, the district head of Maiadua, lauded the efforts of the state government in establishing the committee and pledged the support of the traditional institution to the committee.

Car dealer relives experience with F-SARS …petitions IGP over torture, unlawful detention, extortion IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

gbebor Osasuyi, a Benin based car dealer has petitioned the acting Inspector General of Police (IGP), Mohammed Adamu over an alleged assault and extortion by men of the Federal State Anti-Robbery Squad (F-SARS) at Ekpan Police Station, Warri, Delta State. The petition was signed by Matthew Ekhumelo and addressed to the IGP through the Assistant Inspector-General of Police (AIG), zone 5 in Benin on behalf of the victim, Ogbe-

bor Osasuyi. The petition dated April 11, 2019 and made available to newsmen in Benin, Edo State emanated from Akoko and Co. Chamber. Osasuyi alleged that he was unlawfully assaulted and tortured by the police after his arrest along with his colleague Amos Asoata while returning from Warri where they went to assist a legitimate owner of a Toyota Camry car (2012 model) on April 8, 2019. He said they were accused of snatching the car and thereafter arrested, brutalised, detained and denied access to their lawyers by police operatives who comwww.businessday.ng

pelled them to pact with the sum of N100, 000 to secure their release. “Despite all the obvious, the police still chose to be criminally to the last, they obtained from the parties the sum of N100, 000 as bail money which was collected in bulk along with other charges. “After a former owner of the car had come to absolve them of any wrong doing at the police station, they were forced by the officers to make compromises when it became obvious to them that pleas by one Austin and Cyril Oriferi who claimed to have sold the car to a clergyman who resides at Ekpoma in Edo

State to the divisional police officer at Ekpan, fell on deaf ears,” he stated. He also alleged that they were arrested having presented their valid identity cards on request by the security operatives who forcefully took them to Ekpan police station where they were reportedly beaten with gun buts and other dangerous weapons. The victims called on the police authorities to bring the suspected culprits to book and rid the force of criminal elements in order to serve as deterrent to others, irrespective of whose ox is gored.

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ational Drugs Law Enforcement Agency (NDLEA) command in Katsina says it arrested 182 suspected drug dealers from January 2019 to date. State commandant of the agency, Maryam Gambo, stated this during the commissioning ofa rehabilitation centre in Katsina. She said 113 of the suspects were males, while 49 were females. “The remaining 20 suspects were students,” Gambo said. She said NDLEA secured conviction for 46 suspects during the period, while 131 drug users were counselled 131. According to Gambo, the anti-drug agency seized 66.11 kilograms of cannabis sativa, 15,696.5 grams of psychotropics substances and 38 bottles of cough syrupy with codeine. She urged the state government to engage rehabilitated drug users in skills acquisition programmes to further make them self reliant and curtail drug abuse. Deputy governor of Katsina State, Yakubu, who represented Governor Aminu Ma-

sari, said government spent N41 million on the construction of the center. “Drug abuse is a disturbing global phenomenon to which no country is immune, hence our efforts in dealing with it. We are even more concerned that the menace has spread into homes as married women get increasingly involved in drug or substance abuse,” he said. Mannir appealed to parents, school authorities, religious and community leaders to partner with the NDLEA to rid the society of the menace. “As we are all aware, the future of any society or nation depends largely on the moral and intellectual disposition of its youth. “We cannot and must not therefore sacrifice the future of our people. “I hope NDLEA will not rest on its oars, in the discharge of this onerous responsibility,” he said. Also speaking, wife of the state governor, Hadiza Masari, urged all stakeholders to continue to join hands with NDLEA in the fight against the menace of drug abuse.

Building collapse: LASBCA warns against illegal conversion of buildings

n a bid to stem recurrence incidence of building collapse, the Lagos State Building Control Agency (LASBCA) has warned residents to desist from converting buildings from the original plan to suit their purpose. Olalekan Shodehinde, the general manager, LASBCA, gave the warning in Lagos. Shodehinde said that most buildings in the state had been illegally converted to purposes different from their initial purpose. According to him, it is outright illegal to change the purpose of a building without obtaining approval permit for conversion from the government. He said it was also illegal to attempt to change a residential building to a commercial building within an area still zoned residential. He explained that the government allows for conversion of buildings provided it conforms to master plan of the area. “An approval permit must have been applied for and granted before such conversion can be performed. The Lagos State Government periodically reviews the master plan of the city. Whatever change one wants to make on his/her building must conform to the subsisting master plan of the area. “What is unacceptable is to use a building in an area for a purpose different from the government designated purpose for that area. “So, if you want to change @Businessdayng

the purpose of your building, all you need do is to follow the due process and apply for ‘a change of use permit’ and once granted, you are free to do the conversion,’’ Shodehinde said. He said that to obtain a building approval permit was not as expensive as presumed by most residents of the state. He appealed to every owner/developer in the state whose property was not covered by a valid building approval plan to regularise the property and ascertain the structural stability of their building. Shodehinde lamented that most of the structures within the state were built without the requisite approval plan or due regularisation with the agency. He said that most of the buildings did not conform to building specifications and standard. “To obtain building plan approval is not as expensive as most people think. It takes only 28 working days for an applicant to get the building approval plan. “The parameters for determining the payable amount depend on the size of the building or the purpose for which the building will be used. “An average size of building on a plot of land will cost a maximum of N250,000 to N300,000 to obtain its approval plan. “If compared to the whole cost of constructing the building, which might cost about N50 million to N60 million, it is infinitesimal.

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How Africa can benefit from Google’s new AI lab in Accra CALEB OJEWALE

rtificial Intelligence (AI) can solve many of the problems confronting the African continent today, but researching and developing solutions in this regard appears to have been limited, at least until recently. This may now significantly change as Google formally opened its AI centre in Accra, Ghana. At the new AI centre, the diverse team in Artificial Intelligence and Machine Learning, has a mix of personalities that includes experts of African descent, working on building AIpowered solutions to realworld problems, including helping communities in Africa and beyond to improve their lives. The centre’s primary objective is to research into developing the general framework and theoretical basis for solutions that organizations may then implement in solving specific problems. From health to agriculture, Google’s AI tools can be used to solve real life problems, provided the right collaborations are made with those who can advance those solutions. For instance using Ten-

sorFlow, a tool that has been open sourced by Google, a team of researchers from the University of Pennsylvania and the plant pathology team at IITA-Tanzania, developed an artificial intelligence model that can be deployed on mobile phones to monitor crop disease. It uses Artificial Intelligence (AI) and Machine Learning (ML) to diagnose, in real time, crop pests and diseases, and has been said to accurately diagnose leaves damaged by the two cassava viral diseases—Cassava Mosaic Diseases (CMD) and Cassava Brown Streak Diseases (CBSD) and by red

and green mites. “We open source code so that everybody can just go out there, take the code we publish and use it to build all sort of things,” said Moustapha Cisse, head of Google’s AI Research Lab in Accra, during an interactive session in Accra last week. “In fact, we have seen many times, surprising ways of using code that we open source.” As Cisse explained, the AI centre tries to advance the foundational aspects of artificial intelligence, and use those advances in different fields. There are members of the AI team

in Accra who are working on different impact areas such as health, and there are people interested in using AI to improve various aspects in agriculture. There are also people interested in using AI to analyze satellite imagery to support census and help policy makers in making more informed decisions. This was emphasised by John Quinn, an AI researcher at the centre, who noted one of the many applications of artificial intelligence was using satellite imagery to determine population census, and also using it to aid emergency

services in places with limited population data. According to Google, its focus is how AI and ML can be used for social good. It says by working with partners from such diverse fields as medicine, transportation, environmental groups and small businesses, it can help to evolve AI and ML tools to meet real-world challenges. Currently, there are existing projects under the Google AI for Social Good program, and many of these can be replicated to solve problems on the African continent as well. These include: • F l o o d p re d i c t i o n : Floods affect up to 250 million people, causing thousands of fatalities and inflicting billions of dollars of economic damage every year. Google has developed a system that combines physics-based modelling with AI to produce earlier and more precise flood warnings. • E a r t h q u a k e a f t e rshocks: Google partnered with Harvard researchers to apply AI to seismic data, and created a model that -while far from fully accurate -- can now do a much better job than previous models of predicting where aftershocks will occur. It says existing predictors are little better than chance.

• Healthcare and biology: o Developed an algorithm to predict heart attacks and strokes simply from images of the retina -- no needle or blood draw required! o Google researchers have helped doctors detect the spread of breast cancer tumors -- the doctors and machine learning system are better working together than either is alone. • Environment, agriculture, and natural science: o Researchers at Makerere University used TensorFlow to help farmers identify disease in the cassava plant, a major food source in the developing world. o A dairy farm in Waynesboro, G eorgia is using TensorFlow to keep cows healthier and more productive, similar to another project in the Netherlands. Some of these existing examples cut across healthcare and agriculture, two areas of significance in Africa. With this new centre, researchers can now explore more options in domesticating these existing models to solve some of Africa’s nagging (development) problems. One may already have been done for detecting some Cassava diseases, but many more solutions are yet to be explored.

Atiku’s Better Nigeria Campaign: A case for strategic brand communications FRANK ELEANYA

he 2019 Presidential elections in Nigeria was a gargantuan contest of messaging. This battle cut across the different platforms of Print, Digital, and Social media; a strategic tussle ensued over who could captivate more minds and hearts and above all else, attract and hold the attention of the polity long enough to get them to commit to voting. The main opposition candidate; Atiku Abubakar, had a communications consulting firm at the core of the campaign known as INK Business Design. Headquartered in Lagos servicing domestic and international clients, the firm was initially engaged to run just the digital campaign. That engagement quickly escalated to encompass plan-

ning, design and production management for Print, outdoor and Merchandising, call it the cost of exceeding expectations, if you will. Having over a decade experience in brand strategy and communications for the private sector and subsequently, the public sector, including consulting for the Kaduna State Government and the World Bank, to mention a few, INK came on the Atiku team radar thanks to their headline-grabbing work on the “Grow Nigeria” presidential primaries campaign of Bukola Saraki. In the world of political advertising, it usually takes anywhere from at least 3 to 6 months or more for a messaging strategy to pique the interest of the polity. However, within 40 days, the INK team made the “Grow Nigeria” movement the talk of the nation leading up to the PDP Primaries.

The primaries campaign weekend ended with an overwhelming positive appraisal of the ‘Grow Nigeria’, with many advising Atiku to adopt the ‘Grow Nigeria’ team. In fact they already did by adopting the most iconic line the team had developed; “Follow person wey sabi road” With INK’s work speaking for itself, the team launched itself into voluntary service by creating a self-funded mini-digital campaign labeled #GNWA (Get Nigeria Working Again) which sought to introduce the PDP presidential candidate to young Nigerians while highlighting the pressing national issues using easy to share infographics and flashcards. This pushed even more the public acceptance of an Atiku Presidency. I N K ’s c o m m i t m e n t , experience and strategy

proposals supported their consideration and eventual engagement to being at the helm of the digital media vessel which was pivotal to influencing the eyes and minds of the voting public. What no one was aware of, was that the portfolio would get bigger. With more campaign responsibilities entrusted to them, the INK team became the central strategy hub of the Atiku campaign. Speaking with representatives of the firm; CEO - Femi Odewunmi, Strategist - Ayobami Adekojo and project managers - Enniye Adefolaju and Kelechi Osuji, they recall detailing a team to handle the digital media assignment, only for the entire company to later become engulfed in a 24/7 operation complete with sleepless nights, constant travel and round-the-clock strategy meetings.

Working with the PDP campaign communications director, Bolaji Abdullahi, INK developed the identity system and messaging that tied everything together; from advertising to digital content and merchandising across the nation. This included an impressive content development and digital advertising program showcasing the strengths and value of the Atiku/Obi ticket thereby converting millions of Nigerians into voting advocates in the process. All this culminated in the birth of the compelling “Better Nigeria campaign”. Working on a campaign with multiple moving parts was not challenge free. According to the INK team, this is where Saraki’s leadership as DG of the campaign proved to be most crucial. For what seemed to be a shaky start, the PDP Better Nigeria

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campaign snowballed into a national movement. INK told BusinessDay they were able to accomplish the task of developing a successful brand identity and vibrant campaign content by taking advantage of the collaborative platform provided by Saraki. This, they said allowed them to work with varying groups and persons who brought all manner of insightful and creative contribution to what was adjudged by observers, to be the better campaign. Taking a macro view of campaign operations, one firm scaled all these hurdles with a team of dedicated professionals that delivered over and above on their mandate with enthusiasm and attention to detail. The narrative on their impending consulting exploits for this year and beyond has only just started.

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Opinion

Power and the promise of Aba The Public Sphere

CHIDO NWAKANMA

our straight days without power in my estate at Ibeju Lekki, Lagos has reinforced for me again the centrality of power in the lives and livelihoods of citizens in the modern world. Huge costs attend the absence of power both in direct fiscal terms and an opportunity cost of time, convenience and capacity. Then there is the cacophony as each house switches on its power source, from the ubiquitous generator to others. Energy is a life imperative in this age. Everything revolves around power. The telephone and the ecosystem of information management, as well as the running of our homes and offices, now depend on power. Power enables the proper functioning of communication systems, the modern appliances that make for efficiency and comfort as well as entertainment. Power in whatever form it appears is the central nervous system of advanced economies. That Nigeria is still in darkness con-

cerning power is cause for a national emergency. It goes beyond the politics of our Minister who played one-upmanship on his predecessors. The flagrant boasts of those days continue to haunt him every day and everywhere when citizens suffer the usual power cuts. No, we must look at solutions and commend efforts in that direction. We must also sustain such positive narratives. They are one way to ensure that the positive is the only narrative we have on power. Political noise tended to drown the significant development in Aba preelection with the building and commissioning of a 9.5MW off-grid power plant in the heart of Ariaria market, Aba. Ariaria Market Energy Solutions Limited coordinates the project under license from the Nigerian Electricity Regulatory Commission according to Section 71(6) of the Electric Power Sector Reform (EPSR) Act 2005. The project took form as part of the Energising Economies Initiative of the Rural Electrification Agency. Governor Okezie Ikpeazu, Mr Madein-Aba, Nigeria, deserves kudos for making the promotion of production in Aba a cardinal feature of his government. That singular focus placed the matter of lack of power in Aba further up the agenda. Embedded power in Aba is one of the outcomes. President Muhammadu Buhari took the opportunity to talk up the programmes of the government that he leads. He also took swipes at the op-

position. Then received some jabs in the season of politics for a purported snub by the people of Aba who failed to show for the political aspect of his engagement in the city. Said Buhari: “By providing a dedicated electricity supply to the traders and small businesses in this area, we are strengthening the made in Nigeria policy for which Abia and in particular, Aba and Ariaria are already well known. “Reliable power supply is critical to ease of doing business to ensure sustainability and improvement. I am told that before this intervention, traders in this market only got power for four hours a day and pay exorbitantly for it which constantly affect the viability of many businesses. This is the sad thing we inherited, and which we are replacing with this power supply which is cleaner and better.” This column will continue to follow the matter of power with a visit to Ariaria soon. What difference has steady power made to the fortunes of the community? Is there real stable power beyond the buzz of the commissioning? What has happened to productivity in verifiable terms? With over 37, 000 shops in 11 sections, the Ariaria market is a significant contributor to the economy of Abia State and Nigeria. Power minister Babatunde Raji Fashola said the ministry estimates that 6000 generators would be decommissioned in Ariaria because of the project. The Ministry of Power has made

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Is there real stable power beyond the buzz of the commissioning? What has happened to productivity in verifiable terms?

commendable “incremental” steps in the policy arena to improve the power situation. Two measures of note are the Meter Asset Provider regulation (Regulation No NERC-R-112) that enabled the approval of 87 firms to provide meters. The permission happened in March 2018. Meter scarcity and unavailability are still key features of our power situation. Another one is the Eligible Customer regulation that seeks to open the supply lines and enable Gencos and independent power producers to bypass the Nigerian Bulk Electricity Trading Plc to sell electricity directly to customers. It specifies four categories of eligible customers mainly firms who consume high amounts. The regulations point to opportunities in power in Nigeria in various areas, particularly in alternative or green sources. We will see first what impact and difference availability of steady power makes in Ariaria. One litmus test would be how it spurs copycat schemes in Onitsha and other towns. If it does not come by half-year, you can safely conclude that it has not made any difference. We pray it makes a significant difference because Aba should also be a centre for start-ups. Power is foundational to the ICT ecosystem. Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

The maturation of Nigerian democracy, 1999-2019 (2)

ik MUO

here is one aspect of our national legislative theatricals that I enjoy very much and that is whenever a member raises a motion on ‘issues of urgent national importance’. Even if the matter relates to improper salutation by the NASS orderly, he is given the floor to exercise his legislative privileges. I had started this series before an issue of urgent national importance forced me to look in the direction of Abike Dabiri. Now that the matter has been settled, in good faith and in the spirit of patriotism, I go back to the issue at stake, how Nigeria democracy has matured in the past 20 years. Note that I called it Nigerian democracy, which means that there is democracy and there is Nigerian Democracy! I first learnt about the maturation of markets in my foray into strategic marketing, through the concept of product life-cycle. As a product is introduced, grows, matures and if adequate strategic gymnastics were not initiated, it declines. The maturity stage poses serious challenges and a lot of efforts are made to extend this stage. The decline stage marks the end of that product unless something drastic is done. I am drawing from this to warn that unless something drastic is done, our maturing democracy will experience decline and that will be that! There are also indicators of maturation in democracy. These include the self-evident truths of the American revolutionaries: the equality of men and their inalienable right to life, liberty and pursuit of happiness; the

establishment of governments to guarantee these rights and the peoples’ right to abolish or alter the government if it fails in its core responsibilities. The war-cry of the French revolutionaries was liberty, fraternity and egalitarianism. Other indicators include multiparty participatory democracy, rule of law and equality before the law, separation of powers, universal adult suffrage, respect for what people can do and cannot do within the polity and the power of voters to determine the fate and future of governments and politicians. But a study of Nigerian politics and democracy as we celebrate 20 years of democracy (19992019) has shown that Nigeria has beaten other nations to it by designing its own indicators of democratic maturity. These features of Nigerian democracy, are herein discussed in no particular order of importance In the first instance, we have democracy without democrats. Parties will not abide by their own self-imposed constitutions; party owners will impose their will on the party with audacious impunity; politicians do everything to torpedo the voting process and ensure that the votes are not counted and that they do not count. That is also why we have the strange scenario in which politicians publicly belong to two parties, leading to bi-partisan democracy as we had in Ogun and Imo where the governors belonged to two parties, Rivers where APC campaigned for AAC and Zamfara where APC bigwigs campaigned for other parties. This is so because in Nigeria, parties are seen as Special Purpose Vehicles structured to win elections. Politicians have no attachment, commitment, passion or engagement with and for their parties and there is nothing like ideology. That is why we have continuous decamping and counter-decamping; some people have even decamped after the elections while some have been members of all known political parties in Nigeria. So, the first indicator of the maturity of Nigerian democracy is the embarrassing scarcity or outright absence of democrats or democrats who are ignorant or have no regard for democratic ethos. That

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democratic elections and transitions in Nigeria is war; full-blown war involving the army, and their new and refurbished APCs, the air force, with all sorts of fighter jets, police and their sniffer dogs, and thugs, including those in military uniforms

is why the god-fathers hold sway; that is why you have party owners, joiners and passersby; that is why politicians own certain areas to the extent that others are not even allowed to campaign in those areas. If you want to know more about this, ask Reuben Abati! So how can you practice democracy without democrats? That is Nigeria for you! Then, democratic elections and transitions in Nigeria is war; full-blown war involving the army, and their new and refurbished APCs, the air force, with all sorts of fighter jets, police and their sniffer dogs, and thugs, including those in military uniforms and those who do not give a damn about the presence of policemen like Demola 1 of Okota. There is an unprecedented deployment of military personnel, hardware and software; a lot of people were killed, including INEC staff, people were beaten up for voting according to their conscience and violence was the norm. Because many people do not have access to the military and para-military forces, thuggery has been refined and packaged as a product, freely marketed, openly sold and bought like any other product. So politicians acquire thuggery services as a part of campaign and election logistics. Senator Sanni defined thugs as institutionalised agents of governance, endorsed and positioned to preserve power and commit atrocious violence. Thus where soldiers, real or fake are not available, thugs takeover. And because the police has been deliberately devalued over the years and they have worsened the matter by belittling themselves, thugs operate with maximum freedom. And the electoralwar is not accidental; it is pre-planned and that was why Amaechi declared during the presidential campaign in PH that he and the APC were ready for WAR! It is also a matter of cash; I mean, real, raw cash! And you see cash walking on all fours at party conventions, ( delegates allegedly received up to $5000 apiece at a party convention)at voting centers, at collation centers and even within hallowed security circuits. INEC directly received N240bn for

the elections. Government functionaries surely spent more than that from government coffers in their desperate efforts to serve we, the people while the politicians jointly and severally would have spent much more than N500bn. The governorship candidate of the lesser known Labour Party in a non-lucrative state like Plateau demanded a refund of N1bn from INEC after the inglorious election postponement. You can now imagine the quantum of cash that other governorship and presidential candidates would have deployed. We all recall how the police arrested several crates of fresh cash here and there and how Tinubu received ‘special guests’ who drove in with bullion vans on the election eve. There was nothing wrong with it because it was his money, the anti-money-laundering act and the extant cashless policy notwithstanding! And yet EFCC arrested somebody with just some bags of cash in Benue! There were also rumours of a plane loaded with pure cash , flying from Abuja to Ilorin while EFCC arrested Imo and Kwara Government officials for withdrawing N2bn during the electoral season. The cash squandered on the elections is used to oil the various election-related markets in Nigeria: the endorsement market, the transfer( decamping) market and the votebuying market. But as Kole Omotosho had argued, there is a limit to what money can do as there are certain things that only available to the incumbent, like the control of INEC and the security architecture!( next week) Other Matters: like fuel-subsidy like garbage! Nigeria is a very WONDER-FULL country. A government, which says that subsidy is not in its economic management model suddenly started saying that subsidy would be removed gradually( last week) and then that there are no plans for subsidy removal( this week). Continues online at www.businessday.ng

Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye 08033026625; muoigbo@yahoo.com, muo. ik@oouagoiwoye.edu.ng

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