Businessday 19 jun 2018 by BusinessDay

news you can trust I * *TUESDAY 19 JUNE 2018 I vol. 15, no 78 I N300

Egypt’s inflation falls behind FMDQ, CBI, FSD Africa launch Nigerian Bond Market Nigeria’s as bold reforms pay off Green Development See commodities on page 4

LOLADE AKINMURELE

nnual inflation in Egypt has fallen behind Nigeria’s for the first time since a raft of painful reforms from a currency float to fuel subsidy cuts that started in 2016.

FDI jumps on subsidy cuts, FX liberalisation

While North Africa’s largest economy has undertaken tough policy choices, Nigeria has struggled to take definitive action. The annual inflation rate in urban parts of Egypt in May rose at its slowest

pace in more than two years to 11.4 percent, a considerable way off the 30 percent mark it crossed in 2017 and 20 basis points below Nigeria’s 11.6 percent annual inflation for the same period.

When Cairo followed up its floatation of the Egyptian pound by raising taxes almost immediately, it sparked runaway inflation, the very

Continues on page 4

NASS approves N369bn for Lagos, Akwa-Ibom, 17 others for Federal roads

MDQ OTC Securities Exchange (FMDQ or the OTC Exchange), in partnership with Climate Bonds Initiative (CBI), Financial Sector Deepening Africa (FSD Africa), is making significant contributions to the development of the Nigerian non-sovereign debt capital markets (DCM), specifically the green

Inside

Monetisation of politics seen hampering Not Too Young To Run law

Continues on page 38

Endurance Okafor

Continues on page 38

OWEDE AGBAJILEKE, Abuja agos State will receive the lion’s share of the N369 billion approved by the National Assembly to 19 states of the Federation for the settlement of outstanding claims and liabilities for executing Federal Government projects. The approval followed a request by President Muhammadu Buhari in March to the National Assembly for the issuance of promissory notes and bonds to settle inherited local debts and contractual obligations worth

Programme

P. 4

in association with

World Cup Result L-R: Bright Okpocha, Nigerian comedian; Mike Ogbalu, chief executive officer, Verve International; Cherry Eromosele, group chief product and marketing officer, Interswitch, and Mitchell Elegbe, founder/group CEO, Interswitch, at the 2nd edition of the Verve Life fitness and wellness event in Lagos.

Sweden 1 - S/ Korea 0 Belgium 3 - Panama 0

England 2 - Tunisia

2 BUSINESS DAY NEWS

Tuesday 19 June 2018

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Anambra plans to begin revalidation of land title documents EMMANUEL NDUKUBA, AWKA

nambra State government through its ministry of lands is to carry out a revalidation exercise in some government layouts in the state. This is contained in a press release signed by the commissioner for lands, Nnamdi Onukwuba, and made available to newsmen in Awka on Monday According to Onukwuba, the exercise is also aimed at ascertaining the genuine plot owners and to determine the current status of every allottee. ‘It is also to ensure that genuine plot owners receive the new digital Certificate of Occupancy (C of O) that will give their property `absolute legitimacy. “The ministry is, therefore, inviting all plot owners within the affected layouts to come forward with original copies of relevant documents, including proof of ownership for a revalidation exercise.

“The exercise is scheduled to run from June 25 to Aug. 13, 2018 from 9 am to 4pm (Mondays to Fridays). “The exercise will cover Onitsha GRA, Trans Nkisi (Phases one to three), Akpaka Layout, Harbour Industrial Layout, Fegge-Nupe settlement, Niger Bridge Head, Niger Bridge Industrial layout and Nkwelle Ezunaka Agric lands. “In Awka, the affected areas include Agu Awka, Iyi Agu, Ikenga and Ikenga Extension, Expressway Layout, Hill Top, New Town, Isiagu and Lockwood Layouts. “Others are United Layout Nkpor, Nkpukpa layout Obosi, Parcel D and Oba International Airport. “The rest are Eme Court layout Nnewi, Unity layout Nnewi, Otolo-Utu layout, Nnewi, Industrial layout Ozubulu and Orifite-NnewiOzubulu layouts.” It adds: “The revalidation exercise will hold at two designated venues -- Dolly Hills Hotels and Resort for those within the Onitsha axis -- covering Trans Nkisi, Akpaka and GRA.

Edo tasks world leaders on sustained collaboration to fight desertification, drought

overnor of Edo State, Godwin Obaseki, has called for sustained collaboration among world leaders, donor groups and environmental right activists among other stakeholders in the sector, to tackle the twin challenge of desertification and drought. Obaseki gave the charge on the occasion of the commemoration of the International Day to combat Desertification and Drought. According to Obaseki, “Drought and Desertification are both national and regional problems that require concerted response for sustained outcomes and creative reforestation solutions will check the frequent farmer-herder clash in parts of the country.” He noted that the negative impact of climate change is not restricted to any one state or country and urged “transnational synergy in policy formulation and execution to mitigate its effect.” While calling for “radical effort to re-green areas prone to desertification,” the governor noted that “policy makers must embrace proactive strategies to check practices that exploit the land and render it vulnerable.” He urged leaders to be alive to the impact of climate change across the world, and come up with creative ways to cut back on the human factors that are fuelling climate change and exacerbating its impact. Obaseki said: “In Edo State, strategies are being deployed to boost afforestation across the state, through the promotion of plantation agriculture, green parks and gardens. “The state government has

been working with stakeholders in the oil and gas industry to stop flaring gas in line with global best practice. “We are working with private investors to invest in plantation agriculture, the most recent is the N5 billion Urhonigbe Rubber Plantation, coming weeks after Okomu and Presco began their expansion programmes.” The United Nations notes, “Desertification is the degradation of land in arid, semi-arid and dry sub-humid areas. It is caused primarily by human activities and climatic variations. It occurs because dry land ecosystems, which cover over one third of the world’s land area, are extremely vulnerable to over-exploitation and inappropriate land use. Poverty, political instability, deforestation, overgrazing and bad irrigation practices can all undermine the productivity of the land.” The governor said this year’s theme: “Land has True ValueInvest in it,” dovetails with his administration’s “conviction that land as a resource for development must be efficiently managed for the good of everyone.” He enumerated the reforms in land administration in the state to include the creation of Edo Geographic Information Service Agency Edo (GIS); the repositioning of Edo Development and Property Agency (EDPA), the Law on the protection of private property and the scrapping of Community Development Associations, amongst others. The World Day to Combat Desertification and Drought is observed on June 17, every year to promote public awareness of international efforts to combat desertification.

L-R: Yemi Adaramodu, chieftain of the All Progressives Congress (APC); Ade Adetimehin, Ondo State APC chairman; Kayode Fayemi, APC governorship candidate, Ekiti State; Rotimi Akeredolu, governor, Ondo State, and Bisi Egbeyemi, deputy governorship candidate, Ekiti State, during a campaign tour of Ilawe-Ekiti.

Markafi, Duke presidential ambition: What difference can they make? INIOBONG IWOK

he declaration of former Governors of Kaduna and Cross River State, Ahmed Markarfi and Donald Duke to contest the 2019 president election on the platform of the People’s Democratic Party (PDP) has increased the number of aspirants seeking the presidential ticket of the main opposition People’s Democratic Party (PDP) ahead of the forth-coming national convention of the party, while also raising the question of what difference the aspirants can make if given the presidential ticket? Markafi, who was a twotime senator and immediate past chairman of the PDP Caretaker Committee Chairman, had declared his intention to vie for the nations’ top position in a media briefing on Sunday. The former senator stressed that after extensive consultations with political stakeholders and people of the state he was sure of their support. “The consultations have been quite positive and I believe it is fair enough to come to the conclusion that one should join other equally capable party men and women who have shown interest in seeking the party’s nomination for the 2019 presidential election. At this stage, it is to seek for the party’s nomination,” Makarfi said. “At this stage, I have come to the conclusion that it is okay, based on the consultations that I have had. Those who have

shown interest are equally capable. We do not know how many more will show interest but whatever it is, power comes from God. The party men and women will decide who will be the candidate. I will subject myself to the will of God and the decision of the party men and women whenever it is made”. Donald Duke announced on 9 June that he will be standing for president in 2019 under the platform of the PDP, denying any association with the Obasanjo’s backed, Alliance Democratic Party, (ADC). Apparently his candidacy was quite popular that by Sunday evening his tweet announcing his intention has attracted 1,300 replies, 3,800 retweets and 5,500 likes. Duke speaking recently had said the precarious state of the country informed his decision to contest for president. However, there is keen interest among political observers and Nigerians on who would emerge the PDP presidential candidate among the several aspirants and what difference can such candidates make? This is further heightened considering the fact that the APC would obviously field incumbent President Muhammadu Buhari who is perceived to have performed below expectation as its candidate in the 2019 presidential election. Speaking on the ambition of the two former Governors and their chances of succeeding if they emerge the PDP

candidates, Jolaosho Adeoye, a politician and chieftain of the green party, said that the two aspirants performed above expectation as Governors of their states, stressing that what the country needed was a president with vision and strong will. He stressed that Donald Duke had clear vision of what the country needed, adding that he may not realise his ambition because of the zoning arrangement in the PDP. “Both of them did well when they were Governors, we need a president, who is strong willed and you can see what Donald duke did in his in his state. Markafi also did well in a state like Kaduna were Christians are the majority, there were no issues of marginalisation of Christians when he was there as Governor. But my fear is that Duke may not realise his ambition because of the zoning in the PDP,” Adeoye said. Also speaking a chieftain of the PDP, Ladi Balogun, said the PDP must be careful on who it choose as it presidential candidate if it wants to defeat the APC in the presidential election, adding that the two men had the credentials to transform the country if given the chance. “The PDP must be careful who it presents, because Buhari has not done well and he want to come back. The two candidates are credible, Duke did well as Governor and he is not facing any corruption issues at present. Markarfi we all know what he can do, I think the clamour is about restructuring of the country,” Balogun said.

Dangote inaugurates 200 houses, school for widows in Borno

liko Dangote Foundation on Monday inaugurated 200 housing units and a school it constructed for widows among Internally Displaced Persons (IDPs) in Borno. Aliko Dangote, executive chairman of tahe Foundation, said at the inauguration in Maiduguri that it was in fulfilment of a pledge he made two years ago. He disclosed that the foundation had so far expended over N7 billion in providing humanitarian assistance to those displaced by Boko Haram in the Northeast, and would provide N2 billion more. Dangote said: “You may recall in the last two years when I first paid a visit to the IDPs camp, I made a pledge of N2 billion on behalf of Dangote foundation. “The gesture was designed to support government to key into the reconstruction of houses that were destroyed and vandalised by Boko Haram. It was the decision of the government that the donation should be given in materials and not cash. “It is against this backdrop and with consultation between the foundation and the state government that we provided building materials which included cement, aluminium roofing sheet, iron rode, ceiling as well as fabricated door and windows worth N1 billion to the stat government.

CAA Asaba 2018: Media gets final accreditation deadline

he Local Organising Committee for the Asaba 2018 African Senior Athletics Championships have sounded a final note of warning to journalists and media practitioners yet to complete their accreditation procedure and are hoping to cover the August 1-5 event in Delta State, Nigeria. Olukayode Thomas, head of media and publicity for Asaba 2018, said on Monday that the final warning became imperative as the collation process had begun for those that had officially indicated interest, saying the June 30 deadline set over two months

ago remained sacrosanct. “Yes, we have begun collating the applications we got and already working on making sure that journalists coming from outside Nigeria can get their visas at the point entry,” he said. “For those that are yet to complete the straightforward process of accreditation, I implore them to do so without any further hesitation because we would not extend the deadline to accommodate anybody,” Thomas said. According to Thomas, the Local Organsing Committee are working round the clock to ensure that all accredited journal-

ists are provided with an enabling environment to make them carry out their duties out without any form of stress. He said: “Journalists are our partners in progress and we are doing everything within our reach to make them carry out their duties in a conducive environment.” The accreditation process can be easily done by visiting http://caaasaba2018.com.ng/ media-accreditation/to fill the form online. Interested journalists are expected to fill out one registration form for each member of their

team; as a group or team application will not be accepted. Already, it has been stated that Non-Rights Holders will only be allowed to bring cameras and/ or recording equipment onto the event site solely for carrying out non-live reports. There will be no access with this camera to the stands or any location with view to the live action. Also, the deadline for booking accommodation in the official media hotels is June 30, 2018, while for Media Friends outside Nigeria, the accreditation will serve as their visa.

Tuesday 19 June 2018

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Tuesday 19 June 2018

Egypt inflation falls behind Nigeria as bold... Continued from page 1

problem the Nigerian monetary authorities were trying to avoid when the central bank kept the naira pegged to the dollar at the official window. “The lesson to be learnt here for Nigeria is the need to take a longterm approach to implementing reforms rather than always applying short fixes,” one government source with knowledge of the matter said on condition of anonymity. The source however admits that the political cost of non-populist reforms like an upward review in electricity tariffs and petrol prices make it difficult for the government. There was little opposition in Egypt when the currency was devalued, because they practice a dictatorial system of government, the source said. “So it’s not entirely the same as Nigeria, but that is no excuse for government to drag on reforms.” Meanwhile, the spread between Egypt’s official and parallel market rates have collapsed to 17.8 EGP per dollar, since the float last year. In Nigeria, the spread between the official and black market-one of several other markets- has remained at N57 per dollar (N306 vs 363). With a year to the general elections, Nigeria may have to wait for any Egypt-type economic reforms, analysts say. There as little expectations that an unsustainable N145 per litre retail petrol price would make way until after the elections. “This administration missed the best chance to ring in those reforms,” one business leader told Business Day. “Most of the reforms should have kick-started in the first year of administration.” While the government is not entirely idling away- given that it has implemented tax reforms like the Voluntary Assets and Declaration Scheme and some ease of business reforms which earned it a jump in the World Bank ease of business index to 145 from 169, the feeling is much more could have been done. Egypt’s Minister of Electricity Mohamed Shaker announced new electricity prices for businesses and consumers, which will see costs rise 25 percent for households and 42 percent for industrial use starting next month. Slashing subsidies comes as part of Egypt’s economic reform program, which include cutting subsidies and imposing new taxes. It is also part of a three-year $12 billion International Monetary Fund (IMF) loan agreement, which Egypt clinched in 2016. Electricity prices went up last year, with price increases ranging between 15-36 percent depending on the consumption bracket. Phasing out subsidies will continue to take place every year until they are completely eliminated by the end of fiscal year 2021/22. The new prices will take effect in July. “Both Egypt and Nigeria have

fuel subsidies. Both countries also need to increase their investment to GDP ratio, which is 15% of GDP or less in Egypt and Nigeria,” Charles Robertson, chief economist at Moscow-based investment bank, Renaissance Capital, said in an emailed response to Business Day. “It needs to be 25% of GDP. Egypt is cutting its fuel subsidy so that it can spend more on investment. This will help Egypt in the long-term. Nigeria will struggle to increase government investment when so much money is spent on the fuel subsidy,” Robertson added. Not only is inflation trending downwards in Egypt, other gains from its painful but promising reforms are gradually sprouting, especially in foreign investment inflows. Egypt emerged Africa’s most preferred investment destination in 2017 after recording inflows worth $7.4 billion, according to the United Nations Conference on Trade and Development (UNCTAD). UNCTAD said Egypt’s investment attraction was as a result of “wide-ranging economic reforms such as financial liberalisation, which fostered more reinvestment of domestic earnings.” Egypt’s FDI was more than seven times the inflows Nigeria mustered- in 2017- $981.75 million, according to the National Bureau of Statistics (NBS). Egypt introduced a new law for the setting up of a natural gas regulatory authority charged with licensing and devising a plan to open the gas market to competition,” the report said. “Egypt promulgated the Industrial Permits Act and its executive regulations, aiming to ease procedures for obtaining licenses for industrial establishments,” the report said. “The country also put into effect a new investment law, aiming to promote domestic and foreign investment by offering further incentives, reducing bureaucracy and simplifying administrative processes,” the report added. The report also noted that Egypt issued a decree establishing the “Golden Triangle Economic Zone” as part of ongoing efforts for investment facilitation and promotion. The Nigerian Central Bank pointed to Egypt’s inflation crisis as an example of how a currency float could go bad, and dug in with currency controls and resorted to creating several foreign exchange markets while holding on to a subsidised dollar exchange rate. The CBN’s move to create other fx markets has largely skewed to the success of the Investor and Exporters window, which was has been a revelation since its launch in April 2017. Over $30 billion has been traded at the I & E window, as it has helped lure back portfolio investors who fled in the thick of capital controls in 2016. Continues on wwwbusinessday online

L-R: Usman Mamman Durkwa, deputy governor, Borno State; Kashim Shettima, governor, Borno State; Zouera Youssoufou, managing director, Aliko Dangote Foundation; Halima Dangote, trustee, Aliko Dangote Foundation, and Aliko Dangote, chairman/founder, Aliko Dangote Foundation, at the commissioning of Dangote Estate & School for Widows and Orphans, built by Aliko Dangote Foundation at Dalori Konduga LGA of Borno State.

Monetisation of politics seen hampering Not Too Young To Run law OWEDE AGBAJILEKE, Abuja

he monetisation of the Nigerian politics would be a key drawback on the intended gains from Not Too Young To Run law recently signed by the President Buhari, analysts have said. Those who spoke to BusinessDay submit that although the Act, which reduces the age qualification for some elective positions in the country, will encourage young Nigerians to contest for elective offices, monetisation of the process would be a disincentive to young politicians. Others are of the opinion that the huge financial limits prescribed in the 2010 Electoral Act Bill for candidates as well as the amendment bill for aspirants will promote ‘godfatherism’. “Certainly in politics, money must be there. This is one truth we have to tell ourselves. It is a bitter bill but we have to swallow it. Because for you to contest, even if you are not contesting under any party, you need to print t-shirts, fez caps, handbills,billboardsandsoon.So,there is no way you can do (better) in politics and money will not be there,” PDP National Youth Leader, Udeh Okoye, whileadmittingtheprimeplacemoney occupies in politics. The Youth Leader, however, revealed that the party’s National Working Committee (NWC) is on the verge of approving a proposal that gives concession to youths vying under its platform. The new law signed by President Muhammadu Buhari recently, alters Sections 65, 106, 131 and 177 of the 1999 Constitution and reduces the age qualification for some elective positions in the country. Specifically, it lowers the constitutional age limits for the office of the

President from 40 to 35 years; House of Representatives from 30 to 25 and House of Assembly from 30 to 25. However, the age limits for senators and governors were both retained at the age of 35 years. Analysts have, however, raised concerns about the provisions in the 2010 Electoral Act, which fixes campaign expenditures of party candidates. For instance, the 2010 Electoral Act puts the campaign limits of presidential, governorship and senatorial candidates at N1 billion, N200million and N40million respectively, while that of House of Representatives and State Assembly go for N20million and N10 million in that regard. However, in the Electoral Act Amendment Bill currently before the National Assembly, some of the elections spending limits were increased by between 150 to 900 percent. Lawmakers jerked upwards the maximum election expenses to be incurred by candidates as follows: Presidential candidate from N1 billion to N5 billion; Governorship candidate from N200million to N1 billion; Senatorial candidate from N40 million to N100 million; House of Representatives from N40 million to N70 million and State Assembly candidates from N10 million to N30 million. The proposal also prescribes limits for aspirants for elective offices as follows: N150,000 for a ward councillorship aspirant in the FCT; N250,000 for an area council chairmanship aspirant in the FCT; N500,000 for a house of assembly aspirant; N1 million for a House of Representatives aspirant; N2 million for a senatorial aspirant; N5 million for a governorship aspirant and N10 million for a presidential aspirant. In an interview with BusinessDay, Convener of YesWeFit Revolutionary Movement, Thomas-Wilson Ikubese

likened the scenario to moving a treasure from the third floor of a high-rise building to the second floor, with no staircase or ladder. Ikubese who is also a presidential aspirant on the platform of the Alliance for New Nigeria (ANN), advocated for drastic reduction of cost of nomination forms to make it affordable for the average Nigerian youth. “Now that the age of contesting election has been reduced, of what benefit is it to youths who cannot raise the required sum to pick up nomination forms?” the medical doctor-turned politician asked. He therefore urged lawmakers to reduce the cost of nomination forms for aspirants as follows: Presidential N300,000, Gubernatorial N200,000, Senate N100,000, House of Representatives N75,000 and House of Assembly N50,000. He said: “With this proposed reduction in the cost of nomination forms, more credible young people will be able to come on board, while the political parties will still be able to generate a lot of money from sales of forms because of the large number of aspirants who will come on board. “With the current cost of nomination forms, Nigerian youths will have to wait till African parrots begin to grow teeth! Until the cost of nomination forms is significantly reduced to what an average Nigerian youth can afford, the Not Too Young To Run law is nothing but a joke on Nigerian youths”. But the Executive Director, Policy and Legal Advocacy Centre (PLAC), Clement Nwankwo, said the move is a right step in the right direction, considering the fact that in the buildup to the 2015 general elections, some political parties sold presidential nomination forms for as much as N25 million. Continues on wwwbusinessday online

Tuesday 19 June 2018

BUSINESS DAY

6 BUSINESS DAY NEWS

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Experts say new bill denies SMEs pioneer status benefits … NIPC says willing to push more incentives for SMEs

OWEDE AGBAJILEKE & HARRISON EDEH, Abuja

ith the Industrial Development (Income Tax Relief ) Act (Amendment) Bill, Nigeria’s National Assembly is in the process of legalising the N100 million minimum capital expenditure required for indigenous companies to enjoy pioneer status. The proposed bill seen by BusinessDay, also seeks to amend Section 6 of the Principal Act by increasing the capital expenditure for other companies applying for Pioneer Status Certificate from N150,000 to N120 million. In a set of new guidelines for the operationalisation of the pioneer status in the country, the Ministry of Industry, Trade and Investment, last year reviewed the minimum Qualifying Capital Expenditure (QCE) by 200 percent from N50,000 to N100 million, and later approved by the Federal Executive Council (FEC). Some members of the Organised Private sector (OPS) are concerned that raising the QCE could deny most of the 37 million Micro Small and Medium Enterprises (MSMEs) the necessary pioneer status benefits and discourage the much needed investments. The bill, sponsored by Sabo

Mohammed, has passed First Reading in the Senate, though it has been passed at the lower house. According to the explanatory memorandum, “The Bill further recognises the need to provide the necessary incentives for additional investments by companies. Fundamentally all proposed amendment is meant to ensure smooth implementation of the Pioneer status Incentive scheme by the Nigerian Investment Promotion Council (NIPC).” The bill retains the powers of the President to amend the list of Pioneer Industries and Product (Pioneer Status List). It also mandates the President to issue a notice of approval or disapproval within one year of the application for Pioneer Status Certificate. “All application for pioneer status certificate made pursuant to the provisions of this Bill shall be processed by the Minister and forwarded to the President and a Notice of disapproval or approval shall be issued within one (1) year from the date of submission of application,” the proposal reads. The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) defines Micro Enterprises are those whose total assets (excluding land and buildings) are less than N5 million with a workforce not exceeding nine

employees. Small Enterprises are those whose total assets (excluding land and building) are above N5 million but not exceeding N50 million with a total workforce of ten and above, though not exceeding 49 employees. Medium Enterprises, according to the agency, are those enterprises whose total assets (excluding land and building) are above N50 million, but not exceeding N500 million with a total workforce of between 50 and 199 employees. Some experts think that the proposal contradicts Wednesday’s announcement of the FEC that approved two Executive Orders and five amendment bills to the country’s tax policies aimed at reducing tax burden on Nigerians and boosting ease of doing business. Tony Ejinkonye, the immediate past president of Abuja Chamber of Commerce, told BusinessDay that,” A lot of micro enterprises stand the risk of exclusion if this bill scales through, and it goes contrary the ease of doing business being championed by the Federal Government.” Ejinkonye pointed out that the legal framework must seek inputs from stakeholders and civil societies before drafting it, saying, “When you want to do good for someone, you must also seek his consent.”

He suggested that the promoter of the bill must take more inputs from the organised private sector before proceeding with the bill. Reacting, the Nigeria Investment Promotion Council (NIPC) affirmed willingness to work with SMEDAN to pull together incentives that could support micro businesses. “There is a need to articulate a different incentive regime for MSMES in the country. The NIPC would be more than willing to work with the SMEDAN to work out a regime of incentives for SMEs. It is in the purview of SMEDAN to push for this bill, while working with us,” Emeka Offor, director of strategic communications at the NIPC, told BusinessDay. Traditionally, you don’t just wake up and say you are giving incentives, you must work with sector leaders in Agriculture, Trade and Investments to ensure industry regulatory come up with an acceptable standard,” Offor said. Also, Celestine Okeke, lead partner of Micro, Small and Medium Enterprises Advocacy and Support Initiative, said, “Any initiative that does not reflect the desires of the small scale businesses in the country is working against Federal Government’s ease of doing business and affecting over 37 million small scale businesses across the country.”

Tuesday 19 June 2018

1,500 Nigerians in Italian prisons - envoy

talian Ambassador to Nigeria, Stefanou Pontesilli, says about 1,500 Nigerians are serving jail terms for various offences in Italy. Pontesilli, who made the disclosure in an interview with newsmen in Abuja, said the number was huge, saying, “In Italy we have about 1500 Nigerians in jail for various offences. It is a big number. ”We sometimes send them back to Nigeria once they finished their terms because they have not behaved well.” He however denied reports that Italy sometimes send Nigerian migrants from Italy to Libya, saying, “Never, we never sent anyone not even one single person to Libya. ”Some Nigerians are stuck in Libya because they were never able to cross over to Italy, but all those who went to Italy no one, not even one was ever sent back. ”All Nigerians who have reached Italy and are behaving well have no problem. Not one of them not even one has heard of being sent back to Libya.” According to Pontesilli, thousands of Nigerians unable to cross from Libya to Italy have been stuck in Libya. ”Thank God the government is doing a lot to repatriate them through chattered flights. ”Thanks for the help from the European Union and the International Organisation

for Migrations that are slowly repatriating them back to Nigeria,” he said. The envoy said that the relationship between Italy and Nigeria remained stronger. ”That is why Italy has been doing so much on the migration by saving tens and thousands of the Nigerians’ lives when crossing the Mediterranean. ”Authority has been doing so much by taking them to Italy, feeding them, getting them jobs, giving them house and trying to give them a new life,” Pontesilli said. He said that Italy had also done a lot in trying to help Nigeria maintain security and stability. ”This to Italy is very important, the stability and the security of Nigeria is our foremost consideration. ”We think that without a stable secure country there cannot be development. ”So that’s why we stand strongly behind President Muhammadu Buhari trying to establish a strong, safe and stable Nigeria. ”This to us is the number one priority of the country, we are doing all we can to support this,” he said. The envoy disclosed that the Italian government had been involved in training many Nigerian officials from the military, police and immigration.

Tuesday 19 June 2018

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Tuesday 19 June 2018

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Tuesday 19 June 2018

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Sustaining the spirit of June 12 & righting all the wrongs

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

n this column last week, I applauded and defended the decision of President Muhammadu Buhari (PMB) to honour late MKO Abiola and his vice- presidential candidate, Babagana Kingibe for their victory in the June 12, 1993 elections, a victory which had been denied in the last 25 years. All fair minded people accepted that it was a good thing to happen, though many said PMB was scoring a ‘cheap political point’ questioning his democratic credentials including being on the side of Abacha, and some others said Babagana Kingibe did not deserve the honour as he was said to have abandoned the struggle or even sabotaged Abiola by accepting to serve in Abacha’s cabinet. Everybody is entitled to his opinion but I remain convinced that PMB, irrespective of his motives scored a bull’s eye with this June 12 recognition and re-validation. Indeed, PMB in my view scored more points by what he did and said at the award ceremony on June 12, 2018. Hear him” The recognition is not an attempt to open old wounds but to put right a national wrong”. He further said” We cannot rewind the past but we can at least assuage our feelings; recognize that a wrong has been committed and resolve to stand firm now and in the future for the sanctity of free elections. Nigerians would no longer tolerate such perversion of justice”. After taking the unusual humane step to openly apologise to the Abiola family and the entire nation for the injury done by the annulment he concluded thus “Our decision to recognize and honour June 12 and its actors is in the national interest. It is aimed at setting national healing process and reconciliation of the 25-year festering wound caused by the annulment of June 12 elections.” Very strong and unusual words and

sentiments from PMB! These are the kind of actions and kind of speeches we have long wished and prayed that PMB would take and make since he came to power in 2015 and I have written many articles urging him to take actions along this path to unite the nation which has further fractured under his watch. Therefore how would I not be impressed when it seemed that my prayers were being answered? When IBB annulled the election and saw the anger of Nigerians especially the Yoruba, he tried to appease the Yoruba by appointing Chief Ernest Shonekan, a fellow Egba man as MKO to be the Head of State and to lead the Interim National Government (ING). When that did not work, Olusegun Obasanjo was recruited to become President in 1999. When that seemed not to have fully assuaged the Yoruba nation, PMB finally accepted the demand to honour Abiola and to officially declare June 12 as Nigeria’s official democracy day, somehow trying to bring this national debacle to a closure. Abiola’s family, the entire Yoruba nation and the democracy activists seem to have a sense of relief and a feeling that some justice has been done by this largely unexpected gesture by PMB. Other Nigerian nationalities that love justice, equity and fair play generally feel the same way. Indeed, this is not Nigeria’s first effort to right wrongs and assuage feelings of different nationalities in the Nigerian Federation. We recall the efforts made by Nigeria to assuage and correct some of the wrongs done to the people of the Niger Delta. Though all the wrongs have not been fully righted but the efforts to increase derivation to 13%, create the NDDC, create the Ministry of the Niger Delta, offer the Niger Delta militants amnesty and rehabilitation and the current cleaning of Ogoni land are all in the right direction and indicate a desire to right wrongs and heal wounds. More recently, the Federal Government has been investing hugely to right the wrongs done by Boko Haram against the people of the North East. The North East Development Commission (NEDC) is receiving budgetary allocations from the Federal Government and financial support from local and

I believe it is fair to now ask when it will be the turn of the Igbo nation. When shall we begin to right the legion of wrongs done to them? When shall we begin to assuage their feelings? When we talk about national healing? Is the Igbo nation not currently part of Nigeria? international organizations. The Federal Government is paying huge sums of money to assuage the Boko Haram insurgents to have them release some of their hostages and some others are being de-radicalized and reintegrated into the normal civil system at the expense of the government. Huge rehabilitation of displaced persons and rebuilding of infrastructure are ongoing in the North East. Many other examples abound. Jonathan’s rise to the presidency was helped by a desire to heal the hurt of the Niger Delta people following the Odi massacre; Umaru Yardua’s choice as President was helped by a desire to right the wrongs done to the North West by the unnatural death of Shehu Yardua in prison etc. All these are well and nice and fit into the move to right wrongs, cause healing and national reconciliation. I believe it is fair to now ask when it will be the turn of the Igbo nation. When shall we begin to right the legion of wrongs done to them? When shall we begin to assuage their feelings? When we talk about national healing? Is the Igbo nation not currently part of Nigeria? In line with the statement of PMB last week, I do not want to open old wounds, but every fair minded Nigerian must agree that so much wrong has been done against Ndigbo in Nigeria and it

looks like no one really cares to right any of the wrongs or to assuage their feelings of hurt and alienation. After the supposedly retaliatory counter coup in July 29,1966 when General AguiyiIronsi and over 300 military officers of Igbo extraction were killed, millions of Igbo civilians-men, women (including pregnant women),and children were murdered in cold blood in a well orchestrated progrom across most of Northern Nigeria. Nobody apologized. When the remnant Igbo ran home for safety, Nigeria’s Government unleashed a 30-month gruesome military hostility to force them back to Nigeria. This onslaught took the lives of nearly 3 million Igbo both in military combat and civilian casualty, including the well known and completely unprovoked Asaba massacre that involved men & women who came to welcome the Federal troops. No one has admitted guilt and no one has issued open apology as PMB courageously did last week. I was a young combatant in the war and have first hand evidence that Nigeria fought the war without any restraint or mercy. If as PMB announced recently that General Gowon asked them to fight the war as one between brothers, I need to inform him that the order was not obeyed at all. Nigerian armed forces fought as if they were fighting their fiercest enemy, strafing civilians with Air force jets in market places and using hunger as instrument of warfare. Even after Biafra was forced to surrender and Gowon had declared “ no victor, no vanquished” Nigerian soldiers shot and killed in my presence Biafran exsoldiers, returning home in whose bags were found any item that showed they were soldiers (e.g caps, t-shirts or emblems) .This narration is contained in my book- The Port Harcourt volunteer - Experiences of a young combatant in the Nigeria-Biafra War, published by Kraft books in 2015( chapter 11, page 106),now available on Amazon. The scene was similar to what happened to the unarmed IPOB boys last year. And since the Igbo returned, after ‘abandoning’ their property in parts of Nigeria and receiving only 20 pounds for whatever amount of money they had in the banks, they have suffered uncountable wrongs and injustice. The South East for example has the least no of States, least no of LGAs, least number of representatives in the

National Assembly, least number of ministers in the executive cabinet, least number of good roads in Nigeria, has never been allowed to produce a Nigerian President since we returned to democratic rule and since 2015 has suffered the highest level of marginilzation ever, with no Igbo holding leadership in the security agencies and the police and many young Igbos are unable to get places in the Federal MDAs. When the Igbo youth protest, they are mowed down in cold blood, and many incarcerated despite the fact that unlike the militants and herdsmen, they are never armed. Ndigbo have been threatened with drowning in lagoons and their businesses and property easy targets for destruction. It is bad enough to beat a child and worse when you force the child not to cry. Let it be known that Nigeria may never know true peace and wholesome healing if nobody makes a decided effort to right the series of wrongs and acts of manifest injustice against Ndigbo. General Gowon needs to reflect on why his ‘Nigeria Prays ‘ seems to produce no result. The more we prayed, the more Nigeria became more violent and more disunited. Nigeria needs to borrow from the spirit of June 12 and if the statements made by PMB, which I quoted earlier on are genuine, and not just made to score cheap political points in pursuit of a second term, then this is the opportune moment to begin to right the wrongs against the Igbo and indeed other nationalities like our neighbours in the middle belt. One lowest hanging fruit will be to set free all those IPOB & MASSOB youth languishing in detentions and prisons and de-proscribe IPOB. What is good for the goose is also good for the gizzard- according to Chief Zebrudaya Okoroigwe Nwogbo alias 4.30. Ultimately a determined effort to radically restructure Nigeria using geopolitical zones or what the Alaigbo Development Foundation (ADF) calls autonomous ethnic nationalities as federating units will help to prevent continuing wronging of any nationality, reduce frictions, reduce dependence on Abuja and set Nigeria free to achieve global competitiveness in peace and greater harmony. Let’s not miss this moment!

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My encounter with the billionaire Aliko Dangote

PRECIOUS OSHIDEKO Prescious Oshideko wrote in via preciousoshideko@gmail.com

read a few articles online about Aliko Dangote’s kind gesture to Archbishop Benson Idahosa in the early 90s. The account expounded on how Aliko, who was a young business man, relatively unknown at that time, offered his seat in a fully booked flight to Lagos from Benin to one of the Archbishops’ guests. The account stated that the Archbishop prayed for Aliko and

prophesied into his business. This was a thought provoking article. I thought to myself that these are the kind of stories my Christian folks would like. I cannot confirm the veracity of this story. But let’s assume is it true. A question will naturally arise; was it only Aliko Dangote that the Archbishop pronounced such great words of blessing into his life during Archbishops lifetime? The answer will definitely be no! So where are the others? My point is, it takes more than prayers or prophesies to make a great man or live a great life. It’s called prayer + hard work+ smart thinking +good interpersonal skill+ ability to unlearn and learn new things = fulfilled dreams I was in an Emirate flight from Dubai to Lagos awhile back, and Aliko Dangote was boarding the same flight, I had walked up to

him to exchange pleasantries and had a brief chat before boarding. I headed for the economy section, and he was off to the first-class cabin. About 4hours into the flight, virtually everyone in the economy section was either sleeping or watching movies. I took a walk to the back of the cabin to have a cup of coffee and while there I met with a popular Nigerian musician and we got talking. I mentioned to her that Aliko Dangote was in the same flight. She asked that I should take her to his cabin to say hello. I agreed, and we walked down the aisle towards the first-class section. Behold Aliko Dangote was alone in that cabin, his study light was on, and he had lots of reports, study articles and books right on his table. He was so engrossed in his reading that he didn’t realize we were behind him. He looked up surprised and then he smiled, and we had a beautiful

conversation. This was also thought provoking to me. For many days I thought about that encounter. The billionaire was alone and engrossed in his work and study while many of us were either sleeping or watching movies. Even if a man acquires wealth by luck, it takes diligence and hard-work to increase and multiply the wealth. As a nation we have basically been trained to believe that success comes to people as a result of luck or a mystical spiritual influence that cannot be exactly understood so we all pray for favour so that this spirit of money and prosperity can smile on us. Religious leaders constitute part of the main problem. They make the people believe that the more they “speak and declare that they receive money miracle” then money

comes to the people. I wonder many times how we got here as a nation. Many times, these religious groups bring Pastors from America who come in preaching the “speak it and have it gospel”. What does that even mean? America as a nation was built on hard work, intelligent thinking and diligence. People work morning shift, afternoon and night shift there. All round the clock they are working so hard. The nation was not built on “speak it and take it”, Dubai was not built on “speak it and take it” neither was Singapore. A new generation of deep thinkers and one with great analytical debt is rising and I am glad I am a part of that generation. Emancipate yourself from mental slavery. Success is not accidental.

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Tuesday 19 June 2018

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What is the potential of financing African SMEs via crowdfunding?

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

sk someone for a large donation towards a cause and the person is likely to balk. If considerate, a polite plea to mull it for a while might be made. Ask for something smaller, akin to pocket change, there would probably not be much ado about it. That is the underlying wisdom behind crowdfunding. Network effects of the internet mean small donations from a vast number of people can amount to quite a lot. Now imagine if instead of a charitable course, the proposition is one of profit, naturally with some risk. There is the potential that there would be similarly many takers. But how is that any different from the normal stock or bond issuance process? Do interested investors not similarly take as many units of a share or bond sale as they want

STRATEGY & POLICY

MA JOHNSON Johnson is a marine project management consultant and Chartered Engineer. He is a Fellow of the Institute of Marine Engineering, Science and Technology, UK.

lection season is here again, and politicians have been maneuvering either to be elected or re-elected to serve. Elected office holders at the federal and state levels will soon provide report of their stewardship to the electorate in Nigeria. It may be the last report to be rendered by those elected government officials before the electorate delivers its judgment at the polls. The electorate should expect some surprises, and if need be, deceptions from politicians in a bid to remain in office come 2019. Both surprise and deception are strategies for the survival of politicians. The voters should also expect some political drama. The type acted by some senators and honorable members of state and national assemblies. It cannot be business as usual. Since 1999, democracy has not

or can afford? And one unit of a stock or bond could be less than an American cent in some instances. Well, crowdfunding avoids the regulators and transcends borders. Of course, these supposed advantages also come with inherent risks. Even so, they provide an opportunity for small- and medium-sized enterprises (SMEs) to secure alternative sources of financing in otherwise very difficult environments; especially in African countries where SMEs constitute more than 90 percent of businesses, according to the International Finance Corporation (IFC). By another account, SMEs account for about 80 percent of employment in African countries. And top among their challenges is access to credit; which even when they are able to secure, is usually at exorbitant interest rates. Just another name Crowdfunding, a form of socalled “alternative debt” is just one of quite a few new approaches to financing SMEs. Asset-based finance is already widely used. Other approaches other than typical plain vanilla bank debt with such fancy titles like “hybrid instruments” and “equity instruments” are beginning to be used by SMEs as well; albeit still limitedly, according to a report

Global crowdfunding financing was $34.4billion in 2015, according to a 2016 report by Massolution; more than 70 percent of which was via lending. And how much of this went to Africa? A paltry $24.2 million; less than 1 percent. Most crowdfunding financing still takes place in North America ($17.25 bn) and Europe ($6.48bn); about 70 percent of the global total by the Organisation for Economic Co-operation and Development (OECD). The distinction of crowdfunding is that it is mostly projectfocused, as opposed to financing the entire business. Although still mostly debt financing, equity type financing is beginning to evolve. Whether it is via donations, reward or sponsorship, pre-selling or pre-

ordering, lending or equity, not needing an intermediary other than the platform through which the financing is facilitated is a key attraction. And potential returns to backers need not be financial. For donations, nothing is expected in return, for instance; although this is usually more the forte of charitable organisations. For the reward or sponsorship type, an acknowledgement, service or token of appreciation suffices. As the name implies, investors who back a venture in the pre-selling or pre-ordering format sometimes expect no more than the product they backed before it gets to the mass market; and may be at a much lower price. In the lending format, it is the typical payment of interest and principal that one finds in other credit environments that prevails. Alternatively, the parties could agree to share revenue and thus partake in the risk of the venture. And the equity form is no more than the investors buying into the venture via shares. Limited activity Global crowdfunding financing was $34.4billion in 2015, according to a 2016 report by Massolution; more than 70 percent of which was via lending. And how much of this went to Africa? A paltry $24.2 million; less than 1 per-

cent. Most crowdfunding financing still takes place in North America ($17.25 bn) and Europe ($6.48bn); about 70 percent of the global total. Since only limited crowdfunding makes it to the African continent, what then is the potential for indigenous platforms? A sense of the potential of these would first have to be inferred from current savings in African countries of about 15 percent of GDP, according to the International Monetary Fund (IMF); which is not exactly ideal. What could probably be put to such ventures are increasingly destined for ponzi-type schemes that offer ridiculously high returns. That is not to say there is no potential at all. In Nigeria not too long ago, funds were successfully mobilized for the family of a deceased policeman’s family via crowdfunding. But if the object is a business venture, without the sentimentality of a supposed noble cause, how easy would it be to similarly mobilize funds? One’s observations suggest the potential is limited – for now. • An edited version of these thoughts were first published in my Forbes Africa magazine column in March 2018

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Election season: Time to demand specifics yielded expected dividends to many Nigerians. This is contrary to expectations that a democratically elected government will engender development. Unfortunately, democracy does not bring about socio-economic development by default. Socio-economic development would only play an important role in sustaining democracy. So it is democracy flavored with good governance that will accelerate economic development. Preparations for Osun and Ekiti States’ elections in 2018 are in high speed. While necessary arrangements for the general elections in 2019 are in top gear. Observers can see that politicians have started collaborating and cooperating with their godfathers, forming alliances, making deals, fashioning new political parties and courting political rivals. As politicians make flowery promises, the electorate must as a matter of utmost necessity demand for specifics from politicians to enable them determine those who have ideas about the roles they intend to play in government in 2019. The media and civil societies have a duty to set agenda for public debate and create issues bordering on national development in this election season. If Nigeria had enjoyed good governance for decades, there wouldn’t have been justification for spending billions of dollars

to revamp the nation’s power supply without much to show for it. It wouldn’t have been challenging to liberalize the oil sector after making promises that subsidy would be removed. What do we have? We have increasing insincerity exhibited by our politicians. This is due to a mismatch between democracy and national development. Democracy can only stimulate national development when it is built on good governance, probity, transparency and accountability. New, old and the “not too young to run” politicians have started showing interests in elective offices at state and federal levels respectively. As 2019 approaches, several promises are dangling like carrots before the electorate. Some politicians say, “Poverty will be eradicated when voted into power” and that “there would be a full stop to corruption.” This writer has read headline stories in newspapers such as “we will fence Nigeria, change its name and currencyJustice Must Prevail Party,” and “We will make the Naira stronger and provide 10000Megawatts of electricity.” How will politicians actualize these promises? A flip through Nigeria’s political history shows that this is not the first time that promises would be made by the political class to the electorate. Precisely on July 14, 2014 the Senate President, then a new member of the All Peoples Congress (APC) tweeted that “APC will sign a con-

tract with Nigerians. If we fail to tackle unemployment, insecurity & improve standard of living in 2015-2019 vote us out.” It is left to the electorate to determine if APC have succeeded in tackling unemployment, insecurity and poor standard of living in the second quarter of 2018. Also, a PDP presidential aspirant and former vice president of Nigeria recently pronounced that if Nigeria wants to reduce poverty, women should be empowered. And the question that came to mind is how will this promise be actualized? This writer is not sure the presidential aspirant knows the number of the poor in Nigeria and how many women belong to this taxonomy? It is not only this presidential aspirant that is involved in glittering generalization. The nation is in an election season, and glittering generalizations should not be allowed without demanding for specifics. Any politician that makes a promise must be courageous to let the electorate subject his campaign promises to thorough debate before elections to avoid blaming his or her predecessors when elected. The citizens must be courageous to ask questions from any political aspirant as to how he or she intends to solve the problems bedeviling the nation in all sectors of the economy. Enough of intelligent guesses. Nigerians are fed up with any politician who

says “I’ll achieve restructuring of Nigeria in 6 months, if elected President”. Such a politician should be challenged by the electorate to say in concrete terms what he or she means by restructuring, why is it necessary and how he or she intends to go about actualizing such a campaign promise. In summary, Nigeria is a fragile state considering insecurity, state legitimacy and fragility to deliver basic services to people, unattractive environment for private investment, exposure of our oil-based economy to shocks, and deep divisions in the society, according to a Businessday columnist. So politicians cannot mount the podium, hold microphone in their hands, and deceive Nigerians anymore. Nigerians are tired of promises that cannot be actualized. In fact, all political office aspirants need to educate themselves on how to look at issues of national interest through leadership eyes. This writer expects politicians who aspire to lead the seventh most populous country in the world to develop underpinning thoughts on their aspirations as prospective leaders and also, keep up with latest developments in world affairs. Nigerians expect politicians to be self-critical and self-examining of their promises before presenting them to the electorate.

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Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

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Tuesday 19 June 2018

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Regulatory requirements derailing financial inclusion in Nigeria

here is unanimity of opinion in the financial sector that the best way to ensure greater financial inclusion in the developing world, especially for a country like Nigeria, is through digital financial technology (fintech). This is because access to physical financial services in these countries continue to be hampered by various barriers to access such as long distances to access financial services, bureaucratic bottlenecks and the sometimes prohibitive costs of banking services in a country like Nigeria where the banks charge exorbitant fees for routine and normal services like email and SMS alerts, account maintenance fees and the huge interests charged on loans. What is more, traditional financial services seem not to be designed to meet the needs of small depositors and borrowers. That is why, according to a McKinsey Global Institute report titled: “Digital Finance for all: Powering Inclusive Growth

in Emerging Economies”, “...56 percent of adults (in Nigeria) do not have a bank account, and 80 percent of cash in the economy is not deposited in a bank. Trust in banks is low, and many citizens, particularly those living in rural areas, are not familiar with financial services.” The report was emphatic in its conclusions that digital finance “has an opportunity to flourish in emerging economies because network coverage is near ubiquitous and rapidly increasing in quality.” We need not look far for examples of successes of fintech in bringing financial services to the poor. Kenya – and indeed the entirety of East Africa and other emerging markets – provides key lessons here. Digital mobile services in Kenya, for example, are widespread with over 17 million active users conducting more than $50 billion in cashless transactions yearly. However, regulatory bottleneck has continued to stifle the growth and flourishing of most fintech companies - which incidentally are startups that should be supported

to grow – in Nigeria. For instance, a key CBN regulatory requirement for fintechs to be licensed to operate include 3 years tax clearance of each of the founders, draft agreements with technical partners, participating banks, switching company, merchants, telcos and any other party; payment of non-refundable application fee of N100,000 to CBN; and evidence of shareholders’ fund of N2 billion before a licence is issued. The initial capital requirement used to be N500 million but was recently jacked up to N2 billion. Should a mobile money start-up even manage to provide the tax clearance, draft agreements from banks, telcos, partners, merchants and pay the N100,000 non-refundable application fee, where would it get the N2 billion shareholders’ fund just to be licensed? The requirements may also explain why over 80 percent of the licensed companies are based in Lagos. Meanwhile, the greater percentage of financially excluded Nigerians do not reside in Lagos but in the far interior of the country

– where fintechs find it difficult to survive due to the strangling regulatory requirement. In January 2018, the CBN threatened to revoke the licence of more than 15 mobile money operators for failing to meet up with the N2 billion capital re quirements. The operators’ grace period will end on July 1, 2018. Currently, Nigeria has just 21 mobile money operators. If the CBN makes good on the revocation threat, the country will be left will less than 10 licensed operators servicing the over 60 million unbanked population in Nigeria. The CBN needs to create a robust regulatory environment for both big and small players in the industry to flourish and thereby help capture all the financially excluded in Nigeria. It could also create a multi-tier license process with different capital requirements for players in each tier or segment. This will not only energise the fintechs, but will give the small fintechs not based in Lagos a chance to contribute to the onerous task of bringing financial inclusion to all Nigerians.

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Tuesday 19 June 2018

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SPDC urged to conduct integrity tests on pipelines in Niger Delta Samuel Ese, Yenagoa

hell Petroleum Development Company of Nigeria (SPDC) has been urged to conduct integrity tests on its pipelines in the Niger Delta region. Gboribiogha John Jonah, deputy governor of Bayelsa State made the call during an on the spot assessment of extent of environmental damage due to oil spillage caused by the eruption of the company’s River Ramos pipeline at Aghoro community in Ekeremor Local Government Area of the state. He said an integrity test on the pipelines was imperative given the frequency of oil spillages from its operations as well as the fact that a good number of its pipes were laid a long time ago and may have suffered from corrosion. The deputy governor also blamed SPDC for the delay in carrying out remediation activities and provision of relief materials to residents of the impacted communities as the oil spill occurred about a month ago.

He advised that all the relevant parties must be involved in the joint investigation exercise stressing that it should be conducted in line

with international standards and commended the Agboro people for their patience while assuring them of government support.

The member representing Sagbama/Ekeremor Federal Constituency in the House of Representatives, Fred Agbedi said Aghoro

community had suffered two major spills which had devastating effect on both the marine and aquatic life in the community.

L-R: Hamad Kamal; head of trade and investment uk trade, Topsy Kola-Oyeneyin; Associate Principal, Mckinsey& Company, Segun Akerele; EFInA board chairman and Tunde Kehinde; co-founder; Lidya at the EFInA Inagural FinTech breakfast forum in Lagos.

Agbedi disclosed that one of the spills had occurred in April at Odimodi in neighbouring Delta State, but the spill extended to Aghoro before the May 17 spill at the River Ramos pipeline. An indigene of Aghoro community, the federal lawmaker called on both the Federal Government and SPDC to take some urgent steps to alleviate the plight of the people. Charles Ebulu of SPDC who briefed Jonah at one of the sites said the company was doing everything necessary to contain further spread of the spilled crude and pleaded for understanding from all stakeholders and promised to take issues raised by the deputy governor to the appropriate quarters. The Amananaowei of Aghoro, Ibamua Ojukonsin lamented that it took SPDC two weeks to take action to contain the spill after it was reported and that while it was eager to carry out repairs on the pipeline to resume crude production, his people were yet to receive any form of compensation from the company.

Heritage Bank committed to innovative banking services Mastercard unveils Global Destination Cities Index

eritage Bank Plc said it is committed to innovative banking services through its transparent MasterCard. Head of Corporate Communications of the bank, Fela Ibidapo disclosed this in a statement over the weekend, remarking that; “that is the philosophy behind the bank’s e-payment offerings.” According to him, there is more to e-payment than Nigerian banking customers are currently enjoying, adding that they are determined to take Nigerians to new heights of epayment services that deliver unparalleled convenience and security through the Heritage Bank Transparent MasterCard which is available to new and existing customers of the bank. He said to own a Heritage Bank Transparent MasterCard is easy as the card comes with no additional cost beyond the cost of applying for the average MasterCard. He observed that there was

a huge difference between the current growth in volume of e-payment in the country and the potentials available, if the number of unbanked Nigerians with access to mobile telephone services is anything to go by. According to him, while the volume of e-payment in Nigeria grew from N18.1trillion in 2012 to N35.1trillion in 2014 with transaction through Point of Sale (POS) also increasing from N48 billion in 2013 to N312 billion in 2014, the growth has not mirrored the huge population of mobile phone users in the country which currently stands at more than 105 million while about 60 million Nigerians who do not have bank accounts, have phones. He also said that innovation was inevitable in the banking industry due to changes in dynamics across the globe which has penetrated the Nigerian banking industry and that these changes are driven by forces of globalization, self-service

mobile devices and regulation. He said the impact of these changes on the Nigerian banking landscape has reflected in the sharp increase in the growth of electronic payment services between 2012 and 2014 in the country, remarking that e-payment is now a commodity and innovative epayment is the way to go. He said Heritage Bank has always been driven on the path of continuous innovation, having been the first to transform the interior of banking halls in addition to being the first financial institution to set out deposit machines in all its branches nationwide. The head of corporate communication also observed that Heritage Bank was also the first to launch the first real transparent MasterCard in Nigeria as well as transform small and medium scale enterprise (SME) banking approach. The Heritage Bank Transparent MasterCard distinguishes its customers.

OBINNA EMELIKE

astercard, a technology company in the global payments industry, has released the Global Destination Cities Index: Play. The index looks at the international destinations with the highest concentration of visitors traveling for relaxation and leisure. International travel continues to grow at an incredible rate, transforming local economies and enabling people to broaden their horizons—whether they travel for work or for play. Building on nearly a decade of insight into international travel trends, the Mastercard Global Destination Cities Index: Play shows that special cities around the world are building a brand of fun, relaxation and enjoyment for like-minded travelers.

Punta Cana leads the list of top tencities where more than 90 percent of overnight visitor travel in 2017 was for purposes beyond business such as vacation or family visits. The list includes several lesser-known destinations that cater to eco-tourists, history buffs, beach goers and adventure seekers. With cultures uniquely their own but with a common focus on relaxation and fun, the top 10 cities include: Punta Cana, Dominican Republic(99.9 percent), Cusco, Peru(98 percent), Djerba, Tunisia(97.7 percent), Riviera Maya, Mexico (97.5 percent), Palma de Mallorca, Spain(97.2 percent), Cancun, Mexico (96.8 percent), Bali, Indonesia (96.7 percent), Panama City, Panama (96.3 percent), Orlando, United States(94.1 percent), Phuket, Thailand (93 percent). Mastercard is helping cardholders travel the world with

peace of mind by offering them conveniences and connectivity at their destination and worry-free acceptance at millions of locations around the globe. Also, the technology company in the global payments industry hopes to release additional insights from the 2018 Mastercard Global Destination Cities Index later this year. The Mastercard Global Destination Cities Index ranks cities in terms of the number of their total international overnight visitor arrivals and the cross-border spending by these same visitors in the destination cities, and gives visitor and passenger growth forecasts. Global Destination Cities Index: Play specifically looks at the cities that have the highest concentration of visitors traveling there for nonbusiness purposes according to the International Visitor Survey results from National Tourism Boards.

BUSINESS DAY

Tuesday 19 June 2018

BUSINESS DAY

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COMPANIES & MARKETS EY to support financial institutions on General Data Protection Regulation (GDPR) compliance

e chnolo g y advancements have fundamentally altered how organizations collect, use and manage data. In light of this, the European Commission (EC) embarked on a process to update, simplify, and bolster privacy regulations; and allow European Union (EU) residents control over their personal data. The culmination of these efforts is the Global Data Protection Regulation (GDPR) which came into effect in May 2018. The GDPR is a game changer for organizations. It introduces more stringent and prescriptive data protection compliance challenges. Organizations need to review their current data protection compliance programs to determine next steps and decide on the level of investment they need to make to address the changes. Ernst & Young Nigeria (EY) is set to hold an event

aimed at bringing her deep subject matter experience to provide insights into GDPR and how it impacts the Nigerian organizations. The event will take place at EY Nigeria Office at UBA House, 10th Floor, 57 Marina, Lagos on Wednesday 20 June 2018. EY Advisory Leader for West Africa, Ben Afudego, said financial institutions processing EU data must ensure the security of the personal data of data subject and comply with the GDPR by ensuring safeguard and reducing risk to data subjects. In the absence of a Nigerian general data protection law, Banks would need to build strong privacy and data protection culture which addresses the rights of EU citizens as stated in the GDPR. According to him, EY is proud to be a part of this transformative GDPR journey. We believe the establishment of global regulations such as GDPR

would enhance cybersecurity, improve data management, boost customer loyalty and trust and ultimately nurture social responsibility in business. The risk management practice of EY has helped clients comply with various regulatory requirements. We have worked on privacy transformation programmes and know from experience the complexity of clients complying with new regulations which will alter the way their people, process and technology operate. We are excited and thrilled to support organizations not only to keep to the right side of regulators, but create business value while managing risk now and into the future. â&#x20AC;&#x153;EY is a leading provider of risk management and regulatory services globally. Its highly qualified professionals have deep experience that can assist organizations in their GDPR compliance journeyâ&#x20AC;? Ben said.

Tuesday 19 June 2018

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BUSINESS DAY

COMPANIES & MARKETS Business Event Continuous grid collapse means SMEs will have to struggle to generate power

…if they must remain in business STEPHEN ONYEKWELU

hen Majiri returned from Germany to set up a company in Nigeria that caters to women and men desirous to wear their hair natural, she took power and infrastructure for granted and now, it seems that she had made a serious business mistake when you look at the challenge businesses are facing over power failure. The recent one of June 15 was another that resulted in operational challenges, which many have referred to as system collapse because power was seized between Jun 15 and 16 until the early hours of June 17. “The Transmission Company of Nigeria hereby state that as a result of gas pipeline rupture on the 15th of June, 2018, as well as technical issues at the Shell gas wells on the 16th of June, there has been a sharp drop in generation into the grid by a total of 1,087.6MW, resulting in load-shedding nationwide, necessary to maintain stability of the grid” Ndidi Mbah, general manager, public affairs, Transmission Company of Nigeria (TCN) said in an email response. “Inconsistent electricity provision raises the production costs borne by businesses. The entrepreneur is hurt by poor and underdeveloped transport systems, and wants the government to fix these problems to enable businesses have a breath of fresh air” Majiri Otobo, founder and CEO of Kuicare Limited, said. Two days into 2018, Nigeria’s power transmission grid recorded a first major collapse January 02 night due to a fire incident on a gas supply pipeline leading to widespread blackout across the country, BusinessDay had reported. “Regrettably, after a sustained period of increasing production and distribution of power since September 2017 to date, the Nigerian Gas Processing and Transportation Company Ltd (NGPTC)

has reported a fire incident on its Escravos Lagos Pipeline System near Okada, Edo State on Tuesday, 2nd January, 2018,” said a statement from the ministry of Power, Works and Housing. As a result of the incident, a shutdown of the pipeline supplying gas to Egbin 1,320MW; Olorunsogo NIPP 676MW, Olorunsogo 338MW, Omotosho NIPP 450MW, Omotosho 338 MW and Paras 60MW power stations were effected. The sudden loss of generation due to interruption in gas supply from these stations caused the national transmission grid to trip off around 20:20on 2nd January 2018. The national transmission grid is owned and operated by the Transmission Company of Nigeria (TCN). Nigeria generates 74 percent of its power from thermal power stations that require gas for fuel. The gas is produced by oil and gas companies overseen by the Ministry of Petroleum Resources. The gas is delivered to the power stations through pipelines owned and operated by Nigerian Gas Processing and Transportation Company Ltd (NGPTC), a subsidiary of Nigerian National Petroleum Company (NNPC). “TCN and the generation companies are working to restore operation of the national grid. Once the national grid is restored output from the hydroelectric power stations and all other unaffected gas fired thermal power stations will be increased to the extent possible to minimize the impact of loss of generation from the affected power stations while NNPC takes necessary steps to restore gas supply,” said the statement in January. People with deep knowledge of the sector say insufficient cash flows have significantly impaired the ability of electricity generating companies (GENCOs) and DISCOs to recover all costs and generate appropriate return on investment. BusinessDay investigations show that to make Nigeria’s electricity market competitive

some urgent steps must be taken to push reforms in the sector further along market oriented lines. To find sustainable solution to the power sector woes, experts have suggested some steps. Debts are accumulating at the Nigerian Electricity Supply Industry as only four of the country’s 11 DISCOs, paid for supplies of power they received for transmission to their customers from the generation companies, GENCOs in January 2018. BusinessDay’s check shows that that the highest percentage of revenue paid by the distribution companies for electricity received from the generation companies is 29 percent. Total debt stock in the power sector is close to N800 billion, a source with knowledge of the matter told BusinessDay. Creative financial deals, backed by sovereign guarantees would be needed to free the power sector of this debt. The government needs to give up its 40 percent equity holding in the DISCOs. This could take place in stages. The 40 percent could be managed by a consortium and some commercial banks. However, the government will have to ultimately give up its equity entirely. Transmission Company Nigeria (TCN) needs to be broken-up and privatised. Experts say this is necessary if the market is to be optimally deregulated. In other countries where the electricity industry was formerly a government owned, vertically integrated, monopoly; the reforms have generally involved splitting the industry into separate generating, transmission and distribution sectors. The transmission system often remains a governmentowned common carrier, or is kept under extensive regulatory control as a natural monopoly. Stakeholders in Nigeria’s power industry say Nigeria’s TCN needs to be broken up into mini-privatised operations to make the system work.

L-R: Bukky Femi-Ajala, member, The Institute for National Transformation, Thelma Ekiyor, chief executive officer, Afrigrants Resources, Oby Ezekwesili, keynote speaker, Peggy Anigbogu, member INT, another member, Juliet Benitie and the executive director, Institute of Director, Nkechi Ezeako at the One-Day Women Leadership Forum organised by Institute of National Transformation in Lagos recently

L-R : Ifeanyi Okpuozor Obiligbo , Igbo highlife musician, Emmanuel Agu, Igbo portfolio manager mainstream Lager & Stout Brands NBPlc., Chukwuebuka Akunwafor Obiligbo, highlife musician, zonal business manager East NBPlc. Anselm Alokha, and distributor capability development manager East NBPlc., Akintunde Olayeni, at the Legend real deal experience in Port Harcourt , River State.

L-R: Michael Larbie, CEO RMB Nigeria & Regional head West Africa, Doyin Salami, economist, LBS (Moderator),Yewande Sadiku, executive secretary, NIPC, Dr Enase Okonedo, RMBN nonexecutive director and Dean, LBS, Dave Uduanu, MD, Sigma pensions, amine mati, senior resident representative, imf. discussants during the Rand Merchant Bank Nigeria 5th anniversary business conference themed: Connecting the Building Blocks to drive inclusive and sustainable growth: investments and Economic Diversification held in Lagos recently

Solynta Energy unveils Finidi George as brand ambassador

olynta Energy, Nigeria’s number one solar solution provider, has announced the signing of former Nigerian international, Finidi George, as the new brand ambassador for the solar energy company. The ex-international was introduced to the media at a ceremony held at the Autobiography lounge inside Emperor Mall in Ajah Lagos, at the weekend. Speaking at the unveiling

ceremony, Uvie Ugono, CEO/ founder of Solynta Energy, called Finidi George a national icon whose exploits on and off the pitch make him a role model for all Nigerians, irrespective of tribe or religion. He spoke about Finidi’s level of dedication and call of duty. He praised Finidi’s humilily, stressing that his company shared the values of Finidi, which is hard work and professionalism. The deal will see Finidi

George feature in Solynta’s advertising and marketing campaigns. He is also expected to make special appearances at events. During the unveiling ceremony, Finidi George expressed his happiness on being made the brand’s ambassador of the Nigerian leading solar energy company, and promised to partner the company as it powered Nigerian homes using solar energy.

L-R: Qasim Elegbede, brand & marketing director, StarTimes,; First Winner of N1,000,000 StarTimes World Cup Promo, Tony Fakuade and content marketing manager, StarTimes Abosede Adewara during a cheque presentation to the winner in Lagos recently

BUSINESS DAY

Tuesday 19 June 2018

World Cup: How brands can sustain audience relationship Stories by Daniel Obi Media Business Editor

rands, globally are keying into the on-going World Cup in Russia, through sponsorship activities to connect to over 3.5 billion estimated viewers in more than 200 countries for brand engagement. Research by media group Zenith predict that advertisers will spend additional $2.4 billion globally during the tournament with China, which did not qualify for the competition spending about $835 million on advertising ahead of US which is expected to spend $400 m while Russia, the host country will spend about $64 million. In the UK, the World Cup will add an extra £40m to Ad expenditure, a report quoting Research from Zenith said. At the global level, African brands are quiet on the World Cup. This is understandable as African brands are missing on the list of recently released top 100 brands by Millward Brown. But African brands are playing regionally, exploiting the opportunity the world tournament presents through marketing activities to

connect with their audience. Surprisingly, according to Michael Umogun of Millward Brown, many of these global and local brands don’t have long term strategy to sustain the audience engagement even after the World Cup. According to him, the only strategy for some of them is ‘momentary relationship’ with the audience during the W/Cup. With frenzy of marketing activities by brands around the W/Cup, brands development, he said should be seen as long term journey and investment. For instance, as many African countries are participating in the games, brands should do what is required to exploit the occasion and the gains of the moment and continue the engagement with audience through football thereafter. This would make them salient in the minds of the consumers moving forward. He said the strongest brands don’t rely only on being meaningful or only being different or only being salient - they weave all three qualities together. These brands derive three times more of their volume from the strength of the brand, as opposed to factors like availability and promotions. Stating that investment in brand development should be a story in

motion all the time, Umogun suggested that brands can create relevance around the game of football. For instance, essay competition can be sponsored on ‘Why African nations don’t progress beyond certain stages in W/Cup’. Brands need to create relevant association before, during and after each tournament. This will allow the brand to keep the audience engaged, he said. However, the Nigerian top brands that are tapping into the local W/Cup audience are already boosting the local advertising spend with brand messages. Daily, the print, social and electronic media in Nigeria contain adverts around the 2018 World Cup but some media practitioners cannot put a figure to total World Cup expenditure by brands. “I cannot tell you what my client is spending on the World Cup, but I can say that it is not peanut”, a source said. Some marketing experts in Nigeria have said that media spend by Nigerian brands during the on-going World Cup in Russia will be huge on account of Nigeria’s participation in the global tournament. Those who spoke to BusinessDay said that marketing and promotions around World Cup will double this year compared to total spend in 2014 when Nigeria did not qualify for the tournament hosted in Brazil. Major players in Nigeria’s FMCG sector, pharmaceutical companies, pay Television stations and ICT firms are engaging in sponsorships around the World Cup. A total of 32 teams are battling it out to be crowned World Champions, and a total of 64 games will be played during the event. Germany is the defending champions who beat Brazil 7 -1 in 2014 in Brazil to win the Cup.

X3M Ideas wins grand Cristal for ‘Goodvertising’ at African Cristal Ad Festival

3M Ideas’ sponsored anti – depression social service advertising tagged “Look Beyond” which came out last year to support the Lagos State effort in fighting the sudden surge in the rate of suicides, has won a grand Cristal at the African Cristal Advertising Festival which held recently in Marrakesh, Morocco. The campaign which featured a series of ads including online film is one of the agency’s deliberate attempts at being a social contributor and dependable voice in supporting the Lagos State government in enhancing and keeping a sane and save society for all. The increasing spate of suicides according to the agency, is considered antithetical to the nation’s global recognized as the “happiest

people” on the globe despite all the odds. This is why we, as X3M Ideas, cannot keep silent in the face of this ugly development, Steve Babaeko, Chief Executive Officer, X3M Ideas had explained when the campaign broke May 2017. The campaign which won a Grand Cristal an equivalent of a Grand Prix, in the Social/CSR category, was a major voice that permeated the social media and youth focused TV channels, to drum up support for the Lagos State Governor, Akinwunmi Ambode’s battle cry against suicides in Lagos state and the country at large. The agency has dutifully pursued its DNA ingrained passion to consistently find the time and resources to churn out campaigns to promote social causes despite

its busy work schedule and scarce resources, in a bid to combat tendencies for the society to travel the descent route. As a company, X3M Ideas is passionate about youth, the business is positively youthful and its crop of its staff, so when begin to see a trend of the odious happening and almost becoming like a way of life, we would not want to keep silent. In fact that is not our way of life. This is the main reason behind this awards winning social advocacy campaign tagged “Looking Beyond” an agency source told our correspondent during an interactive session. In the campaign, the agency deployed the ‘huge popularity for social media’ to paint the picture of how depression makes hostage of the victim.

L-R: Kwesé Nigeria staff attending to a customer at its new Experience Centre at Adeola Hopewell Street in Victoria Island, Lagos

Kwesé geared to redefine TV in Africa, opens customer experience centre in Lagos

wesé, pan-African entertainment satellite pay-TV network that aims to use the platform to change the African poor narrative, is geared to provide premium service to its customers as it has opened its first customer experience centre on Victoria Island, Lagos. The experience centre enhances pay Tv retail footprint, joining over 600 Kwesé dealers’ outlets across Nigeria, and it is appropriately timed to manage the frenzy that comes with the FIFA World Cup. At the Kwesé Experience Centre, consumers can purchase Kwesé TV decoders, renew their subscriptions, get assistance with Kwesé apps’ download and resolve queries. Designed by integrated marketing communications agency, Advapro Ltd, the Kwesé Experience Centre’s look and feel combines Kwesé’s signature purple which is symbolic for its premium quality, with a touch of orange to represent its Kwesé Sports’ brands.

The Kwesé Experience Centre is also equipped with an interactive area branded “FreeZone” where subscribers can perform self-service. Also in the FreeZone, prospective customers get a feel of Kwesé TV’s over 70 entertainment and sports channels as well as other Kwesé products namely; Kweséiflix and Kwesé Play. At the unveiling ceremony, Elizabeth Amkpa, general manager, Kwesé TV, said: “Our Experience Centre is a one-stop shop designed to support our multi-platform offering delivered via satellite TV, mobile and digital platforms. Whether you are interested in purchasing a Kwesé TV decoder, renewing your subscription or downloading the Kwesé TV or Kweséiflix apps, we are here for you”. She added that “the first 10 walkin customers who make a payment will be rewarded with a one-month Kwesé TV subscription, adding that Kwesé also offers convenient online customer service via live chat on the Kwesé website and its social media pages”.

Campaign: Capri-Sonne encourages consumers to express themselves

igeria’s kids fruit drink, Capri-Sonne, is aiming to create further brand engagement with the launch of its Express Yourself Campaign. Renowned for offering unique experiences with its signature taste, playful pouch and exciting consumer engagements, the campaign which entails the introduction of Capri-Sonne Emoji Pouches, looks to encourage kids to creatively express themselves with iconic emoji symbols. The distinct Capri-Sonne pouches which are already generating a buzz of excitement are seen as an innovative way to build affinity with kids in an age where virtual communication has revolutionized the way people communicate and express themselves. Emojis are small colourful digital images or icons

used to express an idea or emotion. They are increasingly popular and widely adopted by kids as an unofficial universal language in everyday communication. With eight different “emojis”, the Capri-Sonne limited edition pouches portray various exciting expressions that will fascinate and stir interest in kids to express themselves whilst having a taste of fun. The campaign connects through its pouches that showcase heroic, stylish, artistic and other expressive emojis that offer opportunities for kids to gain more knowledge, as well as build confidence. In a statement Theresa Amadi, a primary school teacher, said employing emoji icons as a tool to help children understand emotions and express themselves can be really beneficial in early learning stages.

Tuesday 19 June 2018

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BUSINESS DAY

Marketing&Pr Services sector holds key to tackling Nigeria’s unemployment challenge - PwC DANIEL OBI

igeria’s services sector is seen as critical to solving the country’s unemployment challenge, according to new report released by PwC Nigeria recently in Lagos. The report titled “Structural transformation and jobless growth in Nigeria” notes that while Nigeria has recorded considerable growth in major sectors, such as agriculture and manufacturing but employment generation by these sectors has been poor. The services sector, which has the highest employment elasticity according to PwC’s analysis, is capable of delivering high productivity jobs with great potential for income generation and poverty reduction. Unlocking this potential in the service sector will however require keen investment

in business environment reforms, which are necessary to improve the ease of doing business, sustain macroeconomic stability, and attract investments. In specific terms, improving human capital development, providing enabling infrastructure and intellectual property rights are necessary to drive growth and productivity in the services sector, a statement quotes the report. Andrew Nevin, Partner and Chief Economist at PwC Nigeria said in the statement “High unemployment rate has remained a huge socio-economic challenge for Nigeria in the last decade, despite economic growth. Data from the National Bureau of Statistics puts Nigeria’s unemployment rate at 18.8 per cent as at the third quarter of 2017. In 2015, the unemployment rate was 9.9 per cent. Similarly, the underemployment rate reached an unprecedented 21.2 per cent, from 17.4 per cent, over the same period.

LG Electronics says eco-friendly innovative products help promote healthy living

G Electronics says it has established a track record of producing eco-friendly appliances, air conditioners, washing machines, refrigerators and other related products designed to help users reduce energy consumption. “Eco-friendly products are products that do not harm the environment whether in their production, use or disposal stages. These products help to preserve the environment by significantly reducing the pollution they could possibly produce. Consumers should be aware that eco-friendly products can be newly developed or from recycled materials that eventually become brand new products. Eco-friendly products are also known as environment friendly products or green products, the good thing about them is they cause little or no harm to consumers and the environment at large. There is a clarion call for organizations to begin to factor this into their line of production to ensure a safe and healthier environment”. As a global technology leader, LG says it offers a range of innovations designed to counteract a number of major environmental threats. “The company is at the forefront of the ongoing revolutions in renewable power, increased energy efficiency and environmentally-friendly production. LG is actively involved in the communities it operates in, by raising the standards of living

of consumers within the communities with its innovative products”. Managing Director, LG Electronics West Africa operations, Taeick Son said in a statement: “We in LG are fully committed to having more of Greenhouse products to protect the environment from hazardous impact which could spell doom for families. We have deliberately adopted it as a policy which means, at every strata of production, we are conscious of the fact that the environment must be kept safe and that is what LG Electronics stands for by promoting sustainable and healthy environment.” There is obviously, no doubt that home appliances are essential in every home. Over the years LG has been able to design cutting-edge technologies that combine eco-friendly features and unparalleled efficiency with the intention of convincing more families to embrace greener solutions which are invariably paying off. He said LG has included green management strategies across each business unit. One of the most prominent approaches is the Green 2020 Strategy. This plan of action calls on LG to aggressively respond to climate change, enhance competitiveness through eco-friendly features, promote recycling, strengthen eco-friendly businesses and to partner with other ecoconscious companies.

“Our findings show that between 2010 and 2017, average job growth was 1.6%, weaker than labour force growth of 3.9%. To reduce the unemployment rate, we estimate that employment growth of at least 4-5% is required. This would translate to at least 3 million new jobs annually. Achieving this will require implementing policies that will deliver inclusive growth and engender a productive labour force is imperative.” The report notes that while industrialisation in most advanced countries followed a three-stage process of agriculture, industry, and services, Nigeria has tended to develop along the line of India, where structural changes boosted

growth and employment through the expansion of high productivity activities within the services sector, particularly, Information Technology and Business Process Outsourcing services. Nigeria has evolved in this same pattern, as declining shares of output and employment in agriculture have been absorbed by the services sector. In addition, estimates of employment elasticities suggest Nigeria’s services sector has the highest employment potential at 0.5, relative to agriculture’s -0.1 and manufacturing’s 0.3. Services sector jobs require a wide range of skills from artisans in traditional services, to ICT experts in modern ser-

vices. Without higher productivity in both segments, the potential of services to drive employment will be unrealised. Hence, enhancing productivity in services requires a significant investment in human capital development. Specifically, investing in tertiary education is required to provide high-skilled workers in modern services, while investing in vocational centers and technical colleges is required to improve the supply of skilled labour in traditional services. Commenting further Nevin noted: “The services sector is the largest sector in the economy, with its share of GDP rising from 54.1 per cent in 2010 to 56.9 per cent in 2017. Although the sector accounts for the

largest proportion of employment at 57.4 per cent, employment growth in the sector has been less than proportionate to its average annual real GDP growth of 7.8 per cent recorded between 2010 and 2014. Our analysis shows that a 1 per cent increase in services growth led to 0.5 per cent increase in employment. This is, perhaps, due to the dominance of the less productive traditional services sub-sectors, such as transport and trade, where scope to increase productivity is low. On the flipside, higher productivity sectors, such as financial services, real estate and professional services are crucial to increasing employment, given the relatively higher employment elasticity.”

BUSINESS DAY

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CEO INTERVIEW

Tuesday 19 June 2018

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BUSINESS DAY

PRASANTA K. MISHRA

Managing Director/CEO, Delta Steel and Mines Limited

Interview with Private Sector Leaders

We are capable and determined to revolutionize the Nigeria’s Steel Industry – Mishra Mr. PRASANTA K. MISHRA, a thoroughbred professional and a global player in the steel development, is the Managing Director/CEO, Delta Steel and Mines Limited, situated in Warri, Delta State. In this exclusive interview with the BusinessDay’s team led by BASHIR IBRAHIM HASSAN (GM, Northern Operations), Mishra talks about the huge potentials of the Nigeria’s steel industry, their capacity and determination towards revolutionizing it. The steel expert also advises the Nigerian Government on what to do with the long-neglected Ajaokuta Steel Company. Excerpts:

indly tell us about yourself I joined this company in 2015 after the execution of this plant. I have worked in various global steel companies. They are all big steel plants. Globally, I have a lot of experience in revamping this kind of steel plant. There are lots of plants we have successfully resuscitated in my previous places of work similar to this plant that we are revamping here. So, you can say that I got a lot of exposure and experience in carrying out operations of this kind and it will interest you to know that I have successfully revived moribund plants like this one in the past. The current task is no different from those I have handled before. In all, I see a lot of opportunities as well as challenges in reviving this plant. What is your educational background? In terms of professional experience, I have been in the steel industry for the past 29 years. I attended one of the reputable institutions for my university degree. I did my MBA in the UK. This firm used to be known as Delta Steel Company and now Premium Steel and Mines Limited. What has changed from the time you started operation till date? I don’t know much about the Delta Steel Company and how it was managed back then. But what they have done reminds me of businesses owned by the Federal Government of Nigeria. The way the plant was left alone was pathetic, and definitely things did not go down well at that time. Some years later, it was taken over by the Global Steel Limited. The firm had another challenge as it was again stopped in 2011/2012, and then, the plant remained idle for the next 5 years. We took over this plant in 2015 and it started operations in March 2018. Are you satisfied with the level of success recorded so far? Looking at the challenges we had when we took over this plant and what we have done today, I think we have verifiable achievements which would not have been possible without the support of AMCON that really guided us and stood with us in every challenge. What we met on ground here was that there were no employment opportunities for the youth in the host communities numbering about 32. In terms of business opportunities, there was nothing on ground, so we came up with this idea that if we revamp this plant and we carry all the host communities along with us on our road path, then that will bring a lot of changes in this place because I believe that you cannot pursue developmental projects lie these in this place until you carry the communities along with you in terms of sensitization. And of course, it is part of our responsibility to see that the communities cooperate fully with us. How did you acquire this plant?

Is it through a partnership agreement, wholly owned by you or you have many shareholders? Ok let me tell you. The same plant has passed through two transitions in 2004 when Global Steel Holdings took over, and at that time it was 80/20. That is, the 80% was for Global Steel Holdings and the 20% was for the government. Now, when Global Steel Holdings defaulted by not paying several Billions of Naira, it was AMCON who rescued the various banks. AMCON then thought that they would be able to sell it, started bidding for this plant and we were the highest bidder, so we took over this plant from AMCON. Where are you taking this company to in the next 5 years? That is a very good question and you are the very first person that asked for our projections for the next 5 years. It is always good to understand that steel needs a gestation period because steel is not like any other trade or business where you start the business today and tomorrow you start making profit. That does not happen in steel. Steel needs a lot of preparation and a lot of investments, and subsequently it takes its own gestation period and then it moves forward and there will definitely be a time where you start getting the benefit of investing in a steel plant but not immediately. So we try to do a backward integration process, where the integration process means what comes last, that means we have started the rolling mill and after the rolling mill, we are going to start the Comcast machines. Now we have completed the phase one which is to be followed by phase two. Now, we are buying billets and later we will able to make our own billets and here the whole integrated plans will start. So that is very important to start as we have many clear goals of what we are going to do in the next 32 months. We have already signed contracts with one of the companies from Italy. A major ingredient in the contract is that the company will buy all the equipment from Europe. We have already place the order and may be in the next 6 months, the company will come here and start doing erection and everything, and then we can say that we have our own billets. Since we had just got 3 mines, we are going to start the mines and the basic concept is that in 2020, we would have perfected the steel policy which was done after the President Buhari took over. Then, making our own steel would have been ingrained in the Nigeria steel policy, which implies that you do everything by yourself, from the iron rod you can make the pellets and from pellets you can make your own bearing and from there you can have steel and from steel you can make billets. In India, everything is there, we have a lot of integrated plants and I got lot of exposure and experience working in these plants and this helps a lot. This is what we are going to do in the next 32 months. On the way forward, we are going to have our own billets and our mines here in Nigeria.

left us. So we have to improve on skill development and we have to send them for training so that they can have right skill. I forgot to mention that in terms of challenges we need the government to give us some support particularly when importing our equipment. Unless there is support from the government to the manufacturing firms in the steel industry, sustainability will be difficult because of the various cost factors. What type of support does your plant need from the government? Steel is a power intensive company, the power sources that we have now is based on electricity. We need more of electrical energy connections, at a low cost. If the government can help us to get electricity at a low cost it will be better. Also we need gas; we need to be gas-based industry for us to be able to take advantage of all the opportunities that are available.

When do you see yourself taking your products to the market? Our products have already gone to the market; we are producing a very special grade called BS triple 49 grades that are of good standard, even as we have many plants in Nigeria. Up to 24 steel plants and steel rolling mills are in Lagos and around 5/6 steel rolling mills here and there but none of them have integrated process to produce a very qualitative finished goods. So this is first of its kind in the history of Nigeria that such an integrated plant is going to operate fully and we are going to have these products, a very specific product. But today, I may not be able to sell through and make any margin because we are buying billets but when we go for the next step, it will be more sustainable. We need to make this plant sustainable and to make this plant sustainable we have to go to phase 2 and then phase 3. We should not stop in the phase 1 which we have completed. Would you have completed the first phase without AMCON’s support? You are absolutely correct that without

AMCON’s support, this project would not have been successful and only we and AMCON know the challenges on ground as per how much liabilities were there, especially liabilities with the labor, gas company, electricity providers, and everywhere. So you cannot start up with this plan until you get full support from companies like AMCON. Secondly, they have trust in us that yes this people can do it and they understand us. It is not like they left us alone; they have been with us in the whole process and have been visiting on and off. They see our progress and started believing that yes we can do it. Otherwise, it is very difficult that you buy or acquire a plant with some transaction and you think you are going to do it by yourself, you cannot. It is because you will get challenges not only from within the company but you will also get challenges from the federal government, in terms of debts and liabilities. It was AMCON who supported us in terms of closing up the liabilities, when everybody in Nigeria did not believe that we would come up with this plan, AMCON believed us that yes we can and that is the most admiring thing for us as investors and for all the employees

here, that yes this plant can come up and the people believe that we can do it. How do you describe the size of the Nigerian steel market? Nigeria imports about 1.78 million tons of steel per annum and we target to capture at least 15% of those imports in the next 2 years. Doing that means we are going to help or take pressure off our foreign exchange in this country. By opening up this plant you don’t think from the economic point of view alone, you also think from the social point of view. This plant was abandoned but it is coming back to life. First, this helps socially as it will create jobs and also benefits the host communities, and second, the moment it starts producing and we start selling we are going to pay our taxes to the government. So both the states and federal government are going to benefit. There are various ways the plant will benefit everyone because as we move forward with our projects, it is going to help both sides and the moment the whole plant starts working, we are going to save a lot of foreign exchanges for the economy. What are the major challenges that you see in Nigeria? I believe in the products that we have. But when

we started going to the market initially, there were hiccups and a lot of challenges. There has been some mushroom growth of steel rolling mills in Nigeria as a result of some investments in steel rolling mills because Delta Steel Complex was in declining phase. Now I’m telling you as new spillers came up, all these people are feeling unsecured so they try to do everything to curtail our growth and progress in the market, but such attempt will short live. Of course, they will not relent but definitely we are going to overcome these challenges especially with a good focus on quality, customer satisfaction, and giving the right products to the customers. Do you have challenges in getting required manpower? The total number of employees that we are going to take for this plant direct and indirect should be about 5,000. Definitely you will have challenges but you know you will have to plan the training for them and we have already planned all those things. Right now, we have taken some people and we hope to send them abroad to get them trained for this. There are some people that have been here since 1982, and there are some people who have received trainings in Germany and some people have

What impact do you think this company can make on the Nigeria economy when it becomes fully operational? Oh tremendous! I cannot but think about it actually because, we cannot say for sure the exact number of the jobs that will be created because when the whole plant will be up and running we are of the view that the entire process can create about 100,000 job opportunities, and the next 4-5 years will be good enough for that. So the future is entirely bright. I just went through an article which revealed that from 2010 to 2016, Nigeria spent around N450 billion on importations of these goods. How do you intend to address the issue of power? I think the power crisis is complex. We need to really streamline this power thing and if this power is to be made available then government needs to be ready. We need a top-down approach to improve the ease of business. If someone is coming from another country to Nigeria to do business, then there has to be ease of doing business. You will find it on the papers but the ease

of doing business is not really on ground as much as an average investor would have expected and this is what we all suffer. The government has to streamline its functionalities to see that the industries are getting power. We are ready to tap the power only that it is a little more complex but we have to make it more simple and accessible. What lessons would you bring to Nigeria from India in terms of steel development? Steel development in Nigeria is very less at around 10-15kg, whereas the global standard is about 240kg, and even India is still lacking behind at about 180kg. China is doing excellently in steel so if you look at it that way there are lots of opportunities for steel development in Nigeria. The only thing is that we have never focused on diversification because we have all along not looked at the economy beyond oil and gas let alone of steel, manufacturing, or mines. Look at the mines in Nigeria they have not been developed as most of them are virgin mines. But if you go to other countries like China and India, they have all exhausted their mines, why because they have been producing steel so this gives more sustainability and here we are importing everything. We should try and produce as much steel as possible in Nigeria instead of focusing on importation. Let’s us implement zero importation policy on steel and let us look at a brighter future in terms of getting everything done in Nigeria. We have mines here, they can be developed with technology and those products of low quality can be made of better quality, we can improve on few contents because the same iron concentrate can be used to produce pellets. What do you think Nigeria should do about the Ajaokuta steel? I was in Ajaokuta for a day, and when I was coming out of the plant, I felt like weeping because, such a good plant in such a good place that spreads across such a big area is not contributing

meaningfully to the economy of Nigeria? Everything is there at Ajaokuta Steel Plant. If you cannot start working on the whole plant, why not consider working on its smaller parts and start working on those. Everything is possible because a lot of companies can take up the challenge and start working on the smaller parts. What the government needs to do is make this place open. We are talking about high unemployment rate in the country, and look at the Ajaokuta plant, if it works optimally unemployment problems will be over. What is the worth of this company? To set up 1 million tons plant you will have to spend about $1 billion. Suppose we are going to make this plant with all this equipment supplied by a European company, and to make this plant anywhere in the world you will spend about $1 billion and is huge money. As per our plant, when it starts running, we are committed to running the whole facilities in the next few years. What style of leadership are you using in maximizing the potential of the people in this organization? I take things a bit more aggressive in place like Nigeria and my staff and colleagues know me. You need to be very aggressive at the same time you need to test your people as you need to delegate. You need to be collaborative as well as aggressive. These are the two leadership styles that are going to give you a much more dividend in the long run. What legacy do you want to leave behind by the time you leave this office? I want to make the people in this place feel more reliable towards this business because we lose focus normally when you are dealing with steel, because you feel it is not going to give me any business sense. Today, if you talk to somebody in NDC or NNPC, they are more comfortable than the employees or investors in

the steel. So, it is high time that the government should be forthright in supporting the manufacturing sector like steel and government should know that it is high time they diversified the economy. And having worked in company like Aso Limited which has almost about 100/200 plants around the world, so it is possible as steel gives a lot of benefits but there is a gestation period and there is a cyclical time. In one particular second, it gives a lot of benefits and at another time you have to curtail your cost. So, I want to say that it is time we diversify and change our focus from oil and gas to steel. There is a lot which we can do. Some of our national assets have already been converted into monuments and it is not too late that we start working on these monuments and then convert them back into reliable assets. And then the same asset will start giving benefits. Throughout the last 29 years of my steel experience, we have seen how the plant comes up. We have revamped plants in Europe which we operated for 17 years. We are talking about Ajaokuta not being run for so many years but still it is possible to revamp it. We have the conviction that this plant, even if it is not being run for so many years, it can be made to start running. And the people are good as there are so many potential in the people. Yes, there are challenges in the skill level but you have to spend money on training. The same employees in this company went to Indian and Germany for training. We will do the same thing just for the purpose of phase 2 or phase 3. So, I want to leave a legacy in which people should have a very clear understanding that whatever they don’t produce today will be produced someday in Nigeria and whatever they manufacture today will also be manufactured in Nigeria. Today we import everything. If I am looking for a small stainless steel bowl I will import it, why? We are indirectly importing poverty.

BUSINESS DAY

Tuesday 19 June 2018

C002D5556

BUSINESS DAY

Energy Report Oil & Gas

Power

Renewables

Environment

Egina: biggest Offshore Loading Terminal (OLT) - Buoy … as Total is pushing the boundaries of Local Content OLUSOLA BELLO

veon Offshorehas recorded a new Nigerian Content feat with the fabrication of the biggest Offshore Loading Terminal (OLT) Buoy ever made in Nigeria and the first to be delivered ahead of schedule and launched on a dedicated slid way. The equipment was commissioned in Port Harcourt, Rivers State by both Simbi Wabote, executive secretary, Nigerian Content Development and Monitoring Board (NCDMB and Nicolas Terraz , managing director of Total Exploration and Production Nigeria. It will be used to offload crude oil from the Egina’s Floating Production Storage and Offloading vessel. Wabote who spoke at the event and commended Aveon Offshore for another sterling execution of a project. “With an assemblage of over 1,300tonnes of steel for this buoy, I am happy you did not cave in under the

weight of the challenges but you have once again proved your mettle.” He noted that many other Nigerian service companies performed creditably on different scopes of the Egina deepwater project. “This flagship project has provided a good opportunity for Nigerian companies to demonstrate their capacity and maturity since the enactment of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act in 2010.” He further

charged Nigerian oil and gas service providers to always deliver on any project they are contacted to do. “It is one thing to win a contract; it is another thing to deliver the contract scope timely and safely.” He also expressed hope that future projects such as Zabazaba, Bonga South-West, Ekike, Owowo and others would utilise the capacities already developed in meeting and exceeding the Nigerian Content targets stipulated in Nigerian Content Act.

The Executive Secretary commended Total for their wonderful disposition towards the development of Local Content in the Nigerian oil and gas industry. “Total remains at the forefront of pushing the boundaries of the local content practice and we are proud of the various Nigerian Content achievements under the Egina project despite the initial challenges.” O t h e r o p e rat o r s, h e counselled, should adopt a similar attitude in the deliv-

ery of their projects, focusing on what can be done to comply with the law rather than looking for ways to circumvent the provisions of the law. On the need for new projects to sustain the capacities that have been developed, Wabote said the Board was working closely with the National Petroleum Investment Management Services (NAPIMS) so that new projects can come on stream quickly. Nicolas Terraz, managing director of Total while speaking confirmed that “this is the first Turret Buoy designed in Nigeria with inservice replaceable wheel bearing system.”He emphasized that the project achieved approximately two million man-hours with Zero Lost Time Injury (LTI). “For Total, safety is a core value because we believe that nothing can truly and sustainably be achieved in our industry without an unconditional respect for the highest safety standards.” Janborre Sannaes, Vice President of NOV APL - the main contractor to Total on the project, stated that 98 percent of the engineering

on the OLT buoy was executed in Nigeria while the project management and procurement were also managed in-country. He asserted that the newly constructed slid way would serve many other projects. Earlier in his comments, Tein George, chairman of Aveon Offshore, disclosed that the company had no prior experience on a similar project but NOV APL and NCDMB gave their backing and Total got convinced to have the company execute the fabrication of the buoy. He also pleaded with the Federal Government and the international operating companies to approve new projects to ensure that the skills that were acquired and facilities developed on the Egina project would not be lost. He also asked the executive and Legislative arms of the Federal Government to clarify the fiscal terms in the Petroleum Industry Bill (PIB), noting that many operating companies were delaying new investments because they want to be sure of the new terms that would determine the viability of their investments.

ket, perhaps in September. This the CNBC says aligns with the view at RBC Capital Markets, where Global Head of Commodity Strategy Helima Croft also sees OPEC erring on the side of caution with a 500,000 bpd bump. She thinks OPEC will sig-

nal a strong willingness to take further action, but she remains wary of tensions ahead of the meeting. “Nonetheless, we could envision a scenario where the meeting proves to be so antagonistic because of deep divisions over production and sanctions that they fail to reach a consensus, leaving big producers like Saudi Arabia and Russia to act on their own,” RBC said in a research note. Michael Cohen, head of energy markets research at Barclays, also told CNBC that this scenario would push oil prices into the $80$85 range, but he thinks the scenario is unlikely. He forecasts OPEC will increase output by 700,000 to 800,000 bpd through the end of the year. If that happens, Barclays would stick to its view that Brent will average $70 a barrel this year and $65 next year.

Whispers of easing OPEC cuts clouds June 22 meeting ISAAC ANYAOGU

arket watchers are of the opinion that OPEC and other exporters including Russia appear poised to ease voluntary production limits, which have helped shrink a global oil glut since they went into effect in November 2016. The production cap deal is set to expire at the end of the year but rising prices which rather than being precipitated by higher demand is largely fuelled by geopolitical risks including the US withdrawal of the Iran nuclear deal have forced producers to consider an early exit. According to the deal, OPEC and other producers agreed to keep 1.8 million barrels a day off the market, but to ramp up oil prices,

prolific producers including Saudi Arabia and Russia have actually been cutting deeper than that. O P E C m e e t i n g s a re closely watched because the cartel pumps about 40 percent of the world’s oil, so its policy decisions can have major implications across the energy mix globally. At the June 22 meeting billed to be held in Vienna, Austria analysts expect the public bickering to continue as countries try to negotiate the best possible deal for their country. While OPEC has capped Nigeria’s production at 1.8million barrels following production recovery, Nigeria has not been able to pump up to the allowed quota. According to a publication of the ministry of petroleum resources, Nigeria produced 1.8m barrels of crude oil per day in May but this includes

condensate. However, analysts are optimistic that the group will nevertheless reach a deal to begin easing the production caps — and any increase will likely be relatively limited and gradual. Ed Morse, Citigroup’s

Olusola Bello, Team lead, Analysts: Kelechi Ewuzie, Isaac Anyaogu, Graphics: Joel Samson.

head of global commodities research, told CNBC that the Saudis, along with Kuwait and the United Arab Emirates, will likely push for a hike of 500,000 barrels per day, leaving another half a million barrel increase until a future review of the mar-

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378; +234-8036534708

BUSINESS DAY

C002D5556

Tuesday 19 June 2018

Energy Report

World oil market prospects for the second half of 2018 OLUSOLA BELLO with agency report

ecent developments in the oil market have led to pronounced uncertainty about the second half of the year. Year-to-date (y-t-d) at the end of May, crude oil prices are 30% higher than in the same period last year, with ICE Brent averaging above $70/b for the first time since 2014. Draws in crude oil inventories, healthy oil demand and geo-political developments have supported this rising trend. NYMEX WTI futures also rose to average $65.09/b during this time, but were trailing other markets due to high US oil production as well as the strengthening of the US dollar. Recently, crude oil futures have lost some momentum amid uncertainty as traders prepare for potentially more supply returning to the market. Global economic activity has slowed in 1Q18, with growth below expectations in the major OECD economies. The global growth forecast for 2018 remains at 3.8%, with a pick up expected in the second half of the year, led by the US, whose economic performance will be supported by the fiscal stimulus measures. Moreover, Japan and the Euro-zone are projected to accelerate in 2H18, following a slow start to the year. While the OECD shows upside po-

tential, the major emerging economies will likely slow from relatively higher activity in 1H18. China is expected to continue financial tightening, which combined with monetary measures in the US, could dampen growth in 2H18. India is also forecast to show lower growth in the second half of the year, after a strong recovery during 1H18. Brazil and Russia are pro-

jected to remain stable in 2H18, subject to short-term commodity prices and political developments. Moreover, the re-emergence of global trade barriers, continued growing debt levels and potentially rising volatility in asset markets amid ongoing monetary tightening, are some of the challenges that may negatively impact the 2H18 growth dynamic.

Turning to the oil market, global oil demand growth is anticipated at 1.61 mb/d y-o-y in 2H18, with total oil consumption projected to surpass the 100 mb/d threshold during 4Q18. In 2H18, OECD countries are projected to sustain the positive momentum with most of the growth seen in OECD Americas, mainly supported by a healthy US economy. OECD Europe is forecast

Stakeholders lament Nigeria’s lack of significant savings from oil

Clement Isong becomes executive secretary of MOMAN,as Olawore retires

ajor Oil Marketers Association of Nigeria (MOMAN), has appointed a new executive secretary. His name is clement Isong who will be taking over from Thomas Olawore who has held that position for 17 years. Clement Isong, an equally experienced industry professional who previously plied his trade at Total where he held various Senior Management positions across the Company’s Africa operations from Nigeria to South Africa before taking up this new appointment as the Executive Secretary of MOMAN. Speaking on his new role, the new MOMAN boss said the fact that Obafemi Olawore’s strides and achievements over the years creates a strong launch-pad for the next phase of the history of the Major Oil Marketers Association of Nigeria and chal-

lenges him as the incoming executive secretary of the organisation to, not only preserve the organisation’s enviable legacy, but to also up the ante in the quest of creating the right policy and market environment for the Downstream Oil and Gas sector in Nigeria. Having mounted the saddle as the first executive secretary of MOMAN at a time of great uncertainty, Thomas Olawore was able to advance the objectives of the organisation while championing its position at major policy dialogue sessions. It is on record that he

acquitted himself well on the job, liaising with all the major regulatory Organisations, such as DPR, PPPRA, PEF and others supervising the operations of the downstream as well as forging alliances with other industry groups on critical industry positions. A firm believer on the need for a deregulated downstream, as opposed to operating in a subsidy regime where the government dictates prices, Olawore believes that Nigeria needs to borrow from successful market and competitive models,where the market dictate prices and

Obafemi Olawore

Clement Isong

to continue to show steady oil demand growth, largely driven by middle distillates. Non-OECD countries are again projected to lead oil demand growth with 1.28 mb/d y-o-y in 2H18. Growth is mainly focused in China, in the transportation and industrial sectors. The steady economic development in most Other Asian countries, including India, will also con-

tribute. While oil demand in the US, China and India shows some upside potential, downside risks might limit this potential going forward, including a slowdown in the pace of economic growth in some major economies, stronger impact of policy reform with regard to retail prices, and further substitution toward natural gas. Meanwhile, non-OPEC oil supply in 2H18 is anticipated to increase by 2.0 mb/d y-o-y. The US is the main driver, contributing 1.4 mb/d to growth, followed by Canada and Brazil. Non-OPEC supply growth is forecast to show further upside potential for the rest of the year, due to higher drilling activity in the US, more new project start-ups in Brazil and possibly higher output following the end of heavy maintenance at upgrading facilities in Canada. Given the Secretariat’s forecast for 2H18, demand for OPEC crude is projected at 33.3 mb/d, down by 0.5 mb/d from 2H17. However, looking at various sources, considerable uncertainty as to world oil demand and non-OPEC supply prevails, leading to a wide forecast range for demand for OPEC crude of around 1.8 mb/d (Graph 2). This outlook for 2H18 warrants close monitoring of the factors impacting both world oil demand and non-OPEC supply that will shape the outlook of the oil market going forward.

competition raises value and innovation to the benefit of the consumers. In his job as executive secretary of MOMAN, Olawore had severally canvassed the need for the liberalization of the downstream sector of the Nigerian Oil and Gas Industry by pointing to the progress made in the Telecommunications industry following its liberalization, with tele-density growing from about three hundred and fifty thousand fixed telephone lines to well over one hundred million fixed and mobile lines in less than a decade. In the same vein, he had continuously pushed the position that the liberalisation of the downstream will further expand possibilities for both players and consumers, as it will engender a competitive regime which will boost industrial production, maximize domestic consumption and positively affect the macro economy.

OLUSOLA BELLO

articipants at a recent roundtable on saving and stabilization mechanism say Nigeria requires improved legal, policy and advocacy frameworks for the Excess Crude Account (ECA) and other Stabilization Funds to be more effective and beneficial to citizens. They stated that every Nigerian has a responsibility to engage the Federal Government on this. Resource persons and participants drawn from the Executive and Legislative arms of government, oil industry players, financial, investment and economic analysts, public policy analysts, civil society organizations (CSOs), development partners and the media expressed disappointment that despite an estimated trillion plus dollars in oil revenue, Nigeria has no significant savings nor have we translated these earnings to productive capital through human development, physical infrastructure and institution building. According to some of the

observations they made: “Nigeria has gone through five cycles of oil booms. During these periods, Nigeria earned a conservative estimate of over one trillion dollars in oil revenue but made no significant savings, nor have these earnings translated to lasting and productive capital through human development, physical infrastructure and institution building”. The huge revenue from oil they said has not translated to real improvement in the welfare of citizens. According to the National Bureau of Statistics, Sixty per cent (60%) of the population still live below the poverty line, adding that corruption, mismanagement of oil reserves and lack of diversification in the export sector all have an important role to play in our slow economic growth and high poverty levels. They also lamented that appropriations from the Excess Crude Account had previously gone through the FAAC, but in the past 3 years, however, this does not seem to be the case. Withdrawals from the ECA are not disclosed to the FAAC even when appropriately documented elsewhere.

BDTECH

BUSINESS DAY

Tuesday 19 June 2018

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Indigenous online market place, 1Market debuts in Nigeria …registers 170 manufactures in two months Stories by JUMOKE AKIYODE-LAWANSON

Market.ng, an online market place that deals exclusively with made in Nigeria products ; an innovation which is bound to make local manufacturers heave a sigh of relief, launched in Lagos on Thursday 14 June 2018. 1Market.ng is a pioneering Business to Business (B2B), Business to Customers (B2C) online marketplace seeks to bridge the gap between global buyers and African suppliers (manufacturers) starting with Nigeria and aims to create an accessible ecosystem for showcasing, promoting and selling exclusively Made-in-Nigeria Products. With a mission to become the market leader in online promotion and sales of Made-in-Nigeria products, 1Market.ng says it intends to bring together from all over Nigeria the manufacturers and distributors of Made-in-Nigeria products on a single platform and allow Nigerians and other international consumers access to these products in large scale and at affordable prices. An initiative of Hi-Impact

L-R : Nwachukwu Henry,head of business development and stratagy, 1Market.ng; Alice Umoh, managing director, Switbud Global Services; Iheanyi Enyika, project manager, 1market.ng; Teju Bolujowo, managing director / CEO Ruchim Limited and Olasumbo Ibironke Ambali, head, business support and administration, 1market. Ng at the unveiling of 1market.ng platform in Lagos on Thursday June 14, 2018.

Solutions Limited, the 1market.ng platform was birthed to solve sales problems for Nigerian manufacturers/producers as well as create an enabling community of both online and offline entrepreneurs, where buyers around the world connect with Nigerian creative designers, sell-

ers and services to shop for quality and unique Nigerian-made products. Being a virtual market place, it was set up to give a face to the macro and micro producers/ business owners, provide opportunity for young aggregators, accelerate the growth of their com-

panies and expand the reach of their medium enterprises by giving them a state-of-the-art platform to showcase and sell their goods at minimal costs, bringing to the world the best of Nigeria most never knew existed. Speaking at the launch event, Ifeanyi Godson Enyika, project manager/founder of 1Market.ng said that customers’ interests are protected as “we try as much as we can to make sure that each product on the platform is certified by the necessary regulatory body, this is to ascertain that all products meet the required standard “. Enyika also expressed his belief in the need for government support as the platform is designed to promote sales for Nigerian manufacturers and ultimately grow the economy. He noted that “1Market signs up manufacturers irrespective of business size, as long as they are capable of producing good quality made-in-Nigeria products” Nwachukwu Henry, business development and strategy said that “although it is an imperfect system, the process is put in a way that it is efficient and sustainable.” Laying emphasis on the secu-

rity of the platform, Henry stated that a lot of measures have been taken to make sure buyers as well as vendors will not have issues pertaining to the security of transactions carried out on the platform. Having registered over 170 manufacturers with over 1,700 products within 2 months of pre-launch, 1Market.ng has developed a range of strategic and visionary engagements with manufacturers and different Associations of Nigerian Manufacturers and certified by Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) Having put together a team of professionals with vast knowledge and dynamic understanding of e-commerce industry, the 1Market.ngvalue proposition includes helping manufacturers reach new partners and distributors, execute bulk sales as well as make logistics affordable. According to the company, customers are not left out as 1market aids customers get genuine products directly from the manufacturers at cheaper rates; make bulk orders as well as making customers’ orders and purchases.

Doogee enters Nigeria’s mobile market with 5 new smartphone devices

oogee mobile, a Chinese smartphone supplier with branch companies and factories in Eastern, Western and North Africa, as well as a strong presence in Europe and South-East Asian markets has launched five futuristic android smartphones into the Nigerian market. The company recently introduced its Mix, BL, S, X and Vs series which are all ultra-modern and cost effective smartphone devices through Doogee Mobile Technology Nigeria Limited, its Nigerian subsidiary. Gbenga Ayodele, director, business development/technical, Doogee Nigeria said the technology which has been successfully

tested in Europe, North and South America, Middle East, Asia, Africa and others, strikes a balance between work and play, enabling people to achieve more than what they thought possible on a smartphone. “Life moves faster than ever now, technology is fleeting, so, Doogee smartphones are created to help users get things done easily, fast as possible wherever, whenever,” Ayodele said. Tech enthusiasts commend the efforts of Doogee to ensure innovation at its best with its Mix, a phone which features an edge- to- edge screen on its four sides, dual cameras and similar features to top of the range smartphone devices including the new Samsung Devices

and Apple’s iPhone X, even though it is a budget phone. Giving details on phone specifications, Ayodele said; “Doogee Mix series are budget Full-Display smartphones consists of Mix2 (full display, 5.99” bezel-less 18.9 aspect ratio where metal and glass are fussed uniquely for a stunning display of 1300 wide angle camera for a group selfie with 16MP + 13MP dual cameras. 6GB RAM + 128GB ROM, powered by 4060mAh polymer Li-on battery.” “Doogee Mix3 comes with 3600 rotatory camera while mix4 embed snapdragon processor for the first time which indicates gaining some traction in Western, Asia and Africa market mostly Nigeria where snapdragon processors are

well cherished. Despite the state of the art features embed in Mix series they are produced at budget price range. Other smartphones in the Mix series includes Mix, Mix Lite and Mix2 while Mix3 and Mix4 soon to be released to the market globally.” Unstable power supply, one of Nigeria’s biggest problems has also been taken into consideration, as Doogee BL (Be long time, Be Long to You) is said to have a Guinness Record Breaking 12000mAh battery. Android 7.0, the biggest battery smartphone in the world lead the pack with incredible battery capacity: 1000 hours of standby, 90 hours of calling, recording 45.2

hours, music playing 50 hours, video playing 25 hours, gaming 23.5 hours and internet surfing 33.2 hours. Built with dual cameras 16 OMP+13OMP and 1300 wide-angle lens. In the new screen of 18.9 aspect ratio in BL12000, you can enjoy wider view that improves your gaming, video playing and operation experiences. It’s available in two versions BL12000 and BL12000 Pro. “Doogee S series come in four products S60, S50, S30 and S60 Lite. Doogee S60 is a perfect outdoor companion. It is currently tagged as “flagship rugged”, large, heavy, rugged and sturdy. Doogee Nigeria has different series now available for sale in Computer Village, Ikeja-Lagos.

BUSINESS DAY

Tuesday 19 June 2018

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

How Africa can embrace an AI-enabled future ADE AJAYI, director marketing & operations, Microsoft Nigeria

t is no longer news that Artificial Intelligence (AI) will be a driving force behind the Fourth Industrial Revolution, with the global economic returns of this revolution expected to be in the region of about $16 trillion. Along with these returns, AI is also expected to create 2.3 million new jobs by 2020, according to Gartner. However, if we look at previous revolutions, history shows us that these revolutions have always been accompanied by a brief transition of temporary job loss followed by a period of recovery where job creation moves into more positive territory. This means that we all need to take steps now to prepare AI in the future. Leapfrogging aboard the AI train Currently, no African country is among the top 10 countries expected to benefit most from AI and automation. But, the continent has the potential to catch up with the rest of world if we act fast. To play catch up, we must take advantage of our best and most powerful resource - our human capital. According to a report by the World Economic Forum (WEF), more than 60 percent of the population in sub-Saharan Africa is under the age of 25. These are the people who are poised to create a future where humans and AI can work together for the good of society. In fact, the most recent WEF Global Shapers survey found that almost 80 percent of youth believe tech-

Ade Ajayi

nology like AI is creating jobs rather than destroying them. Staying ahead of the trends to stay employed AI developments are expected to impact existing jobs, as AI can replicate certain activities at greater speed and scale. In some areas, AI could learn faster than humans, if not yet as deeply. According to Gartner, while AI will improve the productivity of many jobs and create millions more new positions, it could impact many others. The simpler and less creative the job, the earlier, a bot for example, could replace it. It’s important to stay ahead of the trends and find opportunities to expand our knowledge and skills while learning how to work more closely and symbiotically with technology. Another global

study by Accenture, found that the adoption of AI will create several new job categories requiring important and yet surprising skills. These include trainers, who are tasked with teaching AI systems how to perform; explainers, who bridge the gap between technologist and business leader; and sustainers, who ensure that AI systems are operating as designed. It’s clear that successfully integrating human intelligence with AI, so they co-exist in a two-way learning relationship, will become more critical than ever. Combining STEM with the arts Young people have a leg up on those already in the working world because they can easily develop the necessary skills for these new roles. It’s there-

fore essential that our education system constantly evolves to equip youth with the right skills and way of thinking to be successful in jobs that may not even exist yet. As the division of tasks between man and machine changes, we must re-evaluate the type of knowledge and skills imparted to future generations. For example, technical skills will be required to design and implement AI systems, but interpersonal skills, creativity and emotional intelligence will also become crucial in giving humans an advantage over machines. “At one level, AI will require that even more people specialise in digital skills and data science. But skilling-up for an AI-powered world involves more than science, technology, engineering and math. As computers behave more like humans, the social sciences and humanities will become even more important. Languages, art, history, economics, ethics, philosophy, psychology and human development courses can teach critical, philosophical and ethics-based skills that will be instrumental in the development and management of AI solutions.” This is according to Microsoft president, Brad Smith, and EVP of AI and research, Harry Shum, who recently authored the book “The Future Computed”, which primarily deals with AI and its role in society. Interestingly, institutions like Stanford University are already implementing this forward-thinking approach. The university offers a programme called CS+X, which integrates its computer science degree with humanities degrees, re-

sulting in a Bachelor of Arts and Science qualification. Revisiting laws and regulation For this type of evolution to happen, the onus is on policy makers to revisit current laws and even bring in new regulations. Policy makers need to identify the groups most at risk of losing their jobs and create strategies to reintegrate them into the economy. Simultaneously, though AI could be hugely beneficial in areas such as curbing poor access to healthcare and improving diagnoses for example, physicians may avoid using this technology for fear of malpractice. To avoid this, we need regulation that closes the gap between the pace of technological change and that of regulatory response. It will also become essential to develop a code of ethics for this new ecosystem. Preparing for the future With the recent convergence of a transformative set of technologies, economies are entering a period in which AI has the potential overcome physical limitations and open up new sources of value and growth. To avoid missing out on this opportunity, policy makers and business leaders must prepare for, and work toward, a future with AI. We must do so not with the idea that AI is simply another productivity enhancer. Rather, we must see AI as the tool that can transform our thinking about how growth is created. It comes down to a choice of our people and economies being part of the technological disruption, or being left behind.

Design at the core of itel’s new A-series smartphone JUMOKE AKIYODE-LAWANSON

tel mobile has again strengthened it’s A series portfolio, with the launch of yet another stunning smartphone, itel A32F. Sporting a beautifully crafted metallic unibody design with 5.0” inch FWVGA big screen display, this latest device is said to be itel’s entry-level first fingerprint smartphone. The rear mounted multifunctional fingerprint scanner offers more than just unlocking the device speedily or answering calls, taking pictures or quick launch apps in 0.2 seconds, it actually allows users to program up to eight fingerprints while carrying out all these functions. Itel A32F runs on the latest Android™ Oreo™ Sys-

tem (Go edition) operating system. This upgraded OS comes with new and reimagined Google apps such as the YouTube GO and Google GO which enhances faster browsing while using less data. All these are tailored towards giving users a smoother and faster smartphone usage, while saving data and managing storage capacity. Other features include 1.3GHz quad-core processor for easy multi-tasking, 1GB of RAM + 8GB of ROM, expandable up to 32GB, 5MP + 2MP rear and selfie camera and a 2050mAh battery capacity with fast support charging. The itel A32F is available in retail and online stores across the country with an affordable price tag of N20, 500.

Komputer Village Magazine to showcase Nigeria’s largest technology market

omputer Village Magazine is launching July 1, 2018 in a pioneering drive to introduce a dedicated publication promoting Nigeria’s largest technology market, Computer Village, Ikeja located in the heart of Africa’s emerging smart city, Lagos. Technology Times Media Limited (TTML), owners of Technology Times, iSpace Magazine announced that the monthly Komputer Village Magazine is the latest addition to its print, digital, internet and events properties focused on promoting Nigeria’s rising contributions to the global information and communication technology (ICT) industry. Shina Badaru, founder of Technology Times, who announced the introduction of Komputer Village Magazine during a courtesy visit to the Computer and Allied Products Dealers Association of Nigeria (CAPDAN), the umbrella body for the market, says the publication fills a needed gap to showcase and promote entrepreneurship, innovation and consumer technology trends from inside Nigeria’s largest technology market. “We are pleased to launch a fully dedicated publication that showcases the very best of Computer Village, which is the largest technology market in Nigeria and also the hub of a thriving technology SME ecosystem that shapes and defines consumer technology trends across Nigeria, West Africa and beyond.” Komputer Village Magazine will be available in hybrid of print and digital issues to be distributed across Nigeria, Africa and beyond, says Badaru while briefing the top-level CAPDAN leadership that received the TTML management team during the courtesy visit. The CAPDAN executive team included Ahmed Ojikutu, president, CAPDAN; Boniface Aniah, vice president, CAPDAN; Shedrack Egbule, general secretary, CAPDAN and Ibadan Presley, assistant PRO, CAPDAN. According to Badaru, “Komputer Village Magazine’s unique development journalism-meets-industry news hybrid is intended to appeal to the mix of technology professionals, mobile phone and cutting-edge consumer technology enthusiasts, banks and financial services industry, SME policy makers, entrepreneurs and technology innovation lovers.”

BUSINESS DAY

Tuesday 19 June 2018

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Creative entrepreneurship education as option for economy growth Stories by KELECHI EWUZIE

espite parading a diverse mix of talented youths, Nig e r ia st i l l grapples with the hydra-headed monster of inadequate management, entrepreneurial and technical skills that will set the stage for tomorrow’s leaders. Today, latent but unmarketable skills have left many youths unemployed; while some of their underemployed counterparts have become square pegs in round holes. Experts foresee that in the long run, this state of affairs will have dire implications for Nigeria, which needs a pool of confident graduates with the entrepreneurial skills to make ends meet in the event that employment is not immediately available. Worried by this development, concern stakeholders in both the public and private sector have called for manager of the economy to move away from mere political rhetoric and invest in measures that would develop budding creative talent, identify best practices in skills and education.

George Ikpekhia (middle), president, Rotary club of Maryland flanked by Ogunbadejo Adewale (L) district governor, Rotary club of Maryland, Ikeja district 9110 and Abiodun Oni, (R) representative of the governor of Lagos State at the presentation of the newly built classroom blocks to Local government primary school Isan, Epe

Industry experts in human resources management and education opine that if the right investment is place on entrepreneurship education path is followed; it will ensure a better shaped creative economy for Nigeria. We need a broad, flexible and motivating education that

recognises the different talents of all children and delivers excellence for everyone says Steve Mofitt, CEO, New Direction, London. According to him, “If we are to prepare adequately for the 21st century, we will have to do more than just improve literacy and numeracy skills,

Mofitt, while commenting on the 21st century curriculum that will be more economically rewarding, recommended the rebalancing of school policies from ‘academic discipline’ to a much stronger emphasis on creativity and skills development. “Soft employability skills

such as team work, problem solving and self-management are vital across job roles. Employability is not a separate subject, but a combination of skills that can be embedded within other curriculum lessons,” he said. Education experts insist that new strategises need to be put in place by the Nigerian government towards revamping the educational institutions in the country. Analysts observe that management at the various levels of education needs to appreciate the impact of a functional and innovative academic system to national development. Isaac Adeyemi, a university professor maintains that there should be constant review and development of curriculum to ensure that they are relevant to development of enlightened individuals and productive nation. Adeyemi noted that as a developing country, there is need to strategically decide on the knowledge, skills and competencies the country requires to actualise all the visions about greatness it so desires. According to him, “Government should have a very strong regulatory arm to monitor the

quality of education at the various levels.” The university don, while highlighting the importance of funding to the overall growth and development of a vital sector like education in the country, said funding should be expanded, stressing that the federal and state governments should monitor to ensure that the budgetary allocation voted for education are actually spent on the sector. He encouraged those in government to seek ways to fix their dwindling revenues, adding that government needs to find ways to engage the private sector in education funding. There is the need to establish a platform for educators to build new and innovative directions for educational practice by focusing on partnerships in educating the Nigerian child, setting the pace for change in methodology, transforming the nation’s schools and equipping the schools to sustain change. He further reiterated the importance of government fashioning out a carrot and stick approach to get parents to actually send their children to school.

Edo SUBEB introduces marking, open days in public schools

‘Private sector investment in infrastructure key for manpower development’

...creates electronic data base for students’ grades

s part of Governor Godwin Obaseki’s on-going reforms in the Edo State basic education sector, the State Universal Basic Education Board (SUBEB) has commenced the observance of special days as marking and open days in public schools. Joan Osa Oviawe, special adviser to the Governor on Basic Education and acting chairman, Edo SUBEB in a statement, said marking and open days are part of the Edo Basic Education Sector Transformation (BEST) initiative, which are aimed at improving quality of education in public schools. Osa Oviawe said, the marking day would be ob-

served on Wednesday, June 20th, 2018. It will be a day set aside after examinations have been completed for teachers to mark and record scores obtained by the pupils during examinations. “On the day, all pupils would be expected to be in the schools without any form of teaching taking place. The pupils may play outside during school hours. “After completing examination markings, the teachers would use the day to enter examination scores for each pupil on electronic devices distributed to teachers. They would also use the day to update all report books,” she added. She further explained that the activities on the

marking day, would prepare the teachers for the open day which would be held on Thursday, June 21, 2018.” According to her, “On the Open Day, parents or guardians of pupils would be expected to visit the schools of their wards to discuss the academic progress of their children. “On the same day, teachers would have one-on-one interaction with each parent or guardian and their child. The teachers would be expected to explain the child’s academic and developmental performances to the parents or guardians.” “Pupils would be expected to leave the schools with their parents or guardians after the interaction with the teachers,” she noted.

KELECHI EWUZIE he Lagos State Government says the continuous investment by private sector in educational infrastructure represents the needed resolve to ensure the development of skilled manpower in the state and Nigeria. Akinwunmi Ambode, governor of Lagos State while speaking when a newly built block of six classrooms was donated to Local government primary school, Isan village Epe by the Rotary club of Maryland, Ikeja district 9110 commended the club for its commitment to the development of education. The Governor, who was represented by Abiodun Oni, director basic education service in Lagos State said that the state government was committed to providing new structures and rehabilitating existing ones across educa-

tional institutions in the state to ensure that quality education is accessible to all students irrespective of their locations. According to him, “Rotary club has over the years proven to a responsible entity. The intervention in this school with the provision of a block of six classrooms, complimented by the supply of 120 students’ furniture speaks volume about their passion for the development of education and production of skilled manpower to help the growth of the economy of Lagos State and Nigeria”. George Ikpekhia, president, rotary club of Maryland in his remarks said that the donation was a demonstration of its unwavering commitment to the developmental aspirations of the people of Lagos State. Ikpekhia explained that the Club’s interest in the state is part of the vision of the club to add value and touch lives in critical sectors of the economy.

He further urged the school authority and students to use the facility to the good and progress of the state and Nigeria. On his part, Rasaki Isiaka, baale of Isan village commended the club for their effort. He observes that if other organisations take the development of education as serious as Rotary club just did, Nigeria education system would be better for it. Isiaka called on the Lagos State government to provide more teachers to the community school to help improve the process of teaching and learning in the village. The latest donation adds to the increasing number of schools that have benefitted from similar projects in Lagos State under the Rotary club of Maryland, Ikeja district 9110 Nigeria making a difference in basic education and literacy project drive.

BUSINESS DAY

Tuesday 19 June 2018

C002D5556

EDUCATION

INSIGHT

Nigerian teachers urged to showcase global competitiveness

ndria Zafirakou, Art and Textiles teacher from London and winner of the US$1 million Varkey Foundation Global Teacher Prize 2018 in March, has encouraged Nigerian teachers to apply for the 2019 award. She also urges parents and pupils to put forward their most inspirational teacher for the prize on the day that nominations and applications open. The Art and Textiles teacher from London, UK, said: “Technology is changing the world so fast with everything from Artificial Intelligence to 3D printing - that children need great teachers more than ever. “As the world undergoes these massive changes, technology gives us both opportunities and challenges. Only through first class education can we ensure that technology benefits everyone. Only through great teachers passing on knowledge and wisdom will we find the answer. “Maths, the sciences and the arts are all equally important for personal growth, selfunderstanding, and to build the skills that young people will need both now and in the near future. I encourage any inspirational Nigerian teacher

to apply for the prize, to come forward in order to help showcase and celebrate the great work they’re doing in preparing young people for a future which is hugely unpredictable. “Since winning the Global Teacher Prize 2018, I have tried to shine a spotlight on the importance of raising teacher respect. I encourage everyone in Nigeria, from politicians to parents to support and back teachers in every way they can.” The Overseas Development Institute (ODI) report Digitalisation and the Future of Manufacturing in Africa published in March warns increasing use of ever cheaper advanced technologies will wipe out jobs in many sectors. It adds: “With technology increasing at a faster rate than skills, the risk of a skill mismatch is also rising. To increase the development impact of digitalisation, it is crucial for African countries to develop complementary skills. Becoming future-ready involves revising and reorienting the curriculum in African educational institutions around science, technology, engineering and mathematics (STEM) subjects. A special focus needs to be given to technical and vocational education and training (TVET), with better public–private sector collaborations a must.”

Olakunle Fadumiye, Landside Infrastructure manager, Lekki Port LFTZ Enterprise (LPLE); Steven Heukelom, general manager, projects, LPLE; Emmanuel Adesoye, chairman, LPLE; Tobechukwu Okoroji, senior prefect, Albesta Academy Ibeju-Lekki (Winner) and Sandeep Parasramka, chief financial officer, LPLE, during prize presentation at the finals of the third edition of Tolaram science challenge organised by LPLE held in Lagos.

Nigerian teachers have been shortlisted for the Global Teacher Prize since its launch in 2015. Ayodele Odeogbola, a STEM education and global studies teacher at Abeokuta Grammar School, Ogun, and Itodo Anthony, who teaches chemistry, math and physics at Gateway Excel College, Ogeneago Otukpa, Benue State, were shortlisted for this year’s Prize, having been selected from over 30,000

nominations and applications from 173 countries around the world. The nominations for the award which already for theUS$1 million award is the largest prize of its kind in education as entries will close on Sunday 9 September 2018. If Nigerian teachers apply, or are nominated and then apply, they could be potentially shortlisted as Top 50 candidates later in the year and

their inspirational stories publicised, helping to raise the bar of respect for the profession. Andria Zafirakou won the 2018 Global Teacher Prize in March this year at the Global Education and Skills Forum in Dubai. The applicants for the Global Teacher Prize 2019 will be shortlisted down to a Top 50 (expected to be announced in December 2018) and then a final Top 10 (expected to be

announced in February 2019). The winner will be chosen from the 10 finalists by the Global Teacher Prize Academy made up of prominent individuals. All 10 finalists will be flown to Dubai for an award ceremony taking place at the Global Education and Skills Forum in March 2019 where the winner will be announced live. The prize is open to currently working teachers who teach children that are in compulsory schooling, or are between the ages of five and eighteen. Teachers who teach children age 4+ in an Early Years government-recognised curriculum are also eligible, as are teachers who teach on a part-time basis, and teachers of online courses. Teachers must spend at least 10 hours per week teaching children and plan to remain in the profession for the next 5 years. It is open to teachers in every kind of school and, subject to local laws, in every country in the world. If teachers are being nominated, the person nominating them will write a brief description online explaining why. The teacher being nominated will then be sent an email letting them know they’ve been nominated and inviting them to apply for the prize.

School to provide N2.5bn sports complex, promote early talent discovery

Albesta emerges winner of 2018 Tolaram science challenge

STEPHEN ONYEKWELU

tlantic Hall, a coeducational secondary school in Nigeria, is building what might turn out to be one of the biggest sports complexes in any school in Nigeria; to promote grassroots sports and early talent discovery, commemorated June 8 by tree planting exercise at the school’s premises. The event coincided with the 26th Valedictory and graduation ceremony of the 2017/2018 set of students at the school had KwekuTandoh, executive chairman, Lagos State Sports Commission as special guest of honour for the 2.5billion Naira sports complex project. The Atlantic Hall Sports Complex, to be constructed on 15 hectares of land on the vast school campus, shall comprise five football pitches, an eight-lane tartan track, 1000 square meter multipurpose indoor sports hall,

basketball courts, six tennis courts, volleyball and handball courts, a gymnasium, a pavilion with 1200-capacity bleacher, an Olympic size swimming pool and a wall of fame for the outstanding athletes and sports men and women that the school produces. The Pavilion would also include male and female changing rooms for students; male and female changing rooms for adults, offices, adequate equipment storage space and space for a snack bar. The 1500 seat Multipurpose Indoor Sports Hall would have the capacity for a five court hall (badminton, basketball, handball, volleyball) for indoor sports, 600 bleacher capacity; male and female changing rooms and also have offices for the sports department, the gymnasium and space for a small snack bar. This is in addition to, changing rooms, vendor stands, toilets and other ancillary facilities.

Maureen AkpofureAwobokun, Atlantic Hall PTA chairperson, said “The sports complex is conceived to compete with any of its kind worldwide. When completed, the complex will be a source of pride to all Nigerians and Africans at large.” “A journey of a thousand miles, they say, starts with the first step. Today, we take the first step towards the actualization of our dream for an ultra-modern sports complex in Atlantic Hall. The step is building a legacy, a legacy of champions” Akpofure-Awobokun said. Commenting on the tree planting exercise, the PTA Chairman said the act was part of the flag-off of the Sports Complex construction in line with the architectural master plan. According to her “the tree planting is symbolic. Trees represent life. By planting these trees today, we are breathing life into the project” she said.

lbesta Academy, Eleko, Ibeju-Lekki, Lagos has emerged winner of the 2018 edition of the Tolaram Science Challenge, an initiative of Lekki Port LFTZ Enterprise, (LPLE), special purpose vehicle for Lekki Deep Sea Port project at the Lagos Free Trade Zone, Lagos. The Tolaram Science Challenge is a special Corporate Social Responsibility (CSR) initiative focused on developing and promoting science education amongst the students of Lekki-Ajah axis of Lagos state. The third edition of the competition featured a total of fourteen participating secondary schools in the area competing in group stages until the finals. Questions were from Physics, Chemistry, Biology, Mathematics and General Knowledge subjects. Emmanuel Adesoye, chairman of LPLE while presenting Albesta Academy

with the first prize trophy and cash prize commended the hard work, diligence and intelligence of the students of the school stating that their brilliant performance has seen them clinch the first prize again. “Winning this year’s edition of the science challenge makes Albesta Academy a third time and all time winner of the competition which goes to show how hard-work always makes you stand out,” Adesoye said, urging the students not to relent as they climb higher up the educational ladder. Thompson Imhanbor, principal of Albesta Academy, speaking after receiving the trophy, lauded LPLE for its immense contribution to educational development in the entire area. According to him, “We really appreciate the efforts of Lekki Port, especially in the area of educational development and advancement. Thanks to them, the students of this area are better at their

science subjects and always look forward to this competition”. The schools that participated include: Senior Grammar School, MagbonAlade; Community Senior Secondary School, Debojo; Community Senior High School, Magbon-Segun; Community Senior High School, Idata/ Ilagbo; Community Senior High School, Akodo; Community Senior High School, Orimedu; Community Senior High School, Ise; Community Senior High School, Lekki; Community Senior High School, Iwerekun; Ibeju Senior High School, IbejuLekki; Albesta Academy, Eleko; Jona Josh College, Orofun/Akodo; JOAK Private School, MagbonAlade; and LACAPERIA Academy, Obadore. On his part Sandeep Parasramka, chief Finance Officer, LPLE assured that LPLE will continue to deliver impactful contributions to the community around it through its CSR initiatives.

Tuesday 19 June 2018

C002D5556

BUSINESS DAY

In association with

Benefits of buying properties when economy is recovering Stories by CHUKA UROKO

fter a 15-month economic recession that has been adjudged the worship in 25 years, Nigerian economy is in gradual, fragile and vulnerable recession that looks unattractive to investors. Some sectors of the economy, particularly manufacturing, services and fast moving consumer goods, have seen appreciable recovery. But real estate has not. As an economic indicator, this sector is regarded as a laggard, meaning that it moves, positively or negatively, after the economy has moved. The sector has been in negative growth in the last nine quarters which, Adetokunbo Ajayi, MD/ CEO, Propertygate Investment and Development Company, says is because of buyers weak purchasing power arising from the impact of recession on individual and household income. Experts however advise that the condition in which the sector is presents great opportunity to buy or invest because, according to Udo Okonjo, CEO, Fine and Country West Africa, buying property in a recovering economy comes with benefits. “Buying during the recovery of an economy essentially guarantees you good capital growth if done right. You could buy as an owner occupier, therefore having a great asset and collateral if needed in future. Appreciation tends to happen faster and at a higher margin in prime real estate, especially when you buy at a discount”, she advised. Apart from buying a property whose price has been discounted, there are benefits in investing in buyto-let. Many multinational corporations and top executives who make up the bulk of tenants in this space continue to require good quality rental properties but their budgets have largely

Infrastructure Maintenance With TUNDE OBILEYE Benefiting from mobile technology

been adjusted downwards. Therefore, by buying at a discount, the investor can attract those corporates with a good value market related rental unlike those investors who over-capitalised and have a tough time adjusting to reality. Buyers should always do the mathematics to see that the numbers stack up and there’s a real discount and upside. A buyers within this period should also be looking out for motivated sellers who want to move their property stock because of high-interest rates, high stock levels and slow sales. There are also opportunities for buying off investors who bought at the early stage of an off-plan project and who may no longer be in a position to complete due to change in financial or other personal circumstances. Additionally, an investor who has already invested but has holding power and, perhaps, an ability to buy more, should ask his agent or broker for more opportunities. “You never know; only a week ago, we received a call with an incredible opportunity, to purchase a 4000 square metres property in Ikoyi at almost a giveaway price. The seller was an extremely motivated seller, with many issues to grapple with. “A property that was worth almost N1.2bn was sold for approximately 35 percent of the value. It was

sold within 24 hours. These types of transactions exist but are very scarce for obvious reasons”, Okonjo revealed. She shared the experience of an investor who bought a property at the height of the real estate downturn. Less than a year later when the market started regaining momentum, the investor had a property that was essentially worth three times what he had paid and for which he received numerous offers. He refused to sell, subsequently building his dream home on more than a two-acre property in a choice part of Ikoyi. “In future, this investor will extract more layers of value from the same property by developing a multi-unit luxury apartment block. His story is not unique. Investors understand that real opportunities are to be found in slow and the early stage of recovering markets. “At Fine and Country, we have seen an increase in investors specifically looking for ‘discounted properties’ and where better to find these than the prime residential market in Ikoyi and Victoria Island where many sellers are getting more realistic”, she observed. At a time like this, investors can also leverage one of the main attributes of a property which is its capacity to serve as a store of wealth or value. For patient investors with mind to long

term funds, investing in real estate is a great bet and a good protection against inflation. With the equities and bond market going through a bullish season, and inflation still at double digit, although slowing, long term funds are better invested in real estate which is fairly illiquid but generally offers solid, less volatile appreciation along with good cash flow if it’s a rental property. Land banking has been known to deliver superior returns, especially if within a serviced and gated residential scheme. This period presents a unique opportunity for Nigerians in Diaspora who have currency advantage because they are foreign currency income earners. Emmanuel Obire, CEO, Multi-purpose Infrastructure Development Company (MIDC) estimates that 10 percent of the over $22 billion remittances into the country in 2016 went into investment in real estate. With the USD and GBP remaining high, naira denominated transactions still offer real value, especially if an investor has long-term ties/plans to Nigeria and can either use the property or rent it out for income. Over all, the biggest reason to invest now is to prevent the bandwagon effect of buying when everyone else is, and usually paying too much when the market fully rebounds.

n today’s world, technology has become a prominent part of our lives and showing no signs of slowing down anytime soon. This has made it important for businesses to drive development through mobile applications. Mobile applications form part of a computerized maintenance management system (CMMS) that is available to facilities managers to achieve day-to-day tasks. Such tasks include controlling work process flows, track assets and employees, as well as having control over building facilities. It is designed to help them multitask, communicate, collaborate and manage workloads more efficiently. The benefits of using technology by facilities managers are immense. Some are listed below: Increased Productivity- with the workforce getting more mobile and flexible these days, it is important to ensure productivity or ability to work efficiently is not affected. Such applications address and support the needs of today’s mobile workforce. These applications can be accessed by facilities managers and other staff from any location and available for use on devices such as mobile phones and hand held gadgets. The convenience of using these applications means employees can work from anywhere and at any time leading to increased productivity. Access to information: The pace of today’s business world requires access to crucial information in real time. The CMMS system permits data to be uploaded, edited and viewed from anywhere. This means information can be shared quickly and decisions taken faster. This also allows facilities managers and their teams to have greater control of asset tracking. Helps in embracing adaptability: It is common knowledge that the business world is constantly changing due to developments in technology. Therefore, facilities managers should have the ability to adapt to these changes in a dynamic environment and still be able to efficiently maintain the corresponding infrastructure. Applications can be installed and

updated with ease to support required tasks. Improved communication: Communication is one of the key factors that can make a difference in the success or failure of any business. Communicating effectively through traditional methods can be tricky when dealing with a mobile workforce or team working remotely but with mobile applications, tasks such as sharing reports, identify faults, scheduling jobs etc. can easily be completed. Facilities managers can even send instructions through their FM mobile application and get feedback in real time. Makes business processes more efficient: Mobile applications have come to stay and facilities managers need to take advantage of such applications in order to make their tasks mobile-friendly. It will help make processes more efficient as these applications can speed up current operations and also analyze data from different processes. Mobile applications can help in figuring out better, faster and easier ways to do various tasks. Increased safety and security: Facilities managers can make use of technology to keep various aspects of their work safe and secure. As facilities managers, they have to track all the assets within the organization. To do this manually is not easy and prone to human mistakes. By using mobile facility maintenance software, managers have the ability to track and locate their assets in real time. They can even track who is using which asset, duration of its use and if unauthorized people are accessing the assets. They have increased control over the assets and ensure that they are safe at all times. It also helps them keep an eye on the facilities and ensures minor issues are handled before they get big. Facilities managers should harness the power of mobile technology. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

BUSINESS DAY

Tuesday 19 June 2018

Stable GDP, population growth top value propositions for investors in Douala Grand Mall …as promoters widen search net for retailers to Nigeria

ameroon’s stable GDP growth at 5 percent over the last five years coupled with its 2.5—3.0 percent population growth, which is the highest rate in the CEMAC region, are top of the value propositions which Craft Group, a real estate developer, is offering prospective investors and retailers in the Douala Grand Mall. The mall is a joint venture between the company and Actis International. Cameroon accounts for 50 percent of the GDP of the CEMAC region and has a nominal GDP of US$33 billion, in line with Ghana and Ivory Coast but twice that of Mozambique. The country has per capita GDP of $1,200, similar to Cote d’Ivoire, Ghana and Kenya, and larger than Mozambique, Ethiopia and Tanzania. The country has limited inflation and reduced foreign exchange exposure. High growth in the country’s economy is expected in the coming years based on more businessfriendly policies and increased infrastructure spend by the government. Its currency, the CFA franc,

is pegged to the euro which mitigates exposure to foreign exchange volatility that results in inflation rates being generally similar to those of the Eurozone, which are low for Sub-Saharan Africa. Added to this is the country’s history of political stability with the existing president, Paul Biya, in power for 33 years. But analysts are of the opinion that lack of change in government for several years has dampened potential growth, even though there are growing efforts by the government to modernize and formalize retail which has attracted new entrants such as SPAR, FNAC, DIA Carrefour. Douala Grand Mall, which will be completed by the fourth quarter of 2019, is the first formalized mall in Cameroon and, therefore, offers investors the first-mover advantage in a first retail-led mixed use development. “There are no formal retail centres of scale to serve the population of three million in Douala which presents an opportunity to introduce a destination offering to the market. The mall is expected to attract shoppers from Cen-

tral Africa”, revealed Mathurin Kamdem, Craft Group’s CEO, at a tenants forum in Lagos, Nigeria recently. Continuing, Kamdem said, “the mall offers first-mover advantage in a fragmented market where commercial real estate sector is in its infancy similar to Accra 10 years ago. Only two smaller retail centres of 5,000 square metres and 7,000 square metres have opened in Douala and that was in 2015. Little but growing interest from competitors, Cote d’Ivoire first mover advantage in retail closed

quickly”. Expectation here is that investors and retailers who will be the first occupiers of the mall are to recoup their investments quickly as the mall, like The Palms in Lagos, Nigeria, will grow with the growing population. Investors are also to benefit from Actis’ institutional knowledge and the experience it has garnered in developing eight destination retail centers across Africa, including The Palms, Ikeja City Mall and the Jabi Lake Mall in Abuja which it developed in collaboration

with Duval Properties. Funke Okubadejo, director, real estate at Actis, assured investors of strong fundamentals that draw not just investment interest, but also footfalls into the mall. “Besides the stable GDP and growing population, the project site is excellent and strategic in the midst of a dense catchment”, she said. According to her, the proposed development area includes 54,474 square metres of land located in the airport area. This is four minutes drive away from Bonapriso,

Understanding market fundamentals crucial to real estate business continuity — Realtor

t this time in Nigeria when the real estate sector is challenged by difficulties in the wider economy, leading to the sector’s negative growth, a continuous understanding of the fundamentals shaping the sector, anchored on knowledge and experience, is crucial to the of continuity firms in that business. This was the viewpoint of Adetokunbo Ajayi, MD/CEO, Propertygate Investment and Development Company, expressed in an interview on the sideline of the company’s 9th AGM in Lagos recently. Perhaps, more than any other sector of the economy, the 15-month economic recession has left real estate in the cold such that numbers from the sector have been in the red since Q1:2016. Figures from the National Bureau

of Statistics (NBS) quarter one 2018 report show that the sector plunged deeper into recession in this quarter. A breakdown of the report shows that the sector contracted by -9.40 percent in Q1 2018 from -5.92 percent in Q4 2017 and -4.12 percent in Q3 2017. This contraction is -6.3 percentage points worse than the -3.10 percent reported in the comparable period of 2017. “This is a highly capital intensive business that can only thrive in an encouraging and friendly credit regime. The interest rate at a time was about 30 percent per annum and if you doing a development with this, you are likely to run into trouble. “When you succeed in doing your development, because of the huge capital requirement, the off-takers would need mortgage, but mortgage is not available, and

where it is, people are not willing to take it because the interest rate is extremely high”, Ajayi explained. But unlike some players in the building industry that ran into severe difficulties because they did not give knowledge adequate consideration, especially in its accounting year 2017, Propertygage remained dynamic, doing developments that responded to market realities. “We are constantly looking at the environment to know when to go to the field and when to stop. If as a developer you don’t do this, you will be producing when there are no buyers in the market and so, you will get stuck. A developer should be able to study the market to know who the buyers are, what they need and at what price “Our knowledge, experience

L-R: Peter Folikwe, non-executive director; Janet Fifo, company secretary; Adetokunbo Ajayi, MD/CEO, and Jonathan Oluwole,non-executive director, all of Propertygate Development and Investment Plc at the company’s AGM in Lagos recently.

and skill in this business came to play in helping us to take decisions with which we were able to cushion the adverse effect of the recession on our sector and the economy. That really kept us going”, he enthused. Peter Folikwe, a non-executive director at Propertygagte, affirmed that the real estate industry is capital intensive, adding, “this is impacting on the earnings of the companies in the sector. Propertygate has a focused board and management. That is why its massive investment in the Propertygate Center in Lekki promises a huge Return On Investment (ROI) in the nearest future.” Against all odds, it is expect that the housing market with its vast potentials, anchored on rising population, growing urbanization and expanding economy, will continue to present opportunities to players in the sector. But because sector is not out of the woods yet, enormous traction is required, if the negative results being recorded in the sector are to be reversed. While some sectors did comparatively better in 2017, the sector took a hammer. Its overall contribution in 2017 to total real GDP declined to 6.85 percent compared to 7.22 percent recorded in 2016. Real GDP growth recorded in the sector in Q4, 2017 was -5.92 percent, while annual growth for the full year stood at -4.27 percent. This means that the secor underperformed the non-oil sector category, where it belongs, which achieved an annual growth of 4.7 percent by the end of 2017.

the wealthiest residential catchment in Douala. Drive time from CBD is only 10 – 15 minutes. “The mall is one of the few large sites available in close proximity to Bonapriso and enjoys high visibility given proximity to the airport which attracts commuters to and from the city everyday (1.5 million passengers per year). It is very well located in the airport area of Douala with an immediate catchment area of 1.5m people and growth of the city is in the direction of the project site”, she assured.

Expectations as Akintunde, Okubadejo speak at NIESV Summit

xpectations are high among real estate industry professionals and stakeholders as Femi Akintunde, GMD, Alpha Mead Group, Funke Okubadejo, Directror, Real Estate at Actis, among others will be speaking at a summit to be hosted by the Lagos State branch of the Nigerian Institution of Estate Surveyors and Valuers (NIESV). The institution in a statement in Lagos at the weekend said all was set for the real estate flagship programme on specialization tagged The Summit 2.0. The theme of the two-day programme already slated for June 26 and 27, 2018 is ‘Developing Business Modules for Best Practice’. Adedotun Bamigbola, chairman of the Heads of Practice Subcommittee, which is organising the summit, disclosed that a variety of specialized fields in real estate, including Project Finance, Facility Management, Property Taxation, Mortgage & Insurance Valuation, Agribusiness and Real Estate Investment Trust (REIT) among others, will be discussed at the summit. Other key resource persons expected at the Summit include Adeniyi Adeleye, Head, Real Estate at StanbicIBTC West Africa, Jide Orimalade, Managing Director, Law Union and Rock Insurance, Gaventa Otono, Managing Director, Sterling Capital, Modupe Omirin of UNILAG, Steve Mayaki of International Fairwood Property, and Ezekiel Oseni of Bank of Industry.

Tuesday 19 June 2018

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BUSINESS DAY

FEATURE

Leveraging Lagos’ N25bn ETF to create wealth As unemployment bites harder, with millions of Nigerians roaming the streets in major cities in search of unavailable job opportunities, JOSHUA BASSEY writes that small businesses, startups and youths with creative ideas are turning to the Lagos ETF to hop out of poverty and create wealth.

s emphasis shifts from mere certificate possession to skills and entrepreneurship amid shrinking employment space, Nigerians are seeing opportunity in the Lagos’ N25 billion Employment Trust Fund (ETF), to create wealth, and push themselves out of poverty. Unlike the conventional loans from commercial banks with double digits interest rate, cumbersome processes and the hurdle of collateral; the ETF loans come with a cumulative interest rate of ten percent spread over three years, with a proviso that an applicant must be a resident in Lagos State. In the last two years, some 6,462 entrepreneurs and start-ups have drawn a total of N5.22 billion from the ETF to grow existing businesses and start new ones. Lagos, which is reputed as Nigeria’s economic and business hub, ranks fifth largest economy in Africa with a Gross Domestic Product (GDP) of $136 billion. The state accounts for over 90 per cent of nation’s foreign trade flow, contributes about 30 per cent to the country’s GDP and also accounts for about 65 per cent of manufacturing activity. The state, notwithstanding its huge potential and vast opportunities, is not immune from the challenge of unemployment that continues to afflict the national economy, as graduates and unskilled labour roam the streets. According to a 2017 third quarter report of the National Bureau of Statistics (NBS), Nigeria recorded its highest ever aggregate unemployment rate rising from 14.2 percent in the fourth quarter of 2016 to 18.8 percent. The increase occurred despite the fact that the three tiers of governments as well as the organised private sector reportedly generated additional 1.2 million jobs, which thus put the estimated labour population at 85. 1 percent for the same period. The statistics revealed that the number of people within the labour force that were unemployed or underemployed increased drastically from 13.6 million and 17.7 million in the second quarter to 18.8 million in the third quarter of last year. The figures showed that the number of women within the labour force (aged 15-64) who were willing, able and actively seeking for job but unemployed was 21.2 percent while that of men was 16.5 percent. Thus, the total number of unemployed and underemployed put together increased from 37.2 percent in the previous quarter to 40 percent in the third quarter of 2017. In its recent reaction to the NBS figures, the organised labour described the situation as an imminent threat that needed an urgent intervention. Isa Aremu, the general secretary of the National Union of Textile, Garment and Tailoring Workers of Ni-

Gov. Ambode

geria, (NUTGTWN) and a member of the National Executive Council, (NEC) of Nigeria Labour Congress, said that the report confirmed the crisis of underdevelopment in Africa’s biggest economy. “If we have such army of underemployed, the crisis of unemployment has assumed tragic proportions in forms of various mass crimes as restless youths swell the ranks of kidnappers and insurgent. All tiers of government must rise to promote development through re-industrialisation, uninterrupted electricity supply,” said Aremu. As part of strategies to address the unemployment crisis, the Lagos State government in 2016 launched the ETF as a vehicle to inject funds into existing micro, small and medium scale businesses as well as encourage the establishment of new ones and nurturing of creative ideas into viable businesses. The fund is designed to operate with an initial capital of N25 billion contributed over four years by the state government, but will also raise additional funding from various sources including donor partners, development agencies, corporate organisations and individuals. It is focus on promoting entrepreneurship by improving access to finance, strengthening the institutional capacity of small businesses and formulating policies targeted at improving the business environment in Lagos. The ETF also has additional mandate to develop training programmes for the unemployed and seek job placement for graduands of such training; while also focusing

on programmes to drive innovation within the Lagos ecosystem. According to Uzamat AkinbileYusuf, the state commissioner for wealth creation, whose ministry supervises the activities of the ETF, asides funds so far disbursed, the ETF board has received more applications from members of the public. She said in the last one year, May 2017 to May 2018, several persons whose applications met the criteria have accessed the ETF loans. A breakdown shows that the disbursement of the loans was carried out in batches: In 2017, the ETF board approved the disbursement of N627 million to 643 beneficiaries captured under batch 4, which comprised of 130 SMEs; 483 MEs and 30 MES. In batch 5, the sum of N924.6 million was approved and disbursed to 1,438 beneficiaries. In batch 6, a total of N979.7 million was approved by the board and subsequently disbursed to 1,806 applicants.

If we have such army of underemployed, the crisis of unemployment has assumed tragic proportions in forms of various mass crimes as restless youths swell the ranks of kidnappers and insurgent

Further checks showed that in batch 7, about 888 beneficiaries received a total loan of N443.8 million while in batch 8, the sum of N1 billion was released to 1,681 applicants. Akinbile-Yusuf confirmed the first disbursement in 2018 to 1,753 beneficiaries who received N492.7 million while more applications have been processed and successful applicants are presently processing relevant documents to access their loans. Beyond the loans, the state government, according to AkinbileYusuf, has also launched an innovative-driven enterprise programme tagged “Lagos Innovates” which is a series of programmes designed for the benefit of technology and innovation-driven start-ups. This is an important aspect of the wealth creation goal, where people with innovative and creative ideas are tutored with the help of technology on how to nurture such ideas into fruition, and subsequently assist to access funds. Akinbile-Yusuf believed that Lagos innovates would help the state cement its position as the destination for start-ups in Africa by providing access to high quality infrastructure, learning, capital and networks. “So far, we have awarded our first set of workplace vouchers to 23 beneficiaries, and our first hub loan of N40 million to Leadspace, a shared infrastructure solution company that provides office amenities to entrepreneurs, founders, freelancers, start-ups, SMEs and content creators in Yaba and Ojodu.

Leadspace will use the funds to open an additional workspace facility in Tejuosho, Yaba with a capacity of 474 work desks and 26 outdoor seats,” said Akinbile-Yusuf. Much, she explained, has also been done through another initiative, “Lagos Employability Support Projects” to sharpen the skills of young people in order for them to find a space within the different sectors of the economy. The employability project targets to produce at least 10,000 skilled persons in a three-year period to cater for demand in key sectors like manufacturing, healthcare, construction, entertainment, garment making, tourism and hospitality. The project in addition will place at least 6,000 trained persons in jobs and upgrade the equipment and improve the curriculum at two of government owned institutions; Government technical College, Epe, and Government Technical College, Ikorodu. The commissioner confirmed that since the launch of the project website in October 2017, over 13,000 applications have been received from unemployed/underemployed individuals out of which 3,335 candidates have been approved for training in various trades in selected sectors. She explained: “We have completed the training of the first batch of 534 who graduated on March 15, 2018.” Of this number, 98 have been placed in jobs while 100 trainees are being interviewed by employers for job placement in different organisations. One of the beneficiaries, Ahmed Ojikutu, who described the ETF as a beautiful concept, said it has lifted several persons out of hopelessness. According to Ojikutu, who received about five million naira from the ETF, the loan has helped him to reposition his business. An entrepreneur, Tosin Adesanwo, who is into bag making, also received five million naira and promised to expand his business. Akanbi Motolani, another beneficiary who is into fruit business, appreciated the gesture and promised to employ more hands to boost the scheme after she got two million Naira. Yet another beneficiary, O.A Goriola of November 16 Nig Ltd, commended the state government for the initiative and pledged that the funds would be judiciously utilised. The ETF law was signed by Governor Akinwunmi Ambode in January 2016, with Ifueko OmoiguiOkauru, a former chairman of the Federal Inland Revenue Service (FIRS) appointed as chairman of the board of trustees. Ambode had expressed the optimism that the fund would address the challenge of unemployment and promote wealth creation through entrepreneurial development, affirming that an annual contribution of N6.25 billion would be injected into the ETF by his administration over four years totalling N25 billion.

BUSINESS DAY

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Tuesday 19 June 2018

Markets + Finance

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

BALA AUGIE

hareholders of Oando Nigeria Plc shouldn’t fret over the future of their firm as the leading indigenous energy Group has strengthened its financial health. This means investors and owners will drink wine from the flagon poured into a golden goblet as the strategic plan put in place by the indefatigable chief executive officer of the firm-Wale Tinubu and members of his team- has yielded fruit. A glimpse of the five year financial statement (Based on first quarter results) shows the firm has surmounted the headwinds brought on by a sharp drop in crude oil price in mid 2014 that tipped the country in its first recession in 25 years as leverage, profitability and other key ratios have upturned. Historical Back ground Oando PLC is one of Africa’s largest integrated energy solutions provider with a proud heritage. It has a primary listing on the Nigeria Stock Exchange and a secondary listing on the Johannesburg Stock Exchange. With shared values of Teamwork, Respect, Integrity, Passion and Professionalism (TRIPP).

The company has production capacity of 55,000 boedp, while it has 250 km pipeline gas grid developed in western and southern Nigeria. The company has over 300 service stations in Nigeria Ghana, Togo and the Republic of Benin and employee of 1500. Oando share pr ice closed at N6.85 as of June 15 2018, valuing it at N85.11 billion. First Quarter Sales and Profit hit 5 year high Oando’s sales hit N150.56 billion in March 2018; this represents 76.85 percent increase from N85.26 billion recorded in the corresponding period of 2014. Quarter on Quarter (QoQ) revenue increased by 8.89 percent. Revenues were at all time low of N27.27 billion and N30.15 billion in the first quarters of 2015 and 2016 when a precipitous drop in crude oil price and disruption on oil facilities in the Niger Delta region stoked revenue crunch for firms operating in the oil and gas industry. However, the relative calm in the Niger Delta region that resulted in a rebound in production output and the increase crude oil prices on the back of OPEC accord to curb output helped propelled oil firms to growth as evidenced in

Oando’s accelerated profit growth. See Charts. Oando recorded profit after tax of N4.20 billion in March 2018, from a loss of N2.71 billion it recorded in the corresponding periods of 2014. The company reverted to profit position in 2016 at the height of the economic meltdown, thanks to some strategic decisions taken by management and board of

directors that resulted in profit from discontinued operations to a tune of N17.93 billion. The company said assets and liabilities of some targeted companies of the Marketing and Supply & Trading division, Oando Energy Services Limited and Akute Power Limited were presented as held for sale following the approval of the Group’s management and shareholders at the 37th Annual General Meeting (AGM) on 27 October 2014 to sell the entities. In 2015, the Group also signed a Sale and Purchase Agreement for the disposal of 100 percent of its equity interest in Akute Power Limited to Viathan Engineering Limited. On 18 June 2015, Oando Plc signed a sale and Purchase Agreement for the disposal of part of its equity interest in some target operating of the downstream segment to Copper Energy B.V.

Improvement in Leverage ratio validates debt reduction strategy Oando’s is less susceptible to financial risk as it has reduced the proportion of debt to equity in its capital structure, signaling a healthy balance sheet. Debt to equity (D/E) ratio reduced to 0.84 percent in March 2018 from a high of 120 percent the corresponding period of 2014. This means the decision of the management of the firm to sell assets to bolster cash flow and pay back hefty debt has paid off. Also, oil price hedging helped the indigenous oil and gas firm support prepayment of Conoco Philips acquisition loan. The D/E ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders’ equity. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. Aggressive leveraging practices are often associated with high levels of risk. This may result in volatile earnings as a result of the additional interest expense. Oando is solvent as its Times Coverage Ratio (TCR) has improved to 1.39 times earnings in March 2018 from a low of 0.77 times earnings recorded in March 2014. See Chart. This means there are no threats to the ability of the firms’ operating profit cover-

BD MARKETS + FINANCE (Business Team lead: PATRICK ATUANYA - Analysts: BALA AUGIE and LOLADE AKINMURELE)

ing interest expense. The lower a company’s interest coverage ratio is, the more its debt expenses burden the company. When a company’s interest coverage ratio is 1.5 or lower, its ability to meet interest expenses may be questionable. 1.5 is generally considered to be a bare minimum acceptable ratio for a company and the tipping point below which lenders will likely refuse to lend the company more money, as the company’s risk for default may be perceived as too high. Moreover, an interest coverage ratio below 1 indicates the company is not generating sufficient revenues to satisfy its interest expenses. “I am pleased to announce that the Company has maintained The momentum of 2017 by posting a profit of N4.2 billion in our First Quarter ended March 31, 2018 unaudited financials. Our Q1 performance was characterised by a stable operating environment, continued incline in crude oil prices, and the highest level of compliance by member countries’ of the OPEC Accord. Considering the background of current industry trends, the Company is committed to maximizing throughput rates to ensure a positive financial performance in the ensuing quarters of 2018, according to Wale Tinubu,” Group Chief Executive, Oando PLC.

Tuesday 19 June 2018

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BUSINESS DAY

THE BIG HEART DIGEST In association with Delta State Micro, Small and Medium Enterprises Developement Agency (DEMSMA)

Promise kept: Okowa begins another round of project commissioning - Projects to touch lives of Deltans and improve state’s economy - DEMSMA boss says Delta becoming a commercial & smart state uncompleted projects in the state, he stressed. Okowa while thanking the Deputy Senate President for coming to commission projects in Delta State disclosed thus, “We have constructed a lot of roads across the state, we have stayed very strong on our youth empowerment programme, we train and equip them to become entrepreneurs, there are lots of success stories that we are moved to do more; we will continue to construct roads, build schools, encourage agriculture, our health insurance scheme have more than 200, 000 registered people as we believe that the state can show example that Nigerians can be beneficiaries of health insurance scheme.”

MERCY ENOCH, Asaba

ithin two weeks after the 2018 May Day celebration, D e l t a St at e Governor, Ifeanyi Okowa has commissioned more projects in keeping to his words to Deltans that he would give them more people oriented projects. The road projects commissioned are Nsukwa/Ndemili, Agbor-Alidinma roads, that criss-cross Aniocha South, Ndokwa West, Ika North-East and Ika South local government areas of the state. Also commissioned the Bonsaac, Nze Francis Street/Uche Wenwembu Street/ Onwa Nwachinemelu Street in Asaba, Oshimili South local government area of the state. More projects commissioned in parts of the state included the roads in Jesse in Ethiope West LGA, multi-billion naira Sapele Market of international standard in Sapele LGA. The market has 1,532 shops, developed shoreline and four jetties. Also commissioned was Isoko Unity House in Oleh, Isoko South LGA. It is an edifice which was conceived in 1984 and constructed by the Okowa’s administration. Observers have described the projects as projects that would touch the lives of Deltans as well as improve the economy of the state. The governor had told the multi-ethnic groups of Deltans as well as the entire crowd gathered at the Event Centre, Asaba on May 29, that more peopleoriented projects executed by his administration would be commissioned the coming days. He kept his words as the Ekwueme I of Delta State (Talk and Do Governor) by ensuring

Gov. Ifeanyi Okowa

the above mentioned projects were commissioned. The projects have so far brought accolades to the governor. Chairman of South-South Governor Forum, Seriake Dickson while commissioning the multi-billion Sapele international market, expressed, “We are overwhelmed with the quality of projects you have executed. We have seen the wonderful roads you have constructed. These are special projects that will touch the lives of the people, improve on their economy and the economy of Delta State”. He wondered what Deltans would see during Governor Okowa’s second tenure considering what he has achieved in the state so far. “Gov Okowa is a prudent manager of resources. He came at a time of recession, we have heard about what he is doing in Delta State and today, we are witnesses, I wonder what Deltans will see in his second term.” Deputy Senate President,

Shimite Bello

Ike Ekweremadu, while commissioning multiple road projects in parts of the state, said “I feel very pleased that you are instilling in the people what purposeful leadership is about, with your performance in Delta State, from what we are seeing, there is a future for our country, there is hope for Nigeria and you represent that hope,” He continued, “I consider road infrastructure as the most important for our people because, I experienced the effects of bad roads for decades, I want to thank you for changing the story of these communities where these roads are constructed. Roads attract development as we can witness from the Petrol Station being constructed at the junction (Nsukwa Junction).” Okowa however wants the cooperation of the different ethnic nationalities in the state to enable him execute more people-oriented projects as encapsulated in his administration’s SMART agenda.

“We need the cooperation of all Deltans to achieve desired goals because, working together, we will achieve a lot for our people. Government will work optimally when people cooperate with government,” he emphasized as ex-governor, James Ibori performed the tape cutting to mark the commissioning of the Isoko Unity Hall. Okowa seemed to be encouraging Deltans to learn from former governor of the state, James Ibori who he said laid a solid foundation for a united Delta State. Ibori on his own part want the governors from the South South to continue with their demand for the restructuring of the country which is seen as what would help the states in the zone to develop more. Okowa has continued to assured that his administration has no plan to abandon any project. For him, every good project that was started by previous administration must be completed. We will not have

How the road projects will rob off businesses Thousands of Deltans have benefited from the activities of the Delta State Micro Small and Medium Enterprises Development Agency (DEMSMA). Many have been empowered with loan to boost their businesses. Many have also been empowered with entrepreneurial skills as well as starter packs. From the job creation office and various vocational centres across the state, people are being trained and empowered to contribute in growing the economy of the state. This is apart from the job opportunities created by the various ministries, departments and agencies (MDA) in the state as Govenor Okowa had revealed. Good road network and infrastructure are seen as basics for economic growth. In an exclusive interview with the Big Heart Digest, Shimite Bello, DEMSMA’s executive secretary, said the road projects executed by Okowa’s administration would rob off on

Deltans and their businesses culminating in the growth of the economy. She said people may not feel the impact of what the Okowa administration is doing today but that five to six years down the line, the essence would be felt. “A lot of the things we are doing today, a lot of people we’ve empowered and trained to become entrepreneurs – people may not feel the impact today but five years, six years down the line, I think people will see the essence because you empower one person and he or she trains 15 people. It’s a lot of numbers to cover”, she said. “Delta is likely becoming more commercial. More activities are happening and more things that are tangible are being brought into the state but I think with the policies the governor is running under the SMART agenda, the government would be leaning more on the private sector to help. But we want to see a vibrant private sector taking people off the roads (joblessness).” “For me in the SME, I want to see more SMEs creating the jobs that are needed to drive this economy, to make my economy strong, to make my economy attractive - You can see beautiful buildings coming up daily as if it is a competition in Delta State, then you smile”, she added. “I’m very proud to be a Deltan, I’m very proud to have come from Delta. I feel very privileged to have worked under a man who is very intelligent, very deep, very dogmatic and someone who understands administration. You can accuse him of many things but you can’t say he is not smart. He is very smart”, she concluded.

Editorial coordinator’s corner:

Understanding Delta’s 2018 fiscal direction:

Five small business & investment opportunities in Delta IGNATIUS CHUKWU

D E LTA S TAT E M S M E CREDIT PRODUCTS 2 . L E AT H E R- W O R K S CREDIT (LWC) Product Description eather-Works Credit is designed as a follow up to beneficiaries that have primarily graduated from the Delta

state Leather-Works Skill Acquisition Programme. This credit is meant to enable start up and scale up. Who Qualifies 1. Individuals and cooperatives that have successfully completed the Delta State Leather- Works Skills Acquisition Programme or others that can pass our

basic test. 2. Ability of beneficiaries to demonstrate effective and efficient business projection and repayment plan. 3. Non loan defaulters /on time payers. Features/Requirements. 1. Beneficiaries under this programme must have completed the Delta State

Leather-Works Skill Acquisition programme. 2. Individuals will get a maximum of N250, 000 (Two Hundred and fifty Thousand Naira) only each subject to technical determination of the scope of business and cash flow requirement. 3. Beneficiaries must provide acceptable guarantors in line with DEMSMA Risk

Management Guidelines. 4. The Loan tenure is between 1 to 3 Years subject to DEMSMA Credit Assessment Framework. 5. The moratorium is between 3 to 6 Months subject to needs assessment. 6. Interest rate is 9% per Annum (Subject to fund provider) 7. The facility will target

largely youths (especially in rural and sub-urban areas) 8. Loans that fall under the SME’s category may attract collateral security. 9. A special window is available for People Living With Disabilities (PLWD) and widows. 10. A special window is available for prisoner rehabilitation and re-integration

34 BUSINESS DAY

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Tuesday 19 June 2018

NEWS

Ondo to implement national policy on education YOMI AYELESO, Akure

ndo State government says plans are underway to implement Nigeria’s National Policy on Education that provides for a multilingual platform involving one of the three major languages. Special adviser to Governor Oluwarotimi Akeredolu on education, Olawumi Ilawole, made the disclosure while speaking with journalists in Akure, the state capital. Speaking on the prohibition of vernacular speaking in schools and its attendant effect on national development, Ilawole said English language was not the country’s biological and cultural language and should not determine the level of one’s intelligence. He reiterated the present administration’s commitment in ensuring that children were taught more in their Mother tongues than the English language in years ahead.

Speaking on this development, the principal of Oyemekun Grammar School, Steven Ojo, said the imposition of foreign language on Nigerians remain a factor responsible for the nation’s under development in educational sector. Ojo said children should be taught in the language they understand best to ease comprehension and make teaching and learning processes practicable. While stressing that cultural imperialism should be checked for national growth, the state commissioner for culture and tourism, Ishmali Olurimisi, said English language in itself was not the problem but the fact that Western supremacy still ran in the veins of Nigerians. Nigeria is a multilingual country with about 400 languages with education policy that allows for trilingual education in the Mother tongue, a national language and English, he said.

Oscar Onyema, chief executive officer, Nigerian Stock Exchange (NSE) (l), with Tolu Osinibi, executive director, FCMB Capital Markets Limited, receiving award on behalf of the founder of FCMB Group, Olasubomi Balogun, the Lifetime achievement award conferred on him by the Association of Issuing Houses of Nigeria, during the awards/dinner ceremony of the association in Lagos.

NBET dismisses insinuation of non-reflective tariff as bane of power industry

... says Discos will make more money if meters are available for consumers OLUSOLA BELLO

igerian Bulk Electricity Trading (NBET) plc has dismissed insinuation by some stakeholders in the power sector that present tariff regime is the bane of the industry. Eugene Edeoga, head, procurement of the agency, said Discos should look inward and improve on the efficiency and stop blaming their inadequacies on tariff. He argued that if the Discos had adequately metered customers they would be in a position to pay for power supplied to them. According to Edeoga, if the tariff is reviewed upward as they are canvassing, those on estimated billing would not be paying as much as they are currently billed, a bill cannot be supported by the Multi Year Tariff Order (MYTO). The reaction came due to a statement made by Kola Adesina, chairman of Sahara Power Group, that the current tariff regime could not guarantee metering of customers across

all networks. According to Kola Adesina, who while speaking at a roundtable on power sector hosted by the group said with the illiquidity crises in the sector, no Disco can afford to meter its customers. Adesina said such capital investment could not be borne by the Discos under present circumstances, as he blamed poor revenue collection on present tariff regime, he said was not sustainable. Interestingly, the Sahara Group roundtable discussions exposed stakeholders’ lack of understanding as to what actually constitutes the major challenges in the sector. The electricity situation in the country has continued to oscillate around distribution and transmission inefficiencies, causing capacity underutilisation among businesses and rising cost of goods and services. The forum exposed different issues around the sector, presented significant and honest discourse that left stakeholders divided on who takes the blame for non performance in the sector since its partial deregulation

in 2013. Olawale Oluwo, commissioner for energy, Lagos State, said the power sector problem was structural such that there was break in the value chain resulting in the inability of Discos to effectively distribute electricity to final consumers. He observed that technical losses due to infrastructure inadequacies posed greater challenges, as Discos apart from rejecting load were not also generating enough revenue to support their operations. As a result of the inefficiencies, the state government has embarked on an ambitious power project that will bring about energy security for the state, he said. The commissioner said the Power Reform Programme of the government, the embedded power project, would take off in July 2018. According to Oluwo, the Lagos State House of Assembly passed the law in January and the governor signed the bill into law in February. The implementation committee is already working and a lot of work has

Saraki leads Senate delegation to Russian Parliament OWEDE AGBAJILEKE, Abuja

enate president, Bukola Saraki, will today, Tuesday, lead a Senate delegation on a three-day parliamentary visit to Russia. A statement on Monday signed by Bankole Omisore, special assistant to the Senate president on foreign affairs and international relations, says the visit is aimed at deepening legislative best practices and further strengthening the relationship between both countries. During the visit, Saraki is expected to address the Federation Council of the Federal Assembly of the

Russian Federation (Senate of Russia) and hold meetings with its chairperson of the Federation Council, Valentina Matviyenkom ; chairman of the State Duma, Vyacheslav Volodin and the deputy minister of foreign affairs of the Russian Federation, Mikhail Bogdanov, to exchange views on issues of Nigerian-Russian cooperation. The statement also disclosed that senators will also hold side meetings with corresponding committees of the Federation Council of Russia. Senators on the delegation include Senate minority leader, Godswill Akpabio; chief whip of the Senate, Olusola Adeyeye; chairman,

Senate Committee on Foreign Affairs, Monsurat Sunmonu; chairman, Senate Committee on Air Force, Duro Faseyi; chairman, Senate Committee on Sports and Youth, Obinna Ogba, and vice chairman, Senate Committee on Army, Ibrahim Danbaba. Also on the trip is the Chief of Staff to the President of the Senate, Hakeem Baba Ahmed; special assistant on Partnerships and NGOs/CSOs to the President of the Senate, Innocent Onah, and the special assistant on Events to the President of the Senate, Eniola Shitta. The delegation is expected back in the country on June 22.

been going on in the field and everywhere, he said, saying, “We would do our Expression of Interest sometime in June and that process will kick-start this project.” He said the 13 locations for the pilot phase of the state embedded power project was currently awaiting approval of the state executive council and would be released soon. He said the power and gas sectors reforms were key interventions of the Governor Ambode-led administration to correct the structural challenges in the power sector and gradually position the state for 24-hour power supply. He said apart from the reforms in the power sector, the state had began implementation of other sectoral reforms that include the downstream petroleum sector, the gas sector as well as the solid minerals sector and regulatory reforms. “The essence of all this is that we want to give Lagos energy security, and to achieve this, you must have security of electricity, gas and petroleum products,” he said.

FG set to shut land borders to address smuggling HARRISON EDEH, Abuja

ederal Government says Nigerian land borders will soon be totally shut as a measure to curtail smuggling of foreign rice and other toxic materials into the country. Minister of agriculture and rural development, Audu Ogbeh, disclosed this when he interacted with youths during The Guardians of the Nations International (GOTNI) leadership clinic on Monday in Abuja. Ogbeh lamented that the friendly relationship that existed between Nigeria and her neighbouring African countries was adversely affecting the nation’s economy, hence the decision to shut the borders. According to Ogbeh, the Federal Government in past two years had succeeded in reducing rice importation by 95 percent and increased the number of rice farmers from five to 30 million. He noted that states like Anambra, Ebonyi, Kebbi, Kano, Jigawa had taken advantage of theAnchorBorrowerProgramme of the government to upscale their rice production, and that such achievements would not be allowed to fizzle away through smuggling activities. “Our other problem is smuggling. As we speak, a neighbour of ours is importing more rice

than China is importing. They do not eat parboiled rice, they eat white rice, they use their ports to try and damage our economy. “I am telling you now because in a few days, you will hear the border has been shut, we are going to shut it to protect you, us and protect our economy. You will start seeing all sorts of negative things on the internet. “Let me tell you why we need to shut the border. I grow rice, I was the first Nigerian to mill rice free of stones. If you plant rice in certain parcels of land, some poisonous materials gets into the rice. “There are three kinds of water in their natural state; there is fresh water from the river, salt water from the sea, blackish water. If you go to the Delta in many countries, in South East Asia where they grow the rice, if you plant rice in the same place like four to six years continuously, the quantum of arsenic begins to increase and arsenic causes cancer and that is what they are dumping for us. “Some people say they prefer Thai rice because they are very sophisticated, welcome to poison. We just have to handwork you to prosperity otherwise, this country will not grow. My wish for you is to have a better time that we had,” he said.

Edo innovation hub partners Siemens on The Hack Edo Series, offers N3.5m prize

equel to its launch only last week, the Edo Innovates tech cluster has concluded modalities for The Hack Edo Series, a multi-dimensional initiative to identify and incubate the best ideas that tackle problems of power generation and distribution faced by individuals, businesses and the digital ecosystem, with a N3.5 million prize money. In a statement by senior special assistant to the governor on skills development and jobs creation, Ukinebo Dare, said The Hack Edo Series, being organised in partnership with Impact Hub and Siemens Nigeria, would leverage innovation technology to identify solutions in the area of power generation, adding that N3.5 million in cash prizes would be won by the best ideas.

She said starts-ups or groups with ideas could apply on the Edojobs website, as deadline for application was June 30. According to Dare, “Through a series of practical Hackathons, the Hack Edo series aims to equip young Nigerian innovators with the skills necessary to make impact in their various communities.” She said the series would help increase the number of individuals taking action on social and economic issues, build a collaborative community that tackles issues and identify the best ideas that will be supported through the incubation phase. She said the Hackathons would catalyse high-growth startups within Edo State, support development of ventures from

ideation to commercialisation and promote job creation and economic development, adding, “this will drive and ensure the increased adoption of local technology by government, corporates and development agencies across Edo state and Nigeria, strengthen and raise the standard of start-ups in the region and deliver positive social impact returns to communities and people across the region.” Recall that Vice President Yemi Osinbajo, alongside Governor Godwin Obaseki, last week, launched the South-South Innovation Hub in the state, kicking off activities for the state’s fledging tech ecosystem at the remodelled Institute of Continuing Education (ICE).

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35 NEWS

BUSINESS DAY

Bitcoin could ‘bring internet $9.6bn Nigeria-Brazil trade to double as Ooni opens market for herbal medicine in Brazil to a halt’ - BIS FRANK ELEANYA

ank for International Settlements (BIS) in a report warned that digital currencies like bitcoin could overwhelm and break the internet if they continue to grow. The BIS, often described as the central bank for central banks, also warned, in a 24-page report released this week, that cryptocurrencies cannot be trusted the way sovereign currencies can. Unlike central bank-issued denominations, virtual currencies are produced, or “mined,” by banks of computers solving complex algorithms, and then freely traded online. The other key difference with typical currencies is that the number of bitcoin in existence can never exceed 21 million. There are currently some 17 million bitcoins in circulation. Bitcoin’s surge in value from a few cents to a peak in December 2017 of $19,500 turned some of its first investors into billionaires. In a theoretical scenario where a country’s entire population turned to a digital currency like bitcoin, “the size of the ledger would swell well beyond the storage capacity of a typical smartphone in a matter of days, beyond that of a typical personal computer in a matter of weeks and beyond that of servers in a matter of months,” the BIS said. “But the issue goes well beyond storage capacity,

and extends to processing capacity: only supercomputers could keep up with verification of the incoming transactions,” it said. “The associated communication volumes could bring the internet to a halt.” The BIS, which has previously warned of the fraud risk in cryptocurrencies, noted that there was “a fragile foundation of trust” in such systems. “In mainstream payment systems, once an individual payment makes its way through the national payment system and ultimately through the central bank books, it cannot be revoked. In contrast, permissionless cryptocurrencies cannot guarantee the finality of individual payment,” the report said. Furthermore, the BIS pointed to the “unstable value” of currencies such as bitcoin. “This arises from the absence of a central issuer with a mandate to guarantee the currency’s stability,” it said. More broadly, the BIS raised long-standing regulatory concerns over the use of cryptocurrencies, particularly with regards to money laundering and financing of terrorism. The report pointed to the case of the Silk Road underground marketplace for drugs and other contraband, which was shut down by the FBI in 2013, and which had used virtual currencies like bitcoin to shield customers from detection.

RAZAQ AYINLA & BOLADALE BAMIGBOLA in Brazil

’oni of Ife, Oba Enitan Ogunwusi, has signed trade treaty centred on trado-medical treatmentandexportsofYorubaherbal medicine with the Government of Brazil. Thetradetreaty,whichaccording to O’oni of Ife, will open way for Yoruba traditional herbal medicine experts from Nigeria to hold exchange programme with their Brazilian counterparts on African herbal medicine, effectively diagnose and treat patients of various ailments, is expected to explore andcapitaliseonthehugepopulation of the largest country in both South and Latin Americas, using Brazil as African trado-medicine hub for the America. Recall that the bilateral trade between Nigeria and Brazil stood at $9.6 billion (N3.4trn) as of 2012, according to reports released by Emmanuel Ibru-led executive of Nigeria-Brazil Chamber of Commerce, which the former minister of trade, industry and investment, Segun Aganga, had projected to be double by now. But, with the treaty signed by the O’oni, experts believe that Nigeria will benefit immensely. Signing the bilateral trade treatywiththeGovernmentofBrazilin the presence of some royal fathers

fromtheSouthwest,Nigeria,atthe premises of a dedicated Research Institute located in Fiocruz-Bairro Manguinh, Rio de Janeiro, Brazil, the Oba declared that the treaty would increase bilateral trade volume between Nigeria and Brazil as herbs, roots, hide and skins and other valuable medicinal inputs would be exported to Brazil, as well as other South and Latin American states. The trade treaty has its core mandateanddutytoresearchinto contemporary health issues in Brazil and among Brazilians and globally, and come up with solutions, he said, adding that the earlier the rest of the world embrace traditional medical solutions as an alternative to all contemporary health challenges, the better for humanity. He said all today’s health challenges facing the world were also witnessed by the older generations, and declared that solutions applied to the health issues by the progenitors of the Yoruba race that time, that made them live healthy life till old age were still veryrelevantindealingwithmany of today’s health issues The Yoruba traditional ruler said, “I am a testimony of the efficacyandpotencyofYorubaherbal products. Since I ascended the throne, I have not used orthodox medicine to treat myself, whenever I feel it is necessary to do so.

“God created herbs for us to use to deal with our health challenges. We have deities in charge of all major creations of God. And these deities rely on roots and herbs to treat ailments. “The powers of these deities are still very potent. But we should not look down on them or treat them with disdain. We must turn to all these beautiful gifts of God to solve our health challenges. My intention is to tell the world that we have trado-medical solutions to all health challenges plaguing mankind and that is what this agreement is all about. “Let us stop discrimination against African medicine and traditionalreligion.Ifweallbelieve in one God, then we should not discriminate. Let us tolerate one another. We should stop discrimination. We all belong to one God irrespective of our colour. “To ensure workability of the agreement, we have put in place a group comprising trado-medical experts from Nigeria and those from the Institute. Through the agreement,wecanbringinourtraditional medical solutions to solve health challenges here in Brazil.” Speaking earlier, the vice president of the Institute, Marcos Menezes, who signed the treaty on behalf of the Government of Brazil, said that the Institute is at the vanguard of campaign against religious intolerance, adding that

Brazil and entire South and Latin Americas would key into alternative African traditional medicine to treat different ailments and the result would be mutually beneficial to the two countries. He said, “This conference is important as it presents us opportunity to explore traditional means to solve health challenges of facing humanity. We believe the agreement is coming at the right time and will be mutually beneficial to us.” Giving a detailed analysis to the treaty on herbal medicine training, herbal products exports and its economic implications, Akintunde Ayeni, a herbal medicine expert and chief executive officer of Yemkem International, a trado-medical company in Nigeria, noted that the treaty would correct foreign trade imbalance which Nigeria suffers as a result of huge foreign exchange spent by Nigerians on medical tourism annually. BusinessDayrecallsthatNigeriathroughtheMinistryofHealth, recently declared that $1 billion was spent annually on medical tourism for which Federal Government was seriously working to correct, with a view to developing alternativemedicineandincrease trado-medicine products export as a means of correcting foreign trade disequilibrium created by the incessant medical tourism.

Glo TV series canvasses effective service delivery, prompt payment of utilities bills

ffective service delivery and prompt payment of utilities by Nigerians is the focus of episode 10, season six of Glo- sponsored TV drama series, Professor Johnbull. The programme is aired on NTA Network, N TA I n t e r n a t i o n a l o n DST V channel 251 and N TA o n S t a r T i m e s a t 8 . 3 0 p. m . o n Tu e s d a y and Friday and also at 6.00 p.m. on Sunday on DSTV Africa Magic Family and GOT V Channel 2, with repeat broadcast on Thursday at 9.30 p.m. Anambra Broadcasting Service also broadcasts i t o n We d n e s d a y a n d Saturday by 8pm. Titled Cold Meters, the new episode harps on the need for effective and efficient service delivery by public corporations and the need for the public to reciprocate the gesture by paying their bills as and when due.

It highlights how members of the public resort to sabotaging public companies through non-payment of bills, destruction of their tools or tampering with devices installed to deter mine charges in response to poor services rendered. In tr ying to find everlasting solutions to the c o n s t a n t p ro b l e m b e tween public corporations and the general public, the following posers were raised in Cold Meters : Should consumers pay for epileptic services? Can anyone justify the huge sums claimed by electricity distribution companies? If consumers don’t pay for services, how will the service providers sustain the services? Much fun awaits viewers as they see Chief Zebrudayah (Chika Okpala) in another cameo appearance in the new episode.

L-R: Ben Ayade, governor, Cross River State; Luan Marais of Sender 360, South Africa, and Dale Van Den, director, Aardway Chansbury Farming, South Africa, during a soil test by a team of South African farmers, for the cultivation of yellow maize for Cross River State Feedmill at Ochong, Obubra.

Lagos takes delivery of new buses preparatory to flag off BRI JOSHUA BASSEY

ome of the high capacity buses imported by the Lagos State government to boost public transportationunderitsBusReformInitiative (BRI) have started arriving. About 20 of the new buses are already stationed at the Ikeja Bus Terminal preparatory to flag off the operation. The state governor, Akinwunmi Ambode, had during the commissioning of the Ikeja Bus Terminal by President Muhammadu Buhari, on March 28, assured that the state government would be taken delivery of some of the buses in June, this year. About 5,000 new buses are expected under the BRI to add

to the public transport system, while other components of the scheme such as modern bus terminals, bus depots, bus stops and segregated laybys are being constructed in strategic locations across the state metropolis. The BRI will go a long way in enhancingconnectivityacrossthe State.Asidethis,thestateisalsodeveloping an Intelligent Transport Systemmechanismwhichwillaid Lagosians to plan their journeys. The new buses are also intended to gradually phase out the rickety yellow buses, most of which are smoky and add to further pollute the environment. Apart from adding to the aestheticsofthestatewiththeimpressive blue and white colour, the

new environmentally-friendly high capacity buses, which are now arriving the State in batches, were also equipped with modern facilities to bring about comfort and seamless travelling experience along the dedicated routes. Speaking on the initiative, Governor Ambode said the new buses and the terminals were conceived to redefine public transportation in the state with the view to make the state globally competitive. “Like we have said, we are doing bus terminals to actually improve on the management of transportation in the city. Some people would have noticed that we are beginning to receive some ofournewbuses.Wehaveactually

ordered 820 buses and we believe that by end of September, the 820 buses should be in Lagos. “The intention is not to drive away Danfo buses (Commercial Buses). Buses in Lagos right now are never enough. Government is intending to inject 5,000 but we donotintendtooperatethemand so whoever is going to operate the buses would recruit drivers and personnel to work on those buses. “So, if somebody upgrades from Danfo to bus, that is more job for our people. We, as government, are not the ones to drive the buses but what we are doing is to create avenue for people to get employed and to also create greater aesthetics for the city,” Ambode explained.

BUSINESS DAY

Tips & Talking Points

Harvard Business Review TALKING POINTS eBay’s Skype Bid $2.6 billion: In 2015, eBay bought Skype for $2.6 billion with the ambition of using the communication technology to increase sales on the eBay platform. eBay sold Skype four years later, losing $936 million on the write-down.

Learn the skills your industry will need in the future

+ Tech Titans Grow Stronger $3 trillion: Tech giants Apple, Alphabet, Amazon.com and Microsoft have a collective market cap in excess of $3 trillion. + Baby Boomers Retire 10,000: According to Pew Research Center, roughly 10,000 baby boomers will retire every day over the next decade. + Friendships and Happiness at Work One-third to one-half: You spend an estimated one-third to one-half of your time awake at work — one big reason your relationships with colleagues tend to reflect your happiness in the office. + Customers Make Bigger Purchases Online 25%: When consumers shop online, the average size of their carts is 25% larger than when they make purchases in a physical store, according to a study from consulting firm Oliver Wyman.

ou know it’s important to your career to keep learning new skills, but how do you know which ones to focus on? Start by looking at recent job postings from the top companies in your industry. Notice which qualifications keep popping up; the most common skills are probably the most essential. Next, reach out to people in your network who have a job you may want someday. Ask them what they’ve been learning to succeed in their roles. For example, if you want to

Do you actually need that recurring meeting?

know which skills and technologies are valued in sales, talk to some high-level salespeople. Also ask these experts whether they can recommend courses or other materials that will help you gain the skills you’re missing. And don’t feel intimidated about reaching out: Most people are happy to share this information, either because they like helping others or because doing so reinforces their expertise. (Adapted from “4 Habits of People Who Are Always Learning New Skills,” by Mike Keho.)

ometimes a colleague has a strong emotional reaction to something, whether it’s about a struggling project, negative feedback, or a brewing conflict. You may be tempted to keep your distance, hoping that things will blow over, but it’s better to proactively be there for your colleague. Offer to sit in a quiet room with them and hear them out. Empathize with what they’re experiencing and validate their feelings. Your goal is to help the colleague calm down and get perspective on the situation. Ask questions that allow them to share their emotions and make sense of the situation. Point out where they might have acted rashly, and encourage them to consider the issue thoughtfully. Then help them think through options for taking appropriate action. By creating this space for your colleague to slow down and process what happened, you can ensure that their next steps are a productive response. (Adapted from “Good Mentors Help You Work Through Strong Emotions,” by Wendy Murphy.)

focused on longer-term priorities should meet less often for longer amounts of time. Finally, figure out the right composition of attendees. Don’t let hierarchy decide who shows up; only those who have something specific to contribute should be included. And remember, even best practices won’t fix a meeting that shouldn’t be happening at all. (Adapted from “How to Fix the Most Soul-Crushing Meetings,” by Ron Carucci.)

any leaders hav e a f at a l flaw: a weakness so pronounced that it can hamper their career progress. But this type of flaw is hard to see because it’s usually connected to what you don’t do — it’s the listening you didn’t make time for, or the strategic vision it never occurred to you to describe. To figure out your fatal flaw, find someone who will tell you the unvarnished truth. Whether it’s a close friend, a coach, or a therapist, tell them that you genuinely want honest information about your major shortcomings. If they begin to convey the truth in a cautious,

tentative way, encourage them to open up and not hold back. Ask questions that show you’re curious rather than defensive. Your reaction will determine whether they share the complete story. And be sure to ask about the effect your flaw has on the organization. If you understand the severity of the situation, you’ll be more motivated to fix it. (Adapted from “Most Leaders Know Their Strengths but Are Oblivious to Their Weaknesses,” by Jack Zenger and Joseph Folkman.)

o one wants to hold a meeting that everyone dreads going to. If your meeting falls into that category, try using empathy to plan it better. Start by putting your agenda aside and asking two questions: 1. Who is going to be in the room, and what are their needs? 2. Who won’t be in the room but will be affected by the meeting, and what are their needs? Then seek out people from both of those groups. Ask them what they hope to get out of the meeting and what an ideal outcome

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

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Help your colleagues process strong emotions

Get honest feedback about the Use empathy to plan a better meeting traits that will hurt your career

hether they happen weekl y , m o nt h l y , o r quarterly (or even daily), recurring meetings are often a waste of time. To know whether yours are worth keeping, consider a few factors. First, make sure the meeting has a clearly articulated reason to exist. Ask yourself, “If we canceled this meeting, who besides me would care?” Second, determine the right cadence. It may seem obvious, but a meeting’s frequency and length must align with its purpose. For example, teams and task forces governing near-term priorities will need to meet more frequently for shorter amounts of time, while those

Tuesday 19 June 2018

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would be. Even if you run regular meetings with the same group of people, checking in like this can build trust, surface hidden issues, and ensure that participants feel invested. Doing this for every meeting may seem onerous, but with practice you can learn to do it in less time. And this small investment up front will save significant time in the long run. (Adapted from “Plan a Better Meeting with Design Thinking,” by Maya Bernstein and Rae Ringel.)

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BUSINESS DAY

STRATEGYBRIEFING

IDEAS THAT POWER HIGH PERFORMANCE

How to get your customers buy more frequently

here are three ways to grow a business. Most people only know about increasing their client base as a means of business growth. While that is powerful on its own, neglecting to increase the transactional value of these clients will mean shooting yourself on the feet. But even that is not enough, you still have to add the last element, and that is increasing the frequency at which your clients buy. With this three any business can grow and become a giant business. There are a number of things you can do to increase the frequency at which your clients buy from you. Through my research I have identified five ways which when properly applied in a any business will cause an exponential increase in the frequency at which clients buy: developing a back end of products that you can go back to your clients with, communicating with your

clients regularly, organising special events, programming clients, strategic pricing. We will discuss each of them briefly here: Developing a backend of products for your clients: Becoming customer centric is about focusing on your customers. By understanding that your business is really about them you will gain new insights about how to serve them better. You will create more products you can go back to your customers with. Your customers already have needs, its your responsibility to find it. This way they have things to come back for. Communicating with your clients: Keep the line open, your clients like it. Talk with them as frequently as you can, not just when you want to notify them of new arrivals or new offers. Customer relationship management has never being

easier today with the our era of data explosion. You have much more information about your clients right under your nose. For example if you friend them on Facebook, you have easy access to key information like their birthday, wedding anniversary and many things they care about. You must use this to your business advantage. Just make them know you care. Organising special events: Customers week, member’s special package, limited pre-release, indoor sales, clearance sales, open days, product exhibitions are all special events designed to get clients come back and buy. Such special events are important. They give you a chance to connect with your clients, gather information about their preferences, answer their questions and make them buy. When you create a special event you are giving your clients a reason to come back.

Programming clients: If you drive a Toyota car the chances you will speak well of Toyota cars and recommend them to your friends will of course be very high especially if the car really delivered on your perception of it before you bought. The reason is because Toyota has effectively programmed you. A proper positioning of your brand is key to business growth and programming your clients to see you the way you want is a continuous project. When you create a new system of service delivery, talk about it, don’t just assume they will know. If your market conditions

or new technology enables you to offer a lower price, do it before your competitors do. Don’t let your company play the catch up game, lead the market. Strategic pricing: Managing price perception, not just pricing structure and actual price points has become a critical capability for firms especially those in consumer markets. Through a number of strategies you can create a healthy perception about how your clients perceive you in terms of pricing. This way they want to come to you whenever they buy since they think your offer is unbeatable.

Brian Reuben(@brianoreuben) is an advisor on strategy and leadership. He regularly conducts keynote presentations and senior executive workshops with companies around the world on strategy and leadership. He heads BusinessDay Training Was this article helpful? Share your thoughts with us on Facebook @bdtraininglive or email us on trainings@businessdayonline.com

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Cracks open ahead of OPEC’s meeting this week … as Saudi Arabia, Russia seek higher production DIPO OLADEHINDE

he Organisation of Petroleum Exporting Countries (OPEC) and its allies seem set for a contentious meeting this week to review whether to continue or unwind supply curbs put in place 18 months ago as supply risks increases. Although the global oil gluts seems to have disappeared, recent Donald Trump’s comments have led to an increase in supply risk as Saudi Arabia and Russia have threatened to increase supply which OPEC and its Non OPEC allies have been trying to clear since early 2017. Emmanuel Afimia an energy analyst at Afimia consulting Limited warns that terminating the agreement now may cause a free fall in oil prices to as low as $40-$50/barrel in a few months. “OPEC and its allies will probably extend the production cut agreement beyond 2018 because current crude oil prices have not reached $100/barrel,” Afimia an energy analyst at Afimia consulting Limited told BusinessDay. While the Trump administration’s request for lower prices

might irk OPEC members, with Iran obviously the most aggrieved, the apparent willingness of Saudi Arabia to comply with Washington’s request has ignited furor from within the group. Ayodele Oni an energy partner at Bloomfield Law field expects OPEC to extend the production cut in order to allow for more favourable oil prices. “OPEC production cut is not always a reason for higher prices, when there is any crises in oil producing countries especially countries in the Middle East it tends to lead to a sharp reaction in oil prices,” Oni told BusinessDay. Abayomi Fewehinmi a Lagos based oil and energy expert thinks otherwise and is a bit sceptical about the meeting on June 22 as he expects OPEC decision to go either way. The current situation seems a bit precarious for OPEC as every of its member outside the gulf cant increase production. Venezuela‘s production output is falling fast, Angola is also losing production, Iran, obviously is facing production outages from U.S. sanctions, so it likely can’t increase output even if it wanted to. Also, Libya and Nigeria internal issues have led to inconsistent

production. Officials from Iraq and Algeria made negative comments over the past week about the possibility of higher output, while from the non-OPEC camp; Mexico’s production is falling anyway, so it has little to no ability to respond to a change in policy. Ultimately, the only beneficiaries of higher production would be Saudi Arabia and Russia, and to a lesser extent some of the Gulf States like Kuwait and the UAE. “ Despite all the razzmatazz, Saudi Arabia and Russia probably can’t simply increase production without jeopardizing a full-blown rebellion from the rest of the group. So, they will likely need to allocate more production to everyone, but even the act of deciding on a strategy will also be highly controversial,” an oil analyst told BusinessDay. Some analysts wonder if this week’s meeting could not lead to the infamous 2011 meeting that fell apart over sharp differences in opinion, with Saudi Arabia wanting to increase production to ease triple-digit oil prices following the conflagration in parts of North Africa and the Middle East during the Arab Spring. Continues on wwwbusinessday online

L-R: Adeyeye Ogunwusi, Ooni of Ife, and Nilcemar Nogueira, secretary of culture, Rio de Janeiro Municipal Government, signing one of the treaties on the establishment of Oduduwa House in Rio de Janeiro, Brazil.

FMDQ, CBI, FSD Africa launch Nigerian Green... Continued from page 1

bond market. The institutions are spearheading a 3-year Nigerian Green Bond Market Development Programme to, among others, create awareness and drive education required to integrate the principles of green financing into the Nigerian DCM, thereby facilitating the establishment and development of the green bond market in Nigeria. The Programme will support the development of guidelines and listing requirements for green bonds in Nigeria, develop a pool of Nigeria-based licensed verifiers to support issuers, facilitate engagement with extant and potential issuers and investors, support broader DCM reforms that have/will have an impact on the non-government bond market in Nigeria, and foster communications to and sensitisation of Nigerians on green bonds. In March 2018, the three institutions formalised a partnership, which stemmed from the growing global recognition of the role sustainability plays in strengthening financial stability and supporting overall economic growth in a nation, through the signing of a Cooperation Agreement, to support the development of the Nigerian green bond market for a 3-year period. The partnership is aimed at, among other things, enabling the OTC Exchange garner the necessary support required to promote impact investing as entrenched under the sustainable finance pillar in the FMDQ Debt Capital Markets Development (DCMD) Project, and at providing the necessary tools to allow the OTC Exchange continually pursue an economic development agenda to reposition and organise the Nigeria DCM to access the huge global pool of long-term climate-related capital. Subsequently, in June 2018, the parties, supported by the Securities and Exchange Commission (SEC) and Access Bank plc, launched the Programme in a four-day series of events, commencing with a Green Bond Bootcamp for key regulators and other major capital market participants focusing on the basics of green bonds, its pricing, and project identification methodologies required to foster green issues. Then followed by a series of targeted roundtable sessions for potential investors, issuers and

Continued from page 1

NASS approves N369bn for Lagos, Akwa-Ibom, 17 others...

N2.698 trillion. Documents obtained by BusinessDay revealed that the states will be refunded for rehabilitating or constructing federal roads and bridges. While Lagos State receives the highest reimbursement of N114.6 billion, Niger gets the lowest of N333.8 million. The approval followed adoption of the interim report of the Ad-hoc Committee on Issuance of Promissory Note and Bond Issuance in the Senate and that of the House Committee on Aids, Loans and Debt Management in the House of Representatives. Although both legislative chambers approved the Presi-

dent’s request on their last day of sitting on June 7, 2018 before embarking on Sallah break, BusinessDay obtained the report of the ad-hoc committee this week. Other states and the refunds approved for them include: Akwa-Ibom N78.7 billion, Zamfara N39.9 billion, Anambra N37.9 billion, Ebonyi N15.4 billion, Osun N13.2 billion, Plateau N12.1 billion, Ekiti N11.6 billion and Kwara N11.2 billion. Others are: Jigawa N10.7 billion, Edo N10.4 billion, Gombe N6.9 billion, Kano N4.4 billion, Ondo N4.3 billion, Adamawa N4.2 billion, Benue N3.02 billion and Imo N2.8 billion.

States across the Federation have been demanding for immediate reimbursement of funds spent on Federal roads on behalf of the Federal Government. It was gathered that many of the states had to intervene in the pitiable condition of federal roads and bridges between 2010 and 2015 when they were abandoned by contractors mainly due to lack of funds. However, the upper legislative chamber gave the number of states with outstanding claims and liabilities for executing federal highways on behalf of Federal Government at 25, with a debt of N584.983 billion. In a letter dated March 8, 2018, President Buhari had requested

Tuesday 19 June 2018

for approval to commence a promissory note and bonds issuance programme to clear long-standing obligations inherited by the present administration. The obligations, according to the President, include: unpaid obligations to pensioners, salaries and promotional arrears to civil servants; subsidy arrears, interest accrued and foreign exchange differentials; contractors and supplier debts; unpaid power bills and obligations from tariff reversal in 2014; Export Expansion Grant (EEG) scheme debts; judgement debts and refund to State Governments for projects undertaken on behalf of the Federal Government. Chairman of the Senate ad-hoc

intermediaries, respectively, to demystify the concept of green bonds as an alternative financing instrument for market stakeholders, and culminating in the official Launch Ceremony of the Programme on June 7, 2018. The ceremony brought together all the key financial market stakeholders (government, regulators, issuers, investors, intermediaries, inter alia) to discuss the concept of green bonds and the opportunity for Nigeria. Among those present at the launch were Akinwunmi Ambode, governor, Lagos State, ably represented by the deputy governor, Deputy British High Commissioner to Nigeria, Laure Beaufils, Minister of State for Environment, Ibrahim Usman Jibril, vice chairman, Senate Committee on Capital Market, Foster Ogola, chairman, House Committee of Capital Markets, Tajudeen Yusuf, director-general, SEC, Mary Uduk. Central Bank of Nigeria, deputy governor, Economic Policy, Okwu Joseph Nnanna, represented by Friday Ohuche, commissioner for finance, Lagos State, Akinyemi Ashade, director-general, Debt Management office (DMO), Patience Oniha, represented by Oladele Afolabi, director, Portfolio Management Department, DMO, Chief Executive Officer, Chapel Hill Denham Group, Bolaji Balogun, a co-chair of the DCMD Project and group deputy managing director, Access Bank, Roosevelt Ogbonna, amongst other capital market operators. Welcoming the guests, Tajudeen Yusuf, expressed the House’s avowed commitment to innovations aimed at making the Nigerian DCM deeper, more liquid, vibrant, and capable of financing the development of infrastructural projects that will support the preservation of the economic environment. While Akinwunmi Ambode, during his keynote speech stated “the state government will continue to be at the forefront of the campaign that will make our environment healthy and sustainable.” He further stated that Lagos State had set out policies and programmes on tree planting, conservation, transportation systems, waste and water management that would focus on providing profitable investment opportunities and climate-friendly projects.

committee and Deputy Senate Chief Whip, Francis Alimikhena (APC, Edo State), submitted that while the obligations would stimulate the economy, approving all the obligations in one swoop would lead to inflation. “It is important to approve the obligations in order to stimulate the economy, however to avoid inflation, all of the obligations cannot be approved at once,” Alimikhena said. Breakdown of the N2.698 trillion for the settlement of obligations and liabilities submitted by the Executive include: N1.957 trillion for capital projects and N741 billion recurrent expenditure. Continues on wwwbusinessday online

Politics & Policy Tuesday 19 June 2018

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Ekiti PDP berates Fayemi for saying no LG should have more than 200 staff AKINREMI FEYISIPO

he People’s Democratic Party (PDP) in Ekiti State has berated the governorship candidate of the All Progressives Congress (APC), Kayode Fayemi over his reported statement that the only solution to the inability of over 25 states in the country to pay workers salary regularly was for states and local councils’ workforce to be reduced. Fayemi reportedly made the observation while presenting his blueprint to officials of the United States Agency for International Development (USAID) in Abuja that “there were too many idle workers, especially in the local government system and that no local council in Ekiti State should have more than 200 workers.” Reacting, the State Publicity Secretary of the PDP, Jackson Adebayo, said in a statement that “it is obvious that Fayemi has not purged himself of this hatred for workers in Ekiti State, especially teachers and local government workers.” The party further said: “It is on record that as governor, Fayemi did refer to thousands of local council workers as idle and con-

Fayemi

sequently moved them to the classroom as teachers. He also demoted school principals, vice principals and head teachers to the classroom as teachers and took his hatred for workers in the State to the peak when he brought his cousin from Abuja and appointed his as Solicitor-General and Permanent Secretary, Ministry of

2019: Obtain your PVCs now, Ahmed tells residents SIKIRAT SHEHU, Ilorin

head of the 2019 general election, Kwara State Governor, Abdulfatah Ahmed has charged Kwarans to troop out en-masse to obtain their Permanent Voters Cards (PVCs) to enable them elect candidates of their choice. Governor Ahmed in his remarks at a sallah homage by the Emir of Ilorin, Alhaji Ibrahim Sulu Gambari, emphasised that “it is the civic responsibility of every eligible citizen to ensure collection of his or her PVC. It’s

Ahmed

a right and the only tool to elect people who can deliver on campaign promises.” “Ours is a peaceful and grassroots politics where we allow our people to take decisions on their own and encourage inclusive politics,” he said The governor who advised party faithful to queue behind the Senate President to elect credible candidates in the 2019 general elections, said that it was by so doing that they would elect candidates that would respect their customs and traditions. Ahmed also warned against politicising the Offa Bank robbery, urging the Nigeria Police to follow due process to ensure that all those involved were brought to justice. Emir of Ilorin, Ibrahim Sulu Gambari had earlier in his remarks praised the state government for its efforts on security and other sectors of the economy. According to the Emir, “We the traditional rulers in the state are behind the government to be able to actualise its massesoriented programmes for our people “.

Justice.” The PDP assured that its government would never sack workers, calling on workers in the state to be mindful of the manner in which APC governments in states like Kaduna, Edo, Kogi and others have sacked workers in the last one year. Adebayo said: “Having so-

journed in United Kingdom for a very long time, Fayemi should know that employment are even given for charity and that’s why social security scheme was created to assist those that are not employed. “Unfortunately, Fayemi, who should know and act in accordance with the norms in the UK where he came from, is the one supporting retrenchment of workers.” “When over 22,000 teachers and 4,000 local council workers were sacked in Kaduna State, Fayemi was on hand to hail the State Governor, Nasir El-Rufai. He was even the one who introduced the consultant who handled the competency test that led to the sack of the teachers. “Even at a point, youths from the north under the aegis of Northern Youths Movement (NYM) had to warn him to stop selling the idea of compelling teachers to write competency test to governors in the northern region. “We wonder what he (Fayemi) stands to gain from his persistent support for the reduction of workforce in the state and it has become necessary for workers in the state to reject him once again on July 14, 2018.”

Women leader canvasses inclusion of youths, women in politics INIOBONG IWOK

woman leader in Ogun State, Oluwatoyin Isiaka, has called for more inclusion of women and youths in the governing of the country. Isiaka made the call during an interaction with the press recently in Abeokuta, noting that the number of youths and women in politics were declining because of the several obstacles limiting their participation in the political affairs in the country. She however, charged women and youths to attune their psyche, economically, psychologically emotionally so that they could contribute fully to the economic and social-political life of their communities. Isiaka further advocated for more support for women and youths so they could tap into emerging opportunities in the society, adding that it was a responsibility the society owe them to excel.

Oyo LG election: Ad hoc staff protest non-payment of entitlements AKINREMI FEYISIPO, Ibadan

he adhoc staffers used during the local government election conducted by Oyo State Independent Electoral Commission (OYSIEC) last month have protested over nonpayment of their stipends by the commission. The staff in a save-our-soul letter to OYSEIC, Oyo State government and the Commissioner of Finance and Budget Friday, appealed to Governor Abiola Ajimobi, Bimbo Adekanbi, commissioner for Finance and Budget and Jide Ajeigbe OYSIEC chairman, demanded for all their pay accordingly. “This government alongside OYSIEC Chairman has refused to pay people that worked through thick and thin during the Oyo State local government election. And yet all we hear is that the government has done so much and ordinary Adhoc Staff had to wait one month and three days before making this publication”. “The election went well and up until this publication is released today being the 15th of June, 2018 no dime has been paid by OYSIEC

Ajimobi

nor the Oyo State government as remuneration to all the adhoc staff in all the 33 local governments of this state. “We hereby use this ample opportunity to request for our due pay, as the work has been done by the Adhoc Staffs and they are all entitled to get their fair rewards,” they said. However, Media Officer of the commission, Cosmas Oni who confirmed that they have not been paid, declared that the commission is working to ensure that they were paid hopefully by next week.

Oni however, maintained that the situation affected both the Adhoc staff and the electoral body workers. He said: “We are aware of the situation. Yes, the Chairman is working to ensure that they are paid; hopefully, by next week.” “The chairman was with the Chief of Staff last week on this matter. They will be paid, I said hopefully by next week. The governor has approved the money but, it has not been released by the Accountant office and the finance department,” he added.

Tuesday 19 June 2018

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FINANCIAL TIMES Aussie telco voluntarily hands World Cup broadcast rights to TV rival after streaming balls-up

Colombia’s new president faces decades-old challenges

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World Business Newspaper

Brussels heads for showdown with Poland over rule of law Battle over EU power to sanction member states comes to a head MICHAEL PEEL AND JAMES SHOTTER

oland and Brussels are poised for a showdown in their battle over the EU’s power to sanction member states accused of sliding into authoritarianism or corruption. Frans Timmermans, the European Commission’s vice-president, will hold last-ditch talks in Warsaw on Monday ahead of a crucial EU hearing on Poland’s observance of the rule of law — potentially opening the way to the first member state censure. Such a rebuke would set up a further possible clash between EU countries over whether to impose sanctions on Poland, including the suspension of its voting rights. Hungary, after its own disputes with Brussels over the rule of law, has said it will block any countermeasures against Warsaw, which would require unanimity. The next few weeks could reshape Poland’s relationship with the EU, at a time when the bloc is strained by pressure over migration and its disputes over trade and foreign policy with President Donald Trump’s administration. One EU diplomat said he feared the Poland case had exposed a sharp divergence of views around the bloc on “what rule of law means”. “If our starting points are fundamentally different, we may never find an understanding,” the diplomat said. “This is the fifth-largest member state. It is not something you can easily contain.” The Poland dispute has become urgent because of Warsaw’s planned overhaul of the country’s supreme court which will take effect on July 3. The move would force more than onethird of the court’s judges to retire. This and other changes to the Polish judicial system have led Brussels to charge that Warsaw is endangering the rule of law — a fundamental EU tenet. Poland has said it is overhauling an inefficient system that has not adequately been reformed since communist times. Mr Timmermans will on Monday call on Mateusz Morawiecki, Poland’s prime minister, to pull back from the judicial changes. Last week the com-

mission vice-president warned Poland’s government in a speech in the European Parliament not to abuse its powers. “You cannot say ‘Because I have got a majority, I can do with the rule of law whatever I like’,” he said. The commission opened the socalled Article 7 process of possible sanction against Poland last year, arguing that Warsaw was at risk of breaching EU laws and values. A failure to force Poland to back down would be a huge blow to the EU’s ability to govern itself at a time of rising autocracy and of corruption claims in countries such as Malta, Slovakia and Romania. EU ambassadors voted informally by 14 to four last week to escalate the dispute with Poland to a hearing of member states on June 26, which could be followed by a vote on whether to press ahead towards possible sanctions. Older EU members, including Germany, France and the Benelux countries, backed holding a hearing, while Hungary, the Czech Republic, Slovakia and Croatia opposed it. Critics of Brussels’ stance accuse it of double standards and a willingness to ignore breaches of EU rules by bigger and more influential members. EU officials privately recognise the bloc’s lack of tools to tackle alleged rule of law breaches. The commission has proposed tying observance of the rule of law to funding from the bloc’s next proposed multiyear budget — a plan that Poland branded a “massive power grab”. If the commission and Warsaw remain at loggerheads, the fate of the dispute will rest on whether either side can count on support from sufficient member states to force the other to back down. A four-fifths majority of EU countries is needed to press ahead with the case against Warsaw, which equates to 22 of the bloc’s 27 members, excluding Poland. The position of states that ducked the informal ambassadors’ ballot will be crucial if a vote is forced on whether to pursue possible sanctions against Poland. Austria, Romania, Italy, Lithuania, Malta, Estonia, Slovenia, the UK and Bulgaria — which holds the rotating EU presidency — all abstained.

Google pays $550m for stake in China’s JD.com Deal is latest step in low-profile strategy in China, where its search engine is blocked LOUISE LUCAS

oogle is paying $550m for a stake in JD.com, the Chinese ecommerce group, in a move that will see the two collaborate on retail and other initiatives. The deal for a less than 1 per cent stake is the latest step in a low-profile China strategy being quietly stitched together by Google, whose core search engine has been blocked in China since 2010. The move also burnishes the US company’s retail credentials, building on tie-ups it has signed in recent

months with retailers including Walmart and Carrefour. The partnership between Google and China’s second-biggest ecommerce player aims to marry the internet company’s user base with JD.com’s logistics expertise and infrastructure to develop retail opportunities in south-east Asia, the US and Europe. JD.com initially will offer its merchandise over Google’s shopping site — much as Google now does with other retailers — before branching into new markets Continues on page A2

US business leaders warn on impact of Trump tariffs Previously upbeat mood in boardrooms chills as president raises the stakes with China ANDREW EDGECLIFFE-JOHNSON AND PATTI WALDMEIR

onald Trump’s new tariffs on $50bn of Chinese imports have run into stiff opposition from US business leaders, a change in mood for boardrooms that had welcomed the president’s cuts to taxes and regulations and had largely shrugged off his protectionist rhetoric. The US Chamber of Commerce and the Business Roundtable, two of Washington’s largest lobbying groups, both warned on Friday that the tariffs and resulting retaliation from China would harm US manufacturers, farmers and consumers. “This is not the right approach,” said Tom Donohue, Chamber of Commerce president. “Risking a potential trade war is the wrong way to fix these problems,” the roundtable warned, even as it said it shared the administration’s concerns about China’s “discriminatory trade practices”.

The reaction comes after a sustained period of rising confidence among small and large US businesses, which has been boosted by Mr Trump’s deregulatory agenda and, in particular, by the cuts to corporate tax rates in the Republican legislation he signed into law last December. Surveys suggest that trend has turned as talk of trade wars has grown louder. Morgan Stanley’s business conditions index fell from 65 in May to 63 in June, and the Business Roundtable’s economic outlook survey recorded its first decline in nearly two years in the second quarter, falling to 111.1 from 118.6 three months earlier. The Association of International Certified Professional Accountants reported last week that 38 per cent of the executives it polled were concerned about potential conflicts between the US and its trading partners, with 40 per cent saying US tariffs or retaliatory measures would hurt their businesses. Strong corporate earnings and

confidence about the US economy have further boosted directors’ optimism after the tax reforms that yielded windfalls for many companies. But Gary Cohn, one of the most prominent business voices in the administration until he stepped down as head of the National Economic Council in April, said last week that a trade war could wipe out the boost that business had gained from tax reforms. The growing uncertainty and concern about trade policy has made tariffs a flashpoint in the relationship between Washington and a business community that had largely discounted Mr Trump’s protectionist speeches on the subject since he started campaigning for the presidency in 2015. “That’s what’s so frightening. The rhetoric for the first time has reached a level where it is real,” said Peter Quinter, chair of the customs law committee of the American Bar Association, whose clients include Chinese exporters to US importers in sectors from food to electronic equipment.

UN urges US to end separation of migrant children ‘immediately’ Human rights chief’s criticism comes as prominent Republicans revolt over Trump policy ADAM SAMSON AND MARK ODELL

he United Nations has hit out at the Trump administration’s policy of separating undocumented child immigrants from their parents and locking them up, calling on the US to end the practice “immediately”. The organisation’s human rights chief on Monday joined a chorus of criticism over the weekend of the White House’s policy that has seen thousands of children seized and incarcerated on the US-Mexico border in recent weeks. “The thought that any state would seek to deter parents by inflicting such abuse on children is unconscionable. I call on the United States to immediately end the practice of forcible separation of these children,” Zeid Ra’ad al-Hussein, the UN’s high commissioner for human rights, said in a farewell address on Monday. He is due to step down from his role this summer. The policy risks “irreparable harm” to the children, he added.

About 2,000 undocumented children have been separated from their parents at the border and are now being detained by US authorities, according to official figures. The moves have come as the US has begun taking a zero-tolerance policy, strictly enforcing existing law that makes illegally crossing the border a crime that can be punished with detention. The policy introduced by the US administration has drawn widespread condemnation in recent days, from both prominent Republicans and Democrats, including from some of US President Donald Trump’s closest supporters. “On Fathers Day [sic] we shouldn’t be seen as a country that separates it’s [sic] parents from their children. Just isn’t right and we have better values than that,” Anthony Scaramucci, the financier who last year served briefly in the Trump administration, tweeted on Sunday. In a rare public intervention in policy issues, Melania Trump, the First Lady, later on Sunday appeared to join the

criticism of her husband’s zero-tolerance approach, which enforces the letter of existing US law by detaining minors who cross the border illegally. In a statement through a spokesman Mrs Trump said she “hates to see children separated from their families and hopes both sides of the aisle can finally come together to achieve successful immigration reform,” NBC News reported. Mr Trump had sought to place the blame for the policy on Democrats, tweeting over the weekend: “Democrats can fix their forced family break-up at the border by working with Republicans on new legislation, for a change!” Mrs Trump’s comments followed a scathing attack on the White House by Laura Bush, the former First Lady, who compared the policy to internment of US citizens of Japanese descent during the second world war. “Our government should not be in the business of warehousing children in converted box stores” she wrote in the Washington Post. The policy was “cruel” and “immoral”, she added.

BUSINESS DAY

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NATIONAL

‘Environmental disaster’: BIS warns on cryptocurrencies ADAM SAMSON

he Bank for International Settlements, known as the bank for central banks, issued new research this weekend on the cryptocurrencies boom. It has a few concerns with the idea of digital money becoming actual money: •‘Environmental disaster’. •Scalability woes. •‘Unstable value’.

•Oh and it may “bring the internet to a halt”. The BIS has been sceptical for some time on cryptocurrencies, echoing many major players in the financial industry which have serious qualms with advocates’ aim of bringing digital currencies into the mainstream as a key medium for exchange. In its new report this weekend, the BIS has pointed to some of its over-arching

concerns that lead it to conclude that “decentralised cryptocurrencies suffer from a range of shortcomings.” fastFT rounds up some of the key points below. Electricity A key element of many cryptocurrencies, including bitcoin, is that so-called miners compete to complete complex mathematical calculations to get the right to add a ‘block’ to the blockchain. The

addition of the block stores information about a transaction, and the winning miner is rewarded for its work. Miners need to run superfast computers in order to perform these calculations. This requires electricity. A lot of it. . . . a key potential limitation in terms of efficiency is the enormous cost of generating decentralised trust. One would expect miners to compete to add new blocks to the ledger through the proof-of-work until

their anticipated profits fall to zero. Individual facilities operated by miners can host computing power equivalent to that of millions of personal computers. At the time of writing, the total electricity use of bitcoin mining equalled that of midsized economies such as Switzerland, and other cryptocurrencies also use ample electricity. Put in the simplest terms, the quest for decentralised trust has quickly become an environmental disaster.

Google pays $550m for stake in China’s JD.com....

Audi CEO arrested over diesel cheating scandal

Continued from page A1

VW has backed and promoted Rupert Stadler despite calls for his resignation

beyond China. South-east Asia, a fragmented region where Alibabaowned Lazada is expanding, is seen as fertile ground. The company has been looking to expand internationally, with Richard Liu, JD.com’s founder and chief executive, telling the Financial Times earlier this year that he wanted to generate half of its profits from outside China within the next decade. For Google, the deal gives it access to JD.com’s vast logistics and warehouse network. The US company is stepping up its dealmaking in China, where it employs 700 people and has long maintained a $1bn-plus ad business carrying ads for Chinese manufacturers and service providers such as hotels seeking to woo international customers. This year Google inked a longterm pact to cross-license patents with Tencent, the Chinese technology group, on a wide range of products and technologies. It also opened a third office in China, in the southern city of Shenzhen, home to many of the country’s tech and hardware companies, including Tencent and Huawei. That office supplemented a recently opened artificial intelligence lab in Beijing. In addition to signing deals with some of the biggest players in China’s tech universe and increasing its footprint in the country, Google has been rolling out products and investing in start-ups. Last month it launched its Files Go app, which helps users better utilise their storage space, in China, joining its translation app and ARCore technology for augmented reality. As Google Play is unavailable in China the apps are being sold via Chinese app stores. In January, Google participated in the latest funding round for Chinese esports livestreaming platform Chushou, and AI biotechnology start-up XtalPi’s $15m series B funding round. It has invested in voice recognition technology start-up Mobvoi, which also counts Sequoia Capital and Volkswagen as investors. With the latest investment Google becomes JD.com’s second US major investor. Walmart has a stake of about 11 per cent in the ecommerce group. Tencent owns about 20 per cent of JD.com. Philipp Schindler, Google’s chief business officer, said the duo would “explore new solutions for retail ecosystems around the world to . . . give consumers the power to shop wherever and however they want”. Jianwen Liao, JD.com’s chief strategy officer, hailed the Google deal as “a new chapter in our history”, adding that it “opens up a broad range of possibilities to offer a superior retail experience to consumers throughout the world”.

PATRICK MCGEE

German political crisis eases as CSU backs down on asylum threats Merkel buys time to seek pan-European solution to migration at EU summit GUY CHAZAN

he crisis between Angela Merkel’s Christian Democrats and their Bavarian sister party, the CSU, appeared to ease on Monday after CSU interior minister Horst Seehofer backpedalled on his proposed changes to Germany’s asylum policy. German media on Monday reported that Mr Seehofer was no longer insisting that German police immediately be given powers to turn away refugees at the border if they were already registered as asylum seekers in other EU countries — an idea that Ms Merkel has rejected — and was prepared to introduce the new policy gradually. That would give Ms Merkel time to seek a pan-European solution to the issue at an EU summit later this month. The chancellor has said any unilateral action by Germany could endanger the Schengen system of passport-free travel. The concession will draw the sting

out of a spat that at one point threatened to destroy the alliance between Mr Seehofer’s CSU and Ms Merkel’s CDU, a union that has existed since 1949 and is in many ways the bedrock of the German political system. The CSU’s stance has been driven in large part by the fear of losing its absolute majority in the Bavarian regional elections in October, amid strong polling by the far-right populist Alternative for Germany, prompting accusations from CDU politicians that it is risking the future of one of the most successful electoral alliances in Europe for the sake of short-term political gain. The conflict between the two sister parties comes as political leaders across Europe struggle to forge a common response to the refugee crisis, with countries such as Italy and Austria keen to impose a harder line. At a meeting of the CSU party executive in Munich on Monday, senior party figures appeared to back off from confrontation with Ms Merkel, dropping their previous insistence

that the new policy be implemented immediately. “It’s clear we want it,” Joachim Herrmann, the Bavarian interior minster, was quoted by Reuters as saying. “But it’s not a question of hours or days.” The DPA agency said Mr Seehofer proposed at the meeting that in the initial stage, only refugees whose asylum request has already been denied in Germany would be turned away at the border. In this he was accepting a compromise offered by Ms Merkel last week. A spokeswoman for the interior ministry confirmed that would represent a shift in the existing policy. Currently, failed asylum seekers are allowed to re-enter the country and make a second asylum request. According to DPA, Mr Seehofer said preparations would also be made to enforce his new, tougher policy of turning away refugees, but it would only be implemented if no European agreements on the asylum issue were reached.

Colombia’s new president faces decades-old challenges Iván Duque will need to resolve a succession of long-term problems GIDEON LONG

van Duque will become the youngest elected president in Colombia’s 132-year history as a republic when he takes office in August, but many of the problems he will inherit are far older than he is and it will take deft leadership to resolve them. The 41-year-old Mr Duque was not even born when the country’s two biggest Marxist guerrilla groups, the Farc and the ELN, took up arms against the state in the 1960s. While the Farc reached a historic peace deal with the government in 2016 and has disarmed, the ELN is still active and peace remains fragile. In his victory speech on Sunday night after comfortably beating leftwing rival Gustavo Petro, Mr Duque said the Farc deal required “corrections”, without saying what they might be. If clumsily executed, any tinkering with the peace process could re-ignite the

conflict. However, in a positive sign, the Farc’s leader Rodrigo Londoño, better-known by his nom de guerre Timochenko, congratulated Mr Duque on his victory and insisted “the roads of hope are open”. The new president, who will take office on August 7, a week after his 42nd birthday, vowed on Sunday to “turn the page of polarisation” and govern “with all and for all Colombians”. But in such a deeply divided country it will be a challenge for Mr Duque to fulfil such a pledge. The gap between rich and poor remains wide, poverty and corruption are rife and the state’s presence in far-flung corners of the country is negligible. Cocaine production is booming. Mr Duque has said he might resume aerial fumigation of coca plantations, a policy abandoned by the current government on health grounds. Again, it is a measure that could backfire if poorly implemented.

Aside from Colombia’s decades-old issues of guerrilla insurgency and cocaine production, Mr Duque will face newer challenges such as the imploding economy across the border in Venezuela. He is likely to take a tough stance against Venezuela’s leftwing leader Nicolás Maduro and will have the ear of US president Donald Trump through Florida senator Marco Rubio, an ally of the Colombian right and one of the first to congratulate Mr Duque on his victory. Mr Duque, a lawyer who worked at the Inter-American Development Bank in Washington for a decade, has only four years of experience as a senator, but enjoys the backing of former president Álvaro Uribe, the standard-bearer of the Colombian right and still arguably the most influential politician in the country. Mr Uribe will head their Democratic Centre party in parliament, which should ensure Mr Duque enjoys a working majority.

udi chief executive Rupert Stadler was arrested on Monday for his alleged role in the Volkswagen Group’s diesel cheating scandal, the company has confirmed. The arrest, earlier reported by German weekly Der Spiegel, comes one week after his private apartment was raided by Munich prosecutors. Audi had no further comment on the matter. Mr Stadler, the luxury carmaker’s CEO since 2007 and a VW Group board member since 2010, is the highest sitting executive to be taken into custody since the decade-long diesel cheating scandal was exposed by US regulators nearly three years ago. Martin Winterkorn, the former CEO of VW Group, was charged on four counts for his alleged role by US authorities earlier this year. Since the cheating was exposed, Mr Stadler has faced numerous calls from minority shareholders and some analysts to step down. VW has not just defended him; last year it extended his contract by five years and in April, amid a broad restructuring, it promoted him to head of a new “Premium” cars division with group-wide sales responsibilities.

Norwegian Air shares jump on prospect of Lufthansa deal ‘Everyone in Europe is talking to everyone right now’

JOSH SPERO

hares in Norwegian Air have gained almost 10 per cent after the chief executive of the Lufthansa group said his company was interested in making a bid for its northern neighbour. In an interview with the Süddeutsche Zeitung newspaper in Germany, Carsten Spohr said: “Everyone in Europe is talking to everyone right now. There is another wave of consolidation. This means that we are also in contact with Norwegian.” He said all acquisitions were a matter of value, price and opportunity, with “no simple answers”. Norwegian has been engaged in conversations with several potential suitors about a takeover. British Airways owner IAG bought 4.6 per cent of Norwegian in April and made two approaches to buy for an undisclosed price, both of which were rejected by Norwegian’s board. Bjorn Kjos, Norwegian chief executive and joint biggest shareholder, has said: “We are happy to have IAG as an investor. Needless to say, they are not the only interested party that has approached us.” Mr Kjos has also said Norwegian had held discussions with low-cost carrier Ryanair, but Ryanair denied this: “There is no truth to these claims. We have not made an approach to Norwegian and we have no interest.”

Tuesday 19 June 2018

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Aussie telco voluntarily hands World Cup broadcast rights to TV rival after streaming balls-up Emerging markets currency crash has left Fed chairman Powell unmoved JAMIE SMYTH

t’s the most watched sports tournament on earth and offers media rights holders a unique opportunity to reach consumers. But for Optus, Australia’s secondbiggest telecoms company, the 2018 Fifa World Cup is fast becoming a public relations disaster. On Monday the Singtel-owned operator, which holds the streaming rights to all 64 matches, voluntarily handed its television rival SBS the rights to broadcast the following two nights of world cup action. It made the decision following a consumer backlash prompted by technical difficulties with its own streaming services- and a public intervention by Malcolm Turnbull, Australia’s prime minister. “I have spoken with the Optus CEO, Allen Lew. He assures me he is giving the World Cup streaming problems his personal attention and he believes it will be fixed this evening,” Mr Turnbull said in a tweet. Optus initially moved to make TV set top boxes available to customers, who have struggled to

watch matches on its A$15 a month subscription streaming service due to technical faults caused by strong demand. But shortly after Mr Turnbull’s comments, Optus caved in to pressure and agreed to allow SBS to simulcast several matches during the next 48 hours. “I offer an unreserved apology to those customers that have been let down. We have a dedicated team which has been working around the clock to address technical issues where they have occurred,” said Mr Lew. “This decision has been made with the interests of football fans across Australia in mind.” Optus’ “own goal” had threatened to embarrass the government, which has slashed the budget of Australia’s state broadcasters. SBS is a hybrid-funded public broadcaster and the opposition Labor party had sought to link budget cuts to its failure to buy the exclusive rights to the world cup. “Good. It should have been on SBS to begin with. And if they can’t sort this out, it should stay there,” said Bill Shorten, Labor party leader, in response to the Optus announcement.

Stock sell-off deepens on tariff battle worries Havens tick higher as prospects of tit-for-tat trade dispute grow, Wall St set to fall

MICHAEL HUNTER AND HUDSON LOCKETT

hat you need to know European bourses fall faster after Asia-Pacific stocks fall as further tariffs loom Frankfurt’s exporter-heavy Xetra Dax 30 leads European stocks lower Wall Street set to join the retreat according to futures trade Yen firms, euro slips and dollar index ticks up in cautious currencies trade Brent trades around $73 a barrel ahead of Opec meeting “The week starts with the news that China has responded in kind to the US imposition of tariffs, so sentiment towards stocks reliant on unencumbered global trade will remain fragile” — Ian Williams, economics & strategy research analyst at Peel Hunt. Hot topic Stocks are tracking the intensifying threat of a US-China trade war, with Frankfurt’s exporter-heavy Xetra Dax leading deepening declines in Europe after losses across Asia. Stocks in industrial metals makers and car manufacturers are falling, in line with the sense of unease. The US dollar is firmer overall, although the yen and the Swiss franc are ticking higher as the cautious feel to trade also sets the pace among currencies, boosting havens. The yen is 0.2 per cent firmer at ¥110.43 per dollar. The franc is also 0.2 per cent stronger at SFr1.1558 per euro. Yields on government bonds prized by investors for their safety are ticking lower as investors buy into them. Benchmark 10-year US Treasury yields are at 2.9187 per cent, down 1 basis point. German Bund

yields over the same maturity are also down 1bp at 0.404 per cent. Beijing announced at the weekend that it would retaliate against new US tariffs on $50bn in Chinese imports that will go into effect within days, taking the world’s two largest economies to the brink of a full-scale trade war. Equities The sell-off is gathering speed. Frankfurt’s Xetra Dax 30 is down 1.3 per cent, with the Europe-wide Stoxx 600 down 1 per cent. London’s FTSE 100 is down by a more modest 0.4 per cent, helped by a weaker pound. On the German index, shares in global sports brand Adidas is among the biggest fallers, down by over 2 per cent. Volkswagen, the carmaker, is down by over 2.8 per cent. Futures trading is pointing to an opening slip on Wall Street, calling the S&P 500 down 0.6 per cent. In Japan, the benchmark Topix index fell 1 per cent despite a better than expected reading on exports growth. South Korea’s Kospi Composite index lost 1.2 per cent. Markets in Hong Kong, China and Taiwan were closed for a public holiday. Forex The dollar index is up 0.1 per cent to 94.859, while the euro is down 0.2 per cent at $1.1587. The pound is down 0.3 per cent at $1.3238, as investors track the twists and turns of Brexit. Commodities Brent crude oil, the international benchmark, fell 1 per cent to $72.72 a barrel in Asia-Pacific trading, dropping below the $73 marker for the first time since May 3 ahead of a key meeting of major producers later in the week. That followed a 3 per cent fall on Friday.

EIB to offer Libor alternative with Sonia-based bond Debt sale would pioneer the use of Libor replacement KATE ALLEN AND PHILIP STAFFORD

he European Investment Bank is set to sell a sterling-denominated floating rate bond linked to the reformed interest rate benchmark Sonia, in a bid to offer investors an alternative for scandal-hit Libor. The EIB has appointed NatWest Markets, HSBC, RBC Capital Markets and TD Securities to plan the sale. The deal is expected to launch and price in the near future, subject to market conditions, according to a person familiar with the EIB’s plans. The debt sale — which is expected to have a maturity of between three and five years — would help to pave the way for other debt issuers to raise capital at floating rates of interest that are based on Sonia, by offering “a template” for other bonds to follow, the person said. It would be the first Sonia-based sale by a supranational body since 2010, when the EIB sold a £300m Sonia-

linked sterling benchmark note. Libor is set each day as an average of rates submitted by global banks. Sonia by contrast is calculated using information on unsecured overnight lending transactions between banks, as well as those arranged by brokers. The shift from Libor to Sonia is one of the most significant parts of the UK’s bid to revamp the role of benchmarks in the markets, which has come under fierce scrutiny after banks and brokers were found trying to manipulate them. Although the old interest rate benchmarks remain embedded in global financial activity, with $370tn of financial products tracking Libor and its European equivalent Euribor worldwide, Sonia has begun to gain a toehold in recent months. The Bank of England began publishing Sonia rates in April. IntercontinentalExchange, which administers Libor, began trading futures on Sonia earlier this month.

The Financial Conduct Authority will not compel banks to submit Libor rates beyond 2021. Credit rating agency Moody’s warned last month that this would have “uncertain consequences for creditors holding existing Libor-linked floating rate bonds, some of which may effectively become fixed rate”. Moody’s also warned that it was “unclear when swap liquidity will be sufficient” for new benchmarks such as Sonia to be used as reference rates. The new reference rates’ different methodology from Libor could create “mismatches between assets and liabilities and less effective hedges”, Moody’s said. The International Swaps and Derivatives Association is planning a consultation on setting up a fallback option for the derivatives market in the event that Libor ceases to exist before market participants have switched to another reference interest rate.

WP Carey to buy Corporate Property Associates 17 in $6bn deal ERIC PLATT

S property group WP Carey has agreed to purchase commercial real estate company Corporate Property Associates 17 in a stock-deal valued at about $6bn. Stockholders of Corporate Property Associates will receive 0.16 shares of WP Carey for each share of Corporate Property Associates they currently own, worth roughly $10.72 apiece based on

the company’s share price at the closing bell on Friday. WP Carey said it expected the takeover to be completed by the end of 2018. “This transaction simplifies our business and effectively transforms WP Carey into a pure-play net lease Reit with earnings derived almost entirely from higher-multiple lease revenues,” said Jason Fox, chief executive of WP Carey. Corporate Property Associates was formed as a real estate investment trust in 2007 and is advised

by WP Carey. The group said it had net leases on 411 properties, and counted more than 100 tenants including newspaper The New York Times, health insurer Blue Cross and Blue Shield of Minnesota, and Croatian foods group Agrokor, according to marketing documents from the company. JPMorgan and Barclays advised WP Carey on the transaction, while Morgan Stanley offered financial advise to the special committee for Corporate Property Associates.

Trade jitters hit European markets Pan-European equities gauge sinks 1% in mid-afternoon trade

ADAM SAMSON

rops across European bourses accelerated in mid-afternoon action on Monday, with investors increasingly nervous over deepening trade disputes. Just after 1pm in London, the panEuropean Stoxx 600 gauge shed 1 per cent. Germany, which is seen as particularly sensitive to trade barriers because of its export-geared factory sector, sustained some of the heaviest selling. The benchmark Dax index was off 1.6 per cent. France’s CAC 40 fell 1.5 per cent, while Italy’s FTSE MIB dipped 1 per cent and Spain’s Ibex 35 declined 1.2 per cent.

Britain’s FTSE 100 slipped 0.37 per cent, with its losses dulled by a weaker pound. Strategists cited last week’s escalation in the trade skirmish between the US and China as a key reason for the more bearish sentiment. The US finalised plans to launch $50bn in tariffs on Chinese imports, with Beijing threatening retaliation in kind. “People are losing some patience with ‘it’s just a negotiating tactic’ reason for the tariffs because instead of leading to a formal negotiation, it is leading to an escalation,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. In a sign of the growing tension, major US business and agricultural groups

were quick last week to warn over the potential blow to the American and world economy if a full-blown trade war were to develop. The skittishness also made its way to the foreign exchange market. The Japanese yen was among the best performing major developed market currencies against the US dollar, up 0.2 per cent. The currency often rises during times of increased strife. Prices on government bonds perceived to be ‘havens’ also pushed mildly higher, knocking yields lower. The benchmark 10-year Treasury note yield slipped 2.2 basis points (0.022 percentage points) to 2.9022 per cent, while yield on the German equivalent was off 1.2 bps at 0.393 per cent.

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Tuesday 19 June 2018

ANALYSIS China seeks semiconductor security in wake of ZTE ban Stubborn technology gap has frustrated Beijing’s bid to build a world-class chip sector EDWARD WHITE

Colombia’s new president faces decades-old challenges

Iván Duque will need to resolve a succession of long-term problems GIDEON LONG

ván Duque will become the youngest elected president in Colombia’s 132-year history as a republic when he takes office in August, but many of the problems he will inherit are far older than he is and it will take deft leadership to resolve them. The 41-year-old Mr Duque was not even born when the country’s two biggest Marxist guerrilla groups, the Farc and the ELN, took up arms against the state in the 1960s. While the Farc reached a historic peace deal with the government in 2016 and has disarmed, the ELN is still active and peace remains fragile. In his victory speech on Sunday night after comfortably beating leftwing rival Gustavo Petro, Mr Duque said the Farc deal required “corrections”, without saying what they might be. If clumsily executed, any tinkering with the peace process could re-ignite the conflict. However, in a positive sign, the Farc’s leader Rodrigo Londoño, betterknown by his nom de guerre Timochenko, congratulated Mr Duque on his victory and insisted “the roads of hope are open”. The new president, who will take office on August 7, a week after his 42nd birthday, vowed on Sunday to “turn the page of polarisation” and govern “with all and for all Colombians”. But in such a deeply divided country it will be a challenge for Mr Duque to fulfil such a pledge. The gap between rich and poor remains wide, poverty and corruption are rife and the state’s presence in far-flung corners of the country is negligible. Cocaine production is booming. Mr Duque has said he might resume aerial fumigation of coca plantations, a policy abandoned by the current government on health grounds. Again, it is a measure that could backfire if poorly implemented. Aside from Colombia’s decadesold issues of guerrilla insurgency and cocaine production, Mr Duque will face newer challenges such as the imploding economy across the border in Venezuela. He is likely to take a tough stance against Venezuela’s leftwing leader Nicolás Maduro and will have the ear of US president Donald Trump through Florida senator Marco Rubio, an ally of the Colombian right and one of the first to congratulate Mr Duque

on his victory. Mr Duque, a lawyer who worked at the Inter-American Development Bank in Washington for a decade, has only four years of experience as a senator, but enjoys the backing of former president Álvaro Uribe, the standard-bearer of the Colombian right and still arguably the most influential politician in the country. Mr Uribe will head their Democratic Centre party in parliament, which should ensure Mr Duque enjoys a working majority. “The big question is what the relation will be between those two men,” said Yann Basset, a political scientist at the University of Rosario in Bogotá. “Duque can’t let himself be Uribe’s puppet but at the same time he can’t afford to betray Uribe. He will have those two potential nemeses hanging over him as president and he’ll have to bear them in mind whenever he takes a decision.” Mr Uribe said he backed Mr Duque to save Colombia from “destructive socialism” and made a point on Sunday of highlighting the plight of Venezuela, saying he hoped the new government could ensure a return to democracy in Caracas. Economically, Mr Duque is orthodox. He has vowed to cut corporate tax rates, slash red tape, clamp down on tax evasion and reduce legal uncertainty for foreign investors looking to enter the country’s oil and mining sectors. He has pledged to return Colombia to annual growth of 4.5 per cent of gross domestic product after two years in which the economy has expanded by an average of 1.9 per cent. Growth is already picking up and economists expect it to hit about 2.5 per cent this year and 3 per cent

next. Consumer confidence recently returned to positive territory for the first time in 27 months. However, economists say Mr Duque will have little room for tax cuts if he is to stick to Colombia’s fiscal rule, which requires the country to reduce its deficit to 1 per cent of GDP by 2022 from 3.6 per cent last year. Oil production is falling and Colombia’s debt-to-GDP ratio has risen to more than 40 per cent. The margin of Mr Duque’s victory was impressive. He took 54 per cent of the vote to Mr Petro’s 41.8 per cent and become the first Colombian candidate to garner more than 10m votes in the second round of a presidential ballot. Mr Petro won 8m votes, itself a major achievement in a country that has long shunned leftwing firebrands, associating them with the guerrillas. In a combative speech after conceding defeat, Mr Petro said he and his supporters “would not allow Colombia to go back to war”. In a comment that echoed a now infamous remark made by former Venezuelan leader Hugo Chávez following his failed coup attempt in 1992, Mr Petro told his followers: “For now, we will not be in government.” The 58-year-old former guerrilla will enter the Senate as the unofficial leader of the opposition and is likely to have another stab at the presidency when Mr Duque’s term ends in four years. “In Colombia we have to get used to the idea of having a leftwing president,” said Munir Jalil, a senior economist at Citibank in Bogotá. “It happened in Chile, in Peru, in Ecuador and Venezuela [following rightwing governments]. We need to understand that one day it will happen.”

hen the US administration shut down Chinese telecoms equipment maker ZTE in April — putting the future of a $17bn company and 75,000 jobs at risk after sanctions cut the supply of key microchips — it highlighted a vulnerability in the Chinese economy: it depends on foreign-made chips. The country remains dependent on imports to build the phones, telecoms gear, computers and other devices that account for almost one-third of its exports: at $227bn in 2016, the country spent more on the items than it did on oil, iron and basic plastics combined, according to the World Bank and Chinese government data. The US is set to unwind the ZTE sanctions after Chinese leader Xi Jinping pressured Donald Trump, but Beijing remains desperate to end its reliance on foreign chipmakers. It has already committed $150bn to build its domestic semiconductor industry over the next decade via the Made in China 2025 development programme. “The motivation [in China] is pretty clear,” said ANZ chief China economist Raymond Yeung. “If you don’t have the chips, you can’t do anything.” The stakes are high. In April, Alibaba founder Jack Ma, speaking to students at Waseda University in Tokyo, warned of the fallout for Chinese tech companies if the US were to suddenly stop supplying chips to the country. “One hundred per cent of the market for chips is controlled by Americans . . . suddenly if they stop selling . . . what that means, you understand?” he said. China’s sensitivity to its reliance on offshore chip groups was apparent

their capacity at the same time. “Let’s say [Chinese companies are] behind by five years,” he said. “So in five years they will catch up with where we are now, but in five years we’ll be ahead of them again, by another five years.” Analysts agree that Chinese chipmakers still trail their most advanced rivals by years, despite decades of central planning and billions of state funds. “Even for a mid-tier smartphone right now, the main chip cannot be produced by the best foundry that China has,” said Mark Li, an analyst at Bernstein, referring to the contract chipmakers at the heart of the global semiconductor industry. The sales gap between TSMC and Semiconductor Manufacturing International Corporation, the Shanghai-based foundry that ranks fifth worldwide in sales of customised chips, is only growing as the Taiwan group builds on its lead in facilities, customers and capital expenditure. SMIC declined to comment. Making advanced chips means working closely with designers and technology groups to write the rules for how chips will be developed. Overtaking TSMC, for instance, would require a company such as Apple to take a leap of faith on a new Chinese manufacturer to build one of the most critical components for its devices. Nevertheless, the scale of Beijing’s investment and China’s record of success in industrial and technological development means experts are reluctant to rule out the possibility that the country will leapfrog the world in semiconductors. “After 2020, you could see a world in which innovation slows down quite a bit, and therefore you see a world where [China’s] ‘laggards’ are able to catch up, because the leaders are not able to march ahead as fast,” said Mr Thomas.

Taiwan Semiconductor Manufacturing, the world’s biggest contract chipmaker, says Chinese companies will struggle to catch up to foreign rivals © FT montage / Reuters

again earlier this month, when Beijing launched probes into several foreign semiconductor groups, including Samsung and Micron, for alleged price fixing. The two groups said they were co-operating with authorities. Analysts say that what is missing for the Chinese is mastery over “process technology” — the cluster of skills needed to pack billions of transistors into a fingernail-sized chip. “Doing it from scratch is a very, very high bar to figure out,” said Chris Thomas, head of the Asia semiconductor practice at consultants McKinsey. “Even if you had the money, there’s a lot of integrated disciplines.” Mr Thomas added the big chip plants in China were reluctant to invest heavily until they got a handle on process technology. “You can’t invest in capacity until you have the technology,” he said. Morris Chang, founder of Taiwan Semiconductor Manufacturing, the world’s biggest contract chipmaker, says Chinese companies will struggle to catch up to foreign rivals that are improving

As the world’s biggest consumer of semiconductors by value, China also has market power it can use to encourage offshore groups to share their technology. Last year Qualcomm, the US group, formed a joint-venture with state-owned Datang Telecom Technology to develop chips for cheap smartphones. Chinese customers and intellectualproperty licensees in the country accounted for nearly two-thirds of Qualcomm’s sales in 2017, up from 53 per cent in 2015. The importance of good China relations was reinforced by Beijing’s delay of Qualcomm’s $47bn acquisition of Dutch chipmaker NXP Semiconductors, in April. China has also tried to buy its way to the top of the chip industry. The Rhodium Group, which monitors Chinese investment in the US semiconductor sector, recorded 27 attempted Chinese deals worth more than $37bn from 2013 to 2016, including three major acquisitions: Integrated Silicon Solutions, Mattson Technology and OmniVision. That compared to only six transactions worth $214m from 2000 to 2013.

BUSINESS DAY

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NEWS YOU CAN TRUST I TUESDAY 19 JUNE 2018

Opinion APRA conference 2018-Botswana, CHOGM 2018-London and other conversations

ADE ADEFEKO Adefeko is Vice President Corporate and Government Relations, Olam Nigeria

wrote this weeks ago aboard a RWANDAIR flight, which happens to be one of my favorite African airlines which I fly with across Africa, as long as they have a connection. My week was busy and akin to what you could call shuttle diplomacy, though I had no mandate from the Federal Government of Nigeria but as you might well be aware, I often refer to myself as a consummate commercial diplomat. This week is about varying conversations from the mundane to the sublime, looking at divers economies, need for developmental cravings, life styles and even diplomacy. As a senior executive in a multi-billion dollar global agribusiness company with a footprint in 66 countries, and 25 of them on the African continent, it is important to do the talk of promoting and deepening agricultural conversations and promoting bilateral and multilateral trade when the opportunity presents itself, and that is exactly what I did. My journey started from Lagos to Gaborone, Botswana where I was one of the speakers at the African Public Relations Association conference, aptly tagged APRA-2018. Here, I spoke on the topic “story telling as a tool for public relations”,

and the thrust of my allocution was simple: tell the African story through your lens and prism, and in doing that, you must do three things, which I like to refer to as “the 3 Cs of story-telling, and narrative control: create your story, control it and then change it when you deem fit but do not let anyone alter or define for you what story you must tell as it is your prerogative to define it and affect if from your sphere of influence. In times past, our traditional griots and bards told our story under the moonlight and then dramatized same until we allowed western influences to affect our narratives and we lost control of the plot and it only took a Black Panther movie by an all-black ensemble to bring to fore our ubuntu. As a Pan Africanist, I then moved on to another country that had fascinated me since 1980; the homeland of Robert Mugabe, the 92 old leader who was swept away in what the Zimbabweans refer to as a Coup-non Coup as it was bloodless and ushered in a new regime, though from the old guard but has promised to do things differently though it is still early days, and elections are a few months away and hopefully he will consolidate if the former British colony called Northern Rhodesia can rise from the ashes; a hitherto food basket in the 80s to mid-90s lost the plot in my view after the so called land reform which I felt should have been gradual and turned itself into a basket case but is gradually shedding that toga with the new mantra Zimbabwe is open for business. I witnessed first-hand the ease of travel through visa issuance and the pristine and functional airport in Harare. It is noteworthy that

about a couple of weeks ago, Zimbabwe just placed a request to be taken back as a member of CHOGM; the world awaits the next line of action on this. One very uncanny discovery about Zimbabweans revolves around the names they give themselves; a case study is the name of the general manager of the hotel that housed me which is Try-things while the name of his secretary is Do-things. Another interesting discovery is the fact that the Zimbabwe state operates four different payment systems. At least I feel I should share some of my funny findings too. From Botswana to Zimbabwe, and finally the CHOGM 2018 event, issues of discussion around national economies seem to appear same aside the varying conditions and circumstances with regard to growth related requirements. The discussion continues and an insight to the obvious shows that the Commonwealth of Nations is an intergovernmental organization of 53 nations which comprise majorly of territories of former British Empire prior to decolonization. The organization spans the globe, comprising of advanced economies and developing economies of Africa, Asia, Caribbean, Europe and the Pacific Islands. It contains a total population size of 2.4 billion people with a 60% proportion under the age of 30. Furthermore, the organization had a combined estimated gross domestic product (GDP) of $10.4 trillion in 2017 (14% of Global GDP). Despite the wealth within the organization, there is however a marked economic diversity. The membership consists of 31 developing nations, 14 of which are on the list of the

United Nations least developed countries (LDC). Also, the poverty rate is higher than the global average with 20% of its citizens living on less than $2 a day which translates to nearly 1 in 5 people – some 444 million women, men and children living in extreme poverty In recent years, traditional approaches to measuring national prosperity based on macroeconomic indicators have been revised and redefined. Multiple indicators assessing income inequality, average life expectancy, social capital infrastructure, and the level of corruption and literacy rates amongst others tend to show the bigger picture and better stratify and explain a nation’s prosperity. This has prompted an agenda for sustainable development (2030 Agenda) as was discussed in the recent Commonwealth heads of government meeting (CHOGM) of 2018 which sought a solution through which the commonwealth can contribute to a future which is fairer, more sustainable, secure and more prosperous. The growth of the Commonwealth GDP, which is estimated in excess of 4% year-on-year per annum still has potential for growth. This is largely driven by the intra-commonwealth trade in goods which has experienced a steady growth of 10% each year for over the past two decades. A significant proportion of this potential is a result of under-trading between Asian members and between African members. At the same time, there is also considerable untapped potential for trade expansion from Commonwealth African, Asian, Caribbean and Pacific developing nations with developed nations within the Commonwealth. A prime ex-

ample is the estimated $12 billion potential African export to the UK by the Commonwealth Secretariat. The trade potential of a nation however requires considerable investments in its production process to help scale production beyond the limits of the domestic markets. The production of goods for export has the benefit of product improvements and standardization of quality. On the other hand, imports will help the developing nations to access technology, availability of a greater variety of products and competition. This will promote competition and offer consumers a better choice of alternatives. Whilst trade and investment raise global and national incomes, the effects on individual countries and groups within them are not automatic or homogenous. Complementary policies and institutions (e.g. skills and technology to build capabilities of the most vulnerable groups) are required to address potential adverse effects from trade and investment and maximize the benefits. The Commonwealth of Nations is a robust 92 year platform with a variety of countries having varying success factors. This gives an opportunity for “policy arbitrage” through a process of learning from the success stories of others. The benefit of quick adoption of the right economic policies to improve prosperity and inclusive growth is a lowhanging fruit for developing economies within the Commonwealth. This is made easy by the advantage of a common language, shared institutional and legal heritage of the British Empire, convening power of the Commonwealth and the sharing of knowledge and best

practices. There has been slow progress in terms of equitable inclusion of small and medium scale enterprises (SME’s) which majorly involve women and youths within the Commonwealth. This is a bane to prosperity in the long-run considering that more than 1 billion Commonwealth citizens out of an estimated 2.4 billion are under the age of 25. Youth unemployment is a key concern in many Commonwealth developing countries. In Eastern Caribbean countries, for example, unemployment levels within the 18-30 age(s) bracket range from 30% to upwards of 40%. Empowering young entrepreneurs is a particularly important element of leveraging the economic potential of young people in the Commonwealth. The role of small businesses cannot be underestimated especially within developing economies. According to the World Bank, SMEs in emerging markets are responsible for creating four out of five new jobs in the formal economy. In low-income countries, SMEs contribute close to 50% of total employment—and this number is higher when informal SMEs are included. The Commonwealth includes many of the world’s poorest and smallest countries, and its peoples embrace all the world’s major cultural groups. The potential for a prosperous Commonwealth is within reach. Wrapping this up, it is of a necessity for countries within the continent of Africa to consider talking points arising from the various events aforementioned and global strides in the areas of national planning amidst technological advancement towards the global economic integration.

The long wait for a productivity resurgence •Improvement in living standards depends almost entirely on rising output per worker MARTIN WOLF Wolf is the Chief Economics Commentator of The Financial Times.

ou can see the computer age everywhere but in the productivity statistics.” Today, we could repeat this celebrated 1987 statement by Robert Solow, Nobel laureate founder of modern growth theory, with the substitution of “technology” for “computer”. We live in an age judged to be one of exciting technological change, but our national accounts tell us that productivity is almost stagnant. Is the slowdown or the innovation an illusion? If not, what might explain the puzzle? The slowdown, if true, matters. As Paul Krugman, also a Nobel laureate, argued, “Productivity isn’t everything, but in the long run it is almost everything.” Improvements in standards of living depend almost entirely on rising output per worker.

The productivity slowdown is a major explanation for the stagnation in real incomes and the pressure for fiscal austerity in high-income countries. Gene Grossman of Princeton and three co-authors even argue that the marked slowdown in the growth of incomes per head also explains the decline in labour’s share of national income in wealthy countries. No economist has done more to promote the revolutionary implications of information technology than MIT’s Erik Brynjolfsson, above all in books co-authored with Andrew McAfee, also of MIT. But, in an interesting recent paper with two co-authors, he, too, recognises the “productivity paradox”. The paper does not resile from a belief in the transformative power of recent technological advances, particularly artificial intelligence. On the contrary, it emphasises it, notably in image recognition and translation. Yet the productivity slowdown, the paper admits, is real. This seems to reflect weak investment and, above all,

declining growth of “total factor productivity”, a measure of output per input of capital and (quality-adjusted) labour. TFP is a measure of innovation, of the ability to produce more valuable output with given quantities of inputs. Without innovation, the rising prosperity of the past two centuries would have been impossible. In truth, innovation, not productivity, is almost everything. We should also focus our attention on the US, since this large country has been driving the innovation frontier outwards since the late 19th century. A study by Nicholas Crafts of Warwick University and Terence Mills of Loughborough shows a decline in trend growth of TFP in the US from just above 1.5 per cent a year in the early 1970s to 0.9 per cent most recently. Others, notably Robert Gordon of Northwestern University, in his masterpiece The Rise and Fall of American Growth, come to similar conclusions about the recent slowdown, from analysis of longer time periods. One possible explanation

is mismeasurement. It is, and always has been, difficult to measure the impact of new technologies, particularly now when many services are free and many are provided, invisibly, from outside the US. Yet it is hard to accept that measurement suddenly became more difficult in 2005, when the US productivity slowdown began. Moreover, even when account is taken of likely mismeasurement, in a study by David Byrne of the Federal Reserve and Dan Sichel of Wellesley College, the result is to raise TFP growth in the tech sector, but lower it elsewhere, with negligible effects on the whole economy. Mismeasurement then is not the explanation. A second possibility is that diminished competition and expensive rent capture have dissipated the potential gains. So we have islands of innovation and huge wealth, but a weak economy. Several researchers do argue on these lines. This may even be a partial explanation. But it would be astonishing if monopoly alone prevented innovative

technologies from bringing productivity benefits to today’s open economies. A third possibility is that the new technologies are simply not what they are claimed to be, particularly compared with the wide range of transformative ones from the late 19th and early 20th centuries: clean water, electricity, the internal combustion engine, powered flight, petroleum and chemicals. We take all those for granted, but they changed everything, as recent technologies may have not. Artificial intelligence may be a revolutionary general purpose technology but, a century ago, several technologies arrived at much the same time. A complementary view is that progress is harder now: it takes more researchers to advance technology than it used to do (though we can also employ more researchers today). The final possibility — and the one that the paper by Mr Brynjolfsson and his co-authors unsurprisingly believes — is that this is the lull before a storm. It argues that the same productivity pause happened

with electricity in the 1920s. It takes time for a new GPT to transform an economy. Today, AI is in its earliest stages. Soon, they argue, it will change everything. This is consistent with the finding of Profs Crafts and Mills that past productivity performance is a poor forecaster of future performance. When I look at the weighty presence in the modern economy of labour-intensive service sectors, such as health, education and care of children and the elderly, I conclude that the technological transformation will be slow. If I am wrong, it will be disruptive. At the moment, however, we have the worst of both worlds: significant disruption but near stagnation in average incomes. What it will be in future — slow or disruptive — we do not yet know. But our societies are built on an implicit promise of growth. If the choice were between no progress and disruptive advance, we must hope for the latter — and do our best to manage the consequences.

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