BusinessDay 19 Jun 2019

businessday market monitor FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

Foreign Exchange

Biggest Gainer Mobil N164.5

Biggest Loser

Nestle 0.61pc N1420 29,818.80

-0.70pc

Foreign Reserve - $45.11bn Cross Rates - GBP-$:1.26 YUANY-N52.15 Commodities Cocoa

Gold

Crude Oil

US$2,500.00

$1,350.10

$62.19

news you can trust I **wednesDAY 19 june 2019 I vol. 15, no 335 I N300

₦3,280,290.75

+0.21 pc

Powered by

g

Buy

Sell

$-N 358.00 361.50 £-N 457.00 464.00 €-N 401.00 407.00

www.

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

Spot ($/N)

3M

360.49 306.95

0.18 11.13

NGUS aug 21 2019 360.93

gypt’s message to Nigeria is a simple one: Endure the short-term pain from implementing bold economic reforms and reap the benefits in the long haul.

One of the more recent ben-

L-R: Atiku Bagudu, chairman, Progressives Governors’ Forum/ governor, Kebbi State; President Muhammadu Buhari; Abba Kyari, chief of Staff to the President; Babajide Sanwo-Olu, governor, Lagos State, and Yahaya Bello, governor, Kogi State, during the president’s meeting with the All Progressives Congress Governors, at the Presidential Villa, Abuja, yesterday.

Firms boost capital raising on economic rebound Growth set to hit 5.9% this year

efits that Egypt has derived from its bold economic reforms is the boom in capital raising activity by local companies, which adds

to gains the country has made in reducing inflation, attracting foreign investment and boosting economic growth.

6M

Egyptian companies are on track to raise the most capital in eight years by the end Continues on page 38

5Y

0.02

0.02

12.30

14.56

NGUS nov 27 2019 361.38

10 Y -0.05

20 Y 0.00

14.55

14.77

NGUS may 27 2020 362.28

@

g

Egypt reforms upside holds lessons for Nigeria E LOLADE AKINMURELE

fgn bonds

Treasury bills

g

APAPA GRIDLOCK

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

Start-ups enter to digitise Nigeria’s analogue education system Odinaka Anudu, Joseph Maurice Ogu & Gbemi Faminu

C

hiamaka Okoro, a midlevel manager in a financial institution, was unable to find a suitable Physics teacher for her child in September 2018.

In October, she stumbled on Continues on page 38

Inside Sanwo-Olu reverses self, says didn’t promise to end Apapa gridlock P. 2 in 60 days

2

Wednesday 19 June 2019

BUSINESS DAY

news Securing appointment date is fresh hurdle facing Nigerians travelling to South Africa ISAAC ANYAOGU

N

igerians seeking to travel to South Africa have a new hurdle to surmount. They have to be physically present to secure an appointment date, which can be anywhere from one week, before they can submit their visa application, BusinessDay has learnt.

The rule introduced last week without prior notification to intending applicants, according to one senior official at the Lagos office of VFS Global, an outsourcing service for governments and diplomatic missions worldwide, is to deal with the huge volumes of applications for South African visa from Nigeria.

However, many applicants expressed frustration with the sudden imposition of the rule, saying they were not given prior notice which could have helped in planning their visa applications. One applicant said her business trip to South Africa had been ruined as she was banking on six working days required to process the application, but now it would take 12 working days.

“I came all the way from Ikorodu only to get one week appointment date,” complained Chinedu Okezie, a visa applicant. “They should place a notice on their website to inform people or make it

possible to book appointments online. Why do we have to be physically present to get an appointment?”

Some applicants were issued appointment dates so close to their intended travel date that it seems almost impossible for their visas to be ready at the proposed time of their travel. It takes anywhere between three weeks and a month to be issued a visa to South Africa, even though VFS Global claims it takes six working days. In addition, VFS Global has abolished cash payments for visa processing at its office.

“There is nothing I can do about it,” said a VFS Global Nigerian staff attending to a prospective applicant who complained that his appointment date was only days to his intended travel date. “Perhaps you can contact the event organisers in South Africa; there is nothing we can do from here.”

But this is not really of any help because the event organisers are given the email address of VFS Global to correspond with the South African Embassy. Even when applicants visit the embassy to make their case, they are directed to the VFS Global which tells them it has no power to intervene.

•Continues online at www.businessday.ng

Tax Appeal Tribunal exempts Voluntary Pension Contribution from PAYE tax …in landmark judgment between Nexen Petroleum, LIRS

Iheanyi Nwachukwu

T

he Tax Appeal Tribunal (TAT) sitting in Lagos on Tuesday, June 18, 2019 delivered judgment in the case of Nexen Petroleum Nigeria Limited (the Appellant) and Lagos State Internal Revenue Service (the Respondent) to the effect that Voluntary Pension Contribution (VPC) is a valid deduction for calculating Pay-As-You-Earn (PAYE) tax on employee’s emoluments.

KPMG’s Tax Dispute Resolution Team provided support to the Appellant in the resolution of the tax appeal.

While delivering judgment in the case of Nexen Petroleum Nigeria Limited and Lagos State Internal Revenue Service (LIRS), the Tax Appeal Tribunal noted that VPC is statutorily exempted from PAYE tax by the provision of Sections 4(3) and 10 of the Pension Reform Act 2014 (as amended) and Section 20(1) of the Personal Income Tax Act 2011 (as amended).

Also, the TAT ruled that the Appellant was not under statutory obligation to account for tax payable on the

amount of VPC withdrawn by its employees. The responsibility to recover the tax due on such withdrawals is that of the Respondent.

The Joint Tax Board (JTB) and LIRS had issued separate public notices on their positions on the adverse effect of Voluntary Contributions (VC) on tax revenue.

Section 4(3) of the Pension Reform Act 2014 provides that any employee to whom the Act applies may, in addition to the statutory contributions, make voluntary contributions to his Retirement Savings Account (RSA). Section 10(1) of the Act provides for the tax-deductibility of pension contributions – including Voluntary Contributions (VC).

Section 10(4) of the Act, however, provides that any income earned on VC made and withdrawn within five years would be subject to tax at the point of withdrawal. This is in contrast with Section 7(2) of the Pension Reform Act 2004 which taxed VC withdrawn less than five years after the date of contribution, and not merely the income earned from it.

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

L-R: Abdu Dantata, non-executive director; Aliko Dangote, chairman; Olakunle Alake, non-executive director; Ravindra Singhvi, chief operating officer, and Bennedikter Molokwu, independent non-executive director, all of Dangote Sugar Refinery plc, at the company’s annual general meeting in Lagos, yesterday

Sanwo-Olu reverses self, says didn’t promise to end Apapa gridlock in 60 days

...Lekki, Badagry seaports most credible alternatives to Apapa decongestion Tony Ailemen, Abuja

C

ontrary to his earlier promise to resolve the Apapa gridlock within his first 60 days in office, Lagos State governor, Babajide Sanwo-Olu, on Tuesday reversed himself, saying he never made such promise.

The governor was fielding questions from State House Correspondents after meeting with President Muhammadu Buhari in Abuja.

“Interestingly, some media houses are actually counting down on me. They said that I

mentioned during the campaign train that I was going to clear it in 60 days,” Sanwo-Olu said.

“I have mentioned it before, what I said was that in 60 days we would review what was done but that does not take the fact that even if people give you dateline, it’s because they want you to do well and they want you to be able to be accountable for those datelines,” he said.

But BusinessDay reports that this contradicts what the governor had said on May 18, 2019 during an interactive session with his classmates

at the Congratulatory Dinner Reception with the Executive Master of Business Administration class, University of Lagos, 1998/2000 set.

At the event, Sanwo-Olu, who was then a governorelect, promised to end the protracted gridlock in Apapa area of the state within the first 60 days of his administration, “not minding the politics involved”.

“The Apapa trailer issue is a campaign issue; it’s very serious; I’m going to take it very seriously. I believe that it is something that we are going to solve in the first 60 days of

our government. Whatever is going to be required of us, we will take them out,” SanwoOlu had said.

“There is a lot of politics being played around there.

But no; it cannot be the way we’ll continue to live. We cannot continue to give excuses,” he had said.

The then governor-elect had, however, said that as a long-term solution, his administration would develop the Badagry Port to diffuse the pressure on the Apapa Port.

But at the interactive ses-

Continues on page 38

Dangote Sugar posts profit before tax of N34.6bn in 2018 …laments unabated smuggling of sugar into markets

L

eading sugar manufacturing company, Dangote Sugar Refinery plc, on Monday received commendations from shareholders for its resilience despite the harsh operating environment of the 2018 financial year as well as for continuous payment of dividend.

At the Annual General Meeting of the company held in Lagos, Bisi Bakare, national coordinator, Pragmatic Shareholders Association of Nigeria (PSAN), said that though many quoted companies are struggling with the payment of dividends, Dangote Sugar Refinery is consistent in taking care of shareholders. According to her, investors are always happy when they receive returns on their investments both as dividend and share price growth on the Nigerian Stock Exchange.

Sunny Nwosu, founder,

Independent Shareholders Association of Nigeria (ISAN), decried the ApapaWharf traffic which has impacted negatively on the performance of companies as they struggle to move finished goods and raw materials to distributors and warehouses. He said the board and management deserve a hefty pat on the back given the situation under which the achieved the result.

In his response, Aliko Dangote, chairman, Dangote Sugar Refinery plc, stated the resolve of the company to soar to greater heights and create more values for stakeholders despite the plethora of challenges in the economy.

He said the company has posted a profit before tax of N34.6 billion with a turnover of N150.4 billion for the 2018 financial year despite, even as the company lamented the continuous smuggling of

https://www.facebook.com/businessdayng

sugar into the country.

Dangote said the company was able to post an appreciable resilient performance despite the gloomy economic outlook at the dawn of the previous year 2017.

He told the shareholders that Dangote Sugar was able to weather through the economic downturn and advanced significantly in 2018 because it aggressively pursued its backward integration plan by focusing on issues that had been bogging down the plan and subsequently adjusting the timelines.

“2018 was quite a challenging year for the company with several negative activities, which include influx of smuggled sugar into the key markets nationwide coupled with the Apapa gridlock which continue to affect evacuation of products from the refinery,” Dangote said.

He explained that prior to

@Businessdayng

the traffic logjam at Apapa, the company could move up to between 60 and 70 trucks out of the refinery but since the problem started, it could hardly move up to 20 trucks daily.

He said the company had to revise its backward integration timeline to mitigate the unforeseen challenges, noting that the first phase of the plan included the rehabilitation and expansion of the Savanna Sugar, the Lau/Tau project in Taraba State, and the Tunga sugar project in Nasarawa State.

According to him, Savanna Sugar remains the only company producing sugar from sugarcane grown in the country and had just ended its 2018/2019 crop season.

“Rehabilitation of the land and its infrastructure for improved yield and output is still on-going,” Dangote said.

•Continues online at www.businessday.ng

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

3

4

Wednesday 19 June 2019

BUSINESS DAY

NEWS

How Coca-Cola tackles high maternal, TraderMoni is Africa’s most impactful newborn deaths through Safe Birth Initiative scheme - African Bankers

Endurance Okafor

I

nthequesttocontributeitsquota to tackling the high rate of maternal and newborn deaths in Nigeria, Coca-Cola Nigeria Limited delivered maternal and neo-natal careequipmenttotheFederalMedical Centre, Ebute-Metta, Lagos, the beginningofthesecondphaseofthe company’sSafeBirthInitiative(SBI).

SBI is focused on supporting doctors and nurses to achieve successful birth outcomes by strengthening the capacity of target public hospitals in three critical areas, including the procurement of vital maternal and neonatal medical equipment and supplies.

This is with the aim to enable safe deliveries and post-delivery emergency care; training biomedical engineering technicians to improve equipment maintenance and uptime; and reactivating a large stock of abandoned medical equipment wasting away in public hospitals.

“The next beneficiary hospital equipment and supplies have arrived Nigeria and installation as well as end-user training was completed in March 2019,” Bhupendra Suri, managing director, Coca-Cola Nigeria, said in a statement in April.

The successful commissioning of the medical equipment in EbuteMetta was born out of Coca-Cola’s partnership with the Federal Ministry of Health, the Office of the Senior Special Assistant to the President on Sustainable Development Goals and an NGO, Medshare International Inc. ChecksbyBusinessDayrevealthat

the Federal Medical Centre EbuteMetta is the second out of the 15 hospitalssettoreceivemedicalequipment provided under the SBI. During the first phase, 15 major public hospitals across Nigeria recommended by the FederalMinistryofHealth,willreceive hospitalequipment,kitsandsupplies worth a total conservative value of about$10.8million(overN3.8bn).

“Active and intentional collaboration between members of the private and public sector is key to transforming healthcare in Nigeria,” Clem Ugorji, public affairs and communications director, Coca-Cola West Africa, said.

Commendingthegoodworkof Nigeriandoctorsandnurses,Ugorji said, “We recognise that there is a limit to what they can do without the critical equipment required for effective diagnosis, testing and treatment. Through the Safe Birth Initiative, we are pleased to be able to donate vital equipment to aid the work currently being done to safeguard the lives of mothers and

www.businessday.ng

babieshereatFederalMedicalCentre, Ebute-Metta and the 14 other hospitals that will receive donations as part of the first phase of the SBI.” Data from the National Demographic and Health Survey (NDHS) in 2013 revealed that Nigeria loses as many as 576 women per 100,000 childbirths and 37 newborn deaths per 1,000 live births, placing the country among the worst ratios for bothmaternalandnewborndeaths globally.

Through the SBI, 20 biomedical engineering technicians have completed an intensive two-week capacity training focused on improving equipment maintenance and uptime. The technicians, who came from 10 leading medical institutions across the country, comprising university hospitals, federalmedicalcentresandgeneral hospitals,weretrainedbyUS-based Engineering World Health (EWH) at the School of Biomedical Engineering, Lagos University Teaching Hospital.

... as FG projects GEEP to reach 10m people by 2023 Tony Ailemen, Abuja

A

frican Bankers have describedtheFederalGovernmentTraderMoniasAfrica’s most impactful financial inclusion scheme.

The TraderMoni, which is a key elementoftheBuhariadministration’s Social Investment Programmes, is alreadyattractingcontinentalpraiseas African Bankers named the GovernmentEnterpriseandEmpowerment Programme (GEEP) as Africa’s most impactfulfinancialinclusionscheme.

TheAwardwasgiventotheBank of Industry (BoI), which implements GEEP,attheAfricanBankers’Awards ceremonyheldinMalabo,Equatorial GuineaonJune11,2019,foritsrolein implementingGEEP,whichincludes the popular TraderMoni as well as FarmerMoni microcredit schemes.

In a statement, Laolu Akande, senior special assistant to the President on Media and Publicity, Office of the Vice President, said about 10 million Nigerians would have benefited from the GEEP, one of the NationalSocialInvestmentProgramme (NSIP)forMicro,SmallandMedium Enterprises.

TheAfricanBankerAwardsholds annuallyon thefringes oftheAnnual Meetings of the African Development Bank, celebrates excellence in banking and finance on the African continent.

OlukayodePitan,BoI’smanaging director/CEO, received the award at the event alongside other senior government officials.

https://www.facebook.com/businessdayng

GEEP is designed to deliver last mile credit delivery using an aggregation model that works with marketcooperativesastheacquiring structure, and agent networks with technological tools.

This group of GEEP agents is equipped with proprietary application that enables full registration and capture of data, such as the biodata, information on the market, nature of trader, pictures of trader and trade point, GPS coordinate of the trade point, association membership, and 43otherdatapointsthatenablecredit assessment.

This group of agents go into the marketstomeeton-boardbeneficiariesdaily;whiledataoneverycaptured beneficiary is delivered to the Bank of Industry real time to enable verification, appraisals and credit assessment. A call centre staffed with over 120agentsandotherofficialsdoesthis.

Sinceitscommencementin2016, millions of Nigerians have benefited from GEEP, while the micro-credit schemeshaveempoweredover2millionmicro-enterpriseswithcollateralfree, interest-free loans to grow their businesses.

The vast majority of these microenterprises are petty traders, smallscale merchants, enterprising youth, and agricultural workers in over 1,600 clusters and markets across the 36 states, and the Federal Capital Territory.

MarketMoni is a six-month interest-free, collateral-free loan starting from N50,000 to N100,000 for small businessesundertheauspicesoftheir

@Businessdayng

cooperative societies or associations.

Over 350,000 traders have benefitted from MarketMoni.

There is also the FarmerMoni loans,whichstartatN250,000andare tailored to suit the peculiarities of the differentplantingseasonsandfarming requirements. About 5,000 farmers have benefited till date.

In the same vein, over 1.7 million petty traders are beneficiaries of TraderMoni scheme, designed to assist petty traders and artisans nationwide to expand their trade through the provisionofcollateralandinterest-free loans starting from N10,000.

The loans are repayable over a period of six months, after which the traders get an increased loan of N15,000. They get additional sums up to a N100,000 along the way as they repay the loans. TraderMoni is designed to meet the needs of the larger population of petty traders at the bottom of the pyramid who do not meet the stringent criteria of credit facilities required for the bigger MarketMoni loans.

Over 1.5 million of the two million GEEP beneficiaries are first-time beneficiaries of credit from a formal financial lender, while over half of GEEP’s 2 million beneficiaries are first-time operators of bank accounts or mobile wallets.

Also, working with over 4,000 agents and 15,000 cooperatives in more than 1,600 markets across the 36statesandtheFCT,theprogramme has seen the detailed enumeration of over 7 million MSMEs and their owners.

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

5

6

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

7

8

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

9

10

Wednesday 19 June 2019

BUSINESS DAY

comment

comment is free

Send 800word comments to comment@businessday.ng

Opening a Business and Keeping it Open (1)– The value of research Small Business handbook

Emeka Osuji

O

pening a business is not the same thing as keeping a business open. There are two sides to every successful entrepreneurial activity: establishing a business and sustaining it. These two aspects of the functions of an entrepreneur are distinct and require different strategies, attitudes and orientations to accomplish.

In other words, opening a business and keeping it open may sound alike or even tautological but there is a big gulf between the imports of both words.

They are two sides of a coin that may look alike but actually have very little in common.

Those who have attempted to set up any kind of business may have discovered that certain steps are critical in the process of founding a company.

Every successful start-up begins with somebody desiring to have a place in the driving position of an enterprise - somebody anxious to lead a team, achieve results and leave a legacy.

Acquisition of knowledge in the field of business into which the entrepreneur intends to venture is a beginning point.

On the other hand, to keep a business open, meaning to keep it running and successful, somebody is desirous to work very hard; usually with deferred gratification. These two activities demand different mindsets and aptitudes.

To open a business requires knowledge of the trade. The ideal take off point is to do some research into that area of business, with an eye on one’s own personality. To research into oneself is to cross check one’s capacity and character to follow through the business. The research is not only into the business but also into the founder.

Otherwise, one may start a business only to discover he does not have the staying power or the mental and physical wherewithal to keep the business open. A lot depends on the extent to which the nature of the business agrees with the character of the entrepreneur, when it comes to keeping the business open. This preoperational research is sometimes misunderstood to mean

just a study of the business with regard to the market situation – what may be termed an environmental scan, to determine existing players, market size, concentration ratios and such. These details are important but they are just a part of the things the entrepreneur must find out before he takes any action. Another equally important part of the research is the one he must carry out into himself. Anybody who wants to start a business must evaluate himself to find answers to certain questions regarding his personality and capacity to run the business.

In trying to find out why you want to set up a business, you also get the answers to some other preliminary questions. For instance one should also from this outset be sure of the kind of business one wants to run: what kind of business should you go into. Once you can explain why you want to run a business, the next thing to do is to be sure of what drives you. What is your passion? This will also reveal your capability with regard to expertise and staying power. An entrepreneur must look into his mental, physical and financial capacity to set up the kind of business envisaged. This includes the capacity to find the capital if it is beyond his personal savings, the usual

‘

Anybody who wants to start a business must evaluate himself to find answers to certain questions regarding his personality and capacity to run the business

first port of call in the search for initial capital. Essentially, environmental scanning should include self-scanning.

In this regard, the entrepreneur should view himself as an element of the equation that must be in harmony for the successful birth of the business. This aspect is very crucial because it reveals whether one is actually ready to be an entrepreneur.

Many businesses have failed on account of the inability of the founder to effectively run the business he successfully launched. Successful entrepreneurs have certain characteristics, which are not evenly distributed among men and women. They are always ready to defer their gratification. Some businesses fail because the founders do not realize the virtue in allowing the animal to mature before milking it like an adult cow. They go after the benefit entailed by their new office as founders rather than the work in the office. Successful entrepreneurs take the labour first and ask for the pleasure when the animal they raised is old enough to withstand several milking rounds in a day.

Dr Emeka Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emekaosujii

Serving God in our neighbours- the Obijackson example

A

Foundation is a non-governmental entity that is established as a non-profit corporation or a charitable trust, with a principal purpose of making grants to unrelated organizations, institutions, or individuals for scientific, educational, cultural, religious, or other charitable purposes.

This broad definition encompasses two foundation types: private foundations and grant making public charities.

Dr Ernest Azudialu-Obiejesi, Founder Obijackson Foundation A private foundation is an independent legal entity set up for solely charitable purposes. Unlike a public charity, which relies on public fundraising to support its activities, the funding for a private foundation typically comes from a single individual, a family, or a corporation, which receives a tax deduction for donations.

The word “Foundation” is commonly incorporated into the names of many different types of nonprofits (e.g., The Susan G. Komen Foundation, The Bill and Melinda Gates Foundation, Make-AWish Foundation). But not all of these “charitable foundations” are Private Foundations. In fact, a private foundation is a very specific and distinct type of charitable foundation.

The major difference between a private foundation, like The Bill and Melinda Gates Foundation, and a public charity like the Make-A-Wish Foundation, is the source of their financial support. While a public charity gets its funding from the general public, a private foundation usually has one source of funding, typically an individual, family, or Corporation.

The Obijackson Foundation is a typical private foundation which is a non-profit organization that was established in 2010 and an affiliate of the Obijackson Group. The sole aim of the Foundation is to ensure that there is an improvement in the quality of lives of the underprivileged in low income communities not only within our target population but also in the Southwest and Abuja capital territory of Nigeria.

Currently, the immediate operational base of the Foundation is in Okija, Anambra State; with an extension of its charity work in Enugu, Oyo, Lagos state and Abuja.

For the Obijackson Foundation, Serving God in our Neighbours is the driving force in achieving this goal. Who are our neighbours? The Oxford dictionary definition of a Neighbour in concordance with its biblical use is “Any person in need

of one’s help or kindness”. This encompasses the mission of the Obijackson Foundation as we aim to help within the capacity of our resources those who are in dire need. This we do through tailored interventions designed to align with the United Nations Sustainable Development Goals, specifically SDGs 1,2,3,4,6 and 10 in our various locations. In addition, in recognition that health is not just the absence of disease or infirmity but a state of complete physical, mental, social and spiritual well-being, we also cater for the spiritual needs of our beneficiaries. This is done via our inhouse Priest who provides spiritual support and life counselling for beneficiaries experiencing the vicissitudes of life in addition to other interventions aimed at alleviating their conditions.

Microcredit Empowerment and Skill Acquisition Program - The Community Empowerment program was set up in March 2016 when the Foundation identified the need to tackle the high rate of poverty by financially supporting indigents, especially widows to set up small businesses that will enable them fend for themselves and their families. The aim of the empowerment program is to be a social change catalyst in reducing poverty by empowering the less privileged and transforming one family at a time.

This entrepreneurship initiative involves interested prospective entrepreneurs passing through a visual and numeric screening to ensure they qualify to benefit from the program after which they present businesses they have experience or genuine interest in. Seasoned professionals are brought in as resource persons, to Okija from Lagos by the Foundation to train prospective empowerment beneficiaries on how to set up and manage a business before they get empowered. In addition, proper documentation of the person’s location of business and residential address coupled with a presentation of a surety/guarantor is done to reduce default rate. Over the past 3 years, the Foundation has set up over 250 micro enterprises for beneficiaries in various communities in Anambra State, Enugu State and Abuja. Our flexible re-payment plan and free entrepreneurial training have encouraged the indigenes of the communities to willingly apply for the loan.

Education Program – For us, we believe Education should be made available to all who hunger for it. We have made significant impact by offering scholarship to indigent beneficiar-

www.businessday.ng

ies, sponsoring as well as executing educational projects, competitions and expositions amongst students at all levels. Since inception of the Foundation, the unit through the scholarship scheme, has catered for the tuition fees of over 100 indigent students across primary, secondary and university education. Educational projects executed within the period include but are not limited to quiz competition, Igbo debate competition, football competition, essay writing competition, book drive, code camp in partnership with Google and Techquest, Computer based Test Training and literary writing.

Soup Kitchen Program – Presently on this platform, the Foundation supports the indigent people in various rural communities through monthly distribution of food items and cash allowance. We have 22 Soup Kitchen centers across 16 towns in Anambra and Enugu State.

Currently, we have a total of 599 beneficiaries in this program. In addition to that, we cater for the needs of 20 persons that are home bound (poor people who are helpless due to old age or serious disability).

Health Program - This is a key intervention program of the Obijackson Foundation, aimed at the provision of quality and prompt health care to the poor in the society. Indigent persons who are eligible after thorough assessment are taken to Tertiary Care Hospitals. We also carry out random acts of wheelchair and orthopaedic bed donations to the disabled and rehab homes.

We donated 21 mobility aids to physically challenged persons in 2018. Indigent persons with long-term cases such as hypertension, diabetes etc. are enrolled into the Foundation sponsored community health insurance scheme for easy healthcare access. We organize outreaches and campaigns to reach a wider audience. In 2018, over 300 persons benefitted from our free eye outreach.

A major part of the Health intervention program of the Foundation is the world standard Obijackson Women and Children’s Hospital (OWCH) located in Okija Anambra State.

Obijackson Women & Children’s Hospital is staffed by some of the best-qualified teams of paediatricians, Obstetrics/Gynaecology, medical, nursing and non-medical personnel.

Our state-of-the-art laboratory, ultra-modern patient wards, well-equipped operating theatres and well-stocked pharmacy with our world class clinical team, give Obijackson Children’s

https://www.facebook.com/businessdayng

Ernest AzudialuObiejesi,

Hospital an unparalleled edge in pediatric care.

We are also very proud of our Neonatal Intensive Care Unit, which is equipped with world standard advanced neonatology incubators, ventilators (life support machines), multi-parameter monitors and other required equipment. The blood Bank is also of international standard providing life-saving blood products/components on request.

Above all the hospital collaborates with highly experienced medical doctors from international institutions in the United States of America, notably in neonatology and paediatric endocrinology.

Social Welfare and Rehabilitation - Nine Rehabilitation Homes in Nigeria have over the years enjoyed tremendous support from the Foundation. These homes include: Adaeze’s Place, Ihiala; Rehabilitation Centre for the Disabled, Old and Tramps (RECDOT), Ozubulu; Jesus Abandoned Home, Oraifite; St. Joseph’s School for the Deaf and Dumb, Oraifite; St. Joseph’s Home, Fegge Onitsha and Home for the Mentally Challenged, Nteje; all in Anambra State. Others are Juvenile Correctional Centre (Mercy Home), Ibadan; Lagos State Govt. Social Welfare Centre, Ikorodu, Lagos and Special Education Centre, Oji River, Enugu State. Furthermore, the Foundation supports the inmates of the following prisons, Ikoyi and Kirikiri Female Prisons in Lagos State; Onitsha, Nnewi, Awka and Aguata Prisons in Anambra State.

The Foundation provides support ranging from monthly cash allowance, staff salaries, foodstuff, provisions and sanitary materials.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Ernest Azudialu-Obiejesi, Group Managing Director, Nestoil, Nigeria’s foremost indigenous oil and gas company, with various other companies and also the Founder of the Obijackson Foundation

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

comment Discipline: The missing ingredient Character Matters with Daps

Dapo Akande

A

ctions are the physical manifestation of our thoughts. The thought process involved denotes our mindset. This mindset can be a reliable gauge of our core values and how we see life.

Perhaps the most noticeable difference between a Third World country and a First World country is their level of commitment to discipline; governments keeping faith with their professed policies; making punctuality a watchword and other visible evidence of discipline as an established culture.

A discerning first time visitor to Nigeria may, between the airport and his lodgings, be able to tell if Nigerians are people he can do business with.

This is particularly pertinent to Lagos.

Lawless, inconsiderate and out rightly self-centred driving, are all tell tale signs of a people’s values. Selective enforcement of the law, where both policemen and LASTMA officials turn a blind eye when commercial buses turn where they shouldn’t but instantly jump out of nowhere to apprehend private vehicles that do same, signifies

a propensity by all to view the law as relative rather than absolute. This is a sure recipe for disenchantment amongst the people and resultant chaos. It exemplifies a total lack of discipline by both the lawbreaker and the supposed law enforcer. No one wants to feel hard done by and certainly, no one likes to fall victim to such blatant injustice. Once what is good for the goose is no longer considered to be good for the gander, an undercurrent of disillusionment will swell up and from that point onwards, things can only go downhill all the way. This foreign visitor therefore would not be too surprised when he encounters epileptic power supply. It is almost an inevitable consequence. Nor would he be too surprised when asked at checkpoints to “shake his body”. If we genuinely have the ambition to attract the right type of investor to our nation, discipline is sacrosanct because without it, most of them would not touch us with a barge pole. Random enforcement of the law, unpredictable outcome to actions and indiscretions and a collective mindset, which asks, “Can I get away with it?” Rather than, “Is it right?” Simply won’t make them or their investment feel safe. Lack of discipline corrupts everything and the sooner we come to the realization that discipline is a friend, which enables us to ultimately get what we want rather than a stumbling block to our progress, the better.

Discipline needs to be inculcated from the home and further reaffirmed at school. A child who lacks discipline while at Secondary school where

there’s still a modicum of monitoring is bound to go haywire at university where he’s essentially free to do whatever he likes; not to talk of when he’s out of the school system entirely.

So once you miss it in the formative years of an individual’s life, it makes it that much harder to get it right; if not impossible.

A visitor to Lagos who observes that in this society, it is when you indicate that you want to change lane that vehicles will speed up to ensure you can’t, will quickly understand this is a society where you take what you want cunningly or by force. Politely requesting or sitting patiently with the belief that you will get what is due to you is often considered foolish. When truth is, doing things the right way will eventually help both you and society in general because it will help to initiate order and bring sanity. You won’t have to “fight” for everything because what is yours will come to you. I was telling my children just the other day that every action or inaction has a consequence.

If you discipline yourself to prepare for your exams, you’ll pass. If you don’t and feel you can wing it, you’re likely to fail.

Discipline is intentional. Decisions you take now will determine the direction your future will take. Yes, it’s possible to correct things later but at what cost?

So much time and resources may have been lost already. So why not make the right decisions from the beginning.

Why not discipline yourself to do the right thing at the right time.

More than ever, our nation is desperately in need of transformational leadership. Leaders who possess the

11

comment is free

Send 800word comments to comment@businessday.ng

‘

If we genuinely have the ambition to attract the right type of investor to our nation, discipline is sacrosanct because without it, most of them would not touch us with a barge pole

resolve to say “No” to the normalization of wrong values. Leaders who are no longer willing to stand by the sidelines while the nation burns and the future of our offspring disintegrates before our very eyes. Leaders whose default mode is not to make excuses for nonperformance. As my friend and brother, Uzo Enelamah would say, “leaders ready and able to inspire responsible citizenship”. Last but not least, leaders who don’t wait to be given a position or “leadership” title of some kind before doing all of the above.

So if you’re one of those who turn into a street in the wrong lane because you don’t want to allow oncoming traffic to temporarily halt your movement; or you decide to form another lane just because of slow moving traffic, you’re actually part of the nation’s problem.

You therefore lack the moral right to complain about the sorry state of your society because your selfish action, due to widespread indiscipline, leads a multitude to “perdition” as they do the same. As they say, “what goes around comes around.”

One significant thing I’ve learned is that social rejuvenation doesn’t require a population of geniuses; only a steely resolve by individuals like you and I, to always do the right thing, beginning from our own little corner.

Changing the nation...one mind at a time.

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

Effective and sustainable approach to managing change in organizations

T

wo things. First, your organization won’t make it far if it is insensitive to change. Second, if your organization embraces change but with no clearly defined management approach (that is engaging), it will self-destruct with time. Change management is a very complex endeavour because of the complexities of organizations as well as change dynamics. To some, it seems simple because of their constant use of a particular change management model but this approach is problematic because it assumes that all organizations are the same (implying they belong to same industry, they experience the same type and degree of change et cetera). There is nothing farther from the truth. Seasoned consultants understand and can attest to the fact that no two organizations are exactly the same…no two organizations face exactly the same change and react the exact same way. Even when two separate organizations are faced with the challenges that come with restructuring or mergers and acquisition or expansion et cetera, a critical look at the change dynamics in each organization will reveal some nuances no matter how insignificant. This is where open-mindedness is key. Change consultants must be open-minded enough to conduct proper diagnoses to ascertain the symptoms and peculiarities of the types of change faced by organizations. Do not over rely on past experiences and make quick assumptions that lead to quick fixes.

Change is caused by organizational, industrial, market factors et cetera. There is need to constantly pay attention to these domains that bring about organizational change. Specifically, a proper diagnosis of change pays attention to change dynamics like causes, types, magnitude, duration et cetera. This is important because they have implications for the best approach to managing change. I would be remiss if I fail to

mention that diagnosing and making sense of change requires thorough research: interview of key stakeholders as well as some experienced employees; observation of organizational practices; perusal of annual company reports and other organizational reports; industry and market reports. Sole reliance on experience is grossly insufficient. As regards diagnosis of change, I recall vividly while diagnosing the causes of change in a particular organization (which led me to design a customized change management model for them), I interviewed department heads in order to have a deeper insight into what the organization was faced with.

The insights I got were markedly different from what the Deputy Managing Director shared with me. This goes to show that it is important to get multiple perspectives in order to have deeper insights which will inform a more robust and practical approach to managing change.

To manage change in an effective and sustainable manner, one must go beyond assessment of the change dynamics and ascertain the readiness/preparedness of the organization. Attention must be given to the levels of readiness of the individuals, the organization, the change agents et cetera. This is one step towards to lowering resistance which is a big obstacle to change implementation. There are many popular models of managing change in organizations. For example, Lewin’s Three Step Model, Bullock and Batten’s Planned Change Model, The McKinsey Seven ‘S’ Model, Senge Systemic Model, Stacy and Shaw Complex Responsive Processes et cetera. The suitability of any of these models depends on whether you are dealing with a planned or emergent change.

In utilizing any of these approaches one must not fail to take into consideration organizational dynamics like power structures, organizational culture et cetera.

www.businessday.ng

Anderson & Ackerman Anderson stated that there are three main aspects of a comprehensive change strategy: content, people and process.

The success of any change initiative depends largely on these three components. I must quickly add that to ensure sustainability, any change approach adopted must ensure strategic alignment of change initiatives with structures, systems and processes.

Some factors are very central to effective and sustainable management of change.

Communication, financial capability, supportive work culture, employee involvement, organizational learning, (sustained) motivation through rewards of short term wins, leadership etc. Interestingly, leadership (one of the functions of management), communication and employee involvement go hand in hand.

Cameron & Green in their book Making Sense of Change stated that “...employees need to hear about change from two people – the most senior person involved in the change and also their line manager. The senior manager is best suited to communicating business messages around the change, whereas an employee’s line manager is best suited to communicating more personal messages.” I remember having a conversation with an MD/CEO while facilitating a change management process in an organization (which I was part of), I told the MD/CEO squarely: “If these change initiatives will succeed, it will largely depend on you. You will have to throw your weight behind this.”

This was a sole-proprietorship and that meant the MD/CEO called the shots. Despite the talk session on change readiness I facilitated and other technical efforts made, the initiative lost its momentum before my exit – the MD/CEO didn’t show the required leadership bearing in mind that the political structure of the organization clearly depicted that enormous power

https://www.facebook.com/businessdayng

@Businessdayng

Jude Adigwe and influence, organization-wise, resided at the helm of the company.

Change sensitivity is one of the defining features of a strong organization. Organizations must adopt a proactive approach to managing change by constantly assessing their internal environments and external environments (industry, market(s) etc). The role of having and promoting a learning culture cannot be overemphasized in this regard. Organizations should learn from every change experience.

There is need to develop a change management mechanism that is sensitive and swift to respond to changes especially those that require urgent attention. Remember an organization’s survival is also dependent on its ability to keep up with change.

Stephen Hawking said: “Intelligence is the ability to adapt to change”. If we situate this quote within the organizational context, it would mean that an intelligent organization is one that adapts to change. Is your organization intelligent?

Adigwe is a certified Human Resource Management (HRM) professional and an Industrial-Organizational Psychologist. He offers consultancy services on OB and HRM issues. More details can be found on his website: www.adigwejude.com

12

Wednesday 19 June 2019

BUSINESS DAY

Editorial Publisher/CEO

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

Unhappy Nigerians and where to find them

A

ll happy Nigerians have some things in common, unhappy Nigerians are unhappy in their own way, to rephrase Leo Tolstoy, the Russian novelist. Based on inflation and unemployment, what economists call the “twin evils”, Nigerians everywhere, irrespective of geopolitical location, are unhappy. Some are just unhappier than others.

Using a combination of price levels and rates of unemployment BusinessDay published a list of the happiest and worst states to live in Nigeria lately.

The misery index – originally developed by Art Okun, an economist, and updated by Steve Hankes, another American professor of economics – measures how happy citizens are with their lives at a particular moment.

Osun, Oyo, Katsina, Lagos and Ogun states were the least miserable in Nigeria. Akwa Ibom, Rivers, Kano, Bayelsa and Borno were the bottom five.

The index measures misery in relation to other states. It is not a right to brag that my state is

better than yours.

A relatively lower cost of living and rate of joblessness is what the top five have in common, except for Lagos with an inflation rate higher than national average of 11.31% (as at April 2019).

Bayelsa, however, has one of the lowest rates of inflation but an unemployment rate of 32.56% (way above the 23% for the country). This makes its citizens among the most miserable in the country. Its fellow oil-rich state, Rivers, is the second-most miserable despite being the third-largest recipient of money the federal government allocates monthly.

It received N119 billion in 2018 from the Federal Account Allocation Committee (FAAC). The large quantities of oil pumped, and consequently a bigger allocation, has not provided the citizens of Akwa Ibom any relief. The coastal state has the highest unemployment rate.

Elsewhere, inflation and unemployment are politically sensitive issues. A slight rise in the price of bread has caused riots and almost toppled governments.

In Nigeria, a coping mecha-

nism to “manage it like that”, to hope tomorrow will be better, to equate the rice and cash shared during election campaigns as a share of the “national cake”, allows politicians to get away with murder – the millions of children and women that die daily from preventable diseases, the thousands that die on bad roads, the poor, uneducated youth forced into banditry, terrorism, kidnapping, and prostitution.

As newly and re-elected governors will have discovered within their first week in office, their states are in terrible financial conditions. There is debt to be repaid, unpaid salaries to pay plus a new minimum wage, all of which the monthly hand-out from Abuja cannot cover. The recovery and eventual sharing of some of the Abacha loot won’t do either. The excess crude account has been squandered.

What’s more, the money each state gets from taxes and levies i.e. Internally Generated Revenue (IGR) is meagre. In addition, despite showing signs of a slow but uneven recovery during 2017/18, the economy is still a long way

from the average growth rate of 6.22% in 2014. Besides, oil, the major source of government revenue, is one shock away from a calamity.

Consequently, the situation is unlikely to be same as usual.

Governors should expect their citizens to demand delivery of promises made on the campaign.

To expect otherwise would be to underestimate the visible and direct effects of unemployment and inflation. Job loss and an income unable to keep up with the price of food are clear and present worries.

As usual, most clueless governors will probably play the divide and rule game.

For the five others who will and are able to do something, we suggest they be less FAAC-focused.

They need to appoint capable advisers with ideas on how federal powers, on say, the sale of some assets can be transferred to them.

This should be in order for them execute capital expenditures not on the basis of the votes it can reap in four years but on the jobs they can generate, the lives they can save and the number of children they can educate.

GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

Enquiries NEWS ROOM 08169609331 08116759816 Lagos 08033160837 Abuja

}

ADVERTISING 01-2799108 08034743892 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria.

01-2799100 Legal Advisers The Law Union

OUR Core Values

Mission Statement To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven.

• The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests.

• Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

comment

13

comment is free

Send 800word comments to comment@businessday.ng

Restructuring Nigeria: Start With Our Legal System (1)

Franklin Ngwu

W

ith the increasing insecurity, poverty, inequality, politics of exclusion, tribal, religious and economic crisis, it is becoming too apparent that we are heading to a disastrous direction if urgent steps especially the restructuring of the country is not undertaken. However, while key restructuring elements such as regionalism, devolution of powers, state police, revised revenue generation and sharing are very important, the most crucial factor upon which the restructuring depends and should start from is ignored.

This is the reformulation or restructuring of our legal system. It is arguably the most important and the fulcrum upon which other mentioned issues depend.

The reformulation I am referring to is not the kind of reform that is regularly mentioned anytime a new chief justice is appointed like reducing the length of time it takes to conclude a case. The version I am proposing is a total overhaul of our legal system both in terms of content and operational procedure. The reasons for this suggestion are many and include first, the meaning and importance of a law to a society. Second is the limited level of our economic development (sometimes underdevelopment). Third is our inherent and increasing socio-cultural/ economic challenges manifesting in all kinds of governance crises.

Law is generally known as a set of rules or procedures that moderate or guide human behavior and interactions and it is useful or beneficial to any society

when it is effective in reducing transaction costs and improving societal welfare.

But the question is what makes a law to be effective? This is based on the extent to which the law is understood, accepted, internalized and complied with. Interestingly, this understanding, acceptance, internalization and willingness to comply with a law are highly related to the origin of the law. Before the emergence of nation states like Nigeria, societies were governed by their respective values and norms generally referred to as culture. At the emergence of nation states (sometimes through aggregation of different societies), some of these values and norms were documented and referred to as formal law or legal system. The remaining norms and values that were undocumented became known as informal laws. When a formal legal system emerges through this process, the understanding, acceptance, internalization and compliance are normally high due to its derivation and amenability with the inherent norms and values (culture) of the society. This process inculcates a kind of normative moral obligation on the citizens to comply with the law and societies whose legal system developed through this process have witnessed better economic development and governance systems. Good examples include UK, France, China and USA. In the case of Nigeria and other developing countries, the opposite happened.

At the creation of Nigeria in 1914, our past and history, our values and norms were rejected in preference to an alien legal system. Unfortunately at independence in 1960, instead of utilizing the golden opportunity to reverse the legal accident, we exacerbated the accident through the recognition and utilization of two legal system- customary (tribal) and the adopted English legal system but with superiority allocated to the latter. Moreover, elaborate socialization and integration of our over 250 ethnic groups that would have helped to dilute the differences were not carried out at independence. Expectedly, with this

‘

Unfortunately at independence in 1960, instead of utilizing the golden opportunity to reverse the legal accident, we exacerbated the accident through the recognition and utilization of two legal systemcustomary (tribal) and the adopted English legal system but with superiority allocated to the latter

inappropriate juxtaposition of unrelated legal systems, a civil war broke out 6 years after independence and Nigeria has never known genuine consensus for national development and peaceful coexistence since then. But the question is why should it be so and especially why consensus economic development and peaceful co-existence have continued to elude us 105 years after the creation of Nigeria and 59 years after our independence?

The reason is that the different ethnic groups that make up Nigeria are inclined and operate from their respective tribal legal systems (norms and values) which are different from our supposed formal national legal system (the adopted English legal system). Law is an institution that stipulates the rules of the game which the individuals and groups use to achieve their interests (become wealthy, control or dominate governance, win an election, pass an exam, marry, fight a war etc). In this scenario, the wider usage or agreement to the law will depend upon the extent to which individuals and groups believe that their interests can be achieved within the legal system in question. However, as stated earlier, the general agreement to the law will depend on the origin and amenability of the law to norms and values of the concerned distinct society or societies.

As this is not the case with our formal national legal system, we, both as individuals and ethnic groups in Nigeria are under a kind of legal quagmire. Since we are born and brought up predominantly within our tribal values and norms, we are more inclined and entrenched in our tribal legal systems (norms and values). Incidentally, as the control of our national resources are moderated through our formal national legal system, differences and tensions emerge due to the differences in our tribal legal systems through which we draw our disposition and inspiration in engaging in national governance issues. This is also the case in our interaction with our fellow Nigerians from other tribes and as such the

common views or sentiments like, he is a Yoruba man; what do you expect from an Igbo man; this Hausa-Fulani people, a typical Ijaw man; that is the way they behave, Tiv people eh! etc.

With the inherent confusions and contradictions of our legal system and the demands for each of us to comply with at least two legal systems (tribal and formal), our economic development is constrained due to the high transaction costs we encounter in our socio-economic engagements like marriage, buying a landed property and having access to finance etc.

For instance, outside the lands controlled by state and federal governments, the predominant way through which we buy lands is through the tribal legal system (villagers). However, to ensure full ownership (certificate of ownership) or to use the land for any formal engagement like getting a loan, the owner will be made to undergo regularization process through the registration of the land within the formal legal system.

These inherent challenges in fulfilling all the requirements of both the tribal and formal legal systems limits property ownership in Nigeria and by extension limits access to finance which has remained a major constraint to 80% of our SMEs. It is also the reason why the formal banking sector has below 40 million account holders in a country of about 200 million people even with varied financial reforms over these years. This means that about 160 million Nigerians do not use the formal banking sector and have never been banked. The reason is that majority of Nigerians do not trust nor use the formal banking system because they do not understand and accept the formal legal system that regulate it.

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng

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

The menace of extreme poverty!

A

prophecy found in God’s inspired Word, The Bible, at 2 Timothy Chapter 3, Verse 1, shows that this world is now in its “last days,” characterized by “critical times hard to deal with.”

Corroborating this prophecy, a recent Nigerian newspaper report tagged ‘Spotlight’ (specifically in The Guardian newspaper of Thursday, June 6, 2019, page 2) reveals that the figure of extremely poor people in Nigeria has risen to 93.7 million, in 2019.

According to this report, 93,720,530 people in Nigeria now live in extreme poverty. It was first revealed in June 2018 that Nigeria had overtaken India as the nation with the highest number of people living in extreme poverty across the world, with an estimated 86.9 million Nigerians measured to be living on less than $1.90 (N684) a day.

However, according to new data from the World Poverty Clock, a web tool produced

by World Data Lab, that figure has increased to 93.7 million in June 2019. According to the World Bank, a person can be said to be living in extreme poverty if they live below the poverty line of $1.90 per day. This implies that more than half of Nigeria’s population lives on less than a dollar a day.

This trend is expected to continue, as the World Data Lab noted that the outlook for poverty alleviation in Nigeria is weak, and that an estimated 120 million Nigerians are

expected to slip into extreme poverty by 2030.

As the above-mentioned facts show, as long as the present system of human rule lasts, there would be poverty. Poverty can not be permanently eradicated by any form of human government or any economic or social system. And the record of history bears this out.

Throughout the thousands of years of human history, every type of government and every type of economic and social system has been tried, yet poverty is still with us. Indeed, in spite of progress in such areas as science, industry, and medicine, the hard fact is that worldwide the numbers of people trapped by poverty keep increasing.

Despite well-meaning efforts to solve the problem, there are millions of people, not only in Nigeria, but also around the world, living in poverty.

Many palliative measures have been recommended to reduce the suffering of the poor. For example, in an interesting 3-part ‘viewpoint’ column in the Vanguard newspapers, written by a prominent Nigerian, Sir Aare Afe Babalola, which was published consecutively in the Vanguard newspapers of Wednesday, December 26, 2018; January 2, 2019; and January 9, 2019; Sir Aare Afe Babalola, who is the founder of a well-known private university in Nigeria, Afe Babalola University Ado-Ekiti (ABUAD), highlighted the importance of giv-

www.businessday.ng

ing/generosity/philanthropy, in alleviating the suffering of the poor in Nigeria.

In this regard (of philanthropy and generosity), Sir Aare Afe Babalola himself can be said to be doing very well. For example, in The Guardian of Tuesday, October 16, 2018, the management of the Afe Babalola University, Ado-Ekiti (ABUAD), was reported to have awarded automatic employment to 72 first class graduates of the university. It was also reported that the founder of the university, Aare Afe Babalola, doled out #250,000 and a plot of land EACH to ALL the graduating students of Agriculture to start their farming projects. Such acts of generosity are certainly to be highly commended. And I am quite certain that even on more personal fronts, Sir Aare Afe Babalola has shown an exceptional spirit of kindness and generosity.

A revival of the agricultural sector in Nigeria is another suggestion that has been put forth, if any meaningful result is to be achieved in the fight against poverty and the growing divide between the rich and the poor.

However, while human relief efforts have been unsuccessful in bringing the problem of poverty under control, God will give attention to the root of the problem - the tendency for selfish people and governments to look after merely their own interests. The Bible teaches that real happiness depends not on one’s economic situation, but on one’s spiritual

https://www.facebook.com/businessdayng

Daniel IGHAKPE well-being and relationship with the Creator.

“Happy are those conscious of their spiritual need,” the Bible says at Matthew 5:3. Those who understand and follow the Bible’s counsel are better equipped to deal with poverty.

God’s own inspired Word clearly teaches that there will be a complete end to poverty.

The Bible explicitly promises that the King of God’s Kingdom, Jesus Christ, will compassionately address the needs of the poor. “He will rescue the poor who cry for help . . . He will have pity on the lowly and the poor, and the lives of the poor he will save.” - Psalm 72:12, 13. Focusing on such a hope can give a person the strength to endure!

Ighakpe writes from Lagos and can be reached via danighakpe@gmail.com

@Businessdayng

fo c

sy in la e

14

Wednesday 19 June 2019

BUSINESS DAY

AGRIBUSINESS

In association with

ag@businessdayonline.com

How safe are the food Nigerians consume?

Josephine Okojie

Z

ainab Sadiq, who sells fruits and vegetables in Ketu Market, Lagos, needed to supply 20 bunches of ripe plantains and bananas daily to customers who buy in bits to resell.

But she only got five bunches of ripe plantain and bananas from her suppliers. To meet up with the high demand daily from customers, she resorted to applying calcium carbide to force ripening of the fruits.

Ap a r t f ro m s e l l i n g i t t o customers, Sadiq also consumes the plantain and bananas with her family. She is unaware of the health dangers in the consumption of such fruits and vegetables.

“My family also consumes some of the plantain and bananas I sell,” the trader said, when BusinessDay interacted with her.

Sadiq’s case gives an insight into how traders and farmers in Nigeria have continued to ignorantly use harmful chemicals in the storage, colouring, ripening, processing, and preservation of food products in the country, which is a major threat to Nigerians health.

Also, traders and farmers use other chemicals which include artificial sweeteners such as aspartame and acesulfame, sniper, monosodium glutamate, common dyes, sodium sulphite, common dyes, rat poison and sulphur additives.

Others are sodium ascorbate, citric acid, sodium citrate, artificial favourings, zinc and lactic acid, among others.

Health exp er ts say such practices are dangerous to human health and should be out-rightly banned. Many of the preservatives and storage agents are carcinogenic as they cause cancer and death, while others can cause depression or damage to body organs.

“The chemicals being applied by traders and farmers to preserve and force ripening of fruits and vegetables have serious health implications when consumed for a long period of time,” said Doyin Odubanjo, chairman, Association of Public Health Physicians, Lagos chapter.

“The side effects are responsible for the rising cases of cancer, skin disorders, kidney diseases as we have now in the country because Nigerians consume these food products daily,” Odubanjo said.

To identify food products that have these harmful chemicals, the nutritionist advised Nigerians to discard any fruits or vegetables with odd taste when consuming

them.

Similarly, Some Nigerian abattoirs roast meat with tyres and pet bottles which medical experts say is dangerous and should be discouraged.

The European Union (EU) had in 2016 rejected 24 food products from Nigeria. Groundnuts were rejected because they contained aflatoxin, while palm oil had a colouring agent that was carcinogenic.

The European Food Safety Authority had likewise rejected beans from Nigeria in 2015 because it contained between 0.03mg per kg and 4.6mg/kg of dichlorvos pesticide, when the acceptable maximum residue limit was 0.01mg/kg.

The ban had been extended to 2019, indicating that Nigerian food processors and exporters are yet to change from such practice.

Experts are wondering whether food that is not good for Europe or the Americas could be good for consumption by Nigerians.

“We do not have regard for what we eat in Nigeria because the government that is supposed to monitor and ensure that standards are met, not just for export but also for local consumption, is lacking in this area,” said Oluremi Keshinro, professor of nutrition and dietetics, Federal University of Agriculture, Abeokuta (FUNAAB).

“Most of the chemicals found in our crops that are rejected by the EU are dangerous to various organs of the body. These chemicals are injurious to the body and can cause terminal diseases. It is time for us to start taking our health seriously because what we eat determines our health status,” Keshinro said.

In 2017, the Mycotoxicology Society of Nigeria (MSN) conducted a research on 2,133 samples of www.businessday.ng

grain crops in the country and found that only 19.3 percent of the crops were safe for consumption because of the presence of some poisonous chemical compound called mycotoxins.

Mycotoxins are natural poisonous chemical compound produced by certain fungi that cannot be easily detected by looking or tasting.

There are five groups of mycotoxins which are: aflatoxins, ochratoxins, fumonisins, deoxynivalenol and zearalenone that are found in most of Nigeria’s grains and cereals.

“Mycotoxins have very harmful effects on human and animal health. They are very cancerous and supresses the human immune system,” Hussaini Makun, a professor of biochemistry, Federal University of Technology, Minna, who conducted a study on the fungi, said.

He noted that mycotoxins are poisonous chemical compounds produced by certain fungi/moulds that are threats to food and feed for human and animal consumption with regards to long- term poisoning and thus, constitute challenge to agriculture and food security.

Makun stated that these food toxics cannot be easily detected by looking at or tasting foods because of their colourless, odourless and tasteless nature, stating that they can only be detected by Enzyme Linked Immuno Sorbent Assay (ELISA).

Experts say contamination of food and feeds arising from naturally occurring toxicants, microbiological contaminants, chemical contaminants such as additives used above the permitted levels, pesticide and veterinary residues in food or as toxic

https://www.facebook.com/businessdayng

components from food processing could have deleterious effects in humans and animals.

A recent report by the World Health Organisation (WHO) in collaboration with the Food and Agricultural Organisation (FAO) to mark the firs-ever global food safety day states that households in lowand middle-income economies spend $15billion on medical expenses yearly.

The report stressed that most of the health burdens and economic loss could be avoided with proper management of food and food products and appropriate hygiene by producers and consumers.

In like manner, FAO has raised alarm over the worrisome levels of high food contamination in Lagos and Kano – Nigeria’s two most populous states, in a study it conducted recently.

Poor regulation and knowledge fuel use Experts have blamed the National Agency for Food and Drug Administration and Control (NAFDAC) and other regulatory agencies for failing in carry out their duties as regulators, saying such act is fuelling use of these harmful chemicals.

They also blame poor farmers’ knowledge and greed by some players in the agricultural value chains as factors fuelling the usage of such harmful chemicals.

“The Federal Government is lacking in the area of food safety in the country and the situation is getting worst daily. There are no regulations on the use of agro chemicals and pesticides on the farms; even products banned in other countries are found in the hands of farmers in Nigeria,” James Marsh, managing director, James Marsh and Associates, said. @Businessdayng

Marsh, a food safety expert, blamed regulators such as the National Agency for Food and Drug Administration and Control (NAFDAC), Nigerian Agricultural Quarantine Service (NAQS) and the Federal Ministry of Agriculture (FMARD), for failing in regulating the use of these harmful chemicals. “ T h e re g u l a t o r s a re n o t regulating the use of these chemicals effectively to ensure the consumption of safe and nutritious food. The regulation starts from the farms,” he says.

He called for the education framers and traders and their sensitisation on the effect of these harmful chemicals.

For addressing the problem of naturally occurring mycotoxins, he urged the government to train farmers on good agricultural practices. He also called for proper regulation in the importation of agro chemicals and pesticides into the country.

Isaac Ogara, secretary, MSN and a lecturer at the department of Agronomy, Nasarawa State University, said that the mycotoxins content in crops can be reduced by mainstreaming control strategies in the country’s farming systems along the value chain. “ Fa r m e r s n e e d t o h a v e awareness that there are deadly chemical substances that occur naturally without their knowing.

One of the strategies that farmers can use to protect their crops from these toxins is harvesting their crops early. Harvesting early helps to reduce the incidence of mycotoxins,” Ogara said.

“Farmers must also ensure that they carry out good farming practices by ensuring that the y car r y out all the cultivation practices according to recommendations and dry their crops properly. Crops must be properly dried with moisture content of about 12-14 percent,” he added.

He also stated that the use of Neem tree and Jatropha extracts also helps to reduce levels of mycotoxins in foods. He noted that the International Institute of Tropical Agriculture (IITA) had developed a product called aflasafe, which farmers can adopt to reduce the occurrence of the toxicogenic fungi.

If governments at all levels and the regulatory agencies continue to fail in ensuring that Nigerians consume safe and healthy food, the country will record high number of food-borne diseases and lose billions of dollars in the treatment of the illnesses, with many lives lost in the process.

Wednesday 19 June 2019

BUSINESS DAY

15

AGRIBUSINESS ag@businessdayonline.com

Xtralarge Farms promotes organic farming with Agritech City

…unveils digital currency, wonder meal

I

carry out their farming activities in a productive, professional and profitable way’’.

He stated that there was need for Nigerians to adopt organic living, stressing that eating organic food would improve the health of human, animals and their environment,. Organic farming would help to keep the country’s biodiversity, he added.

He noted that exposing human beings to chemicals in food affects their genes and in turn the body system, adding that to enhance a sustainable healthy ecosystem in the country, there was need for reorientation for people to have the understanding and knowhow for them to impact on their environment.

Speaking on the Agritech City, he said that the farm would harbour a farming environment in the midst of world-class luxury, beauty comfort hospitality and serenity.

He added that a University and schools, travel and tours, homes and properties, natural health centre and microfinance bank, a research institute, among others would be facilities built within the city.

Also, speaking on the digital currency – Xtratoken, he said that the entire Xtralarge group referred to it as Generation Next and noted that it is the currency to be spent within the Agritech City.

“The city has come with a change of apparel for agriculture

in Nigeria and Africa as a whole. A farmer must be able to live well, be successful, live a dignified life and be respected in the society.

On the xtralarge wonder meal, he said it was a natural blend of local rice and plantain flour, rich in fibre, thereby aiding bowel movement and avoiding constipation.

“The raw and unpolished nature of the local rice in it combined with the high fibre contents of plantain flour makes it a working wonder for your health,” he said.

He added that the food aids weight loss for people who wish to watch their weight since the food is not retained in the body for a long period of time.

Oke-Ogun youths launch Green Revolution Scheme to tackle unemployment REMI FEYISIPO, Ibadan In a bid to tackle unemployment in the SouthWest region, Oke-Ogun Youth Association has launched a Green Revolution Scheme (GRS).

The scheme is aimed at encouraging young people to engage in profitable and commercial agriculture by creating a platform that will make farming easier and attractive to them.

According to a statement signed by the Bola Olalere, project coordinator, GRS,

youths interested in farming would be trained and established in a particular subsector of agriculture, value chain of their choices.

“The scheme will involve both cooperative farming and individual farming and will collaborate with agencies, government and individual who shares in the vision.

“We have complained e n o u g h a b o u t underdevelopment of our region without noticing the great resources God had giving us as a people and the potentials to turn our stories

around; using our natural resources,” Olalere said.

“Oke Ogun area covers about over 60percent of the entire land mass of Oyo state, with fertile land that can grow anything all season without fertilizer. The prosperity of our community now lies in our hands and on our land,” the statement said.

The introductory project of the scheme which is in partnership with Niji Farms, Ilero, Oke-Ogun, Oyo State is open to Youths from across the region.

“Niji Farms is the biggest

OLUMAKINDE ONI

A

Josephine Okojie n a bid to promote organic farming in the country to help protect Nigeria’s ecosystem as well as promote healthy living for citizens, Xtralarge Farms has launched Agritech City to optimise farmers’ production efficiencies in growing food organically.

The Agritech City which was unveiled alongside the Xtratoken and wonder meals

by Seyi Davids, chief executive officer of Xtralarge Farms, in Lagos recently will be established on 3,000 acres of land in Ogun state.

Davids, at the unveiling said that the introduction of the digital currency was meant for exchange of goods and services within the Agritech City.

“Providing strong consumer base for food items is one of the major objectives of Xtralarge Farms. To do this, we want to provide our customers with healthier foods and organic farming is the way to go,” Davids said.

“We grow our food organically without the use of any chemicals.

By this we want to use food to treat alignment,” he said.

“We train far mers on modern farming methods to

Investing in fish feeds (pellets) production

cassava grower in Africa with massive facilities to process about 100 tons of cassava daily into Starch, Garri , Flour, Fufu and other products.”

“Gracefully, the chairman of Niji Group has agreed to partner with the association in training and engaging members of the association in cassava cultivation with the assistance from the CBN anchor Borrowers program.”

“500 acres of land have been acquired in Ipapo, Itesiwaju local Government for the first phase of the project,” according to the .

gricultural development is the process of expanding the capacity of the farmers and resources within the agricultural sector in such a way that the sector will be able to play an important role in accelerating the national development through the adequate provision of food for the entire citizens.

The establishment of fish feeds production factory is seen as one of the ways to grow the agricultural sector substantially and create job opportunities, provide protein and generate income for the populace.

Fish feeds constitute more than 70percent of the input in fish farming. It is therefore an important input. Every effort must be made to encourage investment in fish feeds production in the country.

The project is seen as one of the opportunities for fish farmers to diversify and at the same time reduce the cost of feeding their fishes as the establishment of fish feeds factory will reduce their production costs as against buying imported fish feeds.

Technical Information Fish feeds production involves procurement of ingredients such as maize, groundnut cake, starch, palm oil, fish meal.

The ingredients are milled to powdery form and mixed

together in a recommended proportion with water to make it marshy. They are later fed into the pelleting machine for the purpose of getting them into pellets.

The pellets are later taken to the dryer for the purpose of drying. Effective drying enables the pellets to float in the pond. The more pellets can float in ponds, the better they is.

To establish the project, you need to get a good site, procure and install the machines including the utility items. This is followed by procurement of raw materials. Seriousminded investors can be assisted to successfully set up the project if required.

Cost Implication N Pre-investments: 100,000 Accommodation (Rental) :

500,000 Plant & Machinery: 3,000,000 Utilities: 850,000 Working Capital: 500,000 TOTAL

N4,950,000 ========

Profitability The plant has the capacity of producing 200 tonnes of fish feeds per annum.

Net profit of N30,000 can be made on every tonne of feed produced. This translates to net income of N6 million per annum.

This is another feasible and genuine means of livelihood for Nigerians. Author’s Contact : 08023058045, olumakindeoni2@yahoo. com

AfDB showcases impact of drone technology on agric productivity

A

t a special event highlighting the partnership between the African Development Bank and Korea held on the sidelines of the bank’s annual meetings, the role of drone technology to boost food productivity in Africa, was on full display.

A pilot project, underway in Tunisia, is designed to reduce food imports as the drone technology is being used to collect and analyse data, and monitor irrigated

areas as well as combat pests.

AfDB launched the project, in cooperation with the Busan Metropolitan City in Korea with support from the Korea-Africa Cooperation fund (KOAFEC). “ We s e e K o r e a a s a strategic partner with respect t o t e c h n o l o g y t ra n s f e r, especially ICT technologies, drone technologies, and t e c h n o l o g y t o i m p rov e crop varieties,” said Martin Fregene, director of agriculture and agro-industry, www.businessday.ng

AfDB, in a statement.

Four hundred and sixty drone pilots are to be trained in 14 months, the statement stated.

The use of industrial drones, artificial intelligence, and cloud computing, in pest control management, security, and the delivery of supplies in remote areas was extensively discussed.

According to Fregene, following the completion of the pilot phase, the project would be expanded to other countries

and regions in Africa.

“Our expectation is that in many cases drone technology can increase land yields by up to five times.”

In 2017, Africa imported $64.5 billion worth of food.

‘Feed Africa’ is one of AfDB’s high five priorities launched in 2016 to transform and industrialise African agriculture and make the continent a net food exporter by 2025.

The city of Busan showcased the use of drones in agricultural and urban

https://www.facebook.com/businessdayng

management and their current application in Africa, focusing on agro-industrial processing zones (SAPZ), a special flagship programme of Feed Africa, which will roll out in 16 African countries over the next four years.

During the KoreaAfrica Forum for Economic Development (KOAFEC), the government of Korea signed a bilateral agreement for $5 billion in support for Africa.

It has renewed its Korea Trust Fund at AfDB with @Businessdayng

an additional $18 million, bringing the fund to about $100 million, to support capacity building for Africans.

Professor Banji Oyelaran Oyeyinka, special advisor to the President of the bank on industrialisation, provided delegates with an overview of AfDB’s ongoing work to establish Special Agr icultural Processing Zones across Africa using advanced technologies as well as investments in human capacity development.

16

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

COMPANIES & MARKETS

17

EFG Hermes named top frontier markets brokerage firm in extel survey Pg. 18

COMPANY NEWS ANALYSIS INSIGHT

Market

Renewed trade war, lower output trigger weaker growth in emerging markets ISRAEL ODUBOLA

T

he massive portfolio outflows recorded in emerging markets (EMs) last month on the heels of renewed trade spat between world’s two biggest economies, coupled with weaker industrial output of countries in the space has significantly weighed down on growth of EMs. According to the Washingtonbased International Institute of Finance, growth forecast for EMs is projected at 3.8 percent in May, compared with 3.6 percent in the previous month. EMs grew 0.2 percentage points in May, lower than 0.4 percentage points and 0.3 percentage points in March and April respectively.

The renewed U.S-China trade war has intensified the woes of emerging markets. The global finance body noted that investors’ appetite for EM stocks and bonds has lost momentum, adding that the increased volatility in the market combined with the trade conflict has painted a challenging horizon for EMs. The poor growth outlook is also underpinned by financial and business conditions, which

Source: International Institute of Finance (IIF) seem to have escalated with the resumption of trade tensions between U.S and China. Intensified trade spat resulted in a trade tantrum, which saw large capital outflows last month, particularly from China.

Equities outflows accelerated to $14.6 billion, its highest level in 6 years since June 2013 Taper Tantrum, when outflows escalated to $22 billion.

Of the $14.6 billion, 49 percent or $7.2 billion were pulled out of China. Portfolio flows plunged 115 percent to negative

$5.7 billion in May, compared with inflows of $33 billion and $38 billion in March and April.

The massive capital outflow, despite dovish monetary policy stance in United States and Europe, holds lessons from the 2018 sell-off that global capital markets are reluctant to finance credit-dependent growth.

“We think activity in China will continue to slow as headwinds from US tariffs and weakening domestic consumption outweigh stimulus measures” said analysts at IIF.

Another major headwind to growth in EM is the slowdown in industrial output of EMs on the heels of contraction in China’s purchasing managers’ index (PMI).

Growth in the global economy has tumbled year-long with trade and investment flows between countries falling faster than expected. China’s PMI, an indicator of economic health of a country’s manufacturing sector slowed more than expected in May, implying that growth in the space remain under pressure.

The global finance body not-

ed that investors have shifted attention away from sustainability of China’s growth recovery to how fast the economy is slowing, posing a downside risk to economic activity.

PMIs in other countries in the EM space align in the same downward direction as that of China. Singapore’s PMI slumped in May, indicating a contraction in manufacturing as trade tensions and global slowdown weigh on its economy.

Taiwan’s manufacturing sector trended downwards, further contracting in new orders and export sales. Brazil’s PMI hit a decade low to 51.5 points in May. Turkey’s growth slowed to 45.4 points.

South Africa’s PMI fell by one index point to 49.3 points in May, falling below the 50 points mark, indicating deteoriated economic and business conditions. Africa’s most developed economy contracted 3.2 percent in 2019’s first quarter on slowdown in power and mining sectors. Nigeria’s PMI increased slightly by 0.2 index points to 58.9 points in May, highest in the last four months.

EM Asia and Latin America are expected to fuel the slowdown in EMs.

INDUSTRIAL GOODS

Dangote Cement plc issues new N50bn Commercial Paper OLUFIKAYO OWOEYE

N

igeria’s most capitalised quoted company and cement maker, Dangote Cement Plc, has issued new N50 billion in Commercial Papers (CP) in order to meet short term financial obligations.

The exercise, which is the second of its kind in barely three weeks, represents the eight of the tenth series of the company’s N150 billion commercial paper program.

Commercial paper is a short-term debt security issued by financial companies and large corporations. By issuing commercial paper to raise short term funds,

companies avoid the time and cost of applying for business loans, as well as SEC registration.

Commercial paper is unsecured, meaning buyers have no claim on a company’s assets if the company fails to pay up at maturity. It is often offered in the short term, usually not exceeding 270 days and is backed only by an issuing bank or company promise to pay the face amount on the maturity date specified on the note.

The eight series has a tenor of 90 days with an effective yield of 12.5254 percent discounted at 10.51 percent with a maturity date of 12 September 2019.

The ninth series, however, has a 180-day tenor with an effective yield of 12.5254 percent and a discount rate of 13.35 percent with a maturity date of 11 December 2019.

The tenth series, which offers CP of 270 days with an effective yield of 12.6862 percent, and a discount of 14 percent, is expected to mature on the 10th of March 2020.

The offer had opened on 7 June 2019 while the offer’s application list had closed on 13 June 2019.

The minimum subscription was N5 million and subsequently in multiples of 1000. Although the CPs were allotted on the closure date, they were issued on 14 June 2019.

L-R: Olufunmilayo Balogun, parmanent secretary, ministry of finance, Lagos State, representing the governor; Dame Olajumoke Simplice, incoming president/chairman of council, Chartered Institute of Taxation of Nigeria (CITN), and Babatunde Fowler, executive chairman, Federal Inland Revenue Service (FIRS), at the Investiture ceremony of Dame Olajumoke Simplice as the 14th president of the Institute in Lagos. Pic by David Apara

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

18

Wednesday 19 June 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Market

EFG Hermes named top frontier markets brokerage firm in extel survey HOPE-MOSES ASHIKE

E

FG Hermes, the leading financial s er vices corp oration in frontier emerging markets (FEM), has for the second year running been ranked the number one frontier market brokerage firm in the Extel Survey 2019 and remains the second highest ranked brokerage firm in the Middle East and North Africa.

Prior to this accolade, EFG Hermes was also named, for the second time in as many years, the leading Africa (ExSouth Africa) Equities House by the Financial Mail, attesting to the success of its expansion into African markets.

“Holding our ground in the Extel rankings is proof positive that we, as a firm and as a partner to our clients the world over, are committed to delivering the highest qual-

ity research in the industry,” said Ahmed Shams El Din, EFG Hermes’ Head of Research. “The leading rankings attest to the capabilities of EFG Hermes Research as a true leader in the provision of frontier and emerging market research and its ability to provide key insights in some of the world’s most compelling markets.”

The recognition comes three short years after the firm expanded into frontier markets, adding to its already deep, on-the-ground presence in the MENA region, to cover some of the fastest-growing markets in Africa and Asia. In 2018, the firm initiated on equities in Georgia, Bangladesh, Mauritius, Uganda, Rwanda, and Botswana, while deepening coverage within existing MENA and FEM markets and expanding its overall coverage universe to over 260 stocks.

“This recognition by the world’s leading research survey reaffirms EFG Hermes’

commitment to producing innovative research, be it macro strategy or equity coverage, of the highest quality. As we have expanded into a number of new markets, the recognition of our analysts reaffirms our commitment to investing in talent of the highest caliber to provide clients with leading insight and investment solutions across our coverage footprint,” he added.

EFG Hermes Research also dominated the MENA and frontier regional analyst rankings, with six of EFG Hermes’ top analysts ranking in the top 10, including Kato Mukuru and Ronak Gadhia in Frontier and Mohamed Abu Basha, Hatem Alaa, Nada Amin and Elena Sanchez-Cabezudo achieving top ten spots for MENA. The EFG Hermes sales team was also well represented in the frontier survey with Sruti Patel and Muathi Kilonzo both placing in the top 10.

L-R: Chukwudi Okoroafor, Fidelity Bank Plc; Tara Fela-Durotoye, MD/CEO, House of Tara International; Chizor Malize, managing partner/CEO, Brandzone Consulting LLC; Korede Odufuwa, account manager, Eterna Plc, at the Tea Time with Chizor (TTWC), personal branding workshop organised by Brandzone Consulting LLC recently in Lagos.

Banking

IFC set to sell stake in Ecobank SEGUN ADAMS

E

cobank Transnational Incorporated, (“ETI”), the Lomé based parent company of the Ecobank Group, has announced that the International Finance Corporation (IFC) and its subsidiary would be selling their stakes in the Pan African Bank in the coming months.

According to information sent to the Nigerian Stock Exchange (NSE) on Monday, the IFC, a member of the World Bank, and investment funds managed by the IFC Asset Management Company have entered into a Share Purchase Agreement with a leading Dutch investment firm Arise B. V for the sale of their approximately 14.1 per cent stake in ETI. The bank, however, did not specify the exact date in which

the transaction would be concluded.

“Completion of the transaction is expected in the coming months, subject to due diligence, internal and regulatory approvals,” ETI said in the note.

A Share Purchase Agreement also called a Stock Purchase Agreement, is an arrangement between parties to the ownership of shares in a company from a seller to a buyer.

According to the Pan African Bank, it has worked with the IFC for about 26 years, since 1993, to broaden access to finance, enhance trade liquidity, and strengthen Ecobank.

In addition, IFC and the funds managed by the IFC Asset Management Company, through their investments, have been supporting Ecobank’s growth strategy across Africa in

building a preeminent banking franchise since 2009.

Arise BV which would be taking over the IFC’s stake is a leading equity investor in financial institutions in Sub-Saharan Africa (SSA) with a combined asset value in excess of USD 700 million. Arise is owned by Netherlands Development Finance Company (FMO), Norfund, and Rabobank.

Its mandate is to capitalize and stimulate growth across all financial services sub-sectors and within SSA. Through partnering with financially sustainable Financial Service providers and helping them to become industry leaders in their respective markets, Arise BV aims to contribute to the economic growth potential of Africa, whilst at the same time achieving long-term investment returns, the note stated.

Financial services

L-R: Marniee Nottingham, Country Exams Manager, British Council Nigeria; Kanto Adesina,Territory Manager,Nigeria Cambridge International; Peter Thomas, Head of Mission, British Deputy high commission Lagos, and Lucy Pearson, Country Director,British Council Nigeria, at the 2019 of British council recognition and outstanding Cambridge Learner Awards in Lagos on Friday.

L-R: president, Risk Managers Association of Nigeria (RIMAN), Magnus Nnoka; board chairman RIMAN, Folakemi Fatogbe; chief risk officer, Nigerian Stock Exchange, Rasaq Ozemede; director, other financial institutions supervision department, Central Bank of Nigeria, Tokunbo Martins, and chief operating officer, FMDQ, Emmanuel Alao, at RIMAN’s 19th International conference in Lagos.

Outsource Global extends services to Silicon Valley, to work with Business Reactors DANIEL OBI

C

oming on the heels of its recent expansion to the UK and Japan, Africa’s leading business process outsourcing company domiciled in Nigeria, Outsource Global has announced its strategic working relationship with US-based information as a service firm, Business Reactor.

“We have traditionally served mainstream clients in financial services, legal, social advocacy, consultancy and healthcare within the US and UK markets.

But technological advancements across the world shows that the tech industry is underserved,” said Amal Hassan, the Founder and CEO of Outsource Global in a statement.

“Where else do we show the viability of this cost effective busi-

ness model to tech founders, accelerators and venture capitalists than the home of tech innovation – Silicon Valley. We now have a working agreement with Business Reactors to introduce Outsource Global and its services to key players in Silicon Valley.”

Business Process Outsourcing (BPO) is considered not only a simple cost-cutting mechanism but also a strategic initiative used to improve the quality of business processes while managing the bottom lines of a company.

Such services are particularly important for tech innovators and global software companies that require acceleration partners to manage different operational processes to help deliver more efficient growth while maximising operational expenses.

“I am confident, with the com-

pany’s sharp focus and strong leadership skills, Outsource Global is poised for global domination,” Valeiry Galistky, CEO Business Reactors said.

Speaking on the capacity of the organisation to handle the expected increase in client requests, Peter Oriabure, the Head of Infrastructure and Technology at Outsource Global said in the statment: “Keeping in view our strategic growth plan, and anticipating an increase in the number of clients that Outsource Global will serve over the next five years, we have established critical technological and infrastructural protocols to handle large client requests. We currently have about 800 remote teams working in three locations across Nigeria. We are able to increase that number to over 2,000 with 99.9 percent up time.”

www.businessday.ng

L-R: Tolulope Adedeji, marketing director; Annabelle Degroot, MD; Otunba Michael Daramola, legal and corporate affairs; Temitope Oguntokun, country lead, sustainability and stakeholder management, and Muyiwa Ayojimi, company secretary, all of International Breweries, at the kickoff of the company’s Sustainability Week and launch of its volunteering program tagged Better World Champions in Lagos.

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

19

cityfile Hawking of naira notes: Police arrest 4 in Kaduna

F

Boy picks waste for survival in Lagos: A survey by Universal Basic Education reveals that the population of Out-of-School Children has risen from10.5 million to 13.2 million.

Pic by David Apara

Police arrest 700 kidnap, armed robbery suspects

T

he police have confirmed the arrest of 424 kidnap and 276 armed robbery suspects in different parts of the country.

The Inspector General of Police Mohammed Adamu gave the figure during a meeting with senior police officers on the ranks of commissioner and above in Abuja, saying the suspects were arrested between May 10 and June 14 in Kaduna, Nasarawa, Katsina, Taraba, Kano and Edo. According to Adamu, the arrest was effected by personnel of the ‘Operation Puff Adder’ recently launched across the country to address internal security threats.

Kaduna State, the police said, recorded the highest number of kidnap suspects with 101, followed by Katsina with 79, Nasarawa, 54 and Taraba, 32.

Edo was said to have recorded the highest number of 38 armed robbery suspects, Nasarawa 25, Federal Capital Territory, 23.

The police chief said that 10, 860 ammunition were recovered while 301 firearms including a rocket launcher, AK 47 rifles, pistols and locally made gun.

He added that Katsina recorded the highest number of firearms with 80, Edo, 26 and Kaduna, 25.

According to him, 176 suspected cultists were also arrested across the

country during the period while 77 vehicles recovered.

The police boss said that within the period under review, 44 murder suspects were also arrested, with seven in the Federal Capital Territory (FCT) and six in Kano state.

The arrests, he stated, were made possible with the cooperation of members of the public and the dedication of police commanders and other tanks.

“I want to reassure the citizens that the police have put in place measures that will facilitate the strengthening of ‘Operation Puff Adder’ and ensure the sustenance of its gains,” he said.

He said that the strategies include the adoption

and implementation of the concept aimed at changing the policing narratives of the country.

“This will ensure the effective integration of the citizens to our internal security framework, guarantee the concept of policing by public consent and build partnership required to address peculiar communal threats,” he said.

Adamu reiterated the commitment of the police to sustain the war against crimes by taking the battle to the door steps of criminal elements.

“We only request one thing which is the continued goodwill, understanding, and support of all citizens across socioeconomic background,” he said.

our persons have been arrested by the police in Kad u na, a c cu s e d of illicit trading in naira notes.

The Commissioner of Police (CP) in Kaduna state, Aji Ali Janga, said in Kaduna that the suspects were arrested during a joint operation on June 14, involving officials of the Central Bank of Nigeria (CBN) and DSS. The CP, who was represented by the command’s Deputy Commissioner, administration, Onah Sunny, said that the sting operation aims at forestalling illicit sales of the country’s currency notes.

“The clampdown on the naira vendors and sellers is hinged on the CBN’s Act of 2007, Sections 20 and 21.

“This Act makes it a punishable offense for any individual or group of people to hawk, sell or otherwise trade in Naira

notes, coins or any note, issued by the CBN,”he said.

He disclosed that a total of N798,000 in various denominations and other exhibits were recovered from the suspects.

Janga said that investigation had already commenced on the matter to ascertain the source of the Naira notes, adding that the police and CBN would continue the clampdown on the perpetrators.

The CP assured that those arrested would be prosecuted after investigation.

“For the avoidance of doubt, acts of spraying the naira notes at occasions, soiling and writing on the naira, and squeezing of the naira are abuses of the naira.

“Other forms of abuse of the Naira, include hawking and selling, and all are punishable by law.” he said. NAN

Whistleblower charged with false information

A

whistle-blower, Usman Ajuji, has been arraigned in a Wuse Zone 6 Chief Magistrate Court, Abuja, for allegedly giving false information on Goverrnor Darius Ishaku of Taraba.

Ajuji, a chief inspector of prison, with the Yobe command, is charged with giving false information with intent to mislead a public officer.

The prosecutor, Celestine Okpong told the court that on June 7, the defendant informed the chairman of Special Presidential Investigation Panel (SPIP), that he had reliable information.

Okpong further said

that the defendant said there were bags of money filled with both local and foreign currencies in the governor of Taraba’s Wuse Zone 1 residence.

The prosecutor said, however, during investigation and operation in the residence, nothing of such was found.

He said the offence contravened the provision of Section 140 of the Penal Code. The defendant, however, pleaded not guilty to the charge.

The magistrate, Ahmed Indajiwo, admitted the defendant to bail in the sum of N500,000 with two sureties in like sum, and adjourned until July 2 for hearing.

Army confirms murder of soldier, 2 NSCDC operatives in Rivers SAMUEL ESE soldier and two operatives of the Nigerian Security and Civil Defence Corps (NSCDC) have been allegedly killed a gun duel with suspected militants in Rivers.

The incident, which occurred on Sunday, and con-

A

firmed by the army authorities, saw the militants allegedly carting away weapons of the murdered security operatives.

He security agents were said to be preventing the militants from vandalising an oil and gas facility in Gio community, Tai area of Rivers, when the incident occurred. www.businessday.ng

Aminu Iliyasu, spokesman of the 6 Division of the Nigerian Army in Port Harcourt, confirmed the killings in a statement on Monday.

“The suspected militants attacked troops of 29 Battalion, 6 Division, with personnel of NSCDC in the early hours of Sunday. The team which was guarding

Shell Petroleum Development Company (SPDC) Trans National Pipelines (TNP) in Gio community prevented the militants from vandalising 24 and 28 of the TNP. “One AK 47 and two G3 rifles, carted away by the assailants,” Iliyasu said.

According to him, the army later deployed more

https://www.facebook.com/businessdayng

troops to the area with intent to apprehend the fleeing militants as well as other criminals in the community.

He said the cordon and search operation led to another gun duel with alleged cultists and an oil bunkering kingpin wanted by security agencies in the state.

The army spokesman @Businessdayng

said Korobe Menele, a prime suspect in the killing of the security operatives, was shot dead in the gun duel with troops.

“At about 9 a.m. on Sunday, troops acting on reliable intelligence sighted a white Toyota Hilux that was without number plate. The vehicle was hastily driven with four occupants.

20

Wednesday 19 June 2019

BUSINESS DAY

Wednesday 19 June 2019

BUSINESS DAY

CEOINTERVIEW

21

ESAYAS WOLDEMARIAM HAILU Managing Director of Ethiopian International Services- Ethiopian Airline

Interview with Private Sector Leaders

‘Ethiopian Airline’s long-term plans, autonomy, new technologies are secrets behind its success’ ESAYAS WOLDEMARIAM HAILU is the managing director of Ethiopian International Services- Ethiopian Airline. As MD, Ethiopian International Services, he heads and directs the development and coordination of Sales, Services and Operation of all International Flights. In this interview with IFEOMA OKEKE in Addis Ababa, he speaks on the secrets behind the airline’s success and how the airline had emerged stronger despite the recent crash, amongst other issues.

W

hat has been the impact of the B737 Max-800 air crash on the operations of the airline and how has it been able to weather the storm following the incident?

We have a high respect for the general Nigerian public, its government, travelling public and the Nigerian media because they have been standing by our side during those hard times. The sense of allegiance within the continent was superb and we are grateful for that. Some of the impacts include the lost lives of our passengers and our crew. These are irreplaceable human lives and it has been so depressing. It was an emergency situation for the first one week after the accident, as we were eating at the accident scene, sitting there and handling everything. We were dedicated to the media, the logistics, and the rescue and search operations amongst others. Secondly, the aircraft was lost. One out of the five B737 Max aircraft we had was lost. Thirdly was our brand but we found out that our customers had a good sense of allegiance towards us and everybody knew that it was from the design deficiency and even Boeing came out to apologise officially.

Western media had this habit of parading the African company or brand as not competent enough. At last Boeing and Federal Aviation Administration (FAA) acknowledged that it was a design problem. Our brand emerged even stronger because the confidence of the travelling public to travel using our airline has not been affected. It has however impacted us in a way that the rest of the aircraft have been on ground. However, because we have over 100 aircraft, we have been switching one aircraft from the other.

The second reason is that March to May was a slack season in our operation, so we could manage with the available fleet in our possession. June to September is peak season in our operation, so we are considering all options to mitigate aircraft shortage we may face during this period. In the future we are going to receive the rest of the order to have a total of 27 MAX aircraft but this will only be determined with the outcome of the adjustment of this aircraft system and FAA accrediting it and all airlines flying it. Ethiopian Airline has vowed to be the last airline to fly that aircraft after the entire world has tried, tested and trusted it. So, the impact has not been easy but with all the support and patronage of our African brothers and sisters and the international community, our brand has emerged even stronger.

If FAA Certifies Boeing B737MAX 8 for operations, will you start its operation immediately or will your pilots undertake more training?

When Boeing does any system adjustment, FAA has to review, audit, test and accredit.

After that, the America carriers, China carriers, the European carriers, and the rest of them will have to use it. We have fulfilled all the requirements and by the way, we even have a simulator. American carriers are operating that aircraft but many of them do not even have simulator for the 737 MAX but we have. So, all our pilots have gotten all the

There have been attempts to float a national carrier by the Federal Republic of Nigeria.

So far, we have not been picked but we are able, capable and ready and whenever the vacancy is created, we are ready to come and partner on this. Secondly, Nigeria has been a very big host. By the population of the county, which is by demographic data, the most precious kind of resource is the human resource. Nigeria being the largest Africa population and the largest economy, the mobility is very high, domestically and overseas. As a result of these, Nigeria really requires its national carrier. We wish them all the best and we are ready and willing to support them on this. Any partnership which arises from that is most welcome and we are expecting that.

requirements. So, after everyone has flown it, we will fulfil all the additional requirements, and then we will fly it. Like I said, the problem is with the design of the flight control system of the B737 MAX and its redesign is under review by regulatory bodies and stakeholders.

If you have a choice, will you rather think of another aircraft type than a MAX 8?

Each and every aircraft type has got its own mission. Some are for long rage, some for medium and some for short range. Some are high density aircraft. MAX is designed to be fuel efficient. It is economical. So if Airbus brings something equivalent to the MAX aircraft’s mission, definitely, we will use that also. Our fleet is highly diversified both from Airbus and Boeing.

We have 737 dash, B777, B787 and A350 amongst others. We have a mixture of longand short-range aircraft and various density classes. All these aircraft are for different missions. So, if there is any other aircraft which fulfils the same mission and economics, we are going to take it. As I speak to you, the age of our average fleet is four years. Ethiopian Airline is the first airline to introduce jets into the African skies. The B707s, B767s, B757s, B787s and the B777; we were the first to bring these aircraft into the African skies. This is to give good value preposition to our customers and to be able to compete in the global aviation market. Of course, it is very expensive to buy an aircraft. Only one single aircraft can cost over $150million. We have a commitment to give a dependable, global standard air service. We have good fleet diversification, simulators, trainings and accreditations. We train our people, our pilots, flight engineers and those from other African carriers. We not only fly our aircraft, we maintain them. We do all engine maintenance and aircraft maintenance for our service and other carriers. So we train pilots, mechanics, hostesses, cargo logistics, marketing amongst others. So our training centre is also registered by International Air Transport Association (IATA), and International Civil Aviation Organisation, (ICAO).

We lay emphasis on training and bringing the best of knowledge.

What do you think of the upcoming Boeing 777X? Do you have any plans of ordering them as a replacement for the current Boeing 777 fleet?

B777X could be a great aircraft, and we are evaluating it as possible replacement for the existing 777 fleet. If the outcome of our evaluation shows that aircraft is very good and can achieve the mission we have for our network, then definitely, we are going to take it.

What is the 2019 end of year projections of Ethiopian Airline and what plans do they have for your operations in Nigeria?

We have a couple of plans. First of all, we fly into four gateways into Nigeria which are Kano, Enugu, Abuja and Lagos. This is because we want to give the best value prepositions to our customers. Many people fly from various parts of Nigeria to Lagos. The Murtala Muhammed International Airport (MMIA) www.businessday.ng

What is the latest on your talks with the Ghanaian government on partnerships to float a National carrier for Ghana?

The initial MOU has already been signed and whenever our legal team finalises, we are going to be signing.

processes a huge number of passengers and finding parking space, slot, arrivals and departures, embarking and disembarking people takes time. So, to reduce the burden of the Lagos airport, we decided to diversify the traffic. When we airlift people from different parts of the country, it is easier for the passengers. We used to fly into Kaduna. We did this for some time but the traffic volume hasn’t been forthcoming. We have been developing the route at our own costs. Because Kaduna is in between Kano and Abuja and we fly into these two places, the economic sense has not been guaranteed. If the economics is eventually justified, then we are going to go there. For 2019 projection, the second frequency to Lagos is being planned.

There is also a plan to connect Lagos across the Atlantics to the United States. All these plans are subject to the approval of the Nigerian government.

What has been the secret behind the success of Ethiopian Airline and how can other African airlines learn from you?

The first is our long-term planning. Ethiopian Airline has always had vision 2010. We upgraded to vision 2025 and now we are

https://www.facebook.com/businessdayng

up scaling it to vision 2055. Long-term planning requires fleet planning, route planning, Human Resource planning, systems planning, facility planning, the ground handling, the catering, and the cargo planning, amongst others. Everything must be planned for. We have to plan for the appropriate type of fleet and you have to plan your order in advance. Aircraft is produced by order and not like cars where you go to the show room and pick it. So all these require planning and our long-term planning has always been the root of our success.

Secondly, the autonomy of the airline despite its government ownership is key. The airline is allowed to run on its own and in in accordance with industry rules and regulations without meddling on its commercial decisions and its day to day running whatsoever. Thirdly, we always emphasize on new technologies and these new technologies are part of the success. We always bring in new aircraft and young fleet. This is also part of the success. The management’s prudence and the strict corporate governance of the management is key.

When it comes to safety, security and transparency, we don’t compromise. So these are some of the elements that are part of the successes of Ethiopian Airline. So, whatever we prescribe, we also share experiences with our fellow African brothers and sisters in those small airlines we are

@Businessdayng

setting up in Africa. We are also trying to sell this model to them. For example, a big executive of Ethiopian Airline travelling for a business trip, if he takes cash advance, when he comes back, he gives a report on expenses and returns the remaining cash to the company. So, this is part of the success factor.

What are the contributions of Ethiopian Airline and its affiliate companies to the GDP and the economy of Ethiopia as a country?

For Ethiopia’s Gross Domestic Product, (GDP), the airline’s contribution is hardly up to four percent of Ethiopia’s GDP because Ethiopia’s annual budget is $350billion. On the other hand, Ethiopian Airline annual revenue is about $4.5billion.

With the passengers and all the other Ethiopian Airlines’ group is about five billion dollars revenue per annum but at the end of vision 2025, we hope to generate revenue of $10billion. We hope to double our revenue.

Is there any partnership plan between Ethiopia Airline and the Federal Government of Nigeria on the proposed Nigeria Air? And what is your advice to the Nigerian government on their quest to float a national carrier?

Airlines have been accused recently of conniving with baggage handlers at the airport to plant illegal items (illicit drugs) on passenger baggage.

What measures has ET put in place to prevent this kind of untoward practice and safeguard the integrity of your operations?

We are always very serious about the security of our operations and customers. We have discussed with all the authorities on how the process of baggage screening should be done in a way that ensures safety is at the peak. We together with other airlines like MS, ground handling company and the security company, raised the need for scanning machines, sniffing dogs at the airport which should be arranged by the authorities. We have also placed strict control on the ground handling company and the security company as well.

The check lists we are using includes sensitising all handling staff to strictly follow the standard passenger check-in procedure, interviewing all passengers in regards to their baggage and asking questions relating to who packed the luggage and details at point of check-in, ensuring passenger appear themselves for check-in of baggage, ensuring security company searches all bags, proper supervision and control are in place at the baggage area and tightening the security check and Additional security check at transit (ADD).

IATA usually talks about Radio Frequency Identification Device (RFID) for baggage tracking. Are you going to adopt this?

Ethiopian Airlines is one of the founding members of IATA and Tewolde GebreMariam, the CEO of Ethiopian Airline, sits on its board of governance and he has just been re-elected. So any IATA initiative is also part of our initiative because IATA is a consortium of airlines. Whenever there is a migration from paper ticket to E-tickets, or any other development, we are always up to the tune and we comply. www.businessday.ng

What are your suggestions on ways forward for the growth of African aviation industry?

We believe that Africa needs to liberalise its sky if the full potentials of African carriers are to be unleashed. Open sky policy is in the best interests of African airlines as it boosts their efficiency by reducing the high operational costs such as high airfares and airport charges. Liberalised airspace will also help strengthen collaboration among the carriers towards claiming the market share they deserve. Ethiopian Airline has been advocating for the implementation of the Single African Air Transportation Market (SAATM) per the Yamoussoukro Decision. So far, a number of African countries have signed SAATM which, once implemented, will drive down airfares by allowing carriers of signatory countries to freely access each other’s airports.

How have you been able to take advantage of the growth of your aviation to grow your tourism industry?

With the growth of aviation service, there is better opportunity to promote Ethiopia as a tourist destination among tourists. The growth of aviation is positively contributing to tourism industry through availing better connectivity to different tourist destinations in Africa and beyond.

SAATM seems to be following the way of YD as many states fear that established airlines like ET, Egypt Air, Air Marco would take advantage of it at the expense of new national carrier start-ups. Do you have reasons to allay these fears?

The Single African Air Transport Market (SAATM) is one of the Flagship Projects of the African Union’s Agenda 2063. It will ensure that aviation plays a major role in connecting Africa in order to achieve social, economic and political integration and boost intraAfrica trade. SAATM was launched by the African Union Heads of State and Government in January, 2018. There is an unrealistic fear that the established airlines like ET, Egypt Air, Air Marco would take advantage of it at the expense of new national carriers.

However; this allegation is baseless due to the following reasons: African Union has competition rules that prohibit any agreement or practice that negatively affects the liberalisation of intraAfrica air transport services and which has as its object or effect the prevention, restriction or distortion of competition.

Secondly, Air transportation service in Africa is one of the underserved, compared elsewhere: African carriers, all combined, cover less than 3 percent of the world’s air transportation. Similarly, African carriers’ market share in their home market, Africa, is only less than 20percent while the remaining is being taken up by the non-African carriers.

SAATM in this regards, proposes African countries to open up their skies for African carriers so that tax and related burden on the African national carriers will ease and countries get motivated to embark on same.

Nigerian market seems to be one

https://www.facebook.com/businessdayng

of the greatest contributors to your earnings. Do you have special products or services for travellers on this route as a reward for loyalty and patronage?

Ethiopian Airline has been serving the Nigerian public since independence and has never stopped its operation. We always give the best to our Nigerian travellers by deploying the most modern , newest aircraft from our fleet collection, availing best and short connections to more than 120 destinations, availing attractive promotional fares and packages ( for tourism travellers ) to all our destinations, and allowing E-visa and on arrival visa facility.

How effectively has your e-visa process contributed to the tourists’ arrival in Ethiopia and how has it help to open new vista of opportunities for tourism value chain and Ethiopia (hotel, tour operators, sites visit, airport pickups etc)?

The e-visa service has eased travel to Ethiopia by streamlining the travel process. It reduced waiting for visa, delays and cancelations.

We are now working on offering tourists attractive packages so that they can extend their say in the country and visit more tourist destinations. The automated visa service has contributed to Ethiopia’s tourism significantly.

How has the multiple routes operated by ET in Nigeria (Abuja, Enugu, Lagos and Kano) scaled up passenger patronage?

Ethiopian Airline is the only airline that operates four destinations in Nigeria which gives better choice for the travelling public.

A passenger based in Enugu was supposed to take domestic flight or take a long drive to fly international routes but since Ethiopian Airline started the flight, all this suffering stopped and they can easily take the flight from their home town. We fly daily from Logos and Abuja and three times weekly from Kano and Enugu, all independent flight. So these flights are serving the public by connecting them to the rest of the world.

Your all-women flight crew has gained tremendous applaud from around the world. What is the rationale behind it?

The flight is aimed at highlighting that women are capable of doing what men can do as long as they get the opportunity. We believe that such an initiative will go a long way towards inspiring girls in Africa and beyond to dream big.

What is new about the new spirit of Africa, Ethiopian Airline, in terms of in-flight entertainment and services?

As part of its continuous efforts to provide the best possible inflight service to its passengers, Ethiopian Airline has been taking different measures. Internet Wi-Fi connectivity is being rolled out on its A350 aircraft – so far Wi-Fi has been availed on three aircraft, Wi-Fi steaming on passengers’ personal devices has been implemented on 3 B767 aircraft and installation has been finalised

@Businessdayng

22

Wednesday 19 June 2019

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

CBN needs to on-board 434,247 mobile money agents to meet 2020 target Stories by Endurance Okafor

F

o r t he Centra l Bank of Nigeria (CBN) to achieve its target of onboarding 500,000 mobile money agents by the year 2020, it would have to enrol about 434,247 agents in less than two years, checks

by BusinessDay revealed.

With less than two years before the projected deadline, financial institutions in Nigeria have so far enrolled only 65,753 mobile agents, data obtained from the Nigeria Interbank Settlement System (NIBSS) showed.

This is 86.85 percent less than the 500,000 mobile agents which are going to serve about 105 million adult Nigerians.

Niger ia had in 2012 launched an ambitious National Financial Inclusion Strategy (NFIS) in which the CBN had targeted 62 mobile money agents per 100,000 adults.

However, in Januar y 2019, the apex bank unveiled a revised version of the strategy in which it projected that there would be about 500,000 mobile money/bank agents available to serve about 105 million adult Nigerians by the year 2020. The figure translates to about 476 agents per 100,000 adults.

Figures by NIBSS ana-

lysed by BusinessDay revealed that the total number of enrolled mobile money agents in Africa’s most populous nation stood at 38,416 as at December 2018 and a total of 27,337 agents were enrolled in the first three months of 2019, this summed the number to 65,753 officially registered mobile money agents.

The NIBSS data also showed that the number of mobile money customers recorded in the industry at the end of 2018 and in the first quarter of this year, stood at 8.5 million and 2.3 million respectively. Meaning the total number of mobile money customers in the

country currently stands at 10.8 million.

Nigeria’s central bank has a target to ensure that 80 percent of the country’s adult population are financially included into the financial cycle by the year 2020.

Nigeria currently has 36.8 percent of its adult population excluded from the financial net; this translates to a population of 36.6 million adult Nigerians who at the moment do not have access to financial services.

This leaves the apex bank with an exclusion gap of 16.8 percent, considering it has plans to ensure only 20 percent of Nigerian adult population are financially

excluded by 2020.

A further breakdown of the data by NIBSS revealed that the total transaction volume and value recorded for the payment channel in the first three months of this year stood at 20.4million and N107.6 billion respectively.

For the whole of 2018, the figures indicated that a total transaction volume and value of 87.1million and N1.8 trillion were recorded.

Nigeria’s high exclusion rate is fuelled by the country’s bank-led financial inclusion model, as it African peers who have imbibed the mobile money led-model have reported higher inclusion

Kenya has about 60 percent mobile money service penetration, while Ghana has about 40 percent service penetration, and Nigeria with a lot more higher population, remains at 1 percent.

However, the revised National Financial Inclusion Strategy also rolled out steps on how the country would get 80 per cent of its adult population become financially included by the end of next year.

“The justification for this new figure is based on recent developments in the financial sector aimed at taking financial services to the unserved and under-served using branchless platforms such as agent banking and digital platforms,” the CBN said in the new document.

Although, the 2018 Access to Financial Services (A2F) survey conducted by the Enhancing Financial Innovation and Access (EFInA), showed that financial inclusion rate dropped from 41.6 per cent in 2016 to 36.8per cent.

It would be recalled that as part of efforts to boost financial inclusion in the country, industry stakeholders which include the Nigeria Interbank Settlement System Plc., CBN, Chartered Institute of Bankers of Nigeria (CIBN), commercial banks and other operators

in the payment system had last year developed a Shared Agent Network Expansion Facility (SANEF) initiative to offer basic financial services across the country.

The initiative involves on-boarding 40 million low income and unserved Nigerians into the financial system, increasing financial access points from the current 50,000 to 500,000 by 2020 and deepening access to mobile and digital financial products and services such as savings accounts, micro loans, insurance, pensions by Nigerians.

With the aim to spur financial inclusion and ensure it achieve its 2020 target, the apex bank in October 2018 proposed Payment Service Banks (PSB) aimed at deepening financial inclusion in a Nigeria.

At least 30 business names have since applied for registration as payment service banks with the functions to: maintain savings accounts and accept deposits from individuals and small businesses, which shall be covered by the deposit insurance scheme; carry out payments and remittance (including cross-border personal remittance) services through various channels within Nigeria; issue debit and pre-paid cards; and operate electronic purse.

Lack of financial literacy tops list of impediments to inclusion - Survey

A

mong the barriers to financial inclusion in Sub-Saharan Africa, lack of financial literacy topped the result of the survey by the International Financial Architecture for Stability and Development/Crypto-assets and Fintech.

According to the policy brief which presented findings of a Human Sciences Research Council (HSRC) survey that studied the impact of Fintech for financial inclusion in Sub-Saharan Africa, Financial literacy remained a “challenge amongst the low-income segment and is compounded by limited capabilities in literacy, numeracy, digital literacy and a general awareness of financial products.”

BusinessDay analysis of the report revealed that

67percent of the survey respondents indicated that a lack of financial literacy was a significant impediment to financial inclusion.

According to Organisation for Economic Co-operation and Development (OECD), low levels of financial inclusion are closely associated with low levels of financial literacy From the 85 responses HSRC received from the administered survey, it pointed that due to the lack of access to a banking account or mobile-wallet facility, rates of poverty have remained high, and the expected benefits of financial services for the low-income segment have not materialized.

Despite the increase in Nigeria’s financial inclusion rate, the Northern region of Africa’s most population retained its position of highest

excluded hub in the country, EFInA’s bi-annual 2018 figures shows.

According to EFInA’s figures analysed by BusinessDay, Nigerian adult popula-

www.businessday.ng

tion who are both formally and informally excluded from the financial market stood at 36.6 million.

Compared to other regions of the country, the

https://www.facebook.com/businessdayng

northern part reported more unbanked people owing among other reasons, the high illiteracy level, BusinessDay survey revealed.

Thus, the International

@Businessdayng

Financial Architecture for Stability and Development/ Crypto-assets and Fintech recommended solutions to financial illiteracy and they include- integration of financial literacy programmes with schools and tertiary institutions. “By accessing schools, it is expected future generations will better prepare to adopt such tools.”

It also added that publicprivate-partnerships should be promoted “as a mechanism to expand the reach of financial literacy programmes in low-income communities.”

“Expand training programmes targeted to mobile-money agents, to help spread awareness of products/services. Agents are well-placed to engage consumers and address their concerns directly,” it added.

Wednesday 19 June 2019

BUSINESS DAY

23

PRIVATEEQUITY &FUNDRAISING

Finnfund, Nortfund make $10 million debt financing in starsight Stories by MICHAEL ANI

F

innfund and Nortfund have entered a $5m longterm senior debt financing with Starsight Power Utility group in Nigeria.

The debt financing of Starsight is Finnfund’s and Nortfund first investment into the energy market in Nigeria.

With the additional $10m of total funding from Finnfund and Norfund, Starsight will install its innovative solar power generation systems across a portfolio of several hundred commercial bank branches in Nigeria.

“We are pleased to partner with Finnfund and Norfund at the forefront of our bid to deliver improved energy reliability, cost savings and environmental benefits to Nigeria’s commer-

cial and industrial power consumers,” said Damilola Agbaje, Director at Starsight and Investment Principal at African Infrastructure Investment Managers.

“Together, we are reimagining power provision to key employers in the Nigerian economy.” He added.

Starsight is backed by Helios Investment Partners and the African Infrastructure Investment Managers, the

largest Africa-focused, private equity and infrastructure investment firms.

Starsight offers solar-diesel-battery hybrid generation and efficient cooling and lighting solutions to commercial and industrial clients throughout Nigeria.

The solution will cut the customer’s use of fossil fuels by up to 70 percent thanks to improved energy efficiency and the use of solar power.

Sahel capital moves to seal second investment deal in 2019 ...announces plans to invest undisclosed amount in Ladgroup

S

ahel Capital, a private equity firm that focuses majorly on the Nigerian agribusiness sector, is moving to seal its second investment deal for the year.

Last week, the firm agreed to invest an undisclosed amount in an indigenous agricultural company that engages in the processing and export of shea butter, Ladgroup, making it the second deal in 2019 after it invested in Coscharis farms, a rice processing firm in May. The new investment would involve reconstituting the board of Ladgroup to include members from the private equity firm.

Sahel capital was not available to respond to BusinessDay’s question seeking comment on the amount of the deal.

Sahel Capital is the fund manager of the Fund for Agricultural Finance in Nigeria (“FAFIN”), which has US$66 million in investable capital.

Its investors include the African

Development Bank (ADB), CDC Group, Dutch Good Growth Fund, KFW Development Bank, Nigerian Sovereign Investment Authority, and Nigerian government via the Federal Ministry of Agriculture and Rural Development (“FMARD”) and the Federal Ministry of Finance.

With the investment, Sahel Capital will leverage on its wealth of experience and relationships in the West African corporate and agribusiness community to support Ladgroup’s growth and position the company as a market leader in the West African shea industry, the company said in a statement available on its website.

The investment will also further strengthen Ladgroup’s capacity to bridge the processing gap of shea nuts in Nigeria, tap into the increasing global demand for shea butter, and venture into downstream industries such as refined cooking oil and other shea butter derivatives over

the next few years.

“We are thrilled to partner with Ladgroup, and are excited by the growth opportunities within the global shea sector”, said Olumide Lawson CFA, Partner at Sahel Capital.

“We expect this investment to create jobs across the shea value chain in Nigeria, and to especially boost incomes of women who are the primary individuals active within the sector.” He said.

Ladgroup commenced operations in 1972 with the exportation of shea nuts, cocoa, ginger, coffee and gum arabic, and became the largest exporter of shea nuts and cocoa.

The company is currently focused on the value addition of shea nuts through processing into shea butter for export on an industrial scale through its factory located at Ikenne-Remo, Ogun State. It has also built strong relationships with leading global shea stakeholders

with an interest in West Africa, and has executed off-taker agreements with some of these stakeholders.

In line with the board reconstitution, Olumide Lawson and Remi Bodunrin of Sahel Capital, along with a number of experienced independent directors, will join pre-existing Board members such as Kunle Onafowokan (current Managing Director) on the reconstituted Board.

Commenting on the deal also, Prince Onafowokan, Chairman and Founder of Ladgroup Limited, said the firm is pleased to have reached an agreement with FAFIN and to have them partner as shareholders in Ladgroup.

“Our long-term focus is to be the leading shea processing company in West Africa, and we are confident that the financing and operational support from Sahel Capital, as well as its technical assistance facility will greatly improve our future prospects”, Onafowokan added.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: OGAR DAVID ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

24

Wednesday 19 June 2019

BUSINESS DAY

BANKING

In Association with

Regulation of cryptocurrencies still underway, SEC assures

dering/terrorism financing, among others.

Blockchain, the technology that powers DCs, has economic, political, humanitarian, and legal system benefits and could have the capacity for reconfiguring all aspects of society and its operations.

Banks and government agencies are already exploring how blockchain might transform their approaches to their operations.

“Nigerian regulators and players are actively involved in DCs and DTLs, as desired.

We should continue to monitor developments in digital currency so as to resolve any concerns on legal, financial and consumer protection issues,” said Kabir Katata, deputy director, research department, Nigeria De-

posit Insurance Corporation (NDIC) in his presentation in October 2018.

According to Hamish Thomas, EY EMEIA payments leader and UK advisory, banking technology leader, Cryptocurrencies have enormous potential to positively disrupt financial services by increasing the speed and reducing the cost of doing business.

Consequently, a coordinated international effort will be needed to make certain these new currencies do not enable criminal activity and tax evasion.

Despite concerns about regulation stifling potential innovation in crypto assets, Thomas said there are exciting developments; for example, Kenyan startup BitPesa — a bitcoinbased remittance service that integrates with Kenya’s mobile money system M-Pesa to reduce friction and transaction fees. In trade finance, the DLT that underpins cryptocurrencies may allow supporting documentation to be attached to financial transactions, reducing risk of human error or exploitation.

In October 2018, Bitcoin traded over $1 for the first time in February 2011, for $30 in June 2011, below $7 in July 2011, below $2.50 in October 2011, climbed back up to $10 by August 2012, to over $230 in April 2013, fell to below $70 within a week and rose to over $1100 in November 2013 before falling by several hundred dollars again.

Bitcoin continued to rise on Monday, after leaping across the $9,000 mark Sunday, boosted by reports that Facebook (FB) is soon set to launch its own cryptocurrency. Bitcoin is up 140 percent since the start of the year.

But it’s still more than 50 percent lower than its all-time high near $20,000 in December 2017, CNBC reports.

were encouraged to dress spectacularly to win cash prizes sponsored by EcobankPay. EcobankPay, is the lifestyle digital payment and collections service of Ecobank Nigeria, had been designated the payment solution for the premiere of the much anticipated movie. EcobankPay is a convenient digital QR code that enables payments using the mobile phone, without the need for a plastic card.

The uniqueness of the platform is that it has MasterPass, MVisa and Mcash embedded in the merchant identity QR Code. This enables each customer to transact across the three platforms not minding the bank cards they are holding.

‘The Bling Lagosians’ is a story that centres on the lifestyle of a Lagos family that is presently living in their past glory. Although, they are not as wealthy as they once were, they still want to live that lifestyle they once used to. They want to host the talk of the town kind of party, they want to wear the best designers and ride the fastest of cars even if they are wallowing in debt. This movie is intended to show how people go the extreme to keep up appearances in public. ‘The Bling Lagosians’ is already attracting great audience. The film stars Jide Kosoko, Elvina Ibru, Denola Grey, Monalisa Chinda, and Helen Paul among others.

Stories by HOPE MOSES-ASHIKE

R

egulation of Cryptocurrencies formed part of the discussions at the two-day annual conference on “Economic Recovery and Development – Leveraging Technological Innovation”, organised by Risk Management Association of Nigeria (RIMAN) in Lagos.

A Cryptocurrency is decentralised digital money used as a medium of exchange. It is a virtual currency that uses cryptography for security.

Regulators of banks and financial institutions across the globe seem to be having sleepless night concerning how to regulate the worldwide proliferating cryptocurrencies.

Mary Uduk, acting director general, Securities and Exchange Commission (SEC), noted that the virtual currency committee had been set up by the financial regulators.

“We talk about bitcoins for instance, cryptocurrency, should we regulate or not? What do we do? We are also talking about online trading, how to come in because people are losing tones of money in those online trading”, Uduk who was represented by Okey Umeano, head, risk management, SEC, said.

To regulate cryptocurrencies is not a oneday thing. “It is something we have to think through because these areas employ a lot of Nigerians”. Nigeria is one of the countries that have high level of activity in cryptocurrency and online forex trading.

“We the regulators are not sleeping, and we hope that finally we will come up with the

best way to go about regulating them,” Uduk added. Top cryptocurrencies as of October 2018 include Bitcoin , Ethereum , XRP, among others. Digital Currencies (DCs), though a new phenomenon, are gaining popularity across the globe and are associated with a lot of risks. That is why regulatory/supervisory authorities in many countries are seriously concerned about DCs. Some of the associated risks have farreaching implications for Deposit Insurance, banking and legal practice. At present, digital currency does not pose global financial stability risks. But they raise other significant concerns, including consumer and investor protection, market integrity and money laun-

Ecobank affirms support for Movie Industry

E

cobank Nigeria says the bank is set to support the Nigerian movie industry to project everything good about Nigeria.

Patrick Akinwuntan, managing director, who spoke at the premiere of the movie ‘The Bling Lagosians’ in Lagos said Ecobank is determined to support the creative industry as they are most suited in the task of reinventing the Nigeria of our dreams. This also being in line with the Central Bank of Nigeria (CBN) vision to support the Creative Industry through a Financing Initiative Akinwuntan said Ecobank is passionate about Africa and its cultural renaissance, and

its partnership with Bolanle Austen-Peters, a renowned African culture promoter, sits perfectly with the Pan African brand. Further he stated that the bank will continue to leverage its digital offerings to facilitate a more seamlessly connected Africa. According to the bank Managing Director, through its flagship products EcobankPay and the Ecobank Xpress ecosystem the bank will remain in the forefront as key enablers of digital payments across the continent.

As part of the partnership, Ecobank handed over the sum of N.5 million to the best dressed person at the premiere, being the climax of the ‘Eko for Show’ dress code for the event. Guests

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

PENSION today

25

In Association with

Private sector employee’s major beneficiaries of PenCom compliance certification

T

Aisha Dahir-Umar, acting director-general, National Pension Commission

the Commission to recover unremitted pension contributions.

The pension law made it mandatory for employers with at least three employees or more to contribute alongside their employees into a Retirement Savings Account domiciled with the Pension Fund Administrators as well as arrange a group life insurance with a life insurance Company for the employees.

Sec 4(5) of PRA 2014 mandates every employer to have group life insurance policy in favour of each employee.

According to the Commission, beyond complying with provisions of the law on CPS, life insurance is another aspect of the employee welfare scheme that employers must provide. Otherwise, the affected organization risks being sanctioned by the pension regulator.

PenCom in an advertorial with the theme “Compliance with guidelines for life insurance policy for employees and submission of insurance certificate” had stated that “In accordance with the provisions of Section 4(5) of the Pension

‘

The sum of N45.90 billion was remitted to 105,382 employees’ Retirement Savings Accounts (RSAs) by the 4,675 organizations that were issued with compliance certificates

‘

he ‘caveat’ that unless you present the pension compliance certificate issued by the National Pension Commission (PenCom) you will not be allowed to participate in any government contract is helping to boost participation of private sector employers in the Contributory Pension Scheme(CPS), as without it, a lot of employees would have been doomed after their working careers.

Many employees would have ended several years of working without a pension to fall back on, meaning their retirement was going to be in poverty and penury.

But this has been largely changed in a lot of private sector employers who do businesses with government particularly contracts. Not only that they have been compelled to enrol their employees into the CPS, they have also been forced to remit their contributions and that of their employees, while as providing group life insurance cover for them.

Thanks to the increased efforts by PenCom through support of the different government agencies including the Bureau of Public Procurement, Federal Inland Revenue Services (FIRS), as well as Ministries Departments and Agencies (MDAs) whose joint efforts have made many private sector employers to comply.

According to statistics released by PenCom, the Commission during the first quarter of 2019 received 6,630 applications from private sector employers for the issuance of compliance certificate.

The Commission said out of these 4,657 certificates were issued, while 1,973 applications were declined due to non-remittance of pension contributions for the appropriate period and/or nonprovision of group life insurance policy for the employees.

“The sum of N45.90 billion was remitted to 105,382 employees’ Retirement Savings Accounts (RSAs) by the 4,675 organizations that were issued with compliance certificates, the Commission said.

PenCom said in a statement, that it has continued to apply various strategies to ensure compliance with the provisions of the Pension Reform Act (PRA) 2014. This included the application of sanctions and collaboration with key stakeholders on public enlightenment campaigns as well as engagement of defaulting employers via pension recovery agents employed by

Reform Act (PRA) 2014 and Section 5.5 of the Guidelines for Insurance Policy for Employees, Employer of labour covered by the PRA 2014 are required to submit copies of the Insurance Certificate with the schedule of benefits to PenCom.

The Insurance certificate should state that all employees are covered up to an amount not less than 3 times their respective annual total emoluments (ATE).

Employers that have not yet submitted copies of Insurance Certificate for the current year to the Commission are therefore advised to do so before 31 March 2017, failing which the National Pension Commission would consider such employers in default of Section 4(5) of the Pension Reform Act (PRA) 2014.

The advertorial further stated that compliance with PRA 2014 is not complete without the Group Life Insurance Policy.

It is the right of an employee to have a group life insurance. It is a scheme that can be likened to a death-in-service policy, designed to pay a benefit called the sum assured to the next of kin or dependants of an employee who dies in active service.

Life insurance policy involves the payment of a premium to the insured against the death of an employee either by natural or accidental causes. It is wholly paid for by the employer and enjoyed by the employee if the death occurs prior to terminal date. The policy also can provide for accident at work that results in permanent disability as well as cover for burial expenses by way of extension to the policy. It therefore demonstrates to employees that the employer places a great premium on their lives and contributions to the development of the organisation.

The objectives of the Contributory Pension Scheme is to ensure that every person who worked in either the public Service of the Federation, Federal Capital Territory, States and Local government or the Private Sector receives his retirement benefits as and when due; and to assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

The provisions of this Act shall apply to any employment in the public service of the Federation, the public Service of the Federal Capital Territory, the Public Service of the state, the public service of the local governments and the private sector.

In the case of the Private Sector, the Scheme shall apply to employees who are in the employment of an organization in which there are 3 or more employees.

This section is created to increase awarness and deepen knowledge about the contributory pension scheme.

If you have enquiries or contributions, send to this e-mail:

RC634453

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

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

https://www.facebook.com/businessdayng

diamondpfcbusday@yahoo.com

@Businessdayng

26

Wednesday 19 June 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Why individuals, businesses must take insurance to safeguard treasured interest Stories by Modestus Anaesoronye

T

he importance of insurance to individual households, businesses and the economy cannot be over emphasised when you realise that we are in a world of risk.

According to Oye Hassan-Odukale, chairman, Sub-Committee on Publicity and Communication, Insurers Committee, it serves as an anchor for both individuals and the economy.

“For the individual, insurance helps to safeguard treasured interests from loss and uncertainty, giving him/her the freedom to enjoy life to the fullest. While for businesses, insurance ensures reduced risk of venture and provides succor during losses, hereby enabling businesses to thrive” On the economy in the other hand, it drives the key sectors of the economy.

“The wealth of the economy and its human and material resources are fortified when they are insured, Odukale said.

Many people think insurance is only for the rich, but that is not true, it is actually for everybody who desires a secured future, and surprisingly N5, 000.00 annually

L-R: Rotimi Edu, vice president, the Nigerian Council of Registered Insurance Brokers (NCRIB); Shola Tinubu, president, NCRIB; Babatunde Fowler, executive chairman, Federal Inland Revenue Service and theme Paper Speaker; Bola Onigbogi, deputy president, NCRIB at the 2019 CEOs’ Retreat of NCRIB held at TCC Ogere Resort and Conference Centre, Ogere, themed: Tax: Unveiling the Ease of Compliance

can purchase you insurance cover.

With a “Live With Freedom”, marketing campaign project by all the insur-

Allianz reaffirms commitment to deepening insurance penetration in Africa

A

llianz said it’s committed to increasing insurance coverage for individuals and businesses in Africa through trusted and innovative solutions.

Allianz announced it partnered with the African Insurance Organization (AIO) for their 46th conference and assembly held recently in Emperors Palace, Johannesburg, South Africa. The theme of the conference is ‘Insurance penetration in Africa: Insuring the uninsured.’

“The majority of individuals and businesses in Africa are not insured or are underinsured. That’s why we artnered with the AIO for this conference to explore ways of ensuring that people and companies in Africa are adequately insured through innovative products and solutions that fit their needs,” says Allianz Global Corporate & Specialty (AGCS) Africa CEO, Thusang Mahlangu.

Allianz has been operating in the continent since 1912 and accompanies clients in 39 countries through a broad range of personal and corporate insurance services, ranging from property, life and health insurance to assistance services to credit insurance and global business insurance.

It provides micro-insurance for 500,000 low income families and individuals in Africa. The continent’s economic growth and increasing insurance penetration is linked to the insurer’s long-term growth aspirations, specifically of the insurance sector.

“Allianz has a great ambition in Africa and we are eager to insure and protect all our clients’ individual and corporate needs. Allianz’s initial presence on the continent dates from more than a century, and now aim to be the leading insurance company in Africa by providing best-inclass services and advisory to our clients as well as offering innovative insurance solutions and technical excellence,” says Allianz Africa COO and new president of the AIO, Delphine Traoré.

“Our commitment continues with our latest investment in SafeBoda, based in Kampala, Uganda. We entered Africa’s biggest economy, Nigeria, through the completion of the acquisition of Nigerian insurer, Ensure Insurance, in 2018, which now operates as Allianz Nigeria and also acquired eight percent in Africa’s leading reinsurer Africa Re. All this contributes to our long-term growth strategy in Africa,” adds Traoré.

Allianz works closely with individuals and communities to design products and solutions that suit their needs through mobile and digital solutions essentially because Africa is digital by nature. Mobile is the fastest growing sector and an innovation enabler on the continent with over a billion subscribers.

In 2018, the organization invested $96.6 million in BIMA, a leading digital micro insurer utilizing mobile technology with the aim of reaching 1 billion customers in low-income customers in Africa. www.businessday.ng

ance companies in Nigeria launched to showcase the advancements made in the insurance sector, and to encourage more

Nigerians to take up insurance, it has become easy to access insurance.

According to Alder Consulting, The “you are insured” platform has made it easy for users to access any insurance company of choice, with a simple click on their mobile devices. The platform also serves as a bank of knowledge and information for Nigerians, as relates to insurance matters. Simply put, it is insurance made easy – a one-stop resource center for everything insurance in Nigeria.

According to the agency, insurance policies and how it can be purchased is available on www.youareinsured.ng.

These educative features span the benefits of insurance, easy ways to purchase insurance and the compulsory insurance policies recognised by law in Nigeria.

There are seven insurance policies mandated by law in Nigeria, which Federal Government has made compulsory for every individual and corporate worker in the country to be protected by operating these policies, as applies to them. The compulsory insurance policies include: Motor Third Party Insurance; Employee Group Life Insurance; Health Care Professional Indemnity; Insurance of Public Buildings; Insurance of Buildings under Construction; Aviation Third Party Insurance and Marine Insurance (Cargo).

Insurance regulators plan 5-year strategic plan

W

ith the approval of its 20202024 Strategic Plan and Financial Outlook, the International Association of Insurance Supervisors (IAIS) will soon embark on a new strategic direction.

A product of extensive member and public input over the course of its 18-month development, this new SPFO sets out the high level goals and strategies that will guide the Association in its work for the next five-year period beginning 1 January 2020.

Victoria Saporta, chair of the IAIS execu-

https://www.facebook.com/businessdayng

tive committee stated: “The new strategic plan encapsulates significant changes for the Association, our members as supervisors, but also the global insurance industry and policyholders more widely.

While the IAIS maintains its core functions of developing global standards, supporting implementation and contributing to global financial stability, the period ahead will see a change in emphasis toward applying these functions in ways that help members proactively respond to a rapidly changing global environment driven by technological innovation, shifts in consumer behaviour and societal challenges”.

Established in 1994, the IAIS is a voluntary membership organization of insurance supervisors and regulators from more than 200 jurisdictions, constituting 97 percent of the world’s insurance premiums.

It is the international standard-setting body responsible for developing and assisting in the implementation of principles, standards and other supporting material for the supervision of the insurance sector.

The IAIS mission is to promote effective and globally consistent supervision of the insurance industry in order to develop and maintain fair, safe and stable insurance markets for the benefit and protection of policyholders and to contribute to global financial stability.

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

27

insurance today E-mail: insurancetoday@businessdayonline.com

Providing SMEs support for growth challenges insurers for greater services Stories by Modestus Anaesoronye

T

he Small and Medium Scale Enterprises (SMEs) are a very important sector in the economy that must develop for there to be economic growth and development.

Beyond contributing to the GDP of the country, the SMEs sector holds the key for employment generation and poverty alleviation, which are key measurement indices for any economy.

To enable the sector thrive and play this role effectively, the sector needs good operating environment, with strong support for access to loan and credit, and this is where insurance comes as a buffer that must support SMEs to grow and ignite the economy.

In view of this, the insurance industry in Nigeria through the College for Insurance and Financial Management (CIFM) is collaborating with the German Corporation for International Cooperation, Africa Re and the Nigerian Insurers Association to look at inclusive insurance for SMEs. According to the ILO’s Impact Insurance Facility, organizers of the training partnership, small businesses are vital to economic development, yet they are exposed to high risks and often struggle more than larger businesses to cope with them.

“Insurance represents an important tool to help businesses better manage risks, but small businesses

worldwide are generally underinsured or have no insurance at all, says the ILO. The facility also stated that for insurers, small businesses represent both a promising and a challenging market. This training slated for July 17 and 18 in Lagos help equip insurers to serve that market, exploring global trends and examples of successful products. It teaches insurance professionals to understand small businesses in depth and design both the right products and distribution strategies to reach them.

Insurance is major component of access to credit, such that people or business are only granted credit or funding when there is insurance guarantee, that is, in the event of default, insurance comes to their rescue.

In this vein, finance institutions like micro finance banks are easily given out monies to SMSEs, while car companies, equipment firms, electronics and home appliances establishments are also at peace, giving out credit which will be repayed over a period of time.

In Nigeria, access to credit was up after the bank-

ing industry consolidation in 2005, but has gradually disappeared as the economic situations worsened, indicated by the collapse of the middle class, increasing loss of job, closure of factories and industries, among others.

Eb e l e c h u k w u N w a chukwu, managing director/CEO, NSIA Insurance Limited had said that credit is the engine of insurance business growth. Until we begin to have access to credit as citizens, growth of insurance will take longer time to come.

Jerome Gotcsche, a retail

marketing expert said the SMSE industry in Nigerian is hugely untapped and its growth requires the support of insurance.

He noted that players in the insurance industry should deploy resources, form partnerships with loan companies to tap from opportunities in SME sector, particularly across the markets.

He believes that these sectors are the growth base of the economy, and needs financing to grow to be able to enhance its contribution to the GDP. According to him, a lo-

cation of daily expanding growing businesses, small business owners, industries, business districts, real estates and viable land mass for investors present a huge opportunity for growth of insurance business.

“The opportunities for insurance engagement are huge when you consider the number of SMEs, the volume of money exchanging hands in the industry particularly among the market women and men whose activities need a lot of insurance protection for risk management.”

In a recently published journal of Microinsurance Network, experts stated that micro, small and medium enterprises (MSMEs) are often overlooked - too small for large banks and insurers to bother with, but too big for microfinance institutions who tend to be more concerned with covering individuals and families.

Yet MSMEs account for more than half of all employment worldwide, and the jobs and wealth they generate are vital for achieving the Sustainable Development Goals - especially SDG 8: decent work and economic growth. Insurance is increasingly recognised as a valuable risk management tool for MSMEs in developing countries, which are vulnerable to risks and have a high incidence of business failure.

However, treating MSMEs as if they have the same insurance needs can undermine the potential value of insurance to contribute to their sustainability and growth.

Marsh sees greater role for insurers as the world faces greater risks

M

arsh & McLennan (MMC), president and chief executive officer, Dan Glaser says that the risk transfer industry has never been so important or relevant.

Glaser addressing delegates at the opening of the MMC Rising Professionals Forum 2019 in London, stressed that there is no better time to be in the risk transfer industry than right now.

He explained that the world is now in a constant state of VUCA (vulnerability, uncertainty, complexity and ambiguity). Unlike the past where it might have just been a country or industry in a state of VUCA, Glaser said that now it is the whole world.

“Every single company is in a state of VUCA – there is no sense of security anymore,” he said.

Since the creation of the risk transfer sector the risk www.businessday.ng

landscape has dramatically changed and continues to do so at an unprecedented rate. New technologies, growing urbanisation, climate change and other factors, both of a micro and macro nature continue to push the boundaries of risk transfer as the industry looks to remain relevant and meet the changing needs of clients in all parts of the world.

According to Glaser, the “Age of Risk” has only just

started, and the increased state of flux has ultimately raised the importance and relevance of the risk transfer industry to levels higher than any point in its existence.

“The risks in front of us are profound. Climate change, unfunded social liabilities, religious fragmentation, water scarcity, cyber securities, AI, robotics – these are the risks of our age,” said Glaser.

While it might well be

https://www.facebook.com/businessdayng

the Age of Risk, the MMC president/CEO also told the audience that it’s also the age of possibility and the age of disruption. Ultimately, Glaser concluded that these developments are more of a positive than a negative, adding that the balance will depend on how the risk transfer industry decides to address them.

“There is no industry that benefits society more than the insurance industry. If insurance did not @Businessdayng

exist, few people would even leave their houses.

There would be no investment, no movement, no advancement without insurance.

“But as an industry we oversell the protection element of what we provide.

Yes, insurance is about protection and offering freedom from the emotional and financial burden of loss.

But it is also about enablement and creation. That is the purpose of our industry.

28

Wednesday 19 June 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

A study of more than 250 platforms reveals why most fail DAVID B. YOFFIE, ANNABELLE GAWER AND MICHAEL A. CUSUMANO

P

latforms have become one of the most important business models of the 21st century. In our new book, we divide all platforms into two types: “Innovation platforms” enable third-party firms to add complementary products and services to a core product or technology. Prominent examples include Google Android and Apple iPhone operating systems as well as Amazon Web Services.

The other type, “transaction platforms,” enable the exchange of information, goods or services.

Examples include Amazon Marketplace, Airbnb and Uber.

Five of the six most valuable firms in the world are built around these types of platforms.

In our analysis of data going back 20 years, we also identified 43 publicly listed platform companies in the Forbes Global 2000.

These platforms generated the same level of annual revenues (about $4.5 billion) as their nonplatform counterparts, but used half the employees. They also had twice the operating profits and much higher market values and growth rates.

However, creating a successful platform business is not so easy. What we call “platformania” has resembled a land grab, where companies feel they have to be the first mover to secure a new territory, exploit network effects and then raise barriers to entry. Uber’s frenetic efforts to conquer every city in the world and Airbnb’s desire to enable room sharing on a global scale are the two most obvious recent examples.

The problem is that platforms fail at an alarming rate. To understand why and how, we tried to identify as many failed American platforms as possible over the last 20 years that have competed with the 43 successful platforms.

These 209 failures allowed us to extract some general lessons about why platforms struggle.

We grouped the most common mistakes into four catego-

YE

AR

ries: mispricing on one side of the market, failing to develop trust with users and partners, prematurely dismissing the competition and entering the market too late.

Researchers have extensively studied pricing decisions, yet managers still get them wrong.

A platform often requires underwriting one side of the market to encourage the other side to participate. But knowing which side should get charged and which side subsidized may be the single most important strategic decision for any platform.

Firms may have to throw common-sense pricing out the window when two or more platforms are racing to create a network effect. For example, Sidecar pioneered the peer-to-peer ride sharing model before Uber and Lyft, but it never became a household name. It deliberately pursued innovation and a conservative, slow-growth strategy to remain financially responsible.

The fatal flaw was in not recognizing the importance of attracting both sides of the platform.

Sidecar also raised much less venture capital than Uber and Lyft, and was unable to attract enough drivers and riders to survive much beyond the startup phase. Of course, Uber and Lyft have lost billions of dollars, and even though both have now gone

public, they may never generate a profit or survive as viable businesses.

Getting the price right is necessary in any platform, though it is not sufficient for success. Platforms also require that two or more parties, who may or may not know each other, connect.

Therefore, building trust is essential; this is typically done through rating systems, payment mechanisms or insurance. In the absence of trust, players on the platform must make a leap of faith.

One of the biggest failures in this category was eBay in China.

It was the first mover, with a dominant share in China in the early 2000s. But Alibaba took over the market. The source of the failure, revealed by the CEO of eBay China in an interview, was that eBay relied on PayPal, which was designed as a payment system, much like a bank. For Chinese consumers unfamiliar with online commerce, that was simply not enough. Alibaba’s Alipay used an escrow model, which did not release payment until the consumer was satisfied. This neutralized eBay’s early advantage, and Alibaba quickly captured the bulk of the market.

A common misconception about platforms is that once the market has tipped in your favor, you will be the winner in the long

run. This is often true. But there is a better way to think about tipped markets: It is the winner’s opportunity to lose. Hubris can produce spectacular failures. For example, browsers are a classic innovation platform; webmasters had to optimize their websites to exploit key features in a browser.

When Microsoft’s Internet Explorer had captured close to 95% of the market by 2004, pundits proclaimed that the browser wars were over, the market had tipped, and Microsoft had won. It would have required a monumental error for Microsoft to lose its leading position, but extremely poor product execution between 2004 and 2008 enabled the emergence of Firefox; and then inferior product innovation between 2008 and 2015 opened the door to Google’s Chrome.

Perhaps the most typical mistake is mistiming the market. The smartphone market illustrates how great products plus all the resources in the world can still lead to failure when entry is too late. Here again, Microsoft is the poster child. Despite billions and billions of dollars invested over a decade, Microsoft’s Windows phone died. Entering the business five years after Apple, and three years after Google, meant that Microsoft had missed the platform window. It never recov-

S

Expertise It’s in our DNA

In an ever changing economy, with 125 years of serving YOU, we remain strong, trustworthy, dependable, safe and consistent.

You can be confident that we will continue to deliver innovative banking products and services which seamlessly and conveniently suit your lifestyle needs.

Visit www.firstbanknigeria.com to learn more about us.

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

ered.

Here are our key conclusions: — Since many things can go wrong, managers and entrepreneurs need to make a concerted effort to learn from failure. Despite the huge upside opportunities, pursuing a platform strategy does not necessarily improve the odds of success as a business.

— Since platforms are ultimately driven by network effects, getting the prices right and identifying which sides to subsidize remain the biggest challenges.

Uber’s great insight (and Sidecar’s great failure) was in recognizing the power of network effects to drive volume by dramatically lowering prices and costs on both sides of the market. While Uber is still struggling to make the economics work, and it may yet fail, Google, Facebook, eBay, Amazon, Alibaba, Tencent and many other platforms started by aggressively subsidizing at least one side of the market and made the transition to high profits.

— Put trust front and center.

Asking customers or suppliers to make a leap of faith, without a history and without prior connections to the other side of a market, is usually asking too much.

— Although it may sound obvious, timing is crucial. Being early is preferable, but is no guarantee of success. Being late can be deadly. Microsoft’s catastrophic delay in building a competitor to iOS and Android is a case in point.

— Hubris can lead to disaster.

Dismissing the competition, even when you have a formidable lead, is inexcusable. If you cannot stay competitive, no market position is safe.

David B. Yoffie is a professor of international business administration at Harvard Business School.

Annabelle Gawer is a professor and the director of the Center of Digital Economy at the University of Surrey. Michael A. Cusumano is a professor at the MIT Sloan School of Management.

Wednesday 19 June 2019

Harvard Business Review

BUSINESS DAY

29

MANAGEMENTDIGEST

Cross-Silo leadership TIZIANA CASCIARO, AMY C. EDMONDSON AND SUJIN JANG HOW TO CREATE MORE VALUE

BY CONNECTING EXPERTS FROM INSIDE AND OUTSIDE THE ORGANIZATION. oday the vast majority of innovation and bu s i n e ss- d e ve l o pment opportunities lie in the interfaces between functions, offices or organizations. The integrated solutions that most customers want — but companies wrestle with developing — require horizontal collaboration.

The value of horizontal teamwork is widely recognized. Employees who can reach outside their silos to find colleagues with complementary expertise learn more, sell more and gain skills faster.

One way to break down silos is to redesign the formal organizational structure. But that approach has limits: It’s costly, confusing and slow. That’s why we’ve focused on identifying activities that facilitate boundary crossing.

We’ve found that people can be trained to see and connect with pools of expertise throughout their organizations and to work better with colleagues who think very differently from them. The core challenges of operating effectively at interfaces are simple: learning about people on the other side and relating to them.

But simple does not mean easy.

Leaders need to help people develop the capacity to overcome these challenges on both individual and organizational levels. That means providing training in and support for four practices that enable effective interface work.

T

1. DEVELOP AND DEPLOY CULTURAL BROKERS Fortunately, in most companies there are people who already excel at interface collaboration. They usually have experiences and relationships that span multiple sectors, functions or domains and informally serve as links between them. We call these people cultural brokers.

Cultural brokers promote cross-boundary work in one of two ways: by acting as a bridge or as an adhesive.

A bridge offers himself as a gobetween, allowing people in different functions or geographies to collaborate with minimal disruption to their day-to-day routine. Adhesives, in contrast, bring people together and help build mutual understanding and lasting relationships.

Company leaders can build both bridging and adhesive capabilities in their organizations

by hiring people with multifunctional or multicultural backgrounds who have the strong interpersonal skills needed to build rapport with multiple parties. Firms should also look for a growth mindset.

2. ENCOURAGE PEOPLE TO ASK THE RIGHT QUESTIONS All of us are vulnerable to forgetting the crucial practice of asking questions as we move up the ladder. High-achieving people in particular frequently fail to wonder what others are seeing.

Worse, when we do recognize that we don’t know something, we may avoid asking a question out of (misguided) fear that it will make us look incompetent or weak.

Leaders can encourage inquiry in two important ways — and in the process help create an organization where it’s psychologically safe to ask questions.

— BE A ROLE MODEL. When leaders show interest in what others are seeing and thinking by asking questions, it has a stunning effect: It prompts people in their organizations to do the same.

— TEACH EMPLOYEES THE ART OF INQUIRY. Training can help expand the range and frequency of questions employees ask and, according to Hal Gregersen of the Massachusetts Institute of Technology Leadership Center, can reinvigorate their sense of curiosity.

It’s important to learn how to request information in the least biased way possible. This means asking open-ended questions that minimize preconceptions, rather than yes-or-no questions.

As collaborations move forward, it’s helpful for team leaders or project managers to raise queries that encourage others to www.businessday.ng

dive more deeply into specific issues and express related ideas or experiences. How you process the answers also matters. It’s important to train people to check whether they’re truly getting their colleagues’ meaning, by using language like “This is what I’m hearing — did I miss anything?”

3. GET PEOPLE TO SEE THE WORLD THROUGH OTHERS’ EYES Leaders shouldn’t just encourage employees to be curious about different groups and ask questions about their thinking and practices; they should also urge their people to actively consider others’ points of view. People from different organizational groups don’t see things the same way. Studies consistently reveal that this leads to misunderstandings in interface work.

Psychological research suggests that while most people are capable of taking others’ perspectives, they are rarely motivated to do so. Leaders can provide some motivation by emphasizing to their teams how much the integration of diverse expertise enhances new value creation. But a couple of other tactics will help: — ORGANIZE CROSS-SILO DIALOGUES. Leaders should set up cross-silo discussions that help employees see the world through the eyes of customers or colleagues in other parts of the company. This happens best in face-to-face meetings that are carefully structured to allow people time to listen to one another’s thinking.

— HIRE FOR CURIOSITY AND EMPATHY. You can boost your company’s capacity to see the world from different perspectives by bringing on board people who relate to and sympathize with the feelings, thoughts and

https://www.facebook.com/businessdayng

attitudes of others.

4. BROADEN YOUR EMPLOYEES’ VISION You can’t lead at the interfaces if you don’t know where they are.

Here are some ways that leaders can create opportunities for employees to widen their horizons, both within the company and beyond it: — BRING EMPLOYEES FROM DIVERSE GROUPS TOGETHER ON INITIATIVES. As a rule, crossfunctional teams give people across silos a chance to identify various kinds of expertise within their organization, map how they’re connected or disconnected and see how the internal knowledge network can be linked to enable valuable collaboration.

— URGE EMPLOYEES TO EXPLORE DISTANT NETWORKS. Employees also need to be pushed to tap into expertise outside the company and even outside the industry. The domains of human knowledge span science, technology, business, geography, politics, history, the arts, the humanities and beyond, and any interface between them could hold new business opportunities.

The tricky part is finding the domains most relevant to key business goals. Leaders can take one of two approaches: A top-down approach works when the knowledge domains with high potential for value creation have already been identified.

A bottom-up approach is better when leaders have trouble determining which outside domains the organization should connect with — a growing challenge given the speed at which new knowledge is being created. Increasingly, leaders must rely on employees to identify and forge connections with far-flung domains.

@Businessdayng

BREAKING DOWN SILOS To unleash the potential of horizontal collaboration, leaders must equip people to learn and to relate to one another across cultural and logistical divides. Over time the practices we’ve just described — none of which require advanced degrees or deep technical smarts — dissolve the barriers that make boundary-crossing work so difficult. When leaders create conditions that encourage and support these practices, collaboration across the interface will ultimately become second nature.

Tiziana Casciaro is a professor of organizational behavior and holds the professorship in leadership development at the University of Toronto’s Rotman School of Management. Amy C. Edmondson is the Novartis professor of leadership and management at Harvard Business School. She is the author of “The Fearless Organization: Creating Psychological Safety in the Workplace for Learning, Innovation and Growth” and a co-author of “Building the Future: Big Teaming for Audacious Innovation.” Sujin Jang is an assistant professor of organizational behavior at INSEAD. Her research focuses on global teams and the challenges of working across cultures.

30

Wednesday 19 June 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Motoring

New vehicle fleet purchases drop by 90 percent …As corporates resort to used vehicle purchase

N

issan automakers have announced senior management changes in Africa to drive sustainable growth across the continent. With a growing middle class, and rapidly increasing demand, Africa is seen as the last frontier for global automakers.

With the latest development,

MIKE OCHONMA Transport Editor

C

orporate organisations financial ability in the purchase of brand new vehicles as pool cars and other logistics needs in Nigeria have dropped abysmally to 90 percent in past four years as result of the 70 percent on imported brand new vehicles, BusinessDay findings revealed.

Instead of the preference for brand new vehicles before the imposition of the 70 percent tax, many of them including the banks, insurance firms, oil companies, have in the past four years chosen to be refleeting their vehicle pool especially with used, including accidented vehicles from the different countries of origin that are imported into the country and subsequently fixed and refurbished.

Over time, many of the accidented that were later refurbished with its attendanted long or short susceptibility to crashes as a result of some of the defects that accompanied it upon entry are eventually sold as pool cars to the corporate institutions at cheaper prices.

This ugly situation has become worrisome when many Nigerians yearn to own a car of their own, but paying fully for one is a luxury aand most of them can’t even afford it in this economy when leading an active life requires mobility.

Reacting on the reasons for his company’s preference for used instead of brand new vehicles, Kelly Emeka, a finance manager of one the corporate institutions in Lagos told BusinessDay that, the move to settle for tokunbo cars was as a result of affordability due to the astronomical increase in the prices

Nissan announces senior management changes in Africa

Mike Whitfield

of new cars that has hit the roof top.

According to Emeka, ‘’As the period begin to witness shrinking economic activities and companies begin to witness reduced revenues and rising overhead cost, thereby making funds unavailable for new cars purchase, it becomes increasing imperative to make adjustments in the day-to-day funding of the operations of the company’’.

He said that, the strategy wasa way of cutting cost of interest rates charged by the banks, adding that, this trend started after immediately after the elections in 2015 when the exchange rates of the naira sky rocketed.

The current trend where banks especially can neither buy new vehicles for their official or even finance new vehicle purchases for the buying has become so damning that

even a subsidiary company cannot even afford to purchase brand new vehicles from one of its subsidiary company that operates a new car dealership.

It would be recalled that, upon introduction national automotive policy of 2013 introduced by the immediate past administration of former President Goodluck Jonathan, the automotive policy increased the tariff on imported vehicles by imposing 35 percent duty and 35 percent levy, amounting to 70 percent tariff to be paid on imported cars to the Nigeri Customs Service (NCS).

BusinessDay checks reveal that over 60 percent of vehicles imported through the nation’s seaports are accidented vehicles. For any vehicle to qualify considered as an accidented vehicle and quality for 30 percent

rebate, some very important components of the vehicles such as the chassis, airbags and a large chunkof the body, must be certified damaged.

Figures from the National Bureau of Statistics (NBS) shows that 105,189 units of vehicles were imported by Nigerians in 2016through the ports, while in 2017, the volume of imported vehicles grew by 2.46 percent to hit 181,404 units.

As a result of this, the quality of vehicles imported into the country has deteriorated over the last four years. Industry followers have arttributed this to the recession and the shrinking purchasing power of mnay people. This is majorly because, not everybody can afford a very expensive vehicle that and this accounts for the main reason why people are importing older or accidented vehicles.

Shinkichi Izumi

Mike Whitfield, currently managing director of Nissan South Africa and Sub-Saharan Africa, is appointed managing director of Nissan Motor Egypt (NMEG). He will also serve as chairman of Nissan in Africa and will be based in Cairo. His appointment takes effect from tomorrow.

Mike, a former president the National Association of Automobile Manufacturers of South Africa (NAAMSA) and vice president of the African Association of Automotive Manufacturers (AAAM), joined Nissan in 1981 as a marketing trainee.

Since then he has held a variety Continues on page 31

Toyota Rush rekindles 7-seater comfort, safety, says TNL

A

uthorities at Toyota Nigeria Limited (TNL) says the Toyota Rush SUV remains the best value for money if you’re looking for a new 7-seater for the family or something that can haul stuff around.

Today, a lot of automakers in the market are now offering 7-seaters from the ever-popular Japanese brands to more luxurious European marques, but the choice depends on whether the buying public is willing to part with millions of naira for a more luxurious model or is looking for something easier on the pocket.

But from feedbacks on the encouraging sales figure across the local dealerships in the country, there are positive indications that, the Toyota Rush will make huge impact in years to come.

Design-wise, the Rush is the best looking among its competitors and one that quickly stands out among other models in a good

way, combining both a stylish design with a sporty and rugged appeal. The Rush does appear to borrow styling cues from other Toyota vehicles, particularly the Fortuner, but this design similarity can be seen more clearly at the www.businessday.ng

front with the its wide grill and tapered headlight design.

One of the favorite features of the Rush’s exterior though is that, it comes standard with LED headlights rather than the standard halogen lights; a big upgrade for

https://www.facebook.com/businessdayng

driving at night, though the white colour temperature does make the light bounce on a rainy road.

The keyless entry doors and smart keyfob are also neat features for those who are too lazy to pull out the key and push a button.

Moving inside, the cabin is very spacious for its size with lots of headroom for passengers and even for those sitting in the third row.

Inside, the seats are soft and comfortable; they don’t yield as much fatigue if you’ve been sitting there for hours at a time. A push start button makes it easier to go on a drive, and it also comes handy when you happen to be holding a lot of stuff.

The digital air-conditioning controls are not complicated and the temperatures can be adjusted easily especially when it started getting really cold in the cabin. A touch-screen infotainment system with Bluetooth is also nice; @Businessdayng

it allows you to play your favorite tunes on the go.

Power-wise, the 1.5-liter engine producing 104 PS and 134 Nm of torque is enough for city driving.

Acceleration could be better, but if you happen to be driving around the streets of the city with much heavier traffic, you won’t really need quick acceleration.

More importantly, the Rush comes with good fuel consumption despite having just a 4-speed automatic. Owners can do an average of 9.2km per liter with the Rush even in horrendous urban traffic everyday.

Unfortunately, I didn’t have the chance to bring the Rush on the expressway to see its fuel economy on open stretches, or see how it would perform. However, I did notice it had a hard time going fast up roads with steep inclines.

Handling-wise, the Rush drove pretty okay considering it is a tall 7-seat SUV, miniature as it is.

Wednesday 19 June 2019

BUSINESS DAY

31

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

With United Airlines apps, tight connection is made simpler

F

light transfers can be tricky.

Even when it appears you’ve got ample time, a simple flight delay or a lengthy gate-to-gate walk can result in a tight or impossible transfer, leaving you waiting hours for the next flight.

United Airlines is looking to eliminate this travel stressor with a new tool that helps travelers make tight transfers. The airline recently announced ConnectionSaver, a program that was designed to make connections easier for United passengers.

ConnectionSaver works by first identifying departing flights

airline will also send a map of the airport and available amenities.

The tool, which was tested earlier this year at Denver International Airport and Chicago O’Hare International Airport, has helped more than 14,400 customers make connections they would not have otherwise missed, according to a statement by the airline. During the test, flights that were held were delayed an average of six minutes.

Toby Enqvist, chief customer officer at United said that through improved technology

that can be held for connecting customers while ensuring passengers who are already on board will arrive at their destination on time.

Before making the decision to hold the flight, the new tool takes into account the impact the hold could take on other flights and how much time it will take the tardy connecting passengers to reach the gate.

Connecting passengers using the latest version of the app will get personalized text messages that include directions to the connecting gate and how long it should take to get there. The

and our dedication to running a reliable operation, customers with tight connections are making their flights.

With summer travel picking up, as many as 150,000 customers will make connections on United flights every day and our goal is to provide our employees and these customers with the most up-to-date information to make connecting as stress-free as possible’’.

United plans to have the technology at every United hub by the fall, before expanding to every airport utilized by the airline.

Lagos-Badagry rail project revamp to cost more ...after years of neglect MIKE OCHONMA Transport Editor

W

ith the current state of the decaying multimillion naira Lagos-Badagry rail infrastructure put in place by the former governor Babatunde Raji Fashola administration and abandoned by the immediate past governor Akinwunmi Ambode, a visit along the corridor shows that, it will cost the present government of Babajide Sanwo-Olu enormous resources to fix back the the massive project.

Since the abandonment of the project, completed rail laying sections of the corridor especially between the Alaba-Suru abd Mile 2 bus stops have become a safe place for destitutes and miscreants.

During a visit to the project

sites before their election into office as executive governor and deputy governor respectively, both Babajide Sanwo-Olu and his Obafemi Hamzat his deputy had assured that the project will be completed on record time to facilitate tade and commerce between Nigeria and her West African neighbours.

From statistical figures obtained from the National Bureau of Statistics (NBS), about 260, 000 people come into Lagos state daily, while only about 20-25 percent of this figure return to their original places of migration.

This huge migration influx to the city, the deputy governor said, is overwhelming the existing infrastructure and facilities, which makes it imperative and urgent need to be inventive in tackling the infrastructural deficit in the state.

According to Hamzat, “Spe-

cifically, the ongoing 60-kilometre Lagos-Badagry Expressway project being executed by the state government must be completed as early as possible. The project has two major intermodal transport schemes namely; the Lagos-Badagry Highway and the Light Rail Mass Transit with their accompanying infrastructure- 10 lanes superhighway taking off from Eric Moore interchange and traverses westward through Orile Iganmu, Alaba Oro, Mile 2, Festac, Agboju, Iyana-Iba, Okokomaiko, IyanaEra, Ijanikin, Agbara, Ibereko and terminated at Badagry.

When completed, the goal is to connect Lagos with the ECOWAS countries. The initiative would no doubt, enhances the commercial and other business activities between the affected neighbouring countries and facilitating regional commercial and trading activities.

UNWTO, BIHUB launch global tourism start-up contest

T

he World Tourism Organization (UNWTO) in collaboration with Barca Innovation Hub (BIHUB) and with the support of the Qatar National Tourism Council (QNTC), has announced the launch of the 1st UNWTO Sports Tourism Start-up Competition. The initiative is designed to identify projects and innovations that can transform the sports tourism sector in the near future.

Over the years, increasing demand from tourists and the growing influence of sports on destinations’ popularity have combined to make sports tourism one of the segments with the greatest potential for socioeconomic development opportunities, attracting growing levels of government interest.

The 1st UNWTO Sports Tourism Start-up Competition, launched

by UNWTO and BIHUB, with the support of QNTC, is looking for

start-ups with disruptive ideas focused on solving real needs and addressing knowledge gaps in the growing sports tourism sector.

In all, 20 start-ups will be shortlisted by a panel of international experts and sports and tourism stakeholders, drawn from the public and private sectors, academia and civil society.

The shortlisted start-ups will be announced on the competition’s website. The panel will then select five semi-finalists who will all be www.businessday.ng

invited to Barcelona to pitch their ideas to sports experts, government representatives, tourism business leaders and international investors.

Zurab Pololikashvili, UNWTO Secretary-General said, “We are pleased to be partnering with the Barca Innovation Hub to harness the potential of sports tourism to stimulate creativity, innovation and sustainable growth. Through this competition, start-ups with disruptive visions can propose new ideas that will allow the sports tourism sector to contribute to the Sustainable Development Goals. We thank BIHUB for their vision and collaboration and, as we move towards the 2022 FIFA World Cup in Qatar, we thank the QNTC for their support for this exciting project,”.

As part of the partnership with QNTC, the winning ideas will also be considered for implementation in Qatar, which is gearing up to host the FIFA World Cup 2022.

https://www.facebook.com/businessdayng

Nissan announces senior management...

Continued from page 30

of senior positions in the company resulting in his appointment as Nissan SA’s managing director in 2008.

Under his leadership, Nissan posted a record market share in South Africa of over 10% in the last financial year, the highest this century.

Shinkichi Izumi replaces Mike as managing director, Nissan South Africa. Appointed deputy managing director in 2018, Shinkichi joined Nissan in 2001 and has held various roles in sales, marketing and corporate planning.

Before joining South Africa last year, he was based in Nissan’s Japanese headquarters working within Nissan’s Asia and Oceania region and also has experience within the global Datsun function.

Kohei Maeda, who was appoint@Businessdayng

ed managing director of Nissan Motor Egypt in April 2018, is leaving the company to pursue other opportunities.

Commenting on the development, Peyman Kargar, chairman of Nissan’s Africa, Middle East and India region said, “Nissan has a plan for rapid and sustainable growth in Africa. We were the first to assemble cars in Nigeria and our ambition is to lead the way in developing automotive manufacturing on the continent.

“The appointments announced today will drive performance in key African markets. Mike and Shinkichi both have extensive market knowledge and diverse experience within the auto industry. They will bring clear leadership and a strong customer focus to deliver growth and business performance”. He concluded.

32

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

33

34

Wednesday 19 June 2019

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

APM Terminals invests in CFS to improve export of Nigerian farm produces in Onne Port amaka Anagor-Ewuzie

T

he West Africa Container Terminal (WACT), a Greenfield terminal built by the APM Terminals with the Federal Government under a public, private partnership, has invested in building a new container freight station (CFS) at the Port of Onne, Rivers State, Nigeria.

The 1,520m2 facility, which is the first of its kind in Eastern Nigeria - provides farmers with an opportunity to grow their businesses by exporting goods such as cashew nuts and sesame seeds.

While Nigeria has long been dependent on revenue from the oil industry, it is estimated that more than 22 percent of the nation’s GDP is generated from agriculture.

This was why experts believed that increasing focus on agriculture would help Nigeria to increase its sources of foreign exchange

L-R: Friday Enamegbai, commercial manager, Josepdam Port Services Ltd; Florence Oyedepo, HR manager; David Iriabe, general manager, and Apata John, maintainance manager, during the presentation of the ISO 9001:2015(QMS) in Lagos recently.

revenue, improve its balance of trade by exporting raw materials, and create employment opportunities for Nigerians especially the youths.

“Government drive to encourage exports, particularly of agricultural raw materials, has already created a steady increase in demand for the facility, which is

equipped with modern safety and security standards,” says Noah Sheriff, WACT commercial manager.

According to him, CFS, which was established on

customers’ and shipping lines’ request, gives customers a ‘one-stop-shop’ experience that provides storage, stuffing, Customs clearance and container weighing services under one roof.

He explains that it reduces costs and waiting time for trucks coming to the terminal, as empty pickups and full export returns are reduced.

“The new facility has the capacity to process 16 twenty-foot Equivalent Units (TEUs) per day, during a two-shift operation. Seven staff are usually on duty and two forklift trucks are in place to assist with offloading and stuffing. Local farmers are most likely to benefit from the new facility. In the past, due to delays, there were instances where export containers arrived too late for vessels,” says Sheriff.

CFS reduces logistics costs because it facilitates timely cargo directly to the terminal, which saves the cost of hiring trucks to pick up empties and to deliver export-full containers to the

terminal.

Findings have shown that previously, the complexity of stuffing containers for export forced most farmers to sell their produce to consolidators locally. This eats into their profit margins but the service is now provided directly to farmers at the CFS. Then, few farmers that were able to export, the only option previously was a CFS located outside the port. They delivered their cargo there and then hired a trucks to collect empty containers from the port, arranged for Customs and other inspection agents to visit the CFS, stuffed the containers outside the port and delivered them back to the port as full export containers.

Sequencing these activities was cumbersome and created a complex logistics challenges for the farmers but with the new CFS, farmers can simply deliver their cargo directly to the terminal to enable them complete all other activities.

WILAT calls for proper disposal of plastic waste for marine protection amaka Anagor-Ewuzie

F

ollowing the increasing rate of plastic p o l l u t io n in t h e nation’s seas and oceans, the Women in Logistics and Transport (WILAT), has called for proper disposal and recycling of plastic waste to protect the marine environment.

Vicky Haastrup, WILAT Board of Trustees member and chairman, Seaport Terminal Operators Association of Nigeria (STOAN), made the call during a sensitisation campaign organised to commemorate the WILAT Founder’s Day Anniversary in Lagos recently.

She decried the harmful effect of plastic wastes on human health and aquatic lives, and called on the governments at all levels to enact laws banning the single use of plastics in Nigeria in order to reduce waste.

While noting that several countries have enacted such laws, Haastrup said Nigeria should not be an exception to eliminating the harmful effects of single use of plastics with affordable alterna-

tives.

She called on manufacturing industries to begin to look at alternative ways of producing consumables that require the use of plastics.

“Plastic pollution constitutes a lot of danger to human and aquatic lives.

We see heaps of plastics almost all over the place that it seems almost impossible for any government to create a clean environment without

handling the issue of plastic waste,” she said.

According to her, the Canadian government plans to ban single-use of plastics as early as 2021, and Nigeria should not be an exception.

“We as women in WILAT are using this opportunity to sensitise the society about the use of plastic, which causes serious pollution in our marine environment. It is affecting fishes such that

when we eat them, it constitutes health hazards to all of us. We are using this opportunity to call on government to look into it as a way of banning some of these plastic products,” she said.

She further stated that industries should begin to look at alternative ways of packaging water and soft drinks to reduce the rate of health hazard to human and marine environment as well

L- R: Vicky Hasstrup, chairman, Seaport Terminal Operators Association of Nigeria (STOAN); Caroline Ufere, former port manager, Rivers Port Complex, Port Harcourt; Mfon Usoro, former directorgeneral, Nigerian Maritime Administration and Safety Agency (NIMASA), and Aisha Ali-Ibrahim, port manager, Lagos Port Complex Apapa/global convener, WILAT, during a sensitisation campaign on proper management of plastic waste held in Lagos recently. www.businessday.ng

https://www.facebook.com/businessdayng

as the economy.

“Nigeria should pass it into law. I think it is high time we all rose up to this occasion. There should be a law that will regulate the use of plastic. It’s a major cause of pollution in the environment,” Haastrup said.

Aisha Ali-Ibrahim, founder and global convener of WILAT, who doubles as the port manager of the Lagos Port Complex (LPC), Apapa, said the need for Nigeria to achieve blue environment led to the sensitisation of the public on proper recycling of plastic.

“Proper disposal of plastic is actually an area we should focus on if we want development in the logistics business. We cannot throw things everywhere. We have to recycle and make the environment better and we as women are concerned about this. That is why we decided to take it up,” she added.

Ufon Usoro, former director-general, Nigerian Maritime Administration and Safety Agency (NIMASA), called for the adoption of innovative ideas towards reducing plastic wastes in the country. @Businessdayng

“We know that the evolution of plastics generated a lot of businesses but we have now realised the dangers posed by plastics. I believe we can invest on how to use those plastics in a sustainable way. We have heard of other countries where they use waste plastics as pellets for road repairs and study show it is very durable,” she said.

Continuing, she said: “We operate in an ecosystem and it has to be safeguarded in order to make it possible for our various businesses to grow.”

The sensitisation campaign which began with a walk from Ikoyi to Lekki through the link bridge was attended by Ibrahim Jubril, president, Chartered Institute of Logistics and Transport (CILT) Nigeria; Iyalode Alaba Lawson, immediate past president, Nigerian Chamber of Commerce, Industries, Mines and Agriculture (NACCIMA), and others.

WILAT, which is an arm of the CILT, set up as the global body of women professionals in the transport and logistics industry.

Wednesday 19 June 2019

BUSINESS DAY

35

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Concern as Europe keeps rejecting Nigerian exports amid PIAs certification amaka Anagor-Ewuzie

W

orried by the repeated rejection of Ni g e r i a n exports after quality checks by the Private Inspection Agents (PIAs), trade experts have raised concern, requesting detailed explanations from PIA as to what the future holds for Nigerian export trade.

Internationally, standards for export goods are established globally, and are expected to be certified and met before goods can be accepted into an importing country, failure for which, there shall be immediate rejection and repatriation to the originating country.

In Nigeria, the PIAs have the responsibility of ensuring compliance with required standards for categories of export goods, for which they issue certificates when the products meet the standards for export.

PIAs are employed to

check quality and keep records of volume of goods exported out of Nigeria, issue a Clean Report of Inspection for goods, yet Nigerians are regularly being rejected and returned to Nigeria.

Obiora Madu, a member of the Export Group of the Lagos Chamber of Commerce and Industry (LCCI), who expressed concern over product rejection after they had been certified compliant

with the standards, said the PIAs should take responsibility and explain what the problems are.

“In the days when the commodities board was there, they followed the commodities from the seed to when it becomes a product to be exported. And at that time, the board would buy, check quality and export by themselves,” he explained.

According to him, the absence of the commodities board has left the export trade in Nigeria without adequate check as it ought to be.

He also expressed concern over the high cost of exporting goods from Nigeria, as he blamed that factor for reasons Nigeria had not yet received its due recognition as the producer of at least 60 percent of shear butter in

the world.

“Nigeria produces 60 percent of shear butter in the world, but in the international market, you see shear butter from other West African countries, because exporting the product from Nigeria is very expensive, so, you see many people selling locally rather than exporting,” Madu added.

Recall that some exported food products including beans from Nigeria have, however, faced rejection and are returned to the country for failing the tests to establish the required standards.

Making reference to a particular rejected export product, Madu said more attention must be given to required details and that Nigeria could not afford to be left behind as regards the issues of standards for export goods.

“The world is now a global village. It means standards are meant for everybody. It is about ethics, following standards. If people are ethical, then they would stay with

the standards,” Madu said.

For the issue in question, Madu said that a consignment of exported vegetables was returned immediately to Nigeria, after it arrive, its destination in the importing country in Europe without a Phytosanitary Certificate.

A Phytosanitary Certificate certifies plant and plantrelated products as free from regulated pests, and conforms to other phytosanitary requirements as specified from the importing country.

“There is need for a onestop-shop process on export as applied internationally to encourage foreign exchange earnings and better balance of trade by reducing and streamlining export processing procedure,” said Lucky Amiwero, maritime expert on the need to fast track export from the port.

He said this would reduce bottlenecks created by lengthy and cumbersome processes that effect acceptability of Nigerian products in the international markets, especially due to delays.

nation.

Chinwe Abanna, gene ra l ma na g e r, Me d i ca l Services of the NPA, who encouraged the NPA Officers to live a healthy lifestyle, stressed that the management was desirous of enshrining a workforce through standard canteens where the principles of

balanced dieting would be implemented among officers across board.

She said the greatest resource of any organisation was its employees, thus investing in their health, is therefore undeniably crucial to their general performance among schedules and operations.

NPA promises to invest in building healthy workforce

T

he management of the Nigerian Ports Authority (NPA) has assured staff of its unflinching resolve to prioritise employees’ h e a l t h by i nv e s t i n g i n building a healthy workforce, who will contribute towards the development of the nation’s port indus-

try.

Hadiza Bala Usman, managing director of the NPA, said while flagging off the NPA annual Workers Wellness Programme Fair, that the theme “Eat Right, Keep Fit and Enhance Productivity,” was in line with the NPA’s core values of upholding efficiency and

www.businessday.ng

engendering greater customer satisfaction.

Usman, who was represented by Mohammed Bello Koko, executive director, Finance and Administration, called on all members of staff to key into the message of theme of the programme.

According to her, the

gateway to the nation’s economy deserves to be driven by a healthy workforce. She however congratulated the health team for being the pinnacle of management’s thrust in ensuring a sustainable health regime, which positions NPA’s officers better in rendering their services to the

https://www.facebook.com/businessdayng

@Businessdayng

36

Wednesday 19 June 2019

BUSINESS DAY

tax issues New CITN president challenged with sustaining institute’s vision Iheanyi Nwachukwu

N

o doubt, the visibility of the Chartered Institute of Taxation of Nigeria (CITN) is today on the upward trajectory, but sustaining this trend is very important.

As a result, this will be one of the hurdles its 14th President and chairman of council, Gladys Olajumoke Simplice will be required to cross.

Today, CITN remains the only Institute recognized by law to regulate and control in all ramifications, the taxation profession in Nigeria.

Simplice, who was officially installed on Saturday June 15 as the new president of the professional tax institute was earlier elected at the 27th annual general meeting (AGM) of the CITN held on Thursday June 13.

In addition to increasing the visibility of CITN, she is expected to strengthen its membership, achieve stronger district societies, as well as collaborate more with other professional associations, and government revenue agencies.

The year 2018 was a beehive of activities in the Nigerian tax system. For instance, some executive, policy and administrative announcements were made to create avenue for increased revenue flows from taxes.

With a vision to be one of the foremost professional associations in Africa and beyond; and mission

The 13th President, Cyril Nwobodo Ede, (right) and the Registrar/chief executive, Adefisayo Awogbade, (left) decorating the 14th President of CITN, Gladys Olajumoke Simplice, (middle) with the insignia of office immediately after her election

to build an Institute which will be a citadel for the advancement of taxation in all its ramifications, the attractiveness of the profession has not dwindled, rather “it is on the rise as we had more qualified persons seeking to become members of the institute,” its immediate past president, Cyril Ikemefuna Ede had said at the annual general meeting.

Two induction ceremonies were held by CITN in November 2018 and May 2019 during which the Institute inducted 724 and 560 new members respectively bringing its membership strength to 22,491 to date.

“Our members have continued to excel and are positively projecting the image of the institute in

diverse sectors of the economy.

As a professional institute, our views and opinions on tax matters remain widely respected and sought after by government and other stakeholders in the Nigerian tax system,” he said.

In the first-quarter (Q1) of 2019, precisely on March 26, CITN delegation was on a courtesy call to President Muhammadu Buhari to outline key recommendations on tax and fiscal policy issues in a concise document, named CITN Charter of tax demands.

Increased earnings from oil and the impact of various reforms in tax administration including the tax amnesty programme resulted in a narrowed fiscal deficit.

... leadership baton changes

T

he Chartered Institute of Taxation of Nigeria has elected new officers to steer the affairs of the Institute for the next two years. Following the successful conduct of the 27 Annual General Meeting of the Institute, the leadership baton of the Institute was officially passed on to Gladys Olajumoke Moyosoreoluwa Ayinke Simplice, by Cyril Ikemefuna Ede who has immediately taken over the position of the immediate Past President.

Simplice was unanimously elected the 14th President of the Institute at an Extra- Ordinary Council Meeting held at the Secretariat of the Institute.

Other elected officers of Council included: Adesina Adedayo, - Vice President, Samuel Olushola Agbeluyi - Deputy Vice President and Innocent Ohagwa, was elected as the Honorary Treasurer.

Gladys Olajumoke Simplice started her academic career at Araromi Baptist School, Moloney, Lagos while her secondary education was at the Methodist Girls High School, Yaba, Lagos and Premier Grammar School, Lafenwa, Abeokuta. She commenced her Higher School Certificate (HSC) with Adeola Odutola College, Ijebuode and finished at the Saint Gregory’s College, Obalende, Lagos. Thereafter, she proceeded to Ahmadu Bello University, Samaru, Zaria where she graduated with a B.Sc in Economics.

She started her training in accountancy with the firm of A B Alabi & Co/ Alabi Bakoh Ekundare & Co. (Chartered Accountants and Secretaries).

She was thereafter employed as an Assistant Accountant at a private Fisheries Company, Transcontinental Fisheries Ltd in Lagos.

In August 1982, Dame Simplice

commenced her tax career with the Federal Inland Revenue Department, (now Federal Inland Revenue Service) and retired after 27 years of a fulfilling and meritorious service.

Due to her diligence during her service years, she was given a contract appointment as Head, Channels Management of the Corporate Communication Department of FIRS in 2009. She made a lot of improvement in the Department and initiated the idea of a Revenue Museum which is still a work in progress at FIRS. She played a strong supportive role in the development of the Chartered Institute of Taxation of Nigeria since 1982 and she has not looked back in terms of her total commitment to the Institute till date. She has successfully headed several Com-

Gladys Olajumoke Simplice

mittees of Council and was until her election, the Chairman Finance and General Purposes Committee.

Understanding tax evasion, avoidance, mitigation: The ethical stance on avoidance in Nigeria Continued from last week Gali Aka and Omojo Okwa

B

y looking at the substance, the court is trying to discover the true character of the transaction entered into. This concept is the basis of the Ramsay composite transaction rule.

Generally, the business purpose rule and substance over form now prevails in common law countries as the overriding general anti avoidance rule (GAAR) principles to make a distinction between transactions for bona fide commercial purpose and those designed primarily to avoid tax.

The United States for example have provisions based on judicial decisions that examine the taxpayer’s purpose in tax-driven transactions. The US Supreme Court once held that a corporate reorganization under the law solely for tax purpose did not qualify for tax benefits. The concept of substance over form also has a long history in the US Court’s case law.

Nigerian Political Terrain and Curbing Tax Evasion and Avoidance Just as it seems impossible to win the war on corruption, bringing tax defaulters into the tax net would also prove difficult. Just as the world has turned to tax morality, it is not the case in Nigeria. Rather, people

www.businessday.ng

may be encouraged to dodge their taxes if they could due to the level of corrupt practices of the ruling class.

One concern often not raised by tax debate is the lack of accountability of the government when it comes to the unendurable waste of public funds through incompetence, nonchalant attitude,

https://www.facebook.com/businessdayng

lack of transparency and corrupt practices. These actions by the government may be a contributor to tax avoidance and evasion in the modern age. Subconsciously, many Nigerians are asking themselves: “why should I be paying excessively high taxes if government perpetually squanders public funds? Also, most Nigerians are of the view that the compensation of government officials is excessive relative to their roles and responsibilities. Research has shown that government officials in Nigeria earn significantly more than their counterparts in more developed economies.

More recently, some State legislators have decided to award to themselves life pensions and other severance benefits after their tenors. Ex-Governors and their deputies are also entitled to pensions and other benefits-in-kind, yet, most of the States are unable to pay salaries of civil servants.

Social infrastructures are also in an abysmal state to mention a few. It is a case of: Who is the thief and who is the hunter? @Businessdayng

Going forward, the government should work on redeeming its public image through accountability and transparency. This could be achieved if government responsibilities are cascaded down to the local government level. The Chairmen and Counselors are elected within their constituencies and are closer to the people. This approach to governance would ensure equitable and parallel development in each of the local government area within a State. More so, the residents of each local government can hold their leaders accountable for their actions and inactions. The Executive and Legislative arms of government should also work together to make quality policies that will improve the lives of the citizenry.

The opinions expressed in this article are strictly those of the authors who are as follows: Gali Aka (Manager) and Omojo Okwa (Manager) of Global Transfer Pricing Services of KPMG in Nigeria. They can be contacted at gali.aka @ng.kpmg. com and omojo.okwa@ng.kpmg. com respectively.

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

37

38

Wednesday 19 June 2019

BUSINESS DAY

news Egypt reforms upside holds lessons...

Continued from page 1

of 2019 when big ticket share sales by Cairo-based

lender, Banque du Caire SAE, and petrochemical company, Carbon Holdings Ltd, happen this year, as Cairo caps a good 2018 that saw four companies raise $315 million from Initial Public Offerings (IPOs) – a 76 percent increase over the $179 million raised in 2017.

The flurry of capital raising activities in Egypt is a sign of growing confidence in the country’s economic policies introduced since the currency float in 2016, analysts say.

“Egypt is generating buzz around its pipeline of IPOs with some speculating this could be the busiest year for listings in Cairo since the uprising in 2011,” said Wildu du Plessis, head of capital markets

at Johannesburg-based consulting firm Baker McKenzie.

“Growing confidence in economic policies introduced since the currency float has boosted the Egyptian Stock Exchange (EGX) and is prompting companies to consider share sales,” du Plessis said in an email to BusinessDay. Thanks to the reforms, Egypt’s economic growth accelerated from 4.2 percent in 2017 to 5.3 percent in 2018, and is expected to reach 5.9 percent in 2019, according to the International Monetary Fund (IMF).

The improving economic fortunes have boosted the Egyptian exchange and are prompting companies to consider share sales.

Some 3,048 kilometres away in Nigeria, critics of the government’s economic policies have

long called on Abuja to borrow a leaf from Egypt’s playbook.

“You can argue that Egypt’s authoritarian political system makes it easier for its leaders to implement tough reforms not caring so much about political capital, unlike in Nigeria,” an economist at one of the big foreign banks with a Nigerian unit told BusinessDay. “But some reforms are simply long overdue, from deregulation of the downstream petrol sector to the passage of the Petroleum Industry Bill and review of electricity prices. Without these, it will be tough to sell Nigeria to investors,” the person said on condition of anonymity as she wasn’t authorised to speak on politically-sensitive matters on behalf of her firm.

The performance of key macro-economic indicators lends credence to the assessment of President Muham-

madu Buhari’s administration by his critics.

When it wasn’t contracting for five straight quarters between 2016 and 2017, the Nigerian economy hasn’t grown more than 2.5 percent since 2015.

Despite showing signs of recovery, the economy has retained a fragile outlook and confidence has yet to be buoyed despite the re-election of President Buhari.

The result of the weak confidence in the economy has caused Foreign Direct Investment (FDI) to slump by more than a third since 2014 and the stock market to plummet. Financially-sound companies from the big banks to consumer goods firms are grossly undervalued.

Some firms have either delayed share sales or shelved them entirely, worried that they may be poorly priced at

time when investor sentiment is downbeat.

MTN Group, as part of negotiations for a regulatory fine in 2015, did a listing by introduction for its Nigerian unit on the stock exchange in May. Some analysts say the telco steered clear of an IPO due to the negative sentiments in the market. The market is down some 4 percent year to date, even after Africa’s largest wireless carrier listing.

Airtel, Nigeria’s second biggest wireless carrier by number of subscribers, also announced plans for a dual listing in Nigeria and London this year.

“Political instability was also to blame for a big collapse in capital raising in Nigeria in recent years, but the country looks to be recovering and, according to Baker McKenzie’s recent Global Transactions Forecast, there is a predicted return of IPOs in Nigeria in the

next three years,” said du Plessis.

“A case in point, Airtel Africa announced recently that it is seeking to raise as much as USD750 million in London and Nigeria, but the company has yet to release more information about when it plans to go public this year. Hopefully this is the start of a long upswing in capital raising activity in the country,” du Plessis said.

Capital raised by African issuers declined by 28 percent year on year to USD341 million in the first half of 2019 (H1 2019), compared with USD472million in H1 2018. The decline is attributed to the 80 percent drop in domesticcapitalraisinginAfrica –standingatonlyUSD85million from four IPOs, compared with USD419 million from the same number of IPOs in H1 2018, according to Baker McKenzie’s latest Cross-Border IPO Index for H1 2019, using data sourced from Refinitiv.

Start-ups enter to digitise Nigeria’s...

Continued from page 1

Tuteria while surfing the

Internet. She was linked with a Physics teacher who had 15 years of experience. Okoro paid Tuteria and the online platform in turn paid the teacher.

Tuteria monitored the teacher-student relationship while it lasted. The tutoring app has over 10,000 teachers on its platform from where students seeking tutors on key school subjects, including bagand shoe-making, can select.

Godwin Benson, 29, founded this platform after leaving his job at Deloitte in 2015. He taught a man’s child for a month but he wasn’t paid for his services. In order to minimise such incident from happening to teachers, he set up the app.

“We are working on connecting students in the Diaspora with teachers,” Peace Cole, chief operating officer, Tuteria, told BusinessDay in a telephone chat.

“We connect people with already vetted teachers who can help them achieve their goals,” Cole said.

Like Tuteria, a number of start-ups are showing that Nigerians can solve their education problems through digital platforms.

Prepclass, for instance, houses over 20,000 tutors that can help give pupils and students tutorials and afterschool lessons.

Perhaps, only those living in busy cities such as Lagos, Abuja, Port Harcourt, Onitsha,

Aba, Kano and Kaduna will appreciate how tough it is to find quality teachers with good moral compass.

Tutor.NG and co are helping to find them, enabling Nigerians to find experts on basic school courses, public speaking, bead making, cooking, mobile app development, among others.

At the launch of the platform in 2014, Peter Ogedengbe, co-founder of Tutor.NG, said the platform would solve the problem of learning beyond the classrooms and create employment for smart and versatile graduates.

Today in Nigeria, students have access to Raadaa, a startup that helps researchers to find reliable works. Research works can be uploaded or downloaded on the platform to improve access to academic materials and journals, thereby breaking the barriers against limited research.

The number of out-ofschool children has risen from 10.5 million in 2010 to 13.2 million in 2015, according to Demographic Health Survey conducted by the United Nations Children Fund (UNICEF) and the Nigerian government.

Seventy-five million Nigerians (38 percent) are illiterate in 2018, according to the National Commission for Mass Literacy, Adult and Non-Formal Education. This number was 35 million in 2013, the then minister of education had said that year.

Sanwo-Olu reverses self, says didn’t...

Continued from page 2

sion with State House Correspondents on Tuesday, Sanwo-Olu said the proposed massive upgrade of Lekki and Badagry seaports in Lagos State remains the most credible alternative to decongesting the Apapa port.

“Apapa Port itself has grown beyond where it is now. That is why Lagos State is speaking with investors to see how we can push either the Lekki Port

or the Badagry Port as the longterm alternative to the Apapa Port because that would be the long-term solution in terms of our growth and development as a nation,” he said.

He said his administration was working closely with President Buhari to develop the Lekki and Badagry deep seaports as a panacea to the intractable gridlock being experienced at the Tin Can Island port. www.businessday.ng

Chimamanda Adichie (3rd r) pictured with Bryan Stevenson, honorary degree recipient/executive director of the Equal Justice Initiative; Pussy Riot, honorary degree recipient/cofounder of the Russian art punk collective; Nadya Tolokonnikov; Michael Spalter, chairman of RISD’s Board of Trustees; Roseanne Somerson, RISD president, and Theaster Gates, American Artist, at its 136th Commencement ceremony.

Only 39.4 percent of Nigerian children of primary school age are currently enrolled in school, according to a Multiple Indicator Cluster Survey (MICs) 5 of 2016 and 2017 conducted

by NBS and UNICEF. To prevent high levels of illiteracy and increased out-ofschool children, EduRecords has stepped in to track the performance of students and teachers. It keeps records of students and teachers against losses, damage or alteration; monitors children or school affairs from any part of the world, and provides performance analysis on children.

It checks continuous decline

in students’ performances as well as decline in enrolment rates, thus enabling parents to learn the performances of their children.

These days, students can also learn on their own at Bilyak Consulting Firm’s online app known as ‘mAcademy’.

Students, teachers, and parents are able to access past questions of school and professional examinations, curricula and other key information in the education sector.

“E-learning is an innovation that has come to stay,” said Eze Onyeka, chief executive officer, Value Spring Group of Schools, Okota, Lagos.

“Now, students learn through technology. We carry out our lessons through computer and projectors. Students glance through it, see the pictures, see the illustrations and they make notes from everything,” he explained.

Nigeria ranks tops in terms of the number of African students studying in the United States, according to the 2017 Open Doors Report released in November 2018. Data from the World Education News and Reviews (WENR) show that every year, number of Nigerian students moving into foreign universities increase by no fewer than 10

percent. ScholarX provides scholarship opportunities to ensure Nigerians know where education opportunities exist at minimal costs.

Comfort Okere, head teacher, May Day School, Isolo, Lagos, said students now use computer which makes the innovation palatable.

“Every student has a laptop in my school, for instance. So, the time students used to copy notes for so long, the teacher uses that time to explain topics to students and they ask questions. Afterwards, the teacher forwards their notes to their e-mails. That is one of the ways,” Okere said.

On the President’s response to his plans, the Lagos State governor said, “I can’t get it any better. His words were very encouraging; his acceptance of the initiatives that I brought on board was very resounding. So I am very encouraged and he just gives me the opportunity to go and do more.”

Recounting some of the initiatives the state government has taken, he said the government recently commenced the reconstruction of the Apapa Tin Can Island to Mile 2 Road, saying it was

“not at the stage in which we can feel the full impact of it”.

“That’s on one side. The movement of the tanker drivers has also started. There is a Lily Pond Terminal that has been created with NPA and other terminal operators, which I imagine has started doing what we call the call-up system,” he said.

“What I understand by the call-up is that it’s a system that needs to be a bit more electronically driven. I think it’s currently run manually now, but if we can get soft-

ware that can enhance it and enforce it, the call-up system can become something that can hold the tanker drivers accountable. If you’re not called on to come unto the port you are not meant to come,” he said.

He said the initiatives were meant to improve the quality of life and business development in Lagos, adding that they included security and economic investment opportunities.

He said that it was imperative for the government

to keep Lagos as a whole safe and secure, pointing out that the state was the gateway to the economic development of the country.

“We must continue to encourage the international investors and the private sector that Lagos remains the hub of business and that it’s safe,” he said.

“So issues around cultism, banditry, kidnapping, armed robbery are little things that we hear about and we have to nip them in the bud before they become challenges that we cannot deal with,” he said.

https://www.facebook.com/businessdayng

@Businessdayng

Wednesnday 19 June 2019

BUSINESS DAY

news NCAA begins demolition of 8,805 telecoms masts Jumoke Akiyode-Lawanson &Ifeoma Okeke

N

igerian Civil Aviation Authority (NCAA) says it will immediately commence the demolition of telecoms masts belonging to Globacom Nigeria Limited, to comply with aviation height clearance.

In a statement sent by Sam Adurogboye, general manager, public relations, NCAA, said the demolition exercise would similarly affect some banks and financial institutions who had discountenanced the Authority’s regulatory requirements on clearance to erect any high structure

within the navigable airspace in Nigeria.

“The Regulatory Authority is left with no choice as the 30day ultimatum given to those telecommunication service providers has expired. Prior to the expiration of the ultimatum, letters of reminder were written to allaffectedorganisationstoobtain Aviation Height Clearance (AHC) for their masts,” Adurogboye said.

The NCAA disclosed that the operatorswhohadnotregularised theirmastswereasfollows:-Globacom Nigeria 7,012 masts, United BankforAfrica439masts,GTBank

… as 30-day ultimatum ends

295 masts, Unity Bank 217 masts, and Sterling Bank 159 masts.

Others are Union Bank 92 masts, First City Monument Bank 205 masts, Fidelity Bank 83 masts and Access Bank 303 masts.

Adurogboyeaddedthattherefore, a total of 8,805 masts belonging to the aforementioned organisations would be decommissioned forthwith.

Responding to the NCAA ultimatum, Gbenga Adebayo, chairman,AssociationofLicensed Telecommunications Operators ofNigeria(ALTON),toldBusiness-

Day, “There is no way we could have erected a mast around flying spaces without permission or approval. Those infrastructures don’t grow over night. They are threatening to shut down critical telecoms infrastructure, which services other sectors in the economy, and this is not right.

“We had a meeting where we were made to understand that the NCAA act demands them to approve any height of masts because of low-flying aircrafts but we argued that approval is to be done once because the masts

don’t grow higher, so once it is cleared for erection, it is done, you don’thavetogoeveryyearagainto renew because the height doesn’t change and this was part of the issues that we discussed with NCAA.” The ALTON chairman, who speaks on behalf of telecoms operators in Nigeria, said there were ongoing discussions between Globacom and the NCAA. “Globacomiscurrentlyengaging the NCAA and we are hoping that they would not go ahead with these threats to pull down sites because decommissioning sites is illegal, as can pose as a national security threat,” he said.

39

It would be recalled that the NCAA had earlier warned all Global System for Mobile Communications (GSM) providers and telecoms operators against violation of safety regulations. A 30-day ultimatum was therefore handed down for compliance.

This is derived from the Nigeria Civil Aviation Regulations (NigCARS)Part12.1.7.1.3.1,which stipulates, “No person or organisation shall put up a structure (permanentortemporary)within the navigable airspace of Nigeria unless such a person or organisation is a holder of Aviation Height Clearance Certificate granted under this regulation.”

Kano anti-graft commission awaits police report to probe N6.8m gorilla saga ... explains why it failed to investigate Ganduje’s alleged corruption TEMITAYO AYETOTO

T

he Kano State Public Complaint and Anti-Corruption Commission says it will probe why the management of the zoo where N6.8 million was lost to robbery decided to house the money despite the operation of a treasury single account (TSA).

Mogaji Rimingado, chairman of the Commission, said the matter, which has been transferred to the Kano Police Command headquarters, would be investigated for further evidence of corruption after the conclusion of the police findings.

Again, clarifying the widespread impression that a gorilla swallowed the money, the chairman said the incidence was a robbery case where force and weapon were used.

Rimingado spoke on the sidelines of a Stakeholders Dialogue on Corruption jointly convened

by ActionAid Nigeria, Centre for Communication and Social Impact and UKaid from the British People.

“There was an incidence whereby some hoodlums broke into the Kano Zoo, overpowered the watchmen, locked them up, combed everywhere and carted away the money,” he said.

“What we are looking for after the investigation of the Police that will give us a headway is that first, why they will keep the money there when we operate single treasury account. The Kano state

police is already suggesting negligence. So we will look into anything corruption in it.”

The N6.8 million issue is the most recent of corruption issues coming to light from Kano, the only state with an anti-graft agency. The video of the re-elected governor, Ganduje had went viral last year showing him receiving cutbacks from contractors who handled projects for the state.

But, the Commission defending why it didn’t investigate the case of Ganduje but is now probing the N6.8 million allegedly swallowed by Gorilla, said it had limited powers to probe a serving governor covered by the provision of immunity.

However, Rimingado blamed the journalist, Jaafar Jaafar, the publisher of Daily Nigeria for not involving the commission in the investigation, despite admitting earlier that the commission was not guaranteed.

“You didn’t involve us on in the sting operation and you want us to come and participate? We can’t. We don’t know the motif, whether it is true or not or a legitimate business,” he said.

“I think it is more easy for the person who released that video to involve EFCC, ICPC and other agencies that will back up his claim.”

The state agency claims it has treated over 4000 cases since in four years; tested its law to the court of appeal, investigated Judicial staff and traditional institutions.

Companies to leverage Bolt’s single platform for easy payment on corporate trips Ifeoma Okeke

B

olt, an on-demand transportation platform that operates in seven Nigerian cities, has launched Bolt for Business, allowing companies of all sizes to manage and pay for corporate trips via a single, easy-to-use portal.

This addition to the Bolt range of services broadens the positive impact of ondemand transport for businesses, as companies can now democratise access to jobs by removing the ‘own transport required’ condition for employment, and have access to a simple service offering for employees and clients alike.

They can do this by allocating a monthly budget through the Bolt platform to individual employees, ensuring that all employees who travel for business enjoy the benefits of affordable and reliable personal transport without the often prohibitive costs associated with vehicle ownership.

In a statement sent by the company Tuesday, it stated that it had launched Bolt for Business after noticing that a growing number of Bolt trips were taken for business purposes during working hours, whether it was commuting to work, rushing to client meetings or getting to the airport,” says Uche Okafor, regional manager for Bolt West Africa. www.businessday.ng

L-R: Alex Mourre, president, ICC, International Court of Arbitration; Babatunde Savage, chairman, International Chamber of Commerce Nigeria/ICC regional coordinator, Sub-Saharan Africa; Adedoyin Rhodes-Vivour, managing partner, Doyin Rhodes- Vivour & Co/member, International Court of Arbitration; Ndanga Kamau, vice president, ICC, International Court of Arbitration, and Alexander Fessas, secretary general, ICC, International Court of Arbitration, at the 4th ICC Africa conference on international arbitration in Lagos, yesterday.

Pic by Pius Okeosisi

Taraba: Death toll rises to 18 as gunmen sustain attacks on residents ... Kona women protest harassment by security agents Nathaniel Gbaoron, Jalingo

T

he death toll from the current attacks in Taraba State has risen to 18, as armed tribal militias and suspected herdsmen continue to unleash terror on residents in some parts of the state.

Tribal militias, suspected to be Jukun youths, in the early hours of Monday ambushed and killed seven farmers on their way to the farm around the Wukari-Donga border near Rafinkada.

On Monday night, armed herdsmen killed 11 persons when they attacked villages around Jalingo and Ardo Kola metropolis for the second time in two days.

A security officer who participated in the evacuation of the dead bodies for burial confided in BusinessDay that the men of the Nigeria Police attached to Wukari division recovered and buried seven corpses.

While the Police Public Relations Officer in the state, DSP David Misal, who confirmed the incident, said only one person was killed, the caretaker chairman of Donga Local Government Council, Nashuka Ipeyen, in whose domain the

attack took place, said he was not aware of such an incident.

“I am not aware of the killing of seven persons in the area. The information I have indicates that there was an attack and one person was killed,” Misal said.

The state Police public relations Officer, DSP David Misal who confirmed the incident, said only five persons were killed in the attack while several houses were burnt.

However, an eyewitness, Danjuma Rimande, said that eleven persons were killed and most of the bodies recovered even as they were still searching for some of the missing persons.

“As we speak, we have recovered eleven bodies and we are still searching for other people that we cannot account for. It is likely that the number would go up.”

As a result of the attack that has created panic and a lot of tension in Jalingo, the state governor, Darius Ishaku, Tuesday imposed a 14-hour curfew on Jalingo from 4pm to 6am with immediate effect.

Meanwhile, Kona women on Tuesday staged a protest against the continued attacks on their communities and killing of the people by armed herdsmen.

https://www.facebook.com/businessdayng

EDHA: Edo APC chair congratulates Okiye, Idiaye … as Edo HOSCOM lauds Obaseki’s people-centric policies, initiatives

C

hairman of the Edo State chapter of the All Progressives Congress (APC), Anselm Ojezua, has congratulated the newly inaugurated seventh Edo State House of Assembly (EDHA) led by Frank Okiye and Yekini Idiaye, as speaker and deputy speaker, respectively.

In a statement, Ojezua said the leadership of the state chapter of the APC was fully in support of the emergence of the new leaders, noting that the party was confident that the House would uphold the ideals of the APC while discharging their legislative duties.

According to Ojezua, “The leadership of the Edo State Chapter of the APC heartily congratulates the Edo State House of Assembly on the peaceful inauguration and election of its Speaker, Rt. Hon. Frank Okiye and Deputy Speaker, Hon. Yekini Idiaye at the first session of the 7th Assembly.

“The Edo State chapter of the APC is convinced that the leadership of the 7th Assembly will uphold the ideals of the party and consolidate on the achievements of the 6th State House of Assembly. There is @Businessdayng

no denying that the Executive arm of government will benefit from the inputs of a supportive, vibrant and stable House of Assembly. This is more so as the party occupies all the 24 seats in the House.

“The new leadership is a product of party supremacy and we are certain that they will collaborate with the executive and judicial arms of government to consolidate on the policies, programmes and initiatives of the state government which align with the vision of the party.”

The chairman said the peaceful election of the leaders of the State Assembly showed that members of the seventh Assembly were confident in the capacity of the Speaker, Okiye and his Deputy, Idiaye to provide the needed leadership to advance the interest of Edo people.

Meanwhile, oil-producing communities in Edo State under the aegis of Host Community of Nigeria Producing Oil and Gas (HOSCOM) have hailed the Governor Godwin Obaseki-led administration for providing clear-cut direction for economic development in the state.

45 DMO; 53 40

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

NEWS

41

Lagos Commodity Exchange gets SEC approval to commence operations Iheanyi Nwachukwu

S

ecurities and Exchange Commission (SEC) has finally endorsed the application of Lagos Commodity and Futures Exchange (LCFE) being promoted by the Association of Securities Dealing Houses of Nigeria (ASHON) to operate as a full-fledged commodities and futures market.

As a prelude to the historic approval, the Commission had earlier granted the LCFE approval-in-principle. By the new approval, the commodities and futures market is set to leverage

the assembled best talents to commence operations as an influential brand, established to unlock its true potential in the financial market.

Besides, SEC has also approved the appointment of the top management team to drive the operations of the new Exchange.

According to a letter of approval, signed by SEC’s Head of Department, Registration, Exchange and Market Infrastructure, Emomotimi Agama, on behalf of the acting Director General, Mary Uduk, the final approval takes effect from June

www.businessday.ng

14, 2019.

Part of the approval letter addressed to LCFE’s managing director/CEO, Akin Akeredolu-Ale, according to a statement, notes, “In the exercise of the power conferred on it by the Investment and Securities Act (ISA) No 29 of 2007 and the Rules and Regulations made there-under, the Commission has granted your Company, registration to perform the function of a Commodities and Futures Exchange in the Capital Market with effect from June 14, 2019.

By virtue of this registration,

you are authorised to perform the function for which you are registered.”

Responding to the approval, ASHON’s chairman, Patrick Ezeagu, said, “SEC has shown a commitment to open up the commodities market ecosystem for ASHON’S initiative of floating LCFE to come to fruition.

Congratulations to the market, the operators and the economy.

We are really grateful to SEC, shareholders, and all our partners NSE, CSCS, technology providers etc that collaboratively birthed this new baby.”

As a collective endorsement

https://www.facebook.com/businessdayng

of the new organisation, which has opened more opportunities for diversification of their businesses, stockbrokers had early this year converged at the corporate office of LCFE for on-the-spot assessment and appreciation of the facilities for trading.

They commended ASHON for the initiative and registered their loyalty to the new trading platform. Also, many professional and technical groups have been identifying with the management of LCFE. The cheery news of the approval has elicited jubilation among stockbrokers with torrents

@Businessdayng

of congratulatory messages to ASHON and the management of LCFE. Analysts were quick to say that the Nigeria’s capital market was long overdue for a thriving commodities exchange in view of the ongoing occasional shocks in the international oil market and the federal government’s resolve to give agriculture a pride of place as the country’s major income driver.

The top management team of LCFE include Ige Lawrence Ifedayo, the compliance officer, while Umunnaehila Allwell Iheanyi and Omowale Rotimi Solomon are principal officers.

42

Wednesday 19 June 2019

BUSINESS DAY

NEWS

Nigeria dithers as global renewable energy jobs hit 11m MIKE OCHONMA

W

hile Nigeria’s renewable energy master plan aims to increase the contribution of renewable energy to account for 10 percent of the country’s total energy consumption by 2025, the International Renewable Energy Agency’s (Irena’s) ‘Renewable Energy and Jobs Annual Review 2019’ reveals that 11 million people were employed in renewable energy worldwide in 2018. This represents an increase on the 10.3-million people employed in the industry in 2017.

As more and more countries manufacture, trade and install renewable energy technologies, renewable jobs grew to their highest level despite slower growth in key renewable energy markets, including China, the report states.

Solar photovoltaic (PV) and wind remain the most dynamic of all renewable energy industries, Irena says.

Accounting for one-third of the total renewable energy workflow, solar PV retained the top spot in 2018, ahead of hydropower, liquid biofuels and wind power.

Geographically, Asia had 3 million people employed in the solar PV industry – nearly nine-tenths of the global total.

In 2018, PV employment expanded in India, South East Asia and Brazil, while China, the US, Japan and the European Union lost jobs.

Meanwhile, most of the wind industry’s activity still occurs on land, which is responsible for the bulk of the sector’s 1.2 million jobs. China alone accounts for 44 percent of global wind employment, followed by Germany and

the US. Offshore wind could be an especially attractive option for leveraging domestic capacity and exploiting synergies with the oil and gas industry, the report indicates.

Further, rising output pushed biofuel jobs up 6 percent to 2.1 million. Brazil, Colombia and South East Asia have labour-intensive supply chains where informal work is prominent, whereas operations in the US and the European Union are far more mechanised, the report highlights.

Hydropower employs 2.1 million people directly, threequarters of whom are in operations and maintenance. The sector has the largest installed capacity of all renewables but is now expanding at a slower rate than other renewables.

Buhari signs Polytechnic amendment, National Institute for Security bills Tony Ailemen, Abuja

P

resident Muhammmadu Buhari on Tuesday signed two bills into law, including the National Institute for Security Bill and those of the Federal Polytechnic Amendments Bill.

The Federal Polytechnic

CHANGE OF NAME I, formerly known and addressed as Edna Imiebihoro Williams now wish to be known, and addressed as Edna Imiebihoro Imala. All Former documents remain valid. General public please take note.

CHANGE OF NAME I, formerly known and addressed as Miss. Tijani Olabisi Aminat now wish to be known, and addressed as Mrs. Alaketu Olabisi Aminat. All Former documents remain valid. General public please take note.

CHANGE OF NAME

Amendment Bill seeks to amend the Federal Polytechnic Act cap 17 of the laws of the Federation of Nigeria, 2004, according to the senior special assistant to the President on National Assembly Matters (House of Representatives), Umar Yakubu.

The new amendment seeks to harmonise the tenure of

CHANGE OF NAME I, formerly known and addressed as Mrs Matilda Modupeola Wilson now wish to be known, and addressed as Ms Matilda Modupeola Cole. All Former documents remain valid. Central Bank of Nigeria, Pension Board and General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Adewunmi Olufunlola Olajumoke now wish to be known, and addressed as Okanlawon Olufunlola Olajumoke. All Former documents remain valid.

General public please take note.

the Rectors of the Federal Polytechnics, retirement age of the staff of the Polytechnics as well as the establishment of the Governing Council for the Polytechnics and membership of the Council.

According to the new law, membership of the Councils will be a five man Council and will be chaired by a chairman.

The law also provides that such membership must be a reflection of the Federal Character.

Each Polytechnic Council under the new law must have a female member as well as a person representing the area where the Polytechnics are located.

CHANGE OF NAME I, formerly known and addressed as Shehu Imam now wish to be known, and addressed as Yakubu Shehu Usman. All Former documents remain valid. General public please take note.

I, formerly known and addressed as Rasaq Kafilat Kemi now wish to be known, and addressed as Mrs. Ajao Kafilat Kemi. All Former documents remain valid. Central Bank of Nigeria, Pension Board and General public please take note.

CHANGE OF NAME I, formerly known and addressed as Ibeh Esther Chioma now wish to be known, and addressed as Megafu Esther Chioma. All Former documents remain valid. General public please take note.

CHANGE OF NAME I, formerly known and addressed as Dennis Blessing now wish to be known, and addressed as Okolie Blessing . All Former documents remain valid. General public please take note. www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

43

news

Management assures tenants, shoppers of safety at Port Harcourt Mall CHUKA UROKO

M

anagement of Port Harcourt Mall, a foremost business and leisure destination in Nigeria, has assured tenants, customers and shoppers of their safety and that of their business at the mall.

The assurance was contained in a statement obtained

by BusinessDay on Monday, where the management also empathised with victims of the gas explosion that happened at the mall recently.

The management assured further that they had undertaken an extensive analysis of the situation alongside other agencies of government and found out that the mall was safe for their customers.

“As a safety-conscious organisation, we have trained all our security personnel on managing emergencies. Our internal fire-fighting team was able to contain the situation within 20 minutes. The mall staff was able to evacuate everyone from the mall, and all those injured were taken to the hospital where they are recuperating; we wish them quick recovery,” Chioma Okorie, the mall manager, said.

Continuing, she said, “As

an organisation, we will want to re-assure our tenants and shoppers that the mall is equipped with the best safety measures and our safety equipment are top-notch because the safety of all of our tenants and shoppers is of utmost importance to us.”

The mall manager noted that the commitment of the management and the staff of the mall has kept them from such emergencies in the last five years in which the mall has been in operation, assuring customers that the mall was a very safe place where family bonding and other activities took place and people could get their quality products from all the stores in the mall.

The mall, located along Azikiwe Road, Port Harcourt, has been described as the city’s number one lifestyle destination where global brands are located to address various needs of Nigerians.

The mail is ready to serve all residents and visitors to Port Harcourt. It was given the Leisure Spot of the Year Award

by Garden City Advancement Award in 2016 and 2018, in recognition of its exceptional contributions to the advancement of the city.

Insecurity: Yoruba leaders raise alarm … as Gani Adams parleys IGP, seeks collaboration between police, OPC Iniobong Iwok

A

are Ona-Kakanfo of Yorubaland, Gani Adams, and several leaders of the Southwest have raised alarm over worsening insecurity in the region, saying the continuous killings of Yorubas by suspected Fulani herdsmen and other criminals had become a serious source of concern.

The leaders stated this Monday in Ibadan after an extraordinary session to appraise the security situation in Nigeria and the region.

However, Adams, who chaired the session, noted that the activity of herdsmen posed a threat to the continuous existence of the Yoruba race and cannot be over looked by the Federal Government.

On the same vein, Yinka Odumakin, publicity secretary of pan-Yoruba socio-political organisation, Afenifere, stated that he was deeply worried about the escalating security situation in the region, stressing that it was alarming that the Federal Government had not

taken any proactive step to deal with the issue.

“We are worried that despite the current killings, raping and kidnapping of our people, the Federal Government have keep mute.

“The Southwest is under siege, the Fulani herdsmen have taken over our territory; kidnapping and raping our people, can you imagine that the Osun State governor said he was almost kidnapped some week back, that is how bad things are,” Odumakin said.

A former minister, Ebenezer Babatope, said it was becoming increasingly difficult to travel from one state to another within the region, urging President Buhari to find a lasting solution to the situation.

“All I can say is that help us appeal to President Buhari to map out strategy to curtail this issue, our women are being raped, people are kidnapped everywhere, you can’t travel, we all are not safe,” Babatope said.

Furthermore, the Are-Ona Kankafo said it was disheartening that despite several appeals and peace moves, the herdsmen

had continued to wreak havoc across the region, warning that the region would not continue to fold its hands.

According to Adams, “The campaign of blood by Fulani herdsmen, who have been ravaging our land, kidnapping, killing, maiming and raping our people in recent years has become a serious source of concern for the Yoruba race; a race renowned for their staunch passion for peaceful coexistence, national cohesion and development.

“The threat posed to our existence by these blood-mongering marauders cannot be overlooked as we, as a people, believe that for peace and accord to reign among the multiplicity of people who occupy a common territory, all parties must play a role in ensuring that each and every unit in this country respect each other in all ramifications.”

He further warned that the region would retaliate if the suspected herdsmen refused to obey its orders to leave the region, saying, “We cannot continue to fold our arms and let

these bandits continue to soil our land with the blood of the innocent. Consequently, “Failure to reconcile themselves with these terms may warrant maximum retaliation as the principle dictates that a bully only respects a bully.”

In a similar note, Gani Adams has charged the Inspector General of Police, Muhammed Adamu, on the need to be proactive in tackling the various security issues in the country.

Speaking during a meeting with the representatives of the Inspector General of Police, Tuesday, Adams restated his beliefs in boosting local security, saying the best measure was to get people at the grassroots involved in local security.

He told the top police hierarchy that as the Aare Onakakanfo of Yorubaland, there were pressures on him to act on the issues, saying the Oodua People’s Congress (OPC) was ready to partner the police, in solving the security challenges in the country, as the group had a history of winning the war against kidnapping, banditry and other social vices.

Doyin Salami advises businesses to build resistant products’ portfolio to avert headwinds Daniel Obi

F

or Nigerian businesses to continue to weather the storm of the present challenging environment occasioned by lot of economic and social issues, they must build portfolio of products that are economy resistant, Doyin Salami, CEO, Kainos Edge Consulting, has advised.

Such portfolio of products, combining packaging and pricing, informed by deep market research will appeal to diverse consumerswithincomedisparity, whether the economy is growing or shrinking Salami says.

The economist, who spoke with marketers and communication officers of organisations at a forum on ‘Business growth in a volatile Economy: Facts versus Myths’ organised by Advertising Association of Nigeria (ADVAN) recently in Lagos, cautioned businesses against adopting ‘one size fits all’ for the Nigerian market.

Presently, Nigeria is a peculiar market with huge disparity of income, declining share of consumption, poor performing sectors and poor infrastructure, which have forced the consumer to behave in a particular way.

For instance, Salami said out of 46 sectors in the Nigerian economy, an economy that could be saidtobeadiversified,only12percent of them were growing faster bypopulationgrowthwhileothers are performing below population growth. “These are the trends you really need to understand,” he told the chief marketing officers (CMOs).

He also told them that Nigeria’s economy, and largely emerging markets invite businesses to ask ‘what if’ in their strategies, saying even when things appear unlikely, the scenario planning should make CEOs and CMOs to

ask the question ‘what if’ in their business planning.

According to Salami, in 2014, Nigeria’s economy was growing at about 7 percent, and if businesses had asked what if affordability becomes a problem sooner, they would have been better positioned as of today. By 2016, he said affordability actually became a problem. “Those that asked that question and developed product in that line are reaping the value today. Essentially, it is about a granular understanding of the marketplace in which you play,” he said.

He also told organisations to constructivelyengagewithregulators and ensure a mutual respect for both parties.

On the impact and contribution of infrastructure especially electricity to volatility of Nigeria’s economy, Salami who in November 2017, completed a two-term 8 years stint as member of CBN Monetary Policy Committee said that the privatisation of electricity in 2012, moving away from government hands to private sector, supposed to engender creation of a market.

What thereafter supposed to be regulated is a market not a sector but today; tariffs are not reflective because government hasnotdonewhatitissupposedto do. Under this situation Nigerians cannot expect constant power.

He noted that payment of taxes is still a big issue in Nigeria and this contradicts expectation and heavy reliance of the public on government to deliver on infrastructure in the face of Nigeria beingadeficientcapitaleconomy.

Also speaking, the president ofADVAN,FolakeAni-Mumuney said the forum was organized to enrich marketers’ understanding on how businesses can drive for profitable growth in volatile economy. www.businessday.ng

L-R: Folake Soyannwo, director, Falck Prime Atlantic; Quintus G. Azogu, acting deputy controller general, Federal Fire Service, and Kevin Keeler, head of international training development, Fire Service College United Kingdom, during a press conference at Falck Prime Atlantic’s training centre in Ipara, Ogun State on Monday, on collaboration of Falck Prime Atlantic and Fire Service College of UK.

Power sector privatisation was designed to fail - former NERC chairman Olusola Bello

F

ormer chairman of the Nigerian Electricity Regulatory Commission (NERC), Sam Amadi, says the privatisation of the power sector was designed to fail.

In a telephone interview with BusinessDay, Amadi states that even though the exercise was transparent, the privatisation process could not produce the desired results because the power assets were sold to investors who lacked the financial and technical capacities.

He says when NERC conducted “Fit and Proper’ test on all the preferred bidders, only one (or none) had the requisite financial and technical competence to effectively manage the

network. Among the bidders consulted non had technical competence to managed the power sector.

The process and evaluation were transparent but threshold on which those who won were qualified was low, he says, as “The Original Terms of Reference (ToRs) set up for privatisation was unilaterally jettisoned and the standards/benchmarks were lowered.”

The sector was privatised after the unbundling of the Power Holding Company of Nigeria (PHCN) in November 2013, as private investors took over distribution and generation firms “to ensure adequate, regular and stable supply of electricity to the consumer at a reasonable cost.

“We failed to corporatise

https://www.facebook.com/businessdayng

and commercialise before privatising; we privatise senselessly without paying attention to context and corporate governance and regulatory regime; we sold to investors who lacked capacity,” he states.

He asks: “We had conducted three tariff hikes before December 2015. Did any of these hikes resulted in any significant improvement in revenue or service quality? No. Why because the problem of the sector is not mainly tariff.”

The challenges in the sector go beyond tariff increase; as such move would force manufacturers off the grid. Excess high tariff will discourage Manufacturers Association of Nigeria, he states.

“Cost reflective is important.

But excessive tariff hike is prob@Businessdayng

lematic because it cannot be collected, and in a country with poor supply the propensity to pay is low,” he says.

Those whose acquired the Licences of Electricity Distribution Companies wholly with 100 percent bank loan are the one performing badly because the bank loans and exchange rates and other variables attached to the loans had made it difficult for them to break even.

There is nowhere in the world where a business of this nature is managed solely and financed 100 percent with bank loans.

Virgin companies that have never been in the business of management and investment in power sector in anywhere or any part of the world were the ones that won the bids.

44

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Connect; 54 Health Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

45

46

Wednesay 19 June 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 18 June 2019

Top Gainers/Losers as at Tuesday 18 June 2019 LOSERS

GAINERS Company MOBIL DANGSUGAR

Opening

Closing

Change

N163.5

N164.5

1

N10.7

N11

0.3

Company

Closing

Change

N1430

N1420

-10

NESTLE OKOMUOIL

N74

N66.6

-7.4

N31.1

N28

-3.1

N21.65

N19.5

-2.15

N18.55

N16.7

-1.85

CAP

OANDO

N3.7

N3.95

0.25

ETI

N10

N10.2

0.2

JBERGER

N9.75

N9.95

0.2

INTBREW

WAPCO

Opening

ASI (Points) DEALS (Numbers) VOLUME (Numbers)

29,818.80 3,324.00 2,912,251,523.00

VALUE (N billion)

11.225

MARKET CAP (N Trn)

13.140

Stock market records additional N52bn loss …large transactions seen on Zenith, Wema shares Stories by Iheanyi Nwachukwu

T

he Nigerian equities market journeyed further into the negative territory on Tuesday June 18, 2019, despite a relatively even split between gainers and losers. Twenty (20) stocks gained led by Mobil Oil Plc as against 21 losers led by Nestle Nigeria Plc. At the sound of the closing gong for stocks trading on the Nigerian Stock Exchange (NSE), the All Share Index (ASI) decreased by 0.39percent, pushing the year-to-date (ytd) return further into the negative territory (-5.13percent).

The All Share Index closed at 29,818.80points as against the preceding day’s close of 29,936.33 points while Market Capitalisation closed at N13.140 trillion against preceding day’s close of N13.192 trillion, indicating a loss of about N52billion.

Despite record spike in market activity in the last

two sessions on the back of large volume transactions on select banking names, bearish sentiment on the Bourse still led to record negative closes.

Analysts foresee another poor performance by the All Share Index on Wednesday in the absence of catalysts to drive the

market back to life.

The volume of stock traded increased by 1.65percent, from 2864.95million to 2912.25million, while the total value of stocks traded increased by 186.20percent, from N3.92billion to N11.22billion in 3,324 deals.

Wema Bank Plc led the activity chart after its 2.399billion units were exchanged for N1.475billion; while 409.965million units of Zenith Bank shares were exchanged for N8.200billion. Other actively traded stocks include that of Access Bank Plc, UBA Plc, and GTBank Plc.

L–R: Jude Chiemeka, divisional head, Trading Business, The Nigerian Stock Exchange (NSE); Patience Oniha, director general, Debt Management Office; Hajara Adeola, managing director/ CEO, Lotus Capital and Andrew Morgan, managing director/CEO, REDmoney during the Inaugural Islamic Finance News (IFN) Nigeria Forum at the Eko Hotel in Lagos.

MBC Securities sees Telluria strengthening Ellah Lakes’ balance sheet

E

llah Lakes Plc acquisition of 100percent equity stake in Telluria Limited will strengthen the company’s balance sheet, says MBC Securities Limited.

Following this acquisition, Ellah Lakes Plc on Monday June 17 listed on the Nigerian Stock Exchange (NSE) additional 1.88billion ordinary shares.

This make the total issued and fully paid up shares of Ellah Lakes to increase from 120million to 2billion ordinary shares, with market capitalisation of about N8.520billion, at N4.26 per share.

MBC Capital Limited, MBC Securities Limited

and The New Practice (TNP) are the professional parties to the transaction.

Through the acquisition of Telluria, Ellah Lakes has successfully made a strategic shift to diversify into oil palm cultivation and processing business.

Olutoyin Ayoade, Managing Director of MBC Securities Limited said until 2016 Ellah Lakes produced and marketed fresh water fish, but giving the company inability to operate in the Niger-Delta region as a result of militancy and other security challenges in the area, it has become necessary to chart a new strategy course to ensure on-going existence and www.businessday.ng

future prosperity of the company.

“After evaluating various options, the company decided to pursue a business combination with Telluria Limited, which is a farming and food processing company with over 2,000 hectares of palm land in Edo State with specialisation in cultivation and processing of oil palm and other products for local and export markets”, Ayoade said.

“The opportunity provided by Telluria offered

by Ellah is a resuscitation and growth strategy that will return Ellah Lakes into a competitive position in the market place.

The combined transaction has strengthen Elah lake balance sheet, pro-

vided access to the market and improve business operation and create organisational efficiency that will drive profitability and increase shareholders’ value,” he said.

Ellah Lakes’ listing of these shares on the NSE creates options for investors in the agri-business segment of the NSE. Consequently, the listing provides increased liquidity to existing shareholders.

Also, the chief executive of NSE, Oscar Onyema said that “We are certain that the listing has marked the beginning of a new era for the company post the previous shut down of its operations due to militant activities and vandalization of the company’s assets.

https://www.facebook.com/businessdayng

Global market indicators FTSE 100 Index 7,443.04GBP +85.73+1.17%

Nikkei 225 20,972.71JPY -151.29-0.72%

S&P 500 Index 2,919.52USD +29.85+1.03%

Deutsche Boerse AG German Stock Index DAX 12,331.75EUR +245.93+2.03%

Generic 1st ‘DM’ Future 26,457.00USD +319.00+1.22%

Shanghai Stock Exchange Composite Index 2,890.16CNY +2.54+0.09%

Lagos Commodity and Futures Exchange gets SEC approval to commence operations

T

he Securities and Exchange Commission (SEC) has finally endorsed the application of Lagos Commodity and Futures Exchange (LCFE) being promoted by the Association of Securities Dealing Houses of Nigeria (ASHON) to operate as a full fledged commodities and futures market.

As a prelude to the historic approval, the Commission had earlier granted the LCFE, approval-in-principle.

By the new approval, the commodities and futures market is set to leverage the assembled best talents to commence operations as an influential brand, established to unlock its true potential in the financial market.

Besides, SEC has also approved the appointment of the top management team to drive the operations of the new Exchange.

According to a letter of approval, signed by SEC’s Head of Department, Registration, Exchange and Market Infrastructure, Emomotimi Agama, on behalf of the acting Director General, Mary Uduk, the final approval takes effect from June 14, 2019.

Part of the approval letter addressed to LCFE’s Managing Director and Chief Executive Officer, Akin AkeredoluAle states that “ In the exercise of the power conferred on it by the Investment and Securities Act (ISA) No 29 of 2007 and the Rules and Regulations made thereunder, the Commission has granted your Company, registration to perform the function of a Commodities and Futures Exchange in the Capital Market with effect from June 14, 2019.

By virtue of this registration, you are authorised to perform the function for which you are reg@Businessdayng

istered.”, the statement stated.

Responding to the approval, ASHON’s Chairman, Patrick Ezeagu said “ SEC has shown a commitment to open up the commodities market ecosystem for ASHON’S initiative of floating LCFE to come to fruition. Congratulations to the market, the operators and the economy . We are really grateful to SEC , shareholders, and all our partners NSE, CSCS, technology providers etc that collaboratively birthed this new baby.”

As a collective endorsement of the new organization which has opened more opportunities for diversification of their businesses, stockbrokers had early this year converged at the corporate office of LCFE for on-the-spot assessment and appreciation of the facilities for trading. They commended ASHON for the initiative and registered their loyalty to the new trading platform. Also, many professional and technical groups have been identifying with the management of LCFE. The cheery news of the approval has elicited jubilation among stockbrokers with torrents of congratulatory messages to ASHON and the management of LCFE. Analysts were quick to say that the Nigeria’s capital market was long overdue for a thriving commodities exchange in view of the ongoing occasional shocks in the international oil market and the federal government’s resolve to give agriculture a pride of place as the country’s major income driver.

The top management team of LCFE include Ige Lawrence Ifedayo, the Compliance Officer while Umunnaehila Allwell Iheanyi and Omowale Rotimi Solomon are Principal Officers.

Wednesay 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

47

48

Wednesday 19 June 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 18 June 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 229,266.71 6.45 0.78 172 13,678,348 UNITED BANK FOR AFRICA PLC 210,326.44 6.15 1.65 138 9,748,251 ZENITH BANK PLC 635,779.00 20.25 0.25 341 409,965,614 651 433,392,213 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 247,677.52 6.90 -0.72 181 4,976,437 181 4,976,437 832 438,368,650 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,707,150.24 133.00 -0.75 78 880,130 78 880,130 78 880,130 BUILDING MATERIALS DANGOTE CEMENT PLC 3,103,076.40 182.10 -0.16 88 517,996 LAFARGE AFRICA PLC. 160,272.57 9.95 2.05 37 378,918 125 896,914 125 896,914 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 302,107.44 513.40 - 3 95 3 95 3 95 1,038 440,145,789 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 63,530.41 66.60 -10.00 10 97,059 PRESCO PLC 55,000.00 55.00 - 8 26,350 18 123,409 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 2 7,706 2 7,706 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,800.00 0.60 - 7 240,000 7 240,000 27 371,115 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 0 0 JOHN HOLT PLC. 182.90 0.47 - 14 22,649 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 45,932.23 1.13 -1.74 44 2,805,663 U A C N PLC. 17,287.78 6.00 -0.83 163 9,220,855 221 12,049,167 221 12,049,167 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 25,740.00 19.50 -9.93 10 100,164 ROADS NIG PLC. 165.00 6.60 - 0 0 10 100,164 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,923.58 1.51 - 6 15,818 6 15,818 16 115,982 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,334.94 1.32 10.00 13 261,470 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 100,210.01 45.75 -2.56 17 4,796,542 INTERNATIONAL BREWERIES PLC. 143,550.89 16.70 -9.97 10 366,000 NIGERIAN BREW. PLC. 455,823.42 57.00 -1.72 91 3,745,337 131 9,169,349 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 83,500.00 16.70 1.21 80 1,747,152 DANGOTE SUGAR REFINERY PLC 132,000.00 11.00 2.80 43 449,249 FLOUR MILLS NIG. PLC. 57,405.31 14.00 -0.71 80 2,938,349 HONEYWELL FLOUR MILL PLC 8,009.50 1.01 -6.48 70 3,043,427 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 49,750 NASCON ALLIED INDUSTRIES PLC 39,741.58 15.00 - 15 95,786 UNION DICON SALT PLC. 3,321.07 12.15 - 3 5,000 292 8,328,713 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,566.31 10.95 - 20 166,174 NESTLE NIGERIA PLC. 1,125,571.88 1,420.00 -0.70 46 99,482 66 265,656 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,678.16 3.74 - 8 25,209 8 25,209 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 29,183.01 7.35 - 25 152,370 UNILEVER NIGERIA PLC. 183,840.17 32.00 - 45 155,648 70 308,018 567 18,096,945 BANKING ECOBANK TRANSNATIONAL INCORPORATED 187,165.42 10.20 2.00 49 402,852 FIDELITY BANK PLC 50,126.40 1.73 1.17 52 891,841 GUARANTY TRUST BANK PLC. 906,480.32 30.80 -0.32 196 9,662,615 JAIZ BANK PLC 14,142.84 0.48 6.67 6 180,200 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 67,945.39 2.36 0.43 102 2,185,440 UNION BANK NIG.PLC. 203,845.27 7.00 - 42 445,734 UNITY BANK PLC 8,883.90 0.76 8.57 14 381,282 WEMA BANK PLC. 23,530.42 0.61 -4.69 60 2,399,041,825 521 2,413,191,789 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 10 AIICO INSURANCE PLC. 4,643.24 0.67 1.49 14 2,064,960 AXAMANSARD INSURANCE PLC 20,055.00 1.91 - 0 0 CONSOLIDATED HALLMARK INSURANCE PLC 1,788.60 0.22 - 1 500 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 2 7,375 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,123.80 0.29 - 6 120,982 LAW UNION AND ROCK INS. PLC. 1,976.31 0.46 - 0 0 LINKAGE ASSURANCE PLC 4,160.00 0.52 8.33 2 112,600 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 -4.76 11 853,350 NEM INSURANCE PLC 11,775.52 2.23 8.78 41 1,055,030 NIGER INSURANCE PLC 1,547.90 0.20 - 2 1,982 PRESTIGE ASSURANCE PLC 2,960.40 0.55 - 1 2,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 3 210,005 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 - 8 3,939,682 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 1 500 WAPIC INSURANCE PLC 6,022.23 0.45 - 22 296,140 115 8,665,116

www.businessday.ng

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 2,972.63 1.30 - 2 11,946 NPF MICROFINANCE BANK PLC 2 11,946 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 1 100 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 1 50 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2 150 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 6,980.00 3.49 - 60 922,240 CUSTODIAN INVESTMENT PLC 35,585.28 6.05 - 7 361,821 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 33,466.58 1.69 2.42 56 2,495,769 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 5 13,825 435,223.50 42.50 - 23 79,514 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 13,500.00 2.25 1.35 74 2,591,885 225 6,465,054 865 2,428,334,055 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 3 82,000 3 82,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,575.00 5.05 - 2 1,065 GLAXO SMITHKLINE CONSUMER NIG. PLC. 10,164.95 8.50 - 19 156,429 4,054.30 2.35 - 6 56,200 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 - 6 15,000 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 1 5 34 228,699 37 310,699 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 781.44 0.22 -4.35 4 233,132 4 233,132 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 346.47 0.70 - 0 0 TRIPPLE GEE AND COMPANY PLC. 0 0 PROCESSING SYSTEMS CHAMS PLC 1,502.74 0.32 -8.57 38 3,608,169 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 1 200 39 3,608,369 43 3,841,501 BUILDING MATERIALS BERGER PAINTS PLC 1,883.85 6.50 1.56 17 140,820 CAP PLC 19,600.00 28.00 -9.97 22 292,901 177,437.26 13.50 - 10 42,003 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 4 10,568 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 2 20 55 486,312 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 2,377.78 1.35 -3.57 31 1,117,348 CUTIX PLC. 31 1,117,348 PACKAGING/CONTAINERS BETA GLASS PLC. 36,847.94 73.70 - 1 400 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 400 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 87 1,604,060 CHEMICALS B.O.C. GASES PLC. 1,565.08 3.76 - 1 5,000 1 5,000 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 1,000 1 1,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 68.20 0.31 - 1 3,172 1 3,172 3 9,172

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,565.68 0.25 -4.00 22 1,093,728 22 1,093,728 INTEGRATED OIL AND GAS SERVICES OANDO PLC 49,104.08 3.95 6.76 94 2,725,486 94 2,725,486 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 59,317.92 164.50 0.61 31 83,302 CONOIL PLC 15,960.90 23.00 - 19 78,966 ETERNA PLC. 4,694.92 3.60 - 4 7,000 FORTE OIL PLC. 41,028.15 31.50 -2.48 118 1,098,789 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 0 0 TOTAL NIGERIA PLC. 50,928.28 150.00 - 23 12,630 195 1,280,687 311 5,099,901 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 2 5,100 2 5,100 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 3 1,419 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 1 200 4 1,619 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,723.22 1.31 -9.66 9 1,000,200 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 1 300 41,042.18 5.40 - 2 7,287 TRANSCORP HOTELS PLC 12 1,007,787 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 163.30 0.27 - 4 70,501 LEARN AFRICA PLC 1,033.74 1.34 - 1 95,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 776.54 1.80 - 13 36,313 18 201,814 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 447.58 0.27 -10.00 7 273,045 7 273,045

https://www.facebook.com/businessdayng

@Businessdayng

Wednesday 19 June 2019

FT

BUSINESS DAY

49

FINANCIAL TIMES

World Business Newspaper CLAIRE JONES AND KATIE MARTIN

U

S president Donald Trump has accused Mario Draghi of unfairly manipulating the euro, after dovish comments from the European Central Bank president sent government bond prices sharply higher and pushed down the single currency.

Speaking at the ECB’s annual symposium in Sintra, Portugal, Mr Draghi said the bank had “considerable headroom” to launch a fresh expansion of its €2.6tn quantitative easing programme and suggested it could, in the short term, target inflation above its medium-term goal of just under 2 per cent for a limited period of time.

Government bond prices rose sharply; French 10-year bond yields turned negative for the first time, falling 0.1 percentage points. Yields fall when prices rise.

The rally spread across the Atlantic with US government bond yields briefly plumbing new multiyear lows.

The yield on the 10-year Treasury note fell as much as 7 basis points to 2.016 per cent, its lowest level since September 2017.

But the bond rally stalled after Donald Trump wrote on Twitter that he was to meet his Chinese counterpart Xi Jinping at a G-20 summit next week, raising hopes for an end to the Sino-American trade war.

The euro sank by about 0.5 per cent against the dollar, reaching a low of just under $1.12, while European equities rose - Germany’s Dax index was up by 2 per cent on the day.

In response, Mr Trump suggested that Europe was engaging in currency manipulation.

Trump hits out at Draghi over signal of fresh eurozone stimulus Bonds rally after ECB buying hint triggers US accusation of currency manipulation “Mario Draghi just announced more stimulus could come, which immediately dropped the euro against the dollar, making it unfairly easier for them to compete against the USA,” the US president wrote on Twitter. “They have been getting away with this for years, along with China and others.”

He also commented on the rise in European share prices, by Tweeting: “German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!”

The clash between Mr Trump and Mr Draghi comes as the US Federal Reserve prepares to discuss whether to cut interest rates in response to signs that the global trade war is hitting growth, with officials due to meet in Washington on Wednesday.

Mr Trump has expressed a clear preference for the Fed to cut interest rates, saying last week that the central bank was “very disruptive to us”.

It is not the first time Mr Trump and his administration have expressed concern about weakness in the euro. Early in his tenure, top White House trade adviser Peter Navarro said Germany used the euro to “exploit” the US. Last month, the US Treasury said that Germany, Ireland and Italy, all euro members, “merit close attention to their currency practices”. That placed them on a list alongside China,

International Airways Group’s order is vote of confidence after deadly crashes

I

nternational Airways Group, the parent company of British Airways, has ordered 200 Boeing 737 Max aircraft in a significant vote of confidence in the plane, which remains grounded after two deadly crashes.

The agreement, worth an estimated $24bn at list prices, ends an orders drought for Boeing since the second deadly crash of the Max in Ethiopia in March. More than 300 people were killed in the two accidents, which have been linked to a flight-control software on the Max. There is still no timetable for when the model will return to the skies and Boeing has yet to formally submit a software fix to the US aviation regulator.

But Willie Walsh, chief executive of IAG, told reporters at the signing of a letter of intent at the Paris air show that he had “every confidence” in Boeing and expected the Max to “make a successful return to service in the coming months”.

Mr Walsh, a former 737 pilot, said he had flown the Max in a simulator and experienced MCAS, the manoeuvring characteristics augmentation system, which played a role in both crashes. He said

he would “not hesitate getting on board a Max tomorrow” but added that its return to service would be “subject to rigorous review by the regulators”.

Although the order is valued at $24bn at list prices, IAG will have received discounts. Analysts suggested the actual value of the deal could be worth around $11bn.

The Max deal with IAG is doubly significant because, although IAG has long operated Boeing’s twinaisle aircraft such as the 747, the carrier’s existing single-aisle fleet is almost exclusively from the Airbus A320 family of jets.

“What we are doing, we are partnering with the Boeing brand,” Mr Walsh said. “It is a brand that I trust and I will continue to do that.

The aircraft is an aircraft that is produced by a world-class company. I have said that consistently.”

Air shows are typically the time when Boeing and its European rival Airbus compete in a public battle for orders but Paris started slowly for the US group, which has made returning the Max safely back into service its priority.

Boeing had earlier announced an order from Korean Air for 30 787 Dreamliner jets. Air Lease Corporation separately announced a deal to purchase five Dreamliners. www.businessday.ng

where a potential burst of fresh currency weakness is seen as a risk to already-strained trade talks.

Mr Draghi said indicators pointed to signs of “lingering softness” in the economy in the coming quarters, adding that if the outlook for inflation failed to improve then additional stimulus must be needed.

The bank could lower its policy interest rates — now at record lows of zero and minus 0.4 per cent. The ECB could also buy more government debt than previously thought

by changing self-imposed rules that limit it to buying up to a third of any one sovereign’s debt, Mr Draghi said.

“If the crisis has shown anything, it is that we will use all the flexibility within our mandate to fulfil our mandate — and we will do so again to answer any challenges to price stability in the future,” he told the audience in Sintra.

German government bonds, the region’s benchmark, hit a new record, with 10-year yields sinking 0.07 percentage points on the day to

minus 0.32 per cent, while 10-year yields in Sweden, which is not a euro member, fell 0.027 percentage points, also sinking past 0 per cent for the first time.

Yields fall when prices rise, and negative yields mean new buyers are guaranteed to make a nominal loss if they hold the debt to maturity.

Italian government bonds also rallied, with the 10-year yield falling 0.17 percentage points to 2.112 per cent, its lowest level since last year’s politically-driven sell-off.

Tanker attacks add pressure on Europe to turn against Iran

BA parent orders 200 Boeing 737 Max aircraft despite grounding SYLVIA PFEIFER

Mario Draghi said the European Central Bank had ‘considerable headroom’ to launch a fresh expansion of its €2.6tn quantitative easing programme © Reuters

Brussels foreign policy chief flies to Washington for talks with Trump aides MICHAEL PEEL

E

uropean powers are facing the most severe test of their readiness to side with Iran in more than a year as the fallout from attacks on two oil tankers and Iran’s vow to bust limits on its uranium puts them under mounting US pressure to turn against Tehran.

Federica Mogherini, the EU’s foreign policy chief, is travelling to Washington on Tuesday and will face Trump administration officials for the first time since the US accused Iran of staging the tanker attacks in the Gulf of Oman, allegations that further damaged a landmark nuclear deal with Tehran.

Iran has dismissed Washington’s allegations.

Analysts say the rising tensions sharpen a dilemma for the Europeans, caught between Iran’s growing assertiveness and the US campaign to put “maximum pressure” on Tehran after President Donald Trump pulled out of the nuclear accord last year.

Ms Mogherini will take part in a round of meetings with top

https://www.facebook.com/businessdayng

officials in Washington including Mike Pompeo, secretary of state, and Jared Kushner, senior adviser to Mr Trump and the president’s son-in-law.

One senior EU diplomat lamented of the growing Iran-Gulf crisis: “Where does it all end — and where does the sabre-rattling from Washington put us?”

Iran on Monday pushed forward with plans unveiled last month to make calculated breaches of uranium supply limits imposed by the nuclear deal. The move alarmed EU diplomats gathered in Luxembourg for a regular meeting of the bloc’s foreign ministers.

One member state official called the escalation a “deeply worrying” indicator of a fundamental disagreement that European powers had with Iran: Tehran’s contention that because it had lost economic benefits due to US sanctions it was justified in breaking parts of the nuclear deal.

“We don’t agree with Iran’s idea of less for less,” the official said.

On Tuesday Bijan Namdar Zanganeh, Iran’s oil minister, said economic conditions in the coun@Businessdayng

try were “more difficult than that of war”, referring to the Iran-Iraq conflict of 1980-88.

Map showing Iran’s nuclear facilities Stef Blok, foreign minister of the Netherlands, said the Iranian uranium statement was “not helpful”, but echoed the EU position of support for the nuclear deal as long as the International Atomic Energy Agency certifies that Tehran continues to comply.

Ms Mogherini admitted it was becoming “increasingly difficult” to keep the nuclear accord alive, but added: “Our focus is not to enter into a blame game . . . our focus is to keep the agreement in place.”

Iran had taken a “real gamble” with Europe by making its move on uranium stocks, said Esfandyar Batmanghelidj, founder of Bourse & Bazaar, a publication that focuses on Iranian politics and economics. “Are they going to strengthen the hand of those in Europe who feel like Europe could do more?” said Mr Batmanghelidj.

“Or does a step like this feed into the sense among certain European officials that basically this is turning into a lost cause?”

50

Wednesday 19 June 2019

BUSINESS DAY

FT

NATIONAL NEWS

Trump will have extended meeting with China’s Xi at G20 Offshore renminbi rallies on hopes of easing US-Sino trade tensions DEMETRI SEVASTOPULO

P

resident Donald Trump said Xi Jinping, his Chinese counterpart, had agreed to meet when the two leaders attend the G20 summit in Japan this month, raising hopes that the US and China will resurrect efforts to end the trade war.

Mr Trump on Tuesday tweeted that he had held a “very good telephone conversation” with Mr Xi about holding an expanded bilateral meeting at the end of June when Japan hosts the leaders of the G20 countries in Osaka.

“Had a very good telephone conversation with President Xi of China.

We will be having an extended meeting next week at the G-20 in Japan,” Mr Trump said on Twitter. “Our respective teams will begin talks

prior to our meeting.”

Mr Trump has previously suggested that the two leaders would meet at the G20 in Japan, but the White House had refused to clarify whether they would meet together as a group with the other world leaders or hold a separate bilateral meeting. The Chinese embassy did not immediately reply to a request for confirmation of the meeting.

The comments, which rekindled hopes that the US and China may be able to reach an agreement on their long running dispute, sent US stocks and the China’s offshore renminbi higher.

The so-called CNH rate — which is traded outside of mainland China (mainly in Hong Kong) — reversed a 0.1 per cent decline to trade 0.4 per cent higher at 6.903 per dollar.

Africa to propel world’s population towards 10bn by 2050 Sub-Saharan region on track to overtake central and south Asia as most populous CLIVE COOKSON

S

ub-Saharan Africa’s population is set to double over the next 30 years, adding an additional 1bn people and putting it on track to overtake central and south Asia soon after as the world’s most populous region.

The high fertility rates south of the Sahara mean that region of Africa will account for more than half of global population growth between now and 2050, according to projections from the UN Population Division report released on Monday. The region’s population will still be rising fast at the end of the century, when the number of people living in much of Asia and elsewhere will be in decline.

The trend is exemplified by Nigeria, whose population has already surged from 95m in 1990 to 201m this year. Nigeria’s population is set to double again to more than 400m by 2050, when it will have overtaken the US as the world’s third most inhabited country.

In Niger, where women on average have seven children, the highest birth rate in the world, the population is projected to almost triple to 66m over the same time period. “In 2050 it is expected that Niger will be the only country in the world experiencing a fertility level greater than four births per woman over a lifetime,” the report said.

Total population by SDG region Liu Zhenmin, UN head of economic and social affairs, commented: “Many of the fastest growing populations are in the poorest countries, where population growth brings additional challenges in the effort to eradicate poverty, achieve greater equality, combat hunger and malnutrition and strengthen . . . health and education systems.”

The report predicted the number of human inhabitants in the world would grow from 7.7bn today to 9.7bn in 2050 and 10.9bn in 2100. “The global population continues to grow, but the rate of increase is slower today than at any time since 1950 and we expect it to continue to slow over

the coming decades,” said Thomas Spoorenberg, UN population affairs officer.

Demographic experts analysed trends in fertility, mortality and migration for a year to come up with the projections, which are slightly below the previous estimates issued two years ago.

India is expected to overtake China as the world’s most populous country in or near 2027. By 2050, India with 1.6bn people will be well ahead of China whose population will then be back at the 2019 level of 1.4bn. Pakistan’s population, which stands at 217m, is one of the fastest growing outside Africa and a projected 338m in 2050.

At the other extreme, some places are experiencing population decline as a result of low fertility and high emigration rates.

Twenty-seven countries have fewer inhabitants now than in 2010 and the number expected to experience a decline between today and 2050 is 55.

Population is falling fastest in eastern Europe, where Lithuania stands out with a decline of 12 per cent between 2010 and 2019 and a further decrease of 27 per cent projected from now to 2050.

Although fertility and death rates drive global population changes, migration to escape violence or poverty can have a large local impact. Syria is the most striking example, recording a 20 per cent population decline since 2010 as a result of people fleeing the civil war.

Global population continues to grow but rate of increase slows Puerto Rico has lost 17 per cent of its inhabitants since 2010 through emigration and is expected to lose another 17 per cent over the next 30 years. The US has gained the most immigrants over the past 10 years — about 10m people — and Germany has added 5m.

People also continue to live longer, the UN report showed.

Average life expectancy at birth increased from 64.2 years in 1990 to 72.6 in 2019 and is expected to increase further to 77.1 in 2050. www.businessday.ng

US secretary of state Mike Pompeo walks in front of an image of an oil tanker he claimed was attacked by Iran © AP

Facebook unveils global digital coin called Libra Initial backers for new currency include Visa, Uber, Vodafone and Spotify HANNAH MURPHY

F

acebook has revealed plans for a new global digital currency backed by assets and supported by more than two dozen companies ranging from Visa and Mastercard to Lyft and Spotify, bringing the heft of the world’s largest social network to efforts to transform financial services.

The scope of Facebook’s ambitions for the new currency, called Libra, was made clear as it claimed 1.7bn people around the world without a bank account would be able to use it to make instant and nearly free international money transfers from their mobile phones.

In early trading, Facebook’s share price rose 1.8 per cent. The price of Bitcoin, the most famous cryptocurrency, was flat after the announcement at around $9,200 according to coinmarketcap.com, the highest it has been for a year.

With traditional banks and the other large technology companies sitting on the sidelines for now, and with regulators taking a cautious approach to digital currencies, Facebook on Tuesday began the task of persuading merchants to use Libra as a means of payment and consumers to see it as a safe store of value.

“The internet . . . has given everyone access to the world’s informa-

tion, and democratised access to free communications, but money has stayed the same,” said David Marcus, the former president of PayPal who joined Facebook in 2014 and has steered the Libra project.

So far 28 groups including payments companies, ecommerce groups and venture capital companies have said they will become backers and integrate the technology into their services. Some have signed up recently — PayPal said it had only been in talks with Facebook for a “few weeks” — but Facebook hopes that 100 groups will have joined before the currency launches next year.

Each founding partner in the Libra Association is expected to contribute a minimum of $10m to help kick-start the project.

Libra will be backed by a pool of currencies and assets stored around the world. It will not have a fixed exchange rate against any one traditional currency, such as dollars and euros, though it will not swing as wildly as cryptocurrencies such as bitcoin.

Apple, Google, Amazon and Microsoft have not yet signed up.

Banks decided not to join the starting roster because of uncertainties about regulation and concerns over logistical issues that could hamper take-up, several industry executives told the Financial Times.

Facebook’s move is the most

significant effort yet to bring blockchain technology, which does not rely on a central authority to issue money, into the mainstream and comes after the launch of hundreds of digital currencies, not least the 10-year-old bitcoin.

Chart showing that many lower income countries have large proportions of adults without bank accounts - but most have mobile phones.

“We believe that people will increasingly trust decentralised forms of governance,” said Facebook and its partners in a statement announcing their proposal.

“This could bring cryptocurrencies to the hundreds of millions,” said Jim Migdal, head of business development at Coinbase, a cryptocurrency exchange.

If successful, the project could dramatically reshape some corners of the finance industry, disintermediating payments platforms and stealing business from retail banks and fintech groups, particularly those that specialise in sending payments across borders.

Jorn Lambert, executive vicepresident for digital solutions at Mastercard, said he was not worried that fee-free transactions would threaten the payment card business.

“It’s an addition to what we do, not instead of what we do. It is not a zero-sum game. Today, 85 per cent of transactions are made in cash.”

South Africa/corporate governance: troubled waters A balancing force is required to avoid future scandals

S

outh Africa became the first country to protect the Great White shark back in 1991.

While the number of predators has still diminished offshore, plenty can be found swimming on the Johannesburg Stock Exchange. On Tuesday, South African insurer Old Mutual sacked its chief executive, Peter Moyo, suspended since last month. He left following a conflict of interest regarding investments.

His departure follows a spate of CEO scandals since early last year.

In Old Mutual’s case, the insurer knew about Mr Moyo’s situation when it appointed him two years ago. He founded NMT Capital, a private equity group in which an Old Mutual subsidiary took a 20

https://www.facebook.com/businessdayng

per cent stake in 2004. The two sides had promised to work to unwind this related party issue when Mr Moyo joined. With NMT and Old Mutual still both paying him, a break-up had to come. In the end, Mr Moyo will have to feed in other waters. That will not help close the yawning gap between Old Mutual’s 9 times forward price-to-earnings ratio and that of rival Sanlam at 16 times.

Old Mutual is not the only company fishing for a new boss.

This month, sugar producer and property owner Tongaat Hulett revealed accounting irregularities over the way it booked revenues on property transactions. CEO Peter Staude took a dive and shares @Businessdayng

have been suspended pending asset sales to cover losses, worth up to Rs4.5bn ($313m) according to the company. Local retailer Choppies this year suspended its CEO and top shareholder Ramachandran Ottapathu. The company has still not issued an annual report for 2018 following accounting irregularities raised by its auditor PwC. All these follow on from gross mismanagement by the erstwhile chief at supermarket chain Steinhoff. Problems in corporate stewardship persist. Better governance of misguided CEOs requires a balancing force, via management delegation, to avoid future scandals.

Wednesday 19 June 2019

BUSINESS DAY

51

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Markets swing on dovish Draghi and US-China trade hopes

Trump plan to meet Xi on trade sends US equities sharply higher

SYLVIA PFEIFER

G

lobal markets convulsed on Tuesday, boosted by signals that the European Central Bank is prepared to cut interest rates and by hopes of a meeting between Donald Trump and Xi Jinping aimed at resolving an impasse over trade.

Comments from Mario Draghi indicating the ECB is preparing fresh stimulus fired up the region’s stocks and European government bonds.

The stock market rally was further boosted in the US after Mr Trump wrote on Twitter that he was to meet his Chinese counterpart Xi Jinping at a G20 summit next week, raising hopes for an end to the SinoAmerican trade war.

He wrote that he had “a very good telephone conversation” with Mr Xi, and that the two would be having an extended meeting during next week’s G20 meeting in Japan.

The S&P 500 was 1.2 per cent higher in early trading while the tech-heavy Nasdaq Composite, whose constituents have been at the centre of the back and forth between the US and China, rose 1.9 per cent. The Euro Stoxx 600 climbed almost 2 per cent.

But some investors remained cautious. “I’m really worried about markets at the moment,” said Fabiana Fedeli, global head of fundamental equities at Robeco.

“They are latching on to whatever the short-term news flow is. They are a little bit complacent, and it is easy to be disappointed. The G20 talks offer a chance for that disappointment.”

Mr Draghi’s boost to European markets, including a blow to the euro, has provoked concern from Mr Trump, who wrote on Twitter that it was “very unfair to the United States”. He has been pressing the US

Federal Reserve to cut rates on his home turf.

Investors have been ratcheting up bets that the world’s major central banks will need to cut interest rates this year in response to slowing inflation and global economic growth.

New Zealand became the first G10 country to lower its rates in May. It was followed by Australia’s quarter-point cut two weeks ago week. Federal Reserve chair Jay Powell has hinted that the Fed could also pull the trigger at the coming meetings, while the Bank of Japan president has said that the bank was ready to ramp up stimulus if needed.

Mr Draghi further fanned investors’ expectations that global central banks will keep rates lower for longer on Tuesday after he said the ECB was prepared to cut rates or buy more government bonds if weak growth and inflation persist.

The comments set off a ferocious rally in global bonds earlier on Tuesday, with the buying pushing the yield on Germany’s benchmark 10-year bond to a new low of minus 0.32 per cent, while French and Swedish 10-year bond yields turned negative for the first time. Yields fall when prices rise, and negative yields show that investors are willing to take a guaranteed nominal loss from buying this paper.

Analysts and investors say that even without stronger global economic growth, central bank backing is enough to boost risky markets. “From a credit markets perspective, it is a support,” said Andrey Kuznetsov, a senior portfolio manager at Hermes. “Tenyear French yields have today flirted with zero, and the amount of negative-yielding assets globally is rising. Investors need to invest in something, so this encourages them to buy spread products.”

Carney keeping ‘open mind’ to Facebook backed digital currency

M

ark Carney, governor of the Bank of England, said he had an “open mind” to Libra, the new digital currency backed by Facebook, but there would be no “open door” to its launch and it would have to meet the “highest standards”.

Speaking at a central bankers conference in Portugal, Mr Carney said that if Libra was successful in attracting users “it would instantly become systemic and will have to be subject to the highest standards of regulation”.

This will come as a blow to Facebook which hoped to have a lighter touch regulatory regime.

The governor said the BoE was there to guarantee financial and monetary stability and would look at Facebook’s proposals “very closely and in a co-ordinated fashion at the level of the G7, the

Bank of International Settlements, the Financial Stability Board and the IMF”.

The BoE governor continued that the regulation he had in mind included rules to ensure the “operational resilience” of the payment system including resistance to cyber attacks, guaranteeing Libra did not facilitate money laundering and respected the data privacy of its users. He said the platform needed to be open so that other companies could join the system and build on it.

He said the payments systems around the world were highly unequal. In many countries there are free and instant tools to move money, while in others, including the US, it is slow and expensive and in that context, Mr Carney said he would view “something like Libra with an open mind to its potential utility”. www.businessday.ng

Managers rush to take advantage of record investor demand before downturn JAVIER ESPINOZA

T

he biggest European private equity groups are rushing to raise new mega funds as they seek to tap into record demand from investors before markets become tougher.

Luxembourg-based CVC Capital Partners is attempting to raise what would be Europe’s largest ever fund — potentially more than €18bn — as early as next year.

Stockholm-based EQT, which is considering a listing later this year, is set to raise a record flagship fund at around €14bn in 2020.

Both firms are planning to market the investments roughly a year earlier than expected, attempting to secure funds ahead of a potential economic downturn when raising capital would be harder.

Meanwhile, London-based BC Partners is expected to raise a new fund within the next 12 months, according to multiple people briefed on these moves.

All three firms declined to comment and people close to the capital raising warned that targets

and timings had not yet been set as discussions were “There is a wall of cash desperate to be assigned to a private equity fund,” said Ludovic Phalippou, professor of finance at Oxford Saïd Business School. “Private equity fund managers are simply taking it while it is there and twisting the terms and conditions of the funds in their favour while people are still hypnotised.”

Demand for private equity funds is being fuelled by an expectation among investors that the asset class will deliver strong returns in a low interest rate environment.

There has already been a flurry of mega funds launching in recent months, including Cinven’s €10bn, and Advent International’s $17.5bn. Data from Preqin shows fundraising is at its fastest pace since 2009 and the average size of funds globally is the largest it has ever been.

“Speed is undoubtedly picking up,” said a veteran fundraiser at a multibillion-euro private equity group in London. “People are nervous about what’s happening

in the economy. Private equity fundraising right now is a case of get out and get the money while the sun is still shining.”

Gareth Whiley, managing partner at London-based buyout fund Silverfleet Capital, said the increase in activity was “a result of record-low interest rates but also due to investor demand as a result of the success of private equity as an asset class”.

To be able to hit the market sooner, CVC removed a clause that forces the group to have at least 70 per cent of its previous fund invested before it raises another one.

Investors in existing funds often worry that launching a new vehicle will mean they lose out to the best deals. To appease concerns, CVC has promised it will first invest the current fund and will not draw fees on the new one until it starts deploying the money.

“Private equity groups want to have a fund in the bag so they can have protection should there be a downturn and it becomes harder to raise money,” said a veteran fundraising adviser.

Brussels threatens to cut off Swiss stocks trading access MEHREEN KHAN AND PHILIP STAFFORD

BoE governor says Libra would have to meet the ‘highest standards’ CHRIS GILES

Private equity groups prepare to raise mega funds

B

russels has warned Switzerland it will cut off the country’s stock traders from EU markets at the end of the month, saying it will not tolerate any “watering down” of the single market’s rules during a “decisive” phase in the Brexit talks.

In a letter to the Swiss president seen by the Financial Times, EU commissioner Johannes Hahn warned Bern that Brussels would not “accept any further attempts at footdragging or watering down internal market rules” from the Alpine nation after months of negotiations over an EU-Swiss framework deal.

The warning is particularly relevant for the UK, which will become an EU third country that will require its financial services sector to be granted “equivalence” rules like the Swiss to continue accessing EU markets after Brexit.

Brussels has been trying to upgrade its messy trading relationship

https://www.facebook.com/businessdayng

with Switzerland — which consists of around 120 bilateral treaties — into an “institutional framework” that would require the Swiss to automatically adopt some EU laws.

Negotiations on finalising the deal have floundered after the Swiss authorities launched a six month “public consultation” on the treaty at the end of last year. In a sign of frustration, the commission has warned Swiss stock exchanges will lose their ability to freely trade on EU markets by a deadline on June 30 if there is no progress on agreeing the deal.

Snags over the deal include whether Switzerland should allow EU citizens in the country to access Swiss social security benefits and rules around adopting Brussels state aid decisions. Earlier this month, Swiss authorities sent a letter to JeanClaude Juncker, EU Commission president, asking for clarifications over some contentious points. Brussels said the demands amounted to a reopening of the agreement.

“The letter explicitly asks the EU to take some language out from the package. If you take it out, you are not @Businessdayng

clarifying, you are modifying”, said a senior EU official.

In the letter to Swiss president Ueli Maurer, Mr Hahn accused Bern of “not engaging seriously” and “playing for time”. He added that an expiration of the trading access for Swiss bourses would be “just the warning shot across the bow [Switzerland] need”.

The commissioner confirmed Brussels was taking a firm line with Switzerland given the backdrop of the Brexit talks. Mr Hahn wrote that any attempt to soften the EU’s internal market rules would not be accepted “especially in what is probably the decisive phase regarding Brexit”.

Investors and trading executives fear that Europe’s integrated crossborder market for share trading will fragment if the equivalence permit expires at the end of June. Some EU governments, including Germany, have also warned against Brussels cutting off Swiss traders. Swiss authorities earlier this year put in place a number of contingency measures in the event that market access was not extended beyond June.

52

Wednesday 19 June 2019

BUSINESS DAY

FT

ANALYSIS

Google’s life sciences unit reveals data-driven opioid addiction centre

OneFifteen in Dayton aims to collect insights on 1,000 annual outpatient addicts HANNAH KUCHLER

O

n the corner of Hopeland Street in Dayton, Ohio — the epicentre of the US opioid epidemic — an old tool factory has been revived. Painted in bright greens and whites, and furnished with comfy chairs and a ping-pong table, the OneFifteen campus looks more like a tech company than a healthcare facility.

In fact the centre, which will open this summer, represents the first attempt by Verily, Google’s life sciences sister company, to bring a data-driven approach to treating patients with opioid use disorder.

Verily, which was spun out of the “moon shot” unit of Google’s parent company Alphabet four years ago and recently raised $1bn in a round led by private equity firm Silver Lake, hopes that the insights it gains from the 1,000 annual outpatients

Many people seeking treatment find it hard to get a place at the right time — and although there is significant evidence in favour of using medication such as buprenorphine for opioid dependence, more than half the counties in the US do not have a doctor qualified to prescribe it.

Ms Taylor believes we need to look at examples such as how much we know now about heart disease as a model for addiction treatment. “We just don’t have that sort of evidence yet for addiction medicine. That is something we are really hoping to do — advance the knowledge of what works for individuals suffering from addiction,” she said.

OneFifteen will collect data on its patients far beyond the strictly medical to better understand what are known as the “social determinants” of addiction. Alexandria Real Estate Equities used data about the challenges people face trying to access

Danielle Schlosser, principal research scientist at Verily, said it was ‘unbelievable’ that nine out of 10 people relapse after rehab

it hopes to treat at OneFifteen will transform the care of the more than 2m Americans suffering from opioid use disorder.

OneFifteen — named after the 115 fatal opioid overdoses a day in the US — will also respond to overdose emergencies and treat inpatients in a rehabilitation unit, and will later expand further to include a sober living facility.

Marti Taylor, OneFifteen chief executive, was a nurse in an HIV clinic at the height of the Aids crisis.

“At the time, I thought it was probably the worst public health epidemic I’d ever see. Now, fast forward a number of years, and we know that for individuals under 50, overdoses are the number one cause of death,” she said in a recent interview.

Montgomery County, where Dayton lies, had the most overdose deaths in the US in 2017. Partly thanks to a push to distribute Narcan, a spray that can reverse narcotic overdoses, the number fell in 2018 — but there have been no sustainable solutions for treating the vast number of patients in the county and across the country.

Last month, tornadoes ripped through Dayton, tearing off roofs and turning the skyline into a patchwork of blue tarpaulins. But metereologic modelling and the ability to send warnings to smartphones helped ensure few died.

OneFifteen wants to harness similar technologies — using data to predict relapse — to tackle the opioid crisis. Addiction treatment has largely been a cottage industry, underfunded and suffering from a lack of robust research.

treatment in the design of the site.

For example, in the outpatient facility, patients will be able to drop their children in a staffed childcare room, while they take their medicine, see a therapist or attend a group session.

“I think the behavioural health field is so far behind from the rest of medicine and not embracing evidence and science,” said Danielle Schlosser, principal research scientist at Verily. She said it was “unbelievable” that nine out of 10 people relapse after rehab. “As a scientist, it’s shocking, I have a hard time wrapping my mind around why this keeps happening.”

She added: “We’ve also done a lot of work on health platforms for disease management such as diabetes. Addiction is very much a chronic disease so some of the challenges you face in engagement, in deploying effective interventions and measuring what works, are the kind of tools we can use.”

OneFifteen said it would obey all relevant health data privacy laws.

But some privacy activists have criticised the current laws as out of date, because they only cover a narrow definition of health information and a particular set of healthcare providers and insurers.

Jeff Chester, executive director of the Center for Digital Democracy, said he believed Google was not the best entity to help people fight off the disease of addiction.

“I think policymakers, patients and their families have to be concerned when any company that is owned by Google further expands into one of the most sensitive areas of our lives — our health,” he said. www.businessday.ng

Real estate: post-crisis boom draws to a close After several years of cheap money and soaring prices, there are growing signs of problems in property markets JUDITH EVANS

W

h e n C h i n a’s Greenland Group launched its Spire project near Canary Wharf in east London in 2016, it promised the 67-storey residential skyscraper would be “a new iconic landmark on the London skyline”.

The £800m curved glass tower was set to include almost 800 luxury apartments, a 35th-floor spa, a cocktail bar, dancing fountains and lifts that would travel at six metres a second. But after piling works were completed a year ago, the Spire building site fell silent.

The project is undergoing a “review” after “the residential sector in London . . . changed significantly since Spire London was conceived in 2014”, the developer said. The changes in prime London real estate have indeed been stark: prices have since fallen more than 20 per cent.

The developer insists the building will go ahead, though possibly in an altered form. But the stalled site has brought back memories of the financial crisis, when from Ireland to Dubai, half-finished construction projects conceived at the peak were stopped in their tracks by collapsing markets, a lack of funding or insolvent developers.

The troubled development is one of many signs that the global real estate boom is drawing to a close after a decade of cheap money that followed the financial crisis.

Stores are shutting on New York’s Fifth Avenue as the retail sector suffers in the face of the relentless rise of ecommerce. In China, a frenzy of real estate speculation has led to millions of empty new-build apartments and to street protests over price drops. Listed real estate securities worldwide are trading at steep discounts to the book value of their assets, a phenomenon that in the past has heralded downturns.

Other parts of the market, such as offices in major cities, have remained healthy. But some respected figures are preparing for a broader slump. Sam Zell, the Chicago-based real estate billionaire known for his sell-off of a $36bn office portfolio on the eve of the financial crisis, has been selling again: he has disposed of almost all the properties within Equity Commonwealth, a $3.9bn real estate investment trust.

That process, he says, has

https://www.facebook.com/businessdayng

brought home the market shift.

“Four and a half years ago, when we put a property on the market, we had 17 bids, and 15 of them were real. Last year when we put one on the market, we had three bidders, and we hoped one was real,” he said.

“It’s clear that in the commercial real estate world, no one is clear about what values are.”

Eleven years have passed since the financial meltdown in which real estate played a starring role.

Portfolios of toxic residential mortgages paralysed credit markets, while some $40bn of risky commercial real estate exposure helped to bring down Lehman Brothers.

Real estate markets around the world now look very different from those before the crisis. Debt levels are lower, mortgage regulation tighter and speculative building more modest. A huge influx of institutional capital has entered real estate, as quantitative easing bloated markets and narrowed bond yields, forcing investors to look elsewhere for income. With interest rates set to remain lower for longer than was thought likely a year ago — economists expect the US Federal Reserve to actually cut rates this year — that search for yield is set to continue.

But that flow of cash has given rise to fears of a bubble. Real estate prices in global cities have soared to new highs: they are 45 per cent higher than at their previous peak in 2007, according to Real Capital Analytics. Yet vast sums are still pushing into the sector. Closed-ended real estate funds had raised a record $342bn of still-undeployed capital worldwide at the beginning of April, according to data from Preqin, of which $62bn was committed to debt funds — also a record.

“The real estate market has been ahead of itself. It’s been very much impacted by the fact that there is too much liquidity . . . There is too much capital chasing too few opportunities,” says Mr Zell.

Few observers believe the market faces an immediate crash. Chad Tredway, co-head of real estate banking in JPMorgan Chase’s commercial bank, says: “Everyone has been calling for a correction since 2014 or 2015 but nothing has really happened . . . I’m not feeling like from a pricing standpoint there are flashing red lights. I would tell you there definitely are yellow lights.”

But institutions’ exposure to real estate is on regulators’ radar. In its first financial stability report in November last year, the US Federal @Businessdayng

Reserve raised high commercial real estate prices as a key vulnerability.

“We are in the more mature part of this cycle, particularly in the US, and pricing is high in many places,” says Lauren Hochfelder Silverman, managing director in Morgan Stanley’s real estate investment division.

“We are finding interesting things to do but we are very disciplined and selective. We are very focused on downside protection.”

Mr Zell is one of a class of selfmade real estate investors who drove much of the industry in the second half of the 20th and early 21st centuries. But they are becoming a rare breed. Property markets once dominated by maverick individuals are now home to trillions in pension and insurance capital, often managed by investment groups such as Blackstone and Brookfield.

In 2007, Blackstone had real estate assets under management of $19.5bn; now it has more than seven times that.

The inexorable rise of economies in Asia, meanwhile, has meant that sovereign wealth funds, pension funds and insurers from China, Singapore and elsewhere have been equally hungry for global real estate assets, snapping up huge portfolios such as Blackstone’s Logicor warehouse group, bought for €12.25bn by China Investment Corporation in 2017.

The Spire project was part of a surge of Chinese investment into western cities. At $90bn, global cross-border real estate investment from Asia exceeded that originating from North America or Europe for the first time in 2017, according to property agency Knight Frank. “The world has become smaller. It used to be much more parochial in terms of where people would invest equity and deploy debt,” says Jim McCaffrey, managing director at Eastdil, a USbased real estate investment bank.

Doug Harmon, chairman of capital markets at UK property agency Cushman & Wakefield, says the “institutionalisation” of real estate means that “the game has changed”.

He adds: “It has become a much more boring, disciplined sector, but the foundations are stronger.”

But the influx of capital has also led to a desperation to deploy it. This has pushed up prices in unlikely corners of the market, from rented homes in Wilmington, Delaware to warehouses in the Czech Republic.

Cash has flooded into “alternative” forms of real estate such as student housing, elderly accommodation and healthcare buildings.

Connect; 54 Health Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

53

45 DMO; 53 54

Wednesday 19 June 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 19 June 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

OIL

Chad: Glencore puts Chad oilfields up for sale Page 56 GAS

Egypt: Tests under way to flow Israeli gas via EMG pipeline to Egypt Page 57 Market Insight

L-R : Chris Okunowo, 1st vice president, Institute of Directors, (IoD) Nigeria; Ahmed Rufai Mohammed, F.IoD, chairman of Governing Council / President, IoD Nigeria; Ije Jidenma, 2nd vice president, IoD, F.IoD handing out membership certificate to newly inducted member; Ransom Owan group managing director, Aiteo Power and Gas at the June 2019 New Members’ Induction in Lagos, Nigeria.

Debrief

Long before first oil flows, Senegal is already embroiled in corruption scandal FRANK UZUEGBUNAM

L Oil rises on tensions after Middle East tanker attacks Page 61 OPEC weekly basket price DAY

PRICE

14/6/19

61.25

13/6/19

61.51

12/6/19

61.01

11/6/19

62.56

10/6/19

63.01 Source: OPEC

ong before its first crude oil starts to flow, Senegal is already embroiled in massive energy contract scandal involving the president’s brother, Aliou Sall and UK oil major, BP. The British Broadcasting Corporation (BBC) recently published an investigation alleging that in a previously unpublished arrangement, BP agreed to pay Timis Corporation, a company run by Romanian-Australian tycoon Frank Timis, around $10 billion in royalty payments for its stake in the blocks Cayar Offshore Profond and St. Louis Profond.

Early history of the acreage reveal it contains one of the largest deposits of gas in the world.

The blocks, currently operated by BP, have caused controversy since 2012, when a previously unknown company

called Petro-Tim was unexpectedly awarded the licence to explore them despite having no known track record in the industry. Soon after, the president’s brother was hired at the company.

The BBC alleged that Timis in 2014 secretly paid $250,000 to a company run by Aliou Sall called Agritrans, based on documents it reviewed. Timis also paid Aliou Sall $1.5 million in salary over five years for his work in Petro-Tim, the company originally given the blocks before Timis Corporation, and that he was also offered $3 million in shares in Timis companies.

Protests against the deal erupted in the capital Dakar in 2016 during President Sall’s first term. Opposition leader Ousmane Sonko said citizens should demonstrate again.

Also, an influential group of opposition organisations called the Conference of Leaders, which includes former and current senior politicians said “the public prosecutor must

immediately initiate actions to unravel fraudulent and corrupt contracts.”

In a quick reaction, BP in a statement “rejects any implication that it acted improperly in the acquisition of our interests in Senegal” and that it “conducted extensive and appropriate due diligence” before acquiring the license.

It said the $10 billion figure quoted by the BBC was “wholly inaccurate”.

Aliou Sall also denied receiving the payment and called the BBC’s report “totally false”.

The African Energy Chamber in a statement rejected the accusations made by the BBC and believes “the case is about a sinister rush to judgment, an obsession to taint a reform-driven President and the oil industry at any cost and by any means, and certainly without an understanding of the facts and how the oil industry works”.

“BP’s acquisition of the blocks is well in line with the current tendering processes applied in Senegal. BP conducted

extensive and appropriate due diligences to ascertain the ownership and operation of the block. This was the same with Kosmos Energy”, stated African Energy Chamber.

The Chamber added that “the oil industry is about risk.

People who take risk need to be compensated. BP and Kosmos Energy are strong companies with great plans for Senegal, and very good track records in doing business in Africa. It is unfair for them to be demonized in this fashion when all the facts are not reviewed”.

All eyes are now on Senegal’s justice ministry who has asked prosecutors to launch an inquiry into the energy contracts.

President Macky Sall said the truth would be established although the government’s first response was to dismiss the allegations as false.

Senegal’s offshore oil and gas reserves have the potential to transform the country with volumes expected to rival some of the region’s biggest producers.

56

Wednesday 19 June 2019

BUSINESS DAY

oil

WEST AFRICA

Outlook

Chad: Glencore puts Chad oilfields up for sale

M

ining and trading giant Glencore has put its oilfields in Chad up for sale in a retreat from its foray into oil production following asset writedowns over the past

Brief

decade, sources said.

Like its oil trading peers, Glencore expanded in the upstream sector around a decade ago in order to secure oil flows, but the value of the assets tumbled with the oil price slump in late 2014.

News of the Chad oilfields sale coincides with the retirement of Glencore’s head of oil Alex Beard at the end of this month and the separation of its upstream oil interests from marketing.

The main producing fields are Mangara and Badila.

Glencore’s net oil production from the West African country accounted for more than half its net production at 7,700 barrels per day (bpd) out of a total net 12,700 bpd. By comparison, oil majors BP produces close to 4 million barrels of oil equivalent per day.

The sources said that Glencore put the assets up for sale less than a month ago and a data room including drilling and seismic details had recently been opened.

The sale is being jointly run by US bank Morgan Stanley and French bank Natixis.

Glencore was started by trader Marc Rich more than 40 years ago specialising in oil trading. Over the past 20 years, it expanded into coal and metals mining but oil production constituted a small part of its business. Its oil trading grew to 5 million barrels per day, making Glencore the world’s second largest oil trader.

It entered Chad in 2012 by buying minority stakes in some licences owned

by Calgary-based Caracal Energy and in 2014, the miner acquired the Chadfocused operator for $1.6 billion.

However, the purchase was ill-timed taking place just months before a major oil price slump and since 2015, Glencore has booked impairments of $1.9 billion on its Chad assets after it scaled back its development programme and froze drilling between early 2016 and the second half of 2017.

Ghana: Oil marketing companies apologise over fuel under-delivery

T

he Association of Oil Marketing Companies (AOMCs) has apologised to consumers who may have been affected by under delivery of fuel at various pumps.

The Association is however assuring of working closely with its members to ensure the situation does not recur.

A market survey by the Ghana Standards Authority at some fuel stations within the nation’s capital in May 2019 revealed that some of the fuel stations had tempered with their dispensing machines hence under supplied fuel purchased by consumers.

The survey found out that ten (10) out of the sixty-five (65) pump stations visited were under delivering fuel they sold to consumers. The move has triggered reaction from the Chamber of Petroleum Consumers (COPEC) which has among others called for stiffer sanctions to the OMCs which were identified to be complicit.

The OMCs included the three leading companies; Total, Goil and Shell which had some of their retail outlets flouting the standards set in dispensing fuel.

A statement issued by the AOMCs on

Cote d’Ivoire: Cote d’Ivoire to conclude talks on new contracts

C

ote d’Ivoire is expected to finalize the licensing procedures for six oil blocks this month with the outcome likely to boost the West African country’s drive to attract increased investment in its upstream activities and enable it double output by 2020 in line with the National Development Plan.

The six blocks are part of the 22 new ones that Cote d’Ivoire had offered for sale in 2017 but had no fixed time for their disposal but left them open for negotiation except those that attracted more suitors to necessitate an auction.

“If we get an expression of interest from one party for a block, we will negotiate with them directly. If several express interest, then there will be a bidding process for that block,” Abdourahmane Cisse, minister for petroleum, energy and renewable energy, said.

Already UK’s Tullow Oil, Italy’s ENI and France’s Total SA are involved in exploration ventures in Cote d’Ivoire even as the

government of President Alassane Ouattara intensifies campaigns to woo more local companies and independents to take up the lucrative deep and ultra-deep water oil and gas opportunities.

“It is a sign that they (majors) actu-

www.businessday.ng

ally believe in the country. Otherwise they won’t be looking at it. We won’t have a remake of 2010,” he said in Cape Town in reference to the political crisis in the West African country sparked off by the declaration of Laurent Gbagbo, the President of Ivory Coast since 2000, as the winner of the 2010 Presidential election, the first poll in the country in 10 years.

With the expected conclusion of the six contracts this month, Cote d’Ivoire is optimistic the country’s portrayal of itself as a preferred investment destination for gas and oil in West Africa would attract exploration and production companies with the necessary wherewithal to dive deep into its ultra-deep space in search of crude oil and natural gas.

In 2017 Eni strengthened its position in Cote d’Ivoire’s upstream operations when it acquired majority share in deep offshore blocks CI-101 and CI-205 in water depths ranging between 200m and 2700m.

https://www.facebook.com/businessdayng

the matter further said that the affected companies have since rectified the issues that were detected by the Metrology Department of the Ghana Standards Authority (GSA).

“These credible and sustainable Oil Marketing Companies (OMCs) mentioned, have since corrected the issues raised by the GSA during the audit of their retail outlets,” the statement said.

“It is worth noting that these companies have quality vans and personnel with excellent technical know-how who periodically embark on visits to their respective retail outlets in order to ensure the right quality, quantity and pricing is delivered to consumers across the country.”

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

gas Brief

Australia dominates China’s LNG Supply

A

ustralia’s fast-expanding liquefied natural gas industry has this year been supplying the lion’s share of China’s growing demand for imports of the commodity, with appetite surging as Beijing shifts away from dirtier fuels such as coal.

Australia supplied over 53 percent of China’s LNG imports during the first five months of 2019, shipping data in Refinitiv showed, up from around 40 percent in 2016 when a previous round of new Australian export projects started to ramp up.

With Royal Dutch Shell’s Prelude facility delivering its first LNG cargo from northwest Australia, that share is likely to increase further. Prelude’s start-up completes a $200 billion LNG construction boom that is putting Australia on track to surpass Qatar as the world’s top exporter of the fuel.

“With uncertainty of demand in more traditional LNG markets, China has emerged as the largest source of new LNG demand growth, and hence a focus for LNG marketing efforts for the next wave of Australian LNG volumes,” said Saul Kavonic, an analyst with Credit Suisse.

The export surge means Australia is well ahead of China’s traditional main suppliers of gas such as Malaysia, Qatar

57

WEST AFRICA

ENERGY intelligence

Egypt: Tests under way to flow Israeli gas via EMG pipeline to Egypt

T

ests to flow Israeli gas through the East Mediterranean Gas (EMG) pipeline to Egypt are now under way and are expected to be concluded at the end of this month ahead of the startup of significant exports later in the year, an industry source told S&P Global Platts.

US-based producer Noble Energy and its Israeli partner Delek Drilling, together with Egyptian-owned Sphinx EG, in September last year agreed to buy a 39 percent stake in the idled EMG pipeline for $518 million as part of plans to use the pipeline in reverse for Israeli gas to flow to Egypt.

“Tests are under way and are on track to be completed as scheduled by the end of June. Once that is done, gas from the Tamar field can start to flow through the EMG pipeline on an interruptible basis,” the source said.

The pipeline, which runs for 90 km off the Israeli and Egyptian coasts, connects the Israel pipeline network from Ashkelon to the Egyptian pipeline network near El Arish.

It started operations in 2008 to flow Egyptian gas to Israel until 2012 when operations were halted as Egypt’s gas production began to decline after the Arab Spring the previous year.

Noble, operator of both the producing Tamar field and the giant Leviathan field due online at the end

of 2019, has said it expects to flow at least 350 MMcf/d (10 million cu m/d) through the EMG pipeline once Leviathan starts. The pipeline has a design capacity of 7 Bcm/year, or 19 million cu m/d.

The deliveries will be part of a deal signed in February 2018 to supply Egypt’s Dolphinus Holdings with 64 Bcm

of Israeli gas over a 10-year period.

Noble and Delek also agreed a deal to supply gas from Leviathan to Israel’s main utility, the Israel Electric Corp.

(IEC), for up to two years from its startup. The agreement, worth some $700 million, will give the Leviathan partners another guaranteed market for the first stage development of the giant field.

Ghana: Price of domestic gas will drop soon - Adam

G

hana’s Deputy Minister for Energy in charge of Petroleum, Mohammed Amin Adam says the price of domestic gas will soon drop on the markets.

According to him, the government is recalibrating domestic gas prices to be able to achieve the target.

The decision to recalibrate follows various complaints from businesses about the high cost of the commodity which makes it difficult for their businesses to thrive.

While delivering his keynote address at the Ghana mining and Energy Summit in Accra, Adam said gas prices will be reduced soon.

“We are also recalibrating domestic gas prices. We are doing all this because we know that cheaper sources of power are essential for the growth of our economy; essential for your operation as mining companies and essential if we have to accelerate the development of our country for the benefit of our people,” Adam said.

He further assured that the era of the constant power outage is over with various government interventions in place.

and Indonesia, as well as newer exporter the United States.

The United States, which only started LNG exports in 2016, initially saw increases to China, supplying a peak of around 10 percent of its overall imports last year. But shipments have all but ceased after Beijing enacted a 25 percent tariff on US supply as part of a tit-for-tat trade dispute with Washington.

“The China-US trade dispute has had an impact on LNG markets. The tariffs make US LNG much less cost-competitive for Chinese buyers, so they have to consider other options,” said James Taverner of consultancy IHS Markit.

With production surging across the world, the Asian LNG market has become oversupplied just as demand stutters from traditional buyers like Japan, resulting in a 60 percent plunge in prices since last year to near record lows of just over $4 per million British thermal units. www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

58

Wednesday 19 June 2019

BUSINESS DAY

power

WEST AFRICA

ENERGY intelligence

Tunisia: Tunisia boosts renewables with ‘game-changing’ solar tender

Global renewables market employed 11m in 2018

E

T

unisia is set to select the winners of its “game-changing” 500 megawatt (MW) solar energy concessions tender by September as it seeks to attract more foreign investment in renewable energy, industry and energy minister Slim Feriani said.

The 16 shortlisted candidates will submit their final offers to the North African country’s government next month, Feriani said on the sidelines of an Africa Energy Forum in Lisbon.

The interested investors are mostly from Europe but also from North America and Asia, he told Reuters.

Describing the tender as ambitious, Feriani said he expected the winners to start producing solar energy within 12 to 18 months of the announcement.

“The tender will be a game-changer because we will boost the production of energy in Tunisia through environmentally friendly energy,” Feriani said. “This is the way the world goes.”

The 500 MW tender is part of a bigger programme launched by Tunisia’s government which expects to reach 3,500 MW of renewable energy, both solar and wind, by 2030, covering 30 percent of the country’s electricity.

“When we set the target of 3,500 MW we were quite careful and cautious but today, given the speed of how things are moving, we have seen the pace accelerating,” he said.

“If we keep pushing we can do a lot more, we think the 3,500 MW can be achieved much quicker than 2030,” he added.

Over the last 20 years, Tunisia has only been able to build around 300 MW of renewable energy capacity, mainly wind and hydroelectric, Feriani said.

Even with many economic problems, such as high inflation and unemployment, still to be resolved, Feriani said that since Tunisia’s transition to democracy in 2011, the country has been able

to rebuild confidence among investors in various economic sectors, beyond traditional tourism.

“The democratic world is very keen to see Tunisia as a success story in this part of the world,” he said. “Economy is about confidence, we need consumer confidence but also investor confidence.”

Asked if the conflict in neighbouring Libya could have a negative impact on Tunisia’s energy sector, Feriani acknowledged that “there are some issues” but said Tunisia has to “keep moving” and is “open for business”.

leven million people were employed in renewable energy worldwide in 2018 according to the latest analysis by the International Renewable Energy Agency (IRENA). This compares with 10.3 million in 2017.

As more and more countries manufacture, trade and install renewable energy technologies, the latest Renewable Energy and Jobs annual review finds that renewables jobs grew to their highest level despite slower growth in key renewable energy markets including China.

The diversification of the renewable energy supply chain is changing the sector’s geographic footprint. Until now, renewable energy industries have remained relatively concentrated in a handful of major markets, such as China, the United States and the European Union.

Increasingly, however, East and Southeast Asian countries have emerged alongside China as key exporters of solar photovoltaic (PV) panels. Countries including Malaysia, Thailand and Vietnam were responsible for a greater share of growth in renewables jobs last year, which allowed Asia to maintain a 60 percent share of renewable energy jobs worldwide.

“Beyond climate goals, governments are prioritising renewables as a driver of low-carbon economic growth in recognition of the numerous employment opportunities created by the transition to renewables,” said Francesco La Camera, Director-General of IRENA. Solar photovoltaic (PV) and wind remain the most dynamic of all renewable

Egypt: Egypt in $500m settlement with Israel Electric Corp

E

gypt has signed a $500 million settlement with state-owned Israel Electric Corp over a defunct natural gas deal, the Egyptian General Petroleum Corporation (EGPC)

and Egyptian Natural Gas (EGAS) said in a statement.

The statement said under the agreement, Egypt will pay the amount over a period of 8-1/2 years in exchange for

www.businessday.ng

the Israeli company dropping all other claims resulting from a 2015 arbitration decision.

The International Chamber of Commerce in 2015 ordered Egypt to pay Israel Electric about $1.8 billion in compensation after a deal to export gas to Israel via pipeline collapsed in 2012 after attacks by insurgents in Egypt’s Sinai peninsula.

Egypt appealed the decision and began discussions on a settlement. The EGPC and EGAS statement said the agreement was reached with government support and as part of efforts to ensure a “conducive investment environment”.

Israel’s Delek Drilling and its partner Noble Energy signed a landmark deal early last year to export $15 billion in natural gas from Israeli offshore fields Tamar and Leviathan to a customer in Egypt.

A Delek Drilling executive said on June 2 that the company hopes to begin commercial sales of natural gas to Egypt by the end of this month. Israeli officials called it the most significant deal to emerge since the neighbours made peace in 1979.

https://www.facebook.com/businessdayng

energy industries. Accounting for onethird of the total renewable energy workflow, solar PV retains the top spot in 2018, ahead of liquid biofuels, hydropower, and wind power. Geographically, Asia hosts over three million PV jobs, nearly ninetenths of the global total.

Most of the wind industry’s activity still occurs on land and is responsible for the bulk of the sector’s 1.2 million jobs.

China alone accounts for 44 per cent of global wind employment, followed by Germany and the United States. Offshore wind could be an especially attractive option for leveraging domestic capacity and exploiting synergies with the oil and gas industry.

The solar PV industry retains the top spot, with a third of the total renewable energy workforce. In 2018, PV employment expanded in India, Southeast Asia and Brazil, while China, the United States, Japan and the European Union lost jobs.

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

59

POLICY

WEST AFRICA

ENERGY intelligence

Enhancing energy security in Africa - the time is NOW

T

he African Energy Chamber calls on African governments and oil companies to do more to protect the security of energy infrastructure

in Africa.

Oil and gas infrastructure is quickly becoming a principal target for terrorists, rogue organizations, hostile state and non-state actors, and criminal enterprises. The recent attacks in the Middle East - the drone attack on the Saudi Aramco pipelines and the attacks on oil tankers in the Gulf of Oman - validate a precedent (and unfortunately techniques, tactics, and procedures for those with malicious intent) of using noncomplex attack methods to create complex problems for owners/operators of energy and natural resource assets.

As is the case in the Middle East, Africa is seeing an increase in attacks on critical energy infrastructure and natural resource assets: assaults on a gas processing plant, pipeline vandalism, rebel attacks on oil fields and refineries, and ransomware attacks.

One of the major concerns generated by attacks on energy and natural resource assets is the catastrophic impact on the supply of energy products and services across Africa. “The local, regional, and global demand for the energy and natural resource assets owned

by African nations is constantly growing. Most nations in Africa depend on the availability of supply of their Natural Resource Assets to generate economic

Snapshot

African countries and Oil and Gas companies have to mobilize immediately and take the necessary steps to address this problem

value for their respective societies.

The same is true for the power supply they generate from their critical energy infrastructure assets which create offtake opportunities – locally, regionally, and globally”. Said Derek Campbell, CEO of Energy & Natural Resource Security, Inc., who served in Operation Iraqi Freedom and Operation Enduring Freedom, with distinction, earning the Bronze Star in Afghanistan. He served as the US Marine & Naval Attaché to Nigeria. “If this availability of supply is attacked and disrupted, secondary and tertiary negative effects will severely impact companies, industries, and nations relying on this www.businessday.ng

supply of energy products and services from African energy and natural resource owners/operators”. Added Derek Campbell.

Another major concern generated by attacks on energy and natural resource assets is the impact that these events have on economies that rely on these assets to create revenue. “As with impacts on supply, security threats – physical and cyber – pose an immense danger to all major sectors of the Oil & Gas, Power & Utility, and Natural Resource economic value chain. This is largely due to sector overlap and interdependency. A physical or cyber-attack on an upstream

https://www.facebook.com/businessdayng

asset can cause operational challenges midstream that can cause financial catastrophes at the downstream end.” The same is true in reverse – a downstream physical or cyber-attack can disrupt midstream operations and bring upstream activity to a halt for a producer.

“The same scenario can be applied to power assets – generation, transmission, and distribution. These types of disruptions can not only negatively impact jobs at the local market level but can also have disastrous impacts on the central banks of African nations who rely on the revenue generated from it is critical energy infrastructure and natural resource assets”. Added Derek Campbell.

“African countries and Oil and Gas companies have to mobilize immediately and take the necessary steps to address this problem. The Chamber will continue to support any efforts to ensure stability and security of oil and gas infrastructure – both onshore and offshore. It is in the best interest of business and citizens to see this happen”. Stated NJ Ayuk chief executive officer of Centurion Law Group and executive chairman of the African Energy Chamber.

Protecting and improving the resilience of energy systems mandates vigilance, contingency planning, and training – ultimately requiring African energy stakeholders to be actively and immediately engaged in the physical and cyber protection of their critical energy infrastructure and natural resource assets.

@Businessdayng

60

Wednesday 19 June 2019

BUSINESS DAY

finance people appointments

WEST AFRICA

ENERGYintelligence

South Sudanese president appoints new oil minister

Brief

T

Ship insurance costs soar after Middle East tanker attacks

I

nsurance costs for ships sailing through the Middle East have increased by at least 10 percent after attacks on two tankers in the Gulf of Oman, with the potential for costs to rise further as regional tensions escalate, ship insurers said.

The attacks have already stoked concerns about reduced flows of crude oil on one of the world’s key shipping routes, pushing up oil prices by as much as 4.5 percent.

Some tanker companies have already suspended new bookings to the Middle East Gulf.

Freight rates for supertankers transporting oil from the Middle East Gulf to Asia were already close to a two-month high at nearly $13,000 a day, up nearly $2,000.

Every ship needs various forms of insurance, including annual war-risk cover as well as an additional ‘breach’ premium when entering high-risk areas. These separate premiums are calculated according to the value of the ship, or hull, for a seven-day period.

Ship insurers say the biggest vessels sailing through the Gulf area face additional costs of up to $200,000 for a single sevenday voyage, roughly twice as expensive as earlier this week.

“The facts on the ground have changed. If any of those tankers sink, you will see a rise across the board in the annual war premiums,” one underwriter said.

“This is not the first incident, and what we are seeing (with rates going up) reflects the worsening situation in the area.”

On May 17 the London insurance market’s Joint War Committee extended the list of waters deemed high risk to include Oman, the United Arab Emirates and the Gulf after separate ship attacks off Fujairah.

Washington has blamed Iran or its proxies for attacks on May 12 that crippled four oil tankers in the same area. It also said Tehran was behind May 14 drone strikes on two Saudi oilpumping stations. Tehran has denied all the allegations.

“War-risk premiums have already gone up since the decision by the Joint War Committee to extend the high-risk zone and they are now in the double digits,” said Marcus Baker, global head of the marine practice at insurance broker Marsh.

About a fifth of the oil consumed globally passes through the Strait of Hormuz, shipped from Gulf energy producers, including Saudi Arabia, the world’s biggest crude exporter.

US President Donald Trump blamed Iran for the attacks after the US military released a video it said showed Iran’s elite Revolutionary Guards were behind the attacks.

Iran has said it is alarming and wrong of Washington to blame Tehran for the attacks.

Jonathan Moss, head of transport and shipping with law firm DWF, said the extent of geopolitical turmoil had not been seen since the US war in Iraq in 2003, when underwriters increased premiums on fears of claims arising from collisions, groundings and attacks on ships and oil facilities. www.businessday.ng

he South Sudanese president has appointed a new petroleum minister, removing Ezekiel Lol Gatkuoth, the presidential spokesman said, but the reasons for the move were unclear.

The ministry is one of the most powerful in the country.

South Sudan gets almost all of its revenues from oil and has been boosting production as it struggles to rebuild its shattered economy from the wreckage of a five-year civil war.

Gatkuoth has been replaced

by Awow Daniel Chuang, the director general at the ministry, said President Salva Kiir’s spokesman, Ateny Wek Ateny.

“Ezekiel Lol, the minister of Petroleum has been relieved and replaced by his director general Awow Daniel as new minister of petroleum,” Ateny said.

“It is the routine duty of the president to sack or appoint government officials,” Ateny said when asked the reason for the move. He declined to give further details.

South Sudan’s total oil production is nearly 180,000 barrels per day (bpd), according to offi-

cial figures. But the government is keen to reach pre-war levels of 350,000 to 400,000 bpd by mid2020. A fragile ceasefire reached in September ended the civil war, but plans to form a unity government in May were delayed after there was no funding to disarm, retrain and integrate militias and rebels.

It is still unclear when a unity government might be formed, but Kiir has said it could take at least a year. Rebel leader Riek Machar is in exile in neighbouring Sudan, which used to rule South Sudan until the south became an independent country in 2011 following decades of scorched-earth conflict.

Egypt mulls licensing round to cover western parts of Mediterranean waters

E

gypt is looking at launching a new license round for blocks in the western parts of Egypt’s Mediterranean waters following on from two other recent exploration rounds, a source at state-owned Egyptian Natural Gas Holding Company (EGAS) said.

Egypt has had significant success in recent years with major gas discoveries, including the supergiant 30 Tcf (850 Bcm) Zohr find and a string of other finds both on- and offshore.

In February, BP, Eni, ExxonMobil and Shell were among

https://www.facebook.com/businessdayng

companies awarded blocks in a wide-reaching exploration round covering a number of East Mediterranean offshore blocks and some onshore zones.

A round was also launched in March for 10 blocks in Egypt’s sector of the Red Sea. Some 11 blocks were also now expected to be put up for auction in western parts of offshore Egypt’s Mediterranean waters, with reports that the round could be launched by the end of 2019 or the start of next year.

Egypt has offered attractive terms to companies looking for @Businessdayng

a share of the country’s vast resources.

Zohr, and additional Egyptian gas field start-ups, made the country self-sufficient in gas last September and Egypt has since become an exporter of gas once again, having been forced to import LNG for several years to meet domestic demand.

Its gas production rose to some 58 Bcm in 2018, according to estimates from BP and the International Energy Agency, its highest level since 2012.

The oil ministry has said it expected production to increase to some 80 Bcm/year in 2020.

Zohr alone could produce as much as 3.2 Bcf/d in the coming years.

Despite the optimism, the IEA said earlier this month it expected Egyptian gas output to peak at 77 Bcm by 2024 at an annual growth rate of around 4.8 percent.

The IEA also said it expected the policy of prioritizing domestic use will remain in force for the foreseeable future and that Egypt’s exports will remain at a maximum of 4 Bcm/year.

Wednesday 19 June 2019

BUSINESS DAY

marketinsight

61

WEST AFRICA

ENERGY intelligence OPEC Flakes Algeria floats idea of larger OPEC+ oil cut

A Oil rises on tensions after Middle East tanker attacks

O

il prices rose after US Secretary of State Mike Pompeo said Washington will take all actions necessary to guarantee safe navigation in the Middle East, as tensions mounted following attacks on tankers.

Brent futures rose 27 cents, 0.4 percent to $62.28 a barrel. US West Texas Intermediate (WTI) crude futures were up 18 cents, or 0.4 percent, at $52.69 a barrel.

Prices had jumped as much as 4.5 percent after the attacks on two oil tankers near Iran and the Strait of Hormuz.

It was the second time in a month tankers have been attacked in the world’s most important zone

for oil supplies as tensions increase between the United States and Iran. Washington blamed Iran for the attacks, prompting a denial and criticism from Tehran.

“We don’t want war. We’ve done what we can to deter this,” Pompeo said in an interview with Fox News, adding: “The Iranians should understand very clearly that we will continue to take actions that deter Iran from engaging in this kind of behaviour.”

Tensions between Iran and the United States have risen since President Donald Trump pulled out of a deal last year between Iran and global powers that aimed to curb Tehran’s nuclear ambitions in exchange for sanctions relief.

Iran has repeatedly warned it would block the Strait of Hormuz if it cannot sell its oil because of US sanctions.

Also supporting prices were comments by the Saudi energy minister, Khalid al-Falih, that OPEC would probably meet in the first week of July and he hoped it would reach an agreement on extending oil output curbs.

The Organization of the Petroleum Exporting Countries plus Russia and other producers, an alliance known as OPEC+, have a deal to cut output by 1.2 million barrels per day (bpd) from January 1. The pact ends this month and the group meets in coming weeks to decide the next move.

IEA cuts 2019 estimate for oil demand growth on global trade worries

T

he outlook for oil demand growth in 2019 has dimmed due to worsening prospects for world trade, the International Energy Agency (IEA) said, although stimulus packages and developing countries should boost growth going into 2020.

The Paris-based IEA, which coordinates the energy policies of industrial nations, revised down its 2019 demand growth estimate by 100,000 barrels to 1.2

million barrels per day (bpd), but said it would climb to 1.4 million bpd for 2020.

“The main focus is on oil demand as economic sentiment weakens. The consequences for oil demand are becoming apparent,” the IEA said in its monthly oil report.

“The worsening trade outlook is a common theme across all regions”, it added.

The oil demand growth forecast assumes the maintenance of US and Chinese tariffs imposed on goods in 2018, but the IEA said it had not factored in further US tariffs announced in May. The IEA also attributed lacklustre demand growth in the first half of the year to a slowdown in the petrochemicals industry in Europe, warmer than average weather in the northern hemisphere and stalled US gasoline and diesel demand.

Demand growth was likely to www.businessday.ng

pick up to 1.6 million bpd in the second half of the year on government measures to mitigate the economic slowdown and robust consumption in the nondeveloped world.

“Stimulus packages are likely to support growth in the short term. In addition, the major central banks have stopped or slowed interest rate increases, which should support growth in 2H19 and 2020,” the IEA wrote.

US sanctions on Iran and Venezuela, an output cut pact by the Organization of the Petroleum Exporting Countries (OPEC) plus its allies, fighting in Libya and attacks on tankers in the Gulf of Oman added only limited uncertainty to supply, the IEA said.

Iran’s production plunged by 210,000 bpd in May to 2.4 mln bpd, the IEA said, its lowest levels since the Iran-Iraq war in the 1980s. Exports fell 480,000 bpd to 810,000 bpd.

https://www.facebook.com/businessdayng

lgeria has floated an idea of increasing an oil supply cut by OPEC and its allies in the second half of 2019 as demand falters, OPEC sources said, although rolling over current output curbs is still the most likely scenario.

Oil has tumbled from a 2019 peak above $75 a barrel in April to $61 a barrel now on concerns about weakening demand due to a US-China trade dispute and an economic slowdown, raising alarm among some oil exporters.

The Organization of the Petroleum Exporting Countries plus Russia and other producers, an alliance known as OPEC+, have implemented a deal since Jan. 1 to cut output by 1.2 million barrels per day (bpd).

The pact ends this month and the group meets in coming weeks to decide their next move, which sources said would most likely involve rolling over the existing cuts.

But four OPEC sources familiar with the matter said Algeria had put forward the idea of increasing the cut to 1.8 million bpd. Two of the sources, both OPEC delegates, said the idea was not a concrete proposal and was not being discussed formally.

“It is just thinking aloud about what to do in case trade tensions are exacerbated with potentially huge adverse impacts on the world economy, and thus oil demand,” said one of the sources familiar with the matter.

The outcome of a possible summit between US President Donald Trump and Chinese President Xi Jinping at the G-20 summit in Japan expected on June 28 would be key to determining the fate of the Algerian idea, the source added.

The meeting of the world’s two largest consumers would give OPEC some idea about any “softening of tone or exacerbation of trade tensions,” the source said.

Goldman sees hard path to OPEC+ extension for Russia, Saudis

U

ncertainty over oil supply and demand fundamentals is making it tougher for Russia and Saudi Arabia, the architects of the OPEC+ deal, to reconcile their differences over the framework for an extension of their output pact into the second half, according to Goldman Sachs Group.

Current demand growth “neither will support exiting the production agreement, nor is bad enough to reinforce more cuts,” Goldman Sachs Head of Commodity Research Jeffrey Currie said in an interview in St. Petersburg. Combined with uncertainty over Iranian exports and growing US shale output, it “becomes

@Businessdayng

increasingly difficult to know what production levels will balance the market.”

As OPEC and its allies prepare to discuss the output cap in Vienna, oil analysts are weighing the chances of a potential oversupply amid slower demand growth. A weakening in consumption may require the group to extend cuts, a task which Russia may not be ready to sign up to.

US crude inventories typify this supply ambiguity. Stockpiles are currently at the highest level since mid-2017, according to Energy Information Administration data.

“It’s much easier to unify a position, when there is a supply disruption or a strong demand, then both Russia and Saudi Arabia want to grow production,” Currie said on the sidelines of the St. Petersburg International Economic Forum.

But now “it’s a very middling environment. This makes those tensions between Russia and Saudi Arabia more apparent.”

Saudi Arabia, which has pushed OPEC+ to prolong production cuts, needs about $85/ bbl, well above current levels of just above $63/bbl, to balance its budget this year. Goldman Sachs retains its price outlook at $65/bbl in the third quarter and $60/bbl for 2020.

62

Wednesday 19 June 2019

BUSINESS DAY

WEST AFRICA

talking points

ENERGY intelligence

IEA explains why there was lower oil demand in Q1 2019 DIPO OLADEHINDE

T

he International Energy Agency (IEA) has said the reason why there was lower oil demand in the first Quarter 2019 was due to lower oil demand from Organization for Economic Co-operation and Development (OECD) countries.

The Paris-based IEA, which coordinates the energy policies of industrial nations said unlike Q1 2018, the first quarter 2019 growth was only 0.3 million barrel per day (mbd) which was the lowest for any quarter since Q4 2011.

“The main weakness was in OECD countries where demand fell by a significant 0.6 mbpd, spread across all regions,” IEA said in its special monthly report.

OECD, is a think tank group of 34 member countries that discuss and develop economic and social policy.

According to the IEA various factors behind the decline include winter in Japan, a slowdown in the petrochemicals industry in Europe, indifferent gasoline and diesel demand in the United States, coupled with the worsening trade out-

look which is a common theme across all regions.

In contrast, the non-OECD world saw demand rise by 0.9 mbpd, although recent data for China suggest that growth in April was a lacklustre of 0.2 mbpd.

“In 2Q19, we see global demand growth of 0.1 mbpd lower than last month’s Report. For now though, there is optimism that the latter part of this year and next year will see an improved economic picture,” IEA said in its special report.

The OECD sees global GDP growth rebounding to 3.4percent in 2020, assuming that trade disputes are resolved and confidence rebuilds which suggests that global oil demand growth will have scope to recover from 1.2 mbpd in 2019 to 1.4 mbpd in 2020.

IEA said demand growth was likely to pick up to 1.6 million bpd in the second half of the year on government measures to mitigate the economic slowdown and robust consumption in the non-developed world.

“Stimulus packages are likely to support growth in the short term. In addition, the major central banks have stopped or slowed interest rate increases, which should support growth in

www.businessday.ng

Snapshot

World oil demand will rise by 1.14 million barrels per day (bpd) this year, 70,000 bpd less than previously expected

2H19 and 2020,” the IEA wrote.

“US sanctions on Iran and Venezuela, an output cut pact by the Organization of the Petroleum Exporting Countries (OPEC) plus its allies, fighting in Libya and attacks on tankers in the Gulf of Oman added only limited uncertainty to supply,” the IEA said.

Surging US supply as well as gains

https://www.facebook.com/businessdayng

from Brazil, Canada and Norway would contribute to an increase in non-OPEC supply of 1.9 million bpd this year and 2.3 million bpd in 2020.

On June 13, OPEC cut its forecast for growth in global oil demand, building a case for prolonged supply restraint in the rest of 2019.

The producer group and its allies meet in the coming weeks to decide whether to maintain supply curbs. Some members are worried about a steep slide in prices, despite demands from US President Donald Trump for action to lower the cost of oil.

“World oil demand will rise by 1.14 million barrels per day (bpd) this year, 70,000 bpd less than previously expected,” OPEC said in a monthly report published on June 13.

Recall, OPEC, Russia and other producers have since January 1 implemented a deal to cut output by 1.2 million bpd. The alliance, known as OPEC+, is due to meet on June 25-26 or in early July to decide whether to extend the pact.

Despite the supply cut, oil has tumbled to $61 a barrel from April’s 2019 peak above $75, pressured by concern over the US-China trade dispute and an economic slowdown.

@Businessdayng

Wednesday 19 June 2019

BUSINESS DAY

63

POLITICS & POLICY

Be pro-active in tackling insecurity - Gani Adams tells IG …seeks collaboration between police, OPC Iniobong Iwok

G

ani Adams, Aare Onakakanfo of Yorubaland, has c ha rg e d t h e Inspector General of Police, Muhammed Adamu, on the need to be proactive in tackling the various security issues in the country.

Speaking during a meeting with the representatives of the Inspector General of Police, Wednesday, Adams restated his beliefs in boosting local security, saying the best measure is to get people at the grassroots involved in local security.

He told the top police hierarchy that as the Aare Onakakanfo of Yorubaland, there are pressures on him to act on the issues.

Adams revealed that the Oodua People’s Congress (OPC) was ready to partner the police, in solving the security challenges in the country, adding that

the group had a history of winning the war against Kidnapping, banditry and

other social vices.

“I commend the Inspector General of Police on this

L-R: Babajide Sanwo-Olu, Lagos State governor, with Femi Gbajabiamila speaker, House of Representatives, during the speaker’s visit to the governor at the State Governor’s Lodge, Abuja.

Kogi guber: Ametuo-led APC advises national leadership to be wary of Zamfara, Imo mistakes Victoria Nnakaike, Lokoja

H

addy Ametuoled faction of the All Progressives Congress (APC) has strongly advised the national leadership of the party to be wary of the mistakes of Zamfara and Imo states and help sanitise the party so that it would avoid pitfalls in the forthcoming election in November 16.

This was coming at the heels of a stakeholders’ meeting held

by Ametuo faction of the state’s executives in Lokoja, as the faction resolved to allow the National Working Committee of the APC come in and determine the mode of election to be adopted for the August primaries, adding that NWC should let fairness, justice and adherence to party principles guide their decisions.

“We will also like to strong-

move. The visit, as far as I am concerned, is a welcome development and it goes a long

ly advise the national leadership of our great party to be wary of the mistakes of Zamfara and Imo states and help sanitise the party in Kogi State so that we can avoid pitfalls ahead. Let fairness, justice and adherence to party principles guide their decisions,” the group said.

According to the communiqué issued by the Secretary, Ade Ismail, the Ametuoled APC disclosed that they would like to announce to the public that the APC has not made an official decision on whether to adopt the direct or indirect primary election for the forthcoming gubernatorial election, stressing that they are sure the state executive council has held congresses across wards in all local government areas and instituted executive committees in the same places.

It also said that it is illegal

for any other faction to make decision for APC in Kogi State on the mode of election to be adopted in the August primaries without their knowledge, adding that the APC National Working Committee has not made their decision known on the matter.

He emphasised that only the NWC of APC has the authority to determine the mode of primary election to be adopted in Kogi State, saying they are disciplined and always open to progressive and harmonised ways of doing things.

He also disclosed that the incumbent governor has invited his faction for a parley and that they will honour it, saying they have always made themselves available for any reconciliatory meeting and discussion as their prior interest is for the success and progress of their great party.

way in solving the menace,” Adams said.

According to him, “The security situation in the country is becoming too worrisome with cases of Killings, kidnapping, raping and banditry; these are prevalent across the southwest states, and there is an urgent need to curb the menace.”

Responding, Chief of Staff to the Inspector General of Police, Jude Nwankor, who led the team of the police top hierarchy on the visit, said the reason for the visit is to seek Adams’ support in solving the security challenges in the country.

He said the police will be willing to partner with the Yoruba leader, based on his deep knowledge and experiences in the grassroots.

“We are happy to relate with you as a prominent voice in Yorubaland. We know there is no way we can secure the grassroots without local intelligence. The

IG has indicated interest in seeking your assistance and support and that is why we are here to tell you that the police as an institution is ready to partner with you,” he said Reflecting on the visit, a Yoruba leader, Akin Osuntokun described the emissary as a long- awaited realistic disposition towards apprehending and containing the security crisis bedevilling the country.

He added that the synergy will go a long way in stemming the trend of rural Fulani banditry and associated crimes in the South West.

Personalities present at the meeting, include Akin Osuntokun, Mogaji, Gboyega Adejumo, Asoju Aareonakakanfo of Yorubaland, Yinka Oguntimehin, Assistant General Secretary of OPC, Lasun Ogunfowokan.

Others arre Superintendent of Police, Peter Gana and Stella Gowon.

Reflect the spirit of Lagos, Sanwo-olu charges Lagosians in Abuja ...Visits state Liaison Office

B

abajide SanwoOlu, Lagos State g o v e r n o r, o n Tuesday charged Lagosians living in Abuja to reflect the spirit of Lagos and be law abiding as they live peacefully in the Federal Capital Territory, (FCT).

Speaking to journalists after a tour of the Lagos House which has the staff of the State liaison office in Abuja, Sanwo-Olu urged Lagos citizens to be good ambassadors of the state.

“I can only wish our people that reside in Abuja well, Nigeria is big for all of us. My advice is just for them to be law abiding, to continue to reflect the

spirit of Lagos, continue to be good ambassadors of state.

“O u r g ov e r n m e n t i s open to them if they have good suggestions or ideas; I am in the liaison office; they can drop whatever suggestions they have for us and certainly it will get to us and by the time they hear news about Lagos, it will be good news,” Sanwo-Olu promised.

On his visit to the Liaison Office, the governor said it was imperative that he comes to the office to see his staff and have a firsthand feel of their working environment, feel their pulse and make them understand what the new government stands for.

According to him, “as a governor, I have got to see my office in Abuja, and also to know the staff and see the environment they work because they are part of us and they will reflect who we are and what we stand for as a state and as a government,” he said.

“The least I can do is to come around and feel their pulse to see the people that have my ears and listen to them. That is the least I can do,” the governor added.

Sanwo-Olu is the first governor to visit the state liaison office and this created excitement amongst staff and occupants of the four-storey building in the Central Area of Abuja.

East), Akunnakwe Kenneth (Oru West), Hillary Eberendu (Oguta), Damian Ezeruo (Ohaji Egbema), Silas Onyeiwu (Onuimo), Jasper Chukwuemeka (Obowo), Ben Nwaoluka (Ehime Mbano), Maureen Onyekele (Ihitte Uboma), Paul Uche (Okigwe),

and Ngozi Oguike (Isiala Mbano).

The statement said the newly appointed interim management members were sworn in at the Sam Mbakwe Expanded Executive Council Chambers, Government House, in Owerri on Tuesday.

Imo governor constitutes LGA interim management committees

I

mo State Governor, Emeka Ihedioha, on Tuesday announced the appointment of Interim Management Committees for the 27 local government areas in the state.

A statement signed by Chibuike Onyeukwu, chief

press secretary to the governor, said the chairmen of the interim management committees and their LGAs include Solomon Onwuegbuchulam (Owerri North), Anslem Opara (Ikeduru), Innocent Ekenma (Owerri West), Ebere Chukwuewww.businessday.ng

meka (Owerri Municipal), Ugo Canice Mba (Mbaitoli), Charles Abara (Ngor Okpala), Jonathan Onyeneke (Aboh Mbaise), Sam Ahiarakwem (Ahiazu Mbaise), and Getrude Iroeme (Ezinihitte Mbaise).

Others are Okey Onye-

jiaka (Nwangele), Lawrence Nwadike (Nkwerre), Obodoshaa Agwubuo (Njaba), Nnamdi Nsoromotu (Isu), I f ea ny i O kwa ra ( Id eato South), Ernest Njesi (Ideato North), Aloysius Oluigbo (Orlu), Herbert Ubah (Orsu), Dympna Mbiamnozie (Oru

https://www.facebook.com/businessdayng

@Businessdayng

Thebigread

BUSINESS DAY Wednesday 19 June 2019 www.businessday.ng

Nigeria, rest of Africa to propel world’s population towards 10bn by 2050 Sub-Saharan region on track to overtake central and south Asia as most populous Clive Cookson, FT

S

ub-Saharan Africa’s population is set to double over the next 30 years, adding an additional 1bn people and putting it on track to overtake central and south Asia soon after as the world’s most populous region.

The high fertility rates south of the Sahara mean that region of Africa will account for more than half of global population growth between now and 2050, according to projections from the UN Population Division report released on Monday. The region’s population will still be rising fast at the end of the century, when the number of people living in much of Asia and elsewhere will be in decline.

The trend is exemplified by Nigeria, whose population has already surged from 95m in 1990 to 201m this year.

Nigeria’s population is set to double again to more than 400m by 2050, when it will have overtaken the US as the world’s third most inhabited country.

In Niger, where women on average have seven children, the highest birth rate in the world, the population is projected to almost triple to 66m over the same time period.

“In 2050 it is expected that Niger will be the only country in the world experiencing a fertility level greater than four births per woman over a lifetime,” the report said.

Liu Zhenmin, UN head of economic and social affairs, commented: “Many of the fastest growing populations are in the poorest countries, where population growth brings additional challenges in the effort to eradicate poverty, achieve greater equality, combat hunger and malnutrition and strengthen . . . health and education systems.”

The report predicted the number of human inhabitants in the world would grow from 7.7bn today to 9.7bn in 2050 and 10.9bn in 2100.

“The global population continues to grow, but the rate of increase is slower today than at any time since 1950 and we expect it to continue to slow over the coming decades,” said Thomas Spoorenberg, UN population affairs officer.

Demographic experts analysed trends

Nigeria’s population is set to double to more than 400m by 2050, when it will have overtaken the US as the world’s third most inhabited country.

in fertility, mortality and migration for a year to come up with the projections, which are slightly below the previous estimates issued two years ago.

India is expected to overtake China as the world’s most populous country in or near 2027. By 2050, India with 1.6bn people will be well ahead of China whose population will then be back at the 2019 level of 1.4bn.

Pakistan’s population, which stands at 217m, is one of the fastest growing outside Africa and a projected 338m in 2050.

At the other extreme, some places

are experiencing population decline as a result of low fertility and high emigration rates.

Twenty-seven countries have fewer inhabitants now than in 2010 and the number expected to experience a decline between today and 2050 is 55.

Population is falling fastest in eastern Europe, where Lithuania stands out with a decline of 12 per cent between 2010 and 2019 and a further decrease of 27 per cent projected from now to 2050.

Although fertility and death rates drive global population changes, migration to

escape violence or poverty can have a large local impact.

Syria is the most striking example, recording a 20 per cent population decline since 2010 as a result of people fleeing the civil war.

Puerto Rico has lost 17 per cent of its inhabitants since 2010 through emigration and is expected to lose another 17 per cent over the next 30 years.

The US has gained the most immigrants over the past 10 years — about 10m people — and Germany has added 5m.

People also continue to live longer, the UN report showed. Average life expectancy at birth increased from 64.2 years in 1990 to 72.6 in 2019 and is expected to increase further to 77.1 in 2050.

The longevity differential between rich and poor countries has been closing, though life expectancy in the least developed countries is still 7.4 years behind the global average, due largely to high levels of child and maternal mortality, as well as violence, conflict and the continuing impact of the Aids epidemic.

Robin Maynard, director of Population Matters, a UK-based charity, welcomed the slight downwards adjustment in population projections.

“But these figures nail the myth that population is going to decline soon,” he said.

“There is only a one-in-four chance of that happening by the end of the century.”

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.