BusinessDay 19 Sep 2018

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news you can trust I **WEDNESDAY 19 SEPTEMBER 2018 I vol. 15, no 143 I N300

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FG’s list of ongoing projects in SouthEast contains truths, half-truths, lies Electoral Act: NASS joint ODINAKA ANUDU

committee restores card reader in fourth amendment

BD INVESTIGATION SERIES

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n in-depth BusinessDay investigation shows that some of the projects listed by the Federal Government as ‘ongoing’ in the SouthEast region of Nigeria were either completed before the advent of the present administration or are not going on at the moment.

On August 24 2018, Lai Mohammed, Nigeria’s information minister, responded to a public statement made by South-East governors that their region had been short-changed in the implementation of infrastructural projects.

“While this claim may have made headlines, it is totally untrue. His excellences’ were either misquoted or they were quoted out of context. Either way, this allegation flies in the face of available evidence,’’ Mohammed said Continues on page 37

Inside African Development Bank in $1bn securitization deal to manage risk P. 2

OWEDE AGBAJILEKE & KEHINDE AKINTOLA, Abuja

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he National Assembly Joint Committee on Independent National Electoral Commission (INEC) has agreed with observations raised by President Muhammadu Buhari in the rejected third version of

L-R: Osaro Eghobamien, vice chair, Intergrity; Frank Aigbogun, publisher/CEO, BusinessDay; Toyin Sanni, former group CEO, UBA Capital; Femi Falana, managing partner, Falana & Falana Chambers; Christopher Kolade, chairman of the occasion; Ibukun Awosika, chairman, Intergrity; Niyi Yusuf, MD, Accenture; Bolaji Owasanoye, , executive secretary, PACAC, and Ene Obi, country director, ActionAid Nigeria , at the regulatory conversations- The role of effective Nigerian Regulatory actions in attracting and retaining foreign direct investment in Lagos.

Pic by Pius Okeosisi

Exxon Mobil to pay exworkers about N12m each DIPO OLADEHINDE

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ngoing negotiations between management of multinational oil and gas firm ExxonMobil and sacked Supernu-

merary (SPY) police officers is already yielding fruits as the counsel to the aggrieved security workers, Femi Falana, says the payment will be done in days.

“We have been working on

Continues on page 37

NIMC begins enforcement of mandatory use of NIN in January ... as FEC approves digital identity ecosystem James Kwen, Abuja

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this payment and we are almost there,” legal luminary, Femi Falana confirmed to BusinessDay. According to Falana, discussions are ongoing as the workers

usinessDay has gathered that the National Identity Management Commission, NICM will begin the enforcement of the mandatory

Continues on page 37

Continues on page 37

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Wednesday 19 September 2018

Nigeria floods leave at least 100 dead – NEMA BUNMI BAILEY

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t least 100 people died in floods in central and southern Nigeria as torrential rains caused the country’s two main rivers to overflow, the National Emergency Management Agency (NEMA) said.

“About 100 lost their lives in 10 states so far, and a national disaster has been declared in four states,” Sani Datti, the spokesman for the National Emergency

Management Agency, said in Lokoja.

The government is concerned that water levels have continued to rise on the Niger and Benue rivers, submerging many houses in the states of Kogi, Niger, Anambra and Delta, Datti said.

Alerts by the hydrological services agency indicated the flooding could reach the scale of the last major such event in 2012, which displaced 2.2 million people and resulted in 363 deaths.

Insurers eye higher yields in bid to boost investment income BALA AUGIE

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nsurance companies are planning on taking advantage of the gradual uptick in yields to increase investment that will enable them take on more risk as they seek to boost profit.

Insurers invest the money given to them by policy holders, and profit from such those investments have traditionally being an important source of income for the industry.

But that income fell due to a drop in yields on government securities since last year as the Federal Government embarked on aggressive purchase of treasury bills with a view to lowering cost of domestic debt.

Treasury Bills for 91, 182 and 364 days were sold at an average of 10 percent, 10.30 percent and 11.5 percent respectivelyatPrimarymarketauctions in June 2018 representing a decline of 350 bps, 720 bps and 715 bps from 13.5 percent, 17.5 percent and 18.6 percent respectively compared to June 2017.

There is however glimmer of hope for insurers to increase investment income as the Central Bank of Nigeria (CBN), in an apparent move to attract foreign investors in the fixed income market, has increased the stop rates at recent auctions with the 364-day instrument climbing to 13.5 per cent, up from 13.05 per cent.

“With yields on short term securities and bonds going up, it means there is an opportunity to earn higher income on investment,” said Fola Lawal, Chief Financial Controller of Old Mutual Limited.

“We saw what was coming and we decided to position ourselves towards Federal Government bonds.

Eurobonds also portend good opportunity to earn high yields on foreign portfolios. We also see the Central Bank increasing the T-bill rates in order to curb inflation , which means yields could remain where they are or move up,” said Lawal.

Insurance companies have two main sources of revenue: premiums from underwriting activities and returns on investment income.

For the first six months through June 2018, investment income of the

18 largest quoted insurers that have reported results fell by 2.85 percent to N15.22 billion from N15.97 billion the previous year.

A breakdown of the figure shows Aiico Insurance Plc’s investment income dipped by 1.19 percent to N4.20 billion in the period under review from N4.25 billion the previous year while income from treasury bills was flat at N2.16billionintheperiodunderreview.

Linkage Assurance Plc investment income fell by 46.29 percent to N1.48 billion in June 2018 as against N2.76 billion as at June 2017.

However, analysts are of the view that insurers should be cautious on how they invest the money to generate investment return since the environment is fraught with risks.

“There is a guideline on how you invest the money in Treasury bills, bonds and real estate,” said Moronfola Monsuru, actuarial analysts with Wapic Insurance.

“It deals with a lot of risk and firms are usually cautious because the money belongs to policy holders and it will be used to settle claims,” said Monsuru.

Firms are bringing in less income from investment activities rather than operations as the cumulative average investment income ratio of 18 firms dipped to 1.04 percent in June 2018 from 2.28 percent the previous year.

Investment income ratio is the ratio of an insurance company’s net investment income to its earned premiums.

Drilling down the financial statement of insurers shows Aiico Insurance’s investment income ratio fell to 29.21 percent in June 2018 from 39.79 percent the previous year.

AXA Mansard Insurance’s investment income ratio fell to 27.78 percent in the period under review from 38.26 percent their previous year.

Wapic Insurance Plc’s investment income ratio fell to 15.15 percent in June 2018 from 26.21 percent as at June 2017.

Linkage Assurance Plc’s investment income ratio fell to 84.24 percent in June 2018 as against 182.69 percent the previous year.

Group Managing Director/CEO, Dangote Cement plc, Joseph Makoju (m), and Chief Operating Officer, Dangote Cement plc, Arvind Pathak (r), welcoming the Secretary to the State Government, Usman Alhaji to the unveiling of Dangote Cement’s new product “BlocMaster” in Kano, yesterday.

African Development Bank in $1bn securitization deal to manage risk ENDURANCE OKAFOR

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he African Development Bank agreed to package about 50 loans from around the continent to create a $1 billion “synthetic securitization” that will count New York- based hedgefund manager Mariner Investment Group LLC as its lead investor.

The loans span industries including power, transportation, financial services and manufactur-

ing in the AfDB’s non-sovereign lending book, the bank said in an emailed statement on Tuesday.

AfDb had a loan portfolio of about $6 billion in Nigeria, at the end of 2017.

Room2Run, as the securitization is known, was structured by the London-based unit of Mizuho Financial Group Inc., while the European Commission’s European Fund for Sustainable Development will provide some credit protection, it said.

“Room2Run is the first-ever portfolio synthetic securitization between a multilateral development bank and private-sector investors, pioneering the use of securitization and credit-risk transfer technology to a new and previously unexplored segment of the financial markets,” the AfDB said.

Africa50, the pan-African infrastructure fund run by the AfDB, is investing alongside Orix Corp.’s Mariner, which has about $11 billion in assets, the lender said.

Falling active oil rig count, reserves tell sector’s tale of woe STEPHEN ONYEKWELU

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igeria’s active rig count contracted in August and its oil reserves replacement ratio has been abysmal in the last decade as some Organisation of Petroleum Exporting Countries (OPEC) peers strive to increase exploration and production.

InJuly,Africa’slargestcrudeproducer had seen its active rig count increase by 9.38 percent, from 32 oil rigs in June to35inJuly,accordingtoOPEC’sAugust Monthly Oil Market Report (MOMR).

But it fell by 5.71 percent, from 35 in July to 32 in August signalling reduction in exploration and production activities in the oil and gas sector.

Rig count is a function of the level of exploration, development and production activities occurring in the oil and gas sector. A drop in active rig count means oil exploration and production activities in Nigeria have decreased month-on-month.

“Both elements correlate. To replace oil reserves, you need to intensify exploration and production activities.

This means more active rigs. It also means more investment inflows into Nigeria’s oil and gas sector,” a major actor in the industry who does not want to be identified told BusinessDay in confidence. “Falling active rig count and reserves mean there have been no fresh investments in the sector.”

According to data obtained from the National Bureau of Statistics, (NBS) Nigerian Capital Importation report for the second quarter of 2018, foreign capital inflow into the oil and gas industry declined by $60.77 million, about N18.6 billion, to $24.85 million, about N7.6 billion in the second quarter of 2018, compared to $85.62 million, about N26.2 billion recorded in the first quarter.

Nigeria’s active oil rigs had remained static at 32 since the first quarter of the year. In 2015, Nigeria had recorded 30 oil rig counts. In 2016, it decreased to 25, and later to 28 early 2017.

Other OPEC members such as Algeria have increased the number of their active rigs from 45 oil rigs in July to 49 in August, Angola still has four, Ecuador from 8 to 10 active rigs

but Equatorial Guinea still has one.

Libya moved from 5 to 8, Qatar 9, Saudi Arabia has the highest with 152 rigs up from 148, the United Arab Emiratesmovedfrom55to57,andVenezuela currently fell from 70 to 69 rigs.

“Continued delay to tackle the Petroleum Industry Governance Bill (PIGB) sends a wrong signal to current and would-be investors. It is either government wants to amend the laws regulating oil and gas or they don’t. Whatever it is, they should come out clear,” Ayodele Oni, energy partner at Lagos-based Bloomfield Law Practice said. “Otherwise, it will delay projects, spending and certain activities in the industry, because of the uncertainty and lack of stability.”

Nigeria’s oil reserve decreased to 36.247billionin2011from37.200billion recordedin2010,whilein2012therewas relative improvement to 37.139 billion but went down again to 37.071 billion in 2013. In 2014, it stood at 37.448 billion before sliding down to 37.062 in 2015 while in 2016 it stood at 37.453 billion.

•Continues online at www.businessdayonline.com

Wednesday 19 September 2018

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Over 100m illegal arms in circulation in Africa- ECOWAS …Int’l illegal arms market value $1.3bn INNOCENT ODOH, Abuja

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he Economic Community of West African States (ECOWAS) has disclosed that about 100 million small arms and light weapons are in circulation illegally in Africa, stressing that there are about 10 million of such illegal arms in West Africa out of about 800 million illegal arms in circulation around the world.

The President of the ECOWAS Commission, Jean -Claude Brou, disclosed this while fielding questions during a high level meeting between regional organisations in the Sahel region held at the ECOWAS Parliament in Abuja on Tuesday.

Represented by the ECOWAS Commissioner for Political Affairs, Peace and Security, Francis Behanzin, the President lamented the disturbing situation as one of the major factors fuelling terrorism and other forms of violent crimes and armed conflicts across West Africa and the Sahel. He added that the international illegal arms market is worth $1.3 billion

annually even as he lamented the difficulties in curbing the proliferation of illicit arms in the region.

He however, noted that concerted efforts are being made by the ECOWAS, the Sahel region, the United Nations and other institutions to curb the menace, adding that they have developed a strategy to curb terrorism and violent extremism and radicalism through the Prevention, Repression and the Reconstruction of areas affected by terrorism and other forms of conflicts through the UN- backed Rapid Impact Programme.

The high Representative of the African Union for Mali and Sahel, Pierre Buyoya, who spoke through a representative, called for a more sustainable strategy for inclusive economic development in West Africa and the Sahel to cater to the needs of a growing population of especially of the youth. He added that Africa needs to make more effort to tap its enormous natural and human resources.

Earlier in his remarks, the

Special Representative of the United Nations Secretary General for West Africa and the Sahel, Mohammed Ibn Chambers, also bemoaned that the security situation in the Sahel and Lake Chad Basin remains fragile as increasing violence has bedevilled countries such as Mali, Burkina Faso, Niger and Nigeria.

He said “violence and terrorist activities, as well as conflicts between nomadic herders and farmers take an alarming toll on the population and future generations.

The violence related to pastoralism is particularly concerning as it increases in frequency, intensity, complexity and geographic scope”.

He also blamed the crises on the continuous impact of climate change and food insecurity on the Sahel population, saying “socio- economic inequalities, including the lack of access to basic rights, services and economic opportunities, violence and challenges to the role and participation of women, continue to hamper progress and development.”

Wednesday 19 September 2018

National Assembly bows to pressure, aligns with Executive’s proposal on electoral amendment bill KEHINDE AKINTOLA, Abuja

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he joint Senate and House of Representatives Committee on Electoral and Political Matters on Tuesday adopted the fourth electoral amendment bill which seeks to strengthen Independent National Electoral Commission (INEC) and ensure free and fair elections in 2019.

The 14 consolidated amendments are: Sections 91a), 9b(5), 181-4), 19(4), 31, 31(1), 31(7), 36(3), 44(3 & 4), 67a-d(6-9), 87(2), 87(14) and 112(4) while 34(2-4) was deleted.

Suleiman Nasif, chairman Senate Committee on INEC who gave update on the outcome of the proposed amendment to Electoral bill at a press briefing held at the National Assembly complex, expressed optimism that the fourth amendment bill

has addressed all controversies raised by the Executive which led to President Muhammadu Buhari’s decision to withhold assent thrice.

According to him, the joint committee came up with additional amendments based on the draft submitted by the Executive arm, adding that the first electoral amendment bill which addressed the issue of sequence of elections also made provision for card reader as well as the powers of National Assembly to legislate for Local Government Councils, which the President declined assent.

He added that the second electoral amendment bill which was concluded on the 26th June 2018 addressed all issues raised by the Executive arm on the sequence of elections which the National Assembly resolved to delete in the second amendment.

“I want you to know that the National Assembly, INEC and the Executive are on the same page, Nasif assured Nigerians.

Nasif who chaired the joint committee maintained that the thirdelectoral amendment bill has the card reader but President withheld assent on the 26th July 2018 which coincides with the day the House embarked on annual recess and two days after the Senate embarked on annual recess.

He observed that the “third bill supposed to be an addendum to the second one which has 41 amendments,” adding that the “third bill has 14 clauses and 15 citation, was aimed at strengthening the secondamendment.

“What we wanted in the third bill was to strengthen the second one which was to make INEC work easier,” hence did not include the cardreader.

Wednesday 19 September 2018

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6 BUSINESS DAY NEWS NNPC explains why it resorted to contractor-financing of pipeline facilities HARRISON EDEH, Abuja

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he Nigerian National Petroleum Corporation (NNPC) has explained why it has resorted to contractorfinancing of its pipeline and other facilities development in recent times in the Industry. Delivering the Keynote speech at the Nigerian International Pipeline Technology and Security Conference (NIPITECS 2018) Tuesday in Abuja, the NNPC Group Managing Director, Maikanti Baru, stated that the recourse was to get around the prevalent funding challenge in the country, He pointed out that the initiative has enabled the corporation to aggressively build the pipeline infrastructure within the Gas Master Plan as exemplified in the recent award of the AjaokutaAbuja-Kaduna-Kano (AKK) gas pipeline and all ongoing downstream pipeline infrastructure rehabilitation effort.

Represented at the event by Babatunde Adeniran, Chief Operating Officer, Ventures, Baru affirmed that pipelines remained the cheapest way of moving products across any distance, noting however that pipeline

operation and construction in Nigeria had been an expensive undertaking.

He challenged members of the Pipeline Professionals Association of Nigeria (PLAN) and other stakeholders to proffer solutions that could lead to a dramatic change and expansion of pipeline business in Nigeria.

Maikanti Baru said such solution must be able to resolve the challenge which has hindered the growth and viability of pipeline venture in the country.

The GMD explained that emphasis should not be on what has been done in the past but to seek quicker, better, cheaper and more effective ways of how things should be done to achieve the feat.

Earlier in his welcome address,Geoff Onuoha, Chairman of PLAN, expressed delight at the high level of support accorded the association by the NNPC Management, assuring that the pipeline professionals would not only pick up the gauntlet and tackle the challenge posed to the group by the NNPC GMD, but would continue to work with other stakeholders to ensure the in-country viability of pipeline business.

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Wednesday 19 September 2018

LBS reiterates commitment to Ajinomoto to showcase Nigerian global business best practices for cuisines to world alumni across borders IFEOMA OKEKE

KELECHI EWUZIE

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agos Business School says it is committed to preparing its alumni for greater business opportunities, enabling them to manage business across borders and to face higher leadership responsibilities after their MBA programmes.

It says through its cultural immersion programme Executive MBA students and alumni from global partner institutions would be exposed to the values and business environment in Nigeria and Africa.

Uchenna Uzo, Academic Director, International EMBA, Lagos Business School while speaking after the school completed its inaugural International Executive MBA Week says the programme content explored the most promising aspects of the country’s potential. Participants were equipped with knowledge to: understand growing

market opportunities, spot where the action is, and what it takes to invest and improve intercultural exchange among people interested in investing in Africa.

According to him, “The five-day programme International Executive MBA Week aligns with the School’s mission imperative to be the leading business school with the greatest impact on the knowledge and practice of management and business in Africa”.

The International Executive MBA Week themed: Playing to Win in Africa: Exploring Business Opportunities in Nigeria presented the platform for participants to build their personal and business thinking agility through immersive experiences.

The International Executive MBA Week programme was built around strategies for managing business in a complex or turbulent environment; using innovation to cope with uncertainty.

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n a bid to promote and showcase Nigerian cuisines to the rest of the world, Wasco Ajinomoto brand ambassadors, Helen Paul and Miyonse Amosu will embark on a four-day trip to New York, United States for World Umami Forum The World Umami Forum organised and presented by AJINOMOTO Co., Inc., is a two-day consortium bringing together food science experts, renowned researchers and top culinary personalities to deepen the understanding for umami and its essential role in different cuisine, and to begin dispelling common myths about monosodium glutamate (MSG).

World Umami Forum 2018 will hold on Thursday, September 20 and Friday, September 21, at the Conrad Hotel, 102 North End Ave, New York, NY 10282.

Few weeks ago, West Africa Seasoning Company Limited (WASCO).

Ajinomoto unveiled the popular Comedienne, Hel-

en Paul as brand ambassador and former BBNaija housemate, Miyonse Amosu as brand influencer of the company with the mission to connect with consumers and increase public awareness on benefits of the brand.

According to Takaaki Nishii, CEO and President, AJINOMOTO Co., “As the world celebrates the 110th anniversary of the discovery of umami, AJINOMOTO Co., Inc. – the world’s first and leading manufacturer of MSG is excited to continue to bring delicious flavor to global cuisines.

The new seasoning, MSG, the purest form of umami, was introduced to the U.S. market in 1917 with a vision of a new way to bring taste to everyone’s kitchen.

“Through the continued research efforts in the last few decades, umami is recognized as a basic taste perception, much like the classic four basic tastes: sweet, salty, sour and bitter. By bringing together a diverse blend of experts, we hope to deepen the understanding for umami and its essential role in American cuisines.”

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COMMENT SMALL BUSINESS HANDBOOK

EMEKA OSUJI Dr Emeka Osuji School of Management and Social Sciences Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

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icrofinance institutions in Nigeria are in for a lifetime of struggle. This is not a doomsday kind of prophesy. It is reality unveiled. The struggle is not with the achievement of their financial targets, in case anyone thinks am talking about their bottom lines. Far from it, they will more than outperform their financial targets, if they follow the rules of their game, and focus on their trade. The hard times are in relation to the objective of their calling: reduction of poverty.

Why are they going to have a hard time? The animal they are called out to fight has got much bigger, despite the over 15 years they have put into the fight, following the adoption of microfinance as a poverty reduction strategy in Nigeria. Poverty has actually worsened over the past few years.

The impact of insurgency and herdsmen attacks is showing massively in the poverty scale. It is so easy for Nigeria to push citizens into IDP camps but hard for us to understand that once a man loses his home and loses his source of livelihood, and enters that camp, he has become extremely poor. Simplicita. And the biggest challenge is that we are still focused on whether it was PDP or APC

NOJEEM ADETUBERU Adetuberu sent this piece from Lagos

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he Federal Ministry of Health in August 2017 disclosed that about 4.5 million Nigerians consume20 billion cigarettes yearly. However, it is not known what portion of this volume is supplied via illicit trade.

Illicit tobacco trade is defined by the Financial Action Task Force (FATF 2012) as “the production, import, export, purchase, sale, or possession of tobacco goods which fail to comply with legislation”.

The World Health Organization (WHO), in its 2015 report on illegal trade in tobacco products, revealed that one in every 10 cigarettes globally might be illicit and this number is much higher (averaging 16.8%) in low income countries that have higher incidence of smuggling.

It also estimated in the WHO report that governments would gain $31billion annually by eliminating illicit trade in tobacco. The major factors that influence illicit trade and smuggling were listed to include the ease and cost of operating in a country; tobacco industry participation; level of sophistication of organized crime networks; the tax administration system’s efficiency and integrity; and the likelihood of being

Wednesday 19 September 2018

comment is free

Send 800word comments to comment@businessdayonline.com

Poverty and the death of the middle class that is responsible for the poverty in Nigeria. I want to help the two major political parties in the country to end the blame game by saying that our poverty was not caused by any of them. Happy? I hope this makes them both happy. If so then let us really and truly face this monster and religiously fight it.

It does not matter whether you are viewing it from the national or regional point of view. Nigerians are getting poorer every day as the fight against poverty has dragged on, as it has in many equally poorly organized countries, especially in Sub-Saharan Africa. Much progress is not being made and poverty appears to have fought back more seriously than its attackers. More people now become poor everyday than the country will ever think of saving from poverty. According to available data available on World Poverty Clock, 87million Nigerians live in extreme poverty. On a daily basis, about 8,000 of them fall into extreme poverty in Nigeria. This is despite all the efforts of government by way of Social Investment Programmes such as the school feeding, microcredit and such activities. We need to ask ourselves what we are doing wrong, apart from the fact that Boko Haram and Herdsmen are significant poverty generators here.

I believe the answer is not farfetched. The problem in Nigeria is lack of integrity. People refuse to accept their errors and by so doing they learn nothing and make no improvements. The key issue here is that nobody in this is ready to admit that the facts are true. We first impugn every critical report and then go back to the error we are used to. Nobody is laying blame on any government for the origins of our problems but we must admonish those who fail to solve it, and that does not mean a credit to the opposition, which in

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As the economy contracts and jobs are wiped out the middle class dries up. Unfortunately, this group is the core drivers of consumer spending, which is a key factor in aggregated demand

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turn had failed even more woefully to deliver on the same issue. The present government must level with Nigerians by accepting international reports that are accepted elsewhere in the world concerning our economic conditions.

That way we begin to seek solutions.

When people whose job has been to fix economies all over the world tell you that you have a challenge and you say you don’t, how then can you go back to them to seek solutions? Continuously battling international organizations for comments we consider critical shuts us out of vital conversation that would produce solutions we desperately need. A problem identified and shared is half solved.

In some of my recent pieces on this page I tried to name some of the key causes of poverty in a series I called poverty generators. After a while we stopped the series. The reason why we stopped was because it appeared

that almost every economic agent we could point at in Nigeria seemed to have a part to play in promoting poverty. It was very scary. We began by looking at the kind of government we run. The presidential system of government, which Nigeria has adopted from the United States of America, is not only very expensive, diverting resources away from useful projects to the payment of emoluments to government appointees, it is very wasteful and must be changed.

It is also very prone to corruption. It gives executive powers to government officials who are not only unaccountable but often incapable, due to the share size of responsibilities it imposes on public officers who cannot be held accountable. Although lack of accountability is not necessarily a feature of the presidential system, in Nigeria laws are apparently made not necessarily to be implemented. That way our system cannot cohere with the presidential system that implies fairly absolute powers.

This system gives the operators the opportunity to muscle their way through everything and rip off the system. That is why governance has become a kind of organized fraud such that whoever is ruling – North or South, Nigerians will never fare better.

In the process, national resources are dissipated in fancy flamboyant office privileges and unviable projects. Little is left for investment. We named this system the number one poverty generator in Nigeria, for diverting public resources away from projects to private pockets of idle political appointees and office holders. The same point can be made of the national and state assemblies – waste pipes that have nothing to show for their defense of the people.

The fact is that Nigeria is rich but has made itself poor by the form of government it is running. By the time presidential and executive perquisites

are done with, there is nothing left for investment in critical sectors like education. It is a shame that the leaders of the national assembly did not save Nigeria from this over bloated cost of government before all backing off to become presidential aspirants.

Perhaps the allegation is may be true that our law maker do not touch the bad laws that hold Nigeria hostage because they plan to profit from them in the future.

Illiteracy is one of the poverty agents in Nigeria. Government ought to take education seriously not only to fund it well but to ensure the fund is properly spent. In most cases when we say we are funding a challenge we just dump money on some public officials to spend without accountability. That is why money meant for poor IDPs would be spent on phantom grass cutting contracts and nobody went to jail. Our spending on education is too shameful and the manner of spending it is even equally disgraceful. We are among the least in sub-Saharan African when it comes to education spending.

Who are these 8,000 people jumping into the fire of extreme poverty every day in Nigeria? They are essentially members of the working and middle class. As the economy contracts and jobs are wiped out the middle class dries up. Unfortunately, this group is the core drivers of consumer spending, which is a key factor in aggregated demand. The decline of consumer spending is usually the first signal of the beginning of economic distress. We cannot continue to deceive ourselves and trade blames. We must stop the bleeding of the middle class by investing in projects that create jobs as a starting point of our economic recovery. How do we do it? The answer is also not farfetched.

Send reactions to: comment@businessdayonline.com

Curbing revenue losses from illicit tobacco trade caught and punished.

Illicit tobacco trade occurs in several forms. Some criminal gangs produce counterfeit cigarettes that are usually difficult to distinguish from genuine products and these are sold at cheaper prices. Smuggling rings also peddle cigarettes across borders thereby engaging in large scale tax evasion. Smuggling occurs for both real and counterfeit products.

This scourge is being tackled globally by various agencies such as WHO, through the Framework Convention on Tobacco Control (WHO FCTC) with the establishment of an International Tobacco Protocol that will be ratified and implemented by governments. Its overarching objective is to eliminate illicit trade in tobacco products. So far, 54 countries are signatories to the Protocol, whilw 48 countries are categorized as parties to the Protocol because they have gone ahead to either ratify or accent it.

The International Police (INTERPOL) has also partnered with the major cigarette manufacturers such as British American Tobacco, Philip Morris International, etc, to create an international framework to combat illicit trade in tobacco. Other fronts from which illicit trade is being fought are The United Nations Convention against Transnational Organized Crime (UNTOC) and the United Nations Convention against Corruption

(UNCAC) with greater involvement of national governments.

These global efforts notwithstanding, every country must identify the peculiarities of the problem within its borders and establish effective measures to tackle them while also pursuing transnational initiatives to prevent smuggling and illegal importation.

In March 2014, Premium Times, an online news publication, released details of its investigative report into the threat of illicit tobacco trade. The report suggested that the WHO report on illicit tobacco in Nigeria, which showed a reduction to 10% in 2012 from30% in 2005 was not robust enough as a lot of illicit products entering the country through the land borders were not factored into the findings by the WHO. The report detailed how illicit cigarettes are smuggled through various land borders across Nigeria and how easily peddlers sold these items on the streets and shops. The report also revealed the existence of locally manufactured cigarettes with false locations listed as their factory addresses.

In 2015, the National Assembly passed the National Tobacco Control Act (NTCA) 2015 to regulate and control the manufacture, sale, advertising, promotion and sponsorship of tobacco or tobacco products in Nigeria and for related matters. The NTCA 2015, which was enacted with the support and cooperation of the major cigarette

manufacturers in Nigeria, facilitated the establishment of the National Tobacco Control Committee as well as the Tobacco Control Fund.

The provisions of this Act, which cover sundry aspects of the industry, including regulation of smoking; prohibition of tobacco advertising promotion and sponsorship; tobacco product sales; tobacco contents and emission disclosures; tobacco product packaging and labeling; licensing of dealers; enforcement; education, communication, training and public awareness, provided effective regulation for the legal players in the industry.

However, illicit trade has continued to thrive despite the NTCA and this may not be unconnected with the level or quality of enforcement of its provisions. While it has encouraged the legal industry players to adhere to international best practice, the NTCA apparently has very minimal effect on the activities of illegal business operators.

The likelihood of being caught and punished is a major deterrent to engaging in illicit trade but the risk remains abysmally low in Nigeria. Therefore, a lot of unscrupulous entities are drawn to a seemingly “low risk, high reward” environment that Nigeria offers.

Additionally, the ease with which they can operate within a country is an important determinant for smugglers and illicit traders. Nigeria’s porous land

borders provide very little resistance and there exists yet many illegal entry points into the country. This continues to make Nigeria very attractive to various syndicates that are involved in the global illicit tobacco trade.

Expectedly, illicit trade results in revenue loss to the nation as taxes and excise duties that would have accrued on the legal trade of these items are lost to smuggling syndicates.

It also poses a great danger to the commercial investments of industry operators as increasingly bigger chunks of businesses are lost to illicit traders who sell at far cheaper prices by marketing counterfeits and through tax avoidance.

Illicit tobacco trade poses yet another threat to Nigeria. Interpol, WHO, The United States Department of Justice all claim that the black market in tobacco is a chief source of funding for organized crime syndicates and terrorist organizations. Curbing illicit trade in Nigeria could thus stifle the funding of the different terrorist activities in the country while reducing government’s escalating costs of combating terrorism and other forms of organized crime.

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Wednesday 19 September 2018

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BUSINESS DAY

comment is free COMMENT Confusion in values

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CHARACTER MATTERS WITH DAPS

DAPO AKANDE 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

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igeria is indeed a nation of the absurd, where everything seems to be deliberately turned on its head. You seek personal safety so you move around blaring sirens to announce your presence to those who otherwise wouldn’t have known you were there. Steal a chicken in a desperate bid to avert starvation and within a week the culprit is publicly paraded, arraigned in court and summarily sentenced to a term absurdly disproportionate to the crime. Misappropriate billions as a public servant, which selfishly deprives millions of what is rightfully theirs thereby destroying lives but then go ahead to “generously” enrich a few with the ill-gotten wealth, do a little charity here and there and bingo!

You attain celebrity status; you’re a big man; you’re even a good man. As the old saying goes, kill someone and they call you a murderer but exterminate hundreds of thousands and you’re hailed a conqueror.

Do we deliberately misconstrue the true meaning of giving back?

What’s so noble about giving back to society a fraction of what you stole from it in the first place? Personally I would prefer such people to leave

for society what rightly belongs to it.

I wholeheartedly agree with Angela Davis who said, “we have to talk about liberating minds as well as liberating society.”

The relevant authorities in their questionable wisdom lower the cut off mark for those who apply for Education degrees at government owned universities (so to attract and accommodate those who fail to qualify for regular degrees) and yet we complain about the deplorable standard of primary and secondary school education. Wait a minute! Am I missing something here? Like an aviation expert recently revealed on television, in this country we have more private jets than all the commercial jets combined. Need I remind you we still don’t have a functioning national carrier ever since the inevitable demise of Nigeria Airways decades ago. Emirates, the multiple award winning national carrier of Dubai, has 244 planes in its fleet. Dubai has a population of under two million eight hundred thousand people. The proud giant of Africa has a population of one hundred and ninety eight million…. and we take so much pride in this.

Sad! This brings to mind the very apt quote by Christoph Walt which says, “It’s a wonderful narrative device to bring someone from the outside and look through his eyes if you want to describe the absurdity and preposterous reality that is accepted amongst the ones who are inside.”

So what is success and what qualifies one to wear that badge?

Is it merely to move around gung ho with sirens ablazing having the roads zealously cleared for you by grossly underpaid cops desperate to impress so to at least enjoy the crumbs from their principal’s table?

Is it to unapologetically oppress the

‘ Our youths of today always

want to go from zero to zillions overnight. Not for them the arduous journey of moving from A to B to C through to Z. After all, many of our religious leaders also harp on us to pray for instant breakthrough so why shouldn’t I expect a miracle that will propel me from A straight to Z one time?

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people by flaunting money one has brazenly stolen from them and future generations? Is it the acquiring of a certificate that “qualifies” you to churn out irredeemably poor students? Or is it to boast to the world that Nigeria is undoubtedly developing at a commendable pace, evidenced by the quantum increase in privately owned jets? Never mind the insignificantly small fact that this is a nation where almost seventy percent of it’s population live below the poverty line. No wonder Oliver Goldsmith succinctly averred that “every absurdity has a champion to defend it”.

Our youths of today always want to go from zero to zillions overnight.

Not for them the arduous journey of moving from A to B to C through to Z. Haba! Dey no get time to waka dat

one o! There isn’t even any need for it. Most of our so-called celebrated leaders haven’t done that so why should they? After all, many of our religious leaders also harp on us to pray for instant breakthrough so why shouldn’t I expect a miracle that will propel me from A straight to Z one time? As a child of God, it’s my right, it’s my heritage and to be honest, that is the absolute truth but….little do these hapless souls understand that God can only bless what you have in your hand. That God given gift or talent honed over time. Skills painstakingly perfected with patience, perseverance and unyielding discipline. This requires confidence in oneself, immutable faith in God and more often than not, several unavoidable encounters with failure and disappointment along the way.

I admonish our teeming youths who engage in ceaseless fasting and praying for breakthrough to be mindful of this biblical verse as it may yet prove valuable to them. It says, “desire without knowledge is not good and he who hastens with his feet misses the mark.”

This is a strong and unequivocal caution if ever I saw one. Be warned not to dubiously chase wealth without first putting in the legitimate effort to earn it for if you do, you’ll be sorry. To fulfill your destiny requires you to develop and subsequently deploy your talent in a manner that honours your creator who gifted you with them in the first place. I’m reminded of a lottery winner in the UK about twenty three years ago who’s run on luck by winning millions of pounds also proved to be his nemesis. The British police had been looking for this petty criminal for quite some time but it was this huge lottery jackpot win, publicly an-

nounced, that helped them to finally catch up with him. The funny thing is he willingly gave himself up and went to jail with a huge smile on his face knowing fully well his millions would wait ever so patiently for him in the bank’s vaults as he served his prison term. Now I ask you, would you call him a success? I want to believe your reply was a resounding No. So why should we view those who steal our commonwealth as successful just because they drive the latest wonder on wheels and appear to get away with it?

It’s a known fact that most lottery winners who come from poverty return to poverty within a twinkle of an eye. In fact one survey puts this at a staggering seventy percent. What does this imply? Most people who come across wealth suddenly by less legitimate means will need to continue down that path of perfidy to sustain it and those whose wealth come by luck smiling on them don’t fare much better as the statistics above suggest. The simple truth is success is not just the end point as it includes the journey. That’s why you don’t just arrive at success but “become” successful. “Become” being the operative word. Success is what you learn along the way, your accomplishments, your experiences and going by the concept of common good and biblical injunction, it includes your giving back and how you positively impact the lives of others on the way. On this, hear Horace Heeley who said, “fame is a vapour, popularity an accident and riches take wind. Only one thing endures and that is character.”

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Lagos state civil service and enduring reforms

TAYO OGUNBIYI Ogunbiyi is of the Features Unit, Ministry of Information and Strategy, Alausa, Ikeja.

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nstitutionally, the Lagos State Civil Service Commission has the statutory responsibility of ensuring that the State Civil Service exudes the highest grade of professionalism in order to really serve as the government’s engine room is the Civil Service Commission (CSC). The establishment of Civil Service Commission as one of the State Executive Bodies was based on the provision of Sections 197 of the 1999 Constitution of the Federal Republic of Nigeria. The composition and powers of the Commission are set out in Part II of the Third Schedule of the Constitution; The Commission was established by the Lagos State Civil Service Commission Law CAP. L10 (1979 No. 7) of 16th December, 1979.

The provision in Section 10 of this Law gave the Commission the power to make regulations for the exercise of its powers; hence the Lagos State Civil Service Commission Regulations was

made with effect from 1st June, 1981.

For the Civil Service to really be effective, it requires transformation at multiple levels. The way public sector organisations behave, how they view their roles, and how they share information between departments determines the effectiveness of making and implementing policies. A competent and well motivated Civil Service is a prerequisite for maintenance of good governance anywhere in the world. Thus, the concern for effective and efficient Civil Service is universal.

Civil Servants are particularly important in delivering effective governance since they are instrument to making and implementing policies.

However, the ability to carry any of these functions out effectively is intricately tied to the degree and quality of competence, that is, the degree to which public officials use their ability in a way that is accountable, transparent and respect for the rule of law and people’s basic human rights.

With professionals and nonprofessionals serving as instrument for implementation of government’s policies, programmes and plans, the Lagos State Civil Service has played a most significant role in the height so far achieve by the State. The Civil Service Commission, in particular, has played significant role in offering advice to Government on strategic

people management; supporting the implementation of Government policy; contributing to effective Civil Service leadership and evaluating and reporting on the performance of the human resource in the state employment.

Presently, Lagos State Civil Service has gained improved work ethics, attitudinal change and productivity as a result of the new policy. It is pertinent to mention for the purpose of experience sharing that part of what precipitates efficiency in the Lagos State Civil Service is the method of promotion among staff. Civil servants have been spurred into higher level of productivity since the State began to use on-the-job assessment of officers and oral interview which is based on structured training attended by officers for promotion. As earlier affirmed, promotion of Civil Servants is one of the vital responsibilities of the civil service commission.

Presently, all stakeholders are now beginning to observe and understand the efforts being deployed to revitalize and advance competence in the Lagos State Public Service. Across board, objective appraisal testifies to a Lagos State Civil Service that is now friendlier, goal driven, people focused and dynamic. But then, the journey of excellence is a continuous one that has no finishing line. Thus, we should not rest on our oars. This is Lagos, the

Centre of Excellence.

So far, the Commission has been able to consolidate on the new model of staff performance approval for promotion exercise through injection of capacity development on the tenets of the State development plan for eligible officers. On staff promotion, the process is becoming more effective and standardized. In 2018, for instance, for the first time in the history of the State Civil Service, 3,803 candidates recorded 100% performance in the promotion exercise.

As part of ongoing reforms, the Commission now experience timely production of different service letters and other processes with the use of Electronics Data Management System (EDMS) and the Letter Management System (LMS). Consequently, issuance of promotion letters is now done promptly while the financial implication of promotion now takes effect in July as against September that used to be the practice. Also, as the need surfaces, recruitment of new officers is being done progressively. Recruitment of four hundred and twenty one officers into the civil service In order to accommodate appearance of applicants for career review, the Commission has restructured its Policy Meeting days to Tuesdays and Thursdays. Similarly, it has begun the commencement of the digitization of the Commission’s responsibilities

through Upgrade of the Letter Management Software for production of Promotion Letters and other service documents.

Other reforms that have been put in place to ensure smooth operation at the Commission include, among others, introduction of the E-Registry which has greatly contributed to the improved image of the Commission, effective synergy with all MDAs, ERecruitment Exercise, introduction of alternative to Written Promotion Examination, review of Conversion Rule for Officers on GL 12 and above as well as the production of Annual Report to measure success on annual basis through statistical graphs.

Equally, the review of the Civil Service Rules to Public Service Rules and Circulars has helped in handling issues relating to advancement, regularization; discipline etc. at Commission’s Policy meetings while the Administration and Human Resources Implementation Report and Human Resource Change Plan have significantly placed the Commission on a high pedestal in terms of improved Human Capital.

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Wednesday 19 September 2018

EDITORIAL PUBLISHER/CEO

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

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

Bashir Ibrahim Hassan

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

Developing Nigeria’s domestic gas market

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he Nigerian National Petroleum Corp oration (NNPC) has committed to supply 5 billion standard cubic feet (SCf ) of gas daily to Nigeria’s domestic gas market to drive willing buyer, willing seller pricing model. This plan, however, might hit a cul-de-sac. This is because investors have stayed away from Nigeria’s domestic gas market due to opacity of fiscal terms, lack of functional gas infrastructure and high entr y barriers, which have, in turn, kept the market underdeveloped and has negatively impacted gas utilisation.

To ensure there is willing buyer, willing seller model in the domestic gas market, the NNPC decided to supply 5 billion standard cubic feet of gas daily to the market.

This will be sufficient to create a viable and sustainable domestic gas market.

For incentives, the NNPC has stipulated variable gas prices for different sectors of the e c onomy to drive i nv e s t m e n t i n f l o w s a n d

comp etitiveness. There is one gas price for power, one for industries and another for industries that use gas as feedstock to manufacture fertilizers and petrochemicals.

In this sense a Nigerian fertilizer manufacturer should be able to compete with other fertilizers makers around the world.

However, the economics of natural gas development and utilisation are driven by the high cost of gas production and transport facilities, and the need for economies of scale. Therefore, to drive an increase in private-sector led activities, government has to execute at the least, the gas infrastructure blueprint as contained in the Gas Master Plan.

The Nigerian Gas Master Plan (GMP) specified a rev is e d transitional pricing structure for gas to power projects in 2010, and ultimately a price of $2.50 per million British thermal unit (MMBTU) was s et in 2014 for contracts that are supplied under the domestic gas supply obligation (D G S O) scheme.

The price by 2010 was $1.99 per MMBTU. The GMP also imposed penalties for noncompliance with the DGSO which includes: payment for volumes not supplied, or a penalty price of $3.50/Mscf, whichever is higher ; and disqualification from supply of gas to any export projects.

Gas is a big source of economic diversification. It can transform agro based industries and boost food production through the development and manufacturing of fertilizers. But to attract the needed investment, Nigeria needs fiscal terms to motivate investors. Some companies have supplied gas but have not been paid. Africa’s top gas producer also needs fiscal terms that encourage small and medium term projects.

To achieve the target of developing Nigeria’s domestic gas market, huge upfront infrastructure spending is needed. The oil and gas sector needs $20 billion to $30 billion annually to maintain production.

As long as there are no pip elines to move the gas from where it is produced

to where it is utilised, the domestic gas market will continue to suffer.

An initial phase of about 2,500km of gas pipeline infrastructure was planned to be completed by the end of 2018.

This target, when achieved, will boost investor’s confidence in natural gas market in the country.

Experts say some pipelines that need attention include: expansion of the EscravosLagos Pipeline System (ELPS) from 1.1 Bscf/day to 2.2 Bscf/ day.

The Trans Nigeria Pipeline Project (TNPP) needs to be completed. TNPP aims to connect the gas pipeline systems in Nigeria to create an inter-connected system that will provide flexibility and better management of gas supplies.

The framework of this system is an integration of the three gas pipeline systems: Obiafu-Obrikom-Oben (OB3) system with a flow capacity of 2.0 Bscf/day, the CalabarAjeokuta-Abuja system with flow capacity of 3.0 Bscf/day, and the Abuja-Kaduna-Kano system.

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Wednesday 19 September 2018

BUSINESS

COMPANIES & MARKETS

DAY

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‘Though stocks are down now, this may be the best time to cherry pick’

Pg. 14

C o m pa n y n e w s a n a ly s i s a n d i n s i g h t

EY reports global revenues of $34.8bn in 2018 Iheanyi Nwachukwu

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Y has announced combined global revenues of $34.8 billion for the financial year ended June 2018. Overall, financial year (FY) 2018 revenues grew by 7.4percent in local currency and 11percent in US dollars (versus FY17).

All EY service lines delivered strong growth in FY18: in local currency Assurance grew 4.4percent; Advisory 10.1percent; Tax 6.4percent and Transaction Advisory Services (TAS) 13.9percent.

Over the five years since the launch of its Vision 2020 plan in 2013, EY has recorded strong 8.5percent compound annual growth.

Revenue increased across all four of the EY geographic areas: the Americas 7.4percent; Europe, Middle East, India and Africa (EMEIA) 6.9percent; Asia-Pacific 10.5percent and Japan 3.1percent.Across the developed markets, the US has had another impressive year, achieving $14billion in revenue, a 7.3percent increase over FY17. Mark Weinberger, EY Global chairman/ CEO, says “This year more clients turned to EY for support in their digital and transformation strategies, and for our bedrock services across audit and tax. Our significant and innovative investments are

driving growth and supporting the delivery of high-quality services. Most of all, our success is driven by the contributions of 260,000 EY people around the world.”

EY has been redefining how it uses technology to transform and strengthen its traditional and new service offerings across all businesses, including labor-intensive manual processes and innovations using blockchain, artificial intelligence (AI) and robotic process automation (RPA). EY is using over 2,000 bots across its businesses and client services. Of these, the 700 bots supporting EY internally have saved more than 2.1 million people hours and brought higher accuracy to manual processes.

In FY18, EY doubled the number of blockchain projects it undertook and launched a number of groundbreaking solutions and pilots. EY Assurance is running a pilot of blockchain audit technologies known as EY Blockchain Analyzer that enhances the ability to perform in-depth reviews of cryptocurrency business transactions. This will also lay the foundation for automated audit tests of smart contracts and blockchain assets.

Additionally, EY teamed up with Microsoft to launch the first blockchain solution for content rights and royalties management. Ubisoft, one of the world’s leading game pub-

L-R: Segun Olusanya, finance director, Noah’s Ark Communications Limited; Ekeno Eyo, chief operating officer; Lanre Adisa, chief creative officer/managing director, and Abolaji Alausa, executive creative director, during the cleaning up exercise community Pic by Olawale Amoo service by the entre management and staff of the company in Lagos.

lishers, is testing the solution, which will be extended from gaming to other industries like music and publishing. EY and Guardtime also announced that their blockchain platform for the marine insurance sector is now in commercial use – a world-first. EY is also working with the City of Vienna using blockchain to validate and secure its data, from voting results to transport schedules and routes.

Targeted strategic acquisitions and alliances also supported EY’s innovation efforts.

Lafarge finds bonding avenue for staff, family in sport RAZAQ AYINLA & IFEDAYO OGUNYEMI, Abeokuta

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riven by zeal to foster unity and ensure welfare of its staff, Lafarge Africa Plc, member of LafargeHolcim, has organised 2018 Sports Day for members of staff and their families with a view to giving them a robust sense of belonging and purposeful commitment to work.

Member staff of Lafarge Africa alongside their spouses and children converged on Agbesi Estate Playing Field at the Ewekoro Cement Plant recently for the 2018 edition of the games that has spanned over twenty years.

Speaking at the event, Managing Director of Lafarge Africa, Michel Puchercos said thta the event is a demonstration of the leadership commit-

ment of the organisation to the welfare of employees as well as their social lives.

The Managing Director who was represented by Ewekoro Plant Manager, Peter Anagbe said, “Sports Day is a special time that this organisation loves dearly to bring all employees and their families together to exercise themselves in sporting activities.

It is a warm opportunity to interact with one another and also have fun.

“The core value of Lafarge Africa is human value and we cherish our people as our assets and in the spirit of Injury and Incident Free (IIF), we cherish a lot the bonding and team spirits between the team and the Sports Day is a vehicle to strengthen this bond between this team.

“This is holding all over the country and we will still have a finale soon, where winners

from all over will compete,” he said.

Sporting activities at the event include 40 metres, 50 metres, 75 metres, 100 metres sprint races, 4x100 Relay race, catching the train, tug of war, ayo olopon, snookers, table tennis, golf and children corner for kids below ages five.

The Ewekoro Plant Football team (Classic Team) defeated their counterparts from Sagamu Plant (Supaset Team) 3-nil. The Ewekoro Tug of War team also defeated Sagamu Plant Team 2-nil.

Winners at the other sporting games include, Femi Adegoroye (snookers), Gbenga Adewunmi (table tennis), Segun Ogunro (golf ), Tosin Ogunleye (wives race), Ehis Ojehioba (male staff race), Faith Afolabi (female staff race), Toyin Adeniregun (management staff race) among others.

In FY18, there were 21 acquisitions in EY, which expanded the organization’s professional skills and capabilities in areas like digital, data, analytics, strategy and cyber. New alliance agreements, such as those with BlackLine Systems and JDA Software, are expanding the range of services and skills EY can bring to clients in areas like cloud-technology, supply chain and fintech.

As part of its innovation drive, EY will invest $1b in new technology solutions and capabilities over the next

two financial years in areas like financial services, cyber, risk management, managed services, software, digital tax and digital audit. In FY18, two additional EY wavespace™ flagship locations opened in Milan and Tel Aviv, bringing the number of globally connected flagship innovation centers to 18. EY plans to launch a further six locations in FY19 to continue its aim to help clients conceive and launch solutions in mobility, customer experience, data analytics and more.

Carmine Di Sibio, EY Global managing partner, Client Service, says: “Our commitment to deploying the best use cases for new technologies helps clients not just keep pace, but stay ahead of the vast disruption in today’s business world. Significant investments in people, technology and alliances over the past few years are transforming traditional and emerging EY services alike. We are proud that we are empowering clients to succeed and grow in this complex environment.”

Heineken Nigeria unveils winners of allexpense paid trip to Europe

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eineken Nigeria, a leading international premium beer brand has announced seven winners of its all-expense paid travel experience to Amsterdam, Paris and Barcelona in the 192 Countries Campaign. The seven lucky consumers were selected in a draw that took place at Heineken House, Ikoyi recently during which the top 60 consumers who unlocked the most countries during the campaign were invited.

The interactive brand campaign which was themed around Heineken’s presence in 192 countries saw the brand team up with mobile app Shazam to launch limited World edition labels with countries expressions on each bottle of the brand.

Emmanuel Oriakhi,

marketing director, Nigerian Breweries in expressing Heineken’s plans for the winners said, “The seven lucky winners will not only get to explore the best of Amsterdam, visit the ‘Heineken Experience’, the historic brewery which was designed for consumers to connect with beer-making and the history of Heineken, they would also visit Paris and Barcelona”.

According to Oriakhi, who was represented by Tokunbo Adodo, the portfolio manager, international premium lagers, Heineken is recognized for developing interactive and innovative campaigns and breaking new grounds in its approach to marketing.

These innovative strategies not only create revolutionary experiences, but also deepen connections with consumers.

However, to ensure

the best travel experiences for winners of the contest, Heineken has partnered with KLM which also has its roots in the Netherlands, to give the lucky winners an amazing travel experience.

Six of the winners, Gregory Ayodeji, Aregbesola Abdulkareem, George Osadolor, Afolashade Adu, Oladoyin Falodun, Arinze Ifejirika were chosen via a raffle draw, while the 7th winner, Omolara Bamgboye who emerged as the most influential social media user during the campaign was also presented with a flight ticket.

All winners will enjoy premium in flight experience provided by KLM Royal Dutch Airlines, hotel accommodation, shopping allowance and VIP access to the special Heineken Experience the company said.

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‘Though stocks are down now, this may be the best time to cherry pick’ As the investment market tightens with equities trending downwards, only experts with eye on the tab can make good investments and achieve strong returns. Here Saheed Bashir, group head, Business Development, Meristem Group in this interview with Modestus Anaesoronye shares his thoughts on developments in the market, growth opportunities and his company’s propositions.

Meristem Group is a conglomerate in the financial services market, what is the company set out to achieve? he overall objective of Meristem as an organisation is customer centric.

It is about fulfilling the investment experience of customers and making them happy. Our businesses are tailored towards customers, in terms of what they want because that is the sole aim of our existence to meet the needs of our customers.It is about offering a great experience from a prospect till we sign you on as a client. All the process flow brings the exquisite and unique touch such that we convert you from a prospect to a client. At Meristem we say our clients are Kingmakers, not just kings,because our business model as a company is essentially about clients. We look at gaps in the market and try to meet the needs of our clients with what the market has to offer.As an organisation, we put our clients first in everything that we do, and we try to meet their needs.

As a group, what are your niche services looking at the subsidiaries?

Each business is unique and as I said earlier, our business, group-wide is about meeting the needs of our clients.The needs of clients are diverse; be it individuals or institutions. Drilling down the individuals segments; there are retail individuals, upwardly mobile, high networth individuals (HNI) and ultra HNIs. For institutions we also have different categories ranging from corporate organizations, private institutions and the government. For all segments we reach, our subsidiaries and services rendered are tailor made to grow wealth for them in good time.

Looking at our brokerage arm of the business, we are very strong in retail and we have always fine tuned our model to meet the gap we see in the retail space in terms of investment management brokerage industry in Nigeria. We were the first brokerage firm in the country to come up with an online real-time retail platform, MeriTrade. MeriTradeaffords a unique trading experience. The platform is enabled on mobile devices so that you can trade shares anywhere in the world as long as your device is internetenabled.

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We do not do a push strategy, we do not just push services to clients instead, we identify our client’s pain points and existing gaps in the market and we ably address them.a classic case in point is our registrar business, we saw a gap in the probate business and effected a change. We went to CAC and the regulators and changed from Meristem Registrars Ltd to Meristem Registrars and Probate Services Ltd because we saw a gap in the probate services and we have been doing remarkably well in the probate business.

When people lose their beloved ones, they leave a lot of assets rotten and they do not know how to go about it.

Lawyers do a portion of it, but we do much more beyond what lawyers do. Lawyers help them procure a letter of administration or probate letter, but we take it further and ensure that the assetsare transferred from the deceased to the estate of the deceased so that the beneficiary can now have access to the assets that the deceased has left behind.

In each of our businesses, we identifygaps and ensure that we bridge such to the client’s delight.We have done thiswith precision repeatedly.

What is Meristem’s position in the market, in terms of market share?

I will like to take each subsidiary business individually as they are all unique.

For our brokerage business, we have constantly ranked top 10 among brokers in the market and we have major landmark transactions even though we do not have any affiliations to banks. Some of the market leaders have one connection to banks as they could be subsidiary or part of a group, Meristem do not have that structure and despite this, we have made it a strength for ourselves. We are not always satisfied with what we have, we always want to do more and ensure that we remain up there. In 2017, we came second in terms of value of transactions done on the exchange.

Our investment advisory unit of the brokerage deals with individuals, institutions, high networth individuals (HNI) and ultra HNI, what the banks will call private clients. We service our private brokerage clients in our physical office and service the retail clients online, through our cloud systems.

However, because there may be

Saheed Bashir

a physical contact needs, across retail and HNIs we created a contact Centre; a whole unit dedicated to making sure our clients remain happy.

Looking at our retail brokerage platform in Nigeria, according to Proshare, we are ranked number 1 and we have maintained an average of top 3 since inception. Our retail platform ranked first in terms of ease of doing transaction and innovation.

For our Registrars, maybe because there is no proper threshold to rank them. You might probably want to look at the number of registers, but that is just a measure, the quality of the accounts and size of the shareholders is a considerable measure, but there is no one measure used

We are going through a phase in the market now.

We have been here before, we were here around 2007/08 and 2010/11 and it is a phase

in the rankings. But if you want to rank based on the number or quality of registers, perhaps you will be ranking us among the top 5 registrars in Nigeria.

For the probate, as far as I know, there is no other registrar business that offers the probate services the way we render them. Although a couple of other registrars are following suit, but of course we always want to be the market leader in a niche that we have carved for ourselves.

Our wealth management subsidiary is relatively young, it came on board in 2008, so justabout 10 years of existence.

We are licensed as portfolio and fund managers by SEC. If you want to rank asset managers by performance, there are certain criteria you must look at.

In terms of the portfolio size, our asset under management as at December 2017, was close to N190 billion from about N150 billion in 2016. There are no appropriate rankings as we do not have an agency that ranks portfolio managers in Nigeria, which is perhaps a clue that stakeholdersshould look into. Outside the country, there are institutions that rank asset managers according to their funds under management, but because there is no database to see what others have as funds under management, it might be a bit difficult.

For our trust business subsidiary, it is less than 5 years oldbut we have made giant steps especially in bridging gaps. One of our ace products is Meristem Diaspora Trust which caters to

Nigerians in diaspora willing to invest reliably back home..

Our quality is one which cannot be overlooked, however we are not ranked in the league of the top trustee companies yet, because, we are considered as relatively new. This notion has not deterred our commitment to meeting clients’ needs in the trustees’ space, and thus, daily we are coming up very strongly.

In similar vein, our advisory business, Meristem Capital hitherto was a unit, we called corporate finance. However, based on increasing clients’ needs and our passion to meet such needs, we just got our SEC licence recently and now we are coming all out.

How have you been able to cope with the challenges in the investment management space?

I must confess, it has been turbulent in terms of the business environment especially for Nigeria as a frontier market, it has been quite challenging in terms of stability. We are going through a phase in the market now. We have been here before, we were here around 2007/08 and 2010/11 and it is a phase.

The cycle is coming up again; we have the period of peak and the tough a firm, we have been very conservative in our approach because we want to be in this market for a long time and we take compliance and regulations seriously. We try as much as possible to avoid those transactions that will affect our image as a firm. For our clients that are in the equities market, we do not promise a specific return as it is unethical, but rather we only give advice based on their risk appetite, return expectations and investment objectives.

Irrespective of the situation we will always take actions and do transactions that will not mar our brand image. Even during the 2008 global financial crisis, Meristem did not lay off any staff as we had to “cut our coat according to our size,” and we operated on slim budget managing our cost and sustaining our relationships with our clients because we knowthat,that period will not last forever.

With the treasury market trending downwards, do you see investors withdrawing from the money market and where do you see hidden opportunities?

That is a very pertinent question in this time and period. If you look at the NSE, the

market is not looking so good and the All Share Index (ASI) is currently unimpressive. It is below waters in terms of the negative return we have in the market, compared to what we had in the market in the first quarter. And there is no likelihood that the market will improve till the end of the year.

As we all know, the season has come up on us, this is election period and elections in Nigeria is a unique experience and I am sure what we are having now has never happened before in terms of party crisis.

The situation all around sends signals to the market alongside investors within and outside. They are taking note of those political developments,and reacting based on their observations, thus causing equities not to do well.

The average transaction done daily now is about N2 billion, so equities are not interesting, but that does not mean investors do not still have certain opportunities in the market.

Warren Buffet will tell you that you should always take a contrarian approach, which simply means when market is down, you invest and take position, but when market is up and rosy, you should be fearful.

Now that the market is down, nobody is looking at equities, perhaps it is the best time to pick equities. The market might not do well, but there are companies that still have strong fundamentals with promising earnings and stable growth in the bucket of companies on the NSE. Perhaps the investors can cherry pick now.

The money market and the equities market are negatively related, if the equity is down, you can take solace in the fixed income and the money market, but reverse is the case here.

Yields are around 12 percent while MPR, the benchmark lending rate is at 14 percent, it is quite unimpressive. If you invest your money in the government instruments, which is the near riskless asset you will get a return below the lending rate which means it is giving a negative return ab-initio. So, in picking an alternative investment, people need not just look at return but also the risk associated as they have a positive relationship. Investors need to look at the risk weighted return, that having considered the risk, what are my returns and not just the absolute returns.

Wednesday 19 September 2018

BUSINESS

DAY

15

COMPANIES & MARKETS AXA Mansard partners Paystack for seamless transactions Modestus Anaesoronye

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n a bid to help customers carryout seamless transactions, AXA Mansard Plc, a member of the AXA Group has partnered with Paystack to offer clients a platform that provides friendly digital payment platforms. By this partnership, subscribers would now be able to make payments directly from the AXA Mansard website from October 2018.

Paystack is the fastest, simplest way to accept online payments in Nigeria. It provides businesses with powerful growth tools in the form of a dashboard that helps them closely monitor and act on every aspect of their business performance, from granular

transaction to detailed customer insights.

The platform gives subscribers the opportunity of performing transactions from signup to receiving real payments in less than 15 minutes.

Subscribers would be able to make payment through automated route, which has been ascertained to be the most optimal channels that ensures the highest transaction success rates in the market.

“As part of our ongoing commitment to innovation and increasing the payment options to clients, we’re pleased to announce this partnership with Paystack payment Solutions,” stated Bayo Adesanya, Chief Digital Officer, AXA Mansard Plc. He further noted that “A key way in which we are de-

livering on this commitment is through the development of highly functional digital payment ecosystems that simplifies payments for both the subscriber and AXA Mansard.

The process of initiating and receiving payments is easy to set up, seamless and real time. Subscribers would now be able to make payments directly from the AXA Mansard website.

“Funds settlements are also straight forward and there have been little or no reconciliation issues for transactions originating from Paystack. There are also additional analytical features on the dashboard, giving us the opportunity to better understand our customers and their behaviours on our platforms.”

He added.

Business Event

Ernest Ndukwe, former executive chairman, Nigeria Communication Commission (NCC) (r) presenting the Titan of Tech CEO of the year award to Godfrey Efeurhobo, managing director, Smile Communications Nigeria Limited, during the Titan of Tech award held in Lekki, Lagos recently.

Huawei to sponsor 10 Nigerian students on ICT training in China FRANK ELEANYA

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en Nigerian students from different public universities across the country will be selected for training in information and communications technology (ICT) training in China later this year.

The students from University of Nsukka (UNN), University of Lagos (Unilag), University of Benin and other universities are part of a program designed by Huawei to train 100,000 staudents through its Huawei ICT Academy every year.

In a statement BusinessDay received, Huawei disclosed that the students will be selected from those signed to the Huawei Authorised Information and Network Academy (HAINA or

Huawei ICT Academy). The academy is a partnership project between Huawei and universities offering Huawei ICT courses to encourage students to attain Huawei certification in support of a subsequent career in the ICT industry.

“The program seeks to develop local ICT talent, enhance knowledge transfer, promote a greater understanding of an interest in the ICT sector, and to improve and encourage regional building and participation in the digital economy,” Simon Zhang, channel service director of Huawei Technologies Company Nigeria Limited, said at the launch of the launch of the event. The program is in its third edition this year.

The company has set a target of 40 ICT academies and 25,000 students for the ICT

competition. So far, ten universities have on to the Huawei ICT Academy.

The company judges will select a team that will represent the country at the regional ICT competition in South Africa.

The best team from the competition will then proceed to the global competition in China.

“The continued cooperation between Huawei and the partner universities will see more and more students benefiting from the program and building their careers,” Huawei’s statement noted.

The deputy vice chancellor of the University of Lagos, Oluwole Babafemi Familoni while speaking at the launch, encouraged participating students to put in their best in the last stage of the competition in Nigeria.

MTN, Google train SMEs on digital marketing SEYI JOHN SALAU

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

The SMEs, who operate businesses in various sectors, were empowered in a 4-hour session to gain first-hand experience on how to use digital tools to maximize their businesses. The facilitators enlightened the trainees on how to effectively promote their businesses using vari-

ous digital tools with a focus on owning business websites, running business ads, leveraging social media amongst others.

Onyinye Ikenna-Emeka, general manager, enterprise marketing MTN said, MTN Nigeria continues to seek ways to contribute to the Nigerian economy by extending its partnership capabilities to brighten the lives of small business owners within the country.

Ikenna-Emeka who was represented by Bridget Enuma, manager, enterprise business, said “Since 2001, we have consistently been providing innovative and customized solutions for our partners to help their businesses thrive, while maximiz-

ing profitability.”

Speaking on the experience, one of the entrepreneurs, Deekor Legborsi, CEO of Squirrel Technologies said, “This was a really rewarding experience. I speak for the other partners when I say that being a partner of MTN has not been a let-down as it has opened the airways to other business owners and prospective business opportunities.”

The SME training is one of MTN business’ commitments to promoting SMEs, enabling them contribute to economic growth with massive potential to generate employment opportunities for Nigeria’s teeming population and generally be the backbone of the economy.

L-R: Jordi Borrut Bel, MD/CEO, Nigerian Breweries (NB Plc); Adebunmi Adekanye, permanent secretary, Ministry of Education, Lagos State, representing the deputy governor; Desmond Elliot, member, representing Surulere, Lagos House of Assembly, and Grace Omo-Lamai, HR director, NB Plc, at the official commissioning of 6-Classroom Block built by NB Pls for itolo Girls Junior Secondary School, Surulere in Lagos.

L-R: Paschal Dike, 2016 JCI World president; Olumide Emeralds, monitoring & evaluation officer, Act Foundation; Bendega Terver, brand manager, Taxify; Adeniyi Balogun, JCI Nigeria president, and Olumide Coker, country leader, Lets Do It Nigeria, at The World Clean Up Day 2018 in Lagos.

L-R: Bukola Nwafor , Legal/HR Manager, Pintar Services Ltd, Dani Samaha, general manager, Pintar Services Ltd, and George Nwachukwu, publisher/CEO, Awesome Brands Magazine, during award ceremony organised by Awesome Brands Magazine Limited at Sheraton hotel and towers, Ikeja, Lagos, recently.

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Leadership

Wednesday 19 September 2018

SHAPING PEOPLE INTO A TEAM

Men buy more from manly men ALISON BEARD

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ETTING TOM BRADY TO PROMOTE YOUR BRAND IS AN EXCELLENT IDEA, NEW RESEARCH SUGGESTS. An international research team led by Tobias Otterbring, now at Aarhus University, tracked purchases people made at a home-furnishings store in a midsize Swedish city during one weekend. When a tall, athleticlooking male employee stood at the entrance, male shoppers spent significantly more money than usual and more, on average, than female shoppers did.

The conclusion: Men buy more from manly men.

Professor Otterbring, defend your research.

The presence of this physically imposing guy in a store uniform as soon as people walked in the door did seem to change the way that men shopped. When he was there, the average bill for male shoppers came to about $165 — more than double the average of $72 that women spent during those times and much higher than what either men or women spent when the employee was absent, which was $92 for men and $97 for women. The average price per item men paid was also higher — $18, versus about $10 when the employee wasn’t at the door, which was also the same amount women paid per item at any time.

My co-authors and I did this study in conjunction with the Service Research Center, CTF, at Karlstad University. Interestingly, in later research we found that the effect was even

greater for male customers of short stature. We think this is because the physically fit male we used activated the classic male competitive instinct. We know that tall, athletic-looking men typically have greater success in economic and mating markets.

So when male shoppers saw him, we suspect, they sensed a rival and responded by signaling their own status: They opened their wallets.

And female employees — or less imposing male ones — wouldn’t inspire the same reaction?

Previous research has shown that men are indeed more inclined to try to prove their superiority when exposed to physically attractive women.

We wanted to explore intrasexual competitive behavior instead. There were, of course, other store employees around during our field study. But we only compared purchases made when this particular male employee was present against those made when he was absent. We suspected that smaller male employees wouldn’t elicit the same effect and found support for that theory in a series of later lab studies. Shorter men just don’t seem to trigger

the same evolutionary urge to show off.

Why wouldn’t the women also spend more money in the presence of a physically dominant guy?

In an evolutionary sense, it’s been more advantageous for women to play up their beauty and health than to highlight their status and wealth. Maybe if we’d conducted our field study in a cosmetics store, we’d have obtained different results.

At the same time, research has shown that women respond to intrasexual competition, too.

For example, after looking at pictures of attractive women, they’re more likely to favor weight loss pills, extreme exercise, excessive suntanning and other beautification behaviors.

Could it be the timing of the employee’s shift that mattered instead? Men spend more in the afternoon than they do in the morning?

We controlled for that by having the employee work after lunch on Saturday and before lunch on Sunday, so he was present at different times on different days.

What exactly did he look like? How tall is tall? How muscular is muscular?

He was taller than 95% of the American male population, which is also tall in Sweden, and had recently finished competing as a professional trackand-field athlete, so he was perceived as significantly more physically dominant than an average man. And in our followup lab experiments, which involved manipulating photos of men to appear either more fit or not, we found that seeing the images of stronger-looking guys caused men (but not women) to prefer larger logos on their clothing. We later determined that this effect was driven by the shorter male study participants, not the taller ones.

How does all of this play out for male shoppers who are gay?

We didn’t measure or control for sexual orientation in our studies. But given the random assignment of study subjects in the settings we used, we would expect that the number of gay men would be evenly distributed across our experimental groups, and so shouldn’t have strongly influenced the results.

I can’t say for sure, but I’d think that gay men could feel the same sense of rivalry as straight men, even if they’re competing for different types of mates.

Should retailers that want more business from men change their hiring criteria then? Only “The Rock” look-alikes need apply?

If you’re a company selling status-signaling luxury goods — like cars, watches and clothes

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— it’s certainly an idea to consider. You probably wouldn’t see the same effect in stores selling more-functional, utilitarian items, however. I’d also note that the big, tall person doesn’t have to be an employee or even physically present, as our lab studies on logo preferences, which used photos of men in both uniforms and street clothes, showed. So we see implications for not just retail hiring but also advertising and marketing.

You mean companies can drop the slim male models and short male actors and hire more NBA or NFL stars to sell cars and clothes?

You already see some of this: Tom Brady in ads for Movado, Aston Martin and Ugg; Roger Federer for Rolex and Credit Suisse.

Well, I’d say that the psychological mechanism is an increased drive to compete with people of the same gender, not decreased feelings of self-confidence. But retailers will have to decide for themselves whether it’s a good strategic move to, say, assign a taller male employee to handle the account of a shorter male customer. Maybe that would drive more sales in the short run. But it might also cause the short man to leave the store feeling unhappy and not come back, which wouldn’t be good for business. Personally, I would never encourage any organization to hire staff members simply on the basis of looks. But that doesn’t mean we shouldn’t be aware of these superficial biases and understand how heavily they can influence consumption.

Politics & Policy Wednesday 19 September 2018

C002D5556

BUSINESS DAY

2019: UK invests 47m Pounds to deepen Nigeria’s democracy

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he British government has earmarked 47 million Pounds to deepen democracy in Nigeria in order to increase the participation of Nigerian citizens in decision making to enhance the development of the country.

Indications to this development emerged during an interactive session with members of the media held at the British High Commission to mark the 2018 International Day of Democracy in Abuja at the weekend with the theme “ Democracy under Strain: Solutions for a Changing World.”

Speaking during the session, the Deputy British High Commissioner to Nigeria, Hariet Thompson, noted that the British government through the Department for International Development (DFID) is Deepening Democracy in Nigeria in the Phase 2 (DDIN2) funded with the 47 million Pounds, to contribute to strengthening of democratic governance in Nigeria.

“In Nigeria we know that inequalities are the reason for lack of participation for a number of different groups, women particularly and people with disabilities. We have seen important step earlier this year with the passage of the Not- too -Young -to -Run Bill, but there is more that can be done to get young people involved in democracy and politics in Nigeria.

“Nigeria’s democracy is relatively young but I would say it is strong, it is growing and it is strengthening and we very much hope that the elections in 2019 will

From left: Debbie Palmoss, head of department for International Development DFID (Nigeria); Hariet Thompson, deputy British High Commissioner to Nigeria, and Dominic Williams, political counsellor in the British High Commission, Abuja, during an interactive session with the media to mark the 2019 International Day of Democracy in Abuja at the weekend

be a further sign of our strengthening of democracy with a further improvement on the last Presidential election. We hope to see a free, fair and transparent process before, during and after the elections and we are discussing with the political parties and also the independent institutions to understand their approach and to encourage them to stay strong in their commitment to further deepening Nigeria’s democracy,” she said.

The Deputy High Commissioner, however, noted that the British government has absolutely no desire to influence the outcome of the elections, saying “we do not have and will not have a preferred candidate. What we want to uphold is

People’s Trust clarifies Gov Ambode’s endorsement for 2019

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he Lagos State Branch of the People’s Trust (PT) has issued a statement to correct and clarify the impression created by some news media that it was the national leaders of PT i.e Dr Olisa Agbakoba (SAN) and Abduljalil Tafawa Balewa who adopted Governor Akinwunmi Ambode for second term.

The statement signed by the Publicity Secretary of the People’s Trust, Lagos Branch, Segun Awe Obe, made available to BusinessDay, said “for the avoidance of doubt, we wish to state clearly that the mobilization of 30 other political parties in Lagos State to adopt Governor Ambode for second term has nothing to do with our two revered national leaders and icons mentioned above.”

The PT said further that contrary to the erroneous reports in some news media, the initiative of the Lagos State Branch of the People’s Trust is in alliance with political leaders in Lagos State, who believe the Governor has

done so much work in Lagos in his first term to deserve a second term ticket and should not be sacrificed on the altar of political intrigues of god fathers “We therefore wish to state clearly that our national leaders are not involved in this present move but will be briefed by the State Branch of PT at the appropriate time for their blessings; as we run a true federal structure in the People’s Trust. Moreso, we wish to recall that the statement in question was signed by the Lagos State Publicity Secretary, Dr Segun Awe Obe and not any of our national officers to warrant erroneous reportage “Therefore, we in Lagos PT in alliance with other like -minded political parties in Lagos State wish to reaffirm and stand by our statement to offer Governor Akinwunmi Ambode our governorship ticket for the 2019 elections to enable him run for second term on our platform, if he is rejected by godfathers in his party, the All Progressives Congress, APC.

the process. That is what matters to us, that is what we will be supporting but we have no preference for any candidate. It is very important to know this.”

Debbie Palmoss, the Head of DFID in Nigeria in her remarks said the British Government is Deepening Democracy in Nigeria with the funding of the 47million Pounds to support INEC in terms of the way the election is managed.

She added that there is also some support to the National Assembly and a very important component which is working with civil society organizations including the media in ensuring that there is a free fair and credible and peaceful election.

“So the sort of things that the

DFID Programme is doing is supporting voter education and making sure that people understand their rights and how they can get a voter card and how they will vote on Election Day. “We are producing election maps and listings for public use, supporting a range of stakeholders not just to oversight the credibility of the election process but also the pre elections process. This is obviously a very important process, we are moving into the primary season,” she said.

Palmoss added that the programme includes the preparations and the training of the election staff, stressing that the way security forces carry out their role will be

17

credibly important as well as the comportment of the political parties themselves, their attitudes and approach to elections.

“We are working with a wide range of stakeholders. We are also trying to mobilize women and youth groups’ and people with disabilities to ensure they have access and are able to vote. We are supporting observer groups as well, and we are thinking about how to support technology in the elections process and indeed supporting the conduct of security and threat assessment to look at electoral hot spots. So it is a very wide range of work with the CSOs and we are also working with the US government on this programme,” she added.

The 6-year 47 million DFID (DDiN2) programme aims to contribute to the strengthening of democratic governance in Nigeria, with strategic outcome of supporting the development of more efficient, effective and responsive political, electoral and democratic institutions through implementation of three components: support well-prepared and well-administered national and state elections, with measures in place for independent observation, and to mitigate risks of violence; support to increase National Assembly’s capacity for responsiveness in law-making, representation and oversight; and support to improve public participation in governance and electoral process, particularly women, youth and people living with disability(PWDs).

Nigerians voted Buhari in 2015 to end PDP, corruption, impunity - APC ...Congratulates Adeosun

JAMES KWEN

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he All Progressives Congress, APC says the acts of corruption, impunity, irresponsibility and executive rascality perpetrated by the then ruling People’s Democratic Party, PDP made Nigerians to vote in the President Buhari administration in 2015, with its Change mantra to put a stop to such undemocratic practices.

APC recalled that, in past PDPled administrations, Nigeria was held down by corrupt and irresponsible public officers who refused to honour invitations of the National Assembly and closed down national airports against perceived political adversaries.

The ruling party also reminded Nigerians of how PDP government officials bought luxurious bullet-

proof vehicles with public funds at inflated prices; locked out National Assembly members, forcing federal lawmakers to climb high barricades in order to assess the legislative chamber.

Yekini Nabena, APC Acting National Publicity Secretary, made these assertions in a congratulatory message to Kemi Adeosun on her recent resignation as Minister of Finance following allegations of her forgery of NYSC exemption certificate.

Nabena described the resignation of Adeosun as Minister of Finance and acceptance of same by President Muhammadu Buhari as actions of honour, strength of character and integrity.

He noted that, “like all responsive and responsible governments concerned about the truth and due process, the APC led federal govern-

ment undertook diligent investigation of the allegation”.

“Now that the report of the investigation is out, the right thing has been done. The honorable minister has taken the path of honour and resigned. We congratulate Mrs. Adeosun for her action”, Nabena said.

According to the APC spokesman, “in President Muhammadu Buhari’s administration of integrity and transparency in the conduct of public affairs, no officer of government with a modicum of questionable conduct or integrity should stay in office”.

“We wish Mrs. Adeosun every success in her future endeavors and join President Buhari in appreciating her immense contributions to the stability of the Nigerian economy in the past three and half years”, he stated.

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BUSINESS DAY

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Wednesday 19 September 2018

Politics & Policy

Countdown to 2019: Who is qualified to lead Nigeria?

INNOCENT ODOH, Abuja

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he Nigerian political landscape perhaps has never been intense in its trajectory as the present moment. The political battle field is brimming with ambitious power seekers at all levels but the battle for the Presidential seat is of fiercer character among the gladiators.

Some of the 91 political parties will between now and October, produce their candidates, who will contest to unseat President Muhammadu Buhari and his ruling All Progressives Congress (APC). President Buhari is also gearing up to clinch the APC sole political ticket having no opposition but the main opposition party- the People’s Democratic Party (PDP) has a dozen aspirants jockeying to clinch the sole ticket of the party as the party goes into presidential primaries on October 6.

The 2019 election will likely have up to 40 Presidential can-

President Buhari

didates from different parties but so far, only one party, the Young Progressive Party (YPP) has pro-

duced the erudite scholar and former Deputy Governor of the Central Bank of Nigeria, Kings-

ley Moghalu as its presidential candidate as Nigerians wait for multiple others to begin the political ‘war’ in earnest.

However, the most important thrust through which these array of politicians will be assessed and rated, will be the state of the Nigerian economy and how the power seekers hope to address the myriad of crises that have bedeviled Nigeria in the last three and half years. The Nigerian economy is in dire strait and the figures are not kind to this current government of President Buhari following the pervasive hardship, poverty, hunger, unemployment, disunity and tension growing in the country.

BusinessDay is helping to set the agenda for the shape and character of politics in Nigeria in the coming political dispensation. BusinessDay gathered that Nigerians desire the leader with a robust business- oriented and governance policy to revamp Nigeria’s ailing industries, education, agriculture, oil and gas among others.

So, who is qualified to lead

Nigeria as President in 2019?

Judging by the harrowing experience that Nigerians have gone through, the citizens are stirred up and in unequivocal term are set to interrogate the principles, norms and values, the nature, character, background of candidates.

Some of these qualities include; honesty, good health, integrity, competence, experience, knowledge of the variables that dictate the circumstances of modern economies, dedication and cosmopolitan outlook on issues. Nigerians also desire the leader who will provide adequate security for all the citizens in the face of ceaseless onslaught from domestic killers and imported gang of terrorists.

Nigerians also desire fidelity and respect to the nation’s diversity, respect to the laws of the land and human rights, astute approach to investment to critical sectors of the nation’s economy, respect for women and a robust foreign policy to put the nation first and pull foreign investments.

…Nigerians speak Nigeria needs a leader to rescue it from division imposed by Buhari- Majeed

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peaking to BusinessDay on Monday, a security expert and public affairs analyst, Majeed Dahiru, said Nigeria needs a leader with nationalist credentials to extricate the country from the disunity that President Muhammadu Buhari allegedly imposed on the country.

“Today Nigeria is more divided than any other time in our entire history. In fact Nigeria is more divided than it was in 1966, the year preceding

Majeed

Nigerian civil war. And this division is principally hinged on the current President’s extreme sectionalism. The elevation of sectionalism to a near state policy by the Buhari administration has gone a long way to polarize the country along ethno-geographic and religious lines,” he said.

He stressed that the immediate challenge before the next President of Nigeria is to unite this country and this cannot be achieved without a leader who possesses impeccable nationalist credentials to undo the damage that President Buhari’s alleged sectionalism has caused the country. “So we need to look out for the leader who through and through from his personal life, to his associations, to his business dealings, to his style of politics to have always displayed enormous capacity to drive a pan Nigerian political process.

“We must go through their history, their antecedents, their utterances, their contributions to national issues to arrive at such an aspirant that

fits this particular qualification,” he noted.

He pointed out that Nigeria’s economy is so bad such that Nigeria has become the poverty capital of the world, saying in “addition to a leader that possesses impeccable nationalist credentials, we also need a leader that is imaginative enough, that is knowledgeable enough about the economy as clearly definable from his own personal economy in this case his own business and how he has been able to make a success out of his own personal economy. Only such a leader will be trusted with the economy of a country as complex as Nigeria.

“Such person must have been known to have concrete ideas on how to manage businesses. He must have businesses and understand how government policies affect businesses like his own and how government policies can help businesses to grow and then create jobs and lift Nigerians out of poverty,” Majeed said.

Nigeria needs a leader driven by vision- Moghalu

K

ingsley Moghalu, the Presidential candidate of the YPP presents himself as probably the best man for the job in 2019. In his acceptance speech, after he emerged as the YPP flag bearer, Moghalu, who castigated President Buhari, the APC and the PDP lamented that they have failed the country and must be kicked out to pave way for a visionary and purposeful leadership that he is ready to provide for Nigeria.

He stressed that Nigeria desperately needs a leader of international repute, not politicians that had failed the country. He said “more than ever before, Nigeria needs to be driven by a vision, informed by a worldview that determines everything else.

“Up till about 40 years ago, China

was viewed as a basket case; overpopulated, unproductive and ruined economically by policies of the decades prior to that.

“Today, they snap their fingers and nearly every single African Head of state shows up in China with their hands out, eager for Chinese largesse.

That’s what a country driven by a worldview can achieve.

“In accepting the presidential ticket of this great party, I stand here before

Moghalu

The new leader must have courage to restructure Nigeria- Ononuju

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public affairs analyst Katch Onunuju advocated for a leader that will have the courage to restructure the country adding that it an idea whose time has come.

“The country is challenged in a way we have never been. So whoever comes we want to know their viewpoint about restructuring. We have reached the bridge and we must cross that bridge if we intend to remain as one nation.

The design of Nigeria is simply unworkable and we must design new set of protocols that will guide our movement. It is not an issue of one group or one tribe it is a Nigeria thing.

“We need the President that will restructure the economy through privatization which President Buhari is averse to. Buhari is not comfortable with Democracy and the input of the interrogation pro-

Ononuju

vided by the legislature. Buhari has doubled down on the employment of nepotism as a state policy and Nigerians are far more divided now than before. We now have home to the highest concentration of poor people than anywhere else in the world.

“We made a mistake as a people and we have to move forward and reconstruct our country. There is no doubt that a new country has been born with this democracy,” he said.

Our attitude is a reflection of our leadership- Varsity don you to say that Nigeria is fully capable of achieving greatness at home and abroad in our lifetimes. But this cannot happen with the normal way of doing things, the so-called Nigerian way.”

He said that it was time for the country to end the era of waste, corruption, and incompetence that held Nigeria back from achieving its potential.

“It is a choice between remaining a mere fractious assortment of ethnicities and religious on one hand and building a real nation on the other.

“It is a choice between freedom and slavery under our recycled and corrupt politicians; between poverty and prosperity for our masses of the poor, and the unemployed, and between stability and continuing instability of the Nigeria state,” he said.

S

peaking to BusinessDay on Friday, a lecturer with the Department of International Relations and Diplomacy, Baze University, Mukhtar Imam (PhD),posited that “the individual should basically have all the qualities but the question now is where do we find this individual from our midst?” he asked.

He pointed out that people’s attitude is a reflection of their lead-

Imam

ership, adding that it is from the followership that leadership emerges.

“Our political socialization is borne out our political behavior. So it is reflective of what we are as a people.

That disunity that we talk about did not happen by accident, it is the tool with which these individuals, who find themselves from among us, see as something that they can lean towards. The things that galvanize our thoughts are ethnically and religiously driven.

“There are lot of unrepentant ethnic chauvinists and religious bigots from among the followership so the leaders have found out that this is the tool that they can use to ascend to position of authority. We as the people must hold our leaders to account, only then will we find the kind of leader we want,’’ he said.

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Politics & Policy

How flooding reduced rice production in Niger state – Bello Abubakar Sani Bello, Niger State Governor laments the impact of flooding on farming communities in his state, stressing that the state, which produced 540,000 metric tonnes of rice last year, may not produce anything close to this figure because of the natural disaster. The governor was one of the few sitting governors who came personally to the National Secretariat of the All Progressives Congress, APC to submit his expression of interest and nomination forms after which he spoke with journalists on pertinent issues in his state and the APC. James Kwen was there. Excerpts: On why he is running for second term am actually not happy today because I just left communities that have been submerged completely by water.

We have close to 20 LGAs which have been submerged with water.

Why I am seeking for a second time is simple, we have started some good works and most of them are near completion and we must do our best to complete those projects in the interest of our people. These are projects that are of high impact to the citizens of Niger State, so we have at the moment invested a lot in the state to ensure conducive economy and social environment in the future, so four years is not enough, eight years is a bit tough but with eight years, we hope that the successor in 2023 would maintain the temple to continue with the infrastructural development. So, yes I am going for second term to enable me complete some of the projects which are still ongoing.

to those agreements. At the moment we have formed a committee, a pressure group that would interface with the government to enable us recover some of those commitment.

The most important of those promises then was to improve on our infrastructure in Suleja, to provide tertiary institutions, access roads to reduce pressure in the main Suleja road itself. Doing this, would reduce hardship in Suleja LGA. So, you are right, we haven’t yet reaped the right benefit of being close to FCT. I hope once we compiled all our documents together, we have a consultant working on all the benefits and compensations but unfortunately, I know most of those for compensation must have died but it is better late than never. So we would continue to push until we get the last dime of what is meant for Niger State.

I

His take on the recent defection on APC I am not really bothered about the defection. I have carefully analyzed those defecting and I have discovered most of them are defecting for personal reasons. They don’t have one unified reason for defection.

They all have individual reasons why they are defecting. So, I am not really

Gov. Bello

bothered about those defections.

On whether Niger State has tapped into the benefit of being around the FCT Because of our proximity to FCT there is a lot of pressure on our infrastructure especially in Suleja area, most people who work in Abuja live in Suleja and that has brought about pressure on our infrastructure and amenities in Suleja Local Government Area. We have

started working with Ministry of Finance and FCT on the infrastructure and we found out that most of the people who work in Suleja pay their taxes in FCT but we have started reaping those benefits and we are still working on others.

When FCT was conceived, Niger State contributed 75% of the land in FCT. At that point, there were a lot of agreements, understandings, arrangements that were signed and the Federal government has not kept

On the intention to sustain Niger State as the best state in terms of Agriculture in Nigeria Agriculture is something we need to take seriously, we have tried our best but I think we need to do more. We have recently provided about 150 tractors but I think we have to go commercial, mechanized farming, we tried to develop our dams to encourage more of dry season farming.

The problem with the wet season farming is the flood issues and I can tell you, we have had the worst flood season since I became the Governor.

Thousands of hectares of lands submerged with water, and more than 100 communities are experiencing this. So, this year unfortunately, the production would be less than last year which was close to 540,000 metric tonnes of rice.

On Educational Development As regards to education, this is something we need to take seriously. We have put in place a framework to guarantee the educational system in Niger State, to improve on the quality. Unfortunately when we came in, most of the infrastructure was worn out, as you are aware, education requires a lot of capital.

You also know the investment of education is not immediately but we have decided to move on.

We have started picking up our schools, the whole school system approach with the secondary schools, we have also started working on the primary schools, through UBEC and at the same time, we are given some spot to our tertiary institutions. We have started a teachers training center to reduce the teachers gap which is functional now and few years from now, we would start yielding fruits when we start producing good quality teachers.

So, those are the main problems we found in education, infrastructure and technical issues as regards to the classrooms, dormitory, materials and the technical side is the quality of teachers that we lack.

Kwara PDP raises alarm over APC violence, urges aspirants to imbibe spirit of sportsmanship SIKIRAT SHEHU, Ilorin

T

he People’s Democratic Party (PDP) in Kwara State has drawn the attention of security agencies and the general public to the alleged violent tendencies of the opposition All Progressives Congress (APC) in the state.

The PDP in a statement by its state publicity secretary, Tunde Ashaolu catalogued the alleged public disturbances involving the supporters of APC in various locations within Ilorin, the state capital.

The statement reads: “On Saturday, 15 September, we got a report that some rampaging thugs loyal to two different camps in the APC engaged in a fight at one of their campaign offices along Sango road, Ilorin, which resulted in injuries to scores of people including party members and other innocent people.

“It was gathered that there were blood stains at the scene of the attack and the injured people were quickly rushed to the University of Ilorin Teaching Hospital (UITH) for treatment.

“This is coming barely two days after some political thugs belonging to an APC governorship aspirant unleashed mayhem on some residents and shop owners along major streets of Ilorin including Ibrahim Taiwo road, Sawmill area, Abdulazeez Attah road, Agaka area and Oja-Oba. “Shop owners, residents and passers- by had to scamper for safety, as the thugs in their large numbers brandished dangerous weapons, which scared people away.

“We are not unmindful of the fact that the outrageous cost of nomination forms of the APC is partly responsible for the desperation and show of shame within the fold of the party. An individual

who paid over N22million to obtain a nomination form is bound to do everything possible no matter how untoward it is to get the party’s ticket.

“Nonetheless, as a party, we condemn these rampant attacks on innocent citizens by APC thugs and called on security agencies to look into the matter and arrest the perpetrators, as part of efforts to forestall recurrence of such unfortunate incidents.

“Furthermore, we wish to note that this latest attack shows that APC is a party that breeds hoodlums, and further demonstrates its large-scale violence planned for 2019 general election in the State.”

H said that in the PDP members of the party in the state have resorted peaceful and amicable ways of doing things saying “it is also instructive to note that in the PDP, we preach and promote unity and brotherliness. We don’t see

politics as a desperate game, and aspirants within the party remain friends and brothers under one big family, as it has always been the case in Saraki’s political dynasty.

“Yesterday (Saturday)around the same time in Kwara North, to the excitement and in full glare of the youths, women elders, and traditional institutions, the campaign teams of two governorship aspirants of the PDP, Hon. Mohammed Zakari and Hon. Aliyu Ahman Pategi bumped into each other along Pategi road. The two aspirants stopped and engaged in a brief chat and wished each other well on the race ahead.

“The brotherly depositions are seen in all our governorship aspirants and all aspirants for other political offices in PDP. This is due to the exemplary leadership style of the Senate President, Abubakar Bukola Saraki and which is considered sacrosanct by the Kola Shittu led State Working Committee of

the PDP. “We, therefore, urge aspirants in the APC and other political parties in the State to emulate this spirit of sportsmanship as demonstrated by the two gubernatorial aspirants in the PDP. Politicians should not see politics as a do-or-die affair and must shun any act capable of causing unrest in any part of the State.

“We are confident that Kwarans will reject seasonal politicians who only come to town on the eve of elections to cause unrest and disappear immediately after the elections. This is a clear indication that they do not have the interest of the people at heart, and their only aim is to grab power at all cost.

“As a party, we understand that all politics is local and we are assured that the good people of Kwara State will continue to support and stand by the leadership of Bukola Saraki, who has always identified with them.”’

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China to implement eight major initiatives with 32 African countries Still on Ambode’s 181 local government roads 31

Nigeria needs 10-20 year plan to meet its local shoe demand 30

SMEs Vital for Employment and Wealth CreationBembatoun-Young 32

5 years after robust summit on hides & skin

Nigerian leather still troubled Five years ago, courtesy of a summit on the sector by the Leather and Allied Products Manufacturing Association of Nigeria (LAPAN) with support from ENABLE and GEMS, the poor state of this vital industry was revealed. SIAKA MOMOH, who did a report on the summit, which held at the Transcorp Hilton hotel on September 16 and 17, 2013, in his segment ‘The Realsectornow’, in Vanguard then, went to town to find out how much progress has been made five years on. He spoke to BELLO ABBA YAKASAI, a principal actor in the September 2013 summit and some related federal ministries sources. His report:

T

Leather industry issues he summit raised the following issues in September 2013: • Despite its position as the second largest non-oil foreign exchange earner, the leather industry has witnessed a decline over the past decade especially at local production levels due to deficits in technology, finance, market access, product quality, and other challenges.

• There is a dearth of industry–specific data required for effective planning and institutional control.

• The quality of leather produced in the country is affected by factors such as the limited institutional control of abattoirs, poor technological input and the absence of a national standardization process.

• The current policy context distorts the local market and makes it more beneficial for finished leather producers to export rather than sell to the local market.

The summit’s resolutions And the summit resolved that: • All stakeholders in the sector should be engaged in policy formulation and implementation.

• The Master Plan should include a funding strategy.

• There should be a concerted effort by public sector to gather relevant data through primary research.

• The Leather Transformation Plan should address issues of eco friendliness, quality and standardization within the Industry.

• Enforcement of laws governing the upstream and downstream sector of the industry should be enshrined in the leather master plan.

• There should be ongoing engagement between the financial institutions and stakeholders within the sector to

improve access to finance.

Its recommendations • Government should initiate a participatory review of the laws and policies that govern activities in the leather industry in order to address emerging stakeholder concerns, trends and impediments to the development of the sector e.g. the Export Expansion Grant (EEG), and the 1942 Hides and Skins law.

• The National Assembly, work-

ing with other stakeholders should strengthen the law and policy regime for the procurement of hides and skins in order to ensure institutional patronage as well as effective quality assurance and control.

• National and State Governments as well as International Partners should create outreach programmes, pilot programmes and networks in order to enable more women participate in the sector. There is the need to include institutionalized arrangements for periodic Monitoring and Evaluation of the Master Plan.

• It is imperative to interface knowledge and skills within the leather industry by building a strong tripartite linkage between policy planners, training institutions and employers of labour. · There is the need to improve the quality of leather goods for domestic and regional markets bearing in mind price and quality that meets the need of the customers.

• It is important to integrate eco friendly practices at different stages of the production process in order to ensure sustainability and compliance with

national, regional and international policy frameworks.

• There is the need to enhance the quality of leather products through continuous training and re- training of leather producers.

• The CBN should continually popularize available intervention funds using appropriate mediums and also review eligibility guidelines in order to promote access.

• LAPAN and other stakeholders should engage the proposed leather transformation committee of the Federal Ministry of Industry, Trade and Investment and also the Ministry’s proposed leather reforms.

• Coalitions of leather producers should coalesce around common interests in order to agree on and also influence national product standards and other policy outcomes • LAPAN and other groups should ensure the effective flow of information among various clusters within the industry such as leather fashion designers, tanneries and other producers of finished leather goods.

• LAPAN and other leather stake-

Advertise here

holders should get the buy- in of Ministries of Industry, Trade and Investment; as well as Agriculture and Rural Development in the Leather Transformation Master Plan.

These were the issues, resolutions and recommendations made at the September 2013 Summit. What progress have we made five years on? We need to ask this question since it has generally been said that Nigeria is traditionally fond of putting up conferences or summits or seminars of this type whose decisions or recommendations end up gathering dust on shelves. We sought out Bello Abba Yakasai, Cluster Manager, GEM (Growth and Employment) Project (WB-FMITI), Abuja, Nigeria, for his take on this subject. Bello Yakasai spoke in his personal capacity. We also spoke to some informed individuals in related ministries on the subject.

How much of these issues would he say have been resolved to date? For him, the most important issue is the lack of policy. He explains that at the moment, policy is in draft form with the consent

Continues on page 31

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Manufacturing

Quality control

‘Nigeria needs 10-20 year plan to meet its local shoe demand’

SON develops international standards for Garri, dry Beans, others

There has to be deliberate plan targeting the finished leather goods segment of the industry; a plan that takes in cognisance the need to do more downstream processing of leather-to-leather products in Nigeria, says Bello Yakasai, Leather Consulting Expert

he Standards Organisation of Nigeria (SON) has developed international standards for most of the nation’s staple food products such as garri, dry beans, soya beans, rice and the likes.

The Director General, SON, Osita Aboloma, added that this move was to put an end to the high level of rejection faced by Nigeria’s agricultural produce at the international markets.

The SON boss represented by the Director, Standards Development, Chinyere Egwuonwu, at a press briefing in Lagos, said, “For instance, as far as agriculture is concerned, the standards we developed are to ensure that our products meet the global benchmark, thereby forestalling a repeat of the rejection of our products as it happened recently at the international market. We have developed standards for many agricultural products, like Shea butter, dry beans, smoked fish, yam flour, plantain chips, sesame seeds, oil, Rice, Cocoa, Cocoa Butter and Garri. It will interest you to know that the standard we developed for garri is accepted globally and now adopted by countries in the Economic Community of West African States (ECOWAS). So, you need to appreciate that the standards we are talking about are indeed standard,” he stated.

He pointed out that out of the 800 standards it had produced in one year, 339 standards have been developed for the nation’s agricultural produce.

“Some of the standards include the anti-bribery and corporate governance standards, the African traditional medicine, human resource management, hotel management, to mention a few. The standards for agricultural produce were developed to end the reject, of exportable Nigerian farm produce at the global market.

So far, the agency had developed standards for Nigeria’s dry beans, smoked fish, yam flour, cocoa, plantain chips, rice, garri, sesame seeds,

SIAKA MOMOH

W

hat is the worth of the Nigerian skin and leather industry as at today?

No official Current figure. But industry players estimated that the worth of Export is still with the 800 - 1m USD range.

While in-country finished leather goods activities hover around 2 – 3 billion USD.

There is a long-term neglect of the leather products industry in favour of oil production. This has left Nigeria behind pack in competing for a global market worth $72 billion.

How do we go about reversing s this trend?

First and most, it is important we have a policy that regulates the tanneries practices, that regulates export, that provides the right incentives, that addresses compliance issues etc.

Neglect of the leather products industry in favour of oil production has left Nigeria behind pack in competing for a global market worth $72 billion that increases in

Bello Yakasai

disposable income are fuelling the international demand for high quality leather shoes, jackets, handbags and upholstery, a market which is growing steadily at 3 per cent per annum. How do we reverse this unpalatable situation?

There has to be deliberate plan targeting the finished leather goods segment of the industry; a plan that takes in cognisance the need to do more downstream processing of leather-to-leather

products in Nigeria. Promote the export of these products and ensure that players in the finished leather goods industry have access to finance, technology and skills.

Nigeria faces several challenges to improving its leather production and processing industry. An example of the need for improvement is found in the shoe market. Nigeria imports close to 20 million pairs of shoes annually despite its manufacturing capacity which could meet local demand and even produce export products.

It will take a while for Nigeria to meet even a reasonable percentage of the local demand for shoes. However, with an articulated 10 -20 years plan, we could do that and even export surplus.

Developing countries export $19 billion worth of leather - much more than commodities such as meat ($2.7 billion), rubber ($3.7 billion), cotton ($2.5 billion) or coffee ($10.7 billion). The African export market is dominated by Ethiopia, Rwanda, Tanzania and Burkina Faso. What can Nigeria do to fall into this frontline group of African leather exporters?

Our purpose should not be to export finished leather; rather we should focus on value addition to turn the leather into goods which is capable of increasing the value by many folds.

In the early 1990s, there were 41 commercial tanneries in Nigeria. Only six of the 41 can produce finished leather. Only eight are functional today.

Local tanneries supply less than 10% of the national demand for leather. The supply gap is 90 million sq ft. How do we resolve this supply gap problem?

The major problems of most tanneries are access to finance to procure the appropriate technology. The cost of money is prohibitive and access is very difficult. We need to factor this in order to support the local tanneries to improve their performance.

EFETOBORE EKUGBE

T

oil and many more,” he added.

According to him, the standards would act as a code of conduct for the nation’s agriculture value chain ranging from planting, processing, harvesting, packaging and transporting these goods within and outside the country.

He noted that SON has continued to use standardization and certification to support businesses to grow and be sustainable.

He said SON’s goals are to use standardization and quality assurance to promote the federal government’s economic development policies such as economic diversification, Economic Recovery and Growth Plan (ERGP), Presidential Enabling Business Environment Council (PEBEC), Ease of Doing Business, Backward Integration, as well as agricultural and industrial revolution He appealed to all operators, stakeholders, manufacturers, entrepreneurs, including MSMEs players to work with SON, urging them to feel free and patronize the standards it had put in place for business growth and sustainability, restating its commitment to ensure that local industries are protected from unfair competition as a result of sub-standard imported goods.

“SON is therefore opening up new vistas and opportunities for farmers, agro-allied operators and commodity exporters. We are taking up agro products from farm to when they come to the table as meal. The aim for the uniformity of standards for agricultural products with CODEX, the global body responsible for food safety, is to boost food export and stop rejections of local agro products overseas due to quality and integrity concerns,” he averred.

The SON helmsman added that SON has also coordinated the development of standards for Nigeria’s smoked fish, yam flour, cocoa, plantain chips, rice, garri, sesame seeds oil and many more in the agro and allied sector.

Logistics & Supply Chain

Multimix Academy, African Resource Centre, sign MOU to deepen supply chain capacity

M

ultimix Academy has signed a Memorandum of Understanding (MOU) with African Resource Centre (ARC) to deepen supply chain capabilities in Nigeria and improve deliveries in the health sector in Africa.

Multimix Academy is a capacity building firm with specialization in global trade, logistics and supply chain whilst ARC is a private health initiative supported by Bill and Melinda Gate Foundation.

Under the partnership, Multimix will serve as a consultant and will be directly involved with assisting five pilot universities under the scheme to develop curriculum and train faculty members to effectively deliver on the project.

In Nigeria, the Bill and Melinda

Gate Foundation works in collaboration with government, private sector, and civil society organisations to lift people out of poverty through intervention in programmes in HIV/AIDs and other diseases.

Speaking on the MOU, Obiora

Madu, CEO of Multimix Academy said the MOU was signed to help improve logistics and supply chain that will in the long run bring effective deliverables to help curb challenges and make medicines and other health products available

to end users.

For Madu, there are two dimensions to supply chain challenge in Africa – the physical logistics infrastructure challenge and the soft infrastructure challenge, which have to do with having the right professionals for the job.

Said he: “Investigation by Bill and Melinda Gate Foundation revealed that inadequacy of physical and soft infrastructure in the supply chain explains why drugs keep coming into Nigeria and other African countries without getting to the people in dire need of them. As a result, after years of huge investment, Bill and Melinda discovered that mortality rate has been on the rise against its vision and aim.”

The MOU, according to Madu, will proffer solution that is why ARF has decided to work with the universities through Multimix in building capacity.

Multimix Academy is a capacity building firm that provides high quality international logistics and business education and intervention. The academy’s vision is to partner with clients in creating and delivering quality and most innovative workforce solutions and services that enable them to keep abreast with changing business needs.

As a consulting firm, it dedicates itself to assisting organisations translate their best ideas into tangible results for growth and development.

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Nigerian leather still troubled Continued from page 29 of four Ministries (including, Trade and investment, Agriculture, Environment and Science and Technology).

“Other bodies that participated in the policy draft include GEM project, Nigerian Institute of Leather Science and Technology (NILEST), Raw Materials Research and Development Council (RMRDC) and various leather associations (LAPAN, Leather Products Manufacturers Association (LEPMASS), NTC etc).Other issues included the establishment of section that deal with leather in all the mentioned ministries.

At the moment, the draft is due for presentation at the Executive Council by one of the Ministers from the aforementioned ministries.”

He adds that the Agricultural Road Map has taken into cognisance, leather as one of the major commodities included in the roadmap. “So it is in the Ministry of Industry, Trade and Investment in which leather is included in the trade and industry agenda,” he says. For him, “there is still little change from then as the only change note is the review of EEG (Export Expansion Grant) which includes leather products”.

Progress made in the last five years Says he: “From my point of view, not much has changed. There is still the un-curtailed importation of finished leather goods from the Far East and Europe, total export of Nigeria finished leather, little budgetary allocation and the new policy is yet to be presented to the NEC.” Yakasai’s take on issues raised then in general According to him, “All of these issues still remain within the industry with no much of progress. There are still no efforts on data collection beyond what GEMS1 project has done. The quality of leather produced in the country is still affected by factors such as the limited institutional control of abattoirs, poor technological input and the absence of a national standardization process.

“The current policy context distorts the local market and makes it more beneficial for finished leather producers to export rather than sell to the local market; efforts to reduce this disparity are made through the review of the EEG – We are still awaiting the implementation of the new EEG.” His take generally on resolutions On the resolution that all stakeholders in the sector should be engage in policy formulation and implementation, he says, “This in progress”. And on the resolution that the master plan for the leather industry should include a funding strategy, Yakasai says, “This is included in the policy in the expected policy.”

On the issue of desired concerted effort by public sector to gather relevant data through primary research, for him, he says “Nothing is done yet.”

On the Leather Transformation Plan addressing issues of eco friendliness, quality, etc, “Nothing is done but it is in the new policy,” he says.

On enforcement of laws governing the upstream and downstream sector of the industry that should be enshrined in the leather master plan, for him, “There is no master plan yet but this issue is in the new policy”.

On the resolution that there should be ongoing engagement between the

financial institutions and stakeholders within the sector to improve access to finance, he says: “Little has been achieved. But the achievement is not as a result of coordinated plan but the efforts of some stakeholder association and individual industries. Please note that regardless, this is now a mandate amongst the mandates of NIRSAL.” The National Assembly has done nothing yet on strengthening the law and policy regime for the procurement of hides and skins in order to ensure institutional patronage as well as effective quality assurance and control, he says. And on the creation of outreach programmes, etc, in order to enable more women participate in the sector, GEMS 1 and GEM projects funded by DFID and World Bank are the only organization that made some efforts in this regard, he says.

Commenting on the recommendation that it is imperative to interface knowledge and skills within the leather industry by building a strong tripartite linkage between policy planners, training institutions and employees of labour, “No achievement” has been made in this respect, “says Bello Yakasai.

“There is a bit of private sector performance improvement with the fashion houses collaborating with shoe makers to improve quality and aesthetics, ” says he on the need to improve the quality of leather goods for domestic and regional markets bearing in mind price and quality that meets the need of the customers.

“Not much has been achieved” regarding integrating of eco-friendly practices at different stages of production, etc. And as regards capacity building, “the only training institute in Zaria did not record any appreciable progress in this regards”.

Not much has changed regarding funding intervention from CBN, Yakasai says.

His take on the recommendation that LAPAN and other stakeholders should engage the proposed leather transformation committee of the Federal Ministry of Industry, Trade and Investment and also the Ministry’s proposed leather reforms is that “This is not relevant as the transformation committee disappeared with the previous government”. And on the recommendation that coalitions of leather producers should coalesce around common interests in order to agree on and also influence national product standards and other policy outcomes, “This has not been achieved as there is still divergence between the leather producers industry association and those of finished leather goods”.

“Nothing has been achieved” regarding the recommendation that LAPAN and other groups should ensure the effective flow of information among various clusters within the industry such as leather fashion designers, tanneries and other producers of finished leather goods.

It is however good news on the following: LAPAN and other leather stakeholders should get the buy-in of both Ministries of Industry, Trade and Investment; as well as Agriculture and Rural Development in the Leather Transformation Master Plan. Says Bello Yakasai: “This has been achieved as the two have been including leather in all their annual plans since then.”

Size of the leather industry in Nigeria • Non-oil is biggest foreign exchange

earner for Nigeria: • Export figure of finished leather averages $680m (N108b). Peaks in 2010 to $3billion (N486b) - Comrade • Estimate value of finished leather goods annual turnover over a billion Dollars (N160b) with potential to grow multiple folds and faster – GEMS • Number of small ruminant skin processed in Nigeria is estimated to be about 45 million pieces. (about 30m skin from Nigerian slaughters and about 15m imported informally )– GEMS • Hides largely used as ponmo value at about N60b • Estimated employment in the sector over 1million Nigerians and growing - GEMS • Shoe import from China alone is estimated to be in excess of 30m pairs annually – worth over N90b – sector association • Over 36 formal tanneries exist in Nigeria, with about 30 located in Kano • About 6 major tanneries account for more than 80% of the export value – others are either dormant or operating way below capacity • Nigeria accounts for about 3% of world production of skin based leather – probably the largest exporter of light leather in the world • Injection of Export Expansion Grant (EEG) boosts exports - but its administration and management remains questionable.

• Nigerian leather is among the best in the fashion world • However, marketing Nigerian leather may face threat from ILO, Environmental, animal right and other global’s ethical standards (production/trade) This is where we are, five years after that robust summit that helped to reveal the poor state of health of Nigeria’s leather industry. Going by Bello Abba Yakasai’s assessment, not much has changed; there is still the un-curtailed importation of finished leather goods from the Far East and Europe, total export of Nigeria finished leather, little budgetary allocation and the new policy is yet to be presented to the NEC. Informed sources in related federal ministries Policy somersault For one of our informed sources in the relevant ministries, who want to be anonymous, the problem is that, a value chain set up during the last regime’s Transformation Agenda (ATA), seems to have gone moribund.

He questioned the quantity and quality of leather we claim to have.

Said he: “First and foremost, and realistically, where are the animals f which the leather is expected to come from? From the fictitious data or from the true one? With the prevalent practice of roasting animals with skins and converting those skinned into ‘ponmo’, what type of leather are we talking about?

“Moreover, without reliable traceability of animals slaughtered, how are we sure of what we are talking about empirically? And, without any appreciable efforts at keeping animals in ranches, poor abattoir practices and weak ministries of agriculture in states, how are we sure there are leathers produced here and not that they are from neighbouring countries?

I am convinced that whatever is being presented to NEC is just a wish, an intention but not something based on

Wednesday 19 August 2018

Editor’s Note

I

t is another month. We are here again to blow your minds with our scintillating stories; stories that will remain evergreen amongst your collections.

Five years ago, I did a story on the state of the Nigerian leather industry based on a summit on leather organised by the Leather and Allied Products Manufacturing Association of Nigeria (LAPAN) with support from ENABLE and GEMS. Five years on, what progress have we made on the poor state of the industry?

We need to ask this question since it has generally been said that Nigeria is traditionally fond of putting up conferences or summits or seminars of this type whose decisions or recommendations end up gathering dust on shelves. We sought out Bello Abba Yakasai, Cluster Manager, GEM (Growth and Employment) Project (WB-FMITI), Abuja, Nigeria, for his take on this subject.

Yakasai says Nigeria needs 10-20 year plan to meet its local shoe demand. How? Bello Yakasai spoke in his personal capacity.

We also spoke to some informed individuals in related federal ministries on the subject. Our cover has the rest of the story.

The Standards Organisation of Nigeria (SON) has developed

empiricism.”

The integrity of the new policy that is in the pipeline is thus being questioned here.

For him, “The story should rather be to ask how, in the light of these observations, their intentions are going to be translated into reality.”

EEG fraud Another source lamented: “Lots of missed opportunities, programmes as conduits for fund allocation, Export Expansion Grant (EEG) fraud wherein foreigners got paid for exploiting Nigeria, taking leather away from here, some to their home countries, with the active connivance of (and in collusion with) Nigerians, all running into billions of naira, the refusal of cattle rearers to subject their animals to interventions that would ordinarily make statistics easy to gather, and so on.”

Hear this from another government informed source: “No fewer than 6,000 cows are slaughtered daily in Lagos. Is there any record of leather or leather value chain arising from this; can Lagos State Government provide any statistics to that effect?” he asked

Siaka Momoh

international standards for most of the nation’s staple food products such as garri, dry beans, soya beans, rice, etc.

This move, according to the Director General, SON, Osita Aboloma, was to put an end to the high level of rejection faced by Nigeria’s agricultural produce at the international markets. Our correspondent, Gilbert Ekugbe brings you the full report.

We bring you these and more in your must-read magazine this month. Welcome on board.

For advert placements, sponsorship, reactions editorial contributions, please contact SIAKA through siakamomoh@yahoo.com; 2348061396410; 23408023033988

rhetorically.

Herdsmen linkage He added: “Majority of the 6,000 cows slaughtered in Lagos is from Burkina Faso, Mali, and Niger and possibly from as further afield as Mauritania.

A meeting recently in Cote d`Ivoire proved how dependent these countries are on Nigeria’s import of cows. In fact, the herdsmen crisis presently witnessed in Nigeria has been unwittingly agreed to by this present government as partly orchestrated by the herdsmen from these countries; which raises serious policy and political questions of “why this upsurge now?”

If this agrees with the fact that so much of what is consumed in Nigeria is coming from these countries, what is being done to monitor the herdsmen and their cattle and to regulate their movements and make them subject to our rules?

“Is Nigeria their grazing outpost?

Or an extension of their countries (ECOWAS rules or not)? Are they free to cross borders unchecked? If you see herdsmen carrying AK 47 instead of mere stick, shouldn’t that raise its own concerns?”

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Global Matters

SMEs Vital for Employment and Wealth Creation-Bembatoun -Young EFETOBORE EKUGBE

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cknowledging the fact that Small and Medium Enterprises SMEs are veritable tools for economic growth, the Chief Executive Officer, African Sustainable SME Export Trade Solutions (ASSETS), Ms. Shade BembatounYoung, has said Nigeria cannot afford to ignore the SME sector in its quest to achieve economic development.

She stated this at an SME exhibition and international investment forum, tagged ‘All hands on deck’ aimed at enlightening and empowering SMEs to act a catalyst to leapfrog the Nigerian economy from the fringes of recession to inclusive, sustainable export-led growth. “ We hope this event will raise the bar as an unprecedented example of dynamic, development-oriented public/ private sector partnership and bridge the yawning gap between SMEs and potential Nigerian and international

Still on Ambode’s 181 local government roads

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investors,” she said.

According to her, the ultimate objective of the exhibition is to lay a solid foundation for the formulation and implementation of innovative result-oriented startegies and workable blueprint which will ensure better organised, integrated, concerted action and joint programmes in support of Nigerian SME value chains.

She added that it would also address deficiencies and inconsistencies in the area of trade

policy formulation and implementation, capacity building and funding, through specially designed SME export friendly financing and investment packages, as well as domestic, African, African diaspora and foreign investment.

“SMEs are more relevant than large firms because they create huge employment opportunities and represent a core area for wealth creation.

Therefore, this sector cannot be pushed aside,” she averred.

China to implement eight major initiatives with African countries, says Xi WEIDA LI

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hinese President Xi Jinping delivers a keynote speech while attending the opening ceremony of the Beijing Summit of the Forum on China-Africa Cooperation on September 3. Liu Weibing Xinhua Chinese President Xi Jinping said on Monday that China will implement eight major initiatives with African countries over the next three years.

Xi made the announcement in a keynote speech, entitled ‘Working Together for Common Development and a Shared Future’, which he delivered at the opening ceremony of the 2018 Beijing Summit of the Forum on ChinaAfrica Cooperation (FOCAC).

In terms of industrial promotion, China will set up a China-Africa economic and trade expo, carry out 50 agricultural assistance programmes, provide emergency humanitarian food aid totaling 1bn Yuan (US$147m) to African countries affected by natural disasters, and send 500

senior agricultural experts to the continent.

China will also work with the African Union to formulate a China-Africa infrastructure cooperation plan, while simultaneously supporting Chinese companies taking part in Africa’s infrastructure development.

According to Xi, China plans to increase imports, especially nonresource products, from Africa and support countries participating in the China International Import Expo. In addition, the least developed African countries will not be required to pay exhibition stand fees.

China will also undertake 50 aid projects related to green development and ecological and environmental protection, with particular focus on climate change, oceans, desertification prevention and control, and wildlife protection.

To help people in Africa improve their skills, China hopes to set up 10 Luban Workshops to provide vocational training for young people there. Further,

China will train 1,000 high-calibre Africans, provide the region with 50,000 government scholarships, sponsor seminar and workshop opportunities for another 50,000 people, and invite 2,000 African youths to China for exchange visits.

When it comes to healthcare, Xi said that China plans to upgrade 50 medical and health aid programmes in Africa, including flagship projects such as the headquarters of the African Centre for Disease Control and Prevention and China-Africa Friendship Hospitals.

To boost people-to-people exchanges, China is scheduled to set up an institute of African studies and enhance civilization exchanges with Africa.

Moreover, China will set up a China-Africa peace and security fund and continue providing free military aid to the African Union.

A total of 50 security assistance programmes will be carried out, covering aspects such as UN peacekeeping missions, piracy and terrorism.

Source GBTIMES

f there is one thing a government can do to make the governed throw its weight behind it, it is giving the ruled good network of roads. The reason is obvious to us all – good roads ensure ease of doing business, just to mention one reason. This is why I am passionate about this subject of good roads.

I have written severally on sustainable roads for the country and will continue to do so for as long as our roads remain in tatters.

You would recall that in my first piece on roads, I advised the use of cement pavements for our roads. My argument: Constructing a road with cement is between 25 and 50 per cent cheaper than making it with asphalt, a method that is currently popularly with Nigeria... when you take the life cycle of the road into consideration. But the concrete road is 10 per cent more expensive to construct than asphalt road, which is the initial capital cost when you are constructing it.

The point I made very clear was that the life cycle of the road “is what matters”. Once you have completed the road, take the life cycle of the road over 20- 30 years and more, the concrete becomes extremely much cheaper because less maintenance is required. And in a country like Nigeria where we know we have poor maintenance culture, it makes sense then that the choice should be concrete road.

My submission was based on the outcome of a September 2012 BusinessDay/Cement Manufacturers Association of Nigeria’s conference with the theme ‘Exploring Cement Based Option for Sustainable Road Construction in Nigeria’ held at Eko Hotel & Suites Victoria Island, Lagos. It was a great conference which laid bare very convincing facts – facts that tell you it is economically wise( on the long run) for Nigeria to go concrete roads.

The facts among others: • There is enormous deficit in transportation infrastructure which is an important requirement for economic development.

• The technology being used for road construction across the world has attracted a lot of inputs from cement-based materials as against the use of asphalt, adding that Nigeria needs to imbibe this new technology.

• Asphalt is in great use for local production for Nigeria, yet across the world concrete is used for road pavements • Concrete roads facilitate accessibility and movement; there is need for us to adopt this road construction option.

• Use of cement for road construction is cost-effective, long lasting, requires less maintenance and is more environmental-friendly, relative to Asphalt.

• Over 99.9 percent of road construction today in Nigeria involves the use of Asphalt. While about 40 percent of the roads in developed countries are made of cement, less than 0.1 percent is used in Nigeria. Cement which is readily available in the country today can be utilized in constructing longer-lasting, more cost-efficient roads.

• On the issue of the suitability of concrete-based pavement to the differ-

ent soil-types in the country, it was emphasized that with proper design, analysis and construction, concrete-based solutions can still be effectively utilized.

• The conference also noted that asphalt does not work well under heavy rain, and is susceptible to oil spillage.

• Cement: Catalyst of growth of manufacturing sector in the country.

• There are a number of financing options for road construction prominent among which is the public-private partnership (PPP), which has made limited progress.

Call on Ambode I do not know what option the Lagos State Government has for its 181 Local Government Area (LGAs)/ Local Council Development Areas (LCDAs) inner roads

Ambode

it plans to commence rehabilitating in September, but I advise it should go for cement concrete option. This is not only cost-effective like has been proven here but appropriate for the nature of Lagos land - coastal land that traditionally comes with flooding.

Oriade LCDAs It is noteworthy that Governor Ambode said the need to scale up the road improvement efforts arose from the fact that he had received many requests on rehabilitation of roads from residents, adding that many of the roads captured for 2017 were key roads that would have positive economic impact on the people.

The governor should please treat Oriade LCDA’s case as a special one.

Why? One, residents of this area are accusing the APC government of Lagos State of deliberately neglecting them because they largely vote for the opposition party. Ambode needs to prove them wrong by rehabilitating Oriade’s key roads and by so doing win them over.

This is a right way of doing it. After all, His Excellency did it with Okota after the resident there cried foul.

Two, the Navy barracks is in Oriade.

It is a shame that the road leading to the prestigious barracks is falling to pieces Three, a multibillion naira fuel depot is located in Oriade. This should attract a superb network of roads if we do not want another Apapa/Tin Can Island mess in our hands.

In fact, there should be a replication of the Dangote Industries/Flour Mills of Nigeria/ Federal Government PPP arrangement here. The fuel companies wouldn’t object, I believe. The points highlighted here, taken along with the case of the litany of small businesses that are doing business in Oriade, make Oriade qualify for special consideration.

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a g @ bu s ines s dayo nl ine. co m

Smuggling dampens FG’s tomato policy JOSEPHINE OKOJIE

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igeria’s dream of having a vibrant tomato industry may never crystallise if smuggled t o mat o p a s t e a n d concentrate continue to find their way into the country.

In April 2017, the Federal Government had enacted a tomato policy to spur local investments in the subsector, boost the production of fresh fruits and vegetables while halting the importation of tomato concentrates into Nigeria.

Under the policy, the government banned the importation of tomato paste, powder or concentrates for retail sales, as well as preserved tomatoes. It also increased tariff for tomato concentrate from five to 50 percent, in addition to $1,500 per metric ton payment.

This, according to the government, is targeted at reviving the tomato subsector and stimulating economic growth, while creating jobs.

But a year and four months down the line, the policy is yet to make any impact as tons of tomato pastes and concentrates still finds its way into the country through the land borders, making it difficult for government to realise its target for the subsector.

Abdulkarim Kaita, managing director, Dangote Tomato Processing Factory said that the major issue hindering the sector remains the massive importation of paste into the country.

“The major issue has been the massive importation of paste into the country. This kills the initiative of the farmers to grow more and the local manufacturers to be able to buy, process and sell,” Kaita said.

“It is cheaper to buy from China than buying locally because the imported tomato pastes are not 100 percent tomatoes; it is usually filled with body fillers like starch,” he added.

According to Kaita, most pastes found in the market have less than

28 percent minimum tomato fruit content which is the specification of the CODEX Standards and the Nigerian Industrial Standards (NIS), as confirmed by the National Food and Drug Administration and Control (NAFDAC).

Recently, BusinessDay surveyed some of the markets in Lagos and its environs and discovered that most shelves of traders in the market are filled with the brands of imported tomato pastes This shows that imported paste

are still finding its way into the Nigerian market.

Also, BusinessDay investigations found that no tomato processors are currently operating in the country, despite farmers increasing production to meet up with off-takers agreements entered into with various processing factories.

“This season alone our members have lost N10 billion due to poor market and lack of guaranteed off takers. The open market cannot mop all the harvest,”

Sani Danladi Yadakwari, national general secretary, Tomato Growers Association Of Nigeria (Togan) said in a statement made available to BusinessDay. Yadakwari said tomato paste packers are conspiring with Chinese tomato paste manufacturers to distribute substandard products to unsuspecting Nigerian consumers.

A f r i c a’s b i g g e s t e c o n o m y produces 1.5 million tons of tomato per annum, with 0.7 million metric tons post-harvest loss.

Tomato demand in Nigeria is put at 2.2 million metric tons per annum, leaving a gap of 700,000 metric tonnes, according to official data.

Nigeria is the 13th largest producer of tomatoes in the world and the second after Egypt in Africa, yet the country is still unable to meet local demand because about 50 percent of tomato produce is wasted to lack adequate storage facility.

Olatunde Oderinde, team lead, Market Development in the Niger Delta (MADE) said that Nigeria would only benefit from the tomato industry policy when all issues affecting all actors along the value chain are effectively resolved.

“We are yet to have a policy life cycle in Nigeria where every player in the industry is carried along and where their challenges are addressed holistically,” Oderinde said.

“Nigeria needs to work deliberately on policies that create inclusiveness. We need to sort out the issue of competitiveness to keep farmers productive,” he added.

Ogbeh lauds Chi Farms, Zoetis on veterinary laboratory project AKINREMI FEYISIPO, Ibadan

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udu Ogbeh , Minister of Agriculture and Rural Development has lauded CHI Farms and Zoetis for the establishment of an ultramodern veterinary diagnostic centre in Ibadan, Oyo state.

Ogbeh who was represented by Olaniran Alabi, director and chief veterinary officer- department of veterinary and pest control services, Federal Ministry of Agriculture and Rural Development stated that the commissioning of the diagnostic centre justifies the collaborative efforts of Federal Government and the private sector in providing essential tools needed for sustainable socio-economic growth in livestock development in Nigeria.

According to him, for livestock businesses in Nigeria to remain profitable and sustainable in the face of growing population and high demand for protein, it is important that livestock diseases and epidemics are well controlled and eradicated.

“It is important to note that animal disease diagnosis is an important component of veterinary services and that Nigeria has quite a

number of laboratories that carry out animal disease diagnosis. However, these laboratories operate below their optimal level thereby leading to huge gap in veterinary diagnosis services,” Ogbeh said.

“The establishment and equipping of Chi Farms ultramodern veterinary diagnostic laboratory being commissioned in Ibadan could not have come at a better time than now that Nigeria is looking forward to diversification of its economy through agricultural and other non-oil sectors.

“Let me use this opportunity to appreciate Chi Farms and Zoetis-ALPHA for this laudable initiative and call on other foreign organizations to partner with Nigeria on animal health and veterinary services” he added.

Also speaking, Ezekiel Ibrahim, n a t i o n a l p re s i d e n t , P o u l t r y Association of Nigeria (PAN), at the ceremony said the poultry industry in Nigeria has been confronted with many challenges especially losses as a result of diseases outbreak, which according to him has frustrated and crippled some farmers’ investments, leaving them dejected and hopeless.

He acknowledged the efforts of National Veterinary Research

Institute (NVRI) in domesticating animal disease diagnosis but pointed out that emerging challenges and changing trend in clinical manifestation of diseases calls for a more aggressive intervention.

“Managing poultry disease is highly sensitive to the time the index case is identified in order to avoid, control and prevent production losses. This is where the quality of

veterinary diagnostic laboratory intervention becomes a centre point in management decision on disease control. The industry requires a diagnostic laboratory facility that is reliable in sensitivity and specificity.

This is the future of addressing challenges of disease in the poultry industry,” Ibrahim said.

“The poultry industry at this time requires availability, reliability,

L-R: Matin Middernacht, managing director, Chi Farms Ltd; Olaniran Alabi, director and chief veterinary Officer, Federal Ministry of Agriculture and Rural Development and Gabriel Varga, regional director, Zoetis, Sub-Sahara Africa at the unveiling of City Laboratory in Ibadan, Oyo State recently.

accessibility and affordability of diagnostic services for growth.

He commended CHI Farms and Zoetis for the precise intervention through the establishment of City Laboratory while adding that, the project has come at the right time to support the growth of the poultry industry and redirect the attention of the sub-sector to the importance of quality laboratory service in disease control.

In his opening remark, Martin Middernacht, managing director of Chi Farms Limited, , said the motive behind the establishment of City Laboratory in partnership with Zoetis is to assist livestock farmers raise healthy and profitable animals as well as conduct research and come up with vaccines based on tests conducted.

On his part, Gabriel Varga, regional director, Zoetis-Sub-Sahara Africa , stated that the partnership of his organization with Chi Farms Limited on the project is basically to assist poultry farmers in Nigeria realize their full potential.

Varga further stated that similar laboratories will be opened in different parts of the country in subsequent phases of the A.L.P.H.A project.

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ag@businessdayonline.com

Agric college commends Ajimobi on subvention increase AKINREMI FEYISIPO, Ibadan

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he governing council of the Oyo State College of Agriculture and Technology, Igbo-Ora has commended the Oyo State Governor, Abiola Ajimobi for the upward review of subvention and grant to the college from N17 billion to N43 billion with effect from June 2018.

The council said that the upward review of the monthly subvention to the college from 25 percent to 62 percent which represents an increase of 37 percent by the state government deserve an appreciation.

Lateef Sanni, the governing council chairman, stated this in a letter made available to BusinessDay that was addressed to the Governor titled ‘Appreciation on Upward Review of Subvention/Grant to Oyo State College of Agriculture and Technology, Igbo –Ora’ with reference number Chairman/Gov. Con/01.

Sanni, a professor said that the governor’s kind gesture is an indication of his genuine concern for the development of tertiary education in the state, stressing that the 37

Dizengoff appoints Owanari Duke as new board chairman JOSEPHINE OKOJIE

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izengoff Nigeria has announced the appointment of Owanari Duke as the company’s new Chairman, Board of Directors of its Nigeria business.

The announcement was made at the company’s annual general meeting (AGM) held in Lagos, recently.

Duke assumed the position from the outgoing Chairman, Prof. J.T.K Duncan who recently retired.

“Duke is a proven leader, and we believe her contribution to the Board will be strategic for the further growth of the organization” Antti Ritvonen, CEO of Dizengoff Nigeria says in a statement made available to BusinessDay. “She brings a lot of energy and expertise to the table as a lawyer

Owanari Duke

and her wealth of experience as former first lady of Cross River State, entrepreneur, training consultant and executive of several other businesses will indeed be invaluable to the organisation,” Ritvonen adds.

Du ke i s a su c c e s s f u l a n d experienced lawyer, a highly s t ra t e g i c a n d a c c o m p l i s h e d training consultant and business development professional. She is a United Nations certified trainer on entrepreneurship and a member of several Boards of both international and local institutions.

Duke is credited with having co-founded the acclaimed Calabar Carnival which has grown to become Africa’s largest annual carnival.

She is a member of the Nigerian Bar Association (NBA) as well as member of the International Federation of Women Lawyers (FIDA) amongst several other professional groups.

Duke brings to bear on her appointment as Chairman of the company’s board over 30 years of solid professional experience.

“I am happy to be appointed by the Board as the new Chairman, Board of Directors of Dizengoff Nigeria and I look forward to contributing to the purpose, vision and strategy of the company alongside other members of the board as we propel the company to greater heights” Duke says in responds to her new appointment.

percent increment has reduced the college’s huge financial burden in monthly payment of salaries.

He said that the governing council shares the financial sustainability

vision for the college by the governor, assuring that the Council is committed to making the Oyo State College of Agriculture and Technology, Igboora the first among

its equals in the nation.

Sanni disclosed that the college introduced eight (8) new programmes recently has been visited by the National Board for Technical Education, noting that promotion, upgrading and conversion of suitably qualified staff were achieved in 2017.

“The college had only five (5) National Diploma programmes as at 2011. At the commencement of 2017/2018 academic session, the college programmes were 11 National Diploma and 13 Higher National Diploma Programmes. In addition, the college introduced eight (8) new programmes visited by the National Board for Technical education,” according to him.

He stressed that efforts were on to ensure that a proposed template on restoration of 100percent salary and payment of accrued arrears are accepted by the unions, pointing out that staff and financial audit exercise had been concluded with final vetting in progress.

Osun to host agritourism beauty pageant BOLADALE BAMIGBOLA, Osogbo

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s u n s t at e ha s b e e n designated as host of a beauty pageant aimed at promoting involvement in agriculture, especially among the youth in the country.

The organisers of the event, the Drumdashme Solution Limited, while briefing newsmen about the initiative in Osogbo during the weekend, urged government at all levels, to enact policies that will promote agritourism in the country.

Sunday Bunmi, chief executive

officer, Drumdashme’s Limited who spoke to newmen said ‘Miss Agritourism’ Beauty Pageant is aimed at addressing the gender imbalance in agric sector and motivate youths in the country to embrace farming.

“Agritourism overlaps with geotourism, ecotourism, wine tourism and culinary tourism. It is a form of niche tourism that is considered a growing industry in many parts of the world, including Australia, Canada, and the United States,” he said.

“With the economic quagmire facing the country and government at all levels now, there is need for

Margaret Idahosa, Archbishop of the Church of God Mission Intl; Wells Hosa,chairman, Greenhouse Farms Limited; Idahosa Okunbor, Edo State deputy governor; Philip Shaibu, and Prince Ezele Khae ,crown prince of Benin kingdom, at the first harvest of Greenhouse Farms Limited in Benin city, Edo state recently.

diversification of the economy, particularly into mechanised farming.

“Government must leverage on the God given potentials the country has like arable land, good weather and youthful population to get more money from agriculture.”

He urged the government to provided the needed infrastructures in rural areas to drive agricultural productivity and agritourism in the country.

“The concept of agritourism encourages visitors to experience agricultural life at first hand.

Agritourism is gathering strong support from small communities, as rural people have realized the benefits of sustainable development brought about by similar forms of nature travel.

“Agrictoursim is a commercial enterprise at any agricultural location, including horticultural and agribusinesses operations, conducted for the enjoyment of visitors that generates supplemental tourism income for farmers.

Highlighting other benefits of the pageant Bunmi said the initiative would provide new and expand tourism-based economic opportunities for farmers, agripreneurs, and rural c o m mu n i t i e s, i n c l u d i ng j o b creation, new markets, networks, and product development.

The initiative, he further posited would create awareness of the challenges facing today’s young farmers and focuses on providing solutions to the challenges.

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Victims of kerosene explosion appeal for financial aid in Abia UDOKA AGWU, Umuahia

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43-year-old carpenter Uchendu Jacob and his 32-year-old wife, Chidinma, both victims of kerosene explosion have appealed to the general public to help them with hospital bills.

The couple who was rushed to Madonna Hospital, Umuahia, Abia State around 3am on August 4, 2018 are still in severe pains and terrible shape. The couple after a month, still being held in the hospital has called on spirited Nigerians to come to their rescue as they cannot afford the hospital bills.

Speaking with some journalists from his hospital bed, Jacob said on that faithful day after the day’s work, he had gone to Uwalaka Street, Isigate Umuahia to buy a bottle of kerosene for their lantern.

He disclosed that at around 11pm, his wife woke up to refill the lantern with the kerosene and suddenly he awoken from sleep with the shout of fire! fire! from his wife while he was sleeping in his sitting room.

The carpenter disclosed that under the influence of sleep he woke up and went straight to the room to save his three little boys adding that in the midst of that confusion he fell inside the fire twice and had severe burns than his wife.

He noted that his happiness was that his three children were unhurt and that himself and wife were the only ones affected by the fire.

He said they have been unable to raise the N700,000 hospital bill and appealed to good spirited-Nigerians to assist in offsetting the bill through the following account. Uchendu Jacob, Access bank 0006217619.

Chidinma, a petty trader in her narration, said she woke up around 11pm to discover that the light in the lantern was about quenching and she quickly rushed to refill the lantern with the kerosene her husband bought and the next thing was the explosion.

Bayelsa assures on addressing flood victims’ plight Samuel Ese, Yenagoa

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ayelsa State government has assured victims of the annual flooding of its readiness to address their plight.

Daniel Iworiso-Markson, commissioner for information and orientation, gave the assurance. Iworiso-Markson who gave updates on the disastrous flooding in the state while addressing journalists said the government was determined to ensure that no lives were lost.

He said that the state government was working to ensure that all those whose homes have been submerged in the flood received immediate succour.

The commissioner urged the people not to panic as the government was fully committed to their plights and doing everything to avoid a repeat of the 2012 flood incident.

In his update, Iworiso-Markson said reports indicated that communities like Egwe-ama in Brass local government area, Imiringi, Ayama and Otuobhi in Ogbia local government area, Ondewari in Southern Ijaw local government area and Anibeze in Sagbama local government were all under flood waters.

Others he said were Ekeremor town, Abukoegede and Tamogbene in Ekeremor local government area, Kaiama and Sampou in Kolokuma/Opokuma local government area and Trofani community in Sagbama local government area.

Iworiso-Markson called on residents of the state who live in flood-prone areas to work with the State Emergency Management Agency (SEMA) and other relevant government agencies for immediate evacuation to temporary sites.

He advised Bayelsans to always call the state’s emergency flood lines: 08025814636, 08110413567 and 09037582261 to report latest developments in their areas for quick intervention.

More than one month after the federal ministry of works, power and housing shut part of Apapa-Ijora bridge for repairs, nothing seemed to be happening.

Pic by Olawale Amoo

Flood kills 31, destroys 10,000 houses in Kano

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ano State government has confirmed the death of 31 people and destruction of more than 10,000 houses during the recent flood disaster in 15 local government areas of the state.

Ali Bashir, the executive secretary of the State Emergency Relief and Rehabilitation Agency (SERERA) confirmed this in Kano just as he put the cost of the disaster, which wreaked havoc in many communities over over N5 billion.

“Thirty one people lost their lives and more than 10,000 houses that are estimated at over N5 billion were affected.

“Most of the affected houses were either totally or partially destroyed,” the Executive

Secretary said.

He explained that no fewer than 35,000 farmers were also affected by the disaster in eight local government areas of the state.

According to Bashir, some of the farmlands were submerged by water while others were completely washed away by the flood.

“The farm produce destroyed include maize, cotton, white beans, onion, rice, groundnut, millet and other cash crops,” he said.

Bashir said that 8,000 farmers were affected in Wudil, 6,000 in Warawa, 2,000 in Gaya and 3,000 in ‎Gabasawa among others.

The executive secretary said that the agency was compiling reports from the eight

local government areas hit by the disaster to ascertain the value of the 35,000 farmlands destroyed.

He assured that a comprehensive report would be produced for onward submission to the state government for immediate consideration.

He added that the agency received alert from Nigeria Hydrological Service Agency and the Nigerian Meteorological Agency that 20 local governments of the state would be affected by flooding.

It would be recalled that Rice Farmers Association of Nigeria (RIFAN) recently disclosed that its members in Kano state lost over 5, 000 hectares of rice farms to flood in 10 local government areas of the state.

LASUTH to create centre for cleft lip, palate patients JOSHUA BASSEY

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agos State University Teaching Hospital (LASUTH), Ikeja is to create a cleft lip and palate centre to properly care for patients with such conditions.

Adewale Oke, the Chief Medical Director (CMD) of LASUTH, disclosed this at the 6th biannual conference on cleft palate and lipping in Lagos.

The conference held Monday was to express the hospitals willingness to work with the consultants and specialists from the United States under the auspices of Alliance for Smiles.

“It is also to continue to partner with the Rotary Clubs, Nigeria, to provide succour to the needy. Four years ago, we had our first interface with Rotary and since then, they have been here biannually to follow up patients that have undergone cleft lip surgery before and to perform surgery on new patients that have continued to come.

“Now, they want to go a step higher; they have been able to gather the specialties that are required to complete the surgery and their mandate, so that they will be no more defect mentally, psycho-

logically and other wise, by putting all these groups together.

“What I will do is to ensure that they have a room, a theatre where the cleft palate surgery will be carried out; so soon, there will be centre for cleft lip in LASUTH. “There is also a plan to have the special x-ray machine that will give us more successes for the surgery and we expect that to be here by the end of next year.

“It is a success story and we hope that we will continue to associate with them to continue to give service to patients as they come,’’ Oke said.

Kola Sodipo, governor of Rotary District 9110, Nigeria, , said that the team was in Nigeria to flag off another edition of treating and managing the illnesses.

“It’s a pleasure to be here in continuation of Rotary International in partnership with LASUTH to provide succour to the needy, especially in the area of cleft palate and lipping surgery.

“What is important is that, apart from the volunteers from U.S coming to work with our specialist here, they are also trying to transfer those skills to our consultant specialists here in Nigeria to improve their ability to deliver that necessary

health services to our patients and our citizens,’’ Sodipo said.

Also, Deinde Shoga, the coordinator, Rotary Cleft Palate Surgical Mission, said the team was in Lagos to ensure that the experts took things to a new level by giving total care to patients with cleft lip and palate.

“In 2014, the team worked in LASUTH and operated over 60 patients.

“Having done all this, and in realisation of the fact that cleft lip and palate had gone beyond just repairing the defects, Alliance for Smiles decided it was high time it moved things to higher levels.

“This is by collaborating with one of the government facilities that they had visited and set up a treatment centre which will ensure that the same practitioners have something to do with cleft palate and lip,’’ Shoga said.

Commenting, the managing director of Alliance for Smiles, Kristin Stueber, expressed joy that LASUTH gave her team the opportunity to continue with the project.

“I thank LASUTH for allowing us to continue with this project; it’s true that in medicine, progress can often be slow and sometimes frustrating,” Stueber said.

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In association with E-mail: insurancetoday@businessdayonline.com

Does new capital regime mean less advantage for ‘Lower Tier Insurers’?

Stories by Modestus Anaesoronye

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here have been lamentations in some quarters within the nation’s insurance industry following the July 25 announcement by the National Insurance Commission (NAICOM) concerning take-off of the TierBased Minimum Solvency Capital Policy for insurance companies.

This worsened when the Commission on a recent circular informed that companies will be assessed based on their 2017 financials, while Tier assessment list for businesses uptakes in 2019 will become effective from October 1, 2018.

Not only has operators who feel that the deadline has shut the door against their participation in certain classes of risks and also not given the opportunity to raise fresh funds or merge to enable them play in the Tier of their choice are complaining, some shareholders groups have also gone to court to restrain NAICOM from continuing with the exercise.

But if available facts in the market, ‘that the biggest insurer in the industry by size of premium earns 85 percent of its revenue from Tier 3 risks including Motor, individual life, fire, accident and other low cost risks, is anything to go by, then, being in Tier 3 or Tier 2 may really not be a disadvantage.

According to Mohammed Kari, commissioner for Insurance, NAICOM “Being in Tier 3 is not in any way less advantageous” He stated that the biggest company in the market earns 85 percent of its premium income from Tier 3 risks, while only 15 percent come from oil and gas, energy or aviation.

What is required is that companies change their strategy, deploy their efforts more appropriately.

Rather than being a disadvantag, it is an advantage because you are

Mohammed Kari, Commissioner for Insurance

not going to face unnecessarily huge claims. You can even do a lot of those insurances without reinsurance treaty because they are small-small risks, and cannot wipe away your capital easily.

“Kari further stated that what the risk based capital means is that you limit your risks to your level of capital.

He said before now, the commission was already regulating companies based on their capital level, “Has any company come before now to tell you we had asked them to stop participating in certain risks because of their solvency level, but we have been doing that, the commissioner said.

According to an analyst, “Being in Tier 3 does not in any way make you small. You can be there, and be more profitable than company in Tier 1. That means better dividend for your shareholders.”

The analysts also said, “What Tier 3 and Tier 2 means are that, you reduce over bloated boards; reduce huge operational costs;

Tope Smart, chairman NIA

reduce size of top management; increase field men; deploy micro products and hit the market and streets.

“You may not need to drive so many big SUV’s to sell Tier 3 products, so spending too much on such vehicles will not be the way to go”.

In the new Tier-Based Minimum Solvency Capital, Tier 3 companies are those that falls within existing paid up capitals of N2 billion for life business; N3 billion for non-life business and N5 billion for composite business.

Companies in this category will be limited to underwrite only risks in life business in the following areas - Individual Life, Health Insurance, Miscellaneous Insurances; while for non-life they will be limited to underwrite risks in these areas - Fire, Motor, General Accident, Engineering (only classes covered by compulsory insurance), Agriculture and Miscellaneous Insurances.

Tier 2 companies are those whose paid up capital has in-

creased by 50 percent above the existing minimum capital.

For life business, their paid up capital will be N3 billion and they are to underwrite all Tier 3 risks and Group Life Assurance (GLA); while for non-life, their paid –up capital base will be N4.5 billion and they will underwrite all Tier 3 risks, Engineering (All inclusive), Marine, Bonds Credit Guarantee and Suretyship Insurances.

Tier 1 companies are those whose paid up capital has increased by 200 percent, above the existing minimum requirement.

Life companies in this category will have capital of N6 billion, and will underwrite all Tier 2 risks and Annuity. While for non-life business, the paid up capital will be N9 billion, and will underwrite all Tier 2 risks and Oil & Gas (oil related projects, exploration & production), and Aviation Insurances.

Composite companies in Tier3 will maintain N5 billion; Trier 2 N7.5 billion and Tier 1 will have N15 billion.

A year’s work for 20 days of leisure

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ravelling is one experience that never ages with the passing of time, it makes you meet new people, explore new places and to top it all it makes you more productive when you get back.

The importance of travel can be summed up by a quote from St. Augustine “The world is a book; those who do not travel read only a page” Apart from recreation and sight-seeing, soft skills can be gained from travel and travel can provide lifelong benefits to your personal and work life such as: A Comfort-Zone Push The thought of breaking away from established friends and lifestyle can be very uncomfortable and people who can overcome this learn how to adapt in unfamiliar or difficult situations.

Cultural Knowledge Experiencing different cultures can be a humbling experience. Often many realize how kind strangers can be or how similar they are in spite of their difference. This makes you an openminded person, enables you to understand and work better with people of unique backgrounds.

Health While traveling you tend to walk more than you do on an average day. This normally has a positive effect on your physical and mental health.

In summary, travel to make memories, relax and have fun with family and friends but remember one unfortunate event like any medical emergency, accident or loss of passport, baggage, flight cancellation etc. could ruin your entire vacation.

Nigeria is a great travel destination too. Why not.

With abundance of natural tourist centres, diverse cultures, entertainment and food varieties, the opportunity for travel within and outside Nigeria is amazing.

It should be a habit and not an exception that it is now. The risks are insignificant when compared to the immense benefits. The door is open, go on and explore

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Wednesday 19 September 2018

E-mail: insurancetoday@businessdayonline.com

Wapic make claims payment a priority with rising pay-out profile

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ntil the unforeseen happens and a remit is required, the importance of holding an insurance policy hardly crosses anyone’s mind. With a cover at hand, the burden of searching for a bailout is lightened by the possibility of making claims on the insurer, but a greater heartbreak occurs when the insured does not get reprieve for their held policy.

The disillusionment and agony suffered by policy holders in situations like this have impaired the reputation of insurance industry across the world, especially in Africa, with Nigeria being a reference point because of the size of its economy, and general expectation about what the industry should be doing in the available landscape of opportunities.

Unsurprisingly, distrust and disbelief are some of the dominant epithets that describe customers’ feelings towards insurance companies and their offerings. Even though some instances of unsettled claims are attributable to ‘process issues and technicalities’, clients procured policies to cover them in the raining days when emergencies rear their ugly heads and do not expect the route to succour to be convoluted anytime the journey be-

comes necessary. Unwittingly, most players in the insurance sector do not see the available opportunities in removing the barriers between policyholders and access to claims, but continue to rue the poor fortune compared to that of its first cousin banking, where technological transformations and customers’ pain-points analysis have boosted process efficiency and made services not just desirable, but more enjoyable through quality experience. Amidst this gloom, there is an emergent star in Wapic Insurance Plc, shining brightly to provide the long-sought illumination for the insurance industry.

For insurance clients in Nigeria, the 60-year old insurer has become the great example of the intervention expected from an insurance company since commencement of its transformation agenda.

With the articulation of a strategic direction for the company, its new owners and management, boasting history of accomplishments’ in the financial services sector including banking, identified for resolution a number of legacy issues, amongst which claims settlement was utmost. As a result of this effort, claims pay-out has risen progressively to N10.6 billion. Resolution of some outstanding

Adeyinka Adekoya, Wapic, managing director/CEO

and disputed claims became possible with a record sum of N2.13 billion paid as claims in 2013.

“The issues at Wapic Insurance upon our arrival were reflective of the general problems facing the insurance sector in Nigeria,” said Adeyinka Adekoya the managing director/CEO “but motivated by our transformation objectives, we carried out a diagnosis of the situation and discovered

that a huge barrier sprouts between insurance companies and policy holders soon after insurance policies are purchased”.

“This situation might not be created knowingly, but it is the reality of what non-human- centred organisational processes has created and the misunderstanding that ensued from inadequate engagement with insurance customers”, she added.

Lamenting the situation, Adekoya said “Regrettably, policy holders experience anguish when the need to extract benefits of their contracts with insurance companies arise”. However, there seems to be a reawakening in the industry that has put customer satisfaction and service experience at the heart of the revolution.

As the signpost for service excellence in the insurance industry, Wapic’s quest for restoration of industry reputation has yielded significant benefits after a year of a rigorous process review and extensive claims audit. The exercise, undertaken to provide succour to insurance clients and set the practice on a worldclass standard manifested in the progressive growth in the company’s paid claims, from N1.63 billion in 2015, N2.86 billion in 2016 to N3.06 billion in 2017.

This commendable growth is a valid testament to the company’s commitment to value creation and exemplary customer experience role. With its recent digital revolution culminating in acquisition of a new core operating system and iPortal’, the interface between the company and its customers will become more effectual with latent phenomenal influence on claims settlement process.

L-R: Richard Borokini, director general, Chartered Insurance Institute of Nigeria(CIIN); Fatai Lawal, past president,CIIN; Eddie Efekoha, president, CIIN; Jeremy Mullen, accreditation manager, Chartered Insurance Institute, United Kingdom and Muftau Oyegunle, council member, CIIN during an Interactive Session between representatives of CIIN and CII UK at the Institute’s office in Lagos

This is predicated on the envisaged similarities between the impact of this strategic corporate undertaking and the effects online real-time systems had on the banking sector.

The insurance application, which is configured to ensure that interactions with Wapic Insurance is most enjoyable and reinforces the company’s status as the most resourceful underwriter in the industry, is suggestively the beginning of digital revolution in the Nigerian insurance sector.

By this, Wapic insurance has again successfully played its industry-confidence restoration role through new service paradigm hinged on innovation, empathy and operational efficiency, which highlight com Meanwhile, in financial the year ended December 31, 2017, Wapic Insurance post-tax profit grew to N1.5 billion from N586 million, which is 161 percent increase over the previous year’s figure. This excellent performance cuts-across the entire business lines, resulting in 9.9 percent total revenue growth, from N12.4 billion to N13.6 billion and 22.5 percent increase in Gross Written Premium, from N8 billion to N9.8 billion.

Impressively, the efficiency of the company’s operations, which delivered remarkable financial performance, also manifested in other critical growth indices. A review of this record performance that signposts Wapic Insurance’s steady, but certain ascension to industry leadership showed that total assets increased by 10.4 percent, from N25.90 billion to N28.60 billion.

Likewise, shareholders’ funds swelled to N17.95 billion from N16.50 billion, just as there was a 12.5 percent increase in policy-holders’ funds, from N7.2 billion to N8.2 billion. While the across- the-board growth recorded by the insurer attested to the success of its 2014-2019 corporate strategic plan, the 13.3 percent increase in paid claims from N2.85 billion to N3.23 billion sends an unequivocal message about the company’s capacity, ability and resolve to meet and fulfill valid obligations in a timely manner.

Wednesday 19 September 2018

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Pension Today

BUSINESS DAY

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In Association with

FG retirees dying of hunger, sickness over unpaid accrued rights …as figure hits N67 billion …last payment received June 2017

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othing can be so frustrating than telling a person who has used the precious part of his or her life to work for you (employer) and after retirement is unable to access pension benefits.

This is the case with many Federal Government retirees, who were part of the old pension scheme (Defined Benefits Scheme) that transited to the new scheme (Contributory Pension Scheme) following the signing into law of the Pension Reform Act in 2004, as amended in 2014.

The law requires that their pension accumulations called accrued rights were to be transferred to their Pension Fund Administrators through pension redemption.

But following non-compliance of this provision by the Federal Government, a lot of the retires have been denied access to their pension benefits, and therefore are falling sick and going to early grave in their numbers.

The PFAs who manages the CPS, says their hands are tight, as they cannot pay the retirees what they have in their Retirement Savings Account, because the pension reform law says, retirement benefits should be the totality of all accumulations including accrued rights.

At the 2018 Media Retreat for Journalist organized by Pension Fund Operators Association of Nigeria (PenOp) held in Lagos, stakeholders raised serious concerns over why government that has the responsibility to provide social welfare is not seeing pension of the citizens as a priority.

Again the participants

L-R: Hassan Adamu, chairman, House of Representative Committee on Pension and Public Service; Paulker Emmanuel, chairman, Senate Committee on Establishment and Public Service; Aisha Dahir-Umar, acting director-general, National Pension Commission (PenCom) and Ayuba Wabba, president, Nigerian Labour Congress at the 6th Conference for Directors of Pension Operators organized by PenCom in Lagos.

asked, why retirees who have used all their life to work for a government will be allowed to die of hunger after retirement, why can’t the law be amended with urgency may be as (‘supplementary’) something (law) to enable PFAs pay the retires what they have in their RSA balance, while the accrued rights were being expected.

“Like one of the retirees was quoted as saying to his PFA- pay me my money before I die’.

According to comments from the concerned participants, Nigerian legislators should see this as a priority and save the senior citizens from going to early grave as a result of hunger.

Farouk Aminu, head, Research and Corporate Strategy, National Pension Commission (PenCom), has said The Federal Govern-

ment’s liability on accrued pension to its employees has risen to about N67 billion.

Farouk said the Commission’s inability to pay the pensions of the Federal Government’s retirees started from January 2014 when PenCom’s budget was cut, stating that the last payment FG made to retirees was in June last year.

He said the problem became compounded this year after the National Assembly reduced pension budget of 2018, saying the Federal Government was working to offset the liabilities through the supplementary budget it planned to submit to the National Assembly.

Aminu said: “Some retirees have not been paid pension from 2017 till date largely because we don’t have the accrued pension to pay them. You will observe

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

that we have been having problems with the bond for payment on accrued benefits. The Debt Management Office was given the responsibility to issue bonds that will cover retirement benefits that accrued under the old pension scheme. What the new provision in the law now says, is that DMO should be providing the money?

“It is not that the Federal Government has not been providing the money but it is not good enough. We go round every year to do enrolment of people retiring in a year’s time, we capture their information and calculate their accrued benefits and then we advise government,” he said, adding that this enables government to make provision in the next year’s budget. However, the government will not pay accrued benefits until some-

body retires, so they release them monthly.

Aminu also said, “For instance, if we need like N60 billion, they divide the N60 billion by 12 and give us N5billion monthly. However, the N5 billion was again slashed by half. So, they were giving us N2.5 billion from January 2014 and by the end of 2014, we were only able to pay till June 2014. Since then, we are yet to recover. We have also not been receiving the accrued benefits because the National Assembly just passed the budget in June and signed in July. So, it is when we are able to get these monies that we will be able to pay.

“In essence, the Federal Government has been paying but it is only that the money is not good enough.

The pension liability is about N67 billion. This is the outstanding. But we know that the Federal Government is working to offset the liability. Part of the supplementary budget the government said it would submit, would include the shortfall. The National Assembly cut a lot from the 2018 budget; so the President said he would send supplementary budget and this money is part of what they will send. When they do that we will be able to offset the outstanding liability.”

The affected retirees are Federal Government employees who had four years or more to retire at the Commencement of the Contributory Pension Scheme (CPS), but had been part of the old pension scheme (Defined Benefit Scheme).

Pension Reform Law mandates the federal government to set aside 5 percent percentage of its total monthly wage into a Pension Redemption

Fund Bond Account so that upon the retirement of the affected individuals this bond will be redeemed and then paid.

Section 15(1) (a) (b) of PRA 2014 states that the transfer entitlement (the accrued rights to retirement benefit) for any non-exempted public service employees who had been under any unfunded DB pension scheme existing before the commencement of PRA 2004, shall be recognized in the form of a bond to be known as Federal Government or Federal Capital Territory Retirement Benefits Bonds (RBB) issued by Debt Management Office (DMO).

The National Pension Commission (PenCom) had informed that at the beginning of the reform there was cut-off date and those who had three or less number of years to go didn’t have to join the scheme, while those who had four or more years to go, joined the Contributory Pension Scheme.

Already, they were mid way into their career and so had some rights due them.

So the law says, those right are to be computed as though they had retired in 2004 and then converted as bond to be redeemed at the time of their retirement.

This is the issue, and the PFA’s saddled with managing RSA under the CPS are unable to pay because the payment schedule says they will need to add both the accrued rights and the contributions together so that there will be agreement on whether it is for lump sum, programmed withdrawal or it’s for annuity.

It will have to be a totality of what is due you; otherwise, it will not be a realistic payment.”

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: diamondpfcbusday@yahoo.com

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Traxtion, RMR form JV to distribute rail parts into Africa Page 32

Jaguar to build charging network for electric cars

World’s first hydrogen fuel cell train enters commercial service

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New York City subway station re-opens 17 years after 9/11 Page 32

New dawn at Mandilas group as CEO retires

…Indegenous successor commits to sustaining legacy

…Gives away Season 1 Toyota car.

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Stories by MIKE OCHONMA

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la Debayo-Doherty, the new group chief executive officer (GCEO) of Mandillas group has assured its corporate and individual customers that the Mandilas group are committed to taking the company to its zenith in the years ahead.

Ola Debayo-Doherty who made thisdeclarationattheformalsend-forth ceremonyofDavidEdwards,theformer group general manager and chief executive officer of Mandilas group recently also assured that, the solid foundation laid by the outgone managing director will be sustained and advanced to achieve greater heights.

Edwrads joined Mandilas in 2005 as finance development manager, and later, in 2007, became the group general manager, which was equivalent to the position of Managing Director which he occupied till his retirement.

She told friends, associates and customers present at the event that, the retiring Edwards deserved to be celebrated for his commendable leadership which spanned a total of 13 years and recalled his contribution to reinforcing the reputation of the group as the provider of quality service to customers, which she said, had become the foundation upon which its core value stands.

On his part, Gregory Ezeokafor, a director with the Mandilas group, recalled that Edwards considered tie and log-sleeve shirts “distractions,” describing him as a man who set goals and worked with his sub-ordinates to ensure the goals were achieved.

In Gregory Ezeokafor’s submission,: “With solid international experience and knowledge, he reinforced the age-old policy of excellence and customer satisfaction established by the visionary founder of the company, John B. Mandilas.

With his financial background, he made some innovations, especially as regards Information Technology.

Under Edwards’ charge, the company won laurels within the industry despite the challenging times.”

Among the awards that came up for mention were those earned repeatedly by one of the group’s most popular divisions, Mandilas Motors, as the best marketer and after-sales provider at the annual Toyota Nigeria Limited awards ceremony.

For over 70 years, the Mandilas group has become a household name in Nigeria, and comprises of airconditioning, automotive, leasing and property divisions.

After many years of being one of the auto sector’s foremost marketers and after-sales providers following years of making Peugeot and Volkswagen {particularly the Beetle}, Mandilas Motors became an accredited Toyota dealer in 2003.

The conglomerate is one of the Toyota accredited dealers in 2003 and presently one of the frontline dealers in the country that has won consistently several awards in various dealership categories of the

annual Toyota Nigeria Awards in the past 11 years.

Among the guests that present at the send-off get-together for David Edwards and his wife are Kunle Ade-Ojo, managing director, Henry Ojuoko; Head of Dealer Development and Bukunola Ogunnusi, public relations/advert manager, all of Toyota Nigeria Limited (TNL).

It would be recalled that recently,

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fter several months of market research on what is the best product model to offer to the buying public, CFAO Yamaha Motor Nigeria Limited launched the much awaited Crux Rev Motorcycle was launched the Crux Rev commercial motorcycle into the market.

Unveiled by CFAO team led

by Boye Ajayi, managing director and other commercial motorcycle stakeholders, the product was presented as the first Yamaha motorcycle built for Africa. CFAO Yamaha Motor Nigeria Limited is a joint venture between the CFAO group and Yamaha Motor Corpora-

tion of Japan The managing director stated that the Yamaha Crux Rev was developed after series of thorough local surveys from end users on their needs, comfort and safety requirements.

Kemi Koyejo, was appointed operations manager as part of a move to further strengthen the automotive division. Company sources who spoke on the basis of hidden identity said, the group is excited to have the new operations manager as she would bring her wealth of experience in driving the auto sales and marketing activities for its auto division.

L-R: Kemi Koyejo: operations manager in charge of motors/leasing, Kunle Ade-Ojo, MD, Toyota Nigeria Limited, David Edwards, former managing director and group general manager, of Mandilas), Ola Debayo-Doherty, the new group chief executive officer, Mandilas and Steven Sirtis, a director of Mandilas group during the send forth ceremony of David Edwards held at Oriental Hotel, Lagos.

Cost-effective CFAO Yamaha bike unveiled in Nigeria Explaining the key features of the new product, Enifadhe Abugo, the company’s sales manager,, said the new product comes with a nu mb e r o f advantahes that will give buyers good returns on their investment.

These includes class-leading excellent fuel efficiency from its blue core engine that has been improved by approximately 20 percent in comparison to existing

Throne Autos floats N5million Charity Foundation

models, it has high performance with full torque, powerful at low speed, strong and smooth passing acceleration, easy handling with newly engineered diamond frame chassis which optimises body size weight and layout creating a balanced body design and stylish design with modern curves, LED headlight, and a plastic tank cover that can be interchanged with the different colour variations.

Other features are reinforcement ribs on the inside which improves toughness and shape retention, a newly developed blue-core engine that increases combustion efficiency, cooling efficiency and reduction in power loss.

The ABS plastic tank cover combines utility, knee grip ease

hrone Autos, the vehicle subsidiary of the Throne Group of companies made good her promise at the 1st Season Car Giveaway event held on September 1 at the PEFTI Film Institute, Ajao Estate, Lagos This 1st edition of the upcoming build up series,lived up to expectations as it attracted people from all walks of life, who trooped in to witness the lined up activities of the day which eventulally culminated in the Grand final winner that walked away with a Toyota Corrola.

It must be noted that the giveaway initiative awareness commenced and enjoyed huge customers and consumers attention with series of A-list social media influencers ranging from Arole & Asiri,Lekan “King Kong”,Radio Host Nedu of Wazobia Fm , Woli Agba and Broda Shaggi respectively. Their followers were treated to engaging treats about the event thus driving interest and likes.

Oladapo Oladimeji, managing director of Throne Autos said that, the give away initiative is the brainchild of the able leadership at the helm of affairs at the company,whose foray into the auto sales industry stemmed from the contined shortchanging of car buyers through hidden charges,delayed delivery and other untidy acts.

The offering is mutaully beneficial as customers are only charged $100 for transaction aids done for them on cars bidded for online in their presence and brought in on their behalf based on other legal/business charges.

Chairman of the group, OlaContinues on page 31

and a stylish design; long, wide and flat seat easy to ride for both rider and passenger; large rear carrier rack with greatly increased luggage area; and rear suspension with dual-rate springs for a pleasant ride..

On the unique selling points that make the Crux Rev superior to other 110cc Motorcycles, the sales manager said “The Yamaha motorcycle has a number of features that differentiates it from other brands such as the all new “blue core” engine with excellent fuel economy: 72.2km/p/l; unbreakable plastic fender; stronger front engine guard frame: light weight with optimum rigidity; strong rear suspension: Continues on page 31

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Toyota’s 10.4m sales beat rivals in 2018 FY …Tops most valuable car brands chat worldwide Stories by MIKE OCHONMA

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he graph illustrates Toyota’s car sales from the fiscal year of 2014 to the fiscal year of 2018. Toyota’s For three years in a row, Toyota has been the largest automaker in the world, based on calendar year sales figures. Worldwide, the Japanese automaker sold around 10.4 million vehicles in the fiscal year that ended in March 2018, making it the largest in terms of global car sales.

Toyota’s China woes aside, key figures for the Japanese company are shining bright, particularly in terms of sustainability. Its market value outperforms the likes of Facebook, Amazon or the China Construction Bank.

Furthermore, Toyota Motor Company is believed to be the most profitable carmaker worldwide, raking in gross profits of around 33 billion U.S. dollars (or 3.39 trillion Japanese yen) in the fiscal year ending March 31, 2014.

The company designs, manufactures and sells passenger vehicles, trucks and motorcycles under five brands, including the millennial-targeted brand Scion and the luxur y brand Lexus.

Calculations within some global automotive industry schools of that, in the long run, it is expected that Germany’s Volkswagen Group, currently the second largest automotive manufacturer globally,

will overtake Toyota both in terms of sales revenue and production output.

Both companies have entere d par tnerships with automobile manufacturing joint ventures in China, although Toyota’s vehicle sales in the world’s largest automobile market are miniscule compared to VW’s 3.7 million deliveries.

Between January and June 2014, Volkswagen and joint ventures claimed the title as China’s leading passenger vehicle manufacturer, while Toyota continued to struggle.

Meanwhile, the ranking of the world’s most valuable car brands in 2018 was topped by Toyota. The brand which is a sub-division of the Toyota Motor Company was founded in the late 1930s.

This statistic shows the most valuable automo-

tive brands worldwide in 2018, based on brand value. The Toyota marque was ranked as the world’s most valuable car brand in 2018, with a brand value of nearly 30 billion U.S. dollars.

The Japanese manufacturer is one of the largest companies within the global automotive industry. It is active in a variety of segments, including SUVs and crossovers, trucks and motorcycles.

Furthermore, Toyota invests heavily in the research and development of hybrid electric vehicles, as well as plug-in and fullelectric vehicles.

In addition to its operations in the automotive manufacturing industry, Toyota is involved in various other areas, including robotics and aerospace projects.

Beside Toyota, auto-

motive brands such as BMW, Mercedes-Benz and Ford also made it into the list of the most valuable car brands worldwide.

Germany’s MercedesBenz (a division of Stuttgart-based car and truck maker Daimler) manufactures luxury and crossover automobiles, buses and trucks. In 2017, the car manufacturing subdivision, Merecedes-Benz Cars had total revenue of around 94.7 billion euros.

In 2018, the scandalstricken Volkswagen passenger car brand climbed back on the tail of the list, while Tesla made a steady climb up the ranking. Of the big three U.S. automakers, General Motors and Chrysler sell automobiles under a variety of brands, while Ford sells vehicles under its namesake Ford brand and the Lincoln brand.

Jaguar to build charging network for electric cars

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arketing electric vehicles in many countries has always been a chicken-andegg scenario; there’s not much sense bringing your company’s battery-powered and plug-in hybrid models to South Africa until there is network of public street charging points in place, and no energy company is going to sink millions into charging infrastructure until there’s a fleet of customers that will buy power from it.

However, somebody, somewhere had to grasp the nettle, and now Jaguar has done it ahead of the local launch of its I-Pace electric SUV in South Africa being the

regional market hub for all Jaguar vehicles that is entering into most African markets.

This is in partnership with electric vehicle charging provider GridCars, with an ambitious R30-million plan for a network of 82 new public charging stations in the

country’s major cities and along frequently-travelled holiday routes.

Under the plans, there will be a public charging stations (not just for JLR models but for all electric vehicles) in the customer parking area at every Jaguar Land Rover

dealership retailer in South Africa and another 30 at shopping centres in Johannesburg, Pretoria, Durban, Cape Town, Port Elizabeth, East London and Bloemfontein.

Which is fine for day-today commuting and school runs - but what about holiday road trips? That’s where it gets interesting: there will also be a series of 22 charging stations along the N1 between Gauteng and Cape Town, and the N3 between Gauteng and Durban. Cape Town will also be connected to the Garden Route with a series of charging stations along the N2 all the way to East London.

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Throne Autos floats N5million...

Continued from page 30

lekan Ilori,during the occasion announced his new pet project tagged the “Throne Charity Foundation” whilst he donated the sum of N5 million as initial take off funding and solicited for the support of all present and Nigerians in general to support the foundation, which he explained was targeted at kids of humble background.

Highlight of the event was the emergence of Abimbola Kazeem alias “Jigan”; an actor and instagram influencer who re-enacted his acting career through with “Sho Mo Age Mi Ni” skit ,as the lucky winner of the grand prize of Toyota Corrolla.

After emerging as winner,Jigan said that 2018 has heralded in good tidings of huge impact to his family after obeying

Gods’ directive on January 1 not to observe his watch night service in church but by offering prayers,by his bed side and upon obedience ,the year has brought him,endorsements,child birth and latest addition been a Toyota Corrola he won at the event,which he accessed with a Keke Napep,locally known as Maruwa.

Deji Oso a guest speaker at the event implored the attendees and the Nigeria motoring public to patronize the company as they stood to benefit from the Business to Business (B2B) Partner Scheme, through the company hassle free car purchase transactions or via their referral scheme, where a referral stands to benefit 50 dollars for every prospecting and eventual customers/car deal concluded by them.

L-R: Olalekan Michael Ilori, chairman/CEO, Throne group of companies, Oladipo Oladimeji, managing director, Throne Autos Nig. Ltd. and Deji Oso, Coo, Vintage Options Ltd, during the Throne Autos consumer car give-away press briefing held at Rolace Hotel, Ajao Estate, Lagos.

Cost-effective CFAO Yamaha bike...

Continued from page 30

adjustable; advanced air cooled engine; good ground clearance: 160mm ; and strong, long and comfortable seat”.

On fuel economy, a rider who works for six days a week, covering 140kilometres a week, saves N144,000 per annum from fuel versus competitors motorcycles, even as on engine oil economy, the rider saves up to 10 percent per week with Yamalube which is Yamaha’s genuine engine oil.

C FA O Ya m a h a a l s o have skilled technical team trained by the manufacturer in terms of production and quality control according to Yamaha standards, and backed by very strong aftersales network across the country through dealers and local mechanic training.

There is also room for adequate mechanic training, provision of special service tools and service manuals for repairs, as well as genuine

spare parts.

Explaining the background of the company, the Marketing Manager, Funmi Abiola disclosed that CAO Yamaha Motor Nigeria Limited is a joint venture between the CFAO group and Yamaha Motor Corporation (YMC) of Japan Strengthened by its “Empowered by a passion for innovation, we create exceptional value and experiences that enrich the lives of our customers” brand statement, the marketing manager said that Yamaha’s line of products include motorcycles, marine products and other motorized products.

Yamaha Motor Corporation’s (YMCs) core technical competencies include small engine technology, chassis and hull technology and electronic control technology, just as its manufacturing systems covers Europe, Asia, North America, Japan and South America.

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Local and global rail news as it breaks

Traxtion, RMR form JV to distribute rail parts into Africa

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World’s first hydrogen fuel cell train enters commercial service MIKE OCHONMA

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he world’s first hydrogen fuel cell train, the Coradia iLint, made its debut this past weekend. The train is equipped with fuel cells that convert hydrogen and oxygen into electricity, thereby eliminating pollutant emissions related to propulsion.

Two such trains last Monday, September 17, entered commercial service according to a fixed timetable in Lower Saxony, Germany, rail transport company Alstom said in a statement.

For the time being, travellers in transport authority Eisenbahnen und Verkehrsbetriebe Elbe-Weser’s (EVB’s) Elbe-Weser network can look forward to a “world-first” journey on the low-noise, zeroemission train that reaches speeds of up to 140 km/h.

On behalf of transport authority Landesnahverkehrsgesellschaft Nieder-

sachsen (LNVG), the Coradia iLint trains will be operated on nearly 100 km of line running between Cuxhaven, Bremerhaven, Bremervörde and Buxtehude, and will replace EVB’s existing diesel fleet.

Fuelled at a mobile hydrogen filling station, the gaseous hydrogen will be pumped into the trains from a 40-ft-high steel container next to the tracks at Bremervörde station and will be able to run throughout the network for the whole day.

A stationary filling station on the EVB premises is scheduled to go into operation in 2021, when Alstom will deliver a further 14 Coradia iLint trains to LNVG. “This is a revolution for Alstom and for the future of mobility. The world’s first hydrogen fuel cell train is entering passenger service and is ready for serial production,” Alstom CEO and chairperson Henri Poupart-Lafarge enthused.

He added that the Coradia iLint “heralds a new era in

emission-free rail transport”, noting that it is an “innovation that results from FrencHGerman teamwork and exemplifies successful cross-border cooperation”.

In addition, Lower Saxony Economy and Transport Minister Bernd Althusmann added that, with the test operation, Lower Saxony is performing “real pioneering work in local transport in cooperation with Alstom and EVB”.

The Minister’s department supported LNVG’s purchase of another 14 hydrogen trains worth more than €81 million.

“The emission-free drive technology of the Coradia iLint provides a climate-friendly alternative to conventional diesel trains, particularly on non-electrified lines,” he explained.

“In successfully proving the operability of the fuel cell technology in daily service, we will set the course for rail transport to be largely operated climate-friendly and emission-free in the future.

The state government of Low-

er Saxony is proud of putting this trendsetting project on the track together with LNVG,” Althusmann elaborated.

Meanwhile, LNVG chief Carmen Schwabl, whose authority organises the rail passenger transport between the North Sea and the Harz mountains, noted that the entry to fuel cell technology is also a strategic decision.

She explained that, with the two trains and with the use of another 14 hydrogen trains from the end of 2021, LNVG is the first passenger rail transport authority to replace existing diesel vehicles with emission-free vehicles, thereby contributing better to the fulfilment of the climate protection goals globally.

“We also do this because about 120 diesel train sets in our vehicle pool will reach the end of their lifetime within the next 30 years, meaning we will have to replace them. The experience gained with this project helps us find a sustainable and practical solution,” LNVG’s MD commented.

rivate locomotive and rail operator Traxtion Sheltam and Austria-based rail services company Railway Material and Resources (RMR) have signed an agreement to create a joint venture (JV) called RMR Africa that will distribute rail parts across the African continent.

The JV brings together two established players in the rail industry. Traxtion has been providing rail services and solutions across Africa for 30 years.

Its newly developed Rosslyn facility, where RMR Africa will be based, will

Group, following a 30% investment from Harith General Partners’ Pan African Infrastructure Development Fund 2.

Traxtion Group aims to partner with locomotive and wagon manufacturers, track construction companies, consulting engineers and project developers in the African rail market.

Chairman Brian Myerson said the business could also expand into the mining and industrial sectors.

In another development, the newly launched Traxtion Leasing business will focus on product innova-

soon offer a maintenance and rail services hub for fleets across the continent.

RMR is a globally recognised supplier of rail transportation parts, services and project support.

“RMR Africa is in a prime position to leverage off of RMR’s international supplier network, experience in the region and understanding of the industry,” said Traxtion CEO James Holley.

It would be recalled that last year, the Sheltam group was rebranded as Traxtion

tion and flexible financing, with maintenance support from Traxtion Sheltam.

Traxtion Projects funds rail and power generation infrastructure across Africa, and boasts of very strong shareholder equity and efficient debt funding.

At the heart of its success lies a comprehensive set of services that include rail operations expertise, various rolling stock leasing options, technical support to OEM standards, and rail safety, regulatory compliance and training.

New York City subway station re-opens 17 years after 9/11

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New York City subway station has reopened 17 years after it was destroyed on September 11, 2001, terrorist attacks.

T h e Me t ro p o l i t a n Transportation Authority (MTA) opened the new WTC Cortlandt station penultimate Saturday and began services in both directions at midday.

The infrastructure of the former Cortlandt station was completely destroyed in the 9/11 terrorist attacks when the World Trade Centre collapsed.

MTA rebuilt 1,200ft of tunnel and tracks and made significant repairs

to the station shell, track tunnels and track infrastructure, which enabled the restoration of line

service to the South Ferry terminal.

The remainder of the Cortlandt St station was

demolished as part of the overall reconstruction of the World Trade Centre site, leaving behind the foundation for a new subway station to be built in its footprint.

Most of the new WTC Cortlandt station was built within the footprint of the former Cortlandt St station.

Construction of the new station began in 2015 when MTA was given control of the site, which is located within the greater World Trade Centre site overseen by the Port Authority of New York and New Jersey.

The station box, within

which the station shell and structure are housed, had to be underpinned or supported by piles driven into the bedrock more than 60ft below, creating an underground railway elevated above the bedrock.

The station site was then built to grade, allowing the construction of a subway station 700ftlong and 47ft-wide to take place several floors below street level. A partnership of several agencies, including the MTA and PANYNJ, worked on the design of the new station.

MTA chair Joseph Lhota said: “The open-

ing of WTC Cortlandt returns a subway station to a vibrant neighbourhood and represents a major milestone in the recovery and growth of downtown Manhattan.

“W TC Cortlandt is more than a new subway station. It is symbolic of New Yorkers’ resolve in restoring and substantially improving the entire World Trade Centre site.”

The new WTC Cortlandt station has 23,720 sq ft of public space, with two side platforms for service in each direction 20ft below street level and two station mezzanines below the platform level.

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LegalPerspectives With Odunayo Oyasiji What are the duties and liabilities of a director under the Companies and Allied Matters Act?

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company is a legal personality; it can sue and be sued under the law. However, a company does not operate on its own without being controlled by some people. The people behind the activities are its directors. The directors see to the day to day running of the company. In doing this, they exercise some powers which are conferred on them by the virtue of the position they occupy. Section 244 of Companies and Allied Matters Act defines a director as “a person duly appointed by the company to direct and manage the business of the company”.

The foregoing definition shows the sensitive nature of the office of a director. The failure of a director to act in the best interest of the company can be fatal to the general wellbeing of the company. Therefore, a look at the duties and liabilities attached to the office of a director as outlined in the Companies and Allied Matters Act is essential.

When a company fails, its shareholders, the creditors, staff and many other people will be negatively affected.

The law has put in place some provisions in order to prevent the failure of a company. These provisions serve as outlines to guide the directors in discharging their duties and to set a boundary for them so as to curtail excesses. The duties of directors are basically- duty to promote the success of the company, duty of care and skill, duty to prevent conflict of interest, fiduciary duty and duty not to accept secret benefits. These duties will be discussed one after the other.

1. Duty of care and skill- A director in the course of managing the business of the company is expected to exercise a level of care, diligence and skill.

The standard here is the level of care a reasonably prudent director will exercise. Section 282(1) of CAMA states that “every Director of a company shall exercise the powers and discharge the duties of his office honestly, in good faith and in the best interest of the company, and shall exercise that degree of care, diligence and skill which a reasonably prudent Director would exercise in comparable circumstances”.

Section 282(2) of CAMA provides for what the consequence will be in a situation where a director falls short of

the standard set out in subsection 1. It provides that “failure to take reasonable care in accordance with the provisions of Section 282 of this Act shall be ground for an action for negligence and breach of duty”.

It must be noted that section 282(3) makes directors to be individually and collectively liable for the action of the Board of Directors. Therefore, an individual director cannot excuse himself from the consequences of the joint decision of the Board of Director.

It is therefore essential that highest level of care and skill be observed when discharging the functions of the office of a director. It is a matter of to whom much is given, much is expected.

2. Duty not to accept secret benefits- Section 287 of CAMA forbids a director from accepting bribe, gift or commission in cash or kind in relation to businesses the director performed on behalf of the company. Bribery and corruption is totally prohibited under the Act. The provision reads “Director shall not accept a bribe, a gift, or a commission either in cash or kind from any person or a share in the profit of that person in respect of any transaction involving his company in order to introduce his company to deal with such a person”. This is to ensure that the director stays neutral in his or her dealings in the company. Section 287(2) of CAMA gives the company the right to recover the gift from the director. The company can also sue both the director and the giver of the gift for damages.

The excuse that the gift was accepted in good faith will not be tenable- Section 287(3).

3. Duty to prevent conflict of interest- In NASR v. BEIRUT-RIYAD NIGERIA [1968] 5 NSCC 218, the court held that a director negotiating a contract on behalf of his company must not do so in a way as to put himself in a state that will make him profit from such contract to the detriment of the company. If this happens, the company can sue such a director for damages and or restitution. Section 280(1) of CAMA provides that “The personal interest of a director shall not conflict with any of his duties as a director under this Act”. Conflict of interest usually occurs where multiple interests is in issue i.e. a situation where a director has other interests apart from the interest of the company. Such interest must be capable of influencing the decision of the director involved. Examples of circumstances where such issue can arise includes where the director is a director in two competing companies, where he is a major shareholder in a competing company and where he uses confidential information obtained in the course of discharging his duty as a director in one company to the benefit of another company or his own personal benefit.

Section 280 (2) provides that ” A director shall not‐ (a) in the course of management of affairs of the company; or (b) in the utilisation of the company’s property, make any secret profit or achieve other unnecessary benefits”. If

a director makes secret profit, he shall be accountable to the company for such secret profit or benefit- Section 280(3). The only exception is if he discloses his interest to the company before entering into such a transaction. This duty extends even to when the director has left the services of a companyhe cannot misuse confidential information he had access to while he was a director (section 280 (5)). The company has the right to sue to obtain a restraining injunction against such director.

4. Fiduciary duty- This is an obligation of an individual to always act in the best interest of another party. Therefore, a director is under an obligation to act in the best interest of the company. Section 279 of CAMA provides that ‘a Director of a company stands in a fiduciary relationship towards the company and shall observe the utmost good faith towards the company in any transaction with it or on its behalf’. Section 279 (3) further states that “a Director shall act at all times in what he believes to be the best interest of the company as a whole so as to preserve its assets, further its business and promote the purposes for which it was formed, and in such manner as a faithful, diligent, careful and ordinarily skilful Director will act in the circumstances”. This duty is owed to the company. In the case of OKEOWO v. MIGLIORE [1979] NSCC 210 it was stated that fiduciary duty is to be to the advantage of the company and not to any individual director.

5. Duty to promote the success of the company- It is the duty of a director to ensure and promote the success of the company. All steps and decisions are to be aimed at ensuring that the company does not fail. Therefore, personal interests are to be put aside in directing the activities of the company. It can be said that all the duties earlier discussed are aimed at promoting the success of the company.

In conclusion, the above listed duties are imposed on the directors by different provisions of CAMA. This is to ensure that the success of a company is the sole aim of the directors both as an individuals and as a board.

In a situation where a director falls short of his duties then the law provides what the liability will be. We have already discussed some of the liabilities while discussing the duties.

However, for the purpose of clarity and emphasis the liabilities are –the company can sue the director for wrongdoing (Section 279(9)), there is joint liability for actions taken by the board, the company can sue for an order of injunction, the company can sue for restoration in a situation where property is involved, company can sue for an order that a director should render account of profit made, a company can sue for negligence and breach of duty and the company can sue for compensation or damages. It is safe to state that a director’s power to direct the affairs of a company comes with consequences when he or she is found to be in breach of the provisions of the law.

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FEATURE

PTAD boss presents scorecard, enrolls 19,000 new pensioners on payroll JOHN OSADOLOR

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t a recently well attended stakeholders’ forum held in Lagos, the Executive Secretary of the Pension Transitional Arrangement Directorate (PTAD) Sharon O. Ikeazor, laid bare the achievements of the Directorate in providing solutions to the myriads of challenges facing pensioners in the country, particularly those on the Defined Benefits Scheme (DBS).

According to Ikeazor, the purpose of the stakeholders’ forum series is to provide updates on the activities of PTAD and interact directly with its pensioners in order to obtain objective feedbacks from them in an interpersonal manner.

The stakeholders’ forum which was first held in 2017 is now decentralized and being held in the nation’s six geopolitical zones. The reason for decentralizing the forum is to bring it closer to the highly regarded pensioners.

Despite the challenges faced by the global economy over the past couple of years, the Directorate, with the unwavering support of the federal government, had recorded substantial achievements in its drive towards ameliorating the welfare of pensioners. Principal amongst these achievements is ensuring the prompt payment of monthly pension to all genuine pensioners. Consequently, the dateline of 15th day of every month for the completion of all departmental payrolls will remain sacrosanct, she told the pensioners. ‘”Our ultimate goal in this regard is to ensure that payment of pensions is prioritized over the payment of salaries, not only by the federal government, but by all tiers of govern-

Sharon O. Ikeazor, Executive Secretary

ment”, the PTAD boss said.

Other breakthrough successes recorded over the period under review according to her, include the enrolment of newly verified pensioners into PTAD payroll.

Following the completion of the civil service verification, all eligible pensioners under that category have been enrolled and the payment of monthly pension to them has since begun. This exercise has brought in over 19,000 new pensioners, who had hitherto been denied their constitutional rights to pension, into the Defined Benefit Scheme.

The Directorate has also successfully verified, computed and put on payroll nearly 5,000 pensioners of defunct/privatized agencies such as Delta Steel Company (DSC), Aladja, Federal Housing Authority of Nigeria (FHA), Nigeria Reinsurance, Nigerian Defence Academy (NDA) Civilians. Pensioners of NICON insurance will commence receiving monthly pension in September 2018, while work on the enrolment of NITEL pensioners has reached advanced stages. This singular

achievement has lifted many families out of miseries that lasted for up to 13 years in some instances. The verification of other agencies under same category will be done alongside that of other parastatals beginning in the fourth quarter of 2018.

PTAD under Ikeazor’s watch has begun Payment of pension and gratuity arrears to over 15,000 newly enrolled civil service pensioners as well as payment of additional 33% arrears to pensioners of Police, Civil Service and Parastatals Pension Departments. With the last round of payments, the 33% liabilities for police pensioners have now been fully settled, joining Customs, Immigration and Prisons Pension Department’s pensioners in this category. The Directorate has also applied for the release of funds set aside in the 2019 budget to settle the remaining arrears of Civil Service and Parastatals pensioners.

As a very proactive organization, in order to combat fraud and protect its pensioners from extortionists, PTAD had intensified its pensioner enlighten-

ment campaigns through the traditional media. “In the coming days and months, we also seek to take these operations to places of worship as well as community centers in order to ensure wider coverage.

We have also strengthened our partnerships with law enforcement agencies and other stakeholders such as the Economic and Financial Crimes Commission, the Independent Corrupt Practices Commission and the Department of State Security (DSS) with a view of eradicating pension fraud in Nigeria”, she assured the pensioners.

She told the gathering of eminent pensioners who had meritoriously served Nigeria and humanity that in line with the Directorate’s vision of being “a model organization for the delivery of innovative and sustainable pension services”, PTAD has taken bold initiatives in order to strengthen the management of pensions under the Defined Benefits Scheme (DBS) in the following key areas: Automation of the pension payment processes and the use of Government Integrated Financial Management Information System (GIFMIS) under which pensioners receive their payments directly into their bank accounts from the Treasury Single Account (TSA) without any interface with the Directorate. PTAD does not operate any commercial bank accounts.

Digitization of pensioners’ data and records with a view to maintaining a comprehensive database of pensioners under DBS: Improving and sustaining our client focused services with emphasis on Care and Empathy: Prompt resolution of complaints and conducting verification exercises under conducive environment, with the provision of food,

water and medical facilities at all centers, will continue to be the driving force in our pensioner relations. Similarly, we will continue to attend to the sick and infirm through our Mobile Verification exercise until such a time when we eliminate the physical verification process and replace it with the “I am Alive” scheme.

Automated Computation of benefits: We will integrate the verification and computation processes in the coming months in order to eliminate the lag between the conduct of the verification exercise and the computation process; Intensifying the recovery of pension still being held by Insurance companies through the use of all available legal means at our disposal; Continue engagement with National Health Insurance Scheme (NHIS) for enrolment of pensioners.

In specific term, PTAD had pay-rolled 284 pensioners of the Nigeria Reinsurance Plc to receive their monthly pension for life. “A relief has come the way of 284 pensioners of the company 16 years after Nigeria Reinsurance was privatized by the Federal Government, as the Pension Transitional Arrangement Directorate (PTAD) has added them to its monthly payroll”, a recent statement from the Directorate said.

A total of N8.31 million was paid to the new enrollees for the month of July 2018 as they start receiving their monthly pension for life.

Reacting to the development, Ikeazor said: “No pensioner or retiree after serving their fatherland should ever be forced into the indignity and painful uncertainty of delayed pensions. Today, Nigeria Reinsurance pensioners verified

by PTAD has been placed on monthly pension payroll. It is indeed a promise kept”.

Wednesday 19 September 2018

BUSINESS DAY

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LOGISTICS

MARITIME e-COMMERCE

Nigeria, Niger Republic builds rail line to promote transshipment of cargo Stories by UZOAMAKA ANAGOR-EWUZIE

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he Federal Government said it has perfected arrangements to partner with the government of Niger Republic in the construction of a standard gauge rail line to connect Maradi in Niger Republic with Katsina State in Nigeria.

Rotimi Chibuike Amaechi, minister of transportation, who disclosed this on Monday at the ongoing International Association of Ports and Harbours (IAPH) Africa Regional Conference in Abuja, said that the move constitute part of Nigeria’s efforts at promoting regional integration and trade between both nations.

Amaechi, who expressed fulfillment that the conference themed “African Ports & Hinterland Connectivity,” took place during the first opportunity that Nigeria, has to be vice President of African Region for the IAPH, said that the conference theme is in sync with this administration’s commitment to optimising the comparative advantage that Nigeria maritime endowments confers.

“This administration appreciates the importance of

Rotimi Amaechi, minister of transportation in a chat with Hadiza Bala Usman, managing director of NPA during the opening of 2018 African Ports and Hinterland Connectivity Regional Conference currently ongoing in Abuja.

the maritime to trade facilitation. We also understand that optimising the potential is totally dependent on the efficient transportation of cargo from port locations into the various destination of use no matter how farflung into the hinterland might be. We are therefore committed to the deployment of a multimodal system of transportation from all our ports,” he assured.

The minister said that the government’s commitment to this cause is evident in the rapid pace with which it’s pursuing the reactivation

and extension of the railway networks to facilitate the ease of transporting cargo from Nigerian port locations to the hinterland.

“In terms of railway, work is already at advance stage on the realignment and re - modification of the national railway gauge lines and the revitalisation of the once moribund Kano express train.”

“Similarly, the Lokoja – Itakpe – Warri rail line started operations only a few months ago while the Port Harcourt – Aba – Maiduguri axis is being reconstructed

Tin-Can Island port begins perimeter fencing for effective security

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etermined to ensure the security of cargoes at the port in line with the global standards, the management of the TinCan Island Port (TCIP), has commenced work on the perimeter fencing of the facility in compliance with the International Ships and Ports Security Facility (ISPS) Code.

Emmanuel Akporherhe, TCIP port manager, who disclosed this in Lagos recently, said the project was aimed at controlling both human and vehicular movement in and out of the port.

Akporherhe, who stated that the terminals were in compliance with the Code, said that the fencing will further ensure that only those who have business, will be given access into the port.

According to him, there would be gates at the three entrances to TCIP for strict implementation.

“The major challenge to the project is the traffic because it’s only when the traffic situation eases off that we can look at areas that should be fenced. This is why all hands must be on deck to sort out the traffic issue along the port access roads,” he said.

He however, blamed the persistent gridlock for poor implementation of truck call-up system. “Though, the system is functional at a minimal level, but full implementation will start once the palliative works on the Apapa – Mile2 axes of the road, is completed.

“On our side, we did some palliatives at the TinCan Second Gate and we are continuing the palliative on

the bad spots of the roads.

We are also in touch with the Commodore in charge of Beecroft, who has given order to sort out the congestion,” Akporherhe stated.

“Stakeholders including the tank farm owners and the concessionaires are working on improving the road situation. Soon, Dangote will be working on the Tin-Can route. It is when the road is manageable that we can effectively use the call-up system to decongestion the roads,” he added.

ISPS Code, which was adopted by the International Maritime Organisation (IMO) after the September 11 terrorism attack on the United States of America, was introduced to forestall recurrence of such incident through the maritime domain.

to standard gauge to further open up the nation’s hinterland for market penetration.

According to him, this move was prompted by the development of dry ports in Kano and Kaduna with direct rail connection, which has enabled ease of cargoes and containers transit to the Northern Nigeria, and to Chad and Niger Republic in order to promote transshipment of cargoes to the neighboring countries.

“In furtherance of government’s determination to create an efficient multimodal transport system

and to improve inland connectivity for effective cargo movement, the inland waterways are being revitalised as alternative to existing modes of transportation. Currently, inland river channels are being dredged starting from the River Port in Onitsha up to the northern region of Lokoja in Kogi and Baro in Niger states with adequate channel markings for ease of navigation,” Amaechi explained.

Amaechi, who disclosed that export cargo such as solid minerals like manganese and agricultural produce are already being exported out of Nigeria from the Ikorodu Lighter Terminal (KLT) through barges on the shallow lagoon extending to the Apapa Port in Lagos, stated that work has commenced on remodeling the existing narrow gauge rail lines on the Apapa corridor of the Lagos – Ibadan rail network into standard gauge for seamless transportation of people and goods.

The project, he noted, is being handled by China Civil Engineering and Construction Company (CCECC) is progressing at a rapid pace.

However, the minister assured that the Lagos-

Ibadan rail network would be commissioned later this year or early next year, adding that the construction work is progressing at a rapid pace.

Hadiza Bala-Usman, managing director, Nigerian Ports Authority (NPA), said that ensuring railway operations is the singular way to decongest the ports.

“So long as we have all the cargo playing the roads, we will continue to have congestion. We want to make our respective governments understand that prioritising hinterland connection is paramount for any port to be operational and efficient.

“We recently got the president to give a directive that the ongoing rail rehabilitation and expansion are linked to all the ports across the country. We have made submissions to the Ministry of Works to prioritise the linkage of access roads to the port locations, and has also notified them of the need to have utilisation of inland waters using barges, ensuring that the Nigerian Inland Waterways Authority (NIWA) prioritises its operational capacity in dredging some of the river ports to ensure importers have routs to move their cargo,” she added

SIFAX partners NGOs to train physically-challenged children

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s part of its corporate social responsibility (CSR) initiative, SIFAX Group has partnered two non-governmental organisations (NGOs), named Initiative for National Growth and Mo Rainbow Foundation to train physically-challenged children in Lagos.

Precisely, 70 visuallyimpaired and 50 children with the Down syndrome, benefitted from the training.

At the training for the visually-impaired organized by the Initiative for National Growth, topics such as choosing a career in Public Speaking, Mass communication, Law and Psychology, mobility skills for the blind, legal rights, music therapy and sports skills, were discussed. This was in addition to free malaria and HIV tests for both the participants and their caregivers.

Mo Rainbow Foundation, hosted children living with the Down syndrome to a 5-day inclusive creative arts training, meant to enhance their learning and adaptive skills.

Fola Rogers-Saliu, executive director, Human Resources and Administration of SIFAX Group said the company’s decision to making the society a better place for the physically challenged, was the reason for sponsoring the programmes.

“At SIFAX, we take delight in supporting social causes that positively impact and add value to the society. The major beneficiaries of our social interventions are the less privileged.

“Physically-challenged children are shut out of many opportunities in the country. These trainings were designed to prepare and equip them with skills

that are required to succeed, even in a competitive environment. We believe that the society could gain a whole lot if the abilities and talents of these children are appropriately tapped,” she said.

Rachael Inegbedion, coordinator, Initiative for National Growth, noted that the blind community has been underserved especially with training that centers on equipping them with life skills. “This is why we want to stimulate the abilities in them and see them become renowned professionals in the different fields.

Tola Makinde, creative director, Mo Rainbow Foundation, who thanked SIFAX Group for supporting the children with the Down syndrome, noted that the children needed a special learning process that will get the best out of them.

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NEWS FG’s list of ongoing projects in South-East contains...

Continued from page 1

in Ilorin, Kwara State, capital, at a lecture.

Three days later, Mohammed

released a list containing 69 ‘ongoing’ projects in the region, which often alleges marginalisation.

“Though the contracts for many of the roads were awarded before the advent of this administration, they were either poorly funded or not funded at all, hence work on the roads has lingered,” Mohammed said.

He said the 69 roads and bridges, spread across the five states in the South-East Nigeria, were now at different stages of completion, thanks to the funding sourced by the present Muhammadu Buhari administration from budgetary allocations, the Sukuk Bond and the Presidential Infrastructure Development Fund.

BusinessDay decided to factcheck these claims to ascertain their veracity or otherwise. We noticed that out of the 69 projects on the list released by the Federal Government, 20 are tagged as ‘construction’ while the rest are designated as ‘rehabilitation’.

BusinessDay investigated those classified as ‘construction’ but found

inconsistencies in the Federal Government’s claims.

Only seven out of the 20, are currently ongoing.

One is Nkporo-Abiriba-Ohafia, which was awarded in May 2012, but was abandoned by the immediate past administration of Goodluck Jonathan.

Though BusinessDay classified this N2.739 billion project as ‘ongoing’, work on this road is in fits and starts now, forcing villagers to ask if the government has indeed mobilised Dutum Construction Nigeria Limited or if the contractor is just slow. The second one classified as ‘ongoing’ from our findings is the Abriba-ArochukwuOhafia Road in Abia State, awarded by the immediate past government on December 13, 2012, at N2.265 billion.

Sections of this road, handled by Beks Kimse Nigeria Limited, are still bad.

BusinessDay was told that the Senator representing the zone, Mao Ohuabunwa, facilitated some level of rehabilitation of this road in March this year, making it a bit motorable.

But as of the second week of September when our correspondent visited this road, the road looked decrepit.

Next is the Ohafia-Oso Road, which is between Abia and Ebonyi

states’ border. Work on this road, though ongoing, is in fits and starts.

The N979.889 million Omor-Umulokpa Road, which borders Anambra and Enugu states, is going on, just as Nnenwe-Uduma-Uburu Road.

Similarly, construction of Nenwe-Nomeh-Mburubu-Nara Road with spur to Obeagu Oduma Road in Enugu State is going on and is handled by Arab Contractors OAO Nigeria Limited.

Also, Ugwueme-Nenwenta-Nkwe-Ezere-Awgunta-Obeagu-Mgbidi Nmaku Road Project Enugu State is ongoing, according to BusinessDay findings. True to Lai Mohammed’s words, it was observed that some of the projects are being funded with Sukuk Fund.

But this is just all, as four of the listed projects had been completed before Muhammadu Buhari came to power on May 29, 2015.

First is the Olokoro-Isiala-OboroNnono Junction awarded on December 21, 2010, to Abia Bok Company at N515.315 million. This road was completed before Buhari came to power, according to our findings. Sections of this road require repair but no work is going on at the moment.

Second is the Ahiakwu-AmangwoUmuahia-Ngwa-Ngwa Road, awarded

onDecember23,2010,contractedtoLa Ann Engineering Nig Ltd for N589.554 million. It was also found that this road was completed before May 2015 when thecurrentgovernmentcametopower.

No work is going on there today.

Another one completed by the immediate past administration but listed as ‘ongoing’ by Lai Mohammed is the Olokoro-Alaukwu-ItajaOkwu-Obuohia-Ikwuano, awarded on March 10, 2010, to Rhas Nigeria Limited for N990.673 million.

Last is the Mbaise-Ngwa Road with Bridge at Imo River, Phase I in Imo/Abia states. This road (including the bridge) was completed in 2014 and is in good shape.

We classified eight out of these 20 roads as ‘not ongoing’ because they are uncompleted and no work was going on around them as of September 15.

The following roads fall into this category: Road in Isseke TownAmafuo-Ulli with Spur (Ihiala-OrluUmuduru Section) in Anambra State; Ikemba Drive Spur on ObaOkigwe Road Through Permanent Site of Nnamdi Azikiwe University Teaching Hospital in Anambra State; Umulungbe-Umuoka-Amokwu Ikedimkpe Egede-Ojieyi Awhum Road; Construction of Oji-Achi-

Mmaku-Awgu Road With Spur To Obeagu-Ugbo in Enugu State; and Ogrute-Umuida-Unadu-AkpanyaOdoru Road in Enugu/Kogi.

Others are: Construction of Aguobu-Owa-Mgbagbu Owa-Ebenebe (Anambra State Border) with Spur to Awaha-Oyoha-Oyofo-Iwollo Road in Enugu; Umuna-Ndiagu-Agba Umuna-Ebenebe-Amasi Awka Express Road with Spur from Umuna – Ndiagu (Agba-Ebenebe) Section I in Enugu State; Ikot Ekpene BorderAba-Owerri Dualisation Road, Section I, Phase I (11.26Km from Owerri End) in Akwa Ibom/Abia/Imo States.

Of particular interest is a project listed as ‘construction of Oseakwa Bridge in Anambra State, C/No. 6043’.

This project was awarded on October 6, 2009, to Horizon Construction Co. Ltd at a cost of N896.863 million. BusinessDay can confirm with pictures and videosthatthelocationcalled‘Oseakwa Bridge’,is not technically a bridge.

The Cambridge Dictionary (online) defines a bridge as a structure that is built over a river, road, or railway to allow people and vehicles to cross from one side to the other’.

Road leading to the so-called ‘Oseakwa Bridge’ in Ihiala is not tarred and the road extending from it is decrepit and is not passed by vehicles.

NIMC begins enforcement of mandatory...

Continued from page 1

use of the National Identification

L-R: Abbas Umar, NSPM CEO; Godwin Emefiele, governor, CBN; Vice President Yemi Osinbajo; Alex Okoh, DG, Bureau of Public Enterprise (BPE), and Olamide Olajide, at the signing ceremony for the sale of the Federal Government’s 12.4 billion shares in Nigerian Security, Printing and Minting (NSPM) plc to the Central Bank of Nigeria held at the Presidential Villa, Abuja, yesterday.

Exxon Mobil to pay ex workers about N12m...

Continued from page 1

were hoping to secure a higher compensation but as things are, we

expect this to be concluded soon.”

Sources familiar with the matter confirmed to BusinessDay that the total payment will cost about $100 million as a minimum take home for each workers is N12million with some workers getting up to N20 million each.

Staffs of ExxonMobil early this month mounted blockade around the company facilities in Nigeria over the sacking of 860 spy police without entitlements.

The company’s workers’ union protested the sacking of these workers, who were mostly Nigerians saying, they were sacked by ExxonMobil in breach of labor laws despite putting in over 22 years of service accusing the management of refusing to comply with Supreme Court Judgment.

The affected workers alleged being victimized, with some saying they were sacked unceremoniously for insisting on right to be treated as other employees of Mobil. They alleged that, aside from being subjected to harsh working condition, they were compelled to sign a document identified as “Mobil Producing Nigeria status agreement

for supernumerary police service condition agreement.”

Recall on April 20, 2018, the Nigerian Supreme Court ruled that all SPY police personnel were employees of ExxonMobil and were thus entitled to all remunerations, benefits, terms and conditions as employees of ExxonMobil.

Approximately 925 personnel are affected by the ruling.

As a result, ExxonMobil implemented a non-voluntary separation program in July 2018 for police officers as approximately 500 affected personnel were still in active service.

The company’s ExxonMobil spokesperson, Ogechukwu Udeagha said the company complied with the Supreme Court ruling by acknowledging the spy police as employees however given the business model, calculating their emoluments and benefits was a challenge as the highest certificate most of them have was a School Certificate.

“The least of them will get a minimum of 10 years annual basic salary and allowances up till July 13, 2018, in addition to August salary paid in lieu of one month notice of disengagement from service,” ExxonMobil noted.

ExxonMobil emphasized that

the ex-police officers are not staff of ExxonMobil rather they were hired or recruited and trained by the Nigeria Police and deployed to Mobil Producing Nigeria facilities, however the company had been paying them through the police.

The oil firm said in press statement thereafter that mounting blockades could threatens crude production and such “disruptions to these operations have the potential to significantly impact revenues.”

On Friday September 7, Chris Ngige, Minister of Labour and Employment said the ex-workers acts of picketing, harassment, blockade of company facilities, playing of loud music, defacing of company facilities or intimidation of personnel and all other forms of industrial actions should be discontinued.

Mobil Producing Nigeria, the ExxonMobil subsidiary produces over 550,000 barrels per day of crude oil, condensates and natural gas liquids.

According to the National Bureau of Statistics, Nigeria’s average production in the second quarter of 2018 was 1.8 million barrels per day.

Officials at the oil company feared the blockade may affect the nation, which relies heavily on oil revenue.

“N12 million in today’s Nigeria is a good deal,” Falana told BusinessDay.

Number (NIN) by January 1, 2019 and the application of appropriate sanctions and penalties on defaulters as provided under Section 28 of the NIMC Act and Regulations.

This is as the Federal Executive Council (FEC) approved the immediate commencement of the implementation of a strategic roadmap for Digital Identity Ecosystem in Nigeria at its last meeting, held September 12th, 2018 and chaired by President Muhammadu Buhari, GCFR. The digital identity Ecosystem is a framework that leverages on the existing capabilities and infrastructure of distinct government agencies and private sector organisations to carry out enrolment of Nigerians and Legal residents into the National Identity Database (NIDB) as well as

issuance of Digital identity, known as the National Identification Number (NIN) to give Nigeria a credible and robust identity management system.

Aliyu Aziz, NINC Director General explained that, the strategic roadmap for the Identity Ecosystem for Nigeria approved by FEC falls in line with the Federal Government’s efforts to reposition the country’s status in the global economy, towards achieving the Economic Recovery and Growth Plan (ERGP) launched in April 2017.

Aziz said, the ERGP is designed as an omnibus strategy for the government to meet the critical needs of the citizens in areas such as food security, energy, transport, human capital development, but more critically developing a local digital economy.

•Continues online at www.businessdayonline.com

Electoral Act: NASS joint committee restores...

Continued from page 1

the 2010 Electoral Act (Amendment) Bill.

To this end, the committee has restored the use of Smart Card Reader for voter accreditation in its fourth attempt to amend the electoral law.

President Muhammadu Buhari had in his refusal of assent to the third version of the amendment bill listed about 14 contentious areas that must be addressed by the federal lawmakers for the bill to see the light of the day.

The President’s observations were accordingly addressed in the fourth version of the bill adopted by the National Assembly joint committee on Independent National Electoral Commission (INEC). The affected sections as announced by the chairman of the joint committee, Suleiman Nazif (PDP, Bauch State) are 9(1A), 9(B5), 18(1-4), 19(4), 30(1), 31(1) and 31(7).

Others are 36(3), 44(3-4), 67( a-d), 87(2), 87(14) and 112(4).

While section 9(1A) deals with voters registers in electronic format and manual or hard copy format , section 18(14) deals with process of replacement of voters card by the INEC on demand by voters which it states must not be done less than 30 days before election.

Section 36(3) of the adopted bill makes provision for constitutional

way out on sudden death of candidate of political party in the course of election as it happened in 2016 Kogi gubernatorial election.

The section states: “If after the commencement of poll and before the announcement of the final result and declaration of a winner, the leading candidate dies, (a), the commission shall, being satisfied of the fact of the death, suspend the election for a period not exceeding 21 days. “(b) the political party whose candidate died may , if it intends to continue to participate in the election , conduct a fresh primary within 7 days of the death of its candidate and submit a new candidate to replace the dead candidate “(c) subject to paragraphs (a) and (b) , the commission shall continue with the election. , announce the final result and declare a winner” The Chairman however added that Section 34(2-4) which deals with added laws on commission of party logo on ballot papers was deleted.

It would be recalled that President Muhammadu Buhari had declined assent to the revised versions on the bill on three different occasions in March, August and September this year, citing constitutional breaches and cross-referencing errors.

•Continues online at www.businessdayonline.com

38 BUSINESS DAY NEWS

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National security & rule of law: Urgent need to restructure our legal system Continued from back page even on mere allegation.

The question therefore is why it is easy for us to kill a petty criminal from our tribe but defend and support a big thief that stole from the national resource?

The answer is that the small petty thief is abhorred using our tribal legal system which forbids stealing and which we accept and have internalized but the big thief that has embezzled public funds is perceived using our formal legal system which we have not accepted and internalized. In the same vein, our traditional rulers and elders are still largely believed to be people of high morals and integrity of which corrupt allegations are normally repudiated at.

This is due to the tribal legal system that is understood, accepted and internalized and which abhors corruption.

The current demands for regionalism, devolution of powers and state police are all connected to the limitedly accepted and weakly internalized formal legal system. They are demands for the transfer of power and control of public revenue from the centre with a limitedly accepted legal system to regions with societies of common tribal legal system (South East, South West, South South, North Central, North West and North East).

This will leave the centre (federal government) with issues such as foreign affairs and national defense which are of common interest to all the tribes and their legal systems. It is therefore deeply important that the restructuring of our national formal legal system be given utmost priority and comprehensively discussed and championed by our “learned brethren�. This they can achieve through

CHANGE OF NAME

I, formerly known and addressed as Liasu Omolara Shakirat now wish to be known and addressed as Ajibola Shakirat Omolara. All former documents remain valid.

General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Miss Obanaye Susan Funmilayo now wish to be known and addressed as Mrs Iwelu Susan Funmilayo. All former documents remain valid.

General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Hassan Suleman now wish to be known and addressed as Hassan Sule. All former documents remain valid.

General Public please take note.

the effective utilization of the under-utilized Nigeria Bar Association (NBA).

If we agree that Nigeria should remain the way it is, then our formal national legal system will need to be comprehensively restructured and rewritten to deeply reflect our national values and cultures. The contents should be discussed and determined by the ethnic nationalities and derive mainly from the similarities in our values and norms.

However, if we agree that there should be devolution of powers to regions, the suggestion will be to create two legal systems.

The first should be a national legal system and the second a regional legal system. The national legal system should develop through the collation and harmonization of similarities and differences in our respective tribal legal systems on issues that will be controlled by the federal government such as national governance, foreign affairs, national security, revenue generation and sharing etc.

The regional legal system should be developed by the regions and dictated by their common values and norms and then used to moderate issues that will be allocated to the regions like development policies, revenue generation and distribution, education, health etc.

This suggestion does not mean that our current formal legal system adopted from Britain should be discarded. It should not,

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I, formerly known and addressed as Saliu Violet Andrew now wish to be known and addressed as Violet Andrew Oladunwo. All former documents remain valid.

General Public please take note.

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I, formerly known and addressed as Miss Chinwendu Jovita Eluchie now wish to be known and addressed as Mrs Chinwendu Jovita Nwoke.

All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Anthonia Amaka Chiejina now wish to be known and addressed as Anthonia Amaka Aniemeke. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Ngwankwe Constance Ezichi now wish to be known and addressed as Iroham Ogechukwu Constance Ezichi. All former documents remain valid. General Public please take note.

but, we need to deeply look at the contents and use only the elements that are amenable to our past, current and future values and norms. This is also the case with our tribal legal systems in which we should discard practices and laws which we consider inappropriate and retrogressive.

If devolution is agreed, each region can have its own supreme court and the other lesser courts while the federal government can have only appeal and supreme courts to adjudicate in cases between the regions or between individuals/groups and regions.

Allowing the regions to have their own supreme courts will not only expedite resolution of cases but will trigger a wider usage of the legal system by the citizens who will be aware and conversant with contents and procedures of the law which derive from their common norms and values.

Irrespective of the structure of governance agreed for Nigeria, it is imperative that a wide and elaborate socio-legal socialization of the citizens is carried out to ensure good understanding, acceptance and societal ownership of the legal system.

Regardless of preferred course or profession, it might be important that law modules are made compulsory in levels of education (from primary to tertiary schools). In the same vein, the judiciary will need to be effectively restructured to enhance delivery of justice.

Continues on www.businessdayonline

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I, formerly known and addressed as Adefogunlo Adekunle James now wish to be known and addressed as Omijie Emmanuel. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Miss. Ajibola Mary Oluwafunke now wish to be known and addressed as Adebeso Mary Oluwafunke. All former documents remain valid.

General Public please take note.

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I, formerly known and addressed as Nwaokorie Ivory Oduenyi now wish to be known and addressed as Nwaokorie Ivory Oduenyi O Alfred. All former documents remain valid. General Public please take note.

Wednesday 19 September 2018

Wednesday 19 September 2018

C002D5556

BUSINESS DAY

39

Wednesday 19 September 2018

FT

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BUSINESS DAY

FINANCIAL TIMES

A1

Alibaba’s Jack Ma warns trade war could last 20 years

Visa and Mastercard in $6.2bn settlement of swipe fees dispute Page A2

Page A3

World Business Newspaper

China retaliates against new US tariffs as trade war escalates Beijing says Trump duties on $200bn in imports show ‘no sincerity and good faith’ TOM MITCHELL, EMILY FENG, XINNING LIU AND JIM BRUNSDEN

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eijing retaliated against US tariffs on Tuesday, saying Donald Trump’s decision to slap duties on more than half of all Chinese imports had undermined efforts to reach a negotiated settlement to resolve the countries’ trade war.

China’s state council said it was imposing tariffs of up to 10 per cent on $60bn of US imports, to take effect next Monday, as it expressed concern about the prospect of a deal with Washington.

“We have been stressing that talks need to happen on the basis of parity, equality and good faith,” a Chinese government spokesperson said at a daily foreign ministry briefing. “What the US has done shows no sincerity and good faith at all.”

The US action also drew a sharp response from the EU. “This escalation is very unfortunate,” Cecilia Malmstrom, the EU’s trade commissioner, told reporters. “Trade wars are not good and they are not easy to win.”

However, China’s retaliatory tariffs — at 5 and 10 per cent — are less than Beijing had first threatened to impose when it put forward a list in August of duties of up to 25 per cent.

Mr Trump has also imposed tariffs towards the lower end of recent expectations, slapping 10 per cent duties on about $200bn worth of Chinese imports beginning next week — although he has threatened to increase the rate to 25 per cent in 2019 if no deal is reached with China.

One person briefed by Chinese officials on Tuesday afternoon said the Trump administration’s decision to hold off from 25 per cent tariffs for now could still provide room for the two sides to manoeuvre.

“A 10 per cent tariff is not going to be earth-shattering for the Chinese economy,” the person said, adding the Chinese authorities were “still trying to

figure out” the “many different signals” from the US. Chinese officials have said the initial $20bn impact of the new US tariffs — or even $50bn if the 25 per cent rate takes effect — could be softened by fiscal and other measures.

Beijing is targeting fewer goods than Washington because China imports less from the US than vice versa. US exports to China last year totalled about $130bn, compared to Chinese exports to the US valued at more than $500bn.

In advance of Beijing’s move, the US president warned Beijing against such action, writing on Twitter: “There will be great and fast economic retaliation against China if our farmers, ranchers and/or industrial workers are targeted!”

A senior Chinese securities regulator had criticised the US president earlier in the day for “poisoning” the atmosphere for negotiations.

“He tries to put pressure on China so he can get concessions,” said Fang Xinghai, who works closely with vicepremier Liu He. “That kind of tactic is not going to work.” Mr Fang was speaking at a World Economic Forum event, which will be formally opened

by Premier Li Keqiang on Wednesday.

On a trip to Beijing earlier this month, Blackstone chairman Stephen Schwarzman helped broker an offer by US Treasury secretary Steven Mnuchin to meet Mr Liu for a fifth round of trade talks, according to two people briefed on the effort.

The people added that Wang Shouwen, a vice-minister of commerce who led a Chinese negotiating team to Washington in August, was due to fly to the US capital this week for preliminary discussions about Mr Mnuchin’s offer.

Chinese officials and analysts said it was highly unlikely that Mr Wang’s trip, which was never formally announced, would now go ahead. “Given this new round of destructive tariffs, it is doubtful where, when and at what level the two sides will hold negotiations,” said Liu Xiang at the Chinese Academy of Social Sciences.

California aims a rocket at Trump over climate change States go it alone on the environment in the absence of federal support LESLIE HOOK

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s President Donald Trump weakens one environmental rule after another, the deep green state of California has found a way to fight back: with a rocket.

“With science still under attack and the climate threat growing, we are launching our own damn satellite,” declared Governor Jerry

Brown, explaining that the craft will track emissions and share the results.

One of the pollutants the satellite will measure is methane, a potent greenhouse gas. Mr Brown’s declaration on Friday in San Francisco, came just two days after the Environmental Protection Agency Continues on page A2

US president Donald Trump, left, and Chinese president Xi Jinping. Washington is imposing a 10 per cent tariff on about $200bn worth of Chinese imports beginning next week

African Development Bank turns to hedge fund to offset risk Pioneering deal comes as supranationals face pressure to expand lending capacity KATE ALLEN

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he African Development Bank is paying a New York hedge fund to take on some of the risk of losses on its loans in a pioneering deal which illustrates the growing financial sophistication of supranational institutions.

The AfDB has bought insurance on a $1bn portfolio of loans from a group of investors led by Mariner Investment Group through a so-called synthetic securitisation, in which the hedge fund does not acquire the assets but will take on $152m of default risk in exchange for returns in the low double digits.

Supranational organisations, which are backed by groups of nations and so enjoy the world’s highest credit ratings, are under pressure from the governments that fund them to seek new ways of bolstering their lending capacity.

By turning to Wall Street to take on some of its lending risk, the

AfDB has reduced the amount of capital it has to hold against the loans and thereby freed up more lending capacity.

While this financing structure has already been used by banks — Mariner signed a similar deal last year with Crédit Agricole — it is the first time that a supranational development bank has engaged in this kind of financial engineering.

The deal will “super-charge our ability to invest in urgently needed projects across Africa”, according to AfDB president Akinwumi Adesina.

“It leverages our financial resources so we can have more impact, and it creates new pathways that enable long-term investors to support Africa’s development while getting excellent financial returns.”

In the decade since the financial crisis supranationals have significantly stepped up their capital markets activity, with their low cost of capital making them a cost-efficient way of financing development and

infrastructure projects.

However they are still small by comparison to sovereign states’ finance-raising volumes — the assets of the world’s multilateral development banks are approximately equivalent to those of a medium-sized international investment bank.

Given governments’ reluctance to boost supranationals’ capitalisation through additional financial contributions, the AfDB-Mariner deal has attracted political attention.

Canada helped advise on its structure, the European Commission has insured a $100m tranche of the loans and Africa50, an investment platform backed by 27 African nations, also invested in the deal.

Bill Morneau, Canadian minister of finance, said: “Attracting more private capital into global development efforts is critical to building economies that work for more and more people around the world.

USA Inc faces growing threat from activist debt investors Court ruling awaited amid concern healthy operators will be pushed into default SUJEET INDAP

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S companies are facing an escalating threat from activist debt investors, who want to push them into default to make a profit from bearish bets on their bonds.

Credit researchers are warning that an impending court decision in New York could open the floodgates for the tactic, which was used by the credit fund Aurelius Capital Management against the telecoms company Windstream last year.

The corporate defence law firm Wachtell Lipton has labelled the practice “net-short debt activism”. In such cases, a hedge fund buys a meaningful enough position in a company’s bonds to agitate for the company to be declared in default — and an even larger position in a company’s credit default swaps, which pay compensation when that default is confirmed.

“We worry that any judicial imprimatur of Aurelius’ tactics in the Windstream situation could inspire other hedge funds to pair a short via the CDS with a

long bond position to force a corporate default that would be destructive both to the company and other long-only bondholders”, said Charlotta Chung, senior legal analyst at CreditSights, an independent research firm.

The practice of so-called “manufactured” defaults has sparked controversy, thanks to the case of Hovnanian, a US housebuilder, which agreed to default on some of its bonds in return for new low-cost financing from a hedge fund, Blackstone’s GSO. Blackstone stood to gain from the subsequent CDS payout.

The Windstream situation represents an escalation of the tactic, since Aurelius was offering no benefit to the company.

By the end of 2017, the fund had acquired $300m of Windstream bonds and began a legal case arguing that the Arkansas-based telecoms company had been in technical default for two years — even though existing bondholders had never protested or served a default notice.

Aurelius argued that a complex sale and leaseback deal of Windstream’s fibre optic cable and cell towers in 2015 breached limits on how much debt

the company could incur. Windstream countered that the fund was wrong in its interpretation of the bond provisions, and acting opportunistically to trigger profits from its CDS position.

The subsequent legal case was heard earlier this year in New York federal court and a ruling could come as soon as this month. As well as deciding whether Windstream was indeed in default, the judge is also due to rule on the legality of tactics used by Windstream that curbed Aurelius’s voting power.

Lawyers and analysts say that the benign US economy and low corporate default rate means distressed debt funds, which normally invest in troubled companies, are looking at otherwise healthy companies to generate trading opportunities.

“It’s perfectly fair game. This is the kind of thing distress-oriented funds are good at because they know how to read credit documents,” said Bruce Bennett, an attorney at Jones Day. “But their interest in some non-distress situations may reflect a relative scarcity of promising distressed investments.”

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NATIONAL NEWS

California aims a rocket at Trump over...

South Africa’s Ramaphosa rails against plot to unseat

Continued from page A1 in Washington said it wanted to relax methane rules.For California and Mr Brown, the satellite is not only about monitoring methane monitoring but also shows how much states can do themselves to fight climate change.

Fifteen months after the US pulled out of the Paris climate agreement, California is at the centre of a growing coalition of mainly Democratic US states and cities that have vowed to work toward the Paris targets themselves — and are agitating for others to join them.

“Because there is no federal leadership, states have to step up,” said Gina McCarthy, the former head of the EPA under Barack Obama. “And that’s a very good thing.”

The coalition of 16 states and Puerto Rico accounts for about $9tn in annual economic activity — roughly half the US total. It has reduced its emissions by 14 per cent since 2005, versus an 11 per cent reduction in the rest of the country.

For Washington governor Jay Inslee, a key goal is to send a message to other countries. “We wanted to make sure the world understood that we were still in the Paris agreement,” he said.

“With all [Trump’s] tweeting, all his action, all his chaos — he has not been able to stop us with our . . . efforts as governors to move forward with climate action,” he added.

Some of the steps taken by the group — whose member states are all led by Democrats except for Maryland, Massachusetts, and Vermont — resemble those that would normally be done at national level. This includes joining forces with Mexico and Canada to continue the Obama-era target of 50 per cent carbon-free electricity by 2025 across North America collectively.

States are also increasingly using their powers to regulate emissions within their borders, independent of the federal standard set by the EPA. Virginia announced last week that it would develop rules to regulate methane leaks from natural gas pipelines and landfills, joining states such as Colorado that already regulate methane emissions.

This is happening against a backdrop of growing conflict between states and the federal government over environmental issues, as the Trump administration works to dismantle regulations on pollution and support the coal industry.

That has included replacing the Obama-era Clean Power Plan and proposing looser fuel economy standards, as well as last week’s proposal to soften rules on methane emissions.

“All together that is a major assault on the wellbeing of the people in California and the US and world,” said Mr Brown. “It borders not only on insanity, but on criminality.”

One of the biggest impending battles is over California’s right to set its vehicle emissions standard — an exemption granted to the state decades ago to help clean up urban smog. The administration has said it wants to rescind that right.

Mary Nichols, the head of California’s air quality regulator, last week hinted that discussions with the EPA on fuel economy standards and vehicle emissions had been going well. “There is still room for an outcome that would not set us back,” she said.

President criticises intrigue linked to former leader Zuma JOSEPH COTTERILL

C Brett Kavanaugh was nominated by US President Donald Trump to fill a vacancy on the Supreme Court. © Getty

Visa and Mastercard in $6.2bn settlement of swipe fees dispute Pact marks culmination of years of negotiations in long-running case FEDERICA COCCO

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isa, Mastercard and a group of top-tier US banks have settled for $6.2bn a long-running antitrust lawsuit over the card “swipe fees” they charge US retailers and other merchants.

Under the deal, the two payment groups and banks including JPMorgan Chase, Bank of America and Citigroup, agreed to pay an extra $900m to the merchants on top of the $5.3bn already agreed under a 2012 settlement agreement.

Visa’s share of the extra payout will be $600m, while Mastercard is liable for another $108m. Both companies had previously increased reserves to reflect their expected liabilities under the latest settlement deal, which still has to be approved by a court.

The card companies previously reached a $7.25bn settlement of the litigation, first brought thirteen years

ago, back in 2012. That was contested by some merchants, however, and ultimately rejected by the court. The value of the settlement was reduced after a number of merchants chose to opt-out.

Visa is on the hook for around $4.1bn of the total settlement of $6.2bn, although because of the previous payments made in to an escrow account and deposited with the court, the company said no extra funds would be needed.

Mastercard, which was responsible for 12 per cent of the global settlement, also said the deal would have no incremental financial impact on the payments company.

Kelly Mahon Tullier, Visa’s executive vice-president and general counsel said in a statement: After years of thoughtful negotiation, we are pleased to be able to reach this agreement and move forward in our partnership with merchants to provide consumers convenient, reli-

able, secure ways to pay. This outcome benefits all parties and enables us to focus more of our resources and attention to building the future of digital commerce together.

Visa added in a regulatory filing that up to $700m could be returned to the defendants — including up to $467m to Visa — if more than 15 per cent of class members measured by payment volume opted out of the class settlement.

Tim Murphy, general counsel at Mastercard, said: We are taking a significant step toward closing a chapter in a longstanding case.

We can put this behind us and focus on continuing to innovate with our merchant partners to deliver the experience and convenience that consumers expect.

Large retailers such as Walmart have long complained about the fees financial companies charge them each time a customer uses a credit card.

The case for rational investment in African aviation Intra-African air travel needs funding for viable services and a willingness to abort MARK TIERNEY

T

he longstanding inadequacy of Africa’s commercial air transport system suggests the returns on the billions of dollars recently pledged to Africa by UK prime minister Theresa May and China’s president Xi Jinping will be lower than they should be.

That should trouble investors and investees, who will find that the unavailability of safe, efficient and affordable air transport intra-Africa — manifested in high fares, inconvenient schedules, ill-timed connections, “wrong-sized” aircraft and anachronistic market fragmentation — takes a toll on profits (in costs-of-sale, travel expenses and opportunity cost), thereby reducing the funding’s primary socioeconomic goal of economic growth and development.

Because African commercial aviation policy has been generally national, even nationalistic, in nature over the years (before you cast a stone, remember Europe and North America before deregulation), multilateral development banks (MDBs), development finance institutions (DFIs) and even aircraft and engine suppliers have tended until now to regard African aviation as an ironic case apart: it has great potential . . . and always will.

So it is all the more gratifying that Afreximbank has recently expressed interest in my analysis of commercial aviation in Africa, first mooted in 2010 in response to a request to devise an

“innovative financing strategy” for African airlines. The most effective, least risky way to create an enabling environment for African airlines to rationalise their behaviour is to establish a world-class commercial aircraft finance enterprise (CAFE), funded jointly by MDBs/DFIs and the private sector.

First let’s consider the status quo.

Despite the continent’s size and the inadequacy of alternative forms of transport, African commercial air travel accounts for a mere 3 per cent of the world’s total.

From the get-go, African airlines — subject to the same laws of economies of density and of scale as everywhere else — fight an uphill battle to be profitable. But rather than submit to those laws and pave the way to consolidation, African policies and practices tend to head in the opposite direction, such that in recent times, for example, the rebirth of national airlines in Chad, Guinea, Nigeria, Tanzania, Uganda and Zambia have all been proposed or are well under way.

The impulse is understandable.

When discussing the possibility of re-establishing a national Ugandan carrier in 2016, President Yoweri Museveni is reported to have told his cabinet: “Ugandan travellers are suffering because of . . . not having a national airline. I thought that our brothers in Ethiopia, Kenya, South Africa, etc having airlines would serve us all. That, however, is apparently not the case.”

But the existence of so many airlines in such a small market fragments traffic flows, increases unit costs and reduces efficiencies, thereby creating (however inadvertently) an environment where, to borrow the memorable phrase coined by former British Airways head Rod Eddington, “bad money pushes out good” — leaving undelivered the safe, efficient and affordable air transport intra-Africa so desired by the travelling public.

If only shareholder funds were at stake, it might not matter so much.

But a fully functioning commercial air transport system that delivers safe, efficient and affordable air travel is needed to support Africa’s jobs drive, a drive that needs to be successful for all our sakes so as to occupy, literally, Africa’s burgeoning working-age population in the coming years. (It is projected to be 1.1bn just 15 years from now.)

Partial adoption of open skies — the Single Africa Air Travel Market (SAATM) came into being last year — and Ethiopian Airlines Group’s admirable continued success (it has just reported net revenue for last year of about $245m) are not nearly enough in themselves. Queue CAFE: the dedicated commercial aircraft finance enterprise for Africa and the Indian Ocean designed to pave the way for airline owners and managers, of their own volition and in their own best interests, to self-select into three principal (and profitable) categories: major, regional/feeder and niche.

yril Ramaphosa, South Africa’s president, lashed out at enemies linked to his deposed predecessor Jacob Zuma for plotting in “dark corners” of the ruling African National Congress to oust him.

Mr Ramaphosa told trade union supporters on Monday that “machinations of weakening the ANC” must end, in a veiled swipe at Mr Zuma, whose corruptionhit presidency he replaced earlier this year.

“Those who are engaging in acts to disunite our people and divide our people must be exposed . . . if you are working to divide the ANC, tell us what your agenda is,” said Mr Ramaphosa, in an address to the country’s biggest trade union federation.

His warning underlines the pressure on Mr Ramaphosa, as a promise of a “new dawn” for South Africa’s stagnant economy falters amid a recession in the first half of this year and a slowdown in reforms. The ANC also faces national elections next year that will test its long-held grip on power.

There is speculation that Mr Zuma’s close allies are trying to reignite a power struggle that he lost after Mr Ramaphosa, a labour leader turned wealthy tycoon, succeeded him as party leader last year. The ANC then forced Mr Zuma to resign in February.

Ever since, Mr Zuma’s acolytes have become irritated under Mr Ramaphosa, who has pledged an all-out fight to root out graft that had become endemic.

Recently, Ace Magashule, the ANC’s secretary-general and a close ally of Mr Zuma, has been accused of being part of the plot and secretly meeting the former president. Mr Magashule has admitted meeting Mr Zuma but denied any plot.

“We must focus all our efforts on the elections rather than expend our energy on pointless meetings aimed at undoing the decisions of the members of the ANC,” Mr Ramaphosa said on Monday.

A judicial inquiry into so-called private “capture” of state institutions under Mr Zuma has increased pressure on his allies as it examines the alleged influence of the Guptas, a now-exiled business family, on state appointments and contracts.

Last week’s inquiry denied a request by the Guptas to testify from Dubai, where they moved to as Mr Zuma lost power and their South African mining-to-media empire collapsed.

Mr Zuma has denied plotting or any wrongdoing over corruption, as have the Guptas. He has called state capture a “politically decorated” term.

Wednesday 19 September 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

A3

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Alibaba’s Jack Ma warns trade war could last 20 years ‘It’s going to be a mess,’ says Chinese tech group’s executive chairman LOUISE LUCAS

The trade war between the US and China could last for 20 years, Jack Ma, executive chairman of technology group Alibaba and China’s richest man, warned on Tuesday.

Speaking after China vowed to retaliate against US plans to impose tariffs on about $200bn of Chinese imports, Mr Ma said of the dispute: “It’s going to last a long time, maybe 20 years. It’s going to be a mess. It’s not a trade war, it’s about competition between two countries.”

However, while Mr Ma acknowledged the impact of the US-China trade war, which no one could win and which would affect both countries as well as his company, remained gung-ho about his legacy. “I don’t worry about Alibaba. If Alibaba cannot grow, no company in China can grow,” he said.

Mr Ma, who earlier this month announced his plans to step down from the company he founded 19 years ago, outlined a strategy of globalisation, expanding in rural China and the internet of things.

“Next year I won’t be able to speak to you as chairman,” he told the 600-plus audience at the event, held at Alibaba’s Hangzhou campus. “I will sit there as an investor and listen to the team speak.”

Mr Ma, who will hand over the chairmanship to Daniel Zhang, chief executive, next September, also sought to dispel some of the stories doing the rounds about his departure.

“People call me these days. I have government officials call me, [saying] ‘Are you crazy? What will happen?’ Rumours outside China [ask is it] because the government want to push you out? Ha, nobody can [push me out],” he said.

“People have a lot of guesses.

But for me I know this has been 10 years in preparation.”

Unlike last year’s investor day,

where Alibaba forecast annual revenue growth guidance that exceeded analysts’ estimates by 10 percentage points, there were no fresh forecasts.

Instead, executives reiterated some earlier targets, including passing $1tn in gross merchandise volume — the total amount of goods sold across its commerce platforms — compared with $768bn last year.

Alibaba, which has its roots in ecommerce but has since branched out into cloud services, digital entertainment and food delivery, also put a price on its investment portfolio, valuing it at $80bn.

Joe Tsai, executive chairman, said most of the funding had gone into international expansion in the past three years, as well as on digital media and entertainment. In the first quarter of this year the focus was on new retail, and the group also ploughed more funds — along with SoftBank of Japan — into Ele. me, its food delivery and local services business.

“I’m looking at venture capitallike returns except our success rate is greater, because we have people to make sure they work,” Mr Tsai said.

Alibaba and arch-rival Tencent can also boost returns on their investments by channelling their users on to other services: shoppers on Alibaba’s Taobao and Tmall shopping platforms are also candidates for watching movies, paying for good and services or ordering food deliveries.

Investments have broadly tracked free cash flow generation over the past three years, he told the audience, adding: “A lot of you will be angry if we under-invest. We are not a dividend-paying company.”

Of the cumulative $33.8bn free cash flow since fiscal year 2016, about $30bn has been invested leaving “a little cushion to make more investments in the future”.

Ofcom plans tough regime for social media networks Slow removal of inappropriate content will result in ‘meaningful’ penalties ALIYA RAM AND NIC FILDES

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he UK media and telecoms regulator on Tuesday outlined a blueprint for regulating social media platforms led by Facebook, Google’s YouTube and Twitter.

Ofcom said future regulation of the platforms should force them to remove inappropriate online content “quickly and effectively”, or face “meaningful financial penalties”.

Platforms should also be asked to improve transparency so audiences would know why they were targeted with certain material, added the regulator.

Ofcom’s intervention comes as the government is considering new regulation of technology companies.

Ministers are working on a detailed policy paper that could force companies to take more responsibility for the online content that appears on their platforms.

Public debate about social media content platforms has intensified in recent years following a series of online scandals about bullying, so-called

fake news, terrorist content and hate speech.

Ofcom chief executive Sharon White is due to say in a speech on Tuesday at a London conference organised by the Royal Television Society that the UK currently has a “standards lottery” that allows social media platforms to take advantage of lax regulation while traditional broadcasters have to follow tough rules on protecting audiences — for example children under the age of 18.

“As a regulator, we are required to keep audiences safe and protected — irrespective of the screen they watch, or the device they hold,” Ms White is expected to say. ““Without even knowing it, viewers are watching the same content, governed by different regulation in different places, or by none at all.”

Ofcom supervises the country’s media and telecoms companies, as well as the postal service, and is one of several watchdogs that could be given additional responsibilities if the government opts for new regulation of social media platforms.

Jack Ma is gung-ho about his legacy at Alibaba despite the escalating US-China trade war © Reuters

US homebuilder confidence stays put as lumber prices ease MAMTA BADKAR

A

gauge of US homebuilder confidence remained unchanged in September as demand for homes remained firm and lumber prices slipped from record levels seen over the summer.

The National Association of Homebuilders’ housing market index remained unchanged at 67, against expectations for a drop to 66, according to a survey

by Thomson Reuters.

“The recent decline in lumber prices from record-high levels earlier this summer is also welcome relief, although builders still need to manage construction costs to keep homes com-

petitively priced,” said NAHB chairman Randy Noel.

Demand for housing has been supported by strength in the US labour market and rising wages alongside rising household formations as millennials enter the market.

However, a tight supply of housing stock has driven up home prices and affordability concerns have been exacerbated “as builders face overly burdensome regulations and rising material costs exacerbated by an escalating trade skirmish,” NAHB’s chief economist Robert Dietz said.

The US has already imposed tariffs on about $50bn of Chinese imports this year, mainly

steel and aluminium products.

And overnight, Donald Trump moved to impose a 10 per cent tariff on about $200bn worth of Chinese imports beginning next week. Earlier on Tuesday, Reuters reported that Beijing will impose new tariffs on $60bn worth of US goods, effective September 24.

Last week, the NAHB warned that tariffs on steel imports and Canadian lumber shipments into the US “are needlessly increasing the cost of building materials and exacerbating the housing affordability crisis”. The industry group argued the tariffs could act as a tax increase of up to $2.5bn on the residential construction industry.

BAE ties up £5bn Qatar deal for Typhoon fighters UK defence group confirms contract for jets with receipt of first payment SYLVIA PFEIFER

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AE Systems has finalised a £5bn deal to supply Qatar with 24 Typhoon fighter jets after it received the first payment on the contract, the company said on Tuesday.

Britain’s largest defence company said the down payment had rendered the agreement, which was signed in December last year, effective.

The long-awaited confirmation will help to extend production of the aircraft into the mid-2020s and help support vital engineering jobs in Britain’s combat air industry.

The contract to supply 24 Eurofighter Typhoon jets and nine Hawk aircraft along with a support and training package for the Qatar Emiri Air Force had been subject to financing conditions and receipt by BAE of the first payment.

The original contract was amended in June to include the

supply of nine Hawk trainer jets but there had been concerns of delays to the final confirmation.

Qatar became the ninth export customer to choose the Typhoon in December 2017.

The agreement was the largest UK order for the Eurofighter in a decade and brought some relief to BAE’s aerospace workers who were facing an end to production in 2019 if no new order materialised.

The company has about 5,000 employees manufacturing and supporting Typhoon aircraft in Britain. The sites that will see the most benefit from the deal are in the north of the country, at Warton in Lancashire and Brough in east Yorkshire.

BAE Systems’ shares rose more than 1 per cent to 635.4p in London on news of the down payment.

Charles Woodburn, chief executive of BAE Systems, said in a statement that the contract represented “a significant step in BAE Systems’ long-term rela-

tionship with the state of Qatar”.

Gavin Williamson, UK defence secretary, said “this monumental, multibillion pound deal is now officially in place” and described it as “a massive boost to the British defence industry, helping to support thousands of jobs”.

UK Export Finance provided a £5bn package of support to secure the deal, including providing financing and insurance.

UKEF supports British exports and provides export finance to enable overseas buyers to purchase goods and services from the UK. The Typhoon is built by a consortium involving BAE, Airbus and Leonardo, which each take the prime contractor position depending on the customer.

However, it has struggled to win new orders in the face of competition from lower-cost rivals such as France’s Rafale.

Deliveries of the first Typhoon and Hawk aircraft to Qatar are expected in 2022.

A4

BUSINESS DAY

Wednesday 19 September 2018

In Association with

Customers to bear charges on electronic fund transfer Hope Moses-Ashike

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he Central Bank of Nigeria (CBN) on Friday last week issued a regulation on instant (interbank) Electronic Funds Transfer (EFT) services in Nigeria, which maintains that customers are to pay bank charges based on the Guide to Bank Charges.

It was stated in the regulation that “Instant EFT service providers and sending entities shall apply fees and charges in compliance to the approved Guide to Bank Charges.

The Receiving entity shall not earn income on funds transferred. However, statutory levies/charges shall apply”.

The CBN’s Guide to Bank Charges allows a N50 bank charge on electronic fund transfer below N10 million and N50 for N10 million and above, while N550 is charged for RTGS. Customers have always groaned under excess

charges and the deposit money banks and other financial institutions have continued to feed from transaction fees, and commissions.

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

Dipo Fatokun, director, banking and payments system department, stated this in circular to all deposit money banks, Microfinance banks, other financial institutions, mobile money operators, development finance institutions, payment service providers and other stakeholders on the regulation on instant (inter-bank) electronic funds transfer services in Nigeria.

“Banks are accused of debiting customers accounts with unexplainable charges (to meet unexplainable targets from the Board, management, etc.) while customers run away from banks with unpaid obligations”,

Godwin Emefiele. CBN, governor

said Segun Ajibola, former president and chairman of council, Chartered Institute of Bankers of Nigeria (CIBN).

However, Nigeria deposit money banks will have to pay N10,000 per

item sanction for a failed NIBSS Instant Payment (NIP) transaction not reversed into customer’s account within 24 hours, the Central Bank said in the regulatory guideline .

According to the CBN,

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

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

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

The CBN regulation further explained that where a sending entity erroneously sends value contrary to customer’s instructions due to wrong account number, wrong amount, duplication, and

so on, to a receiving entity and requests the reversal in writing within 14 working days of the transaction, the receiving entity shall oblige within one business day without recourse to the customer (beneficiary) of the receiving entity provided funds are available.

An automatic indemnity shall be inferred against the sending entity making the reversal request.

Also, where funds are not available, the receiving entity shall immediately notify its customer that the account was wrongly credited and provide proof of such notification to the sending entity.

The regulation states that the receiving entity shall notify the customer the consequences of not funding the account within 24 hours, which includes watch-listing in the banking industry, Credit Bureau and reporting to law enforcement agencies.

The receiving entity shall watch-list the customer if he fails to provide fund within seven days.

Why OAU is partnering with Sterling Bank – VC In this interview, Eyitope Ogunbodede, the12th vice Chancellor of the Obafemi Awolowo University (OAU), speaks to the challenges facing higher institutions of learning in Nigeria, OAU’s beneficial partnership with Sterling Bank and attaining international standards.

He also explained why the University is a permanent feature on the list of top universities in Nigeria.

How will you compare the higher education system in Nigeria with what obtains internationally? ell, the university as the name implies is universal. So, all universities are judged by the same standards because they have the same aim and objectives. What every institution must do is to carve a niche for each itself in one or more unique areas. This is where we currently find ourselves in Nigeria.

To draw a comparison, in some programmes and courses, we are doing better than universities outside the country while in some other areas like the Sciences and Technology, Nigerian

W

universities are not yet up to globally acceptable levels.

At OAU, we are doing all we can across board to ensure we raise the standards and promote the strides we are making in the Sciences such that we will be able to meet international standards.

In your view, what are some of the challenges facing Universities in Nigeria that have prevented them from being up to par with international universities around STEM? With emphasis to OAU. One major challenge in Nigeria is the infrastructure such as the equipment available for research. Before you can do any meaningful thing for example, you need to cre-

ate an atmosphere that will support research. Looking at some of our tertiary institutions across Nigeria, you will find that issues such as students’ accommodation isn’t considered priority. The prevailing situation across most of our universities is less than ideal accommodation, inefficient transport systems not to mention the epileptic power situation.

At OAU, we have identified relevant organisations that can help solve some of these challenges to enable us to create a conducive environment for our students to learn and our staff to work.

For example, our partnership with Sterling Bank will deliver remarkable im-

pact on many frontiers such as our University website, elibrary facility, hostel facilities, alternative energy solutions, consumer finance for our staff, payment gateways and internship opportunities for our students.

Once our students and employees can live comfortably, they can then think beyond their immediate survival and proffer solutions on what can be done to make OAU a better institution better. We are convinced that with these items in place, the world will see greater output from our institution compared to what we are currently doing.

Are those the toughest challenges facing universities?

Research is a critical area while another one is the university curricula. To address this at the Obafemi Awolowo University, we have partnered with specific industries to bring us up to speed on global developments and best practices, so that while changing our curricula, we transit from an academically oriented institution to a practical one, which will also see our graduates move beyond seeking employment to creating employment opportunities upon leaving the institution.

This informed our decision to build a relationship with an organization like Sterling Bank that is equally passionate about developing the critical sectors of

our economy. Through this partnership we will be able to produce graduates who see themselves as entrepreneurs instead of waiting on the government to provide job opportunities.

Despite the challenges you listed above, OAU still features top on Nigerian Universities Ranking, you must be doing something right.

Well, the Obafemi Awolowo University will be 60 years old in 2021. Any institution that has been in existence for 60 years will have a working system in place.

For example, in OAU, we have over a hundred thousand alumni holding positions not only in Nigeria but across the world.

Wednesday 19 September 2018

C002D5556

BUSINESS DAY

A5

Tax Issues

CbC Reporting: Updated guidance out for implementation by tax administrations, MNE Groups

Oil-producing countries adjust tax regimes to attract investment

IHEANYI NWACHUKWU

il-producing countries are adjusting tax regimes to attract investment and develop assets, as companies look to adapt to a new paradigm characterized by industry transformation and single-digit growth in production. This is reflected by the EY Global oil and gas tax guide 2018, which summarizes the oil and gas corporate tax regimes in 86 countries.

Derek Leith, EY Global Oil & Gas Tax Leader, says: “Tax structures and business models across the globe continue to develop and change, as investment in digital technology not only drives efficiency, but brings new opportunities for existing and new entrants into the market. This trend is further compounded by continued uncertainty around the future of energy, which is driving governments to adjust to broader energy tax structures that help companies to invest in wider portfolios of assets.”

Changes to tax structures detailed in the tax guide also reflect the impact of a more stable oil price and rising confidence across the industry. This environment has driven increased access to capital as investors look to make early gains in a refreshed oil and gas market.

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he Inclusive Framework o n B a s e E ro s i o n a n d Profit Shifting (BEPS) has released additional interpretative guidance to give certainty to tax administrations and multinational enterprises (MNE) Groups alike on the implementation of Country-byCountry (CbC) Reporting (BEPS Action 13).

In September 2013, the Organisation for Ec onomic Coop eration and D evelopment (OECD) and G20 countries, working together on an equal footing, adopted an ambitious and comprehensive 15-point Action Plan to address BEPS. Base erosion and profit shifting (BEPS) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. Under the inclusive framework, over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS. The Action Plan aims to ensure that profits are taxed where economic activities generating the profits are performed and where value is create d. The Action Plan is based on three Pillars; (i) coherence of corporate

tax at the international level; (ii) substance or value creation; and (iii) cooperation and transparency, coupled with certainty and predictability.

Currently, all OECD and G20 countries have committed to implementing Country-by-Country (CbC) reporting, as set out in the Action 13 Report “Transfer Pricing Do cumentation and Country-by-Country Reporting”.

N i g e r i a s i g ne d the Mul tilateral Comp etent Authority Agre ement on Countryb y - C o u n t r y Re p o r t i n g (C b C

MCAA) in January 2016 and has produced the Income Tax (Country-by-Country Reporting) Regulations 2018 (“CbC Regulations”) for the implementation of the Country-by-Country Reporting in Nigeria.

The new guidance includes questions and answers on the treatment of dividends received and the number of employees to be reported in cases where an MNE uses proportional consolidation in preparing its consolidated financial statements, which apply prospectively.

The complete set of guidance concerning the interpretation of BEPS Action 13 issued so far is presented in the document released last week Thursday September 13, 2018. Now that jurisdictions have moved into the implementation stage, some questions of interpretation have arisen.

In the interests of consistent implementation and certainty for both tax administrations and taxpayers, the Inclusive Framework on BEPS issued guidance to address certain key questions.

The updated guidance also clarifies that shortened amounts should not be used in completing Table 1 of a country-by-country report and contains a table that summarises existing interpretative guidance on the approach to be applied in cases of mergers, demergers and acquisitions.

Recognising the significant b enefits that CbC rep orting can offer a tax administration in undertaking high level risk assessment of transfer pricing and other BEPS related tax risks, a number of other jurisdictions have also committed to implementing CbC reporting (which with OECD members form the “Inclusive Framework”), including developing countries.

O

Transfer Pricing and Quasi Equity Loans – Considerations for the imputation of interest (2) BENITA NGOZI ONYEBEZIE & GALI AKA •Debt- equity ratio – Is the borrower’s debt to equity ratio very high in comparison to industry average?

•Factors affecting the form of investment in a country – Are there regulatory restrictions on foreign shareholding or barriers to repatriation of equity in the borrower’s jurisdiction preventing a direct equity investment?

•Written loan agreement – The presence or absence of a loan agreement may not matter much in characterizing the transaction as debt or equity.

•Ability to obtain finance from an unrelated third party – Does the recipient of funds have the circumstances to obtain finance from an unrelated lender?

Note that while these and other factors will be of relevance, what is important is the total picture that emerges from the transaction. The taxpayer would have to establish that the transaction that bears the legal character of a loan is equivalent to a contribution to equity.

United Kingdom The concept of equity loans is also recognized in the United Kingdom.

The HM Revenue & Customs (HMRC) internal manual discusses in detail interest imputation on loans performing equity function in the borrower’s financial structure. Although the manual does not provide certainty as to the treatment of quasi-equity loans, certain insights are taken away from the discussion. These are summarized as follows: •The equity function argument means that the sum advanced by the lender will, unless re-characterised again at some point in the future, generate neither interest income nor

dividends. The recipient will hopefully provide a dividend return in the long run, since the money will be put to work in the borrower’s business, but this is unquantifiable and uncertain, and not the basis on which money would be lent between unconnected persons.

•Interest imputation may be permissible if the overseas affiliate could have borrowed from a third party lender, on a stand-alone basis, at the same time as, and under comparable conditions to those pertaining when the loan was taken out.

India A 2013 ruling by the Indian Income Tax Appellate Tribunal (ITAT) on the interest-free loan advanced by Micro Inks Limited to its wholly owned subsidiary in the USA considered the following factors in determining whether interest should be imputed on the loan: •Intention - Do the terms of agreement for the instrument include a provision for conversion of the loan to equity? It is important that the intention of the lender is clearly seen to be conversion of the facility to equity in the long term.

•Commercial expediency - The financial position of the offshore related party should be considered. Is it necessary for the taxpayer to increase capital support to the offshore related party to ensure sustainability of the company where both companies are mutually dependent? Is the offshore related party able to raise sufficient funds for its operations from third parties?

Keeping these economic circumstances in mind, interest free loans may be permissible before conversion of the loan instrument to equity.

•Regulatory restrictions - In the Micro Inks case, the ITAT acknowledged that the lender had intended to infuse

equity but was restricted by a national regulatory requirement. It was noted that the loans were converted to equity as soon as the relevant regulatory approvals were granted.

Considering the above, the ITAT regarded the loan as a quasi-capital contribution.

The different positions and outcomes in the jurisdictions considered indicates that there is no clear cut answer to the characterization of quasi–equity loans as debt or equity.

Taxpayers therefore need to tread carefully in characterizing shareholders’ loan as equity on which no interest should be charged as other factors may play out in the assessment of the transaction by the taxing authority.

Review of quasi-equity loan arrangements from a Nigerian perspective.

In Nigeria, equity loan arrangements are more prevalent in the oil and gas industry. This is largely due to the huge capital requirement and high risk exposure during the exploration and production stage of the business, which makes it difficult to access debt finance from financial institutions.

From experience, Nigerian subsidiaries/affiliates of multinational companies are often the recipients of interest free shareholder loans and so far, the Nigerian tax authorities, do not frown at this arrangement considering that the tax base of the Nigerian entities are not eroded. On the flip side, it is yet to be seen how the Nigerian tax authorities will address equity loan transactions where a Nigerian entity is the lender as there are currently no set of guidelines regarding equity loans.

Going by the Nigerian company law, there are no regulatory restrictions for shareholders willing to inject additional capital into the business

of their subsidiaries. The Company Law permits a company to increase its authorized share capital through a resolution in so far as a notice of increase is given to the Corporate Affairs Commission within three months and not less than 25 per cent of the share capital including the increase is issued.

Considering the above, it may be difficult, from the perspective of the lender’s jurisdiction, to justify the issuance of a quasi-equity loan to a Nigerian subsidiary/related entity on the basis of regulatory restrictions on capital injection. Equity loans to a Nigerian related entity may therefore trigger transfer pricing adjustments in the jurisdiction of the lender.

Multinational Enterprises considering options for financing their start-up operations in Nigeria may consider providing loans with favorable repayment terms. The Companies Income Tax Act allows recipients of interest on loans granted to a Nigerian company to enjoy up to 100 per cent exemption from withholding taxes where the lender grants a grace period between 2 to 7 years. This favorable loan terms may be justifiable from a transfer pricing perspective in the jurisdiction of the lender as payment of interest is only deferred to such a time when the borrower is buoyant enough to service its debts.

Conclusion Traditionally, the capital structure of most companies is a mixture of debt and equity. Equity loans on the other hand attempts to take the character of both debt and equity. The appropriate treatment of equity loans will continue to be a contentious issue, and judgments would have to be made on a case by case basis.

It is also important to consider the requirements of the International

Financial Reporting Standards (IFRS) in the classification of financial instruments such as debt and equity.

International Accounting Standard (IAS) 32 requires that a financial instrument should be classified as either a financial liability or an equity instrument according to the substance of the contract, not its legal form, and the definitions of financial liability and equity instrument. Also, the entity involved must make the decision at the time the instrument is initially recognised. The classification is not subsequently changed based on changed circumstances.

In compliance with this requirement, if the lending entity intends to convert a debt advanced to a subsidiary to equity at a future time, it would be wise to classify the instrument as equity right from the start.

From a transfer pricing perspective, the lender’s jurisdiction would continue to attempt to impute interest on equity loans in order to ensure balance in the allocation of taxing rights, unless the borrower’s interest obligation is deferred to a future period. Also, the lender has to be able to demonstrate that indeed, the borrower would be financially capable to pay the interest in a foreseeable period.

With the continued work on financial transactions by the OECD under the BEPS initiative, we can hope that in the near future, there will be more guidance and probably, consistent rules on the treatment of quasi-equity loans.

Benita Ngozi Onyebezie and Gali Aka are Senior Advisers in KPMG Advisory Services, Lagos and may be contacted via e-mail at ngozi. onyebezie@ng.kpmg.com and gali. aka@ng.kpmg.com.

A6 BUSINESS DAY Financial Inclusion

& INNOVATION

C002D5556

Wednesday 19 September 2018

Supported by:

Universal financial access is closer than ever before, but what about usage?

After Financial access, what comes next?

IBUKUN TAIWO & OLAYINKA DAVID-WEST

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n 2011, 43 percent of the world’s adults lacked access to formal financial services, according to the Global Findex report. By 2017, that number reduced to 31 percent. If current projections remain consistent, we should be celebrating universal financial access by 2025.

While this is encouraging and worth celebrating, another problem has surfaced - a surge in dormant bank accounts. That is, people are opening bank accounts but they are not using them.

On the average, one in five of all account holders are not frequent users of their accounts, with as many accounts being inactive for periods exceeding a year. Greta Bull, the CEO of CGAP, in this article, , pegs the total amount of inactive accounts at about 49 percent. That’s incredibly high!

For us to begin to reap the dividends of financial inclusion, those with financial access have to utilise these facilities, often.

Financial access can lead to improved financial health when consumers use the tools, services and facilities provided by formal financial institutions to plan and manage their financial lives.

Thus, the next priority for us in the financial inclusion community is stimulating the usage of formal financial services and giving consumers reasons to keep utilising them.

It is pertinent that as stakeholders begin to lend more of their resources and attention to stimulating usage, inevitably the underlying problems associated with the formal financial sector will come to the fore.

These constraints need to be resolved to deepen access and utility of financial products and services so that we can arrive at the envisioned promised land.

In this article, we’re discussing one of those issues which is the [in]appropriateness of financial products and services.

[In]appropriateness of

financial products and services They key to unlocking the true potential of financial services lies in the ability of consumers to leverage the right financial services at affordable costs.

The slow rate of adoption of formal financial services as well as the decline in financial inclusion in recent years has spurred discussions on the lack of appropriate products and services on offer by financial services providers. This stems from the dearth of accurate insights into customers’ lifestyles, aspirations, habits and so on, therefore providers are unable to tailor their products to meet these needs.

There’s enough evidence to suggest that financial products and ser vices would gain greater adoption and usage if they actually fit into the lifestyles of their target market as well as address their pressing needs.

The recently released Nigeria Customer Segmentation Framework (CSF) tries to address this gap within the ecosystem. One of the ma-

jor paradigm shifts the CSF presented is that homogeneity does not exist within the Nigerian market. With over 90 million (bankable) adults in Nigeria, there is a rich diversity within the market, enough to bring to the fore different customer segments and their peculiar features which include their fears and aspirations, the communities in which they reside and earn their livelihood , their overall financial health as well as obstacles to financial access and usage, financial needs and literacy levels.

The CSF identifies six customer personas. While these six are in no way exhaustive, they serve as a catalyst for innovation and fresh paradigms in serving financial service customers.

They are: Vulnerable Believers Lower middle-class to poor, religious, predominantly rural, with limited education.

They use financial services infrequently and struggle to pay their bills. They have the lowest aspirations for the future, and are less open and consider themselves

less dependable.

in their business.

Resilient Savers Primarily men, across all socio-economic groups, who are responsible for household financial decisions. Frequent savers through friends, family, and groups, they use their savings to manage emergencies. They are more impulsive than average.

Confident Optimists Middle to upper class, young, well educated, and urban, with high self-esteem and a positive view of the past and future. They are the most deliberate and open segment, with strong trust and belief in their community, and the largest users of mobile money.

Dependent Individualists Lower middle class, mostly female, with the second lowest level of education of all segments. The least impulsive segment, they rely on others to make financial decisions and for support during emergencies, yet have lower than average trust in both banks and social networks.

Digital Youth Young, well educated, urban, and frequent users of digital technology. They are the wealthiest segment, but have high income volatility. They are most likely to perceive their community as unequal, and believe they can trust their community but not rely on the community to invest

Skeptical Cultivators Lower-middle class, rural, and older than average. They distrust banks and their broader community, and are most likely to trust only those they’ve known long. They have the lowest self-esteem but high self-confidence and sense of control. They struggle with planning but excel at savings.

Of course, these are simply snippets; the CSF report explores each persona in more detail, with eye opening statistics and narratives exploring each segment’s habits, aspirations and pain points.

As a framework. the CSF will enable providers to develop and deploy more

market-centric products and services. It is a general belief within the ecosystem that consumers need savings, credit and some form of insurance. And to an extent, this is true. However, beyond identifying generic products and services, human centered design would enable providers to reverseengineer informal solutions which underserved consumers already use, albeit with appropriate tweaks which will increase convenience and security.

The CSF is a framework, so providers are free to tweak and test them as well as run experiments on them to arrive at their true north in terms of product design.

Have you read the Nigerian Customer Segmentation Framework? What did you think? Share your thoughts with us at sustainabledfs@lbs.edu.ng or on Twitter: @SustainableDFS. Olayinka David-West and Ibukun Taiwo are members of the Sustainable and Inclusive Digital Financial Services initiative of the Lagos Business School

Wednesday 19 September 2018

BUSINESS DAY

C002D5556

Quarterly

Economic Review

BUSINESS DAY

A7

In association with

Elections, oil prices, output to shape H2 GDP

W

e are presently in the ninth month of 2018 and the eighth months preceding the present month have been attended by developments that depict a mixed picture of the near-term direction of the Nigerian economic and business environment. The following summarises the most consequential macroeconomic developments in the course of the first half of 2018. On the international front, we observed these key developments: • Improved price conditions in the international oil market (from the Nigerian standpoint), albeit with some volatility in recent months and a less certain outlook; • Two policy rate increases by the US Federal Reserve, and the consequent rise in US interest rates as well as the strengthening of the US dollar; • Pressure on emerging market asset classes and currencies as portfolio outflows trail faster exits of portfolio managers from their jurisdictions; • A rising tide of trade protectionism characterized by the instigation of international tariff wars, which have intensified along some trading corridors in recent months (e.g. US–China), whilst somewhat de-escalating in others (e.g. US–EU, NAFTA), even as greater synergy is forged along non-US corridors (e.g.

EU-Japan agreement). Reflections on the impact of these disruptions on the global growth outlook are mixed.

• The unfolding challenges confronting the UK as it seeks to navigate a conducive exit from the EU in 2019.

The domestic environment was characterized by: • A fragile economic recovery, defined by two consecutive decelerations in economic growth recorded in the first half of the year; • Continued moderation in inflation, albeit with emergent signs of a possible inflection and potential acceleration • A ‘correction’ of the 2017 rally in the capital market; • Accretion to foreign exchange (FOREX) reserves, albeit more slowly in recent months, and enhanced liquidity conditions in the FOREX market Activity Estimates of production side of

Gross Domestic Product for the second quarter of 2018 were released Monday, August 27. The economy was reported to have grown 1.5% in Q2, down from 1.95% in Q1. This represents a second consecutive deceleration of growth since Q4-2017, wherein GDP was revealed, according to revised estimates, to have grown 2.11%. Although the recorded growth in Q2 more than doubled the recorded growth for its corresponding quarter last year (Q2-2017; 0.72%), slowing growth seems the uppermost concern, as far as the solidity and durability of the recovery goes.

When analyzed at more granular levels, the data reveals that of the economy’s 46 activity sectors, 15 sub sectors contracted. Using a 3% growth threshold (based on estimated annual population growth rates, which range between 2.5% and 3%) to separate fast growth from slow growth, we count as many as 13 slow growth sectors and 18 relatively fast growth sectors.

Prior analysis of the contribution of the various economic sectors to the recovery in 2017

by Kainos Edge underscores the reliance of the economy on its primary sectors – Agriculture and Oil & Gas – to drive growth.

It is thus unsurprising to find that the softening of growth in Q2 was largely occasioned by the steep deceleration of

Source: Stanbic IBTC/Markit, CBN, NBS, Kainos Edge Research

growth in agriculture relative to previous quarters and the sharp contraction of oil & gas sector, which snapped a four-quarter growth spurt in that sector.

The Stanbic IBTC/Markit PMI for Nigeria which is formally recognized by the National Bureau of Statistics (NBS) as a measure of the pulse of economic activity in the monthly frequency, in addition to the Central Bank of Nigeria’s PMIs, all showed activity to be recovering briskly in the first half of the year. The GDP line appears to have flatlined even as the PMI numbers remain ascendant.

Spending The recent release by the National Bureau of Statistics (NBS) of data on income and expenditure side GDP up until the end of Q4-2017 provides a more recent picture of spending conditions in the economy. On the income side of GDP, we are surprised to see a very sharp recovery in Employee Compensation (worker wages and salaries) by 11.14% in 2017, after consecutive annual contractions in 2015 (-8.8%) and 2016 (-9.68%). Although we did see some of the backlog of delayed worker remuneration in the civil service by some states in 2017, we expect that the scale of the recovery outweighs the scale of the impact expected from the payment of these delayed backlogs. Incidentally,

Business Operating Surplus (profits), which had weathered the storm of the recession, contracted -2.11%.

The data also shows that all the elements of spending within the domestic economy contracted in 2017: consumer spending by -0.95% and business investment by -1.83%.

Spending by government on domestic value added shrank by 8%. The NBS release belatedly confirms the general sentiment that demand facing businesses from across the three customer categories (or counterparties) – consumers, other businesses and the government remained weak in the outgone year.

FAAC allocations have continued to rise steadily, on the back of higher oil prices. There appears to be some indication that oil production has come under some strain recently, but this has not made a significant dent in FAAC allocations, which have now reached levels preceding the beginning of the decline in oil prices in 2014.

The passage and signing into law of the FY2018 budget in June further strengthens the case for spending increases on the part of government. At N9.12trn, the FGN budget is 22.5% higher than the 2017 budget. When FGN spending outlay is combined with a 36% increase in the consolidated budget of the states, spending outlays across the three tiers are up 29%.

Cost Conditions The three prices that constitute the building blocks of the cost structure of businesses in an economy are the inflation rate, the exchange rate and interest rates. To businesses, the inflation rate measures the change in Naira-denominated operating costs. In contrast, movements in the exchange

rate provide a sense of developments in the cost of imports and other foreign payments.

Interest rates measure the cost of capital, in the debt market for tradable securities as well as in non-tradable debt (credit) market.

Inflation has continued to moderate to 11.23% by August. Perhaps more revealing is the steady ascent of monthon-month inflation in recent months which, despite a slight moderation in July, is an indication that underlying price pressures are building.

Supported by substantial autonomous inflows and regular CBN interventions, the FOREX market remains stable at the I &E, with exchange rates at or around the N360/$ mark.

Volume of transactions stood at over $30bn year-to-date at the end of the H1. CBN interventions are backed up by a strong headline FOREX reserves position, which, regardless of composition and obligations embedded therein, stood at $47.79bn by the end of H1.

Aggregate trade was up 35% in Q1-2018, compared to the corresponding period in 2017.

Supported by higher oil prices and stronger production volumes, exports were up 56%. The economy recorded a trade balance equivalent to 7.6% of GDP in the first quarter, supporting the continued improvement in the current account, which stood at 4.8% of GDP in the same period.

On another positive note is that in the first half of the year, the economy attracted US$11.8billion in foreign capital, more than 4 times the size of inflows in the corresponding period last year. We still expect inflows to taper in the second half of the year as interest rates rise further in key counterparty jurisdictions – namely the US and the UK – and the uncertainties associated with the approach of the 2019 elections.

The recent ramping up of the number and volume of commercial papers (CPs) in the market underscores increased reliance on cash balances to meet liquidity and working capital needs. The Central Bank seemingly took a cue from the willingness of corporate to resort to CPs as a debt-financing avenue in the face of a tight credit market when, at the end of its July 23 and 24 MPC meeting, it announced an offer to purchase such CPs from issuing credit-constrained corporates “if needs be”. This, in our view, represents another Quantitative Easing measure by the CBN, following the AMCON injections into the banking system in the wake of the 2009-10 crisis and the various soft-loan intervention funding windows targeted at the real sector.

The CBN also introduced a “differentiated dynamic CRR

regime” whereby banks which opt to receive some of their warehoused deposits under the current CRR regime, conditional on their channeling same to the creation of loans with a minimum 7-year tenor at a fixed rate of 9% per annum, preferably to “employmentelastic” sectors like agriculture & manufacturing. The quoted rate of 9% prices the loans at a negative premium to the riskfree rate (an applicable risk-free instrument would be the 7-year FGN bond, which was paying 14.3% at the time of writing) as well as at a negative real return rate (with inflation at 11.23%).

Outlook The outlook remains reliant on developments in the international market for crude as well as on domestic production. We see mutually countervailing forces acting on prices: on one hand, market sentiments surrounding the imposition of US sanctions on Iran, in addition to severe supply disruptions in Venezuela and Libya are acting to push prices back up towards the $80 mark. We are comforted by oil prices remaining inside the $70–$80pb range, even as futures markets bet on $70 by year end.

Should oil production fail to recover appreciably, assumptions surrounding the pace of FY2018 GDP growth would have to be re-built. It is challenging to comment on seasonal patterns as a result, although the attribution of the slippage to the face-offs between pastoralists and arable crop farmers in the Middle Belt leaves us worried that slow growth will persist.

These concerns lead us to revise our FY2018 GDP growth forecast to the 1.5%–2% range.

We nurse the residual hope that higher fiscal spending – enabled by oil prices that are comfortably above the budget benchmark and thus with the potential to neutralize production shortfall effects – would lend support to an economy beset by the aforementioned headwinds.

We hold the view that Inflation would turn upwards by the fourth quarter (possibly before), and close the year just above 11%. This would, of course, be triggered in part by spending increases due to the fiscal impulses that would crystallize as we head towards the end of the year.

The complications created by the respective growth and inflation outlooks lead us to expect monetary policy to remain unchanged for the rest of the year, given the risks to exacerbation of conditions in each case of moving policy decisively in either direction.

This quarterly economic report was prepared specially for BusinessDay by a team at Kainosedge led by Dr Doyin Salami.

A8 BUSINESS DAY NEWS FG, Republic of Korea partner on technical education, job creation JOSHUA BASSEY

T

he Federal Government of Nigeria and the Republic of Korea are to partner in the area of technical and vocational education with the aim of creating jobs in Nigeria.

Chris Ngige, minister of labour and employment stated this in Abuja, Tuesday, when he received InTae Lee, the Republic of Korea ambassador to Nigeria.

According to Ngige, Nigeria would be seeking two-fold technical assistance from the Republic of Korea in technical training and equipping of skills acquisition centres across the country.

“The Federal Govern-

CSO calls for synergy in electricity sector to address power challenges

T

he Network of Nigeria Civil Society Organisations, a Non-Governmental Organisation, has advised stakeholders in the power sector to synergise towards addressing challenges in the sector.

The Director General of the group, Agbonkpolor Splendour while addressing a news conference in Abuja said the collaboration was necessary because the challenges in the sector were hydra-headed.

Splendour identified pipeline and cable vandalism among others as some of the main causes of instability in power in the country.

“Effective power supply remains the fundamental bane of Nigeria’s development but light for us remains an imagination without the corresponding force to affect an end to the reign of beclouding the power sector.

“This is making it difficult for the sector to empower Nigerians to participate effectively in the 21st century global agenda even though we know that light determines the direction that development will go.

“Light for all will remain a life-time quest as long as the major infrastructures in this critical sector remain obsolete to fit into the global industrialisation demand. Effective power supply will remain a wish as long as it is a subject of politics rather than purpose and until we get the power sector right, nothing will be right ,’’ he said.

ment is not relenting in its efforts at job creation through renewed emphasis on technical education along-side vocational training so that Nigerian youths can be trained on how to repair and assemble information technology gadgets such as laptops GSM sets among others.”

Ngige said that the visit was centered around how Nigeria and Republic of Korea can exchange ideas on bilateral co-operation on job creation for the teeming unemployed Nigerian youths.

On his part, In-Tae Lee said that his visit was to share ideas with the labour minister on how the Korean government can initiate a bilateral relationship to tackle unemployment in the country.

C002D5556

Wednesday 19 September 2018

NES2018: FG optimistic economic summit will accelerate achievement of ERGP

T

he Federal Government says it is optimistic the 2018 Nigeria Economic Summit (NES) will help to accelerate the achievement of the governance component of the Economic Recovery and Growth Plan (ERGP).

Sen. Udoma Udo Udoma, the Minister for Budget and National Planning, made this known at a news conference on Tuesday in Abuja to herald the summit. The summit is which provides a forum for dialogue among top stakeholders to reflect on issues constraining national development with the aim of building consensus to evolve common strategies and policy framework for addressing

these issues will be help in Abuja from Oct. 22 to Oct. 23.

ERGP is a mediumterm plan of 2017 to 2020, launched by the President Muhammadu Buhari in April 2017. The growth plan sets out the direction of government policy for the economy to put it on path of a strong, diversified, inclusive and sustainable growth.

The strategy of the ERGP aims to address the issues of macroeconomic stabilisation, agriculture and food security, transportation, energy and industrialisation in the country.

“This year’s summit is designed to accelerate progress toward the implementation of the governance component of the ERGP. The ul-

timate goal is to stimulate discussions on accelerating implementation of the ERGP strategies on governance in order to enhance the social welfare of the Nigerian people.

“It is against this backdrop that the summit is structured along areas of corruption and rule of law, effective public institutions, sustainable economic opportunities, human development and participation and citizen’s right.The summit will underscore the link between good governance and economic growth and development as set out in the ERGP. And it will also highlight the current state of governance and challenges in delivering public services to citizens to identify ways of

overcoming those challenges,’’ Udoma said.

The minister said that the government had continued to implement the various strategies outlined in the ERGP toward enhancing good governance and strengthening the country’s institutions and the results were encouraging.

While reiterating the positive outcomes of the implementation of the ERGP, Udoma said that more work still had to be done in the country. He expressed government’s commitment in sustaining implementation of policies geared toward good governance and strengthening of institutions toward the realisation of the objectives of the ERGP.

BUSINESS DAY

Wednesday 19 September 2018

A9

Live @ the Stock exchange Prices for Securities Traded as of Tuesday 18 September 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 231,423.77 7.95 -1.85 124 84,948,165 UNITED BANK FOR AFRICA PLC 253,075.72 7.70 6.94 192 6,734,668 651,477.25 20.75 2.47 330 16,431,397 ZENITH BANK PLC 646 108,114,230 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 314,083.81 8.75 6.71 177 8,027,914 177 8,027,914 823 116,142,144

BUILDING MATERIALS DANGOTE CEMENT PLC 3,578,506.56 210.00 - 58 308,267 LAFARGE AFRICA PLC. 179,539.96 20.70 - 48 260,380 106 568,647 106 568,647

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 357,009.32 606.70 - 49 112,830 49 112,830 49 112,830 978 116,823,621

CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 76,217.41 79.90 - 17 15,808 PRESCO PLC 60,000.00 60.00 - 5 8,329 22 24,137 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 - 7 107,504 7 107,504 29 131,641

DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,085.39 0.41 2.50 6 431,776 JOHN HOLT PLC. 206.25 0.53 - 5 6,494 2,111.93 3.25 - 2 273 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 49,184.07 1.21 -1.63 53 3,517,860 U A C N PLC. 28,812.97 10.00 - 68 3,594,492 134 7,550,895 134 7,550,895

BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 33,000.00 25.00 - 12 29,665 165.00 6.60 - 0 0 ROADS NIG PLC. 12 29,665 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,391.29 1.70 8.28 31 1,949,606 31 1,949,606 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 3 33 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 24,014.43 9.00 - 4 6,040 7 6,073 50 1,985,344

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,701.62 1.75 8.02 22 704,911 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 188,372.92 86.00 - 28 650,584 INTERNATIONAL BREWERIES PLC. 275,067.58 32.00 -9.37 9 10,292,393 NIGERIAN BREW. PLC. 681,336.05 90.00 -2.17 99 2,182,449 158 13,830,337 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 38,000.00 7.60 - 40 104,211 DANGOTE SUGAR REFINERY PLC 168,000.00 14.00 0.72 24 134,251 FLOUR MILLS NIG. PLC. 78,522.27 19.15 - 61 428,926 HONEYWELL FLOUR MILL PLC 11,102.28 1.40 -5.41 22 715,550 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 0 0 NASCON ALLIED INDUSTRIES PLC 49,279.55 18.60 -3.38 16 72,787 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 163 1,455,725 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 17,655.10 9.40 - 36 110,218 NESTLE NIGERIA PLC. 1,094,261.96 1,380.50 2.26 43 105,975 79 216,193 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 1 5 VITAFOAM NIG PLC. 3,439.82 3.30 - 43 674,535 44 674,540 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 53,601.44 13.50 - 36 180,563 UNILEVER NIGERIA PLC. 247,035.23 43.00 - 40 148,944 76 329,507 520 16,506,302

BANKING DIAMOND BANK PLC 29,413.69 1.27 -2.31 39 3,078,890 ECOBANK TRANSNATIONAL INCORPORATED 330,291.92 18.00 0.83 50 1,864,007 FIDELITY BANK PLC 48,387.91 1.67 -0.60 113 6,622,179 GUARANTY TRUST BANK PLC. 991,830.74 33.70 -0.74 160 8,832,049 JAIZ BANK PLC 15,026.77 0.50 -5.66 18 1,991,831 SKYE BANK PLC 9,161.00 0.66 -1.49 48 22,908,930 STERLING BANK PLC. 41,746.11 1.45 - 1,318 11,670,874 UNION BANK NIG.PLC. 158,708.10 5.45 9.00 49 1,342,208 UNITY BANK PLC 10,871.08 0.93 9.41 27 2,194,773 WEMA BANK PLC. 23,144.68 0.60 5.26 48 8,653,396 1,870 69,159,137 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,544.16 0.80 -2.50 36 2,962,759 AXAMANSARD INSURANCE PLC 23,940.00 2.28 - 8 147,316 CONSOLIDATED HALLMARK INSURANCE PLC 2,240.00 0.32 - 3 26,010 CONTINENTAL REINSURANCE PLC 14,936.75 1.44 - 10 247,099 CORNERSTONE INSURANCE PLC 3,093.20 0.21 -8.70 15 1,485,449 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,964.80 0.32 - 2 1,005 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 1 5 LASACO ASSURANCE PLC. 2,416.73 0.33 6.45 41 4,912,997 LAW UNION AND ROCK INS. PLC. 2,835.58 0.66 3.13 4 236,174 LINKAGE ASSURANCE PLC 4,720.00 0.59 -6.78 14 1,778,067 MUTUAL BENEFITS ASSURANCE PLC. 2,240.00 0.28 7.69 3 145,000 NEM INSURANCE PLC 15,841.51 3.00 - 20 1,443,707 NIGER INSURANCE PLC 2,399.24 0.31 - 9 320,518 PRESTIGE ASSURANCE PLC 2,175.92 0.57 9.62 14 1,363,431 REGENCY ASSURANCE PLC 1,467.13 0.22 - 2 24,855 SOVEREIGN TRUST INSURANCE PLC 1,834.98 0.22 -8.33 14 4,582,188 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,711.32 0.21 -8.70 5 1,005,250 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 5 50,010 516.46 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. UNIVERSAL INSURANCE PLC 3,680.00 0.23 -8.00 2 200,005 VERITAS KAPITAL ASSURANCE PLC 3,605.33 0.26 - 2 21,000 WAPIC INSURANCE PLC 4,817.79 0.36 -5.26 46 1,925,538 256 22,878,383

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,567.15 1.56 0.65 18 736,621 18 736,621 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 1 160 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 1 5 5,664.87 0.50 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 2 165 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,600.00 3.80 1.60 79 4,883,674 32,938.44 5.60 1.82 11 191,993 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 33,070.53 1.67 4.38 72 3,099,925 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND ROYAL EXCHANGE PLC. 1,183.44 0.23 9.52 9 945,175 420,728.86 41.60 0.24 28 1,421,998 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 16,920.00 2.82 - 65 3,408,869 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 264 13,951,634 2,410 106,725,940

HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,243.60 0.35 9.38 17 1,510,866 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 17 1,510,866 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 9,000.00 6.00 - 4 10,012 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 17,101.03 14.30 - 28 224,912 MAY & BAKER NIGERIA PLC. 2,254.00 2.30 0.44 22 716,339 1,070.43 0.62 - 7 39,252 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 411.96 1.90 - 0 0 PHARMA-DEKO PLC. 61 990,515 78 2,501,381

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 4 10,105 4 10,105 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 680.40 6.30 - 0 0 381.11 0.77 - 3 205 TRIPPLE GEE AND COMPANY PLC. 3 205 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 3 18,015 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 2 16 5 18,031 12 28,341

BUILDING MATERIALS BERGER PAINTS PLC 1,898.34 6.55 - 6 25,053 19,845.00 28.35 - 12 44,200 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 28,400.92 22.60 - 37 165,784 FIRST ALUMINIUM NIGERIA PLC 696.42 0.33 10.00 8 296,985 MEYER PLC. 361.24 0.68 - 5 31,380 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 2,364.38 2.98 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 68 563,402 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,610.71 4.10 2.50 43 972,758 43 972,758 PACKAGING/CONTAINERS BETA GLASS PLC. 38,997.82 78.00 - 3 9,550 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 9,550 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 114 1,545,710

CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 2 7 2 7 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 5 1 5 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 3 12

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,440.42 0.23 -4.17 41 3,606,178 41 3,606,178 INTEGRATED OIL AND GAS SERVICES OANDO PLC 62,157.06 5.00 - 61 1,375,641 61 1,375,641 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,546.55 179.00 - 18 6,929 CONOIL PLC 15,197.55 21.90 - 17 17,477 ETERNA PLC. 8,150.90 6.25 3.31 8 7,396,548 FORTE OIL PLC. 26,049.62 20.00 5.26 91 1,370,265 MRS OIL NIGERIA PLC. 8,701.65 28.55 - 4 5,965 TOTAL NIGERIA PLC. 64,407.29 189.70 - 20 14,396 158 8,811,580 260 13,793,399

ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,818.75 1.93 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 541.12 0.46 - 3 6,485 3 6,485 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,652.74 4.50 -9.09 19 433,717 TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 5 29,045 24 462,762 HOSPITALITY TANTALIZERS PLC 674.44 0.21 - 1 5 1 5 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,718.87 2.27 - 1 5 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 51,302.73 6.75 - 0 0 1 5 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 0 0

A10

BUSINESS DAY

Wednesday 19 September 2018

Live @ The Exchanges Top Gainers/Losers as at Tuesday 18 September 2018 GAINERS Company

LOSERS Opening

Closing

Change

N1350

N1380.5

30.5

FO

N19

N20

1

FBNH

N8.2

N8.75

0.55

UBA

N7.2

N7.7

N20.25

N20.75

NESTLE

ZENITHBANK

Market Statistics as at Tuesday 18 September 2018

Company

Opening

Closing

Change

N92

N90

-2

N19.25

N18.6

-0.65

REDSTAREX

N4.95

N4.5

-0.45

0.5

GUARANTY

N33.95

N33.7

-0.25

0.5

CILEASING

N3.15

N3

-0.15

NB NASCON

ASI (Points)

32,381.00

DEALS (Numbers)

4,705.00

VOLUME (Numbers) VALUE (N billion)

2.653

MARKET CAP (N Trn

11.821

Stocks rally as bargain hunting gains traction Stories by Iheanyi Nwachukwu

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igerian stock market resumed uptrend on Tuesday September 18, 2018 following investors increased interest in low-priced value stocks.

At the close of trading on Tuesday, twenty-seven (27) stocks led by Nestle Nigeria Plc advanced in price as against 18 losers led by Nigerian Breweries Plc. The market’s negative Year-to-Date (YtD) returns moderated to 15.33percent.

Stocks value increased by approximately N66billion as market capitalisation closed at N11.822 trillion against preceding day’s close of N11.756 trillion.

The All Share Index (ASI) increased by 0.56percent to 32,381 points against the preceding trading day’s close of 32,201.98points.

Nestle Nigeria Plc which led the advancers increased from N1350 to

N1380.5, up by N30.5 or 2.26percent; Forte Oil Plc gained N1, from N19 to N20, up by 5.26percent.

Also, FBN Holdings Plc increased from N8.2 to N8.75, up by 55kobo or

6.71percent; UBA Plc stock gained, from N7.2 to N7.7, up by 50kobo or 6.94percent; while Zenith Bank Plc increased from N20.25 to N20.75, up by 50kobo or 2.47percent.

… rating expires June 30 , 2019

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gusto & Co has confirmed the “Aaa” rating assigned to Infrastructure Credit Guarantee Company Limited (InfraCredit); this rating expires on June 30, 2019.

Agusto hinged the rating assigned to Infrastructure Credit Guarantee Company Limited primarily on the support of its shareholder; Nigeria Sovereign Investment Authority (NSIA) and contingent capital provider; GuarantCo Management Company Limited (GuarantCo).

The support is demonstrated in the form of contributed capital and active involvement in guiding the Corporation in the formative years through technical and financial

Nigerian Breweries Plc led the pack of laggards after its share price decreased from N92 to N90, up N2 or 2.17percent; followed by NASCON Plc which dipped from N19.25

L-R: Samuel Nzekwe, past president, Association Of National Accountants Of Nigeria; Elemanya Ebilah, chairman, Professional Women Accountants Of Nigeria (PROWAN); Shehu Usman Ladan, president and chairman of Council Association Of National Accountants Of Nigeria, Samuel Olukunle Ojo, chief of staff, Lagos State and Folasade Adesoye, head of Service, Lagos State, at The 2018 Annual Seminar Of Professional Women Accountants Of Nigeria in association of National Accountants Of Nigeria.

Agusto & Co affirms ‘Aaa’ rating assigned to InfraCredit support.

The rating also takes into cognisance InfraCredit’s good liquidity, risk management and asset quality. However, the dearth of bankable infrastructure projects which elongates transaction origination timeframe tempers the assigned rating.

Given the huge infrastructural financing needs of Nigeria estimated at $100billion annually and the dearth of long term capital required by infrastructure projects, the credit guarantees being provided by developmental institutions like InfraCredit will serve as a catalyst to attract investments from pension funds, insurance firms and other long

term investors. However, the need to create strong post-guarantee monitoring frameworks which will oversee the usage of the funds and the remittance of revenue being generated from these projects, remains critical for these institutions.

We believe that there is need for development of effective public-private partnerships to help create bankable investment projects for investors and fund managers for the construction of critical infrastructure that will drive sustainable growth in the country. Currently, Nigeria’s pension assets are worth over ₦8.5 trillion and a maximum of 5% of these assets are permissible for infrastructure investments.

269,814,285.00

to N18.6, down by 65kobo or 3.38percent; while RedStar Express Plc declined from N4.95 to N4.5, down by 45kobo or 9.09percent.

Also, GTBank Plc stock price dropped from N33.95 to N33.7, losing 25kobo or 0.74percent; while C&I Leasing Plc lost 15kobo, from N3.15 to N3, down by 4.76percent.

The volume of stocks traded increased by 67.94percent from 160.66million to 269.8million, while the total value of stocks traded increased by 23.32percent, from N2.15billion to N2.65billion in 4,705 deals.

Access Bank Plc, Skye Bank Plc, Zenith Bank Plc, Sterling Bank Plc and International Breweries Plc were actively traded stocks Tuesday on the Nigerian Bourse.

The Financial Services sector led the activity chart with 222.86million shares exchanged for N1.63billion; followed by Consumer Goods with 16.50million shares traded for N727 million.

Yemisi Ayeni joins board of Guinness Nigeria

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uinness Nigeria Plc has appointed Yemisi Ayeni as a non-executive director. Ayeni’s appointment became effective from September 1, 2018. She replaces Joe Irukwu (SAN), who retired as non-executive director of the company effective August 28, 2018.

Ayeni is the immediate past managing director of Shell Nigeria Closed Fund Administrators Limited, a position she held for 10 years until her retirement in April 2015. She was a council member of the Nigerian Stock Exchange (NSE) and the chair of the Exchange’s demutualization and technical committee.

IOSCO guidance addresses conflicts of interest, conduct risks in equity capital raising

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he Board of the International Organisation of Securities Commissions (IOSCO) on Tuesday September 18, 2018 published guidance to help its members address conflicts of interest and associated misconduct risks that may arise and undermine the equity capital raising process.

Conflicts of interest and associated conduct risks stemming from the role of intermediaries can harm the integrity and efficiency of the equity capital raising process, damage investor confidence and weaken capital markets as an effective vehicle for issuers to raise funding.

To help regulators identify and address these risks, IOSCO today published the final report on Conflicts of interest and associated conduct risks during the equity capital

raising process, which sets out guidance for regulators to address conflicts of interests that may occur when intermediaries manage an equity securities offering.

The report details the key stages of equity capital raising where the role of intermediaries might give rise to conflicts of interest that compromise the integrity and efficiency of the process. The guidance comprises eight measures that address: conflicts of interest and pressure on analysts during the formation of their views on an issuer in the pre-offering phase of a capital raising;

conflicts of interest during the allocation of securities; conflicts of interest and conduct risks in the pricing of securities offerings; conflicts of interest and conduct risks stemming from personal transactions by staff employed within firms managing a securities offering.

The guidance sets standards of conduct for market intermediaries in the equity capital raising process. Implementation of the guidance is expected to materially improve the equity raising process, which includes enhancing: the range and quality of timely information that is made available to investors during the process; the transparency of allocations; as well as the efficiency and integrity of the overall process, boosting investor confidence and rendering capital markets a more effective channel to raise financing.

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Naspers to spin off, list ultichoice on JSE EMEKA UCHEAGA

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aspers, Africa’s largest media group and one of Te n c e n t ’s biggest shareholders, will spin off its pay-TV arm as it battles a deep discount in its shares.

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

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

Van Dijk also called Multichoice an “African success story.” Its services, which include sports broadcasting and South Africa’s Dstv, reach 13.5m households on the continent and generated trading profits of 6.1bn rand ($409m) during

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Singapore’s CapitaLand snaps up US multifamily properties for US$835mn

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the last financial year, the company said.

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

Van Dijk hinted earlier this year that Multichoice might be spun off. In March the company sold some of its Tencent shares for the first time since it invested in 17 years ago, raising $10bn

through a sale worth two per cent of the Chinese internet giant.

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

Multichoice is also facing a fierce contest in its most mature markets from Net-

flix, which has launched an aggressive expansion this year in South Africa. The company has lost subscribers in its premium satellite service and it has called for Netflix to come under tighter regulation in the country.

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

TIZETI raises $3 million for African expansion izeti, a Nigerian internet service provider behind the brand Wifi.com.ng, has raised $3 million in a Series A round of funding as it expands its unlimited internet service into Ghana, according to information available on its website.

The company will also make additional investments in operations, product development and overall customer experience, with a view towards growing profitability exponentially.

The new financing was led by 4DX Ventures, a new, Africa-focused fund that has been deploying capital at an incredibly fast clip since its launch earlier this year. Its portfolio includes Sokowatch, a startup connecting local African retailers to international suppliers; the outsourced programmer

COMPANIES & MARKETS

LOLADE AKINMURELE

COMPANIES & MARKETS

MICHEAL ANI

Wednesday 19 September 2018

placement and apprenticeship service, Andela; and the integrated pharmacy supplier and operator, mPharma.

“This Series A investment allows us to continue providing a peerless service in Nigeria, building out our customer base there, as well as scale across Africa, starting with Ghana”. Kendall Ananyi, CEO and Co-Founder of Tizeti said.

“Tizeti was built to tackle poor internet connectivity not only in Nigeria, but on the continent as a whole, by developing a cost-effective solution from inception to delivery, for reliable and uncapped internet access for potentially millions of Africans.

We have grown rapidly in the Nigerian market in the last 12 months and expect to continue on this trajectory, as millions more Africans come online,” he added.

The company operates widely as a “Comcast for Africa”, builds and operates solar-powered towers in Nigeria, while also providing residences, businesses, events and conferences with unlimited high speed broadband internet access, covering over 70 percent of Lagos.

Since graduating from Y Combinator’s Winter 2017 batch, Tizeti has installed over 7,000 public Wifi hotspots within Nigeria with 150,000 users and in November 2017, announced a partnership with Facebook to offer Express Wi-Fi in the country, to roll out hundreds of internet hotspots across Nigeria’s capital.

In November, the company partnered with Facebook to offer Express Wi-Fi and roll out hundreds of hotspots across the Nigerian capital of Abuja.

Now, with the new funding, Tizeti is expanding its operations outside

of Nigeria, launching a new brand — Wifi.Africa — and pushing its service into Ghana.

The company’s unlimited internet packages cost $30 per month, a price it’s able to achieve through the use of cheap solar electricity to power its towers.

As part this financing round, Walter Baddoo CoFounder & Managing Partner of 4DX Ventures joins Tizeti’s Board of Directors.

“Reducing the cost of data in Africa is a critical step in accelerating the pace of internet adoption across the continent.

Tizeti, driven by a stellar company culture, has built a world-class network that delivers data to users at a fraction of the current cost.

Tizeti makes it easier and cheaper to connect Africa to the global digital economy and we are excited to partner with Kendall and his team on this mission.”

Baddoo says

apitaLand, through its wholly owned international business unit CapitaLand International, has acquired a portfolio of 16 US multifamily properties for US$835 million (1.14 billion Singaporean dollars).

The acquisition marks CapitaLand’s initial foray into the country’s multifamily asset class to ride on the growing demand for long-term rental housing.

The portfolio comprises 3,787 apartment units, all located in well-connected suburban communities of the metropolitan areas of Seattle, Portland, Greater Los Angeles and Denver. The price per unit of the portfolio is US$220,000.

“This latest acquisition in the U.S., the world’s biggest economy, would expand CapitaLand’s global investment portfolio, diversify our business outside of our two core markets of Singapore and China and allow us to grow new businesses,” Lee Chee Koon, President & Group CEO of CapitaLand Group, said.

According to Koon, it also enables the Singaporean company to diversify its investment property portfolio into developed markets as we continue to scale up our presence in our core emerging markets of China and Vietnam, according to Koon.

As a leading global real estate player, it is important for CapitaLand to create value for our stakeholders with an optimal portfolio mix which is efficient and high returning, through a balanced and meaningful allocation between developed and emerging markets,” Koon added.

CapitaLand owns and manages a global portfolio worth over USD$93 billion as at 30 June 2018, comprising integrated developments, shopping malls, serviced residences.

The multifamily sector in the U.S. has the highest average returns in the commercial real estate asset class, offering close to 10% annually in the last three decades.

Healthy economic fundamentals, job growth, netin migration trends, low home ownership rates and the booming millennial generation’s preferences for geographic mobility and community living in the suburban markets have driven strong demand for rental apartments.

“We are acquiring a well-diversified portfolio of multifamily assets across several suburban markets in a single transaction, each regional market with a critical mass of over 1,000 units,” Gerald Yong, CEO of CapitaLand International, said.

“Situated in well-established, well-connected rental communities, this portfolio of low-rise and garden-style properties continue to be a strong draw for middle-income and skilled professionals working in surrounding employment hubs,” Yong added.

CapitaLand first entered the U.S. market in August 2015 and has set up an office in New York to oversee the Group’s investments and to build up its market expertise and capabilities in the country.

Through Ascott and its real estate investment trust, Ascott Residence Trust (Ascott Reit), the Group has acquired five properties with over 1,260 units in Manhattan, New York and Silicon Valley.

On top of its portfolio of hotels in the U.S., Ascott also owns a majority stake in Synergy Global Housing (Synergy), a leading accommodation provider in the market, which offers apartments for corporate lease. Synergy has close to 1,500 units in the U.S. with a strong presence in the West Coast, including Los Angeles, Orange County, San Diego, Seattle as well as New York.

This latest multifamily portfolio acquisition will more than double CapitaLand Group’s investment in the U.S. to over US$1.5 billion, as well as its presence in the market to more than 6,500 units.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: SAMUEL IDUH ) 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

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Wednesday 19 September 2018

Motorists, commuters bemoan poor Awka-Onitsha expressway

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otorists and commuters plying the Awka-Onitsha axis of the Enugu-Onitsha Expressway have bemoaned the inability of the Federal Government to fix the road despite countless promises.

The people voiced out their anger and frustration over the deplorable condition of the road when BusinessDay visited the area on Tuesday. With collapsed spots along the Umuokpu, Igbariam and Umunya axis of the road, a journey from Awka to Onitsha using the route which according to the commuters, initially takes about forty minutes, now takes about two hours to complete.

During the visit, pockets of gully were also observed developing at some spots, while one lane along

some axis of the dual carriageway cannot be accessed by motorists due to very dangerous portholes.

What looked like palliative work along some axis of the expressway have been completely abandoned as there was no contractor nor functional working equipment on site.

Some motorists including Anthony Odenigbo, a truck driver who had slept for two days on the road because his vehicle broke down and a commercial bus driver, James Abusi regretted the huge amount of money they spend on vehicle repairs due to the very bad road.

He noted that due to its very strategic nature and the heavy traffic it carries on daily basis, the road cannot be allowed to remain the way it is.

SUBEB to relocate pupils from flood-prone schools in Edo

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s public schools resume for a new academic session in Edo State, the State Universal Basic Education Board (SUBEB), has unveiled plans to commence renovation of dilapidated structures and relocation of pupils from flood-prone schools across the state.

Joan Osa Oviawe, chairman-designate, Edo SUBEB, , who disclosed this in a chat with journalists, said that Edo SUBEB plans an aggressive roll out of renovation and construction projects in public primary schools, which includes provision of furniture for at least 150,000 pupils in the first phase.

She said arrangements have been made to relocate pupils from schools in

flood-prone areas, whose schools were affected by flood, to nearby schools.

Osa Oviawe, who decried vandalism across schools in the state, said “vandalism and theft are major concerns. We are appealing to communities to play their part in safeguarding these schools.

The torrential rains wreaked havoc on our renovation plans.”

She identified four categories of schools that have been marked for intervention, noting “These include schools in good condition; those hitherto renovated by the previous administration of Adams Oshiomhole, but have been vandalised and valuable materials like window protectors, aluminium windows stolen.

U.K Eke (m) GMD, FBN Holdings and to his left Rosie Ebe-Arthur; group head, human capital management and development with a group of participants at the induction programme for its new hires in Lagos.

Nigeria, Kenya lead real estate business transparency in SSA on back of reforms …but law and policy remain growth inhibitors CHUKA UROKO

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hough the SubSaharan Africa (SSA) region has seen limited progress in the last two years, there have been reforms and some levels of improvements led by Nigeria and Kenya who are adjudged the regional hubs.

Incrementally, there has been market data availability being pushed forward, while both valuation standards and transaction processes are advancing, with more international service providers entering markets across the region.

What this means is that the real estate market which witnesses limited foreign directed investment due to lack of data to guide potential investors on areas of strength, weakness, threats and opportunities, may be attracted to the market on the back of these improvements.

VP Osinbajo to speak at CIPM 2018 national conference

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he Vice President, Yemi Osinbajo, is expected to speak on Exceptional Leadership For Nation Building at the 2018 national conference of the Chartered Institute of Personnel Management of Nigeria (CIPM) holding November in Abuja.

The annual 3-day conference of Human Resource (HR) practitioners themed, ‘Stand Out’ which coincides with the golden jubilee (50th) anniversary of the institute will see over 3000 HR delegates in different fields and sectors converge on Abuja between November 14 and 16.

The first panel discussion would look at ‘A People-Centered Labour Law for Organizational Productivity’ with Kenneth Amadi, a Justice of the National Industrial Court of Nigeria, Dennis Zulu, director, ILO country office Nigeria, Sierra Leone, Isa Inuwa, COO, corporate services, NNPC as discussants while the second plenary discussion would focus on ‘Human Capital Development: An Imperative for Economic Prosperity’ and feature Uyi Akpata, country senior partner, PwC Nigeria, Jordi Borrut Bel, managing director, Nigerian Breweries PLC. Ajibola Ponnle, the reg-

istrar/CEO of the institute said, this edition which is also the 50th, will feature 2 Panel Discussions Sessions, 9 Master Classes, Career Advisory clinics, Several A-list exhibitors and a fun-filled Anniversary Dinner.

According to her, each of the sessions would be geared towards shared learning and proffering contemporary solutions to the challenges arising in the workplace. “These solutions will help in shaping and reshaping policy direction in private and public sectors of the economy; thus contributing to sustainable national development,” said Ponnle.

Government data initiatives have been important in raising transparency levels, with Kenya and Rwanda digitising their land registries just as Lagos, Nigeria’s commercial nerve centre, has also digitized its land transaction processes, improving both efficiency and transparency in transaction.

Nigeria and Ghana have started to publish more information on regulatory requirements online. This, according to analysts, is a major improvement in the regional market, more so as technology is, increasingly, disrupting the global real estate space.

Kenya, particularly, sees continued progress due to improved transaction process and greater data availability while Nigeria tops regional improvers as 3rd party providers enhance market coverage and valuation quality.

Hakeem Oguniran, former managing director of

UPDC, notes that Nigeria, in the last five years, has introduced major reforms in its real estate sector, attributing the improvement that has been seen in the last couple years to the impact of these reforms which cut across mortgage and housing sectors.

At both federal and state levels, governments have come up with some policies and reform initiatives such as the National Housing Finance Programme (NHFP)— a federal government initiative domiciled at the Central Bank of Nigeria (CBN). This has been followed by the establishment of the Family Homes Fund just as Lagos State has also established property protection Law and the prohibition of land grabbing law, both of 2016.

Besides the CBN’s guarantee of World Bank’s $300 million credit to Nigeria to boost mortgage refinancing, there are also plans to recapi-

talize the Federal Mortgage Bank of Nigeria (FMBN) to the tune of N500 billion to enable it provide funding for more affordable housing for low income earners.

The mortgage sector has also seen some reforms such as the FMBN Bill, Uniform Mortgage Underwitting Standards (UMUL), Model Mortgage Foreclosure Law (MMFL), Mortgage Warehouse Funding Limited (MWFL).

Analysts are of the view that these reforms and the market improvement that followed contributed significantly to World Bank’s Ease of Doing Business Report of 2018 where Nigeria moved up 24 points from 169th position in the 2017 ranking to 145th out of 190 countries.

As a result, the country has been acknowledged as one of the top 10 most improved economies in the world.

Africa needs strong defence force to set foundation for economic, social development – Professor MIKE OCHONMA

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ell-led and legitimate defence force, which is underpinned by scientific defence industries, will be vital to ensuring peace on the continent which is the foundation of economic and social development, says University of the Western Cape research dean professor; Renfrew Christie.

To provide the 2.5 billion people in Africa with a safe and secure environment in which they can prosper will require strong defence, police, justice and political resources, as well as advanced science and technology, he told delegates at the Aero-

space, Maritime and Defence Conference, in Pretoria, on Tuesday.

Further, he stated that as military logistics are a key requirement of Africa’s future prosperity, a centrally coordinated infrastructure and logistics thrust will be vital. Roads, railways, electric grids, airways, water supplies, fibre connections, space networks and air links must all have a trans-continental logic, he elaborated.

“If African defence forces cannot put an overwhelming force into the correct space at the right time by 2050, Africa will have no peace or economic future,” Christie said, pointing out that Africa will constitute 26% of the world’s popula-

tion by 2050.

To ensure the continent prospers, Africa’s militaries must be based on top quality domestic defence industries, while passing on cutting edge science skills to other industries.

“Without good defence forces, which are backed by high-quality, scientific defence industries, Africa will not achieve its social and economic goals over the coming 20 or 30 years,” Christie averred.

Underpinning this, however, is the requirement that Africa’s governments provide sufficient funding to enable Africa’s militaries to buy large quantities of goods and services from domestic defence industries.

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A16 BUSINESS DAY NEWS 2019: Lagos PDP denies Enforcing environmental laws can create Ambode opportunities for entrepreneurs—Environmentalists wooing …as Oki group threatens to C002D5556

CHUKA UROKO

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nforcing enabling laws on environment can guard against abuse of waste and also provide opportunities for entrepreneurs who can convert waste to economic activities to boost national Gross Domestic Product (GDP), environment activists have said.

On daily basis, especially in the cities, waste is generated quantitatively from homes and industries and little or no thought is given to the use they could be put into by way of recycling and re-using.

As a result, waste litters the streets and roads; clogs drains from where it finds its way to the rivers and oceans. Lagos, Nigeria’s commercial capital typifies a city with poorly managed waste disposal.

According to the World Bank, the generation of solid waste is tied to population, income and urbanization. If

the report by this body which puts per capita waste generation rate at 1.2kg per person per day is anything to go by, waste generated in Lagos far outweighs the official figure of 13,000 tons per day. Even at that the state authorities are unable to manage what is generated, racing concerns among environmentalists.

Recently when environment activists gathered to mark the World Clean-Up Day, these concerns were amplified as they lamented the poor waste disposal mechanism in most cities of the world and their social and economic impact on humans and nations’ economy.

The World Clean Up Day started in the small Northern European country of Estonia in 2008, when 50,000 people cleaned up the entire country in just five hours. Since then, the model of cleaning a country in a single day has spread around the world, creating one of the fastest-

growing grassroots movements ever. Over the past decade, nearly 140 countries and 20 million people joined efforts to clean up waste in their neighbourhoods.

As a strategic move to align with over 150 countries which stood up against global waste and pollution challenges, Nigeria joined the celebration of this year’s World Cleanup Day. A group comprising Let’s Do It, JCI Foundation, Taxify and others, teamed up to raise awareness on waste and environment.

“I see this campaign to clean up the whole world as an opportunity to increase waste entrepreneurs and employment in waste collection, recycling and composting; it is better to see waste as resources and reduce government spending on waste management at dumpsite as waste can be recycled to different products for human use”, said Olumide Coker, JCI Foundation’s Country Lead-

er, who spoke to the press at the clean up event in Lagos.

According to him, the team’s initiative was aimed to clean up streets, parks, beaches, forests, and riversides among others where thousands of communities would act together as one, creating a powerful ‘green wave’ of cleanups spanning from New Zealand to Hawaii.

“The aim of World Cleanup Day is not just to pick up waste, but also to raise awareness both locally and globally about the severity of the situation.

The movement supports and connects a new generation of community leaders who are ready to act together to find lasting solutions for the global waste problem”, he said, adding that alongside World Cleanup Day, the movement was also releasing a ‘Keep It Clean Plan’ which, he explained, was a set of guidelines for a clean planet, aimed at governments, business, civil society and individuals.

Wednesday 19 September 2018

boycott Lagos APC primaries INIOBONG IWOK

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he People’s Democratic Party (PDP) in Lagos state has denied media report that it was wooing the State Governor Akinwunmi Ambode to stand as its governorship candidate in the 2019 general elections, if the Governor is denied the All Progressives Congress (APC) ticket.

Ambode’s second term bid has increasingly come under jeopardy over alleged disagreement between him and his political godfather and the national leader of the APC, Asiwaju Bola Ahmed Tinubu.

Ambode and two other aspirants Jide Sanwonolu and Obafemi Hamzat, last week picked the governorship nomination forms of the All Progressives Congress (APC) ahead of the September 25th APC primary in the State.

Sanwo-olu, subsequently last Sunday formerly declared his intention to contest for the party’s ticket, promising to restore the glory of the State and give special attention to the environment which had become

a source of concern to Lagosians.

But some sources in the Lagos PDP who spoke to Business day, disclosed that the party had several aspirants who had signified interest for its governorship ticket, stressing that it has never considered offering Ambode its governorship ticket.

Another sources in the party who spoke to this medium, said that party was keen on Femi Otedola which leaders of the party have met on several occasions in London, stressing that Ambode was not welcome in the party because he had failed Lagosians.

“It is not true that we are wooing Ambode, our party has not at any point said that, all this are just speculations, which are sponsored. We have some people that have signified interest to contest for the Lagos PDP governor ticket and they have bought nomination forms.

“You are aware that Deji Dorherty is interested and we have also Agbaje who have also bought the nomination form and these are leaders of the party who have sacrificed a lot to where we are today”.

CBN intervenes in forex market with $210m HOPE MOSES-ASHIKE

T L-R: Ademola Adekoya, coordinator centre for information, press and public relations, Lagos State University (LASU); Anat Adesunkanmi, deputy registrar, vice chancellor’s office; Olarenwaju Adigun Fagbohun, vice chancellor; Zebulon Agomuo, editor, BDSunday, and Adeola Ajewole, advert manager, BusinessDay, during a courtesy visit to vice chancellor of LASU

by BusinessDay management team in Lagos, yesterday. Pic by Olawale Amoo

Dangote introduces ‘BlocMaster’ for cement moulders

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uilders and other stakeholders have lauded the BlocMaster Cement which was formally launched by Dangote Cement PLC yesterday in Kano, Kano State, describing it as extra strong and the best for block moulding in Nigeria.

Before it was officially rolled out , the innovative cement product had been adjudged ideal by the country’s engineers, builders and block makers, due to its rapid setting within an hour, its strength and top quality.

Multitude of block makers in attendance lauded the company’s innovate efforts and after a demonstrative test also confirmed its strength

and asserted that surely, it is the best product for building construction for now, from the stable of Dangote cement.

Speaking at the official unveiling of the cement yesterday, Kano State Governor Abdullahi Umar Ganduje called on all Nigerians to patronize the new cement to help minimize the menace of collapse building in the country.

The Governor who was represented by the Secretary to the State Government Usman Alhaji commended the Management of Dangote Group, adding that it has always been supportive in all sectors of the economy.

Group Managing Director, Dangote Cement Plc, Joe Makoju said the new brand

is a product of years of deep research, adding that it has been tested and approved by builders nationwide.

According to him, it is strong and affordable to Nigerians because of its rapid setting, especially during raining season.

“This is a new era. This is a new quality. This is a product of research,” Makoju said.

Speaking, Group Chief Marketing Officer Oare Ojeikere said the new cement is multipurpose and very strong, urging Nigerians to adopt it for all construction purposes.

He said he was happy that hundreds of builders in Kano had used it before the launch.

The immediate past chairman, Nigeria Institute

of Building and Director Consultancy Services, Science and Technical Schools Board, Kano State Abdullahi Alhassan SanSan said he was elated because the new cement block will address the issue of collapse building in the country.

Speaking also at the event, Manager Magina Blocks Industries Kano Nura Musa Yahayah said he has used the block and can therefore recommend it to Nigerians.

According to him: “I can recommend this product. I have personally used it and I am very convinced that it is the best for those of us who are in the business of cement moulding. It is strong and sets very fast.

he Central Bank of Nigeria (CBN) on Tuesday intervened in the inter-bank foreign exchange market to the tune of $210 million, to boost liquidity and lower pressure in the market.

According to the figures obtained from the CBN on Tuesday, September 18, 2018, the Bank offered $100million to authorized dealers in the wholesale segment of the market, while the Small and Medium Enterprises (SMEs) segment received the sum of $55 million. Customers requiring foreign exchange for invisibles such as tuition fees, medical payments and Basic Travel Allowance (BTA), among others, were also allocated the sum of $55 million.

However, the nation’s currency on Tuesday depreciated against the U.S dollar, losing N0.37k to close at N363.30k per dollar compared to N362.93k/$ traded the previous day at the investors and exporters forex window, data from FMDQ indicated.

Confirming the figures, Isaac Okorafor, the Bank’s director, corporate communications department, reiter-

ated the Bank’s commitment to continue to intervene in the country’s interbank foreign exchange market.

Okorafor assured that the apex Bank will continue to ensure liquidity in the market and sustain the stability in the market.

Meanwhile, the CBN has disbursed a total of N1.3 billion lower denomination banknote to the various market associations, merchants and retailers across the country. It will be recalled that on Tuesday, September 11, 2018, the Bank injected the total sum of $303.91 million and CHY46.58 million into the spot and short tenored forwards of the inter-bank foreign exchange market with Meanwhile, the Naira, on Tuesday, September 18, 2018 exchanged at an average of N361/$1 in the BDC segment of the market.

The framework for the disbarment of these denominations stipulates that it would be made through the respective deposit money banks (DMBs) of the beneficiaries.

She said the beneficiaries must ensure that their accounts are funded before any withdrawal could be made on their behalf.

BUSINESS DAY

Opinion

FRANKLIN NGWU Dr Ngwu is a Senior Lecturer in Strategy, Corporate Governance and Risk Management, Lagos Business School, Pan- Atlantic University, Lagos.

E

xpectedly, President Buhari’s position that he would continue to place national security and national interest above rule of law attracted wide condemnation especially from our ‘learned brethren’. Interestingly, the outcry and condemnation somehow ignored PMB’s efforts to link his stance on the submissions of our Supreme Court in the Case ‘Mujahid Asari Dokubo vs The Federal Government of Nigeria (2007). While the condemnation is expected, the truth is that majority of Nigerians including our learned brethren really do not believe and practice what we call formal Nigerian rule of law.

And the evidence is litany! Majority of Nigerians perceive the courts as places where cases are bought and sold. Using the World Bank surveys from 1996-2016, Nigeria has consistently performed poorly in the practice of rule law. In a performance range from positive (+2.5) the highest to negative (-2.5) the lowest, Nigeria has consistently maintained an average of -1.18 for rule of law as compared to peer countries (other developing and emerging economies) at + 0.47.

Rule of law reflects the perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of

C002D5556

NEWS YOU CAN TRUST I WEDNESDAY 19 SEPTEMBER 2018

National security & rule of law: Urgent need to restructure our legal system crime and violence.

Interestingly, the cogent need to restructure our legal system which is arguably the most important and the fulcrum upon which most our socio-economic problems depend is ignored. The restructuring 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 restructuring I am proposing is a total overhaul of our legal system both in terms of content and operational procedure.

The reasons for this proposal 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 socio-cultural tensions currently manifesting in the ongoing political and governance crisis.

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 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 co-existence 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 100 years after the creation of Nigeria and 58 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). It is also the reason why the 2014 National Conference immediately upon announcement degenerated to tribal acrimonies among our ethnic groups and even the issues discussed were mainly along ethnic lines and interests. 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 (rule

Interestingly, the cogent need to restructure our legal system which is arguably the most important and the fulcrum upon which most our socio-economic problems depend is ignored...

The restructuring I am proposing is a total overhaul of our legal system both in terms of content and operational procedure

of law), 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 also 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. Addressing this legal challenge is the starting point for the success of our banking policies such as the current National Financial Inclusion Strategy. It is this contradiction and confusion of our legal system that we have continued to lag behind in most international measures of governance such as rule of law, regulatory quality, government effectiveness and ease of doing business.

Corruption is perceived to be high in Nigeria because the formal governance system is regulated by a formal legal system that is not widely accepted and internalized.

Governance therefore suffers from problems of common resource and free rider due to its regulation by unaccepted and limitedly internalized legal system that can be bought and sold ( even the enforcement agencies and individuals do not believe in it). This is why unquestionable cases of corrupt enrichment and fraud normally degenerate to ethnic confrontations with the tribes of the concerned individuals emerging as unrepentant supporters of corruption with intriguing cries of ethnic persecution of their illustrious sons/daughters. On the contrary, a petty criminal or thief can easily be lynched within his village or tribe

Continues on page 38

Chinko diplomacy and chopsticks imperialism: The weaponisation of finance (1)

BONGO ADI

Bongo Adi, PhD is a faculty member of Lagos Business School

C

hinko” is the street name disparagingly labelled on cheap and substandard Chinese products but has equally been extended to Chinese immigrants in Ghana and Nigeria. It was first brought to the limelight in the 2014 book, Chinese Migrants and Africa’s Development: New Imperialists or Agents of Change?

by Giles Mohan and his coauthors.

Chopsticks imperialism is a phrase recently coined by George Ayittey, the Ghanaian who won the HL Mencken Award in 2003 for his book, Africa Betrayed. It alludes to the chopsticks dexterity with which China snaps up the raw materials of Africa in exchange for shoddy infrastructure deals from the Northernmost to the Southernmost fringes of the continent.

Chinko diplomacy describes Africa-Chinese relationship fostered by the non-interference attitude that seems to support, aide and feed off official and institutional corruption in Africa.

Since our last issue on this column focusing on Chinese eco-

nomic relations with Africa, there seems to have been a deluge of negative media attention on China, from the Americas to Africa. Just a few days ago, a viral online video clip captured a Chinese national by the name of Liu Jiaqi, racially abusing a Kenyan employee and the rest Kenyans, including President Uhuru Kenyatta as “poor, smelly, black monkeys.” This stirred a massive outrage and provoked calls for the immediate arrest and prosecution of the miscreant whose attitude many read as largely typifying Chinese sentiments about Africans in general.

In the beginning of August, about 16 US Senators petitioned the US secretaries of the Treasury and the State over what they tagged predatory Chinese infrastructure financing or what some have tagged “Chinese debt-trap diplomacy” associated with the latter’s Belt and Road Initiative (BRI). It was alleged that of the 63 countries currently hosting BRI funded projects, 23 are at the risk of debt distress and for 8 of these countries, future BRI-related financing jeopardises sovereign debt sustainability.

Zambia is the latest to hand over key strategic assets to China for defaulting on Chinese loans.

Zambia’s power utility company, ZESCO, is on the brink of takeover

by Chinese over loan default. The country’s broadcasting network ZNBC - had already been willed to China over debts. Kenneth Kaun-

of the 63 countries currently hosting BRI funded projects, 23 are at the risk of debt distress and for 8 of these countries, future BRI-related financing jeopardises sovereign debt sustainability

da International Airport has also been pencilled down as another default booty that the Chinese are about to take should Zambia fail to timely comply with its huge debts to China. Some pundits reason that Zambia may become the first Chinese African colony.

In Kenya, it is being alleged that the USD 16 billion Lamu port constructed by Chinese engineers on Chinese loans risks default in the next 3 years which will trigger the forfeiture of this critical asset to China.

In the Republic of Djibouti, a country of less than a million people but strategically located in the Horn of Africa and near to some of the world’s busiest shipping lanes, controlling access to the Red Sea and Indian Ocean, China has provided more than USD 1.4 billion in infrastructure project finance, which amounts to about 75 percent of the coun-

try’s GDP. The country’s external debt, most of it to China, currently stands at 85 percent of GDP which exposes the country’s vulnerability to a take-over by China of Doraleh Container Terminal which is a major strategic asset as a key refuelling and transshipment centre and a principal maritime port for imports and exports to neighbouring Ethiopia. Djibouti is among the 8 countries the Centre for Global Development recently marked as facing debt distress arising from Chinese BRI-related investments.

To consolidate its presence in this key strategic port city, China established a military base in Djibouti thus putting to rest any doubts regarding its geo strategic intent.

Sri-Lanka, like Zambia, have had a taste of chopsticks imperialism when its Hambantota Port, constructed with borrowed Chinese money and by Chinese engineers, fell into China hands last year on a 99-year lease because the Sri-Lankan government found itself unable to repay over USD 1 billion of the Chinese debt used to construct the asset.

Pakistan is also caught in this web of Chinese chopstick imperialism which, in the words of US Senators, “weaponises” capital. So are other countries located in the major “corridors” of the Chinese BRI such as Laos, Kyrgyzstan, Maldives, Montenegro, Tajikistan, and Mongolia. These are among the 8 countries that the Centre for Global Development asserted last

year are at the brink of debt distress asaresultofbarteringinfrastructural finance for strategic natural assets with China. The US is not alone in reading a strategic intent into this newwaveofChineseweaponisation of capital. We had argued in our last episode that the earlier, global Chinesemercantilismofthefirstmillennium before Europe took the sail off its ship, was largely non militarized — the reason why some historians think it eventually succumbed to thesuperiorlyweaponisedimperialism of the West. Now that it seems China has learned its lessons, its Belt and Road Initiative consisting of a number of “economic corridors” is very instructive.

The concept of economic corridor is not new in economic geography. It is an integrated network of infrastructure within a geographical area designed to stimulate economic development. It leverages the advantages conferred by linkages in what economic geographers call agglomeration economies. But as the Economist recently put it, “there has never been a neat division between the power that allows a country to open and maintain trade routes and the clout that builds empires.”

Actually, the famous “Silk Road” is a term coined by a German geographer, Ferdinand von Richthofen, in 1877 to describe a stretch of ancient trading routes which networked commerce, diplomacy and hard power. The success of international economic corridors,

crisscrossing various economic hub cities scattered in different countries, exceedingly depend on the hard power that protects and safeguards it. Chinese new vision of economic corridors are therefore not without a geo-strategic intent to open up and defend access routes to important gateways critical for movement of resources to the China mainland and the flow of cheap items out of China.

To consolidate this new vision China has weaponised its capital investment in third world countries, including Africa. Its use of tied aid, though not new or unique, has threatened the economic sovereignty of the continent. Both IMF and the United States are concerned that China’s weaponised financing strategy — debt-trap diplomacy — is first to encourage indebtedness, and then to take over strategic national assets when debtors default on repayments. The United States Senate notes that “Chinese behaviour as a creditor has not been subject to the disciplines and standards that other major sovereign and multilateral creditors have adopted collectively, and in the process, debt levels and dependence on China are rising. As financially strapped countries negotiate with China to free themselves of mounting debt, Beijing has extracted onerous concessions, including equity in strategically important assets.

Further, Beijing has repeatedly used economic pressure to affect foreign policy decisions.”

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana.

Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 19 September 2018

C002D5556

BUSINESS DAY

POLICY

OPEC’s expectations highlight threat to oil demand

Page 5

finance people appointments

Debrief

What could have ignited this buying spree for West African crude?

Reforms in Angola cost Trafigura its prized oil deal Page 6 OPEC weekly basket price DAY

PRICE

14/9/18

76.59

7/9/18

75.19

31/8/18

74.96

24/8/18

72.09

17/8/18

70.36 Source: OPEC

FRANK UZUEGBUNAM

A

fter long periods of overhang, there is a sudden rush for West African crude grades raising new trading opportunities. Sales of Nigerian cargoes have been slow this year. About 25 out of 60 Nigerian cargoes scheduled for October export remain unsold, while trading will switch to November shipments when new programs are released.

The jump in trading activity comes at a time when Nigerian crude are being squeezed by the rise of US shale. Most Nigerian crudes are light and low in sulfur and have therefore been

hit hard by surging output of US crudes with similar geological properties. Not only has the US cut imports from Nigeria, but some traditional buyers, such as Taiwan’s CPC Corp., have also turned to American grades.

Over the past six sessions, BP bought about 7.6 MMbbl of Nigerian crude, including four Qua Iboe for loading from mid-October to early-November. There will be a total of nine shipments of Qua Iboe in October, a previously unseen volume in the West African crude market, where a whole month can sometimes go without a single public bid or offer in the Platts window.

But what could have ignited this buying spree? Two of the

world’s biggest oil companies (BP & Vitol) stepped up buying and selling of West African crude. The sudden gush in activity has surprised many participants in a West African market where cargoes are typically transacted privately.

BP does not produce oil in Nigeria and has not been a large trader of Nigerian oil in recent years, although it has bought some cargoes for its refining system. However, it quietly built a long position of up to 10 million barrels in the African CFDs contracts in August, betting the premium of the grades to Brent will rise in September.

In reaction, Vitol spent over $500 million to buy seven cargoes outside the Platts system

from oil majors Total and Shell, paying premiums above $1.70 per barrel, according to traders familiar with the developments.

While Nigeria and Angola are clear beneficiaries in this flurry of activities, market participants say the main losers will be the refineries especially European refiners as the developments may have raised their costs.

“This is very bad from a refiners’ perspective. Every seller is now asking high prices,” according media reports.

As a huge refiner of crude, BP could either try to resell the barrels it bought, or process them in its own plants. That is where it has huge advantage over Vitol.

02 BUSINESS DAY WEST AFRICA Outlook Brief Libya: Oil output normal despite attack on NOC headquarters

L

ibya’s state oil firm NOC said that it continued to manage its operations normally throughout the country, without loss of production, after a shooting attack on its Tripoli headquarters.

NOC provides the vast bulk of the Libyan state’s income and, along with the Tripoli-based central bank, is one of the only state enterprises still functioning well after years of armed factional conflict.

“The National Oil Corporation has assured all citizens that it has implemented contingency plans to

deal with the crisis to ensure that its production and daily operations continue on a regular basis,” NOC said in a statement.

“This attack did not cause a loss of production,” Mustafa Sonallah, NOC chairman said in the statement, which did not reveal NOC’s current production level.

Libya has been divided between rival governments and military factions based in the east and west of the country since 2014, causing political deadlock and an economic crisis.

However, the NOC has continued to function relatively normally across Libya, which relies on oil exports for most of its income. Oil output has been hit by attacks on oil facilities and blockades, though last year it partially recovered to around one million barrels per day.

Islamist militants have sleeper cells in northern cities as well as mobile units in Libya’s southern desert, according to Libyan and Western officials.

C002D5556 Wednesday 19 September

2018

oil

Ghana: GNPC begins oil exploration in Northern region

T

he Ghana National Petroleum Corporation (GNPC) has started exploring for oil in the Northern Region. The region, which forms about 52 per cent of the Voltaian Basin that stretches across 104,000 square kilometres of land, is said to be a potential hub of commercial quantities of oil.

John-Peter Amewu, Minister of Energy, on tour of the northern region, said effort would be made in the region to discover the oil and harness it for national development. About 16 districts in the region are said to have a huge potential for the natural resource which has not been harnessed.

Amewu called on Yagbonwura Tuntumba Boresa I, the overlord of the Gonja Traditional Area, and other traditional rulers to cooperate with the government to ensure that the resource was dis-

covered and exploited.

He stressed that the government was committed to ensuring that oil resources were properly harnessed to benefit the host communities and the country at large adding that he would address challenges related to erratic power supply that had confronted the Northern Region.

Salifu Saeed, Northern Regional Minister, said that the Northern Region had a huge investment

potential and added that the discovery of oil in commercial quantities would help address the daunting development challenges in the area.

Saeed bemoaned the loss of livelihoods resulting from the perennial spillage of the Bagre Dam in Burkina Faso and asked for pragmatic steps to be taken to address that challenge.

He, therefore, called on the Ministry of Energy and other relevant state

agencies to take steps to tap the excess water from the Bagre Dam to generate more hydroelectric power.

“There is hydro power potential here because steps can be taken to provide small dams to store excess water from the Bagre Dam which can then be used to generate more electricity. The spillage of the dam should rather be a blessing to us and not the other way round,” he said.

Kenya: China’s CCCC to build Mombasa oil terminal

C

hina Communications Construction Co has won a $398 million contract to build a new oil terminal at Kenya’s main port of Mombasa, Daniel Manduku, acting head of the Kenya Ports Authority said.

Manduku said the new terminal, whose construction will take 18 months, will raise the port’s oil handling capacity to 100,000 dead weight tonnes from 20,000 tonnes currently.

“It is going to take four ships at a time and it will

also handle gas and liquefied petroleum gas. It will have LPG, oil and petroleum, both refined and unrefined.”

The East African nation is upgrading its energy importation and distribution facilities to keep up with growing demand.

CCCC, through its subsidiary CRBC, had previously won a contract in Kenya to build a $3.23 billion rail line between Mombasa and Nairobi, and secured another deal to operate services on that line when it was completed last year.

C002D5556

Wednesday 12 September 2018

gas

BUSINESS DAY

WEST AFRICA

ENERGY intelligence

Algeria: Sonatrach eyes more gas exports to Spain through Medgaz expansion

Brief

A

LNG Market: Prices for November soften after earlier strong weeks

A

sian spot liquefied natural gas (LNG) softened for November delivery after several weeks of strong demand and tightening supplies led buyers to wait for a correction in prices.

Spot prices for November LNG-AS delivery in Asia were heard around $12.00 per million British thermal units (mmBtu), down 5 cents, market sources said.

The first half of November was weaker than the second, with one cargo for delivery in the first two weeks of the month offered but unsold at $12.00, traders said.

The last of the October cargoes also weakened, slipping to around $11.40 from $11.55.

LNG prices had risen in recent weeks to multi-year seasonal highs and above peaks reached in the previous four winters, usually the most expensive period of the super-cool gas.

Aside from demand from Japanese and South Korean customers seeking to replenish their gas stocks before winter, prices of contracts were pulled up by rising crude oil, against

03

which some deals are priced.

In Bangladesh, one of the world’s latest LNG importers, supplies to its new floating LNG terminal are set to start on a regular basis following months of technical difficulties after a cargo from Qatar loaded.

An official form the stateowned Petrobangla said cargos now should be arriving at a rate of around three a month, or every 10 days.

India’s state-run GAIL (India) was in the market to sell a cargo from Cove Point, one trader said, adding it was the third time the utility was trying to sell LNG from the US terminal with which it has a longterm tolling agreement.

Despite low activity from Asian buyers, utilities are expected to be restocking sites after a hot summer which prompted more gas usage and delayed stocking up.

South Korea’s KOGAS, the world’s second corporate largest LNG buyer and only wholesaler in the country, bought 2.3 million tonnes of LNG last month, an increase of 18.8 percent from a year ago.

l g e r i a ’ s state-owned Sonatrach wants to boost its gas exports to Spain through the expansion of the 8 Bcm/year Medgaz pipeline while also maintaining supplies through the GME link via Morocco, its CEO Abdelmoumen Ould Kaddour said.

Algeria sends gas via the two pipelines to Spain, with volumes totaling 14.5 Bcm in 2017, but Sonatrach wants to be able to increase exports as it brings online a number of new major gas production projects in the coming years.

Sonatrach began construction work on a new 200 km pipeline that can divert gas away from the GME pipeline into Medgaz, but Ould Kaddour said this did not necessarily mean transit via Morocco would cease, rather that it would give the company more flexibility and optionality in its exports to Spain.

“One of our objectives is to continue to produce more gas and to transport

more gas to Europe and in particular to Spain,” he said.

The new pipeline will run from El-Aricha on the border between Algeria and Morocco to Beni-Saf, the starting point of the Medgaz pipeline, creating a new “loop” between the export lines. In order to be able to move gas in that direction, however, the capacity of Medgaz will also need to be expanded.

“We are currently transporting 8 Bcm/year through Medgaz and we are putting in place a tur-

bo-compressor to increase it to 10 Bcm/year,” he said.

Ould Kaddour was speaking after the launch ceremony of the new El Aricha-Beni Saf pipeline, also attended by energy minister Mustapha Guitouni. The new link is expected to be completed by September 2020.

On the question of continued gas transit via Morocco through the GME pipeline after the current contract expires in 2021, Ould Kaddour was hopeful of reaching a new deal.

“By 2021, we will see

what will happen. There are Moroccans who are on the project and we are discussing it with them. I think there is going to be an extension of this contract. I do not think there are any difficulties so we can continue to work with them,” he said.

“For us, it is a question of increasing our export capacities. I have always said that Algeria is a ‘gas country’ rather an ‘oil country’ and it is in this sense that we want to increase our export capacity”.

The Moroccan authorities have said it is unclear whether the contract to transit Algerian gas via Morocco to Spain will be renewed, prompting Algiers to come up with a back-up plan.

Morocco has made some significant gas finds in the east of the country in recent years, including finds by the UK-based exploration company Sound Energy, and is also looking to install an LNG import terminal, meaning it will have less need for Algerian gas, which it takes in lieu of payment for transit.

Ghana resurrects LNG import terminal with Chinese deals

G

hana has resurrected the liquefied natural gas import terminal project with the choice of two Chinese companies to build the Tema terminal infrastructure that will cost $350 million which would make the country the first in sub-Saharan Africa to buy LNG. Tema LNG, backed by Africa-focused private equity firm Helios Investment, signed deals with China Harbour Engineer-

ing Company to build onshore facilities and Jiangnan Shipyard for a floating storage and regasification unit (FSRU), the Ghanaian government said in a statement.

It gave no further financial details of the deals but said $200 million of the estimated cost of the project of over $350 million would be spent in Ghana itself.

LNG is expected to be sourced by Russian oil giant Rosneft , which has a 12-year deal to supply 1.7 million tonnes a year (mtpa) with Ghana National Petroleum Corporation, although the project has had previous LNG suppliers lined up.

Ghana has been try-

ing to get an LNG import project off the ground for years, with two leading FSRU operators, Golar and Hoegh, earmarking their giant vessels for the country’s eastern Tema port only to withdraw due to delays over contracts.

Since then, the development of oil and gas discoveries such as the Jubilee, TEN and Sankofa fields in Ghana and others close by have brought into question the need of a gas import project.

04 BUSINESS DAY WEST AFRICA ENERGY intelligence

C002D5556

Wednesday 19 September 2018

power

Why did NERC ban DISCOs’ association for criticising Fashola?

ISAAC ANYAOGU

T

he Nigerian Electricity Regulatory Commission (NERC), the regulator of the power sector has essentially proscribed the activities of the Association of Nigerian Electricity Distributors (ANED), a pressure group formed to press for the rights of electricity distribution companies (DisCos), saying the group has no binding legal contract in the sector.

In a communiqué issued at the end of the last monthly meeting with power sector operators, excerpts of the document reads, “Inter- relationships between Electricity Distribution Companies were encouraged but activities of Association of Nigerian Electricity Distributors (ANED) were discouraged.”

The document further said, “A strict adherence to contract agreement signed by the Commission’s Licensees (DisCos) was re-echoed as the only binding legal entity that should form the continued relationship between the Commission and Electricity Distribution Companies “The meeting agreed henceforth the Legal Counsel of the Electricity Distribution Companies representing ANED should never in whatsoever way interfere with the policy directives or regulatory pronouncements made either by the honourable minister of power or the commission. That no unwarranted remark should be made by ANED representatives against the person of the honourable minister, NERC Chairman or against any of the NERC Commissioner going forward.”

There is clearly no love lost between Babatunde Fashola

minister of Power, Works and Housing and ANED. In July, the minister issued a press statement specifically addressing the irritation ANED’s executive secretary Sunday Oduntan, was causing, and calling him an interloper.

“Oduntan should tell members of the public if ANED is a licensee. He should tell the public whether he is an investor in a DisCo and in which DisCo he has invested and what he invested,” Then it gets personal, “He should tell members of the public that I walked him out of our monthly meeting because he has no capacity to attend and he was not invited.

If ANED is not a licensee, who is ANED? An NGO? If so, they should listen to consumers

because nothing is going on about poor service.”

Clearly ANED’s Odutan has become a nuisance that must be removed. However, NERC’s ban on the association coming after the minster’s public frustration with the group, questions its independence. It reinforces the notion that it is tied to the apron strings of the minister.

On July 5, Oduntan in an interview on Television Continental, a Lagos-based broadcasting outfit, said the major problem in the sector is the regulator, who is partial, unfair and incompetent.

Usman Abba Arabi, NERC’s spokesperson in response to BusinessDay’s request for comment said, “We do not respond to ANED. They are not our licensee. NERC does not recog-

nize them. So we will not join issues with them.”

Pressed further that the claims of an association that speaks for its licensee when valid should warrant more than just a cavalier response, Arabi insisted that the group does not matter as they are not the ones they are regulating. But NERC did not proscribe the group even then.

Legal analysts, including BusinessDay’s legal representatives said that ANED by virtue of the fact that it did not obtain any license from NERC had no standing and lacks the ability to engage the Commission. This is, in spite of constitutional guarantee to free association, they said ANED would have a weak case pleading this right.

Perhaps, but it beggars be-

lief that the DisCos on whose behalf, ANED claims to speak have not disavowed the organisation. Analysts say they play a critical role in pushing back on some of the minster’s directives that DisCos consider inimical to their interest.

An example is the eligible customer declaration the minister issued last year which some DisCos consider premature. The Minister conceded to declaring a competition charge to assuage their fears of revenue loss, some say this could not have been expedient without pressure from groups such as ANED. As majority owned private organisation, with a regulator that they accuse of lacking independence, DisCos are more comfortable speaking through the veil of a trade group so as not to jeopardise chances of keeping their licenses, especially as they are believed to have serious shortcomings with fulfilling their obligations.

Interestingly, ANED functions like full-fledged pressure group, with offices, staff and organises press conferences sanctioned by DisCos. There is little information about how it is funded but it is really not difficult to hazard a guess. GenCos too have their own group, the Association of Power Generation Companies of which Joy Ogaji, is executive secretary. Are they banned too?

While these groups may seem like an aberration, the peculiar nature of Nigeria’s power sector makes them indispensable. If the sector were treated like a business, rather than a social service hence vulnerable to political calculations, if it had an efficient regulator, a strict adherence to market rules, and sanctity of contracts respected, creating these groups would be unnecessary.

Wednesday 19 September 2018

C002D5556

POLICY

BUSINESS DAY

05

WEST AFRICA

ENERGY intelligence

OPEC’s expectations highlight threat to oil demand DIPO OLADEHINDE

L

atest report from Organization of Petroleum Exporting Countries (OPEC) reveals that several oil producers led by Saudi Arabia oil has increased oil production for the month of August, as the prospect of the loss of Iranian supply added to concerns over the delicate balance between consumption and production.

The 15-member OPEC said crude oil production rose month-on-month by 278,000 barrels a day in August which was driven by higher output in Libya, Iraq, Iran and Nigeria.

According to the report, OPEC produced 32.57 million bpd in August, which increased by 278,000 bpd from July as OPEC’s largest producer Saudi Arabia saw its output rise modestly to 10.40 million bpd, up 38,000 bpd from the previous month.

Oil analysts expect the increase in output by the Saudis over the past few months to dominate monitoring committee talks scheduled for September 23 in the Algerian capital.

A six-country Joint Ministerial Meeting Committee (JMMC) overseeing the OPEC/nonOPEC supply accord will meet September 23 in Algiers to assess market fundamentals and potentially make output policy recommendations.

Industry experts are expecting that the monitoring committee will be discussing the need to further increase output to cover potential shortages in the market as production from Iran and Venezuela continues to slump.

Second-largest producer, Iraq, boost output by 90,000 bpd to 4.65 million bpd, according to secondary sources, while direct communication showed production of 4.46 million bpd,

unchanged from July.

The two nations remain sharply divided over the details of the agreement reached in June as the Saudis, supported by other Gulf nations and Russia said OPEC had agreed to add about 1 million barrels a day to world markets.

On the other hand, Iran, which is seeing its supply pressured by US sanctions, saw its production drop 150,000 bpd to 3.58 million bpd in August, secondary sources estimated

while direct communications reported steady production of 3.81 million bpd.

Libya was the biggest gainer in the month, boosting production by 256,000 bpd to 926,000 bpd, while Nigeria also increased production by 74,000 bpd to record 1.7million in the month of August.

OPEC said the current state of the world economy and geopolitics will come increasingly into focus in the next few months, impacting the global

oil markets.

“A combination of monetary tightening from G4 central banks, the weakening financial situations in some emerging and developing economies, rising trade tensions and ongoing geopolitical concerns in some parts of the world constitute challenges to the current global economic growth trend,” the Vienna-based organization said.

According to OPEC “the aforementioned monetary

tightening by the US Fed has put pressure on emerging economies, especially those facing relatively large external shortterm financing needs. This has translated into some significant currency depreciation in August, specifically in the case of Turkey and Argentina.”

It is a marked shift in tone from last month’s report, which noted that “healthy economic developments and increased industrial activity” would likely support demand for distillate fuels.

OPEC and allies led by Russia will meet in Algiers later this month to assess world markets, having agreed to boost production by 1 million bpd by reducing over compliance with cuts at their last meeting in June 23. Oil prices are trading near their highest in two months in London, at almost $80 a barrel, as demand concerns arising from US-China trade tensions are countered by supply losses from Iran to Venezuela.

In its latest report, OPEC revised down slightly its nonOPEC supply in 2018 saying it will average 59.56 million bpd.

“This was due to a “downward adjustment in the supply forecast for Brazil, the UK, India, Malaysia and China on lower-than-expected output” in the second half of this year,” OPEC said.

In 2019, Vienna-based organization expects an increase in non-OPEC oil supply to 61.71 million bpd, with the US, Brazil, Canada, UK, Kazakhstan, Australia, China and Malaysia being the main growth drivers.

Mexico and Norway are expected to see the largest declines but OPEC added that the 2019 forecast is subject to many uncertainties.

OECD commercial oil inventories stood at 2.830 billion barrels as of July, which was 43 million barrels below the five-year average but 194 million barrels lower than the July 2018 level.

06 BUSINESS DAY

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WEST AFRICA

ENERGY intelligence

Wednesday 19 September 2018

finance people appointments

Reforms in Angola cost Trafigura its prized oil deal

Brief

T Saudis hire ex-solicitor general to lobby against N-OPEC

S

audi Arabia is taking no chances with the longshot “N-OPEC” bill, hiring former Solicitor General Ted Olson as a lobbyist to campaign against the act.

The Saudi embassy contracted with Olson’s law firm, Gibson, Dunn & Crutcher LLP, to develop a white paper opposing the “No Oil Producing and Exporting Cartels Act” legislation.

It will also prepare a legal analysis of the bill and write an op-ed against it. The firm’s work also could include lobbying members of Congress and their staffs.

Details of the embassy’s contract with the law firm are described in a September 7 filing with the Justice Department, which maintains registrations of foreign agents in the US. Saudi Arabia is the de facto leader of the Organization of Petroleum Exporting Countries, which pumps about one-third of the world’s crude. The group was said in July to be consulting with lawyers to prepare a strategy to defend against pro-

posed US legislation that could open up the cartel to antitrust lawsuits, according to people familiar with the matter at the time.

Although Congress has debated various forms of legislation targeting OPEC since 2000, Presidents George W. Bush and Barack Obama threatened to use their veto power to prevent it becoming law. President Donald Trump has repeatedly attacked the cartel both before and after being elected.

The House of Representatives introduced a version of the bill in May. The Senate has also revived legislation which would amend the Sherman Antitrust Act of 1890.

That’s the law used more than a century ago to break up the oil empire of John Rockefeller.

The firm said it would be paid as much as $250,000 in a flat fee for the initial op-ed and legislative analysis. The embassy would pay an additional $100,000 per month if it wants the law firm to press the issue in meetings with lawmakers.

rafigura has lost its last big contract in Angola, once a core market and revenue generator for the trading house, as the country’s new president Joao Lourenco part ways with oil firms that worked with his predecessor Jose Eduardo Dos Santos.

Trafigura lost the rights to sell Angolan fuel oil this year, with the contract going to French oil major Total.

Fuel oil was the last major Angolan contract Trafigura had, with volumes of 1.1 million tonnes in 18 cargoes over 2017 worth some $450 million.

Total is now expected to market a similar amount for Angolan state oil company Sonangol in 2019.

“It is part of broader oil industry reforms that were ordered by Lorenco. The fuel oil contract change effectively completes this process on the trading side,” a source familiar with how Sonangol sells its oil and products told

Reuters.

Lourenco said shortly after taking office in September 2017 that he was committed to economic reforms and ordered a review of Angola’s oil industry.

He has since pushed out prominent figures

from key state roles, including the former president’s daughter Isabel dos Santos, who was head of Sonangol.

Trafigura has long been the main player in Angolan oil, helping Sonangol sell large volumes of crude and fuel oil and also importing

gasoline, gasoil and other refined products.

The trading house was also a large lender to Sonangol - with debt guaranteed by future fuel sales, although the sources said the African country had now repaid all loans.

Sonangol also changed the way it imported refined products with Trafigura losing out in March on the right to supply 2 million tonnes a year of gasoil in 21 cargoes to rival Glencore.

In addition, it lost the rights to import some 300,000-400,000 tonnes of bunker fuel to Total, which has also won the right to supply 1.2 million tonnes of gasoline to Angola, a contract previously held

by Vitol.

Total, one of the biggest foreign operators in Angola, has been steadily expanding production with the launch this summer the offshore Kaombo project and reaching a framework agreement with Sonangol to develop a retail station network.

Harlequin inaugurates $23m fabrication facility

H

arlequin International Ghana has formally opened a $23 million fabrication, hydraulic and engineering facility in Takoradi to provide services to the oil and gas sub-sector.

Frimpong Boateng, Minister for Environment, Science & Technology & Innovation, inaugurated the $23 million fabrication, hydraulic and engineering facility in Takoradi on behalf of the President, Nana Akufo-Addo as part of government’s determination and commitment to accelerate the participation of local companies in the oil and gas industry. The inauguration also marked the 20thanniversary of Harlequin.

The facility has state-of-

the-art equipment, as well as internationally trained Ghanaians and power backup systems to deliver quality services to the sector. The facility has well equipped individual setups for the fabrication, hydraulic and engineering departments.

The Takoradi facility is in

line with the government’s programme to encourage local content participation in the oil and gas sector.

The facility is safety compliant with ISO 18000 and ISO 4500. Besides, it is quality compliant with ISO 9000 – 2015.

Harlequin International

started modestly in Tema 20 years ago on 12th September, 1998, with the provision of only engineering services, but Harlequin has grown steadily into a full spectrum manufacturing and support services provider to major industries in the oil and gas sector covering fabrication, engineering and hydraulics.

The journey has not been easy but hard work and determination from both workers and management has brought the company to its present state.

Harlequin is an example of a local Ghanaian company that is providing local content services to save the country millions of cedis that would otherwise have to be spent on importing the same services.

07 WEST AFRICA ENERGY intelligence

Wednesday 19 September 2018

C002D5556

marketinsight

Oil hovers near $80 a barrel as concern grows over global supply

O

il neared its highest level this year after a drop in US crude inventories and the prospect of the loss of Iranian supply added to concerns over the delicate balance between consumption and production.

“We think oil market fundamentals are increasingly supportive of crude prices, at least at current levels,” said Gordon Gray, HSBC’s global head of oil and gas equity research.

“While we are not explicitly forecasting Brent to rise to $100 a barrel, we see real risks of this happening. The fact that much higher supply is already needed from the likes of Saudi Arabia - and the low levels of spare capacity remaining - leave the global system highly vulnerable to any further significant outage.”

US crude stocks fell by 8.6 million barrels in the

week to September 7 to 395.9 million, the American Petroleum Institute (API) said, while the US Energy Information Administration (EIA) cut its forecast for US crude output growth in 2019.

Outside the United States, traders have been focusing on the impact of US sanctions against Iran that will target oil exports from November.

“Iran is increasingly

becoming the preoccupation of the crude market.

The last couple of weeks have seen the expected squeeze on Iranian crude flows taking shape, with overall outflows down markedly,” consultant JBC Energy said.

Russian energy minister Alexander Novak warned of the impact of US sanctions against Iran.

“This is a huge uncertainty on the market, how

countries, which buy almost 2 million barrels per day of Iranian oil, will act.

The situation should be closely watched, the right decisions should be taken,” he said.

Novak said global oil markets were “fragile” due to geopolitical risks and supply disruptions.

Should markets overheat and prices spike, however, Novak said Russia could increase its output.

“Russia has the potential to raise production by 300,000 barrels (per day) mid-term, in addition to the level of October 2016,” he said.

That month Russia produced 11.247 million bpd, a post-Soviet Union record-high.

Oil markets were also watching Hurricane Florence offshore the United States amid surging demand for gasoline and diesel, although crude output will not be affected on the storm’s current route.

World oil market entering ‘crucial’ period as uncertainties mount: IEA

T

he International Energy Agency warned that the oil market is entering a “very cru-

cial period” due to uncertainties over Libya, Venezuela and the Iranian sanctions, and said demand in non-OECD countries was proving mostly resilient to currency depreciations.

In its monthly oil market report, the IEA highlighted Venezuela’s continuing decline, attack on the headquarters of Libya’s NOC, and a sharp reduction in Iranian output ahead of the reinstatement of US sanctions on November 4.

And it nudged higher its estimates of the “call” on OPEC, or need for OPEC crude, for the fourth quarter of this year and Q1 next year, to 32.8 million b/d

and 31.3 million b/d respectively, while keeping its annual estimates unchanged.

“The situation in Venezuela could deteriorate even faster, strife could return to Libya and the 53 days to 4 November will reveal more decisions taken by countries and companies with respect to Iranian oil purchases.

It remains to be seen if other producers decide to increase their production.

The price range for Brent of $70-$80/b in place since April could be tested,” the IEA said.

It estimated Iran’s crude production had fallen by 150,000 b/d to a 25-month low of 3.63 million b/d in

August.

Offsetting the worries over OPEC, the IEA said Iraqi production had jumped by 90,000 b/d in August, and with Iraqi exports running at nearly 4 million b/d it had shipped more crude than Iran had produced, this despite an upsurge of public unrest in the southern oil hub of Basra.

On the demand side, the IEA raised its estimate of China’s oil demand growth this year to 640,000 b/d, from 490,000 b/d in its previous report, and said non-OECD demand was by and large proving “resilient” in the face of currency depreciations, though there are risks to that view.

BUSINESS DAY

OPEC Flakes OPEC sees slower 2019 oil demand growth, warns on economy

O

PEC has further trimmed its forecast for 2019 global oil demand growth and said the risk to the economic outlook was skewed to the downside, adding a new challenge to the group’s efforts to support the market next year.

In a monthly report, the Organization of the Petroleum Exporting Countries said world oil demand next year would rise by 1.41 million barrels per day (bpd), 20,000 bpd less than last month and the second consecutive reduction in the forecast.

The report provides further indication the rapid oil demand that helped OPEC and allies get rid of a supply glut will moderate in 2019. OPEC last month said global growth faced “numerous challenges”, although its latest report suggests concern about them has deepened.

“Rising challenges in some emerging and developing economies are skewing the current global economic growth risk forecast to the downside,” OPEC said in the report.

“Rising trade tensions, and the consequences of further potential monetary tightening by G4 central banks, in combination with rising global debt levels, are additional concerns.”

Iran OPEC governor accuses Trump of ‘bullying world’ and oil markets

I

ran’s OPEC governor has blamed US President Donald Trump for “bullying” oil markets and warned of the economic consequences for Europe and Asia from higher prices after crude breached $80/b.

“Oil prices are getting higher in favor of Russia and Saudi Arabia while the US is punishing its allies,” said Hossein Kazempour Ardebili.

His remarks come as

Brent crude breached $80/b in London trading and Europe’s largest bank HSBC warned a spike to $100/b was a risk when US sanctions on Iran, which come into force in November, limit the Middle East producer’s exports.

“The US’ only choice is to appeal to Russia and Saudi to produce more.

They already started in Washington and Moscow, but seems they cannot do more,” said Kazempour.

OPEC’s latest survey of production showed Iranian output already falling, down to 3.60 million b/d in August, its lowest production in more than two years. Meanwhile, Saudi Arabia, pumped almost 10.5 million b/d in the same period.

08 BUSINESS DAY WEST AFRICA ENERGY intelligence

C002D5556 Wednesday 19 September

2018

talking points

In association with

Nigeria’s natural gas market fundamentals strong amid waning investor confidence STEPHEN ONYEKWELU

T

he fundamentals underpinning Nigeria’s natural gas market remain strong but investor confidence is waning because Africa’s largest crude oil producer is failing to spell out clear legal and fiscal regimes to govern the petroleum industry.

Nigeria’s gas reserves are thought to be the largest in Africa at 5.2 trillion cubic metres, according to BP data. Domestic gas production has been steadily increasing over the past decade, reaching 47.2 billion cubic metres last year. That is up from 35 billion cubic metres in 2007.

Aggregate gas demand in Nigeria has remained low, and hard to calculate too, Ed Ubong, the managing Shell Nigeria Gas told Bloomberg in an interview. This is “partly because there isn’t a robust distribution system” Ubong said.

Available data show that Nigeria, with a population of 200 million people consumed 20 billion cubic metres, (about 706.3 billion cubic feet) of gas in 2016, according to government data. That is just a quarter of the 81 billion cubic metres 66.57 million people strong United Kingdom consumed that year, and with just a third of Nigeria’s population, according to data from BP Plc. This shows a market that is largely underdeveloped and poised for growth.

In addition, Nigeria currently flares 700 MMscf/d of gas at 178 flare sites which is equivalent of the total volume of gas used in power production. This results in 20 million tons of CO2 emissions per year.

In 2016, Nigeria lost $800 million to gas flaring, annually, for many years, the country

loses close to $1.15 billion. The challenge it seems, is the absence of political will.

The Nigeria Gas Flare Commercialisation Programme (NGFCP) value proposition is that assuming around 65 percent of the flared gas volume meets a minimum monetisation investment threshold; it could lead to overall investment of $3-5 billion.

Low aggregate demand foreshows growth potential and commercialisation of flared gas represents investment opportunities.

Furthermore, natural gas is plentiful and harder to steal, better for the environment, which can build a robust sector that employs thousands of Nigerians.

Nigeria has taken some first steps to expand its liquefied natural gas capacity by a third, outlining a $12 billion programme to help it keep up with the world’s biggest

producers of the fuel.

Nigeria LNG, a venture involving the stateowned oil company and three oil majors, signed engineering and design contracts for a seventh facility on the nation’s Atlantic coast.

Among the contractors participating are Saipem SpA, TechnipFMC Plc and Chiyoda Corp. A final investment decision could be taken late this year.

Nigeria has joined nations from the United States of America to Australia in increasing output of the fastest growing fossil fuel to help meet rising demand from China to the Middle East. NLNG’s Train 7 would boost production to 30 million tons by 2024 from 22 million tons now.

“Our vision is to be a global player that helps to build a better Nigeria,” Tony Attah, Nigeria LNG’s chief executive officer, said

in London. “We are looking forward to the growth. When I am talking about growth I am talking about Train 7. We have the support we need, we have the support from the shareholders, from the government, from the board of directors.”

Qatar, Australia and the US will probably account for 60 percent of global LNG supply by 2023, according to the International Energy Agency in Paris. Nigeria, which supplied the world with 7 percent of the super-chilled fuel last year, does not want to miss out.

Keeping up will require a huge investment. Train 7 will cost as much as $6.5 billion to build, with another $5 billion to be spent on wells and pipelines needed to supply the plant. Nigeria LNG is seeking $7 billion from the global financial markets for sustainability of its operations and the expansion.