BusinessDay 19 Sep 2019 by BusinessDay

Standard Chartered joins race for Nigeria’s retail banking market SEGUN ADAMS

s lenders vie for Nigeria’s retail market amid a directive to lend more, Standard Chartered Nigeria, local outlet of the London

bank, is mulling expansion in the retail banking space in a bid to boost growth and diversify risk. The corporate-focused lender in an interview with Bloomberg said retail banking would offer an opportunity for expo-

nential growth. “It’s just a logical expansion of our portfolio so the company can be diversified should there be a downturn in other parts of the business,” said Lamin Manjang, the chief executive

officer for Standard Chartered’s Nigerian unit. The bank said the business banking segment within its Retail portfolio is currently small relative to opportunities it sees in that market.

Standard Chartered Bank has a target to raise revenue contributions of Retail banking to its Nigerian business by slightly more than double to 15 percent in the

Continues on page 39

businessday market monitor

Biggest Gainer

Biggest Loser

STANBIC FO N39.95 6.53%pc N16.00 -2.14pc 27,681.61

Foreign Reserve - $42.47bn Cross Rates - GBP-$:1.25 YUANY-N 50.80 Commodities Cocoa

US$2,401.00

Gold

$1,502.80

news you can trust I **THURSDAY 19 SEPTEMBER 2019 I vol. 19, no 397

₦3,629,144.71 +0.44pc

Foreign Exchange

Buy

Sell

$-N 357.00 360.00 £-N 444.00 454.00 €-N 390.00 400.00

Crude Oil

$63.47

I N300

FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

www.

Market

Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

($/N)

fgn bonds

Treasury bills

362.46 306.90

3M 0.02 11.87

NGUS NOV 27 2019 363.97

6M -0.01

0.00

10 Y 0.01

20 Y -0.07

13.20

14.35

14.31

14.48

NGUS FEB 26 2020 364.42

SMEs, traders, supermarkets to be most hit by new charges on deposits threaten financial inclusion set to boost lenders’ profits

Hope Moses-Ashike

igeria’s financial inclusion is at risk, while deposit money banks stand to make huge profits from charges on cash deposits and withdrawal which commenced yesterday

NGUS SEP 30 2020 365.47

Xenophobia: Number of Nigerians evacuated from South Africa now 504 …as 315 returnees land in Lagos

Continues on page 39

IFEOMA OKEKE

Inside CBN issues Approvals-inPrinciple to 3 Payment P. 6 Service Banks L-R: Sergio Pimenta, vice president for the Middle East and Africa, International Finance Corporation; Hafez Ghanem, vice president (for Africa), World Bank, and Vice President Yemi Osinbajo, during a meeting with World Bank vice president at the Presidential Villa in Abuja.

ir Peace, Nigeria’s largest carrier, on Wednesday evacuated 315 Nigerians from South Africa, bringing the total number of those evacuated so far to 504. The first batch of 187 Nigerian returnees had been brought back into the country on September 11. The Air Peace flight with registration number APK 7818 touched down at the Murtala

Continues on page 39

Thursday 19 September 2019

BUSINESS DAY

news L-R: Ngozi Nzegwu, vice-chair, WIMBOARD advocacy committee, Women in Management, Business and Public Service (WIMBIZ); Jordi Borrut Bel, managing director, Nigerian Breweries plc; Janet Adetu, chair, WIMBOARD advocacy committee, WIMBIZ, and Sade Morgan, corporate affairs director, Nigerian Breweries plc, during a courtesy visit of WIMBIZ team to Nigerian Breweries plc in Lagos, yesterday.

56% of NSE 30 firms record decline in profit BALA AUGIE

ver 50 percent of the largest companies quoted on the Nigerian bourse recorded a reduction in profit in the second quarter of the year, a result that validates National Bureau of Statistics’ GDP report that shows a flagging economy. For consumer corporate, those that reported falling profits include firms like Unilever, Dangote Sugar, Guinness Nigeria, Nigerian Breweries, PZ Cussons and Nascon Allied Industries. For the financial services sector, First Bank Holdings, Stanbic IBTC Holdings and Sterling Bank recorded a reduction in profit. For the oil and gas industry, Mobil Nigeria, Total Nigeria, and Oando Oil Nigeria saw fall in

profit. Results of Okomu and Presco (major players in the agric sector) were disappointing while conglomerate giant, Transnational Corporation (Transcorp), failed to impress. However, profit of NSE 30 firms, the list of the most capitalised and liquid firms, increased by 9.18 percent to N661.12 billion as at June 2019, thanks to contributions of the big banks and dominant players in the building goods industry. “An earnings recession is not unlikely, especially for the consumer goods firms. There will be continued pressure on margins. However, the banks can work around the challenges and surmount the headwinds,” said Ayodeji Ebo, managing director/ CEO, Afrinvest Securities Limited. “G overnment ne eds

to free up subsidies and channel the money for capital projects so that business activities can jump-start,” said Ebo. The slow growth in profit validates the protracted stock market routs as lack of policy direction on the part of government and disappointing corporate results forced investors to dump shares and seek safe-haven assets. “If your economy is not growing, foreign investors will dump risk assets to risk-free market,” said Kayode Tinuoye, fund Manager at United Capital Limited. “No matter how cheap bank stocks, the weak sentiment will continue to depress shares,” said Tinuoye. The NSE ASI has lost -11.93 percent since the start of the year to close at a 247681.81 points. However, valuations are cheap and attractive, an

entry point for investors that wish to allot more securities to their portfolios. The price to earnings ratio of NSE ASI Index is 7.19 times, while banks have the most attractive valuations. FirstBank Holdings is trading at P/E ratio of 3.98, Zenith (3.51); GTBank, (4.51); UBA, (2.70), and Access Bank (1.97). The economy has been growing sluggishly since it exited a recession in 2016. The economy grew at a slower pace of 1.94 percent in the second quarter of 2019 (Q2) 2019, according to a recent report by the NBS; that compares with a growth rate of 2.10 percent in the first quarter. Mo re w o r r y i ng, t h e manufacturing sector contracted by 0.13 percent from the 0.81 percent expansion in first quarter

Continues on page 39

Nigerian importers pay more than peers to ship containers from US …excess of $3,500 for 40ft compared to S/Africa …inefficiency, slow inspection processes pile up cost AMAKA ANAGOR-EWUZIE

t costs much higher to ship both 20-foot and 40-foot containers to Lagos ports from Port of New York. Nigerian importers pay freight cost to shipping lines in excess of $2,400 on 20foot and $3,500 on 40-foot containers that are bound for Nigerian ports, a new report by Quartz Africa has found. Much of the high cost of shipping to Nigeria arises from inefficiency at the country’s ports, including slow inspection process by the Nigeria Customs Service (NCS) and other government agencies, leading to longer cargo dwell time. Shipping goods to Nigeria by sea from the United

States can leave a big hole in your pocket, according to the Quartz Africa report titled ‘It Costs More to Ship Goods to Nigeria from the US than Any Other Destination’. According to the report, analysis on overseas cargo and freight costs by MoverDB, an online resource for international shipping, shows that high costs of shipping to Nigeria do not correlate with distance, and shipping from New York to Nigeria is nearly double the cost of shipping to South Africa even though Nigeria is closer. A breakdown of the cost shows that shipping a 20ft container from Port of New York to Apapa, Lagos (Nigeria) costs about $4,982 compared to shipping the same 20ft container to Cape Town www.businessday.ng

(South Africa) which costs $2,542 ($2,440 less). Similarly, it costs $7,436 to ship a 40ft container to Apapa as against $3,795 to ship the same size to Cape Town ($3,641 less). “The slow pace of inspection of cargo means that congestion and bottlenecks are nearly perpetual in Nigerian ports. The ports’ inefficiencies have for years enabled and incentivised corruption from official and unofficial middlemen that clear goods for a ‘fee’,” said the report. A further breakdown shows that shipping a 20ft container to Beirut (Lebanon) from Port of New York costs about $1,943 while 40ft costs $2,900. Also, moving 20ft container from the same loca-

tion to Zayed (United Arab Emirates) costs $1,723 while 40ft container costs $2,572; 20ft container to Haifa (Israel) costs $1,729 while 40ft costs $2,581; 20ft container to Montevideo (Uruguay) costs $1,816 while 40ft costs $2,711. Similarly, shipping 20ft container from Port of New York to Buenos Aires (Argentina) costs $1,993 while 40ft container costs $2,975; 20ft container to Auckland (New Zealand) costs $2,645 while 40ft costs $3,949; 20ft container to Sydney (Australia) costs $2,797 while 40ft costs about $4,175, and 20ft container to Jeddah (Saudi Arabia) costs about $3,086 while 40ft costs $4,606.

https://www.facebook.com/businessdayng

•Continues online at www.businessday.ng

House of Reps sets up ad hoc committee to probe $9.6bn P&ID debt ...urges FG to confer national honour on Onyema ...adopts Air Peace as NASS official airline JAMES KWEN, Abuja

he House of Representatives has set up an ad hoc committee chaired by Sada Soli (APC, Katsina) to investigate the recent judgment debt of $9.6 billion against Nigeria by a UK court in favour of Process and Industrial Development (P&ID) Limited. The House recommended appropriate sanctions where necessary without fear or favour or preference for status in line with Order 14 of the Standing Orders of the House, against those involved in the contract that led to the judgment debt. It further resolved to initiate a process of reviewing all agreements and treaties signed by Nigeria through the appropriate committees to create opportunities to discover anomalies and avoid a repeat in the future.

These resolutions were reached Wednesday during plenary, sequel to a motion on the urgent need to ‘Investigate the Act of Negligence in the Handling of the Process and Industrial Development (P&ID) Limited’s Transaction by the Ministry of Justice and Ministry of Petroleum Resources Respectively’, sponsored by Julius Ihonvbere (APC, Edo). Ihonvbere, while presenting the motion, said the House noted that the recent judgment debt of $9.6 billion (with daily interest accruing) by a commercial court in the United Kingdom against Nigeria, in a matter between P&ID Limited, leaves very sour taste in the mouth. He said that for a country “with a foreign reserve of only $45 billion and a sover-

Continues on page 39

Cocoa farmers see main crop output edging marginally despite flash floods …as harvest commences in October Josephine Okojie

n spite of flash flooding incidents recorded in some key cocoaproducing states in Nigeria, farmers are optimistic that the 2018/2019 main crop output will still rise marginally. The farmers link the marginal increase to a more favourable weather condition in 2018/2019 crop season when compared to that of 2017/2018 season. “The flowering on the cocoa trees has been appreciable even though they are slow in starting and the weather pattern has been good despite records of flash floods in some states,” Sayina Rima, national president, Cocoa Association of Nigeria (CAN), said by phone from his Ikom farm in the South-South region. “If the weather continues like this in the next two months, there is going to be a marginal increase of between 3.5 to 5 percent in our 2018/2019 cocoa main crop output compared to 2017/2018 season,” Rima said. The International Cocoa Association (ICCO) had earlier in the year predicted that Nigeria’s 2018/2019 cocoa production will dip by 10,000MT from 255,000MT in 2017/2018 season to 245,000MT. ICCO had attributed the predicted de-

@Businessdayng

cline to extreme weather conditions. In recent months, Nigeria has been experiencing torrential rainfalls that have caused flash floods in Oyo, Ekiti, Adamawa, Gombe, Bayelsa and Osun States with many more to witness floods following the rise of water levels of Nigeria’s two major rivers – Benue and Niger. The Nigeria Hydrological Services Agency recently said that states in the southern parts of the country will be more affected and this region currently accounts for 95 percent of cocoa crop in Nigeria. However, the recent heavy rainfall in the country does not pose any threat to the country’s cocoa production, says the Cocoa Association of Nigeria. “The pods are doing well and the rains have been falling and if this continues till October we will have a slight increase in 2018/2019 main crop production,” Robo Adhuze, chief operating officer, Centre for Cocoa Development Initiative, said. Adhuze said that the country would have recorded a tremendous increase in the 2018/2019 season if the government had put in measures to boost productivity of farmers.

•Continues online at www.businessday.ng

Thursday 19 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

news VAT: Manufacturers say hike counterproductive

Non-communicable diseases now more alarming, says NCD Alliance

Temitayo Ayetoto

...stakeholders’ engagement, advocacy can curb their rise in Nigeria ANTHONIA OBOKOH

he NCD Alliance Nigeria has raised alarm over increasing cases of Non-Communicable Diseases, (NCDs) among Nigerians, calling for government intervention to stop the spread of these diseases in the country. “The Nigerian government is yet to implement policies against the four major risk factors for the World Health Organisations four main global NCDs, popularly known as four by four,” NCD Alliance said at a workshop it organised recently in Lagos with the aim of strengthening advocacy by civil society and related organisations. The Alliance recognised the four major NCDs as cardiovascular diseases, diabetes, cancer, and trauma, but warned that trauma could overtake the others in prevalence, if urgent measures were not taken to reduce the level of violence across the country. Participants at the workshop pointed out that weak surveillance, inadequate funding for NCDs control and prevention, lack of policies/strategic plans

of action for risk factors, among others, were the constraints hindering effective tackling of these diseases. “We recognise the importance of advocacy in entrenching activities towards prevention and control of diseases at all strata – globally, nationally even at community levels,” said Sonny Kuku, president NCD Alliance Nigeria. “Towards this need, the NCD Alliance Nigeria has played pivotal roles in the past in providing leadership for coordinated action and a united voice on the prevention of NCDs in Nigeria. This can be achieved through effective advocacy and awareness programs organized by relevant stakeholders such as participants gathered here today,” he added. Speakers at the workshop took turns to present papers on the various NCDs, including cancer, stroke, sickle cell anaemia, maternal and child mortality. “Unhealthy, physical inactivity, tobacco, harmful use of alcohol and overweight and obesity are part of the factors to be addressed,” said Kingsley Akinroye, executive director,

Nigerian Heart Foundation. He noted that growing fast food which contains high intake of salt and sugar had made it impossible to tackle the problem of overweight and obsesity. Akinroye said that physical inactivity was also the least addressed in Nigeria, noting that it was unaddressed because the environment is not good for physical activity. He stated that tobacco remained a problem in terms of policy implementations because many of the states were not implementing the tobacco law. “Almost 6 per cent of Nigerian adults (from ages 15 and above) is categorised as smokers,” he said. If these were put in figures, he said they were more than 4 million, noting that smoking was higher among the youths than in the adults. Harmful use of alcohol is also a very serious risk factor, noted. According to him, the prevalence level is about 35 per cent, but more in men than women.” Akinroye contended that overweight and obesity were climbing up in the population, noting that the presence of cholesterol was as high as 40 percent in the population.

www.businessday.ng

ith the new minimum wage yet to be implemented nationwide, Mansur Ahmed, president of the Manufacturers Association of Nigeria (MAN) has advised that the idea of increasing value added tax (VAT) by 44 percent be jettisoned, saying the move will be counterproductive. “We are embarking on our advocacy set on our position which remains that VAT should not be increased,” Ahmed said, highlighting the body’s effort to deepen engagement with the government on policies that impact the private sector during the 48th annual general meeting of the Apapa Branch of the association. He said the organised private sector body was in talks with the Federal Inland Revenue Service chief executive on charting key reforms in the current tax system to ease operational hurdles facing producers. Multiple taxations alongside poor infrastructure are considered among factors preventing the manufacturing sector from achieving full potential, placing Nigeria at 146 out of 190 countries on the World Bank ‘Ease of Doing

https://www.facebook.com/businessdayng

Business’ rankings. As a result of different taxes and overlapping responsibilities between collection agencies, an average of 47 payments is made yearly, consuming an average of 908 hours. “This is indeed most undesirable, considering the fact that the manufacturing sector is undoubtedly the bedrock of any thriving economy and a major provider of jobs and economic growth opportunity,” Ahmed said. “I, therefore, urge that you continue to create and foster a more enabling environment for existing and prospective industries to thrive and make a greater contribution to the state’s economy.” The president who also raised worries over the low level of industrialisation in the country, especially the manufacturing sector, which currently contributes less than 10 percent to the national gross domestic product (GDP) said the state government urgently needs to establish a more efficient consultative mechanism with the association, to ensure sustenance of existing manufacturing companies and the creation of new industries and markets. Stating its resolve to reduce operating challenges, Joseph Onyebu, the chairman @Businessdayng

of MAN, Apapa Branch, said the council would present a road map to Eko and Ikeja electricity distribution companies, with a view to persuading them to place more focus on the industrial areas of the branch by investing massively on infrastructural developments. For him, the importance of a steady power supply, reducing the incidence of multipletaxation, good roads to move raw materials and finished goods between suppliers, consumers and factories in an efficient manner cannot be over-emphasised. In 2018, some adjustments were recorded, with expenditure on alternative energy source in the manufacturing sector slowing down to N49.92 billion in the second half from N51.35 billion in 2017. But Onyebu believes the persistence of these challenges, for instance, limits Nigeria from reaping substantially from the opportunity presented by the Africa Continental Free Trade Agreement (AFCTA). “There is no way we can continue to produce with generating sets. The government needs to provide infrastructure, rails and so on. These things are necessary to make our production a hub in Africa,” the chairman explained.

Thursday 19 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

news

Oil attacks unquestionably sponsored by Iran, says Saudi defence military spokesman … Trump orders new sanction on Iran DIPO OLADEHINDE

audi Arabia’s defence ministry spokesman Colonel Turki al-Malki has said strikes on the world’s biggest oil processing facility in Saudi Arabia, as well as an oil field, which took out about 6 percent of global oil supplies, came from the “north” and were “unquestionably” sponsored by Iran, but the kingdom was still investigating where exactly they were launched from. At a press conference on Wednesday while showing debris from the alleged weapons, Colonel al-Malki said there was no way the strikes could have been launched from Yemen, as claimed by the Iran-aligned Houthi rebels. “The attack was launched from the north and unquestionably sponsored by Iran,” he told reporters. “We are working to know the exact launch point.” Al-Malki said the cruise missiles had a range of 700km (435 miles), meaning they could not have been fired from inside Yemen. He played surveillance video he said showed a drone coming in from the north. “This is the kind of weapon the Iranian regime and the Iranian IRGC are using against the civilian object and facilities infrastructure,” he said, using an acronym for Iran’s paramilitary Revolutionary Guard Corp. However, al-Malki didn’t directly blame Iran for the attack when asked by international journalists. He said once “the culprits” were definitively identified they would “be held accountable”. While responding to the kingdom’s video evidence on

assaults on its oil sites, an advisor to Iran’s President Hassan Rouhani said Saudi Arabia has proved that “it knows nothing” about Saturday’s attack. “The press conference proved that Saudi Arabia knows nothing about where the missiles and drones were made or launched from and failed to explain why the country’s defence system failed to intercept them,” Hesameddin Ashena wrote on Twitter. Also, Yemen’s Houthi rebels, who claimed responsibility for the weekend attack on Saudi oil facilities, said it has dozens of sites located in the United Arab Emirates listed as possible targets for attacks. A military spokesman of the Iran-aligned organisation said the Houthis have new drones, powered by “normal and jet engines” that can reach targets deep in Saudi Arabia. United States President, Donald Trump on Wednesday ordered increased sanctions on Iran, the latest escalation in tensions between the two countries following the attack over the weekend on Saudi oil facilities. “I have just instructed the Secretary of the Treasury to substantially increase Sanctions on the country of Iran!” Trump tweeted on Wednesday afternoon. Trump’s tweet came after Iran warned the United States it will retaliate “immediately” if Tehran is targeted, its state-run news agency reported, further raising Gulf tensions. The new violence in the Middle East has led to fears that further action on any side could rapidly escalate a confrontation that’s been raging just below the surface in the wider region in recent months.

L-R: Aderemi Adewoye, plant manager, Nigerian Bottling Company (NBC) Limited, Ikeja Plant; Olayinka Omotosho, head of ecology and conservation, Lagos State Environmental Protection Agency (LASEPA); Soni Alok, manufacturing operations director, Nigerian Bottling Company (NBC) Limited, and Ransford Nyarko, managing director, Control Union, Ghana, during the presentation of the first Alliance for Water Stewardship Gold certification in Africa to Nigerian Bottling Company Limited (Ikeja Plant) by Control Union in Lagos, yesterday.

CBN issues Approvals-in-Principle to 3 Payment Service Banks HOPEMOSES-ASHIKE & ENDURANCE OKAFOR

he Central Bank of Nigeria (CBN) on Wednesday issued Approvalsin-Principle (AIP) to three Payment Service Banks (PSBs). This according to the regulators was in line with its objective of enhancing financial inclusion and the development of the payment system by increasing access to deposit products and payments services through a secured technology-driven environment. The three institutions issued approvals in principle to operate as Payment Service Banks are Hope PSB, Money Master PSB and 9PSB. This was disclosed in Abuja by Isaac Okorafor, director, corporate communications department of the CBN, who explained that the approval in principle was part of the processes the institutions had to fulfil in order to be granted license to operate as fully-fledged

Sterling Bank earmarks N50bn facility for MSMEs … sets aside N50 billion to meet customer urgent needs

HOPE MOSES-ASHIKE

n line with its vision of impacting lives and developing solutions, Sterling Bank Plc on Tuesday set aside a Business Support Facility for Micro, Small and Medium Enterprises (MSMEs) in the country. Speaking at a press conference in Lagos on Tuesday, Benedicta Sadoh, group head, retail assets and liability with Sterling Bank, noted that the importance of small and medium business enterprises to an economy was enormous. She said this had been confirmed by several surveys and researches conducted by the bank before the launch of the SME Banking Project recently. Sadoh said MMSEs had a lot of challenges to contend with, particularly in the area of access to finance, adding that Sterling Bank had developed the scheme in line with its vision to impact lives and develop

solutions. The Business Support Facility is targeted at businesses that generate cash flow daily and the rental is monthly. The scheme does not have a fixed interest rate because it is based on a digital score card which is a scoring process where information about the prospective customer is used to determine the applicable interest based on his financial worth. The bank has set aside about N50 billion to meet the urgent needs of existing and potential customers in the SMEs space before the end of the year. The Head of SMEs said the scheme was targeted at entrepreneurs who wish to access loans to meet their urgent business needs and is payable over an extended period of 24 months. Sadoh said the maximum amount of loan that a customer with collateral could get is N20 million while those without collateral could get up to N5 million.

Payment Service banks. According to Okorafor, the decision of the CBN to issue the AIP to the applicants followed the institutions’ satisfaction of documentation and other laid-down conditions. Sequel to the issuance of the AIP to the three banks, he said they are expected to submit their respective applications for the grant of a final licence, not later than six months after the AIP. Speaking further, he disclosed that the CBN code of corporate governance for banks would also be applicable to the PSBs. PSB is a payment service initiative proposed by CBN in which Banking agents, Mobile Money Operators (MMOs), Retail chains (Supermarkets), Telecommunications companies (Telcos) who are able to present an initial capital of N5 billion will be given license to operate under the structures and guideline specified by the apex bank, with the motive but not limited to ensuring

access to financial services for the unbanked rural segments of the society. On the 5th of October 2018, the apex released an exposure draft guideline in which it proposed PSB aimed at deepening financial inclusion in a country where only half of its total adult population are included in the financial cycle. Godwin Emefiele, governor of the CBN said in his five-year policy thrust that the ultimate objective of the Bank was to ensure that 95 percent of eligible Nigerians have access to financial services by 2024. He said over the next five years, through initiatives and policy measures such as the Shared Agent Network (SANEF) and the payment service banks, the Apex bank intend to broaden access to financial services to individuals in underserved parts of the country. Latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2percent, meaning that as much 36.8 percent

adults still lack access In the quest to ensure more of Nigeria’s adult population are granted access to financial services, the industry regulator through its collaboration with industry stakeholders launched the National Financial Inclusion Strategy (NFIS) in January 201. Through the initiative, the CBN projected that it would ensure 80 percent of Nigerian adult population are included into the financial cycle by the year 2020. Checks by BusinessDay revealed that at least 30 business names are currently undergoing registration as payment service banks with the functions to: maintain savings accounts and accept deposits from individuals and small businesses, which shall be covered by the deposit insurance scheme; carry out payments and remittance (including crossborder personal remittance) services through various channels within Nigeria; issue debit and pre-paid cards; and operate electronic purse.

24 states, FCT sell above official price as PMS rises 0.3% in August …petrol most expensive in Bayelsa, Cross River SEGUN ADAMS

nly 12 states sold petrol at or below official pump price in August as average price rose 0.3 percent from previous month to N145.5 per litre across the federation. The official pump price of Premium Motor Spirit (PMS) commonly referred to as petrol is N145 per litre but the commodity sells slightly above and below benchmark across the country. While average price of petrol rose on a monthly basis by the most since April, on a

www.businessday.ng

yearly basis the price eased for the 9th straight month by 1 percent, according to Premium Motor Spirit (Petrol) Price Watch published by the National Bureau of Statistics (NBS) Tuesday. The report shows that the product was most expensive in two of the oil producing states in the Niger Delta- Bayelsa and Cross River. Anambra state noted a 0.5 percent decline, the most among the states and the Federal Capital Territory, while price surged most in Kogi, by 2.62 percent. States that sold at or less than the official pump price

https://www.facebook.com/businessdayng

include Akwa Ibom, Bauchi, Edo, Ekiti, Kaduna, Katsina, Lagos, Ogun, Osun, Rivers, Yobe and Zamfara. The states with the least price were Kaduna (N144.68 p e r l i t re ) a n d Z a m f a ra (N144.33 per litre) where petrol has remained below benchmark price since March, and Katsina (N142.50 per litre). Conversely, petrol was most expensive in Bayelsa (N146.78 per litre), Cross River (N146.76 per litre) and Kogi (N146.75 per litre) Across zones, petrol was cheapest in the North West averaging N144.75 per litre ( @Businessdayng

highest in Sokoto and lowest in Kastina), followed by South West where it sold at N145.27 per litre on the average (Highest in Oyo and lowest in Lagos, Osun and Ogun). The commodity was sold for N145.62 per litre in South South (Highest in Bayelsa and lowest in Rivers) and N145.69 per litre in the North East (Highest in Borno and lowest in Bauchi). In the North Central, petrol averaged N145.82 per litre (highest in Kogi and lowest in Benue) while in the South East it sold for N145.87 per litre (highest in Abia and lowest in Anambra).

Thursday 19 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

news

Nigeria moves to achieve SDG of providing legal identity for all by 2030 Jumoke Akiyode-Lawanson

he Nigerian government through the National Identity Management Commission (NIMC) has adopted September 16 of every year as National Identity Day and is taking steps towards the achievement of the United Nation’s Sustainable Development Goals (SDG) 16.9, which aims at providing legal identity for everyone, including birth registration, by the year 2030. Legal identity and birth registration play a primary role in ensuring individual rights and access to justice and social

services. Even if many regions have reached universal or near universal birth registration, globally the average is just 73 per cent, according to the UN. Fewer than half (46 per cent) of all children under the age of 5 in sub-Saharan Africa have had their births registered. Industry players say that adoption of a National Identity Day, and intense efforts to increase the number of Nigerians with verifiable identity is a step in the right direction in the country’s quest to achieve this SDG. Esigie Aguele, chief executive officer of VerifyMe Nigeria, a leading identity verification and work history reporting

www.businessday.ng

company, says it is gratifying to see NIMC take strong initiatives to document Nigerians such as instituting a National ID Day to raise awareness about the important role identity plays in empowering individuals. “As a business within the ID verification space, we are excited at the opportunities this development presents and cannot over-emphasize the benefits to all stakeholders. In the first stance, putting processes in place to ensure that all Nigerians have a legal identity is a key factor in government planning in providing essential infrastructure and services for the citizenry,” he said.

Aguele added that: “As partners to NIMC, we have worked assiduously over the years to help trickle down the organisation’s objectives to the population through public education and the provision of best-in-class solutions that guarantee integrity of the process whether during ID data collection or management. Our Know Your Customer (KYC) solution delivers real time ID authentication with secure last mile verification checks that meet Central Bank of Nigeria (CBN’s) tier 3 and international Anti-Money Laundering (AML) directive standards.

https://www.facebook.com/businessdayng

5 killed, 6 injured in Taraba triple attacks Nathaniel Gbaoron, Jalingo

o fewer than five persons were reportedly killed by unknown gunmen in three different attacks on Tuesday in Wukari local government area of Taraba state. The Council Chairman, Daniel Grace, who spoke to journalists on Wednesday via telephone said six other persons also sustained injuries. “The first attack was in Numa where two people were killed on their farm and two others injured. “In Yoyina, a vehicle passing was ambushed which re-

@Businessdayng

sulted in the death of two persons while two others were injured. “The third attack was in Toshan where another vehicle passing was also attacked and one person shot dead while two others were injured.” When Contacted, spokesman of Taraba state Police command, DSP David Misal, said the police could only confirm the death of three persons from two separate attacks. According to him, “one person was killed when a bus coming from the East was attacked while two other persons were killed on their farms.”

Thursday 19 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

comment is free

COMMENT

Send 800word comments to comment@businessday.ng

Failure of leadership in Africa and the coming anarchy CHRISTOPHER AKOR

t the root of the xenophobic attacks in South Africa and the recent reprisal attacks and looting of so-called South African owned businesses in Nigeria is the failure of leadership and inability to integrate an increasingly marginalised and angry youth population into mainstream society. It is also telling that the effects of this failure are being felt in the two largest economies in Africa. In SA, although the African National Congress (ANC) inherited a badly divided and unequal society, it also inherited a fairly developed and capable state, putting them ahead of other African states struggling to build a capable state. This is based on that platform that many were optimistic that black majority rule will translate into jobs, education and land reparations for the largely black population. It helped greatly, as the ANC under the leadership of Nelson Mandela adopted an ambitious national identity project of a multiracial Rainbow Nation that should unite the country and assure prosperity for all its citizens. Sadly however, that task has derailed and the ANC had damaged its moral and political authority through various corruption scandals and sheer

incompetence. Today, South Africa remains the country with the highest rate of inequality in the world. Unemployment stands at 29 percent with youth unemployment at a world-record of 55 percent. The rate of crime and murder is so high that South African is being referred to as the murder and rape capital of the world. Rather than act to translate its control of government into jobs and education for its people, the ANC bigwigs were content to just inherit the privileges bequeathed by the apartheid state, empowering just themselves and their families and cronies. Under the scandal-prone tenure of the former president, Jacob Zuma, the term “state-capture” was even added to the political lexicon of SA to describe a type of systemic political corruption in which private interests significantly influence a state’s decision-making processes to their own advantage. Coupled with an erratic policing system that victimises and overly violent, you are sure to end up with a very angry and disillusioned black population. The case of Nigeria isn’t any better. It is a country noted for its unusually high level of corruption, lawlessness, impunity and depravity that has never been seen before in governance, aided, no doubt, by the free money coming from oil. Of course, this has consequences for the economy and the well-being of the society. The economy remained largely underdeveloped, oil-dependent, import-dependent and without the capacity to create the jobs to engage its vast youthful population. The last five years have been particularly bad. Economic growth has tanked declining from a high of 6.31percent in 2014 to just 1.9 percent in 2018,

far below the population growth rate. Meanwhile, unemployment rose steadily from 6.1 percent in 2014 to 23.1 percent with youth unemployment reaching an all-time high of 38 percent in the second quarter of 2018. So, both the South African and Nigerian youth remain on the margins of their societies, incapable of playing any meaningful role in the political, economic, social and cultural processes of the society and becoming what a scholar once describes as the “lost generation” – a disempowered, stunted, and now bitter youth with fewer access to the means of becoming adults and their youth at risk of becoming indefinitely prolonged. Faced with these challenges, both political leaders in South Africa and Nigeria have adopted “scapegoatism” as a policy to deflect from their failure to deliver. While in Nigeria, the past administrations and political oppositions are to blame, in South Africa, it is foreign nationals. Through a skilful process of projection by the political leadership, black South Africans have now come to see foreign nationals (black Africans) as the reason for their socioeconomic woes including poverty, unemployment, poor service delivery, lack of business space and opportunities, crime, prostitution, drug and alcohol abuse, and even deadly diseases such as HIV/AIDS. This perception is even stronger among the majority of citizens living in poor townships and informal settlements where they meet and fiercely compete with equally poor African immigrants for scarce resources and opportunities. In Nigeria, youth restiveness takes the form of youth violence and crime.

‘

The case of Nigeria isn’t any better. It is a country noted for its unusually high level of corruption, lawlessness, impunity and depravity that has never been seen before in governance, aided, no doubt, by the free money coming from oil

While crimes like armed robbery and kidnapping have become staples in almost all parts of the country, others – youth and adults trapped in the vortex of “youthness” – are appropriating the space of youth as a means of accumulation and self-expression. In Nigeria’s Niger Delta, for instance, where violent insurgency is shaped by the politics of extraction and rent seeking, remaining a “youth” even when one is above 50 years of age is essential to remaining relevant as violent youth groups have supplanted local or community elders as real sources of power in the oil producing communities. In the north, while Boko Haram and the Islamic state franchises in Nigeria are mainly ideological, they have also not failed to cash in on kidnapping as a means of raising funds to further their insurgency. Currently, state governors in Nigeria’s northwest besieged by bandits and cattle rustlers are busy negotiating and dolling out huge amounts of money to the gangs for some period of peace and quiet as the Nigerian state have failed to arrest the situation. It is not surprising therefore that on the slightest prodding, illiterate youth with no knowledge of happenings in SA descended on South African and Nigerian businesses operating in the same location looting and destroying properties. If we are not to see a fulfilment of Rebert Kaplan’s “coming anarchy” as the way of the future for Africa, its leaders must rise up to the occasion and begin to grow their economies and create jobs for their peoples. Scapegoatism can only work for a while, but ultimately, reality will catch up on all of us sooner than we think.

A sniper-friendly generation: Suicide is ‘NOT’ an option and…it shall come to pass!

our months ago, I complained about the ease with which youths of this generation readily and without much ado, took their lives or the lives of others (Other matters: A death-friendly generation, BusinessDay. 23/5/19). My concern was that it appeared that our general desire to stay longer on this side of the divide, our value for human life and the awe with which we held death, are all becoming things of the past. I illustrated my concerns with five incidents that were “fresh” as at then and asked nobody in particular, “what is happening?” But as things turned out, I had complained too soon! A spate of juvenile suicides, which started in the “white-man’s land” soon became usual in our campuses and other parts of the society. From other parts of the world, a 10-yearold boy from Namibia committed suicide while being urged on by a computer game; a 9-yearold girl committed suicide in Canada because she was bullied by her friends and another 16-year-old Malaysian girl killed herself when she did an online poll and 64 percent of her friends voted for death. Those her friends who voted for death are probably still alive! A 19-year-old Cambridge student killed herself by jumping off a plane because of project-related academic challenges and then, a 13-year-old boy committed suicide because the girl he had a crush on, already had a boyfriend (13-year-old boy killing himself over a potential girl-friend!) When the suicide wild-fire (which is still razing) came calling on our shores, it was like everything we do… in excess. Our undergraduates and youths started killing themselves, because of what those of us who are nearer to where we are going to than where we are coming from, see as non-issues. Our youths committed suicide because they had disagreements with their bed mates, because the girls “ported” to other boys or vice versa and because they had academic challenges- projects, poor results and

several carry-overs. The most recent in my data-base killed himself because he had three “carry-overs” while another killed himself because the mother could not give him N700, now-now! The mother had assured him of the money the following day! 80 percent of the recent undergraduate and youth suicides were mostly due to failed romance, failed projects and failed academic performance and almost all of them used sniper, a harmless looking pesticide as an instrument of suicide. We are now in a sniper-friendly generation! Our youths now found solace in sniperinduced suicide, forgetting that whatever can get worse can also get better (Baldwin). They forget that the main problem is refusing to get up, not falling down; that the route to success is usually narrow, that a road that had no bumps and obstacles invariably led to doom and that the arrow is usually pulled back before being shot forward. They forget that all the big-names they dream to be like had passed through the desert-experience, when they were down and out. They want to learn from their counterparts overseas, forgetting that when the rat jumps into the waters with the lizard, the later will come out dry while it will come out wet. After all, while Dino Melaye has been in and out of court for “attempted suicide”, the Red-Roof Inn in Columbus is unabashedly advertising its “cheap” suicidal suites ($60/day) for those who want “comfortable, quick and relatively painless death.” Suicide is not a youth-only affair and even those who are knowledgeable about such matters are falling into the allure of suicide. As the world was celebrating the world suicide prevention day (10/9/19), Gregory Eells, the executive director of counselling and psychological services at the University of Pennsylvania died by suicide.

www.businessday.ng

It is also not an undergraduates-only affair as a 17-year-old bride in somewhere up north set herself on fire because the groom could not afford the N17000 dowry demanded by her parents. Now, how does setting herself on fire solve the problem? The WHO, worried by the increasing rate of suicide globally (40 suicides per second) has suggested the ban of dangerous pesticides like sniper. However, long before the at last suicide prevention day and the activities that followed it, the OOU, management took a proactive approach to the issue. It organized a five-day programme in July for thousands of students in the four campuses of the university. The programme tagged “Suicide is Not an Option” had the University Management, led by G.O Olatunde, the Vice chancellor in attendance and the speakers addressed the issue of depression and suicide from diverse perspectives: general, sociological, guidance and counselling, medical and spiritual perspectives. The youths were also involved because all the sessions were addressed by Student Unions executives. The students came out in large numbers, offered meaningful feedbacks and gave the OOU management fresh insights to issues that might lead to depression and suicide. The scourge of juvenile suicide is here with us and may not be in a hurry to abate. The “OOU-model” is a useful approach to this challenge but more coordinated and sustainable nationwide efforts are needed by governments, NGOs and religious organisations, which market faith and hope. My advice to youths is that suicide is “NOT” an option. In any case, if one kills himself because of one girl, then he has lost the opportunity of encountering 1001 other girls and very often, the night is darkest just before the dawn. Persevere, share your challenges with the significant others and always remember; you are not alone and…it shall come to pass.

https://www.facebook.com/businessdayng

Other matters: This odd world! This is a very odd world indeed and what is odd depends on the reality of the person interpreting the oddity. The other day, a so-called pastor was doing unholy things with another woman in a public swimming pool and his congregants were cheering them up, taking pictures and mouthing religious incantations. They said it was holy, “holy?” in a holy pool! And just the other day a group of 50 percent naked South African damsels were dancing and dangling these unmentionable things in public and they said it was an exhibition of Zulu culture. Earlier this month, Lilian a mother of 3 and Millicent, a mother of two, exchanged their husband (marital trade by batter) in a queer effort to find happiness! Lilian’s husband had married Millicent, (another man’s wife) as his second wife. Lilian then decided to get even by convincing Millicent’s husband to marry her. They eventually had a reconciliatory meeting and agreed to take it as it is and now, they happily legally married! Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

COMMENT

comment is free

Send 800word comments to comment@businessday.ng

Why Ahmadu Bello called Nigeria a ‘mistake’

ast series, we discussed the ethnic undertones of the 1951 general election and their consequences on Igbo-Yoruba relations. Today, we’ll discuss the 1953 selfgovernment motion which highlighted Nigeria’s north-south fault line and almost led to the break-up of the country. In March 1953, Anthony Enahoro of Awolowo’s Action Group party motioned for Nigeria’s federal House of Representatives to endorse the attainment of independence in 1956 as a primary objective. Azikiwe’s National Council of Nigeria and the Cameroons (NCNC) party supported the motion, but Northern members led by Ahmadu Bello opposed it. Bello suggested replacing “1956” with “as soon as practicable.” Addressing the House, he stated: “It is true that we politicians always delight in talking loosely about the unity of Nigeria. Sixty years ago, there was no country called Nigeria. What is now Nigeria consisted of a number of large and small communities all of which were different in their outlooks and beliefs. The advent of the British and that of Western education has not materially altered the situation and the many and varied communities have not knit themselves into a composite unit.”

Bello dismissed declarations of Nigerian unity as empty rhetoric, asserting that the country’s inhabitants were no more a nation in 1953 than they had been before the British arrived. He then went further, stating that “the mistake of 1914 has come to light.” In his memoirs published a decade later, Bello described his statement characterising the 1914 amalgamation of Nigeria as a “mistake” as the “most important” political speech he ever made. Justifying northern opposition to early independence, Bello argued there had been too few educated northerners at the time. Northern elites feared that if independence came as early as 1956, southerners would dominate their civil service. In their view, this would be dangerous because southerners could not be trusted to do the fair thing. Instead, they would most likely exploit northerners and divert resources to the south, leaving the north ever poorer and weaker. Bello stated, “If the British administration had failed to give us the even development that we deserved and craved so much- and they were on the whole a very fair administrationwhat had we to hope from an African administration? The answer to our minds was quite simply just nothing beyond a little window dressing.” Northern elites trusted the British “to do the right thing” more than they trusted southern Nigerians. Southerners described this as the result of British brainwashing, but northerners argued their mistrust stemmed from real-life experiences with southerners. After northern politicians blocked the 1953 self-government motion, southern leaders accused them of being colonialist lackeys. Northern politicians were booed and insulted

by southern crowds on leaving the House of Representatives’ building in Lagos. The abuse continued throughout their trip back to the north, with angry southerners awaiting them at each train stop. Following this, northern elites favoured seceding from Nigeria and were restrained solely by practical considerations. The north was landlocked and dependent on southern coastal links to transport its goods. Northern elites worried southern leaders might block transportation of goods across their lands if the north seceded. Awolowo threatened as much, saying if Britain let the north secede “we (the west) shall declare our independence immediately and we will not allow the north to transport their groundnuts through our territory.” Groundnuts were a key northern export at the time. Nevertheless, Northern leaders declared an 8-point program entailing de-facto secession from Nigeria, only to be dissuaded by the British who feared a domino effect. At the time, John Stuart Macpherson, British colonial administrator who served as the Governor-General of Nigeria wrote to Thomas Lloyd, Undersecretary of State for the Colonies, warning that “if Nigeria splits, it will not be into two or three parts, but into many fragments.” As a result, AG leaders decided on an “educational tour” of the north to promote their self-government motion. Inter-ethnic violence eventually erupted in Kano, leading to 277 casualties, including 36 deaths - 15 northerners and 21 southerners. After the Kano riots, Oliver Lyttleton, Secretary of State for the Colonies, informed London it was clear the regions could not work together in

‘

“if Nigeria splits, it will not be into two or three parts, but into many fragments”

a tightly-knit federation and Nigeria needed to be decentralised. Constitutional conferences involving Nigerian leaders were held between July 1953 and February 1954. A memo written by Lyttleton to the British cabinet during a heated debate over the future status of Lagos gives us interesting insight into the thinking of Britain’s highest-ranking colonial official at the time. In the memo, Lyttleton described “Hausa-Fulanis” as “Muslims and warriors, with the dignity, courtly manners, high bearing and conservative outlook which democracy has not yet debased.” He then described Yorubas and Igbos as people “with higher education, but lower manners and inferior fighting value, somewhat intoxicated with nationalism, though loyal to the British connection at least so long as it suits them.” Advising the British cabinet on what to do regarding Lagos, Lyttleton wrote: “The north with their deep but already somewhat shaken trust in the British and distrust of their ‘brothers’ in the West and East fear that greater autonomy now suggested for regions will lead to the West seceding when it suits them, especially as the West incorporates Lagos, at once the commercial and political capital and only effective outlet to the sea for the trade and commerce of the North. Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline. com/ Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs, Washington Post and Politico among others. He tweets @ RemiAdekoya1

Nigeria education system: Fixing the learning crisis

ne of the policy goals of Universal Basic Education Road Map for the 2015 – 2020 Strategy is the need to “ensure the acquisition of appropriate levels of literacy, numeracy, manipulative, communicative, and life skills needed for laying a solid foundation for life-long learning.” It’s September 2019, four months before the year 2020. How has the country faired on this particular goal? On August 23, 2019, the leading newspaper in northern Nigeria, Daily Trust, carried a story that caught my attention, “Only 1.5 percent of early grade pupils in northern Nigeria read effectively, says expert.” According, to the findings from a survey conducted by the Nigerian Centre for Reading Research and Development (NCRRD), only 1.5 percent of children surveyed were able “to read and answer comprehension questions.” Its further states that over 72 percent of them cannot read a word in English language. The national average is 60 per cent. The findings by NCRRD helps to put in proper perspective the Human Capital Index (HCI) launched by the World Bank in 2018. HCI conveys the productivity of the next generation of workers compared to a benchmark of complete education and full health by measuring the amount of human capital development a child born today can expect to attain by age 18. According to the HCI, a child born in Nigeria in 2018 will only acquire about 8.2 years of school education, on the average, by age 18. But when the year of school is adjusted for quality education, it was found that a Nigerian student only gets an equivalent of 4.3 years of school. The global and sub-Saharan Africa average is 7.9 and 4.9 years, respectively. Many countries in Africa are doing better than Nigeria! Universal Basic Education (UBE) Act of 2004 provides that every Nigerian child is entitled to

9 years of uninterrupted basic education covering primary education up to Junior Secondary School (JSS) level. However, the World Bank HCI shows that, when adjusted for quality of education, a Nigerian child in JSS 3 will have only had school education equivalent of what is expected of a child in Primary 4. According to the UNESCO Institute for Statistics, the 2018 global average pupil-teacher ratio is 24 pupils per teacher while Nigerian average is 49. Nigeria faces the most significant shortage of teachers in the world, accounting for about 12 percent of the global total. The quality of teachers is poor, with unqualified primary teachers exceeding 40 percent of teaching staff. Early childhood education practically does not exist. Governments at different levels are very good at constituting committees which write beautiful reports with lovely recommendations, but the execution is always the problem. There is no doubt that that the governors and Commissioner for Education in different states lack a full understanding of how to fix the issues facing our primary education system. Furthermore, the re-appointment of Adamu Adamu, Minister of Education back to his position as the Minister of Education after four years of what I call inactivity is a rude shock, and one wonders if the President has any vision or plans for the educational sector at all. One thing is clear; the issues bedevilling our educational system cannot be fixed in isolation. Therefore, there is an urgent need to declare a national state of emergency on education in Nigeria and the federal government must take the lead in driving the process. A well-coordinated and centralised national emergency task force with the federal government at the forefront will help to drive funding and other resources

www.businessday.ng

to deal with the issues decisively. Teaching cannot and should never be the last result for people who could not find jobs in the private sector. The government must make concerted efforts to retain the best graduates in English language, mathematics and sciences to teach. These people must be adequately trained, especially in early childhood education techniques. Beyond recruiting the best, training and retraining teaching staffs, there is also the issue of motivation. Currently, many teachers do not show up in school, and even when they do, they are either selling wares or using the students to run personal errands to make extra money. Teachers must be motivated with different incentives; for example; the government must ensure that teachers are adequately paid so that they are focussed on teaching. Learning requires a conducive atmosphere, so Nigeria needs to increase investment in school infrastructure significantly. Building classrooms and increasing the number of desks as many governors have celebrated over the years is not enough. Other school infrastructures include well-equipped libraries, laboratories for the science practical, open fields for games, games equipment, dormitories, sanitation facilities and others. Physical Education and extra-curricular activities have now been relegated in so many schools. The fact that a school lacks decent toilets can harm learning. A recent study from the United Kingdom found that environmental and design elements of school infrastructure together accounted for about 16 per cent of the variation in primary school’s academic progress. The study explains how three major factors - naturalness (e.g. light, air quality), stimulation (e.g. complexity, colour), and individualisation (e.g. flexibility

https://www.facebook.com/businessdayng

BISI OGUNWALE of the learning space) - considered in school infrastructure design of primary schools have significant effects on the learning outcomes of the pupils. Although Nigeria is currently underfunding education at all levels of government, policymakers must do an audit to evaluate the effectiveness of the different educational policies they have formulated over the years. If government prioritise monitoring and evaluation of its budget spending on education, we will begin to see the enormous implication of not following through on every milestone in the goal. Instead of moving forward from where we were in 2015, the educational system has gotten worse. When I compared the quality of education received by my parents to what I received and how the current education system in Nigeria is, it is unfortunate to note that in Nigeria, with every generation the level of education keeps falling. Meanwhile, other African countries like Ghana, Rwanda, Ethiopia are recording significant progress in improving the productivity level of their citizens. As President Muhammadu Buhari goes into his second 4-year term in office, I hope that he will task his education minister to put together the foundation towards building a more educated and productive country. Bisi Ogunwale is a public policy analyst.

@Businessdayng

BUSINESS DAY

Thursday 19 September 2019

EDITORIAL PUBLISHER/CEO

Frank Aigbogun EDITOR Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

Brain Drain 3.0: The exodus that’s not being televised

growing number of young, educated and employed Nigerians plan to leave the country, are in the process of migrating or are either researching their options (Canada is favourite destination) or saving money towards it. Ask any young Nigerian doctor these days who among her colleagues is still in the country and she’ll most likely say she’s leaving next week. In a recent survey almost half of the Nigerian adults (45 percent) interviewed said they planned to move to another country within the next five years, according to Pew Research Centre, a polling and research organisation based in the US. Not only were Nigerians the highest among nationals of 12 countries from over four continents, the proportion of Nigerians planning to relocate has increased by 7 percent since the last survey in 2017. Most plan to move to the United States. And the three major reasons for moving are “to find

better educational opportunities”, “to find better job opportunities” and “to escape violence”. Education, jobs and security are three interrelated challenges facing Nigeria. A bulging uneducated and unemployed youth population is a dangerous concoction and one of the major reasons for unrest across the country. Bright young Nigerians in search of better education, jobs, and peace, because they don’t see any immediate nor remote solution to these problems are checking out. Call it Brain Drain or Exodus 3.0. No advert, reality T V show or viral video will broadcast this trend. To rephrase the song of Gil Scott-Heron, the American poet, musician and author: This exodus will not be televised; it’s live and happening every day. No TV commercial like the Andrew Don’t Check Out in the 1980s can stop this exodus. Even if government attempted a campaign blitz to discourage migration it can neither outspend nor drown out the multiple sources of information about green-

er pastures awaiting intending migrants. Stories like that of Tanitoluwa Adewunmi, the eight-yearold chess pro dig y, will probably see more wives pestering their husbands to quit their well-paid job with a multinational company in Nigeria in order to give their children a similar opportunity. Even if they have to sacrifice the middle-class lifestyle they enjoyed in Nigeria. Each passing day people are finding more reasons to leave the country. Both the available human and financial capital required to turn the tide of migration are impatient amid the slow and uncertain pace of the economy. The present state of the economy and doubts about whether the next four years will be any different from the last is quenching the hopes of many and discouraging new investments. Without a clear signal on the economy’s direction, companies and individuals don’t have the time to wait-and-see anymore. As a result, the incurably aspirational Nigerian has concluded to take his

dreams elsewhere –whether legally or illegally. Once intrepid and optimistic investors are either reducing their stakes in the country or have shutdown. Three quick things can be done to dampen the increasing eagerness to migrate. Accelerating the transition of the economy to a pro-growth phase will jump-start economic growth. Ending the multiple foreign exchange regimes will signal willingness for reform and attract more patient capital to revamp power, transport and other infrastructure. And finally, a committed plan to phase out the petrol subsidy that has cost Nigeria N7 trillion in the past four years will gradually free funds sorely needed for human capital development : education and health. Economic growth matters but it must be broad, even and consistent. In the survey Pew Research Centre conducted in 2017, more Ghanaians than Nigerians wanted to leave their country for greener pastures even though Ghana was one the fastest-growing economies that year.

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi

ENQUIRIES NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

ADVERTISING 01-2799109 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 LEGAL ADVISERS The Law Union

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

OUR CORE VALUES

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Thursday 19 September 2019

comment is free

COMMENT

Send 800word comments to comment@businessday.ng

The harvests of the August meeting THE PUBLIC SPHERE

CHIDO NWAKANMA

ven as we have long left August 2019 behind, a few communities would still hold their August meetings up to the end of September. The transformation of the August meeting from an activity with a fixed timeline in the calendar to a generic one is one of the significant changes ongoing with this contribution of Ndigbo women to the meetings and conventions ecosystem. There is much more ahead only if the stakeholders think scale and impact in larger spaces. We canvassed in 2018 the need to make the August meeting a more prominent event and communication platform. A few groups held meetings that cut across local governments and towns. It is the way to go. We await the fruits of the August meetings in reports of the critical decisions and their implementation. The August meeting of the women should grow in scale and significance for the valuable contributions the women continue to make in Igboland. They are usually a force for good, particularly in the area of peace-making.

The August meeting is noteworthy for several positives. It is one of the largest conventions in the world, holding simultaneously in many locations across the states of the South East. Some other persons would celebrate even the mere fact of the scale of this annual event that the Meetings Incentives Conventions and Events (MICE) industry ought to take into its calendar once organised convention-style. The August meeting aggregates the development visions and agenda of Igbo women, both elites and the rural folks. It stands on existing communal democratic decision-making models. The Igbo are individualistic, yet collective and take decisions for the common good at open forums where all votes count. There is no preferred stock. Their highly educated daughters are furthering the cause of community development from their new homes as wives and mothers. The involvement of the sophisticated daughters of Igboland has raised the stakes and profile of the August meeting. They used to stay away and look askance at the ordinary folks who participated. Their involvement has brought cosmopolitanism in better-organised events. It brought a downside inevitably in the fashion contests that ensued, a regular occurrence where women gather. Unfortunately, lazy Nollywood writers picked on the downsides of the August meeting and demonised this vital platform for community development. That narrative of a negative for the August meeting needs to change to a rediscovery of its essence and utility. At the August Meeting, women of Igboland focus on community develop-

ment projects. They tackle their projects or contribute to the ones outlined by the development association of the village, town or broader community. It is Akurueulo in practice. Their forebears played critical roles in the struggle for independence, including taking on the colonialists in the Aba Women’s battle. With the August meeting, Igboland is reaping from the contributions of its large body of educated females and the foresight of the Igbo in educating women and tapping into this highly productive and replicable human capital. It strengthens the Igbo experience and skillset in running community development organisations. The United Nations system in Nigeria has admirably promoted the recognition and involvement of community development associations in grassroots development. Ndigbo were pioneers in driving growth using community associations. They built schools, gave themselves boreholes, electricity and such. It is time to scale up and to modernise. The call on the educated women increasingly involved in the affairs of their development associations is to turn this forum into a more focused development agency. The August meeting must resume its developmental urgency and walk back from a creeping elite flamboyance and exhibitionism. It must be depoliticised, from village to state and regional levels. The women should think of organising the August meeting across tiers. The traditional village level one, followed by one of kindred communities, local government to state-level events. They can however, have the South East-wide August meeting rotated annually among

‘

Igboland is reaping from the contributions of its large body of educated females and the foresight of the Igbo in educating women and tapping into this highly productive and replicable human capital. It strengthens the Igbo experience and skillset in running community development organisations

the states. The South East August meeting would be a high impact cultural event with influence on politics and economy. This event should be such that it brings the Igbo and their local and international friends to savour their artefacts, exhibitions and various aspects of culture. It should attract sponsorship of corporate bodies and stakeholders in the South East. Governors are welcome to sponsor. The August meeting at every level should now work with what serves as the Women’s Wing of our town unions to become a gender-based NGO or CDC. They would register with the relevant government, international and multilateral agencies. They would define areas of focus and seek support and collaboration. They can become community development corporations, for instance, which are “non-profit, community-based organisations focused on revitalising their locations and neighbourhoods”. CDCs can drive investments in various areas including agriculture, health and social services. We shall listen to the women of Igboland in August. With the recent exploits of one of their kind, President Kolinda Grabar-Kitarović, the fourth and current president of Croatia, at the World Cup, many ears would eagerly listen to what our women have to say and do.

Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Ikpeazu and the Ariaria traders’ tale

rom the beauty of the main entry point, the famous Faulks road, with the well-paved pedestrian walkway and the concrete median that have helped to control traffic, there is a sense of order and decency that bespeak of the new Ariaria international market in Aba, Abia State. There is also a memory that has disappeared – the haunting spectre of the flood of Ukwu Mango with its accompanying debris and refuse heaps. There is also the almost nightmarish memory of nagging motorists, barrowpushers and commuters struggling for space on the road and the daily chaotic drama. All these are things of the past. The orientation and the atmosphere are new. However, this is not the Ariaria Traders’ tale. The story of Vivian Achuonu captures the tale of the Ariaria artisans and traders. Achuonu is the business owner of Mummy Baby Communications, dealers on phones and telecommunication gadgets, whose shop is at 63 Lock-up Shop, A-Line. Achuonu is happy and grateful to Okezie Ikpeazu, governor of Abia statefor being a beneficiary of a great vision and initiative of the governor that have turned life around and engendered a new lease of experience in the way and manner of doing business at the international market. She, like many others, is enjoying uninterrupted power supply, kudos to the Ariaria Independent Power Project, powered by the Ariaria Market Energy Solu-

tion Limited (AMES), a public-private partnership project between the state government, federal government and the Rural Electrification Agency, an arm of the federal ministry of power. “Our business has improved. We enjoy uninterrupted power supply from 7.30am to 5pm. Power was a major challenge for us in this market. But, now with the power plant, the problem is solved, we shall remain grateful to Governor Ikpeazu,” declared Vivian Achuonu. Micheal Amaku, business owner of M&C Boss Limited, former vice chairman of Ariaria International Market Association (AIMA) and a dealer in suits and governor Ikpeazu for attracting this project. Now, we can use all our gadgets in the market, including music equipment and CCTV. There is a lot of advantage in the Independent Power Project. It is efficient and effective, and the price is affordable. We are so comfortable with their tariff. We used to pay N4000 weekly to some private generator plants, but with this new one we pay N2000. It has made our business easy. Our governor is a man of vision,” he affirmed. Chika Eze produces leather materials like bags and belt. His story is that of eulogy and thanksgiving to governor Ikpeazu for the vision of the power project which, according to him, has consolidated his Made-in-Aba promotion drives and assisted new business start-ups in growing. “Power was a major issue here for us. From the shoemakers and leather workers and other artisans, our story is the same. But, this singular effort of the

www.businessday.ng

governor has changed our narratives in the way our business is done here at Ariaria. We now work round the clock without any hindrances,” he said. Indeed, the Ariaria Traders’ tale is a ringing endorsement to visionary leadership. It is both a commendation and a justification for a leader, who, from onset, has remained passionate about fostering a new orientation in the Aba artisanship economy – a very vibrant economy that many stakeholders neglected for long. For governor Ikpeazu, the Ariaria Market Energy Solution (AMES) is one of the critical vehicles for driving the state’s policy of promoting Small, Micro and Medium Scale Enterprises (SMEs); a successful adventure that has become one of the major signposts of the administration and for which he has received plaudits from all concerned. There is a sense in which the Ariaria Traders’ Tale is not only a lullaby of victory for the leader but also a measure of the collective sentiment of acceptance and contentment with the creative metamorphosis of Abia in the hand of the teacher-governor. The pilot phase of the Ariaria Market Energy Solution Limited started in 2017 at the A-Line section of the market. Later, the government approved for the construction of the permanent site of the plant. The power plant was eventually commissioned on the 29th January 2019 by President Muhammadu Buhari, with a total capacity of 9.6 megawatts. Kelechi Nwankpa, system operator of the plant station, disclosed that the company

https://www.facebook.com/businessdayng

GODWIN ADINDU

started with two megawatts. Even with many shops that have hooked up to the grid, the consumption is still not up to 1 megawatt. “The reason is that the market is not fully integrated into the power grid. The station can serve the entire community beyond the market. It’s a gas-flared power, not just gas but Compressed Natural Gas from Total Support Plant, Eleme, Port-Harcourt,” he said. Last line: the vision of governor Ikpeazu AMES is to ensure uninterrupted power supply to all customers, Aba artisans and traders at the Ariaria International Market. From the testimonial of beneficiaries, governor Ikpeazu has scored a big pass mark. There is a new orientation and a unique atmosphere of business at Ariaria. Come, let’s visit Ariaria. Adindu is the director-general of the Abia state orientation agency.

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

BANKING

Africa’s non-interest lenders to perform better as sukuk issuance gains traction – Moody’s ISRAEL ODUBOLA

lobal credit rating agency headquartered in N e w Yo r k , Moody’s Investor Service, has said that African Islamic banks will continue to perform well and sukuk issuance in the continent will keep expanding steadily to fund sovereigns and financial institutions. Moody’s asserted that the expectation is supported by global investors’ growing comfort with Islamic instruments, and foresees sukuk issuance in Africa to increase robustly in the next 18 months. According to Moody’s, non-interest lenders operating in economies with deepened financial sector such as Nigeria and South Africa will benefit more from growing issuance of sukuk. “Islamic bank performance in large African banking system should remain robust over the next 12 to 18 months,” said Akin Majekodunmi, Vice-President at Moody’s. “And Africa’s large Muslim population, which is predominantly unbanked or underserved, will continue to provide solid foundation in which Islamic banking assets, and thus

earnings can grow rapidly.” Majekodunmi added. Islamic banking is a system based on the principles of Sharia law which prohibits banks from collecting interest on credit given to borrowers. Nigeria through the Debt Management Office (DMO) floated its 7-year debut N100 billion sukuk in 2017 to raise funds to close the country’s huge infrastructure gap. The instrument gained traction in the capital market as it was oversubscribed by 6 percent even as over 1, 000 retail investors showed interest. Towards the tail of last year, the state-funded agency on behalf of the Buhariled administration raised another N100 billion sovereign sukuk to fund 28 projects across the country including Lagos-Ibadan expressway and Second Niger Bridge. Sukuk like conventional bond provides investors with payment stream. Sukuk investors receive profit generated by the underlying assets while bond investors get periodic interests. But the difference is that while the former involves asset ownership the latter is a debt obligation. Morocco issued its first $105 million sukuk in 2018 which was oversubscribed nearly four times. According to Moody,

structural factors such as legislative complexity and time associated with sukuk issuance, especially for new issuers and the need to identify physical collateral (for example, infrastructure projects) to support the sukuk mechanism, are constraints to Africa’s sukuk markets growth. “Nonetheless, we expect robust issuance in African sukuk as more African sov-

ereign seek to diversify their funding base,” it said, adding that Egypt, Algeria and Sudan have showed interest to issue the instrument. Few months back, the continent’s third-biggest economy set up a Shariah supervisory committee to oversee issuance. Given Moody’s position, Nigeria’s pioneer non-interest lender, Jaiz Bank, might

see earnings numbers surpass expectations. Amid the paucity of noninterest banking liquidity instruments, the lender saw profit hit a four-year high of N815.6 million in the six months through June 2019, driven by a surge in investment income. In the first six months, the lender invested about N18 billion in a 7-year Fed-

eral Government sukuk with 15.74 return. If the trend is maintained going forward, the lender is on course to deliver profit in excess of N1 billion in the next comparable period. Jaiz Bank paid N1.2 billion in profit to investment account holders, bringing its share as an equity investor to N4.5 billion, double of last year.

L-R: Ahmed Yerima, playwright; Adenrele Sonariwo, director, Rele; Ojoma Ochai, director programs, British Council, and Yinka Iyinolakan, head communications, Nigerian Economic Summit Group, at the Jury Selection Session for the 2050: Nigeria of our Dreams Art Contest, organized by the NESG in Lagos.

PENSIONS

IEI Anchor Pension’s assets under management grows 35% MODESTUS ANAESORONYE

ension Fund Administrator (PFA), IEI Anchor Pension Managers Limited has achieved a 35 percent growth in asset under management (AUM) in 2018 to N92 billion from N68.2 billion recorded in 2017. Jo n a t h a n Zw i n g i n a, chairman of the company who made the disclosure during its Annual General Meeting (AGM) in Abuja said the Company maintained its growth trajec-

tory, as her Retirement Savings Accounts also grew from 117,031 in 2017 to 131,047 in 2018. Operations of the company, he added ran smoothly, leading to a general growth in the company. He noted that the management of its PFA is committed to ensuring that strategies put in place are driven to continually grow the company, promising customers constant engagement and satisfaction as well as working tirelessly on delivering to its share-

holders and stakeholders. Glory Etaduovie, managing director/CEO said its fees earned increased from N661million in 2017 to N774million in 2018, representing a 17 percent growth. To him, “RSA Fund Unit price (now Fund II) grew from N2.21 billion in 2017 to N2.42 billion in 2018, a growth of 9.62 percent, while Retiree Fund Unit Price (Now Fund IV) grew to N2.85 billion, a growth of 11.44 percent during the year under review. Profit after Tax, he said, in-

creased from N1.4 million in 2017 to N34.01 million, a growth of 2329 percent in 2018.” Etaduovie noted that 2018 performance was targeted at driving and ensuring customer satisfaction, noting that the Customer Service Center at its head office was given a major face lift to make it more welcoming and comfortable to its clients, among other initiatives. In 2019, he said the Pension Fund Administrator (PFA) intends to continue in its quest to satisfy its numer-

ous customers with a wider market base, while increasing the use of technology to reach and serve them. “Hence, our theme for 2019 is Inclusion and Digitisation. We intend to bring everybody on board by reaching out to every segment of the economy. We will be relying more on technology to achieve this goal,” he stressed. On the outlook of the company in the current year, Etaduovie said, his PFA intends to key into this expected growth opportunity in the economy, by

enhancing its digital reach, deepening its market and increase its physical presence in key locations. “We expect lots of new initiatives in the industry in 2019, as there was quite a number of such the previous year, some of which would have a resounding effect in 2019. We will continue in our strive to meet all of such demands, by deploying measures to meet them, while improving on our capacity and strategies that would help us to become pacesetters in the industry,” he pointed out.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Thursday 19 September 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

TECHNOLOGY

Apple battle EU in court over $14bn tax charge OLUFIKAYO OWOEYE

orld’s biggest company by market capitalization, Apple, has vowed to challenge a $14bn tax charge it got from the European Commission in 2016. The Commission made the order in 2016, arguing that tax rulings in Ireland from 1991 and 2007 had massively and artificially reduced Apple’s tax burden for over two decades, a claim which the maker of iphone vehemently denied noting that it had always fol-

lowed Irish and U.S tax laws. Ireland’s low tax rate has attracted several multinationals into the country. EUcommissioner,Margrethe VestagerorderedApplein2016to payback $14.3 billion to Ireland, because Ireland reportedly had cut deals over the years that allowed Apple to avoid Ireland’s 12.5% corporate tax and instead pay rates as low as 0.005%. Apple only registered its sales in Ireland instead of the actual territories. As a result, the company escaped corporate taxes. The European Union alleged that Apple created an “artificial” profit

arrangement by redirecting profits to a “head office” in Ireland that only exists on paper. As a result, the European Commission ordered Ireland to recover $14 billion worth of taxes along with interest for the period between 2013 and 2014 Last week, the tech giant, Apple, launched a slew of products which caused widespread enthusiasm among buyers and investors. The company unveiled its latest iPhone11, the latest iPad, Apple Watch 5. Apple shares traded at $219.89 at 2.32pm on Tuesday with a one year return up by 2.52percent.

L-R: Abubakar Umar, sole administrator, Arewa Local Government Area; Ibrahim Hassan, representing emir of Argungu; Aminu Umar, acting permanent secretary, ministry of water resources and rural development/representing the governor of Kebbi State; Sanusi Ohiare, Representing of CEO/MD of REA/ executive director, rural electrification fund, and Musa Maina Jantuliu, district head, Kare Community, during the commissioning of 98.8kw Solar Hybrid Power Plant of Federal Government’s initiative under the Rural Electrification Agency at Kare-Dadin Kowa Community, in Arewa Local Government Area of Kebbi State on Tuesday. Photo: Rural Electrifictaion Agency (REA)

MD Perspective partners UAEC to strengthen distributive trade, service industries KELECHI EWUZIE

etermined to provide economic and commercial bridges between local and international investors in the distributive trade and service industries, MD Perspective Nigeria Limited has partnered United Asia Exhibition Company, China to host four different B2B exhibitions in Lagos. The exhibitions scheduled for the 4th to 7th November 2019 would include four business events which are the International Automotive Parts, Equipment and Services Trade Fair (AutoEquip), Nigeria International Textile Industry Fair (NGTEX), The Home Show Nigeria and Premium Mechatronics Brand China (PBC). Morenike Dele-Alimi, managing director, MD Perspective Nigeria Limited says Distributive trade and service industries (DTSI) account for a substantial proportion of

economic activities in every country and any effort targeted at adding value to the sector should be welcomed. Dele-Alimi while speaking at a press conference to announce the exhibition observes that with our population size and the corresponding size of our economy, Nigeria remains an attractive investment destination for global businesses. According to Dele-Alimi, “These exhibitions would focus primarily at big and medium size Nigeria distributive trade and service sector practitioners and they would be able to meet Chinese manufacturers and business people from these four business areas, who are desirous of doing business in our country”. Dele-Alimi opines that these exhibitions will provide economic and commercial bridges between local and international investors and provide platforms to broaden the horizon and

scope of investment opportunities for Nigerians. She further pointed out that need to go beyond the way exhibitions are usually held in the country as foreign business counterparts had a need to converse with people and not just show off products, adding that the exhibitions are meant to be continuous and not one-off.

Continue online @www. businessday.ng

L-R: James Shindi, managing director, Brevity Anderson/NIPS; Timipre , Nigeria minister of state for petroleum resources, and Folasade Yemi-Esan, secretary ministry of petroleum resources, after Nigeria International Petroleum Summit(NIPS) briefing in Abuja recently.

DEALS

Printfactoryng strengthens branding offering with Amrod partnership IHEANYI NWACHUKWU

rintfactoryng, Nigeria’s number one one-stop online print shop has announced partnership with African’s topmost branding outfit Amrod, which further consolidates its position as the leader in the print industry. Dare Bakre, director at Printfactory said that the pact with Amrod was borne out of the outfit’s quest to further cut turnover time to the shortest in the industry and extend its quality offering for clients. “Our position as the best in the industry is based on quite a number of factors, out of which our turnaround time plays a huge part. Our recent pact with Amrod means that we can further deliver on quality branding briefs at almost half of the best possible delivery time anywhere”. He said while hosting Gary Nelson, Amrod’s Business

Development Manager at their Lagos office last week. Dare, says the company vision to be the number one branding choice for start-up, small and medium scale business has spurred it to develop differentinnovativeofferingsthat seek to meet the demands of the fledging business on-the-go. “Branding and communication needs of start up, small and medium sized businesses are what we are primarily out for. These needs come with request for quality, innovative expressions on vast arrays of surfaces and delivered at the best possible time.” He emphasised that Printfactory portal is fully automated and has eliminated middlemen in the process, which makes it the simplest interface for branding demand to be met in the country. Continue online @www. businessday.ng www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

BUSINESS TRAVEL NAHCO is diversifying operations to improve revenue, profitability – Lasisi Prince Saheed Lasisi is the group executive director for business development commercial, Nigerian Aviation Handling Company PLC (NAHCO). His role entails the entire commercial activities of the group, including the business of the subsidiary Companies which include the Mainland Cargo Options (MCO), the NAHCO Free Zone (nfz) and recently, the NAHCO energy and power. In this interview with IFEOMA OKEKE, he speaks on how the company’s transformation agenda will not only boost its revenue but provide exceptional services to its clientele. Could you explain some of the subsidiaries under NAHCO? e have developed subsidiaries to grow the company’s revenues and profitability. The Mainland Cargo Option (MCO) is the freight forwarding arm of NAHCO, where we target airlines. The strategic plan is to also expand into maritime through the MCO. The business is about transport basically which include air, land and sea. Currently, we are in the air and we also plan to go to land and sea. The Mainland Cargo Option is set up to pursue this objective. Which one of these subsidiaries generate the most revenue for NAHCO? Most of these subsidiaries are recent initiatives and it takes time for them to grow. NACHO still gets 90 percent of its revenue from NAHCO Plc. We handle about 35 airlines and that is where the chunk of the revenue comes from. Apart from aircraft handling, we also have cargo handling as well. The cargo business is imports and exports. These are basically the two major income streams coming into the company. The free zone is also doing very well. The MCO was set up in 2014 and it is growing in leaps and bounds. I am sure that in 2020, we will have achieved doing business in the land and sea. What we are planning to do, is to structure the company in such a way that 40 percent of the revenue comes from NAHCO subsidiaries, so that we can diversify. NAHCO realised revenue of N9 billion last year. So, what are you doing to increase the revenue this year? We are working to make sure that the revenue is substantially higher than that of last year but we also have to bear in mind the economic activities in the country. About seven years ago, a lot of people shipped their goods through the air because they want their cargo to come in quickly. For maritime, you wait between six to seven weeks for your goods to arrive, whereas in 48 hours, cargo arrives by air. However, as a result of the economic downturn, companies began to look at cost control measures. Basically, a lot of the goods that came by air before are now being transported through the sea because a lot of people are trying to save cost. This is, however, impacting our revenue and there is nothing we can do

Saheed Lasisi

about this. So the economy is a determinant of our revenue. However, those subsidiaries that were set up, this year I am sure they will do more than they did last year in terms of revenue and profitability. The cargo volumes have reduced because 30 percent of the cargo that used to come in have gone to the seaport. People now import computers and printers through the seaport. Aviation has its own cost which is very high. The recession has caused a dwindling of activities on the airside. Even the airlines are affected. An airline was complaining to us recently that they have an aircraft with 100 tonnes capacity but for the past weeks, they have not done up to 60 tonnes. Once someone is doing five flights a week and he now reduces to two flights, even the revenue for the government agency will be affected. So, this is a collective problem in the industry and this is the reason why we are diversifying. Part of our strategic plan is also to look at other African countries we hope to render this kind of services to. Since your group MD came in, she has been stressing on transforming the company. What is this transformation really about? The transformation objective is basically on five points, some of which include the digital transformation, people and culture, www.businessday.ng

amongst others. This is in a bid for us to do business differently from how it was done before. This is to make sure our processes are in line with international standards. KPMG has been with us for some time now and they are driving that process to ensure that everyone has a good knowledge of where the company is headed. We are getting the right people, renewing our equipment and engaging in digital transformation. All these are embedded in NAHCO’s five-pillar objectives. A few months ago, I learnt there were new equipment you were bringing in to facilitate business activities. Have those equipment arrived? Some of the equipment are in use as I speak to you. We have bought eight new forklifts to enhance cargo operations. We have a good number of pallets because these are what they use every day to ensure the cargoes coming in are being processed immediately. We have invested close to N1.5billion so far on equipment and they have started arriving. On the aircraft handling, we have bought pushback, tractors, passenger steps and ground power unit amongst others. All these equipment have arrived and more are coming in batches. About 60 percent of the equipment we are looking to acquire are here

https://www.facebook.com/businessdayng

already and about to be deployed to support the operations. Majority of the forklifts have been deployed already. What is the current nature of competition in the industry? Currently, we know that four to five people have the licences to operate but it is a duopoly in the market, which are NAHCO and SAHCO. Currently NAHCO still does over 65percent of the business. And that is undisputable. What is setting you apart from the major competitor in the market? NAHCO started 40 years ago. Being the pioneer, in terms of certifications, most foreign bodies and regulators come to NAHCO. The history of NAHCO is tied to government and foreign airlines, which were the original owners of NAHCO before the government sold their shares in 2005. So the foreign airlines still prefer to patronise us because they know we go through the international process of ground handling. We are the only one with the EU Regulated Agent Third Country (RA3) certification; that means anything that is going to European Union must pass through our warehouse in terms of export because we have all the required equipment including the Explosive Trace Detection (ETD). Once anything pass through our warehouse and the checks are done, EU will allow it to pass through their region. So, a lot of the airlines come to us because we have this certification. I hear airlines pay an incredibly low amount for the services ground handlers offer. How are you looking at tackling this challenge knowing that you have a competitor who may be ready to offer the same amount or less to them? This has been the bane. Everyone is trying to maintain the market share but unfortunately, we are supposed to collaborate and ensure we operate efficiently. However, both companies, i.e NAHCO and SAHCO will lose eventually because there are basic costs for offering these services and the new management in the board of NAHCO has a new strategy; we don’t do any business lower than the cost. We approach our clients and we show them the numbers. Some of them eventually understand and give us the contract. What is NAHCO doing to increase exports in the country? With the new move of the government to encourage local production and exports and our partner@Businessdayng

ship with government agencies, development banks, UN and other concerned authorities to encourage people to farm, exports will increase. For goods that are perishable, we encourage people to come to the airport and send their shipment because that is the fastest means to get the goods out. We sponsor events and facilitate programmes to enlighten people on how to package for exports because that is what we do here. Cashew nuts, apples, fresh vegetables, etc. can be exported with the right packaging. We have all these facilities in NAHCO including the cold storage room. Ghana is doing well in this aspect but we are supposed to be the leaders. We are working on this. With this awareness we are creating, we should see an increase in export by 30 percent next year. What are the major challenges you are currently facing you think the government can address? The exchange rate has been a major challenge because we have to convert our money into dollars to get our equipment. Although the government can’t do much to address the exchange rate, it is something that is hindering our business. Imports and exports have to be facilitated. We just want the government to create the enabling environment for business to thrive. Once business thrives, we can think of other areas we can invest in as a country. What do you think is the future of ground handling business in Nigeria? The future is bright. We shouldn’t miss the fact that the other people that have the licence to operate are not investing now because the prices airlines are charging are very low. We need government efforts to address this. By the time the proper pricing is in place, people would be attracted to come. Sierra-Leone doesn’t have the kind of electricity issues we have but they pay almost three times what our airlines pay to us in Nigeria. We have that market but we don’t charge. In aviation, 90 percent emphasis is on safety. So for people to render these services, they have to charge the right fees so they have money to maintain the equipment, pay the staff operating the equipment, pay dues to the government, fulfil some other statutory duties and train the staff adequately. It is only the government through its regulators that can enforce this. As a result of competition, the price has been ridiculously low.

Thursday 19 September 2019

BUSINESS DAY

Investor

In association with

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

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open ((06– 09–19)

31,924.51 27,146.57

N13.207 trillion

2,271.82

Week close (13– 09–19)

27,779.00

N13.523 trillion

2,320.41

Year Open

Percentage change (WoW) Percentage change (YTD)

2.33 -11.62

2,241.37

2.14 5.71

The NSE-Main Board

1,456.29 1,086.38 1,115.30

2.66 -22.54

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

778.95

1,073.09 1,102.33

321.83

107.74

519.05

198.38

1,720.31

1,097.67

933.45

338.12

105.45

521.99

212.64

1,728.08

1,093.14

2,320.41

778.95

0.00 -1.87

5.06

2.72 -22.22

-15.25

-2.13 -16.63

0.57 -30.29

7.19 -29.64

0.45 -22.64

-0.41

3.38

-11.69

-20.08

Investors should take long-term position in stocks with upside potentials …despite mixed sentiments trailing equities Iheanyi Nwachukwu

he Nigerian stock market which took-off this week on a negative note has further created an entry opportunity for value hunters with long term investment approach. With the exception of the profit taking action on value stocks, the Nigerian Stock Exchange (NSE) All Share Index (ASI) could have ended in the green on Monday September 16 being the first trading day of this week. As a result, investors booked N99.6billion loss. Despite the record negative on the Bourse, market watchers believe investors with a long-term investment approach should take position in value stocks that are currently priced low but offer significant upside potentials. Such stocks have the potential for increased capital appreciation and dividend yield. “There appears to be an improved level of confidence in the domestic market leading to bargain hunting in fundamentally sound stocks which were trading at their lows. “However, having exhibited similar trading patterns in the past, the possibility of profit taking action on gains made last week cannot be overruled, hence, we recommend investor’s to stagger their investment”, said Lagos-based Vetiva Research. Some other analysts have different views on the market this week.

For instance, Afrinvest Researcher analysts expect bearish sentiment to resume, “although there is room for gains in fundamentally sound stocks through bargain hunting”. The research analysts in their September 16 note expect the stock market index to continue to wander within the negative territory. “But why are we pessimistic? All indicators strongly suggest there are no possible triggers to herald a rebound in the near term,” Afrinvest Researchers added. “We expect the market to maintain the same trading pattern in the coming week”, according to FBN Quest research analysts who noted

www.businessday.ng

that the bullish stance seen last week was “underpinned by investors positive sentiment across board evidenced in all sector trackers closing in the positive region save for industrial sector and insurance sector which dipped marginally.” “While we continue to monitor the latest trend in the equities market, suspected to be linked to events in the global space, we advise investors to opt for quality in anticipation of a sustained uptrend,” said United Capital research analysts. Market in review The equity market had experienced mixed performance last week, having started on a bearish

https://www.facebook.com/businessdayng

note but ended bullish. As a result, the market advanced remarkably in the trading week ended Friday September 13 as bargain hunters took advantage of the market’s recent declines. The record weekly gain is evidenced in the NSE All-Share Index (ASI) and Market Capitalisation which appreciated by 2.33percent and 2.39percent to close the review week at 27,779 points and N13.523 trillion respectively. All other sectoral indices finished higher with the exception of NSE Insurance and NSE Industrial Goods Indices which depreciated by 2.13percent and 0.41percent while

@Businessdayng

the NSE ASeM index closed flat. With the market seen showing similar trading patterns in the past, most analysts see the possibility of profit taking actions on gains made in the review week. Going into a new week, investors are advised to stagger their investment to cushion the effect of possible sell pressure. The market recorded total turnover of 1.147 billion shares worth N14.082 billion traded in 17,980 deals by investors, in contrast to a total of 1.101 billion shares valued at N17.082 billion that exchanged hands in preceding trading week in 15,431 deals. The Financial Services industry (measured by volume) led the activity chart with 840.704 million shares valued at N10.765 billion traded in 11,331 deals; thus contributing 73.30 percent and 76.45 percent to the total equity turnover volume and value respectively. The Conglomerates industry followed with 111.231 million shares worth N243.124 million in 963 deals and the ICT Industry with a turnover of 95.087 million shares worth N605.135 million in 404 deals. Top trades Trading in the top three Equities namely, Guaranty Trust Bank Plc, Access Bank Plc and FBN Holdings Plc (measured by volume) accounted for 484.003 million shares worth N8.306 billion in 4,265 deals, contributing 42.20 percent and 58.99 percent to the total equity turnover volume and value respectively.

Thursday 19 September 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Investor’s Square

NSE-ASI closes higher by 2.3% weekon-week, ECB resumes asset purchase

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

n the prior week, the equity market experienced a mixed performance starting on a bearish note and ended bullish, appreciating 2.3percent week-on-week (w/w). Yearto-date (YtD) loss moderated to -11.6percent (previously: -13.63percent) as NSE-ASI settled at 27,779.0point. We obs er ve that the performance of the market is consistent with a couple of positive headlines during the week. This includes the decision of the election tribunal to uphold president Buhari’s Victory and the announcement of the European Central bank (ECB) resume asset purchase to the tune of £20billion monthly effective from November 2019. Market capitalization added N316.2bn to close at N13.5trillion. Activity levels, however, remained weak, as average value and volume traded fell 17percent and 4.2percent w/w respectively. Performance across the sectors was mixed. The Oil and Gas sector index

3.8x w/w (previously 0.8x); with 30 stocks advancing, while 8 stocks declined. While we continue to monitor the latest trend in the equities market, suspected to be linked to events in the global space, we advise investors to opt for quality in anticipation of a sustained uptrend. Money Market: Interbank rates spike despite increase liquidity System liquidity stayed positive throughout the week despite OMO sales by the CBN on Monday and Thursday amid an influx of maturing bills and retail FX refunds. While outflows were in the form of CBN’s weekly wholesale FX funding sales on Monday as well as OMO mop-ups (totaling N528billion). The major inflow for the week included an OMO maturity, worth N334.8billion, that hit the system on Thursday, inflows from Nigerian Treasury Bills (NTB) maturity and retail FX refunds which were later mopped up via NTB and retail FX funding sales. The above notwithstanding average

(+7.2percent) led the gainer’s camp and followed by Banking (+5.1percent) and Consumer goods sector (+0.6percent) indices amid renewed interest in SEPLAT (+15.7percent), FO (+14.1percent), FBNH (+24.1percent), GUARANTY (+5.4percent), DANGSUGAR (+9.7percent) and DANGFLOUR (+5percent). In the Telcos space, MTNN improved +0.7percent even as AIRTEL AFRI jumped 8.2percent, defying third consecutive weeks of flattish close. On the flip side, the Insurance (-2.1percent) and Industrial goods (-0.4percent) sectors closed lower respectively largely due to sell-offs in CONTINSURE ( - 8 p e rc e nt ) , M A N SA R D (-2.3percent), DANGCEM (-0.2percent) and CCNN (-2.9percent). Ma rk e t b re a d t h a l s o improved markedly, surging

interbank funding rates -open buy back (OBB) and Over Night (O/N) rates) which opened the week at 3.5percent, closed the week at 23.6percent. We attribute the spike to the retail FX auction floated by the CBN on Friday. Looking at the result of the two OMO auctions and NTB auction conducted by the CBN, we note that the demand, though buoyant, was tilted to the high yielding long-dated bills. In terms of rates, the CBN left stop rates at the respective OMO auction unchanged (80/91-day: 11.59percent, 182/185-day: 11.79percent and 364-day: 13.5percent). However, at the NTB auction, stop rates continued to track higher - up 20bps on average, relative to the previous auction [91-day (11.10percent versus 11.10percent at the last auction), 182-day (11.80percent versus 11.59percent at the last auction)

www.businessday.ng

and 364-day (13.29percent versus 12.89percent at the last auction). Elsewhere, at the secondary NTB market, the activities at the primary market spurred some selling interest as market players sought to create liquidity to meet their funding obligations for the week. Accordingly, the level of selling interest outweighed overall buying interest as average yields was up 6bps w/w to 13.4percent. This week, we expect the pace of liquidity mop-ups by the CBN to reduce as the only circa N356.5billion worth of OMO is scheduled to hit the system. In all, we expect the broader money market and interbank rates to continue to reflect the overall liquidity in the system. Bond Market : Overall sentiments remain tepid Activities at the secondary bond market were largely muted for the major part of the week. Though we saw pockets of buying interest on the short and mid-end of the curve, selling interest dominated as average yield rose marginally by 5bps w/w to 14.2percent. In the Eurobond space, we saw an increased selling interest for FGN dollar notes as investors opted for equity investments. As such, yields tracked higher across the curve, up 9bps w/w on average to 6.3percent. However, we observed a balanced sentiment in the corporate Eurobond space amid a mixed bag of buying and selling interest. Consequently, average yields in the corporate segment dipped marginally by 9bps w/w to 6.3percent. Notably, Zenith bank announced the result of its invitation to purchase its outstanding $500million notes for cash. The total tender received from holders of the notes as at the deadline date of September 11 was $392.6million. Thus, the purchase price ($1,085 per $1,000) and the accrued interest amount is scheduled to be paid on or before September 16th. Looking ahead, we expect activities in the secondary bond market to remain tepid as investors look forward to further primary money market auctions. Additionally, the Debt Management Office will release the Sept-19 bond offer circular this week. We expect investors to begin to position ahead, for a higher rate at the auction.

Off Markets

Lagos: showcasing money making opportunities in cake industry Iheanyi Nwachukwu

agos State Government last week sponsored the ‘Dewdrops Uncut Learning 2,’ seminar for bakers in the cake industry. The event, which enjoyed generous support from the Lagos State as part of the 100 days in office celebration of Governor Babajide SanwoOlu helped to showcase the money making opportunities in the cake industry which till date is often seen by many as dominated by a gender-based professionals. In line with his promise to give priority to the private sector as a critical stakeholder in the economic development of Lagos, Sanwo-Olu had a ssu re d t hat h e w ou ld create a conducive business environment to attract investments and industries, support the growth of the local economy, and empower the workforce using local talent to drive job and wealth creation. In Lagos State, the government’s strategy is to optimise and sustainably grow the local economy, projected to be the fifthlargest economy in Africa, by creating access to funds for women entrepreneurs. Other initiatives which will further boost economic growth are to be unveiled by the State in the near future in line with the T.H.E.M.E.S agenda. Speaking at the event which held recently in Lagos, Shuli Adebolu, Commissioner for Tourism, Arts and Culture said “The administration of His Excellency, Babajide SanwoOlu is committed to developing the tourism potentials of Lagos State and showcasing the State to the world”.

https://www.facebook.com/businessdayng

The event which was in line with the government’s economic agenda tagged ‘THEME’ aimed at promoting tourism and entrepreneurship in the state. ‘THEME’ under the Sanwo-Olu-led administration stands for Traffic management and Transportation; Health and Environment; Education and Technology; Making Lagos a 21st Century Economy; and Entertainment and Tourism. Adebolu added that “Lagos is one of the most beautiful cities in the world that tourists and fun-seekers need to discover. Our culture is amazing and welcoming. Aside from being the home of entertainment the rating attained through the resourcefulness our music and movie industries Lagos is also home to Arts”. “Entertainment and Tourism are a focal point of this administration. The state government is open to meaningful collaborations that will support its vision of positioning Lagos State distinctly on the global map” concluded Adebolu. Uncut Learning 2 the second edition in a row now met the expectation of over 3,000 attendees that gathered to learn from the best the country could offer at the event. It also placed Nigeria on the map of the world in the bakery industry, considering the profile of experts that attended the event. This year’s event was regarded as the best thing to have ever happen to the sub-sector which is believed to be an untapped goldmine in the country. Precisely, it featured cake entrepreneurs and enthusiasts from Tanzania, Vietnam, Canada, Brazil and the United States of America. The event theme: “A Fun Fantastic Bakers Seminar,” was @Businessdayng

chosen because of the presence of the world renowned cake expert, Buddy Valastro, popularly known as the Cake Boss, a fourth generation baker that is globally recognised. Speaking at the conference, the host and Managing Director/ CEO, Dewdrops Ca ke s L i m i t e d , Ez i n n e Okonkwo, said her cake journey so far has not been without challenges, after undergoing the first training in 2006 in Port Harcourt. “The quest for knowledge has led me to attend some demo classes with different instructors, which made us to include over 20 demo classes that worth over millions of naira to help us encourage upcoming bakers in the country,” she said. C o m m e nt i ng o n t h e conference, a coach at the session and the CEO, Bakers Option, Ndirika Udoyeh, said with this event, “the industry has been pushed forward into the future, sales has been tremendous and for me having the opportunity to teach at the conference was memorable one I will not forget,” she said. On her part, Tahiya Amour –Aljabry, Managing Director of Tanzania-based Leymax Food Products said the opportunity to network and learn new things was worth the amount spent to attend the programme. “Each of the coaches touched different areas to give me skills to leverage on. And I hope this can happen in my country,” she stated. Another participant, Soyombo Hanna, said it was fun as she has learnt wood design, edible mask, champagne bottle design, butter icing from Cake Boss, which would help to show to her clients.

Thursday 19 September 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Analysis

UPDC restructuring: Removing the obstacle in wheels of UACN Iheanyi Nwachukwu

ecently, the Board of Directors of UAC of Nigeria Plc (UAC) and UACN Property Development Company (UPDC) informed the Nigerian Stock Exchange (NSE), their shareholders and stakeholders that they are considering strategic initiatives involving a recapitalisation and restructuring of UPDC. The initiatives are still subject to the review and approval of the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange, and shareholders of both companies. The ownership structure reorganisation will involve UPDC’s interest in UPDC Real Estate Investment Trust (UPDC REIT) being unbundled to UPDC shareholders via the allocation of REIT units directly to shareholders of UPDC in proportion to their post-Rights Issue holdings in UPDC (UPDC Unbundling). Analysts believe that investors should position ahead of the transaction, because if successful, offers an opportunity for UACN investors to receive shareholding in UPDC and UPDC REITs, post the transaction while enjoying the potential expected upsides on these stocks/units. The share price of UACN Property Development Company (UPDC) lost 53.9percent of its year open value as at the 8 months trading period ended August, likewise that of UACN Plc which had declined by 48.7percent. UPDC commenced operations as department and subsequently a division within UAC focused on managing UAC’s real estate holdings. In 1997, UPDC was incorporated as a public limited liability company and certain assets held by UAC were transferred to UPDC via scheme of arrangement. UPDC’s shares were listed on the Nigerian Stock Exchange on November 19, 1998. Additionally, the post-capitalised UPDC will unbundle its holding in the UPDC Real Estate Investment Trust (UPDC REIT) leading to the emergence of three

standalone entities – UACN (exUPDC), a standalone UPDC and a standalone REIT company (UPDC REIT). Cur rently, UACN holds a 64.2percent stake in UPDC. Similarly, UPDC controls 61.77percent of UPDC REIT. Following the completion of the rights issue, UPDC would unbundle its stake in UPDC REIT to UPDC shareholders (including UACN) in proportion to their post right issue holdings in UPDC. Also, UACN would thereafter unbundle its shareholding in UPDC to its shareholders on a pro-rata basis. The objectives of the unbundling exercise are that: UPDC will no longer own any units in the REIT, UPDC REIT will cease to be an associate company of UPDC, UPDC shareholders will become direct unitholders in the UPDC REIT in addition to their shares in UPDC, UPDC will cease to be a subsidiary of UAC, and UAC shareholders will become direct holders www.businessday.ng

“

With the UPDC REIT paying circa N3billion in dividends to UPDC since 2016, current and new shareholders of UPDC stand to benefit from constant dividend payment from the profitable REIT after it is unbundled from UPDC while it is expected that the REIT will enjoy increased liquidity and free float

https://www.facebook.com/businessdayng

of shares in UPDC and units in the UPDC REIT. United Capital research analysts while looking at the impact of the restructuring on UACN said in their September 10 noted that “UPDC has been a clog in the wheel for the UACN.” “In financial year 2018, UACN’s bottom line was dragged by the impact of the impairment losses of N10.2billion (N8.9billion was from the real estate business). Thus, if the proposed unbundling exercise is successful, we believe this will remove the current pressures emanating from UPDC in UACN’s book, making it more attractive going forward. “In all, we believe the unbundling is positive for UACN, as we expect revenue growth in Paints, Logistics, and Food businesses to drive the standalone UACN (exUPDC),” the analysts said. Also, looking at the impact of the restructuring on UPDC, United Capital noted that “Since 2016, UPDC has generated losses on account of its heavy debt Burden.” “Over the years, UPDC sold assets to meet obligations; however, given the quantum of debt, external injection of capital is required to materially reduce leverage. UPDC historically relied on commercial paper (CPs) issuance to meet its obligations, with total CPs outstanding increasing from N10.4billion in 2014 to N14.3billion by 2018. In 2018, UPDC took markto-market adjustments on its portfolio and recorded losses on asset sales, which led to the N8.9billion impairment loss”, the research analysts said. In a Monday September 2 note released at the NSE and signed by Godwin Samuel, UAC Company Secretary and Folake Kalaro, UPDC Company Secretary, they are considering an equity capital raise of N15.96billion by way of a Rights Issue to repay its short term debt obligations. The Board of Directors believed that for UPDC to attain sustainability, the focus is on reducing outstanding debt to a level at which it is serviceable from reoccurring cash flows. “However, with management intention to raise N15.96billion in equity (via a rights issue), to @Businessdayng

eliminate UPDC’s interest-bearing obligations (12-month intra-group Bridge Loan from UACN and 5 Year Corporate Bond) from circa N20.3billion to only the corporate bond worth N4.36billion, finance cost is expected to decline sharply compared to N4.73billion and N1.57billion incurred in FY-18 and H1-19 respectively and lessen the pressure on the bottom-line numbers of UPDC for FY-19,” United Capital further stated. They believe that much of the current challenges encountered by UPDC are in line with the broad sector challenges, which has been in decline since 2016 as consumers spending on real estate investment are pressured. “Thus, further out, with our overall outlook for economic growth to remain sluggish, we are not overly optimistic about the real estate sector growth in the near to medium term amid the absence of bold policy reforms”, according to United Capital. “This will require a significant cash injection which is to be raised through the Rights Issue. Post the Rights Issue, UPDC’s only interestbearing obligation will be its longterm bond with total outstanding balance of N4.3billion”, the UPDC had said. They also looked at the impact of the restructuring on UPDC REIT which is a close-ended property fund with underlying assets comprising a diversified portfolio of commercial and residential real estate assets. “In financial year 2018, the properties earned a gross rental income of N1.3billion. The REIT also earned interest income of N837million from cash and shortterm investments. Reported profit after tax (PAT) was circa N2.6billion (after fair value gains). UPDC REIT paid aggregate dividends of N1.3billion in 2018, a circa 10percent yield at September 5, 2019. “With the UPDC REIT paying circa N3billion in dividends to UPDC since 2016, current and new shareholders of UPDC stand to benefit from constant dividend payment from the profitable REIT after it is unbundled from UPDC while it is expected that the REIT will enjoy increased liquidity and free float”, the analysts stated.

Thursday 19 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Rihanna’s Diamond Ball delivers the goods

Pharell Williams and Rihanna performing

And good money was indeed raised. Cardi B bought an Annie Leibovitz photographed Phaidon book on Rihanna for $110,000. Each attendee was given a card on entry that had the face of a young beneficiary of Clara Lionel Foundation. If any attendee tapped the card and viewed the story, American Express automatically made a $100 donation to the foundation. Cool. An auction for a 20 person trip to the Barbados, inclusive of submarine ride and three villas sold twice for $275,000. A Roc Nation VIP sports package complete with tickets, meet & greets and four bottles luxury champagne sold for $105,000.

town Manhattan, New York. As expected, the celebs supported their own with folks like Pharrell Williams, DJ Khaled, 21 Savage, 2 Chainz, Offset, A$AP Rocky, Fat Joe, Megan Thee Stallion, Meek Mill, Offset, Cardi B and a host of others gracing the event, performing and shelling out some good money for a good cause. Also present was Mia Motley, the 53 year old Prime Minister of Rihanna’s home country, Barbados. She gave a rousing speech at the event which was organised to raise funds for the superstar’s Clara Lionel Foundation (CLF) – named for her grandparents. The Foundation was created to funds “education and emergency

Mottley, Rihanna at 5th Annual Diamond Ball

Stories by ONUWA LUCKY JOSEPH

hen Rihanna was a kid, and like most kids, she planned on doing good as she got older and had the means to. In an interview with the Associated Press, she said “As a kid, just seeing those commercials on television with the kids in Africa where it’s like, ‘it just takes 10 cent or 25 cents to help somebody’, I used to think, ‘When I grow up, I’m gonna be rich and I’m going to make a lot of money and I could make a lot of 10 cents and a lot of 25 cents.’” Rihanna is still quite young, 31 to be exact. But hearing about Africa’s hunger problem was a worldwide discussion staple long before she was born. And it has not quite abated. Everybody knows Africa as the place where the hungry folks live who are happy to do with a handout just to make it to another day. This, despite the continent’s reputation for sitting on some of the most fertile soils found anywhere. Hopefully, the issues are being addressed, albeit in a non-systematic way, thereby giving room for a recycling of some of the errors of the past. But that was just by way of background for the 5th edition of Rihanna’s annual Diamond Ball charity gala which took place last Thursday at Cipriani’s in down-

response programs around the world”. Ambitious? Like all things Rihanna, yes. And yes, the foundation was among those that helped give succour to victims of Hurricane Dorian in the Bahamas with provision of food and other resources. The Ball was a most enthralling event that had guests enjoying themselves over the surfeit of good music, as Pharell Williams went over his oeuvre (both as performer and producer); as well as Fenty beauty and lingerie show. Businesswoman that she is, Rihanna made sure the mix was right and that guests had enough options for forking good money, all of it going to the foundation.

FirstBank SPARK Initiative Seeks to Empower 500 Widows

s part of activities that marked the 2019 First Bank of Nigeria Limited Corporate Responsibility and Sustainability Week (CR&S) the Bank empowered 125 widows as identified by the International Women Society (IWS) vis-à-vis their initiative for widows – Widows Trust Fund. The funding is to enable the widows grow their micro-medium scale businesses. However, in view of the enormity of the challenge and the sheer number of widows in the society, the Bank has expressed its intention to scale up the empowerment to 500 widows before the end of the year. At the 125 widows’ endowment empowerment programme done in commemoration of First Bank’s 125th anniversary, the Group Executive, International Banking Group (ITBG), First Bank of Nigeria Limited, Mrs. Bashirat Odunewu revealed that the bank’s partnership with IWS was designed to further empower women, especially widows. She also stated that the CR&S week themed: ‘Ripples of Kindness; You First’ reflects the brand promise to always put its stakeholders first and is designed to offer employees and other stakeholder, opportunities to give their time and resources to defined causes. Odunewu was represented at the event by the Business Development Manager (ITBG), First Bank of Nigeria Limited, Kunle Olorunfemi who explained that as part of the bank’s employee giving and volunteering programme, the week focuses on

Adesola-Adeduntan, CEO, First Bank

wide range of activities under the SPARK (Start Performing Acts of Random Kindness) initiative, which include partnership with IWS for the empowerment of widows, as well as visit and donations to orphanage/ less privileged homes, Internally Displaced Persons (IDPs) and deepening the values of SPARK amongst school children. According to Odunewu, “A world without active collaboration amongst people, organisations, nations and regions is inconceivable. We are here because of our collective desire to pursue synergies that would generate progress for us and future generations. That is the focal piece of sustainability. I am, therefore, optimistic that this partnership will help drive sustainable development. Continuing, she said, “At First Bank, the partnership amongst people and stakeholders have sustained us for over 125 years. As you might be aware our impact traverses virtually every sector of the economy. www.businessday.ng

This indeed resonates in our 125th anniversary theme ‘Woven into the Fabric of Society’; going to further to say “such partnerships have also provided the opportunity for us to help create an enabling platform for Small and Medium Enterprises to thrive and develop the national economy. Saying that “The partnership with International Women Society is designed to advance social and economic impact by providing capital and capacity building for women running small businesses including widows”, she voiced the bank’s belief “that a committed, well-funded and well implemented partnership with International Women Society will enhance our goals as a responsible corporate citizen which include focusing on empowering women and nation building”. Mrs. Odunewu made it clear that “The partnership with International Women Society is also in line with the Bank’s financial inclusion and women’s economic empowerment policy which promotes accessible and affordable financial products and services to disadvantaged groups with the goal of bringing these marginalized populations into the mainstream economy, improving their chances for resilient livelihoods and financial stability. “In partnering with International Women Society, by providing opportunities for widows in areas of capacity building and access to start-up capital, the Bank advances social and economic impact,” he concluded.

https://www.facebook.com/businessdayng

On her motivation for doing events like this, Rihanna said “My grandmother taught me that it only takes one person, doing one thing, to help someone else”. And the proud Barbadian PM, Mrs Mottley said of the organizer: “Rihanna is one of our citizens of whom we are very, very proud.” Aren’t we all? Declaring that no matter how global Rihanna is, she always brings Barbados with her, Mottley affirmed that “When you come from 166 square miles and you can produce people who make a global impact, it gives your heart a certain amount of warmth.” Yes, yes, yes!!

WTEC Kits 50 schoolgirls with STEAM and Technology skills

0 schoolgirls from various secondary schools across the country were empowered with technology and engineering skills at the 12th edition of a technology camp organised by the Women’s Technology Empowerment Centre. The programme, tagged, ‘She Creates Camp’, is, according to the organisers, a residential science & technology education and men-

digital film production. This was alongside co-curricular activities including financial literacy, arts & crafts, self-defense, public speaking and Gender & Leadership. Mrs. Oreoluwa Lesi, the Executive Director, W.TEC, while speaking at the grand finale held at the Laureates College, Lagos on Saturday, said the idea was to catch the girls young and prepare them as future technology leaders

toring camp designed to teach secondary schoolgirls from ages 13 to 17 how to create useful solutions for everyday living through the application of engineering and scientific concepts, programming, mobile application development and digital content development. The girls, while at the camp, participated in technology workshops on electronics & digital circuit technologies (programmable integrated circuits), mechatronics (a blend of robotics, electronics and programming), computer programming with Python, website design using Mobirise, and

with a view to bridging the gap between males and females in the digital space. Mrs. Lesi added that this year’s edition, unlike the previous ones, comprised the Science, Technology, Engineering, Arts and Mathematics curriculum as a way of equipping the girls with technical skills to enable them become productively reliant as well as able to compete favourably with their counterparts on the global stage. She explained that the long term goal of the camp was to inspire and equip the girls to start

@Businessdayng

Continues on page 23

Thursday 19 September 2019

BUSINESS DAY

Corporate Social Impact The article below was excerpted from the Facebook wall of Uche Nworah. We print it here because his feelings mirror that of millions of Nigerians. It is not every day that one man stands up for the cause of our people and does the needful. For the most part, individuals of means look after themselves and look the other way when the hoi polloi scream in anguish and despair.This one was for Nigeria. According to the breakdown by Abike Dabiri Erewa, CEO of the Nigerians in Diaspora Commission (NIDCOM), Ogun State topped the list of returnees with 30 indigenes, followed by Imo State with 28, Oyo had 23, Delta 15, Anambra State 13 and Abia 7. The cross was Nigeria’s and he bore it gallantly. The second Air Peace flight from South Africa would have touched by the time you’re reading this. And Chief Onyema promised that as long as there are Nigerians in that country who wish to return, his airline is at their beck and call. Now, that’s a good man!

My man of the year

Blake Lively and Ryan-Reynolds

BY UCHE NWORAH (Facebook)

y man of the year is Chief Allen Onyema, Owner of Air Peace Airlines. At a time Nigerians were being killed in South Africa, and their businesses looted, he courageously deployed an aircraft to bring home Nigerians willing to come home at no cost. The joyous scenes of their departure from South Africa and arrival in Nigeria are both heartwarming and inspiring. Images of young kids clutching unto their parents reminded one of a scene in the movie – 90 minutes at Entebbe – but this one with a happy and glorious ending. The welcome scenes aboard the aircraft at Murtala Muhammed International Airport, Lagos, had everyone tearing up including Chief Onyema himself who said that he was moved to deploy the aircraft by the need to restore the dignity of Nigeria and Nigerians, and also to send a message to the world that Nigerians will always stand up for each other in time of need, Onye aghana nwanne ya. This Anambra –born peace and conflict strategist has once again rekindled the Igbo spirit of Nwanne Di Na Mba. His action has demonstrated the triumph of

Blake Lively and hubby donate $1m each • To promote racial justice and help immigrant children

lake Lively and Ryan Reynolds gave $1 million apiece to two nonprofits: The NNACP Legal Defense and Educational Fund, and the Young Center for Immigrant Children’s Rights. Their gift to the NAACP will be used to expand the NAACP LDF’s social and racial-justice efforts, and their donation to the Young Center will help to establish the Waymaker Fund for Immigrant Children, an effort to protect the rights of immigrant children who

have been separated from their families. Lively is a well-known actress who has appeared in the popular television series Gossip Girl and starred in a number of films, including The Sisterhood of the Traveling Pants, Green Lantern, and The Shallows. Reynolds is an actor, screenwriter, and film producer who appeared on the sitcom Two Guys and a Girl and in a range of films including The Proposal and Deadpool.

T. Boone Pickens, billionaire philanthropist, dies at 91

Allen Onyema

humanity over iberiberism (apologies Owelle Rochas) Let history be kind to Chief Onyema for walking the talk and doing the needful at a time like this when what is expected is action and not words. He has said that Air Peace will continue to make the flights available for as long as

there are Nigerians still stuck in South Africa and wish to come home. This is how to engrave your name in gold in the hyearts of your people. Sad that in a country of billionaires and private jet owning individuals, no one else felt touched or moved to help.

. Boone Pickens was a guy who had a bone to pick with many people in the course of his eventful life. He was a famed oil prospector and hedge fund founder who, with his Texas-sized ego disrupted both industries. While those were indeed remarkable, it is for his philanthropic activities that CSI remembers him. Pickens donated much of his wealth to other organizations, including the University of Texas Southwestern Medical Center and Oklahoma State University. OSU received a $165 million donation from Pickens in 2005 and ended

www.businessday.ng

https://www.facebook.com/businessdayng

(For feedback, contact us at csr momentum@gmail.com/ 08023314782)

WTEC Kits 50 schoolgirls with STEAM and... Continued from page 22 using and creating technology productively for learning, domestic, professional and leadership activities, adding that the exercise had empowered them with the needed skills to develop digital contents capable of providing solutions to technological, domestic and leadership needs of the society. Lesi explained that the 12th edition of the Camp was aimed at inspiring and equipping “the young girls to take up careers in science and technology. It is a way of bridging the gap between the male and the female in the digital sphere. There are many opportunities in the digital space and these girls need to be prepared with the relevant skills to tap into it.” Continuing, she said “The

South African returnees

up naming its renovated football stadium after him.

@Businessdayng

focus this year was on STEAM – Science, Technology, Engineering, Arts and Maths – and it is for our girls to learn more about building solutions to keep the society safe with technology. The long-term objective is to increase the number of women and girls working in science, technology, engineering, design & mathsrelated fields, as well as increase the number of girls and women using and creating technology for learning, professional and leadership activities.” The programme which was facilitated by Oracle, Sage Foundation and Swift Networks Limited, among others, saw the girls participating in career talk sessions, team-building exercises and excursions including panels on women in technology, women in engineering and women in medical & biological sciences.

Thursday 19 September 2019

BUSINESS DAY

cityfile Police nab armed bandits in Lagos suburb

Augustine Agundu, commander, Operation Safe Haven, (2nd r) leading Plateau Peace Road Walk in Jos. NAN

Oyo to revoke C of O on land without building plans REMI FEYISIPO, Ibadan

yo State government has threatened to revoke Certificate of Occupanc y (C of O) issued on land where houses have been erected without approved building plans. The state has indicated it would be selling about 38 semi-detached units of bungalow situated at Carlton Gate Estate, Akobo, Ibadan to members of the public. Commissioner for lands, housing and urban development, Abiodun Abdu-Raheem stated this while inspecting various housing estates in Ibadan.

It was observed during the inspection that many plots of land allocated to individuals by the government have been left undeveloped. It was further observed that most houses did not follow the layout scheme provided by the state government. “I am not happy with the state of things after assessing the estates. Lands that could be bought by people who are ready to build are wasting away without being utilised,” said Abdu-Raheem. The commissioner further warned that illegal structures on such lands would be demolished and all allocations sub-listed for revocation and withdrawal. He said that the gov-

ernment would also be withdrawing allocations from those who have not paid, noting, however, that the process would be handled with transparency and fairness. Abdu-Raheem urged people whose building plans have not been approved as well as those with letters of allocation but no C of O and those that have obtained building plans but their applications not completed, to do so within seven days, from Monday, September 23, 2019 or have their lands revoked. He explained that the decision to sell the 38 semi-detached units of bungalow at Carlton Gate Estate, was a measure to fulfill part of the present administration’s elec-

toral promises towards provision of affordable housing for the citizenry. “ The aim of this is to make people home owners without much problem and this is just the beginning. The present administration will provide more affordable housing to the people and make acquisition of houses and landed properties easier and affordable for our people,” said the official. Among the places visited were Kolapo Ishola Estate, Carlton Gate Estate, Akobo, Quarter 105 Onikoko Avenue Agodi GRA, Ajumose Housing Estate NIHORT Jericho, Elenushonsho Estate, Jericho, Queen’s school Ibadan Apata, Adeoyo GRA, Ring road.

Lagos intensifies free surgeries for indigent residents JOSHUA BASSEY

agos government has flagged off a n o t h e r rou n d of free surgical intervention programme for indigent residents of the state. T h e p ro g ra m m e i s in continuation of the recently celebrated 100 days in office of Governor Babajide Sanwo-Olu’s administration. Wi f e o f t h e g ov e rnor, Ibijoke Sanwo-Olu flagged off the programme on Tuesday in collaboration with a nongovernmental organisa-

tion, Benjamin Olowojebutu Foundation. It featured free surgeries for residents suffering from lipoma, hernia, fibroid and breast lumps, as well as free dental and general health screening. At the event which held at General Hospital, Ijede, a suburb of Ikorodu, Ibijoke said it was a demonstration of commitment to reposition the state’s health sector for topnotch service to the people. “The second pillar of the developmental agenda for a greater Lagos promised by this administration as espoused in www.businessday.ng

T.H.E.M.E.S speaks to provision of affordable, qualitative and accessible health care, as well as implementation of initiatives to rev up health care delivery and equally ensure healthy, livable and sustainable environment. In furtherance of this, the 110-bed Maternal and Child Centre (MCC) in Eti-Osa was completed and commissioned; while work is nearing completion on two others in Badagry and Epe, with more to follow,” said Ibijoke. Sh e d i s c l o s e d t hat through the health intervention programme, over

21, 000 people had been screened across seven centres in the state. “These include pediatric eye surgery, adult eye surgery, pediatric surgery, dental surgery, orthopedic surgery and E N T ( E a r, N o s e a n d Throat) surger y,” she said. The executive director of the foundation, Benjamin Olowojebutu said since the initiative commenced, 51 life transforming surgeries have been performed including five for fibroids, 33 lipomas, and 13 breast lumps.

https://www.facebook.com/businessdayng

team of police detectives has arrested three suspected notorious armed bandits in Igando, a Lagos suburb. Bala Elkana, spokesperson of the Lagos police command, said the suspects had been terrorising Igando and Egan neighbourhood mostly at night time. “They arrived the neighborhood on three motorcycles with intent t o ro b a l o n g I ko t u n Igando road but the attempt was foiled by the police,” said Elkana on Wednesday. According to him, one Oseni Waheed, 32, was arrested at the scene with one locally made pistol while the rest escaped. “Waheed led detectives to Aribisala Street in Egan where three of his fleeing accomplices were arrested,” he said. Elkana said that the suspects were also on the wanted list of the State Criminal Investiga-

tion Department (SCID), Yaba, for serial robberies and murders. He said that they were wanted for the murder of a policeman under Amukoko Division during one of their robbery operations. “Investigation is ongoing and the suspects will be charged to court,” said Elkana. He further noted that detectives from Ilemba Hausa Division, also arrested two suspects, one Gidion Amuzie, 25, and Godspower Imafidion, 25, of Satellite town, Lagos. He said that one black Honda Accord 2007 which they hid at Jemilugba street, Ilogbo Lagos had been recovered. “ The suspects specialised in snatching vehicles from the owners or stealing the vehicles f ro m w h e re t h e y a re parked. “They confessed to have stolen the vehicle at a car wash in Satellite town,” he said, adding that investigation was still ongoing.

LASG partners NGO on skill acquisition SEYI JOHN SALAU

h e L a g o s St a t e i s pa r tn e r i ng a non-governmental organisation to develop entrepreneurs and provide training for Nigerians resident in the state. The training is targeted at skill acquisition that will contribute to the economy of the state and the nation at large. Th o mp s o n Jo h n , a n assistant director with the state ministry of wealth creation and employment, stated this at the end of a graduation ceremony of Motivated Women for Grassroots Support and Development Initiative, a Lagos based non-governmental organisation where about 80 persons were graduated in various skill programmes after weeks of training. John noted that the collaboration became necessary when the agency saw the passion and commitment of the organisation in alleviating poverty and unemployment in the society that goes along with @Businessdayng

government plan. “We believe that government cannot do it alone and so we are working with relevant stakeholders especially those ones that have passion for what they are doing,” he said. Abiola Ajibade, president of the NGO, said the organisation was set up to support “the suffering women” in the society. “ The role of women cannot be underrated in the home and society. In Nigeria, women are suffering and they need help so I put this NGO together to render assistance and augment the efforts of both the state and federal governments,” said Ajibade. He said the partnership with the agencies of the state has grown stronger. “More people are gaining from the opportunity. About 800 trainees were graduated in June in various skill acquisition and entrepreneur in the areas of photography and video coverage, liquid soap making, shoe and bag, tailoring and garment making, hairdressing/weaving among others,” Ajibade explained.

Thursday 19 September 2019

Retail &

BUSINESS DAY

consumer business Luxury

Malls

Companies

Deals

Spending Trends

ECONOMY

Nigeria’s inflation to rise 11.07% in September on border closure, tariff hike BALA AUGIE

igeria consumer inflation expectations has increased as the border closure with western neighbours, proposed hike in Value Added Tax (VAT), and a possible increase in electricity tariff will further weaken the purchasing power of consumers. Inflation will rise to 11.07 percent in September as against an earlier forecast of 10.95 percent, according to Chapel Hill Denham Limited. Headline inflation decelerated for the third consecutive months to touch down at 11.02 percent in August, from 11.08 percent in July, according to the National Bureau of Statistics (NBS). Consumer price has remained broadly sticky despite tight monetary policy and foreign exchange controls. “Over the near term, we think inflationary pressures are likely to increase and halt the deceleration trend due to the recent land border blockage imposed on neighbouring countries (Benin Republic and Niger) by Nigerian security agencies to check smuggling activities,” said analysts at Chapel Hill.

“Further out in 2020, we expect the fiscal authorities to implement a nationwide increase in electricity tariff and adjust value added tax rate upward to begin the inevitable process of fiscal adjustment. In our view, the fiscal adjustments will have inflationary consequences,” they added. The price of food stuffs and other commodities have risen due to the border closure, as federal government said the decision for the blockage is to curb smuggling. A bag of 50 kg foreign rice which usually sold for N13,000

and 15,000 before the closure now goes for N16,000, N18,000 and N20,000 depending on the brands in many towns and cities in the country. The Buhari led government is in talks with the leaders to Niger, Cameroun, and Benin to slap tariffs on imports, according to sources who asked not be mentioned because the issue is confidential. “People had to sell down their products overnight,” said Johnson Chukwwu. “If you take the price of beans and rice, you will agree that there will be higher infla-

tion for the month of September,” said Johnson Chukuwu, managing director and CEO of Cowry Assets Management Limited. There has been exchange of goods between Nigeria and its neighbours, resulting in billions of dollars in revenue generation. The CBN’s Informal CrossBorder Trade (ICBT) study carried out between June 2013 and May 2014 is the most reliable official estimate of informal trade activities between Nigeria and the affected countries.

The CBN’s limited survey (not all border posts were covered and observations were limited to daytime movements in goods) showed that informal cross-border trade between Nigeria and Benin Republic, Niger and Cameroon is quite significant at $6.9 billion, accounting for 4.5 percent of formal trade in goods in the period. Based on CBN’s estimate, Nigeria exported $2.8bn worth of goods (3.0 percent of formal exports) via the observed land borders compared to informal imports of $4.2 billion (6.6 percent of formal import) in the period. More importantly, the land borders that were shutdown are major entry points for food products. Based on the CBN’s study, $3.2bn of the $4.2bn informal imports (75 percent) via land borders with Benin Republic, Niger and Cameroon are food related (vegetable products, animal and animal products and foodstuff). Federal Government, through the Ministry of Finance, Budget, and National Planning, plans to increase the rate of Value added Tax (VAT) to 7.50 percent from 5 percent, a decision analyst fear could damp consumer spending since nearly all goods and services are vatable.

Law makers have summoned Minister of Finance, Zainab Ahmed, while millions of Nigerians have continued to bemoan the proposed policy. An increase in tariff could further undermine economic growth, while over 80 percent of population of 180 million live on less than $2 a day. The country has overtaken India to become the poverty capital of the world. The economy has been growing sluggishly since it exited a recession in 2016, as high cost of doing business continues to hinder companies from delivering a return to shareholders in form of bumper dividend and share appreciation. The economy grew at a slower pace of 1.94 percent in the second quarter of 2019 (Q2) 2019, according to a recent report by the NBS; that compares with a growth rate of 2.10 percent in the first quarter. More worrying, manufacturing sector contracted by 0.13 percent from the 0.81 percent expansion in first quarter (Q1)2019. The contraction contradicts evidence from manufacturing PMI data published by the Central of Bank Nigeria (CBN) in the period which suggested that activities continued to expand, albeit at a weaker pace.

CONSUMER SPENDING

Increasing awareness on sugar intake to compound sweeteners’ woes BUNMI BAILEY

ales revenue of Nigerian sugar processors has been declining in recent years, and might slow further as consumers are increasingly becoming aware of the implication of high sugar intake on their health. Sugar consumption has declined by 20 percent in the three years through 2018, according to data by the National Sugar Development Council (NSDC), meaning if sugar consumption decline further, sales of industry players might most likely follow similar direction. Consumer analysts attributed the decline to the adoption of people living a healthy lifestyle and now adapting for healthier sugar substitutes like

honey. “The health consciousness that people are developing now will be amongst the challenges that may affect sugar producer’s revenue. For example, the confectionary guys that makes cakes, eggrolls, snacks etc. have reduce their demand for sugar. Consumers have lessened their sugar demand and most of the producers have cut down on their sugar content,” Ayorinde Akinloye, a consumer goods analyst at Lagos-based CSL Stockbrokers said. Currently, looking at most retail stores, most juice drinkS like Chivita, Five alive, Frutta etc. are displayed, there are no or low sugar drinks but natural fruits unlike before when sugar was the major ingredient. Mogaji African Farmer, head of agriculture and agro-

allied group, Lagos Chamber of Commerce and Industry, (LCCI) said that the people especially the educated ones are now adopting the lifestyle of healthy living. “And also corporate organizations are cutting back on their sugar cost,” Mogaji further added. Earlier this year, a report by Euromonitor International, the world’s leading independent provider of global strategic intelligence on industries, countries and consumers said that producers of carbonated drinks may be challenged by the emerging health and wellness trend of consumers as they may shift to low sugar juice as an apparent healthier alternative. “The juice manufacturers are set to derive further

www.businessday.ng

benefit from this trend over the forecast period and this development is supported by growing concerns over the health risks associated with high sugar consumption,” the report further stated. Health experts believe that sugar consumption is a major cause of obesity and many chronic diseases, such as diabetes. Also, the World Health Organization (WHO) recommends that in both adults and children there should be a reduced intake of free sugar (monosaccharides and disaccharides) added to foods and beverages by the manufacturer, cook or consumers throughout the life course. According to Eronmosele Aziba, Consumer analyst, Tellimer Group, people are

https://www.facebook.com/businessdayng

really getting health conscious and he feels that this will affect the local producers but in the long term. This year, the three major sugar producers or refineries in Nigeria such as Dangote Sugar Refinery Plc, a subsidiary of Dangote Industries Limited, Golden Penny Sugar, a subsidiary of Flour Mills of Nigeria (FMN) and BUA Sugar Refinery Limited complained that the high rate of smuggling of cheap unlicensed sugar into the country affected their sales revenue in 2018. Abiola Gbemisola, an agriculture analyst at Chapel Hill Denham said, “A lot of people and government are really getting involved in the sugar sector by trying to improve local production. So, it might be not be a challenge for @Businessdayng

them but may be in the future and I don’t even think that the health conscious is causing sugar consumption to go down but the weak purchasing power of people.” Nigeria’s sugar and sugar confectionery imports has been consistently declining since 2016 on the basis of the federal government’s National Sugar Master Plan (NSMP) and Nigerians becoming more health conscious, agricultural experts says. Data from the International Trade centre, a multilateral agency that serves as a focal point for trade related technical assistance showed that importation of sugar steadily reduced by 23 percent to $619.3 million in 2017 from $804.5 in 2016 and by 16 percent to $519.9 million in 2018.

Thursday 19 September 2019

BUSINESS DAY

Retail &

consumer business COMPANY

Huawei’s H1 smartphone sales hit $1.58bn to raise 20bn yuan in bond program OLUFIKAYO OWOEYE

espite mounting trade spat between China and U.S., harsh operating environment in the Eurozone, Chinese techgiant, Huawei, recorded better than expected revenue growth in the first half of 2019. Figures published in a bond prospectus released by Huawei’s parent Huawei Investment & Holding Co Ltd shows profit from its device business, which comprises its smartphone sales jumped to CNY11.2 billion ($1.58 billion) on revenue of CNY211 billion. Profit during the period equalled the total generated in 2018 when revenue stood at CNY329 billion. Huawei Technologies Limited, the company’s main business entity, recorded a net profit of 30.27

billion yuan and revenue of 353 billion yuan in the first half of 2019. The group recorded increases in gross margins across all three businesses of the carrier network, c o n s u m e r a n d e n t e rprise business in the period. Revenue contribution from China rose to 58.12percent in the first half, up from 52.02percent for the full year of 2018. According to Huawei’s regulatory filings, it plans to issue two tranches of 3 billion yuan ($422 million) bonds, each with three-year maturities while proceeds from the bond raise would be used to replenish working capital and invest in core businesses such as ICT infrastructure as the race for 5G technology heats up. Huawei is expected to raise a total of 20 billion yuan in the program. Huawei was put on a trade blacklist by the United States in May, which cut off

its access to essential U.S. components and technology. The ban stops U.S. companies such as Alphabet, search engine, Google’s

parent company, from doing business with Huawei. Analysts have said that the consumer business is the most vulnerable to

Washington’s sanctions, with the main impact likely to be felt in the second half of the year. Huawei said last month

that, while the impact of the curbs was weaker than previously expected, it would still push the smartphone unit’s revenue lower by about $10 billion this year. The company had so far disclosed annual profit figures for the entire company and the filing provide a rare window into the growing profit contribution from Huawei’s consumer business. Huawei previously said smartphone shipments in the first half of the year jumped 24percent jump to 118 million units, as demand surged from patriotic Chinese buyers amid rising rhetoric in local media that Huawei was being treated unfairly by the United States. Its market share rose more than 10 percentage points to 38percent in the June quarter in China, the world’s biggest smartphone market.

COMPANY

Colgate partners Tolaram on innovative oral care solutions in Nigeria David Ibemere

olgate Palmolive company makers of “Colgate” and TOLARAM Group Inc. the conglomerates behind several household brands in Nigeria have entered into a strategic Joint venture to bring innovative oral, personal and home care products to consumers across Nigeria. In a statement to BusinessDay the management of Tolaram Group, said that the partnership will help strengthen Colgate presence in Nigeria and equally continue to cement To-

laram Group’s position as one of the leading and most diversified consumer brand builders in Nigeria. According to John Hazlin, president Africa Eurasia for the Colgate-Palmolive Company said “Colgate is proud to partner with Tolaram to increase its investment in Nigeria. We see many bright opportunities ahead for this new venture and consumers in this vibrant and growing market”. Also, from the other end, Deepak Singhal, CEO Consumer Division for Tolaram Group Inc. stated that the partnership with Colgate will mark Tolaram’s fourth Joint venture in Nigeria with

global leaders and is a testament to the company’s commitment to continue delivering quality products to Nigerian consumers. “We are excited as we increase our investment in the oral care, home care and personal care categories with Colgate, a partner with which we can effectively

combine market knowledge and product expertise,” he said. “Tolaram group has a track record of building b ra n d s f ro m d i f f e re nt categories right from the scratch into becoming market leaders and most beloved household names in Nigeria, such as; Indomie

Instant Noodles, Power Oil, Minimie Noodles, Minimie ChinChin, Power Pasta, Hypo Bleach, Munch It, Lucky Fibres, Lush Hair and Goodlife Magik fruit drink the newest brand addition, recently launched into the Nigerian beverage market.” Operationally, the joint venture will leverage To-

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

laram’s significant local manufacturing presence, marketing expertise and distribution strength with Colgate’s product formulations and R & D capabilities. “The joint Venture business has been set up as a partnership of equals and will initially focus on aggressive marketing and promotion of oral/dental care products - Colgate toothpaste and toothbrush as well as other Colgate Palmolive brands in the category of personal and home carePalmolive soaps, cosmetic lines while the construction of a multi-million dollar facility for the production will be set up in due course.

Thursday 19 September 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

LPG utilisation in country records steady growth over last one year Stories by OLUSOLA BELLO

IRINA SLAV

he country is recording steady growth in the domestic use of Liquefied Petroleum Gas, otherwise known as cooking gas, as it consumption level has moved from 54,000 metric tons on monthly basis in 2018 to 78,000 metric tons monthly in 2019. This notwithstanding there is room for further investment and expansion to ensure significant penetration of untapped and underserved markets in Nigeria. The Petroleum Products Pricing Regulatory Agency which disclosed this said the intention is to achieve the national target of penetrating every part of the country within the shortest possible time Abdulkadir Saidu, executive secretary, PPPRA, said the increase in the LPG consumption showed that more Nigerians were beginning to appreciate the usefulness of cooking gas, as opposed to the use of kerosene or firewood. He said, “While domestic utilisation ranged between 40,000MT and 54,000MT from January to April 2018, the July 2019 monthly utilisation rose to 78,000MT. “This figure is expected to

increase in the months ahead as some of government and industry initiatives take root.” Saidu said the use of kerosene had witnessed considerable drop following the switch to cooking gas by citizens across the country. He noted that the growth in the LPG utilisation was in fulfilment of the vision of the government on deepening its consumption across the country as encapsulated in the National Gas Policy 2017. There are significant investment opportunities in the LPG sub-sector. Significant percentage of the Nigerian population depends on liquefied petroleum gas (LPG) for their cooking and

other domestic uses. Industries, government parastatals, hospitality establishments, hospitals, the fastfood industry, restaurants, bakeries, and so forth, all make use of gas for commercial and business purposes. However, there is room for further investment and expansion to ensure significant penetration of untapped and underserved markets in Nigeria. According to National Bureau of Statistics average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas (Cooking Gas) decreased by -1.21% month-on-month and by -2.62% year-on-year to N2,000.34 in August 2019 from N2,024.80 in July 2019.

States with the highest average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas were Adamawa (N2,488.75), Bauchi (N2,468.89) and Borno (N2,391.07). States with the lowest average price for the refilling of a 5kg cylinder for Liquefied Petroleum Gas were Osun (N1,694.44), Enugu (N1,718.05) and Abuja (N1,739.17). Similarly, average price for the refilling of a 12.5kg cylinder for Liquefied Petroleum Gas increased by 0.09% month-on-month and decreased by -3.35% year-onyear to N4,220.11 in August 2019 from N4,216.29 in July 2019.

BEDC turns out 134 trainees to improve service delivery

enin El;ectricity Distribution Company (BEDC Electricity) Plc has turned out another set of 60 Graduate Trainees and 74 Technician Trainees for its 2018/19 edition in its quest at improving service delivery to customers and bridging skills gap in the power sector. It also announced take-off locations for the Meter Asset Provider (MAP) scheme in Delta state. Funke Osibodu, managing director/CEO, made these known at the 4th in the

series of graduation for the trainees held recently for the graduating trainees Osibodu said BEDC believes that the recruitment of new and additional workforce and training of staff would help improve service delivery to customers and also build capacity in the power sector. “Our yearly churn out of new employees under the Graduate Management Trainee and Technician Trainee schemes continue to grow as we lead in the

drive to bridge the capacity and skills gap in the power sector. Our goal is to attract and train 1,500 young and new employees with the aim of helping to improve the quality of service to customers and also help reduce youth unemployment in our society,” she stated. Declaring that BEDC will leave no stone unturned in its desire to meet customer expectations, she disclosed that between 2018 and now, BEDC has connected 112 communities without elec-

tricity supply in its coverage areas to the national grid out of which 55 of such connections were done in Delta state. She solicited for the cooperation of customers in respect of the ongoing enumeration exercise which she said was a precondition for them to benefit from the MAP scheme, stressing that this would enable the company plan properly for network expansion, improve quality of power supply, adding that nearly 400,000 households have been enumerated.

Nigeria risks shut-in of 150,000 bpd under NCTL’s force majeure

igeria’s Nembe Creek Trunk Line (NCTL), which exports Bonny Light crude oil, was shut down and placed under force majeure last week, a spokesman for operator Aiteo said on Tuesday. According to Reuters ,the spokesman did not give a reason for the shutdown. The pipeline is one of two that exports Bonny Light, so the Olusola Bello, Team lead,

Oil prices may slump heavily in 2020

terminal is currently loading only from the Trans Niger Pipeline, a spokesman for terminal operator Shell said In May this year the Nembe Creek Trunk Line (NCTL), was shut down almost immediately after it was reopened having discovered that two new spots were compromised near Awoba Riser Manifold. NCTL is a 97-kilometre, 150,000 barrels of oil per day

Graphics: Joel Samson.

owned by Aiteo Group, which recently purchased it as part of the related facilities of the prolific oil bloc OML 29 from Shell Petroleum Development Company, (SPDC). It is one of Nigeria’s major oil transportation arteries that evacuate crude from the Niger Delta to the atlantic coast for export. With the shutdown, Nigeria loses 150,000 barrels of crude

www.businessday.ng

oil per day until it is reopened. The pipeline always suffer attacks from oil thieves who very often hack into the line thereby creating as many illegal bunkering points that requires constant plugging. The facility starts from Nembe Creek field in oil mining lease (OML 29) and end at manifold at the Cawthorn Channel field Oil mining lease (OML) 18

PEC and its partners will not deepen their oil production cut yet but will discuss the topic again in December. This is what Saudi Arabia’s newly appointed Energy Minister Abdulaziz bin Salman told media after the organisation meeting of the Joint Ministerial Monitoring Committee. A discussion, he said may not be enough. OPEC+ may be forced to decide to cut deeper to prevent a major slump in prices. When OPEC+ agreed to cut 1.2 million bpd from the global market in December last year, benchmark prices reacted without much enthusiasm. In hindsight, this was a harbinger of tough times. Although prices rallied in the beginning of the second quarter of the year with Brent topping $70 a barrel, the rally was brief and correction followed soon enough. OPEC has been over complying with its production quotas. U.S. sanctions against Venezuela and, to a lesser extent Iran, have helped this. And yet, prices have failed to rise again and stay higher. Brent has been hovering around $60 a barrel and WTI has been range bound between $50 and $58. And now, prices are due to fall even further if demand forecasts from some of the world’s top energy agencies are correct. Bloomberg’s Julian Lee warned this week even tougher times were ahead for the oil-producing cartel and its partners next year as oil demand slowed down, according to the Energy Information Administration and OPEC itself. Indeed, in its latest ShortTerm Energy Outlook, the EIA forecast global demand for liquid fuels would rise by 900,000 bpd on average for full-2019. That’s down from an earlier forecast of a demand growth rate of 1.3 million bpd. The international Energy Agency, for its part, forecast average demand growth this year would be 1.1 million bpd, unchanged from its earlier monthly estimate, and in 2020, it would accelerate to 1.3 million bpd. OPEC, interestingly, is the most pessimistic about

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

https://www.facebook.com/businessdayng

@Businessdayng

demand. For this year, the group expects this at 1.02 million bpd, with a slight improvement to 1.08 million bpd next year. Related: Oil Demand Growth Weakest In Nearly A Decade Slow demand growth is bad enough when you sacrifice market share growth for higher prices. Yet coupled with rising production from places you cannot control, the news becomes really bad. Besides the obvious wrench in OPEC’s works, U.S. shale, production growth is imminent in Norway and Brazil as well. In the U.S., OPEC expects production to grow by 1.8 million bpd this year, which is substantially higher than the EIA’s forecast for domestic production growth, at 1.2 million bpd. The IEA, for its part, sees the U.S. and Norway boosting production by a combined 1 million bpd in the second half of this year, with Brazil adding another 130,000 bpd. To add insult to injury, more of the additional U.S. oil being pumped in the shale patch is going to reach international markets as some 2 million bpd of new pipeline capacity enters into operation. Against this backdrop, OPEC’s limited options become clear. The cartel has two choices, and nobody is talking about the second one: a repeat of the pumpthem-to-death approach that brought on the 2014 price collapse. The reason nobody is talking about it is that OPEC members lack sufficient financial buffers to withstand another price collapse unscathed. This leaves them with one choice: cut production more. Yet there is a problem with this, too. Russia has repeatedly signaled it is not too fond of more cuts. Moscow has been consistent in its general support for supply controls but reluctant to comply fully with these controls not least because it can do just fine with lower oil. The Russian central bank recently said it had stipulated a price of $25 per barrel of crude in a risk scenario for next year. That’s some pretty nutritious food for thought for Russia’s partners in the cuts.

Thursday 19 September 2019

BUSINESS DAY

TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

Nigeria’s poor management of fixed wireless assets rubs off on mobile infrastructure ...country not among top five mobile wireless enablers in Africa Stories By FRANK ELEANYA

obile wireless may be the major driver of internet connectivity in Nigeria, but a new report released in September by GSM Association has shown that the country is not among the top five countries in Africa growing mobile internet infrastructure, adoption, content, and services or affordability in 2018. The GSMA report titled ‘Mobile Internet Connectivity 2019: Sub-Saharan Africa Fact Sheet’ revealed that mobile internet adoption currently stands at 24 percent in sub-Saharan Africa. The region is also responsible for 40 percent of the world’s population not covered by a mobile broadband network. In essence, while adoption is happening in sub-Saharan Africa, it is not growing fast enough. This is underlined by the fact that the number of people able to afford 1GB dropped from 8.6 percent in 2017 to 6.8 percent in 2018. Whereas the number of mobile owners grew only by 1 percent, from 44 percent in 2017 to 45 percent in 2018. Mobile data has also become more affordable but it remains above 2 percent of the monthly income threshold for more than 75 percent of countries in the region. Nigeria was conspicuously missing among the top countries in mobile connectivity index, infrastructure enablers, affordability,

Source GSMA

consumer readiness, content and services. Among the top five countries enabling mobile internet infrastructure in 2018 were Rwanda, South Africa, Mauritius, Lesotho, and Kenya. In the overall mobile connectivity index were Mauritius, South Africa, Ghana, Cabo Verde, and Kenya. There are three major sources of internet connectivity in Nigeria, namely fixed wireless, mobile wireless and satellite broadband. Although Nigeria has significant capacities in all three assets, the authorities have for some reason prioritized mobile wireless and have shown little commitment to supporting fixed wireless and satellite. Unlike fixed wireless which comes with the more tedious task of laying physical cables, mobile broadband only requires the deployment of cell towers which enables people to

transfer data to their mobile phones, maintaining the internet portable for millions of people. Mobile networks are used for a high volume demanding fairly low bandwidth, focusing on activities like streaming the internet or transferring voice data. Mobile internet is designed to be flexible, hence networks sacrifice speed and latency in patchy coverage. Nigeria currently has 33 percent mobile broadband penetration which is a far cry from what the country needs to power its digital revolution. Ghana with a population almost six times less than Nigeria has achieved 35 percent broadband penetration and is making better strides than Nigeria - as the GSMA report showed - to grow the number in order to meet global standards. Interestingly, fixed broadband is capable of delivering many times what the country is currently receiving from

mobile wireless, moreover, the technology can deliver faster internet speeds than 4G with lower latency. Nigeria has five major cables; MainOne (10Tb), SAT3/SAFE (800Gb); WACS (14.5Tb); Glo1 (2.5Tb); and ACE (5Tb), with a combined capacity of 32.800Tbps. So far, less than 10 percent of the capacity has been deployed. For context, a terabyte delivers 1024 gigabytes for a whole month. With that amount of data an individual could get 1 million photos at a size of 10 kilobytes each or stream 600 and 700 hours of HD video, or play online games for more than 12,000 hours, or stream more than 15,000 hours of music or upload or download more than 60,000 hi-res photos. While Nigeria is dillydallying on fixed wireless, many countries around the world are deepening their investment and creating new strategies to reduce the cost

of deploying fiber to reach every nook and cranny. In many of these countries, fiber wireless adoption has surpassed mobile internet. Data from the Organisation for Economic Co-operation and Development (OECD), an economic bloc with 36 member countries, showed that fiber, which has reached 26 percent of all fixed broadband subscriptions in countries within the group, is the fastest growing broadband technology, with a growth rate of 13 percent in 2018 and 16 percent in the preceding two years. Overall, fixed broadband subscriptions in OECD countries totaled 418 million as of December 2018, up from 406 million a year earlier and averaged 30.9 subscriptions per 100 inhabitants. Years of trying to get the government to provide an enabling policy environment and invest in infrastructure that enables carriers to deploy remaining capacity have yielded little results. Stakeholders have over time emphasized that penetration can only increase significantly with massive investment in terrestrial infrastructure, for example, more fiber, more towers, more radio, etc. However, over the last decade, the growth rate in new investments in telecoms infrastructure in Nigeria has slowed almost to a crawl. The GSMA report only confirms what stakeholders in the telecommunications sector has always known, that the regulators are busy

propping their image with surface growth in the sector without really getting involved in addressing the nitty-gritty issues that players face. An industry stakeholder who would not want to be mentioned told BusinessDay that the solution is, “Let Nigeria identify top hubs, cities like Lagos, Abuja and eight where technology clusters are beginning to grow and attract investors attention and invest in the critical infrastructure.” At the recent Southern Africa Network Operators Group (SAFNOG) in Johannesburg, stakeholders agreed that there is a need for authorities to go beyond rhetorics and engage local investors to drive up internet penetration on the African continent. The private sector alone will not successfully address problems around the Right of Way, multiple taxations, insecurity, consumer protection violations, and poor road infrastructure. Similarly, if Nigeria is to make any meaningful progress, the authorities whose responsibility it is to enable companies to provide reliable and affordable internet to Nigerians, would need to roll-up their sleeves and work round-the-clock to move the country forward. Apart from the consumers, the local investors depend on their next steps to know the direction the millions of dollars of investments they have made in fixed wireless assets would go.

Nigerian Advertising practitioners body tests limits of its powers in move to vet online adverts

he Advertising Practitioners Council of Nigeria (APCON) recently moved to sanction a small business which it claimed violated its rules that requires members to submit all advert materials for vetting before publishing. However, going by the pronouncements in two separate judgments in the Court of Appeals, APCON’ violation notice is an overreach of its powers. In a 3 September letter addressed to an online fashion firm, and signed by the Acting Registrar, Ijedi Iyoha, APCON said: “all communication materials regardless of the medium” needed to go through it before it is released to the public. Its guideline also requires the owners of the advert materials to pay a minimum vetting fee of N25,000 per material.

“We hereby inform all advertising stakeholders, going forward that there will be zero tolerance on the exposure of adverts on any social media platform including and not limited to YouTube, Facebook, Twitter, Blogs, and Websites without the prior approval of the Advertising Standards Panel (ASP). APCON is the statutory body that has the mandate to monitor and ensure ethical advertising practice of its members in Nigeria. The body was established by the Advertising Practitioners Act No. 55 of 1988, as amended by Act No. 93 of 1992 and Act No.116 of 1993 (now Advertising Practitioners Registration Act Cap A7 of 2004). Iyoha, the Acting Registrar class that by virtue of Article 21and 80 (a) of the Nigerian Code of Advertising Practice, Sales Promotion and

Other Rights Restrictions of Practice, APCON is legally mandated to cover all areas of advertising, including online adverts. This is not the first time the body is issuing a notice of violation to a business entity. In 2014, APCON found itself in court over claims that its Act empowers to regulate advertising in Nigeria was not limited to its members. The body had contended that it is empowered to regulate advertisements in general and that any person or entity who publishes or procures the publication of an advertisement within the meaning of the Act and the Code is advertiser and is therefore within the remit of its regulatory powers. In a July 2018 judgment, in the case of MIC Royal Limited v. APCON (Suit No. CA/L/1140/2016, the peti-

tioner had asked the court to consider the applicability and scope of the Act to persons/entities who are not members of the advertising profession. According to a report from Banwo & Ighodalo, a legal institution, MIC, without recourse to APCON, procured the placement of an advertisement in the Punch Newspaper of May 29, 2014. Following this development, APCON, via a Violation Notice, imposed a penalty of N500, 000 (Five Hundred Thousand Naira) on MIC Royal for procuring the advertisement without its approval. MIC, meanwhile, had irrefutable evidence that it is a limited liability company engaged in the business of funeral homes, carpentry, joinery trade and manufacturing. The Court of Appeal re-

turned the judgment in MIC’ favor, as it held that APCON’s powers did not extend to persons who are not advertising practitioners. The Court of Appeal ultimately invalidated the Violation Notice issued to MIC. Similarly, The Registered Trustees of International Covenant Ministerial Council - Ors. in the case APCON v. RTICM, sought the intervention of the Court of Appeals after the advertisement body directed the council to submit their advertisement for vetting prior to publication. Like the MIC’s case, the Court of Appeal also held that RTICM are not advertising practitioners as projected by the APCON Act hence were not subject to it. “Apart from the fact that they don’t even have jurisdiction over media served on a foreign tech platform to a

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

global audience, isn’t this like ICAN trying to vet my bookkeeping as a non-member?” Samuel Laolu, cofounder of SureGifts said on Twitter. “Before you know it, the Computer Society of Nigeria too will ask to vet every line of code for N1,000 before you push.” He recommended that rather than the rent-seeking approach, APCON could evolve its platform to make it attractive for digital marketers to become members then it can start to regulate them. Sim Shagaya, former cofounder of ecommerce platform said the APCON move was anti-economic growth, anti-employment and not enforceable. “It makes no sense,” he said. “A platform like Jiji, which is serving a good purpose and is purely online ads cannot function.”

Thursday 19 September 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

LABOUR LAW

Triangular Employment: a misunderstood concept OSE OKPEKU

here is no doubt that the National Industrial Court Act of 2006 and the Third Alteration of the Constitution 2010 (“Third Alteration”) which elevated the National Industrial Court (“NIC”) to a Court of superior record has to a very large extent altered the Employment Law and Industrial Relations jurisprudence in Nigeria. Specifically, S254 (C) of the Constitution of the Federal Republic of Nigeria 1999 (as amended) (the “Constitution”) clearly empowers the NIC to apply conventions and treaties in relation to employment law that Nigeria has ratified but not yet domesticated. The Third Alteration also gave express jurisdiction to the NIC in relation to, connected with or pertaining to the application or interpretation of international

INSIDE NBA inaugurates Women Forum to increase female participation in legal profession

JEE Advises on Debut Samurai Loan Facility to Africa Finance Corporation 30

HEDA threatens MTN with court action over newly constituted board 31

Hong Kong decides against constraints on foreign lawyers 32

Labour standards. In addition, The NIC Act provides that the NIC in exercising its jurisdiction on any powers conferred on it shall have regard to good and international best practices in labour and what constitutes international best practice is a matter of fact. The combined effect of these two pieces of legislation is that the NIC in deciding labour matters

can now apply ratified conventions relating to labour. In the event that such relevant conventions have not been ratified by Nigeria, the NIC can equally apply them as international best practice if pleaded. This position is also codified in Order 14A of the NIC (Civil Procedure) Rules, 2017. Based on the above, the NIC has in recent times applied the following conventions i.e. con-

vention 158 (termination), convention 111 (discrimination) convention 181 (private employment agencies) either as ratified Conventions or as international best practices. As a result of such applications by the NIC, hitherto unknown concepts have now found their way into our employment law jurisprudence and one of such concepts is TRIANGULAR EMPLOYMENT. WHAT IS TRIANGULAR EMPLOYMENT Perhaps by far the most missunderstood concept in employment law in Nigeria today is the concept of triangular employment. Triangular employment in its simple form is the employment relationship between three parties i.e. employer, employee and an end-user as opposed to the traditional employment relationship between two parties i.e. the employer and the employee.

Typically, the triangular employment relationship will involve an employer who takes on an employee, who is then in turn seconded to an end –user, most times as an outsourced or contract staff. This triangle of employment relationship between the parties is what is then referred to as a triangular employment relationship. The major misconception around this concept is based on the thinking that a finding of triangular employment means that there is automatically a direct employment relationship between the outsourced employee and an end user meaning therefore that triangular employment is itself wrong. It would appear that this misconception is not only peculiar to Nigeria because the International Labour Organisation (ILO) in 2003 in a Report titled the “Scope of Employment Relationships”, Continues on page 30

NBA president calls on members to protect the rule of law now more than ever

…Congratulates former CJ for surviving externally-induced political intrigues

he President of the Nigerian Bar Association (NBA), Paul Usoro, SAN has said that, with the judiciary currently under siege, it has become pertinent now more than ever, for members of the bar and bench to protect the rule of law in all its ramifications. Usoro who made this call during the opening ceremony of the 2019/2020 Legal Year of the Federal High Court in Abuja on Monday, September 16, 2019, said that the occasion traditionally affords the Bar (lawyers) and Bench (judges) an opportunity for introspection and to ruminate on national issues particularly those that affect the justice sector. In his congratulatory message he observed that topping the list of such issues at all times was the need to promote and protect the rule of law in all its ramifications. “That need is perhaps more pronounced today given the siege under which the justice sector is currently operating, evident in the open and sometimes veiled incursions by the executive arm and its agencies,” he said, adding that the www.businessday.ng

Chief judge of the Federal High Court with other judges at the ceremony to mark the opening of the 2019/2020 legal year.

independence of the judiciary and the independence of thoughts by the judges in the determination of matters before the Courts was also under severe attack. The NBA President further noted the increasing critical na-

https://www.facebook.com/businessdayng

ture of the executive arm of government and its agencies towards the judiciary and its decisions particularly in matters that the Government and its agencies may be interested in. Addressing the judges, he said, @Businessdayng

“It is not unusual these days to hear officials of government talk down the judiciary and ridiculously and rather ill-advisedly dump all the ills of society on the judiciary. Continues on page 30

Thursday 19 September 2019

BUSINESS DAY

INDUSTRYFILE

LegalBusiness

NBA inaugurates Women Forum to increase female participation in legal profession IFEOMA OKEKE

he president of the Nigerian Bar Association (NBA), Paul Usoro, SAN has inaugurated a new executive for the NBA Women Forum. This is in a bid to increase active participation of women in the profession and national development. Speaking during the inaugural meeting of the forum’s executive, the NBA president said that the meeting was to set the tone for the work the executives were to do, and to underscore the expectations of the association from each member - as it relates to their roles individually and collectively; as well as to create a roadmap towards achieving the forum’s goals. Usoro noted that the constitution of the Nigerian Bar Association (NBA) mandates that there should be women’s forum to address issues that affect women. “Men sometimes presume that it is the same thing that affects them that affects women but gradually the society is letting us know that there are certain peculiarities and dynamics that affect women, to which we must begin to pay attention. It is important to have a forum where these things can be discussed and addressed. “We have just finished our Annual General Conference (AGC) and one of the very hot sessions was the session on bullying and sexual harassment. A lot of female lawyers spoke passionately about their experiences and the general consensus was that the NBA must do something about it. “With this forum, we will fashion out steps which should be taken in the context of the conversations held at that AGC session, which would help protect women.” Usoro further noted the challenges faced by women aiming for the top at law firms or other organisations. “The question to ask is: why do we have few women working

L-R: Balarabe Safiya Iweyi, treasurer, NBA Women Forum; Aideyan Nsidibe, secretary; Professor Oluyemisi Bamgbose, chairperson; Paul Usoro, SAN, president, NBA; Chinyere Okorocha, vice chairperson, and Foluke Dada, 2nd vice president, NBA, at the formal inauguration of the NBA Women Forum in Lagos. Pic by David Apara.

as partners in top law firms?” he queried. The NBA president hinted that considering the numerous challenges women face, a forum of this nature will sensitise the people to what these issues are and

encourage women not to give up. He said, “The Forum will also build that work force. Women have a lot to contribute not only to the profession but to national development Association and the National executive of the

NBA would do all that is required to assist the forum in its workings and activities.” Also speaking at the event, the newly appointed chairperson of the NBA Women Forum, Prof. Oluyemisi Adefunke Bamgbose,

Professor Oluyemisi Bamgbose, SAN, chairperson, NBA Women Forum (R) and her vice, Chinyere Okorocha.

SAN, said the forum was going to look into issues that are of interest to female lawyers in Nigeria. “We are going to also see how we can effectively network. With the NBA Women Forum, we are going to effectively network, share our problems and see how we can see to issues affecting the interests of female lawyers in Nigeria. “We are also going to discuss issues that relate to females, which they will be interested in. We will be having workshops, conferences and different programmes to address these issues. The main aim is to effectively coordinate female lawyers in Nigeria,” Bamgbose said. It would be recalled that the NBA President on Friday September 7th, 2019 constituted a new leadership for the NBA Women Forum. The executive, led by frontline Professor of law at the University of Ibadan, Professor Oluyemisi Bamgbose, SAN, as chairperson, is made up of highly distinguished and experienced female legal practitioners, namely, Chinyere Okorocha, vice chairperson, Nsidibe Aideyan, secretary and Hajia Safiya Balarabe as treasurer. To assist the Forum’s executive in an advisory capacity, a blue-ribbon Council was also constituted by the NBA President comprising very eminent legal practitioners. These include, Her Excellency, Anna Isiyaku, First Lady of Taraba State, Maryam Uwais, MFR, Special Adviser to the President, Professor Joy Ngozi Ezeilo, OON, Dean, Faculty of Law, University of Nigeria, Nsukka, frontline arbitrator, Dorothy Ufot, SAN, frontline arbitrator, Hajia Hadiza Magaji, Chief Registrar, Borno State Judiciary Others are, Florence Fiberesima, Solicitor-General and Permanent Secretary, Rivers, State Ministry of Justice, Dr. Foluke Dada, academician, gender activist and NBA 2nd Vice President ; and Ayotola Jagun, Chief Compliance Officer at Oando Plc.

JEE advises on debut Samurai loan facility to Africa finance corporation THEODORA KIO-LAWSON

he Banking & Finance team at top commercial law firm, Jackson Etti & Edu (JEE) has recently advised on the debut Samurai term loan facility to Africa Finance Corporation (“AFC”). According to reports, the completion of this deal and its wide acceptance by Japanese

lenders, demonstrates AFC’s consistency over the years as Africa’s leading investment grade development finance institution, it also shows the level of progress, maturity and creativity attained by the African finance market. The Facility was a US$ and JPY dual currency syndicated term facility with MUFG Bank, Ltd. (“MUFG”) and Sumitomo Mitsui Banking Corporation (“SMBC”), acting as Mandated www.businessday.ng

Lead Arrangers and Bookrunners. The facility will be used by AFC for general corporate purposes. The firm advised the Finance Parties on the deal,

https://www.facebook.com/businessdayng

alongside Norton Rose Fulbright. The team was led by Partner, Folasade Olusanya, Senior Associate and Co-Head of Sector, Financial Services, Okey @Businessdayng

Nnebedum, and assisted by Associate Modupe Balogun. JEE provides transactional and advisory services on a range of banking products including syndicated and bilateral lending, leveraged finance, restructuring, acquisition finance, asset finance, and real estate finance. Its Banking & Finance Team is known to offer expert opinion in an increasingly complex practice area.

Thursday 19 September 2019

BUSINESS DAY

LegalBusiness RIGHTSWATCH HEDA threatens MTN with court action over new board BD

ights group, Human and Environmental Development Agenda (HEDA) has given the Nigerian Securities and Exchange Commission, (SEC) a 14-day ultimatum to delist some members of the newly constituted MTN board or face legal action. The new MTN Board of Directors who were former public officials are said to have been picked to offer the South African communications concern undue advantage in Nigeria’s political and economic environment. According to the protesting anti-corruption group, their retention violates the Nigerian constitution and undermines best practices in corporate governance. In a petition written by Human and Environmental Development Agenda (HEDA Resource Centre) and sent to the Acting Director General of SEC, the group called for the immediate rejection of the former public office holders listed as new board members of the South African owner communication concern. HEDA in the petition signed by its Chairman, Olanrewaju Suraju, said it has been monitoring reports that former MTN local boss, Pascal Dozie’s, exit as MTN Nigeria’s Chairman saw a bee rush of new Directors who are anxious to offer strong local pull with Regulatory Commissions and the Presidency. The anti-corruption group said there were reports that MTN Nigeria’s recent Board members’ selection represents an economic intrigue aimed at insulating the MTN from adverse local political action given its recent history with the regulatory agency, the Nigerian Communications Commission, NCC, and the office of the Attorney General of the Federation, AGF. Earlier media reports had listed its designate Chairman, Ernest Ndukwe, an engineer, who was one-time Executive Vice Chairman of the Nigerian Communications Commission with strong speculations that his presence on the Board will afford the company the benefit of having a regulatory insider available to intervene on its behalf in troubled times. HEDA list other figures in

the board that may offer undue priviledge to MTN. The group rejected Muhammad Ahmed, former Chairman of the Technical Committee of the Nigerian Code on Corporate Governance and it was alleged that he will bring to the Board technical guidance and public credibility on issues relating to the company’s internal control processes and overall governance standards. In addition, it said reports indicate that Muhammed Ahmed also Chairs the Boards of two local banks and is also on the interim Board of International Energy Insurance Company (IEI). Suraju said it was perceived that he has been brought on the Board to provide a sound Board for governance and protect the company from the intrusion of third-party investigators. The group stated “it was equally reported that the presence of Mr. Andrew Alli on the MTN Nigeria’s Board as a non-Executive Director provides MTNN with the technical expertise of a seasoned banker and the extensive local contacts of a long-standing local Boardroom Executive. As conveyed in the report, Alli’s nomination also seems to give the outgoing Chairman, Dr. Dozie, a backdoor channel to the Board as Alli is known to be a long-time associate of Pascal Dozie and was at one time speculated to have been head-hunted as a possible managing director of Pascal Dozie’s now defunct, Diamond Bank. Alli, a chartered accountant, has extensive investment banking experience and was at one time on the Board of MTNN representing www.businessday.ng

the International Finance Corporation (IFC).” HEDA expressed worry that Alli may likely be Dr. Dozie’s principal liaison with the MTNN C- suite. The group also questioned another person on the board, Omobola Johnson, a former Minister for Communication between 2011 and 2015 who is believed will reinforce the company’s efforts at ring fencing its local Nigerian operations from potential institutional and political storms. According to HEDA, Ifueko Okauru who was a former Executive Chairman of the Federal Inland Revenue Services (FIRS) and remains a highly connected local authority on taxation also should not have been listed in the MTN board. HEDA said with the MTN board members, transparency, neutrality and accountability will be compromised. The group noted that Ifueko Okauru was a one time Chairman of Federal Inland Revenue Service (FIRS) when the Nigeria Labour Congress demanded Economic and Financial Crimes Commission, (EFCC) to probe the operations of MTN Nigeria following allegations of illicit financial flow and tax evasion as reported by the Nigerian media. It noted that the allegations were not addressed by Ifueko Okauru as Chairman of FIRS, exposing the country to losses of funds badly needed by the country for developmental purposes. “As relayed above, Okauru was Chairman of FIRS when the allegations of MTN Nigeria’s tax evasion of over $2 billion relat-

https://www.facebook.com/businessdayng

ing to import duties, VAT, withholding tax on foreign import/ payments were revealed and despite this it was reported that tranches of transfers were discovered to have been made to companies in Dubai and Mauritius as reported by Satellite Times on the 8th October, 2018 and these allegations under the nose of the former Chairman was consequent upon the failure of the FIRS to undertake diligent and effective supervision and no record of investigations to confirm the authenticity or otherwise while in office.” HEDA stated further “It was reported that major mobile companies in Nigeria were fined by the NCC for failure to adhere to the law and were given a week to de-activate unregistered lines. It was reported that while other mobile firms complied, MTN flouted the regulator’s instructions, leaving 5.2 million unregistered users on its network and the fine was due on November 17, 2015, but MTN managed to secure a cover up and delayed fines until a new management and government came into office. It is a complete show of irony that Ernest Ndukwe who was the Vice Chairman of Nigerian Communications Commission during the MTN infractions, the regulatory body solely responsible for the business activities of telecommunications and Mobolaji Johnson as the Communication Minister at the time of this infractions will be selected as the designate chairman and Board Member respectively by the telecommunication company”. The group regretted that the NCC and Communication @Businessdayng

Ministry under the two public officers watched the same telecommunication company flout rules without actions against the company until a change in government and NCC management. “It is our firm believe that these persons who were once public office holders who ought to have acted against some activities and alleged infractions of this company but failed in their responsibilities and capacities are now being compensated with appointments into the board. This only goes to suggest that the organisation has compensated these officers for their previous compromise of their oath of offices and would further indulge in cutting corners with the confidence of the influence of these persons in their former respective capacities which we believe will amount to evading sanctions and on the whole rub the nations of its sanctity” HEDA said that according to Rule 601 of the SECURITIES AND EXCHANGE COMMISSION RULES AND REGULATIONS, 2013, which empowers the Commission to impose sanctions on registered companies, particularly Rule 601(5) and states that the removal of executive officers of a capital market operator, securities exchange, capital trade point and other SROs as one of the sanctions that can be imposed by the Commission. “We hereby demand that this provision be enforced against MTN Nigeria Communications Plc. with respect to the newly constituted board, based on the above relayed and the eventually undue privileges peddling that this may result to” said HEDA The group added “In the light of the above, we hereby demand that the Commission rejects with immediate effect the nomination of the above stated persons: Dr. Ernest Ndukwe, Mobolaji Johnson, Ifueko Omoigui Okauru and Muhamad Ahmed, as members of the Board of the MTN Nigeria Communications Plc. within 14 days of the receipt of this letter or in the event that this is not done within the stated period, we shall without a further recourse to you proceed to a court of competent jurisdiction to demand the performance of this request.”

Thursday 19 September 2019

BUSINESS DAY

GLOBALREPORT Hong Kong decides against constraints on foreign lawyers

ong Kong has decided not to tighten its rules governing overseas lawyers’ practicing rights in a move that has been praised by the Law Society of England and Wales. The Law Society of Hong Kong has been mulling controversial amendments to foreign lawyer practicing rules for the past three years. The changes would require international firms practicing in the special administrative region to hire two domestic lawyers for

each foreign lawyer, double the current quota. The proposals also stipulated that lawyers from outside Hong Kong should be able to give legal advice only in cases involving the jurisdictions they are registered in rather than cases that merely involve overseas elements, as is current practice. Simon Davis, president of the Law Society of England and Wales, strongly welcomed the decision to abandon the proposals. He said: ‘We have been raising concerns

about Hong Kong’s plans to restrict international law firms and lawyers since they first emerged. ‘We advised against the measures on the grounds they would have had a detrimental effect on the local legal profession, on our own members in Hong Kong and – most importantly – on the standing of Hong Kong as a leading international business and financial centre. ’The jurisdiction of Hong Kong thrives on its openness, so it is good news the proposals have been abandoned.’ Melissa Pang, Hong Kong Law Society president, said that ‘overwhelming objections’ convinced the council that there could be ‘unintended consequences that adversely affect the development of the legal profession and the legal services market in Hong Kong if such proposed amendments were made.’ Pang added: ‘The position of the [Hong Kong] Law Society on its support for Hong Kong’s open door policy has remained unchanged.’ ---Law Society Gazette

Former Akin Gump partner charged over expenses claims

lobal firm Akin Gump has said it is ‘deeply troubled’ by events leading up to one of its partners being charged with misconduct. The SRA has referred Igor Krivoshekov to the Solicitors Disciplinary Tribunal over events that took place while he was at the firm’s central London office. It is alleged that between December 2016 and June 2018, he submitted expense claims to the firm for expenses that were not incurred. It is further alleged that he amended electronic taxi receipts from May 2008 which had been altered to show his own name as the person ordering the taxis, instead of the original recipient. The allegations are subject to a hearing before the tribunal and are as yet unproven. In a statement, Akin Gump said it was ‘deeply troubled’ by the mat-

ter and took steps to thoroughly investigate Krivoshekov’s conduct before obtaining his resignation. No client was prejudiced by his conduct, and the firm said it made appropriate reports to the SRA and other authorities. The statement added: ‘Honesty and integrity are of paramount im-

portance at Akin Gump.’ The cross-border transactions partner was held up as a significant capture when he joined Akin Gump in December 2016. His practice focused on mergers and acquisitions and other private equity transactions, particularly in the energy and natural resources sector.

LegalBusiness

Lawyer reprimanded for discriminatory statements about Chinese optometrist

awyer suspended for pocketing fees intended for law firm; court warns of tougher future penalties A Cedar Rapids, Iowa, lawyer has been suspended for four months for keeping fees from clients that should have been split with his law firm. The Iowa Supreme Court indefinitely suspended Curtis Den Beste, without the possibility of reinstatement for four months, in a Sept. 13 opinion. The Des Moines Register and the Gazette have coverage, while the Legal Profession Blog posted highlights from the decision.

misconduct was discovered in March 2017, when he told the firm’s accounting manager to “write off” several accounts because they were deemed to be “uncollectable.” When the manager began calling clients to collect payment, some said they had paid Den Beste directly. When he was confronted by lawyer Steve Howes, Den Beste admitted to the theft and was fired. He self-reported the misconduct to disciplinary authorities. Howes submitted a letter to the disciplinary board that said he was the only person harmed by the theft. He also spoke positively about Den Beste’s professional abilities and

Den Beste collected $18,200 in fees that he failed to split with the Howes Law Firm, the opinion said. The law firm should have received $9,200 of the total, after taking into account tax and reimbursement considerations, according to the opinion. Den Beste was not criminally charged, and he agreed to a repayment plan. The Iowa Supreme Court said a four-month suspension is in accord with prior cases. In those cases, theft from a client ordinarily leads to revocation of a lawyer’s law license, but theft from an employer can result in a sanction that is much lower. The court used the cases, however, to put the bar on notice that it would “ratchet up the disciplinary sanctions for nonclient theft” in future cases. Den Beste received his law license in 2000 and began practicing law at the Howes Law Firm in 2007. His agreement with the law firm required him to deposit all earned client fees into a trust account or the general law firm account, the opinion said. Den Beste would then retain half of the fees he earned, and the law firm would keep the other half for overhead and other expenses. Beginning in 2015, however, Den Beste accepted cash payments from some clients and kept the proceeds for himself, the opinion said. The

character and his mentorship of young lawyers. The Iowa Supreme Court said the theft is conduct that involves dishonesty, fraud, deceit or misrepresentation. The conduct also reflects adversely on Den Beste’s “fitness to practice law,” the court said. Although a four-month suspension fits with prior case law, the Iowa Supreme Court said, acting dishonestly toward an employer “raises serious questions of whether the lawyer has the necessary integrity to practice law.” “We use this case as a vehicle to put the bar on notice that an attorney who steals from a law firm without a colorable claim may well incur stiffer disciplinary sanctions than have been imposed in our past cases,” the court said. Chief Justice Mark Cady wrote the majority opinion. In a partial dissent, Justice David Wiggins said Den Beste’s law license should have been revoked, which would allow him to reapply for his law license in five years. “Theft of funds involves dishonesty, and dishonest attorneys have no place in our profession,” Wiggins wrote. A phone number listed for Den Beste on the Iowa Judicial Branch website notifies callers in a recording that the number is busy. ---ABA Journal

of significant growth opportunities for LCM. Notably, corporate portfolio funding, where in the past year we have established ourselves as the global leader for this product. During the year, we originated over 15 applications and funded two corporate

transactions. ‘This number might seem small, but it represents more than any other funder globally and corporate portfolio funding remains a key part of our growth strategy going forward.’ --Law Society Gazette

Litigation funder secures £92m investment in boost to sector

major litigation funder has announced a further £92m has been secured in response to growing demand for the service from lawyers. Augusta, which claims to be the UK’s largest litigation and disputes funder by case volume, raised the finance from a multi-billion-dollar US-based investment manager. The facility will be used on a ‘coinvestment’ basis allowing both new and existing investors to participate in the cases funded. It comes at a time when the viability of the litigation funding market is under more scrutiny than ever before, after the share value in another funder, Burford Capital, dropped sharply when questions were raised about its accounting practices.

Louis Young, managing director at Augusta, said: ‘With the increase in demand from lawyers for our support, we are delighted to have added additional capacity to our business. Both our existing and new investors are keen to promote access to justice and appreciative of the returns Augusta’s model provides. ‘This development is a strong endorsement of the litigation funding industry and in particular, our market-leading experienced team.’ Augusta, which has a team of 70 in London and 85 worldwide, was since established in 2013 and has funded 213 claims with a win ratio of more than 80%. It recently announced £25m firmwide case funding deals with international firm Pinsent Masons and www.businessday.ng

litigation practice HFW. Last year it secured £150m from a global investment fund to finance business growth and investment in funding cases. Meanwhile, listed financier Litigation Capital Management Limited has reported its pre-tax profits increased by 5% to almost £10m for the year ending 30 June 2019. Revenue for the year was up 17% to almost £28m. The firm, which has a London office led by executive vice chairman Nick Rowles-Davies, has also expanded into Singapore in the last year and as at 30 June had a portfolio of 29 current projects under management. Of these, 23 are unconditionally funded. Chief executive Patrick Moloney said: ‘We are excited about a number

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

YOUNG BUSINESSLAWYER

LegalBusiness

Xenophobia - A case for socially relevant lawyering Pt 2

he case against Xenophobia did not start with the events recently reported. Apart from the (at least) three major episodes in the last twenty years which resulted in extensive loss of life and property, it is reported that there have been isolated incidents which do not filter through international media. In the prequel to this article published last Thursday, I outlined what young lawyers can do to contribute to alleviate social gaps especially those related to civic duties. The more I pondered on the situation, I realised that it was important to stay on the subject with the aim of using this platform as a channel for advocacy on certain underlying issues which (in my opinion) have led to the compounded disorder this most recent uproar has been. While we cannot solve the South African problem, we can take steps to remediate the Nigerian situation. It is my view that the legal community and other professional circles need to begin to more actively undertake socially relevant projects which seek to enlighten their immediate communities. Poverty alleviation which does not impact the mindset is pointless as we have seen with the outbursts for “Mr. Xenophobia” the Nigerian man allegedly killed by South Africans. To think that young agile men and women attacked Nigerian businesses with such vehemence; the scale of which speaks only of retained anger at the economic opportunity of their victims rather than the cause they allegedly fought for should

keep us at red alert. No economic progress made can be preserved when the bulk of the populace remains uneducated and uncivilised. Lawyers and as many professional communities as there are, need to begin to campaign/lobby more actively than they currently do for the overhaul of the policy and the laws surrounding critical areas of our underdevelopment before they get out of hand. Like has been done in certain sectors, the undertaking of socially relevant projects, espe-

cially those relating to education and social development should increasingly form the basis for incentives and waivers. Some of these critical areas which need immediate resolution that lawyers can adopt and lobby for are as follows: National identification systems: In a country where national identity has overtime been a money-making venture at the risk of Nigeria’s citizens, highlighting this as a critical area for which we should lobby might

seem inordinate. This is however a critical index that is relevant to our progress at the various levels of government. How accurate are the records kept of the various Nigerians moving in and out of states and Nigeria? How accurate are our records of persons involved in accidents, the incessant mini-wars in pockets of Nigeria? We continually use estimates but for proper economic planning, strategy and implementation, it is necessary that this issue of national identification be settled as quickly as possible. Imagine if in addition to the already saturated crowd of lobbyists for the change, critical representatives of private sector and the legal community mapped out a strategy to ensure overhaul without letting, I believe policy in this regard would progress and eventually change. Migration: We see daily, the continued trends of brain drain, human trafficking, slavery across Nigeria and it appears that there is little to no tangible reaction from the government or the society at large. The best of professionals, especially in critical sectors of our society; health and education, exit Nigeria in droves. That is one aspect of the puzzle. Though some of these factors are largely attributed to the dismal standard of living and insecurity, we cannot to observe the problem and do nothing. On the other hand, that Nigeria’s borders are porous is no news. Immigration facilities are issued inordinately, policies are formulated and/or changed without synergy across the relevant government agencies. This is a critical flaw of the system as well.

There is a need to review these and I consider lawyers better placed to strategize on the policy and the law which can create an avenue for harmonious law making and policy drives on immigration and migration. The social development problems: I do not need to identify these. The United Nations has helped by coining the Sustainable Development Goals (SDGs) and mapping our recommended strategies for resolution. Social entrepreneurship is thriving in Nigeria and this is something to celebrate. However, looking at the proportion or impact of the current flock of social entrepreneurs, grant giving organisations, public good organisations, we will all agree that as a community, we can do more. In my view, every legal service provider, individual or organisation should undertake a socially relevant cause, mandatorily. This principle underlines the rules of professional conduct and ethics and we should embrace this, given the criticality of the Nigerian situation. As stated in the prequel, no pleasure or gain will thrive long if the Nigerian project is abandoned. We need to do more; We need to do more; We need to do more. OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association. Feedback – Oyeyemi.aderibigbe@templars-law.com; yemiimmanuel@yahoo.com.

less protection. Disguised employment relationships may also involve masking the identity of the employer, when the person designated as an employer is an intermediary, with the intention of releasing the real employer from any involvement in the employment relationship and above all from any responsibility to the workers. As stated earlier, for a court to reach the conclusion that a triangular employment has evolved into a direct employment relationship, the end user must have been taking some positive actions like paying the employees directly, managing the disciplinary process of the employee, training, termination etc. An end user taking positive

action that ordinarily should be the preserve of an employer was the basis for the Court’s decision in Diamond Bank Plc. v. National Union of Banks, Insurance and Financial Institutions Employees (NUBIFIE) Suit No. NICN/ ABJ/130/2013 decided on 6th February, 2019, wherein the NIC held that the outsourced employees were actually the direct employees of the defunct Diamond Bank Plc. The point must be made here that the NIC did not reach its decision because of the triangular relationship in itself, but because that triangular employment relationship based on the positive actions of Diamond Bank has

Triangular Employment: a misunderstood... Continued from page 30

made at the International Labour Conference, 91st Session, 2003, Disguised, Objectively Ambiguous and Triangular employment relationships were succinctly

explained. According to the ILO report, an employment relationship normally involves two parties: the employer and the employee. There are, however, more complex situations in which one or more third parties are involved, in what might be termed a “triangular” employment relationship. A Triangular employment relationship occurs when employees of an enterprise (the “provider”) perform work for a third party (the “user enterprise”) to whom their employer provides labour

or services. Outsourcing arrangement is therefore a typical example of a triangular employment relationship, which in itself does not make the end-user and the Consultant co-employers. What has fueled this misconception in Nigeria is the fact that in instances where the NIC has reached a conclusion that an employment relationship is a one of co-employer, direct employer or disguised employer relationship, most, if not all of them stem from a triangular employment relationship. In reality, the triangular employment is legal and acceptable. However, in managing the triangular relationship, it may then become the case that the end user enterprise has www.businessday.ng

over time taken positive steps reserved for the provider or employer. In such a scenario, the Courts will hold that the triangular employment has evolved to a direct employment between the worker and the end user. Also the NIC may come to the conclusion that the triangular relationship is actually a disguised employment. A disguised employment relationship “is one which is lent an appearance that is different from the underlying reality, with the intention of nullifying or attenuating the protection afforded by the law. It is thus an attempt to conceal or distort the employment relationship, either by cloaking it in another legal guise or by giving it another form in which the worker enjoys

https://www.facebook.com/businessdayng

@Businessdayng

Continues on page 34

Thursday 19 September 2019

BUSINESS DAY

LegalBusiness

NBA president calls on members to protect the rule of law... Continued from page 29

Decisions by your Lordships are

sometimes brazenly denigrated and attributed to ulterior and ill motives–and these on social and traditional media platforms. Veiled and sometimes open and, in all cases, audacious attempts are made to teleguide and program the decisions of Courts. “These are very dangerous practices that destroy the independence of the judiciary and by extension the rule of law and indeed the fabric of our society. The society needs and can only sur vive if we have independent-minded Judges who are empowered to dispense justice to all manner of men, including government departments, without fear or favor. We can only survive as a nation if the independence and vibrancy of the judiciary, particularly, the non-interference with the thoughts and decision-making processes of your Lordships, are guaranteed and protected,” the president said. According to Usoro, the society is diminished when Judges are robbed of their independent minds and thought processes and the confidence of the ordinary person in the judiciary is thereby diminished, if not destroyed. He stated that Self-help and anarchy ultimately become the available remedy.

“Of course, our economy suffers in the process. The investing public, both local and international lose confidence in our justice system consequent upon these denigrations of our judiciary and there follows a consequential down turn in our economy with the attendant fallout on the socioeconomic wellbeing of our people, he said. In closing, the bar leader reiterated that the society and people are the ultimate losers when Judges are robbed of their independence, in thoughts and discretions and thus urged

members of the bar and bench at the legal year opening ceremony to stand up and/or speak against tyranny. “To stand up and speak out is what we all need, both the Bar and the Bench, in our present circumstances. My Lords have, at critical moments shown such outstanding courage even in the face of danger and our prayer is that such courage and grit should never depart from our Lordships. “These are indeed moments that require courageous Judges with the candour and fortitude to speak truth to power, to bor-

row the hackneyed phrase, and to dispense justices to all manner of men without fear or favour, as demanded by your lordships’ Oaths of Office.” He expressed confidence that the judges will continue to live up to the dictates of their oaths, even as the prayers and well wishes of the bar will continue to be with them. In his remarks, the Acting Chief Judge of the Federal High Court, Honourable Justice Tsoho, urged the Federal Government to appoint more judges to the Federal High Court. Making a case for judges at

the federal high court, the CJ disclosed that there were records to show that judges were over burdened with work in the last legal year. “116,623 cases were pending at the high court, 16,144 filed in a quarter, while 12,692 were disposed off,” he revealed, whilst calling on the federal government to appoint more judicial officers to ease this burden. Also speaking at the occasion, the Attorney General of the Federation and Minister for Justice, congratulated the Federal High Court for the speed at which it handled pre-election matters at the wake of the election. He said, “This Court has set the records straight which helped the Independent National Electoral Commission (INEC) to effectively field the right candidates for the election and the efficient conduct of election processes.” He however urged lawyers to cooperate with the Federal High Court in ensuring that the dignity, integrity and credibility of this Court is not put to ridicule,” adding that. “We must collectively shun fraudulent practices and to render sound and unbiased advice to our clients based on laid down laws and not on sentiment. We should also not be seen encouraging our clients in a bit to ridicule this Court into doing the impossible.”

Triangular Employment: a misunderstood... Continued from page 33

over time evolved into a direct employment relationship based on the principle of primacy of facts. On the other hand, in Petroleum and Natural Gas Senior Staff Association (PENGASSAN) v. Mobil Producing Nigeria Unlimited Suit No: NIC/ LA/47/2010 delivered on 21 March 2012, the NIC held that there was no direct employment relationship. In this case the Appellant had appealed against the decision of the Industrial Arbitration Panel that there is no employment relationship between the Appellant and Respondent. The decision had been premised on the fact the respondent engaged independent companies (contractors) or MPS, under which category the appellant’s employers fell, to provide various services in the course of normal business. As such,

there was no privity of contract between the Appellant and the Respondent. The NIC held that there was a triangular employment relationship amongst the Appellant, the Respondent and the independent contractor. The Court further held that the International Labour Organisation (“ILO”) does not brand as invalid or unlawful or as wrong the triangular employment relationship; neither had it even branded the practice of outsourcing or contracting out as an unfair labour practice as the Appellant made it out in some of its communications with the Ministry of Labour regarding this matter. All the ILO enjoins is that the respective laws of member States on the issue should be respected and applied. Thus, the Court found that there was no material placed before it to come to the conclusion that the Appellant was an employee www.businessday.ng

of the Respondent. The Court therefore dismissed the Appeal on this basis. The Suit affirms the principle of outsourcing if correctly applied as opposed to a situation where the same is used to mask an employment relationship which further drives home the point that a triangular employment relationship does not necessarily create a co-employment or a direct employment relationship. CONCLUSION The concept of triangular employment is misunderstood in Nigeria purely because of the wrong implementation of outsourcing agreements. We make the point again that outsourcing is legal and so is triangular employment. However, in implementing the outsourcing agreement, employers must adopt the arm’s length approach in dealing with the outsourced

https://www.facebook.com/businessdayng

employees. The end-user must refrain from taking positive actions with regard to the outsourced employees. Such actions include but are not limited to determining the terms and conditions of employment of the outsourced staff, disciplining of the outsourced staff or termination of the outsourced employees. A practical approach is to limit the tenure of outsourced employees to two years because the longer they stay, the more difficult it is for the enduser to draw a distinction or apply the arm’s length principle. In reality therefore, it is possible to have a triangular employment relationship which does not evolve into a direct employment relationship, co-employer relationship or is not a disguised employment relationship.

• Ose Okpeku is a Partner at the Law Crest, LLP. @Businessdayng

“Typically, the triangular employment relationship will involve an employer who takes on an employee, who is then in turn seconded to an end –user, most times as an outsourced or contract staff. This triangle of employment relationship between the parties is what is then referred to as a triangular employment relationship”

Thursday 19 September 2019

BUSINESS DAY

Garden City Business Digest The lies, half truths that keep PH port down • Low drought •Insecure •Ravaged by Civil bombs • Wreckage on the way • No equipment • Not functional at all Ignatius Chukwu

or years, the impression out there was that there is no port in Port Harcourt Port. What an irony. The impression was that though there may be a physical port located at Abonnema Wharf area through Azikiwe Road, but that no goods pass through there. It was said that bombs from the war era ravaged the quays and rendered them unfit for port operations. These days, the impression is that the port is totally insecure from the high seas to the port itself. They make it look like there drought is so low that no serious ship can sail in, and that wharf rats have taken over everywhere and everything. It was believed that no serious equipment such as cranes or lifters are available. The worst was that the collapsed road to from Azikiwe Road Junction seemed to complete the image of an obliterated facility. The worst was that many journalists grew into this impression and accepted it as ‘fact’. Thus, reporting followed this line of reasoning. Nobody tried to probe deeper to get to the truth. On this account, importers, mostly from the east and south-south, convinced themselves that ports were only in Lagos. Thus, goods passed from the south-south coast to Lagos, offloaded and transported back to the region for consumption. The result is that items bought in Lagos for N1000 can sell for N3000 in Ph zone. Manufacturers this cannot compete with those in western Nigeria. There is also a black market in Lagos receiving goods from smuggling routes in Cotonou, Benin, and the wharfs into Lagos mainland. This subsidized the general Lagos price index to the detriment of other regions. It was a vicious intra-country commercial competition which the east lost. True position Newsmen were shocked recently when a business guru and tractor manufacturer, Ibifiri Bobmanuel, debunked the low drought impression which he said had even been sold to topmost transportation officials such as ministers,

Denrick Moos, MD of PTOL

Adawari Michael Pepple, MAN chairman (Rivers/ Bayelsa chapter)

NIMASA, NPA civil officials, importers, etc. He said: “The minister and DG of NIMASA all came and talked about droughts. This is not the issue. The drought in Port Harcourt seaport has one of the highest in the country. Lagos is between 13 and 16; PH has between 15 and 17. So, this tells you it’s not about the drought. “The South-South and South East zones still have a huge potential when it comes to portrelated activities or maritime activities because as far back as 1912, Port Harcourt was actually the first destination for a deep seaport in Nigeria. The NPA was working skeletally on it. Later, sea ports were developed in Lagos at Apapa and Tin-Can, then Warri and Calabar.” Insecurity: No port in the world is 100 secure on its own. Coastguards escort vessels into the ports. This is what is happening in PH port; escorted vessels and there has been no single attack in years, as confirmed by the immediate past port manager, Abubakar Garuba Umar, who played host to maritime reporters before he left. The myth about being ravaged by bombs is now found to be half-truth. The quays are functioning except Quay 8. Others underwent minor repairs and are back. BusinessDay who was imbedded in an inspection tour last week could confirm a lot of goings on. Wreckage is real but no ship has been stopped. NIMASA headed by an Opobo-born technocrat is capable of handling it, though it was gathered

that the NPA has used it as cash cow for decades in the name of clearing it. If a bit of transparency through coverage by maritime reporters is allowed, this will be set aright. The trip revealed all manner of equipment on ground lifting containers out of berthed ships. The repair yard of PTOL is headed by an expatriate who is said to be alert 24 hours. No heavy-duty can leave the yard un-repaired. Parts are stocked there, too. There are also world-class cranes within the region that can be hired to come in and do special work. An official said his colleague in Lagos asked what he was doing in PH since the port there was not functional. He was shocked that such myth is prevalent around Nigeria. He revealed that his firm (concessionaire) met its 2019 target in May. He insisted that the port is fully functional. MAN to be manly to rescuing PH port On Friday, the Rivers/Bayelsa chairman of Manufacturers Association of Nigeria (MAN), the senator, Adawari Michael Pepple, led a small team to PTOL to see how the port is operating. He said he had just received a container of his import from there. He said: The Port Harcourt Port was the centrepoint of Port Harcourt City and beehive of activities over the decades. We as MAN need support from the stakeholders including Customs, NIMASA, House of Reps, National Assembly, etc. All importers in the zone must come back here.

Thank God that the Lagos State governor has cried out for other ports to be made functional so as to free Lagos roads. The city of Lagos is being choked by endless rows of trucks waiting to enter or leave the ports. He demanded for special incentives from the PTOL other than the 10 per cent discount offered by the NPA. He made it clear that the Onne port was too exorbitant for small importers. “This is a fight we must take seriously. It is the fight of our lives.” PTOL MD; Denrick Moos The GM (Efioita Ephraim) and I are new here but we bring combined 60 years experience in the industry. He comes with public sector experience and I am a private sector person. Together, we complement things and make progress. We often think alike. The PTOL is working hard to justify the concession given to it (4 quays). The Port Harcourt port is back and working very well. We have all equipment needed to attend to any type of ship that calls at this port. The shipping world has realized our capability and in fact, by May this year, we have met our 2019 target. We now handle ships in about four days instead of 14 days needed for such operations. What matters is that most of the revenue a port generates is also spent in that city. This boosts the economy of any port city. The world is beginning to realize the prowess of the Port Harcourt Port and every day we get inquiries about whether truly the PH Port is working. All our equipment are working as a tour will show you. We have a functional workshop with expertise to repair all our cranes and other heavy duty equipment needed here. People give some excuses to shun the PH port such as insecurity, roads, equipment. We can tell you that we have the equipment, the warehouses, etc needed to operate. The major challenge is access roads. (The Port Harcourt-Enugu Expressway will help importers in the east to move their containers from PH to their destinations. The Onne Road would make way for those heading to that route). On discount, we can consider the MAN members in graduated forms.

Author of ‘The Noble Policeman’ floats 12 suggestions to professionalise the police the society. He retired as an assistant commissioner of police and bagged a doctorate degree thereafter. Above all, he emerged as a strong voice in crime matters and turned into a prolific writer on policing. He wrote on community policing.

Port Harcourt by Boat

Last weekend, he unveiled two books; ‘Professionalism: Reform and the Nigeria Police Force’, with 210 pages. The other is a 150-pager titled: ‘Chronicle of My Testimony’. Professionalism! A professor in Uniport, Fyneface Aaron, said about the first book; “Like his other books, this one is also an in-

IGNATIUS CHUKWU

obody knew anybody could write a book about the police, let alone someone from inside. Rivers-born Mike Uche Chukwuma was an inspector when he became the image-maker of police public relations officer (PPRO) of the Rivers State Police Command. He made waves by being the first to make journalists feel at home with the command and to be upfront with crime reporters, thereby getting the buy-in an huge support of the media in crime reporting. The Rivers police harvested hugely from his style. He did the upturn by publishing a book titled ‘The Noble Policeman’ which almost brought nobility to the police job. He at least won a noble image for himself. This may have catapulted him to the high echelons of both the police hierarchy and

Mike Uche Chukwuma; ‘The Noble Policeman’

www.businessday.ng

depth research into the evolution of the Nigeria Police Force, dating from its pre-colonial era to present post-independence Nigeria. It is one of the most studied investigations into the causes of abysmal performances of Nigeria Police Force. This is with a view to laundering the poor public performance of the police both locally and globally by a serving member who has gone through the thick-and-thin of the police institution in the country, having enlisted as a recruit constable and rising through the ranks. “The author’s studied recommendations freeze colonial mind frames in the Force and the full implementation of the reports of the police reform communities in Nigeria which, if adhered to, will bring the abysmal, inefficient, ineffective, ineptitude performances of the nation’s Police Force to the history books.” Testimony! The chairman of the editorial board of The Tide (Newspaper), Goodluck Ukwe, saw the second book thus: “It is simply a true story of the travails of a police officer who stood by what he believed and knew was the truth but was almost crucified for saying it the way he saw it when called upon to do so. “The irony, however, was that the authorities that authorized him to carry out the assignment denied him when pressure mounted on them from higher quarters. “The piece of work is a wake-up call for administrators or managers of both public institutions to stand up and own up their actions instead of trying to push their subordinates to

https://www.facebook.com/businessdayng

the alter as a sacrificial lambs; same way the author was presented, but for the intervention of God and God’s instruments, Ibrahim Idris, the incumbent Inspector-General of Police (IGP), to ensure that those who tried to deny him even the least of his rights swallowed their shame and self-inflicted disappointments.” In an exciting review that attracted several applause sessions, Karibi George, the notable fellow of the Nigerian Institute of Public Relations (NIPR), hailed the 12 reform steps suggested by the author. He however differed in the suggestion that policemen should start off with specialization. He said: “Instead of asking a policeman to start specialization from day one, let a policeman or woman serve in all departments for the first six years first so that when he/she becomes a Commissioner or Inspector-General of Police, he/she would be in a position to understand issues from all units.” George also supported the recommendation for life insurance package to policemen as a critical aspect. On appointment of an inspector-general of police, the reviewer agreed that the IG should be appointed on merit and subjected to the senate approval such that once appointed, the IG would not be accountable to anybody but to Nigerians. He also supported what Chukwuma suggested on recruitment, promotion and streamlining the departments in the Nigeria Police as well as change of nomenclature.

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

news NLC, TUC, others to picket Nigerian firms dealing in ‘stolen’ resources from Western Sahara ...Demand end of Moroccan rule in Western Sahara Innocent Odoh, Abuja

he Nigerian Labour Congress (NLC), the Trade Union Congress (TUC), the Academic Staff Union of Universities (ASUU) and about 17 civil Society organisations have said they would picket Nigerian companies buying stolen phosphate, fertilizer and fishes from Morocco, claiming that the resources are stolen from the Saharawi Arab Democratic Republic (SADR) otherwise known as Western Sahara. The labour unions and allied groups under the aegis of Nigerian Movement for the Liberation of Western Sahara, told a press conference in Abuja on Wednesday that they condemned the continued colonial occupation of Western Sahara by Morocco and the continued exploitation of the resources of the country without the consent of the people amidst human rights violations perpetrated by Morocco. Leader of the movement in Nigeria, Dipo Fasina, said the formidable team was determined to bring to book all

companies in Nigeria which are currently receiving phosphate stolen by the Kingdom of Morocco from Western Sahara to produce fertilizer. “The legal moves we are making are just one of the steps to ensure that our proud country does not continue to be a receiver of stolen goods and profit from such unholy theft. “This movement supports the development of Nigeria, but not with stolen resources. We insist that although our country needs fertilizer, but not that produced with the blood of our brothers and sisters in Western Sahara,” he said. He added that Nigerians were freedom-loving peoples, not accomplices of leaders of a country like Morocco who against all known tenets of African brotherhood, religious obligations and social justice, would invade and occupy a member country of the African Union, dehumanise its people and plunder its resources which it sells to the European (EU) countries and companies in Nigeria. “So, we put all those dealing in the stolen Western Sahara

natural resources including their fishes on notice that they cannot continue to do business as usual. “After giving this notice to the Nigerian companies dealing in stolen Western Sahara resources, we will picket them across the country and bring them before our courts. This also includes super markets selling sardines and fishes from Morocco because 92% of these fishes are stolen from the Western Sahara coast,” he said. The labour unions therefore demanded that the Moroccan monarchy and leadership be called to order and brought to book for gross human rights violations in Western Sahara. They also demanded that the consent and permission of the Saharawi people through the SADR government be secured before the natural resources of the country are utilized or traded in any form. “We demand that the African Union defends its member SADR by giving Morocco a timeline to vacate Western Sahara and if it fails, to expel and impose stiff sanctions against it as we did to Apartheid in South Africa.

ITEX receives CBN license to operate as super agent Jumoke Akiyode-Lawanson

ndigenous Fin-Tech company, Itex Integrated Services Limited, has finally secured its license to operate as a commercial superagent and to drive the Central Bank of Nigeria’s (CBN’s) financial inclusion agenda. The licence will enable the innovative fintech company to provide basic financial services such as account opening, BVN capture, funds transfer, cash withdrawals and bill payments to the unbanked, particularly in rural areas in Nigeria. The licence will also enable the company to recruit more agents to carry out financial services. Itex is one of the first organisations to successfully deploy and manage Point-of-Sale (POS) Terminals in Nigeria.

Its customary POS application eases electronic payment and revenue collections of bills, tariffs, and airtime. We Commenting on the licence, Ernest Iduje, Managing Director and CEO, Itex Integrated Services Limited, said that the Company was elated to have gotten the full approval to be a Super-Agent. “We are indeed happy to have qualified for this licence. Our primary goal is to provide ease of financial services and transactions for our customers including those in the rural areas. This licence gives us an opportunity to provide these services on an even larger scale, thus providing financial empowerment to the unbanked and underbanked”. “This is also a testament to the fact that we have systems, structures and security to ren-

der the best payment solutions for our clients, providing tailormade services to them and providing solutions that will guarantee smooth and secure transactions,” Uduje added. The Super-Agent licence is part of CBN’s efforts to deepen financial inclusion in the country and to reduce the financial exclusion rate to 20 percent by 2020. The company which supports over 45,000 POS terminals with about 30,000 active in Nigeria and over 15,000 deployed across Africa, currently has 2200 agents in the field, who are already carrying out a volume of about N2 billion worth of transactions monthly. Itex says it hopes to increase the number by virtue of the new commercial SuperAgent licence.

Standard Chartered to join race for Nigeria’s Retail banking market SEGUN ADAMS

s lenders vie for Nigeria’s retail market amid a directive to lend more, Standard Chartered Nigeria, local outlet of the London bank, is mulling expansion in the retail banking space in a bid to boost growth and diversify risk. The corporate-focused lender in an interview reported by Bloomberg said retail banking would offer an opportunity for exponential growth. “It’s just a logical expansion of our portfolio” so the company can be diversified should there be a downturn in other parts of the business,” said Lamin Manjang, the chief executive officer for Standard Chartered’s Nigerian unit. The bank said the business

banking segment within its Retail portfolio is currently small relative to opportunities it sees in that market. Standard Chartered Bank has a target to raise revenue contributions of Retail banking to its Nigerian business by slightly more than double to 15 percent in the next two years. The lender eyes a fivefold increase in its current 100,000 Retail clients by leveraging digital technology which would enable customers to open an account in less than five minutes. Also, Standard Chartered Nigeria, which plans to grow its overall loan book in 2019 by five percent to 10 percent, says it has doubled the size of the facility it offers in personal loans to N20 million ($55,300). The move by the bank folwww.businessday.ng

lows directives by Nigeria’s Central Bank for lenders to give a minimum of 60 percent of total deposits received or risk sterilisation of a percentage of the shortfall. Deadline for the first round of evaluation is at the end of September after which review of lenders’ performance would be quarterly, the apex bank has said. In response, lenders in the country have noticeably increased their footprint in the Retail banking space and have relied on digital technology to create products alluring to loan seekers. Nigerians wake to emails and text messages from banks offering loan products to finance small businesses, pay schools fees, and similar needs; the lenders under pressure scuttle for Retail customers. https://www.facebook.com/businessdayng

@Businessdayng

Thursday 18 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

Investing in Rivers State Dangerous trends in pension booty:

Sons kill fathers, wives declare husbands ‘dead’, just to collect huge sums - But PenCom seems ahead of them all Ignatius Chukwu

ension authorities led by PenCom held retreats around Nigeria including in Port Harcourt last week in conjunction with the Nigerian Employers Consultative Assembly (NECA) led by the soft-spoken but highly loved Timothy Olawale, the director-general (DG). The interactive sessions with employers were meant to update them with current developments and challenges in the administration of pensions. One development that caught the attention of many is the fact that as the payouts grow bigger due to effective management and reforms (that seem to put huge sums in the hands of retirees; especially the death benefits imbedded herein), some relations seem to eye the booty and have devised devious plots. In one of such situations, according to Fatsuma Abubakar, a senior manager in Pencom, “Some persons are claiming the death benefits of a living person and some persons even forge their own deaths and want to claim the benefits. Killings are going on just to collect someone’s benefits. “A professor has been killed by his own children just to claim his benefits. It was found that they saw the alerts in his phone and began planning to get it. In another situation, a woman forged her husband’s documents to claim his death benefits even while the man was still alive. She almost collected it before someone who knew the man personally and saw him recently decided to place a call to be sure. “Based on these developments, new rules have been set. The rules said the PFA must go to the police and confirm the death certificate pledged; they must go to the employer to confirm it if the person is said to be still

A cross section of NECA/ NSITF key Stakeholders at the Safe Workplace Intervention Project (SWIP) Award Interactive Forum which held in Port- Harcourt

working; must obtain a report from a notary public if it is a retiree; must get a letter of administration; get evidence of burial from a sharia court (in the case of a Moslem) or magistrate court if not. Obituary notification was a condition but in these days of high-tech, nothing is impossible. “Missing persons must now be traced by the Commission and an inquiry is held after one full year to pronounce the person dead for the purpose of awarding his benefits.” The audience seemed to worry between staying alive after retirement for 10 years or dieing within the 10 years grace for the family to claim more, under annuity scheme. The PenCom explained thus: “To access pension, the area of some confusion includes: The law provides paying pension 10 years after retirement, hoping the person would die. There is provision to pay you balance on account if one were to die within 10 years. Now, if you die after 10 years, nothing more is paid to your family.”

Challenges include late remittance which now attracts two per cent fine. Companies who complained that their employees were reluctant to submit retirement account numbers were told the way out: “Employees without RSA will have to be assigned a temporary account till they get theirs. It is advisable for every worker to go now and open an RSA account. You can contact your PFA. Get knowledge of withdrawal type. It pays.” Way forward was stated thus: Sensitisation; standardize annuity pricing, do wider coverage including informal sector through micro-pension scheme. It also includes strengthening existing collaboration and the need to strengthen the regulation. It was revealed that the Fund has N9.4 trillion now with 8.272m contributors in the data base. Due to more awareness, new measures and reforms, voluntary compliance is getting higher. Multiple registration is a challenge in the system, but bio-data

system is going on to solve this. Some experts pointed out some drawbacks such as most employees not knowing what is happening to their pension; demand for lump sum payout which is seen as dangerous; and emergencies such as sickness not being accommodated in the insurance scheme. Suggestions: Femi Mokikan, a former labour leader in Pepsi Cola and now an employer as well as pension beneficiary, gave the challenges and suggestions, thus: “Health insurance policy not supported by this scheme. Add healthcare to the scheme because many aging workers spend most on health. “Lump sum payment, please increase this to meet present realities. Increase it to about 75 per cent. Voluntary contribution: If it was voluntary to enter, let it be voluntary to exit, too. Do not attach conditions. Programmed withdrawal is better for retirees because truly they do not have investment or business orien-

tation and usually lose the money fast to the first beautiful proposition before them. Do not accept the annuity offer because insurers tend to lie a lot. Be watchful. Olawale: The DG gave deep insight that seemed to go down very well with the participants; Thank you o PenCom for opening a clearing desk for issues from NECA. You are very responsive. Bwala helped to set this up and to handle our matters. Bad PFAs agents will be dealt with soon. There is serious transparency in PenCom. They are prompt. If PenCom finds any agent liable or guilty, they are dropped. So, employers should report any agent that misbehaves. “Pay slip is compulsory. Pay slip and employment letters are rights of the worker. These documents advise employees of their rights, entitlements, deductions and reasons. NECA may intervene by reporting to Pen Com any employer that is found to breaching this clause. “Three things: Give employment letter, give pay slip, and remit deductions plus your matching payment to the PFA. This way, you stay out of trouble and would receive defence and protection from NECA. “Penalty: On complaints that recovery agents were being aggressive and unmindful of lodgment details, let it be known that they look at documents and evidence to know if lateness is not your fault. Reconciliation ensures that employees or employers are not short-changed. Report to PenCom if you have problem with any recovery agent. We know that agents want more commission and may not care about any process that may reduce the face value amount on recovery order. Pension clearance certificate is available to any company that has remitted pension, no matter the number of years in existence.

Maritime stakeholders commend NPA intervention over high charges - Hail Elshcon for drawing their attention

he Marine Club of Nigeria (MCN), Ship Owners Association of Nigeria, the Nigerian Chamber of Shipping, and other maritime stakeholders have commended the federal government over its intervention on lingering high charge practices against ship owners plying the Nigerian territorial waters. They also commended the management of Elshcon Nigeria Limited, a foremost Integrated Maritime Logistics and Fabrication Company, for- drawing the attention of the Nigeria Ports Authority (NPA) to this practice. The bodies had acknowledged that the Maritime Industry in Nigeria would have suffered a great loss had it not been for the timely intervention of the Nigerian Ports Authority. The president of MCN, Chinedu Jideofo-Ogbuagu, particularly wrote to Elshcon for leading the fight that has helped other industry players, saying it was the

way to go to get Nigeria reformed. It will be recalled that Elshcon had recently alerted the NPA of an ongoing practice which made ship owners in Nigeria abandon the country’s shipyards to patronize those of other African countries due to persistent high fees foisted on them to pay. The company had sought to tow its 4000-Gross Tonnage off-shore barge to the Lagos dry dock for repair, being the only shipyard that has the capacity to handle such a big vessel. The company, however, discovered that despite the fact that the voyage was for repair and not for commercial or trading purpose, it was still required to pay the same full ship dues that commercial voyage ships paid, a development that has informed the decision of ship owners in Nigeria to head to ports located outside the country such as Tema Port, Ghana, Namibia Port, among others, to repair their ships. www.businessday.ng

Uncomfortable with this trend, Elshcon Nigeria Ltd had alerted the NPA of the development via a letter dated 28th May 2018 which NPA replied in its own letter dated 6th August 2019, appreciating the observation of Elshcon and immediately making drastic changes.

Emi Membere-Otaji, chairman/CEO Elshcon Nig Ltd

https://www.facebook.com/businessdayng

In the letter, the NPA had stated: “With respect to vessels coming for dry-docking and maintenance but not making any operational movements, the volume conversion and interpolation of GRT shall not be applicable to such operations… vessels that have made first entry into any Nigerian Port and reenters any other Port on the same voyage (such as service boats) shall pay the following rates and these rates are also applicable for vessels coming for repairs and maintenance: (1). Ship Dues USD: $0.938 * 8GRT + 1176. (2). USD $160.89 Per Voyage (This is in addition to 1 above.)” Commending the federal government for the timely intervention, and the management of Elshcon Nigeria Ltd for bringing the issue to the notice of the NPA, the Marine Club of Nigeria, Ship Owners Association of Nigeria and the Nigerian Chamber of Shipping had noted that @Businessdayng

the new measures will be beneficial for both the maritime industry and the local shipyards in the country. This feat is one to which the maritime industry and the local shipyards shall remain grateful for, as it serves as a win-win situation for all parties affected, they said. The Chairman/CEO of Elshcon Nigeria Limited, Emi MembereOtaji, a medical doctor, emphasized the need for the regulatory bodies to entrench practices that will boost the maritime sector, rather than one that would stifle and mitigate the progress. He, however, commended the NPA for their timely understanding of the situation and intervention, adding that the economic gains of this key decision cannot be quantified as a good number of vessels will now return to the country‘s territorial waters and consequently increase employment and stimulate the nation’s economy.

Thursday 19 September 2019

BUSINESS DAY

news

FG must provide quick wins for subsidy removal’s success – FSDH Merchant Bank Temitayo Ayetoto

he chief executive officer of FSDH Merchant Bank Limited, Hamda Ambah, has said the government must provide palliative measures for Nigerians in the fuel subsidy removal in order to guarantee success in the deregulation of the downstream oil and gas sector. While speaking in an interactive session in her Lagos office on initiatives to revamp the downstream oil and gas sector in Nige-

ria, Ambah noted that the perceived apprehension of the masses is genuine as the implementation of the fuel subsidy may lead to increase in the pump price and may further erode the already weak purchasing power of the masses, if no social safety net is provided. “Government must plan adequately if it intends to deregulate the downstream oil and gas. It should not occur suddenly because the country can no longer afford to pay the increasing amount of subsidy,” she said. Ambah said the savings

to the government from the subsidy removal can be used to provide more primary healthcare centres, increase allocation to the school feeding programme, provide motr funding for compulsory primary and secondary education in the public schools, provide soft loans for the petty traders, invest in the power sector, and other areas that can have direct impact on the masses. “A critical part of the preparation will involve engaging various opinion leaders, religious organisations, as well as trade and labour unions.

It should also come up with a framework on how to deploy the savings that will result from the withdrawal of the subsidy to improve the wellbeing of Nigerians,” Ambah said. She noted that it would amount to economic suicide if the government continued to subsidise petroleum products in the face of dwindling revenue, considering that from 2017 to 2018, the estimated value of the subsidy jumped from N225billion to N731billion. “Such a framework must include a transparent track-

ing mechanism to show that the government is doing what it promises to do after the removal,” she asserted. She urged the Major Oil Marketers Association of Nigeria (MOMAN) to work and maintain a constant dialogue with the government to ensure the success of the deregulation policy. The private sector players must also be ready for a symbiotic relationship with the government during the process. “It is necessary for private business concerns to know that they must work with the government to develop

FG to auction N150bn bonds September 25 OLUWASEGUN OLAKOYENIKAN

he Federal Government Nigeria (FGN) is set offer for subscription N150 billion worth of bonds at an auction which would be conducted on September 25, according to the Debt Management Office (DMO). A breakdown of the amount revealed that the debt instruments include a N45 billion five-year, N50 billion ten-year, and N55 billion thirty-year reopening bonds which would be auctioned at interest rates of 12.75 percent, 14.55 percent, and 14.80 percent, respectively. The DMO, which is offering the bonds on behalf of FGN, said in a circular released Tuesday in Abuja that the five-year re-opening bond would mature in April 2023; the ten-year reopening bond would be due in April 2029; while the thirty-year re-opening bond would mature in April 2049. Nigeria issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit. Out of the N145 billion the Federal Government sought to raise in August across the three tenors, only N95 billion total subscriptions were recorded with a total sale of N15.03 billion. According to the debt agency, the three bonds would have a settlement date of September 27 and the units of the sale would be N1, 000 per unit, subject to a minimum subscription of N50, 001,000 and in multiples of N1, 000 thereafter. “For re-opening of previously issued bonds, (where the coupon is already set), successful bidders will pay a price corresponding to the yieldto-maturity bid that clears the volume being auctioned, plus any accrued interest on the instrument,” it said adding that the instruments were backed by the full faith and credit of the Federal Government and were charged upon the general assets of Nigeria. Meanwhile, the Central Bank of Nigeria (CBN) would on September 18 hold a Treasury Bills (T-Bills) Primary Market Auction (PMA) to roll over the 91-day, 182-day, and 364-day instruments worth N179.75 billion expected to hit the market on Wednesday. www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

plans for deregulation and responding to the concerns and fears that people will have. This will involve informing the people of the true state of affairs in the sector and how the savings that will result will be used for their benefit in the long run, even though there might be some initial discomfort at inception,” she added. Ambah said it was a fact that the present financial situation of the country is challenging, which makes fixing the margin of oil marketers and the price of petrol untenable in the long run.

Thursday 19 September 2019

BUSINESS DAY

INSIGHT Amended amcon act: Taking recovery to the next level

Bashir Ibrahim Hassan

Ahmed Kuru, managing director, AMCON

A Federal High Court in Abuja presided by Justice Taiwo Taiwo granted AMCON’s application to take over large portions of his assets of the Chairman in addition to granting order to AMCON to take over of the assets of two of Dr. Orjiako’s affiliate companies, Shebah Exploration & Production Company Limited and Allenne Limited. The court order affected all movable and immovable assets of the two companies, including the oil production facilities and other assets belonging to Shebah Exploration & Production Company Limited and located in and around Ukpokiti Oil Field. The court order, issued on August 15, was accompanied with the letters to the Managing Directors of over 20 commercial and merchant banks in the country where Dr. Orjiako and his allies have accounts. The court order gave the Receiver/Manager of AMCON judicial protection to take over the assets of Shebah Exploration and Production Company Limited for the purpose of liquidating its outstanding indebtedness to AMCON. The wrath of the law is seen in the way the court order not only authorized the AMCON to take over the assets of the companies but it also authorized the Receiver/ Manager to take over Dr Ojiako’s property in Parkview Estate, Ikoyi, Lagos, and Maryland in the United States as well as London, United www.businessday.ng

Kingdom. These blitzkriegs have shocked and awed the obligor community in Nigeria and beyond and has since sent them running to AMCON with genuine out-of-court settlement propositions. It seems the amended Act came along with the long-awaited tonic needed to recover from the feverish hold of the obligors, whose total obligation is more than what Nigeria has borrowed from world financial institutions in recent past. Until the signing of the new law, the names of the individual behind the N5 trillion debt portfolios were almost held in secret. Today such names can be published. Their cover has been blown. Today we know the details of persons and companies owing the nation some N5 trillion. We even know that 20% of the defaulters owe 65% of the

“

The debtors AMCON is dealing with now have passed through all the three stages of a normal debt recovery process. They failed to settle their debts with their initial creditors’ internal collectors (bank loan recovery teams) referred to as first-party agency, which is the first stage in the process

https://www.facebook.com/businessdayng

“

There has been noticeable rise in positive responses from obligors since constituting the task force on recovery of AMCON debt under the office of Vice President Yomi Osinbajo SAN and the subsequent signing of the Asset Management Corporation of Nigeria (Amendment No. 2) Act 2019 by President Muhammadu Buhari, which gave the committee the teeth to bite, last month. Finally, the jinx is broken at AMCON, so to speak. Now the corporation is singing a new melody. It is a far cry from the singsong of yesteryears; of complaints that it was finding it so difficult to get its obligors to honour their obligation by paying their outstanding debts. No doubt the amended law is working; big names are coming forward with genuine commitment to repay their debt and indeed paying. Donald Duke, former Governor of Cross Rivers State, it was reported, is one big name that recently paid up his debt. AMCON had gone to court and obtained an order of the court to enforce on the ex-governor’s choice Ikoyi property over a huge debt of over N500 million, which has now been resolved as reported in the media. What has changed significantly since the signing of the new law is the speed with which the High Courts are responding to AMCON’s application to take over the properties of recalcitrant obligors. Before now, all manners of judicial technicalities delayed the processes thereby slowing the pace of recovery. Another interesting fact is the amount of powers the Law gave AMCON. For example, the amended Act empowers the recovery agency to access the financial details of debtors. It empowers AMCON to by-pass any legal or procedural restriction, specifically those protecting banking details of debtors, and get unhindered access to their bank records. The agency can now place bank accounts of debtors under surveillance and can now establish the location of debtors’ funds at home or in the Diaspora. The law also empowers AMCON to furnish government Ministries, Departments and Agencies (MDAs) with a list of debtors and advises government not to do business with such defaulting companies. One of the earliest tests of the law was the case of Dr. ABC Orjiako, the chairman of SEPLAT Petroleum Development Company.

money in question. Nigerians are grateful to AMCON and the Federal Government for starting the debt recovery blitzkrieg from the top 20 debtors. The law that was drafted to guard the powers that be has been amended to work for the interest of the Nigerian populace. Pampered individuals lurking in corridors of power are no longer untouchable. Lest we forget, the debtors AMCON is dealing with now have passed through all the three stages of a normal debt recovery process. They failed to settle their debts with their initial creditors’ internal collectors (bank loan recovery teams) referred to as first-party agency, which is the first stage in the process. The second stage is when a third party is introduced to play the role of debt collector. The third stage is for the original creditor to write off the debt and sell it, which is where AMCON came in. AMCON has acquired the NonPerforming Loans of the banks using tax payers’ money; so, it is in the national interest that it recovers these loans from the debtors and in such a way that it can return profit on its purchase. To do otherwise would be to short-change toiling Nigerian tax payers. Part of the AMCON’s mandate is to assist eligible financial institutions to efficiently dispose of eligible bank assets; efficiently manage and dispose of eligible bank assets acquired by it; and obtain the best achievable financial returns on eligible bank assets or other assets acquired by it. In the course of implementing its mandate, AMCON has bought huge toxic bank assets and injected huge amounts of funding to save the country’s financial system from systemic collapse. But its successes in stabilizing the financial system will not be fully celebrated until it is able to recover those debts owed it by individuals and companies. The management at AMCON is up to the task of this gigantic debt

@Businessdayng

recovery, no doubt. The MD/CEO, Ahmed Lawan Kuru (ALK) and his management team, with the support of the Board, have been taking the corporation to greater heights. What started as a strategy to use the powers of other financial crime institutions has now quickly metamorphosed into renewed fighting powers for AMCON through the Asset Management Corporation of Nigeria (Amendment No. 2) Act 2019. So far the Federal Government has displayed the required political will needed for the debt recovery efforts must succeed and the judiciary is in concert too. The debt recovery effort has a positive multiplier effect as we have started seeing from the news that last month AMCON refunded N282.5m to the Zamfara State government after property belonging to the state were auctioned in a move to recover debts owed by the former governor, Abdulaziz Yari’s administration. The multiplier effect should be double-aged. While people like Governor Matawalle of Zamfara are happy with the results of recovery efforts, AMCON should also be concerned with determining whether there was foul play with bank officials in the approving the loans that turned out to be non-performing in the first instance. Criminal connivance should not be ruled out in such matter. Deliberate over valuing of collaterals is a common feature of non-performing loans years after they have been approved. And where such deliberate breaches of risk management protocols are established, penalties should be meted on the culprits to serve as deterrence those currently in the system. With the amended AMCON Act in force, and from what we have started seeing of its implementation, especially by the courts of competent jurisdiction, very soon the table will turn for common good. From all indications, it does appear the past years that AMCON suffered lean recoveries due to “recalcitrance” on the part of the obligors will soon give way to one astonishing fat year. This is because the over N1.2 trillion recovered during its years in existence will give way to N3.8 to be recovered in less than one year. When that happens, it will be the most phenomenal debt recovery effort ever seen in Nigeria’s history. Hassan is financial analyst wrote from Abuja

Thursday 19 September 2019

BUSINESS DAY

news Xenophobia: Number of Nigerians ... Continued from page 1

Muhammed International Airport (MMIA) at 7.22pm local time on Wednesday. The evacuation followed xenophobic attacks on Nigerians and other African nationals in South Africa, which led the Federal Government to grant approval that any Nigerian in South Africa willing to return home should indicate interest. Following this, more than 600 Nigerians reportedly registered for evacuation from the country. Speaking shortly after the evacuation on Wednesday, Allen Onyema, Air Peace chairman, said the lives of 315 people have been rescued as a result of the evacuation. Onyema said with this evacuation, Air Peace has succeeded in bringing in 504 stranded Nigerians in all. He assured that A ir Peace would still evacuate more people when they have finished with their documentation process. The Air Peace flight earlier billed to airlift Nigerians from South Africa was delayed for 24 hours because authorities at the

OR Tambo International Airport, Johannesburg, did not give permit to the airline for the flight in time. Onyema, who confirmed the delay at the time, said, “We did not take off by 1:00am as scheduled because South African authorities are yet to give us landing permit. We are hopeful that they will give us the permit. Our crew waited till 3:00 am but when the permit did not come, they went back to the hotel. Once we get the permit we will set off to South Africa. We don’t want to speculate but we are hopeful they will give the permit.” BusinessDay checks show that the South African authorities eventually gave Air Peace permit to land at 8am on Wednesday morning. As a result of the development, the flight was rescheduled to take off from MMIA at 1.ooam on Wednesday morning and arrive by 8am at the OR Tambo International Airport, Johannesburg. The Air Peace flight, therefore, rescheduled to depart South Africa by midday on Wednesday and arrive by 7pm same day.

56% of NSE 30 firms record decline... Continued from page 1

(Q1)2019. The contraction contradicts evidence from manufacturing PMI data published by the Central of Bank Nigeria (CBN) in the period which suggested that activities continued to expand, albeit at a weaker pace. “Purchasing power has been eroded while factory activities are slow. We are seeing reduced capacity utilization,” said Johnson Chukwu, managing director and CEO of Afrinvest Securities Limited. Profit of the six largest consumer goods firms on the NSE 30 dipped by 22.77 percent to N48.91 billion as at June 2019, further compounding their woes is heavy levies imposed by federal government and menacing gridlock at the Apapa Ports. While the cumulative net income of the largest banks increased by 11.20 percent in June 2019, it next two years. The lender eyes a fivefold increase in its current 100,000 Retail clients by leveraging digital technology which would enable customers to open an account in less than five minutes. Also, Standard Chartered Nigeria, which plans to grow its overall loan book in 2019 by five percent to 10 percent, says it has doubled

is lower than the 16.07 percent and 27.02 percent growth recorded in corresponding period of 2018 and 2017. The rally in crude oil price and the decision of the Nigerian National Petroleum Corporation (NNPC) to be the sole importer of petroleum product deal a great blow on the earnings of downstream oil and gas firms. Total Nigeria, Forte Oil Nigeria, and Mobil Nigeria saw cumulative net income dip by 15.10 percent to N9.75 billion as at June 2019, but Forte Oil bucked the trend as bottom line surged by 1,387 percent. “There has been a lot of under recovery by the NNPC, a lot of them had to write-off. The industry is still weak, so to say,” said O luwabus ola Jeje research analyst at United Capital plc.

L-R: Zubairu Dada, minister of state for foreign affairs; Clement Agba, minister of state for finance, budget and national planning; Chukwuemeka Nwajiuba, minister of state for education, and Chibuike Amaechi, minister of transport, during the Federal Executive Council meeting in Abuja, yesterday. NAN

Continued from page 1

as directed by the Central Bank of Nigeria (CBN) on Tuesday. Tax collectors, supermarkets and retailers who d e p o s i t a n d w i t h d raw large sum of cash would also be affected by the new rule on bank charges. The CBN on Tuesday issued a circular on commencement of charges on deposits in addition to already existing charges on withdrawals. Consequently, customers are to pay huge fees for cash deposit or withdrawal above N500,000 for individual account and N3 million for corporate account. Uju Ogubunka, president, Banks Customers Ass ociation of Niger ia (BCAN), said banks’ bottom-line will increase as they now have another source of income. “They will be making income and killing their customers because some customers will back out and the banks’ deposit base will drop,” Ogubunka said. He sees the CBN’s new rule on bank charges as going against cashless drive of the government as customers may look for elsewhere to lodge their

Standard Chartered joins race for Nigeria’s... Continued from page 1

the size of the facility it offers in personal loans to N20 million ($55,300). The move by the bank follows directives by Nigeria’s Central Bank for lenders to give a minimum of 60 percent of total deposits received or risk sterilisawww.businessday.ng

money, saying this would not encourage financial inclusion. Godwin Emefiele, governor of the CBN, said in his five-year policy thrust that the ultimate objective of the apex bank was to ensure that 95 percent of eligible Nigerians have access to financial services by 2024. The 2018 Financial Inclusion Survey by Enhancing Financial Innovation and Access (EFInA) revealed that financial inclusion rate increased to 63.6 percent in 2018 from 45.4 percent recorded in 2016. The circular to deposit money banks signed by Sam Okojere, director, payment system management department of the CBN, said the nationwide implementation of cashless policy will take effect from March 31, 2020. The statement said the charge on deposits would apply in Lag os, O gun, Kano, Abia, Anambra, and Rivers States as well as the Federal Capital Territory. Taiwo Oyedele, head of tax at PwC, said the policy would affect supermarkets and retailers with a lot of cash takings, and even tax collectors who collect taxes in cash. He said via Twitter that without careful imple-

mentation with relevant exemptions, the policy would negatively affect financial inclusion and further complicate ease of doing business for small businesses. Ayodele Akinwunmi of FSDH Merchant Bank Limited said the development would help to reduce cash handling and increase the cash retention within the financial system. “It will also increase the adoption of electronic banking which will accelerate financial inclusion,” Akinwunmi said. The selected banking sector report for the first quarter of 2019 by the National Bureau of Statistics (NBS) shows that 557,083,712 transactions valued at N34.02 trillion were recorded in the Electronic Payment Channels. To further promote a cash-less economy and enhance the collection o f a p p l i c a b l e g ov e r n ment revenues, the CBN on Tuesday announced a review of the process for merchant settlement. With effect from September 17, 2019, the CBN approved for banks to unbundle merchant settlement amounts and charge applicable taxes and duties on individual transactions as stipulated by regulations.

House of Reps sets up ad hoc committee...

the country have noticeably increased their footprint in the Retail banking space and have relied on digital technology to create products alluring to loan seekers. Nigerians wake to emails and text messages from banks offering loan products to finance small businesses, pay schools

fees, and similar needs; the lenders under pressure scuttle for Retail customers. “I hope the penalty for noncompliance can be waived or looked at,” Manjang said. “People are put under pressure to meet a certain target within a short period of time.” According to Manjang, the unintended conse-

quence of the policy aimed at enhancing credit flow to boost real sector activities could cause banks to initially price loan aggressively. After a while, however, lenders would adopt “measures to symmetrically grow their loan books in a responsible way,” he said.

SMEs, traders, supermarkets to be most hit...

tion of a percentage of the shortfall. Deadline for the first round of evaluation is at the end of September after which review of lenders’ performance would be quarterly, the apex bank has said. In response, lenders in

https://www.facebook.com/businessdayng

@Businessdayng

Continued from page 2

eign debt profile of over $80 billion”, this judgment debt would devastatingly affect the Nigerian economy. He said the House was aware of Nigeria’s “penchant for disregarding the sanctity of contracts and terms of agreement”, as well as every other thing that had gone on with the Gas Supply and Processing Agreement (GSPA) with P&ID Limited, in January 2010, through the Ministry of Petroleum Resources. He said the embarrassing judgment “exposes a deep decay in our governance and leadership infrastructure with far-reaching implications for the credibility of the country’s capacity to handle business and legal cases”. The House of Reps also urged the Federal Government to confer National Honour on Allen Onyema, chairman of Air Peace, for conveying Nigerians free of charge from South Africa in the wake of xenophobic attacks. The House also resolved to make Air Peace the official airline of the National Assembly in appreciation of the selfless and patriotic service of the chairman of the group.

•Continues online at www.businessday.ng

Thursday 19 September 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 18 Sept. 2019

Top Gainers/Losers as at Wednesday 18 September 2019 LOSERS

GAINERS Company

Company

Opening

Closing

Change

STANBIC

N37.5

N39.95

2.45

GUARANTY

N28.5

N29.8

1.3

MTNN

N139

N140

UBA

N8.8

0.8

FBNH

N14.7

N15.3

0.6

CUSTODIAN

ETI WAPCO

Opening

Closing

Change

N16.35

N16

-0.35

N1.25

N1.14

-0.11

N6.4

N6.35

-0.05

N5.45

N5.4

-0.05

N5.95

-0.05

FO CHAMPION

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

27,681.61 3,923.00 379,506,330.00 5.346

Global market indicators FTSE 100 Index 7,314.05GBP -6.35-0.09%

Nikkei 225 21,960.71JPY -40.61-0.18%

Generic 1st ‘DM’ Future 27,038.00USD -72.00-0.27%

Deutsche Boerse AG German Stock Index DAX 12,389.62EUR +17.01+0.14%

S&P 500 Index 2,997.47USD -8.23-0.27%

13.475

Shanghai Stock Exchange Composite Index 2,985.66CNY +7.54+0.25%

Domestic investors outshine foreigners in N1.32trn equities trade Stories by Iheanyi Nwachukwu

tock investors at the Nigerian Bourse exchanged about N1.32trillion worth of shares in the 8 months trading period ended August 30, summary of transactions showed. Not less than N594.4billion or 47.29percent of the total value of stocks exchanged in the review period was done by foreign investors while N728.51billion or 52.71percent of the total was by domestic investors. The Nigerian Stock Exchange (NSE) said foreigners brought in N278.27billion in 8 months but took away N316.19billion from the same market. Retail domestic investors accounted for N379.05billion while their institutional counter-

parts exchanged stocks valued at N349.46billion. On a monthly basis, the Nigerian Stock Exchange polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows. As at 30 August 2019, total transactions at the nation’s bourse increased by 7.51percent from N113.47 billion in July 2019 to N121.99 billion (about $398 million) in August 2019. The performance of the current month (August) when compared to the performance in the same period (August 2018) of the prior year revealed that total transactions decreased by 8.85percent. In August 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 4percent. A further analysis of the total transactions executed

between the current and prior month (July 2019) revealed that total domestic transactions increased by 5.39percent from N55.69 billion in July to N58.69 billion in August 2019. Similarly, total foreign transactions also increased by 10.59percent from N57.78 billion to N63.90 billion between July and August 2019. The value of domestic transactions executed by institutional investors outperformed retail investors by 8percent in August. A comparison of domestic transactions in the review month and prior month (July 2019) revealed that retail transactions decreased by 5.97percent from N25.44 billion in July 2019 to N23.92 billion in August 2019. However, the institutional composition of the domestic market increased by 12.95percent from N30.25 billion in July 2019 to N34.17 billion in August 2019.

R-L: Dare Bakre, director, Printfactory discussing with Gary Nelson, business development manager, Amrod during both companies meeting in Lagos office of Printfactory to announce their partnership.

IST assures speedy adjudication of investment matters as new legal year begins MICHAEL ANI

he Investment and Securities Tribunal (IST) says it will continue to leverage its success stories in delivering speedy resolution of investment disputes to restore investors’ confidence in the Nigerian capital market. Speaking during the opening ceremony of the 2019/2020 legal year of the Tribunal in Lagos, chief executive officer, IST, Siaka Idoko-Akoh, noted that the past years have seen the Tribunal work tirelessly in clearing up cases that were piled up at the period when the tribunal was not constituted. According to him, a total of 54 cases which was hitherto

accumulated during the period of inactivity between 2015-2017 have been settled. This excludes over 60 cases that had been filed since the tribunal commenced sitting in October 2017. He noted also that section 289 subsection 5 of its Act, mandates the Tribunal to dispose of cases pending before it within three months of commencement of the hearing, which seemed enormous. However, the Tribunal under his watch has succeeded in delivering on this mandate as over 70 judgments have been delivered in keenly contested cases across the zones within the statutorily prescribed time of 3 months from the date of commencement of the hearing. “We make bold to say that over the years, the tribunal has continued through its long line

of well thought out judgments and rulings, to evolve a new and unique jurisprudence in the Nigerian capital market,” he said Idoko-Akoh, while commenting on the outlook for the tribunal in the 2019/2020 legal year said it has become necessary that the relevance of the IST be not limited to the capital market alone. He explained that going by the success stories that have been achieved by the Tribunal, ideas have been suggested in some quarters on the need to enlarge the jurisdiction of the investments and securities Tribunal to encompass adjudication of disputes arising from transactions in the financial service sector of the Nigerian economy.

Lafarge Africa CFO resigns L-R:Tamunonimim Ngerebo, a professor in Department of Banking and Finance, Rivers State University, Russell Somoye, a Professor and Dean, Faculty of Administration and Management Sciences, Olabisi Onabanjo University, Adedeji Ajadi, registrar and chief executive Chartered Institute of Stockbrokers (CIS), Ariyo Olushekun, past president, CIS and Anthony Owojori, a professor of Business and Accounting Education, Ekiti State University at the second executive conversion programme of the Chartered Institute of Stockbrokers’ (CIS) in Lagos.

ITEX receives CBN licence to operate as Super Agent

tex Integrated Services Limited, an innovative Fin-Tech Company that deploys secure solutions to diverse customers has been granted the licence to operate as a commercial Super Agent in the nation’s financial services by the Central Bank of Nigeria (CBN). The licence will enable Itex to provide basic

financial services such as account opening, BVN capture, funds transfer, cash withdrawals, bill payments to the unbanked particularly in rural areas. The licence will also enable the Company to recruit more agents to carry out financial services. Commenting on the licence, Managing Director www.businessday.ng

and CEO, Itex Integrated Services Ltd, Ernest Uduje stated that the Company is elated to have gotten the full approval to be a Super Agent. He said “We are indeed happy to have qualified for this licence. Our primary goal is to provide ease of financial services and transactions for our customers including those in the rural areas.

afarge Africa Plc has announced the resignation of Bruno Bayet from his position as the company’s Chief Finance Officer. The company noted this in a letter sent to the Nigeri-

an Stock Exchange (NSE) and signed by Adewunmi Alode, General Counsel & Company Secretary. The Company said it has initiated the process of finding a new Chief Finance Officer and will be considering

internal and external candidates. During the search period, for Bruno’s replacement, Marie-Christiane Kaul-Meledje will assume the role of interim Chief Finance Officer until a successor is appointed.

NSE lifts suspension on trading in shares of R.T. Briscoe

he Nigerian Stock Exchange (NSE) has lifted the suspension earlier placed on trading in the shares of R.T. Briscoe (Nigeria) Plc. R.T. Briscoe (Nigeria) Plc is one of the 11 companies that were suspended on July 2 2019. The NSE had on July 2,

https://www.facebook.com/businessdayng

2019 notified Dealing Members of the suspension of 11 listed companies for noncompliance with its Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing which provides that: “If an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Exchange will: send to @Businessdayng

the Issuer a “Second Filing Deficiency Notification” within two business days after the end of the Cure Period; suspend trading in the Issuer’s securities; and notify the Securities and Exchange Commission (SEC) and the Market within 24 hours of the suspension.”

Thursday 19 September 2019

BUSINESS DAY

POLITICS & POLICY Bayelsa PDP guber candidate, Diri, says he and others popularised Alaibe SAMUEL ESE, Yenagoa

overnorship candidate of the Peoples Democratic Party (PDP) in Bayelsa State, Douye Diri has described how he and others popularised Timi Alaibe, a former managing director of the Niger Delta Development Commission (NDDC). Diri, who was interacting with members of the Nigeria Union of Journalists (NUJ), Bayelsa State Council, on Wednesday in Yenagoa, said at the time they were preparing the people for an Alaibe governorship, he was not even known. His words: “We know you, Douye, this man you are talking about, where is he? We have not seen him. Senator Felix Oboro, we know you, you are talking about Ndutimi Alaibe; who is he, where is he? “We were in that sojourn for about 10 years, trying to see how we can make Chief Ndutimi Alaibe the governor. We are the people who even gave him that name, Principal. “But that didn’t work out, so at a point in one’s life you have to take your destiny in your hands. I decided, once again, to take my destiny in my hands. I finally parted ways

Douye Diri

with the Bison, New Vision that they called Alaibe.” In his first media interaction since he began to run for the PDP ticket, he explained that he and others left Alaibe to forge his own political path and returned to the party to be appointed first as Deputy Chief of Staff and later Principal Executive Secretary by Governor Henry Seriake Dickson. Media practitioners and observers see Diri’s statements about Alaibe as an attack on his former principal, an indication of a growing

frosty relationship since the former Special Adviser to the President on Niger Delta Affairs challenged his victory at the party primary at the Federal High Court, Yenagoa last Friday. The attack is coming at a time that the PDP is inaugurating a peace committee with a former member of the Senate, Inatimi Rufus-Spiff as chairman, to resolve all lingering disputes from the September 3 governorship primary election. Diri, however, called on all those who contested against

him, who are still not happy at the outcome of the primary election to “sheathe their swords” and work with him to ensure a PDP victory at the November 16 governorship election. He assured that he would continue with the legacies of the incumbent administration while reviewing certain aspects and blamed the current power outage in the state on the Federal Government since power is in the exclusive legislative list in the constitution. While answering questions from journalists, Diri expressed dissatisfaction with the level of development of Bayelsa State after 20 years of PDP rule, but also defended the party, saying the state of development is much better than when the party came into power. He deflected the question on who his running mate is, rather directing journalists to the Independent National Electoral Commission (INEC) server as it is the duty of the election umpire to publish the name submitted by the party. The issue of the running mate has been a sore issue within the party and according to him, it was only after the name submitted by the party has been published by INEC that he can publicly announce it.

APC chieftain urges Obaseki, Oshiomhole to end feud in party’s interest IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

chieftain of the All Progressives Congress (APC), Charles Idahosa, on Tuesday urged the Edo State Governor, Godwin Obaseki and Adams Oshiomhole, the national chairman of the party to settle their difference amicably in the interest of the party. Idahosa, political adviser to Adams Oshiomhole made the appeal at a press briefing in Benin City. He also urged the duo not to drag politicians and press into their personal crisis. Idahosa, who attributed the crisis between governor Obaseki and Adams Oshiomhole to envy and jealousy, noted that the governor has within three years in office performed creditably to the expectations of the electorate. “Why is this fighting? What has the young man done that they are now fighting him about? Case

Charles Idahosa

of envy and jealousy cannot be settled. That is the cause of their quarrel. Obaseki has performed very well within three years in office and if given another opportunity to govern the state for another four years, he will do more than what he is doing now. “They should go and settle their quarrel (themselves) instead of indicting politicians and press. Obaseki will say politicians are greedy. They want money and I have no

money to share to them while Oshiomhole will say they are political merchants, and that they are gaining from it. “Obaseki and Oshiomhole should try and settle themselves because Oshiomhole is the one that brought Obaseki and we bought it from him. Until, now they have not told us the causes of their quarrel (crisis)”, he said. He however, warned that any attempt to deny the governor the party’s ticket in the 2020 gover-

norship election will not only be resisted but will lead to the end of the party in the state. “Anybody thinking that they are going to wrestle Obaseki out of the governorship race in 2020 is wrong. We will not allow it. I am standing by him, and nobody can push him out of the party unless they want to finish APC in South-South and SouthEast. As I speak now, only Edo is APC state, and if by error, omission and commission they push Obaseki out of the party that is the end of APC”, he added. He said Oshiomhole should be held responsible for whatever Obaseki is doing in the state. According to him, Oshiomhole is shooting himself in the foot. So, everything Obaseki has done is for Oshiomhole because he owned him and he brought him. If Obaseki brought 20 commissioners it is Oshiomhole that brought them.

Tribunal nullifies election of Ilorin South state Assembly, orders fresh poll SIKIRAT SHEHU, Ilorin

he Kwara State Election Petition Tribunal on Wednesday delivered judgment on the petition challenging the election that produced Hassan Elewu of the All Progressives Congress (APC) as member Kwara State House of Assembly, representing Ilorin South Constituency by Jimoh Raheem Agboola of People’s Democratic Party (PDP). Recall that in the petition number KW/EPT/HA1/2019, Jimoh Raheem Agboola with his party, People’s Democratic Party (PDP), through their Counsel, Abdulwahab Bamidele, A.A. Ibrahim and a host of other counsels represented the Petitioners at the tribunal where they were seeking for legal redress on the House of Assembly poll in Ilorin South state constituency on the premise that the candidate returned by INEC as the winner of the Election was not qualified to contest the said election. In the judgment delivered by the Tribunal and read by Justice Mariya M. Ismaila, the issue of jurisdiction was resolved against the respondents, namely, Sulaiman Shehu Abdulsalam, APC, and the Independent National Electoral Commission (INEC). The Tribunal on its stance over jurisdiction to entertain the matter, held that it had the

prerequisites powers to hear the Petition and that it is fortified by the provision of section 138 (1) (a-e) of the Electoral Act, 2010 (as amended) On the merit of the petition, Justice Mariya Ismaila resolved the issue against Agboola and PDP on the basis that they failed to prove allegation of forgery and deposition to false affidavit raised against the 1st Respondent. On the question of who was the actual candidate of the APC for the poll between Elewu and Shehu, the Tribunal posited that Shehu’s name is contained in the Election results declared by INEC and a rebuttable presumption existed that Sulaiman Shehu Abdulsalam was the candidate presented by party, APC. However, the Tribunal further found that since all the Respondents have deposed that Hassan Elewu is the candidate of the APC, the presumption that Sulaiman Shehu Abdulsalam is the candidate of APC has been successfully rebutted. Meanwhile, Tribunal in its central ruling nullified the election that produced All Progressive Congress (APC), candidate and ordered the fresh election within three months time. In the circumstance, Tribunal ordered INEC to withdraw any Certificate of Return already issued in respect of the said election.

Kogi/Bayelsa guber: INEC to deploy special mechanism to check vote-buying INIOBONG IWOK

head of November gubernatorial election in Kogi and Bayelsa States, the Independent National electoral Commission (INEC) has said it was strategising on a special mechanism to be adopted to check vote-buying in the elections. Recent elections in Nigeria have been characterised by a new trend of alleged vote-buying and inducement of voters. In most cases, the trend often takes place at the polling units in the presence of INEC and security officials. Different international and local election observer groups who monitored the 2019 general election, said vote-buying and intimidation of voters were among major factors that undermined the credibility of the elections. They, however, urged the electoral empire and the Federal Government to take stringent measures to check the trend in future elections. But speaking in an interview with BusinessDay, Tuesday, on the commission’s preparedness to conduct both gubernatorial elections, Festus Okoye, INEC chairman of information and

voters education, said the commission had reviewed the conduct of the 2019 general election and was aware of the challenge posed by vote-buying to the electoral system. Okoye, who refused to disclose the new strategy, however, warned politicians and their agents who intend inducing voters to stay away from the polling units or be arrested. “We are aware the problems vote-buying poses and we are adopting new strategies to deal with it in both elections. We appeal to political parties and the candidates to steer clear of our polling units as the Commission will not condone buying and selling of votes or voters’ cards in any of the polling units. “We shall collaborate with security agencies to stamp out vote-buying. The ban on the use of photographic equipment inside the polling cubicle is still in force. We shall further fortify our polling units to guarantee secrecy of the vote,” Okoye said. The INEC Commissioner stressed that the commission had intensified preparations for both elections and would soon round off the distribution of Permanent Voters Card (PVC’s) in the state.

Thursday 19 September 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 18 September 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 248,816.58 7.00 0.72 520 29,948,020 UNITED BANK FOR AFRICA PLC 212,036.41 6.20 0.81 167 12,467,772 ZENITH BANK PLC 572,986.01 18.25 0.27 258 11,303,263 945 53,719,055 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 179,476.46 5.00 -1.00 172 4,197,403 172 4,197,403 1,117 57,916,458 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,819,100.06 138.50 - 57 586,559 57 586,559 57 586,559 BUILDING MATERIALS DANGOTE CEMENT PLC 2,641,278.65 155.00 -0.65 43 283,612 LAFARGE AFRICA PLC. 231,952.26 14.40 -0.69 51 1,614,421 94 1,898,033 94 1,898,033 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 264,800.05 450.00 5.63 6 328,462 6 328,462 6 328,462 1,274 60,729,512 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 0 0 0 0 0 0 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 0 0 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 42,115.13 44.15 - 27 20,510 PRESCO PLC 44,800.00 44.80 - 1 100 28 20,610 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,080.00 0.36 -7.69 13 380,311 13 380,311 41 400,921 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 1 1,739 JOHN HOLT PLC. 237.38 0.61 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 1 100 TRANSNATIONAL CORPORATION OF NIGERIA PLC 41,054.47 1.01 1.98 64 15,849,138 U A C N PLC. 17,431.84 6.05 -2.42 126 9,194,835 192 25,045,812 192 25,045,812 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 8 37,125 ROADS NIG PLC. 165.00 6.60 - 0 0 8 37,125 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,247.99 1.25 5.93 56 1,908,854 56 1,908,854 64 1,945,979 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 10,804.71 1.38 - 5 2,652 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 81,044.16 37.00 -0.80 28 134,202 INTERNATIONAL BREWERIES PLC. 103,150.34 12.00 - 5 11,375 NIGERIAN BREW. PLC. 405,842.78 50.75 0.10 64 501,459 102 649,688 FOOD PRODUCTS 110,500.00 22.10 -0.67 74 1,355,841 DANGOTE FLOUR MILLS PLC 102,000.00 8.50 1.18 112 1,982,411 DANGOTE SUGAR REFINERY PLC 54,330.03 13.25 -1.85 59 2,161,884 FLOUR MILLS NIG. PLC. 7,692.29 0.97 - 10 91,528 HONEYWELL FLOUR MILL PLC 1,340.10 0.36 - 0 0 MULTI-TREX INTEGRATED FOODS PLC 766.26 4.30 - 1 20 N NIG. FLOUR MILLS PLC. 34,442.70 13.00 - 3 2,551,000 NASCON ALLIED INDUSTRIES PLC 3,321.07 12.15 - 0 0 UNION DICON SALT PLC. 259 8,142,684 FOOD PRODUCTS--DIVERSIFIED 18,594.20 9.90 - 23 57,951 CADBURY NIGERIA PLC. 887,775.00 1,120.00 3.70 43 131,541 NESTLE NIGERIA PLC. 66 189,492 HOUSEHOLD DURABLES 1,680.31 22.10 - 0 0 NIGERIAN ENAMELWARE PLC. 5,366.12 4.29 - 6 97,000 VITAFOAM NIG PLC. 6 97,000 PERSONAL/HOUSEHOLD PRODUCTS 23,425.81 5.90 - 24 146,258 P Z CUSSONS NIGERIA PLC. 168,328.66 29.30 - 14 11,051 UNILEVER NIGERIA PLC. 38 157,309 471 9,236,173 BANKING 133,951.72 7.30 -0.68 24 231,921 ECOBANK TRANSNATIONAL INCORPORATED 45,490.43 1.57 1.29 40 1,505,030 FIDELITY BANK PLC 791,698.72 26.90 0.19 150 4,547,068 GUARANTY TRUST BANK PLC. 11,785.70 0.40 5.26 7 1,341,000 JAIZ BANK PLC 67,657.48 2.35 1.29 1,395 34,693,778 STERLING BANK PLC. 203,845.27 7.00 - 42 553,735 UNION BANK NIG.PLC. 8,182.54 0.70 -1.43 13 558,827 UNITY BANK PLC 22,758.93 0.59 1.72 41 1,577,930 WEMA BANK PLC. 1,712 45,009,289 INSURANCE CARRIERS, BROKERS AND SERVICES 4,117.00 0.20 - 1 1,000 AFRICAN ALLIANCE INSURANCE PLC 4,227.42 0.61 -4.69 56 5,439,553 AIICO INSURANCE PLC. 18,375.00 1.75 -2.78 11 193,116 AXAMANSARD INSURANCE PLC 2,439.00 0.30 -6.67 6 1,981,130 CONSOLIDATED HALLMARK INSURANCE PLC 15,559.12 1.50 -0.66 2 134,400 CONTINENTAL REINSURANCE PLC 4,124.26 0.28 3.70 25 6,622,939 CORNERSTONE INSURANCE PLC 909.99 0.20 - 0 0 GOLDLINK INSURANCE PLC 1,228.00 0.20 - 0 0 GUINEA INSURANCE PLC. 487.95 0.38 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 2,123.80 0.29 3.57 7 762,050 LASACO ASSURANCE PLC. 1,675.57 0.39 - 0 0 LAW UNION AND ROCK INS. PLC. 3,920.00 0.49 -5.77 4 306,000 LINKAGE ASSURANCE PLC 2,234.55 0.20 - 13 6,580,000 MUTUAL BENEFITS ASSURANCE PLC. 9,399.30 1.78 0.56 12 236,000 NEM INSURANCE PLC 1,547.90 0.20 - 0 0 NIGER INSURANCE PLC 2,637.45 0.49 - 1 11,817 PRESTIGE ASSURANCE PLC 1,333.75 0.20 - 0 0 REGENCY ASSURANCE PLC 1,668.16 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 4,483.72 0.48 - 0 0 STACO INSURANCE PLC 2,582.21 0.20 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,800.00 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 516.46 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 3,200.00 0.20 - 0 0 UNIVERSAL INSURANCE PLC 2,773.33 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 5,219.27 0.39 - 15 386,673 WAPIC INSURANCE PLC 153 22,654,678

www.businessday.ng

MICRO-FINANCE BANKS 2,652.50 1.16 - 10 38,050 NPF MICROFINANCE BANK PLC 10 38,050 MORTGAGE CARRIERS, BROKERS AND SERVICES 4,158.00 0.99 - 0 0 ABBEY MORTGAGE BANK PLC 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 2,265.95 0.20 - 0 0 RESORT SAVINGS & LOANS PLC 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS 7,760.00 3.88 - 27 214,948 AFRICA PRUDENTIAL PLC 37,055.74 6.30 - 6 78,342 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC 32,476.45 1.64 5.81 42 2,318,202 FCMB GROUP PLC. 1,029.07 0.20 - 0 0 ROYAL EXCHANGE PLC. 366,099.77 35.75 -0.69 16 751,986 STANBIC IBTC HOLDINGS PLC 12,300.00 2.05 0.49 39 1,308,175 UNITED CAPITAL PLC 130 4,671,653 2,005 72,373,670 HEALTHCARE PROVIDERS 1,680.29 3.37 - 0 0 EKOCORP PLC. 888.28 0.25 8.70 2 186,240 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 2 186,240 MEDICAL SUPPLIES 494.58 0.50 - 0 0 MORISON INDUSTRIES PLC. 0 0 PHARMACEUTICALS 366.17 0.50 - 0 0 EVANS MEDICAL PLC. 9,388.62 4.50 - 1 100 FIDSON HEALTHCARE PLC 8,550.52 7.15 - 11 107,347 GLAXO SMITHKLINE CONSUMER NIG. PLC. 3,605.74 2.09 10.00 17 825,042 MAY & BAKER NIGERIA PLC. 854.62 0.45 - 0 0 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 29 932,489 31 1,118,729 COMPUTER BASED SYSTEMS 781.44 0.22 -4.55 11 35,204,300 COURTEVILLE BUSINESS SOLUTIONS PLC 11 35,204,300 COMPUTERS AND PERIPHERALS 1,470.89 0.50 - 0 0 OMATEK VENTURES PLC 0 0 IT SERVICES 6,413.06 2.54 - 1 100 CWG PLC 534.60 4.95 - 0 0 NCR (NIGERIA) PLC. 282.12 0.57 - 3 5,000 TRIPPLE GEE AND COMPANY PLC. 4 5,100 PROCESSING SYSTEMS 1,127.05 0.24 -7.69 9 1,938,000 CHAMS PLC 9,996.00 2.38 - 3 16,844 E-TRANZACT INTERNATIONAL PLC 12 1,954,844 TELECOMMUNICATIONS SERVICES 1,215,762.01 323.50 - 0 0 AIRTEL AFRICA PLC 0 0 27 37,164,244 BUILDING MATERIALS 2,173.68 7.50 - 9 29,242 BERGER PAINTS PLC 17,325.00 24.75 - 20 54,119 CAP PLC 216,867.77 16.50 1.54 21 195,166 CEMENT CO. OF NORTH.NIG. PLC 313.43 0.59 - 0 0 MEYER PLC. 1,959.74 2.47 - 1 50 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. 51 278,577 ELECTRONIC AND ELECTRICAL PRODUCTS 2,256.91 2.09 - 0 0 AUSTIN LAZ & COMPANY PLC 2,465.85 1.40 - 8 42,150 CUTIX PLC. 8 42,150 PACKAGING/CONTAINERS 29,873.33 59.75 - 1 5 BETA GLASS PLC. 388.02 9.10 - 0 0 GREIF NIGERIA PLC 1 5 AGRO-ALLIED & CHEMICALS 100,754.14 62.50 - 0 0 NOTORE CHEMICAL IND PLC 0 0 60 320,732 CHEMICALS 2,547.42 6.12 - 2 1,000 B.O.C. GASES PLC. 2 1,000 METALS 1,781.64 8.10 - 0 0 ALUMINIUM EXTRUSION IND. PLC. 0 0 MINING SERVICES 852.39 0.20 - 0 0 MULTIVERSE MINING AND EXPLORATION PLC 0 0 PAPER/FOREST PRODUCTS 83.60 0.38 - 0 0 THOMAS WYATT NIG. PLC. 0 0 2 1,000 ENERGY EQUIPMENT AND SERVICES 1,252.54 0.20 - 2 1,004,600 JAPAUL OIL & MARITIME SERVICES PLC 2 1,004,600 INTEGRATED OIL AND GAS SERVICES 48,606.82 3.91 - 24 211,910 24 211,910 OANDO PLC PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 56,974.05 158.00 - 9 3,833 11 PLC 11,658.40 16.80 - 13 11,835 CONOIL PLC 3,521.19 2.70 - 11 30,897 ETERNA PLC. 18,234.74 14.00 - 26 64,367 FORTE OIL PLC. 5,729.98 18.80 - 1 500 MRS OIL NIGERIA PLC. 33,952.18 100.00 - 38 17,070 TOTAL NIGERIA PLC. 98 128,502 124 1,345,012 ADVERTISING 1,820.01 0.41 - 1 100 1 100 AFROMEDIA PLC AIRLINES 17,551.17 1.80 - 1 500 MEDVIEW AIRLINE PLC 1 500 AUTOMOBILE/AUTO PART RETAILERS 341.14 0.29 - 0 0 R T BRISCOE PLC. 0 0 COURIER/FREIGHT/DELIVERY 2,387.46 4.05 - 3 7,125 RED STAR EXPRESS PLC 328.19 0.70 - 2 200,900 TRANS-NATIONWIDE EXPRESS PLC. 5 208,025 HOSPITALITY 642.33 0.20 - 0 0 TANTALIZERS PLC 0 0 HOTELS/LODGING 4,723.78 3.05 - 0 0 CAPITAL HOTEL PLC 2,432.19 1.17 - 2 5,500 IKEJA HOTEL PLC 7,862.53 3.50 - 1 280 TOURIST COMPANY OF NIGERIA PLC. 41,042.18 5.40 - 1 48,000 TRANSCORP HOTELS PLC 4 53,780 MEDIA/ENTERTAINMENT 4,800.00 0.40 - 0 0 DAAR COMMUNICATIONS PLC 0 0 PRINTING/PUBLISHING 211.68 0.35 - 0 0 ACADEMY PRESS PLC. 1,072.32 1.39 - 10 124,101 LEARN AFRICA PLC 1,183.82 1.99 - 1 10 STUDIO PRESS (NIG) PLC. 452.98 1.05 - 3 18,157 UNIVERSITY PRESS PLC. 14 142,268 ROAD TRANSPORTATION 596.77 0.36 -2.78 5 1,088,266

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 19 September 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

JAMES POLITI IN WASHINGTON, PETER WELLS IN NEW YORK AND ANDREW ENGLAND IN LONDON

onald Trump has asked the Treasury department to “substantially” toughen economic sanctions on Iran, as the US weighs its response to a strike against Saudi Arabian oil facilities that knocked out more than half the kingdom’s production. The US president made the announcement in a tweet on Wednesday, shortly after tapping Robert O’Brien, the state department’s envoy for hostage negotiations, to be his next national security adviser. Mr O’Brien replaces John Bolton, who abruptly exited the White House this month. Mr Trump’s demand for more aggressive economic sanctions suggests he is initially taking a more cautious approach to the crisis triggered by the attack on the Saudi oil facility. Iran-backed Houthi militias in Yemen claimed responsibility for the strike, which on Monday triggered a sharp rise in oil prices. Mr Trump said on Tuesday that Iran appeared to be behind the attack, as the Pentagon worked with US allies on a response. The US has imposed crippling economic sanctions on Iran since abandoning the nuclear deal negotiated by President Barack Obama during his second term in office, meaning that there is not much scope for additional punishment. “The Trump administration will be scraping the bottom of the barrel,” said Henry Rome, an analyst at the Eurasia Group in Washington.

Donald Trump orders ‘substantially’ tougher sanctions on Iran US president has blamed Tehran for attack on Saudi oil facilities

“They’ve gone down the list of top industries and crossed them out. They can target minor industries and individuals . . . and they can certainly make announcements every day for the next year and a half, but at this point there is very little utility to that,” he added. The US Treasury did not

Lower birthrates may lead to higher savings and lower interest rates, stimulating growth

Two studies find devices share information on location and usage with advertisers

he smart T Vs in our homes are leaking sensitive user data to companies including Netflix, Google and Facebook even when some devices are idle, according to two large-scale analyses. Researchers from Northeastern University and Imperial College London found that a number of smart TVs, including those made by Samsung and LG, and the streaming dongles Roku and Amazon’s FireTV were sending out data such as location and IP address to Netflix and third-party advertisers. The data were being sent whether or not the user had a Netflix account. The researchers also found that other smart devices including speakers and cameras were sending user data to dozens of third parties including Spotify and Microsoft. The findings are likely to heighten concerns about the privacy of user data on the internet just as smart devices, including televisions, are flooding homes.

STEVE JOHNSON

In a separate study of smart TVs by Princeton University, researchers found that some apps supported by Roku and FireTV were sending data such as specific user identifiers to third parties including Google. Roughly 68 per cent of US households had a connected TV device, including external hardware such as Roku and Apple TV, at the end of 2018, according to a Nielsen report from March. Tens of millions of these devices use content recognition technology that tracks everything you watch, to be able to target you better with TV advertising, which now accounts for about half of all digital ads. The Northeastern University study, conducted on 81 different devices, both in the UK and the US, is the largest published experiment of its kind, and found “notable cases of information exposure”. Amazon, Google, Akamai and Microsoft were the most frequently contacted companies, partly because these companies provide cloud and networking services for smart devices to operate on, the researchers said. www.businessday.ng

this month. The likelihood of such a summit has faded in the wake of the attack. Mr Bolton, who departed the White House this month, held extremely hawkish views on Iran that had put him at odds with Mr Trump, along with other disagreements on

Want more investment? Have fewer babies

Smart TVs sending private data to Netflix and Facebook MADHUMITA MURGIA, EUROPEAN TECHNOLOGY CORRESPONDENT

respond to a request for comment. A week ago, before the Saudi Arabian strike, media reports suggested Mr Trump had discussed reducing sanctions against the Islamic republic in an effort to facilitate a meeting with Iran’s president, Hassan Rouhani, at the UN General Assembly

policy in Afghanistan and North Korea. Mr O’Brien’s opinions are less well known. A Los Angeles-based lawyer, Mr O’Brien is a former UN and George W Bush administration official who wrote a book in 2016 titled While America Slept: Restoring American Leadership to a World in Crisis. US sanctions on Iran already cover sectors ranging from petrochemicals to oil, precious metals and vehicles. Curbs could possibly be expanded to cover certain manufacturing components that have been spared. Mr Rome said that among the most effective steps Mr Trump could take would be to work with China to cut its own business dealings with Iran. However, that is unlikely to happen given the trade war with Beijing and the longstanding diplomatic ties between China and Iran. After Mr Trump’s tweet on Wednesday, Riyadh expressed satisfaction with the support it was receiving from Washington. Prince Khalid bin Salman, Saudi Arabia’s deputy defence minister, said Mr Trump’s administration had “confronted the Iranian regime’s and terrorist organisations’ aggression in an unprecedented way”.

eveloping countries seeking to follow the successful investment-led growth model blazed by China often run into a problem - high domestic borrowing costs that render infrastructure too expensive to build. This can push countries to borrow more cheaply from abroad, leaving them potentially vulnerable to a debt crisis if this money is suddenly withdrawn, or, instead, remain mired in poverty. For many countries, the way out of this dilemma is simply to have fewer babies, at least according to one economist. “Over half the increase in Chinese household savings since the 1970s can be attributed to the one-child policy,” said Charles Robertson, chief economist at Renaissance Capital, an emerging markets-focused consultancy. Mr Robertson’s thesis is that, broadly speaking, “people with lots of kids don’t save money”. This is not only because they have more dependants to support and therefore less ability to save, but also because people with fewer children need to save for retirement because they are less able to rely on their offspring to

https://www.facebook.com/businessdayng

provide for them in their dotage. As a result, he said there was a “surprisingly high correlation between fertility rates and bank deposits to GDP – a correlation which holds in the 1990s as well as today – and across a great many countries.” RenCap’s analysis found a 53 per cent correlation between a country’s fertility rate, measured by the number of children per woman, and its bank deposits-to-GDP ratio, as seen in the first chart. This finding is strikingly similar to that of an IMF working paper published in December that found that in China “demographic shifts alone account for half of the rise in household savings, suggesting that it has been the most important driver”, as the savings rate rose from 5 per cent in the 1980s to 23 per cent today, 15 percentage points above the global average. China’s bank deposits are equal to 210 per cent of GDP, compared with 33 per cent in Kenya, a typical frontier market country in this regard. Indeed, a 2018 Bank of England working paper went further still, concluding that demographic change could explain three quarters of the 210-basis point decline in interest rates in advanced economies since the early 1980s. @Businessdayng

Higher bank deposits should, everything else being equal, mean an increased supply of loanable funds, which should in theory lead to lower interest rates. RenCap’s analysis suggests this relationship does, indeed, hold across both developed and emerging economies. The correlation is, admittedly, not particularly strong, yet Mr Robertson said that, barring Vietnam, “all countries with bank deposits above 90 per cent of GDP have low singledigit interest rates and all countries with one-year interest rates above 5 per cent in 2017 have bank deposits below 90 per cent of GDP, so high nominal interest rates that deter investment only occur in countries with a low level of bank deposits”. Perhaps more importantly, the relationship between bank deposits and real interest rates is somewhat stronger, with those countries with deposit-to-GDP ratios of at least 60 per cent in 2013 having average oneyear real interest rates of 0.9 per cent between 2014 and 2018, compared with 2.1 per cent for countries with deposits of between 20 and 30 per cent, as the second chart shows. Those states with higher bank deposits have also seen higher levels of investment in the subsequent fiveyear period.

Thursday 19 September 2019

BUSINESS DAY

NATIONAL NEWS

Officials work to convince world Saudi Aramco still a good bet Attacks laid bare the vulnerability of the world’s biggest oil exporter SIMEON KERR IN DUBAI, ANJLI RAVAL, ARASH MASSOUDI AND CHRIS FLOOD IN LONDON AND ANDREW ENGLAND IN JEDDAH

hen Saudi Arabia’s officials outlined plans to restore output to maximum capacity after attacks that set two major oil facilities ablaze on Saturday, they were also tasked with convincing the world that the national oil company Saudi Aramco was investable. Energy minister Prince Abdulaziz bin Salman told reporters Saudi Aramco had “come out like a phoenix from the ashes”, while chief executive Amin Nasser said its swift recovery showed it to be “the most reliable company in the world”. The message was aimed at potential investors in the longawaited Saudi Aramco initial public offering, with Riyadh determined to float shares even after the largest attack on the country’s infrastructure. Despite optimistic forecasts about when production will resume, the incident has laid bare the vulnerability of the world’s biggest exporter, called into question the kingdom’s reputation as a reliable producer and the country’s ability to protect its prized assets. Riyadh is very much aware. One adviser briefed on Saudi Aramco’s thinking said there were fears among officials about weaker investment interest that could hit the $2tn valuation target sought by crown prince Mohammed bin Salman. “The government would rather delay than take a big hit on the valuation,” he said. Some of the nine banks, including big Wall Street names, selected as global coordinators for the Saudi Aramco IPO gave a valuation of at least $2tn for the company, higher than the $11.5tn assumed to be fair value by independent analysts. Jonathan Waghorn, co-manager of the £168m Guinness Global Energy fund, said “The company specific risk for Aramco trumps the effect of higher oil prices [which have risen after the attack] on its valuation”. The geopolitical risk associated with an investment in Saudi Aramco is increasing, with officials concerned about the ramifications of possible retaliatory action by Saudi Arabia or the US precipitating wider conflict in the region. Steffen Hertog, a Gulf expert at the London School of Economics, said a geopolitical risk premium linked to Saudi Arabia was rarely reflected fully in asset pricing: “The vulnerability was always there but no one ever took it very seriously. But now

they are.” Others have said that the kingdom is pursuing this listing at all costs. The oil giant’s new chairman Yasir Rumayyan was adamant “the IPO will continue as is” adding it could come “any time in the coming 12 months”, depending on market conditions. Saudi officials had hoped for a domestic listing as early as the end of 2019, followed by a potential international flotation. This timeframe was already deemed optimistic, with early 2020 more likely and the company is now focused primarily on listing in Riyadh. Bankers and other advisers have been instructed to move ahead with IPO plans, including daily conference calls and other meetings with the company. “There is a lot that could still happen, but we are still going full steam ahead,” said a banker working on the process. The listing is at the heart of ambitious plans led by Prince Mohammed to diversify the kingdom’s economy, using the IPO proceeds to invest in sectors beyond oil and bolster government coffers at a time of huge spending on mega projects. The government is encouraging the wealthiest families to make major investments in the IPO, advisers said. It is hoped that their backing — which is more urgent after the attacks — encourages Saudi retail investors to buy into the offering and secure healthy oversubscription. Other global institutions have also promised to buy shares, one of the advisers said, channelling their investment via the international financial firms operating on Riyadh’s Tadawul exchange. P r i n c e Mo ha m m e d ha s sought to accelerate IPO plans in recent weeks, giving more influence to the kingdom’s sovereign Public Investment Fund over the process and appointing his half brother as energy minister. People working on the IPO said there had been no slowdown in preparations since Saudi Aramco’s kick off meeting with bankers, advisers and lawyers last week at the ballrooms of the Ritz-Carlton hotel in Dubai’s financial centre. Bankers were given a timetable for the listing on Riyadh’s Tadawul stock exchange. Next week, Saudi Aramco executives will give a presentation of its investment narrative to analysts linked to the nine banks that have been appointed joint global coordinators at its Dhahran headquarters, several people said. www.businessday.ng

Jean-Claude Juncker doubts chances of striking Brexit deal

Commission president says ‘very little time’ remains with UK yet to outline backstop solutions MEHREEN KHAN IN STRASBOURG AND TOBIAS BUCK IN BERLIN

ean-Claude Juncker has thrown doubt on the possibility of the EU striking a Brexit deal with the UK, warning that time is tight for an agreement as Boris Johnson has yet to spell out his demands on the Irish backstop. Speaking to MEPs in Strasbourg on Wednesday, the president of the EuropeanCommissionsaidhewas“notsure wewillgetthere”withafinalagreement. “Very little time is remaining.” The warning came after Mr Juncker and Michel Barnier, the EU’s chief negotiator, had lunch with Mr Johnson in Luxembourg on Monday — a meeting in which the UK prime minister failed to provide any ideas on how the government wanted to replace an Irish backstop. “I can’t look you in the eyes and say progress has been achieved,” said Mr Juncker, who described the lunch as “friendly, constructive, and in part positive”.

“I have no sentimental attachment to the backstop. That is why I called on the British prime minister to come forward with concrete proposals, operational and in writing on all alternatives that would allow us to reach these objectives,” said Mr Juncker, who was heckled by Brexit Party MEPs in the chamber. The UK is due to leave the bloc on October 31. It has demanded the full removal of a backstop arrangement that would keep the UK inside the customs union and aligned to EU rules to prevent a hard border on the island of Ireland in the absence of a free trade agreement. Mr Barnier, also speaking at the debate, said the EU was still waiting for “a legally operative solution in the withdrawal agreement that responds to each one of the problems” of the Irish border. So far the UK has suggested allowing Northern Ireland to stick to EU rules on food and livestock. But the EU has warned this would not prevent a hard border in the absence of customs arrangements for all

other types of goods. Britain is also demanding the freedom to diverge from EU regulations on social and environmental standards after Brexit. Mr Barnier warned this demand would reduce the ambition of any future trade agreement. EU officials have grown increasingly pessimistic about the chances of securing a deal with the government and the probability it can pass through a divided House of Commons. Mr Juncker told his college of commissioners on Tuesday that it was only this week that Mr Johnson seemed to “understand the meaning of the single market” and the costs of leaving it for Northern Ireland, according to an official. “We should not spend time pretending to negotiate,” said Mr Barnier. Guy Verhofstadt, the European Parliament’s Brexit chief, said the backstop or any form of safety net would be demanded by MEPs to avoid violence returning to the Irish border.

US businesses ‘tapping the brake’ as uncertainty bites

usiness Roundtable survey of chief executives finds declining confidence for sixth quarter

in a row Lauren Fedor in Washington and Andrew Edgecliffe-Johnson in New York Business confidence among top US chief executives fell for the sixth quarter in a row, as geopolitical uncertainty, the US-China trade war and slowing global economic growth continued to bite, according to a survey published on Wednesday. The Business Roundtable, a group of leading US chief executives from nearly 200 companies, said its economic outlook index fell 10.3 points in the third quarter, to a reading of 79.2. While that was significantly above the 50-point benchmark that

https://www.facebook.com/businessdayng

indicates growth, all three components of the index — plans for hiring, plans for capital investment and expectations for sales — fell during the quarter. Joshua Bolten, president and chief executive of the Business Roundtable, said US businesses “now have their foot poised above the brake, and they’re tapping the brake periodically”. “Uncertainty is preventing the full potential of the economy from being unleashed, limiting growth and investment here in the US,” he said, adding that “opening markets and promoting rules-based trade remains vital to US economic prosperity”. “Congress and the [Trump] administration have the immediate opportunity to come together and provide stability @Businessdayng

and growth to our economy by enacting the US-Mexico-Canada Agreement.” Senior White House officials and Republican lawmakers are pushing for a quick vote on USMCA, which was struck last year as a replacement for the Clinton-era Nafta deal. However, many Democrats are sceptical of the agreement, and have demanded changes to its provisions on labour and environmental standards, drug prices and enforcement. The stand-off has cast a shadow over US president Donald Trump’s trade agenda as the trade war with China escalates. Mr Trump ramped up the trade war earlier this month with a fresh round of 15 per cent tariffs on a further $112bn of imports from China.

Thursday 19 September 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Federal Reserve sees huge demand for cash after money market jolt Crunch in short-term borrowing market sends key policy rate above central bank’s target ADAM SAMSON IN LONDON AND JOE RENNISON IN NEW YORK

anks and investors rushed on Wednesday to gobble up $75bn in short-term cash the Federal Reserve made available in a second attempt to steady one of the world’s most important money markets. Dealers submitted requests for over $80bn in overnight borrowing, exceeding the maximum amount the New York Fed had placed on offer. That amount far exceeded the $53bn demanded when the central bank stepped into the market on Tuesday for the first time in more than a decade. In a sign of the crunch that has hit the short-term borrowing market, the Fed’s main policy rate, the federal funds rate, has jumped above the central bank’s 2 to 2.25 per cent target. Data released on Wednesday morning showed the rate rose to 2.3 per cent on Tuesday, from 2.25 per cent on Monday and 2.14 per cent at the end of last week. The central bank has been forced to intervene after a severe imbalance in the so-called repo market sent the cost of borrowing cash overnight, known as the repo rate, surging to a historic peak. The Fed had not previously used its repurchase agreement auction mechanism outside of small tests since the financial crisis in 2008 and encountered a hiccup on Tuesday as it attempted to open the facility for a large-scale operation. “US funding markets were shocked this week as a combination of factors reduced the amount of cash available to fund securities positions,” said Alex Roever, head

of US rates strategy at JPMorgan Securities, one of the two dozen primary dealers that act as trading counterparties for the Fed. Analysts said the Fed’s dramatic intervention should be seen as a valve meant to release pressure on the repo market, in which banks and funds provide Treasuries and other securities in exchange for cash in transactions that reverse overnight. Wednesday’s operation and this week’s market ructions come as policymakers on the rate-setting Federal Open Market Committee are meeting in Washington. The central bank is expected to reduce its main policy rate by a quarter of a percentage point as it seeks to stimulate the economy in face of growing global headwinds. Highlighting the importance of the repo market to financial stability, Mr Roever said that while the money markets were functioning normally, the sharp rise in the repo rate had reverberated elsewhere, such as the short-term corporate borrowing market known as commercial paper, on Tuesday. Joseph Abate, a managing director focusing on money markets at Barclays Capital, another primary dealer, said that a combination of “temporary pressures” had struck the crucial portion of the financial system in recent days. Analysts specifically pointed to corporations pulling billions of dollars out of money market funds, which are typically major providers of cash in repo transactions, ahead of tax deadlines as a key component of the shock. It had been exacerbated, they said, by a flood of Treasuries hitting the market, something that sharpened dealers’ demand for cash via repo transactions.

Heels that turn into flats: the start-up taking the pain out of fashion How a US entrepreneur sold her innovative shoes to sceptical venture capitalists CAMILLA HODGSON IN SAN FRANCISCO

hen Haley Pavone, founder of Pashion f o o t w ea r, p itches her innovative highheeled shoe business to (overwhelmingly male) sneaker-wearing venture capitalists, she often suggests that they discuss the idea with their wives. Those who follow the 23-year-old’s advice tend to return less sceptical and more intrigued, she says. “It’s worked every time, it’s really funny.” Pashion produces heels that turn into flats. The idea is simple: when a pair of stilettos is making the balls of your feet burn, you should be able to fix the problem without going barefoot, sitting down or changing shoes. Pashion allows women to take the heel off, but keep their shoes on. Pashion’s shoes do not contain the metal rods that give stilettos their characteristic arch. They use flexible materials — similar to those used in trainers — that allow the sole to flatten out when the heel is unscrewed.

The company also claims that its shoes, which are lined with a flexible material usually seen in trainers, are the “only heels on the market with a comfortable insole.” Venture capitalists often don’t grasp the high-heel problem during Ms Pavone’s pitch. “I end up spending eight of my 10 [pitching] minutes explaining why women would want this, because they’re like, ‘Do heels really hurt that bad? My wife wears them all the time.’” This is why Ms Pavone suggests the VCs call their spouses. Pashion has been three years in development and has raised $1.7m. It launched its first line in June. There is a team of 14, including four employees, plus the board and contractors. It is one of a wave of US female-led fashion start-ups making practical and comfortable products. Others include lingerie companies ThirdLove, which offers half-cup bra sizing and a mobile app that lets women measure themselves at home, and True & Co, which fits bras remotely using a quiz. www.businessday.ng

SoftBank looks to Oyo after WeWork setback Fast-growing Indian hotel chain offers solace for Japanese investor BENJAMIN PARKIN IN GURGAON AND KANA INAGAKI IN TOKYO

former Hooters casino resort in Las Vegas is the unlikely test-bed for a revolution in the hotel industry. The 675-room property is this week being rebranded under the banner of Oyo, the Indian budget outfit that has reshaped its home market and is now opening a hotel a day in the UK and US. Fuelled with funds from SoftBank, the Japanese technology group, Oyo is plotting to become the world’s biggest hotel chain. “It’s very hard to put a limit as to the kind of growth, return, the market share that these guys could achieve,” said Munish Varma, managing partner at SoftBank’s Vision Fund. “If you have a product that serves a purpose and solves a very real consumer need . . . why should you not expand?” Yet the ambitious plans — accompanied by a rapid increase in

its valuation — have raised questions about the pace of growth for a company that might be SoftBank’s biggest bet yet. Oyo says it is already the world’s third-largest hotel chain with roughly 1m rooms, including vacation homes, behind only Marriott International and Hilton Worldwide. Ritesh Agarwal, founder and chief executive of Oyo, says the group is on course to surpass its bigger competitors by 2023. “If you compare other traditional hotel chains which have become a million-plus rooms, they’ve all taken at least over half a century,” Mr Agarwal, who founded Oyo when he was 19, said from the company’s cramped office in a Delhi suburb. “Oyo Hotels has taken maybe five-and-a-half years to be able to get there.” Oyo’s pursuit of scale is drawing comparisons to another SoftBank investment and fellow property manager WeWork, which postponed its planned initial public offering this week after investors

baulked at the valuation, business model and governance. As they tried to save the deal, bankers floated valuations at about a third of the $47bn level attached to SoftBank’s last investment. Oyo’s own valuation has drawn scrutiny. In July Mr Agarwal led a $2bn investment round into his own company in an unusual transaction, borrowing in order to buy shares from existing investors Lightspeed and Sequoia. According to people with knowledge of the deal, a consortium of Japanese financial groups including Nomura and Mizuho, which count SoftBank as one of its biggest clients, helped to finance Mr Agarwal’s purchase. In addition to loans, the Japanese consortium later made an investment in Oyo, which valued the company at $10bn, double its previous $5bn valuation. Nomura and Mizuho declined to comment on the deal, which shareholders and regulators still have to approve.

Wall Street banks look to sell more research to companies Regulatory squeeze forces Goldman Sachs and Morgan Stanley to hunt for new consumers ROBIN WIGGLESWORTH IN NEW YORK

oldman Sachs and Morgan Stanley are going head-to-head with the likes of Bain and McKinsey, hoping to sell research services to companies to offset big falls in demand from their traditional clients in asset management. Historically, the reams of research and economic analysis produced by Wall Street’s army of “sellside” analysts has been targeted at hedge funds and fund managers — the “buyside” in industry jargon. But investment groups have

https://www.facebook.com/businessdayng

come under ferocious fee pressure in recent years and are trying to cut down on costs. At the same time, new regulations stemming from the EU — and which have washed over the US — have required banks to charge investors for the research they provide, rather than bundling the cost into commissions for trading. As a result, fund managers have slashed budgets for spending on research, spurring banks to look for new opportunities in the corporate world. Simon Bound, global head of research at Morgan Stanley, said: “The catalyst is pressure on the @Businessdayng

overall business. These are incremental dollars we didn’t think about before, that we are now trying to bring into the firm.” The motivation is somewhat different at Goldman Sachs, where chief executive David Solomon has been aiming to build relationships with executives at smaller companies, hoping that they can boost the bank’s investment banking revenues. Steve Strongin, the bank’s global head of research, said: “The shift is very real. There is a broader recognition that research can be useful to our clients . . . beyond the investment industry.”

Thursday 19 September 2019

BUSINESS DAY

ANALYSIS

Outdated rules are holding back financial innovation Central bank-backed digital currencies would pave the way for revolutionary change VIKRAM PANDIT

lthough banks have been going digital for years, and “fintechs” have been around for a while, the industry has not fundamentally changed. That is because disruption can happen only as quickly as regulators allow it. The pace is limited not only by valid safety and soundness considerations but also the painfully slow speed of regulatory innovation. We are trying to regulate a digital world with 20th century architecture that was designed for physical assets. The growing support for central bank-backed digital currencies could finally pave the way for change by spurring the creation of 21st century regulation. It can do more than just disrupt the industry, it can tackle oligopolistic banking, too big to fail, systemic efficiency, and fulfil the promise of finance. Our current rules are rooted in physical assets and evolved as the industry innovated. Deposit boxes were created for safekeeping coins. Lending earned returns on these deposits through pooled investments. Deposit insurance was created to prevent bank runs. Bank account numbers became a source of identity. This bundled offering of services required new laws and regulations to make the industry safe. As regulators codified this model, economies of scale created an oligopoly of

conglomerates. But politicians still worry about banks that are “too big to fail”, regulators struggle to supervise such big institutions, investors remain disappointed with returns, and customers feel overcharged and underserved. The widespread use of innovative technology has made finance more affordable and accessible by unbundling the functions of banking. But this can only do so much to modernise a 20th-century paradigm. There have been attempts to create the veneer of something new: Facebook’s Libra mimics central bank-issued digital currency by promising convertibility into notes. But finance works on trust, and it is not clear that a digital currency issued by a social media company outside normal banking rules can engender trust. If central banks issued digital currencies that would allow us to unbundle many banking attributes that developed from physical assets. A cyber vault can be used to store digital currency holdings, secure protocols for digital transfers and payments, and cyber wallets for identification. Central banks could offer this service, but so could tech companies, custodian banks or anyone else who agreed to follow a new set of regulations that safeguard these functions. A vault that holds digital currency would not need deposit insurance but it probably would require cyber insurance instead.

US moves to expand sweep of foreign deal review powers Trump administration targets tech, infrastructure, data and real estate sectors JAMES POLITI IN WASHINGTON

he Trump administration has moved to expand the US government’s scrutiny of foreign investments to more deals involving sensitive technology, infrastructure, personal data, and real estate, in new rules implementing legislation passed last year. The US Treasury department’s publication of the regulations on Tuesday offers further details of the new regulatory regime that foreign buyers will be facing in America in the coming years, as Washington frets over rising national security threats posed by China and other geopolitical rivals. In particular, the Trump administration is broadening the powers of the Committee on Foreign Investment in the US (Cfius) — an inter-agency body chaired by the Treasury department — to examine non-controlling investments as well as property deals that were not previously under its scope. Among the transactions that will be subject to additional scrutiny are real estate transactions close to critical facilities in terms of defence and infrastructure.

“The United States welcomes and encourages investment in our country and our workforce,” Steven Mnuchin, the US Treasury secretary, said. “Today’s proposed regulations will provide clarity and certainty to investors regarding Cfius’s enhanced authorities to address national security risks that arise from certain foreign investments, and continue modernising the Cfius process.” A senior US Treasury official said the regulations did not target any nation specifically, and would be subject to a 30-day comment period, to inform their final version which is expected to take effect no later than February 2020. The new rules outlined by the Treasury department follow legislation enacted last year by Donald Trump — with bipartisan support in Congress — to toughen scrutiny on foreign investment at the same time as it expanded export controls with regard to sensitive technologies. They come at a sensitive time in US-China relations, with senior trade negotiators expected to meet in Washington in early October to try to mend fences in their trade dispute. www.businessday.ng

Martin Wolf: why rigged capitalism is damaging liberal democracy Economies are not delivering for most citizens because of weak competition, feeble productivity growth and tax loopholes MARTIN WOLF

“W

hile each of our individual companies serves its own corporate purpose, we share a fundamental commitment to all of our stakeholders.” With this sentence, the US Business Roundtable, which represents the chief executives of 181 of the world’s largest companies, abandoned their longstanding view that “corporations exist principally to serve their shareholders”. This is certainly a moment. But what does — and should — that moment mean? The answer needs to start with acknowledgment of the fact that something has gone very wrong. Over the past four decades, and especially in the US, the most important country of all, we have observed an unholy trinity of slowing productivity growth, soaring inequality and huge financial shocks. As Jason Furman of Harvard University and Peter Orszag of Lazard Frères noted in a paper last year: “From 1948 to 1973, real median family income in the US rose 3 per cent annually. At this rate . . . there was a 96 per cent chance that a child would have a higher income than his or her parents. Since 1973, the median family has seen its real income grow only 0.4 per cent annually . . . As a result, 28 per cent of children have lower income than their parents did.” So why is the economy not delivering? The answer lies, in large part, with the rise of rentier capitalism. In this case “rent” means rewards over and above those required to induce the desired supply of goods, services, land or labour. “Rentier capitalism” means an economy in which market and political power allows privileged individuals and businesses to extract a great deal of such rent from everybody else. That does not explain every disappointment. As Robert Gordon, professor of social sciences at Northwestern University, argues,

https://www.facebook.com/businessdayng

fundamental innovation slowed after the mid-20th century. Technology has also created greater reliance on graduates and raised their relative wages, explaining part of the rise of inequality. But the share of the top 1 per cent of US earners in pre-tax income jumped from 11 per cent in 1980 to 20 per cent in 2014. This was not mainly the result of such skill-biased technological change. If one listens to the political debates in many countries, notably the US and UK, one would conclude that the disappointment is mainly the fault of imports from China or low-wage immigrants, or both. Foreigners are ideal scapegoats. But the notion that rising inequality and slow productivity growth are due to foreigners is simply false. Every western high-income country trades more with emerging and developing countries today than it did four decades ago. Yet increases in inequality have varied substantially. The outcome depended on how the institutions of the market economy behaved and on domestic policy choices. Harvard economist Elhanan Helpman ends his overview of a huge academic literature on the topic with the conclusion that “globalisation in the form of foreign trade and offshoring has not been a large contributor to rising inequality. Multiple studies of different events around the world point to this conclusion.” The shift in the location of much manufacturing, principally to China, may have lowered investment in high-income economies a little. But this effect cannot have been powerful enough to reduce productivity growth significantly. To the contrary, the shift in the global division of labour induced high-income economies to specialise in skill-intensive sectors, where there was more potential for fast productivity growth. Donald Trump, a naive mercantilist, focuses, instead, on bilateral trade imbalances as a cause of job losses. These deficits reflect bad trade deals, the American president insists. It is true that the US has

@Businessdayng

overall trade deficits, while the EU has surpluses. But their trade policies are quite similar. Trade policies do not explain bilateral balances. Bilateral balances, in turn, do not explain overall balances. The latter are macroeconomic phenomena. Both theory and evidence concur on this. The economic impact of immigration has also been small, however big the political and cultural “shock of the foreigner” may be. Research strongly suggests that the effect of immigration on the real earnings of the native population and on receiving countries’ fiscal position has been small and frequently positive. Far more productive than this politically rewarding, but mistaken, focus on the damage done by trade and migration is an examination of contemporary rentier capitalism itself. Finance plays a key role, with several dimensions. Liberalised finance tends to metastasise, like a cancer. Thus, the financial sector’s ability to create credit and money finances its own activities, incomes and (often illusory) profits. A 2015 study by Stephen Cecchetti and Enisse Kharroubi for the Bank for International Settlements said “the level of financial development is good only up to a point, after which it becomes a drag on growth, and that a fast-growing financial sector is detrimental to aggregate productivity growth”. When the financial sector grows quickly, they argue, it hires talented people. These then lend against property, because it generates collateral. This is a diversion of talented human resources in unproductive, useless directions. Again, excessive growth of credit almost always leads to crises, as Carmen Reinhart and Kenneth Rogoff showed in This Time is Different. This is why no modern government dares let the supposedly marketdriven financial sector operate unaided and unguided. But that in turn creates huge opportunities to gain from irresponsibility: heads, they win; tails, the rest of us lose. Further crises are guaranteed.

industry Insight

BUSINESS DAY Thursday 19 September 2019 www.businessday.ng

How manufacturers can thrive amid macroeconomic headwinds ODINAKA ANUDU, MICHAEL ANI & GBEMI FAMINU

t is interesting to be a manufacturer in Nigeria. There is money to be made but also hurdles to cross. The population of 200 million provides a big market for manufacturers though almost half of this demography are extremely poor. The environment in which manufacturers operate is tough as the sector appears to be the hardest hit from an economy that is struggling and growing at a pace below its population growth. Dwindling economic activities, coupled with falling purchasing power, has caused sharp declines in the revenues of most manufacturing firms in Africa’s largest economy. The Manufacturers CEOs Confidence Index (MCCI) survey carried out among business owners in the manufacturing sector for the second quarter of 2019, conducted by the Manufacturers Association of Nigeria (MAN), showed that issues around foreign exchange, bank lending rate, government capital implementation, multiple taxes, overregulation of regulatory agencies, and sources of raw materials were some of the challenges dragging the growth of the sector which have also constrained its performance on the global market scale. However, in spite of the harsh operating environment, many manufacturing companies have been able to surmount the economic headwinds by growing revenue from sales and raking in good returns for shareholders. For example, Nestle has succeeded in consistently growing revenue and net income in the last three years. In 2015, when many companies started feeling the shock of a collapse in oil prices, where Nigeria gets about 84 percent of its foreign exchange earnings from, revenue and net income of Nestle rose 6 percent and 7 percent respectively to N151.3 billion and N23.8 billion. The same trend was seen in 2017 after the firm picked up the pieces of a horrid year in 2016, to grow revenue by a whopping 34 percent to N244.1 billion in 2017, fuelled by 139 percent surge in domestic sales. Export sales, which contracted in 2016, grew more than double to settle at N3 billion in 2017. Revenue further trended northwards to N266.2 billion in 2018, and a sharp drop in finance cost helped after-tax earnings to soar 26 percent to N43 billion last year. The firm has continued to succeed due to a combination factors that have been put in place, ranging from long-term investments, development of people, continuous brand building, quality and trust, development of the community it operates, creation of partnership, nutritional products and consumercentric innovations, among others. The truth is, for the economy and the manufacturing sector to improve, it is important that the various challenges of the sector be adequately addressed. While await-

ing government intervention, It is of greater advantage for industry players to address the issues in-house by applying homemade options. Innovation To operate in an economy that is Volatile, Uncertain, Complex and Ambiguous (VUCA) like Nigeria, manufacturing companies must be innovative, producing a variety of goods that are price friendly and suit consumer preferences. Poverty rate is almost 50 percent with unemployment rate hitting 23.1 percent, according to official date, meaning shrinking wallets for consumers. A 2019 Coronation Merchant Bank Report says that price is a key battle ground and companies with lowest price points win. This is Innovation number one: Lowering production cost to give consumer relatively cheaper but comparatively good products. Manufacturers now produce smaller sizes of goods in response to shrinking wallets of consumers. FrieslandCampina WAMCO for example, now has Peak and Three Crown dairy products in small sizes, helping them to reach more consumers while making good margins. Data from the National Bureau of Statistics on Gross Domestic Product (GDP) by Income and

Expenditure approach at 2010 purchaser’s values show that consumption expenditure of households has been declining at varying pace since it rose by 1.5 per cent in 2015. Also, the International Monetary Fund (IMF) says that per capita income of citizens in the country has declined to $2,049 in 2018 from as high as $3,268 in 2014, signifying that consumers have less to spend on basic necessities. Those who fail to see from the angle have lost market share to competitors or have seen their business operations crawl. Jik once lost the bleach market to Hypo when the latter took notice of economic reality and entered the market with sachet bleach, selling it as low as N20 to serve consumers. Similarly, Coca-Cola has faced intense competition from the likes of Bigi and Big Cola, who are both selling at N100 for a product of same quantity. This pushed CocaCola into innovating to cater for the demands of those consumers who might have N100 and still want to derive satisfaction for its products. The same was with Dufil, when it snapped up the vegetable oil market with the introduction of ‘Power Oil’. In reality, for manufacturers to stay afloat, they must continuously

develop variety of products, taking into consideration falling consumption in line with its cost. Backward Integration Importation of raw materials is becoming increasingly difficult as naira weakens. For over three years now, 43 items have been on the list of products not eligible for foreign exchange in Nigeria. Imagine a multinational which needs $100 million to import inputs. It may have to resort to black and secondary markets, which may not be easy. Manufacturing companies can resort to local sourcing of raw materials, also known as backward integration, which will be beneficial for both the company and its host community. Backward integration is a tactical move by the government aimed at sustaining a favourable foreign exchange, boosting local capacity, creating jobs, enhancing skills acquisition and increasing the utilisation of locally available raw materials. Economists say increased raw materials sourcing by manufacturers, when done sustainably, will not only create a number of value chains and jobs, but will also bring huge foreign exchange and development. Many multinationals are surviving today by backward integrating

or getting raw materials locally. Doing so is cost-effective at best and reduces exposure to foreign exchange. In 2016, 54 manufacturing companies shut down because of their inability to access FX, shedding hundreds of jobs. This should not be allowed to happen again especially now that the government is openly encouraging firms to source inputs locally—even with incentives. Smart Technology Using technology comes with attendant of advantages for manufacturing companies and has become a necessity within manufacturing operations that are seeking to reduce cost and eliminate wastes. Manufacturing technology helps to achieve speed and efficiency. The advantages of manufacturing technology include: increase in quality / decrease in human error, cost reduction, and reduction in overall production time, among others. Companies which leverage technology have the potential to easily meet increasing demands whether domestically and internationally. Today several companies are becoming tech-complaint and they have nothing to regret. Beloxxi is a typical example of a company that uses smart technology. Once you press a button, production takes care of itself. This saves cost, though it has implications on employment. Export Oriented Manufacturing companies must strive to be export oriented in their operations. This is because companies which export get foreign exchange from sales of their products, making them have dollar liquidity in their confers to purchase more inputs. Recently, the Federal Government ordered the Central bank to stop providing FX to importers of agricultural products, a move that can cripple activities for companies who rely on the CBN for FX of its imports. Following the order, manufacturers exporting products to the international market are expected to be able to weather the storm without being affected, while those that do not would need to source dollars from bureau de change where dollars are more expensive. This increases cost of production. Government Manufacturers must learn how to deal with government agencies. It is a skill that needs to be learnt. Appoint a officer who will deal with regulatory issues. Government, on its part, must help businesses to grow by eliminating multiple taxes. It can also intervene by enforcing patronage of local goods. One of the things India has successfully accomplished is sensitising its citizens to always buy locally made products. It both increases the economy and instils the spirit of patriotism on the citizens. Nigeria could do this by enforcing and monitoring the Executive Orders 003 and 005, and encourage the government of all levels to embrace patronage of made-inNigerian products. Doing this would boost the output of the industries and save foreign exchange for the country.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.