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More job losses loom as manufacturers struggle to pass cost to consumers

…as energy, raw materials, logistics cost soars BALA AUGIE & ODINAKA ANUDU

anufacturers could embark on job cuts next year in order to protect slim margins as they increasContinues on page 46

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Apapa: NPA reacts to P. 47 BusinessDay Editorial, clarifies on efforts in addressing gridlock

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Buhari presents N8.6trn 2019 budget as 20.93m Nigerians now unemployed KEHINDE AKINTOLA & OWEDE AGBAJILEKE, Abuja, DIPO OLADEHINDE, MICHEAL ANI, BUNMI BAILEY & ISRAEL ODUBOLA, Lagos

t was a mix of jeers and cheers on the floor of the National Assembly yesterday as President Muhammadu Buhari presented a N8.8 trillion spending plan which he said is aimed at placing

Earmarks $1bn for fuel subsidy in 2019 Misery index now 34.38

“the economy on the path of inclusive, diversified and sustainable growth in order to continue to lift significant numbers of our citizens out of poverty.”

Earlier yesterday, the National Bureau of Statistics (NBS) released the latest unemployment data showing that 20.93 million Nigerians are actively

searching for jobs but cannot find any to do. The NBS data shows that the Continues on page 46

State of health in Nigeria

Dr Femi Olugbile is an acclaimed physician, health administrator and writer. An astute psycho-profiler, he was for nine years chief medical director of Lagos State University Teaching Hospital, which he built into a first-class health facility. He has also served as permanent secretary of the ministry of health. P. 26

L-R: Seyi Kumapayi, group chief finance officer; Roosevelt Ogbonna, group deputy managing director; Herbert Wigwe, group managing director/CEO, all of Access Bank plc, and Uzoma Dozie, group managing director, Diamond Bank plc, at a press conference on the proposed merger between Access Bank and Diamond Bank in Lagos, yesterday. Pic by Olawale Amoo

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Political parties demanding money to endorse Buhari – Oshiomhole

... solicits EU, IRI support against hate speech, fake news JAMES KWEN, Abuja

head of the 2019 general elections, National Chairman of the All Progressives Congress, APC Adams Oshiomhole revealed that many opposition political parties have being demanding payment of money to endorse it’s Presidential Candidate, Muhammadu Buhari and work for his victory. Oshiomhole who made this revelation when he received delegations from the European Union, EU and International Republican Institute, IRI at the APC National Secretariat Abuja regretted that the proliferation of political parties has created avenue for vote buying in next year’s election as they do not feature candidates for election but they go about endorsing money bag political parties. He noted that, “INEC tried to restrict the registration of political parties, the judiciary said no you can register anybody who wants to but the result is that, we have a long ballot paper which poses challenges on election day with regard to how people are going to identify who to vote for. “I can tell you how many requests I have from these so called political parties that if you pay me this we will announce that we are supporting your Presidential candidate. So people have formed political parties as platform for trading.” The APC National Chairman

denied allegations by opposition parties that the ruling party was not disposed to a free, fair and peaceful elections and called on EU and IRI to help in sensitizing Nigerians especially the main opposition Peoples Democratic Party, PDP on the need to eschew hate speech and stop spreading fake news capable of fanning the embers of fire in the already volatile political environment. He particularly tasked the international bodies to prevail on INEC to accredit only election monitors not sponsored by political parties and to engage with Civil Society Organizations that are not politically inclined to evolve measures that would ensure credible polls while they should help to stop the turning of worship centres into political theatres. Earlier, Thomas-Greenfield who spoke on behalf of the delegations, told Oshiomhole of the rising fear among opposition parties and Nigerians that the ruling party was planning to retain power in the 2019 general elections using state apparatuses. Thomas-Greenfield noted that the whole world is keenly interested in the outcome of Nigeria’s next election and charged the APC led government to improve on the successes the country recorded in 2015 and promised to factor in the process by engaging critical stakeholders especially in reducing hate speech but encouraging issue based campaigns.

Access Bank says Diamond not bringing toxic assets to books

...to source $250m tier 2 capital from partners ...seeks shareholders’ approval for Rights Issue IHEANYI NWACHUKWU

he management of Access Bank Plc on Wednesday December 19 said the merger with Diamond Bank will not in any way add toxic assets to its books, adding that the latter has been asked to write off its bad loans. With central bank of Nigeria (CBN) no objection and notifications to the Securities and Exchange Commission (SEC), Nigerian Stock Exchange (NSE), and National Pension Commission (Pencom), Access Bank is offering N3.13 in cash or (N1 and 2 of its shares for every 7 of Diamond Bank). Herbert Wigwe, GMD, Access Bank said at the press briefing on the merger with Diamond Bank that “Access Bank has enough capital to consummate the transaction.” He said the bank is expecting tier 2 capital of $250million from its partners by this year end, adding that it will

still seek shareholders’ approval for a $200million Rights Issue by next year. “What we are seeing here is a combination of our asset pool. We will be leveraging Diamond Bank footprint in retail banking and its digital growth. Diamond Bank will also bring on board additional 17million of its customers to the enlarged institution,” Wigwe said. “The new institution will reflect the strength of both institutions. This transaction will be value creating for shareholders. With respect to the management, the team in Diamond Bank that is responsible for running the retail function will be brought into the combined entity,” he added. Uzoma Dozie, MD, Diamond Bank Plc said “we chose to look for partner that will address and create value for all stakeholders and shareholders.” Roosevelt Ogbonna, deputy GMD, Access Bank said “postmerger the bank will continue to be responsible to its shareholders”.

President Muhammadu Buhari, presenting 2019 Next Level Budget to the National Assembly in Abuja, yesterday. Picture by Tunde Adeniyi

The problem with Nigeria’s power privatisation project ISAAC ANYAOGU

igeria’s 2013 power sector privatisation programme, copied from India was designed to address an intractable situation where massive government investments failed to improve power generation and supply. Both programmes achieved different ends. Five years after privatisation which gulped over $3billion, the Nigerian government has provided another N1.2trillion in the form of intervention funding and loans to the players. Actual power supply has risen from less than 2,000MW to above 3,000MW. Nigeria’s population grows at over 2 percent annually and entire cities report power cuts that last for weeks. India has recorded a different outcome. A report by its ministry of power says that in the last two years, India had the fifth largest installed capacity in the world. As of October 2016, the installed power capacity was 307.28 GW. Private capacity generation increased to 124 GW in FY2015- 16, which constitutes 41 percent of the total power generated in the country. The electricity generation (including renewable energy) in the country grew by 5.9 percent to 738,027 Million Units (MUs) in 2017. Fixing policy The power privatisation policy was organised to have the distribution companies (DisCos) who would collect and pay the Nigerian Bulk Electricity Trading (NBET) Plc who will pay every other operator in the value chain – generation companies, (GenCos), gas companies (GasCos)

ANALYSIS and the Transmission Company of Nigeria (TCN). It was assumed that the DisCos would collect a cost reflective tariff hence a Multi-Year Tariff Order (MYTO) was developed. However, “the challenge was assumptions that fed into tariff changed,” said Chuks Nwani an energy lawyer, and DisCos began to default badly. Inflation jumped from single digit, gas prices rose and foreign exchange went through the roof. This set in liquidity challenges in the system. Operators say the regulator; the Nigerian Electricity Regulatory Agency (NERC) erred by failing to enforce sanctions on defaulters. DisCos withheld more than they should without penalties and political interference marred the process. The privatisation exercise was abused towards the end, when the competent people driving the process were fired and replaced with those pliable to special interests, the regulator was weakened and became susceptible to political interference, especially in matters of tariff and the DisCos became the enfant terrible of the electricity market. By February 2, 2016, power generation had ramped to 5,074 MW, the highest in Nigeria’s history. Two weeks later, Niger Delta militants blew up the Forcados pipeline which feeds gas to all the critical gas-fired plants in the country and Nigeria’s power sector collapsed. Conservative estimates say losses were over $3billion dollars by September 2016, with over 1,500MW of power lost because Forcados is

Nigeria’s major artery and accounts for 50 percent of gas production. Nigeria depends on gas fired plants to generate 85 percent of its power. Babatunde Fashola began an incremental policy and soon backed it with N701bn power sector funding to gas producers. Legal challenges made it difficult to review pricing, non-provision of meters lowered collections and liquidity gaps grew north of N1trillion in 2018. The government’s response was to throw more money at the problem. “The danger with all these bailouts is that Nigerians will still pay for these monies, many of which are given without the consent or knowledge of market operators,” Joy Ogaji, executive secretary of AEGC told BusinessDay. Nigeria has secured approval for a Power Sector Reform Implementation Programme,alongwiththeWorldBank and African Development Bank for a $7.6billionfundingforthesectorin2017 andbeganaphasedimplementationof aspects of the programme. Last year, Fashola announced that Gencos could sell power directly to eligible customers and a competition transition charge has been announced by the minister to assuage the concerns of the DisCos that they will lose huge market share. NERC has approved a mini grid regulation which has provided opportunity to deepen energy access for rural communities. The Rural Electrification Agency (REA) is ramping up efforts to help communities without access to the grid or those who are underserved to get power through renewable energy sources. There are also many projects coming on stream in rural communities.

Stanbic IBTC, ARM, Premium top PFAs by assets under management …PFAs earn N104.89bn in fees HOPE MOSES ASHIKE

n analysis of the RSA Active and Retiree Funds under the Management of pension fund administrators (PFAs) shows that Stanbic IBTC Pension Managers managed N2 trillion or 37.21 percent of the total assets as at the reporting

period, followed by ARM Pension Managers and Premium Pension limited to make up the top three ranked PFAs accounting for N497 billion (8.82 percent) and N444 billion (8.17 percent) respectively at the end of 2017, according to data released yesterday by the National Pension Commission (PenCom)

An analysis of membership by PFAs shows that Stanbic IBTC PFA has the highest proportion of RSA registrations with 20.83 percent of the total registration. Trustfund Pensions Plc and ARM Pension Managers Limited followed with 8.88 and 8.78 percent respectively. The PFAs with the least number of RSA registrations were Radix and Investment One Pension

Fund Managers Limited accounting for 0.11 and 0.86 percent of the RSA holders respectively. The PFAs registered a total number of 7,823,773 RSA holders as at 31 December, 2017. A further analysis of PFAs ranking indicates that the top 3 PFAs accounted for 38.49 percent of total RSA registrations. The top 5 and top 10 PFAs accounted for 54.97 and 79.92 per-

cent proportion of the total RSA registrations respectively, while the bottom 3 PFAs accounted for 1.87 percent of total RSA registration. The bottom 5 and 10 PFAs accounted for 4.79 and 16.80 percent respectively during the review period. The Weighted Average Rate of Return (WARR) on the RSA ‘Active’

Continues on page 46

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APC has no capacity, will to create jobs, says Atiku in Aba GODFREY OFURUM, Aba

eople’s Democratic Party (PDP) presidential candidate, Atiku Abubakar, Wednesday in Aba, Abia State, urged the people of the South-East region to join other regions in the country to vote out President Muhammadu Buhari. Atiku, while addressing South-East business community at a town hall meeting held in Aba, observed that Nigeria had no business in voting for the All Progressives Congress (APC), stressing that the party lacked the understanding, the capacity and the will to create jobs. He explained that the interaction with the business community in South East was not borne out of politics, but because the zone was the hub of business in Nigeria. The PDP presidential candidate assured the South-East business community that as a well known businessman, he cannot afford to sleep while businesses belonging to hardworking Nigerians were folding up. “I’m delighted to be here to interact with the business community of South-East.

Naturally, if you want to talk about the hub of business in Nigeria it is the South East, because from Lagos, Port Harcourt to the North, it is the people from South East that run businesses. “I’m giving you my word that whatever can be done to improve business in this country, which is in the confinement of our laws, I’ll do it. If we really want to make Aba the hub of business in Africa, we must listen to people like you and all the challenges you’ve enumerated for me here are very evidence. “As a businessman, I should know and I assure you that I know your problems very well. Your condition pains me so much, but we must work together to remove those problems. “The current government in power doesn’t have the understanding, capacity and will to create jobs. This government has completely destroyed the ease of doing business in Nigeria. “What we are going to do when elected is to make cost of doing businesses easier by introducing technological inputs in business. Nobody in this current government knows anything about Ports. Call it dry Port or normal

seaport they don’t know anything. “You have no business voting for APC. I want you to join me to say that Buhari must go. The only government that can change the business problems in this country is the PDP. I’m happy to be with you here and above all, to cooperate with you to send Buahri packing.” Peter Obi, vice presidential candidate of the PDP, assured that Atiku Abubakar would not watch businesses in the country suffer as the current government was doing now because he was a businessman. “Aba is the engine of manufacturing that can change Nigeria. The fastest growing cities in Nigeria today are Aba, Onitsha and Uyo. SME and entrepreneurship are the two things that can change the world, and Aba is the capital. “Buhari says the economy is in a bad shape, which shows that he cannot handle it anymore. Atiku has created businesses and managed them. He knows how to solve power problems. Geometric is one of the saddest things that has happened to Nigerians. Over half a trillion naira was borrowed from a bank to put that power plant”.

EDHA increases 2019 budget estimate to N183.7bn IDRIS UMAR MOMOH, Benin

do State House of Assembly on Wednesday passed the 2019 appropriation estimate of N183,744,326,962,18 billion as against N175,744,852,425,37 billion presented to it by Governor Godwin Obaseki in November. They however shored up the initial budget by N7,999,474,536.82 billion to accommodate more developmental programme of the administration. A breakdown of the passed 2019 appropriation estimate indicates that capital ex-

penditure was increased to N102,942,672,327.93 billion as against N95.8 billion while recurrent expenditure was shored up to N80,802,058,285,.58 billion as against N79.9 billion. It also approved under recurrent expenditure of N20.4 billion, N7.3 billion, N3.6 billion and N24.28 billion under the sub-heads of Administrative sector, Economic sector, Law and Justice sector and Social sector. Also approved was the Capital expenditure, administrative sector, economic sector, Law Justice sector and Social

sector were N14.06 billion, N57.29 billion, N997.5 million, and N30.59 billion were respectively approved for year 2019 fiscal year budget. Speaker of the House, Kabiru Adjoto, however, directed that a clean copy of the passed budget be sent to the state governor, Godwin Obaseki for assent. Adjoto, who announced the end of the fourth session, second quarters of the sixth assembly, said the lawmakers sat for a period 55 days and in which a total of three bills were passed. He however said that seven bills were pending.

Taxpayers face penalty of N10m for transfer pricing defaults STEPHEN ONYEKWELU

t is five working days away from December 31 stipulated by the Federal Inland Revenue Service (FIRS) for tax payers to file all outstanding transfer pricing (TP) forms and compliance documentation. Failure to fulfil all pending TP compliance obligation by the deadline may expose defaulting companies to administrative penalties in the range of N10 million per year for each type of default, according to Transfer Pricing Alert, a KPMG Nigeria TaxNewsletter. A transfer price arises for accounting purposes when different divisions of a multientity company are in charge of their own profits. When di-

visions are required to transact with each other, a transfer price is used to determine costs. Transfer prices generally do not differ much from the market price. If the price does differ, then one of the entities is at a disadvantage and would ultimately start buying from the market to get a better price. With the filing of the first set of transfer pricing returns by companies in respect of their 2013 financial year transactions, there is no longer any doubt that Nigeria is serious both about the Income Tax (Transfer Pricing) Regulations No 1, 2012 (the Regulations) and its implementation. “When the policy came into effect in 2012, there was

low compliance rate possibly because there were no direct penalties attached to non-filing of statutory transfer pricing returns,” Tayo Olugbenro, partner and head of transfer pricing at KPMG-Nigeria, said on phone. “However, effective from March 12, 2018, a new policy directive has attached stringent administrative penalties and there are indications that many companies will comply,” Olugbenro said. The Regulations aim at increased compliance with the TP requirements and are in line with the TP Guidelines for Multinational Enterprises and Tax Administrations published by the Organisation for Economic Corporation and Development (OECD) in July 2017.

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comment Positive Growth with Babs

Babs Olugbemi Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Limited and Founder, the Positive Growth Africa. He can be reach on babs@babsolugbemi.org or 08025489396.

wo events in the last few weeks inspired me to write on the prevailing culture of sycophancy in our society. The first is the twin disaster in Port Harcourt and Benue states. The second is Christopher Akor’s submission on whether we need strong men or strong institutions to make Nigeria great. In the wake of the collapse of a 7-storey building in Port Harcourt was a government official display of excessive culture of sycophancy, in his interview at the venue of the collapsed building. In the midst of the tragedy, he praise-sang his principal by saying the Governor is a very caring person and ordered all the relevant organs of government to take actions immediately. Though, the unidentified spoke person acknowledged how sad, the event was but the praise-singing of the Governor was unconsciously ill-timed and very insensitive to the victims of the collapsed building. Does the Governor need to be praised for being concerned with the plight of the people at that emotional moment? Who will be elected as Governor and will have no concerns for his people in such a moment? Should there be any directive from the Governor before emergency actions are taken by the state organs in a situation like the

ONYEKA AGHATISE Aghatise (MCIPD) is a HR Professional with over a decade of experience working for Multinationals across Africa and Europe. She is also an alumni of the World Economic Forum’s Global Shapers Network and a mentor of young professionals.

ecruiters and employers often see candidates as privileged and themselves as the giver of this privilege. Candidates are viewed as lucky to be selected, lucky to be interviewed and exceptionally lucky if they eventually get the job. When you look at the statistics, it’s clear this is the case. According to the National Bureau of Statistics, unemployment has risen 300% in just two years, from 6.4% in 2015 to 18.8 % in the last quarter of 2017. This means that 20% of Nigerians are actively seeking employment. With so many people vying for the same positions it’s easy to see why employers often feel spoilt for choice. Feeling spoilt for choice is not a bad thing of itself – unless it is reflected in recruitment practices and the way candidates are treated during the recruitment process. Unfortunately, shoddy recruit-

Thursday 20 December 2018

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The culture of sycophancy collapse of a building? A different approach was the response from Benue state where the spokesman, a local government chairman detailed the supposed causes of the boat mishap; the number of lives lost and what will be done to prevent the reoccurrence of the event. Unlike the Rivers State’s counterpart, he showcased his disaster response skills without any ill-timed praising singing of his political employers or godfathers. The first scenario strongly affirms the culture of sycophancy that has eaten deeply into our society’s interactions and behavioural life. The question is: what is the relevance, harm or benefit of an entrenched culture of sycophancy in building a sustainable institution and society? Wikipedia defines “sycophancy as flattery that is very obedient, or an indication of deference to another, to an excessive or servile degree. A user of sycophancy is referred to as a sycophant or a “yes-man.” In simple term, to be a sycophant is to be a person who tries to win favour from wealthy or influential people by flattering them for personal advantage. The culture of sycophancy cannot be taken away from human existence. It is a behaviour with intended outcomes, and often the practitioners are intelligent people with an understanding of the environment. Sycophancy is not limited to the public sector where political office holders unduly reference their godfathers even to the detriment of the masses for relevance, power and as the prerequisite for political affiliation. It has also found its relevance in the private sector due to competition for promotion, security and relevance in the workplace. Be it corporate or the political world, a culture where leaders

‘

Be it corporate or the political world, a culture where leaders understand the unguided influence of sycophancy and are emotionally aware or able to draw the lines is desirable to allow merit to prevail as a bastion of the reward system

’

understand the unguided influence of sycophancy and are emotionally aware or able to draw the lines is desirable to allow merit to prevail as a bastion of the reward system. I can differentiate sycophancy into two categories – the positive and the negative sycophancy. The foundation of human behaviour whether categorised as sycophancy or not is within the principle of psychological egoism. Psychological egoism is the notion that, deep inside every action is the desire of the person to achieve self-interest even if the action is selfless. If the theory of psychological egoism is correct most of the time, then we are all sycophants whether the benefits directly or indirectly come to us in form of financial reward, progression, relevance, praise or others. Kelly is a positive sycophant. He is very visible in the workplace and there is hardly any discussion for a sensitive role without his name be-

ing mentioned or nominated for the role. He is a three sixty degrees leader and leads from the middle of the organisation. You will see Kelly discussing at meetings with the top executive of his company, whether he has a direct reporting relationship with them or not. Among his peers, he is very influential and an example of a staff that is a bridge for others. To staff below his grade, he is a radiation of hope and possibility. You can never see Kelly using negative narratives against his employer. He would rather demand to speak to or write to those in the position to make changes in the interest of the company. He is a change agent and has often put his career on the line by speaking against practices that are not in compliance with building institutions from organisations. His major strength in his relationship, leadership and influence building process is never have to ask for benefits for himself but always commend others, including top-level executives of his company for actions or policies that advance the people and the business. Kelly always put in ideas or suggestions to his supervisors and top executives most of which are being implemented with or without reference to him. Kelly’s style though, laden with psychological benefits to him and direct benefits to the organisation, its process and people is an example of positive sycophancy if all human behaviours cannot escape the psychological egoism theory. Contrary to Kelly’s style of showing visibility is Nelly’s style of influence. She is close to the power brokers and the ‘landmine’ in the organisation. Landmines according to Dr Maxwell Ubah are the powerful employees you should not offend; otherwise, you will incur the wrath of the powers in the workplace. Nelly is destructive. She is an information carrier to the management giving gossip details

on other staff. Her comments on others can make or mar their careers. This is an attestation to her powerful influence and tactics. She can find her ways and lobby for top positions and promotions. She has been promoted above her competence level and gets away with the mistreatments of junior officers. Nelly’s degree, magnitude and direction of sycophancy are extremely exceptional. She is an example of a negative sycophant in the workplace and in the society, though she had the right to advance herself by whichever means she chooses to. The use of Nelly does not depict women as the masters of the act of sycophancy. Men have been claimed to be masters of the act of sycophancy. Sycophancies thrive due to the environment. The presence of a prominent key man who can make a decision in favour or against others will encourage the culture of sycophancy in any environment. Sycophantic behaviours are more entrenched where the leaders behaved like kings or queens of the medieval age whose words are laws that could kill and make alive without repercussions. No doubt leaders will experience overture and ingratiating behaviour from people they influence. It is the responsibility of the leaders to distil the intention of the actions as either self-seeking or in the interest of the organisation. Leaders should look out for what Nelly and Kelly are putting on the table and in whose interests their actions serve before unconsciously rewarding or castrating them. Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Dear recruiter, I’m talking to you... ment practices and habits have become the norm and the sadness of this new reality becomes magnified when compared with the values these companies, with shoddy recruitment practices, claim to espouse. But what are these practices that alienate rather than ingratiate? It starts from the moment a prospective employee looks at a job ad. They’re interested, however, there’s a clause at the end “ensure you use code Admin assistant 005 in the title of the e-mail, anyone who does not do this will not be considered”. The sentiment behind this clause is understandable; applications without titles make managing multiple recruitment campaigns complicated. That said, caveats like this scream privilege; you are privileged to apply and if you don’t “do as we say” we will withdraw that privilege. This is not to say recruiters can’t communicate requirements, however they should be communicated in a way that shows respect for the time given by the candidate to view the ad. “This email address will manage

multiple applications, to enable us categorise and address your application quickly, please indicate the application code in the title of your email.” With a bit of wordsmithing, you have passed your requirement, respected your candidate and transferred the accountability for successfully submitting the application. My next point is quite simple. It is about acknowledgement and follow up. If someone takes the time to put together a CV or application, this effort should be acknowledged, even if this is an automated response so that candidates know their submission was indeed successful. Unfortunately, this rarely happens and even more unfortunate is the fact that many applications remain unread and unacknowledged, the 21st century version of tossed in the bin. As we get further in the recruitment process there are many more touch points with candidates where employers often show a disregard for candidates’ time and candidates themselves: Some examples include: * Inviting a candidate for an interview and being more than 5 minutes late. A friend of mine had an interview at an international consulting firm

where the interviewers were over an hour late and offered no apologies. * Speaking to the interviewee rudely: I had a personal experience in 2008 where a recruiter for one of the top 3 banks in Nigeria told me in an interview that my answer to a question “was crap.” I was later told they were testing my resilience and was then offered the job. I didn’t take the role; I was unwilling to work in an environment where it was ok to speak to people like that for any reason. * Not giving feedback after a face to face interview. It is the minimum expected after a candidate has made additional time commitments to attend interviews. * Putting candidates’ applications on hold Indefinitely without sufficient explanation and consent from the candidate. Some of the larger companies are guilty of this and sometimes the intent is good; we don’t want to let you go but we’re not ready yet. This is unacceptable. Recruit only when you are sure you have a vacancy to fill and if you must put the process on hold, get the candidate’s consent letting them know the time frame (which you must stick to).

Not only is the “we’re doing you a favour” approach to recruitment bad for the candidate experience, it is bad for the organisations’ brand and future as an employer of choice. Most applicants will not consider working at a place where they have previously had a negative recruitment experience, and those with a negative recruitment experience are also less likely to purchase from the company with whom they’ve had a negative experience. So, not only are you loosing potentially good employees, you are losing customers as well. Also, as most people share their negative experiences with friends and on social media, your brand could suffer avoidable damage as a result. Your recruitment process is indicative of the value you place on employees and a magnifying glass into your values as a company. A positive approach to recruitment should be like your mission, vision and values: reverberating, strong and uninfluenced by external factors like unemployment rates.

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Owning your career: Wise choices, quality experiences, reflections and (re)strategizing Jude Adigwe Adigwe is a certified Human Resource Management (HRM) professional and is the Human Resources and Administration Manager at Sharemind Lagos

our career (i.e. the totality of jobs, positions, accomplishments, failures etc. in your working life) is an aspect of your life to be taken seriously because of its implications for fulfilment. Many times, we glide through life taking different jobs that have nothing in common – it is understandable that environment and circumstances partly shape most of these decisions nonetheless there is need for us to think critically about our careers which is part of our identity and a source of fulfilment. Why the choice of your present job over other options? Who are you and how does work fit into your self-concept? Why do you work? What would you want to be known for career-wise? Burning

OBED P. UMUENYEN UMUENYEN, an economist and political researcher, wrote from Edo state. For feedbacks 07033255289/obedphila@ gmail.com

9th May, 2015 was a historical day in Nigerian politics and democracy as a political party that has never produced a president eventually produced one. On that day, power changed hands and the breaking of presidency party monopoly came to light. Since the inception of the Fourth Republic in Nigeria in 1999, the People’s Democratic Party (PDP) has dominated the political atmosphere of the country as its own the majority of political seats in the country and has never lose the seat of the president to any political party. This made them to claim that there exist just two political parties in Nigeria namely, PDP and Others. The story changed as the All Progressive Congress (APC) won the seat of the president for the first time in history in an election that can best be described as, let PDP go. APC was formed majorly from a coalition of four political parties; the Action Congress of Nigeria (CAN), the All Nigeria Peoples Party (ANPP), the All Progressives Grand Alliance (APGA), and the Congress for Progressive Change (CPC). As Ikimi, the chairman of ACN’s merger committee puts it, “at no time in our national life has radical change become more urgent. And to meet the challenge of that change, we, the following progressive political parties namely, ACN, ANPP, APGA, and, CPC, have resolved to merge forthwith and become the All Progressive Congress, and offer to our beleaguered people a recipe

questions! Sometimes, we are not privileged to have alternatives when making choices of jobs to take up nonetheless we are expected to display wisdom in making these choices. To make wise choices, you ought to know where you are headed career-wise. What is the big picture? Each job taken should help you inch closer to your career goals – the choices you make ought to be strategic. There are times when certain job offers may have to be rejected because they are not strategic (i.e. they do not fit into the big picture). Emphasis on the word choice drives home the point that your career journey should not be teleguided by someone else rather you ought to take full ownership of your career. While occupying job positions, it is important to pay attention to the quality of experience you acquire. Length of experience is not what really matters, quality of experience is what truly counts. What do you do in your present position? Is your skill set moving from simple to sophisticated? Do you have room to exercise initiative? Are you well equipped for the journey ahead with the knowledge and skills being acquired on the job? Does your present experience

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Each job taken should help you inch closer to your career goals – the choices you make ought to be strategic

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have substance? These questions are worth answering because they help you stay grounded and focused. Insisting on quality of experience is very important because when you eventually decide to step up to take on jobs in bigger and more structured firms with global outlook, the quality of your work experience(s) is what stands you out. When you choose to play it big, would the quality of your lengthy experience add up? Remember seasoned interviewers have the expertise to perform a surgery on your lengthy work experience to ascertain its depth, richness and suitability for the job position under consideration. As the career journey continues, there is need for constant reflection. Where am I headed? Where am I

now? How close am I to my target? Reflections are not done in a hurry. You ought to take your time to think through choices made, ongoing experiences and the destination you are headed. Sometimes in the course of reflecting, you might see the need to make a few adjustments in the big picture. Reflections might necessitate a decision to resign from a job position. Also, reflections might inform a decision to temporarily veer off course to learn a few things. Yes, you can make such decisions insofar as you consider it strategic. The idea of having reflections on your career journey further emphasizes that career management is first and foremost personal. As the career journey continues, one ought to constantly strategize and re-strategize. Strategizing simply means making plans and settling for jobs that are in line with your career goals. This gives structure to your career journey. It makes the journey a deliberate one. To re-strategize means coming up with new strategies or revising existing strategies. Nothing is cast in stone –occasionally, there will be reasons to make adjustments in your career plans. Some flexibility is healthy. While taking ownership of one’s

career might seem neat on paper, it is tough because of the myriads of decisions (tough ones) that it entails. This is one of the reasons why individuals are usually advised to have career mentors. Career mentors provide guidance and support to protégés on their career journeys. Regardless of having mentors, it still remains the call of individuals to make those (tough) career decisions. Making choices develops individuals – this is one of the critical competencies individuals ought to possess. Might I add that it is not simply about making choices, it is about making good and sound choices. This requires having insight and a good sense of judgement. It is paramount to always keep in mind that a career journey is part of life’s journey and it is not always an easy one…there will be mountains and valleys, rough and smooth paths. These experiences are priceless – they are worth having and reflecting on. While going through these different phases, never take your eyes off the big picture. Remain deliberate and purposeful because your career is personal – do not be overly sentimental about it.

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The implications of few parties dominance and party’s first time governance for prosperity. What could be the implications and expectations of this adventure taken by All Progressive Congress (APC) on the society, politics, and economy in relation to firstly, what can be described as market penetration as APC has taken a step to towards expanding its political coverage by producing the President? Secondly, the fact that few political parties dominate the politics of Nigeria nation can be liken to the case of oligopoly market in Economics, and considering the nature and impact of such market on the economy, it calls for worries and concerns. Thirdly, since this political party is new in the system, therefore it will need to be grown and developed. It will need to expand and solidify its capital formation and base. How will it go about this? What are therefore the implications and what should the masses expect? The nature of political parties first time participation and administration A big applaud and salutation to All Progressive Congress (APC) for its courage, doggedness, tenacity in breaking the walls of political cabals and status quo, won the seat of the presidency, liberate the democracy of the nation and inspiring new political parties by erasing their stereotypical ideal about the worthwhile of electoral processes and power of incumbency in Nigeria. APC therefore underwent what could be termed as market penetration, which refers to a business growth strategy in which a body executes initiatives to expand the customer base for its products and services within a certain market space. These initiatives are the

right move toward the growth of an organisation but the most important factors to be considered are, whether or not it is the right time in the life span of the organization to attempt this strategy. Does the party have the resources or finance needed to executive this strategy? Does it have the right products and services the people need, those products and services that are better than that of its competitors? Has the party’s personnel currently occupying political offices be accepted in their present geographical areas and are they serving satisfactorily? Has it carried out its first and secondary data (information) research both internally and on her competitors? From the research, is there element of success? And finally, has it formulated a subsistent strategy that will be consistent, base on the research? The All Progressive Congress (APC) which now occupies the seat of the presidency should be able to provide excellent answers to the above questions. The ability of APC to answer accurately the above postulated questions will greatly determine her success, otherwise, expect the antonyms. The implications of two or few party system Since this kind of environment can be likened to the case of oligopoly, let draw some deduction and make some objective conclusions. Oligopoly is a market structure in which few firms dominate the market. Although only a few firms dominate, it is possible that small firms may also operate in the market. As you can see, this is a typical situation of Nigerian politics as few political parties have dominated Nigerian politics from the inception of the Fourth Republic. In this kind

of environment, there are some innate attributes which must come to play such as interdependence, competition, barriers towards entry the market of politics, etc. The nature of politics in Nigeria calls for inter-dependency. A situation where a move or action of one political party, will and always provoke a counter move by other or opposition parties. So, you begin to see a scenario where a certain political party comes out to ridicule and condemn another party or parties about corruption, lack of vision, poor administration, among others and at the same time, claiming to be the best and Messiah sent to deliver the nation. On the other hand, without wasting time, the opposition party or parties come out with a counter claim, all in a bid to win the heart of the masses. In an environment such as this, competition is very high. Note: Where there is competition, there is struggle, where there is struggle, there is fight, and where there is fight, there arises setup, hate, propaganda, unrest, and death. This is the situation we have found ourselves in Nigeria. What we are yet to see is the case of initiating and implement programmes and policies on security, employment/engagement, infrastructure, investment, foreign relations among others, which will bring about inclusive economic growth and development, enhancing the standard of living of the people. What we are yet to see is a situation where a certain administration will make the price of things so cheap that the people will so much patronize them to the extent that it becomes almost impossible for the other political parties to win a

single ward in an election, depriving them the chance of coming into power again. Participation in politics as practiced in Nigeria is highly discouraging because the prevailing or ruling political parties have dominated the politics too far and strong. They have built strong capital formation, financial base, structures, influence, powers, cabals, party faithful, and polarities. Any party that rules establishes machineries, lobby for some exclusive rights, and as well influences the government at the expense of other political parties, especially the minor parties. This highly makes it difficult for other political parties to grow, win election, and rule. In this regard, the formation of new political party is highly daunted. This is among other reasons why new political parties find it difficult to come up in Nigeria. The initial stage of a first time government If we may divert a little, conceptually, in Economics, a period where the quantity of, at least, one input is fixed and the quantities of the other inputs can be varied is refers to as short-run period. Factors such as land, and machinery remain the same. On the other hand, factors such as labour and capital vary with time. Therefore, in such period, expansion or a higher production or much success is only possible by hiring more labour and increasing capital. Note: The rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Thursday 20 December 2018

The curious case of governor Ganduje!

n scenes reminiscent of Nigeria’s Nollywood where videos are released in series, recently, series of videos have been trending online allegedly showing the Kano State Governor, Abdullahi Ganduje, purportedly collecting brides from contractors. The videos show picture of a man stocking wraps of US dollars in his ‘babanriga’, a traditional cloth common in the northern part of the countr y. When invited by the Kano State House of Assembly to explain the videos, the publisher of Daily Nigerian, Jafaar Jafaar, who published the videos insisted the person on the videos is the governor, Ganduje. According to Jafaar, the said videos were recorded in 2017 after series of complaints from one of the contractors handling projects in the state, that Gnaduje allegedly collects kickbacks from him. According to the contractor, the kickbacks run up from 15% to 25% of each project carried out in the state. In one video, a man is seeing pocketing money, which Jafaar puts at $230,000. The alleged bribe collected is said to have run up to N750m due from N3bn

contracts awarded in the state. “More than two years ago, a contractor friend of mine complained to me that the governor had been receiving kickbacks, ranging from 15 to 25 percent, for every project executed in the state from contractors. “We then agreed to plant spy cameras on his Kaftan lapel so that he can capture the brazen act in hard evidence. He captured at least 15 clips, nine of which fully showed the governor’s face, body and hands collecting bundles of dollars”, Jafaar alleged. Ganduje has denied any wrong doing, insisting the videos either do not exist or were doctored. But Jafar maintained the videos are authentic and have been so verified by his technical team before being published. Expectedly, the governor had taken the matter to court, slamming a N3billion court suit on Jafar accusing him of “publishing and circulating libellous statements, false and doctored video clips attacking and impugning [his] character and integrity [which] amounts to defamation of character.” He has also successfully gotten the courts to block the investigation of the matter by the Kano state House of Assembly. The court, in its

wisdom, decided the duty of investigation lies with the anti-graft agencies and not with the legislature. However, the EFCC and ICPC, and even the presidency have kept mute and are unwilling to entertain the matter. Even though the governor enjoys immunity, it does not prevent the EFCC from investigating the governor as was the case with so many other governors in the recent past. The silence of the president and the EFCC is in sharp contrast to the treatment of former Ekiti state governor, Ayo Fayose, whose accounts were variously frozen by the EFCC and who was virtually encircled and kept under watch even while still governor. He was immediately picked up and charged to court after the expiration of his tenure in office. Rather than investigate the governor, the EFCC has been alleged to have received a donation of N10 million from Ganduje during the National anti-corruption marathon organized in honour of President Buhari. What was more, even the president was videoed in France commending the governor for his many accomplishments in office. Of course, president Buhari will not want to say anything

bad about the Kano state governor where he got over 2 million votes in 2015 and where the governor has again promised him another 5 million votes in 2019. It is clear from the forgoing that both the presidency and anti-corruption agencies are doing everything to make the matter go away without doing anything to investigate it. No wonder an analyst recently q u i p p e d t ha t “ B u ha r i ’s so-called anti-corruption fight is the most invidiously selective, the least transparent, the most brazenly unjust, and the silliest joke in Nigeria’s entire history.” Ho w c a n t h e P r e s i d e n t use the EFCC to smear his opponents in the media, but tells falsifiable lies to defend, deflect, minimise, and excuse the corruption of his close aides and political associates? L i ke w e h av e a l w a y s maintained, it may be easier to create agencies to fight corruption. It may be easier to launch a media campaign against perceived corrupt officials or even make scapegoat of some, but until the government gets serious and shows absolute commitment to the fight against corruption regardless who is involved, it usually declared wars on corruption are bound to fail.

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Thursday 20 December 2018

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Thursday 20 December 2018

Why an African artificial intelligence is not optional

forward-looking and that cognizes the place of technology in the emerging new world in terms of addressing Africa’s developmental challenges. At the end of the two day forum on Artificial Intelligence in Morocco, the participants came up with a resolution to promote artificial intelligence in Africa, as a lever for development, centred on the human dimension, anchored in universal ethical principles, as well as in human rights principles and standards. The participants encouraged the African Union, regional economic communities, governments, academic institutions and professional associations, the private sector, civil society

and international organisations, especially UNESCO, to promote a rights based, open, accessible AI through a multi-stakeholders approach as an instrument for the empowerment of African people and the positive transformation of African societies. They also urged African governments to, among other things; integrate AI into national development policies and strategies as a vector for the emergence of African economies based on African cultures, values and knowledge; Leverage AI to promote quality education with special focus on STEM (Science, Technology, Engineering and Maths) and scientific research and innovation as well as continuing to strengthen education for citizenship based on values and rights; Use technology to fight against all forms of terrorism, violent extremism and other forms of violence; Promote the disciplines of humanities, social sciences, and media and AI literacy that contribute to the development of critical thinking as well as skills necessary to apprehend the world of AI; Promote an appropriate dialogue with different social actors, scientific communities and the private sector to develop an ethical framework ensuring adequate protection of principles such as autonomy, privacy, non-stigmatization, non-discrimination and protection of human dignity.

the foundation for the first POC (proof-of-concept) attacks on financial services using leaked biometric data. • The emergence of new, local groups attacking financial institutions in the IndoPakistan region, South-East Asia and Central Europe The activity of cybercriminals in these regions is constantly growing: the immaturity of protective solutions in the financial sector and the rapid spread of various electronic means of payment among the population and companies in these regions are contributing to this. Now, all the prerequi-

sites exist for the emergence of a new center for financial threats in Asia, in addition to the three that exist already in Latin America, the Korean peninsula and the formerUSSR. • Attacks on mobile banking for business users Mobile applications for business are gaining popularity, which is likely to lead to the first attacks on their users. There are enough tools for this, and the possible losses that businesses incur would be much higher than the losses incurred when individuals are attacked.

FRANK ELEANYA

t the UNESCO Forum on Artificial Intelligence in Morocco, experts reiterated the urgent need for a framework that recognises the peculiarities of the African continent. African countries, they said, cannot afford to wait and hope to ‘leapfrog’ what the rest of the world has already done. Like elsewhere in the world, artificial intelligence (AI) is becoming a phenomenon on the continent. AI is finding expression in many sectors and industries. Companies like Aerobotics and Clevva (both in South Africa) are applying it to agriculture, and DataProphet (South Africa) and Hubs.ng (Nigeria) are using it in manufacturing and customer care respectively. Businesses in financial services are increasingly integrating AI into customer relations and engagement. For instance, Zipeline, a San Franciscobased robotics company, built the first drone airport in Rwanda from which it delivers blood by drone to almost half of all Rwanda’s blood transfusion centres. In the same vein, the use of chatbots by Nigerian banks to engage customers on social media has seen a remarkable growth in 2018. Nonetheless, there is a concern that AI is not growing at a healthy pace compared to the rest of the world. In 2017, the combined value of AI markets in Middle East and Africa

was estimated at just $66 million. Since then, big technology spenders like Google and Facebook have focused more on the market making it likely that the value in 2018 will outpace that of the previous year. The volume of activities in AI so far has favoured elsewhere but Africa. A report released by the Boston Consulting Group (BCG) found that the most active players in AI are in Asia, North America, and Europe. The report disclosed that China leads the pack with 85 per cent of its companies very active. USA (51%); France (49%) and Germany (49%); Switzerland (46%); and Austria (42%) alongside make up the top five countries in the world leading

activities in AI. These countries also dominate AI research activities according to the CAI AI Index 2018. In terms of output, Europe accounted for 28 per cent of AI papers in 2017, followed by China, which accounted for 25 per cent, and the US with 17 per cent. Africa does not feature anywhere in the report. Experts at the UNESCO forum attribute this to the fact that most of the activities leading to AI adoption are driven by private sector, there is little government buy-in in the technology. Ebenezer Njoh Mouelle, Cameroonian philosopher and author of several books told the audience in Morocco that African governments’ lack of investment in

academic research on machine learning and artificial intelligence means that the continent has no voice and no strong representation in the future of technology. To prevent this from happening, he said, governments in Africa must lead from the front with resources committed to producing research by Africans to Africans. Ikram Chairi, a doctor of machine learning at the Mohammed VI University Polytechnic, Ben Guerir, Morocco, also agreed that research is critical to leveraging opportunities and addressing the question of ethics in artificial intelligence as it relates to Africa. For her, the continent needs education that is

Cyber, crypto mining attacks surge in 2018 – Kaspersky . . . Attacks through theft, use of biometric data likely in 2019 CALEB OJEWALE

nsights from Kaspersky Lab, one of the leading companies in cyber security and anti-virus have shown the company recorded increase in cryptomining attacks in the Middle East, Turkey and Africa (META) region from 3.5 million in 2017 to 13 million in 2018, a 271 percent increase. According to the KSN statistics by Kaspersky Lab, the META region also witnessed 17 percent increase in banking malware attack to reach almost half a

million attacks in 2018. The security ser vice provider noted that this year has been extremely eventful in terms of the digital threats faced by financial institutions with c ybercr ime groups using new infiltration techniques, and the geography of attacks has become more extensive. Cryptocurrencies have also become an established part of many people’s lives, and a more attractive target for cybercriminals across the world, which resulted in a rapid increase in malicious mining of cryptocurrencies.

“The META region is becoming more appealing to cybercriminals, with financial and malicious cyrpotomining attacks taking center stage. We discovered six new ATM malware families in 2018. On the other hand, illegal mining of cryptocurrencies has increased dramatically to overtake the main threat of the last few years: ransomware. We believe the reason behind this is that mining is silent and cause less impact that ransomware, making it less noticeable,” said Fabio Assolini, senior security researcher at Kaspersky Lab.

Kaspersky Lab experts also made a number of predictions on how unrelenting efforts by cyber criminals could affect our lives in the coming year. Financial cyber threats • 2019 could see the first attacks through the theft and use of biometric data Biometric systems for user identification and authentication are being gradually implemented by various financial institutions. According to Kaspersky, several major leaks of biometric data have already occurred. These two facts lay

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Thursday 20 December 2018

BUSINESS DAY

TechTalk

Stakeholders mobilise against threats to submarine cables, internet traffic FRANK ELEANYA

hreats facing Nigeria’s five submarine fibre optic cables delivering over 40 terabytes of internet traffic capacity will henceforth receive maximum attention from a new group called Association of Submarine Cable Operators of Nigeria (ASCON). The group was unveiled at the 2018 Cable Protection Awareness event that held in Lagos recently. 95 per cent of international and a large proportion of other international, internet traffic travel by means of submarine cables. To be sure, a submarine fibre optic or communications cable is a cable laid on the sea between land-based stations to carry telecommunications signals. Optical fibre cables are not only simple point-to-point connections, but multiple destinations can be served by a single cable system. A vast web of submarine cable totalling more than a million kilometres in length interconnects the modern world, carrying 100s of millions of simultaneous calls and untold amounts of data, and ceaselessly performing at staggering capacities. In Nigeria, submarine cables

jumped from 1 to 5 between 2001 and 2014. The five cables include SAT3 Cable landed by NatCom, MainOne cable by MainOne, Glo1 cable by Glo 1, ACE cable by Dolphin Telecom, and WACS cable by MTN. Among the benefits of submarine cable deployment are low latency network, cheaper band-

width and high speed. It is seen as fundamental to closing the between developed economies and developing economies. Over time, threats such as deep sea earthquakes, sharks, dragging of ship anchors, dredging in shallow water, fishing trawlers among others have made it difficult for efficient operation of the cables.

Most cable operators at a point in time had had fault on their submarine cable, which required huge cost of repairs. “The protection of optic fibre cables is of paramount importance, and we as a nation must pay attention to the protection of our submarine optic fibre infrastructure that connect Nigeria with

the rest of the world,” a statement from ASCON sent to BusinessDay noted. In terms of cable protection, ASCON noted that West Africa is currently performing below average. ASCON’s mandate includes the creation of a national advocacy forum for Nigerian companies and administrations that own and or operate submarine telecommunications cables landing in the country. The group was established, according to the statement, to promote, encourage and assist in the protection of subsea cable infrastructure and ancillary equipment and facilities from marine activities, man-made and natural hazards. “The association shall support and manage governmental and public and private sector collaboration, to ensure that the operations and maintenance of critical subsea communication assets are adequately protected and recognized in the development of rules and policies in Nigeria. “The association would equally serve as a forum for the exchange of technical, environmental and legal information pertaining to submarine systems operations and maintenance,” ASCON said in its statement.

Proville’s platform to facilitate service-delivery, contracts across Africa CALEB OJEWALE

igeria’s unemployment rate may not be improving as fast as many people may want it to, and a solution advocated over time is increasing involvement of young people in entrepreneurship. The digital space offers a lot of opportunity for this, and Adeshina Adewumi, chief operations officer of Proville, an internet-based platform that enables people to provide professional services across the continent, shared some insights with TechTalk on how this can change the future of work and delivery of services. First, we ask Adeshina, what Proville is all about, and what it offers. Excerpts: Proville is a Nigerian based company in Lagos that provides tailored made technology solutions for businesses in Nigeria and Africa. Our solution Proville.net; an online service market place for professional services, is changing the narrative on how professional services are engaged across Africa and the globe in line with the future of smart work. Our platform offers a fast and secure base for project outsourcing and engaging of quality professionals. So for example, Toke a business owner wants to grow her business. She would typically

reach out to friends for a website designer, business consultant, social media consultant etc. Whereas there lies a Ken, Umar and Ade who have the required skill set Toke needs. Proville.net saves Toke the time and stress, as all she needs is to log on to Proville.net, sign up and post a job with a set budget. Ken, Umar and Ade would be notified of the job and in turn, submit proposals to Toke via the platform. Once Toke is satisfied, she accepts one of them, pays using our escrow system and the job commences. Upon completion and satisfaction of the job by Toke, she clicks on the release button and then payment is credited into Ken, Umar or Ade’s account as the case may be. There is at least one website already popular for this; ‘freelancer. com’, could this be an adaption Proville.net has a similar model to freelancer.com, however with a difference, which is to promote the future of smart work in Africa among African professionals. We took freelancer a step further by adopting an offline hub where professionals can come together, collaborate, learn and build capacity to deliver better services to their prospective customers on Proville.net platform. We plan to replicate our hub across major cities in Nigeria and Africa in other to ensure professionals begin to adopt remote working with the

right technical, customer centric and emotional skills to deliver top-notch services globally. What kinds of jobs can be offered/taken up for execution on the platform? Proville.net offers top professional services ranging but not limited to web and software developers, legal, accounting, sales and marketing, virtual assistants, writers, consultants and other creatives. Is there a quality/assessment mechanism to ensure jobs meet ‘agreed’ standards, and curtail post-contract misunderstandings? Yes, we have an arbitration team that does assessments, and it comprises industry experts in case issues arise from contract misunderstandings. However surprisingly we have completed over 50 jobs since launch 5 months ago without any need to move to arbi-

tration. We however have a robust team of professionals who vet the jobs to ensure quality services are rendered and in line with global standards. What incentives exist for the platform’s users; both the people giving out jobs, and those taking them up? For clients engaging professionals on our platform, its gives them pool and access to competitive rates from top-notch vetted professionals across Africa to get their jobs done. On the other hand, professionals get access to do side jobs to increase their earnings and also those who enjoy flexible working can now become their own boss by working remotely. Our professionals also get to enjoy free access to our hub twice a week and on other days discounted. Is there a pricing template on the platform? Whether or not it

exists, how does it offer an advantage over offline transactions? There is no pricing template on our platform; the service receiver gets to determine at what rate he/she intends to get their jobs done. The advantage over offline transactions is the fact that the client get to receive competitive quotes from a wider range of professionals and payment is carried out using an escrow model that ensures that value is provided before funds are released to the professional. This cannot be found in the regular offline transactions and most times a party usually defaults partially or in full. This is not going to happen if done on our platform as we pride our platform for its fast and secure features for professional service engagements. What are your growth projections in terms of users? We have been able to cross our first thousand-user milestone within the last 5 months comprising users from over 10 African countries. We intend to cut the edge in Africa and grow the community to over 1 billion users by year 2030 with offices across Africa, Europe and USA. We believe the future of work is here and research projections are also in our favour with a projection that over 85 percent of the working population would be millennials by year 2023. This in itself is also a good indication for our projection.

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COMPANIES & MARKETS

Banks’ staff association writes Access as fears of job losses over Diamond merger mounts

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Shareholders have more questions than answers ahead of crucial Access Bank conference call LOLADE AKINMURELE

ccess bank’s share price slumps as investors fear dilution with proposed $200m rights issue Investors will take the opportunity of a conference call with the management of Access Bank Plc on Wednesday to ask tough questions concerning the Bank’s merger with Diamond Bank Plc. Shareholders of the tierone lender, who are now bracing for a potential share dilution, want to know the full extent to which the merger will impact key performance metrics from profitability to Return on Equity (ROE). “Shareholders know the merger brings short-term pain with it, but want to lay a finger on what the future holds,” said Wale Okunrinboye, head of research at Pension fund manager, Sigma Ltd. “They want some assurance that the bank will not burn out from the deal and are curious if there are any sweeteners to have emerged from the transaction that puts Access bank at an advantage,” Okunrinboye added. Ac c e s s a n n ou n c e d a merger with struggling tiertwo lender Diamond bank Monday in a cash plus shares deal worth some N72 billion, about $200 million. On Tuesday, bankers working on the deal said Access will launch a subordinated rights issue of

about $200 million to keep its capital well above regulatory requirements. Access Bank’s share price declined 4.29 percent Tuesday as investors who had bided the stock 9 percent higher Monday, feared further share dilution from the planned rights issues. Plans by Access bank to issue 6.6 billion additional shares to accommodate the shareholders of Diamond bank, means shareholders of the former face a potential dilution of 19 percent, according to estimates by ARM Research and Renaissance Capital. The additional shares will take the current outstanding shares of Access bank of 28.9 billion to 35.5 billion. Furthermore, post-merger, Carlyle Group, Kunoch Holdings and Diamond Partners will own 3.3%, 1.7% and 1.1% of the enlarge Access bank respectively. “While this acquisition appears positive for shareholders of Diamond Bank, the transaction will be undesirable for Access Bank in the near term, giving bottlenecks in terms of collapsing of structures as well as dilution impact on profitability metrics,” analysts at ARM said in a note to clients Tuesday. “That said, we await meeting with Management of Access Bank Wednesday for further details and discussion on this acquisition and would communicate our views in due course,” ARM analysts added.

There are also questions to be answered about the true health of Diamond bank and whether it was worth merging with Access. The transaction implies that the fair value of Diamond bank’s equity is N3.13, when it has just published a third quarter 2018 book value per share of N9.57. A likely question to emerge from this would be why it was not announced to both shareholders and the market that Diamond Bank was restating its stated equity. How it is possible for the N9.57 figure to be real if Diamond actually thinks N3.13 is fair value is unclear. Another question on the minds of shareholders is how Access was able to strike a deal with Diamond bank at a time when the latter is without an independent chairman and two independent directors. Investors are also scratching their heads over how such an important transaction by the board could be made without a Chairman and two independent members even when the Central Bank of Nigeria (CBN) requires the Board of Directors of a bank to have at least two independent members and currently there are none at Diamond following the resignation Seyi Bickersteth, Rotimi Oyekanmi, Juliet Anammah and Aisha Oyebode last October. “Whilst the Board of Directors in October had a strong bias towards non-executives, the current board has an

Source: Bloomberg

equal weighting of executive and non-executive members and this concerns us,” an informed market source told Business Day. In addition to concerns over the structure of the Diamond bank board that approved the transaction, there are also questions unanswered about the sale process. Diamond Bank said that “following a strategic review leading to a competitive process, the Board has selected Access Bank Plc as the preferred bidder”.

That implies there was apparently a competitive process where bids were being sought for the bank’s equity but minority shareholders were not told about the process. Diamond bank had refuted claims by former board Chairman, Seyi Bickersteth, that it received any offers when rumours of an acquisition by a local lender made the rounds. Even if the Securities Exchange Commission (SEC) or Nigerian Stock Exchange (NSE) may not require this,

the question is why wasn’t more information made available about the various options? If shareholders have to accept the Access shares, surely they need to be told about the alternatives available to the bank. “Minority shareholders need to be told a lot more so that they may make an informed decision,” an informed market source told Business Day. First published on December 18 on www.businessdayonline.com

MONEY MARKET

GDL lists N1.2bn money market fund on NSE HOPE MOSES-ASHIKE

rowth and Development Asset Management Limited on Tuesday listed its Money Market Fund on the floor of the Nigeria Stock exchange (NSE). Consequently, the NSE has admitted 200 million units of shares at N10 per unit brought to the floor of the exchange by the company. The GDL had in July this year, signed the Initial Public Offer-

ing (IPO) of N1 billion units of N10 each at par in the GDL Money Market Fund. However, the fund was fully subscribed by almost N1.2 billion. At the listing ceremony on Tuesday in Lagos, Tinuade Awe, executive director of regulation, NSE, while welcoming the firm, expressed optimism in the progress of the fund’s sales. She said the company have over the years proven to be one with good reputation and worthy of being enlisted.

Kola Ayeye, managing director/CEO of GDL said, “The significant of this event for us at GDL, starts with the fact that we took over this company three and a half years ago. We acquired it from one of the oldest core houses. And within these period to make our maiden introduction; we are very glad. And it is a start of what will be a fruitful and long association with the market”. “Essentially, this fund, being a money market fund; the money market is much more insulated from the

economy than equities. Money market is much more a function of monetary policies. It is not as correlated to the fundamentals of the economy as much as the equity, Ayeye said.” Speaking further, he said, “We went to the market for a billion naira, in a market that has been this soft. Thank God we are able to make do with almost N1.2 billion, which is something we are very grateful for. This is an addition to the market. You will reckon the market has been a bit north and south

this year. But we are glad that this year, we have been able to do a fund that succeeded. Our contribution to the market by adding these funds to the memorandum listings of the market is significant”. Nadu Denloye, Co-Chairman of GDL, noted, the company had a very successful subscription of N1 billion money market funds which was fully subscribed. She added that they have come to list it so that it gives opportunities for trading, and partner with the Nigeria

Stock exchange to grow the market. Thereby expressing believes “that this will be the first of other funds that we will be able to list in the market” The GDL fund seeks to maximise return on invested capital in a coordinated and risk averse manner consistent with the preservation of capital and the maintenance of liquidity by investing exclusively in investment grade money market instruments introduced and duly approved by the Central Bank of Nigeria (CBN).

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COMPANIES & MARKETS MARKETS

Diamond Bank’s Eurobond rallies second straight day after Access merger LOLADE AKINMURELE

he yields on Diamond Bank Plc’s $200 million Eurobond closed lower for the second straight day at 25.40 percent Tuesday, according to FMDQ data, as investors continued to react positively to the retail lender’s merger with Access Bank Plc. The bond price also sustained a steady march upwards, rising to 93.59 Tuesday from 93.33 Monday and a record-low of 90 in November. The bond presents an opportunity for investors to make profit as the price nears its par value of 100. “Investors were heaving a sigh of relief upon the Access and Diamond bank deal and that has paved way for the Eurobond rally we are seeing,” a South-African based fund manager told Business Day. The inverse relationship between bond prices and yields means that when yields decline, prices rally in a show of high investor demand. During a bond sell-off however, yields rise and prices fall in reflection of negative investor sentiment. Diamond bank’s Eurobond had endured a thicksell off that was sparked by credit downgrades from the three largest global ratings agencies, Standard & Poor’s, Moody’s and Fitch.

All three downgrades came in a scorching month of November that also saw the tier-two bank announce it was revising revenue forecasts lower. Investors panicked, sparking a sell-off that has just only been cut short by the merger deal. Some investors will be beating themselves for not betting on the Eurobond at a time the sell-offs intensified and yields climbed as high as 31 percent late November, which was three times higher than the 10.9 percent average yield on the outstanding Eurobonds of other local banks. Investors who could stomach the risk associated with the Eurobond have made a killing. Business Day had reported last week that the struggling bank’s Eurobond presented a bargain opportunity for investors, seeing the price had slumped to 90 as against a par value of 100, less than six months to maturity. S&P, Moody’s and Fitch all warned of a risk of default, saying they had little optimism that the bank would be able to sell its UK unit in time to repay its dollar obligations. The Bank’s merger with Access bank means the latter will now be the one to pay international creditors for the loan taken in 2014 which falls due next May, squashing initial concerns over a

L-R: Ebinum Nosen, purchases group manager, East and West Africa P&G; Thelma Ekiyor, co-founder and CEO Afrigrants Resources; Temitope Iluyemi, Director, Global Government Relations P&G; and, Osalobo Desmond Osemhenjie, program manager, Women Leadership and Participation at UN Women, during the graduation ceremony of 250 women trained by P&G and UN Women on financial literacy in Kaduna.

possible default. Access Bank will launch a subordinated rights issue of about $200 million to keep its capital well above regulatory requirements, bankers working on the deal said Tuesday. Access Bank confirmed news of a merger deal with Diamond bank Monday after saying it signed a Memorandum of Agreement with Diamond Bank. Access said in a statement that it emerged the preferred

bidder after a competitive process undertaken by the Board of Diamond Bank. The deal, worth some N72.33 billion, involves Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger. Based on the agreement reached by both parties, Diamond Bank shareholders will receive N3.13 per share, comprising a cash

consideration of N1.00 (one Naira) per Diamond Bank Share representing a total cash amount of N23.16 billion (US$ 75.58 million). The offer represents a premium of 260 percent to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer. Diamond shareholders will also be allotted roughly 6.6 billion new Access Bank

ordinary shares, representing 2 new Access Bank ordinary shares for every 7 Diamond Bank shares. Using Access bank’s closing market price of 7.45 per share Friday, 6.6 billion shares are worth N49.17 billion, taking the total value of the cash (N23.16 billion) and share deal to N72.33 billion, about $200 million. The completion of a transaction would be subject to formal regulatory and shareholder approvals.

FINANCE

How merger with Diamond will lead to moderation in cost of funds for Access LOLADE AKINMURELE

Snapshot of what Access/Diamond merger means for balance sheet

ccess Bank, in November, guided to the bank’s plan to gradually clos e out on expensive borrowings and the merger with Diamond might just be the trigger to achieve that. T h e C h i e f Fi na n c i a l Officer (CFO) stated that the bank could refinance its expensive Eurobonds if presented with the opportunity and any other available opportunity that could result in a significant moderation in its funding costs. Notably, as at the end of September 2018, Access’ cost of funds stood at 5.6 percent compared to the Tier 1 average of 4.0 percent, following a contraction in cheaper deposit (current and savings account) mix by 195bps to 45 percent.

Source: Rencap

T h e c o n t ra c t i o n re s u l t e d i n a n 1 8 . 5 p e rcent year-on-year jump in interest on customer deposits, 1.0x year-onyear growth in interbank placements, and 73.8

percent year-on-year increase in borrowing cost. H o w e v e r, D i a m o n d bank’s cost of funds remains the lowest among peers at 4 percent compared to the Tier 2 aver-

age of 5.4 percent, despite a 260bps YoY contraction in current and savings account comp osition to 78.3% over the nine month period of 2018.

The acquisition of Diamond bank could help Access minimise its cost of funds. T h e c o n s e n s u s a na lyst estimate is for a 5 percent moderation in

Access’ cost of funds from the 5.6 percent premerger. “How ever, given the reaction to the bank in re c e nt m o nt h s, w e a re cautious on the level of cheaper deposits composition being inherited by Access bank,” analysts at ARM said in a note to clients. For context, over the last five quarters, Diamond bank has lost current and savings account deposits of N247.6 billion, reflecting a 22.8 percent decline yearon-year to N836.7 billion in Q3 18 from N1.1 trillion in Q3 17. “Also, given the lower credit rating of Diamond bank, in terms of corporate deposits, we do not rule out the possibility of erosion in Access bank’s credit rating,” ARM analysts concluded.

Thursday 20 December 2018

BUSINESS

COMPANIES & MARKETS

DAY

Business Event

BANKS

Banks’ staff association writes Access as fears of job losses over Diamond merger mounts JOSHUA BASSEY

he merger deal announced by Access and Diamond Banks has spurred fears within the Nigeria’s banking industr y of an other round of job losses. Threatened by the development, the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI) has written the management o f Ac c e s s Ba n k s e e k i n g audience to discuss modalities that would ensure maximum protection for members in the face of the merger, and where staff rationalisation becomes inevitable, that the collective bargaining agreement is observed and respected. Oyinkan Olasanoye, national president of ASSBIFI, in a telephone interview with BusinessDay on Tuesday, said the union was hopeful it would have a fruitful discussion with

Access Bank where they have unionised members. According to her, ASSBIFI is not unaware of the implication of a merger or acquisition on job security, hence the decision to liaise with the management of Access Bank to protect workers from being shortchanged or victimised in t h e e ve nt t hat t h e ba n k cannot keep all its staffs. She noted that although the union does not have members in Diamond Bank, it would equally seek ways to ensure that workers in the bank are not unjustly treated. “I know that in s ome cases we have branches o f D ia m o n d a n d Ac c e ss Banks standing next to one another or even sharing fences. It is possible by the time the merger is f u l l y c o n s u m mat e d a n d the two banks become one, the management may close dow n some of the branches. This in effect could result in staff ratio-

na l i sat i o n . Bu t w e have written a letter to Access Bank where we have our members. We’re seeking audience with the bank to protect the workers and to ensure adherence to collective bargaining agreement,” said Olasanoye. Meanwhile, a staff of Diamond Bank in one of the branches in Apapa who spoke with BusinessDay said nobody was too sure what would happen next. The female staff said since the rumour of the merger broke last month, the staff had been in trepidation, especially as the merger seemed to be more in favour of Access Bank. Access Bank has emerged Nigeria’s largest lender after N74.6 billion merger deal with Diamond Bank, with a combined total assets of N6 trillion a n d ov e r 2 7 c u s t o m e r s. Recall that Access Bank had similarly acquired the defunct Intercontinental Bank in 2012.

AWARDS

Rex Mafiana wins ‘Tech Company CEO’ award

L-R: Atobalo Ayotola, regional event manager, International Breweries, presenting a cheque to Fasusi Femi, a winner in the ongoing Trophy Lager National Consumer Promo, tagged Honourable Millionaires, flanked by Sola Sokunbi, sales manager, Ogun State, International Breweries, in Abeokuta, Ogun State

L-R: Kola Ayeye, CEO, GDL; Tinuade Awe, executive director, Nigerian Stock Exchange (NSE); Nadu Denloye, chairman, Growth and Development Asset Management Limited; Christiana Bamidele George, director; Bayo Omole, legal counsel, and Peter Shodipo, group head, compliance and risk management, GDL, at the listing ceremony of the GDL Money Market Fund on the floor of NSE in Lagos. Pic by Olawale Amoo.

JUMOKE AKIYODE-LAWANSON

ex Mafiana, the chief executive officer of FPG Technologies & Solutions Limited has been voted Tech Company CEO 2018 by the Nigerian Technology Awards (NITA). This annual award is organised to celebrate technology excellence, and to recognise outstanding technology companies and individuals in Nigeria, who have made contributions during the year, as well as to the technology industry overall. According to the award ceremony organisers, Rex Mafiana as CEO of FPG technologies & Solutions Limited has demonstrated exceptional leadership while developing and deploying new technological advancements in the Nigerian Information Technology sector. ‘His unique level of understanding and commitment to leadership has not only built FPG Technologies & Solutions limited to become a well recognised IT company today but shaped the industry it serves. From the private sector to public sector, using exceptional technical leadership and thought partnership, he has been able to demonstrate

L-R: Timi Alaibe, Non-Executive Director, Heritage Bank Plc; Oladapo Daniel Oyebanjo (D’banji); Rita Dominic; Ifie Sekibo, MD/CEO, Heritage Bank and immediate past president of African Export-Import Bank (Afreximbank) Jean-Louis Ekra, at the first African Export-Import Bank (Afreximbank), Intra-Africa Trade Fair (IAFT), held in Cairo, Egypt.

FPG Tech award

that indigenous IT firms in Nigeria can deploy world class IT solutions in the country.’ Toheeb Mohammed, head of technology group asserts; ‘This award recognises a visionary known for outstanding leadership in advancing and accelerating the performance and progress of the IT sector and the adoption of technology in Nigeria. Rex Mafiana is considered a mentor; his passion has been to leverage technology to drive digital transformation by helping organisations accelerate

growth while achieving extreme business agility with confidence. We are proud to have a leader who advocates technology as a means for changing lives, businesses and governance for good’. Also, FPG Technologies & Solutions Limited, was awarded ‘Tech Consulting Company of the Year’. ‘We are all excited to continue these trends as we continue to adapt and evolve alongside technology and market trends in 2019’ says Ugonna Agujioni, FPG’s business development manager.

L-R: Patrick Osadebe, group head retail , sale and distribution, Wapic Insurance plc; Bode Ojeniyi, executive director, Wapic Insurance plc; Adeyinka Adekoya, managing director, Wapic Insurance plc; Bankole Bernard, national president, National association of Nigeria Travel Agencies; Aina Akintunde, group head, customer experiences and fulfilment, Wapic Insurance Plc, and Ayodeji Bankole-Olusina, managing director, Wapic Life Assurance Limited, at the launch of Wapic Travel Insurance in Lagos.

Thursday 20 December 2018

BUSINESS DAY

CITYFile FRSC, Julius Berger to ease gridlock Lagos/Ibadan express road

Okada men (commercial Bike riders) fagged out at Oshodi-Apapa Express Way in Lagos.

Pic by Pius Okeosisi

Kaduna: Police arrest 2 female kidnappers, 12 others ADEOLA AJAKAIYE

he police in Kaduna say they have arrested two notorious female kidnappers and 12 others suspected criminals in the state. The Commissioner of Police (CP) in charge of Kaduna, Abdurrahman Ahmad, who disclosed this, said three of the 14 suspects were arrested for criminal conspiracy, kidnapping and possession of firearms while others were nabbed in connection with culpable homicide, theft and receiving stolen property. Others were involved in armed robbery and possession of Indian hemp. Ahmad identified the two suspected female kidnappers as Hashiya Dauda and Safara’u Mohammed Tahir, both aged 23.

“The other suspected kidnappers are Ishaq Sulaiman, 33; Sale Ya’u, 20; Yusuf Sulaiman, 23 and Iliyasu Ali, 22 years. The suspected armed robbers are Mark Pwa’ashino, 28; Abdulganiyu Musa, 25 and Sabi’u Yusuf, 23 years.” He named the suspected drug peddlers as Abdulkarim Rabi’u 25; Abdulsalam Yahaya, 21; Abdulsamad Yusuf, 18; Solomon Bakari, 23, and 50-year-old Nura Ahmadu. The CP further disclosed items recovered from the suspects to include, two dane guns, one black Toyota Matrix with registration number PHC833AGU, a Toyota Highlander, one Toyota Camry car, a black Focus Ford and a green Mercedes Benz C230, among others. Ahmad said all suspects would be arraigned upon the completion of investiga-

tion into their cases. “I want to reassure the people of Kaduna that the command will remain alive to its responsibility of bringing crime to the barest minimum in Kaduna. I will like to remind members of the public those processions or demonstrations of all kinds remain banned in Kaduna state. “Thus, the police and other law enforcement agencies will not hesitate to deal with any person or group seeking to violate this lawful order. The law will be brought to bear on any group of persons that carry out any procession without fear or favour.” The CP thanked the public for their continued support to the command and appealed for disclose of useful information to the police via 08075391105 and 07039675856 dedicated phone lines.

Human trafficking: NGO wants FG to create jobs FRANCIS SADHERE, Warri

non-governmental organisation (NGO), PHEW Foundation International, has urged the Federal Government to create the enabling environment and right policies to generate employment for the youth population in order to check illegal migration. Chigbo Uche, the chairperson of PHEW Foundation made the call at the presentation in Warri, Delta State, of a ‘Cinemarena Caravan film’ organised by her NGO to educate people on the danger of illegal migration. She called for collective involvement of individuals, corporate organisations and government in the crusade against

human trafficking in Nigeria. Speaking with BusinessDay on the sideline of the event, Uche said the gesture would help to stem illegal migration of youths to other countries in search for greener pasture. “To end human trafficking, all hands must be on deck, individuals, corporate organisations and the government. Government should put the right policies in place to galvanise employment for the youth, by so doing, they will not be frustrated and thinking of travelling abroad through illegal means to seek for greener pastures. She also tasked parents to desist from encouraging their children to travel abroad through the desert, saying “it is a suicide mission. Corporate organisation should be more humanitarian in their

dealings, giving back to the host communities by way of empowerment,” she said. Uche said the NGO was collaborating with the International Organisation of Migrants (IOM) and the Federal Government with a view to stemming what she described as “modern day slavery” through aggressive awareness and advocacy. “We are making impact, recently, IOM returned some persons to us from Libya. One of them is a 13-year-old girl, she was 11 when she travelled with the consent of her parents, the little girl passed through harrowing experience which might destroy her life. Another girl travelled to Libya without the knowledge of her parents. So ending trafficking is not going to be immediate, it is a collective and gradual process,” she said.

gun State sector of the Federal Road Safety Corps (FRSC) says it is collaborating with Julius Berger Nigeria Plc and the Federal Ministry of Power, Works and Housing, to ease gridlock on the Lagos/Ibadan Expressway during the yuletide. Clement Oladele, Ogun sector commander of the FRSC stated this in Ota, at a brief ceremony to remove barriers earlier erected for the reconstruction of the Lagos-Ibadan Expressway around Oremeji/Asese, up to Mowe. According to him, “this is to enable traffic flow unhindered during the end of year festivities and to ease special patrol operations on the axis during the period.” Oladele said the team of FRSC personnel, together with the Federal Controller of Works and the Julius Berger project manager collaborated in removing the barriers. The sector commander, however, advised motorists to note that despite the removal of the diversions, the entire area still remained a construction zone and, therefore, urged motorists to restrict themselves within the 50km/hour maximum speed limit and the prohibition on overtaking in the construction zones. He warned that any defaulter apprehended risks prosecution, including the confiscation of their vehicles until after the yelutide in January.

NDLEA arrests distributor of illicit drugs in Aba

he National Drug Law Enforcement Agency (NDLEA), Abia State command, has arrested a major distributor of psychotropic substances at Ariaria market in Aba. The NDLEA commander in Abia, Bamidele Akingbade said in Aba on Tuesday that the man, Chukwuemeka Donatus, was arrested inside Ariaria market after being put on surveillance by NDLEA operatives for about three months. The commander said the suspect was arrested in possession of 60, 000 tablets of Tramadol, over 50 bottles of Codeine syrup, 2, 000 tablets of Diazepan and 1, 500 tablets of Rophenol. According to him, the legal department has concluded investigations on the matter and “we expect that he will be arraigned at the Federal High Court in Umuahia as soon as possible. “We wish to use this medium to warn drug traffickers to leave the state as the Command is determined to make Abia state very hot for them. “Our resolve is to ensure youths in the state celebrate this Christmas and new year in peace devoid of substance abuse.” NAN

Thursday 20 December 2018

BUSINESS DAY

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Investor

In association with

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

Market capitalisation

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (07 – 11–18)

38,243.19 30,866.82

N13.609 trillion

N11.269 trillion

2,150.26

1,416.20

788.24

Week close (14 – 12–18)

30,672.79

N11.204 trillion

2,147.20

1,401.64

793.81

Year Open

Percentage change (WoW) Percentage change (YTD)

-0.63 -19.80

-0.14 -16.26

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

739.70

281.49

2,207.42

1,218.68

1,163.13

719.05

279.12

2,164.26

1,228.55

1,160.22

NSE Banking Index

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

1,746.68

475.44

139.37

1,396.37 1,382.81

402.02

122.50

402.76

122.74

NSE 30 Index

-1.03

0.71

-0.97

-18.21

-26.99

-20.83

0.18 -15.29

976.10

0.20

-2.79

-11.93

-26.33

-0.84

-1.96

-15.59

-15.47

0.81

-0.25

-37.81

-15.91

Access, Diamond Bank deal: A win for shareholders …investors advised to ‘hold’ Diamond stock HEANYI NWACHUKWU

ccess Bank Plc growth strategy is very clear. From a very humble beginning on May 11, 1989 when it commenced operations at its Burma Road, Apapa Head Office, the now ambitious banking institution has succeeded in hurling its way to the very top.

Access Bank’s rise started in 2012 when it swallowed a then bigger bank –Intercontinental Bank. Six years after, the bank is consolidating that inorganic growth with the buying of retail banking champion, Diamond Bank Plc. Both banks shares have been on a rally since the news on their deal broke on Monday December 17, 2018. Access Bank was trading at N7.7 per share as at Tuesday, December 18 from a 52-week low of N6.80 while Diamond Bank reached N1.14 from a 52-week low of 61kobo. Access Bank’s offer in the deal In an acquisition deal which Exotix Capital acted as international financial advisor to Diamond Bank and Templars as Nigerian legal counsel, Access Bank Plc is offering the shareholders of Diamond Bank N1.00 per share in cash and also two Access Bank shares for every 7 shares of Diamond Bank. The total value of the offer is N3.13 per share. The proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in

L-R: Kolawole Ayeye, CEO GDL; Tinuade Awe, executive director, regulations, NSE; Nadu Denloye, chairman, GDL; Christiana Bamidele George, director, GDL; Bayo Omole, Legal Counsel to GDL; Peter Shodipo, group head risk management and compliance, GDL, at the listing of GDL Money Market Fund at The Exchange in Lagos.

Access Bank via a Scheme of Merger. The offer represents a premium of 260 percent to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange (NSE) as of December 13, 2018, the date of the final binding offer. The Board of Diamond Bank believes that the merger is in the best interest of all stakeholders including, employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bank’s shareholders. Completion of the merger is subject to certain shareholder and regulatory approvals. Immediately following completion of the merger, Diamond Bank would

be absorbed into Access Bank and it will cease to exist under Nigerian law. The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective. Diamond Bank expects the transaction to complete in the first half of 2019. Barely one year ago (December 4, 2017), Access Bank Plc unleashed its 5-year strategy to become Africa’s gateway to the World. At the launching of the five-year strategy at the Nigerian StockExchange(NSE),HerbertWigwe, CEO and Group Managing Director, Access Bank Plc said: “Five years ago

we set the ambitious goal to attain top three positions in our chosen markets. We are a strong, diversified institution with a consolidated top tier position in our sector.” The asset base of Access Bank Plc remained strong and robust with growth of 11percent Year to Date (YtD) in total assets to N4.55 trillion as at thirdquarter (Q3) to September 30, 2018, from N4.10 trillion in December 2017. The bank’s 5-year strategy will accelerate this growth story to position Access Bank as the No. 1 Nigerian bank by 2022 and create a Universal Payments Gateway to dominate international trade and inter-African payments according to Wigwe.

Access Bank said it recognises that it has a vital role to play in growing Nigeria, its largest market, adding that its global footprint is changing and growing. As a result of its strategy, it will be in the Africa corridor trade hubs and the global gateway markets within five years, he said. Research analysts view on the Access Bank/Diamond Bank deal In their December 18 note to investors, United Capital Plc analysts said, “We highlight that on completion, Diamond Bank would be subsumed into Access Bank and will cease to exist as a separate legal entity under the Nigerian Law. Also, the shares of Diamond Bank Plc on the NSE and its Global Depository Receipts (GDR) on the floor of the London Stock Exchange (LSE) will be delisted.” “On completion of the merger, Access Bank’s total asset is expected to jump from N4.5trillion as at 9Month 2018 to N6trillion (plus Diamond’s N1.5trillion), making the bank the largest bank in Nigeria by Total Asset, ahead of Zenith (N5.6trillion) and FBN Holdings (N5.3trillion). While we advise investors to ‘hold’ Diamond, we are neutral on Access bank until our review of the implication is concluded,” United Capital analysts added. “This deal is impressive and should potentially create Nigeria’s largest bank,” according to analysts at Proshare equities sales desk. “We believe that the new resulting entity will have an advantage in terms of its retail footprint. And although post-acquisition integration may be a challenge, we highlight Access Bank’s experience from its acquisition of Intercontinental Bank,” said Vetiva Continues on page......

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he week to 14th of December Africa’s JALSH (+1.0percent) and India’s a bid to curbing system liquidity from 2018 witnessed an influx of SENSEX (+0.8percent). Russia’s RTSI maturing OMO and PMA repayments. key economic data from the (-3.6percent),Brazil’sIBOV(-0.8percent) Ontheside,stoprateswaskeptat91-day: National Bureau of Statistics and China’s SCHOMP (-0.5percent) 11.9percent, 182-day: 13.5percent, and (NBS).Firstly,theGDPgrowthforQ3-18 stood as the laggards within the 364-day: 15percent. Thesecondarymarketperformance cameinat1.8percentyear-on-year(y/y) classification. Notably, India welcomed versus1.5percenty/yinsecond-quarter a new Central Bank Chief after the was characterized by a tussle between (Q2) 2018 and 1.2percent y/y in Q3-17). surprise resignation of the previous the bulls (spurred by bargains on Also, Foreign Trade in Goods Governor.Relatedly,theRussianCentral attractiveofferings)andthebears(stoked statistics for Q3-18 indicated that trade Bank hiked policy rate to 7.75percent by the compressed system liquidity). STOCK MARKET REPORT FOR DECEMBER 14THyields 2018 traded sideways Cumulatively, balance (exports minus imports) from 7.5percent. remained in a surplus position of This week, the markets will be to settle at 15.6percent [91-day (down Continued from page...... N681.3bn,thoughtumbled67.6percent keeping tabs on the spate of monetary 81bps to 14.3percent), 182-day (down turnover of 1.169including billion shares N14.762206bps billion into 14,554 deals were and traded364-day this week research analysts in their 14.2percent) compared to Q2-18. This was A total policy decisions the worth US Fed, the floorand of the Exchange in contrast to 9bps a totaltoof17.3percent)]. 1.107 billion shares valued (up Looking intoat December 18 note to investors. underscoredbythe73.8percentquarter- by investors Bank ofon England Bank of Japan, billion that exchanged hands last week in 14,430 deals.week,weexpecttoseeyetmore thenew on-quarter(q/q)spikeinimportswhich N11.192 among others. The banks CEOs view on morethanoffseta7.8percentq/qdecline Domestic Market Financial OMO auctions as the CBN doubles the acquisition The Financial Services Industry (measured by volume) led the activity chart with 983.374 million down on curbing system liquidity in in exports. Review Outlook shares valuedand at N9.358 billion traded in 8,484 deals; thus contributing 84.15% and 63.39% to the Uzoma Dozie, the Chief wake of circa N472.4billion OMO Similarly, total capital imported total equity Local equities dip down the turnover volume andfurther, value respectively. The Healthcare Industry followed with 44.802 Executive Officer of Diamond maturities and circa N25.4billion PMA into Nigeria in Q3-18 faltered to its million 0.6percent w/wN183.753 million in 253 deals.The third place was Consumer Goods Industry shares worth Bank, said: “The proposed tempo of these events lowest level since Q2-17, after recording with a turnover The past weekmillion saw shares the domestic of 42.758 worth N3.553 maturities. billion in 2,227The deals. combination with Access Bank a 31.1percent y/y decline to $2.9bn. equity benchmark index weave in and should guide trading sentiments in the secondary market.Plc, and United Bank for will create one of Africa’s leading Meanwhile, the Nov-18 inflation report Trading out in ofthe bullish and bearish dominance Top Three Equities namely Zenith Bank Plc, FBN Holdings Bond Market: by revealed that the headline Inflation rate Africa financial institutions. There is amid a deluge of data. The shares worth Characterized N 5.691 billion in 2,962 Plc, (measured by economic volume) accounted for 438.938 million lullturnover theme volume and value respectively. contributing 37.56% 38.55% the total equity inched higher by 2bps relative to the deals, market opened the and week on a tobearish clear strategic rationale for the The bonds market continued to be priormonthtosettleat11.28percenty/y. note and recorded losses intermittently proposed merger and strong Elsewhere,theFederalGovernment Equity on three of five trading days. Thus, in an characterizedbyalullthemeinthewake Turnover - Last 5 days complementarities between is proposing an N8.6tn Budget for the extensionofthepreviousweek’sbearish of rising short-term rates and political the two institutions. While 2019fiscalyearaccordingtotheMinister run, the NSEASI shed 0.6percent w/w uncertainties which has spurred a Diamond Bank has pioneered risk-off in the market. In all, Unchanged FGN ofBudgetandNationalPlanning. What’s to settle at 30,672.8 points. Investors’ Turnover Turnover Tradedtheme Advanced Declined Nigeria’s largest technology-led bond traded sideways to remain at more, Vice-Presidential aspirants’ Date parted with N64.9billion as market Deals Volume Value (N) Stocks Stocks Stocks Stocks However, the average yield63 retail banking platform, Access debates for the 2019 election was the 10-‐capitalisation at N11.2trillion Dec-‐18 3,193 closed 164,582,396 1,666,271,052.64 15.6percent. 102 14 25 highlight of Friday night as 5 candidates 11-‐while return sank to -19.8percent. Dec-‐18 YTD 2,933 215,380,560 3,398,472,706.01 for FGN 98 Eurobond 23 edged lower 16 to settle59 Bank is one of Nigeria’s leading from make cases to the Nigerian public in a 12-‐Meanwhile, level3,694,989,891.74 trended at 8percent Dec-‐18 3,141 activity 246,134,051 107 24 8.2percent 20 while the63 full-service commercial banks. Eurobonds60 bid to earn their votes. This week, the 13-‐northwards average volume and average Consolidation in the Dec-‐18 2,950 as 193,253,773 3,696,296,336.89 101 yield in20 corporate21 fractionally to 10 10.6% from67 Nigerian banking industry is an NBS is scheduled to release its long- 14-‐value 5.6percent and decreased Dec-‐18 traded 2,337 rose 349,233,284 2,306,050,827.25 98 21 awaited job data report for Q4-17 and 31.9percent to 233.7million units and 10.7percent. There is a better balance of inevitable,naturalprogressionin Q3-18. a sector where the gap between Global Market Review and Tier 1 and Tier 2 banks has been Outlook widening and scale has become Mixed sentiments cloak global critical; where technology will equitiesamidaconfluxofeconomicand disrupt the traditional business geopolitical headlines The past week culminated into model while enabling broader mixed sentiments across major equity financial inclusion. indices in the world. In the US market, “The board of Diamond weobservedabarrageofeconomicdata. Bank believes that the proposed Thisincludes;aweakerNov-18inflation combination of the two reading of 2.2percent compared to operations provides an exciting 2.5percent in October; a 0.2percent prospect for all stakeholders m/m growth recorded in retail sales; in both businesses and will and a sharp decline in weekly jobless create a financial institution claims to a 49-year low. However, the focus remains largely on geopolitics; with the scale, strength and trade jitters, President Trump’s threat expertise to capitalise on the to shut down the government and significant opportunities in concerns over slowing growth outside Nigeria and sub-Saharan Africa the US, which forestalls slowing global N2.9billion respectively. risk for the market as some of the factors more broadly,” Dozie said. growth. Consequently, the S&P 500 that predicated Emerging & Frontier In spite the general bearish theme Herbert Wigwe, CEO of (-1.3percent), DJIA (-1.2percent) and that cloaked the market, four of the Market fund flow during the year seems Access Bank, said: “Access Bank NASDAQ (-0.8percent), all trended six sector indices we track trended to be abating. Nonetheless, we expect For Further Inquiries Contact: Market Operations Department Page 1 southwards week-on-week (w/w). political risk premia to remain elevated has a strong track record of northwards w/w. The Industrial acquisition and integration Meanwhile, European markets Goods (+0.8percent), Agricultural in the build-up to elections next year. closed bullish despite unsettling (+0.7percent), Banking (+0.2percent) Foreign Exchange: Naira and has a clear growth strategy. headlines across the region. On one and Insurance (+0.2percent) indices appreciates at both NAFEX and Access Bank and Diamond hand was British PM’s (Theresa May) bucked the trend as bargain hunting in Parallel market Bank have complementary survival of ‘a vote of no confidence’ DANGCEM(+0.7percent),OKOMUOIL IntheForeignexchangemarket,the operations and similar values, that could have tipped the country into (+1.4percent), UBN (+14percent), local currency strengthened against the and a merger with Diamond further turmoil, on the other, was Italy’s FCMB (+7.9percent), WEMA dollar at both the Parallel and Investors Bank, with its leadership in signalling of a lower budget deficit from (+7.3percent), NIGERINS (+10percent) & Exporters market, up by 41bps and digital and mobile-led retail 2.4% to 2.0% of GDP. 3bpsw/wtoclosetheweekatN362.5/$1 and CONTINSURE (+5.7percent) What’s more, the ECB kept policy buoyed the indices. On the flipside, the andN365.2/$1respectively.Meanwhile, banking, could accelerate rates unchanged but highlighted that Consumer Goods (-2.8percent) and Oil the naira continued to record marginal our strategy as a significant policy rates will only be maintained & Gas (-0.8percent) indices stood as the depreciationattheOfficialmarket,down corporate and retail bank in at least through the summer of 2019, week’slaggardsconsequentondeclines by 2bps to N306.9/$1, even as the CBN Nigeria and a Pan-African as its asset purchase program will be inNESTLE(-6.4percent),DANGSUGAR maintaineditsweeklyFXinterventionin financial services champion. wrapped off in Dec-18. Additionally, (-1.5percent), MOBIL (-10.4percent) the wholesale and retail FX market, in a “Access Bank has a strong France’s Emmanuel Macron promised and OANDO (-3.9percent). bid to supporting the naira. financial profile with attractive to raise the country’s minimum wage Also, FX reserves accreted by returns and a robust capital Investors’ sentiment was positive and possibly cut taxes. Nonetheless, as market breadth closed at 1.1x; 33 0.7percent w/w to $42.9billion as position with 20.1percent EU’s parliament ratification of the stocksadvancedwhile31declined.This at Thursday, maintaining its recent Economic Partnership Agreement week, we expect sentiment to remain uptrend despite the Apex banks CAR as at 30 September with Japan was well received by the mixed as the market Relative Strength willingness to continue to support the 2018. We believe that this market. Consequently, Pan European Index (RSI) signals that equities are nairaevenattheexpenseofthereserves. platform, together with the STOXX (+0.5percent), France’s oversold.Inourview,thisdynamiccould Meanwhile, benchmark Brent price two banks’ shared focus on CAC (+0.8percent), Germany’s spur some bargain hunting although traded above $60/barrel for a significant innovation, financial inclusion DAX (+0.7percent) and UK’s FTSE concerns in polity could keep investors part of the week as OPEC output cut and sustainability, can bring (+1.0percent) all rose w/w. continued to provide a floor for crude benefits to Access Bank and onthesideline.MoneyMarket:System Mixed sentiments seeped into liquidity in dire straits oil prices around $60/b. Diamond Bank customers, staff emerging markets as concerns Looking ahead, we expect the In the week to 7th December, and shareholders,” Wigwe said. over a further slowdown in China system liquidity was in dire straits as sustained weekly FX intervention by Securities and Exchange prevailed. Chinese Nov-18 Retail average money market rates (Open the CBN to continue to support the Sales rose 8.1percent (its slowest pace Buy Back and Overnight rates) for the local unit at N360-N365/1$ in the I & Commission position since 2003), while industrial output week reached as high as 42.1percent The Securities and Exchange E window. In the meantime, an above data added 5.4percent (its slowest in (from an average of 12.5percent in the $60/b oil combined with the Nov-18 Commission (SEC) said it is almost three years). Consequently, preceding week). The CBN conducted $2.9bn Eurobond remains positive for aware of the intention of Access only two of the five BRICS-classified OMO sales on every day of the week in overall reserves position by year-end. Bank and Diamond Bank to go markets closed in green territory; South

WEEKLY REPORT

Access, Diamond Bank deal... into a merger. “The SEC received on Monday, Dec 17 2018, notice of intention by Diamond Bank and Access Bank to merge. The Commission is currently waiting for their formal Application. Access Bank and Diamond Bank have both notified the Commission and the general public. It is a notice to merge, they have not merged yet. SEC is awaiting their application on the matter”, SEC said in a recent release. Access Bank 5-year strategy “We are setting out a new and ambitious five-year strategy which will put Access Bank at the forefront of Africa’s changing financial landscape by creating a Universal Payments Gateway to dominate international trade and inter-African payments. “Our strategy will mean that by 2022, millions of people will have access to banking services for the first time. Customers will make payments and transfers when and how they need to. Businesses will be able to trade in new markets and invest in new technology.” The five-year strategy is the latest in a series of Access Bank’s transformative strategies that have resulted in sustained growth of the full service commercial bank with headquarters in Nigeria and operations across Sub-Saharan Africa, the UK, Asia and the Middle East. The strategy has six strategic levers: Digitally led; Retail banking growth and consolidation in wholesale markets; Customer focused; Analytics driven, with robust risk management; Strong global collaboration in key gateway markets; and the creation of a universal payments gateway. “This next phase of our transformation journey will deliver our most ambitious goal yet - a bank that is digital, innovative and nimble. A bank underpinned by the highest standards of risk and compliance –a bank that serves Africa and the world. Our ambition is to become Africa’s Gateway to the World,”Wigwe said. From 2013 to November 2017, Access Bank has increased its total assets at a CAGR of 18percent and delivered shareholder returns of 90percent. The bank has also grown its customer base from 90,000 in 2002 to over 8 million in 2017 and in the same period opened 351 new branches. Todeliverthetransformation, Access Bank adopts a new organisational structure. The

retail bank will have a customer segment focus, driven by digital and payments. The corporate bank will build deep sector expertise and deploy global relationship managers. Access Bank’s subsidiaries will be organised around strategic clusters, with strong collaboration between them to secure trade finance and correspondent banking. The bank’s transformation programme will be underpinned by robust risk management together with high levels of automation to enhance the compliance and risk functions and drive customer insights. Access Bank Q3 scorecard Access Bank Plc scorecards for the nine months (9M) ended September 30, 2018 shows top-line earnings of N375.2billion, up 3percent from N365.1billion recorded during the corresponding period in 2017. Though the bank’s Profit BeforeTax(PBT)atN70.26billion in Q3’18 against N72.91billion in Q3’17 represents 3.6percent, its Profit After Tax (PAT) increased by 12percent to N62.9 billion from N56.4 billion of which subsidiary contribution increased to 32percent, from 15percent from the corresponding period. Loans and Advances totaled N2.08 trillion as at September 2018 (December 2017: N2.06 trillion). Access Bank stock price had reached 52-week high of N11.35 and a 52-week low of N6.80. The bank stock was priced N7.45 as at Friday December 14, 2018 and it is far below target price (TP) of N13.32 set by equity research analysts at Vetiva Capital in their August 30 note to investors. Access Bank Plc has a market capitalization of N215.513billion and shares outstanding of 28,927,971,631 units. Access Bank customer deposits increased by 10percent to N2.48 trillion in September 2018, up from N2.25trillion recorded in December 2017. Capital Adequacy of 20.3percent and liquidity ratios of 44.2percent remained consistently above the regulatory minimum requirement. Further analysis of the results showed Non-performing loans stood at 4.7percent as at September 2018 compared to 4.8percent in December 2017. Cost of risk decreased to 0.5percent in 9 months to September 2018 from 0.9percent in 2017 on the back of prudent risk management practices during the period.

Thursday 20 December 2018

C002D5556

BUSINESS DAY

Investor

Helping you to build wealth & make wise decisions

SAHCO gets SEC nod to close IPO on January 9 IHEANYI NWACHUKWU

k y w a y Av i a t i o n Handling Company (SAHCO) has got the approval of the Securities and E x c ha n g e C o m m i s s i o n (SEC) to extend the Offer period of its Initial Public Offering (IPO) by twelve (12) working days. Skyway Aviation Handling Company through the Initial Public Offering is offering for sale 406,074,000 ordinary shares of 50kobo each at N4.65 per share. The Nigerian Stock Exchange (NSE) through its Head, Listings Regulation Depar tment, G odstime Iwenekhai has notified the dealing members of the Exchange on the SEC approved extension. With the SEC approval, the IPO initially scheduled to close on Wednesday December 19, 2018 will now close on Wednesday, January 9, 2019. The Lead Issuing House in the IPO is Vetiva Capital Management Limited while Joint Issuing House is Cordros Capital Limited. The offer prospectus shows the net proceeds of the IPO estimated at N1.83billion will be disbursed to three Vendors in consideration for the shares divested under the Offer. The three vendors in the offer are Sifax Shipping Company Limited, Taiwo Afolabi, and Folashade Afolabi. Out of 1.353billion ordinary shares of 50kobo each in the issued share capital of Skyway Aviation Handling Company, Sifax Shipping Company Limited owns 550million units (40.6percent); Taiwo Afolabi owns N503.58million or (37.2p ercent) while Folashade Afolabi owns

300million or 22.2percent. The Initial Public Offer is being undertaken to enable the Vendors divest 406,074,000 Ordinary Shares representing 30percent of the entire issued and fully paid up ordinary shares of SAHCO in partial compliance with the terms of the SSPA (as approved by BPE). Ten (10) percent of the shares being offered for sale will be reserved for staff of SAHCO (in accordance with section 4.2 of the SSPA and section 5 (3) of the Public Enterprises (Privatisation and Commercialisation) Act No. 28 of 1999) under an Employee Stock Ownership Plan to be set up and administered by a Trustee. Only Nigerian citizens are entitled to apply for and be allotted shares under this Offer in accordance w it h t he p rov isions of t h e S S PA a n d P u b l i c Enterprises (Privatisation and Commercialisation) Act Cap. P38 LFN 2004. An application has been made to The NSE for the Admission to its Daily Official List, of 1,353,580,000 Ordinary Shares of 50 Kobo

each representing the entire issued and fully paid up ordinary shares of SAHCO, according to the abridged offer prospectus. The shares being offered for sale will be allotted on the basis of equality between the three hundred and sixty (360) Federal constituencies in the Federation and the Federal Capital Territory. However, shares may be allotted from Federal constituencies with under-subscription to those with over-subscription. In the financial period to March 31, 2018, Skyway Aviation Handling Company reported revenue of N1.36billion; profit before tax of N23million and Loss After Tax of N25million. Skyway Aviation Handling Company Plc (SAHCO) is a locally owned company engaged in the principal activities of Ground Handling (Passenger and Aircraft Handling) and Cargo Handling operating in close conjunction with t h e av i a t i o n i n d u s t r y . SAHCO was incorporated as a private limited liability company on 22nd April 2009 under the Companies and Allied Matters Act. The

Company is a member of the SIFAX Group and in 2009 was the vehicle used by the SIFAX Group to acquire the Federal Government’s 100percent equity stake i n S k y p o w e r Av i a t i o n Handling Company Limited (Skypower), an aviation handling services entity, under the privatization programme of the Nigerian Government. The company is going public as part of the share purchase agreement that its owners –SIFAX group had with Bureau of Public Enterprises (BPE). “SAHCO was handed over to the SIFAX group 100percent. Part of the share purchase agreement states that after a period of time, some shares of the company will be diverted to the public and that is exactly what we are respecting today. “We are aligning ourselves with the documents that were signed. SAHCOL becomes one of the first case of that they want to put out to the public of privatization”, Basil Agboarumi, the new Ma n a g i n g D i r e c t o r o f SAHCOL had noted.

Lafarge Africa’s Rights Issue of N89.2bn opens IHEANYI NWACHUKWU

afarge Africa Plc notified the Nigerian Stock Exchange (NSE) of the clearance by the Securities and Exchange Commission (SEC) to open its announced N89.2 billion Rights Issue. In the notice signed by Adewunmi Alode, Company Secretary, Lafarge Africa Plc, the company noted that the offer which opened on Monday December 17, 2018 will close on Wednesday January 23, 2019. Lafarge Africa will raise N89.2 billion by way of a Rights Issue of 7,434,367,256 shares at N12 per share, by issuing 6 new shares for every 7 shares held by shareholders as at December 4, 2018 which is the Qualification Date. Chapel Hill Denham is the Lead Issuing House to the Rights Issue while Stanbic IBTC Capital is the Joint Issuing House. The rights being offered are tradable on the floor of The Nigeria Exchange for the duration of the offer. Lafarge Africa Plc has outstanding shares of 8,673,428,240 units while its market capitalisation is in excess of N116.223billion. The Rights price represents about 10.45percent discount on Lafarge Africa’s traded closing price of N13.4kobo as at Monday December 3, 2018. Lafarge Africa Plc is a subsidiary of LafargeHolcim, a world leader in building materials. The company has operations in Nigeria - Ewekoro and Sagamu plants in Ogun State, Ashakacem in Gombe

State, Mfamosing in Cross Rivers State, Atlas cement in Rivers State and ReadyMix Nigeria and varied operations in South Africa and Ghana with total group capacity of around 14 million Metric Tonnes. In September, the Board of Lafarge Africa Plc approved the refinancing of the shareholder loan to $293million with longer maturity and a Right Issue of up to N90billion. The restructuring is aimed at reducing Lafarge Africa Plc leverage position as well as strengthen its profitability. In the third-quarter (Q3) to September 30, 2018, the cement maker berthed at the Nigerian Stock Exchange (NSE) with group revenue increasing to N234.3billion, from N223.6billion in Q3’ 2017, representing 4.8percent increase. The company said its positive performance in Q3’18 was mainly driven by strong volume growth in Nigeria and favourable pricing trends in South Africa. The group pre-tax loss of N14.36billion implies a decline of 1,413.2percent when compared to N1.094billion pre-tax profit reported in thirdquarter (Q3) of 2017. Loss After Tax (LAT) stood at N10.3billion against N938million profit after tax in Q3’17, representing a decline of 1206percent. Earnings before tax, depreciation and amortization (EBITDA) for the third quarter increased significantly as a result of improved performance in South Africa while it was down for the nine-month period due to South Africa’s performance in the first two quarters of 2018.

Cement Company of Northern Nigeria grows Q3 profit by over 100% …Stock price gains over 60% year-to-date

ement Company of Northern Nigeria Plc (CCNN) has released its statement of profit or loss and other comprehensive income for the nine months (9M) ended September 30, 2018 with revenue growing

by 43.3 percent to N19.571billion as again N13.628billion in the corresponding nine months period of 2017. In the review third-quarter (Q3) of 2018, the company grew gross profit by 65.3percent to N8.62billion from N5.22billion in

Q3’2017. Profit Before Income Taxes (PBT) grew by 103.5percent to N5.728billion from N2.857billion recorded in the corresponding third quarter of 2017. Profit After Income Taxes (PAT) increased to N4.010billion from N2.036billion in Q3’17. In the review third-

quarter (Q3), CCNN basic earnings per share (Kobo) increased to 319kobo from 162kobo recorded in Q3’17. The market capitalisation of CCNN is N21.552billion while shares outstanding are 1,256,677,766 units. The N15.70kobo which the share price

closed in the trading week to December 14 represents year-todate (ytd) increase of 65.3percent. While strengthening its rally, the company’s share price gained N1.45 or 9.24percent to N17.15kobo at the close of trading on Monday December 17. Damnaz Cement

Nigeria Limited is a majority shareholder of CCNN Plc and it currently holds 50.7percent of the issued shares capital of Cement Company of Northern Nigeria Plc. The shares of Damnaz are held by Abdulsamad Rabiu and BUA International Limited.

BUSINESS DAY

Thursday 20 December 2018

Investor

Helping you to build wealth & make wise decisions

Market Review:

11 Plc, Conoil, Cutix, 34 others caused market N63bn loss IHEANYI NWACHUKWU

n the trading week to December 14, thirty-four (34) equities appreciated in price, higher than thirty (30) in the preceding week. Thirty-seven (37) e q u i t i e s d e p re c i at e d i n p r i c e, l o w e r t h a n thirty-eight (38) in the preceding week; while 98 equities remained unchanged lower than 101 equities recorded in the preceding week. 11 Plc led the losers t a b l e a f t e r i t s s h a re price which opened at N174.80 declined to N156.60, down N18.20 or 10.41percent ; followed by Conoil Plc which declined from N22.50 to N20.25, recording a dip of N2.25 or 10percent. Also, Cutix Plc stock p r i c e d e c l i n e d f ro m N1.97 to N1.78, down by 19kobo or 9.64percent; L i v e s t o c k Fe e d s P l c d i p p e d f ro m 5 2 k o b o t o 4 7 k o b o, d o w n b y 5kobo or 9.62percent. Chams Plc declined from 22kobo to 20kobo, down by 2kobo or 9.09percent. C o r n e r s t o n e Insurance Plc stock pr ice d als o de cline d from 22kobo to 20kobo, losing 2kobo or 9.09percent. Daar Communications Plc lost 4kobo or 9.09percent, from 44kobo to 40kobo; Mutual Benefits Assurance Plc declined by 2kobo or 8.70percent, from 23kobo to 21kobo while C & I Leasing Plc lost 16kobo or 8.25percent, from N1.94 to N1.78. Ass o ciate d Bus Company Plc which dipped from 27kobo to 25kobo, lost 2kobo or 7.41percent of its week open price. The Nigerian Stock Exchange (NSE) All

Share Index (ASI) lost 185.32points last week to close at 30,672.79 points against preceding trading weekâ&#x20AC;&#x2122;s high of 30,866.82 points. Also, Nigerian listed stocks lost approximately N63billion in the trading week to December 14, 2018 as investors failed to leverage the opportunity offered by record value decline. The value of listed equities also declined from N11.269 trillion recorded in the trading week ended December 7 to N11.203trillion as at trading week to December 14, 2018. The Year-to-Date (YtD) returns stood last week at -19.77percent. L ooking at the top gainers table, Forte Oil Plc stock price rallied most from N18 to N 2 4 . 1 0 , u p by N 6 . 1 0 or 33.89percent ; while Jo h n Ho l t P l c w h i c h increased from 40kobo to 48kobo, gained 8kobo or 20percent. Veritas Kapital Assurance Plc

stock price increased from 21kobo to 25kobo, up 4kobo or 19.05percent last week while Chemical and A l l i e d P ro d u c t s P L C moved up from N31.50 to N37.25, adding N5.75 or 18.25percent. The share price of Union Bank Plc increased from N5.35 to N6.10, adding 75kobo or 14.02percent; Eterna Plc stock advanced from N4.20 to N4.65, up by 45kobo or 10.71percent. All other indices finished lower in the review week to December 14 with the exception of the NSE AS eM, NSE Banking, NSE Insurance and NSE Industrial Goods Indices that ro s e by 0 . 7 1 p e rc e nt, 0 . 1 8 p e r c e n t , 0 . 2 0 p e r c e n t , and 0.81percent respectively. NSE Consumer Goods Index at 1,225.84 points is down by 19.22percent this year. NSE Premium Index which stood last

week at 2,147.20 points re p re s e nt s a d e c l i n e o f 1 6 . 2 6 p e rc e n t t h i s y e a r. T h e N S E - Ma i n Board Index at 1,401.64 points has declined by 18.21percent in 2018. The NSE ASeM Index stood at 793.81 points, representing a decline of 26.99percent. NSE 3 0 In d e x at 1 , 3 8 2 . 8 1 points last week is down 20.83percent this year. NSE Banking Index which stood at 402.76points, down 15.29percent. NSE Insurance Index ( 1 2 2 . 7 4 p o i nt s, d ow n 11.93percent); NSE Consumer Goods Index (719.05 points, down 26.33percent); NSE Oil/ Gas Index (279.12 points , down 15.59percent) while NSE Lotus II at 2,164.26 points last week lost 15.47percent of its year-open level. The NSE Industrial Goods Index stood at 1,228.55 points, repres enting de cline o f 3 7 . 8 1 p e rc e n t t h i s year while NSE Pension

Index at 1,160.22 points has lost 15.91percent of its year-open level. In 14,554 deals last week, the stock market recorded total turnover of 1.169 billion shares worth N14.762 billion in contrast to a total of 1.107 billion shares valued at N11.192 billion that exchanged hands the preceding week in 14,430 deals. The Financial Services Industry (measured by volume) led the activity chart w ith 983.374 million shares valued at N9.358 billion traded in 8,484 deals; thus contributing 84.15percent and 63.39percent to the total equity turnover volume and value respectively. The Healthcare Industry followed with 44.802 million shares worth N183.753 million in 253 deals ; and Consumer Goods Industry with a turnover of 42.758 million shares worth N3.553 billion in 2,227 deals.

Trading in the Top Three Equities â&#x20AC;&#x201C; Zenith Bank Plc, FBN Holdings Plc, and United Bank for Africa Plc, (measured by volume) accounted for 438.938 million shares worth N 5.691 billion in 2,962 deals, contributing 37.56percent and 38.55percent to the total equity turnover volume and value respectively. Also traded during the review week were 316 units of Exchange Traded Products (ETPs) valued at N849, 000 executed in 5 deals compared with 84,714 units valued at N1.219 million that w e re t r a n s a c t e d t h e preceding week in 10 deals. A total of 10,934 units of Federal Government Bonds valued at N10.746 million were traded last week in 31 deals compared w ith a total of 2,908 units valued at N2.516 million transacted the preceding week in 11 deals. Last week, a total volume of 126,878,501 ordinary shares of Stanbic IBTC Holdings Plc were listed on the Daily Official L i s t o f t h e Ni g e r i a n Stock E xchange. The a d d i t i o n a l s h a re s o f 126,878,501 ordinar y shares of 50 kobo each resulted from the scrip dividend offered to eligible shareholders of Stanbic IBTC who elected to receive new ordinary shares in lieu of cash dividends with re sp e c t t o t h e N 1 . 0 0 dividend declared for the half year ended 30 Ju n e 2 0 1 8 . Wit h t h is listing of 126,878,501 ordinary shares, the total issued and f u l l y p a i d u p s h a re s of the Company has n o w i n c re a s e d f ro m 10,113,674,444 to 10,240,552,945 ordinary shares .

Thursday 20 December 2018

C002D5556

BUSINESS DAY

BUSINESSTRAVEL ‘South African Airways is executing laid down strategies to return to profitability’ Vuyani Jarana is the chief executive officer of South African Airways, (SAA). In this interview with Ifeoma Okeke, he speaks on the current state of SAA and plans to return the airline to profitability.

Vuyani Jarana

ed service. We are balancing skills and profitability. Some South Africans may be a little bit impatient about what we are doing. We are relying on evidences of what we do; showing them progress and where we are. With time, they will see that it is a different team that is executing on the strategy and that is our commitment. There is a chosen path by the government and we are doing everything in our hands to make it work. These are practical things that we are doing and some of them take time but some of them are easy to execute on the commercial side. What are the particular efforts you have made to enhance visa facilitation and tourism? When you talk about visa, when I am here I meet with the Consulate General and the ambassador. When we go back home, we talk to the minister looking at ways we can improve the processing of visa in Nigeria. So, I must say that with the stimulus package that the president announced, in there is the promotion of tourism, which talks to the review of visa processes. The consulate general spoke earlier saying there are efforts to look at longer term visas because what is important is that if you are a frequent traveller to Nigeria and South Africa, it doesn’t make sense to be given single entry or onetime visa because you are going to apply many times. So, once you have gone through the profiling

and you go there often, why should you not be given a longer term visa? What you see in the changes that are coming through is that possibility. So, once you see more and more people qualified getting longer term visa, then the ability to process the new comers, then you spend lot more time on the right people. This way, we will get volumes coming through. When we have volumes coming through, then we can look at whether we are serving the market adequately because once we have more volumes of people coming to South Africa, it creates an opportunity to expand the services. How is the Nigerian market to your operations compared to other markets where you operate? The difference is the size here. There is only one Nigeria. If you are not in Nigeria, then you are not in the world cup in terms of business. However, doing business in Nigeria is not a tea party. It is a lot more complex, you need to understand it and have a lot more temperament to work with the environment. So, hopefully, with the team that we have on ground and our own understanding of the market, we should be able to make success out of the market. Nigerians are looking for great service and they always ask for proper service. So the services must talk to their tastes and preferences. That is why our priority

was to put a newer aircraft here because of the market. The focus is on quality and really looking at great service. So, we are responding to the market appropriately and we will continue to do so. Our big focus is to make sure we are consistent in service, so that customers’ expectations are met almost 99percent of the time. What is the actual state of SAA now? We have said it is going to take us three years; from now to 2021 to make the company break even, which means it becomes profitable. When you own a company that is not profitable today, shareholder capital costs and debt financing becomes the instrument to support working capital. So, that is where we are. The government of South Africa injected another five billion rand to support SAA. Our commitment is to implement the breaking even of SAA in three years. Twenty years gone for SAA in Nigeria, what is the next big step? We understand that the Nigerian market is big. There should be possibilities to look at other opportunities in the market. It could be Nigeria outbound to other continents or other countries whether it is London or United States. So, we need to understand how we can participate in those opportunities. We are putting teams in place to study the market and understand the revolutions of the market. We understand that opportunities are a lot bigger than Johannesburg and Lagos routes that we currently have. That is the ambition. Ambitions like this take time because we need the

‘ We don’t want to fly all over the world when we are not making money. We want to make sure we are on routes that we’ve got plans to make them profitable

‘

Considering the current state of SAA, what is your plan for the airline to return to profitability? t is well known that SAA in recent years have gone through difficult times in terms of profitability and lack of profitability. There have been a lot of initiatives and strategies developed in SAA to turn it around. Any business that has to succeed has to be able to carry its own operations. There is nothing wrong with shareholder injection as it is normal in any business especially if you are trying to grow or facing difficult times. The case of SAA has been slightly different. We have come in as a new management and the big focus has been turning SAA around. If you look at the history of SAA, it hasn’t lacked strategy and the strategies are not bad. However, what has been missing is that if you write a strategy without implementing it, you will not achieve success. The difference between the current board and the management team that we have put in place and will continue to beef up is the willingness to execute on the strategy. This means really rolling off your sleeves and getting things done. The biggest dimension of strategy is timing. Strategy is not static, it continues to evolve. It is not necessarily that there are too much new ideas but the difference is the willingness to implement. So, we are implementing the strategy. We have pulled back a lot in the domestic market. A lot of the routes were negative at the gross profit margin ladder. Our own strategy has brought back margins at gross profit ladder as well as in the rest of the continent. The next thing is to take out the costs, the fixed costs in the organisation. On contracts which we feel we will have negotiated better, we have put in teams to look into that. We need to take out the costs so that we can get back to profitability. As we do so, we have to keep our eyes on the market. Customers must be served better. Instead of flying two frequencies a day where we are making losses on both, we are consolidating on one where we can come out with better margins. We are also putting good services on-board so that customers must choose SAA flight ahead of the other competitors. We are achieving being the most sought after airline. We will continue to improve. Therefore, what it does is that it allows you to command a price premium in that market because of the differentiat-

frameworks; we need to get all approvals and a lot more before starting. We have ambitions but as we go through them, we begin to see where we are and the next thing we need to do. The strategy of SAA is using the airline to drive tourism. Are you now changing that strategy with your emphasis on profitability? We have not abandoned the issue of increasing tourism but we also understand that you have to balance these things. You can’t drive tourism without sacrifice. We don’t want to fly all over the world when we are not making money. We want to make sure we are on routes that we’ve got plans to make them profitable. Some routes will take time to turn profitable; some others will be a lot quicker. That is the focus. We are working at driving tourism, which is critical but also we see ourselves as a Pan-African airline. There is a lot of city pass we are doing with Johannesburg. We need to look at East and West Africa connectivity. The tourism strategy still exists but not to the detriment of other strategies. We have to look at what the market wants and we must do what the market wants not necessarily what we want. So, it is a balanced approach. What is the situation with some of the subsidiaries of South African Airways? Mango Airline is a very successful subsidiary of SAA. It is a low cost airline and very strong in the domestic market. It does a few regional routes but predominantly, low cost. What we have seen in the domestic market is that there is a huge appetite for low cost carrier services. Mango has grown significantly in that area, so we made that decision to ensure that they continue to lead in that market. We put more aircraft in the beginning of this year in Mango to ensure that they continue to continue to be a leader in the region. So, that part of the business is working very well. We’ve also got the technology organisation that maintains aircraft. Where we have to fix a lot of things is within SAA overall cost structure; how we buy things, how we operate and really making sure we optimise business processes. Business process automation will save a lot more cost for us, specially looking at how you buy parts. So, these are the modern ways of doing business in technology. We have to evolve to that tech organisation so that the cost to serve is lower.

BUSINESS DAY

Research & INSIGHT

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Thursday 20 December 2018

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

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When will the nation’s power sector attain its full potential? age energy generated through thermal and hydro as at the end the end of July 2018 amounted to 77,762 Mwh and 15,287 Mwh respectively. More so, the 3rd quarter of 2018, the both energy source increase from what is was in the second of 2018. The industry highest peak daily generation of 5,162 MW for the second quarter of 2018 was recorded on the 1st of May 2018. During the same period, available generation capacity rose by 2.3 percent to 7,654 MW relative to the first quarter of 2018. This increase in available capacity is attributable to the increase in the number of available generation units after maintenance and overhaul of plant generation units. On the average, 79 generation plants were available in the second quarter compared to 78 generation plants during the first quarter of 2018. However, the increase in the available capacity did not translate into an increase in output as total electricity generated during the second quarter of 2018 decreased by 1.9 percent from 8,350, 174MWh recorded in the first quarter of 2018 according to NERC Annual Report 2018.

ISAAC ESOWE

Analysis of Nigeria power generation Nigeria generates energy through two major sources which are thermal (gas) and hydro (water). Presently, we have 26 thermal generation stations across the federation and 3 hydro stations. capacity. The analysis of the data gathered from the Nigeria Electricity Regulatory Commission (NERC) on the performance of the power sector provides an insight into the progress or otherwise made in the power sector. In the second quarter of 2018, our investigation shows that the total electric energy generated was 8,350,174MWh – 1.9 percent less than the level of generation in the preceding quarter. The industry recorded its

highest daily peak generation of 5,162MW on May 1, 2018. Despite the increase in the peak generation in the second quarter, the utilisation of the total available generation capacity declined by 2.6 percent due to insufficient gas supply, limited transmission line, poor distribution networks and water management at the hydro power stations. Insufficient gas supply constituted the biggest constraint responsible for the stranded generation capacity during the quarter. This is fol-

lowed by the poor distribution networks which accounted for 27 percent. What industry statistics shows As at the end of the third quarter of 2018, the total electricity generation hit its highest peak daily generation of 89,077 Mwh in July 11, 2018 and lowest of 57,357 Mwh in July 8, 2018 with an average of 79,246 Mwh at the end of July from energy generated from both thermal and hydro. Similarly, the total aver-

The average total of power generated through thermal as at July 2018 amounted to 77,762 mwh, which increased by 1.5 per cent basis point to 79,305 mwh in August 2018. However, electricity generation in September 2018, according to NERC report, decreased by 14,009mwh to 65,296mwh during the period. Further analysis of the NERC report by BusinessDay Research and Intelligent Unit (BRIU), result shows that 50.1 per cent of the available capacity was utilised

Electricity and the Nigeria economy Poor access to electricity in Nigeria has been a major hindrance to Nigeria’s economic growth. Small and medium scale enterprises (SMEs) have been regarded as the engine of economic growth but their performance is grossly poor due to inadequate power supply. Investigation shows that adequate supply represents an essential factor that stimulates and supports economic growth. It is worrisome to know that despite Nigeria being the giant Africa by population and economic size, this title does not reflect in its power generation, hence Nigeria is still struggling to produce up 7,000MW of electricity supply. 12734BDN

he aim of a wellorganized energy market is to provide regular electricity supply to power the industrial, transport, households and service sectors of the economy. Hence, energy remains the link towards sustainable economic growth. However, having noted the importance of energy to any given economy, the question is: has the Nigerian power sector attained its potential? This is somewhat an issue that needs to be addressed, despite the daily energy generation fluctuating at different times of the year. The dilapidated condition of the power sector is something to worry about as such that the sector still needs a lot of improvement. There is a general consensus that power generation as well as supply is expedient to any economy, as energy is a must have factor for economic growth of any country. Energy enhances the progress of economic development by increasing productivity and income as well as creating employment. Nigeria is unarguably the largest economy in sub-Saharan Africa which is endowed with crude oil, gas, hydro and solar resources. For a while, generation of electricity has been focused mainly on thermal (gas) and hydro (water) resources but recently, attention is shifting to other sources particularly electricity generation through renewable resources such as solar. As the different options not exploited, the power sector has not reached its optimal electricity generation in spite of the availability of different energy generation resources due to inefficient utilization of these resources. This has constrained the growth of the power sector, which ordinarily should have the ability to generate 12,522 megawatts (MW) of electricity from the existing plant stations, but so far succeeded in generating less than average of its full

during the second quarter of 2018, representing 2.6 percent less than the capacity utilisation during the first quarter of 2018. By implication, about half of the total available capacity during the quarter was out of operations owing to a combination of factors including inadequate gas supply, water management, transmission line limitation, and limited distribution networks. Hydropower generation experienced a shift in power generation from what it used to be. As at the end of July power generated from hydro amounted to 15,287 mwh and continued to rise before reaching its all time highest for the year 2018, while the average total power generated in July 2018 through thermal and hydro hit 79,246 Mwh. Daily energy generations attained a peak of 90,197 MWh on the 16th of August 2018. Thermal stations generated a peak of 85,948 mwh on 10th July, 2018 while the hydro stations attained a peak of 30,164 mwh on the 28th of August, 2018. However, the lowest daily energy generation of 57,357 MWh was attained on 8th of July 2018 as show in Nigeria Bureau of Statistic Report for 3rd quarter of 2018.

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Thursday 20 December 2018

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BUSINESS DAY

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

briu@businessday.ng

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Nigeria capital importation in Q3: What can we learn from it? Data from NBS showed that FPI with a 60 per cent share in the total capital inflows in the period under review, dipped by 58.2 per cent quarter-on-quarter to $1.72 billion in Q3 2018 relative to $4.12 billion recorded in the previous quarter. “It’s natural that when interest rate goes up in advanced economies, it is assumed to be less risky to invest in those economies and there will be a lot of pressures on emerging markets,” Akinwunmi said. Equity component of FPI decreased from $1.05 billion in Q2 2018 to $394.5 million in Q3 2018 while FPI in bonds and money market instruments both recorded a decline from $400.1 million and $2.67 billion in Q2 2018 to $37.48 million and $1.29 billion in Q3 2018 respectively. The implication is that total capital inflow fell by 48.2 per cent to $2.86 billion at the end of the period Q3 2018.

KELVIN UMWENI

ecent data released by the National Bureau of Statistics (NBS) revealed a drastic drop in the amount of capital inflows into the country in the third quarter (Q3) of 2018 underlined by massive pull-outs of funds by foreign portfolio investors and exacerbated by a decrease in foreign loans for investment purposes. In the period under review, capital inflows plunged by 48.2 per cent in Q3 2018 to $2.86 billion compared with $5.51 billion posted in the preceding quarter. On an annual basis, capital imported sank by 31.1 per cent relative to $4.15 billion recorded in the corresponding quarter of the previous year. Essentially, the sum of capital inflows for the first three quarters of 2018 has so far exceeded annual value of capital inflow recorded individually in years 2015, 2016 and 2017. In this week’s edition of BusinessDay Research and Intelligence Unit (BRIU) Economic Monitor, we attempt to breakdown the data on the capital importation by type, sector and country of origin and to identify factors that underpinned the trend in capital inflow in the period. FDI hits an all-time high of $530.6m since Q4 of 2015 Foreign Direct Investment (FDI), a key component of capital importation, recorded the highest inflow since the economy slipped into recession in 2016 based on data from the NBS. The value of FDI in Q3 2018 showed massive improvements relative to the last eleven quarters even though it fell short of the high levels recorded in the last two quarters of 2014 and the third quarter of 2015. FDI inflows grew quarteron-quarter by 103 per cent from $261.4 millionin Q2 2018 to $530.6 million at the end of Q3 2018. In the same vein, FDI rose significantly by 351.2 per cent year-on-year (y/y) from $117.6 million in the corresponding quarter of the previous year. The total FDI value of N503.6 million represents

18.6 per cent of the value of the total capital inflow ($2.86 billion) into the country. Half year FDI data in 2013 stood at $317 million according to the NBS. The annual FDI declined at a CAGR of 89 per cent from over $2.2 billion in 2014 to less than a $1 billion in 2017. Results from the first nine months of 2018 showed that FDI figure pick up to a record $1.04 billion which is about $0.05billion less than the annual FDI value in 2016. Consequently, should the FDI maintain its Q3 momentum into Q4 2018, the FDI value would be on its way to surpass its value recorded in 2015 by $122.6 million.

FPI drops on political uncertainties, rate hike in the US Foreign Portfolio Investment (FPI) often termed as “hot money” by analysts crashed amid political uncertainties surrounding next year’s general elections and partly due to capital flight underscored by interest rate hike in developed economies like in the United States. “This is normal all over the world as investment activities will slow when election is approaching. Investors would want to wait and see what the direction of the new government will be before they invest. Foreign investors look at where they would get the best return from their investment

and fund would naturally go to the market where people would want to get the best from their returns”, Ayodele Akinwunmi, head, Research and Strategy department at the Lagos-based FSDH Merchant Bank told BRIU. In June 2018, the Federal Reserves, the central bank of the US, raised the federal funds rate by 0.25 per cent to between 1.75 and 2 per cent marking the seventh time the Fed would be tinkering with the rate since 2015. Consequently, thehigher yields in the US underpinned by the monetary tightening by the Fed led to the reversal in capital flows to emerging and frontier markets, Nigeria inclusive.

Shares, banking, financing top capital inflows with agriculture lagging Overtime, and across sectors or the nature of businesses, investing in shares has topped the sectoral capital importation chart. Capital importation for the acquisition of shares, for example, in the $2.86 billion capital inflows into the country in Q3 2018, was more than half. The banking and financing sector raked in a combined capital inflow worth $661 million representing 23.2 per cent share of the total capital inflow for the quarter. Interestingly, the growth rate of capital importation in the financing sector somewhat portrays the huge appetite for the sectors by investors. Capital inflow into the financing sector more than doubled (147 per cent) from $150.3 million in Q2 2018 to N371.6 million in Q3 2018. Capital inflow into financing was over seven times more than its value in the corresponding quarter of the preceding year. “Many Nigerian companies are investing in agriculture but one of the reasons for the slow growth in agriculture is the herdsmen-

farmers clashes. If these issues are not fixed, foreign investors wouldn’t come in to invest in agriculture,” Akinwunmi said. Gbolahan Ologunro, a research analyst at CSL Stockbrokers averred that the flooding experienced in most states in the country was another possible reason for the low appetite of investors in agriculture. “There were cases of pastoral conflicts in the early part of Q3 even though they were not as much as in Q2 and more importantly there was flooding in some states”, Ologunro added. “The major states of the federation where we have farms with high yields were hit by floods and resulted in heavy losses to farmers,” he said. From which country was the most to capital imported? The United States of America (USA) emerged the top source of capital importation into the country in Q3 2018 to displace the United Kingdom (UK) which traditionally has been Nigeria’s number one source of capital inflows. This is the second time since the first quarter of 2015 the US will be surpassing the UK in the value of capital imported into the country. In the period under review, capital inflow from the US which decreased by 25.6 per cent quarter-onquarter to $911.3 million, accounted for 32 per cent of the total capital importation in Q3’2018. Relative to the corresponding quarter of the previous year, capital importation fell by 6 per cent from $962.1 million. The UK trailed the US to emerge the second highest source of capital importation into Nigeria in Q3 2018. Inflow from the UK into Nigeria was $871.1 million, a decrease of 51 per cent from $1.8 billion recorded in Q2 2018. The US, South Africa and the European countries of UK, Belgium and Netherlands emerged the top five countries that accounted for the largest share of the capital importation. In fact, these five countries accounted for over 70 per cent of the total capital imported into Nigeria in Q3 2018.

BUSINESS DAY

C002D5556

Thursday 20 December 2018

BUSINESS DAY

Thursday 20 December 2018

Leadership

Shaping people into a team

Your data literacy depends on understanding the types of data and how they’re captured Hugo Bowne-Anderson

he ability to understand and communicate about data is an increasingly important skill for the 21st-century citizen. First, data science and artificial intelligence are affecting many industries globally, from health care and government to agriculture and finance. Second, much of the news is reported through the lenses of data and predictive models. And third, so much of our personal data is being used to define how we interact with the world. When so much data is informing decisions across so many industries, you need to have a basic understanding of the data ecosystem in order to be part of the conversation. On top of this, the industry that you work in will more likely than not see the impact of data analytics. Even if you yourself don’t work directly with data, having this form of literacy will allow you to ask the right questions and be part of the conversation at work. The data-related concepts nontechnical people need to understand fall into five buckets: data generation, collection and storage; what data looks and feels like to data scientists and analysts; statistics intuition and common statistical pitfalls; model building, machine learning and AI; and the ethics of data, big and small. This article will focus the first two buckets; I’ll leave the other three for a future article. HOW DATA IS GENERATED, COLLECTED AND STORED Every time you engage with

the internet, whether via web browser or mobile app, your activity is detected and most often stored. To get a feel for some of what your basic web browser can detect, check out Clickclickclick. click, a project that opens a window into the extent of passive data collection online. If you are more adventurous, you can install data selfie , which “collect[s] the same information you provide to Facebook, while still respecting your privacy.” The collection of data isn’t relegated to merely the world of laptop, smartphone and tablet interactions but the far wider internet of things, a catchall for traditionally dumb objects, such as radios and lights, that can be smartified by connecting them to the internet, along with any other data-collecting devices, such as fitness trackers, Amazon Echo and self-driving cars. All the collected data is stored in what we colloquially refer to as “the cloud” and it’s important to clarify what’s meant by this term. Data in cloud storage exists in physical space, just like on a computer or an external hard drive. The difference for the user is that the space it exists in

is elsewhere, generally on server farms and data centers owned and operated by multinationals, and you usually access it over the internet. Cloud storage providers occur in two types, public and private. Public cloud services such as Amazon.com, Microsoft and Google are responsible for data management and maintenance, whereas the responsibility for data in private clouds remains that of the company. Facebook, for example, has its own private cloud. It is essential to recognize that cloud services store data in physical space, and the data may be subject to the laws of the country where the data is located. This year’s General Data Protection Regulation, or GDPR, in the European Union impacts user data privacy and consent around personal data. Another pressing question is security and we need to have a more public and comprehensible conversation around data security in the cloud. THE FEEL OF DATA Data scientists mostly encounter data in one of three forms: tabular data (that is, data

in a table, like a spreadsheet), image data or unstructured data, such as natural language text or html code, which makes up the majority of the world’s data. The most common type for a data scientist to use is tabular data, which is analogous to a spreadsheet. In Robert Chang’s article on “Using Machine Learning to Predict Value of Homes on Airbnb,” he shows a sample of the data, which appears in a table in which each row is a particular property and each column a particular feature of properties, such as host city, average nightly price and one-year revenue. (Note that data are rarely delivered directly from the user to tabular data; data engineering is an essential step to make data ready for such an analysis.) Such data is used to train, or teach, machine learning models to predict lifetime values of properties, that is, how much revenue they will bring in over the course of the relationship. Image data is data that consists of, well, images. Many of the successes of deep learning, have occurred in the realm of image classification. The ability to diagnose disease from imaging data, such as diagnosing cancerous tissue from combined positron emission tomography and CT scans, and the ability of self-driving cars to detect and classify objects in their field-ofvision are two of many use cases of image data. To work with image data, a data scientist will convert an image into a grid (or matrix) of red-green-blue pixel values or numbers and use these matrices as inputs to their predictive models. Unstructured data is, as one might guess, data that isn’t organized in either of the above

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

manners. Part of the data scientist’s job is to structure such unstructured data so it may be analyzed. Natural language, or text, provides the clearest example. One common method of turning textual data into structured data is to represent it as word counts, so that “the cat chased the mouse” becomes “(cat,1),(chased,1),(m ouse,1),(the,2)”. This is called a bag-of-words model, and allows us to compare texts, to compute distances between them, and to combine them into clusters. Bagof-words performs surprisingly well for many practical applications, especially considering that it doesn’t distinguish “build bridges not walls” from “build walls not bridges.” Part of the game here is to turn textual data into numbers that we can feed into predictive models, and the principle is very similar between bag-of-words and more sophisticated methods. Such methods allow for sentiment analysis (“is a text positive, negative or neutral?”) and text classification (“is a given article news, entertainment or sport?”), among many others. For a recent example of text classification, check out Cloudera Fast Forward Labs’ prototype Newsie. These are just two of the five steps to working with data, but they’re essential starting points for data literacy. When you’re dealing with data, think about how the data was collected and what kind of data it is. That will help you understand its meaning, how much to trust it and how much work needs to be done to convert it into a useful form.

Hugo Bowne-Anderson is a data scientist and educator at DataCamp, as well as the host of the podcast “DataFramed.”

BUSINESS DAY

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Thursday 20 December 2018

BUSINESS DAY

Thursday 20 December 2018

PHOTO SPLASH

Award presentation at the BusinessDayâ&#x20AC;&#x2122;s Top 100 fastest growing SMEâ&#x20AC;&#x2122;s in Nigeria

Ageless Physiotherapy Limited receives award from Opeyemi Awoyemi, Jobberman co-founder.

Opeyemi Awoyemi, Jobberman co-founder presents Bitnurture Financial Services the Top100SMEs award

Uyi Akpata, PWC regional senior manager presents award to Jemack Facilities & Engineering Services.

Uyi Akpata, PWC regional senior manager presents award to Stresert Services Limited.

Uyi Akpata, PWC Regional senior manager presents awards to Infoprive Services Limited.

Sapient Vendors receives the Top100SMEs award from Frank Aigbogun, BusinessDay Publisher.

Amugold Global Network receives Plague from Frank Aigbogun, BusinessDay Publisher.

Uyi Akpata, PWC regional senior manager presents awards to Femcards Creativity Limited.

Uyi Akpata, PWC regional senior manager presents award to Multi-Modal Transport Technologies.

Uyi Akpata, PWC regional senior manager presents award to Tera work.

Uyi Akpata, PWC Regional senior manager presents awards to Nwakama Dredge Nigeria Limited.

Slyn Global Partner Limited receives award from Opeyemi Awoyemi, Jobberman Co-Founder.

Brookhouse Construction International receives plague from Frank Aigbogun, BusinesssDay Publisher.

Frank Aigbogun, BusinessDay Publisher presents the Top100SMEs award to Piggy Bank.

Farmcrowdy receives award from Frank Aigbogun, BusinessDay Publisher.

Uyi Akpata, PWC regional senior manager presents award to Ade Digital Media Limited.

Uyi Akpata, PWC regional senior manager presents award to Dorado Soft Touch.

Uyi Akpata, PWC regional senior manager presents award to Fusion Instant & Virtual Offices.

Uyi Akpata, PWC regional senior manager presents award to Rubique Limited.

Uyi Akpata, PWC regional senior manager presents award to Sefton Fross.

Uyi Akpata, PWC regional senior manager presents award to Showgear Limited.

Uyi Akpata, PWC regional senior manager presents award to Threem Plus.

Uyi Akpata, PWC regional senior manager presents awards to Quantum Travels Nigeria Limited.

Uyi Akpata, PWC regional senior manager presents awards to Dochase ADX Digital Marketing Limited.

Uyi Akpata, PWC regional senior manager presents the award to Falke Industries Limited.

Uyi Akpata, PWC regional senior manager presents awards to Goldfire & Liquidfire Nigeria Limited.

Uyi Akpata, PWC Regional senior manager presents the Top100SMEs to Smoothie Express.

Topgas Global Investments Ltd receives Top100SMEs award from Frank Aigbogun, BusinessDay Publisher.

Vanpeux Global Synergy Limited receives award from Frank Aigbogun, BusinessDay publisher.

Pics by David Apara

BUSINESS DAY

Thursday 20 December 2018

FEATURE

State of health in Nigeria Femi olugbile

Physician, psycho-profiler and essayist

Background: igeria is a nation on the west coast of Africa. It is made up of a large number of ethnic nationalities and diverse landscapes. The population has increased massively since Independence in 1960, when it was estimated at 45.2 million people. Currently the best estimation stands at 185 million. There are over five hundred languages spoken locally. Nigeria is an oil-producing nation and a prominent member of the Organization of Petroleum Exporting Countries (OPEC). Oil still constitutes the mainstay of Nigeria’s economy, despite the efforts by succeeding governments of an intention to diversify the economy. Nigeria, despite its oil wealth, is not a rich nation. The indices concerning its citizens – their quality of life and standards of education and health, are abysmal. More than half of the population live on less than $1.25 a day (‘Poverty Head-count’) making them one of the poorest populations in the world. In the 2018 ranking of the Human Development Index (UNDP), a measure of general quality of life for the citizenry, Nigeria is ranked 157 out of 189 countries ranked in the world. Human Development Index (2018). Nigeria 157 The total government expenditure on Health as a percentage of Gross Domestic product (2014) was 3.67 and has not changed much in the years since. (GHO; Key Country Indicators; Nigeria key indicators – WHO), and as a percentage on all government expenditure it is 8.7. Private expenditure on health as a percentage of total health expenditure is 74.85%. The implication of this is that government expenditure for Health is only 25.15% of all the money spent on health all across the nation. Of the percentage spent on health by the citizens (74.85%), about seventy percent is spent as out of pocket expenditure to pay for access to health services in government and private facilities. Most of the remaining money spent by citizens on their health is spent in procuring ‘alternative’ remedies of dubious value. In absolute numbers, Nigeria is better provisioned with health personnel than most other African countries. However, given its size and population, there are fewer health workers per unit population than are required to provide effective health services to the nation. The density of physicians for every 1000 of the population is 0.376. For nurses and midwives, the comparative figure is 1.489. These

figures – ten years old, do not appear to have improved significantly since. Despite the presence of at least25 accredited Colleges of Medicine and several Schools of Nursing in the country, the numbers have not increased over the years for a number of reasons. The most commonly advertised reason is the ‘Brain Drain’ of health professionals to other countries, especially in Europe and America. The less well known, but equally important fact in any analysis, is that many of the doctors, nurses, pharmacists, laboratory scientists, physiotherapists and other cadres have difficulty getting into paid employment. The unmet need in society does not always translate to employment positions for eligible candidates. As example, many doctors, fresh out of Medical School, find it difficult to get Housemanship positions. Some of them have to take unpaid ‘Supernumerary’ appointments in order to get the experience without losing time vis a vis their peers. A similar situation occurs every year in finding placement for Pharmacy interns, Physiotherapists and laboratory scientists. The problem persists beyond the period of internship, when it comes to finding jobs. There are generally not enough job positions to go around. Life expectancy average is 55.2, with 54.7 for men, and 55.7 years for females. The population of Nigeria may be described as young but getting increasingly old. 44% of the population are aged under 15 years, while 24.0% are aged 60 years and above. Literacy: 61% of adults in the country cannot read or write, though the pattern varies from area to area, being worst in some parts of the North of the country. Child Mortality: 100.2 out of every 1000 children die before they are five years old. Out of these, 32.9 die in their very first few weeks of life, all due to largely preventable causes. Maternal Mortality: Though there has been some improvement in the recent past, the evidence is still that there are 814 maternal deaths per 100,000 live births. Deliveries by Skilled Birth Attendants: One of the best guarantors of survival for mother and child in childbirth is to have a properly trained ‘skilled birth attendant’ taking the deliveries of all the babies being born in the country. 57% of babies are still delivered by persons without formal training, usually ‘traditional birth attendants’, with consequences as detailed in the indices. The evolution of policies in Nigerian health, and the challenges of implementation It is appropriate that such a complex

and diverse assignment as ensuring that every citizen of a country lives a reasonably healthy life and has access to good health care, both preventive and curative, be guided by clearly defined policies that set out goals to be achieved and pathways towards the attainment of those goals. Nigeria has had a succession of well-articulated policies both in the broad area of health and in specific areas such as mental health, HIV/ AIDS, and Integrated Disease and Surveillance and Response. A National Health Policy was formulated in 1988. It was subsequently reviewed in 1996, 2004 and as recently as 2016. Though the terminology employed in the different documents has evolved, the central objective remains the same – that Nigerian citizens should enjoy a level of health that would enable them to lead fully productive lives, attaining their own personal development goals and contributing meaningfully to national development. In order to attain this, there would have to be at least one health facility within reasonable distance of every Nigerian, in whatever part of the country he is located. The citizen should be able to secure access to the service without suffering undue economic hardship. The concept of Universal Health Care encompasses these ambitions and is a regular feature of latter-day discussions on the subject. In moving towards unhindered access to healthcare for all citizens, an effort has been made to define the inputs of the three tiers of government in the country. Primary Health Care includes the provision of facilities and personnel to carry out ‘public health’ functions such as immunization, but also such ‘private health’ interventions such as the treatment of common health prob-

lems such as malaria and diarrhea diseases. It is meant to be essentially the duty of the Local Governments, of which there are a total of 774 in the nation. State governments were to provide support for the local governments – financially and organizationally, as well as being responsible for a second tier of health facilities in the form of General Hospitals. Responsibility for a third tier of care – tertiary healthcare - Teaching Hospitals, Specialist Hospitals and ‘Federal Medical Centres’ belongs in the province of the Federal Government. A number of assumptions embedded in this division of power and responsibility have proved faulty in reality and may have contributed, along with poor finance and a lack

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The ultimate weapon in the hand of the Health Manager for bringing a defined bouquet of services to everybody at the grassroots all over the nation is a readiness to practice a meticulously detailed and carefully monitored system of Task Shifting and Task Sharing

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of political will on the part of succeeding governments, to the failure to achieve the desired impact on the health of the citizenry so far. One of these is that there is no formal recognition of a role for the local community in the design and implementation of what goes on at the Primary Care level. Another is that the neat parceling out of authority and responsibility has not worked well on the ground. Some local governments for political reasons have in the past expended scarce resources on building expensive showpiece health structures which they are unable to operate – such as diagnostic centres and even General Hospitals. Sometimes the politicians at that level are not interested in committing resources to ‘invisible’ public health activities such as maintaining a cold chain for immunization. Another problem is that there is no mention of private resources - personnel, facilities and finance, as potential or actual stakeholders at the three tiers. And, finally, it is not correct to say that Tertiary Healthcare, including the ownership of Teaching Hospitals and the offering of tertiary health services to the citizenry can only be done by the federal government, an assumption that is repeated even in the National Health Act of 2014. Some states run their own Teaching Hospitals, and quite well too. The Lagos State University Teaching Hospital has achieved a certain amount of prominence in the nation for some cutting-edge interventions, despite its relatively young age. Still further, state governments have been encouraged to set up Primary Healthcare Boards to supervise and coordinate the activities at that level. Many have discovered that in order to be able to implement policy or put out uniform, standardized

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services at the community level, they need to be substantially involved financially and operationally. Some employ and pay the salaries of the doctors nurses and other staff working in the Primary Care system. The national coordinating body – the National Primary Healthcare Development Agency, centrally coordinates local and donor-sourced resources for development and operation of Primary Healthcare across the nation. It disburses them according to its own rules, which have a significant amount of latitude. The states complain they are not always carried along. Even the wording of the terms for disbursing the provision of the Basic Healthcare Provision Fund in the Health Act (45% of the 1% of the total budget is reserved for training, drug supplies and other improvements in Primary Care system) reflect some of this subjective latitude that may result in unequitable distribution of resources. Human resources for health It is a given that Nigeria has fewer health workers than it needs. There is also the problem of skewed distribution, with the few available personnel being mostly concentrated in the cities, where most of the large facilities such as General Hospitals and Teaching Hospitals tend to be located. Beyond this, there is a geographical skewing, with some states being extremely lacking in health personnel resources while some other states appear to be relatively well provisioned. The underpinning issues for this may include the political dimension, with some states unwilling to recruit large numbers of workers from other parts of the country as an act of deliberate policy, preferring to employ their own indigenes, or, where there is a short-fall, preferring to employ foreigners mostly from North Africa on shortterm contracts. A National Human Resources for Health Policy was formulated by the Federal Ministry of Health and approved by the National Council on Health in 2007. Subsequently a Human Resource for Health Strategic Plan 2008-2012 was drawn up to guide implementation of the policy at all levels. It was to provide a framework for resource mobilization along priority lines, especially as they concern planning, management and development of the health workforce. The ultimate aim was to ensure adequate numbers of skilled and well-motivated health workers were available and equitably distributed through the nation in order to ensure provision of quality health services. The situation appears set to get worse. As the era of Sustainable Development Goals is commenced and the target of 2030 begins to come into focus, the statistics are far from providing reassurance. An ever-widening ‘supply gap’ for Doctors, Nurses/Midwives and other categories of health workers makes it necessary that close attention be paid to the problem of personnel, and some innovative solutions procured in short order. A medical researcher from the University of Ibadan, Dr Oladimeji Adebayo and his collaborators, used the following tables to depict the

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Estimated Supply Gap of some key health personnel:

One of the facts that will have to be accepted in the Nigerian situation is that what is required to get round the problem of inadequate numbers of health workers of all categories, which itself is due to inadequate training capacity, brain drain, inadequate numbers of employment positions, the uneven spread of workers not only between urban and rural areas, but also between southern and northern states, may not just be to throw numbers at the problem, but to think creatively and out of the box in order to come up with a bouquet of implementable remedies. Some of the issues are political, reflecting the distortions that are still living realities in the Nigerian federation. The reluctance to offer full-time employment to Nigerians just because they are not from a particular state or region while a yawning gap is still left in the employment situation and the people are underserved is the proverbial case of cutting one’s nose to spite one’s nose. Employment positions and dispensations for employment in public facilities are technically limited by the ability of the various governments – federal, state, and local government, to pay salaries. However, where a whole state has such a paucity of health staff that it has fewer health workers all told than a decent General Hospital elsewhere, something is clearly wrong. It is not just a problem of finance but also of prioritization. This is borne home when such states expend huge resources on sending people on religious pilgrimage or building ‘International Conference centres’. The ultimate weapon in the hand of the Health Manager for bringing a defined bouquet of services to everybody at the grassroots all over the nation is a readiness to practice a meticulously detailed and carefully

monitored system of Task Shifting and Task Sharing. This involves

training people who are not ‘specialists’, some of whom may not even be doctors and nurses, to carry out certain clearly circumscribed medical interventions using protocols and guidelines that ensure they do not go beyond what they are trained for, and with the services arranged in such a way that they are directly or remotely supervised by people who have the requisite formal training and skills. The reality is that there will not in the foreseeable future be a time when it will be possible for a full complement of ‘proper’ medical staff to be deployed in all the Primary Care facilities in all the 774 local government areas of Nigeria. On the other hand, there are probably already available in virtually all of those areas enough people who can be trained and supervised to carry out a defined set of services in a uniform way. The private medical sector is not often mentioned in discussions of the human resource for health limitations in Nigeria. The sector is affected by a

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The ultimate evidence of Quality is the achievement of International Accreditation. Only a few Nigerian hospitals have passed formal Quality evaluation. None of them is a government hospital

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similar situation of chronic shortage. A closer examination of the shortage situation in the private sector, though, would reveal that the limiting factor is invariably finance rather than availability, except in some areas where rare skills are required and are not available, such as Intensivists for Critical Care, and Perfusionists for Heart Surgery. The economics of private medical practice in Nigeria are such that specialist services are under-utilized due to low numbers, not because there are too few patients needing the services but because there are few who have the ability to pay. Health finance In April 2001, members of the African Union, at a meeting in Abuja, decided to make a radical departure from the past and begin a movement to devote adequate resources to the peoples’ health. They resolved to devote a minimum of 15% of their annual budget to Health in what would become known as the ‘Abuja Declaration’. Seventeen years later, while a few countries have taken steps towards that goal, most of the countries have failed to show seriousness on the issue. The health budget of Nigeria has tended to hover around somewhere under the 5% mark, although some states such as Lagos regularly devote a higher percentage, although still short of the prescription. Such funds as there are mostly spent mostly on Overhead and Recurrent costs – mostly the payment of emoluments of personnel, with very little being left for Capital Development, Programs and Research. The commencement in the 2018 budget of funding for the implementation of the Basic Healthcare Provision Fund – with the allocation of 1% of total government spending towards funding emergency care, primary care and basic health insurance for the citizenry as provided for in the Nigeria Health Act – all measures crucial to the attainment of the long-held dream of Universal Health Care, was regarded as a salutary development by all stakeholders. Unfortunately, the actual implementation of BHCPF is yet to commence. The reality on the ground remains that a spluttering National Health Insurance system covers only a small minority of the population. There are individual and corporate social health insurance arrangements covering perhaps 1-2% of the population. Beyond these, for the most part, access to healthcare is through out of pocket payment on the part of the citizens. The implications of these are manifold – both for the citizenry and the healthcare industry. Access to care, especially expensive cutting-edge treatments for conditions such as Cancer and Cardiac problems, is currently not based on need but on the ability to pay. Capacity utilization in good advanced care hospitals is low, again due to an inability on the part of most citizens to pay realistic costs, making such hospitals less economically sustainable and bankable, despite the great need for their services. In the end, everybody suffers. The National Health Insurance scheme was established under the National Health Insurance Scheme Act Cap N42 of 2004. Despite the high hopes vested in it at the beginning, it has barely been able to offer cover to

5% of the population - mostly federal civil servants. It has been bedeviled by frequent crises whose issues often reflect personal difficulties of chief executives of dubious provenance, but also fundamental flaws in the structure of the organization itself. Money is often at issue, and it is clear that a separate legal framework needs to be created for handling the huge amounts of money going into what was meant to be a health fund, but which has become a treasure trove to struggle over. Some states, such as Lagos and Delta have inaugurated their own Basic Health Insurance Schemes. There is, a requirement to decentralize the Health insurance project and coordinate the work of stakeholders in the three tiers of government, just as there is a need for legislation to make insurance compulsory for citizenry, as a way of showing seriousness in the drive to Universal Health Care. Legislation, standardisation and regulation A National Health Act was signed into law in 2014 as an umbrella law for healthcare in Nigeria. There are several laws guiding various aspects of health as well as regulating professional practice. Some of the laws, such as the Lunacy Act of 1958 are embarrassingly anachronistic. For several years there has been a move at the National Assembly to pass a new Mental Health Act. Efforts to achieve a similar purpose in Lagos State have met with somewhat greater success, with a new Mental Health Law having passed through the House of Assembly and currently awaiting the signature of the State Governor. The Health Facilities Accreditation and Monitoring And Accreditation Agency (HEFAAMA) represents a model for the nation as a body charged with registering health facilities and ensuring that they meet minimum standards for registration and renewal. The need to create a regulatory framework for advanced research and medical interventions such as transplants and IVF, including the creation of special registers for eligible practitioners, is yet to be properly addressed, though Lagos State has commenced some effort in this direction. The health team and its discontents Operations of the health system, especially within public health facilities, have been marred by labour disputes, with different categories of health staff in the employ of federal or state governments embarking on strike actions. An even more fundamental area of discontent is the inter-professional rivalry and disharmony that afflicts the space and inhibits efficient function of what is supposed to be a medical team, with doctors, pharmacists, laboratory scientists and other categories of workers perpetually at loggerheads. The battle for power has been carried even to the corridors of the country’s legislature, with different professional groups pushing through the enactment of professional practice laws, some of which are mutually contradictory and impossible to implement in the same space. At the heart Continues on page 34

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FEATURE

State of health in Nigeria Continued from page 33

of the ‘battle’ is a shortage of goodwill. The practice of Medical Healthcare, afterall, is an international science, and it is hardly worthwhile re-inventing the wheel. Another point worthy of note is that the much-advertised ‘war’ between the medical professionals is limited to the civil service and does not take place in private health establishments. The health team in government-service will have to find a way back to the path of communication, coordination, and mutual respect, borrowing a leaf from how healthcare is practiced in countries with successful health systems. The challenge of quality A recognition of the need for continuous Quality Improvement has become one of the defining features of modern Healthcare. The hallmarks of Quality are Measurement and the standardization of all practices and procedures through the use of protocols. There are other elements that ensure a continuous adherence to best practice, leading to the best possible outcomes in both clinical and non-clinical functions. The ultimate evidence of Quality is the achievement of International Accreditation. Only a few Nigerian hospitals have passed formal Quality evaluation. None of them is a government hospital. Lagoon Hospitals leads the way with accreditation from Joint Commission International (JCI) – the gold standard. Reddington Hospital and one or two others hold accreditation from COSASA – the South African equivalent. It is always interesting in a bizarre way to hear succeeding heads of government talking about creating ‘Centres of Excellence’ in different parts of the country. Such statements usually arise when they are commissioning some new fancy equipment they have just purchased at great cost to the public purse – a linear accelerator, and MRI machine – for the National Hospital or one of the Teaching Hospitals. The truth is that ‘Excellence’ is a quality measure and is not about linear accelerators but about practices, procedure, measurement. On those scores none of the public facilities – state or federal measure up at present, or are likely to be accreditable in the near future. ‘Excellence’ is not a chieftaincy title. Quality Improvement is an expensive rigorous journey for health facilities. The payback is being able to achieve outcomes comparable with the best centres in the world, whether it is for open heart surgery or knee replacement.

People would, and should, pay good money to be treated in a facility with Accreditation, in preference with a cheaper so-so facility, even if they have exactly the same equipment and number of specialists. That is why the emotional argument about stopping Nigerian citizens from going abroad to shop for good quality is never going to achieve anything but pander to the base sentiment of the public. People may be stopped from using government money for such purposes. But if they have their own money, the right to seek best quality care even for their non-life-threatening conditions is a fundamental human right. The true way to fight back is for the country to encourage its own health facilities to seriously embark on the journey of quality improvement and accreditation. A past Minister of State for Health – Dr Ali Pate, indeed made some effort to start a quality drive in the federal tertiary facilities. He achieved only a faint beginning that needs to be aggressively given life. Pharm Access and some private individuals are also working in the field to help health practitioners and willing state governments achieve the first tentative steps of quality improvement in their facilities. Some private facilities, such as Paelon Hospital in Lagos and Lily Hospitals Warri are taking significant steps in that direction. Given Nigeria’s standing in Africa, it is also necessary to facilitate the setting up of a local body that is able to do Accreditation of facilities to international standards. It would build up indigenous expertise in that crucial area, and also save the foreign exchange that is being expended on Accreditation by foreign bodies. The Society for Quality Health in Nigeria (SQHN) has set up such a body from scratch, trained assessors, and secured its bona fides with the international accrediting authority ISQUA. It would be to the advantage of the Nigeria and its healthcare industry if the government deliberately took steps to recognize and encourage SQHN in this project, although it would need to remain privately held to retain its credibility. Disrupting health – the place of appropriate technology There has been a rush, mostly by young Nigerian entrepreneurs, to introduce ground-breaking technology and new ideas into the healthcare space in the past few years. Innovations such as iDokita and various smartphone apps and software have been created to bridge information and service gaps

or create new opportunities. Nowhere in Nigeria is there a greater need for innovative, technology-based thinking than the healthcare space. Take, for example, the three ‘delays’ that need to be overcome in order to reduce the maternal and child mortality rates in the country. Delay 1 is the awareness of the woman in the rural area about the availability of the service she needs in the PHC nearby, and her readiness to use it. This is Information and Advocacy. Can the message be repackaged and resold more effectively? The woman in the rural area does not have television, does not read newspapers, and is not sure to listen to the radio. But she has a phone, or her neighbour has one. Delay 2 – She has been convinced to seek help in the PHC. But the PHC is quite a way away. How does she get there, especially when she is in distress, or in labour? Can ondemand functional logistics that doesn’t cost a fortune and actually works be packaged and deployed? Delay 3 has to do with the facility itself – can it be guaranteed to meet the woman’s needs and keep her trust? There are still other levels. She may need to be transferred to the General Hospital far away. Who owns the problem? How can it be seamlessly, sustainably executed? Healthcare in 2018 is not about doctors and nurses and pharmacists alone, but young

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nerds who code and create apps, and mechanical engineers, and marketing communications experts. Everybody has a role to play. Advanced healthcare: The problem of health tourism Mega-hospitals to the rescue? In the latter days of the last administration, there was some talk of a government initiative to get the private sector to build six ‘mega-hospitals’ in the six geo-political areas of the country. There was, of course, something anomalous about the government taking the lead in something that was supposed to be a private sector initiative. The need to substantially shore up private sector participation in the business of Healthcare has been evident over the years. In a cosmopolitan environment such as Lagos, more than 60% of daily health encounters are carried out in private facilities, as distinct from government-owned facilities. In terms of gross numbers, the government has somewhat under 300 health facilities in Lagos State. The private sector has about three thousand. The private sector is already participating in government health facilities – state and federal, through the agency of Public Private Partnership in some important areas of operation, such as the Mortuary service of the Lagos State University Teaching Hospital and the operation of the Pathcare

With the advent of Basic Healthcare Provision fund, the government does not need to ‘own’ a facility to deliver primary care from it, especially if it is the only one in the area. What is required is to define the package of services to be offered, and set the minimum standards to be attained. Government could then pay for access for every citizen that attends

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Laboratory at LUTH. There has also been an effort to get the business side of Healthcare operations more actively focused upon, especially in the tertiary hospitals. Borrowing from the example of India, there is a realization that part of the solution to the egress of large numbers of Nigerians abroad in search of specialist treatment must be a greater participation of the private sector in creating and operating facilities for specialist care. Capital – both local and foreign, would need to be sought for such projects, and somehow, they would need to be made viable and sustainable. The best specialists, including those in the diaspora, would be able to function in such entities, because there would be personalized, performance-based remuneration. They would not be encumbered by strikes and inter-professional wrangling. The challenge is – how would the hospitals make their money back? They cannot be sustained on the basis of a patchy NHIS and out of pocket payment. There would have to be return on investment for the investors. Obviously, a good business case could onlyand adequate numbers of patients guaranteed if there is compulsory health insurance in the country. A few such hospitals are already beginning to emerge on the landscape. The future for Nigeria’s health That there are a lot of problems afflicting Nigerian health is quite obvious. Embedded within the problem situation are opportunities for new thinking, radical change and dramatic progress. Possibilities include the following: • Direct Commissioning – bulk purchase of specialist procedures. The government could commit every year to buying a defined number of interventions for needy Nigerians at market cost. The interventions should be those ones that normally cause Nigerians to go seek care in India. Perhaps 1000 Open Heart surgeries, 500 kidney transplants,500 knee or hip replacements, 500 advanced Cancer treatments. They should look for the facilities with the best track records in these interventions, or investors who are ready to build the facility and provide the service at the highest level, possibly using skilled Nigerians from the diaspora. Without spending one naira on brick and mortar, the nation would be buying service for Nigerians selected purely on clinical need, and facilitating the operation of advanced medical care, and making a dent on medical tourism.

• Removing the PublicPrivate dichotomy: dotted all over the Nigerian rural landscape are health facilities, many in disrepair, and many offering poor quality services, admittedly. Those facilities are a mixture of private clinics and primary health centres. All the centres are running what is essentially primary care. But in any audit, it is only the ‘government’ facilities that are counted, giving a distorted impression of shortage. With the advent of Basic Healthcare Provision fund, the government does not need to ‘own’ a facility to deliver primary care from it, especially if it is the only one in the area. What is required is to define the package of services to be offered, and set the minimum standards to be attained. Government could then pay for access for every citizen that attends. The citizen is served, with minimal building or maintenance commitment on the part of government. The ramshackle ‘private’ practice is boosted. A win-win is achieved. • Task Shifting: The need to deliver a defined package of services at Primary Care level requires that a deliberate and carefully executed system of task shifting and task sharing be executed, across the nation, so that optimal use is made of locally available resources, and the services are affordable and sustainable. • Identification of gaps and problem areas for deliberate input of technology solutions, including the commissioning of ‘translational’ research and development (eg a battery-operated desktop lab equipment that can be used by the doctor or nurse to do basic hematology and chemistry tests, and get an instant report. • Government to facilitate and encourage investment in healthcare industry by tax incentives, customs waivers for equipment and other measures. • Pharmaceutical industry to be encouraged to increase local production of drugs in the nation’s formulary. • Local manufacture of medical equipment to be encouraged, possibly through subsidized partnership with designated manufacturers. • Immediate implementation of compulsory health insurance requirement across the nation. • Revamp of the NHIS with creating of separate structure for administration of health fund. • Handshake between State and ‘Federal’: Better interface between NHIS and state health insurance structures, as well as between NPHCDA and State Primary Healthcare Boards.

Thursday 20 December 2018

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Asos blames ‘bump in the road’ as investors flee e-commerce crash FT

sos described Monday’s profit warning as a “bump in the road”. But investors, who saw the shares crash by almost 40 per cent, experienced severe whiplash. The severity of the slowdown at the fastfashion retailer, whose market value peaked at £6.4bn in March, has raised questions about the confidence of Europe’s millennial consumers and the future of one of the UK’s rare e-commerce success stories. Shares in the company plummeted to a four-year low after Asos revealed in an unscheduled trading update that sales growth would be slower than expected and that profit margins would fall from 4 per cent to 2 per cent as it cuts prices and spends more on marketing. Analysts slashed their profit forecasts for this year by up to three-fifths. The fall is the most serious recent setback for a company that started 18 years ago copying the clothes that celebrities wore — hence the original name, “As Seen on Screen”. Asos has had to cut prices

sharply in its home market to maintain sales growth, even at a slower pace. Customers switched to cheaper items and spent less. “Average basket size is up 3 per cent. Average basket value is down 6 per cent. Those are trends I’ve not seen for the best part of nine years,” said chief executive Nick Beighton on a conference call. Suzy Ross, a consultant at Accenture, said: “The whole of fashion retail, both online and offline, has just become so promotional.” It is also much more competitive. When Asos floated on London’s junior market in 2001 at 20p a share, it was venturing back into a marketplace few thought was viable. Boo. com, an early online fashion retailer, had gone bust barely a year earlier. Consumers surfed basic websites with dial-up internet services. Today, roughly a quarter of all fashion sales are made online, often via mobile devices. Domestic competitors such as Boohoo and Missguided are growing rapidly and established retailers have moved online; this year, Next’s online sales exceeded its sales from stores for the first time. Asos’s worldwide revenues of £2.4bn are bigger than those

of Sir Philip Green’s Arcadia empire, but size has brought complexity and growing pain. Flagging consumer sentiment and heavy discounting in the UK was only one reason for the warning. In Australia, a market the group entered in 2011, Asos held off Black Friday promotions as the event has traditionally not had the impact seen in the northern hemisphere. Germany and France, which between them account for three-fifths of Asos’s European revenues, were also weak. Mr Beighton, a former finance director at discount retailer Matalan who succeeded founder Nick Robertson as chief executive of Asos in 2015, said it was “hard to pin down why” sentiment had worsened in those countries. Asked whether the group would have to rethink its Black Friday strategy, Mr Beighton said: “The benefit of hindsight is two weeks old. We need to have a good think about what we do going forward.” The share prices of other pan-European retailers also bear the scars of heavy discounting. H&M stock fell on Monday after the Swedish fashion group boosted sales only by cutting prices. Spain’s

SandBox Games, YuuZoo Group Network launches Mr.Twister, Unstoppable Rex and other mobile app game BUNMI BAILEY

andbox, a globally recognized brand known for developing next generation mobile games and AR immersive experiences in partnership with the ever innovative tech giant, YuuZoo Group have collaborated in the launch of a series of exciting, fun and engaging internationally acclaimed mobile games into the Nigerian gaming community. The games include unstoppable rex, which is centered on a dinosaur on rampage,

causing maximum destruction through the streets of a city and Mr Twister, who is jumping over vertically ascending spinning hurdles in the form of stairs all to stay afloat. These series of cuttingedge games were specially launched into the Nigeria, to bring people together and promote the development of the gaming community. Speaking at the event, “Digital Marketing Manager, Yuuzoo Group, Gbenga Ogunbiyi, said, “These are hyper casual games that can be played during leisure and can help reduce depression

L-R: Jibola Jegede,the project lead of Yuuzoo Sandbox and Damilola Popoola, Game Content,Yuuzoo Sandbox

which is at an alarming rate. You download, play, enjoy, entertain yourself and stand a chance to get any of our weekly incentives on social media (Facebook and Instagram @sandboxglobal) ranging from smart phones, cash prices, shopping vouchers on smearena.com.ng, recharge cards” Sandbox had officially launched both Unstoppable Rex and Mr Twister in the same week, first by collaborating with the renowned Yaba college of Technology Heroes Award on the 22nd of November, as one of the major proud sponsors of the honorary event and beauty pageant. The event which was attended by both the school alumni and students, saw the second successful launch on the 24th of November 2018 in collaboration with the Digital Marketing Meetup community at the Lagos Chamber of Commerce International Conference Center (LCCI), Ikeja, Lagos state. The illustrious event mixed with the thrill of sandbox games witnessed ensured a contest for who could amass the highest scores in unstoppable rex. These games can be made available on the IO and Google play store

Inditex, the owner of Zara and Pull & Bear, maintained greater price discipline but may not now achieve its fullyear sales forecast. Germany’s Zalando — a key Asos rival — warned on profits earlier this year but said it would not change its current guidance. The UK’s Boohoo, which targets younger consumers with cheaper clothes, also rushed out a statement saying sales had been in line with its expectations. Neither assurance was enough to prevent a double-digit percentage fall in Asos’s wake. Asos has been a market darling for much of its existence. At one point in 2014 its shares were valued at more than 100 times forecast profits and before Monday, 18 of the 25 analysts who follow the stock still rated it a buy. Bestseller, the privately-owned Danish group that built up a 29 per cent stake in Asos in 2010 and is still its biggest shareholder, also remains supportive despite selling some shares this year. But there are doubters too;

about 14 per cent of the free float now is on loan to shortsellers, according to Markit data. At the start of the year, it was less than 1 per cent. Even before Monday’s fall, Asos shares were down more than 40 per cent from their March highs. Michelle Wilson, analyst at Berenberg, attributes this largely to negative sentiment towards the UK, which still accounts for a third of the group’s operating profit, but others think that investors are becoming more wary of the investment needed to maintain the growth rate. Asos was planning to spend up to £250m a year on logistics and technology for the next few years; that has now been scaled back to £200m. “The challenge is to convert revenue growth into sustainable profit growth,” said Ms Ross. Our ambitions have not changed. Macro trends are challenging but that will not stop us building the business that our customers want and that we want Nick Beighton, Asos chief executive

The company’s history has not been without adversity. In 2005, an explosion at an oil terminal next to its warehouse halted business for six weeks, while the group’s distribution centres in Barnsley and Germany have also been damaged by fires. And Asos has downgraded margin guidance before, in 2014, when high levels of promotional activity and a strong pound were the culprits. At the time, Mr Beighton predicted that margins would recover, but not to the 7 per cent levels previously forecast. They have remained at about 4 per cent ever since. This time, he is adamant they will bounce back. “I am confident that 2 per cent is a low point. I have every expectation that margins will recover and may even exceed 4 per cent,” he said. Kate Calvert, an analyst at Investec and one of the few to recommend selling the shares, is not so sure. “I think [margins] will recover, but perhaps not to 4 per cent,” she said, citing the growing proportion of thirdparty brands now sold on Asos.

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Bread, cereals, Milk, cheese, egg, increases food prices by 13.3% in November 2018 Stories by Bunmi Bailey

read, cereals, Milk, cheese, egg, Fish, Ve g e t a b l e s , Fruits, Oil and fats, Potatoes, yam and other tubers were the food items that increased food prices by 13.3 percent in November 2018, according to the National Bureau of Statistics (NBS) inflation report. From the NBS report, food prices rose marginally by 13.30 percent in November 2018 compared to 13.28 percent in Octo-

ber and on a (month-onmonth) basis, the food sub-index increased by 0.90 percent in November 2018, up by 0.08 percent points from 0.82 percent recorded in October 2018. Africanfarmer Mogaji, CEO of X-Ray Farms Consulting said, “It is normal for these food prices to increase e.g. potatoes are expensive because it is off season and also the festive period we are in contributes to the increase.” Interestingly, the NBS inflation rate for November corresponded to FSDH Merchant Bank Limited forecast inflation rate of

11.28 percent . “We noticed here that usually end of the year purchases will increase inflation from 11.26 in october to 11.28 percent in November and our estimate for inflation rate for December is 11.63 percent,” Ayo Akinwunmi, Head of Research, FSDH Merchant Bank, said to BusinessDay in a telephone interview From the NBS, the inflation rate for goods and services increased marginally on a (month-on-month) basis by 0.02 percentage points to 11.28 percent in November 2018 from 11.26 percent in October 2018.

Thursday 20 December 2018

India phone maker Lava to unveil high end phones into Nigeiran market

AVA, an international Indian company intends to invade the Ni g e r i a n m a rk e t with the latest devices that carry advanced capabilities to compete with prominent international brands, especially the Chinese ones at affordable prices to the average and medium consumer, according to a press release from the company. The company said, “In the coming days, the Nigerian market will witness a fierce competition in the technology industry between the emerging technology giant and the Chinese dragon after the announcement of LAVA that occupies a leading position in the industry to launch major investments in this field. After the completion of all licenses and procedures required to establish vast presence in the Nigerian market.” “LAVA focuses on utilizing the software industry and the economical proximity with the Nigerian market to deploy technologically advanced products. LAVA will take advantage of the strong relations, the state of economic mobility and trade exchange between the Nigerian and the Indian civilizations and their

similarity in many characteristics, qualities, cultures and economic situation and follow the example of major Indian investment companies in the creation of a brand that suits the Nigerian consumer,” the company further said. Indian companies have demonstrated their dominance in the field of technology in the last 2 decades and have evolved their ecosystem in a way that they are now positioned to deliver some of the most advanced and high quality technological products to the world. Today, India is the second largest source of computer software in the world after the United States. About 40 percent of the software used today in mobile phones is be-

ing developed in India. India is the source of programmers and engineers that make up the largest companies in the US Silicon Valley, with more than 300,000 engineers and programmers that own 750 companies with some of the leading Software as well hardware companies having Indians being the CEO of businesses like Google, Microsoft, Adobe and Nokia. Nigeria today stands at a point where the economy will receive a positive boost from not only a mutually beneficial trade and intellectual exchange but also employment generation with the onset of operations of such technologically advanced global brands.

Living under poverty line How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 803 889 1567, +234(0) 8155184838 chinwe.agbeze@businessdayonline.com

Trader in dire need of funds for dialysis, surgery Name: Mrs Ugbede Kehinde Oluwatoyin State of Origin: Ogun Age: 35 Dependents: Mother and three siblings Occupation: Trader I deal in eggs and foodstuffs at App market, Abuja. Before I ventured into this business, I worked in the bank having graduated from University of Abuja where I studied Economics. In 2008, I was employed at Oceanic Bank (now Ecobank) where I worked as a teller before I was moved to the customer service desk. I served in different branches of the bank before I was relieved my job. From App market, I moved to Kubuwa where I was trading until I was diagnosed of kidney failure in 2018. How did it start?

It started in August, 2017 but like malaria and typhoid. I had the same experience every two weeks. By November, 2017, we were treating ulcer but unknown to us, what I had was bigger than ulcer. I was short of blood and was given two pints of blood. Before I got married in December, 2017, I was referred to Maitama Hospital for endoscopic but my fiancé did not allow me to go because of the cost. Two months after the wedding, my condition deteriorated and that was why I was diagnosed of kidney failure. The situation got worse in January, 2018 when I started bleeding through the nose and vomiting two or thrice a week. Second week in January, I was at Kubwa General Hospital. I asked the doctor the result of the general tests carried out

on me and she said they were all good. But, I wasn’t getting any better. The bleeding and vomiting still persist. I also lost appetite, had sleepless nights and coughed profusely. I was given antibiotic, malaria drugs and cough syrup. With the

medication, it even got worse. On February 23, 2018, I was diagnosed of Chronic Kidney Disease (CKD) at Kubwa General Hospital. I was referred to Gwagwalada Teaching Hospital for further treatment and dialysis.

Analyst: Chinwe Agbeze, Graphics: Fifen Eyemisanre Famous

I spent six weeks at the hospital before I moved to Zenith Medical and kidney centre in Abuja, where I have been receiving treatment till date. What is the cost implication? I was told the best treatment option for my condition is kidney transplantation and it would cost about N13.3m. This sickness is really capital intensive. My husband and I cannot bear the cost. I do dialysis twice a week and the treatment drugs cost N110,000 per week. On every dialysis, I take injection for blood because I’m anaemic and infusion because I lack vitamins and glucose. How have you coped so far? We get assistance from family, friends and good spirited individuals. This sickness is really capital intensive.

A plea for help My husband work is a mathematics teacher at ElisAngel model school. From the time I was diagnosed of this sickness till now, it has not been easy for him. My husband’s salar y couldn’t take care of the sessions of dialysis in a week. Since I was diagnosed of this disease, I couldn’t do any work to support my husband and the family. On monthly basis, I spend N1m dialysis, drugs and admission. The doctor said the lasting solution is the kidney transplant. N10m is required for the transplant but I sincerely do not know where or how to get that kind of money. I am calling on Nigerians to come to my aid and help me raise the funds for my kidney transplant.

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BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Legal community celebrates Oyebode for contributions to jurisprudence

rominent Professor of jurisprudence and international law, Akin Oyebode was greatly celebrated by members of the legal profession at a recent event to unveil the work, “Crisscrossing law and jurisprudence: A festschrift in honour of Professor Akindele Babatunde Oyebode.” in honour of the renowned university professor. Speaking at the public presentation of book at the University of Lagos (UNILAG), Lagos State, Lagos State Attorney-General & Commissioner for Justice, Adeniji Kazeem SAN described Prof. Oyebode as one the most enterprising, innovative, intriguing and inspiring lecturers he had ever come across. “And I have encountered several in my lifetime. I say this without fear or favour…” he said. The festschrift, a volume of scholarly articles is contributed by many authors to honour a senior colleague or renowned scholar and usually on the occasion of the honoree’s birthday. The Attorney General noted that there were so many people that Prof. Oyebode has touched,” adding: “I still come back to consult him on several legal issues. I expect him to be back because he is so passionate about what he does. I am sure the university authorities have listened (to the request that he be made an emeritus professor).” Asue Ighodalo, Founding Partner, Banwo & Ighodalo and Chairman Nigerian Economic Summit Group (NESG), described Oyebode as a “highly respected and highly distinguished teacher of men,” adding that he is “extremely cerebral, very confident, very eloquent, with strong views on many issues, and with the mastery of most issues.” He also urged Oyebode to return to the faculty, saying, “You must come back. We must not let Prof. Oyebode go. He must continue to be a teacher of men.” Dean of Law, University of Lagos, Prof. Ayo Atsenuwa said that the collection of essays was “in celebration of an uncommon scholar who gave the best years of his life to the faculty and the university.” Popular Economic and Financial Crimes Commission (EFCC) prosecutor, Wahab Shittu described Oyebode as “an extra-ordinary scholar, a father figure for many,” adding: “A lot Continues on page 39

Oil rig as vessel under the cabotage act 2003 and the cabotage amendment bill 2016 Caroline Tokulah-Oshoma

ver the years, the Nigerian maritime industry has witnessed an alarming increase in the rate of uncontrolled and illegal participation of foreign shipowners. This undesirable trend has been detrimental to the industry and necessitated the enactment of the Coastal and Inland Shipping (Cabotage) Act in 2003. The Cabotage Act was enacted to restrict the participation of foreign vessels in the Nigerian Coastal Trade, to promote the development of local tonnage, to establish a Cabotage Vessel Financing Fund and most importantly to build up local skills and human capacity. It is unfortunate that to date the Cabotage Act has not produced the desired effect due to the weak drafting as it is bedeviled with various shortcomings. One of such shortcomings of the Act is the failure to expressly include an oil rig as one of the vessels to be subject to the operation of the Act. This position has generated a lot of controversy which appears to have been taken advantage of by foreign shipowners. Nigeria as a Maritime Nation stands the chance of losing about $2,000,000,000 (2 Billion Dollars) of revenue through complex taxes and rates that oil rigs and drilling operations are charged if urgent reform is not implemented and steps are not taken in the right direction. Presently, there is a Bill pending before the National Assembly which has the aim of amending the Cabotage Act. This article will focus mainly on the Bill to Amend the Cabotage Act with emphasis on Section 13 (definition section) of the Bill to Amend the Act. THE CABOTAGE ACT 2003 The Cabotage Act was enacted with the aim of enhancing the partici-

pation of indigenous shipowners in the domestic coastal trade and restricting the use of foreign vessels in engaging in the domestic carriage of goods and passengers within Nigerian coastal waters. In seeking to enhance the promotion and development of indigenous tonnage in Nigeria’s cabotage trade, sections 3 – 6 of the Act provides that only vessels that are wholly built in Nigeria, wholly owned by Nigerian, wholly crewed by Nigerians, and registered in Nigeria can engage in cabotage trade. However, sections 15 – 20 of the Act stipulates that foreign vessels may be permitted to participate in cabotage trade, if the necessary application for a restricted license and waiver has been made to the relevant authority and approved. Section 30 of the Act empowers NIMASA to enforce and implement the provisions of the Act.

The Cabotage Act with all its positive intent and purposes has so far not achieved its objectives due to various drawbacks in the provisions of the Act. One of such drawbacks is the direct failure of the Act to include an oil rig/ platform as one of the vessels specifically falling under the operation of the Act. This drawback has generated significant controversy and foreign shipowners have in recent times contested that oil rigs cannot be considered as vessels falling within the operation of the Act which is presently the subject of litigation. DRAWBACK OF CABOTAGE ACT – FAILURE TO CLASSIFY OIL RIG AS A VESSEL Section 2 of the Cabotage Act defined a vessel to include; “any description of vessel, ship, boat, hovercraft or craft, including air cushion vehicles and dynamically supported craft, designed, used or capable of

being used solely or partly for marine navigation and used for the carriage on, through or under water of persons or property without regard to method or lack of propulsion” It is of important to note that section 2 of the Act as quoted above, did not expressly define a vessel as a specific thing. Rather, it simply identifies certain requirements for determining what could be regarded as a vessel for the purposes of the Act. Interestingly, foreign shipowners are aware of the failure of the Act to classify a particular thing as a vessel and have advanced this position for arguing that an oil rig is not a vessel under the Act. However, it is posited that the argument of the foreign shipowners cannot be sustained. This is because a close scrutiny of section 2 of the Act reveals that a crucial requirement for determining that a thing can be regarded as a vessel under the Act is that such a thing must have been described as a vessel. In other words, any available description of a thing as a vessel will render such a thing to be recognised as a vessel under the Act. Given this position, it is important to identify those laws that have expressly described an oil rig as a vessel which provides a premise for arguing that oil rigs are subject to the operation of the Act. LEGISLATION CLASSIFYING OIL RIGS AS VESSELS. It is of importance to note here that there is local legislation expressly describing an oil rig as a vessel/ship. These legislation are outlined below; i. The MERCHANT SHIPPING ACT (MSA) 2007 The MSA 2007 expressly included oil rig/platform in its definition of a vessel. Section 337 of the Act provides that a “vessel” means “any ship, craft, machine, rig or platform whether capable of navigation or not which is involved in a collision”. ii. ADMIRALTY JURISDICTION ACT (AJA) Continues on page 38

We‘re ready to prosecute Buhari at the ICC - Femi Falana

oremost human rights activist, Femi Falana SAN has warned that he will not hesitate to seek prosecution of President Muhammadu Buhari at the International Criminal Court (ICC) if the president annuls the forthcoming general elections. Speaking at the weekend at the launch of the League of Anambra Professionals (LAP) Legal Defence Initiative (LDI) in Lagos, Falana said that the days of annulment of elections are gone for good. His words: “I am touching on these (public interest litigation) cases to warn Nigerians to appreciate that an election can no longer be annulled in Nigeria, because the fear has been expressed that if President Buhari is defeated next year he may not want to hand over. I mean, that belongs to the past.” The human rights lawyer who was the Guest Speaker at the event

L-R: Guest Speaker, Femi Falana SAN with former President of League of Anambra Professionals (LAP), Katia Ekesi

held at Colonades Hotel, Ikoyi, Lagos emphasized that “Unlike 1993 when the Military President, Gen. Ibrahim Babangida successfully annulled an election, that is no longer possible. Whoever does that now will end up in The Hague. He is likely to be tried for crimes against humanity because

if you annul an election, you are likely to have a monumental violence in the country which will lead to crimes against humanity.” Putting a seal of finality on his resolve to drag de-

L-R: Keynote Speaker Anselm Chidi Odinkalu; ex President, League of Anambra Professionals (LAP), Katia Ekesi; LAP President, ChijIoke Okoli SAN, and his wife, Ngozi Okoli.

faulters to the ICC, Falana who commended Anambra indigenes for leading the way in similar public interest litigation, said: “I want to assure Nigerians that because of the fact that public interest litigation has come to stay in Nigeria, we are not going to hesitate to drag whoever Continues on page 39

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Docket

Thursday 20 December 2018

LegalBusiness

NBA President gets bail in the sum of N250 million …Applies to transfer case to Uyo or Abuja THEODORA KIO-LAWSON

he President of the Nigerian Bar Association, Paul Usoro, SAN was on Tuesday granted bail when he appeared before the Hon. Justice Muslim Hassan of the Federal High Court in relation to the 10-Count Charge leveled against him by the Economic and Financial Crimes Commission (EFCC). The court had at its last sitting, ordered that the EFCC served the defendant with the charge sheet personally, after which it adjourned to December 18th, 2018 for arraignment. Upon the insistence of the EFCC, the NBA President had to be served personally with the charge at the commission’s office in Ikoyi. Announcing his appearance for the prosecution at Tuesday’s proceedings, Rotimi Oyedepo informed the court that the Charge had been served on the defendant. He thus applied that the plea be taken on the 10-count charge. Counsel for the defendant, Wole Olanipekun, SAN promptly objected to this move, arguing that the procedure adopted by the prosecution in which it asked the court to accept the Charge is a wrong one. ″The prosecution cannot be asking the court to accept a charge that the court itself proffered,″ he said, Defence Counsel went on to add that the charge cannot also be read

where there is a pending application to the Chief Judge for the transfer of the case. He disclosed that a letter dated December 17, 2018 addressed to the Chief Judge of the Federal High Court has been filed, praying the court to transfer the matter to any judicial division between Uyo and Abuja. Referring the court to Section 98 of Administration of Criminal Justice Act (ACJA) 2015, Wole Olanipekun said, “The defendant’s request is harmless and a right that inures to the advantage of the defendant or any defendant for that matter. We do not need to belabor the point, as it is indeed harmless.” He went on to read aloud Section 22 of the Federal High Court Act which establishes that defendant has the power to transfer any matter. On the other hand, Rotimi Oyedepo argued that there was no basis for transfer to Uyo or Abuja. According to him, the application for adjournment, which relies on the said letter, should not be entertained by the court. He further argued that sufficient facts, which would lead to a transfer of the case to Uyo or Abuja, were not available. “Apart from the letter to the CJ, there was no formal application before the court seeking a recuse, adding that the prosecution was entitled to join issues on same.” Prosecution Counsel thus urged the court to proceed with arraignment. The Court held that having lis-

tened to the submissions of counsel on both sides, and also read the letter written to the Chief Judge, the issues in view comes down to whether the defendant can take his plea in the circumstance.’ The Judge said, “Although it is not in dispute that the Chief Judge reserved the right to transfer cases, the instant case is already assigned to this court. It is a rule, that even where such application for transfer exists, the trial judge is to continue with hearing of the case, pending any contrary decision. Justice Hassan consequently,

called on the accused to take his plea on the charge. The plea was thus read to the defendant, Paul Usoro, SAN and he pleaded not guilty to all 10 charges. After his plea, Counsel for the accused, moved a bail application on behalfoftheaccused,urgingthecourtto admit him to bail on liberal terms of selfrecognizance as President of the NBA. He added that the International passport of the defendant would be deposited with the court as a measure, and would be applied for,

Oil rig as vessel under the cabotage act 2003... Continued from page 37

The AJA defines a Ship to mean “a vessel of any kind used or constructed for use in Navigation by water, however it is propelled or moved and includes; A barge, lighter or floating vessel, including a drilling rig, a hovercraft, an offshore industry mobile unit, and a vessel that has sunk or is stranded and the remains of such vessel, but does not include a vessel under construction that has not been launched iii. THE NIGERIAN MARITIME ADMINISTRATION AND SAFETY (NIMASA) ACT 2007 The NIMASA Act 2007, expressly described an oil rig as a vessel. Section 64 of the Act provides that a “vessel “ means “any kind of vessel that is used, or capable of being used, in navigation by water, however propelled or moved, and includes: a barge, lighter, floating platforms, restaurant or other floating vessel; and an air-collusion vehicle; or other similar craft that is used in navigation by water. It must be noted that Nigeria is not a standalone jurisdiction in describing an oil rig as a vessel as it appears that other maritime countries have also described an oil rig as a vessel. Reference is made below to some countries that have expressly described an oil rig as a vessel. INTERNATIONAL PRACTICES In the Netherlands, a ‘ships’ or “vessel” is defined as “all objects which, according to their construction, are destined to float and which float or have done so”. This means that all floating offshore structures (including oil rigs) are registered in the Netherlands and fall within Coastal trade. In the United States of America,

under the Jones Act, the following are classified as vessels: ocean-going ships, Tug boats, barges, dredgers, pile drivers, commercial fishing boats, offshore oil platform service boats, oil drilling rigs, Jack-up rigs, Semi-submersible rigs, Drilling ships, Tension leg platforms, and other types of maritime craft. This list practically covers all forms of structure. In the case of Offshore Co. v. Robison, 266 F.2d 769 (5th Cir. 1959) it was held that a mobile drilling platform was a vessel and that “vessel” had a “wide range of meaning”. In the United Kingdom, The Merchant Shipping Act defines a “ship” to include every description of vessel used in Navigation”. There is no specific type of vessel mentioned, thus covers all forms of structures. The author of Admiralty & Maritime Law (4th ed. 2004) further buttress this fact by stating emphatically that virtually every type of movable rig or structure qualified for vessel status. Having established that the description of an oil rig as a vessel is not peculiar to Nigeria but is prevalent in other maritime countries, it is pertinent to consider the position of the Nigerian courts on the matter. CURRENT CASE LAW ON OIL RIG AS A VESSEL UNDER THE CABOTAGE ACT The controversy regarding whether an oil rig is to be regarded as a vessel that is subject to the operation of the Cabotage Act has been the subject of judicial consideration. In the case of Noble Drilling (Nigeria) Limited v The Nigerian Maritime Administration and Safety Agency (“NIMASA”) and The Minister of Transportation - Suit No. FHC/L/CS/78/2008, the Federal High Court was presented with the opportunity of determining whether

an oil rig could be regarded as a vessel for the purpose of the Cabotage Act. The Plaintiff, Noble Drilling (Nigeria) Limited, an offshore drilling contractor, argued that its activities within Nigerian territorial waters (drilling operations) did not amount to “Coastal trade” or “Cabotage” as defined under the Cabotage Act. The Defendants, NIMASA / FMOT argued that because drilling rigs carry oil, mud and other substances from the sea bed to the surface, they are vessels within the contemplation of Section 2 of the Cabotage Act and that the definition of the word “ship” or “vessel” includes a drilling rig under the Act thereby rendering the use of a drilling rig within the Nigerian Coastal Waters subject to the operation of the Act. However, the Honourable Court held that the definition of the word “vessel” in the Cabotage Act did not include an Oil rig. The court further placed emphasis on the fact that oil rigs were not expressly mentioned in the Act as one of the vessels to be subject to the Cabotage Act. It is respectfully argued that the position of the Honourable Court is flawed upon the premise that while the Cabotage Act failed to expressly include an oil rig as a vessel to be subject to the operation of the Act, the list of vessels expressly identified in the Act to be subject to the operation of the Act is neither exhaustive nor a closed list. It is important to note that the case is presently on appeal and it will be interesting to see the decision which the appellate court will arrive at in its determination of the appeal. In any event, it is crucial to note that the failure of the Cabotage Act in expressly classifying an oil rig

whenever required. Prosecutor did not oppose this application, leaving this to the discretion of the court. ThecourtwentontoadmittheNBA PresidenttobailinthesumofN250million, with one surety in like sum. The court added that the surety must be owner of a landed property within the court’s jurisdiction, or a civil servant not lower than the rank of a Director in the Federal or State civil service. The court ordered that the accused’s international passport also be deposited with the court’s registry, which will be verified if genuine. The case was adjourned to February 5th, March 5th, and March 6th, 2019 for trial. In a Charge Sheet marked FHC/418c/18, the EFCC has accused Usoro SAN of conniving with others to divert the sum of N1.4b of Akwa-Ibom State Government funds to personal use contrary to Section 18(a) of the a Money Laundering (Prohibition) Act and liable to be punished, if found guilty, under Section 15(3) of the same Act. The prosecution also alleges that the unlawful activity includes a criminal breach of trust which contravenes the provisions of section 15 (2), 15(3), and 18 (A) of the Money Laundering (Prohibition) Act, 2011. Also named in the charge, is the incumbent governor of Akwa Ibom, Emmanuel Udom, who is described in the charge as being “currently constitutionly immune from prosecution”

as a vessel appears to have been addressed in the recent Cabotage Amendment Bill presently undergoing consideration at the House of Assembly. A brief consideration of the Bill is undertaken below. CABOTAGE AMENDMENT BILL – REMEDYING OIL RIG DEFINITION DRAWBACK The Cabotage Amendment Bill seeks to make certain amendments to the Act. A notable amendment sought to be made to the Act is in respect of expressly classifying an oil rig as a vessel to be subject to the operation of the Act which will deal with the existing controversy concerning whether oil rigs are to be regarded as vessels. Section 13 of the Bill provides that: “Vessel” includes any description of vessel, ship, boat hovercraft or craft, including air cushion vehicles and dynamically supported craft, designed, used or capable of being used solely or partly for marine navigation and used for the carriage on, through or under water of persons or property without regard to method or lack of propulsion and include rigs, floating, production, storage and offloading platforms (FPSOJ floating, storage and offloading platforms (FPSO);” The importance of this section of the Bill cannot be overemphasized. The lack of inclusion of an Oil Rig as a vessel has resulted in a number of suits being instituted at the Federal High court. The failure of the Cabotage Act to expressly describe an oil rig as a vessel has also been used by foreign shipowners as an avenue for contesting the statutory powers of NIMASA to levy its statutory fees on the oil rigs employed by these foreign

shipowners in their drilling operations. Against this position, a number of foreign shipowners trading within the Nigerian Coastal Waters are refusing to register their oil rigs as required by the NIMASA Act thus denying the Nigerian Government of the required taxes and rates. It is important to reiterate that Nigeria as a Maritime Nation stands the chance of losing about $2,000,000,000 (2 Billion Dollars) if this is not tackled promptly and accordingly. This is no small sum. The provision of Section 13 of the Bill is therefore welcome as it provides a remedy to the existing drawback in the Cabotage Act represented by the failure to expressly describe an Oil rig/platform as a vessel. CONCLUSION The need to pass the Bill pending before the House cannot be overemphasized. The passing of the Bill will help generate lost revenue and further boost our maritime trade, and importantly, it will finally put an end to the unfair exploitation of the lacuna created as a result of the ambiguity of the definition of an oil rig/platform within the operation of the Cabotage Act.

Caroline Tokulah-Oshoma Associate - Olisa Agbakoba Legal

39 LegalBusiness

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INDUSTRY FILE

Legal community celebrates Oyebode...

BUSINESS DAY

We‘re ready to prosecute Buhari... Continued from page 37

L-R: Prof. Ayodele Atsenuwa, Adeniji Kazeem, SAN, Prince Julius Adelusi-Adeluyi, Prof. Akin Oyebode and his wife.

Continued from page 37

of things has been said about Prof. Oyebode but one striking attribute of his that I want us to take away from here is -apart from his scholarship his unparalleled integrity.” He then presented the renowned scholar with EFCC souvenirs as an “anticorruption scholar,” noting that he “spent 44 years in the university with his integrity intact.” UNILAG Pro-Chancellor, Dr. Wale Babalakin, SAN noted that only a well-funded university system could attract the best minds. His words: “If I am going to sacrifice because I insist that quality education must be had in Nigeria, that we must have good funding, that we must have the likes of Prof Akin Oyebode joining the universities all over again and having a full life in the university and achieving everything they set out to achieve, I

stand charged, and I will stand by it.” On his part, former Minister of Health and Social Services, Prince Julius Adelusi-Adeluyi OFR noted that “One golden thread that runs through all the accolades apart from his integrity is that he is one who has inspired many.” Emphasizing the need for others to emulate this virtue, the renowned pharmacist and former Nigerian Law School best graduating student said: “Nothing is better in life than to be called an inspirer, because the greatest form of flattery is imitation. Please aspire to inspire others before you expire.” Thanking the Faculty of Law for the honour done the patriarch of the Oyebode family, Gbenga Oyebode MFR noted “his 44 years of service not just to the University of Lagos but to Nigeria and his students.” He also observed that his students are “doing very well up to Supreme Court.” In his response, Prof. Oyebode

thanked the faculty for the honour done him. His words: “There is a lot of life after retirement. I am even busier now paradoxically. One is so grateful to God. I thank those who are asking the university authority to confer me with the rank of emeritus professor. I am sure a lot of work has gone into that, but I still leave everything in the womb of history. “Our faculty has done its best; there might be rough edges. The faculty organized four dinners for my send off. The vice president attended one of the dinners to honour his former teacher. I have been very lucky and privileged as a teacher in the faculty. I have been privileged to teach over 70 senior advocates. I taught over 30 law professors. My former students could be found from the Supreme Court to the lowest courts in the land. What more can I ask for than to have produced people who are making waves.”

NiCArb vows to improve domestication of arbitration, maintain high standards of training KELECHI EWUZIE

he Nigeria Institute of Chartered Arbitrators (NICArb) has vowed to use every necessary mechanics to domesticate arbitration in Nigeria and reduce significantly the number of arbitration of home, generated disputes exported outside Nigeria. The premier arbitration institute in Nigeria also said it will continue to explore ways of maintaining the high standards of training aimed at achieving the highest standards in its membership, while trying to ensure that arbitrators are not only competent and experienced in this field, but are of the highest moral caliber and professional competence. Speaking in Lagos at the 2018 Annual Investiture/Awards ceremony of the institute, Aare Afe Babalola, chairman of the event said that with qualified persons in the Institute, there should be no excuse to seek expertise outside, except of course in international commercial arbitration; or where the specific circumstances of a case so demand. Babalola who was represented by Fabian Ajogwu, vice president and member of Governing Council said the institute is putting in place measures to reverse the trend of setting aside arbitral awards at the slightest opportunity, and to appointing qualified arbitrators in Nigeria to conduct arbitration. He observes that the 2018 Fellows, Members and Associate members that were inducted serves as testimony to the high

Executives and newly inducted members of the Nigeria Institute of Chartered Arbitrators (NICArb) in Lagos recently.

premium that the institute continue to place on its objectives and activities. He further lauded the founders of the Institute and charged all inductees to go forth and practice and promote arbitration, mediation and other ADR; and serve as good ambassadors of the Institute in their different fields. Walter S.N. Onnoghen, chief justice of Nigeria and chairman, Board of Governors, National Judicial Institute in his keynote address at the event said recourse to arbitration as a method of dispute resolution has been on the increase in Nigeria, and of course the nature of the proceedings and the minimal implications were the drivers. Onnoghen while speaking on the topic ‘Rising Cost of Arbitration Fees: a Potential Threat to Arbitration Practice’ reiterated the fact that arbitration mechanism has come to stay in Nigeria because the country cannot afford to lose the advantages associated with its practice. He opines that the time to make a choice between encouraging the clients and patronising the institution and turning down their offers is now.

According to him, “Given the complexity of most commercial arbitration cases, the assistance of experts is almost always recommended, if not required. Parties are responsible for these experts’ fees, which can range from a few hundred thousand Naira to tens of millions of Naira, depending on the complexity of the case and the type of expert”. He commended the organising committee chairman and his team for organizing such an important event, and urge experts to make use of the opportunity offered by the Institute and proffer solutions. High point of the event was the induction of 37 Fellows, 64 members and 233 Associates. Among those inducted are Olarinde Elisabeta Smaranda, Provost, College of Law, Afe Babalola University, Ado Ekiti; Folusho, Falade, Dean, Faculty of Engineering, University of Lagos; Chioma Agomo, University of Lagos; Kathleen Okafor, Dean, Blaze University, Abuja. Others are, Esohe Frances Ikponmwen, Chief Judge of Edo State; Sidi Dauda Bage, Justice of the Supreme Court, (JSC), Nonyerem Okoronkwo, JCA; and Munta Ladipo Abimbola, chief Justice of Oyo State.

tries to annul an election in Nigeria to the International Criminal Court.” He also hinted that it was the fear of such prosecution that forced former President Goodluck Jonathan to hand over to the incumbent president, noting that former President Olusegun Obasanjo had warned Jonathan of similar consequences should he renege in accepting defeat at the polls. Falana who spoke on the theme, “Public interest litigation as a potent tool for redress of group marginalization and advancement of rule of law in Nigeria,” noted that public interest cases filed by Anambra indigenes or originating from Anambra State have helped to shape Nigeria’s legal and constitutional landscape, urging LAP to sustain this glorious tradition. He said: “More than any state in Nigeria, Anambra State has contributed more to public interest litigation in Nigeria. Apart from the cases of constitutional importance that arose from that state, you also have a man like Olisa Agbakoba who is in the forefront for entrenchment of public interest litigation. Many of the cases that have arisen from Anambra State relate to the consolidation of the democratic process. “NGIGE V. OBI led the country to go back to the drawing table and amend the Electoral Act, such that election petitions do not last more than 180 days at the tribunals. In OBI V. INEC, the Supreme Court also clarified the issue of when a governor’s term of office begins to run, namely when he takes the oath of office.” He also noted that cases from the state have helped to heal the hardships wrought by harmful cultural practices on women, citing cases such as MOJEKWU AND MOJEKWU, MOJEKWU AND EJIKEME, UKEJE AND UKEJE among others where female children have been denied the right to inherit from their father’s estate. “The courts have repeatedly maintained than any culture that discriminates against women is clearly illegal and unconstitutional, having regard to the right to freedom from discrimination,” he stated. On his part, former Chairman of the National Human Rights Commission (NHRC), Prof. Chidi Odinkalu also urged LAP to sustain the legacy of revered Anambra professionals such as Dr. Nnamdi Azikiwe, Chief Jerome Udoji, Prof. Chinua Achebe, Chief Emeka Anyaoku and Dr. Dozie Ikedife among others. In his keynote address at the event, Odinkalu warned that Nigeria is dysfunctional, urging Nigerians to close ranks. His words: “Nigeria is not working for any part of it. We are all united in our discontent with Nigeria. Why is Nigeria not working for any part of it? It is because the country is top heavy.” Explaining, he said: “In a fiscal sense, we are running and have been running a recurrent deficit for over six years. In fact, for the better part of the last 10 years, we have been running a recurrent deficit. Which means what? All of our recurrent expenditure is borrowed. Some of our capital expenditure is borrowed. It has been for seven years. We are borrowing to pay for the cost of government - to pay for the salaries of civil servants who run government, and their allowances, too. In a geospatial sense, Nigeria is top heavy.” He said that the country is also

top heavy economically and demographically, being a mono-economy deriving a lion’s share of its revenue from oil as well as “producing more children than we can feed. In another 23 years we will double our population, but we are not doubling our capacity to feed this population. That is why hate is growing, because quite clearly we are having a crisis of demand and supply.” He warned that Nigeria may implode if nothing is done to check the situation, adding that the clamour for restructuring must be viewed contextually as “Nigeria has been in the process of restructuring since 1903. According to him, “The debate over the structure of Nigeria and its ’restructuring’ encapsulates in varying degrees all these elements, i.e. the geo-physical, geo-political, political economy, fiscal and ethical re-balancing of the country. The costs of these distortions are evident in Nigeria’s abysmal human development indicia in poverty (1st in the world); education (most out-of-school-children in the world); maternal mortality (2nd highest in the world); and internal displacement (3rd in the world). But it is in our coexistence indicia and in the resulting fragility of the Nigerian state that the deepest evidence of these costs show up.” Speaking earlier, LAP President, Chijioke Okoli SAN recalled the contributions of LAP to national development, noting that the LAP Legal Defence Initiative (LAP-LDI) is a new paradigm in public interest litigation. He said: “It is holistic; it is not restricted to Anambra people. We intend to have, for starters, two young lawyers who will be working full-time. When they go to the police station or the prisons to assist people who do not have legal representation, it will be their duty to offer legal assistance to them. We have our common ‘Nigerianness’ and common humanity. If anybody tells us a story of oppression, notwithstanding which part of the country he or she comes from, it will be within the remit of our lawyers to do their utmost to ensure that they get legal redress.” The event also witnessed the celebration of past LAP Presidents who have contributed immensely to the growth and development of LAP and Anambra State. Among the honorees were the pioneer LAP President, Dr. Ndi Onuekwusi, Dr. Ikem Odumodu, Dr. Mrs. Katia Ekesi (Ugonma Abatete), Mr. Chike Nwegbe and the immediate past president, Mr. Willy Nzewi. LAP is a non-partisan organization with a focus on enthronement of good governance, public enlightenment and overall development of Anambra State and Nigeria in general. In 2005, LAP mapped out a 25-year development programme tagged ‘Anambra 2030’ with the aim of attaining large scale turnaround in the fortunes of Anambra State within the stipulated period. It provides a platform for all Anambra professionals to work towards rebuilding the homeland into a world-class, rich, modern, free and safe society. LAP is designed to offer strong and strategic support towards multi-sectoral development of the State by providing the institutional framework through which Anambra professionals all over the world can contribute to planned, focused, and sustainable development of the State.

BUSINESS DAY

PhotoPile Top ICT lawyers at digital economy workshop for policy makers

BDLegalBusiness

OAL Partner, recognised as leading lawyer in arbitration

L-R, Rotimi Ogunyemi of Bayo Ogunyemi & Co; Akinkunmi Akinkunmi of Paragon Advisors, Rimini Makama of Microsoft; and Basil Udotai of Technology Advisors; during the recent Digital Economy Workshop for Nigerian Policymakers discussing Artificial intelligence.

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riscilla Ogwemoh, Managing Partner, Olisa Agbakoba Legal, has been recognised in Whoâ&#x20AC;&#x2122;sWho Legal 2018 as one of the leading lawyers in Arbitration. She was recognised for her competence and over 20 years in arbitration matters across various industries. Since 1996 Whoâ&#x20AC;&#x2122;s Who Legal

has identified foremost legal practitioners and consulting experts in business law based upon comprehensive, independent research. Through its research and assessment, the rating body identifies individuals and law firms who have performed exceptionally well in their areas of specialisation, our research.

NBA-SLP conference on 2019 electoral process

Members of the Nigerian Bar Association Section on Legal Practice (NBA-SLP), conference organising committee with the Chairman, of the Committee on Democratic Process and Electoral at the event Litigation.

Senior Associate, Intellectual Property & Technology Practice group, Chinasa Uwanna (3rd left) with the Nigerian Registrar of Trade Marks, Shafiu Adamu Yauri (2nd left) and other participants from Nigeria at the INTA 2018 Middle East & Africa Conference, today, in Dubai.

The Banwo & Ighodalo team at the 2018 Annual Dinner of the NBA Lagos branch on Thursday December 13, 2018.

More members of the Nigerian Bar Association Section on Legal Practice (NBASLP), conference organising committee with the Chairman, of the Committee on Democratic Process and Electoral at the event Litigation.

Chairperson of the NBA-SLP council, Miannaya Essien, SAN (R) with immediate past chairman of NBA Port Harcourt Branch, Victor Frank Briggs.

Chairman, NBA-SLP Committee on Democratic Process and Electoral Litigation with immediate past chairman of NBA Port Harcourt Branch, Victor Frank Briggs.

Thursday 20 December 2018

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BUSINESS DAY

FIIRO Develops Technology forThaumatin Production 43

BOI renews commitment to support backward integration programmes 42

A close look at asphalt versus concrete debate 43

Of climate change and agribusiness 44

Poor road infrastructure

Victory for Cement Pavement Option Victory for Dangote Group and other cement manufacturers as Nigeria’s central government endorses cement pavement option for road construction, reports SIAKA MOMOH, who was part of the seminar team that kick-started the lobby for cement pavement adoption by government.

ictory for Dangote Group and other cement manufacturers as Nigeria’s central government endorses cement pavement option for road construction, reports SIAKA MOMOH, who was part of the seminar team that kick-started the lobby for cement pavement adoption by government. With the completion of the Apapa Wharf concrete pavement road, and the recent flagging-off of the construction of Apapa-OshodiOworonshoki-Ojota (concrete) Motorway, it is victory for the promoters of adoption of cement pavement for the construction of Nigerian roads. It is victory as well for players in the Nigerian business space – transporters in particular, and other business persons. The N73 billion motorway, whose construction was flagged-off, according to the Minister of Power, Works and Housing, Babatunde Fashola, was built between 1975 and 1978, has neither been expanded nor rehabilitated since then and yet has been helping in the economic development of the area. Aliko Dangote “The road”, the Minister said, “will start from Creek Road (Apapa) through Liverpool to Tincan and terminate at the toll gate near Oworonshoki and will be delivered within two years”. He appreciated the architect of this project, Alhaji Aliko Dangote, “who has never relented in his drive to reduce the hardship of Lagosians in particular and Nigerians in general”. At the flagging-off event, the Chairman of Dangote Group, Alhaji Aliko Dangote, appreciated the government of Muhammadu Buhari for establishing Road Trust Fund (RTF), which he said “helps in developing and constructing roads nationwide”. He added that the completion of these infrastructure would bring about rapid development in the country, stressing that if all the taxes paid by the group were to be calculated, it would be over N200 billion. He noted that the roads built by AG Dangote “are warranted to last between 40 to 50 years”. It would be recalled that the Minister of Power, Works and Housing, Babatunde Fashola, on June 17, 2017, signed a N4.34 billion Memorandum of Understanding (MOU) for the reconstruction of the four kilometres Apa-

pa Wharf Road with AG Dangote Construction Company Ltd and other stakeholders. The project is being funded by AG Dangote Construction Company Ltd, the Nigerian Ports Authority (NPA) and Flour Mills of Nigeria.

How it all started The journey started five years ago, September 2012 to be specific. It commenced then when BusinessDay, in collaboration with Cement Manufacturers Association of Nigeria,

Advertise here

held a conference with the theme ‘Exploring Cement Based Option for Sustainable Road Construction in Nigeria’ at Eko Hotel & Suites Victoria Island, Lagos. It was a great conference which laid bare very convincing facts – facts that tell you it is economically wise( on the long run) for Nigeria to go concrete roads. At the end of deliberations at the conference, the following points among many others were made: • There is enormous deficit in transportation infrastructure which is an important requirement for economic development. • The technology being used for road construction across the world has attracted a lot of inputs from cement-based materials as against the use of asphalt, adding that Nigeria needs to imbibe this new technology. • Asphalt is in great use for local production for Nigeria, yet across the world concrete is

Continues on page 43

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Thursday 20 December 2018

Manufacturing

BOI renews commitment to support backward integration programmes Efetobore Ekugbe

etermined to reduce the high importation of goods and services which the country has competitive and comparative advantage of producing, the Bank of Industry (BOI) has renewed its commitment to supporting genuine investments that have plans to backward integrate. The Managing Director, BOI, Olukayode Pitan, explained that the move was to encourage and attract local and Foreign Direct Investments (FDIs) to develop the nation’s huge abundant natural resources, save scare foreign exchange and create job opportunities for the nation’s teeming unemployed youths. The BOI stated this at a facility tour to Proforce Limited, a leading manufacturer of various defence land systems in Sub-saharan Africa situated in Sagamu area of Ogun State. He commended Proforce for its investment in the Nigerian economy, saying that the company has saved Nigeria a lot of money, stressing that the development finance

Kayode Pintan

institution is happy that the loan facility borrowed had been put into judicious use. “We are also happy that you have employed a lot of people here and we know that the numbers of

employees are going to increase by the time you expand your operations in Port Harcourt. On our own part, we will keep supporting companies like this, companies that support backward linkages, companies re-

cruiting Nigerians while also saving our foreign exchange, companies that their products will be exported to earn foreign exchange for the country. We will do what we can to support what you are doing,” he said.

He said the tour has shown that a Nigerian company has succeeded in developing domestic capacity for the production of armoured vehicles by acquiring modern technology from all over the world to make military grade defence vehicles. Earlier, the Managing Director, Proforce Ltd, Adetokunbo Ogundeyin, commended BOI for supporting his operations with access to finance, saying that his operations would not have grown without funding from the bank. According to him, Proforce has developed a large portfolio of products for the military and civilian markets. “We are able to customize solutions to fit clients needs, while maintaining the industry’s highest levels for quality and performance. “With upsurge of insurgency in North East, we request that BoI aid in financing of Proforce defense expansion drive,” he said. He said that the company has acquired about 150 hectares of land for expansion and to deepen backward integration into its production process, saying it has started local production of helmets and vests.

Quality Control

SON Mops up Substandard Lubricants Nationwide Efetobore Ekugbe

he Standards Organisation of Nigeria (SON) has once again, mopped up substandard lubricants in different parts of the country. Indeed, the standards body stated that the action became necessary after it discovered through its surveillance activities and extensive survey of the market that most lubricants in the market failed to meet quality parameters of the Nigerian Industrial Standard (NIS). The Director General, SON, Osita Aboloma, at an enforcement exercise to Swiss Park, a haven known for dealing in substandard lubricants in ASPAMDA market, Lagos, disclosed that over five containers have been seized so that the goods not will find their way into the hands of unsuspecting consumers. The Director General represented by the Coordinator, Surveillance, Intelligence and Monitoring (SIM) unit, SON, Isa Suleiman, said the products lack the chemical compositions of the oil, which reduce wear and friction even in extreme conditions. In his words, “ Before now, we did a lot of surveillance activities where most of the brands of this engine

oils and lubricants were sampled and tested and quite a number of them failed including this particular brand we have intercepted.” He said the enforcement was also to safeguard many Nigerians that would be travelling this yuletide season by way of ensuring that only lubricants that meet the minimum requirement of the standards are sold in the market. He advised buyers to always insist on purchasing goods from genuine dealers while also looking out for certain marks of quality. He stated that the exercise being carried out simultaneously in most of the States nationwide is being monitored by the Director General and serves as a warning to all sellers and distributors of lubricants and other auto parts to desist from the illicit trade. “This activity is just the beginning; we are going to follow up while also talking to the market leaders for self-regulation. They have all seen the need to cooperate with SON and other government regulatory agencies to ensure that products meet the required standards,” he added. According to Isa, the exercise was sequel to the surveillance it carried out following tip-offs on the influx of substandard lubricants in circula-

tion, saying that SON swung into action in order to salvage the situation. “Today’s outing is specifically designed to take cognizance of the fact that we have an increase in the substandard lubricants. We have conducted surveillance recently where we subjected a number of lubricants to market survey and laboratory test and a number of them failed. So, we are in the shops and other places where these substandard products were found to mop them up, but due to some logistics, the best thing we can do now is to lock them up,” he stressed. He therefore warned erring

marketers that the organization would not relent in its effort to ensure that substandard products were removed out of market and urged the public to always look out for the Mandatory Conformity Assessment Programme (MANCAP) number and logo to ensure that they purchase standard and certified products. Meanwhile, in Kano and Jigawa, some affected businesses were SACLUX Industries Ltd at Sabon Gari market and EXIM IMPEX warehouse along MagandaRoad in Kano city, where such unregistered products were found.

The exercise which also took part in Rivers and Bayelsa also witnessed SON officials swoop on Becmac Limited Lubricant Marketers in Port Harcourt, where drums of branded and unbranded lubricants were discovered. The SON team together with NUPENG task force raided Mile One, Ikoku, Iriebe/Oyigbo axis of Port-Harcourt, where 12 shops were sealed, 16 drums, cartons and jerry cans of lub oils were quarantined. The NUPENG leader appreciated SON efforts in ridding the market of spoilers in the line of lubricants and pledged to be of assistance to SON in carrying out its mandate. Next stop was in Abuja where SON officials discovered the major source of substandard Mobil oil in the FCT during an operation that lasted for seven hours to trace back from the open market back to the major distributor. The exercise led to the closure of 10 warehouses and shops within the FCT. The major distributor has nine of the ten sealed warehouses and substandard Mobil lubricant of about 700 cartons were put on hold. Other lubricants put on hold were Total lubricant suspected to be substandard, Forte oil, Ammasco, Castel oil, a foreign brand.

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Infrastructure

A close look at asphalt versus concrete debate ‘There are three main factors to consider: initial cost, time to first rehabilitation, and cost of total reconstruction or major rehabilitation at the 40- to 50-year mark.’ Siaka MOMOH

2006 article sourced from Public works online furthered the asphalt versus concrete debate. The article argues: ‘Which is better, concrete or asphalt? While there is no cut-and-dried answer, a smart public works official will consider the following questions before selecting a material for the next road project: Which pavement option is better for my specific application? Which will be more cost-effective for me? Which will last longer, decreasing lifetime maintenance costs? Which do I and my team have experience working with? Do I want to fully replace, or rehabilitate? Before a public works (or street maintenance, or road repair) department can decide whether to use concrete or asphalt in a specific application, the department manager must arm himself with information to help him make the best choice. “There are three main factors to consider: initial cost, time to first rehabilitation, and cost of total reconstruction or major rehabilitation at the 40- to 50-year mark,” said Dave Newcomb, P.E., PhD, vice president of research and technology with the National Asphalt Pavement Association (NAPA), which is based in Lanham, Md. Similar to calculating the depreciation of a vehicle or other asset (think GASB 34), the cost of the installation—whether

it’s concrete or asphalt—along with the long-term maintenance must be considered. Crunching the Numbers Cost is often the No. 1 factor that public works departments must consider, but basing assessments solely on upfront costs can be dangerous. Cost of the raw material may fluctuate daily or may be difficult to acquire locally (think of rising oil costs or shortages of Portland cement). Both ACPA and NAPA encourage public works departments to look at the long-term costs of maintenance and rehabilitation when deciding which material to specify. Haislip said that asphalt is more

Manufacturing

FIIRO Develops Technology forThaumatin Production Efetobore Ekugbe

he Federal Institute of Industrial Research Oshodi (FIIRO) has developed simple process technologies for commercial extraction and optimization of high grade Thaumatin and Miraculin, a low calorie sweetener and flavor modifier. The Director General, FIIRO, Gloria Elemo, said this move was apt considering the fact that global high intensity sweetener both natural and synthetic market was estimated to be close to $1.3billion in 2008 and is expected to quadruple by 2021. Elemo stated this at the opening ceremony of the International conference on alternative sweeteners tagged “Harnessing of the economic potentials of Thaumatin (Thaumatococcus danielli) in Africa”. She said attention is shifting to sourcing of alternative sweeteners mainly non-nutritive phyto chemicals from plants in order to close the gap between the production and consumption of sweeteners, sweetening and flavor enhancers. According to her, there is increasing large segment of the population with special dietary requirements containing non-nutritive sugar, such as the diabetic patients, pointing out that over the past few decades, non-nutritive sweeteners have been gaining significance and are expected to develop into a major source of high potency sweetener for the growing natural food and pharmaceutical

markets. She added that in Nigeria, there is a huge gap between sugar production and consumption, saying this represents a serious problem since an estimated amount and quantity of 2.5 million tonnes will be imported to meet local demand. She said almost all the commercially available sweeteners for industrial and domestic use in Nigeria are imported, stressing that the commercial sweeteners sugar, saccharin, acesulfame K, cyclamates, and the likes, aside from non availability and high cost, all have their attendant negative health implications. “On the account of this, FIIRO as an organization has over a long period of time been involved in herbal programmes and project for sweeteners, medicines, spices, condiments, nutraceuticals, foods and functional foods. FIIRO also have well-established medicinal aromatic and pesticidal plants research laboratories for research and development activities,” she said. Also speaking at the event, a Director, Raw Materials Research Development Council (RMRDC), Muhammed Musa, said the council has a scheme called strategic projects to develop the nation through industrial technology, pointing out that Thaumatin is a focal point of the scheme. He stated the need to have plantations to domesticate the plant, adding that the council had also put in place different initiatives for processing the plant for commercialization.

common for a department to specify than concrete. “Asphalt over concrete—that’s the standard,” he said. “That’s what they’ve been doing for so long.” But because it’s the “standard” doesn’t necessarily make it the best option for all applications. Concrete may be better in some instances, the first of which is new construction. In urban metropolitan areas, where new roads are being built and existing roadways are being expanded, using concrete may be a good way to minimize future inconvenience. “Funding is a big challenge, however,” said Haislip. “People are looking for short-term fixes, which have a political impact.”

BUSINESS DAY

Editor’s Note

his last edition for the year 2018 brings you a robust piece on road infrastructure – specifically cement pavement, which the Federal government has wisely adopted. The busy and highly strategic Apapa Wharf Road is now wearing a new look. It is now a cement pavement road built by AG Dangote. And coming on the heels of this is the flagging off of the construction of Apapa-Oshodi-Oworonshoki-Ojota (concrete) Motorway. The N73 billion motorway, which according to the Minister of Power, Works and Housing, Babatunde Fashola, was built between 1975 and 1978, has neither been expanded nor rehabilitated since then and yet has been helping in the economic development of the area. According to experts, concrete roads are exceptionally durable and mostly maintenance free; they have expected life of 30 - 40 years compared to 2 -15 years for bitumen (asphalt) roads; their tremendous compressive strength prevents the formation of wheel ruts or similar irregularities even when used by high percentage of heavy traffic. Read the rest of the story in our lead piece. The Bank of Industry (BOI) has renewed its commitment to supporting genuine investments that have plans to backward integrate. Boss of BOI, Olukayode Pitan, explained that the move was to encourage and attract local and Foreign Direct Investments (FDIs) to develop the nation’s huge

Siaka Momoh abundant natural resources, save scare foreign exchange and create job opportunities for the nation’s teeming unemployed youths. The Standards Organisation of Nigeria (SON) has declared war on peddlers’ substandard lubricants in different parts of the country. SON stated that the action became necessary after it discovered through its surveillance activities and extensive survey of the market that most lubricants in the market failed to meet quality parameters of the Nigerian Industrial Standard (NIS). Read all above and more in our ever refreshingly different package for this month. For advert placements, sponsorship, reactions editorial contributions, please contact SIAKA through siakamomoh@yahoo.com; 2348061396410; 23408023033988.

Victory for Cement Pavement Option Continued from page 41 used for road pavements • Concrete roads facilitate accessibility and movement; there is need for us to adopt this road construction option. • Use of cement for road construction is cost-effective, long lasting, requires less maintenance and is more environmental-friendly, relative to Asphalt. • Over 99.9 percent of road construction today in Nigeria involves the use of Asphalt. While about 40 percent of the roads in developed countries are made of cement, less than 0.1 percent is used in Nigeria. • Cement which is readily available in the country today can be utilized in constructing longer-lasting, more cost-efficient roads. • On the issue of the suitability of concrete-based pavement to the different soil-types in the country, it was emphasized that with proper design, analysis and construction, concretebased solutions can still be effectively utilized. • Use of stone-based solutions is currently used in road construction. How this impacts on the selection of the type of pavement to opt for is depends on the parties involved in the construction, as it makes little or no difference • Transportation and energy costs account for the current high cost of cement. If these are addressed, then prices of cement would be more competitive. • Policy inconsistency in government does not help timely delivery

of projects. • Nigeria has largest population in Africa, young and growing – need housing, education, health and other – huge gap in infrastructure. • Cement is catalyst of growth of manufacturing sector in the country. • There are a number of financing options for road construction prominent among which is the public-private partnership (PPP), which has made limited progress. • Other financing sources are the local commercial banks, regional banks such as the economic credit agencies, local pension funds, and the traditional government budget. • Nigeria’s road sector has a strong potential to attract significant private sector investment. Joseph Makoju, then chairman Cement Manufacturers Association of Nigeria and special adviser to Dangote Group’s president and CEO, told BusinessDay more in an exclusive interview with Siaka Momoh and his colleague Chuka Uroko in Lagos. For him, “Constructing a road with cement is between 25 and 50 per cent cheaper than making it with asphalt, a method that is currently popular with Nigeria. And this is when you take the life cycle of the road into consideration. But the concrete road is 10 per cent more expensive to construct than asphalt road, which is the initial capital cost when you are constructing it”. Makoju argued somebody who is just looking at the immediate cost would be attracted to asphalt. “But one thing we definitely know,

even the asphalt road construction engineers will admit, the life cycle of the road is what matters. Once you have completed the road, take the life cycle of the road over 20- 30 years and more, the concrete becomes extremely much cheaper because less maintenance is required. And in a country like Nigeria where we know we have poor maintenance culture, it makes sense then that the choice should be concrete road.” For Makoju, if 20 percent of our roads are concrete, 20 percent of these roads should be motorable now. He argued, “What we are now advising is what is happening worldwide. In most advanced countries like the U.S., Germany, etc, about 50 percent of their roads are concrete. While the emerging economies like India and Brazil have 5 to 10 percent in concrete, Nigeria’s is a fraction of 1 percent. So we have a lot of catching up to do.” What makes the takeoff of the project interesting is the private sector involvement, a step that is in consonance with the deliberation at the conference. For instance, a paper presented by Amadou Wadda, Senior Vice President, Infrastructure, AFC, made a strong case for private sector involvement. It is therefore a welcome development that the construction of the Apapa Wharf Road in question was built by AG Dangote, a subsidiary of Dangote Industries Limited. AG Dangote has constructed concrete roads in Ibese, Ogun State and Obajana in Kogi State.

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Thursday 20 December 2018

From the Archives

Series on diversification

Of climate change and agribusiness This natural menace is a killer albatross that we must fight hard. This story was first published on August 31 2016 in Realsectornow.com. Siaka MOMOH

rive for food security has been canvassed severally in the past by concerned stakeholders in the industry. Recall that the Food and Agricultural Organisation (FAO) announced few years back that “36 countries across the globe are in crisis stemming from food insecurity.” The FAO noted in its World Development Report 2008- Agriculture and Development that: “36 countries are in crisis as a result of higher food prices and will require external assistance.” It also observed that in many of these countries, food insecurity has been worsened by conflict, floods, or extreme weather. Floods or extreme weather – that is the point – climatic change. We witnessed it on our shores not too long ago. Huge losses, we can recall, were recorded. The challenge is still very much around. Agriculture is an important factor in Nigeria. It is no news that before oil, this sector was the pillar of the nation’s economy. Today, whether we admit it or not, it is the backbone of the rural economy, generating more than a third of gross domestic product (GDP), with the crop sector (especially cassava, yam, sorghum, maize and millet) contributing the largest share of the agricultural GDP, followed by livestock, fisheries and forestry sub-sectors. Agriculture also provides over 70 percent of rural employment. And the nation’s agriculture is largely peasant-dominated – the rural employment in reference here. The Federal Government of Nigeria realizes the need to diversify its economy outside oil and reduce poverty in a larger scale, and has identified agriculture as a major priority. It introduced the agric transformation agenda. Progress was made with various commodities transformation plans – cassava, rice, sorghum, palm oil, cocoa, etc by the last administration. The Buhari administration is currently out with what it tags “The Green Alternative”, Agriculture Promotion Policy 2016 -2020. In 2013, according to Financial Derivatives Company Limited, Nigeria ranked 13th in agricultural dependent economies. Tomilayo Adekanye, a professor and chairperson, Centre for Gender, Governance and Development, an NGO with headquarters in Ibadan, and former head of Agricultural Economics, University of Ibadan, said Food Security “can appropriately be conceptualized as a balance, or even the equilibrium, between supply and demand.” This, she said, “can be for the individual, family or household, a country such as Nigeria, a region such as Sub-Saharan Africa or even the continent of Africa.” For the former university don, this conceptual presentation fits into the definitional framework of the Food and Agriculture Organisation of the United Nations in which food security is referred to as a situation where “all people have access to safe and nutritious food at all times such that they can maintain healthy and active lives.” She explained that “an individual, household, country or region is food secure if its food supply balances, is equivalent to, or is in equilibrium with, the demand for it.” But she held that food security equilibrium “is a dynamic and not a static one.” She also threw light on traditional agriculture (that is largely smallholder farmerscentred) which, according to her, could also be conceptualized as equilibrium, but of a different kind. “Unlike food security, the equilibrium of traditional agriculture is not a dynamic, but a static, one, which has remained relatively stable for a fairly long time,” she said. Tomilayo Adekanye talked of Green

Poor road infrastructure, Nigeria’s nemesis

P Revolution, of “miracle” seeds (coupled with greater use of fertilizer and irrigation) which have generated several-fold increases in output in different parts of the world and of how development literature has now gone beyond the green revolution towards nutrient recycling within traditional agriculture itself to generate increases in productivity with minimum use of purchased inputs, obtained from outside the agricultural sector; of how this is particularly applicable to Sub-Saharan Africa, which, unlike other developing areas, has been unable to develop its own “miracle” crop varieties. Good suggestions, but climatic change menace still remains an albatross. With an unchecked menace of climatic change, our agriculture, largely smallholder farming, which provides over 70 per cent of rural employment, may become extinct in no time. As part of efforts to improve yam production and enhance the income of farmers in Nigeria, Taye Babaleye, former public affairs manager for International Institute of Tropical Agriculture (IITA) said the institute embarked on series of enlightenment programmes to create awareness on improved technologies of yam production, that it focused its attention on yam farmers around the Federal Capital Territory (FCT), a major yam producing area, to launch the technologies on white and water yam propagation, production and storage for better quality food and good market values. The technologies, he said, cover dissemination of new yam varieties with high and stable yields of good quality tubers; promotion of rapid propagation techniques and strategies for integrated soil and pest management suited to intensify cultivation; and diversification of food products from yams. Again, the question arises- will these technologies have any positive impact with an unchecked ravaging global warming? That climate change will increase hunger and malnutrition cannot be contested. According to Food and Agricultural Organisation (FAO), “Climate change will worsen the living conditions of farmers, fishers and forest-dependent people who are already vulnerable and food insecure. Hunger and malnutrition will increase. Rural communities dependent on agriculture in a fragile environment will face an immediate risk of increased crop failure and loss of livestock. Mostly at risk are people living along coasts, in floodplains, mountains, drylands (Nigerians do), and the arctic. In general, poor people will be at risk of food insecurity due to loss of assets and lack of adequate insurance coverage.” The FAO added: “Climate change will particularly affect vulnerable people and food systems. More frequent and intense extreme weather will have immediate adverse impacts on food production, food distribution infrastructure, on livelihood assets and opportunities in both rural and urban areas. Changes in mean temperatures and rainfall, increasing weather variability and rising sea levels will affect the suitability of land for different types of crops and pasture, the health and productivity of forests, the incidence of pests

and diseases, biodiversity and ecosystems. Loss of arable land is likely due to increased aridity, groundwater depletion and the rise in sea level.” These are all happening here. Agriculture contributes to climate change. Definitely, it does. Greenhouse gas emissions from the food and agriculture sector contribute over 30 percent of the current annual total emissions (deforestation 17.4 percent, agriculture 13.5 percent). About 13 million hectares of forests are annually being lost due to deforestation, according to FAO. Reducing forest degradation and deforestation helps to protect water and soil resources as well as biodiversity, and it contributes to the reduction of greenhouse gas emissions. Climate change will also affect the health of forests through an increase of forest fires and pests and diseases. Without economic or other incentives and political will, it will be difficult to stop deforestation and forest degradation. Ours is essentially political will. This has been our problem over the years. Governance in Nigeria is self-centred. You do not need to psychoanalyse our state resource managers to know this. It is a trait that a toddler can easily discern. “Climate change is having an impact on oceans, seas, lakes and rivers and on the animals and plants that are found in them. Climate change will affect about 200 million people and their families worldwide who live by fishing and aquaculture. Some fish resources will become less abundant while important species may move to other areas where they are less available to the fishers. This will make it harder for many fishing communities to continue to make a living from fish or to provide fish for feeding their families”, FAO noted. Coastal communities may also be displaced by rising sea levels and will be forced to find new places to live and new ways to earn a living. This no doubt is fresh crisis for Niger Deltans). How much are we prepared for this? And new patterns of pests and diseases will emerge; humans, plants, livestock and fish will be exposed to new pests and diseases that flourish only at specific temperatures and humidity. This will pose new risks for food security, food safety and human health. Lesson from Mauritania A recent report from the FAO presents a model of success in halting desertification in the Sahel. Based on the FAO’s seven year project in Mauritania, “Fighting Sand Encroachment: Lessons from Mauritania” provides lessons for similar efforts taking place throughout sub-Saharan Africa. Given the complexity of the problem and its significant economic implications, the Mauritanian government decided to make halting desertification a political priority. With the support of development partners, such as the FAO, United Nations Development Programme (UNDP), and the International Fund for Agricultural Development (IFAD), among many others, national-level projects and programmes were implemented in order to create widespread and synchronized action to stop the spread of the sand.

oor infrastructure tops the factors that account for Nigeria’s poor showing on IFC/World Bank Ease of Doing Business Rating. The infrastructure in question is made up of power, roads, railways, and waterways. So when concerned industry experts talk of poor enabling environment for business in Nigeria, poor infrastructure, network of roads in particular, comes out strong in their argument. It is on record that the more paved roads a country has, the stronger the economy. According to Robert Rodden, P.E. , Director of Technical Services and Product Development, American Concrete Pavement Association, Per Capita GNP for U.S., part of South America, part of Europe, Australia is US$15,000 and above, whereas most of Africa, including Nigeria, has US$1999 and below Per Capita GNP. Rodden’s point of reference is concrete pavement which by inference means very good roads, excellent roads. The argument therefore is that having very good roads, excellent network of roads, means achieving a stronger economy for a country. In fact, we do not need a Nobel Laureate in Economics to tell us this before we agree that it is true. Rodden’s point of view is therefore food for thought. Nigerian failed roads That most Nigerian roads have failed is no longer news. We witness yearin-year-out the pains that commuters go through journeying through Sagamu-Ore- Benin motorway; East-West Road in the South-East/ South South axis; Owo/Ikare or Owo/Ipele/Okene/Lokoja/Abuja Road, and many others across the country. Our cities, town and villages are strewn with crater-spiced roads – all over the country, roads once constructed with asphalt are dilapidated, are speckled with myriad of gullies. These roads are death traps; they slow down business and lower margins of business concerns since they bring about high vehicle maintenance cost, reduction in vehicle useful life and transaction delays. Ultimately, revenues accruing to governments at all levels fall. This ties up with Robert Rodden’s argument cited earlier. Transportation as lifeline No doubt, transportation is the lifeline of every economy as it facilitates the movement of goods and people. In Nigeria, the primary mode of transportation is by road because other modes of transportation are either expensive, limited in reach or in deplorable state. Consequently, road transportation accounts for over 90 percent of passenger and freight traffic and is therefore the backbone for all other economic infrastructure. Largest road network in West

Africa And Nigeria has the largest road network in West Africa and second largest in Sub Saharan Africa. Total road network in Nigeria is estimated to be between 195,000 kilometres to 198,000 kilometres. About 2,627 kilometres of the roads are dualised. Road Ownership is approximately 18 percent Federal Government, 16 percent State Governments and 66 percent Local Governments. Most of the roads are in poor condition as only about 35 percent of the total road network is motorable. Problem/solution It is therefore very obvious that we have a problem. Our per capital GNP will remain low at under US$1999 as stated by Rodden if we do not address this problem. What then is the problem? How do we solve the problem? To identify the problem, it is appropriate for us to look at the types of roads that are available (types in the sense of what roads are made off, what materials roads are constructed with).There are two broad approaches to road construction – one is the use of asphalt, and the other is use of concrete. What is commonly used in Nigeria is asphalt. This culture of constructing roads with asphalt came with the colonial administration. Concrete is sparingly used in Nigeria. Asphalt versus concrete Making a case for concrete roads, Daljeet S, Ghai, CEO Dangote Cement Plc argued:, “Concrete roads are exceptionally durable and mostly maintenance free - they have expected life of 30 - 40 years compared to 2 -15 years for bitumen (asphalt) roads; their tremendous compressive strength prevents the formation of wheel ruts or similar irregularities even when used by high percentage of heavy traffic; concrete is highly economical pavement material in particular for motorways that are subject to extreme load.” In Nigeria, virtually all goods are transported by roads and roads are therefore subjected to extreme loads. He therefore argued that for Nigeria, concrete roads for highways and cities are the best and lasting solution. Ghai argued further: “Main ingredient for concrete road – cement is now abundantly available (locally) and can save a lot of foreign exchange for importation of bitumen required for flexible pavement. Avoidance of road repairing helps in smooth traffic flow throughout the year 24/7. It saves on fuel consumption of vehicles, reduces travelling time and it is environment friendly – less pollution and traffic noise. Concrete roads give long lasting smoothness as against bitumen roads which need frequent resurfacing. Life cycle cost of concrete roads is much lower than that of bitumen roads.”

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Buhari presents N8.6trn 2019 budget as... Continued from page 1

country’s misery index, which is

a sum of the inflation rate and the unemployment rate, is now 34.38 percent compared to 36 percent in the corresponding period of 2017. The marginal decline in the misery index is mainly because of a drop in inflation rate which has dropped from 17.2 percent in September 2017 to a November 2018 rate of 11.28 percent. However, within the same period, the unemployment rate has consistently been on the rise, an indication that many families are losing their source of income and falling into misery. The number of unemployed Nigerian represented 23.1 percent of the country’s total labour force of 90.47 million as at September 2018, up from 18.8 percent in the corresponding quarter in 2017, the NBS said yesterday. In absolute numbers, unemployed Nigerians rose to 20.93 million at the end of the period, from 16 million in the corresponding quarter a year earlier. This implies that the number of jobless Nigerians jumped by 30 percent or 4.9 million within one year. But besides Nigerians actively seeking for job, who cannot find any, the NBS data also shows that there are another 25 million Nigerians who are of employment age but are not interested in working or are not actively seeking to work. In total, there are 115.49 million Nigerians within the working age population but only 69 million people are in full time employment currently, a net increase of 1.6 million when compared to the 67.95 million that were employed as at June 2015, just about a month after President Buhari was sworn as president. Another 18.2 million Nigerians, representing 20.2 percent of the country’s workforce are classified as underemployed. Combined, unemployed and the unemployed make up 43.2 percent of the country’s workforce. The administration of President Muhammadu Buhari came into office in May 2015 with a pledge to create jobs as part of his plans to resuscitate

the Nigerian economy. Since its inauguration it has churned out figures of jobs created in different sectors, chiefly agriculture but these figures have been questioned consistently. “There are two things that this unemployment figure has done for Yemi Kale and NBS,” Johnson Chukwu, CEO, Cowry Asset Management Limited,” said by phone to BusinessDay today. “It has saved them from embarrassment and reputation damage.” “You don’t need to be an economist or statistician to know that the level of unemployment has increased. If someone tells you that there are 12 million jobs that have been created it means that the person does not know what he is taking about,” Chukwu added. The rising unemployment is becoming a big source of discomfort to the Presidency which still insists that it is creating jobs despite the rising unemployment rate and sluggish economic growth. The President stated that N2.14 trillion, which is almost 25percent of the budget, will be used to service debts. N2.031 trillion, which is approximately 23.0percent of the budget, is earmarked for capital expenditure, and N4.04 trillion, which accounts for 45.75percent, will be incurred on recurrent expenditure. “The big problem with the budget is there is an inability by the government to take certain reforms like subsidies, agitations, streamlining government recurrent expenditures and privatizing government enterprises,” Wale Okunrinboye, Head of research at Sigma pension said. Okunrinboye explained that part of the reasons why the FGs recurrent expenditure is going up is because the government will be paying higher salaries next year when the implementation of the new minimum wage starts. “And based on the shortfalls of revenues, CAPEX will be the one to suffer because the government will want to look into recurrent first before talking about CAPEX,” Okunrinboye said. “Next year, capital expenditure

More job losses loom as manufacturers... Continued from page 1

ingly find it harder to pass costs onto consumers already dis-

tressed following constantly falling disposable income. This is because in a period of prolonged low demand in an economy where capacity utilisation rates are dropping, and sales growth are unable to offset fixed cost, companies are forced to trim work force to stay afloat. Already, decrepit infrastructure, high energy cost and low consumer disposable income have hindered firms from delivering a higher return on

investment to owners of the business. “We will see some layoffs but it will be worse for companies at the lower segment that do not have a large market share or competitive advantage,” said Christian Orajekwe, equity research analyst at Cordros Capital Ltd. “Productions on the floor of the big firms are technology driven and some of their distribution channels are outsourced,” said Orajekwe. However, Orajekwe said he doesn’t see macro conditions deteriorate in 2019. Forty percent of manufacturing

Stanbic IBTC, ARM, Premium top PFAs by... Continued from page 2

Fund (net of fees and taxes), was 16.42 percent in 2017. The performance was significantly better than the WARR of 11.59 percent recorded in 2016. However, in view of the average inflation rate of 16.55 percent in 2017, the RSA Active Fund recorded a real return of -0.13 percent. However, this represented an improved real return when compared with -4.04 percent recorded in 2016. Meanwhile, the total asset based fees, including value added

tax, charged to the RSA “Active” Fund was N104.89 billion representing an increase of N19.55 billion (23 percent) over the total fees of N84.66 billion in 2016. The other allowable expense charged to the Fund was in respect of audit fees, which amounted to N357.88 million, according to PenCom. During the year under review, approvals were granted for payment of N20.68 billion, to 57,416 RSA holders representing temporary access to RSAs for withdrawal of 25 percent of RSA balances made by persons (RSA holders) who were disengaged or retired

Atiku Abubakar (l), presidential candidate of the PDP and former Vice President of Nigeria, alongside other chieftains of the party acknowledging cheers at the Gombe Township Stadium, Gombe State, during the North-East zonal rally of the PDP.

will be very weak because in the first quarter of the year, nothing will necessarily be done due to the elections.” Buhari while presenting his N8.8 trillion spending plan for 2019 said that he expects the economy to grow at 3.1 percent in 2019, a growth rate analysts say is ambitious considering that the economy grew at just 1.9 percent in the third quarter of 2018. Despite achieving only 53 percent of 2018 revenue targets three months into the year, Buhari set a revenue target of N6.97 trillion to fund the 2019 budget. While giving breakdown of the sources of revenue, Buhari disclosed that the sum of N6.97 trillion (3 percent lower than the 2018 estimate of N7.17 trillion), consisting of N3.73 trillion oil revenue while non-oil revenue is estimated at N1.39 trillion. Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers said next year will not be different from the past because

the delay in the passage of budget in 2019 will also mean a slow start to the economy in 2019. “Momentum in GDP growth for next year will be very slow even if oil prices are high because politicians will be concerned with retaining power even after the elections,” Ologunro explained. President Buhari said the administration has earmarked the sum of $1 billion (N305 billion) for fuel subsidy also called Under Recovery in 2019. The President explained that the new subsidy regime involves the Nigerian National Petroleum Corporation (NNPC) being the sole importer of fuel for local consumption against practice of the past where marketers presented fictitious claims. “We have allowed for N305 billion ($1 billion) for under-recovery by NNPC on PMS in 2019. We will continue working to bring it downwards so that such resources are freed up to meet the developmental needs of

our people,” Buhari said. Prior to his assumption of office on May 29, 2015, President Buhari had vehemently denied the existence of fuel subsidy and described it as a scam. The budget is based on assumptions of $60 per barrel of oil benchmark at 2.3 million barrels per day, a GDP growth rate of 3.01 percent and inflation rate of 9.98 percent while exchange rate was based on N305/$. Allocations to sectors are as follow Ministry of Health (N315.62billion), Ministry of Education (N462.24 billion), Ministry of Defence (N435.62 billion) and Ministry of Interior (N569.07 billion). According to the president, the budget deficit is forecast to drop to N1.86 trillion which will be about 1.3 of GDP in 2019, from N1.95 trillion forecast for the preceding year. In his words “this reduction is in line with our plans to progressively reduce deficit and borrowing over the medium term”.

expenditure goes to alternative energy. Manufacturers have spent N212.85 billion on alternative energy sources between the second half of 2016 and the first half of 2018, according to data from the Manufacturers Association of Nigeria (MAN). This is over 100 percent higher than what was incurred in the previous four halves. Manufacturers told BusinessDay that logistics costs have risen by 50 to 100 percent in the last two years, owing to poor state of roads and lack of good transport system. Firms bringing in raw materials into Apapa ports and those exporting commodities abroad have seen

their costs swell on rising dwell time, which results in high demurrage charges. Tola Faseru, president of the National Cashew Association of Nigeria, told BusinessDay that exporters shipping out 1,700 tons of cashew per day in 2014 now manage to ship between 100 and 250 tons. A reduction in export and sales increases cost per unit of product and raises inventory. The combined administrative and distribution expenses of 24 largest manufacturers quoted on the floor of the Nigerian Stock Exchange (NSE) increased by 7.59 percent to N196.61 billion in the third quarter of 2018, according to data compiled by BusinesssDay. Manufacturers were unable to sell goods worth N149.23 billion in the first half of 2018 after producing goods worth N4.6 trillion, according to MAN. Incidentally,manufacturersareselling to a population whose disposable incomes and spending are shrinking. Real household consumption and government consumption expenditures declined in 2017 (at –0.99 percent) while national disposable income fell by 1.52 percent, according to the National Bureau of Statistics (NBS). “Inventory of unsold finished goods in the manufacturing sector rose in H1 of 2018, induced by low real consumption due to inflationary pressure, smuggling, counterfeiting and cloning of Nigerian manufac-

tured products as well as high cost operating environment,” MAN said in its latest data. According to a recent World Bank data, 92.10 percent of Nigerians live at below $5.50 a day. Nigeria, with a population of 180 million people, has 87 million people, nearly half its population, in extreme poverty as high inflation environment continues to erode discretionary income. Job layoffs due to mounting wage bills and deteriorating macroeconomic conditions are a double whammy for consumers. Unemployment rate in Nigeria increased to 23.10 percent in the third quarter of 2018 from 22.70 percent in the second quarter of 2018, according to the latest figure from the NBS. In 2016, hundreds of jobs were lost in the manufacturing sector as 54 firms shut down owing to foreign exchange crunch that year, according to Frank Jacobs, former MAN president. Manufacturers have been struggling since then, with inventory of unsold products remaining almost the same. “The point is that people are more concerned with the basic things of life now. You have to first of all eat, then pay house rent and your children’s school fees before talking about buying new pairs of shoes or wines,” Ike Ibeabuchi, CEO of MD Services Limited, with interests in manufacturing and services, said.

before the age of 50 years and have stayed 4 months without securing employment. A breakdown showed that Federal and States Governments accounted for 803 and 1,374 RSA holders respectively, while the Private Sector stood at 55,239. These figures showed an increase in the turnover rate of staff in year 2017 compared to 2016. From inception to date, a total of 250,321 RSA holders in this category have collected a cumulative amount of N82.57 billion. This represent a growth of 30.00 percent in the cumulative number of disengaged employees over the figures of 2016.

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Apapa: NPA reacts to BusinessDay Editorial, clarifies on efforts in addressing gridlock AMAKA ANAGOR-EWUZIE

n reaction to BusinessDay Editorial of Monday, December 3, 2018, management of the Nigerian Ports Authority (NPA) has made clarifications on some of the efforts made by the authority in ameliorating the plight of commuters and port users as a result of the Apapa gridlock. A rejoinder signed by Hadiza Bala Usman, managing director of NPA, and sent to BusinessDay on Wednesday, stated that the traffic situation in Apapa was an age-long problem that had worsened and defied solutions over the past two decades as a result of lack of foresight in deploying intermodal transportation system (rail, inland waters and pipelines) for cargo evacuation. Usman said the current management of the Authority had taken the bull by the horns by spearheading the

reconstruction of the dilapidated Wharf Road in conjunction with Dangote Group and Flour Mills plc. “Although the repair of roads is not the statutory responsibility of the Authority, we committed the sum of N1.8 billion to this road which has now been completed and put into use. “Due to the importance of the Oshodi/Apapa/Creek Road to effective management of traffic in Apapa, the NPA has since 2016 mobilised support for the rehabilitation of this road. We have even written to the Federal Ministry of Power, Works and Housing requesting that the road be handed over to the NPA. Gratefully, the contract for the reconstruction of this road has now been awarded. “The Authority has a standing committee which worked with terminal operators, millers and other stakeholders to fashion out ways of fixing the

Tin-Can axis route with enduring palliatives works and provide a bleeder route,” Usman said. On inland waters, she said a number of companies had also been licensed to operate barges for the evacuation of cargo through the inland waterways, aimed at ensuring that there was less pressure on the roads. According to Usman, the NPA is working towards the maximum utilisation of other ports to facilitate the reconstruction of roads connecting the Eastern Ports with the North Central, North East and South East. She further made it clear that NPA cannot dictate destination as cargo owners have the right to a destination of choice. “As a result, a portion of the cargoes that come into the Lagos Ports are meant for the industrial clusters within Lagos, Oyo, Ogun and sometimes Kwara State.

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Transport minister tasks CCECC to speed up work on Lagos-Ibadan rail project MIKE OCHONMA & STELLA ENENCHE

igeria’s minister of transportation, Rotimi Amaechi, has expressed dismay on the slow pace of work being handled by the Chinese Civil Engineering and Construction Corporation (CCECC) on the LagosIbadan standard gauge rail corridor, especially from Abeokuta in Ogun State to Ibadan in Oyo State. The minister, who expressed this on Tuesday while inspecting the rail project alongside members of the House of Representatives, further said the target of the Federal Government was by the end of January next year, the train service would also start operations in Ibadan. He frowned at a situation where the CCECC would want to finish from Lagos to Abeokuta and then move their equipment to Ibadan, saying, “What I have done is to express my displeasure at the pace of work from Abeo-

kuta to Ibadan. “Our expectation is that we have given them the period in which we think they can complete it. The same period that they applied from Iju to Abeokuta, if they apply the same speed in Abeokuta to Ibadan, we will achieve the same result. But the problem is that I suspect that they don’t want to spend more money on equipment. “So, I want a meeting between myself, the management of TEAM and CCECC when their managing director returns from Christmas break, which is the first week in January.” The minister however expressed hope that the ongoing construction work on the Lagos-Ibadan rail project was steadily coming to an end. The project was being finalised, as train ride would commence from Iju in Lagos State to Abeokuta in Ogun State by the first week of January 2019. He said, “We are gradually coming to the end of the pro-

ject because we are 6km away from Abeokuta and I have been assured, even though sometimes they may not keep to their promises, that we will be able to ride from Iju to Abeokuta at least by the first week of January. “The idea is to bring the Vice President and some ministers to join us in the ride. When we do the ride we will then allow passengers to use it up to Abeokuta. Our target is that by the end of the month we should get to Ibaºdan by rail.” He further stated that after the completion of the rail lines, the government would put on pressure the contractor handling the project to fully carry out work on the train stations. According to Amaechi, “We can begin to put the pressure on them (contractors) to build the stations, for as you drive past the stations, you’ll see that they are working but they are slow because I’ve told them that emphasis should be on the tracks.

Agribusiness: Edo mobilises entrepreneurs, manufacturers, academics, others to processing centres

do State governor, Godwin Obaseki, has urged small businesses, manufacturers and academics to work together at the 12 processing canters being built in different locations across the state to boost job creation. Obaseki gave the charge after inspecting renovation work at the abandoned state government-owned warehouse in Evbuoriaria, along Sapele Road, in Benin City, the state capital. The governor said the idea behind the centres was to link entrepreneurs to power, water and other necessary utilities to drive business growth in the state. He said the centres were being set up in collaboration with academic institutions, manufacturer associations

and private industries, noting, “We have identified six of such facilities within the Benin metropolis and in six other locations in the state to serve as processing centres. “We want to encourage artisans to come to these locations and produce. What we have done here is to refurbish government warehouses and are discussing with private power suppliers to provide electricity.” Senior special assistant to the Governor on Job Creation and Skills Development, Ukinebo Dare, said those to be hosted at the centres were small business owners. Dare said the entrepreneurs would receive training at the centre and also benefit from marketing and legal services to allow their businesses operate better outside the centre.

L-R: Maymunah Kadiri, consultant, Neuro-Psychiatrist; Adeshola Bello, MD, Pinnacle Medical Services/coordinating manager, Freedom Foundation; Dennis Okoro, director, MTN Foundation; Julius Adebisi-Adeluyi, chairman, MTN Foundation; Nonny Ugboma, executive secretary, MTN Foundation, and Samuel Adekola, national chairman, Association of Community Pharmacists of Nigeria, at the launch of the MTN Foundation multi-stakeholder Anti-Substance Abuse Programme (ASAP) in Lagos, yesterday. Pic by Pius Okeosisi

‘Progressive tax system requires closing economic gap’ TEMITAYO AYETOTO

ridging the widening economic gap among Nigerians of low and extremely high income cadre will require government adopting progressive tax systems as both an avenue for adequate income generation and an equitable instrument to ensure taxes are appropriately utilised for the social protection of the poor, Actionaid, a humanitarian rights group, says. Ekanem Okon, its project manager on Social Investment Programme, at a media forum on ‘Tax Justice in Nigeria,’ said regressive taxes, particularly the Value Added Tax (VAT) and broader range of undefined taxes collected through unorthodox means leave a debilitating impact on

economy of the poor, as larger portions of their income were expended on taxes. The group underscored the need for progressive national tax systems to address cases of over-contribution among the haves-not like smallholder farmers, slumdwellers, women and other marginalised groups compared with those with huge purchasing power. The burden of VAT, an indirect tax levied on goods and services, is usually borne by the end-consumer, and since women constitute more of the poor than men, the group raised concern that the consumption tax fell disproportionately on women. Progressive taxation means higher tax rates for those with higher income or more wealth, such that those who earn or have more are

taxed at a higher rate. According to the group, personal income tax, based on graduated scales where the tax rate rises as income level rises is the clearest instance of progressiveness, which should be effected with exemptions and thresholds on who earns or has enough to pay a particular tax. “Our main interest is ensuring that we work to achieve social justice for the poor in Nigeria. We see tax justice as one of the areas in which we can have a strong voice towards ensuring that the taxes that we have in Nigeria are progressive and that the revenue that we receive from those taxes are properly used for the poor. We emphasise on progressive tax because there are a number of taxes that are in their very nature regressive,” Okon said.

FG, HP clamp down on fraudulent tech manufacturers, distributors JUMOKE AKIYODE-LAWANSON

he Nigerian police force in collaboration with HP’s AntiCounterfeiting and Fraud (ACF) programme, have identified and closed down over 12 criminal operations trading in counterfeit cartridges for printers. In October 2018, the Police officials raided numerous premises across Nigeria, including Lagos, Abuja, Edo and Rivers. The sites raided included outlet stores and hidden manufacturing sites for fakes. In total, the authorities confiscated 67,000 illicit print cartridges. Counterfeiting is a crime. For users, such illegal imitations can cause a multitude of problems that can cause performance and reliabil-

ity issues. Should a printer get damaged due to the use of counterfeit printer ink or toner, you could also have issues with your manufacturer’s warranty becoming not applicable. According to HP, its original products are designed to meet HP’s strict quality and reliability standards, based on a long history of inventing and testing. Original HP LaserJet and HP inkjet cartridges, unlike counterfeits, benefit from superior performance and consistent results. Commenting on this development, Glenn Jones, the director, global anti-counterfeit program, HP, said that HP is proud of its continued work with local authorities especially the Police force in Africa to combat the sale of counterfeit print supplies.

“We thank the Nigerian Police authorities for their cooperation and swift action in this successful seizure and their determination to apprehend and prosecute counterfeiters who break the law,” “Through our unwavering efforts and commitment to removing counterfeit products from the market, we continue to focus on the protection of our customers through our Anti-Counterfeiting and Fraud Programme,” he said. Jones disclosed that across EMEA over the last five years, local authorities, supported by HP, have seized approximately 12 million counterfeits and components. HP has conducted over 4,500 audits and inspections (CPPAs and CDIs) of partners’ stocks or suspicious deliveries for customers.

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Thursday 20 December 2018

National Discourse Vote-buying, a looming threat to the coming elections OLUSOLA BELLO

he 2019 general elections in Nigeria are fast approaching with all the political parties coming up with an assortment of razzmatazz and shenanigans to sway voters to their side. But the way some of the political parties are going about canvassing for votes and support does not give the electorate the confidence that there will be free and fair elections. This is because they have started taking steps that suggest that they are going to attempt to rig the election through vote buying. Some of the parties have become so desperate that they

are going as far as collecting account numbers or BVN of both party members and non-party members, so as to start depositing money into their bank accounts as a way of luring them to vote for their parties. In some places in Lagos and Oyo states, this development is so prevalent that it is now common knowledge that the ruling parties in these states are crediting people’s accounts for no work done. It is a common thing that people just walk into banks and demand for account numbers and BVN. This has led to an increase in the number of those opening accounts with banks, especially in a place like Oyo state. However, what qualifies people to benefit from such monies is that they be party members but exception is sometimes made to the rule. The parties are already laying the foundation for rigging. This act is condemnable as it

seeks to compromise elections before they are held. Corruption is being elevated through such acts and this is dangerous for us as a nation and as a people. This action calls to question the integrity of our so -called political leaders, who it seems will go to any extent to secure political office. The brazen act of vote-buying was reported during the recently held governorship election in Ekiti State. That is not the first time such incident was reported during an election and the phenomenon can hurt the country’s democracy in the long run. Elections are a central feature of democracy and for them to express the will of the electorate, they must be free and fair. Democracy proponents believe that if an election is “free,” it means that all those entitled to vote are rightly registered and are totally free to make their choice of candidate without imposition or inducement.

Concerns mount on impact of smuggled sugar on job creation, health ... as Sugar Development Fund in BoI, BoA now over N8bn HARRISON EDEH, ABUJA

xecutive secretary of National Sugar Development Council (NSDC), Latif Demola Busari, has expressed concern on the activities of smugglers in the sugar sub-sector as well as the wider health implications. Latif, who expressed worry that smuggling activities was taking away market from industry players in the sugar sub sector, said the consequence of smuggling had affected local players not to meet their quota. “Every one percent of sugar that is smuggled into Nigeria or imported illegally leaves us with unemployment. It also affects our backward integration programme according the National Sugar Development Plan,” Latif said. Nigeria has a 10-year Sugar Development Master Plan starting from 2013, according to Ni-

geria Industrial Revolution Plan, which is geared towards development of the sugar sub-sector, while creating jobs for industry players along the value chain. On the contrary, smuggling activities is watering down the plan, as the Executive Secretary noted that sector players were impeded by smuggling activities and Nigeria’s porous borders. “We gave out 1.55 million metric tons of quota last year for legal importation of raw sugar to support local production, but smuggling activities had made them not to only do less than 800 thousand tons, which is far below 50 percent of the quota. Sugar is there for them to import but they cannot sell what they produce because of smuggling,” he said. The executive secretary also explained that Apapa road had also created a long barrier to pushing out of refined products since most of the refineries were

operating there. “Most of our sugar refineries operate at Apapa axis, and the gridlock is seriously impeding our pushing out of refined products.” Further in his remarks, the Executive Secretary said the sugar development funds under the custody of the Bank of Industry was now put at N8.8 billion, whereas the fund with the Bank of Agriculture was now put at N3.2 billion. He said the Federal Government was intensifying effort to address concerns of smuggling while meeting with relevant stakeholders such as the Nigeria Customs Service, the National Agency for food and Drugs Administration and Control and the Standards Organisation of Nigeria, to ensure that smuggling was curtailed and the local industry players assisted to grow their business for wealth creation.

In the past, there were more cases of snatching of ballot boxes and other forms of violence by politicians wanting to win elections by all means, but recently, the country has seen a wave of vote-buying during elections. According to the Electoral Act, 2010, Article 130, “A person who – (a) corruptly by himself or by any other person at any time after the date of an election has been announced, directly or indirectly gives or provides or pays money to or for any person for the purpose of corruptly influencing that person or any other person to vote or refrain from voting at such election, or on account of such person or any other person having voted or refrained from voting at such election; or (b) being a voter, corruptly accepts or takes money or any other inducement during any of the periods stated in paragraph (a) of this section, commits an offence and is liable on conviction to a fine of N100,000

or 12 months imprisonment or both.” Vote-buying is a corrupt election practice which could hamper the growth of democracy in the country. It’s a threat to the conduct of free and fair elections. The manner in which it is being done these days is alarming. It is now done openly, without fear. Vote-buying could drive up the cost of elections for parties and candidates and might prevent credible candidates from running for political office. Most importantly, it breeds cynicism among voters who feel disenfranchised by a corrupt system that fails to adhere to democratic ideals. While Nigeria has improved electoral laws and invested in biometric technology amongst other milestones, there is a need to enhance the legal framework, the integrity of ballot secrecy, and develop a democratic civic political culture.”

Pipeline fire: 73 shops, 54 vehicles burnt in Lagos JOSHUA BASSEY

isaster str uck in Abule-Egba area of Lagos on Wednesday, as 73 shops, 45 vehicles and three residential buildings were burnt in a pipeline fire allegedly caused by vandals. Edgal Imohimi, Lagos Commissioner of Police, who confirmed the incident, blamed it on the unwillingness of the public to volunteer information, saying if the police had been aware of vandal activities the disaster might have been averted. But residents of the area accused the police of being aware of the vandalism, alleging that the police have always shielded the vandals. According to the residents, the police raided the community the previous day (Tuesday) at about 10pm, force traders to leave the streets. BusinessDay gathered that the vandals destroyed the pipelines, scooped fuel but could not

seal back the lid, allowing the fuel to spill continuously into the drainages, which then spread to Oko-Oba Abattoir and other areas within that axis. According to eyewitnesses, the fire was ignited at about 3am from the content that spilled to the abattoir axis after some traders dropped used charcoal into the drainage. The raging fire caused hundreds of residents in the community to flee their homes. No fewer than four vehicles and 12 shops were burnt on Arowolo Street while on Shobowale Street, three buildings, 11 shops and three vehicles were razed. Also, on Wamontaofeek Street, one building was completely burnt and 11 cars parked at mechanic workshops and at entrance of the owners homes were razed by the inferno, while on Adepegba Street, six shops were completely razed. Affected traders have called for the intervention of the state government to enable them restart their lives.

Thursday 20 December 2018

C002D5556

Corporate Social Impact

Do they know it’s Christmas?

hristmas is that season that everyone looks forward to. It’s end of year, so it’s special. All the work’s been done. It’s time to rest. It’s time for travel. It’s time for some play. Lots of things are scheduled with Christmas in mind. It’s the get-together season when folks everywhere meet up again and share some cheer. But it’s not that way for everyone. The cheer all around and the lack of reason to celebrate is the reason for an onset of depression for lots of people. And not only that, hunger is pervasive in the land. True, you will always have the poor, like Jesus said, but it’s a more acute problem at Christmas 2018. Thankfully, some corporate organisations and individuals are doing their bit to bring on the smile even in the darkest of personal places. Food goes a long way, clothes go a long way. Companionship goes a long, long way. Happy that this is not 1984 when Band Aid recorded this song which lyrics I have reproduced hereunder. That was a bad time. Ethiopia was Africa and there was famine in Ethiopia. And people were dying. And Africa couldn’t help. So Bob Geldof and Midge Ure came up with Do they Know it’s Christmas? It’s a haunting song, some of it ‘grating’ when seen from today’s point of view and consciousness. But it was a different time. ‘We are the World’ happened same time. Michael Jackson, Lionel Richie, Stevie Wonder, etc., all teamed up to record that monster hit and the proceeds came to the starving in Ethiopia. Africa needs stand up. Corporates need to organize massive benefit con-

certs for the hungry and the homeless. We are the world and we got to let our not so privileged brothers and sisters know it is Christmas season. Let the bells ring!!!! DO THEY KNOW IT’S CHRISTMAS BY BAND AID It’s Christmas time, there’s no need to be afraid At Christmas time, we let in light and we banish shade And in our world of peace, we can spread a smile of joy! Throw your arms around the world at Christmas time But say a prayer – pray for the other ones at Christmas time It’s hard, but when you’re having fun There’s a world outside your window And it’s a world of dreaded fear Where the only water flowing is a bitter sting of tears And the Christmas bells that ring there And the clanging chimes of doom Well tonight, thank God it’s them instead of you And there won’t be snow in Africa this Christmas time The greatest gift they’ll get this year is life Where nothing ever grows, no rain or river flows Do they know it’s Christmas time at all? Here’s to you, raise your glass for everyone Here’s to them underneath that burning sun Do they know it’s Christmas time at all? Feed the world, feed the world, Feed the world Let them know it’s Christmas time

Onuwa Lucky Joseph (08023314782) Editor.

Microsoft is No1 on forbes ‘just 100’

Stories ny Onuwa Lucky Joseph

BUSINESS DAY

onald Trump rolled into the White House on the strength of his otherwise laughable Make America Great Again slogan. Needless to say, many, especially, blue collar whites bought into his rhetoric, believing that the country was going to the dogs unless some strong character stepped in and stopped the slide. While this is not the place for discussing electioneering strategy, suffice it to say that Trump’s demagoguery, not to mention roguery, won over millions of people and overall he was considered to have done a better job of persuading Americans to vote for him than Hillary Clinton did. That’s all an aside, by the way. We just wanted to channel the Make America Great Again slogan as it affects corporates and their perception by the public. America is, after all, the home of ‘nationstate corporates’, where corporate organisations have many times the revenue base of smaller nations. Their ability to impact their immediate and wider environments is not in doubt at all. But Americans, as indeed all Western nations, despite their tilt towards capitalism never stop trying to stay vigilant in order

to rein in corporates’ penchant for profiteering that a good number of them exercise if not reined in. Unfortunately, that vigilance is not often extended to activities outside Western borders. And leaders of non developed nations tend to collude with the corporate organisations rather than regulate their activities as properly as they do it in Western countries. Thankfully, a number of strong NGOs e.g. Greenpeace, Friends of the Earth, etc. are doing the needful in combating corporate excesses anywhere it occurs. Recently, Forbes magazine, in partnership with Just Capital asked 81,000 American to help in their 2018 ranking of 890 of America’s largest public liability companies to determine which of them are actively promoting good practices in their businesses that redound to the country. The most popular answers gotten from respondents with regards to their expectation include: Pay workers fairly, Treat customers well and promote their privacy Minimise environmental impact Give back to communities they operate in

Commit to ethical and diverse leadership Create abundant job opportunities Microsoft came tops overall, edging out Intel, which won last year. Intel was second this time around. Hereunder, the first 25 of the ‘Just 100’ 1. Microsoft 2. Intel 3. Alphabet (parent company of Google) 4. Texas Instruments 5. IBM 6. Nvidia 7. VMware 8. P&G 9. Adobe 10. Cisco 11. Humana 12. Accenture 13. AT&T 14. General Motors 15. General Mills 16. Apple 17. Kimberly-Clark 18. ResMed 19. Biogen 20. UPS 21. Keysight Technologies 22. S&P Global 23. Colgate-Palmolive 24. Prudential Financial 25. Clorox

Nda set of 1968 donates N25m e-library to Nda

n 1968, 43 young men scaled the tortuous entry tests and successfully joined the Nigerian Defence Academy as cadets. 2018 makes that 50 years ago. Don’t forget that this was at the time when the Nigerian civil war was raging. Some of them rose to the highest heights of the profession while, as is the case with people and endeavours everywhere, some didn’t make it quite as far. But a strong bond had been forged and those young men now older citizens, 29 of whom survive, have stayed in touch. As their golden jubilee got nearer, they got to thinking about how to memorialize their time at the school while also setting the place on its digital way.

Mujakperuo, that he and his colleagues were ‘afforded the leverage to a higher pedestal in life especially after retirement’. Corroborating this, the chairman of the Local Organising Committee for the bequest, And so their returned to their Air Vice Marshal Muhammed alma mater 50 years later to gift Umaru (rtd), affirmed that it the Nigerian Defence Academy was in view of the impact of the an e-library worth N25milAcademy on their lives, that lion. Their chairman, Maj-Gen ‘they therefore see it as a duty Felix Mujakperuo (rtd.), who is to contribute to its developnow the Orodje (King) of Okpe ment’. Kingdom in Delta State, was, on Gratitude for the good done behalf of his old course mates them was the impetus for the full of gratitude to the Nigerian Class of 68 gifting the NDA with military which he said gave the huge e-library to ensure him and his colleagues ‘opthat their successors at the portunities for further training academy would have the same in the military and other and kind of leverage that helped set other civil courses’. The outthem up for life. come of that was, according to Good job!

BUSINESS DAY

Thursday 20 December 2018

Corporate Social Impact

Ifeyinwa Ugochukwu takes over Ghana students force removal of Ghandi’s statue at Tony Elumelu foundation

Stories by Onuwa Lucky Joseph

as Mahatma Gandhi a great man? No doubt. It is fitting that he is recognized as the Father of modern India. It was his principled non-violent struggle that eventually helped lead to India’s independence from colonialist Britain. But what is good for India is not necessarily good for Africa. And students of the University of Ghana showed the rest of Africa that it’s about time we started making that distinction. Mohandas Karamchand Gandhi, popularly known as Mahatma (High Souled One) Gandhi, practiced as a lawyer for more than 20 years in South Africa. But while there he exhibited disdain for the local black population, referring to them derogatorily as Kaffirs, and as a lower caste of human beings. According to Ashwin Desai and Goolam Vahed, two South African academics of Indian heritage, Gandhi promoted segregation of Indians from Africans. In fact, according to BBC’s Soutik Biswas, in his interview with Deswas, Gandhi believed in a gradated sort of racism, with whites at the top, Indians right under them and blacks being at the bottom. And this was with regards to South Africa, a land owned by Black people. He wanted them slaves in their own land. When he went back to India however, he wanted the whites out and for Indians to take over their own land. Hypocritical. But that was how his mind worked. “Be the change you want to see in the world” is a classic, Mahatma Gandhi quote beloved by activists, motivational speakers, teachers, preachers, etc. It’s about the power of one man to ensure that the old order is toppled and replaced by something better. It

might take a while, but with persistence and perseverance, it is bound to happen. It is this storied part of Mahatma from his personal travails for India that endeared him to blacks and struggling people everywhere. Martin Luther King Jr. famously channeled Gandhi in his adoption of non-violent struggle for the desegregation of America. Lots of other black activists equally see him as some kind of kindred spirit; a fellow victim who suffered to break the yoke of systemic oppression. In recent years, however, there has been a rethink of Gandhi the person vis-a-vis the ‘Gandhian’ method. The verdict is that while the man was good for his people, he was not good for black folks and so should not be overly venerated by us. And so, even while we adopt his methods where we deem them appropriate, we must not forget that the man did not think of us as his equal. On a lighter note, one hopes Governor Rochas doesn’t have a statue of Gandhi in the works.

Spelman College receives $30M from couple

pelman trustee Ronda Stryker and her husband, William Johnston have gifted Spelman College $30million, the largest single gift from living donors. The money is to be used for its new Centre for Innovation & the Arts. Spelman, a private women’s HBCU in Atlanta Georgia was founded on April 11, 1881 by Sophia Packard and Harriet E. Giles. Notable alumnae include Stacey Abrams, Alice Walker, Keshia Knight Puliam, Esther Rolle, Marian Wright Edelman and Bernice King. It had always been a sticky point that HBCUs attract nowhere near the princely sums that Ivy Leagues and other large colleges get from philanthropic donors. In fact, the highest donation to Spelman College was in 1992, the sum of $37million from the estate of DeWitt Wallace, founder of the Readers Digest. An elated Mary Schmidt Campbell, Spelman President gushed that the couple’s gift will be transformational, ensuring that “Spelman students will be prepared to tackle the challenges of our changing world through innovation, creativity and dynamic intersection of science, technology, engineering, arts and math”. The Centre, projected to cost $86million will house all Spelman’s arts programmes – art, art history, curatorial studies, digital media,

he Board of Trustees of the Tony Elumelu Foundation (TEF) has announced the appointment of Ifeyinwa Ugochukwu as Chief Executive Officer. This was done at the end of its Board Meeting on December 12, 2018. The appointment takes effect from April 1, 2019. Ifeyinwa will, in her new capacity, be expected to lead the team in scaling up the impact of the Foundation which has shown uncommon commitment to empowering African entrepreneurs. The Foundation’s mission is rooted in Africapitalism, which positions the private sector as the key enabler of economic and social wealth creation in Africa. For Ifeyinwa, it’s a move-up from her position as Director of Partnerships of TEF which she has occupied since November 2017, to succeed Parminder Vir, OBE, who has been elevated to the Foundation’s Advisory Board. It is hoped that in her new position, according to a press statement issued by TEF, “Ifeyinwa will leverage her expertise, experience and network to provide strategic leadership in realizing the Foundation’s goal of transforming Africa through entrepreneurship”. Founder of TEF, Tony Elumelu, praised the incoming CEO of whom he said “As Director of Partnerships, Ifeyinwa demonstrated strong leadership and strategic thinking in delivering the Foundation’s Mission to transform Africa, securing major partnerships that scale the impact of the Foundation beyond its targeted 10,000 entrepreneurs”. He envisions her as “the perfect candidate to build on Parminder’s immense contribution.” And in welcoming Parminder to the Board, a woman he said is “fondly known as the mother of African entrepreneurs,” he commended her for “her notable achievements, significant sacrifice and commitment to building and empowering the next generation of African business leaders”. In her response, Parminder recalled how under her leadership, “we have empowered a generation of young Africans with the training, tools and opportunities to launch the continent into prosperity. As CEO”, she continued, “…it has been my profound joy to support thousands of young people whose ideas are transforming Africa.” She deems herself honoured to join the Foundation’s Advisory Board “to contribute to the many more success stories that

Ifeyinwa Ugochukwu

will emerge out of Africa”. Accepting her new appointment, Ifeyinwa, who, prior to joining TEF, had served as a management consultant for the Enterprise Development Centre at the Pan African University, and also sat on the Board of the Cape Town based Women Empowerment and Children Relief in Africa, said that as TEF Director of Partnerships she had witnessed, first hand, the “potential of entrepreneurship in tackling Africa’s key challenges of unemployment and poverty”. She hopes that the recently launched digital networking platform TEFConnect, introduced to connect African entrepreneurs, investors and mentors for business success will further achieve Tony Elumelu’s goal of democratizing luck across the continent and fostering business beyond physical borders. “I am honoured to build on Parminder’s legacy and launch the Tony Elumelu Foundation to its next phase of growth”, she enthused. The new CEO holds a Bachelor of Law degree from the University of Wales and a Post Graduate Degree in Business and Executive Coaching from the Integral Africa Institute, Cape Town. She is an associate of the Chartered Institute of Arbitrators, Nigeria.

The centrality of diversity as a corporate and civic responsibiity (1)

N documentary film making, photography, music and theatre. It will also include Spelman’s Museum of Fine Art, a digital theatre housing publicly accessible performances, technology events, film screenings, and a café. The donor, Ronda Stryker is happy that “Spelman alumnae are leaders across every field imaginable, breaking new ground while tackling some of the world’s most challenging issues, from health disparities to the digital divide”. She said he and her husband were “thrilled to support a building that will encourage students to master technology, innovation and the arts”.

igeria is multi ethnic, multi religious, multi-dimensional, multi many things anyone can think about. Even our opinion of Nigeria is multi. Some talk in terms of nations and nationalities within the Nigerian state while others think of Nigeria as one indissoluble nation whose ethnic units cannot be regarded as nations. There are others also who believe everything is negotiable, including our nationhood and in fact sovereignty. It is difficult to have such a country buzzing with inherent diversity and then thinking that business or governance can be achieved without reflecting the many colours that make of ours such a beautiful tapestry. Whenever one group takes the decision to monopolize what ought to be the commonwealth, resentment is the response from the other groups locked out. And while some may decide to negotiate, it’s very easy for the not so patient to ditch negotiation that’s going nowhere for a jagged approach inimical to everyone’s good. Big corporates especially should stop whining about how Nigeria is not practicing true federalism when they themselves do not emblematize true federalism in their employments, board composition, staff promotion, business spread, etc. Every big corporate ought to be a mini Nigeria, and not in a lopsided way where all the big boys and girls are from one part of the country while

the hewers of wood and drawers of water come from the other not so favoured part, depending on the ownership. Here’s how I mean: You go to a business whose founder is Yoruba. Most of the operatives are Yoruba. An Ibo man’s business, ditto. A Hausa man’s business, ditto. And on and on. The same is the case even in our houses of worship. Such a crying shame! I’ve spoken with CEOs who put this down to ‘ease of doing business’, so to speak. The boss doesn’t want to spend too much energy communicating only for his communication to get lost in translation. You know, how everything can be interpreted through cultural prisms. But is that good enough excuse? What happened to corporate culture? Or must that be ethnic based? Having grown up in the Army Barracks in different parts of Nigeria, I know firsthand what role proper integration plays in ensuring that the sum of the parts end up making a wholesome whole. Best friends hardly ever came from the same part of the country or even the same religion. Bonding was about chemistry and two or more people pursuing the same goal, maybe just from different angles. But the endpoint is never in dispute. Whatever anyone might say of Gen Yakubu Gowon, he was clearly desirous of building a Nigeria whose growth was not hampered by the barrier of ethnicity. The Civil war that threatened to tear the country apart taught him that lesson.

Thursday 20 December 2018

C002D5556

BUSINESS DAY

GARDEN CITY BUSINESS DIGEST Your investment is safe in Rivers – PHCCIMA new boss, Nabil Saleh, declares at PH Int’l Trade Fair IGNATIUS CHUKWU

nvestors out there still fearing to make final investment decisions for Port Harcourt have been urged to fear no more and join the new investment rush for the Garden City. The assurance was delivered by the new President of Port Harcourt Chamber of Commerce, Industries, Mines and Agriculture (PHCCIMA), Nabil Saleh, who has urged investors to take advantage of the enormous potentials that abound in Rivers State to take their businesses to the next level. The PHCCIMA boss, a high chief, placed this call in his welcome address at the 14th edition of Port Harcourt International Trade Fair 2018 holding in the popular Isaac Boro Park, Mile One, Port Harcourt. Saleh said: “This year’s team is; ‘Encouraging Indigenous Production While Maintaining Global Relationships’. This theme is apt as it particularly recognizes and encourages active indigenous participation in creating a viable economic growth for Nigeria”. According to him, Rivers State presents a natural attraction for investors, both indigenous and foreign, owing to its status as the ‘Trea-

sure Base of the Nation’, the commercial nerve-center of the oil and gas industry in Nigeria, and a State with an economy hugely diversified. Saleh explained that the investment climate is quite conducive with a market vast with friendly and innovative people; an atmosphere of peace, availability of qualified manpower in technical, managerial and other areas of labor requirements. The PHCCIMA President expressed joy in acknowledging the fact that the Rivers State government has shown commitment to work closely with the business community through the commencement of tax harmonization. “I wish to use this opportunity to urge more investors to take advantage of the enormous potentials that abound in Rivers State. Bring your investments to Rivers State and be part of the community of investors who are happy to be here. I assure you, your investments are safe. I also urge companies and enterprises who are not yet members of PHCCIMA to hasten to become members, and of course enjoy the unending benefits of membership”. He welcomed the exhibitors and participants assuring them of bountiful sales, security, emergency medicals and of course colour with

Nabil Saleh

funfair in the duration of the trade fair. Chairman of the occasion and chairman, Rivers State Civil Service Commission, Oris Onyiri, in his remark, said the government cannot function effectively without the participation of the Organized Private Sector (OPS). This, according to him, is why the Rivers State Government will continue to partner with

the PH Chamber to achieve the state economic objective. He congratulated the new executives led by Saleh, commending his administration for opting to take the huge responsibility of sustaining the trade fair momentum via organizing the 14th edition of the international trade fair. The NACCIMA President, IyalodeAlaba Lawson, who was represented by the na-

tional publicity secretary and former PHCCIMA President, Amaopusenibo Vincent Furo, lauded PHCCIMA for sustaining the momentum and for the recurring success story of the Port Harcourt International Trade Fairs. This, according to him, is a strong pointer that Rivers State is safe for business and investment. He congratulated the new executives and advised them to work assiduously for the overall benefit of the entire membership. The Assistant ComptrollerGeneral of Customs, Zone C, Sanusi Umar, represented by B.T Ivara, said the regional Customs body would continue to provide a platform to facilitate trade and access for import and export business to thrive. On her part, the SouthSouth Coordinator of the Nigerian Export Promotion Council, Azuka Ikejiofor, said the trade fair would afford NEPC the opportunity to identify innovations that would support the zero-oil plan. According to her, all countries are going back to the drawing board to find a substitute for oil, with a view to bracing up to the challenges ahead. She assured that the body would continue to work closely with the PHCCIMA as a veritable partner. The Attorney-General and Commissioner for Justice, Riv-

One day for the unsung hero Port Harcourt by Boat With

IGNATIUS CHUKWU

he typical accountant, especially a ful-bred chartered one, is seen as a conservative. Anyone that comes with a proposal for a project in any established corporation knows that his obstacle in Management when presenting the idea would be the Chief Accountant. Those who play with figures and cook up financial reports after executing a project dread to face the Chief Accountant. Often, these fellows with an eye for figures live quiet, sometimes disturbed lives. They have the misfortune of screening out bad men from good ones. Sometimes, they are at risk. When awards and flamboyant recognitions fly about in our kind of country, the secret heroes, accountants, are hardly part of it. Even when they make do-

nations in public, they ask their right hand not to disclose to the left. So, they ride low all the time. If the Port Harcourt District Society of the Institute of Chartered Accountants of Nigeria (ICAN) did not institute an award this year, 2018, perhaps, the hardworking Director of Finance and Supply in the Niger Delta Development Commission (NDDC), Ogbalubi Linus (PhD), a fellow, would have continued to go about his onerous tasks of dealing with figures expended by others in his corner of the richest Government Agency in Nigeria. ICAN, led at the moment by a strong-willed female accountant, Felicia Jones Ayuwo (PhD), selected 10 top achievers in the accounting world and toasted them to high heavens last weekend at the Swiss Spirit Hotel on Stadium Road. Spirits were indeed high on that avenue. There was no space both on the main road and in the hall. The crowd listened with rapt attention as Chinedu Nwachukwu, a fellow too and state chairperson of female accountants, SWAN (Ogbalubi must be lucky with female accountants), was called out to read his citation. The profile began straight away by declaring the man standing tall as a ‘consummate professional accountant’. Minds immediately went

to the sea of heads that usually line up at the accounts floor of the NDDC by persons pressing for payment. There were also those utterly frustrated by the endless movement of their files in the Commission. In the past, there were those who got fed up and abandoned their payments until one female interim MD passed through the Commission few years ago and ‘liberated’ such ‘detainees’ by fiat. People began to get small alerts for small jobs, at least, following a policy to clear those owed below N10m.

Linus Ogbalubi

Many however do forget that processing the approval for payment is not the job of the busy accounts people. Their job starts when all approvals have been secured. The next step becomes payment processing which leads to a cheque or an alert. This way, the accounts people bear the bad name caused by other department; that is not to say they are saints. As Ogbalubi stood tall at such a revered moment of honour, his hidden qualities began to come to public notice one by one. It became obvious that this man is of Shell stuff, being his first job after sterling results in the university (UST). Shell professionals usually come strong and hard as rounded professionals. They have access to some of the best accounting trainings and packages in the world. He later passed through Expro as Chief Accountant, much later had a stint at OMPADEC as Senior Accountant, and now moored his boat at the NDDC where he has risen to Director. His professional colleagues testified in his profile that his rise to his present level was no surprise to them, meaning he has a pedigree. His professional accomplishments may not be the only highlight of this high achiever but the testament of his deep Christian life. About him, they talked about ‘true and self-

ers State, Zacchaeus Adango, represented by a Director in his office, Blessing Uriri, expressed excitement to be invited for the opening ceremony. He said it represented an ample avenue beyond issues of the legal profession to encourage networking and open new frontiers of opportunities. He said this invitation has opened channels that would facilitate close working relationship between his office and PHCCIMA. The first deputy president of PHCCIMA and chairman of the Trade Fair Organising Committee (TFOC), Mike Elechi, in his vote of thanks, expressed gratitude to all that graced the opening ceremony. He assured them that the trade fair would continue to experience growth and enhance stimulation of the Rivers economy. Present at the event were the dynamic second deputy president, Chinyere Nwoga (PhD); treasurer, Tony Nwogbo; Financial Secretary, Hanson Oyet-Ille; Publicity Secretary, Mercy Abu Bello, elected council members including Uche Onochie and Godwin Etim. Also present were former presidents; Hyke Ochia, Emeka Unachukwu, one time Chairman of Port Harcourt International Trade Fair, Emmanuel Ogbonda, representative of Standard Organization of Nigeria (SON), Corporate Affairs Commission (CAC), National Association of Small Scale Industries (NASSI), top PHCCIMA members, Director-General and staff of the Chamber.

less service’. Now this; “His forte is rooted in a strong Christian compass based on a forward-looking working philosophy, combined with a zeal for professional and technical excellence premised on high ethical standards with the touch for managerial leadership as a tool for service”. Great! They said he is a man of service in all his callings and represents in spirit and substance of the archetypical professional career civil servant. Mention was made of his academic brilliance that saw him with top grades in his college results, later at the University of Science and Technology with honours, MBA in Imo State University, Masters in Leeds Becket (UK), another Masters (MSc) Economics in Uniport, and eventual PhD in Economics from Uniport. ICAN apart, Ogbalubi is a fellow or member of many professional institutes and associations. He was toasted as one with what the Japanese call ‘kaizen’, a high conviction for upholding high ethical standards, team building, and an eye for high performance and continuous service delivery. Little wonder he is serving as chairman of a microfinance bank in his hometown, free of any charges. He is married to Anne Obiageli but is seen to be more married to Jesus, demonstrated by an active involvement in Evangelism in the Salvation Ministries, a tasted denomination headquartered in Port Harcourt.

BUSINESS DAY

C002D5556

Thursday 20 December 2018

Investing in Rivers State Chartered accountants roll out the red carpet, declare:

People live and do serious business in Port Harcourt As ICAN boss insists on accuracy and integrity of accounts statements to build investors’ confidence Ignatius Chukwu & Favour Ichemati

hose still staying away from the Garden City on account of insecurity may be losing huge fortunes or business advantage to competitors. Other investors are apparently busy making a killing in the oil city, according to businessmen in the Garden City. For now, there seems to be no idle spot in Port Harcourt. Hoteliers in Nigeria came to the state capital last week and testified that they have had brimming occupancy rates these months. Now, last week Saturday, most of the driveway from the Air Force Junction to the Liberation Stadium in Port Harcourt was filled with parked cars as all feet trekked to Swiss Spirit Hotel where members of the Institute of Chartered Accountants of Nigeria (ICAN), Port Harcourt & District Society, headed for their annual end of year festivity called Dinner/Gala Night. Speaking to BusinessDay on the sidelines of the bustling night, the chairman of the District and a fellow, Felicia Jones Ayuwo (PhD), in assessing the economy of Rivers State at the moment, wondered why some persons outside the oil region keep habouring the impression that those in Port Harcourt were roasting like those in Iraq. Her words: “Those outside have this impression that Port Harcourt is not peaceful, that people are run-

Felicia Jones Ayuwo, ICAN chairman, Port Harcourt & District Society

ning away, or that there are killings and troubles. On the contrary, we here have enjoyed peace. People still live and do business in Port Harcourt. The state government has done much to ensure safety. Besides, other states have their own insecurity. Yes, some kidnapping here and there but the government is on top of its game.” Encouraging the government to do more, the expert said no matter how you close holes, rats must open another. “So, the government will continue to adjust its measures. My advice is, government should

continue to take proactive measures to beat them at their game. The state government is trying and they can checkmate the criminal elements in the society. They should continue to deal with these people.” According to her, Chartered Accountants are poised to supporting the effort of the administration by supporting tax policies and processing accurate statements of accounts and returns to create confidence in the investing public. “The motto of our profession is ‘Accuracy and Integrity’. My advice to Chartered Accountants is to uphold the integ-

rity of the profession because the figures and records we keep guide investors. We should not be seen to misguide them. We should be honest and upright in what we do.” On tax and the new policies expected to roll out in January 2019 in the state as announced by the executive chairman of the state’s board of internal revenue, Adoage Norteh, the ICAN boss said: “Yes, we work hand in hand. At the end of the day, whatever tax laws come into place, we will also be part of the implementation. Most of our members are also members of the Chartered Institute of Taxation. You know, after oil, tax is the next biggest source of revenue to the government. So, we are working together with the Rivers State Internal Revenue Service (TIRS) and even the Federal Inland Revenue Service (FIRS) to ensure that we implement their programmes to enhance revenue collection.” In her speech proper, Ayuwo said ICAN Port Harcourt accomplished some big tasks in 2018 including the hosting of the first Southern Zonal Conference in April with the help of the immediate past chairman (Okey Nwogu and his team) and her investiture event as the 26th chairman of the District Society plus the inauguration of the 2018/2019 executive committee in August. She also mentioned the Annual Accountants Conference that held in Abuja from in October where she said Port Harcourt took the first position in attire and third in size of

contingency. “The technical committee headed by Abah Oloche has ensured our constant touch with the next generation through successful Catch Them Young programmes.” In his remarks, the chairman of the organizing committee, a Knight, Tim Konye Osondu, noted that “ICAN, which was formed in 1960 before being registered by an Act of Parliament in 1965, took off with 250 members in Lagos, today has 46,683 members, with Port Harcourt alone supplying about 745 members.” He went on: “We carry out our practice in a sensitive region that lays the golden egg of the Nigerian economy, and many oil-related activities and firms require proper husbanding, such that the opinion of an accountant carries weight in his or her office environment. Often, this attracts risks and challenges. It often looks like the Accounts Department is at war with the rest of the firm, and the external auditor is seen often as an outright threat, or even an enemy. But, we are trained to survive and surmount all of this.” For this, ICAN members deserved to set aside a day to unwind, he said. Further justifying the hassles and costs of creating a night of fun and leisure, the chairman of the occasion, Odobot Ekere, another fellow, urged members to unwind, not bottle up, because the accounting profession is a sensitive one. Ten awards were given out on the night while traditional dances, good food, and lottery marked other highlights.

NDDC boosts ‘Moot Court’ system * Recounts feats of scholars esp one that saved $1Bn in Canada by re-designing Turcot interchange Ignatius Chukwu

he Niger Delta development Commission (NDDC) has launched a scheme that may produce the nation’s leading legal luminaries of the next generation and replace the stars the region produced in the past including the present Chief Justice of the Federation, Walter Onneghen. The Commission has thus flagged off the second year of its support for the ‘Moot Court & Mock Trials System’ aimed at boosting court competence of future legal practitioners in the oil region. It is also to boost educational development in the region. As a motivation in its education programmes, the good name brought by an NDDC PhD scholar in far away Canada is said to have boosted the determination and resolve of the intervention agency to continue its postgraduate scholarship scheme. The Commission mentioned several feats topped by the feat of one Charles Igwe (PhD scholarship student) who made waves in Canada by saving whopping sum of $1Bn in the $3.67Bn Turcot Road interchange

project. Disclosing the motivation in the education sector, the managing director of NDDC, Nsima Ekere, stated at the Moot Court & Mock Trial competition at the Rivers State University (formerly University of Science & Technology, UST), the Commission would continue to support education and build infrastructure. “This is why, in this institution, you will find that the best hostel was built by the Commission as one of the 18 NDDC hostel projects in universities across the Niger Delta region.’ Ekere, who was represented by the Director of Special Duties, Princewill Ekanim, said: “Beside infrastructure, we have sponsored over 1411 postgraduate students to different foreign universities in nine skill areas, including oil and gas law, plus another 200 just to join.” Mentioning other feats in the area of education support, the NDDC boss stated thus: “The latest batch would join other outstanding scholars such as Ubong Peters, a Ph.D student who won the threeminute thesis competition in Australia, and Augustine Osarogiagbon of Memorial University who completed

his PhD in less than the stipulated time and was offered a dual PhD with two graduate assistants to work with. There is Charles Igwe, who, while studying in Construction Engineering at Concordia University in Canada, saved the Montreal Area Municipality over $1Bn by redesigning the TURCOT interchange road construction project costing $3.67Bn.”

Nsima Ekere, managing director, NDDC

He said the Commission was also investing in e-learning because it is the future of education. “Our partnership with the government of Sao Tome and Principe is designed to channel their excess internet capacity to the Niger Delta so that our people can enjoy the robust benefits and help build the new generation we are helping to facilitate.” In his opening remarks, the dean, faculty of law, RSU, O.V.C Okene, represented by Linus Nwauzi, said: “There is great need to foster partnership between multinational corporations and the universities as the only way to develop education and prepare students for professional life. That is the way to go. The presence of NDDC in this faculty will bring more development and progress, thus enhancing development in the oil region. There is need to formulate a policy framework in Corporate Social Responsibility (CSR) for multinational corporations. Multinational corporations must be given minimum responsibility that is clear. They must take up projects such as this one. The time when they said charity was not part of boards of enterprises is over because part of

sustainability in enterprise is CSR, thus, charity is now part of the board.” Also speaking, David Diya Ashaolu of Velma Foundation, represented by Thomas Ogbemi Ibinabo, said the competition continues because the NDDC recognizes the importance of balance between education, play, learning, and leisure. “There have been changes in the administration of the Criminal Justice System in Nigeria recently, thus, Moot and Mock Trial system becomes more important to ensure that students are abreast of the prevailing system of administration of justice in the country. To achieve this aim, three core areas shall be focused on: Advocacy skills, Strict compliance and reliance on evidence, and Learning the language of the court. Innovation is the focus in this edition.” For Peace and Development Project (PEDEP), the Director, Francis Abayomi, represented by Florence Awah, stated thus: “The competition offers a platform of interaction, knowledge-sharing, and skills acquisition. It will enable the participants showcase their skills. It prepares one for the future.”

Thursday 20 December 2018

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BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

Fed’s Powell under pressure over rate rises US president urges central bank to call off planned increase on Wednesday Sam Fleming and Joe Rennison

ay Powell will today wrap up the thorniest policy meeting of his chairmanship as the Federal Reserve faces a barrage of calls for easy money as the stock market slides in anticipation of soggy global economic growth. America’s top central banker will face the media at 2.30pm US eastern time, a half-hour after the Fed announces its latest rates decision. President Donald Trump renewed his demands for unchanged rates in advance of the meeting, as did some investors bruised by the recent declines on the stock market. However, Fed officials have signalled they will boost rates by a quarter point at the meeting, and holding fire would look skittish, according to analysts and strategists. It would send a markedly downbeat signal about the economic outlook ; it might indicate the Fed is overly influenced by market turbulence; and it would trigger claims that the president is influencing policy. “The Fed doesn’t like surprising the market,” said Ralph Axel, an interest rate strategist at Bank of America Merrill Lynch. “It would be more disruptive for the Fed to not hike than to hike.” Assuming the central bank pulls the trigger on a rate increase, Mr Powell faces a delicate balancing act as he attempts to convey an upbeat assessment of US growth while acknowledging the fears that have roiled financial markets in recent weeks.

Those hazards — dubbed “downside risks” in central banker parlance — include signs of a sharp slowdown in European and Asian growth, induced in part by Mr Trump’s trade wars. In addition, the Fed is weighing up the chances of a market-jolting hard Brexit in the UK; evidence of a slowdown in US sectors that are sensitive to past rate rises such as housing; and the prospect of waning fiscal stimulus from the second half of next year. Markets are still pricing in an increase in interest rates when the Fed puts out its monetary policy announcement today. It will mark the fourth move of 2018, putting the Fed’s target range at 2.25-2.5 per cent. But rates predictions have been curtailed somewhat in recent days. More dramatic has been the fall in market expectations for next year. Back in November, fed funds futures were pointing to two quarter-point rate increases next year, but that measure now implies a strong chance of no move at all in 2019, with only a possibility of a single increase. Weaker economic data overseas — including contraction in Germany and Japan in the third quarter, and a marked slowing in China — have contributed to angst on the stock market. While the domestic US economy still looks solid as the unemployment rate hovers at just 3.7 per cent, recent days have produced a chorus of complaints from both the president and Wall Street over the Fed’s tightening policies. On social media, Mr Trump said on Tuesday that Fed officials

GlaxoSmithKline to break up after striking Pfizer consumer joint venture Drugmaker plans to demerge into two operations within three years of deal

Sarah Neville and Arash Massoudi

laxoSmithKline has paved the way for a break-up after agreeing to combine its consumer health business in a joint venture with US rival Pfizer, creating the world’s biggest provider of medicinal products sold directly to the public. GSK will take an equity interest of 68 per cent and Pfizer 32 per cent in the venture, which will have sales of about $9.8bn and will combine GSK’s Sensodyne, Voltaren and Panadol brands with Pfizer’s Advil, Centrum and Caltrate. The UK drugmaker said that within three years of closing the deal, GSK intended to demerge the consumer division through a UK stock market listing, splitting the company into two separate businesses — one focused on consumer products and one on prescription medicines and vaccines. Emma Walmsley, chief executive, said: “Ultimately, our goal is to create two exceptional, UK-based global companies, with appropriate capital

structures, that are each well positioned to deliver improving returns to shareholders and significant benefits to patients and consumers.” Once the UK had moved “beyond Brexit and into a more stable environment” the new structure would enable GSK to leverage the country’s “tremendous strengths” in science, innovation and the creative industries, she told reporters. She refused to speculate on whether the joint venture would lead to job losses, saying: “Obviously there are going to be some impacts on people, but that’s something we’re working through.” But she added: “If you take a longer-term view, I believe we should be optimistic about the opportunities both for growth and employment that this deal today will create.” The deal will require regulatory approval but one person close to the deal said there were no pressing antitrust concerns. Shares in GSK rose 7.4 per cent on the announcement. The companies said the joint venture would be the global leader in Continues on page 54

should read a Wall Street Journal editorial calling for a pause on rates “before they make yet another mistake”. He added: “Feel the market, don’t just go by meaningless numbers.” Stanley Druckenmiller, a prominent investor who runs Duquesne Family Office, said on Bloomberg television there were “amber” signals on the economy, and that officials needed to pay attention to equity market falls. To the Fed’s critics, lifting rates further while reducing its balance sheet will squeeze growth when the economy is already at risk of slowing. Recent declines in equity markets are adding to the pressure on the economy: Goldman Sachs analysts say if the recent tightening in financial conditions

remains unchanged it would shave between three-quarters and one percentage point off growth next year. Defying expectations and holding rates unchanged today would carry its own hazards, however. It could be portrayed as capitulation to Wall Street and to a president who has disregarded White House precedent with a steady stream of public advice and admonitions to the central bank. It may also be taken by traders as affirmation of their worst fears about the slowing global outlook — at a time when the central bank needs to offer a reassuring hand. Mr Powell has recently struggled to offer a steady lead on Fed policy. In early October he gave an exuberant assessment of

America’s economic outlook and appeared to suggest multiple rate increases lay ahead. Yet he amended that message in a November speech that sent rollercoaster stock markets surging again, as he indicated the central bank would not need to lift rates far to get them into the “neutral” range of estimates — levels that neither boost the economy nor hold it back. Uncertainty will probably grow in the new year, since the Fed is preparing to withdraw its guidance telling markets to expect further gradual rate increases. The central bank wants instead to keep its options open about what to do next with rates, as it shifts to a more “data-dependent” approach.

China’s share of global output ‘to fall’ by 2040

Income gaps between rich and poor countries may also fail to close or even widen Steve Johnson

hina’s share of global output will fall over the next two decades, a leading consultancy is forecasting, upending the expectations of a generation that has only ever seen the Middle Kingdom rise inexorably in importance. The country will account for 17 per cent of global gross domestic product, measured on a purchasing power parity basis, by 2040, below its current 19 per cent weight, according to Neil Shearing, group chief economist at Capital Economics, having peaked at 20 per cent in the mid-2020s, as the first chart shows. The projected small but noticeable reversal in China’s dramatic rise to prominence since it opened up to the world 40 years ago is largely driven by an expected 12 per cent decline in its working-age population by 2040, depicted in the second chart. “China’s working age population peaked in 2013 and employment will start to shrink before long, possibly as soon as this year, which will become an increasing headwind to economic growth,” said Mr Shearing. In combination with other struc-

tural headwinds — such as an overinvestment boom that has bolstered growth in recent years but led to too many resources being pumped into relatively unproductive parts of the economy — this means that China’s sustainable growth rate will fall to just 2 per cent by the late 2020s, Mr Shearing forecast. Moreover, China’s rapidly ageing population, a result of its one-child policy, and its lack of private provision, means that, without reform, it is on course to spend 9.5 per cent of its GDP on pensions, a larger slice than in developed countries such as Japan, the UK and the US by 2050, as illustrated in the third chart, the consultancy calculates. China has made dramatic strides since 1980, when its share of the global economy was only 2.3 per cent in PPP terms, as seen in the fourth chart, but Mr Shearing saw this progress petering out. “We think China will fall off the path of rapid development laid down by the Asian growth stars of Japan, Korea and Taiwan,” he said. “Our forecasts suggest that China will remain much poorer than all the major advanced economies,

with its GDP per capita staying around a third of that of the US.” Capital Economics’ analysis suggests a challenging future for many emerging market countries. While many economists and policymakers work on the assumption that, broadly, the developing world will gradually narrow the income gap with advanced economies thanks to faster growth in GDP per capita, the consultancy suggests that convergence will actually reverse over the next 20 years in some countries. Mexico is seen as the only major Latin American country that is likely to increase its GDP per capita as a proportion of that of the US (in PPP terms) in the period to 2040, as shown in the final chart. Brazil and Argentina are both projected to go backwards by this measure, with productivity growth constrained by low investment rates, largely a result of weak savings rates, which also dictate that real interest rates are likely to remain high. Colombia’s outlook is darkened by the fact that “it is set to run out of crude oil, its key export, in around five years”, Mr Shearing said.

BUSINESS DAY

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NATIONAL NEWS

GlaxoSmithKline to break up after striking Pfizer...

EU and Italy strike crucial budget agreement

Continued from page 53

over-the-counter medicinal products with a market share of 7.3 per cent. That is ahead of its nearest competitors Johnson & Johnson, Sanofi and Bayer, which hold about 4 per cent market shares each. GSK and Pfizer added the venture would have a number one or two market share position in all key geographies, including the US and China. The agreement caps a ferocious year of dealmaking by Ms Walmsley, who took over as chief executive 18 months ago and has moved rapidly to remake the company. GSK agreed in March to buy out Swiss drugmaker Novartis from a consumer health joint venture for $13bn. The deal came just days after GSK walked away from a $20bn auction for the Pfizer unit where it had emerged as the clear frontrunner. At the time, bankers said that the two sides remained cordial and that the Novartis deal had opened the door to a tie-up between the GSK and Pfizer units later. More recently, GSK agreed to sell its consumer nutrition business to a subsidiary of Unilever in a $3.3bn all-stock deal. Earlier this month, Ms Walmsley unveiled a $5.1bn cash deal to buy oncology-focused US biotech Tesaro, paying a near 200 per cent premium for the company. Pfizer’s decision to enter a joint venture with the UK drugmaker is likely to be the last big strategic move for Pfizer chief executive Ian Read before he becomes executive chairman in the new year. The deal also comes four years after Mr Read failed in an attempt to take over AstraZeneca, the Anglo-Swedish company. Mr Read said. “Pfizer and GSK have an excellent track record of creating successful collaborations, and we look forward to working together again to unlock the potential of our combined consumer healthcare businesses.” The Financial Times first revealed in July that Philip Hampton, GSK chairman, was weighing a mediumterm break up of the company after coming under pressure from investors. At that time, one top 10 shareholder described the logic of splitting up the business as “pretty clear . . . The financial dynamics of consumer and pharma are pretty different”. With the tie-up, which is expected to be completed by the second half of next year, GSK will target annual cash savings of £500m annually by 2022 after one-off charges of £1.2bn. The company is planning to divest about £1bn in proceeds to cover these charges. Under a shareholders’ agreement, GSK will have six directors on the board of the venture and Pfizer will have three directors. Ms Walmsley will be chair of the new joint venture. Brian McNamara, at present chief executive of GSK Consumer Healthcare, will become chief executive of the new business. Tobias Hestler, currently chief financial officer of GSK Consumer Healthcare, will take the same role in the venture. GSK has agreed to pay a break fee of $900m to Pfizer if its board withdraws its recommendation of the deal or it is not approved by shareholders. The UK company said it would will have the sole right to decide whether and when to initiate a separation and listing of the joint venture for five years after the deal closes.

Thursday 20 December 2018

Move means Italy will avoid potentially damaging sanctions procedure Jim Brunsden

Ken Miyauchi, chief executive of SoftBank’s mobile unit, at the company’s listing ceremony at the Tokyo Stock Exchange © AFP

SoftBank mobile unit falls 15% in Tokyo trading debut Dismal performance casts shadow over efforts to prod people to shift savings into equities Leo Lewis and Kana Inagaki

apan’s biggest initial public offering made a dismal trading debut with shares in SoftBank’s mobile phone business sliding 15 per cent, wiping $9bn off the company’s IPO price market capitalisation. At a news conference on Wednesday to mark the first day of trading after its $23.5bn listing, Ken Miyauchi, chief executive of SoftBank’s mobile unit, began by apologising for a recent mobile network outage at what might otherwise have been a celebration of one of the largest share sales in global market history. Brokers and institutional investors said the share issue, which was aimed at retail investors and persuaded many ordinary Japanese to open trading accounts for the first time, could cast a shadow over the IPO market, where 10 companies were still to make their debut in December alone. “This is our starting point and we will work to increase our corporate value,” Mr Miyauchi said when asked about the poor trading debut. The opening day decline for the blockbuster IPO came amid wider questions about the business strategies of Masayoshi Son, the founder of SoftBank who now plans to focus the parent company on technology investment at what some investors believe is an increasingly shaky stage of the cycle.

The massive issue, which initially priced SoftBank’s mobile unit — listed as SoftBank Corp — at ¥1,500 per share, faced what traders said were strong headwinds. Those included a rare but embarrassing service collapse earlier this month that left millions of SoftBank’s Japanese mobile customers without a network for several hours, tainting the brand at a critical moment. The global dispute surrounding Huawei Technologies has also had an effect, shining a spotlight on Mr Son’s long relationship with the Chinese equipment supplier and raising questions with some investors over the potential cost of replacing existing Huawei equipment in SoftBank’s 4G network base stations. A bearish market environment, as the Topix index heads for its first annual decline since 2011, was no help. “The market is concluding that the ¥1,500 IPO price was too high, considering questions about longerterm growth prospects of the mobile business,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management. “If investors want to invest in SoftBank’s growth potential, they’ll just buy SoftBank group shares.” Japan’s third-biggest mobile carrier said it expects net profit for the fiscal year to the end of March 2019 to increase 4.8 per cent from a year earlier to ¥420bn.

After opening at ¥1,463 on Wednesday, the stock sank 15 per cent to ¥1,282, taking the mobile unit’s market value to ¥6.1tn ($54bn). Shares in parent SoftBank group fell 0.9 per cent. Even after that tumble, institutional investors said the stock was too expensive. One investment manager said his fund was unlikely to be a buyer of SoftBank Corp at a price much above ¥1,000 per share, and that the shares were likely to attract short-sellers as more become available to borrow over coming weeks. Traders said the sell-off was driven by domestic retail investors, the group that bought some 80 per cent of the new shares, attracted by the 5 per cent dividend yield. Brokers also convinced them that in the medium term the shares would be supported by huge volumes of passive investment money as the stock was added to the various benchmark indices tracked by those funds. Makoto Kikuchi, chief executive of Myojo Asset Management, said the dismal performance could damp Japan’s longer-term efforts to lure people to shift their savings into equities and other investments. “For those who tried equity trading for the first time, this IPO just reinforces the image that stocks are bad, thus driving away investors who had the potential to actively participate in markets in the future,” Mr Kikuchi said.

Zimbabwe security forces blamed for post-election deaths Six killings ‘arose from actions of military and police’, says Mnangagwa Joseph Cotterill

imbabwe’s security forces officially received blame for causing deaths in the post-election violence last August that marred President Emmerson Mnangagwa’s bid to gain international legitimacy for his rule over the southern African nation. An inquiry into the deaths of six people in a crackdown on an opposition protest following the July vote found that “on the balance of probabilities . . . the killings arose from the actions of the military and the police” sent to quell demonstrators, said Mr Mnangagwa said on Tuesday. Masked soldiers fired on supporters of the main opposition Movement for Democratic Change in Zimbabwe’s capital, Harare, as they protested against alleged rigging of the vote days after ballots were cast. Mr Mnangagwa and his ruling Zanu-PF were eventually declared

winners of the election, the first held since a 2017 military coup overthrew Robert Mugabe, the veteran strongman under whose rule Zimbabwe descended into economic ruin. The shootings damaged Mr Mnangagwa’s credibility as a reformer in the eyes of western governments who hold the purse strings for financial aid needed for the country to emerge from its isolation. Accountability for the violence is seen as necessary before international lenders will resume dealing with Mr Mnangagwa, a 76-year-old former security chief. A year on following Mr Mugabe’s overthrow, the economy continues to buckle under a desperate shortage of cash and fuel. The inquiry led by former South African president Kgalema Motlanthe criticised soldiers who fired live rounds at fleeing civilians as part of the crackdown, and called on the army to revise its rules of engagement.

The deployment of the army to support police was proportionate and legal, but proper lines of command had not been followed, the inquiry added. The inquiry also called for reconciliation between political parties. “There is at present a very worrisome degree of polarisation and bitterness within the body politic of Zimbabwe,” the inquiry said in its final report released on Tuesday. Mr Mnangagwa said on Tuesday that all those responsible for wrongdoing over the shootings should be prosecuted. However, analysts are sceptical that any military figures will be investigated given that the president was installed by a coup. On Monday, Mr Mnangagwa promoted Anselem Sanyatwe, presidential guard commander, who told the inquiry that soldiers had not fired on civilians. His testimony was contradicted by several eyewitnesses.

ome and Brussels have ended their long-running feud over Italy’s 2019 budget, striking a deal on spending plans that had rattled investors and stoked tensions between the country’s populist government and the rest of the EU. Valdis Dombrovskis, the EU commission vice-president responsible for the euro, said the agreement that had been reached would lead to a budget deficit next year of 2.04 per cent of gross domestic product, compared with 2.4 per cent in Rome’s original plans. He said Brussels’ hope is that the budget will be “the basis for balanced budgetary and economic policies in Italy”. The country “urgently needs to restore confidence in its economy to ease financial conditions and support investment,” he said. The breakthrough came after a two-month stand-off over budget plans, which Italy’s populist government insisted were essential to reviving the country’s flagging economy but Brussels warned would simply add to its mountainous debt pile while smashing euro area fiscal rules. Brussels made clear that, despite Wednesday’s deal, it still had underlying concerns about the state of Italy’s finances. “Let’s be clear: the solution is not ideal,” Mr Dombrovskis said, citing the rolling back of planned pension reforms as one source of anxiety. The deal is the result of days of intensive talks between Italy and the commission, with Rome having decided to seek a negotiated solution despite previously warning it would never sacrifice the spending plans. Matteo Salvini, deputy prime minister and leader of the farright League, said in October that Italy would not change “a comma of the budget.” Brussels had warned that Italy’s original plans risked the country “sleepwalking into instability.” The plans included the introduction of a basic citizens income — a policy dear to deputy prime minister Luigi Di Maio and his Five Star Movement — as well as tax cuts favoured by Mr Salvini. Until several days ago, the commission had pencilled in December 19 as the day it would announce an “excessive deficit procedure” against Italy for breaching fiscal limits — a process that would have seen the country handed deadlines to mend its finances or face fines if it refused to comply. Mr Dombrovskis said an EDP was no longer needed “at this stage” and that Brussels would monitor the commitments Rome had given.

Thursday 20 December 2018

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Apapa: NPA reacts to BusinessDay Editorial, clarifies on efforts in addressing gridlock AMAKA ANAGOR-EWUZIE

55 NEWS

BUSINESS DAY

Transport minister tasks CCECC to speed up work on Lagos-Ibadan rail project MIKE OCHONMA & STELLA ENENCHE

Agribusiness: Edo mobilises entrepreneurs, manufacturers, academics, others to processing centres

‘Progressive tax system requires closing economic gap’ TEMITAYO AYETOTO

FG, HP clamp down on fraudulent tech manufacturers, distributors JUMOKE AKIYODE-LAWANSON

56 BUSINESS DAY NEWS Inflation rate to rise to 11.8% in December FBNQuest DAVID IBIDAPO

uesday, FBNQuest released a report stating their expectation on a further uptick in inflation rate to 11.8 percent for December 2018. This will represent an increase by 0.52 basis points from November inflation rate of 11.28 percent, according to data released by the National Bureau of Statistics (NBS). BusinessDay year-todate (YTD) analysis of inflation rate movement revealed that average growth in inflation rate stood at 12.21 percent between January and November. Inflation rate declined significantly in the first seven months of the year to 11.14 percent from 15.13 percent before it began experiencing a slow uptick in the last four months. According to the NBS report, price pressures were particularly high for fuels and lubricants, personal transport as well as for medical services. Against the single digit inflation targets of the Central Bank of Nigeria, the MPC in November observed that the near-term upside risks to inflation remained. The disruption to agricultural production and distribution arising from flooding, insurgency in the North-East, high cost of energy, anticipated spending in the run-up to Christmas festivities and campaignrelated spending towards the upcoming 2019 general elections. In response to the festive period among other factors, the All Share Index (ASI) at the end of November dropped to its lowest points of 30,611.55 in a year six months. So far, the market has maintained the 30,000 points range on the All Share Index as sell off pressure build in celebration of the Christmas season. This may likely push upwards pressure on food inflation. In November, month on month inflation was 0.8 percent, compared with 0.7 percent recorded in the previous month. The pattern for food prices was similar however, with an increase from 0.8 percent to 0.9 percent. To this end, FBNQuest posited, “Our view is similar to the CBN/MPC. Looking ahead to December, we see inflation at 11.8% y/y”. Tajudeen Ibrahim, head of research, Chapel Hill, said “11.8% inflation rate is very possible mainly due to the demand impact of the festive period on inflation.”

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Thursday 20 December 2018

AFC invests $25m equity in InfraCredit DIPO OLADEHINDE

nfrastructure Credit Guarantee Company Limited (InfraCredit) has successfully closed a $25 million equity investment from Africa Finance Corporation (AFC), an infrastructure development finance institution in Africa. In this primary transaction, AFC has become a shareholder in InfraCredit alongside the Nigeria Sovereign Investment Authority (NSIA). On account of this investment, Sanjeev Gupta,

executive director, financial services of AFC, and Banji Fehintola, Treasurer and Senior Director of AFC, will join InfraCredit’s Board of Directors. InfraCredit is a specialised infrastructure credit enhancement facility established in 2017 by the NSIA in collaboration with GuarantCo (a member of the Private Infrastructure Development Group) to provide guarantees that enhance the credit quality of local-currency debt instruments issued to finance eligible infrastructure projects in Nigeria. The company maintains

‘AAA’ long-term national scale credit rating from Agusto & Co and GCR. Managing director/CEO of InfraCredit, Chinua Azubike, commented: “Our partnership with AFC as an equity investor will help accelerate our transformation while better positioning us to execute on our strategy and mission to unlock longterm local currency financing for infrastructure. We are delighted to have investors who share our values and vision for success.” President/CEO of AFC, Samaila Zubairu, also comments: “We are very pleased

to work alongside InfraCredit and support its goal of bringing more bankable infrastructure projects in Nigeria on line. AFC has always been committed to supporting the continent to reach its economic potential through strategic investments in infrastructure. To maximise our impact, it is important to partner with highly esteemed and reputable organisations such as InfraCredit. “Nigeria is Africa’s largest economy and the 30th-largest in the world. However it has far more potential that could be unlocked if its in-

frastructure challenges were to be overcome. We believe such investments would allow Nigeria to diversify its economy and reduce its dependency on the oil industry. As an institution, AFC is looking to build a coalition of investors, both globally and domestically, to accelerate the pace at which the infrastructure gap is closed, and we are delighted to now count such an esteemed organisation as part of this coalition.” Speaking on the successful completion of the equity raise, the Chairman, InfraCredit and

Thursday 20 December 2018

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Land, property market booms in Ogun as state issues over 30,000 C of O RAZAQ AYINLA, Abeokuta

… 80% discounts on land allocation

he Homeowners’ Charter presents an opportunity for all those who have built on private land without obtaining Building Plan Approval and were therefore unable to apply for a Certificate of Occupancy, to regularise their status at a huge discount on what they would normally be required to pay. “Also, those who have built illegally on land that belongs to the state government, OPIC and Housing Corporation, and who for years, have lived with uncertainty about whether government would eventually repossess the land, are being afforded an opportunity to formalise their ownership, also at a huge discount. “This administration took the view that this situation was too widespread to be ignored but rather needed to be addressed directly and urgently. For us as a government, the

problem meant that our planning for the medium and long term needs of our state was being hampered by the lack of data on our residents and their needs.” These were the words of Governor Ibikunle Amosun of Ogun State in 2012 when he first launched discounted payment of C of O, land survey and titles documentation that had been a major obstacles to home ownership in the state. BusinessDay recalls that before the advent of discounted payment for C of O and other land title documents established by the Ibikunle Amosun-led government, would-be owners used to pay N450,000 but the cost was slashed to N95,000 for which home owners are expected to even pay in instalments over nine months. It would be recalled that discounts ranging from 40 80% were also announced by

the governor on land allocation for industrial, agricultural, religious and educational usage with a proviso that development must commence in the first 180 days of land allocation. Over the time, thousands of certificates of occupancy have been issued and distributed to home owners across the three senatorial districts of the state at N95,000 at minimum, in addition to land allocations to hundreds of manufacturing and agricultural industries with a view to attracting more foreign direct investments to the state. Although, Ogun State government, for the reason best known to it, has never disclosed the total number of the C of O and land title documents issued and distributed so far, an insider source told BusinessDay that “over 30,000 of such documents have been processed so far and been distributed to home owners.

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N30,000 minimum wage: Labour opposes FG’s technical c’tte option JOSHUA BASSEY

he organised labour says the plan by the Federal Government to set up a technical committee to review the recent N30,000 agreed by the tripartite national minimum wage committee will not fly. The Nigeria Labour Congress (NLC) says a technical committee will not look into the already agreed N30,000, as it is not the standard procedure in minimum wage matters. According to the NLC, it is rather expecting the Federal Government to forward the recommendation of the tripartite committee that recommended the N30,000 to the National Assembly as acceptable practice and procedure. President Muhammadu Buhari, while presenting the Federal Government’s 2019 budget to the National Assembly on Wednesday, said a “high powered technical committee” would be set up

to look into the ability of state governments to pay the already agreed minimum wage to avoid job loss. “To avoid a system crisis on the Federal Government and states, it is important to device ways to ensure that its implementation does not lead to an increase in the level of borrowing. “I am, accordingly, setting up a high powered technical committee to advise on ways of funding an increase in the minimum wage and attendant wage adjustments without having to resort to additional borrowing. “The work of the committee will be the basis of finance bill, which will be submitted to the National Assembly alongside the minimum wage bill.” The President said the committee would recommend modalities for the implementation of the new minimum wage. But reacting to the government’s position, Ayuba Wabba, president of the NLC,

said, “No technical committee will look into the issue of N30,000 minimum wage. “We cannot use any technical committee to look into the agreed minimum wage. The President promised to pass the report to lawmakers a week after it was presented to him. “Once the tripartite committee has met and agreed on an amount, no other committee can meet on the same issue,’’ Wabba said. He said it was the tripartite committee’s decision for workers to be paid N30,000 as minimum wage and there was no going back by labour on the amount. He noted that the organised labour would meet next week to take a decision of the next line of action. Also, Joe Ajaero, president of the United Labour Congress (ULC), said that a tripartite committee had considered the ability of governments to pay the sum before the committee agreed on it.

Forbes Magazine features Bukunyi Olateru-Olagbegi MBATA JEREMAIH

ational chairman of Modern Democratic Party, Bukunyi Olateru-Olagbegi, has been featured in the latest edition of Forbes Magazine out in the newsstands from December 15. In the Forbes feature, Olateru-Olagbegi spoke on his political party’s position in harnessing the mental capacity, resources and innovation of a new generation of Nigerians towards building a prosperous future. Written by Forbes West Africa correspondent, Peace Hyde, the piece focuses on the 2019 political campaign, with the party leader explaining the need to understand global trends and the imperatives of engendering real change. “The masses are not blind.

They see the internal wrangling in these political parties on the pages of newspapers. How then can they truly believe in a message of hope by these same people? Our youthfulness and firm grasp of the complexities and blistering pace of the world we live in today easily make us fit to lead. “We understand the power of flexibility and we understand what ‘change’ really means. The world needs the youth right now, and we are finally ready to step up,” he said. According to Bukunyi Olateru-Olagbegi, his party is committed to building a structure capable of winning elections across all political levels with a resolution to put a spotlight on the downtrodden in society who are in critical need of deliverance from bad leadership.

EY Charity Day 2018: Some members of EY partners at the premises of Bonny Camp Primary School in Lagos Island, to mark this year’s Charity Day, as part of its annual corporate social responsibility event.

Buhari declines assent to two economic bills OWEDE AGBAJILEKE, Abuja

resident Muhammadu Buhari has declined assent to two economic priority bills passed by the National Assembly. The bills are the National Transport Commission Bill and the Federal Road Authority (Establishment) Bill. Buhari’s letters were addressed to the Senate president, Bukola Saraki, and read on the floor at Wednesday plenary. The two letters were dated December 12, 2018. While the National Transport Commission Bill seeks to create a multi-modal transport system that will drive the nation’s transport policy and engender speedy economic development, the

Federal Roads Authority Bill aims to scrap the Federal Road Maintenance Agency (FERMA) and replace it with Federal Roads Authority. The President explained that his decision to withhold assent to the two bills was because they would duplicate the functions of existing ministries and agencies, if signed into law. In all, he gave six reasons for declining assent to the two bills. Specifically, he said the National Transport Commission Bill would duplicate the functions of agencies like the Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA) and National Inland Waterways Authority (NIWA). He therefore requested that the ‘safety regulatory

provisions’ of the bill be deleted. The President also asked that the 10 percent royalty to be collected by the agency as proposed in the bill - be reduced to 5 percent. “Section 19 (2m) which stipulates charge of 3 percent freight tariff stabilization fee of all import and export from Nigeria should be amended and reduced from 3 percent to 1 percent as contained in the Nigerian Shippers Council legislation,” he said. On the Federal Roads Authority Bill, Buhari pointed out that establishing a road sector regulator as a separate and distinctive body would render the ‘entire technical workforce of the supervisory ministry redundant,’ if the bill is signed into law.

USAID, Coca Cola partnership to improve water, sanitation in Abia, Cross River communities DANIEL OBI

he United States Agency for International Development (USAID) and The Coca-Cola Foundation (TCCF) through their Water and Development Alliance (WADA) global partnership have commissioned a project to improve access to safe water and sanitation services for more than 44,800 persons in Abia and Cross River states in southern Nigeria. The projects were implemented over a two-year period by Partners for Development (PfD) and working closely with the state Rural Water Agencies (RUWASSA) and four selected local government areas (LGAs), to strengthened the capacity of water, sanitation and hygiene

committees (WASHCOMs), providing new and improved water and sanitation facilities in 58 communities. Under the partnership, 40 boreholes have been drilled and 31 sanitation facilities constructed across 34 locations in the two states. In addition, sanitation facilities in 19 schools and seven health centres have been upgraded and are expected to significantly improve the learning environment for pupils in the locality. According to the JMP/ WHO, 59.5 million (33%) Nigerians lack access to safe water and over 121 million (67%) Nigerians lack access to adequate sanitation. During the commissioning event, USAID Mission Director Stephen Haykin commented on the importance of invest-

ing in WASH services. “Investment in water, sanitation and hygiene is extremely important. This is why we partner Coca-Cola and a number of local communities, four LGAs in two states to provide improved water services to more than 50,000 individuals and sanitation to them…We believe maintaining these facilities will go a long way to contribute to the health and economic well-being and development of your communities.” Representing Bhupendra Suri, managing director of Coca-Cola Nigeria, the company’s public affairs and communications manager, Nwamaka Onyemelukwe, said, “Critical challenges relating to water and sanitation require collective and collaborative action.

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Oyo Guber: I am not in politics to make money - APC candidate, Adelabu CBN. There are 52 weekends in a year, and about 208 in four years. I always came to spend my weekends in Ibadan because of the passion that I have for my state,” he said. While addressing members of the Oyo State Oil and Gas Stakeholders Association in Ibadan, the state capital Tuesday evening, Adelabu said his friends and admirers thought that he was mad when he resigned as Deputy Governor of the Central Bank of Nigeria (CBN) to join the gubernatorial race in the state. “People thought that I was mad when I resigned as the Deputy Governor of CBN. My determination to serve my people made me to resign; my love for Oyo State and the masses made me to resign. I love Oyo State, and my intention is to get closer to my people,” he said. The APC gubernatorial candidate also said: “If I am after money, I should not have resigned my

Akinremi Feyisipo, Ibadan

ubernatorial candidate of the ruling All Progressives Congress (APC), in the 2019 general election in Oyo State, Adebayo Adelabu has said that he was not coming into politics to make money, but to touch the lives of the masses of the state, as his late grandfather, Adegoke Adelabu, First Republic politician, did during his lifetime. According to Adelabu, “My love for Ibadan and Oyo State made me to resign as the Deputy Governor of CBN to join the 2019 governorship race in the state on the platform of the ruling APC,” promising to remove status discrimination among the indigenes if elected. “I never spent a weekend in Abuja throughout the period of four years and three months I spent as the Deputy Governor of

Adelabu

Benue APC inaugurates gubernatorial campaign team Benjamin Agesan, Makurdi

he All Progressives Congress (APC), Benue State chapter has inaugurated a 36-man gubernatorial campaign committee for the March general election in Benue State, led by George Akume. The inauguration of APC 2019 Governorship Campaign Organisation/Retreat was held at Benue Hotels Makurdi, the state capital. The gubernatorial campaign committee has Jacob Gyado as the director-general as well as Ategher Moses, Francis Ameh, Edwin Joando, as campaign advisers and Mathias Byuan, Terhemen Tarzoor and John Ochoga as campaign zonal coordinators of polling units. The campaign committee was inaugurated by the APC gubernatorial aspirant, Emmanuel Jime, who tasked the committee members to work for the victory of the party in the election. According to him, “I call it challenging because of the special circumstances that has brought us to this point today. Otherwise, Benue State is ripe for the taking and added to the APC progressive family. “The challenge I am passing on to you today is the obvious challenge that arose at the primaries. But I trust that you and your team will overcome those difficulties and deliver Benue to APC family.” However, the candidate of the party, Emmanuel Jime, said the party is sure of victory in the election. According to him, “We are surefooted in this election. We are

gaining grounds. Virtually all our members have come back. The full leadership of the party remains in the APC and all of us are now working together. “I want to believe that my chances are very bright. We do not have any doubt that by the grace of God, we will win. We have the full support of our members. We can be sure that the victory is certain although we have a lot of work to do.” Addressing the gubernatorial campaign team, Senator representing Benue North West Senatorial District and leader of APC in the state, George Akume urged the Jime/Ode campaign organisation to carryout issue-based campaign ahead of 2019 general election. The APC leader, who advised supporters of the party to eschew violence, hate speech and anything that could mar their campaign, praised the party leadership and supporters for keeping faith and supporting the party in the state, saying the party is poised to restore its stolen mandate. Akume, who accused Governor Samuel Ortom of failing the state and embezzling the local government funds leading to the collapse in the third tier of government in the state, also urged the campaign organisation and supporters to work hard and make sacrifices to retrieve their stolen mandate. Responding on behalf of the gubernatorial campaign team, Jacob Gyado assured the gubernatorial aspirant and entire APC family of total loyalty and hard work that will lead the party to victory come 2019.

appointment as the Deputy Governor of CBN. My mission is the renewal of my family’s good name. I have benefitted a lot from my grandfather’s good name. I must also leave a good name for my own children and grandchildren”. The meeting which was facilitated by the Jericho Businessmen Club, also had in attendance leaders of the club led by Remi Babalola, Bola Jaiyeola, Taiwo Akande, Barrister Bayo Adepoju and Abiodun Yusuff. The oil and gas stakeholders were led to the meeting by National President of the Petroleum Tanker Drivers (PTD), Salmon Oladiti; Chairman of Ibadan Unit of the PTD, Kehinde Babalola; Chairman of Ibadan unit of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Raheem Tayo, and Chairman of Ibadan unit of the Independent Marketers Board (IMB), Taofeek Akinyosoye.

Rely solely on God for every challenge, Cleric tells Saraki …as Senate president marks 56th birthday SIKIRAT SHEHU, Ilorin

he Grand Mukadam of Ilorin, Ustaz Suleiman DanBorno, has admonished Senate President, Abubakar Bukola Saraki to rely solely on thr Almighty God whenever he is confronted with challenges, saying, the recent happenings clearly show that God is with him. The cleric in his sermon at a prayer session, organised to celebrate the 56th birthday of Saraki, noted that the Senate President would always receive divine guidance and protection as long as he stands firm in his welfarist schemes, adding that whoever plots against him would not succeed.

Saraki

Dan-Borno, however, urged Saraki to continue sustaining the path and legacies bequeathed to him by his late father, Olusola Saraki. The Chief Imam of Ilorin, Sheik Mohammad Bashir Salihu led other clerics at the famous Charity House, Iloffa Road, GRA, Ilorin, where the prayer was held. Although Saraki was not on ground due to the 2019 Budget presentation to the joint session of the National Assembly, his birthday was marked with special prayer organised by the ABS Mandate Constituency Office, Ilorin. The governorship candidate of the PDP in Kwara State, Razak Atunwa described the Senate President as a true Nigerian with patriotic zeal. “We are gathered to wish him

(Saraki) a very happy birthday. He has been a true Kwaran, a true Nigerian with patriotic zeal. He is particularly of exemplary leadership. He is a paragon of bravery and patriotism. He has shown that he is patriotic as a true Nigerian. He should be steadfast with the people and should be steadfast with God. I wish him all the best”, Atunwa said. In his remarks, the Speaker of the state House of Assembly, Ali Ahmad stated that Saraki could not attend the session physically because of national assignment, adding that Kwara was proud of his achievements. The Speaker said: “This is the time I can remember that he is not with us. He is on a national assignment. All we are doing now is the ritual. He is on a national assignment, we miss him. But what he is doing there, we appreciate it. We pray that Almighty Allah will continue to guide him. “We are proud of him. May the Almighty Allah guide and protect him to continue to deliver good governance to the people of Nigeria. Kwara is very proud of him”. Also speaking, the Director-General, ABS Mandate Constituency Office, Musa Abdullahi, said the prayer was organised to beseech God to grant Saraki long life, prosperity and victories in all his endeavours. The state chairman of the PDP, Kola Shittu hailed Saraki’s unparalleled philanthropist gestures, noting that he had through his numerous empowerment schemes put smiles on the faces of the women, youths, students, artisans, market men and women as well as the physicallychallenged persons.

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Why electorate must deliver verdict on money politics in 2019 ODINAKA ANUDU

he Nigerian electorate must make a strong statement against money politics in 2019. The general elections will take place between February and March 2019 and politicians are already wooing the electorate with money, bags of rice and salt. In 2015, politicians sold their choice houses and property to have a stash of war chest needed to execute their political projects. Two months to the 2019 election, the media has been silent on who is selling what, probably because politicians have chosen to act discreetly to avoid being exposed or arrested by the Economic and Financial Crimes Commission (EFCC). Politicians often spend money on procurement of forms, wooing of the electorate and vote-buying. The ruling All Progressives Congress (APC) and opposition Peoples Democratic Party (PDP) have shown poor judgment in the area of stemming money politics by pricing their forms out of the reach of youths and those who may not have the wherewithal. The APC, in a statement in September, said presidential aspirants would pay N45m, while governorship aspirants would pay N2.5m for expression of interest form and N20m for nomination form, putting the total at N22.5m. For a senatorial ticket, an aspirant was asked to pay N1m for the expression of interest form and N6m for a nomination form. For the House of Representatives, aspirants paid N3.85m, including N350,000 for the expression of interest form and N3.5m for the nomination form. Those seeking tickets to the House

of Assembly paid N850,000, including N100,000 for the expression of interest form and N750,000 for the nomination form. Because it is in opposition at the moment, the PDP cut down the cost of its nomination forms. Presidential aspirants paid N12m, while governorship aspirants were asked to pay N6m. Aspirants to the Senate and the House of Representatives paid N3.5m and N1.5m respectively. Also, Houses of Assembly aspirants paid N600000. Official audit reports submitted to the Independent National Electoral Commission (INEC) in 2015 showed that the ruling APC and opposition PDP spent a combined total of N7.7 billion on the 2015 general elections. The PDP spent N2.9 billion while the APC spent N4.8 billion on the hotlycontested polls.

However, this is far from the truth as empirical evidence showed that politicians and their goons openly distributed large sums of money, including dollars, across the country. In their work, ‘The Phenomenon of Money Politics and Nigeria’s Democratisation: An Exploration of the Fourth Republic’, Rauf Tunde Sakariyau, Fatima Lawal Aliu and Muhammed Adamu noted that buying and selling of votes have become an accepted norm in Nigeria’s political arrangement, threatening her readiness to embrace democratic virtues. “Vying for political posts is left for rich individuals due to the huge amount of money involved in preparation for elective offices. Though the Electoral Act regulates political finance, its application is not obtainable. The electoral body that is responsible for monitoring and regulating expenses of candidates

has not been vibrant in such obligation,” they said. According to section 91 of the Electoral Act, 2010 as amended, the maximum expenses to be incurred by a candidate at a presidential election is N1 billion. For governorship, a candidate must not exceed N200 million. The Act also stipulates sanctions for candidates who flout the campaign spending limits. The INEC had earlier threatened N1 million or 12 months imprisonment or both for presidential candidates who spend above the limits. The body equally said governorship candidates that spent above the limits would be forced to pay N800,000 or spend nine months in jail or both. “Where has this been done?” Onyeka Omekagu, a political analyst, asked. “INEC’s hands are tied, because the ruling party or president may

also overspend. So, do you, for example, expect INEC to go after President Muhammadu Buhari if, for any reason, he overspends in 2019 and wins?” “This is why we need systems to work,” Omekagu added. Analysts argue that politicians are overspending because they believe that they will not just recover what they have expended but will make more. “They are all desperate because as a legislator in the Senate, you pocket N13 million monthly. So, you find people quitting their jobs to go for the Senate. You also find people who are career politicians. The truth is that there is too much money in our politics,” said Muhammad Dunga, a public affairs analyst. He argued that halting this trend is in the hands of the electorate who must say ‘no’ with their PVCs. “Ignore those politicians. They only want to give you a bag of rice but steal your bags of blessings when they get to power,” Dunga urged the electorate. According to the Brookings Institution, Nigeria is now the poverty capital of the world with a record 87 million people living in extreme poverty and 8,000 people sliding into extreme poverty on a daily basis. Unemployment rate in Nigeria increased to 23.10 percent in the third quarter of 2018 from 22.70 percent in the second quarter of 2018, according to the latest figure from the National Bureau of Statistics (NBS). “Our people are obviously hungry, but we do not have to stem hunger with N500 or N1,000. If you wish to stem hunger, chase away money politicians because they steal your commonwealth,”Omekagu said. The 2019 election nears, the Nigerian electorate must take a firm position on this malaise.

2019: Nigeria needs increased health budget

igeria needs an increase in health budget to stem rising cases of deaths. Nigeria has allocated only 2.9 percent of its total budget on health in the last three years, as against South Africa’s 13 to 15 percent over the same period. Budget allocations to the health sector in the last three years represent just 0.2 percent, 0.02 percent and 0.2 percent respectively of the gross domestic product (GDP), assuming modestly that Nigeria’s GDP stands at $420 billion. “The World Health Organisation has a standard benchmark that should be followed by developing countries with high rates of diseases. Compare that ratio with what we have in Nigeria and you will see why we still struggle with health issues,” Okey Akpa, chairman of Pharmaceutical Manufacturers Group of the Manufacturers Association of Nigeria (MAN), told

BusinessDay on the phone. “This is a global benchmark that is a product of research,” Akpa added. Larne Yusuf, a Lagos-based gen-

eral practitioner based, told BusinessDay in an earlier interview that government must plan more for the sector as low health budget in the face of outbreaks means crisis.

The WHO puts standard health budget allocations at 26 percent, especially for developing countries. Nigeria has demography of 198

L-R: Paul Sommerin, partner, Africa, India & Middle East (AIM), financial services; Hennie Human, partner, Africa, India & Middle East (AIM), advisory services, and Ben Afudego, partner and advisory services leader (West Africa) at EY interactive session with the media in Lagos recently

million, which presents a market opportunity but also a health burden on the government. The 2017 was marred by outbreaks of diseases such Lassa fever, which occurred in 718 cases wherein 68 persons died. Between January and July 2018, there have been 115 deaths in confirmed cases and 10 in probable cases. Cerebrospinal meningitis was suspected in 14,518 cases, across 181 local government councils, with 1,166 people reported death. Other outbreaks of include monkey pox and cholera. Cancer is responsible for the deaths of 72,000 Nigerians yearly, according to Wellbeing Foundation Africa (WBFA)’s 2019 research. Doyin Odubanjo, chairman, Association of Public Health Physicians of Nigeria, Lagos Chapter, said disease outbreaks cannot be predicted but get worse when a country fails to address prevention issues squarely.

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NEWS YOU CAN TRUST I THURSDAY 20 DECEMBER 2018

Opinion THE PUBLIC SPHERE

CHIDO NWAKANMA

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.

he 2019 elections took a decisive upward pitch with the debate of vice-presidential candidates on Friday, 14 December 2018. It has sparked interest and provided a basis for initial assessment of the political parties and candidates. More significantly, it has activated the interest of the middle class who have since engaged in heated conversations around the debate. Five candidates lined up for the debate. They are Yemi Osinbajo (APC), Peter Obi (PDP), Umma Getso (YPP), Ganiyu Galadima (ACPN) and Kadijah Abdullahi (ANN). The Nigeria Election Debate Group organised the debate in conjunction with the Broadcasting Organisation of Nigeria, the umbrella

Debates should bolster middle-class participation in General Election 2019 body of radio and television stations in the country. Emerging national consensus on the debate is that the candidates of the two leading parties, Osinbajo for the All Progressives Congress and Obi for the Peoples Democratic Party, stood out. The representatives of the other parties did not bring their best to the podium. They could have done better to offer the nation an alternative. Five persons on a debate platform over two and a half hours also limited the time available for each participant. More importantly, the session turned out to be a Question and Answer platform for each candidate rather than a debate. The moderator asked questions to which the participants responded. They should have tackled identical topics or questions so that the audience could appreciate their perspectives on the issues. It was appropriate that the first round of debates focused on the economy. The economy is a determinant of so much in all other spheres of life and provides the overarching bases for all actions in statecraft, governance and the management of the personal affairs of citizens. The health of nations is a function of the wealth of nations. Nigeria

needs to pay even greater attention to the management of its economic resources.

‘

A growing and prosperous middle class ensures the survival of democracy by its greater independence and capacity to hold government accountable. The middle class is better informed and has access to all levels of government

It is satisfying that the leading contestants delivered robust statements and responses on broad economic issues. Hearty commendations for the fact of the debate. Congratulations to both the organisers and the participants. Nigerians eagerly anticipate

the January 19, 2019 debate of the presidential candidates as the final testing ground. It should also provide grounds for choice for undecided or swing voters while consolidating choices or changing decisions for others. Organisers of the debate should exercise the presidential candidates with a broader range of issues. Topics include the structure of Nigeria; the share of the federation account between the federal, states and local governments; agriculture and water resources; the environment; citizenship; devolution of power; and youth, labour and sports. Others are energy; economy, trade and investment; foreign policy and diaspora matters; the rule of law and human rights; law and judiciary; public finance; property rights and land legislation; security. They should interrogate the place of the legislature and whether our democracy should continue to model the presidential system or revert to the parliamentary system of the First Republic. Citizens expect from them clear outlines of policy on these significant issues. We should discern from them a direction. We should be able to hold them accountable for the promises that they would make.

It is positive that the debate has sparked the interest of the middle class in the coming elections. Such interest is notable because of the recognised significant role of the middle class in entrenching democracy as well as contributing to values, standards and growth in all societies. The Nigerian middle class must stand up for the count if our democracy would effectively take root. Firstly, leaders at all levels of government come mostly from the middle class. The values, attitudes and performance of the government reflect those of the class from which they emerged. Experts call it the “elite consensus”. Drawing from the above, the elite consensus on Nigeria up until now is that sub-optimal performance is okay. The middle class looks askance at the governance process, detaching itself as if they were visitors to the country from other places. They spend much time contrarily lamenting the dysfunctions caused by poor policy choices and, in particular, poor execution. Much more than corruption explains the failures in execution. There is the paramount challenge of capacity. From our traditional societies and in other modern systems, the middle class

adopts formal and informal mechanisms to ensure better outcomes for the society with themselves as prime beneficiaries. They form political action committees. They visit, write and demand town hall meetings with their representatives, whether in the executive or the legislature. Then they adopt peer pressure; the tried and tested informal means of social control. Members shun their colleagues for failing to uphold agreed values. Approbation and reprobation draw on the foundation of shared values. The social contract in a democracy is also an economic one. People contract with the government to offer allegiance, obey the rules, pay taxes and levies in exchange for government delivering on the security of lives and property and betterment of lives. A growing and prosperous middle class ensures the survival of democracy by its greater independence and capacity to hold government accountable. The middle class is better informed and has access to all levels of government. Let the Nigerian middle class play the role of middle classes elsewhere who propelled the political and social direction of their countries. We must stop leaving it to chance.

Certificatemania, universitymania & quantity illusion 3

IK MUO Ik Muo, PhD. Department of Business administration, OOU, Ago_Iwoye 08033026625, muoigbo@yahoo. com, muo.ik@oouagoiweye. edu.ng

e have moved from certificatemania (desperate craze for certificates), which led to universitymania (making universities three-for-a-penny) and this led to the current plan by the government to establish 80 universities and allied institutions. That is in a distressed economy that already has 43 federal universities, 47 state universities, 75 private universities, about 100 fake universities and thousands of online universities. As in previous occasions, the NASS argued that the deluge is necessary given the population of the country, the large number of students seeking admission and ASUU’s complaints about the pressure on existing universities. At least, for the first time, they have listened

to ASUU! It is however obvious that the quests for more universities is not an altruistic agenda to develop our educational system. It is politically motivated. Most politicians have failed their constituents; they lost so much time pursuing stomach infrastructure through blackmail-oriented political crises and so, as the day of reckoning is at hand, they are desperately looking for something to show-off within their constituencies. And this is happening when ASUU and ASUP are on strike as a result of poor funding and failed government promises On top of all these, the NASS has just resolved to declare an emergency in the educational sector of Nigeria. Well… I just de laff! I laugh because all aspects of the Nigerian socio-political environment (health, infrastructure, governance, everything) are on all fours and thus are all emergency cases. I had raised this matter 8 months ago (Nigeria, an emergency case, BusinesDay, 25/4/18). Secondly, this emergency declaration is coming from legislooters who have repeatedly given serious haircuts to the educational budget! In any case, our people say that the person who attempted to murder his neighbour with a gun should not be responsible

for extracting the bullet lodged in his victim’s chest! In effect, to what extent should we trust the NASS, which, in conjunction with the executive, has wrought the extant level of harm on education, to restore the sector to health? Can we trust those who caused the emergency cure the emergency? By establishing more universities when those in existence are derelict shows that the government is more interested in quantity than quality. As our people would say, if the first child cannot crawl, how do we expect the second child to run? How can we drink over-tea when we have not tasted tea (first things first)? How can we equate the height of a child with his level of maturity (there is a gulf of difference between growth and development!). Building more universities when those in existence are just existing shows that the government is suffering from eso-otu (being distracted by several things) or ochi-ili syndrom(pursuing ten things at the same time; pursuing three rats simultaneously, with the likelihood that all will escape!) Establishing more universities just for the sake of establishing them will rather complicate the challenges

of our educational system. The chief ASUUist, Professor Ogunyemi recently informed all of us that some universities in Egypt and Malaysia have over 500,000 students. It is better to stock the existing universities with requisite material human resources rather than just dotting the entire

‘

Most politicians have failed their constituents; they lost so much time pursuing stomach infrastructure through blackmail-oriented political crises and so, as the day of reckoning is at hand, they are desperately looking for something to show-off within their constituencies

landscape with UNIVERSities which are mostly local. Rather than setting up more universities that will devalue the quality of higher education, the FG should explore ways of improving the quality and encourage retention of high standards of scholarship in teaching and research I conclude with the views of two other Nigerians on this vexatious matter: ‘We boast that 1 in every 5 African is a Nigerian. The importance of this huge number is if every Nigerian becomes a positive contributor to human development. We can only achieve this with an educational system that enables an individual to positively use his or her talent for the good of the society. Currently, our education system works to bring the worst out of the Nigerian. We have destroyed our education system from the family foundation. We have broken the foundation of our education and built it on structures of fraudulence and infrastructures of deception. Where does the president begin to reform such a system? He can only by his example lead and teach Nigerians to see the need for quality education. He must declare a state of our education, a national emergency’ Professor O Tomori, Vice Chancellor, Re-

deemers University, Setting an Agenda for President Jonathan Guardian, 6/5/10,p22 ‘There are too many questions groping for answers especially, the tertiary level. Our public universities are still operating along their original Soviet model lines: total public funding, poor remuneration, little or no research funding, uniform pay for disparate academic levels of commitment and academic performance; virtually free tuition, lack of facilities, staff trade union tyranny etc. In the present situation, we are faced with producing graduates that can neither work in private companies nor employ themselves as small business people. Precisely how many graduates does this system demand in a year; which are the critical disciplines; what % of our university needs should be filled by federal, state and private institutions? What are the desirable standards? Which nations are we benchmarking [India, China, Malaysia? What are the overall strategic goals of Nigerian higher education in the 1st half of the 21stcentury? And how are we going to pay for the education we need and gainfully engage the products of these universities? Chidi Amuta; Microwave Universities, Thisday, 22/11/10,back-Page

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