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Cashew farmers, exporters eye $350m earnings as 2020 harvest commences … task FG on Apapa, Tin Can gridlock

LOLADE AKINMURELE

Josephine Okojie

magine trimming down an exhausting four-hour commute from your home to workplace in Lagos to 30 minutes - there are at least three things that does for you. First is increased productivity, as less time is spent in traffic congestion. There is an upside in that for the economy as well. Second is money saved paying lower rent, as individuals hitherto motivated to live closer to their workplaces to cut excessive commute time, can decide to relocate farther away to cheaper areas now that their commute time is shorter. Take a person who works in the business district of Victoria Island that decides to move home from suburb in Lekki Phase 1 to Ajah and cutting rent costs by over 60 percent. Thirdly, for a business owner, Continues on page 42

ashew farmers and exporters in Nigeria are targeting $350 million earnings from the export of cashew nuts in 2020, as harvest season commences in major producing states. “If the harvest comes out better this year, giving the fact that the weather condition has been quite good and the harmattan moderate, we expect to earn at least $350 million from export this season,” Tola Faseru, vice president, African Cashew Alliance, says in a telephone interview.

Continues on page 42

Inside Where is the PTT?

With the helpless Apapa gridlock, it seems the Presidential Task Team (PTT) on restoration of law and order in Apapa is in deep slumber with no hope of reasonable action soon. Pic by Pius Okeosisi

World leaders, businessmen, meet in Davos as WEF forum begins P. 2

Monday 20 January 2020

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news FG to refinance N3.6trn local debt in 2020 ... plans N150bn Sukuk bond for 44 road projects Onyinye Nwachukwu, Abuja

L-R: Solomon Olamilekan Adeola, chairman, Senate Committee on Finance; Saidu Abdullahi, deputy chairman, House Committee on Finance; Godwin Emefiele, CBN governor; Muhammed Nami, new chairman, Federal Inland Revenue Service (FIRS); Albert Akpan, chairman, Senate Committee on Petroleum (Upstream), and Zainab Ahmed, minister of finance, budget and national planning, during the inauguration of the chairman and board members of the FIRS by the minister in Abuja.

Why 64m of Nigeria’s working class cannot buy affordable housing if available ENDURANCE OKAFOR

ut of the 69.54 million Nigerians reported b y t h e Na tional Bureau of Statistics (NBS) to have been gainfully employed as at third quarter of 2018, only 5 million of the total number earn a salary of N3 million and above per year, as compiled from data by Graeme Blaque Group, a Lagos-based advisory firm. This data put employed Nigerians who can buy affordable housing at only 7.19 percent, meaning as much as 64.54 million people who earn less than N3 million cannot afford to own their own home except of course there is an increase in their income level. “We found that less than 5 million Nigerians earn up to N3 million a year, and when we first brought out the data a lot of people shouted, so when you put that into consideration and look at affordable housing; if I give you a house at zero

interest rate for even 50 years, what type of house can you afford?” Zeal Akaraiwe, CEO of Graeme Blaque Group and member, Technical Advisory Committee to the Nigerian Senate, said. According to the Akaraiwe, before addressing the issue of affordable housing and whether or not one can afford or have access, earning capacity of the average Nigerian needs to be able to allow for it to happen. With the current income level in Africa’s most populous nation, Akaraiwe believes that Nigerians cannot afford to own real estate property in the urban areas. If someone earning N3 million per year (N250,000 per month), wants to save towards acquiring a house, he or she would have to set aside N83,333 per month (the one-third of total earnings allowed by HR). This will amount to N1 million in a year, and to buy a four-bedroom semidetached house in Lekki

worth N75 million such a person would have to save for 75 years. Even if the person was to acquire a property in Ikorodu, Ebute Metta, both in the mainland axis of Lagos, or Choba in Port Harcourt, which have similarities with Wuse in Abuja, he or she would have to save for at least 20 years. Nigeria’s housing challenge borders on insufficient stock that meets the demand of low-income earners, low ownership level and lack of demand enablers in terms of mortgage or low-rate housing finance. According to the Association of Housing Corporation of Nigeria (AHCN), the underdevelopment of Nigeria’s mortgage sector in driving homeownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction. “The biggest problem of the mortgage sector in Nigeria is the high cost of

the very limited mortgage that is available. If they can develop a policy to ease housing finance, it will be impactful,” Wole Olabanji, the CEO of CoBuildIT, a real estate firm said. The high mortgage rate is considered as one of the key culprits of Nigeria’s housing challenge. A typical mortgage in Nigeria ranges between 7-10 percent for Federal Mortgage Bank of Nigeria (FMBN) and between 15-25 percent for commercial mortgage institutions, one of the highest in the world and the main reason the industry has become less attractive to many whose purchasing power was eroded by the 2016 recession. Nigeria’s economy continued to expand at a sluggish rate in the third quarter of 2019 after state data agency, NBS, reported a 2.28 percent growth for the period. Although that’s the fastest growth in four quarters, Continues on page 42

World leaders, businessmen, meet in Davos as WEF forum begins FRANK ELEANYA

t least 119 billionaires are converging on Switzerland to join bankers, politicians and other grandees for their annual pilgrimage to the Alps. The elite group, worth about $500 billion, includes regulars like Bridgewater Associates LP founder Ray Dalio, Blackstone Group Inc. Chairman Steve Schwarzman, JPMorgan Chase & Co. Chief Execu-

tive Officer Jamie Dimon and Africa’s richest man Aliko Dangote of the Dangote Group. Billionaires slated to attend hail from at least 36 countries. They appear on a guest list of more than 2,000 n a m e s, re p re s e n t i n g roughly 100 countries, for the World Economic Forum’s annual meeting in Davos. The event retains its enduring status as the premier networking hub www.businessday.ng

for the world’s wealthiest -- with its attendant flock of private jets. “I’ve been going since 1979,” said India’s Rahul Bajaj, who will be making his 40th appearance at the event. “It’s grown a great deal since then but I continue to get a lot out of the meetings, the sessions, the surroundings.” This year’s theme is “Stakeholders for a Cohesive and Sustainable World,” and panels include “Balancing Domestic and Glob-

al Inequality” and “Breaking Legal Barriers to Equality.” “The World Economic Forum in Davos is the only place of its kind where you can simultaneously meet heads of state, captains of global business and public opinion leaders,” Russian mining magnate Alisher Usmanov, an occasional attendee, said. “It is noteworthy that the forum has remained like this for half a century. This is a unique melting pot of ideas and opportunities.”

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he Federal Government plans to refinance up to N3.6 trillion local debts in 2020, according to Debt Management Office (DMO). The refinancing includes some N1.13 trillion worth of Federal Government Bonds and N2.452 trillion in Treasury Bills. Patience Oniha, DMO director-general, announced this at a press conference over the weekend in Abuja, saying the Federal Government would base its borrowings for the year around the regular FGN savings and sukuk bonds and might consider green bonds “if the conditions are right.” Government plans to launch a third tranche of sukuk bonds, but hopes it could raise up to N150 billion to enable it fund 44 road projects. The earlier two came at N100 billion each, and according to Oniha, did well. Federal Government 2020 budget projects some N2.175

trillion deficit, which authorities say will be funded through N850 billion new foreign and N744.99 billion new domestic borrowings. N328 billion will be sourced through multilateral/bilateral sources and some N252 billion from privatisation proceeds. “A lot of the external borrowing will be concessional,” she stated. Meanwhile, total debt stock comprising that for the Federal Government, states and Federal Capital Territory (FCT) reached N26.215 trillion as at September 2019. The debts size expanded by 2 percent in three months between July and September, and recorded at N25.701 trillion in June. She said the total debt stock included promissory notes totalling N821.651 billion, which had been issued to settle Federal Government arrears to oil marketers, and state government approved by both the Federal Executive Council and National Assembly.

Analysts see rates on hold as MPC meets this week ENDURANCE OKAFOR

head of the first Monetary Polic y C o m m i tte e (MPC) meeting for the year, analysts and economists in the financial services sector see no change in the key monetary policy stance of the Central Bank of Nigeria (CBN). The analysts expect the CBN to maintain the Monetary Policy Rate (MPR) at the current level of 13.5 percent at the end of the meeting on Friday, on grounds of inflation rate and wavy economy. The MPC, which has the statutory duty to manage the central bank’s interest and exchange rate policies, is scheduled to announce its decision at the end of a two-day meeting on January 23 and 24, 2020, according to a statement on the CBN’s website. The meeting, which held last in November 2019, was earlier scheduled for January 20 and 21 this year but was shifted by the apex bank without any disclosed reason. According to Ayorinde Akinloye, a research analyst at Lagos-based CSL, Nigeria cannot afford to ease rates as it could trickle into the OMO window which CBN currently uses to attract FX from foreign portfolio investors (FPIs) @Businessdayng

and could negatively affect exchange rate and reserves. “Meanwhile, I don’t think growth would be spurred by easing rates now; there are structural issues we need to take care off,” Akinloye, said. The central bank at the last meeting of 2019 retained the monetary policy rate (MPR) at 13.5 percent, asymmetric corridor at +200/-500 basis points around the MPR, cash reserve ratio (CRR) at 22.5 percent and the Liquidity Ratio at 30 percent. The decision by the apex bank was influenced by the positive macroeconomic indicators such as the growth in the GDP in the third quarter to 2.28 percent, a decline in the non-performing loan to a further 6.56 percent at end-October, an increase in the capital adequacy of banks and an increase in absolute gross credit, amounting to N1.169 trillion recorded between end-May and end-October 2019. Analysts at United Capital plc do not think the MPC will do much when they meet this week. They explained that the committee favoured the position of the apex bank to restrict local corporates and individuals from participaContinues on page 42

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Afreximbank signs term sheet for $190m facility to Made In Africa Inc HOPE MOSES-ASHIKE

frican Export-Import Bank (Afreximbank) on Friday in Kigali, the capital of Rwanda, signed a term sheet with Made In Africa Inc. (MIA) to provide the company with a $190-million facility to finance the acquisition of African Fabric Holdings BV, Netherlands, also known as Vlisco Group. The facility, broken into two tranches, will also be used to provide working capital to Vlisco group following the acquisition. Kanayo Awani, managing director of Afreximbank’s Intra-African Trade Initiative, signed on behalf of the bank, while Kojo Annan, Chairman and Founder of MIA, signed for the company during a ceremony held on the sidelines of the Creative Africa Exchange Weekend (CAX WKND) taking place in Kigali. Vlisco Group designs, produces and distributes fashion fabrics, especially of the African wax print style, for the West and Central African market and African consumers in global metropolitan cities. Its fabrics have grown into an essential part of African

culture, receiving widespread attention from the art, design and fashion worlds. CAX WKND, which is featuring more than 2,000 participants and 250 exhibitors from 68 countries, is organised by Times Multimedia and sponsored by Afreximbank and other partners, as the opening act of activities planned under the CAX Programme to bring together African creative talents from the music, arts, design, fashion, literature, publishing, film and television sectors. Afreximbank is the foremost pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was established in October 1993 by African governments, African private and institutional investors, and non-African investors. Its two basic constitutive documents are the Establishment Agreement, which gives it the status of an international organization, and the Charter, which governs its corporate structure and operations. Since 1994, it has approved more than $67 billion in credit facilities for African businesses, including $7.2 billion in 2018. Afreximbank had total assets of $13.4 billion as at 31 December 2018.

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At 11.98%, CBN has new inflation headache as MPC meets this week BUNMI BAILEY & MICHAEL ANI

he Central Bank of Nigeria’s (CBN) raft of policies aimed at boost lending may be paying off following an uptick in economic activities. But it has a much tougher headache to worry when it meets this week to determine the flow of credit, which is: higher inflation. Annual inflation, which measures the rate at which goods and services are sold, increased at a faster pace for the fourth consecutive months, as the impact of the border closure as well as the festive season, pushed food prices minimally. Headline inflation rose to 11.98 percent in December, up from 11.85 percent in November, to record its fastest increase in 19 months, the National Bureau of Statistics (NBS) said last week, citing broad price increases. The increase in the inflation rate was caused by sustained increases in average food and non-food prices. Higher inflation would raise the cost of living on Nigerians who have been faced with low income; reduce the real value of savings and investment, and increase the cost of raw materials, which are those the Monetary Policy Committee (MPC) would

… analysts forecast a ‘hold’ in MPR consider when it meets. “The CBN cannot afford to tighten the interest rate since the inflationary pressure is not coming from exchange rate liquidity,” said Johnson Chukwu, managing director, Cowry Asset Management Limited. “On the other hand, they also cannot afford to loosen due to the effect inflationary pressure could have on the exchange rate owing to portfolio outflows,” Chukwu said. For over three years, the central bank has used tight monetary policy to cushion the effect of high inflation after currency devaluation in 2016 pushed commodity prices to an all-time high of 18.7 percent. In its last meeting in November, the apex bank held the key interest rate at 13.5 percent, while rolling out other orthodox policies to boost growth in the economy. As members of the MPC meet this Thursday to decide interest rate, most analysts are upbeat that the apex bank will apply a wait-and-see approach to know the direction of the economy. “I expect the MPC to maintain the status quo as I do not see any reason to make the cut or in-

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crease the rates or even increase in the wake of higher inflation,” said Ayodeji Ebo, managing director/CEO, Afrinvest Securities Limited. There are indications that commodity prices will still head north as Africa’s largest economy continues on its stance to keep its land borders closed in what it says is aimed at tackling smuggling of rice and petrol. There are also signs that the implementation of the new increase in Value Added Taxes (VAT) to 7.5 percent would take effect February, after President Muhammadu Buhari last week signed the Finance Bill into law. Despite expectations of increased inflationary pressures emanating from the increase in VAT, full implementation of the minimum wage, hike in electricity tariffs amid rising food prices, the committee will likely keep monetary policy parameters at current level and continue to monitor the impact of their heterodox policies on macroeconomic variables, according to Gbolahan Ologunro, an equity researcher at CSL Stockbroker. “The odds are in favour of

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a ‘hold’,” Ologunro told BusinessDay. To boost growth in the economy, the Central bank set a minimum of 65 per cent that commercial banks must lend from the money they receive as a deposit. This has helped to boost lending to the real sector of the economy and has brought down the cost of credit, with the manufacturing sector being the biggest beneficiary. Nigeria’s economy expanded 2.28 percent in the third quarter of the year with improvements seen in telecommunications and manufacturing. The trade sector has the highest hit from the policy as the sector dipped further into negative, contracting 1.45 percent year on year from the negative 0.25 percent reported the previous quarters. The central bank in late last month barred domestic individual as well as non-bank financial institutions from participating from its N14 trillion OMO market, a move that has forced Pension Fund Administrators (PFAs), second largest players in the market after foreign investors, crowd into N2 trillion treasury bills market.

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news CIPM commits to deepen stakeholders’ engagement for better workplace experience

SEYI JOHN SALAU

hartered Institute of Personnel Management (CIPM), in reeling out its strategic objectives for 2020, reiterates its resolve to deepen stakeholders’ engagement for better workplace experience, to deliver prime experience for the overall business interest. According to the CIPM, its strategic objectives are derived from its current three-year plan updated in 2019 and runs into 2021. “I believe that the strategic objectives of CIPM for 2020 will be continually reiterated by the current leadership team led by the president/chairman of Council, Olawale Adediran,” Busola Alofe, the registrar/CEO of the CIPM, states. “Our long-term goal is to build the CIPM of our dream. We will achieve this by driving a number of priority areas, and I am certain that implementing the initiative in our current strategic plans will move us in leaps and bounds towards achieving those objectives,” Alofe notes. According to Alofe, the institute need top quality people to drive its strategic plans. Hence, the need to focus on the work, the worker and the workplace, and ensure that everything done by the CIPM in delivering its operational activities creates and deliver prime experience. “We will not be able to achieve stakeholders’ satisfaction or deliver prime experience if our own ways of working are not excellent. We need efficient and effective processes,” says Alofe stating that the institute will equally focus on its brand presence. On the ideal work environment, Alofe states that it is a place where human resource managers appreciates the fact that they are not just in business to drive HR practices; it starts and ends with the business. “So we need to understand the business objectives of each organisation. Then translate those objectives into the right people management strategies that will help achieve the objectives of the organisation.” The workplace in which people work is very important, she says, saying, “There are certain work environments that actually kill productivity. The resources needed are not available, and the culture is toxic.

What to expect from remodelling of Allen-Awolowo Way roundabout, Ikeja JOSHUA BASSEY

f you regularly commute on the popular Awolowo Way, Allen Avenue and Aromire Avenue, all within Central Ikeja, the Lagos State capital, you sure have an unpleasant tale to tell about the traffic situation around that axis. It gets frustrating during peak traffic hours - mornings and evenings which are often characterised by “mad rush” to get to work and return home after the close of work. The result is always a logjam

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at the Allen-Awolowo Roundabout, where motorists spend a considerable time to wriggle out of the gridlocks, assisted by the officials of the Lagos State Traffic Management Authority (LASTMA). This is the daily experience of commuters at this popular roundabout. But this ugly experience may soon be a thing of the past, as the Lagos State government is taking steps to address the perennial Allen-Awolowo Way traffic logjam. Commuters and motorists can, therefore, look with hope to an improved traffic flow

and reduced travel time as construction works to remodel the massive roundabout has since begun. The Allen roundabout helps motorists and commuters to connect key areas like the Lagos State Secretariat, Alausa; Aromire Avenue, Allen and Ikeja Under-bridge linking the popular Computer Village. The roundabout was, in 2019, identified as a major cause of heavy traffic buildup on the Awolowo Way and Allen Avenue, and therefore, recommended for remodelling. As should be expected, the

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statues of Obafemi Awolowo, first Premier of Western Region of Nigeria, and Fela Anikulapo Kuti, a Nigerian afro-beat legend (both late), erected at the roundabout, have been taken down to allow work to commence on the site. The headless ‘Liberation’ statue of Fela, and ‘Victory’ statue of Awolowo, according to officials, would be relocated elsewhere. The Babajide Sanwo-Olu administration last year identified 60 areas across Lagos where it hoped to modify to allow for better traffic flow and

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reduce travel time within the metropolis. The work is starting with four out of the 60 identified traffic prone areas. The first four include Allen, Maryland, Ikotun and 2nd Lekki roundabout. The remodelling entails removal of the affected roundabouts and separate streams of traffic through Traffic Signal Lights (TSL).The work will synchronise all TSLs through intelligent traffic systems which will recognise the densities of traffic streams and give priorities accordingly.

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The Metropolitan Club – If you think you are surrounded by idiots

Bashorun J.K Randle

gbamuche-Mba, whose focus was on security during elections, noted that: “Elections in Nigeria is just like going to war. In Port Harcourt during the last elections, I saw it all. I was there. INEC staff and sensitive electoral materials were being transported in armoured vehicles yet people threw dynamites at the moving armoured vehicles. Is this not war? What can better be described as war than this?” Therefore, in readiness for the November 16 governorship elections in Bayelsa and Kogi States, she said, “We are looking unto the political parties that they will be kind to the people of Bayelsa by doing what they are expected to do. “We are going to use smart card readers and where it fails, which I believe it won’t, we will come back again, because we are ready for this election and I pray that the political class will allow us do our work”. She however warned that INEC would record zero votes for parties in areas, where there are violence or ballot box snatching during the elections. “There will be no hijacking of ballot boxes, because if they are hijacked, the area is going to get zero votes,” AgbamucheMbu said, reiterating that the commission would work to ensure that the poll did not result in inconclusive election. But Zakari said that where it was evidently established that the people were disenfranchised, the election might be declared inconclusive, because there would be another election. According to her, “INEC doesn’t deliberately go out to declare an election as inconclusive, but where the people are disenfranchised and it is clearly so, the commission will have no reason than to postpone the election and conduct it the next day. So,

you can see why inconclusive elections are inevitable?” However, preparing the minds of the people for certain possibilities, Soyebi said one of the challenges that would mar the conduct of the elections in Kogi and Bayelsa States was the possibility of vote buying by the political parties. He said, “No doubt about it. In the Kogi State governorship election, money will flow like rivers but INEC would be equal to the task. Relevant security agencies will fish them out. We have a strategy to do this. The cat will not be let out of the bag now.” He pledged that there would be punctuality of personnel and materials as well as adequacy of electoral materials, including the smart card readers, vehicles and all that would be required for the election to run smooth. Pastor Monday Tom, INEC’s Resident Electoral Commissioner (REC) for Bayelsa, hinted earlier that the number of smart card readers for the state was 2,337, out of which 86 were faulty and 2251 functional. He also told the gathering the total number of registered voters in the state was 923,182, while the number of Permanent Voter Cards (PVCs) collected was 889,308. For the Kogi analysis, INEC stated that the state had registered 1,646,350 voters, but that the PVCs collected were 1,485,828 across all the 21 local government areas of the state. INEC further stated that there would be 2,548 polling units, 2,548 presiding officers, 3,508 voting points and 12,804 Assistant Presiding Officers. According to the commission, there would a total of 12,132 ad-hoc staff, including 255 Senior Presiding Officers, 26 Collection Officers and 240 Registration Supervisors.” By way of contrast, Britain held elections on 12th December 2019. Voting started at 8 am and closed at 10pm. Police were not involved. Neither were the military. There was no restriction of movement and no public holiday was declared. Even before voting was over, the exit polls indicated that the Conservative Party had won and Boris Johnson, the incumbent would be returned as Prime

Minister. Within a matter of hours, Jeremy Corbyn, the opposition leader had conceded defeat. All over England, Wales; Scotland and Northern Ireland – the principalities which constitute the United Kingdom, not a single election petition was filed. Neither were there reports of kidnapping, snatching of ballot boxes or setting of poll stations on fire. Strange country!! Where were their idiots?? Many of the founding fathers of the Metropolitan Club would have preferred an early exit to reading about child rape which is all over social media: “Adegboyega Adenekan, a school supervisor, has just been jailed for 60 years for defiling a two-year-old girl under his care. Sentencing him on Thursday, Justice Sybil Nwaka of the Ikeja (Lagos State) domestic violence and sexual offences court described the beast as “wicked”, conscienceless and an animal who is not worthy of walking on the streets of Lagos.” Indeed, some of the founding fathers of the club would have had to reflect on the efficacy of their strategy to sustain the standards of good governance – transparency, probity, integrity and accountability. Nothing could have prepared them for the front-page headline of “Daily Sun” newspaper of December 6, 2019. Headline: Auditor-general seeks sanction of NPA MD Accuses agency of contract award scandal of N7.5 billion “The Auditor-General of the Federation (AuGF), Anthony Ayine, has uncovered irregularities in the award, execution and payment for contract for Shore Erosion Control Works at Akipelai, Ayakoro and Otuoke towns in Bayelsa State at a contract sum of N7,503,344,599 by the Nigeria Ports Authority (NPA). Ayine, in his 2017 audit report of Ministries, Departments and Agencies (MDAs), said the gigantic contract was awarded via a letter with reference number: HQ/GME/CP/CON/R.16/067 dated March 22, 2012 with 14 months’ completion period. As at November 11, 2015, four payment certificates and an advance payment totalling N4,247,938,353.26, representing 56.61 per cent of the contract sum, had been paid to the contractor.

‘

Indeed, some of the founding fathers of the club would have had to reflect on the efficacy of their strategy to sustain the standards of good governance – transparency, probity, integrity and accountability

Review of documents and the Bill of Quantities (BOQs) under Bill No. 1 (general) attached to these payments revealed that : mobilization fee of N1,125,501,659.85 paid to the contractor, was supported by a conditional bank guarantee from Zenith Bank Plc. with a validity period of 365 days which expired on March 2, 2013, contrary to the provisions of Section 35 “1” “a” of the Public Procurement Act, 2007 and Financial Regulations 2933 “I” (2009) which only provide for submission of an unconditional bank guarantee or insurance bond. More than four years after expiration of the bank guarantee, the contractor failed to renew it and the balance of unrecovered advance payment stood at N539,452,959. The sum of N19.5 billion(sic) was paid for the purchase of three Toyota Hilux double cabin petrol engine vehicles. However, there was no evidence to confirm that these vehicles were purchased. The sum of N13.5 billion(sic) was “made” (sic) for annual running cost of the project vehicles, in which N6.75 billion was certified and paid to the contractor, but there was no evidence to show what the amount was used for. The report further revealed that N11.25 billion(sic) certified for compensation of properties to be affected by the project and paid per Certificate No. 3, had no records on how the money was utilised nor the beneficiaries involved. N12.5 billion(sic) provided for community relations, was certified and paid vide Certificate No. 3 with no supporting documents to validate the payment. N128 million provided for insurance of the works and insurance against damages to persons and properties, was certified and paid through Certificate No. 3 with No evidence that any insurance policy(s) was undertaken. The Principal Manager’s (QS) report on Interim Valuation Certificate No. 4 dated November 11, 2015, showed that the value of works executed as at the period was N3,903,668,868 representing 52.07 percent of contract sum.” Concluded Randle is Chairman/Chief Executive JK Randle Professional Services Chartered Accountants

Nigeria’s free trade zones could unlock Africa’s digital economy If technology and innovation will change Africa, and there’s no doubt that they will, governance must shift to stimulating opportunity, not stifling it. e are all waking up to the enormous potential of Africa becoming the emerging giant tech hub of the world. The evidence is everywhere: from news of a $360 million Chinese investment in Nigeria’s Fintech industry; to predictions that more than half of the world’s working population will live in Africa by 2035, and news that Twitter CEO Jack Dorsey will spend up to six months a year in Africa because Africa as he says, “will define the future.’’ As far back as 2016, Mark Zuckeberg, CEO of Facebook made a similarly bold remark in front of an army of developers in Lagos, Nigeria, “I am here,” he said, “because this is where a lot of the future will get built.” But while smart people around the world don’t doubt that the global future of tech will be built in Africa, the form this building will take remains uncertain. For one thing, the future of Africa’s cities and urban areas need much attention. By the turn of the century, a third of all people will be African. The population of the continent is expected to grow from its 1.2 billion today to 4.5 billion by the end of the century. Nigeria alone will be home to 400 million people. This is double the numbers who live here right now. More than 60 percent of these people will live in cities and

urban areas. At present Africa’s cities are ill-equipped to cope with the huge changes that are coming and that, many would say, that are already upon us. For example, Lagos, a tiny 110 square kilometre coastal city that’s threatened by climate change, is home to more than 17 million people. The Lagos population is projected to grow to more than 100 million by the turn of the century. Yet, Nigeria with a population of close to 200 million people has only seven cities accommodating more than a million people each. Contrast this to India that has 46 cities with populations greater than a million, or China with more than 100 cities with at least a million people each. Africa has an opportunity to build more sustainable cities for exponential population growth. However, unlike China and India, African governments lack both the time and the money to build these cities. It’s for exactly this reason that Andela is working (with a state government backed free trade zone in South Eastern Nigeria) to tackle this problem. We’re building a talent city: a charter city focused on the talent that will drive technology, innovation and the digital economy. This Talent City (its working name) will be a charter city focused on attracting technology and creating technology enabled jobs and will be run and managed within a free trade zone with its own www.businessday.ng

productivity-focused, entrepreneurial-cantered regulations and bylaws. Whereas the old Nigerian economy was built on agriculture and oil, today trade services and ICT comprise more than half of the country’s GDP. Yet Nigeria’s political class still makes policy as though agriculture and oil comprise the vast majority of our economy. Africa continues to be poor because its leaders maintain the illusion that Africa’s riches lie only in natural resources. Meanwhile they often ignore the continent’s human resources that have evolved to become the bedrock of its ICT and trade services-centred economy. If technology and innovation are going to transform Africa, and there’s no doubt that they can, then governance must shift to stimulate talent and opportunity, and not stifle it. Nigeria’s free trade zone laws give us a blank canvas (free of socio-political and protectionism). We have, in developing this talent city, an opportunity to develop policies that are data driven and evidence based, making it possible for us to ensure the best of African technology and innovation emerges and flourishes. This is the model that’s enabled Chinese cities like Shenzhen and Dalian to emerge as manufacturing capitals of the world, and Indian cities like Bangalore and Hyderabad to become the outsourcing capital of the world. Nigeria, despite its immense potential and talent, remains the

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Iyinoluwa Aboyeji poverty capital of the world. There’s no doubt that peripheral industries will develop around our talent cities. Our pioneer talent city is sited in one of Nigeria’s most beautiful and vibrant areas with an active tourism and entertainment sector. With an influx of businesses staffed by upwardly mobile young technology talent, there will be a resultant tourism and economic boom to the surrounding area. My hope is that this charter city model, already applied to good effect in cities around the world from Dubai to Kigali, will enable governance innovation. This is the most important form of innovation. It unlocks the potential of the continent and will ensure that all of our 4.5 billion people of the future can lead lives of purpose and prosperity. Aboyeji is co-founder of Andela, a Lagos-based global IT giant. He will be a speaker and panellist at the inaugural Charter Cities Conference. The Conference takes place on 17 and 18 March 2020 in Johannesburg. For more information, please visit https://chartercitiesconference.com/

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A nightmare on Lagos streets Patrick Atuanya

he nightmarish traffic jams that the 22 million residents of the mega city of Lagos have to navigate, costs the city some N42 billion ($116 million) per annum in economic losses, according to estimates by city officials. The costs in terms of mental health, sanity, noise and environmental pollution is sadly much higher. Everyday more than 8 million people, moving in 5 million vehicles traverse a patchwork of just 9,100 roads. As a result, Lagosians end up spending an average of 30 hours in traffic each week -- or 1,560 annually -- while drivers in Los Angeles and Moscow traffic spend only 128 and 210 hours respectively per year. It has the dubious ranking of being the 3rd most stressful city in the world (2017), just behind Kabul, Afghanistan and Baghdad, Iraq. The blame for this horror show is certainly enough to go round, from a Federal Government that looks increasingly inept and unable to tackle the crises and Gridlock in roads leading to and from the Apapa

and TinCan Ports to the inability of previous state Governments to complete at least one major rail line that would have eased the number of vehicles on the overwhelmed roads. Compare this state of total irresponsibility to progress being made in megacities in faraway places like Jakarta, Indonesia or even cities closer to home like Abidjan. Jakarta opened its first Mass Rapid Transit rail line last year. The project, first mooted in the 1980s (just like Lagos’ stillborn metro system truncated by a military government headed by the current President), finally got off the ground in 2013 after President Joko Widodo, then Jakarta governor, secured funding and approval. The first phase, built at a cost of $1.2 billion, will connect 13 stations along 16 kilometres of line from the south of the city to the business district. It is expected to move 170,000 passengers a day for 10,000 rupiah (71 cents) or less per trip. In the next phase, Indonesia plans to spend about $40 billion to extend Jakarta’s metro network seeking to add an additional six lines and building 230 kilometres by 2030, from only about16 kilometres today. Meanwhile in neighboring Abidjan, the commercial capital of Ivory Coast, the Government in October, signed a $1.5 billion agreement with a unit of Bouygues SA for an urban railway known as Metro d’Abidjan to ease congestion. The 37-kilometer railway project is expected to carry 530,000 passengers daily, once complete.

Lagos is the largest city in the world without a functioning rail system, and has been trying to construct one since the 1980s without success. After being conceived by then Governor of Lagos state, Lateef Jakande, in 1983, the initial Metroline project was scrapped in 1985 by Muhammadu Buhari, at a loss of over $78 million to the Lagos tax payers. In 2007 the Lagos light rail project was resurrected by the then Governor Babatunde Fashola, after the government developed a transportation master plan that will integrate road, water, rail, and cable-car transportation to provide one of the most efficient systems of transportation in the megacity. Seven train lines were planned to link all parts of the states: Red, Blue, Green, Yellow, Purple, Brown and Orange , and the contract for the Blue Line (the 27-kilometre Badagry line running from Okokomaiko to Marina via Iddo) was awarded at a cost of $1.2 billion or about N190 billion (at the market exchange rates of the time). The Blue Line was supposed to be fully ready in 2012 but eight years after the supposed start date, construction is not yet complete. In August 2018, the Lagos Metropolitan Area Transport Authority or LAMATA signed an agreement with French manufacturer of rail transport equipment, Alstom SA to conduct a review of the rail lines. After the review of the rail project, the state government said the Blue Line, would now be ready for pas-

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The miserable traffic in Lagos is partly as a result of the city’s overwhelming importance in the nation’s economy. The metropolitan area generates almost a fifth of Nigeria’s annual gross domestic product (GDP)

Atuanya is the editor of BusinessDay. Email: patrick.atuanya@businessday.ng Twitter: @patrick_atuanya

Inconsistencies in the macro space

he Nigeria macro space has been turbulent over the last decade. We have seen inflation go from single digits to as high as 18 percent and back down. We have seen very volatile exchange rates with black market rates moving from 199 per US dollar to almost 500 per US dollar before falling down to 360. This kind of turbulence has not been great for the economy as you can guess. Growth slowed from around seven percent to recession and is current stumbling along at 2 percent. Unemployment continues to climb and climb. Of course, we cannot ignore the oil price shock that happened over that period with oil prices dropping from a high of above $100 per barrel to as low as $30 per barrel in a few months. Still, lest we forget, the oil price crash was four years ago. The monetary policy authorities have had to respond to all that by raising interest rates higher and higher. In 2010 the monetary policy rate was 6 percent. It is currently 13.5 percent in principle. All this has created a dilemma for the central bank. On the one hand the actual macro conditions require that rates remain relatively high. I say relatively for a reason and I will get back to

that. The central bank also needs higher rates to continue to incentivize foreign exchange inflows. A policy I don’t agree with but that is neither here nor there. Higher rates are however not great for the economy. Especially an economy that really needs to be growing much faster. Then there is the problem of government debt financing with higher rates implying higher debt servicing costs limiting its non-debt spending plans. How have they dealt with this dilemma? Essentially by trying to eat their cake and have it. The market for risk-free securities was essentially split into two with the OMO market on one side and everyone else on the other. The OMO market has chugged along with relatively high rates and securities returning near 14 percent. For foreign portfolio funds, as long as they believe they can repatriate their returns in dollars, then everything continues as normal. For everyone else though, rates have effectively collapsed. As at last week rates for treasury bills were hovering near four percent. Banks have reportedly cut their rates for fixed deposits for some customers to as low as one percent. Effectively, for everyone besides banks and www.businessday.ng

senger operation by 2022. It is clear from the above that with the devaluation of the naira since 2007, and movement in the Dollar/ Naira, Foreign Exchange (FX) rate since then, the project estimates are probably no longer feasible. The miserable traffic in Lagos is partly as a result of the city’s overwhelming importance in the nation’s economy. The metropolitan area generates almost a fifth of Nigeria’s annual gross domestic product (GDP). This is why the Federal Government must intervene in helping the state build out its transport infrastructure just as is being done by the national governments in Jakarta, Abidjan or Addis-Ababa. A functioning rail-line built by the Federal Government in the middle of the country (the Abuja – Kaduna, light rail), is estimated to have led to improved trade and linkages between the two cities. Financing something similar that improves transportation links within Lagos, would have led to an impact probably 10-times greater for the Nigerian economy. In that regards, the recent $22.7 billion loan request by the Federal Government was disappointing as the transportation projects had outlays for an Abuja Mass Rail 2, expected to cost $1.25 billion, but had zero funding plans for any rail project in the largest city and sub-national economy in the country!

ECONOMIST foreign portfolio funds, the options for safe returns have collapsed. But there is a problem. Earlier on I said rates were “relative” for a reason. In the macro space we do not really care about the nominal rate. We care about the real interest rate. This is the return after accounting for inflation. Think about it this way. You loaned Emeka N20,000, which you could have used to buy one bag of rice today. In one-year Emeka pays you back the 20,000 but the price of rice has increased to N25,000. Inflation happened. In nominal terms you have not lost any money. Emeka paid you back the 20,000 intact. But in real terms you have lost out because that money could buy you one bag of rice when you loaned it out but now it cannot buy it. You would have been better off just buying the rice and storing it. Real interest rates are what really counts. Once you consider the fact that the current inflation rate is near 12 percent and climbing then interest rates of 4 percent start to look problematic. The implication of such low rates is that people who have money are better off not saving. But it does not end there. The risk-free real interest rate of near negative 8 percent is significantly lower than

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NONSO OBIKILI

the equivalent for the United States, Germany, and Japan. Which in essence is saying that Nigeria is a less risky borrower than the United States, Germany, and Japan. Is that really true or are we incentivizing people to find out. The current macro space is inconsistent with the reality of the Nigerian economy and such inconsistencies tend to create problems. Problems which will mature sooner or later. The interest rate is a price and like every other price problem arise if it is too high or too low. If the central bank really wants to move into a low nominal interest rate environment then the thing to tackle is inflation. But that is easier said than done. Dr. Obikili is the chief economist at Business Day

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Monday 20 January 2020

EDITORIAL Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

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

Bashir Ibrahim Hassan

Lagos roads infrastructure and environment

fter what looked like “waiting for Godot” or sp en d ing eternity watching the weather, the Lagos State government has swung into action with its graders and rollers for the repair and rehabilitation of roads within the metropolis. And they have, at the moment, touched many roads. Before now, the condition of roads infrastructure in the state was bad and no location, including the highbrow areas, was spared. The situation was really dire and the need to save both the environment and the residents, who were already edgy, was urgent. Like most residents of the state, what we have seen so far gladdens our heart and we are, therefore, commending the state government for the work well done. For us, what is being done is for the collective interest of the state and its residents whose wellbeing and prosperity should be the concern of the state and vice versa.

We also commend the state government for the serious attention two major projects in the state are receiving after their apparent abandonment by previous governments. These are The Pen Cinema flyover and the Lagos Badagry Expressway. As at Friday, January 3, 2020 when Governor Babajide Sanwo-Olu went on an inspection of the Expressway and Pen Cinema Flyover, the Agboju to Commerce Honest part of the former had been accomplished whereas there’s an assurance that pen Cinema Bridge shall be delivered in six months. The social and economic impact of projects like these can hardly be over-emphasised. The Expressway, particularly, has the potential to facilitate regional trade and commerce, increase real estate activities in that axis, create jobs and, by extension, increase government revenue and grow its economy. This explains why we are happy with the special consideration given to roads infrastructure in the state’s 2020 budget allocation where N117

billion have been planned for the sector. That, in our view, is forward-looking given the multiplier effect that expenditure on toad projects has. We, however, have our concerns. The pace of work on the roads and other project sites is too slow for the enormous work that needs to be done. The rot is deep and that is understandable in a state where for whole two years governance gave way for politicking, leaving the environment in the hands of destructive scavengers. G o v e r n o r S a nw o - O l u i s hereby reminded that time is running out and there is still so much to be done, especially in the hinterland where life is difficult and miserable for lack of good roads infrastructure. With its over 20 million population, Lagos is a very small state landmass-wise. This largesize population is crammed into an estimated 3,577 square kilometres, which is just 0.4 percent of Nigeria’s 923,768 square kilometres total land area. This is why Lagos environment is choking, especially at the city centres where everybody wants

to live, work and play. We are calling on the state and its authorities to move faster, higher and stronger. They need to do more and do so with greater urgency. It is pertinent for us to tell the governor that the excuse on rainy season does not hold and will no longer serve. Time is now for him to act before another bout of rains. It is pertinent for us too to remind the state government that while it is true that Lagos needs new roads, it should do well by evolving a culture of maintenance which, in our view, is even more important. The state should prioritise roads infrastructure, considering that its economy is a function of the ease, duration and cost of movement within the state. Expectation is that motorists and commuters alike should not spend all their day’s income on transport fare. Motorists don’t hav e to spend quality man-hour commuting from their residences to their work places because that affects productivity and, by extension, the GDP and economy of the state.

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Monday 20 January 2020

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Good capitalists give back to society, Nigerian billionaires can do more global Perspectives

OLU FASAN

ast year, the Financial Times launched what it called “the new agenda” on capitalism. The FT started by describing free market capitalism as “the foundation for the creation of wealth, which provides more jobs, more money and more taxes”, and has spectacularly reduced poverty and raised living standards worldwide. However, the newspaper argued, the liberal capitalist model is now under fire. But why? Well, because capitalism’s seeming focus solely on maximising profits and shareholder value is seen by critics as myopic and wrong. Thus, instead of “shareholder capitalism”, some are now calling for “stakeholder capitalism”, which considers not just shareholders’ interests but also the interests of other groups, including the community. “The long-term health of free enterprise capitalism will depend on delivering profit with purpose”, the FT concludes, adding: “It is time for a reset”! But the agenda to “reset” capitalism is controversial. Recently, Warren Buffett, the chairman and CEO of Berkshire Hathaway, came out strongly against it. Buffett’s intervention is strange because he is not only one of the world’s top billionaires, with an estimated net worth of $89bn, but also one of the world’s most generous philanthropists, who has given billions of dollars to charity. The FT calls him “capitalism’s kindly grandpa”. So, why is he opposed, as it seems, to the concept of corporate social responsibility? Well, Buffett’s argument is that the only duty of a company’s management is to increase the value of the shareholders’ shares and that it’s not up to corporate

managers to spend the shareholders’ money on environmental or social issues. Shareholders can spend their dividends on any environmental or social issue they like, as Buffet himself does by donating billions of dollars to charity, but corporate managers should focus on maximising profits and shareholder value. Put this way, Buffett is not opposed to corporate social responsibility but wants the decision to be made by shareholders themselves, not by corporate managers. But his critics argue that companies have a duty to bring about a better society through social activities, otherwise they would lose the moral licence to operate. So, who is right: Buffett or the moralisers? Well, both are right, but the moralisers have a stronger case. Let’s turn to our authority: Adam Smith, the father of capitalism, himself! To be sure, Adam Smith was strongly in favour of the profit motive and even the greed or self-interest that underpins it. As he famously said in The Wealth of Nations, “It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own interest”. In other words, no entrepreneur or capitalist starts a business for charitable activities; rather, their primary motive is to make money, a lot of money! But Smith argued that with that self-interested desire to make money, the capitalist ends up promoting the interest of the society as well. But how? Well, if an entrepreneur wants to make a lot of money, he or she needs to produce what society wants and can afford. For instance, broadband internet, computers and mobile phones make lives enjoyable and thus benefit society. Those producing them become very rich as a result, and if they want to be richer, they must improve the quality of the products and make them widely available at low prices. In doing so, they become extremely rich, but also create jobs and pay taxes. Surely, by producing life-enhancing goods and services, and by creating jobs and paying taxes, the entrepreneur is promoting the public interest, even without doing charitable activities. But there are two snags. The first

is about fair competition. What if the entrepreneur is benefiting from rentier or crony capitalism? What if he or she is operating effectively as a monopoly, and enjoys protection in the domestic market, which allows him or her to make excessive profits and thus become super rich? What if the entrepreneur has so captured the state that policies are made at his or her behest and not in the interest of the whole society? And what if the entrepreneur is not even paying the right amount of tax? Well, this is not Adam Smith’s capitalism. Rather, it is, as Martin Wolf wrote in the FT, “capitalism rigged to favour a small elite”. And it is that kind of capitalism that makes people angry about capitalism! But the true capitalism is free enterprise capitalism, the emphasis being on the word “free”. Which is why Adam Smith anchored capitalism on competition and proper regulation. So, any true defender of capitalism must be a strong believer in, and advocate of, fair competition underpinned by sensible regulation. Which brings us to the second issue. Even if a company or an entrepreneur is operating fairly, producing life-enhancing products, creating jobs and paying proper taxes, that may not be enough. And this is where social corporate responsibility comes in. We live in a world where there is so much poverty, inequality and social degradation. In that world, it doesn’t look good if large companies and billionaires simply turn a blind eye. Before Adam Smith wrote The Wealth of Nations (1776), he wrote The Theory of Moral Sentiments (1759), in which he argued that pity or compassion drives the emotion we feel to the misery of others. “That we often derive sorrow from the sorrows of others is a matter of fact”, he said. Maybe he was being too optimistic, but the truth is that the capitalism that is not compassionate is not true capitalism. After all, as the Bible says, to whom much is given, much is expected! So, what does all this tell us about Nigerian billionaires? The first is that rentier or crony capitalism is the dominant form of capitalism in Nigeria. Few became billionaires without special favours from the state. Indeed, former President Olusegun Obasanjo once boasted that he created 25

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So, what does all this tell us about Nigerian billionaires? The first is that rentier or crony capitalism is the dominant form of capitalism in Nigeria. Few became billionaires without special favours from the state

Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

Border closure: Impact on the Nigerian economy

he federal government of Nigeria closed the land borders to the country on the 20th of August 2019 with a view to curtailing the smuggling of goods into the country from neighbouring countries as well as ensuring compliance with existing trade rules as to how trade should be conducted. Statistics show that there is probably very little to worry about since the volume of intra-Africa trade is low and most of the trade by African countries is done with countries outside the continent. According to the Economic Development in Africa Report 2019 publication by the United Nations Conference on Trade and Development (UNCTAD), Intra-Africa trade was about 16.6 percent of total Africa Exports in 2017 which is low compared to 68.1 percent in Europe and 59.4 percent in Asia. This statistic is somehow misleading though as it fails to capture the value and volume of the informal trade that takes place amongst the African countries. This does not also take into cognizance the amount of smuggling that goes on across the porous land borders. Benin is one of the countries that border Nigeria and has a population of about 12 million people. From a trade perspective, data from the Thailand Rice Export Association shows that Benin has been the largest importer of rice from Thailand for some time now. To put this in proper context, Benin imports more rice from Thailand than even the most populous country in the world, China. It is clear that Benin does not have the capacity to consume the quantity of rice she imports which means that what they

import is most likely repackaged and exported to the countries closest to them. The countries that share border with Benin include Nigeria with a population of about 190 million, Togo with a population of about 7.8 million and Burkina Faso with a population of about 19.19 million as at 2017 (World Bank). Nigeria is several times the size of Benin and even the other countries bordering her which makes Nigeria the most likely destination for the rice imported by Benin. This however does not reflect in Nigeria’s import figures which provide further credence to the fact that this is most likely smuggled into the country from Benin. A close consideration of the volume of petrol consumed in Nigeria shows clearly that a substantial part of it finds their way to neighbouring countries and this makes economic sense. According to a research published by SBMIntel in August 2019, the price of petrol in Nigeria is $0.40 (N145/litre) while the price in neighbouring countries is more than double that figure. In economic terms, goods will normally move to the location where valuation is at its highest and given the porous land borders, there is basically no restriction whatsoever on the movement of goods across the borders and petrol marketers seek to maximize their profit by simply moving the goods across borders. The Nigerian Immigration Service says that there are more than 1,400 illegal border routes across the country which means that there are several points where petrol can be smuggled out of the country. There is also the part of the poor security around the borders and the high level of www.businessday.ng

corruption amongst immigration officers. There are some advantages to this border closure but there are lots of disadvantages as well. One major advantage is the increase in government revenue collected via custom duties. The Comptroller General of the Nigerian Customs, Col. Hameed Ali (Rtd.) informed the National Assembly in October that the Nigerian Customs has been collecting an average of between 4.7 billion and 5.8 billion in daily revenue since the border was closed which is way higher than what was obtainable previously. The federal government of Nigeria is in dire need of funds at the moment as can be seen in their aggressive drive to generate funds in recent times as evident in the proposed increase in VAT and the stamp duty already implemented on POS payments above N10,000 among other strategies of government in the offing. Another advantage is that it helps local production by making local goods comparable in price with other imported goods which come into the country via other channels which are still open as the importers will pay the applicable tariff on these goods which will increase the price. It also reduces the volume of goods which find their way into the country thereby providing ample opportunity for local producers to sell their products to local consumers. The disadvantages of the land border closure include increase in the price of staple foods in Nigeria especially rice which is one of the most popular foods in the country. It is a known fact that many states in Nigeria are yet to implement the minimum wage for workers and any increase

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billionaires. “My aim when I was in government was to create 50 Nigerian billionaires. Unfortunately, I failed. I created only 25”, he said. But market forces, not presidents, should create billionaires. But what about taxes? A famous British politician, Peter Mandelson, once said that he was “intensely relaxed about people getting filthily rich as long as they pay their taxes”. So, are Nigerian billionaires paying their taxes? Well, no! Tunde Fowler, the former chairman of the Federal Inland Revenue Service, FIRS, was once quoted as saying that “over 6,772 billionaires don’t pay tax”. If true, that’s really sad! But what about philanthropy? To be fair, Nigerian billionaires are engaged in philanthropical activities, with some donating to several causes, such as Femi Otedola’s N5 billion donation to the Save the Children Fund, Aliko Dangoke’s donation towards the Ebola crisis or Tony Elumelu’s entrepreneurship programme. But, let’s face it, compared with their counterparts elsewhere, Nigerian billionaires are not doing enough to help tackle poverty and inequality in this country, dubbed the “poverty capital of the world”. A few years ago, the Chinese government launched a programme to end extreme poverty. Chinese billionaires and conglomerates immediately piled in to support the programme, with the tech giant, Alibaba, pledging to spend RMB 10 billion in rural areas. Of course, it is the government must pursue sensible policies that help create wealth and spread it more widely to reduce extreme poverty and inequality. But those who became billionaires under the current imperfect system should contribute to reducing the level of misery in Nigeria. So, the FT is right. So is BusinessDay in its recent restatement of its commitment to free enterprise. Both are following in the footsteps of Adam Smith. Capitalism must have a human face, and, for me, Nigerian billionaires should give a lot more back to this country.

Philip Oguntoye in staples or any other product for that matter will make many Nigerians worse off. Also, local farmers were not particularly ready for the sudden increase in demand that came about as a result of the land border closure and have not been able to react fast enough to take advantage of it. Another major disadvantage is the negative effect it has on informal trade that take place across the land borders. It is almost impossible to estimate the value and volume of the informal trade that takes place across the land border since there is no available data but without doubt, this will run into several millions of naira on a daily basis providing several thousand with a daily means of livelihood. The importance of this informal trade must not be underestimated as it is the major source of funds for many and the Federal Government is not able to provide enough jobs or opportunities to reduce the adverse effect of the land border closure. In essence, there are both advantages and disadvantages to this land border closure. It is difficult to ascertain which outweighs the other but one thing is for sure, the government cannot continue to make the citizens pay for their inefficiencies. It is the duty of the government to secure and safeguard the land borders and their inability to effectively do this should not result in a measure with adverse effect on the citizenry especially with no palliative or prior information to prepare them adequately for the closure. Oguntoye has background in Economics and spent about 8 years with Citibank Nigeria Limited.

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Monday 20 January 2019

BUSINESS DAY

cityfile Kwara: Police prosecute 275 suspects for murder, kidnapping SIKIRAT SHEHU, Ilorin

wara State police command says it has arrested and prosecuted 275 suspects in cases of armed robbery and kidnapping. Kayode Agbetokun, the Commissioner of Police, Kwara command, who disclosed this while briefing journalists, said the most of the cases did not take place in the state as the suspects committed the offences from different areas and escaped to Kwara for cover. He said: “We have arrested a lot of them, we transferred some of them back to the states that have jurisdiction over the cases and we have prosecuted some here too,” said the CP. He disclosed that a suspect from Katsina, Adamu Bawa, arrested in Kwara, while another, Jamiu Sulaiman, who murdered his friend in Lagos, took his tipper truck and ran down to Ilorin for cover, has been apprehended. The arm he used in committing the crime has been recovered from him and he will be transferred to Lagos where he committed the offence,” he added. Speaking on why the suspects have chosen Ilorin, Kwara State as cover after committing crime elsewhere, he said: “It is not only in Kwara State that you see suspects running down for cover. Even those who commit offence here in Kwara would run down to other states for cover, so it cuts across all the states as we arrest suspects that are running down here for cover, so other commands too are arresting suspects who run to their commands for cover.” The command also paraded 16 suspected land grabbers, who breached public peace at Egbejila in Ilorin on Monday, January 13, 2020. The police chief explained that the suspects did not just disturb the public peace but also macheted a policeman who intervened in that crises. “The police don’t intrude into land matter that is not our case; we are not concerned about that. It is only when there is threat to life or violence in that area that we now move in. “In the case of Ebgejila, the police were not invited until some people started macheting other people and they did not just machete, they even disposed those people of their properties which actually amount to armed robbery because they were armed while they unleashed the violence on these people,” the CP said.

EFCC nabs 6 over internet fraud in Ilorin

he Economic and Financial Crimes Commission (EFCC), Ilorin zonal office, has arrested six persons in connection for alleged involvement in the offence bordering on internet and other fraud related offences. Spokesperson of the EFCC, Wilson Uwujaren, in a statement, weekend, named the suspects to include Atanda Femi Benjamin, Atoyebi Samson, Olapade Oladimeji Solomon, Amoo Saheed, Lawal Opeyemi Mubarak and Sadiku Muniru Dolapo. “They were arrested in the early hours of Thursday, Jan. 16, 2020 near Kwara State House of Assembly, in Ilorin, based on intelligence reports over their involvement in internet fraud. “The suspects have confessed to the crime while being interogated by the operatives of the commission,” Uwujaren said. He listed items recovered from the suspects to include three exotic cars, Laptops, mobile phones among others, adding that they will soon be charged to court. NAN

Fire fighters battling to save tanker truck which caught fire on Ijora-Apapa bridge in Lagos on Friday.

Pic by Olawale Amoo

One year after, foundation offers 34,000 eye surgeries to indigent Nigerians HARRISON EDEH & GODSGIFT ONYEDINEFU, Abuja

ne year after inauguration by President Muhammadu Buhari with the charge to close the gap in accessing affordable eye care services and remove the financial burden on poor patients in Nigeria, the Tulsi Chanrai Eye Foundation has reached out to over 34,000 patients with free and subsidised eye care services, treatment and surgeries. Kannan Narayanan, director at the eye foundation speaking at a press conference in Abuja, said due to the huge gap in accessing affordable eye care services in Nigeria, the Eye Hospital which began operation in January 2019, was built with a target to reach the indigent patients in Nigeria. The director added that the specialty eye hospital has also performed more than 700 subsidised eye surgeries, treated more than 20,000 out-patients and conducted 96 rural eye camps where it screened over 14,000 persons

within its one year of operation. According to Narayanan, the objective of the hospital is to offer services at a subsidised cost to those who can pay and offer free services to the poor. He said the subsidised tariffs from those who pay are used to fund services for the poor. “We conduct surgeries free for the poor, we provide life transforming services. It is free from their door-step back to their door-step. We pick themup,accommodatethem,providethemfood, givethemthemedicineandtakethemback.Thirty days after the surgery we go back for a review. “Services we give to the poor are the same for the paying patients. There is no distinction and the feedback has been very encouraging,” he said. Narayanan explained that the Tulsi Chanrai Foundation (TCF) was formed in 1992 to help the less privileged with interventions in three areas to include primary health care, water rehabilitation and eye care. He said the TCF since inception has conducted 124,000 surgeries to the poor and 70 percent of its operations free. Narayanan, however, noted that 1.8 million

Nigerians are blind and many still need to be reached and called for more support and donations. He hinted that the foundation plans to establish satellite units across the country to reach more people. Deepak Kumar, a consultant ophthalmologist at the Tulsi Chanrai Foundation Eye hospital observed that glaucoma and cataract is high in Nigeria than in other countries across the world due to ignorance and the high cost of treatment which most patients cannot pay for. Kumar also said that a high number of patients with these diseases are in need of surgery and warned that diseases when not diagnosed early and treated results in blindness. A beneficiary of the foundation, Rabiu Ali who spoke to BusinessDay said she has been suffering from cataract for two years but had no money for treatment until she heard about the hospital from a friend who was also a beneficiary. “I did not pay for this treatment. They came and picked me from my house and performed the cataract surgery on me. I am very grateful to this foundation,” Ali said.

Police recover 9 trafficked children in Enugu

ine trafficked children have been rescued just as two suspected child traffickers who specialise in moving children from Plateau State in North Central zone to River State in South-South zone are now in police net in Enugu. The Commissioner of Police (CP), Enugu command, Ahmed Abdurrahman, who paraded the two suspects, at the weekend, said that they were intercepted trafficking the nine children on January 4, 2019. According to the CP, the suspects and the children were in a luxury bus travelling from the northern part of the country. Abdurrahman said that they were intercepted at Orba check-point in Udenu council area of Enugu State by the army troop “Operation Atilogwu Udo 1’’. The police chief explained that the army authorities handed over the victims and sus-

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pects to the command for further investigation. The nine children- four girls and five boys, ages between two year and 13 years, were recovered from the suspected child traffickers. He said that one female suspect was moving with the children in the luxury bus before the interception. “We also have another suspect, who arranges the children being trafficked for Nwachi from Barkin Ladi council area in Plateau State,” he said. The CP, however, said that the police were still tracking the end receiver of the trafficked children, who allegedly runs an orphanage in Port Harcourt, River State. “This is a type of organised crime where children are trafficked from the northern part of the country to the south-east and southsouth. This syndicate runs their illegal business using orphanage as a cover-up.

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“We have reached and contacted the parents of the trafficked children and some said that they gave their children to the (suspect) on condition that he will provide better welfare and education for them. “Some other parents said that they did not know when their children moved out of their homes and they have declared them missing for some time now. “While at the end receiver’s point, only God knows what these children are used for; some might be used as sacrificial lambs, child labour; and others subjected to a lot of criminal activities. “Parents especially people in Plateau State should be wary of the where about of their children. Parents should endeavor to take care of their children themselves,’’ he advised. The police chief said that the children would be handed over to their parents after investigation.

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Monday 20 January 2020

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Monday 20 January 2020

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On trial

Lessons from a radical education experiment in Liberia The messy reality of trying to improve schools in a poor country

N 2016 GEORGE WERNER faced an unenviable task. Liberia’s education minister was in charge of one of the most difficult school systems in the world. More than a decade of civil war and an outbreak of Ebola in 2014 had stopped many children from going to class. Those who did learned little. Just 25% of Liberian women who completed primary school could read, one of the lowest shares anywhere. Mr Werner’s budget was a mere $50 per pupil per year. Many teachers on his payroll were “ghosts” who did not exist but somehow kept on drawing salaries. So Mr Werner signed off on one of the boldest public-policy experiments in recent African history. He outsourced 93 primary schools containing 8.6% of state-school pupils to eight private operators. Five charities and three companies were monitored in a randomised controlled trial (RCT). Researchers tracked test scores in the operators’ schools and nearby government ones. More than three years later, the results are in. They reveal the messy reality of education reform in one of the world’s poorest countries. On average children who began the study in outsourced schools learned more than those in government ones. But those gains were “modest”, says Justin Sandefur of the Centre for Global Development. Pupils beginning in privately run schools could on average read 15 words per minute three years later, versus 11 in state-run classrooms. Any boost is welcome, but the average reading level in the pilot schools is still behind the 45-60 words per minute deemed necessary to understand a simple passage (and far behind the more than 100 words per minute that peers in rich countries can read). Improvements in maths skills were of a similar magnitude. Unspectacular results are perhaps unsurprising. Running a school in Liberia is hard. Operators talk of building classrooms from scratch and being unable to reach schools during rainy seasons. Unlike in, say, charter schools in America, staff members were mostly recruited from the existing pool of teachers. Many were badly educated. Operators could not fire

poor performers or reward good ones. They had an advantage nevertheless. With the help of philanthropic donations they could supplement the government’s budget of $50 per pupil—almost all of which goes on teachers’ salaries. In the first year they spent on average about $300 per pupil beyond the government’s contribution. Two years later that amount was $119. The figures suggest that after spending on startup costs, operators learned to do things more cheaply. Though this was more true of some than others. The biggest spender was Bridge International Academies, a company that opened its first schools in Kenya in 2009. It improved scores, but at a cost of $161 per pupil after three years. Children were also more likely to drop out of its schools. The case of Bridge does, however, point to one of the advantages of the study. Researchers were able to look at the performance of eight different

operators, with eight different models. In theory that diversity allows them—and, more importantly, Liberian policymakers—to decide which approach worked best, and why. Three of the operators had no effect on pupils’ results whatsoever. The other five did improve scores. Some had downsides but two operators come out of the evaluation with their reputations enhanced. One is Rising Academies, which was founded in Sierra Leone in 2014 to teach children during the Ebola crisis. In June a research paper found that Rising pupils in that country learned as much in one year of schooling as peers in government schools learned in more than two. One reason for its success in both Sierra Leone and Liberia is that “we are willing to work with the grain of the system,” says Paul Skidmore, Rising’s chief executive. In Liberia it gave teachers coaching and feedback. Rising also spent more

time than other operators talking with parents about, for example, why their children skipped school. Another success was Street Child. This was the cheapest operator ($37 per pupil per year on top of the government’s spending) that improved results. “Ensuring that our programme was sustainable and that Liberia could afford it was always the priority,” says Tom Dannatt, the charity’s founder. Whereas some operators splashed out on technology, Street Child kept things simple. Teachers would at times trace out words in the dirt with a stick. Some development types are unimpressed with Liberia’s experiment, pointing to how far behind many pupils remain. Yet one can be too cynical. Running such a programme in Liberia was always going to be messy, argues Mr Skidmore. Donors often say they want projects to be quick, cheap, rigorously evaluated and

under the control of local politicians. Liberia’s scheme was all of that. It cost far less than a typical project (using just $23m of donor cash); it was set up in less than a year; and it was subjected to a RCT. It also survived a change of government. That hints at another success: the project was seen as useful by Liberian policymakers. Through the scheme Mr Werner and his successor were able to glean insights from school operators who would not otherwise have come to the country. The government is now encouraging those who improved scores to take on the running of more schools. Rising began with just five; today it has 87. Several African governments are mulling similar “public-private partnerships”. If designed well, they could help hundreds of thousands of children. But it is not only children who must learn lessons through these experiments. Policymakers must do so, too.

Monday 20 January 2020

BUSINESS DAY

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Masterstroke or madness?

Donald Trump wants to curb Iran. Has he gone about it the right way? He may have deterred conventional attacks, but goaded Iran to build a bomb faster

HE KILLING of Qassem Suleimani by an American drone on January 3rd threatened to bring the United States and Iran closer to war than at any time since the hostage crisis in 1979. In a part of the world that has lost the power to shock, the audacious killing of Iran’s most important general, ordered by President Donald Trump, sent Iran reeling. In public ceremonies millions of Iranians put aside their discontent with the regime to mark General Suleimani’s death. Blood-curdling threats of destruction issued from the Middle East, echoed by warnings of mayhem from Western experts. And yet a retaliatory missile strike on two American bases in Iraq five days later killed nobody. It looked like a face-saving attempt by Iran to wind the crisis down. If that were the end of it, Mr Trump would be right to say that his strike had worked, as he suggested on January 8th. Ridding the world of a baleful individual and forcing Iran to curb its aggression really would be worthwhile achievements. In the coming months, that may indeed be how things turn out. The trouble is that nobody, including Mr Trump, can count on it. Two tests will define whether the killing of the general was a success—its effect on deterrence and on Iran’s regional power. For the past year Mr Trump has stood by as Iran and its proxies attacked merchant shipping in the Strait of Hormuz, two American drones, oil facilities in Saudi Arabia and military bases in Iraq. Because it had concluded that there was no price to pay, Iran was becoming more brazen and belligerent. The beneficial effect of the drone strike on January 3rd is to re-establish the idea that America is willing to hit back. Iran’s restraint on Tuesday this week signals that it does not want to face an aerial onslaught by

America. Another Iranian missile strike is less likely today than it was just weeks ago. And yet Iran’s thirst for revenge is surely not slaked. Even if they avoid overt forms of aggression, the Revolutionary Guards are likely to pursue other tactics, including cyber-attacks, suicide-bombings by proxies, assassinations of American officials and an array of means they have honed over the years (see Briefing). These reprisals could take months to unfold. As the killing of General Suleimani recedes, Iran will once again begin to probe the willingness of America to use force. In an asymmetric world weak parties often retreat in the face of force, only to return. They have more patience and a greater tolerance of pain than a distant superpower does. The second test is whether America’s strike weakens Iran’s grip on its neighbours. Iran has a network of militias, proxies and forward bases for its Quds Force, across an area that stretches from the Mediterranean to the Arabian

Sea. This is about projecting Iranian power, regardless of the atrocities committed by its clients, such as Bashar al-Assad, who used nerve gas on his own people without a whisper of complaint from Iran. General Suleimani’s death deprives this grim network of its architect and orchestrator. It is too soon to judge the calibre of those who are taking his place, but if the general was as exceptional as his reputation (see Obituary), then his loss will be felt. It may also deprive the Quds Force of funds. The Iranian state is desperately short of money. Ordinary Iranians have noticed that resources which are going on guns and mortars might be better spent on schools and hospitals. But there are complications here, too. After the assassination, Iran is hellbent on pushing America out of the Middle East. It will start in Iraq, where it has mostly outmanoeuvred America. The government in Baghdad is dominated by Shia politicians in thrall to Iran. On January 5th Iraq’s parliament

passed a resolution calling on the government to start evicting foreign troops, including 5,000 or so American soldiers. The vote is not binding, many Iraqis resent Iranian influence, and American money and weapons are valuable to Iraq. Even so, it increasingly seems more a question of when, rather than if, the troops finally go. Still more threatening is Iran’s nuclear programme. Mr Trump pulled America out of the agreement with Iran, signed in 2015 with six world powers, which limited its ability to get a bomb. He argued that he would be able to negotiate a better deal which also took in Iran’s non-nuclear regional activities—a proposal he repeated in his press conference this week. Last summer there was speculation that Iran was ready to talk. But that now seems out of the question, possibly for a long time. Indeed, on January 5th Iran said it would no longer abide by any restrictions on the enrichment of uranium. It has every reason to indulge in nuclear brinkmanship

The horrible housing blunder

Home ownership is the West’s biggest economic-policy mistake It is an obsession that undermines growth, fairness and public faith in capitalism

CONOMIES CAN suffer both sudden crashes and chronic diseases. Housing markets in the rich world have caused both types of problem. A trillion dollars of dud mortgages blew up the financial system in 2007-08. But just as pernicious is the creeping dysfunction that housing has created over decades: vibrant cities without space to grow;

ageing homeowners sitting in half-empty homes who are keen to protect their view; and a generation of young people who cannot easily afford to rent or buy and think capitalism has let them down. As our special report this week explains, much of the blame lies with warped housing policies that date back to the second world war and which are intertwined with an

infatuation with home ownership. They have caused one of the rich world’s most serious and longest-running economic failures. A fresh architecture is urgently needed. At the root of that failure is a lack of building, especially near the thriving cities in which jobs are plentiful. From Sydney to Sydenham, fiddly regulations protect an elite of exist-

ing homeowners and prevent developers from building the skyscrapers and flats that the modern economy demands. The resulting high rents and house prices make it hard for workers to move to where the most productive jobs are, and have slowed growth. Overall housing costs in America absorb 11% of GDP, up from 8% in the 1970s

not only as a bargaining counter against America, but also because, were Iran to get the bomb, it would permanently oblige America to change its calculations about using military force against it. The lack of an American strategy for negotiation means that the general’s killing has reduced America’s Iran policy to extreme sanctions accompanied by an illdefined threat of massive retaliation if the regime misbehaves. Yet, starving Iran into submission is unlikely to work—other regimes have resisted American pressure for longer. There is no path to the peace Mr Trump this week said he wanted. Indeed, because America’s red lines are unclear, the danger of blundering into war remains. Meanwhile, sanctions and deterrence will gradually become less potent, because they always do. If America wants its approach to be sustained, the price could well be repeated rounds of sanctions buttressed by sustained military counters to Iranian aggression— and an aerial campaign if Iran appears about to get the bomb. Is Mr Trump prepared for that? Are his successors? The wrong place at the wrong time Both Barack Obama and Mr Trump realised that turmoil in the Middle East consumes American resources and attention that would be better focused on Asia. Mr Obama tried to negotiate his way out of the region and failed. Mr Trump is trying to bully his way out instead, but he is likely to fail, too—because his strategy towards the regime in Tehran depends on America being present in the Middle East to contain Iran and maintain deterrence. The dramatic assassination of General Suleimani may look like a gamble that has paid off in the short term. Unfortunately, it has not solved America’s Iran problem.

Monday 20 January 2020

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Monday 20 January 2020

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COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

CONSUMER GOODS

Border closure to weigh on FY19 earnings of FMCGs … as firms are exposed more to the Apapa menace DAVID IBIDAPO

ot only have consumers felt the impact of the federal governments policy to close the land borders as increased prices of goods pressured further their purchasing powers, fast-moving consumer goods firms also anticipate “a not so good” full-year performance ahead of earnings season. According to a report by CSL stockbrokers, “companies within the FMCG space have decried the negative impact of the August border closure on their businesses.” Recall the Nigerian federal government in a bid to check the activities of smugglers, protect and promote local producers and production, in August, ordered the closure of the land borders which hindered the free movement of goods and hence led to price hikes on some commodities like rice ahead of the festive period. In a move hoped to be more beneficial than at a detriment, the opposite was the case for FMCGs as this increased their cost of sourcing raw materials and time taking to get these materials

delivered to their factories. Access to raw materials for manufacturers of cocoa beverages, for example, became more difficult. Prior to the closure of the border, cocoa beverage manufacturers imported cocoa from neighbouring countries like Ghana through trucks via the land borders rather than through the seaports. However, a report from CSL revealed that the closure of the border forced these manufacturers

to move their raw materials through the seaports which according to them makes freight more expensive. More detrimental for manufacturers are the negative effect on their revenues, especially the books of manufacturers who carry out major export operations across West African countries and are unable to push their products through the land borders as a result of the government’s protectionist policy. In a bid to

reach their market at all cost, they suffer higher distribution cost and longer delivery time as they pass through seaports. “Importing and exporting goods via the seaports has exposed more FMCGs to the Apapa menace,” CSL stated in its report. As a result, the border closure will most certainly feed into FMCG’s fourth-quarter earnings scorecards of 2019 in the form of pressured revenue, higher production cost,

L-R- Otto Orondaam, founder, Slum2School Africa; Ashwine Dhanuka, chief operations officer, Eat’N’Go Limited; Ruth Ebe, head of operations, Slum2School Africa, and Patrick McMichael, CEO, Eat’N’Go Limited, at the N50million cheque presentation ceremony, in fulfillment of Eat’N’Go’s commitment to send 1000 kids to school in Nigeria.

and higher distribution cost. “While we note that the percentage of export revenue to total revenue for local FMCGs is not significant, the fact that domestic consumption is still significantly pressured, makes the situation worse for FMCGs,” CSL explained further in the report. Outlook for FMCGs in 2020 remains bleak as the Nigerian federal government still maintain stance on closed borders which will mean these firms will be left with two choices; incur further cost or pass the cost down in terms of higher prices to consumers who already are feeling the brunt of rising inflation and shrinking wallets. The narrative on pressured consumer purchasing power is not looking to change soon as the forecast for headline inflation shows a continued upward trend possibility, amid the border closure as well as the newly signed finance bill introducing a VAT hike. December 2019 headline inflation published by the National Bureau of Statistics (NBS), settled at 11.98 percent year on year against 11.85 percent in November. According to Bloomberg, “It shows little sign of cooling

as there is no clear indication yet from the government when borders with Nigeria’s neighbours, which were shut in August to curb smuggling, will be reopened for trade.” We can’t also forget in a hurry the impact of VAT hike of 7.5 percent on prices of consumer goods being a consumption tax. All of these factors give Nigeria based FMCGs especially quoted ones a reason to worry. This obviously has impact on quoted FMCGs stock price as may lead to further shedding of already bleeding FMCGs in market value which are closer to their 5-year lows. As at early August 2019, prior to the border closure, If you had invested at least a million in Nigeria’s consumer goods firms five years from then, you would have been close to losing over 70 percent in investment worth amid economic headwinds which has shown little or no mercy to Nigeria listed fast-moving consumer goods (FMCGs) firms. Our analysis showed that 6 FMCGs (UAC, Cadbury, Flour Mill, Honeywell, Unilever, and PZ Cussons) bled c.N670.8 billion. Although an August 2019 to date market analysis of these firms has shown a positive return to investors.

BANKING

Access Bank acquires 100% of Kenya’s Transnational Bank SEGUN ADAMS

ig Nigerian lender, Access Bank has acquired 100 percent of a Kenyan Bank with 28 branches, the East African Country’s Central Bank said Friday. Access Bank’s acquisition of Kenya’s Transnational Bank comes amid a continental expansion that would include Mozambique, while Nigeria’s Central Bank on Wednesday gave ‘No Objection’ to the tier-one bank’s move to open its subsidiary in Cameroon. The Central Bank of Kenya (CBK) said the acquisition is expected to “drive Transnational Bank Plc’s business growth for the benefit of the Kenyan economy and the banking sector.” The acquisition, amid industry-wide consolidation in Kenya, takes effect February 1, 2020, and follows CBK’s approval in December last year. Access Bank will be operating in the country of almost 50 million people competing with local banks, and its Ni-

gerian peers, GTB and UBA. The Kenyan bank purchase would increase Access Bank’s foothold in East Africa where it already operates in Rwanda and Zambia. Access Bank operates in six African countries outside Nigeria including Ghana, Congo, Gambia and Sierra Leone. A proposed Cameroon expansion, Access Bank said, is in a bid to become “Africa’s Gateway to the World”. Spokesperson of the bank told Reuters on Friday that it’s Mozambique and Sierra Leone expansion will be in 2020. Access Bank has branches in the United Kingdom (with a branch in Dubai, United Arabia Emirate) as well as a presence in international cities like Mumbai, Beirut, and Shanghai. On the back of a merger with Diamond Bank last year, Access Bank boasts of an asset base of almost N6trn and the largest customer base of any bank in Africa. The lender has around 29 million customers

across over 600 branches and service outlets in 12 countries across the globe. The acquired bank, Transnational, is strong on Agriclending. As of September 2019, it had a total asset of KES 9.574bn (N34.26bn), the lender’s unaudited financials show. The bank’s total liabilities stood at KES 7.669bn ( N27.45bn) with shareholders fund at KES 1.905bn (N6.82bn). As of September, the total capital of Transnational Bank (made of up core and supplementary capital) was KES 1.917bn (N6.86bn). The bank reported its core capital to total deposit liabilities to be 24.2 percent compared to a minimum statutory ratio of 8 percent, and a core capital to total risk-weighted assets of 19.9 percent (vs. regulatory floor of 10.5%) while total capital to total risk-weighted assets was 21.6 percent (vs. minimum regulatory ratio of 14.5%) The bank’s liquidity at 33.3 percent

was 13.3 percent points above the minimum regulatory requirement. Transnational Bank had a

negative profit of KES 23.299m (N83.39m) in the period. Meanwhile, shares of Access Bank jumped 4.35 per-

cent to N10.8 per share on the Nigerian Stock exchange (NSE) which gained almost 1 percent on Friday.

L-R: Yetunde Daramola; Tony Agah, gateway plant manager, International Breweries (IB) Plc; Teresa Umeakunne, compliance manager, IB Plc; Michael Daramola, legal and corporate affairs director, IB Plc; Temitope Oguntokun, country lead, sustainability and stakeholder engagement, IB Plc., and Somtochukwu Obinna-Njoku, communications specialist, IB Plc, at the presentation of the Best Company in the Provision of Clean and Affordable Energy Award to International Breweries Plc. by SERAS CSR Award Africa in Lagos

Monday 20 January 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

BANKING

Standard Bank partners UK on Africa Investment Summit MICHAEL ANI

tandard Bank, Africa’s largest banking group by assets, is partnering with the UK Government to sponsor the inaugural UK-Africa Investment Summit, which will be held in London on January 20, 2020. The Summit will create new lasting partnerships between UK and African businesses, governments and institutions to deliver more investment, jobs and growth. These partnerships will benefit people and businesses across Africa and the UK. Hosted by the Prime Minister, the Summit will bring together UK and African businesses, African leaders and delegations, international institutions and young entrepreneurs. The summit will cover topics including: Trade and investment, infrastructure development, sustainable finance, the role of the City of London in attracting African businesses to raise capital, clean energy, women’s economic empowerment and creat-

ing jobs for young people across the continent. Commenting on the sponsorship, Sola DavidBorha, chief executive, Africa regions, Standard Bank, said: “We are proud to be a sponsor of this prestigious and important summit. Africa is home to many fast-growing economies and businesses, and it is very positive to see the recognition of the huge potential for UK companies and investors. Furthermore, improving socio-economic ties between the UK and Africa can only be mutually beneficial. There are an increasing number of African businesses and governments looking to the UK, and the City of London in particular, to access capital, as well as investment and commercial expertise across different sectors. “British investors and businesses are increasingly recognising Africa’s potential and the role they can play in boosting the continent’s long-term growth – particularly through investments that have positive social, economic and environmental impacts.

This well-timed summit will help to build significant and long-lasting commercial ties between the UK and Africa.” Sola David-Borha will participate in a panel event on Sustainable Finance and will be meeting British and African leaders across business, politics and other institutions. International Development Secretary Alok Sharma visited Africa ahead of the Summit. Sharma said ahead of his visit: “Africa has eight of the 15 fastest growing economies in the world but currently receives less than 4 percent of foreign direct investment. There are fantastic opportunities for UK businesses to work alongside, invest in and partner with African nations. “At the UK-Africa Investment Summit in London on January 20, we will bring together UK and African businesses, African leaders, international institutions and young entrepreneurs to drive the investment Africa needs to flourish. I look forward to seeing many of you there.”

L-R: Bayo Adeokun, chairman, board of trustees, Itamapako High School, Old Students Association (IHSOSA); Abayomi Abolaji, chairman of the Association; Lateef Ahmed, principal of the School, and Tosin Oloko, director, ministry of education, Ogun State, at the presentation of plaque in appreciation of various interventions by the alumni group in Ogun State

L-R: Winnie Uloghobui, executive assistant, Bravo Points International, Producers of The Next Titan Show; Adekunle Oyinloye, GMD, SIFAX Group; Amifeoluwa Yakubu, winner, The Next Titan, Season 6; Mide Kunle-Akinlaja, executive producer, Bravo Points International, Producers of The Next Titan Show; Adetutu Folashade, executive assistant, Bravo Points International, Producers of The Next Titan show and Olumuyiwa Akande, group head, corporate communications, SIFAX Group at The Next Titan appreciation visit to SIFAX Group head office recently.

COMPANY RELEASE

Lakeshore Cancer Center proffers preventive options to tame growing rate of cancer

akeshore Cancer Center, first operational facility in Nigeria dedicated to cancer prevention and treatment have called for the adoption of preventive measures to address growing cases and mortality resulting from cancer in Nigeria. Chukwumere Nwogu, the CEO of Lakeshore Cancer Center and a leading Cancer Epidemiologist and Surgical Oncologist, noted that available cancer statistic for Nigeria is under-estimated since cancer registration in Nigeria is markedly incomplete. A research conducted by International Agency for Research on Cancer (IARC) in 2018 had however noted that about 115,950 new cancer cases, 70,327 cancer deaths and 211,052 prevalent cases (five-year) were recorded in the period under review. But Nwogu and other medical experts, who gathered at the 2019 annual oncology conference of the Lagos-based Lakeshore Cancer Center, to discuss ways to ‘Improving Cancer Outcomes in Nigeria,’ believed that early detention, lifestyle changes as well as concerted efforts of govern-

ment and private players could reduce the spread of the disease. The experts, who decried cases of breast cancer, said among the solutions to avoiding cancer, especially breast cancer and remaining healthy are control of alcohol intake, adequate breastfeeding and consumption of vegetables in daily meals. “18 million cases are recorded annually with about 1 million deaths. Cancer is a great problem all over the world. Hence, we need a lot of work on it,” Nwogu said. He said there was need to pay more attention to some practices including varieties of meal with pertinent attention to vegetable. “ Vegetable should be part of our food. We should start inculcating that at home and at restaurants. “How can one person alone consume a full bottle of wine? I’m not saying you should not drink. However, moderation is key when consuming alcohol or wine. The more the intake of alcohol, the higher the risk,” the oncologist said. Nwogu named modifiable risk factors to include

obesity, exercise, alcohol, breastfeeding and hormone replacement therapy. According to him, one of three cases of cancers is preventable, potentially curable and can be palliated effectively therefore there is need for increase cancer awareness, improve knowledge and capacity while plans should be evidencebased, priority driven and resource-appropriate Nwogu also made case for training and education, adding that connectivity remained crucial as well as access to care. In a joint research on Oncology Emergencies, Okezie Ofor, a Consutlant Medical Oncologist, and Azeez Salawu, Consultant Medical Oncologist, Nottingham University Hospitals, said it is important to have adequate support systems in place for patients on systemic anticancer treatments. They noted that many oncology emergencies are reversible or at least have reversible symptoms, while stressing that early recognition remained critical while multidisciplinary working is key to improving outcomes in cancer.

L-R: Mohammed Abdullahi, minister of state for science and technology; Garba Malumfashi, president, University of Dundee Alumni, Nigeria-Chapter; Peter McEleavy, academic lead for Sub-Saharan Africa, University of Dundee in Scotland UK, and Grace Dauda, treasurer, University of Dundee Alumni, NigeriaChapter, during the visit of University of Dundee’s delegation to the minister’s office in Abuja

L-R: Abubakar Aliyu, minister of state for works and housing; Muhammed Bukar, permanent secretary, federal ministry of works and housing (FMWH); Ahmed Daginwa, MD, Federal Mortgage Bank of Nigeria, and Andrew Chimphondah, MD, Shelter Afrique, at a sensitization forum on Housing and Urban Development

Monday 20 January 2020

BUSINESS DAY

Monday 20 January 2020

BUSINESS DAY

VALENTINE OZIGBO

CEOINTERVIEW

President and CEO of Transcorp PLC

Interview with Private Sector Leaders

‘The Afam deal brings us closer to generating power for one out of every four Nigerians’ - Transcorp President VALENTINE OZIGBO is the current President and CEO of Transcorp PLC. Prior to this, he was the Managing Director and CEO of Transcorp Hotels Plc, the hospitality subsidiary of Transnational Corporation of Nigeria Plc (Transcorp) and owners of the award-winning Transcorp Hilton Abuja and the iconic Transcorp Hotels Calabar. He is a banker and accountant with over 20 years’ experience in commercial, retail, investment, and international banking. Ozigbo is a graduate of Lancaster University, The UK where he bagged a distinction in MSc finance. He also has an MBA in banking and finance and a B.Sc in accounting, both from the University of Nigeria. In this interview with DIPO OLADEHNDE, he explains the challenges facing Nigeria’s power sector and next Transcorp plans. Excerpt

he turn of a new year marks one year for you as President/CEO of Transcorp. How have you fit into the role and what kind of challenges have you faced? As President and Group CEO of Transnational Corporation of Nigeria Plc (Transcorp), I have led a conglomerate of 3 businesses: Transcorp Power, one of the largest power generation companies in Nigeria with 972MW installed capacity; Transcorp Hotels, the owners of Transcorp Hilton Abuja (the leading business hotel in Africa) and Transcorp Hotels Calabar; as well as Transcorp OPL281, an oil and gas company. Fitting in has come quite easy. My background in banking, finance, accounting and management, coupled with my core strength in emotional intelligence, means that I am exceptionally qualified to build any organization to last. My robust analytical skills and continuous improvement culture orientation means I can lead any transformation in the knowledge economy that we have today. And finally, my dynamic leadership style and ethical orientation means I can lead sustainable business underpinned by strong governance ethos. The journey so far has been a fulfilling despite the challenges of our operating environment. In our power business for example, we have had to grapple with significant operational challenges including severe gas shortages, mandated reduction in generation from the National Control Center and importantly, revenue exposures from delayed payment of receivables in our power business. Nonetheless we have taken several ac-

the problem holistically, aligning at the technical, commercial and political levels. The World Bank loan is expected to pay special emphasis to transmission and distribution just like the Siemens deal. This new investment will increase efficiency along the transmission and distribution value chain. There are boxes to be ticked when it comes to loan, I am optimistic that we will get it right and the world bank cannot lend money without asking the right questions or asking for proof they can payback. I hope the government applies the best execution skills towards ensuring the success of it. Nigerians need to know that there are lots of peculiar challenges we face as a nation. There are many gaps such as the inability to transmit everything we generate, power theft and government debt leading to many losses and inefficiencies where a few people are paying for power which is inadequate to cater for the value chain. Hence the importance of good policies cannot be overemphasised.

tions to proactively and sustainably address these issues. These include the recent activation of our Gas Supply and Aggregation Agreement, leveraging the Eligible Customer regime initiated by the Federal Government, as well as consummating the acquisition of Afam Power Plc and Afam Fast Power Limited, thereby raising our total generation capacity from 972MW to 1938MW; expansion into alternative power generation and mini-grid opportunities, among other things” In our hospitality business, within the year we have built a strategy to roll out new service offering. I have also championed operational excellence and top-line corporate governance initiatives that have ultimately led to the recent discharge of the hotel from the Bureau of Public Enterprise (BPE) post-privatization monitoring. Last year, the World Bank approved Nigeria’s request for a $3billion loan for the expansion of the transmission and distribution networks in the power sector. Despite huge investment in the power sector, Nigerians are yet to feel the benefits of these investments, why is this so? The attention and increased activity in the Power Industry is commendable and it is worthy of mention that no amount of investment is too much for the power sector due to its critical importance. The Nigerian Power sector however, is still not attracting the level of attention it deserves. My recent review of an article on the activities of the Nigeria Investment Promotion Council (NIPC), indicated that it is glaring that apart from the Piowww.businessday.ng

neer Status, there has been no recent action to incentivise the growth and development of the Nigerian Electricity Market. For example, I was recently going through the Nigeria Investment Promotion Council (NIPC) reports and I was looking at

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incentives over the years to various sectors. I discovered that apart from the pioneer status and initial investments there has been nothing in the last few years for the power sector. Indeed, two key mistakes have been made in the past @Businessdayng

around the management of the sector. The first emanates from the mismanagement of expectations and the second is the non implementation for the master plan. So with these challenges, it is comprehensible that Nigerians are impatient. So, we must look at the entire value chain issues together not in part and solve

Nigeria’s power sector is riddled by debt and Transcorp Power is owed about $250 million. How has the debt impacted your operations? It is unfortunate that we are owed about N80 billion. This type of exposure would have been more catastrophic if not for our strength and capacity, we would have collapsed with that level of debt. What is even sad is, if we don’t have solutions to deal with the problem in the future there will be more accumulations as time progresses. We have been engaging with government to explore options,

there are plans to put some of this obligation in the budget as subventions that government will need to now take care of which will clear the arrears and fix the issues going forward however it must not be allowed to fester and continue in the future. As a Genco, the existing agreement with government is to generate power and sell to a government agency which is known as Nigerian Bulk Electricity Trading (NBET), so the government has taken the sole responsibility to pay Transcorp its debts not Discos. Additionally, there are ongoing conversations about the deployment of debt instruments to enable us monetize and keep thriving however what is most critical is how to improve impairment system such that even with these inefficiencies mentioned, whatever funds are ultimately generated, there is efficiency in distribution. I like the system that Nigeria Electricity Regulatory Commission (NERC) and Central Bank of Nigeria (CBN) is championing to automate the payment system which implies we would have an efficient market to make sure no future debt is accrued. We are hoping the government will clear those outstanding debts so that Transcorp can also clear its debts with gas suppliers and other lenders. We are optimistic and the body language of government is actually encouraging. As one of the leading power generating companies, we are at the forefront of advocacy and engagements to address the myriad of issues plaguing the generation segment and the power sector as a whole. We do this as an entity as well as an acwww.businessday.ng

tive member of the Association of Power Generation Companies. We also provide advisory to the government, key players and agencies on relevant issues and interventions necessary to ensure a thriving power sector. What are Transcorp plans for the Afam Electricity Generation Company (Afam Power Plc and Afam Three Fast Power Limited) recently ratified by the Council on Privatization? At Transcorp, the Nigerian power sector is one that is close to our hearts and is deeply aligned with our purpose; Improving lives and Transforming Nigeria. As stated by our Chairman, Tony O. Elumelu, “If we fix power, we fix Nigeria”. This sums up our interest in this sector. This investment reiterates our commitment to our strategic goal of contributing at least 25% of power generation in Nigeria and that explains our increased foray despite the value chain issues in Nigeria’s power sector. We are excited at the opportunity to be the preferred bidder for this project, and we worked very hard to achieve this goal, after meeting the technical and commercial qualifications. This is a very strategic investment in Nigeria because it is the first power plant in the country and has a capacity of 966 megawatts. So, it’s a good deal anywhere in the world. Its equally situated in an area that has much more gas than most places and has two transmission lines that are easily assessable. We are very excited about the deal because it will help us achieve our global ambition which is to be able to generate power for one out of every four

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Nigerians. We will eventually introduce other energy sources as time proceeds. In terms of next steps, we recently received final approval and have proceeded into the negotiation phase. There are still a few issues to be resolved. Once we reach a middle ground and payment the next question is when the takeover will be. We expect that will be before Q2 this year.

cessing such that if it’s possible we will like to generate all the gas we need for our business and in fact sell gas to others. Apart from exploring gas commercialization opportunities being amplified by the government, there are discussions in the pipeline to acquire additional oil assets although they are bound with confidentiality clauses so we can’t disclose them right now.

There are speculations Transcorp Power Plc is also making significant forays into the gas business with its acquisition of two oil prospecting licences. What are your thoughts on this? With Gas constituting 60 percent of our cost exposures, we understand that the success of our business is tied to a robust gas strategy. Thankfully, Nigeria is rich in gas and this underscores why we have prioritized upstream energy as a major component of our gas strategy. We own OPL 281 and through our group company, there are also discussions to acquire additional oil assets. Together, we want to be a major stakeholder in oil exploration and gas pro-

What is the next big news we will receive from Transcorp or where do you envision Transcorp in five years’ time? Our strategy in the next five years is to deepen our play in areas we already have operations, we plan to increase our investments in hospitality, increase exploration, expand our gas operations and beyond just taking the gas to power, we will also process the gas. At Trancorp, we carefully select the sectors we invest in. For us to invest in a sector we look at few parameters, the sector must be impactful, it must be growth ready and must be able to generate enough funds for its sustainability. Watch out for Transcorp in the coming years.

@Businessdayng

Monday 20 January 2020

BUSINESS DAY

real sector watch

Economic crunch hits factories as output, capacity utilisation fall …Ikeja now Nigeria’s industrial hub ODINAKA ANUDU

embers of the Manufacturers Association of Nigeria (MAN) were hit by economic crunch in the first half of 2019 as the value of their output and capacity utilisation fell within the period. Despite a stable foreign exchange market, value of output from over 2,000 factories of members of MAN fell to N4.61 trillion, from N4.76 trillion obtained in the first half of 2018, representing a 3.2 percent decline. When compared with the value of output in the second half of 2018 (N5.2 trillion), the N4.61 trillion in the first half of 2019 represents a 11.35 percent slump. “Manufacturing production in the first half of 2019 was affected by poor macroeconomic ambience, infrastructure issues and poor regulation by government agencies,” MAN said in its latest economic review. Analysis of sectoral group performance shows that production value in almost all the groups slowed in the first half of 2019. In the foods, beverage and tobacco sub-sector, output stood at N1.43 trillion in the first half of 2019 as against N1.55 trillion in in the first half of 2018, repre-

senting a 7.7 percent slip, MAN said. Similarly, output in the chemical & pharmaceutical sectoral group declined to N313.16 billion in the first half of 2019, from N336.61 billion recorded in the first half of 2018, indicating a 6.96 percent fall. Further analysis on industrial zones shows that production fell in almost all the industrial zones. MAN, however, said Ikeja industrial zone is the hub of industrialisation in Nigeria with an output of N2.05 trillion in the first half 2019. This, though, was a decline when compared with N2.65 trillion recorded in the second half of 2018. More so, capacity utilisation, which means the rate at which factories make use of their capacities, slowed to 54.1 percent in the first half of 2019, from 54.50 percent recorded in same half of 2018, indicating 0.4 percentage point decline over the period. The 54.1 percent represents a 6.9 percent fall when compared with 61 percent capacity utilisation recorded in the second half of 2018. “The fall in capacity utilisation of the sector in the period is as a result of poor macroeconomic, regulatory and infrastructure conditions in the economy,” MAN said. Analysis on sub-sectors

presents a mixed result. Capacity utilisation declined in food, beverage and tobacco group (55.3 percent), wood & wood products (49.4 percent), chemical & pharmaceutical (47.4 percent), non-metallic (52.7 percent) and domestic/industrial plastic and rubber group (52.2 percent). However, it increased in textile apparel & footwear group (56.5 percent), pulp, paper, printing & publishing (67.0 percent), and electrical electronics (48.2 percent) and Motor Vehicle & Miscellaneous Assembly group (56.3 percent). Industrial zones analysis also presents a mixed-bag of performance. It rose in Ikeja

zone to 68.14 percent; Ogun to 69.19 percent, Apapa to 69.46 percent, and Kano Sharada/Challawa to 55.11 percent. But it fell in Kwara/Kogi zone to 44.13 percent. Recent reports from MAN show that major problems of manufacturers include: the congested Apapa and Tin Can ports in Lagos, poor power supply, issues around multiple and excessive taxation, and infrastructure deficit, among others. Nigerian economy is hard hit by infrastructure challenges which are hurting manufacturers. “Manufacturing companies situated on the Amuwo-

Odofin and Kirikiri axes lose over N20 billion annually, and most of the factories are on the brink of shutting down because we produce but do not sell as customers avoid coming to this area,” said Frank Onyebu, chairman Manufacturers Association of Nigeria (MAN) Apapa branch in Lagos recently. This is not limited to manufacturers in Amuwo-Odofin, Lagos, but is extended to almost all firms in Lagos, Aba (Abia State) and many parts of the country. Nigeria requires $15 billion (N4. 59tn at N306 to a dollar) worth of investments annually for 15 years in order to adequately develop its infrastructure, according to

a report from the Financial Derivatives Company, an economic and financial research firm. Oluwafunmilayo Bakare Okeowo, chief executive officer of FAE Limited, said that tariffs were a major problem for manufacturers. “The issue of tariffs should be properly addressed. We also need protective policies to create an enabling and competitive environment,” she said. In a recent CEO Confidence Index prepared by MAN in the third quarter of 2019, CEOs of manufacturing companies said that congestion at the ports significantly affected productivity negatively with the prevalence of poor access and road network, heavy traffic and undue congestion at the ports. “There is an issue, particularly delay in clearance of imported raw-materials and machinery that are not locally available by manufacturers, including the associated high and unwarranted demurrage which oftentimes slows down manufacturing operations and increases cost of production in the sector,” the report said. High energy cost and policy flip-flops have also continued to hurt the manufacturing sector, with government restriction of 43 items from the FX market hitting many firms.

Cassava to ethanol, vegetable oil projects top Nosak’s 5-year plan …projects to create jobs, improve GDP ODINAKA ANUDU

he management of Nosak Group has embarked on a five-year development agenda for business expansion to tap opportunities in the country and boost the Gross Domestic Product (GDP). The company disclosed this at the recently-held 2020 Executive Management Retreat in Lagos. Presenting the business scope for the mid-term framework, Toni Ogunbor, executive chairman, said the Group had put in place a number of projects in the coming years to drive expansion and provide jobs

for Nigerians while contributing to the GDP of the country. “We have put plans in place to commence and implement the cassava to ethanol project in Edo State,” he said. “We will also commence the implementation of the 1,000 metric tonnes integrated vegetable oil refinery in the Export Processing Zone and consolidate on our Oil Palm Backward Integration Project, also in Edo State”, he said. He said the Group had commenced the procurement of additional fleets to expand the operations of Nosak Haulage Limited to service her customers at optimum levels. www.businessday.ng

L-R: Segun Sowande, partner & head, management consulting, KPMG; Toni Ogunbor, executive chairman, Nosak Group; Juliet Obidegwu, management consulting, KPMG, and Thomas Oloriegbe, group chief operating officer, Nosak Group, during the 2020 Group Executive Management Retreat held in Lagos recently. https://www.facebook.com/businessdayng

Ogunbor explained that the Group was riding on the back of the African Continental Free Trade Agreement (AfCFTA), which will open up the economy for further export of non-oil products to earn foreign exchange. “With the completion and commissioning of our ultra-modern state-ofthe-art retail packaging line for Nosak Farm Produce in Lagos, we will be ready to export our brand, Nosak Famili Vegetable and Palm Oil to other neighbouring countries of Africa,” he further said. With the business expansion plans, Nosak Group aims to create over 1,000 jobs for Nigerians in the various @Businessdayng

sectors of its operations, which include oil palm and cassava plantation, production and derivatives of these raw materials, manufacturing, haulage, real estate and financial services. This will cut down the growing rate of unemployment among Nigerian youths, according to the Group. As a corporate organisation, Nosak Group considers all employees as its greatest asset. “Hence in the coming years, all employees will enjoy enhancement of manpower base through trainings to develop internal capacity and recruitment to develop best-in-class personnel,” the Group noted.

Monday 20 January 2020

BUSINESS DAY

real sector watch

FMN gathers momentum amid market gains, high earnings expectation Gbemi Faminu

lour Mills of Nigeria (FMN) surpassed its industry peers in the Nigerian Stock Exchange, recording the highest trade in the previous week. At the close of trading on Friday, the flour miller had a share price of N23.50 per share. The share of the giant miller rallied 19.29 percent from December 31 to January 17—the highest among the major fast-moving consumer goods (FMCGs) firms listed on the Nigerian bourse. FMN’s was followed by Dangote Sugar with 7.72 percent share gain; Honeywell with 4.04 percent rise and PZ Cussons with 3.54 percent gain. However Nestle Nigeria and Nigeria Northern Flour Mills (NNFM) both gained zero percent increase during the period under review. This could prove good value for investment in a depressed stock market. Flour Mills of Nigeria is an industry leader with a market share of 32 percent, according to a KPMG wheat sector report, and controls over 70 percent of the market. It is also Nigeria’s largest importer of soft red wheat, hard red winter, and hard white wheat types. A year-to-date analysis of FMN’s stocks reveal that overtime, the company recorded a double-digit growth in trading shares as well as a rise in its stocks, heightened by the border closure by the federal government in August 2019. Despite analysts’ opinion

Source: Bloomberg of consumer goods firms being the worst hit by the sluggish recovery of the Nigerian economy, which has been stuck in a low growth cycle, low purchasing power of the consumers and a tough operating environment, the company has managed to survive. In a public statement from the company concerning its operational review, it says although the revenue from some of its food businesses was adversely impacted by lower volumes, pasta and noodles recorded positive growth in base products and the sugar business continued

to show remarkable growth in line with projections. While the fruits of ongoing backward integration are yet to be reaped, high cost of importing wheat and infrastructure deficit, especially logistics, remain a bane to the millers. FMN, however, has shown resilience in delivering value to its owners, consumers and shareholders. Analysis of the company’s second quarter of 2019 shows that the firm recorded revenue of N270 billion, representing a marginal 0.37 percent increase from the N269 billion recorded in

the corresponding period of 2018. Its profit before tax stood at N8.6 billion, which was a 4 percent increase from the N8.3 billion achieved the previous year. Similarly, its profit for the period stood at 5.89 billion after a tax payment of N2.7 billion, marking a 16 percent increase from the N5 billion recorded in the previous period. The food segment contributed majorly to its revenue with N170 billion while its agro-allied and sugar value chain segments contributed N49 billion and N44 billion respectively. However, its

support services contributed the least with N6 billion. Despite engaging in backward integration, the company spent the sum of N205 billion on materials sourcing in Q2 2019. FMN is also projected to have improved earnings in 2020 with higher demand for pasta due to border closure, according to a report on FMN by Chapel Hill Denham Research. “Renewed demand for pasta to boost food turnover in FY-20E, as the recent border closure has impacted rice importation, inducing a shift in demand to pasta

(Spaghetti, Macaroni etc). Notably, our market price survey indicates that FMN’s Golden Penny Spaghetti retail price has increased to an average of N235/500grams SKU (from an average of N200),” Chapel Hill Denham Research said. “We expect this development (price increase) and higher sales volumes to support FMN’s food segment turnover over the next two quarters in FY-20E. We also expect the sugar and agroallied segments to maintain current growth trajectories pushing FY-20E turnover to N548.32bn, up 4.0 percent YoY from N527.41bn in FY19,” the report further said. The company, according to Bloomberg, is making plans to raise N50 billion through a bond sale programme, of which 20 billion naira ($138 million) is planned in the first quarter. Proceeds from the sale will be used to refinance debt and buffer working capital amid low borrowing cost. Nigeria President Muhammadu Buhari commissioned FMN’s N50 billion Sunti Golden Sugar Estates in March 2018, featuring 17, 000 hectares of irrigable farmland and a sugar mill processing 4,500 metric tons (MT) of sugarcane per day. At full capacity, the estate can produce 1 million tons of Sugarcane which roughly translates into 100,000 MT of sugar yearly. According to John G. Coumantaros, chairman of FMN, the Sunti Golden Sugar Estates achieved its first development target of reaching 2,836 hectares of land under cane in July 2018.

Exporters push for friendly policies to earn FX, create jobs for economy Odinaka Anudu

anufacturing exporters are calling for friendly economic policies that will enable them to repatriate dollars into an economy in need of foreign exchange, and create jobs. Speaking in Lagos recently, Ede Dafinone, chairman of the Manufacturers Association of Nigeria Export Promotion Group (MANEG), said the poor performance of exports called for export- friendly policies that would enable

players to raise production and expanding output. Dafinone said a 1.5 percent increase in non-oil receipts in 2018 from 2017 was a testament that the government needed to restart the Export Expansion Grant (EEG),which had been the most successful export incentive deployed by the Federal Government. Nigeria’s total non-oil export earnings from more than 25 commodities in 2018 were $3.3 billion (N1.19 trillion), according to the National Bureau of Statistics (NBS). Bangladesh earned ten times that from only one product — garment. www.businessday.ng

According to Dafinone, some of the challenges facing exporters included poor infrastructure, high energy costs and non-payment of the EEG claims. “I shall add the closure of borders to the list of the challenges,” he said. “Our land borders have been closed and this is affecting export and import by our members,” he further said. A document seen by BusinessDay shows that the National Assembly committees approved the promissory notes of 269 companies worth N193.042 billion for the pay-

ment of EEG claims. Some of the companies approved were A&P Foods, African Glass Limited, African Textile Manufacturers Limited, Crown Flour Mills, Jebba Paper Mills, Deli Foods, Peugeot Automobiles, Procter & Gamble, Ajaokuta Steel Company, Olam Nigeria Limited and GZ Industries, among many others. But the Federal Government is yet to start settling any of these claims. The EEG was originally established in 1986 to help Nigerian exporters to become competitive at the global market. It is a practice in many

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developing and developed countries such as China, India and Australia to provide concessions or cash rebates/ grants to companies penetrating new markets or consolidating already established markets to enable them rival competitors. In Nigeria, companies that exported different kinds of products or commodities between 2006 and 2016 were owed billions of naira in claims as the federal government did not meet the obligation of settling them as promised. After suspension since 2013, the current government says @Businessdayng

it will settle the claims, but is yet to do so. The National Assembly is yet to approve the remaining 38 companies, which include PZ Cussons, British American Tobacco, Okomu Oil, Lee Group (which has seven subsidiaries), and Sapele Integrated. Others are Nestlé Nigeria, De-United Foods, Beta Glass, Unilever, and Dangote Agrosacks, among many others “The Group, in collaboration with our parent body, MAN, is working assiduously to ensure the enlisting of the 38 exporters by the 8th Assembly,” Dafinone said.

Monday 20 January 2020

BUSINESS DAY

insurance today

In association with

E-mail: insurancetoday@businessdayonline.com

Underwriters may absorb VAT burden on broker’s commission in new Finance Act Modestus Anaesoronye

or relationship sake and to encourage insurance brokers as major intermediaries, underwriters may have decided to absorb the VAT burden on brokerage commission in the new tax law as provided in the Finance Act 2019. An insurance broker is someone who advises people on their insurance needs and negotiates insurance contracts on their behalf with insurers in return for a fee or commission. They act as middlemen between firms or individuals that want to insure their property and casualty risks and the insurers that underwrite policies. With the new Finance Law, brokers are expected to pay VAT on their commission from the risks they placed

Sunday Thomas, acting commissioner for Insurance/CEO, National Insurance Commission (NAICOM) third from right, flanked by insurance industry practitioners at the Service of Song of late Adebisi Fadejimi Famoriyo, father in-law of Thomas in Abuja over the weekend.

with underwriters, but most brokers deduct their commission upfront before crediting underwriters. According to some underwriters who commented on the impact of the new Finance Act on their business, the only negative issue we have

to cope with is the tax burden on Commission of brokers that we will have to accommodate. Akinwale Sofile, GM, Finance & Accounts at LASACO Assurance Plc commenting on the new Finance Act, said the positive side of it is that

the company income tax that has been a burden for insurance companies has been finally removed. He said this is a healthy development for the insurance companies. “Section 16(7) of the CITA restricts insurance compa-

nies to carrying forward tax losses for a maximum of four years. Losses that are not fully relieved after four years by an insurance company cannot be carried forward. Companies are made to pay taxes irrespective of the losses accumulated from preceding years.” According to analysts, with this Bill now into law, insurance companies would be able to carry forward losses indefinitely as opposed to the 4-year restriction that was in place. Life and non-life businesses would no longer be liable to special minimum tax provision and all wholly, exclusively, reasonably and necessarily incurred expenses will be tax deductible. Furthermore, “taxable investment income” would be limited to “income derived from the investment of shareholders’ funds”. This seeks to clarify taxable income and limits it to income accruing

to the insurance company as against income accruing to the insurance fund, according to expert’s analysis. According to experts, this is game changer in ensuring the fair taxation of insurance companies. Insurance is technical in nature requiring that somebody going into it understand it for effective insurance buying. This is why many use the services of brokers to avoid making mistakes particularly when claims occur. To avoid these take the services of an insurance brokers who by virtue of their profession understand the deal and can mediate for you to undertake an insurance cover successfully. Just like an accountant or lawyer who provides you with professional advice based on years of training and experience, a qualified broker can do the same with your insurance at no cost to the insured.

LASACO marks 40 years of successful business in Nigeria …promises greater value in the future

Modestus Anaesoronye

nderwriting firm, LASACO Assurance Plc has recorded four decades of successful business in Nigeria, having weathered the storm at different levels of operating environment, regulatory changes including different recapitalization regimes in the nation’s insurance industry. Standing tall as a major player in the insurance business, offering both life and general business, LASACO is excited that it has continued

to meet her claims obligations to customers and at the same time creating value to its esteemed shareholders. Segun Balogun, managing director/CEO, LASACO Assurance Plc supported by his management during a press briefing in Lagos, said that the company which came into being in 1979 was 40 years last December, stating the rest of this year 2020 will be used to celebrate the firms four decades in business, particularly to create awareness on the benefits of insurance. On the ongoing recapitalization in the industry, Balo-

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gun said LASACO was confident that it will recapitalise and stand as a brand at the completion of the exercise this year, stating that 10 percent of its shareholders who control 70 percent equity of the company are positive and willing to bring the funds to recapitalise the company. According to him, the company is also embarking on share reconstruction, which he said will reduce the number of the Company issued and paid-up share capital, but create more value to existing shareholders, while also enable the company accommodate more authorized capital

into issued shares. Other measures to enable the company meet the recapitalization requirement he said including rights issues and private placements, even though not foreclosing an acquisition if need be, and where the other company has some values to bring to the table. LASACO currently has about N4 billion in paid-up share capital, and would be looking for about 14 billion to comply with the new capital requirement set for companies in the industry. Going into the future, Balogun said LASACO will be playing acting in real estate invest-

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ment and hospitality industry. LASACO Assurance Plc is a composite insurance and financial services company incorporated on 20th of December 1979 under the Companies Decree of 1968. The Company, then known as Lagos State Assurance Company Limited obtained License as an Insurer on 7th July 1980 and commenced business operations on 1st of August 1980. With the vast opportunities presented by increased capitalization for business expansion and growth, LASACO became a Public Liability Company in 1991

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when its Shares were admitted for the first time to the Nigerian Stock Exchange (NSE) through listing by Introduction. Now in its foruth decade, LASACO has grown considerably in size, business coverage, profits, capital base and assets with its operations spanning all classes of the Insurance and Special Risks business, high impact financial services and Real Estate. The Company’s businesses are conducted through a network of thirteen regional and branch offices spread across Nigeria, administered by well qualified, experienced and dedicated personnel.

Monday 20 January 2020

BUSINESS DAY

insurance today

In association with

E-mail: insurancetoday@businessdayonline.com

Operators see recapitalisation boosting consumer confidence in insurance Modestus Anaesoronye

ndustry operators have continued to express confidence in the ongoing recapitalization in the insurance industry. They believe that the exercise when completed will lead to a boost in consumer confidence, as it will leave in the hands of operators enough fund to meet claims obligations. The National Insurance Commission (NAICOM) had in a circular issued on Monday May 20, 2019 announced increase in the paid-up share capital of life companies from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsurance companies from N10 billion to N20 billion. According to the Commission, the minimum paidup share capital requirement shall take effect from

L-R: Eddie Efekoha, managing director/CEO, Consolidated Hallmark Insurance Plc and president, Chartered Insurance Institute of Nigeria; his wife, Josephine Efekoha and other family members at the interment Service of Efekoha’s mother, Mercy Omotunde Daniel in Warri, Delta State recently.

the commencement date of the circular (May 20, 2019) for new applications, while existing insurance and reinsurance companies shall be required to fully comply not

later than 30th June 2020, before the recent extension in date to December 31 2020. Tope Smart, chairman of the Nigerian Insurers Association (NIA) said the ongoing

Peter Ekwueme named ED at FIN Insurance, gets NAICOM approval Modestus Anaesoronye

he National Insurance Commission (NAICOM), the apex regulatory authority in Nigeria’s insurance market, has confirmed the appointment of Peter Ekwueme as executive director Technical/ Operation of FIN Insurance Company Limited. The confirmation was conveyed in a letter addressed to the Managing Director/CEO FIN Insurance Company Limited and signed by Leonard M. Akah, director, Governance, Enforcement & Compliance on behalf of the Commissioner for Insurance. Peter Ekwueme is an accomplished Insurance professional with over 24 years of experience in the sector. Prior to Joining FIN Insurance, he was the General Manager and Divisional Head, Institutional Business at Cornerstone Insurance Plc where he began his career in Insurance. A versatile insurance practitioner with vast experience in Sales and Marketing Management, Underwriting and Operations, Peter is an As-

recapitalization of insurance companies will bring more confidence in the industry. Smart who is also the managing director/CEO of NEM Insurance Plc said

sociate member of the Chartered Insurance Institute of Nigeria (CIIN). He has attended various courses locally and abroad including Advanced Management Course on Sales Force Performance at Kellogg School of Management, Illinois, Chicago, USA. He is an alumnus of the prestigious Kellogg School of Management and Lagos Business School. Peter holds a bachelor’s degree in Agriculture from www.businessday.ng

University of Agriculture Makurdi, formerly UNIJOS, Makurdi Campus and a master’s in business administration from Delta State University Abraka. FIN Insurance Company Limited is a member of Cornerstone Insurance Plc, which was incorporated on 24th April 1981 as a limited liability company, registered as a licensed insurer in 1982, and commenced business on the 1st January 1983.

same way when you have N3 billion. That is the only way you can grow capacity when you have the capital and right management experience, Braie said. With an estimated N170 billion expected into the Nigerian insurance industry after the ongoing recapitalisation by underwriters, the sector is hopeful to emerge stronger, contribute reasonably to the economy and also able to offer good returns to investors. Industry experts believe that the sector post consolidation will have enough resources to attract quality manpower, acquire necessary skills to underwrite big ticket risks, increase retention in the local market, and be able to take advantage of untapped potentials to create shareholder value. Industry operators say there is still much to hope for in investing in insurance as the industry holds a lot of untapped potentials in the long term for savvy investors.

Sovereign Trust Insurance standing tall, meting obligations 25-years after Modestus Anaesoronye

Peter Ekwueme

many people within and outside the country are getting more interested in the activities of insurance industry. “They know that we are going through a recapitalisation and a lot of people are looking at the opportunities open to them.” Daniel Braie, managing director/CEO, Linkage Assurance Plc said “I expect that insurance companies would be able to build more capacity to do business because at the moment we have capacity problem in the industry, and that is why most of the risks still go offshore. Imagine a situation where the bulk of the risk especially the energy risks that are going outside are taken up in this system, what it will do and the effect it will have in the economy in terms of income for government (taxes) and employment for the citizens.” I believe that the impetus will be at post recapitalization because you cannot have N10 billion and still do business

overeign Trust Insurance Plc no doubt has become a reckoning force in the Nigerian Insurance landscape. The underwriting firm commemorated her 25th anniversary a day after the New Year with a special thanksgiving held at the company’s Head Office on Victoria Island, Lagos. It was a moment of reflection and gratitude for members of Management and Staff of the insurance company when they all gathered early in the Year to acknowledge God’s faithfulness upon the organization in the last two and half decades. The vision of one of Nigeria’s prolific underwriters, Oluseun O. Ajayi ably amplified with the support of a prominent Boardroom guru and Entrepreneur,in the person of Ephraim F. Faloughi has today become

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a household name in the insurance industry in the country. Together, this duo and the pioneering members of Management and Staff nurtured the company from birth to maturity and ever since, the journey has been forward-looking for a better tomorrow for the underwriting firm. Two and half decades after, Sovereign Trust Insurance Plc has indeed made commendable strides in the insurance industry in Nigeria. From inception, the company moved from an average industry rating to a leading position, investing in the best of people and technology, improving on processes, growing market share at an average annual growth rate of 30 percent, while consistently expanding the balance sheet size of the company. The ownership of the company is made up of diverse shareholders from wide range @Businessdayng

of individuals and institutional investors with a robust Board of Directors of distinguished personalities under the chairmanship of the hitherto pioneer managing director, Oluseun Ajayi. Olaotan Soyinka, the managing director/CEO of the firm, used the occasion to thank all the company’s customers and associates alike for their patronage, support and the belief in the story called Sovereign Trust Insurance Plc. In his words, “as a transiting world-class organization conscious of our brand equity, the company has a well-entrenched culture of upholding sound moral and professional ethics beyond profit. For Sovereign Trust Insurance Plc, the journey has just begun and the insurance industry is set to witness a new and more innovative way of underwriting insurance business in Nigeria.

Monday 20 January 2020

BUSINESS DAY

Access Bank Rateswatch

Market Analysis and Outlook: January 17 - January 24, 2020

KEY MACROECONOMIC INDICATORS GDP Growth (%)

2.28

Q3 2019 — higher by 0.17% compared to 2.12% in Q2 2019

Broad Money Supply (N’ trillion)

36.48

Increased by 2.9% in Nov’ 2019 from N35.45 trillion in Oct’ 2019

Credit to Private Sector (N’ trillion) Currency in Circulation (N’ trillion)

26.41 2.20

Increased by 2.18% in Nov’ 2019 from N25.85 trillion in Oct’ 2019 Increased by 7.17% in Nov’ 2019 from N2.06 trillion in Oct’ 2019

Inflation rate (%) (y-o-y)

11.98

Increased to 11.98% in December 2019 from 11.85% in November 2019

Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor)

13.5 Adjusted to 13.5% in March 2019 from 14% 13.5 (+2/-5) Lending rate changed to 15.5% & Deposit rate 8.5%

External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

38.34 65.29 1.77

January 15, 2019 figure — a decrease of 0.5% from January start January 16, 2020 figure— a decrease of 1.39% from the previous wk December 2019, figure — a decrease of 1.34% from November 2019 figure

COMMODITIES MARKET

STOCK MARKET Indicators

Friday 17/1/20

NSE ASI Market Cap(N’tr)

29,618.52 15.26

Friday

Indicators

Change(%)

17/1/20

10/1/20 29,415.39 15.17

Volume (bn)

0.32

0.28

Value (N’bn)

3.55

4.82

MONEY MARKET NIBOR Tenor

Friday Rate

(%)

1-week Change

YTD Change

(%) Energy Crude Oil $/bbl) Natural Gas ($/MMBtu) 15.68 Agriculture Cocoa ($/MT) (26.17) Coffee ($/lb.) Cotton ($/lb.) Sugar ($/lb.) Wheat ($/bu.) Metals Change Gold ($/t oz.) Silver ($/t oz.) (Basis Point) Copper ($/lb.) 0.69 0.54

(%)

65.29 2.05

(1.39) (4.65)

1.29 (32.92)

2691.00 112.45 70.94 14.39 567.25

4.42 (4.05) (0.06) 5.04 0.71

39.00 (13.63) (8.46) (6.13) 30.85

1555.44 18.06 286.75

0.38 0.78 2.12

18.05 5.06 (12.52)

17/1/20

10/1/20

OBB

3.0000

9.7100

(671)

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

O/N CALL 30 Days

3.8600 5.3000 8.7324

10.7100 11.3125 9.6124

(685) (601) (88)

Tenor

90 Days

8.7187

9.6681

(95)

FOREIGN EXCHANGE MARKET Market

Friday

1 Month

(N/$)

Rate (N/$)

17/1/20

10/1/20

17/12/19

Official (N) Inter-Bank (N)

306.90 361.84

306.95 362.22

306.95 362.99

BDC (N) Parallel (N)

0.00 362.00

360.00 360.00

Friday

Change

(%)

(Basis Point)

(%) 17/1/20 3-Year 5-Year 7-Year 10-Year 20-Year 30-Year

0.00 9.16 10.40 10.51 11.44 12.61

10/1/20 0.00 9.19 10.02 10.49 11.32 12.36

0 (3) 38 2 12 25

Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Friday

Change

(%)

(Basis Point)

10/1/20

1 Mnth 3 Mnths

2.89 2.90

3.40 3.54

(51) (64)

6 Mnths 9 Mnths 12 Mnths

3.57 4.17 4.35

3.83 4.42 4.68

(26) (25) (32)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

AVERAGE YIELDS Friday

Friday 17/1/20

BOND MARKET Tenor

Global Economy In Europe, current account surplus expanded to EUR 36.6 billion in November of 2019 from EUR 31.8 billion in the corresponding month of the prior year. According to the European Central Bank, the services surplus rose to EUR 6.6 billion from EUR 4.4 billion a year earlier and the secondary income deficit contracted to EUR 9.5 billion from EUR 13.9 billion. On the other hand, the goods surplus declined to EUR 28.5 billion from EUR 29.0 billion a year earlier and the primary income surplus fell to EUR 11.0 billion from EUR 12.2 billion. Elsewhere in India, foreign reserves increased for the 16th consecutive week to an all-time high of $461.21 billion in the th week ended January 10 , 2020. According to the Reserve Bank of India, Gold reserves increased to $28.49 million from $28.06 billion in the previous week while foreign currency assets went down to $427.58 billion from $427.95 billion.

Friday

Change

(%)

(Basis Point)

17/1/20

10/1/20

Index Mkt Cap Gross (N'tr)

3,535.41 11.05

3,545.02 11.08

(0.27) (0.27)

Mkt Cap Net (N'tr) YTD return (%)

7.40 43.92

7.45 44.32

(0.62) (0.40)

YTD return (%)(US $)

-11.86

-11.50

(0.36)

TREASURY BILLS (MATURITIES) Tenor

Amount (N' million)

Rate(%)

Date

91 Day

10,000.00

3.5

2-Jan-2020

182 Day

20,000.00

4.9

2-Jan-2020

364 Day

3,000.00

5.495

18-Dec-2019

Domestic Economy Data from the National Bureau of Statistics reported that inflation rate for December 2019 printed at 11.98% year-on-year from 11.85% in November 2019. Prices rose for both food and core inflation. Core inflation jumped 9.33% in December, up by 0.34% when compared with 8.99% recorded in November. Highest increases were recorded in prices of hospital services, hairdressing saloons and personal grooming establishment, garments, repair and hire of footwear, vehicle spare parts, passenger transport by air, shoes and other footwear, appliances, articles and products for personal care, clothing materials, other articles of clothing and clothing accessories and cleaning, repair and hire of clothing. Food inflation rose 14.67% in December from 14.48% in the prior month. In a separate development, available data from Central Bank of Nigeria (CBN) showed that Nigeria spent $1.31 billion to service external debt obligations between January and November last year. According to CBN, the external debt service payment stood at $1.31 billion at the end of November last year, compared to $1.47 billion spent in the corresponding period of 2018. Specifically, the country's total debt stock constitutes both external and domestic debts. As at June last year, the country's total external stood at N8.32 trillion. Nigeria's total public debt stock stood at N25.7 trillion. This means external debt service payment alone rose by 245.9% between 2015 and 2019 while an accumulated $3.95 billion was paid between the periods. Stock Market The stock market extended its upward swing for the third consecutive week on increased demand for high cap stocks that made the benchmark index to soar higher. Consequently, the All Share Index (ASI) rose 0.69% to end at 29,618.52 points from 26,415.39 points the prior week. Similarly, market capitalization rose by 0.54% to N15.26 trillion from N15.18 trillion the prior week. We expect investors to take advantage of low prices and positive macroeconomic indices to support the market. Money Market Cost of borrowing declined as January 2020 Federation Accounts Allocation

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation.

Committee (FAAC) allocation hit the system. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates closed lower at 9.71% and 10.71% from 9.71% and 10.71%. The 30day and 90-day Nigeria Interbank (NIBOR) rate also declined to 8.73% and 8.72% from 9.61% and 9.67% the prior week. This week, we envisage that rates will remain at single digit levels due to high liquidity in the system and Open Market Operation (OMO) maturity of N433 billion. Foreign Exchange Market The naira strengthened across most market segments the preceding week. The official rate marginally appreciated ending at N306.90/$, a 5 kobo gain from the previous week whilst the Nigerian Autonomous Foreign Exchange (NAFEX) gained 38 kobo to close at N361.84/US$ from N362.22/US$ the prior week. The parallel market remained unchanged week-on-week at N362/US$. The stability of the local currency continues to be supported by the intervention of the apex bank across various market segments. This week, the naira is expected to remain around prevailing levels due to the apex bank's sustained supply of liquidity. Bond Market Activities at the bond market was bearish due to persistent sell-off of securities by market players. Yields on the seven-, tentwenty- and thirty-year debt papers finished at 10.40%, 10.51%, 11.44% and 12.61% from 10.02%, 10.49%, 11.32% and 12.36% respectively, the previous week. Consequently, the Access Bank Bond index reduced by 9.61 points to close at 3,535.41 points from 3,542.02 points the prior week. This week, the market is expected to maintain its selling interest given the recently released calendar of bond issuances for Q1 2020. Commodities The price of oil went southwards as reports that the U.S. will likely keep existing tariffs on Chinese goods in place until after the presidential election in November hit the market. Bonny light, Nigeria's benchmark crude dipped 1.39% or 92 cents to close the week at $65.29 per barrel. Contrastingly, bullion counters were trading in the green as traders were sceptical of improvement in trade relations between US and China. Consequently, gold gained 0.38% to $1,555.44 per ounce while silver rose by 0.78% to $18.06 per ounce. This week, oil prices are likely to rise due to a build-up in the U.S. crude inventories. Precious metal prices might decline this week as some expected upbeat U.S. economic data dulls safe-haven demand.

MONTHLY MACRO ECONOMIC FORECASTS Variables

Jan’20

Feb’20

363

362

Inflation Rate (%)

11.90

11.98

12.1

Crude Oil Price (US$/Barrel)

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

www.businessday.ng

https://www.facebook.com/businessdayng

Mar’20

Exchange Rate (NAFEX) (N/$)

@Businessdayng

Monday 20 January 2020

Harvard Business Review

BUSINESS DAY

MONDAYMORNING

In association with

Setting the record straight on managing your boss AMY GALLO

veryone knows how helpful it is to have a positive relationship with your boss and that it’s up to you to make it work. But do you know how to best interact with your manager to get what you need, support her success and excel at your job? HBR talked with two experts to get their perspectives on whether the conventional wisdom holds up in practice. ALWAYS BRING SOLUTIONS — NOT PROBLEMS — TO YOUR BOSS. “Problems don’t make anyone happy, and bringing unsolved problems to your manager makes it look like you’re not doing your job,” says Jeffrey Pfeffer, a professor of organizational behavior at the Stanford Graduate School of Business. There are limitations to the “bring solutions, not problems” rule, however, says Linda Hill, a professor of business admin-

istration at Harvard Business School. Some people, afraid of not having the right solution in hand, don’t do anything. NEVER CRY IN FRONT OF YOUR BOSS. Pfeffer says that from a power perspective, crying is a bad move. “You defi-

nitely don’t want to show that you’re emotionally weak,” he says. There are experts who dispute that crying doesn’t belong in the office. Some have even advocated for the appropriateness of tears at work. Still, both Pfeffer and Hill agree

that if you think you won’t be able to control your emotions, you might want to put off the conversation with your boss. UNDER-PROMISE AND OVER-DELIVER. Hill and Pfeffer both agree this is a good idea. Hill says that when she

asks leaders why they’d chosen to mentor certain employees, they often said it had to do with the results they’d seen them deliver. One manager explained: “When I ask her to bring me a fish, she brings me back a whale.” DON’T BE FRIENDS WITH YOUR BOSS. This one can be sticky. Pfeffer points out that you want a strong relationship with your boss no matter what. “The more the boss likes you, the more she feels favorably toward you. The more the boss feels like she has a stake in your success, the better off you’ll be,” he says. LET YOUR WORK SPEAK FOR ITSELF. According to Pfeffer, this is malarkey. Yes, you need to do good work, but your boss isn’t going to automatically notice. Instead, you have to find ways to promote your work. “Visibility really matters,” says Hill.

(Amy Gallo is a contributing editor at Harvard Business Review.)

The 5 kinds of blockchain projects DAVID FURLONGER AND CHRISTOPHE UZUREAU

espite widespread experimentation, blockchain is still young and evolving. Today’s experiments often use only some of the core elements that make a blockchain. In particular, today’s blockchains rarely include digital tokens, and their technology architecture is almost never decentralized, as was intended in the original blockchain design. What that means in practice is that many blockchain solutions available today are owned and governed by a single company or small group, and only authorized participants can join. Some solutions are highly centralized, with one owner or group of owners controlling the currencies, while others exert less absolute control. To help business leaders identify the difference, we have defined the following five blockchain archetypes based on their degree of centralization:

— FEAR OF MISSING OUT SOLUTIONS: Although FOMO blockchain solutions won’t create much value, they aren’t always pointless. They could send a message to the market that your organization is on top of current trends. Prospective customers might give you a second look. Competitors might invest time and resources for similar FOMO reasons. — TROJAN HORSE SOLUTIONS: For this archetype, one powerful actor such as a digital giant, a dominant supply-chain participant or a small group develops a blockchain solution and invites other ecosystem participants to use it. These solutions look attractive from the outside. The risk for the participants, however, is that they become dependent on the owner’s technology and locked in to the contract terms. — OPPORTUNISTIC SOLUTIONS: These aim to address known problems or opportunities around record keeping that are ill-served by existing solutions. They can bring value to participants,

even if they don’t lead to a live, operational platform. They may present some loss of control over data and contracts, but the solutions offer experiential payoff. — EVOLUTIONARY SOLUTIONS: These are designed to mature over time to use tokens with decentralized governance. — BLOCKCHAIN-NATIVE SOLUTIONS: These are either developed by startups

or by innovation arms of existing firms to create a new market or disrupt an existing business model. They may not start out with tokens or decentralized governance, but they are designed to move in that direction as the market matures. Native blockchain solutions will insert new business approaches into legacy industries. Untested technology will be the major cur-

rency risk, though these will appeal to participants who want to control their own data and experiment with decentralization.

(Adapted from “The Real Business of Blockchain: How Leaders Can Create Value in a New Digital Age” by David Furlonger and Christopher Uzureau, who are vice presidents at Gartner.)

Monday 20 January 2020

BUSINESS DAY

Start-Up Digest 10 funding options for Nigerian entrepreneurs in 2020 In association with

ness ideas. It is the practice of funding a project or venture by raising money from a large number of people who each contribute a relatively small amount, typically via the Internet. It is initiated by some organisations or people to support a broad array of activities such as journalism, disaster relief, political campaigns, start-up funding, movie development, support of artists by fans, and scientific research, among others. Though its knowledge is still low amongst Nigeria’s start-ups, some entrepreneurs are already talking advantage of it to raise funds for their businesses. Some of the popular crowdfunding websites where entrepreneurs can raise funds from are: Kickstarter, RocketHub, Indiegogo, GoFundMe, Imeela, Crowdfunder and Wefunder, among others.

Odinaka Anudu & Josephine Okojie

inance is the fuel that propels every business and, in its absence, entrepreneurs with wonderful ideas risk failure or stagnation. Seed capital for expansion is becoming increasingly challenging for businesses to locate. Understanding the critical importance of funding to Nigerian business owners and entrepreneurs, Start-Up Digest, in its characteristic manner, has dug up some of the places where entrepreneurs can access funds for their businesses. There are general criteria to access these funds and there are also specific ones depending on the particular funding institution. General criteria The general criterion for accessing these funds is to have a business. These firms rarely fund ideas because ideas are untested and untried. You must have a business and ensure that it is providing a solution to a problem in society. Next is to have a bankable and viable business plan. More so, the entrepreneur should be clear on where they want to be in the near future and be able to describe their market. Moreover, they should have good book-keeping in order to accurately know their revenue and the expenditure. LSETF The Lagos State Employment Trust Fund (LSETF) has a capital base of about N11.1 billion and has disbursed loans worth N7.3 billion to no fewer than 11,000 micro, small and medium scale enterprises. Its fund is divided into two categories: micro and small businesses. Under the micro, businesses can access up to N500, 000 loans with an interest rate of five percent and a tenor of one year. For the small business category, businesses can get up to N5 million with a tenor of three years. Speaking with Start-Up Digest, Uchechukwu Abiakam, who runs a fashion business and produces a sportswear brand, said she got N5 million from LSETF. “I must tell you it was amazing how that happened. I approached the Lagos State Employment Trust Fund (LSETF). I submitted my application and it was as if everything was timed. Af-

ter a couple of weeks, I was contacted and they came to inspect my premises. After some time, they told me to come for training. After the training, they asked me to come and take my offer letter. In October this year, they told me the fund would be disbursed at a certain time and it was done.” On why she got that loan of N5 million, Abiakam said, “I think they saw the kind of business we are doing. We have a proper structure. We showed them our track record and they saw the products displayed on online stores. They also saw what we already had without funding.” This is a lesson for entrepreneurs seeking funds. BOI Funds The BoI has a number of funds that entrepreneurs of all levels can access. First is the Graduate Entrepreneurship Fund (GEF), which is meant for serving members of the National Youth Service Corps (NYSC). There are also the Cottage Agro Processing (CAP) Fund for small and medium agro processors; Nolly Fund for players in the Nollywood industry, as well as Fashion Fund for designers and other www.businessday.ng

players in the value chain. There are specific funds for manufacturers, including CTG Fund for textile makers, and Cassava Bread Fund. The bank has other matching and managed funds, including a fund for the automotive industry and the Government Enterprise and Empow er ment Program funds (MarketMoni, TraderMoni). Through the business development experts, it has become easy for entrepreneurs to access funds. Tony Elumelu Fund Tony Elumelu Foundation has empowered 9,631 entrepreneurs from across 54 countries of Africa with seed funds of mostly $5,000 each. Elumelu set aside $100 million few years ago for 10,000 African entrepreneurs. If you are in agriculture, fashion and design, light manufacturing, ICT, and solid minerals, among others, then you may apply for the ongoing Tony Elumemu Fund. You can be one of the 1,000 lucky entrepreneurs to be shortlisted for 2020. Nexim Bank The funds offered by the Nigerian Export-Import Bank

(NEXIM) is good for exporters and manufacturers seeking to explore new markets. NEXIM was established in 1991 with a share capital of N50 billion held equally by the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria. Some of the funds available at the bank include ECOWAS Trade Support Facility for exporters within West Africa, Direct Lending Facility, and Foreign Input Facility, among others. GroFin Fund GroFin, a development financier, has committed over $500 million to funding Nigerian micro, small and medium business (MSMEs) across the country. The firm has five different types of fund: the Aspire Nigeria Fund, the Growth Africa Fund, the Small Growing Business Fund, the Aspire Small Business Fund and the Aspire Growth Fund. The Aspire Nigeria Fund, the Growth Africa Fund and the Small Growing Business Fund cater for all parts of Nigeria except the Niger Delta. The Aspire Small Business Fund provides a minimum of $100,000 and a maximum of $1.5 million to SMEs in Nigeria. The Aspire Small Business Fund and the Aspire Growth Fund cater for the Niger Delta. The Aspire Small Business Fund provides between $10,000 and $100,000 to small business owners in the oilrich region, while the Aspire

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Growth Fund frees between $100,000 and $3 million to businesses to stimulate growth in the area. GroFin provides its funds mostly for a maximum of six years. Afrexim Bank The African Export-Import (Afrexim) Bank has offered $500 million for manufacturers in preparation for the African Continental Free Trade Area (AfCFTA) which begins in July this year. Those who may easily access this fund are members of the Manufacturers Association of Nigeria (MAN). Orange Corners The Orange Corners is an incubation programme that provides aspiring Nigerian young entrepreneurs with a dynamic, state-of-the-art facility, where they get the opportunity to collaborate and work with like-minded individuals. Orange Corners Lagos is developed and funded by the Netherlands embassy in Lagos and implemented by FATE Foundation. It provides funding for prototype business development for entrepreneurs who are within 18- 35 years with innovative business models in education, health, agriculture and the creative sector. Crowd funds Over the years, crowd funding has become an effective alternative for entrepreneurs to raise funds for their busi@Businessdayng

AYEEN Africa’s Young Entrepreneurs (A.Y.E) was conceived to effectively affect the business space and entrepreneurial minds of young Nigerians. The conception has led to the identification of viable business ideas, start-ups and existing businesses which have been generously aided with funding, business mentorship and training. The peculiarity of AYEEN is that there will be no ultimate winners, rather hundreds of people walk away annually with various degrees of business funding and other forms of empowerment. NESG Startup Pitch Competition The Nigerian Economic Summit Group (NESG) startup pitch competition is a yearly event organised in partnership with Venture Garden Group and its start-up investment/acceleration arm GreenHouse Capital to develop a strategy for the event that will empower start-ups before and after the competition, provide value to ecosystem players and sponsors, while putting NESG on the map as a key supporter of innovation in Nigeria. In 2017 (NES23), the NESG introduced a Startup Pitch Competition as part of the Annual Nigerian Economic Summit. The pitch competition created an avenue through which, young, innovative Nigerian start-ups engaged with the wide array of stakeholders drawn to NES. Additionally, start-ups participating in the competition had the opportunity to win catalytic funding to help them scale their businesses.

Monday 20 January 2020

BUSINESS DAY

Start-Up Digest

LSETF disburses N7.3bn to 11,000 MSMEs …set to hold employment summit Gbemi Faminu

he Lagos State Employment Trust Fund (LSETF) says it has a capital base of about N11.1 billion and has disbursed loans worth N7.3 billion to no fewer than 11,000 small and medium scale enterprises. The LSETF says it is set to hold the maiden edition of its employment summit this year, which aims to tackle unemployment in Nigeria and across the continent. The summit themed ‘Showcasing Leading Practices for Job Creation’ is aimed at identifying sustainable solutions to unemployment. The event is scheduled to take place on the 5th and 6th of February in Ikeja, with the governor of Lagos State as the chief host of the summit. Expected in attendance are representatives of the governors of the 36 states in Nigeria, non-governmental organisations, international agencies, corporate organisations and experts in business

L-R: Kudirat Bello, director, HR/admin, ministry of wealth creation and employment, Lagos State; Dele Martins, member, board of trustee, Lagos State Employment Trust Fund (LSETF); Teju Abisoye, acting executive secretary, and Popoola Ajayi, member, board of trustees/chairman, styakeholders management, during a press conference to announce theLSETF Employment Summit 2020, with the theme “Showcasing Leading Practice for Job Creation” in Lagos, at the weekend. Pic by Olawale Amoo

across Africa and the world who will take positions as panellist, speakers and more. Speaking to journalists at a press conference in Lagos on Friday, Dele Martins, mem-

ber of the board of trustees of the LSETF, said the summit aims to create an avenue to discuss strategic plans and interventions relating to tackling unemployment in

Nigeria’s entrepreneurs are key to Africa’s progress – Pierangelo ODINAKA ANUDU

laire Pierangelo, the United States consul general, has said that Nigeria’s entrepreneurs are critical to the continued growth of economies in the West African sub-region and the prosperity of the continent. Speaking at a one-day capacity-building seminar for the first cohort of USsponsored Tony Elumelu Foundation alumni, Pierangelo noted that population trends in Africa’s largest economy meant that Nigeria could become the world’s third most populous country by 2050, saying that events in the country could have wideranging global repercussions going forward. “If Nigeria is successful, its extremely young population will represent a tremendous source of productive labour and an extremely attractive market for a variety of products and services,” Pierangelo said. “Its success will be Africa’s success and the world

will also benefit from the creativity and resourcefulness of its people,” Pierangelo observed. “That is why the government of the United States cares so deeply about supporting entrepreneurship in Nigeria. Right now, according to sources, small to medium sized enterprises run by entrepreneurs create about 85 percent of all jobs in this country. We are, therefore, committed to working with you and our local partners, including the Tony Elumelu Foundation, to help you maximise opportunities to use your drive and skills to create a better Nigeria for all of us,” she added. Ifeanyinwa Ugochukwu, chief executive officer of the Tony Elumelu Foundation, who expressed the organisation’s appreciation for the partnership with the US consulate general, highlighted the importance of strategic alliances for the country’s sustained economic development. “It is clear that development aid does not solve economic problems, hand-outs never work in the long-term www.businessday.ng

Nigeria and Africa. “The summit will be a revelation and sharing of ideas and innovations targeted at solving unemployment. We believe that the summit is

aligned with the goal of the Next Level plan of the federal government and the state government for job creation,” Martins said. He said the summit aims to make impact beyond Lagos as unemployment is one of the major drivers of migration. Teju Abisoye, acting executive secretary of the board, said the summit is targeting a minimum of 300 participants, adding that it primarily aims at organisations that can create employment, the government which can influence policies that will create employment opportunities and people that can create employment in large numbers within Nigeria and across Africa. It also targets state agencies responsible for youth and employment across the country. She said the current administration is genuinely committed to the cause of the LSETF and has provided funding for them. Boladele Dapo-Thomas, permanent secretary, Min-

istry of Wealth Creation and Employment, said the LSETF, since its inceptions, has engaged in various activities to generate wealth and combat unemployment. Dapo-Thomas, who was represented by Kudirat Bello, director for admin and HR, said “the ministry will continue to support all programmes aimed at proving sustainable means of generating wealth and in its drive to foster economic growth and zero crime rate, the ministry will indulge itself in becoming a vanguard to realise the objectives of the government.” She said Lagos residents have been major beneficiaries of the activities of the LSETF and urged the Fund to continue their activities at an accelerated rate seeing how impactful it has been. The summit is supported by various organisations such as IBM, Harambee Youth Employment Accelerators (South Africa), FCMB, Tech Experts, GIZ, Eko Innovation Center, Coca-Cola, Jobberman, and International Breweries, among others.

There is reluctance by banks to offer SME loans—Mabogunje and in no developed country does government shoulder economic burdens alone. On the other hand, partnerships such as this support the jobcreating, solution-driven mentality which Nigeria needs to lift itself up,” she pointed out. The seminar also included a presentation on ‘Globalisation and Nigeria’ by John Doggett, a senior lecturer at the McCombs School of Business, University of Texas at Austin. It concluded with a panel discussion on the ‘Key to Success’ featuring Olori Anita Ololade Odozi, fashion entrepreneur; Adebola Williams, co-founder of Red Media Africa; AfricanFarmer Mogaji, CEO of AfricanFarmer; and Omowale Ogunrinde, CEO of Field of Skills and Dreams. The United States Government in October 2019 announced its partnership with the Tony Elumelu Foundation to promote entrepreneurship initiatives in Nigeria, through a public diplomacy grant of $105, 000 or approximately N37.8 million.

ODINAKA ANUDU

oki Mabogunje, president of the Lagos Chamber of Commerce and Industry (LCCI), says many deposit money banks are still reluctant to offer credit to the micro, small and medium enterprises. In an interview with Start-Up Digest in Lagos, Mabogunje says though progress has been made in terms of lending to businesses in the last 20 years, a lot more still need to be done. “I started MSME consulting when there was nothing—around year 2000. So, I am looking at over a span of 20 years. In 20 years, the (credit) situation has greatly improved,” she says. “There is a lot of funding, but still a lot of reluctance on the side of the banks because they consider MSMEs to be high-risk. This is what has led the CBN to use carrot and the sticks with the banks,” she says. Mabogunje notes that

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Toki Mabogunje

banking is still not where it should be in Nigeria, stressing that every bank account holder should be able to borrow from banks to whatever degree that the business turnover justifies. “On the side of the banks, we do not have enough banks that understand MSME lending,” she further says. “You cannot be lending to Emmanuel & Sons the same way you are lending to Globacom. We do not have enough of them with technical competence behind MSME lending. Because of that, they are even more averse with risks that come with being an MSME. It is not as if the risks are @Businessdayng

extraordinary in Nigeria compared with any other developing country. Some of the things that the banks require in order to make good lending decision are not yet strengthened,” she explains. She points out that the policy behind BVN is a brilliant idea that helps to determine those who are bad borrowers and good borrowers, but regretted that the country is not utilising the initiative for innovations. “We need to leverage it. On the side of the MSMEs, there is a whole education to be done in terms of MSMEs not understanding the banks’ requirements. So, they keep complaining that the banks’ requirements are steep. Yes, in some cases, they are, but in other cases, they are looking for basic information. Are you keeping your financial records? Do you have processes in place that convince the banks that over time you will pay back? There are challenges on both sides which need to be worked upon,” she added.

Monday 20 January 2020

BUSINESS DAY

This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

• Utilities • Managing your Tax

How to flush entitlement from bloodline heirs forever The Solid Wealth Messenger

Grace Agada

ntitlement is having a right to something. It is the belief that a person is deserving of certain privileges or special treatment. Everyone is entitled. And we all express entitlement is different areas of our lives. Parents feel entitled to their children. Citizens feel entitled to the government and employees feel entitled to their salary. Having an entitlement mentality is thus not entirely a bad thing. What makes entitlement bad is how entitlement is formed. And what type of entitlement a person has. There are two types of entitlement. The first type is the “Something for Something entitlement”. And the second type is the ‘’Something for Nothing entitlement’’. The something for something entitlement is the entitlement that expects certain compensation for services rendered. That is, a person demands a reward in exchange for the provision of value. For example, employees who invest their time and energy to grow a company can demand a salary reward. Citizens who pay taxes to the government can expect certain privileges in return. This type of entitlement that expects something in return for a certain value, is healthy and beneficial. It is healthy because it requires a person to pay a certain price. This helps a person develop the capacity to add value and thus a healthy value for money. When a person works or adds value. Their expectation for a reward is right and appropriate. This is the only type of entitlement that is healthy. The second type of entitlement is different. It requires something in exchange for nothing. That is, it demands compensation in the absence of value. For example, some children enjoy certain privileges for no effort on their part. Save for their blue blood. This kind of entitlement robs children of two things. First, it robs them of the ability to develop sound work ethics. Second, it diminishes their value for money. Children grow up to see money as a free resource rather than something that demands hard work. They develop

rights to privileges without concerns for contribution. The something for nothing entitlement is thus an unhealthy kind of entitlement. So how is the Something for nothing entitlement formed? The something for nothing entitlement is formed. When parents oversupply their family environments with unearned wealth and lifestyle. Parents create these perfect environments because it reflects the kind of environment. They wished they had while growing up. But a perfect environment. That is laden with the trappings of wealth is seldom what a child needs to succeed. Children in this kind of environment develop a dysfunctional relationship with money. They become lazy unhappy and dependent on existing wealth. For children to value money and manage it well. They must believe that money only comes through hard work. When access to money becomes easy. And when money that is accessible is not earned or justified. The result is Laziness, unworthiness, and entitlement. Parents must resist the temptation to overprotect, over give, and overindulge their children. They must keep their protective tendencies within reasonable limits. Parents must also understand that there are two types of protection. And only one is beneficial for their children. The first type of protection is the threat protection and the second type of protection is Pain protection. Threat protection is protection that keeps chil-

dren away from life-threatening diseases or danger. This type of protection is beneficial for a child. Pain protection is protection that shield a child from pain. This type of protection robs a child of valuable life lessons. Pain is how life helps us grow. Shielding a child from pain is impeding natural development and growth. Without pain, a person cannot move to the next level in life. For example, if a mother decides to protect her child from the pain of falling and crashing into things. And decides to carry the child throughout childhood. That child will never walk or stand on his own two feet. The only way for a child to grow into an independent adult is for a mother to release the child from safety. Similarly, if a mother refuses to deprive a child of breast milk after the stipulated weaning period. Because she wants to protect her child from the pain of weaning. The child will not eat the right kind of food. That will help him develop into a mature adult. The only way for a child to develop into a mature adult. Is for the mother to starve him of breast milk. Without the right exposure to pain. Natural development will stall. Valuable Lessons will be lost and growth will be impeded. When this happens, parents will have to carry their children for the rest of their lives. For children to succeed in life. Parents must release them from safety. Wean them off over dependence on wealth. And help them develop the ability to create new wealth. Only then can they become resil-

‘

The only way for a child to grow into an independent adult is for a mother to release the child from safety. Similarly, if a mother refuses to deprive a child of breast milk after the stipulated weaning period

Grace Agada is a Generational Wealth Advisor, Business Longevity Expert, and Author of the popular Solid Wealth Book. She Consults and Coaches a private group of clientele comprising Family Business Owners, C-Suite Executives, and the Boards of multinationals. She helps her clients prepare their businesses and leadership for generational relevance, competitive advantage and Goodwill with consumers. Her role is to help her client plan and execute Leadership succession, Business succession, and Consumer succession.

Objectives • Solid Wealth Creation • Solid Wealth Preservation www.businessday.ng

ient to withstand the many hard knocks of life. The road to wealth is littered with pain and perseverance. Without the right exposure to pain, children will break under the weight of life. Shielding children from pain is producing a generation of weak successors. Weak successors will break in the absence of their protective parents While it is the duty of parents to protect their children. They must make sure that protection does not stand in the way of development. Parents must resist the temptation to bail children out of pain. This is the only way to end unhealthy entitlement forever. If parents developed work ethic and value for money through years of sacrifice, patience and determination. Children will develop these attributes in the exact same way. When children are allowed to go through life the normal way. They develop the resilience they need to steward and increase family wealth. The role of existing wealth is not to stand in the way of growth or buy a child a painless life. The true use of wealth is to help a child develop the capacity to seize value addition opportunities. The same type of opportunities parents could not seize. When they started. Due to a lack of capital. When children see wealth as a tool that helps them add value. They will succeed like you. Otherwise they will fail. Perhaps you worry about the ability of your children to enlarge, manage and steward wealth well. You can mute the late-night worries by getting the right kind of help today. To resolve any future concern about your wealth you need fresh eyes, new strategies, and the right expertise. That’s where we come in. We will help you resolve any burning concerns you have about the long-term preservation of your wealth. For more details about how we can help you send an email to info@ createsolidwealth.com. Protection from pain breeds entitlement. It won’t change with age.

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Monday 20 January 2020

BUSINESS DAY

MARKETS INTELLIGENCE Supported by Asset Management Corporation of Nigeria (AMCON)

Stocks

Currencies

Commodities

Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

P.E

Check out these 4 impressive value stocks in 2020 BALA AUGIE

wenty days have passed in 2020, and it’s time for investors to evaluate the stock markets in a new light. Last year, the market suffered substantially due to lack of policy direction on the part of government and poor earnings performance by companies, which dampened investors’ sentiment. The Nigerian Stock Exchange (NSE) has however gained 9.74 percent since the start of the year, thanks to the influence of local investors as foreign investors are waiting on the side-lines. Crude oil price jumped to $70 a barrel on the back of the assassination of an Iranian general by the United States, but the price is back to $68, as the OPEC plus group are steadfast in their production cuts. Amid macroeconomic uncertainties in Nigeria, and a rally in equities it is wise for investors to put their money in stocks which have cheap valuation. Why Should You Invest in Value Stocks?

Value investing is the practice of buying stocks in companies that have market capitalization lower than the book value of the asset. The market capitalization of a firm is derived by multiplying the share price of a stock by its total number of ordinary shares while book value is total assets minus total current liabilities. Value stocks are a safe bet for investors as they provide good returns over a period and are considered fundamentally more

stable. Zenith Bank Zenith Bank’s market capitalization of N681.30 billion (as at January 17) is lower than N871.10 billion shareholders fund. It has a price to book ratio of 0.798, lower than the industry average of 0.812, while its shares have gained 17.20 percent since the start of the year, outperforming the NSE ASI Index. Inv e s t m e n t h o u s e s h av e placed Buy ratings on the lender’s stocks on the expectation

that its aggressive foray into internet banking will add impetus to earnings amid a low yield environment. Zenith Bank has a dividend yield of 12.73 percent, the highest among the companies quoted on the bourse. That means an investor would get N120,730 in dividend for every N1 million invested in the stock. Access Bank Access Bank is relatively undervalued and it will make a good buy since its market capitalization

of N364.33 billion is lower than shareholders fund of N614.84 billion. Its price to book ratio of 0.60 is lower than the industry average as it continues to record double digit growth in earnings after acquiring Diamond Bank to emerge as the largest lender by total assets. United Bank for Africa The lender is indeed a value stock with a lot of growth potentials. Its market cap of N304.17 billion is lower than shareholders’ fund of N555.50 billion. It has a price to book ratio of 0.60, lower than the industry average. Seplat Petroluem Development Corporation Seplat Petroleum Development, the largest upstream oil and gas firm in Africa’s largest economy, has a market cap of N324.18 billion, a figure that is less than its total equity. Seplat and Nigeria’s state oil company will raise $700 million for a joint gas project scheduled to start production this year. This means the upstream oil and gas’s revenue will get a boost from the joint venture.

Investment sentiment for consumer goods stock may not improve in 2020 BALA AUGIE

nvestment sentiments for consumer goods stocks haven’t improved and may continue to be poor as tax increases by Federal Government will squeeze consumer wallets and stoke inflation. In the last two years, stripping out Nestle and Nigerian Breweries, consumer goods firms have lost considerable amount of value with brewers being the hardest hit from a volatile and unpredictable macroeconomic environment. While Banks, Agriculture, Insurance, Oil and gas, and industrial goods stocks are relatively cheap and attractive because of their low price to earnings ratios, consumer goods stocks are expensive as investors have lost confidence in the growth potential of the industry. “Their earnings have been dropping while share price has been dropping faster. The hike in Value Added Tax (VAT) will hurt them. They are also facing a lot of competition from cheaper brands,”

said Wale Olusi, head of research at United Capital Limited. The average Price to earnings ratio of the Banking, Agriculture, Oil and gas, and Industrial goods sectors are 3.70 times, 3.40 times, 4.30 times, and 11.40 times. That’s mostly lower than the 7.74 times NSE ASI average, which is an opportunity for investors to buy these shares when economic

fundamentals improve. Consumer goods are however currently trading at a trailing P/E of 24.40x, which is higher than NSE ASI average of 7.74x, which implies that each Naira of their earnings is being overvalued by investors. As such, they represent an overpriced stock. Nestle and Nigerian Breweries

(other most capitalized firm in the industry) trade at a premium because investors are buying them for stable performance in the past. These firms have been able to keep their value, and Nestle has been producing essential goods that find their way into household kitchens. Following a bearish run in 2019,

with a negative return of -14.6 percent, the local bourse began the year on a positive note and has sustained the upbeat performance for the sixth trading session of the year. The NSE has gained 9.5 percent year-to-date, thanks to participation of local investors, but analysts are sceptical that the rally will continue given the unpredictability of government policies and harsh operating environment. Analysts say the hike in VAT rate to 7.5 percent from 5 percent and likely increase in electricity tariff by Federal Government will keep consumer spending in check. The direction of the headline inflation rate turned northwards, spiking to 11.85 percent in December 2019, thanks to the complete shutdown of all land borders by Federal Government as it continues to check activities of smugglers. Analysts at United Capital Research said in a recent publication that they expect inflation rate to trend northwards to 12.1 percent due to protracted border closure and increase in minimum wage.

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: Dipo Oladehinde, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: FIFEN FAMOUS)

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Continues on page 37 Email the BMI team patrick.atuanya@businessdayonline.com www.businessday.ng

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Monday 20 January 2020

BUSINESS DAY

MARKETS INTELLIGENCE

The N781bn wall of liquidity set to sustain equities rally IFEANYI JOHN

nalysts are increasingly pointing to potential investments from Nigerian pension funds this year to sustain a stock market rally after a severe decline in treasury yields is causing money managers to look for decent yields in other financial assets. “Stocks will likely continue its great start to the year as investors seeking yield will move out of trea-

sury bills and enter the stock market because of lower yields. We think pension funds will be at the heart of the rally because of the size of money they control and the leeway they have to still invest further in the capital market,” said a money manager at a Lagos-based investment firm. As at the end of the t h i rd q u a r t e r o f 2 0 1 9 , Nigerian pension assets reached a staggering N9.5 trillion, adding more than N500 billion in assets between Q1 and Q3 2019. The ballooning size of the

Pension fund means that more than 9million RSA members may soon start urging their fund managers to take more risks betting on winning stocks on the local bourse. Prior to the sharp decline in treasury yields in Q4 2019, PFAs had allocated just 5.78 percent of their portfolio in local and foreign equities, amounting to about N557 billion in stocks (N492 billion in local equities and N65 billion in foreign stocks). Based on PenCom regulation on PFA investment limits in stocks,

pension funds have allowance to increase their stake significantly in the stock market. Based on the allowable limits on RSA Fund I to IV, pension fund can allocate up to 1.3 trillion in equities which is equivalent to 14 percent of total pension fund assets compared to the N557 billion currently invested. This means that there is an additional N781 billion waiting on the sidelines that could enter the stock market if there is an asset rotation from treasury bills into stocks

this year. Currently, PFAs hold as much as N2.26 trillion in treasury bills and almost N4.5 trillion in FGN bonds. With yields declining, analysts told BusinessDay that they except that pension funds may lose as much as N181 billion in reduced interest income from treasury bills and N201.4 billion in FGN Bonds if asset allocation remains unchanged from last year. “This is because treasury yields have declined precipitously from about 13 percent in Q3 2019 to less than

5 percent today and Bonds have also declined from 14 percent to just around 10 percent,” said Obinna Uzoma, chief economist at EUA Intelligence. If PFAs are willing to add more than N700 billion in investments in Nigerian stocks, analysts are highly optimistic that the outlook for stocks this year will become a lot more favorable. The Nigerian Stock Exchange All Share Index has returned 9.9 percent so far this year in what has been a blistering start to the year for the equities market.

Palladium surges to new record high over $2,500 an ounce Henry Sanderson and Neil Hume, FT

Why Presco’s stock price fell by almost 30% in 2019 IFEANYI JOHN

resco Plc, Nigeria’s second largest agricultural firm by market capitalization saw its stock price decline by 26 percent last year after unhappy investors began selling the stocks due to its sharp profit decline over the last 3 years. In 2016, Presco reported a profit after tax of about N21.7 billion after a biological revaluation gain of around N24.8 billion helped the company post its largest net profit performance on record. Since then, profits have declined for the next 2 consecutive years. In 2017, the company reported a net profit of about N5.6 billion, which represented a 74 percent decline from the previous year. The following year, profit again declined by 24 percent to N4.2 billion after a N2.6 billion loss on biological asset revaluation sent profit crashing by almost a quarter. This broke the camel back for investors who had been patiently expecting a profit

recovery from the firm in 2018. Operating profit rose by 12 percent in 2018 to N10.2 billion, its highest level on record but investors were only interested in the impact on the bottom-line as continued negative profit growth triggered a stock price selloff in 2019. The company’s finances appear to have moderately improved for 2019 according to the financial results of the company’s 9 months financial statement for 2019. In the first nine months of the year, the company generated about N3.6 billion in net profit which translates to an annualized PAT of N4.8 billion. While the profit growth for 2019 is expected to be around 13 percent, it is still nowhere close to the profit generated by the business in 2016 causing some market analysts to doubt if there could be any realistic recovery in the stock price in the near term. “I don’t think the stock price will recover to around N64 where it traded at the start of 2019 in the near term. www.businessday.ng

The stock is already one of the highest priced in the agricultural sector as it is currently trading at a price to earnings ratio of 17.6 which is almost twice the NSE 30 average PE ratio. Its too pricy at this level, we haven’t seen a complete downward correction in the stock price since the market mistakenly priced in a windfall profit. I think the outlook for the stock is bearish. It’s just not a winning stock this year considering how high the price is,” said Obinna Uzoma, chief economist at EUA Intelligence. The stock price closed unchanged on Friday, trading at N47.50. According to Bloomberg, the stock returned -22.47 percent in the last one year. Pres co Plc produces specialty fats and oils. The company specializes in the cultivation of oil palm and in the extraction, refining and fractioning of crude oil into finished products. It possesses oil palm plantations, a palm oil mill, a palm kernel crushing plant and a vegetable oil refining plant in Nigeria.

alladium prices surged to a new record on Friday, jumping by 10 per cent to over $2,500 an ounce, in a move that adds pressure on carmakers to switch to other metals for their catalytic converters. The precious metal has risen by over 25 per cent this year, due to a global shortage of supply and increased demand in China, where carmakers have to meet more stringent air pollution standards. The rising palladium price

has led to a rise in thefts of catalytic converters around the world and concerns about future supply for carmakers. Rising prices will make it “more difficult for palladium consumers to obtain the material they need,” analysts at Commerzbank said. Palladium is a critical ingredient in catalysts for petrol and hybrid cars that convert toxic emissions such as carbon monoxide and nitrogen oxide to carbon dioxide, water and nitrogen. “It’s the same old broken record with the rally being driven by momentum and tight supply with no one at this point daring to go against

it,” Ole Hansen, head of commodity strategy at Saxo Bank Group, said. Still Max Layton, an analyst at Citi, said carmakers are reluctant to switch catalytic converter technology due “to global growth uncertainty and pressure to invest in EV technology.” The rising price is a boon for some mining companies such as Anglo-American, which mines palladium in South Africa. At current prices Anglo American’s Platinum business could generate earnings before interest, tax, depreciation and amortisation of more than $3.4bn this year, from $1.95bn in 2018, according to analysts at UBS.

Travelex says no evidence customer data taken Systems gradually coming back online with some stores now able to operate Kate Beioley, FT

ravelex said there was no evidence to suggest customer data had been taken following a cyber hack that plunged the company into chaos this month, but claimed an investigation into the safety of customer data was continuing. Travelex fell victim to a cyber attack in which hackers threatened to sell customer data, including bank details, unless the company paid a multimillion dollar ransom. In a video statement on Friday, chief executive Tony D’Souza said the company had “engaged internationally renowned cyber experts” after uncovering the attack on New Year’s Eve and said the company had “not to date uncovered any evidence to suggest that customer data has left the organisation”.

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However, responding to a Q&A on the company’s website asking “is my data safe?”, Travelex said it was “undertaking extensive forensic analyses with our expert advisers” and that the investigation was “ongoing”. Travelex refused to say whether it had paid a ransom but said it was taking advice from a number of experts. Hackers used sophisticated malware known as Sodinokibi to enter and block Travelex’s systems, demanding payment in return for the tools to decrypt the bug. The same ransomware was used to temporarily cripple the National Health Service’s systems in the UK in 2017. Travelex immediately took its systems offline in the wake of the attack, affecting banks including Barclays, HSBC and Royal Bank of Scotland, which rely on the company for travel money services. Some banks were unable to take orders for travel money @Businessdayng

online, on the phone or in their branches. Meanwhile staff at the currency group were forced to hand in their potentially infected laptops for urgent treatment and write customer receipts by hand. Travelex claimed no personal data had yet been breached. It has not reported the hack to the UK data regulator, the Information Commissioner’s Office, which must be informed within 72 hours if such a situation occurs. The company said many of its customer-facing systems were being brought back online this week. Some of its stores are now able to use the online systems, and the order placement service used by several UK banks has been restored. On Friday Mr D’Souza said the company was rebooting its systems in phases, and was “making good progress towards recovery in a managed way” as well as “enhancing parts of our infrastructure”.

Monday 20 January 2020

BUSINESS DAY

Live @ The Exchanges Investors gain only N80bn as equities rally moderates Stories by Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) All Share Index (ASI) and Market Capitalisation appreciated by 0.69percent and 0.54percent respectively to close the week ended January 17 at 29,618.52 points and N15.256 trillion respectively as against 29,415.39 points and N15.175 trillion recorded the preceding weekend. In-

vestors gained only N80billion in the review trading week ended January 17, 2020 as profit taking weakened record rally. Twenty-one equities appreciated in price during the review week, lower than 51 equities in the preceding week. Forty-two (42) equities depreciated in price, higher than 20 equities in the preceding week, while 100 equities remained unchanged, higher than 92 equities recorded in the preceding week.

All other indices finished lower with the exception of NSE 30, NSE CG, NSE Premium, NSE Banking, NSE AFRI Bank Value, NSE MERI Value and NSE Oil/Gas index, which appreciated by 0.66percent, 0.64percent, 3.85percent, 2.30percent, 2.67percent, 1.74percent and 0.57percent respectively while NSE ASeM Index closed flat. A total turnover of 2.087 billion shares worth N26.470 billion in 24,262 deals were traded last week by inves-

tors on the floor of the Exchange, in contrast to a total of 2.683 billion shares valued at N32.646 billion that exchanged hands last week in 30,956 deals. The Financial Services industry (measured by volume) led the activity chart with 1.117 billion shares valued at N13.693 billion traded in 13,739 deals; thus contributing 53.51percent and 51.73percent to the total equity turnover volume and value respectively. The Healthcare industry

followed with 521.893 million shares worth N182.965 million in 420 deals. The third place was Conglomerates industry, with a turnover of 123.606 million shares worth N573.907 million in 1,164 deals. Trading in the top three equities –Union Diagnostic & Clinical Services Plc, Access Bank Plc and Zenith Bank Plc. (measured by volume) accounted for 877.992 million shares worth N8.399 billion in 5,251 deals, contributing

SEC, ICPC strengthen collaboration

he Securities and Exchange Commission (SEC) and the Independent Corrupt Practices and other Related Offences Commission (ICPC) are to collaborate in combating crime in the Nigerian capital market. This agreement was reached when the management of the SEC met with the management team of the ICPC in Abuja, Wednesday. Mary Uduk, acting director-general of SEC said the visit was necessary in order to seek collaboration, and also leverage on the expertise and mandate of the ICPC in tackling corrupt practices especially fraud, which has been prevalent in the Nigerian Capital Market and which is a major obstacle to the actualization of the objectives of the Commission Uduk said the objective of regulating the capital market is to protect investors, maintain fair, efficient and transparent Market by ensuring integrity in the market place and by preventing fraudulent practices. This shared goal she added, has necessitated a collaboration with relevant anti-corruption and law enforcement agencies in a bid to ensure that the market is fair to all investors According to her, “we are aware that your agency is established to curb corruption in the public sector, but as an agency of government we owe investors the duty to protect their investments, hence the need for this collaboration. Uduk said the Capital Market has witnessed incidences of fraud by market operators who have converted and diverted investors’ funds and utilised same for the acquisition of personal properties within and outside Nigeria adding that this potentially undermines investor confidence. “We believe that this collaboration will be mutually

beneficial to both agencies. Promoting market integrity and the integrity of the regulator is important for facilitating the liquidity and depth necessary to attract local and foreign investors. This naturally translates to sustainable growth and development of the economy which impacts the lives of every citizen and resident. “We are confident that creating awareness within the Commission, on relevant laws and regulations administered by the ICPC, would project the Commission as a law-abiding institution, aid our fight against market abuse, and further boost investor confidence in the regulator and the market. “Given that technology and globalization has made it easy for assets to be dissipated or to disappear without a trace, swift and effective ways of safeguarding and tracing assets has become even more relevant. The Commission therefore seeks to leverage on your intelligence network in other countries, for the tracing and recovery of assets belonging to innocent and hardworking investors in the Nigerian Capital Market. In his remarks, ICPC Chairman, Bolaji Owasanoye said the capital market is very important to any economy that wants to grow, stating that the ICPC is ready to partner with the SEC in order for the nation to reap the benefits of a vibrant capital market. “I understand the need to protect investors because the capital market has been so badly affected by the activities of fraudulent individuals and organisations. We are happy to collaborate with SEC to look at those who are giving the investment climate a bad name by collecting investors funds and disappearing. We have powers to trace such people and seize their assets”. www.businessday.ng

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42.06percent and 31.73percent to the total equity turnover volume and value respectively. At the Over-The-Counter (OTC) market for unlisted equities the market Capitalisation increased to N504.79 billion from preceding week’s N504.54 billion, which shows a 0.05percent increase in Capitalisation. Also the NASD Security Index (NSI) for the week ended January 17, 2020 recorded an increase from 702.62 points to 702.28 points.

Monday 20 January 2020

BUSINESS DAY

CHAPTER 2

Direct Taxes

he Finance Act 2020 provides amendments to the various pieces of Nigerian income tax legislation across the key thematic areas. These changes are discussed under the relevant tax Acts as follows: 2.1 Capital Gains Tax Act (CGTA) Cap C1, Laws of the Federation of Nigeria (LFN) 2007 2.1.1 Restricted tax exemption on compensation for loss of office The Capital Gains Tax Act (CGTA) imposes tax at 10% on any capital sum received as compensation for loss of office. The Finance Act, however, limits the impact of this provision by exempting any capital sum of N10 million or less received as compensation for loss of office. 2.1.2 Tax concessions on assets transferred pursuant to a related party business reorganisation The Finance Act introduces tax concessions for business reorganisations to exempt chargeable gains on assets transferred pursuant to a related party business reorganisation from CGT, subject to meeting certain conditions. We have discussed the details of this change and the impact thereof in Chapter 7: Impact on Business Reorganisation. 2.2 Companies Income Tax Act (CITA) Cap C4. Laws of the Federation (LFN) 2004 (as amended) 2.2.1 Taxation of non-resident companies (i) Introduction of Digital and Service Permanent Establishment The Finance Act modifies the provisions of Section 13 of the CITA to create a nexus for the taxation of income earned by foreign companies from technical, management, consultancy or professional services that are remotely provided to a person resident in Nigeria. The tax payable by such foreign companies will be limited to the Withholding Tax (WHT) deducted from them on such payments. The Finance Act also introduces provisions to tax any foreign company that “transmits, emits or receives signals, sounds, messages, images or data of any kind from cable, radio, electromagnetic systems or any other electronic or wireless apparatus to Nigeria in respect of any activity, including electronic commerce, application store, high frequency trading, electronic data storage, online adverts, participative network platform, online payments and so on, to the extent that the company has significant economic presence in Nigeria and profit can be attributable to such activity.” The Finance Act does not define what constitutes “significant economic presence,” but empowers the Minister of Finance to define the term.

The expectation is that ministerial guidance will be provided now that the Act has been passed. We have discussed this extensively in Chapter 8: Impact on the Digital Economy. 2.2.2 Taxation of Dividend (ii) Exemption of profits from Excess Dividend Tax rule The Excess Dividend Tax (EDT) provision contained in the CITA is intended as an anti-tax avoidance rule that creates a minimum level of protection against corporate tax avoidance using aggressive tax planning schemes. According to the rule, dividends paid by a company in any year should be deemed to be that company’s taxable profit for the year, if the actual taxable profits is less than the dividend paid in the same year. A strict interpretation of this provision has sometimes resulted in further taxation of profits that have already suffered tax, i.e., after-tax profits transferred to retained earnings account. In some other instances, this provision has been applied to dividends paid out of tax-exempt profits, thereby, effectively rescinding the tax-exemption on those profits. The unintended consequences of a strict interpretation of the rule has caused several disputes between taxpayers and the Federal Inland Revenue Service (FIRS), some of which have been adjudicated on by the courts in favor of the FIRS. The Finance Act seeks to mitigate the above incidence of (double) taxation by excluding certain profits from the rule. These profits include franked investment income, after-tax profits, tax-exempt income and distributions made by Real Estate Investment Companies etc. That said, companies are encouraged to properly track the sources of the dividends they declare (and possibly disclose these sources on their financial statements) in order to enjoy the exemptions. It may also be useful for some companies to update their current dividend policy to ensure alignment between the dividend paid to shareholders and the tax payable to government. (iii) Amendment of the requirement to pay income tax on interim dividend distributions. Every company liable to tax under

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the CITA is required to make an advance payment of its CIT prior to paying interim dividends. This requirement is generally regarded by taxpayers as moribund, though it was not deleted from the law, after Nigeria transitioned in 1993 from the provisional-tax-cumgovernmentasessment era to the self-assessment regime. It was in the same year that the scope of transactions liable to WHT, which was limited at the time to interest, royalty, rent and dividend payment, was significantly expanded to cover payments relating to active business transactions. Consequently, the general view was that the WHT deducted from companies’ income from business transactions, which is an advance payment of their CIT, made the requirement to pay advance CIT prior to paying interim dividend redundant. 6 | Finance Act, 2020 Finance Act, 2020– Impact Analysis Thus, the FIRS’ Public Notice of 14 October 2015 on its decision to commence the collection of advance CIT on interim dividend payment came as a surprise to many tax professionals and might have disrupted/ affected companies’ cash flows since then. The repeal of this provision as contained in the Finance Act is, therefore, a welcome development to many taxpayers. However, in deleting the provision, the WHT exemption on dividends in specie has also been removed. Taxpayers who would typically pay dividends in the form of scrip issue are therefore encouraged to take note of this significant change. 2.2.3 Introduction of new expense deductibility rules (i) Expenses Incurred in respect of exempt income The underlying principle for the tax-deductibility of expenses in Nigeria is that such expenses must have been wholly, reasonably, exclusively and necessarily incurred for the purpose of the business. The Finance Act does not introduce any fundamental changes to this principle. However, it modifies the way the rules are applied with the intention of closing loopholes in the application of expense deductibility rules. One such loophole is that a company may deduct expenses incurred to generate tax-exempt income (such as foreignsourced dividend, interest, rental and royalty income brought into Nigeria through governmentapproved channels, income on bonds, treasury bills etc.) from non-exempt income. Consequently, the nonexempt income is diminished by an excessive expense deduction and, by extension, the profits available for tax is significantly reduced. The Finance Act proposes to close this loophole by introducing expense deductibility rules. Accordingly, companies are now permitted to only take a tax deduction for expenses incurred in the generation of non-exempt income. Expenses incurred in the generation of tax-exempt income would no longer be allowed as a tax deduction. It will become mandatory for companies to properly track and/or apportion the costs relating to their tax-exempt

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business segments and revenue streams to ensure that such expenses are disallowed for tax purposes. Taxpayers are therefore advised to formulate a fair and equitable basis for cost apportionment. (ii) Gross-up Clauses The Finance Act seeks to address the deductibility of taxes borne by a company on behalf of another person. This, for instance, will affect PayAs-You-Earn taxes b orne by s ome companies on behalf of their employees, transaction taxes borne on behalf of foreign service providers, landlords, etc. Thus, such arrangements may need to be reviewed to manage the increased incidence of corporate tax they will create. (iii) Management Fees and other related party cost The Finance Act eliminates the bureaucracy associated with obtaining regulatory approvals required to claim management fee-related expenses and expenses incurred outside Nigeria for and on behalf of a company as a taxdeductible expense. Deductibility of these expenses have been the subject of debate, and even adjudication, in recent years Thus, the clarity the Finance Act brings, by basing the taxdeductibility of such relatedparty expenses on their consistency with the Transfer Pricing (TP) Regulations, would in large parts resolve these controversies. Wole Obayomi Partner & Head

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Continues on Tomorrow

Monday 20 January 2020

BUSINESS DAY

FEATURE

Celebrating AACE Foods at 10

t is a busy day at AACE Food Processing & Distribution Limited nested off Ijoko Road in Sango Ota, Ogun State. The senior management team have just completed their morning meeting, and production is already in full gear in the factory, with a bee-hive of activity in the spice and soya maize lines. What started as an idea in the mind and hearts of Mezuo and Ndidi Nwuneli, ten years ago, to address the high rates of post-harvest losses and malnutrition in Nigeria, reduce dependency on imports and improve the lives of smallholder farmers, is now a full-blown operation, managed by a dynamic team. From inception, the founders of AACE Foods committed to “providing nutritious and tasty food made from the best of West Africa’s cereals, grains, herbs and vegetables,” as clearly articulated in their mission statement. They recruited a proudly Nigerian team with over 50% women and youth. In addition, they invested in building a local supply chain as their key competitive advantage, training smallholder farmers and ensuring that they could meet the sourcing standards of the company. Todate, the company sources chili, ginger, garlic, turmeric, maize, soyabeans and a range of other products from 10,000 farmers in rural communities across West Africa and has also facilitated their access to microfinance and provided them with storage technology. This direct relationship has enabled AACE to build reliable sources of raw materials for its range of products, and clear traceability which is critical for building trust with local and international customers. The company has also introduced 18 retail products to the Nigerian market, has a strong relationship with leading FMCGs and retailers, and is recognized as a catalyst in the spice and seasonings industry, proving that proudly Nigerian products can thrive in local and global landscapes. Its products are sold in open air markets and retail chains across Nigeria, including Shoprite, Spar, Game, Hubmart and Ebeano. It has also exported bulk products to the Netherlands and the United States, demonstrating the potential export value

A Cross-Section of AACE Foods Board Members at the Factory Launch: Rtd. General ‘Tunde Reis, Temi Jebutu, Ndidi Nwuneli, Nnenna Oyewuchi, Prof. Gbenga Ogunmoyela, Mr. Mezuo Nwuneli

A display of AACE Foods Retail Products

Some members of the AACE Foods Management team lead by Mr. Temi Jebutu

of local spices, seasonings and flours. According to Vivian Maduekeh, the

A cross-section of the Production Team at the 10th Anniversary Celebration with Mr. Mezuo & Mrs. Ndidi Nwuneli, the co-founder of AACE Foods

Nigeria program manager for Partners in Food Solutions, “It is encouraging to work with a company that is committed to developing the local economy in which it operates, and in the nutritional composition of its products.” AACE Foods has also invested in fighting malnutrition in Nigeria through its complementary food products including Soyamaize, a complete meal fortified with vitamins and minerals. The company donates these products to children in internally displaced camps across Nigeria, in partnership with leading nonprofits organizations such as Slum2School. It has also worked with NGOs such as Adopt a

child, Orbus global, QCAT International, Africare Nigeria and government agencies such as Borno State Government to reduce the high levels of under-five mortality and ensure the development of healthy children in the country. AACE’s Our Mama Program has empowered Women to become micro-entrepreneurs and provided them with financial support and training that will enable them break free from poverty to achieve their highest potentials. Over the past ten years, the business has benefited from the support and partnership of international organizations including the African Diaspora Marketplace, Africa Enterprise Challenge Fund (AECF), West African Food Markets (WAFM), Business Innovation Facility, 2SCALE-IFDC, Partners in Food Solutions, and Innovations Against Poverty. These partners have supported AACE Foods on projects aimed at increasing local food production and exports, the improvements of farmer livelihoods, child nutrition, and helping women start up small scale businesses, as distributors of AACE products. Terry Lacey, a member of the West Africa Food Markets Team indicated that “AACE Foods is a great example of an innovative processed food producer which targets new markets, devises new distribution systems and finances new ideas from its own resources.” In addition, the company has received notable awards including the Sisterhood Awards for “Made in Nigeria Product of the Year – 2016” given by WIMBIZ and Ebonylife Television, Business Day recognition for “Most Innovative Companies in Nigeria – 2017” and the London Stock Exchange Group Companies to “Inspire Africa” in 2019. Reflecting on these awards, Temitope Jebutu, the General Manager of AACE Foods remarked – “Our modest success has been built on integrity, accountability, competence, and consistency in delivering quality products, and a commitment to continuous improvement. We are proud of the impact that we have made in the Country and we are excited about the next chapter in our history!” AACE Foods is well positioned for an exciting future, as it plans on introducing a range of healthy and ready to eat snacks in early 2020 and expanding its retail and international footprint, with the support of a range of partners. With every passing year, a commitment to innovation and excellence, it plans to be one step closer to its vision of becoming, “the preferred provider of food for West Africans, thereby contributing significantly to the improved livelihoods of our farmers and nutritional status of our people.”

Monday 20 January 2020

BUSINESS DAY

Insight The Finance – Inequality Nexus: Reducing inequality within and among countries

Introduction ustainable development goal ten (10) speaks to the need for reduced inequality within and amongst countries around the world. But before I delve into my thoughts it is perhaps apropos to inquire whether financial development leads to economic growth? To be frank, this question has indeed sparked a lot of interest amongst academic circles and policymakers alike in the past decade or so. In this economist view, the question is indeed axiomatic. Economists agree overwhelmingly that a well-functioning and properly regulated financial sector induces growth (Christopoulos and Tsionas, 2004); (Greenwood et al. 2013). To be sure, financial markets and financial intermediaries are the best positioned to play this role, thanks to their unique role of being able to move funds throughout the economy. Levine (2005) describes several channels through which financial development can foster economic growth. Firstly, by (i) enabling the exchange of goods and services via the delivery of payment services, (ii) allocating savings to their most productive use, (iii) monitoring investment and carrying out corporate governance, and (iv) diversifying, increasing liquidity and reducing intertemporal risk. Africa witnessed a strong economic performance over the past two decades, which led to the eminent narrative of an “Africa rising”.However, one could have thought of this growth to be more inclusive, leading to a significant reduction in poverty. Contrary to expectations, Africa’s growth story has wretchedly not been pro-poor, and subsequently little impact felt on poverty reduction. Income inequality has also not ensued fast enough, and remains stubbornly high, suggesting that the strong growth has largely been enjoyed by the richest Africans, thereby causing the gap between the rich and the poor to become wider. This, therefore, stands as a major cause for concern. In a scenario where access to financial services is solely limited to individuals based on their level of income, there is a prospect that financial sector development could bring about uneven growth, which in turn may lead to a wider income gap. To this end, the trend of rising income inequality is one of the most central challenges for policymakers in both developed and developing countries alike, albeit more apparent and severe in the latter group. Income inequality carries several implications and is harmful to the macroeconomic stability of the overall economy. Explicitly, reducing income inequality will suggest an uneven increase in the income of the poor relative to that of the rich. How can this be effectively attained without any detrimental effects? This is the puzzling question that continues to glow economic debates. Nevertheless, the central thrust of this exposition is to identify potential policies to reduce economic inequality in Nigeria and by extension amongst other countries. Theoretical Overview and Stylised Facts The financial development-income inequality nexus draws its origin from the pioneer work of Kuznets (1955), who established the famous Kuznets curve, advocating a non-

linear relationship between financial development and income inequality. Kuznets’ argument supports that in the early stages of development, income disparities increase due to the rapid rate of urbanization (as the population move from low agricultural productivity jobs to high productivity jobs in industries where the average income is higher). In the intermediate phase of development however, the relationship is expected to stabilize and should then start to decline in the advanced stage as a result of public redistribution policies. Three main theories underpin the work on the relationship between financial development and income inequality. The first theory by Greenwood and Jovanovic (1990) postulates an inverted U-shaped nexus. The study built a model of financial development, growth and wage distribution where the use of financial intermediaries generally enhances trade, as it is well known that transacting through these intermediaries entails both greater and secure profits. Nonetheless, it was accentuated that transacting through intermediaries usually comes at a cost, which is often higher in the early phase of development. Due to constraints of high associated costs and low income, the poor population group might not be able to use the services; and this may only benefit the rich, causing income inequality to widen. As the economy approaches the intermediate phase, financial intermediaries begin to develop. Consequently, the national savings rate will increase, causing the income disparity to widen given the poor capacity of the underprivileged to save. As the economy transitions to the intermediate phase and then to the advanced stage, income inequality will start to decline, as more agents will see their income grow given easier access to financial intermediaries. The above reasoning, which concurs with that of Kuznets (1955), translates into an inverted U-shaped relationship, with income inequality increasing at the early stage of financial development and dropping at the advanced stage of financial development. In later years, this school of thought was challenged by another strand of literature which posits a negative linear relationship between financial development and income inequality. The model built by Banerjee and Newman (1993) is based on the initial assumption that finance can provide entrepreneurship opportunities. However, several financial market imperfections such as high transaction costs and contract enforcement hinder the low-income group from making investment and becoming entrepreneurs, as they often have no credit histories and lack the requisite collateral needed by financial institutions. Within this context, it goes without saying that the poor will have limited access to credit even if they are in the possession of high-profitability projects and are therefore most likely to work for better-off employers, earning much lesser than what they should. This, in turn, proposes that should financial markets become accessible, efficient and stable, regardless of the background, entrepreneurs will be able to gain access to capital, thus translating to a decrease in income inequality. At the other end of the spectrum, the third strand of the literature, initiated www.businessday.ng

by Galor and Zeira (1993) is based on the assertion that with imperfect credit markets, income inequalities prevent an efficient allocation of resources by reducing the ability of poor households to invest in human and physical capital. The model by Galor and Zeira (2003) is centered on the argument that individuals are on par in terms of their capacities or potential abilities yet tend to differ in terms of their inherited wealth. Due to imperfect information and high transaction costs, the poor are usually faced with lending constraints and are therefore likely to invest less in human capital as opposed to the rich. In the model, the inheritance received by each individual defines whether he/she will invest in human capital (education) to become skilled. As such, the future of a household will consequently be defined by its initial wealth. Rich families will, therefore, tend to invest in human capital and become skilled, amass enough and leave large inheritances for the future while poor families, with little bequests will remain unskilled and amass little for the future generations. Even if it becomes possible

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There have been several published studies that show that higher wages for the lowest-paid workers have the potential to help nearly millions of people out of poverty and add billions of Naira to the nation’s overall real income

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Joseph Nnanna

for the poor to finance human capital, the hindrances related to financial market imperfections prevent them from doing so. Consequently, in the long run, the distribution of income will therefore be determined by the level of investment in human capital, with the latter being contingent on the initial wealth inheritance. Considering the above theoretical discussions, it goes without saying that for each theory, there is a unique mechanism through which financial development impacts income inequality. In the case of Nigeria, inequality amongst the socio-economic class continues to expand. In layman terms, the rich appear to be getting richer and the poor continue to get poorer without any effective safety net. In more sophisticated parts of the world, the notion of automatic stabilizers would be activated to ensure the effects are not so detrimental. Unfortunately, in Nigeria those mechanisms are nonexistent. Since the Great Financial crisis of 2008/2009, the Nigerian economy has witnessed growing disparities in income levels. Indeed, other countries such as the United States, the Euro Area and a host of other countries have witnessed the same fate. However, one cannot overlook the effects of the disparity in developing and emerging economies such as Nigeria where the minimum wage hovered around $50 a month or just under $2 per day. Unlike in other countries where benefits such as healthcare, retirement among other

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entitlements are paid to the employees consistently, in Nigeria, the same cannot be said. In 2019 the minimum wage was revised upwards to thirty-thousand Naira or ($83) per month using 360 Naira as the exchange rate, only to be partially accepted by a few states in the federation. Some states have argued that the affordability of the hike in wages eludes the state’s capacity to pay. In short, permit me to restate the point of this discourse is to proffer some policy interventions that can address poverty and inequality in Nigeria but perhaps in Africa in general. Policies to reduce economic inequality 1. Increase the minimum wage. There have been several published studies that show that higher wages for the lowest-paid workers have the potential to help nearly millions of people out of poverty and add billions of Naira to the nation’s overall real income. Perhaps more importantly, increasing the minimum wage does not hurt employment nor does it erode economic growth. Although the federal government of Nigeria along with the Nigerian Labor Congress (NLC) have gone back and forth on the subject matter, the consensus agreement was reached that the new minimum wage would move upwards to thirty thousand Naira from eighteen thousand. In this economist view, the new wage figure is unsatisfactory because the increase to the minimum wage vis a vis cost of living remains inadequate giving the average family size of 5 children in the country. However, it is noteworthy to state that the policy is moving in the right direction. 2. Build assets for working families. Policies that encourage higher savings rates and lower the cost of building assets for working- and middle-class households can provide better economic security for struggling families. New programs that automatically enroll workers in retirement plans and provide a savings credit or a federal match for retirement savings accounts could help lower-income households build wealth. Access to fair, low-cost financial services and homeownership are also important pathways to wealth. 3. Invest in education. Let me emphasize this point because I firmly believe in the case of Nigeria, we have ridiculed what it means to be educated. From my personal experience in the education sector in the United States of America, I have witnessed the benefits of government programs aimed at ensuring all children are educated. Programs such as “No child left behind”, Head Start, and Universal Pre -K all come to mind. Differences in early education and school quality are the most important components contributing to persistent inequality across generations. Investments in education, beginning with programs at the Creche, Kindergarten, Primary and Secondary levels can increase economic mobility, contribute to increased productivity and decrease inequality. In other words, the federal and state government should create laws that ensure all children have access and are compelled to gain an education. @Businessdayng

4. Make the tax code more progressive. The Palma ratio is a measure of inequality. Simply put, it is the ratio of the richest 10% of the population’s share of gross national income (GNI) divided by the poorest 40 % share. According to the United Nations Development Program, Nigeria ranks among the bottom 30 countries in terms of human development and equality. Ironically, tax rates for those at the top have been declining even as their share of income and wealth has increased dramatically. The data show we have created bad tax policy by giving capital gains -- profits from the sale of property or investments -- special privileges in our country’s tax code; privileges that give investment income more value than actual work. Capital gains tax rates are currently 10% however, this must be adjusted so that they are in line with income tax rates which are certainly much higher. Savings incentives structured as refundable tax credits, which treat every Naira saved equally, can provide equal benefits for lower-income families. 5. End residential segregation. All over the country, we continue to witness higher levels of residential segregation by income within a metropolitan region. Whether it is in Lagos (Island) or in Abuja, highbrow neighborhoods are strongly correlated with significantly reduced levels of intergenerational upward mobility for all residents of that area. Segregation by income, particularly the isolation of low-income households, also correlates with significantly reduced levels of upward mobility. Eliminating residential segregation by income can boost economic mobility for all. To achieve this, the federal government may opt to conceive an affordable housing scheme that will enable the bottom half to have an opportunity for upward mobility across generations. Conclusion This article set out to examine the finance inequality nexus on reducing inequality. I put forward a hand full of policies that if carefully implemented has the potential to lift working families out of poverty, support greater economic mobility and/or reduce the growth of inequality. In my humble opinion, all these policies could be enacted at the local, state and federal levels if there is political will. While there are still some disagreements of the best way to reduce inequality, there is a growing consensus even amongst the top 1% of earners globally that inequality should be reduced.

Prof. Joseph Nnanna works with the Development Bank of Nigeria Plc

BUSINESS DAY

Monday 20 January 2020

BUSINESS DAY

news

Five ways adopting Eco will impact Nigeria STEPHEN ONYEKWELU

eventeen years ago, members of the Economic Community of West African States (ECOWAS) decided they wanted a common currency, Eco. Launch of the Eco has been moved at least three times since, largely because member states have failed at meeting the terms for such a currency union. Nigeria accounts for 67 percent of the gross domestic product of the 15-member state economic community. Frenchspeaking West African countries that use the French-backed CFA have decided to adopt a new currency, the Eco, to displace the CFA in 2020. Other member states such as Nigeria are expected to join eventually. Here are five ways this will impact on Nigeria. •The Central Bank of Nigeria loses control over interest rates. It matters for a country to be able to control its interest rates because this means it can also control inflation and the supply of money in the economy. The Central Bank of Nigeria is the economy’s heartbeat. Once Nigeria adopts the Eco, the powers of the CBN will be surrendered to West African Central Bank, which will now regulate the supply of money in Eco-area. •The Greek effect in the Eurozone – the value of the single currency used by the 27 members (excluding the United Kingdom) of the European Union has been negatively impacted by Greece’s economic debacles. This is despite the fact that Greece is a minor player on a global scale and contributes only 2 percent to the Eurozone’s overall economy. A

single West African currency will expose Nigeria to the economic good and bad of each single member state. The Eco will be the transmission mechanism. •Market efficiency - Eco will bring new strengths and opportunities arising from the integration and scale of West Africa’s $1.50 trillion economy, making the single market more efficient. •Eliminates exchange rate costs – when Nigeria joins the Ecozone, it will eliminate the need to exchange currencies which causes extra costs, risks and a lack of transparency in cross-border transactions. With the single currency, doing business in the future Eco area will be more cost-effective and less risky. •Improved economic performance among countries in the Eco area – some of the requirements impairing the launch of the Eco is the inability of ECOWAS member states to meet the baseline economic terms and conditions. The currency agreement obliges member countries to keep inflation rate below 10 percent, Nigeria’s November inflation was 11.70 percent in November. Another requirement is to achieve budget deficit-to-gross domestic product (GDP) ratios of 4 percent and Central Bank financing of budget deficits should be no more than 10 percent of the previous year’s tax revenue while gross external reserves of country members must cover at least three months of imports. To date, no country in the bloc has fully met such stringent conditions. Improved economic performance will increase the chances of each member state being better off.

Lekki/Ikoyi Bridge: Lagos begins full implementation of cashless toll Jan. 20

agos State government on Sunday said full implementation of cashless policy at the Lekki/Ikoyi Bridge Toll Plaza would commence on Monday, January 20. The state Commissioner for Transportation, Frederic Oladeinde, in a statement by the Public Affairs Unit of the Ministry, said full implementation of the policy had become necessary. The News Agency of Nigeria reports that the state government had in 2019 announced that it would go cashless on toll payments at the Lekki/Ikoyi toll plaza effective from Jan. 1 due to the excessive delays experienced along the corridor with cash payments. The cashless policy, however, commenced partially on January 2 in the state. Oladeinde warned that from January 20, anyone who turned up with cash at the Lekki-Ikoyi toll gate would attract stiff penalty of N1,000 pending when they would get through with their cashless payment method. He also warned against all corrupt practices such as photocopying payment vouchers for multiple usages or presenting fake e-payment device. “The state government will not hesitate to apply the law on any motorist that attempts to frustrate its effort at improving

traffic situation along the LekkiIkoyi Bridge corridor. The e-tags are free to obtain and widely available. Therefore, such sharp practices are unnecessary,” he said. The commissioner, who commended motorists in the state for enhancing success of the cashless toll implementation, urged full compliance. He said the cashless toll initiative had the objective of removing bottlenecks at the toll gates and impacting positively on the reduction of traffic queue length and journey time for Lagosians. He also said the cashless policy had become necessary to address constant traffic gridlock often experienced at that corridor due to slow process of cash payments at the toll plaza. He urged those who had yet to obtain their e-tags to do so as full compliance would be enforced, now that the additional two weeks grace for motorists to align had elapsed. He thanked the general public for their cooperation and compliance during the implementation period. It would be recalled that the managing director, Lekki Concession Company Limited, Yomi Omomuwasan, highlighted four seamless ways by which people could make their e-payments. www.businessday.ng

L-R: Abike Dabiri-Erewa, chairman/CEO, Nigerians in Diaspora Commission; Anthony Joshua, world heavyweight champion; President Muhammadu Buhari; Geoffrey Onyeama, minister of foreign affairs; Adesola Oguntade, Nigeria’s high commissioner to the United Kingdom, and other dignitaries, during Buhari’s meeting with Nigerians living in the UK ahead of the UK/ Africa Investment Summit in London. NAN

Hospitality sector to soar on slightly stable economy … as stakeholders predict 70% average occupancy, more investment OBINNA EMELIKE

ith the relative stability in the economy and political scene, most stakeholders in the Nigerian hospitality business are optimistic of appreciable growth in the sector this year. For the stakeholders, the outlook is very positive as most hotels are better managing the traditional lull in the business this year than same time last year. The lull is usually between late December till February ending resulting in huge revenue loss due to very low occupancy, poor government and corporate patronage, as businesses and government agencies are just opening and adjusting for New Year’s activities. Comparing occupancy rate this time last year and now, the Nigerian hospitality sector is experiencing better patronage, hovering between 30 and 40 per-

cent, which is unprecedented in a lull season. Speaking on the development, Shola Adeyemo, public relations/marketing manager, Transcorp Hilton Abuja, notes that early passage of the 2020 budget has impacted positively on the sector. The budget, which is the nerve of the economy, has generated lots of economic activities that have also benefited the hospitality sector, unlike this time last year when businesses were skeptical of the direction of the economy. He also discloses that the traditional lull in business last year lasted through the first quarter of the year because 2019 was an election year. With the postponement of the elections, business activities did not stabilise across the first and second quarters of 2019. Also speaking on the outlook for the sector this year, Ronald Stilting, general manager, Ibom Hotel and Golf Resort, assures 2020 would be good for the

sector because of the slightly economic as well as political stability, with the election tribunals over. The positive development, according to him, would encourage more activities in the economy, boost hotel patronage and woo more investments, especially foreign investors who are going to take advantage of the stability. Despite the fact that 2019 was an election year, the Ibom Hotel and Golf Resort general manager notes that the Nwaniba-based resort in the outskirt of Uyo, Akwa Ibom State, recorded 13 percent more room night in 2019 than in 2018. With the stability, he assures that the resort hopes to make additional 14 percent growth this year, while the Nigerian hospitality sector at large would gain more with an occupancy expected to average 70 percent this year. In the same vein, Adeyemo predicts that Transcorp Hilton Abuja would maintain an aver-

age occupancy of between 60 and 65 percent, while occupancy nationwide would average 60 percent. He hinges his growth prediction on improvement on security and relative stability in the economy and political scene. Ada Ojukwu-Mathews, sales and marketing director, Radisson Blu Hotel Lagos Ikeja, assures that the Radisson brand, which has seen steady growth in Nigeria since its debut in the country with the converted Radisson Hotel Lagos Ikeja, would continue this upward growth in 2020. “Although it has been a tough year, we are working hard to achieve a year-on-year growth,” Ada says and further noting that Radisson and its sister brands within Radisson Hotel Group has identified potential for more growth and presence in the market due to the increase in local and international engagements, and new entrants.

Frequent grid collapses question competence of managers … TCN’s $1.66bn donor funding fails to dent problem ISAAC ANYAOGU & HARRISON EDEH, Abuja

i g e r i a’s f r a g i l e electricity grid collapsed again Thursday last week, the thirteenth such collapse in the past 13 months, casting doubts on the competence of the system operator, a unit of the Transmission Company of Nigeria (TCN) managed by the Federal Government and the billion-dollar funding the organisation has received. The Systems Operator is responsible for keeping the grid stable. From its headquarters in Abuja, it coordinates supply of electricity generation from Generation Companies (GenCos) through its National Control Centre (NCC) in Osogbo where at least 30 percent of the capacity generated is lost through weary transmission lines. It claims that its office in Oshogbo is equipped with a

state-of-the-art Supervisory Control and Data Acquisition (SCADA)/ Energy Management System, Tele-control Interfaces, Human Machine Interfaces, Communication Equipment, System Planning tools etc, and supervises all the Regional Control Centres in the grid network, but the reality tells a different story. To maintain the integrity of the grid, GenCos are obligated to maintain spinning reserves - generation capacity that is online but unloaded and that can be used to compensate for generation or transmission outages – but the operator has over the past year been unable to enforce provisions that require GenCos to maintain these reserves. Last year, spinning reserves fell from over 200MW to less than 40MW and on some days thinned to zero and threats to remove GenCos who flout the rules on

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spinning reserves from the grid, have largely been unenforced. Worse still, the technological systems required to keep the system operational, SCADA, is broken. The SCADA control system architecture comprising computers, networked data communications and graphical user interfaces (GUI) for high-level process supervisory management of the grid. But the SCADA system has not functioned in years, thereby preventing the gathering and analysing of realtime data. The process of relaying communication to sub-stations is tardy as operators have to make phone calls to engineers in the event of a problem. Nigeria’s dodgy telecommunication services ensure that substation operators do not receive information timeously, so they allocate electricity to DisCos even @Businessdayng

when capacity is limited. Drawing on insufficient capacity, reserves are spent and this triggers a collapse. “Much of these frequent collapses is the result of poor communication between the Systems operator and those managing the sub stations,” says Chuks Nwani, an energy lawyer based in Lagos. “The process has to be automated to end this situation.” Industry analysts also blame the Nigerian Electricity Regulatory Commission (NERC) which has repeatedly failed to sanction stakeholders involved in the recurring collapses which continuously put intense pressure on the socio-economic activities in Africa’s largest economy. They also attribute some blame to load rejection by most of the 11 distribution companies across the country, putting greater pressure on the national grid and the spinning reserve.

Monday 20 January 2020

BUSINESS DAY

news Cashew farmers, exporters eye $350m... Continued from page 1

“We expect a lot of interest from the international market as most of our contracts were cancelled last year because of the gridlock at the port,” Faseru who is also the chairman of Colossus Investment Limited, states. Cashew crop can be grown in the entire South-West, South-South and South-East region of Nigeria, with Kogi, Oyo, Anambra, Osun and Enugu having the largest production areas. Faseru says the Nigerian cashew brand is presently gaining traction, and refers to it as one of the best in the international market because of its good flavour that has given it an edge over other countries. He calls on the government to address the Apapa and Tin Can traffic situation as well as the slow clearing processes at the ports to facilitate a seamless process in exports. He adds that it will enable exporters meet up with their contractual supply agreements in a timely manner. Nigeria’s cashew is usually harvested between February and June, though farmers stock the crop and export it all year round. The country is rated as the fourth-largest producer of cashew nuts in Africa and sixth in the world, with production estimated at 275,000 metric tons per annum in 2019, and is expected to reach 500,000 metric tons by 2025, according to National Cashew Association of Nigeria. Cashew has become a topnotch cash crop in Nigeria and it is one of the commodities focused on by the Buhari-led government to revamp the Nigerian economy. Cashew is eaten and also serves as industrial raw materials for firms producing chemicals, paints, varnishes, insecticides and fungicides,

electrical conductress, and several types of oil, among others. Data from the National Bureau of Statistics show that Nigeria exported N35.7 billion ($116m) worth of cashew in the first nine months of 2019. It was exported to the United States, Vietnam, Russia, Germany, Italy, and many parts of Europe. Apart from helping to maintain a healthy heart and bones, cashew also helps in weight loss. Nigerian cashew farmers are optimistic that prices for cashew nuts will be higher in 2020, when compared to 2019 when the country suffered a 60 percent drop in prices of the nuts. “We expect a favourable price this year with farmers earning more this year than before,” Ojo Ajanaku, CEO, Seacos Nigeria Limited, states. “With the quality and quantity of cashew I have seen so far on the field and report from members across major growing states, our cashew output will be more than what we harvested last year,” Ajanaku says. He states that farmers are very optimistic that 2020 crop production will surpass that of last year, as many new trees will start producing coupled with the early fruiting of most trees in key producing states. Since the Federal Government renewed focus on agriculture, cashew crop has risen in its profile, emerging as one of the top-five exported non-oil commodities. Currently, the price for a metric ton of cashew for the current season is yet to be made available as the season will commence in February. “Last year, the season closed with prices hovering between N350,000 and N210,000,” Olanrewaju Osifeso, CEO of San-Jose, says in a telephone response to questions.

Analysts see rates on hold as MPC meets... Continued from page 2

tion in the periodic OMO auction or trade OMO bills in the secondary market. Hence, their view is that the benchmark interest rate will be kept unchanged or reduced slightly. “But the CBN will sustain its recent framework of heterodox policy mix until conditions necessitate policy normalization. Hence, interest rates in the fixed income market may remain low, especially in H1-2020,” the analysts projected. Increasing the benchmark interest rate would help in controlling spiralling inflation driven by higher food prices from the yuletide season and the border closure. The rate at which the prices of goods and services increased in Nigeria

(inflation) soared to an 11-month high to 11.98 percent in December 2019. This is the fourth-straight month since Nigeria shut its land borders, raising concerns on the state of local production to plug supply gaps. “In this meeting, we do not see compelling reasons to move the rate up or down but would not be surprised by a sight movement up, down, or just staying the same,” Andrew S. Nevin, chief economist at PwC said. Nevin does not believe that Nigeria’s economic challenges will be solved by tweaking the MPC Rate. “To give an analogy, if the economy is a car, the CBN is the driver. But if we are driving a 1920 car, it does not matter if Lewis Hamilton is at the wheel,” Nevin said. www.businessday.ng

L-R: Usman Bello, commander, 4 Brigade Nigerian Army; Yinka Omoregbe, attorney general and commissioner for justice, Edo State; Godwin Obaseki, governor, Edo State, and Lawal Jimeta, commissioner of police, Edo State, after the Security Council meeting, held at the Government House, Benin City.

Lagosians pay price in choking traffic in... Continued from page 1

shorter commute time

means there’s better flexibility in considering options for an office space, not to mention how an interconnected mega city helps drive down the cost of operations and improve the ease of doing business. It’s time to return to present day Lagos, where a nonfunctioning metro rail system means one of Africa’s largest city is only still nursing the ambition of a mega city. Horrendous traffic jams are a common sight and people spend four hours on journeys of 28 kilometres that take five minutes in true mega cities where high speed trains run 350km per hour. “When I was in England, I lived in Manchester but worked in Central London, it’s five hours by road but two hours by train, and I loved it,” said Janice Okeke, a small business owner who recently relocated to Lagos. It’s been a rude awakening for Okeke since her return as she finds that shorter distances within same state – Lagos - take even longer periods. “I remember dropping off a cousin at the international airport in Ikeja and she arrived in London, which is a six hour trip, before I arrived home in Ajah,” Okeke said. The distance between Manchester to London is 262

kilometres, that’s five times the distance between Ajah and the Ikeja airport. The latter journey should take an hour at most, according to Google Map estimates. Lagos is the largest city in the world without a functioning rail system, as decades of stop-starts have scuttled plans to build a metro line first muted as far back as the 1980s. After being conceived by then Governor of Lagos State, LateefJakande,in1983,theinitial Metroline project was scrapped in1985byMuhammaduBuhari, who happens to be President of Nigeria some 35 years later, at a loss of over $78 million to the Lagostaxpayers.Thatprojecthas since been dumped. In the latest of many incarnations, the project was supposed to begin operations in 2012 at a cost of $2.4 billion. At that time, the Lagos Metropolitan Area Transport Authority (LAMATA), the agency set up to fast-track the state’s transport ambition, proposed seven lines in the network: Red, Blue, Green, Yellow, Purple, Brown and Orange. China Civil Engineering Construction Company (CCECC) was appointed as the contractor for the construction of the first line (Blue). CCECC was to construct the Blue Line in two phases. The first phase included the National Theatre to Mile 2

Why 64m of Nigeria’s working class cannot... Continued from page 2

it’s unlikely to resonate with many Nigerians because even though the headline GDP seems to be expanding, it is shrinking in per capita terms. Individual efforts at increasing Nigeria’s real estate stock by way of developing more houses offering insights into possible solutions, have not helped to reduce the demand-supply gap or increase the owner-

ship level estimated at more than 17 million units. Whereas homeownership level is 84 percent in Indonesia, 75 percent in Kenya and 56 percent in South Africa, it is only 25 percent in Nigeria whose population is estimated at 200 million. Going by United Nations projection, the country’s population will be as high as 400 million in 2050. “The major issues that

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section and the second phase includes the Mile 2 to Okokomaiko section. The Blue Line was supposed to be fully ready in 2012, but eight years after the supposed start date, construction is not yet complete. In August 2018, LAMATA signed an agreement with French manufacturer of rail transport equipment, Alstom SA to conduct a review of the rail lines. After the review of the rail project, the state government said the Blue Line would now be ready for passenger operation by 2022. That’s two years from now. But on the evidence of past failings, Lagosians will be forgiven if they show little hope that the rail line will be ready at the stipulated time. In the meantime, each day a functional metro rail system stalls in Lagos, residents pay the heavy price of commuting on “nightmare roads that eat into average life expectancy,” a lawyer who works in Apapa, which houses the country’s busiest ports, says. The nightmarish traffic on the roads will get worse the longer the rail line stalls, going by population growth expectations. Lagos is home to roughly 22 million people which could top 30 million in the next 10 years, according to 2019 estimates by the state government. It makes up some 20 percent of Nigeria’s GDP and the poor transport links are a drag on the whole

country, economists say. “Lagos cannot truly consider itself a ‘mega city’ without a functional rail system and it’s a big problem when you consider the rapidly expanding population,” said Ayodeji Ebo, managing director of investment bank, Afrinvest Securities, who has inside details of the rail project. “The reason the rail project has stalled mainly has to do with the government failing to meet the terms of private sector partners,” Ebo said. It’s not a lack of funds but the lack of political will that stands between Lagos and its rail transport ambition, according to some sources with knowledge of the matter. Johnson Chukwu, CEO of financialadvisoryfirm,CowryAssets,saidtherewasalackofinterest by the immediate past administrationofAkinwunmiAmbodeto complete the Blue rail line. According to his interactions with some of the people monitoring the project, Chukwu said “There weren’t enough resources committed to completing it under Ambode and no one is sure whether the new government of Babajide Sanwo-Olu is keen to revive it,” Chukwu said. Kolawole Ojelabi, the assistant director of corporate communication at LAMATA, said last October that the rail project was “set for a breath of fresh air” under Governor Sanwo-Olu.

continue to affect housing delivery in Nigeria, which also account for the wide demand-supply gap, include constraints related to the high cost of securing and registering secure land title,” said Nasir El Rufai, Kaduna State governor. Commenting on how to provide affordable housing to Nigerians with lowincome capacity, Tayo Odunsi, CEO, Northcourt Real Estate said even if a real estate developer in Nigeria wanted to run its

business like an NGO, it still wouldn’t have the capacity to be able to manoeuvre market forces to make housing to be affordable. “But the government, being the one that governs land access, approvals, planning and what can be built and controls who accesses it, the government can play a role in delivering social housing, and the policies that will ensure they are delivered to the low-income earners,” Odunsi said.

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Monday 20 January 2020

BUSINESS DAY

abujacitybusiness Comprehensive coverage of Nation’s capital

Taraba Governor’s wife trains 47,748 people in skills acquisition Nathaniel Gbaoron, Jalingo

L-R: Akala Samuel Gajere, executive chairman, Karu LGC, Nasarawa State; Babatunde Savage, chairman, board of directors, Guinness Nigeria plc, and Henry Omaku, chairman, NASIEC, during the pre-dinner of 69th annual general meeting of Guinness Pic by Tunde Adeniyi Nigeria plc held in Abuja recently.

FCT Minister commissions 22 vehicles, 60 powerbikes to implement transport policy James Kwen, Abuja

he Minister of the Federal Capital Territory (FCT), Muhammad Bello has commissioned a fleet of 22 operational and utility vehicle as well as 60 high speed and capacity motorcycles for the use of the Directorate of Road Traffic Services (DRTS). The move is part of efforts to enhance the implementation of the safe functional and efficient transport policy of the FCT Administration (FCTA). According to Bello, the vehicles comprising Ford Ranger and Nissan Pickup trucks, Peugeot Salon cars as well as Innoson manufactured motorcycles were purchased in order to

strengthen the capacity of the DRTS and reposition it for better service delivery. The Minister reminded officers and men of the DRTS that with the provision of these equipment, the FCT Administration as well as residents of the FCT look forward to a safer and better managed traffic enforcement strategy. He also reminded the officers of the DRTS that all enforcement of road traffic rules and regulations must be done within the ambits of the law. “All actions must be done knowing that we are here to serve the people. So, as you relate with even traffic violators, you have to deal with them courteously and show respect for dignity and human rights”, the Minister cautioned.

Bello also decried the situation where some road users still broke traffic rules within the city with impunity either by operating vehicles that are not road worthy or lacking the skills to properly handle their vehicles. He lamented the indication of statistics that the FCT had the second highest number of road accidents in the country caused basically by road users who engage in over speeding because of the good road network in the city and urged road users to always obey all traffic rules. The Minister charged DRTS high command to make sure that the organization fulfilled its mandate 100% and reciprocate the gesture of the FCTA in

purchasing the equipment and recruiting the needed manpower as required by the DRTS. Bello also disclosed that discussions have reached very advanced stage with private sector entrepreneurs for the provision of vehicles to fill the gaps created by the restriction of the operations of Tricycles and to replace the aged fleet of high capacity vehicles currently plying FCT roads. In a welcome address, the Acting Secretary Transportation Secretariat Alice Odey-Achu, commended the FCT Minister for the operational and utility vehicles and motorcycles, noting that the gesture would go a long way in addressing issues of safety for road users.

Minister sad over deteriorating housing scheme in Benin Cynthia Egboboh, Abuja

he Minister of State, Ministry of Niger Delta Affairs, Omotayo Alasoadura has expressed displeasure over the deteriorating state of housing scheme in Benin City, Edo State over the years, leading to vandalism. Alasoadura who made his feelings known during a visit to Governor Godwin Obaseki in Benin City, said he noticed that the housing

scheme in Egba area of the Benin City has been built to a level of commissioning but has been vandalized due to location, lack of security and basic amenities. The Minister in statement signed by Patricia Deworishe, Head of Press and Public Relations Unit of the Ministry, also lamented that bush has over taken almost all the housing project and advised the State Government to allocate areas that are close to the people to www.businessday.ng

avoid wastage in the future. According to Deworishe, the Minister also inspected the rehabilitation and reconstruction of Otua-ikhin road and the Otuo-Afuze road both in Owan East Local Government Area of Edo State which are 75% and 50% completed respectively. In his response, Governor Obaseki thanked the Minister for his timely visit and assured him of the State Government full support and asked for col-

laboration between the Ministry of Niger Delta Affairs and Edo State in the areas of energy sufficiency, education, economy, agriculture, amongst others. Earlier, Deputy Director, Housing and Urban Development in the Ministry of Niger Delta Affairs, Salas Bamai said it was lack of funds that led to non-delivery of the projects and called on the Federal Government to provide necessary funds to complete the project.

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he Hope Afresh Foundation-Taraba, a non- governmental organisation (NGO) owned by Anna Ishaku, wife of the Governor of Taraba State has trained a total of 47,748 people in tailoring, soap making, carpentry, baking and event management within the last four years. Ishaku told journalists in Jalingo that she was satisfied with the success her foundation had recorded in the area of manpower development, noting that the secret of the success of the skill training programme lies in the follow-up. According to her, “we place premium on followup. We supervise, we keep records. We monitor them; if we go there one or two

times and you are not there, you are withdrawn. “It all depend on supervision because as wife of the government people think it’s a government thing and they deserve it, but it is not like that. “We don’t force people, people come themselves and availed themselves for training and our training is focus basically on sowing, cosmetic, hairdressing and so on. On the whole, I am satisfied with the success we have recorded”. The Governor’s wife added that, “you know if you want to get the best out of people, you don’t force them. We allow people to choose what they want to learn and we train them based on their interest and most of those trained were presented with starter packs to start their business”.

MRA calls on Kano govt to abolish media conduct committee Godsgift Onyedinefu, Abuja

he Media Rights Agenda (MRA) has called on the Kano State Government to discontinue its move to establish a committee to address alleged professional misconduct and abuse of privilege by media organizations in the State, describing it as an unwarranted and politically motivated effort to restrict media freedom. In a statement issued in Lagos, MRA’s Programme Director, Ayode Longe, said the State Government’s initiative to regulate the conduct of the media and media professionals in the state violates regional and international norms and standards on media freedom and freedom of expression which are binding on Nigeria. Kano State Commissioner for Information, Muhammad Garba, recently announced at a media briefing on the outcome of the State Executive Council meeting that the Council had approved the setting up of a committee to address professional misconduct and abuse of privileges in the State. Opposing the State Executive Council’s approval, Longe drew the Government’s attention to Section 22 of the Constitution, which he stressed, affirms the freedom of the “press, radio, television and other agencies of the mass media” to uphold the responsibility and accountability of the Government to the people. According to him, “it would be incongruous and clearly unacceptable for the Kano State Government to arrogate to itself the power, right or authority to oversee how the media perform this @Businessdayng

constitutional duty conferred on it by Section 22 of the Constitution and, in particular, to determine whether media professionals are misconducting themselves in this regard and abusing their privileges, assuming that any such privilege exists”. Longe argued that “since the Government is frequently at the receiving end of critical reports in the media, even if its intentions are sincere and genuine, there is a high degree of likelihood that it will also be looking for ways of either controlling such critical media or hitting back at journalists or media establishments which have carried critical or unfavourable reports about it”. He said MRA is not convinced that the Government’s intentions are sincere or genuine, particularly in the light of the widespread perception in the State that the move is motivated by a desire to punish media organizations which, in keeping with the best traditions of media freedom, independence and professionalism, have sought to provide diverse and pluralistic media content by also reporting the perspectives and positions of political opposition and other critical voices in the State. Longe insisted that “aprocess such as the one embarked upon by the Kano State Government, presents an opportunity for the Government to exercise controls over independent and critical media. It puts journalists and media establishments, which are supposed to be holding the Government accountable to the people, at the mercy of the Government, and therefore, at risk. Equally important is the fact that it would put the important constitutional function of the media in jeopardy.”

Monday 20 January 2020

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Monday 20 January 2020

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Monday 20 January 2020

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NERC to focus on smart grid solutions as collapse concerns heighten ... may rejig centralised grid structure HARRISON EDEH, Abuja

igerian Electricity Regulatory Commission (NERC) would be focusing on smart grid solutions as concerns on persistent grid collapse put pressure on the socio-economic life of Nigerians. Nigeria has a centralised grid that only has capacity for fault detections, but lacks the smartness to anticipate faults for quicker solutions in order to avert collapse recurrence. James Momoh, chairman, NERC, told newsmen on Sunday during a pre-event briefing on international conference on Energy Power Systems operation and planning, taking off on Monday, that the regulator was worried about the persistent grid collapse putting enormous pressure on the socio-economic activities across the country. The conference, which will avail opportunities to scholars across the globe to market global best practices in the sector, would be looking at specific issues confronting the Nigerian electricity sector. “NERC is embarking on this conference in order to allow stakeholders learn from international best practices.

The Discos, the Gencos and the Transmission Company of Nigeria would have experts in their field provide solutions on the persistent problem bedevilling the sector in their respective areas. As such they would adopt most of the proffered solutions to improve on their efficiency,” the NERC chairman said. “The regulator would have a specific focus on the smart grid solutions which is anticipatory and proffers better solutions to persistent grid collapse since it could anticipate problems. “With the current set up of the national grid and the persistent grid collapse, the commission would possibly in the future rejig the set up for the grid in order to have a holistic solution to persistent grid problems. “Smart and intelligent grid could detect danger and signal actions ahead. It could also track over heating of transformers, monitor substation and reduce intensity,” he said. He pointed out that select Nigerian professors alongside some scientific researchers would be on hand to adopt and domesticate solutions proffered in Nigeria’s power sector.

Focus on access to power, Sahara Group urges investors in UK, Africa SEGUN ADAMS

ahara Group has urged participants at the UKAfrica Investment Summit to explore committing resources towards addressing the energy needs on the continent that is home to about 1.3 billion people. The Summit, holding January 20, 2020 in London, will be hosted by the UK Prime Minister, bringing together businesses, governments and international institutions to showcase and promote the breadth and quality of investment opportunities across Africa. Sahara Group said UK and African businesses need to commit more funds to grid electricity development while ramping up investment in renewable energy to bring electricity to over 600 million people, a figure that is 10 times the population of the UK. According to Kola Adesina, executive director, Sahara Group, access to power in Africa is crucial to ensuring sustainable economic growth and seamless transition to the fourth industrial revolution. “Investment in off-grid electr icity w ill light up homes and small businesses in rural and poor communi-

ties, mostly in sub Saharan Africa. This is an auspicious time for investors in the UK and across the globe to explore this opportunity which promises a win-win situation for all,” he stated. Adesina said apart from having the potential to promote access to clean energy, off-grid electricity from renewable energy sources, including solar, wind and hydro, has the potential of becoming more affordable for more Africans in the long run. “The aspirations of Africa’s youth population, some 400 million people aged between 15-34 - which is about twice Europe’s entire population - rest on the decisions UK and African investors take at this summit. We can promote the agenda of bringing energy to life through enhanced access to electricity in Africa and Sahara Group is committed to spearheading this cause through more investment and collaboration,” he said. He stated that Sahara Group, with its profile as one of the largest private power business operators in Africa, was already in partnership with the United Nations Development Programme (UNDP) on a project aimed at boosting access to sustainable energy in Africa.

MTN launches ‘Turn it up’ to inspire Nigerians to look inward for greatness SEYI JOHN SALAU

T N Ni g e r i a r e cently launched a new thematic campaign for 2020, tagged ‘Turn-It-Up’ inspired by the telco’s commitment in facilitating transformation, progress, and success in the new decade. The campaign seeks to encourage Nigerians to look within to live their brightest lives by taking advantage of the varied opportunities around to achieve greatness. Powered by a TV commercial, radio, press, and outdoor advertisements, the ‘Turn it Up’ campaign is a nationwide initiative geared towards reminding Nigerians to reach for their dreams and achieve personal and career success. “ Ev e r y Ni g e r i a n d e ser ves a positive turnaround in their lives and we believe opportunities abound in and around the individual, but the opp o r tunities are o nly potent when we choose to bring them to life. We are simply saying, ‘Don’t look too far; the opportunities you seek are closer than you think,” said Richard Iweanoge, the general manager, Brands and

Minister, NCC engage states on increased RoW charges Jumoke Akiyode-Lawanson

n an effort to get state governors to stick to the national benchmark for right of way (RoW) charge of N145.00 per linear meter of fibre, Isa Ali Pantami, Nigeria’s minister of communications and digital economy, and Umar Garba Danbatta, executive vice chairman of the Nigerian Communications Commission (NCC) have met with Kayode Fayemi, governor of Ekiti State, who is also the chairman of Nigerian Governors’ Forum (NGF) to discuss the recent hike in RoW charges for telecom service providers in 14 states. During the meeting held in Abuja, the minister told Fayemi that it was in the country’s best interest for the governors not to disregard the resolutions reached by the National Economic Council (NEC) on uniform RoW charge of N145.00 per linear meter of fibre. According to Pantami, states have an obligation to support the Federal Government’s agenda to grow the national digital economy. Lagos, Ondo, Osun, Anambra, Adamawa, Kano, Kogi, Kaduna, Kebbi, Enugu, Ebonyi, Cross River, and Gombe states have raised or plan to raise RoW charges by over 1200 percent. The ministry had on Tuesday last week, in an official statement, expressed disapproval of hike in RoW charges in some states by over 1,200 percent warning that such wanton

increments could jeopardise Nigeria’s deepen broadband and provide affordable internet services to underserved and unserved areas. Also speaking at the meeting with the chairman of Nigerian Governors Forum, Danbatta said states should ensure growth in the telecom sector by not disregarding the resolutions reached by the NEC to harmonise the taxes applicable to broadband-related activities and to streamline taxation management processes in the country, particularly as they concern telcos. “Our first step was to write to all the state governors and the State Governors’ Forum, drawing their attention to these resolutions and soliciting their

support and collaboration towards the realization of the National Digital Economy by fast-tracking the deployment of broadband infrastructure for the provision of affordable internet services to under-served and un-served areas,” he said. Nigeria’s telecom sector is the hardest hit by multiple taxes, increased levies and heavy fines. As at the last count, there is a minimum of 38 different taxes and levies that are paid by telcos. These exclude some taxes that are just levied by local governments that creep up on them. Industry watchers say this could hamper national target of a digital economy and would definitely hurt prospects of investment in the sector.

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Communication, stating that “the combination of these is what we speak to when we turn it up.” According to Iweanoge, MTN through the campaign is urging Nigerians to lo ok inward for answers. “We want every Ni g e r i a n t o re m e m b e r that in whatever they have chosen to pursue, we are that brand that will provide the support for them to attain those dreams and aspirations.” R a h u l D e, t h e c h i e f marketing officer, MTN Nig er ia, said the company wants Nigerians to excel and attain their dreams and aspirations. “This campaign is about c h a n g i n g a n d i m p roving the quality of lives, encou raging Nig er ia ns to rethink and embrace a new approach that reflects the changing dynamics of the world around us. This is what drives us to continue investing and exploring opportunities for Nigerians. “For us at MTN, our promise is to be that brand that will stand with every Nigerian in their quest to turn things up and live their best. This philosophy will guide everything we do as a brand this New Year,” De said.

Monday 20 January 2020

BUSINESS DAY

news Supporters protest Ihedioha’s removal in Imo, demand Tanko’ sack … as security heightens around FCT as tension mounts over planned PDP protest ... Supreme Court rules on Kano, Sokoto elections today Desmond Okon & Solomon Ayado, Abuja

upporters of Emeka Ihedioha on Sunday took to the streets of Owerri, the Imo State capital, to protesters to kick against the verdict of the Supreme Court that led to the removal of Emeka Ihedioha as governor of the state. The protesters also demanded the sack of the current Chief Justice of Nigeria, Ibrahim Tanko Muhammad Last week, the Supreme Court sacked Ihedioha and affirmed Hope Uzodinma, candidate of the All Progressives Congress (APC), as governor of Imo. The Independent National Electoral Commission had declared Ihedioha winner of the governorship election in March 2019, but Uzodinma challenged his victory. Uzodinma came fourth in the results announced by INEC. But the apex court pronounced him winner based on the APC candidate’s claim that his votes across 388 polling units were annulled. While the judgement returned Uzodinma as governor, it has become hard for the opposition to swallow. The Peoples’ Democratic Party (PDP) threatened to carry out a protest in Abuja on Monday. In a statement, Austin Akobundu, PDP national organising secretary, said the take-off point for the demonstration is Legacy House, the party’s campaign

headquarters in Maitama. “In line with the approval of the National Executive Committee of our Great Party, the National Chairman as directed that a peaceful, civil and nonviolent protest be organised in the Federal Capital Territory to register the displeasure of the Party against the current state of affairs in the country, especially the miscarriages of justice of the Supreme Court against the lawfully elected Governor of Imo,” he said. “This is a clarion call to all lovers of Democracy as we join hands to save our dear Nation.” Meanwhile, ahead of the planned non-violent protest by the PDP in Abuja on Monday, already, there is heavy security presence in major areas of the FCT, Abuja. This comes as the Supreme Court has scheduled today, to finally rule on appeals by candidates in the gubernatorial elections in Kano and Sokoto states respectively. In Kano, the PDP and its candidate, Abba-Yusuf had approached the Supreme Court to seek for an order overturning the lower court’s decision that validated the emergence of Governor Abdullahi Ganduje of the APC. While in Sokoto, it is the APC candidate, Aliyu Sokoto versus Governor Aminu Tambuwal of PDP. Apart from the Supreme Court judgment that has necessitated massive arrival of party supporters from the affected states into the FCT to witness

the judgment, the appeal on Benue gubernatorial elections is also fixed for Tuesday by the apex court. The National Executive Committee (NEC) of the PDP, led by the national chairman, Uche Secondus, after an emergency meeting on Saturday, directed that a peaceful, civil and non-violent protest be organised in the FCT on Monday. The National Organising Secretary of the party, Austin Akobundu, has announced in a statement that the protest is employed by the opposition party to register its displeasure against the current state of affairs in the country. Specifically, the peaceful demonstration is particularly hinged on removal of Imo State governor, Emeka Ihedioha, by the Supreme Court, recently which PDP is calling for review of the Supreme Court judgement. The party is also alleging that the APC want to take-over all PDP controlled states hence the protest. According to Akobundu, “The protest will commence by Monday at 9.am, with take-off point from the Legacy House located in Maitama part of the FCT.” On Sunday, it was observed that security vehicles, such as Armoured Personnel Carriers, hilux vans and SUVs, were stationed at strategic points of the city. Some armed uniformed and plain clothes security operatives were seen positioned in key places while others patrolled the major FCT areas.

Odu’a Investment re-appoints Adewale Raji as GMD for another term REMI FEYISIPO, Ibadan

oard of Odu’a Investment Company Limited has re-appointed Adewale Raji as the Group Managing Director (GMD) for another 5 years. Raji was appointed the GMD of Odua for a term of five years from June 1, 2014, with provision for renewal for another term subject to performance. The five-year tenure of Adewale Raji as the GMD of Odua expired May

Adewale Raji

31, 2019. However, before the expiration of the tenure, the shareholders (i.e. the six owner state governments of South West, Nigeria) engaged the services of KPMG Advisory Services to carry out evaluation of the five years performance of the GMD. The shareholders resolved and directed the Board of Directors to grant the GMD an extension of tenure for a period of six months pending the outcome of KPMG Performance Evaluation with effect from June 1, 2019. The owner states governors at a meeting held October 28, 2019, considered the report of KPMG and accepted its recommendation that the GMD should be offered appointment for another term of five years with effect from the date of expiration of the initial term of five years. They directed the Board to ratify and carry out the decision. The Board was formally informed of this decision of the shareholders by a letter dated November 14, 2019, signed by the chairman of the Western Nigeria Governors Forum – Oluwarotimi Akeredolu. The Board of Odu’a Investwww.businessday.ng

ment Company Limited at a subsequent meeting considered the directive of the Shareholders and by a resolution approved and ratified the appointment of Adewale Raji as the GMD for a period of five years with effect from June 1, 2019. The first five years of Raji witnessed significant growth in the Profit Before Tax from N378m and N495m in 2013 to N849m and N1.061b in 2018 for the Holding Company and the Group respectively. In the same 5-year period, a Gross Dividend of N1.208b has been paid out to Shareholders which is a record of consecutive dividend payout in the history of the Company. New business initiatives particularly in Agric-Business and processing were being explored and the Company was better managed with a very high sense of accountability and transparency while upholding the principles of Corporate Governance and safeguarding the interest of Shareholders. Raji has since commenced work in earnest with commitment to growth, profitability and sustainability of the Group. https://www.facebook.com/businessdayng

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Sun Trust Bank appoints Halima Buba as MD/CEO

un Trust Bank has appointed Halima Buba as its managing director/ chief executive officer. The Central Bank of Nigeria (CBN) gave a nod to this appointment via a letter signed by the bank’s director, banking supervision, Ahmed Abdullahi. The letter noted that Buba will take over from Ayo Babatunde. Buba’s appointment was premised on her experience as a financial expert and a seasoned banker with over 20 years of experience in both the private and public sector with recognisable and impressive strides. Buba who hails from Adamawa is a cofounder of TAJ consortium a group of young dynamic technocrats, cum financial advisory experts, who specialise in trade finance, project and export development finance, syndication and specialised finance. She is currently sitting on the board of Nigerian Sovereign Investment Authority (NSIA) as a non-executive director and participate amongst other key stakeholders in making critical decisions to ensure that the nation’s wealth is being chan-

nelled to optimum use for the future generations of Nigerian. The new CEO of Sun Trust Bank rose to the rank of deputy general manager in Ecobank Nigeria, in charge of FCT and the North, where she demonstrated exceptional leadership qualities in building crossfunctional teams and focused on business development and market expansion. She is an alumnus of the prestigious Lagos Business School (LBS) Senior Management Programme in Nigeria and also holds an MBA from the University of Maiduguri and a BSc in Business Management from the University of Maiduguri. She has attended several courses both at home and abroad. She is an honorary senior member of the Chartered Institute of Bankers (CIB) and a Fellow Institute of Management consultant and not afraid to explore new things. She brings to his job strategic thinking, inspirational leadership, energetic and entrepreneurial skills. Responding to her appointment, she said: “These are interesting times for us as a country. The economy is still in its post-recession phase and the prospects of sustained growth are encouraging.

Nigeria to rank top in W/Bank ease of doing business list by 2023 – SGF AMAKA ANAGOR-EWUZIE

ederal Government of Nigeria says it is perfecting plans to place Nigeria among the first 70 nation in the World Bank Ease of Doing Business index by 2023. Boss Mustapha, secretary to the Government of the Federation (SGF), stated this Saturday night in Lagos at the third edition of the annual Corporate Dinner and Merit Awards organised by the Nigerian Maritime Administration and Safety Agency (NIMASA). Mustapha, who chaired the evening of honours for outstanding maritime players, said recent improvements in the Nigerian maritime industry had positioned it as a viable guarantee of economic growth and wealth creation. He disclosed with delight that Nigeria had moved from 170 to 131 in the global ease of doing business table since Buhari established the Presidential

Enabling Business Environment Council (PEBEC) in July 2016. The council was set up to remove bureaucratic constraints to doing business in Nigeria and make the country an increasingly easier place to start and grow a business. Mustapha said the PEBEC initiative, coupled with significant developments in ports and maritime, had engendered great improvements in ease of doing business in the country. “In our bid to improve efficiency and productivity in the maritime industry and the country at large, the PEBEC was created to ensure an enabling environment for port efficiency. Government will continue to support the maritime sector because on it rests opportunities for wealth creation and economic growth,” he stated. On his part, Chibuike Amaechi, minister of transportation, said a developed transport sector would increase productivity, which comes with creation of

more jobs and production of more goods and services. “All these will make the economy more competitive, reduce dependence on oil, and usher in economic growth. This is our target. “We are aware that transportation is key in any economic development plan. The major elements of production – raw materials, machines, people, finished products, etc. – have to be seamlessly moved from one point to the other as the need arises,” he said. The President Muhammadu Buhari government, he said, is implementing a transport policy, which entails linking all seaports in the country by rail, in line with global best practices. According to Amaechi, “Nigeria has a 25-year rail modernisation programme, involving the development of a comprehensive intermodal system. We are taking the rail from where the past governments stopped to the seaports.

The Lagos-Kano rail line, which began from Ebute Metta, is being taken from Ebute Metta to Apapa seaport. “We will take it from Tin-Can and Apapa to connect the new Lekki port. The rail line from Lagos to Calabar links Port Harcourt, Onne, and Warri seaports. Our goal is to have a system where importers would bring in their goods and load them on the rail that takes them to the hinterland, thus, easing the pressure on the roads and increasing their longevity,” he said. On the economic significance of transportation, Amaechi said, “Adequate investment in transport infrastructure will enhance the efficiency, reliability, and capacity of the transportation system, which will, in turn, lead to lower transport costs, shorter transit times, increased business efficiency, and business expansion, as money previously spent on transport is ploughed back into business.”

OPay creates 107,000 jobs in Nigeria’s economy with 23.1% unemployment rate … serves 3m customers daily ENDURANCE OKAFOR

ince launching in Nigeria a year ago, OPay, a Chinese backed start-up company, says it has been able to contribute its quota in reducing Nigeria’s highest unemployment rate of 23.1 percent. In an interview with BusinessDay, OPay says it has created 107,000 jobs in its one year of operation in Africa’s most populous nation where more than 16 million young people are without jobs. According to Seun Alley, the director, partnership at OPay, in terms of impact on the society, OPay has been able to contribute to Nigeria’s employment rate. “We have 12,000 staff working with us across the 21 cities where we currently have our footprints,” Alley said. Nigeria’s jobless rate embarked on an upward spiral in 2015 after a decline to 6.4 percent a year earlier, and according to most recent data by the state-funded National Bureau of Statistics (NBS), the unemployment rate in Nigeria climbed to 23.1 percent in the third quarter of 2018. While there seems to be no end in sight for the country’s soaring jobless rate, the challenge could be resolved through private sector expansion and industrial growth, according to the research arm of Nigerian Economic Summit Group (NESG). In January 2019, OPay entered into the Nigerian market intending to provide financial services for mostly the country’s 40 million unbanked popula-

tion. As the year progressed, the fintech company tweaked its model to branch off to several sectors in the non-payment services industry. It launched a bike hailing service, ORide. It entered into food delivery with OFood. It delved into an investment service, OWealth. Two months ago it launched a ride-hailing service called OCar, the company also recently equally launched QR code payment, an instant messaging feature and OTrike, a tricycle hailing service. “We currently have about 95,000 riders on OPay and we are serving 3 million subscribers daily,” Alley states. Speaking on how the e-hailing arm of OPay has remained competitive with industry peers, Hanson Olorunfemi, growth/ marketing executive, ORide, says the 24-hour payment model that enables riders get their payments within a day has given them an edge over their competitors. “A lot of the riders always require access to their funds, which they don’t get immediately on other platforms. We have adhered strictly to the 24 hours payment policy and this has remained a major source of attraction for these riders to us,” Olorunfemi says. He also cites moderate fare as one of the reasons why a lot of Nigerians patronise their ehailing platforms. With an eye-watering discount, OCar started with N200 for trips within Lagos in its first week of operation, and this was later followed by N250 charge. www.businessday.ng

L-R: Tunji Olaopa, professor of public administration/guest speaker; Bismarck Rewane, economist and finance expert; Noimot Salako-Oyedele, deputy governor of Ogun State; Dapo Abiodun, governor of Ogun State; Amope Chokor, state head of service; Doyin Salami, chairman, Nigerian Economic Advisory Council, and Tokunbo Talabi, secretary to the Ogun State government, at the Executive Strategy Session organised for Cabinet Members and Permanent Secretaries of Ogun State at Ogere in Ogun State.

Apapa: How multiple checks, extortion, gridlock inflate haulage costs CHUKA UROKO, JOSHUA BASSEY & AMAKA ANAHOR-EWUZIE

eyond gridlock and congestion, there are extraneous factors that hike the cost of moving imported goods from Apapa and Tin Can Island ports in Lagos to other parts of Lagos and the country at large, BusinessDay checks reveal. Among those factors, multiple checkpoints by Federal Government agencies and extortion by security agencies stand out. What these agencies take away from the truckers is transferred to the importers. The situation is such that it is feared the gridlock would persist even after all the ports access roads would have been fixed, because these agencies who are everywhere in and around the ports do not let go until they cut their pound of flesh from the truckers. “Whether you are going in to pick your goods or you are returning the empty container,

the story is the same—you must ‘settle’ and those to be settled are too many in and around the ports,” said John Omenkeya, a truck driver, who spoke with BusinessDay on Wharf Road, Apapa. At a stakeholders meeting convened by the Nigerian Shippers Council on Tuesday last week, the truckers complained bitterly of extortion by terminal operators, mentioning specifically AP Moller, which they said deliberately make their equipment malfunction and charge them heavily for delayed return of empty containers, All these contribute significantly to the meteoric rise in the haulage cost in the last 24 months by about 500 percent. An importer who craved anonymity told BusinessDay that he paid N690,000 to move his goods in a 40-foot container from Tin Can Island Port to his business premise within Apapa. The importer, who cried blue

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murder with this huge increase, explained that 24 months ago, he paid N120,000 to move same size of container to same location. But Remi Ogungbemi, chairman, Association of Maritime Truck Owners (AMATO), explained to BusinessDay that truckers operate under an abnormal situation due to the chaos on the roads leading to the ports. “We don’t have standard rates charged on importers for moving their goods to warehouses within and outside Lagos. I will not say that importers lie about the exorbitant transportation fare they are charged to move their goods because truckers charge based on demand and the situation of the road,” he said. According to Ogungbemi, a trucker that collects N400,000 to move a container from Apapa to a warehouse in Apapa today, may charge N700,000 to move the same size of container from Apapa to same warehouse to@Businessdayng

morrow if the road situation becomes bad. Road is good or bad is not only about gridlock, but also the level of extortion by security agencies and others, he said, saying, “This was why we were calling for the disbandment of the Presidential Task Team because many of them deliberately create chaos to enrich themselves.” Aloga Ogbogo, executive secretary, Nigerian Association of Road Transport Owners (NARTO), affirmed this, explaining that the high cost of haulage from Apapa was a direct consequence of the various hiccups that transporters encounter within and along the ports corridor. Ogbogo listed some of the hiccups to include bad roads, multiple checkpoints, time lost in transit, extortion by security personnel, cost of diesel, among others, saying, “when you factor in these variables, you will see that the only way a transporter can break-even is to mark up cost of haulage.”

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Monday 20 January 2020

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COVER

ECONOMY

These are the stocks driving the NSE rally-and why

Here are five insights from December inflation data

The nation’s stock market is currently on a ‘steroids’ in just twelve trading days so far this year, stocks are already up 10.34percent as at Friday as investors take position ahead of robust dividend payment and corporate announcements.

Owing to seasonality and the border closure, inflation rose to 11.98 percent in December, but like in November, the reading remained below 12.48 percent established in April 2018.

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Cover Story These are the stocks driving the NSE rally-and why

Monday 20 January 2020

Fees on secured lending decline by 5.3 points in Q4

he long awaited low interest rate lending by households and corporates is gradually coming to play as fees on secured lending declined to 5.3 points in the fourth quarter (Q4) of 2019 from 10.5 points in the third quarter of the same year. Secured lending is a process whereby a borrower seeks to obtain a loan from the creditor by pledging some asset as collateral. Demand for secured lending for consumer loans from households rose to 36.7 points in Q4 2019 from 30.9 points in Q3 2019. Similarly, demand for mortgage/remortgaging from households rose in Q4 2019 and is expected also to rise in Q1 2020. The Central Bank of Nigeria (CBN)’s Q4 2019 credit condition survey for households, small businesses and corporate entities indicated increased availability of both secured and secured credit to households, as well as corporates entities. Spreads on overall secured lending to households and all firm sizes narrowed in Q4 2019 and were expected to remain unchanged in Q1 2020.

he nation’s stock market is currently on a ‘steroids’ in just twelve trading days so far this year, stocks are already up 10.34percent as at Friday as investors take position ahead of robust dividend payment and corporate announcements. To better appreciate this resurgence, at the end of December 2019, the market closed the year with a negative return of 14.6percent in back to back losses closing the decade with a paltry return of just 28.9percent. The Premium Index has benefited the most year-to-date (YTD) returning 18.39percent. So far as at Friday, Industrial goods giant, Dangote Cement has returned 22.11percent, Teleco-giant, MTN returned 21.71percent, First Bank’s parent company, FBNH has returned 19.51percent, Zenith Bank and UBA have also both returned 19.89percent and 23.08percent respectively. Other tier-1 banks such as Guaranty Trust Bank returned 12.79percent and Access Bank returned 8percent. The ripple effect of the upbeat performance also reflected in the performance

Economy HOPE MOSES-ASHIKE

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BUSINESS DAY

Lenders reported that demand for total unsecured lending from households increased in the last quarter of 2019, and is expected to increase in the next quarter. Demand for corporate lending increased across all firm sizes in the review quarter. The Monetary Policy Committee (MPC), at its last meeting said it was hopeful that the Loan to Deposit Ratio (LDR) initiative must be sustained as interest rates being paid by borrowers have so far dropped by up to 400 basis points between June and October 2019. These have happened with corresponding decline in Non-Performing Loans (NPLs) to 6.5 per cent at end-October 2019. The CBN had in June announced a new policy measure, which requires banks to maintain a minimum 60 percent loan to deposit ratio. This the regulator later raised to 65 percent and set December 2019 as deadline for compliance by banks. In addition to credit to the private sector, which has helped spur growth in Q3 2019, Aishah Ahmad, deputy governor said in her personal statement at the last MPC that the LDR policy created a number of other positive effects. Renewed focus on lending by banks has created competitive pressure, which is driving a reduction in market lending rates,

enhancing affordability and creating demand for loans. “The new credit has been primarily in manufacturing, agriculture and consumer lending which is helping to diversify bank credit portfolios which have hitherto been heavily concentrated in Oil and Gas,” Ahmad said. Maximum Loan to Value (LTV) ratios increased in the fourth quarter and was expected to remain unchanged in the next quarter.

Lenders were willing to lend at low LTV ratios (75% or less) in the last quarter of 2019 and next quarter. Similarly, they were willing to lend at high LTV (more than 75%) in both the last and next quarters. The average credit quality on new secured lending improved in Q4 2019 and was expected to also improve in Q1 2020. Demand for unsecured credit card lending from households increased in Q4 2019 and is expected to increase in Q1 2020. Similarly, demand for unsecured overdraft/personal loans from households increased in Q4 2019 and is expected to increase in Q1 2020, the report stated. Lenders experienced lower default rates on credit card and on overdrafts/personal lending to households in the current quarter, and expect similar rates in the next quarter. Demand for corporate lending increased for all business sizes in the last quarter of 2019, and was expected to increase for all business sizes in the next quarter. The most significant factors that influenced demand for lending in the review quarter were the increase in inventory finance and capital investment, and they were expected to remain the main drivers in the next quarter.

Here are five insights from December inflation data of Tier 2 bank, EcoBank which is up by double-digit (in fact all banking stocks are positive this year) Flour Mills, and

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Julius Berger have also posted positive returns year to date What could be propelling this rally?

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Firstly, these stocks have been relatively cheap for months trading as low as 2x their earnings per share with an indicative double-digit dividend yield. Also, investors are quickly taking positions ahead of the earnings season, which is when banks start to release their full-year results. With share price at low valuation, multiples dividend yields are in double digits and if priced appropriately could be higher than the inflation rate. Another reason for this bullish trend is the central bank’s recent decision to ban investors from the Open Market Operations (OMO) window. Currently, bonds and government short-term debt instruments often called treasury bills are offering abysmal rates of return on investment, prompting investors to seek alternative asset classes to invest their funds. And it appears the equities market is now the logical destination of any discerning investor. If you’re about to get into this game keep your portfolio close to your chest and watch out for the bears.

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SEGUN ADAMS

wing to seasonality and the border closure, inflation rose to 11.98 percent in December, but like in November, the reading remained below 12.48 percent established in April 2018. Food inflation hit 14.67 percent, while core inflation accelerated to 9.33 percent, the highest since March 2019. On a monthly basis inflation declined, however these are the five interesting things from the National Bureau of Statistics’ report. Inflation surprised: The rate of change in price level printed lower than most analysts had anticipated, a positive indication that part of the factors fuelling inflation is easing. Financial Derivatives had forecast inflation to rise by 0.25 percent from November to 12.10 percent. Bloomberg’s poll was 12 percent and analysts across some investment houses in Nigeria predicted a similar outcome. While a 0.02 percent point difference between major forecast and outcome is little, the importance of the lower reading

is that it shows the waning impact of the border closure. Inflation squeezes Real yield in fixedincome space: The latest inflation figure means the real yield on the bellwether one-year primary yield at auction is -6.50 percent, the lowest since August 2010, says Analysts at Lagosbased Chapel Hill Denham. On Wednesday, stop rates on 364-Day NTB crashed to 5.2 percent in the CBN’s primary auction.

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Given the liquidity glut in the money market and dovish liquidity outlook, yields on NTBs have trended to sub-5 percent level in the secondary market, says Chapel Hill Denham. Similarly, yields on FGN bonds have trended lower to an average of 10.68 percent. “Yet, outlook for inflation is biased to the upside, implying real returns on short term bills and bond yields would decline further into the negative region.” Chapel Hill Denham expects only a marginal increase in headline inflation in January 2020 to 12.01 percent year-on-year, and estimate a more substantial increase to 12.13 percent year-on-year in February once the Finance Bill goes into effect. Abuja had lowest inflation, Bauchi the highest: In December, the Federal Capital Territory (FCT) had an annual inflation rate of 9.77 percent, the lowest among all 36 States plus FCT itself. However if we consider the fact that Abuja is not a state, then Kwara’s 9.93 percent means it has the softest increment in price levels among Nigerian states. Katsina (10.68%), Delta (10.73%), Imo (10.81%) and Benue (10.95%) are among the least in the country.

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On the flip side, Bauchi (15.14%), Kebbi (14.43%), Plateau (14.34%), Sokoto (14.3%) and Taraba (13.8%) had the highest inflation rate among Nigerian states. Transport inflation is lowest since 2015, at least: At 9.25 percent, transport inflation (a component of core inflation is at its lowest in more than four years. In Nigeria, transport prices typically go up in December especially for inter-city and urban-rural travels. However since a 17.32 percent sharp rise in 2016, transport inflation has been steadily falling. Nigeria’s inflation 2nd highest among Africa’s 5 biggest economies : Nigeria’s inflation rate is the highest among big African peers like South Africa, Egypt, Algeria- if Angola is excluded from the list. Only Angola (16.9%), Africa’s 5th biggest economy in 2018, and Nigeria (11.58%), the continent’s leading economy, have double-digit inflation among the top five markets. South Africa in November reported 3.6 percent while Egypt and Algeria reported 7.1 percent and 1.6 percent respectively in December.

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Market Wrap-up

total turnover of 2.087 billion shares worth N26.470 billion in 24,262 deals were traded last week by investors on the floor of the Exchange, in contrast to a total of 2.683 billion shares valued at N32.646 billion that exchanged hands preceding week in 30,956 deals. The Financial Services industry (measured by volume) led the activity chart with 1.117 billion shares valued at N13.693 billion traded in 13,739 deals; thus contributing 53.51% and 51.73% to the total equity turnover vol-

ume and value respectively. The Healthcare industry followed with 521.893 million shares worth N182.965 million in 420 deals. The third place was Conglomerates industry, with a turnover of 123.606 million shares worth N573.907 million in 1,164 deals. Twenty-one equities appreciated in price during the week, lower than fifty-one equities in the previous week. Forty-two equities depreciated in price, higher than twenty equities in the previous week, while one hundred equities remained unchanged, higher than ninety-two equities recorded in the preceding week.

Chart of the week

WeekAhead Ahead Week Week Aheadahead (Monday, April â&#x20AC;&#x201C;market, Friday,profit-taking 12th April, 2019) Looking in the8th equities will continue in the coming

week, we still see significant legroom for a further rally as the elevated maturities from fixed income instruments hunt for investment vehicles. Nonetheless, we advise investors to cherry-pick fundamentally sound stocks. In Treasury Bills, volumes to increase and yields to further pare in the NTB market, as maturities flood the market in the coming week. However, we do not expect the average yield on OMO bills to significantly pare from the level this week, as the CBN will likely mop-up maturities in the coming week, which should support secondary market levels. In Bonds market, in coming week trading activities to remain strong in the Treasury bonds market, as the liquidity expected to come on board next week is channeled to next weekâ&#x20AC;&#x2122;s PMA. We still expect the bond market to remain bullish given strong buying activity. In foreign exchange, despite the rate of decline in FX reserves, which has heightened fears regarding the possibility of a currency devaluation, the CBN has enough ammunition to sustain its naira defense through to at least H1-20.

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Nigerian stocks dipped and bounced back last week after profit-taking halted a record gaining streak. Market declined 1.18 percent on Tuesday and 0.75 percent on Wednesday. However, bargain hunting resumed Thursday and was sustained thorough Friday to push NSE ASI to 29,600 points where it had fallen from in earlier trading sessions of the week. So far in 2020, Nigerian stocks have gained 10.34 percent.

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FINANCIAL TIMES

World Business Newspaper WILLIAM WALLIS

t was conceived as a comingout party for “Global Britain” — a signal of new trading ambitions as the UK sails free of the EU and takes advantage of commercial opportunity further afield. In the event, Monday’s first UKAfrica summit in London finds prime minister Boris Johnson’s government still in Brexit limbo, constrained by protracted divorce proceedings with Brussels and uncertainty over the extent to which the UK will remain aligned with Europe. African officials are nonetheless intrigued as to how Britain will set out its pitch after a decade in which the former colonial power has been slow to adapt to the continent’s rapidly changing fortunes. “You can argue we are late to this game. But better late than never,” said one senior UK official, acknowledging that when it came to Africa summits, London was entering a crowded field. China, India, Japan, the US and latterly Russia, have all sought to strengthen ties with Africa through summitry — in Tokyo’s case for almost three decades, as an old order dominated by multilateral donors and former colonisers has been shaken up by more fleet-footed emerging powers. “I was with Theresa May on her (2018) trip to Africa and it was clear then that on a continent where we have deep historical relationships and lots of advantage . . . it wasn’t getting the attention it deserves,” said Nick O’Donohoe, head of CDC Group, the UK’s development finance institution. “Since then I get the impression we have really tried to raise our game. This conference is part of that,” he said. Organisers are expecting around 15 African heads of state, including Muhammadu Buhari of Nigeria, Uhuru Kenyatta of Kenya and Felix

Global Britain changes tack in search of fortune in Africa First summit between UK and continent aims to improve overseas trade

Tshisekedi of the Democractic Republic of Congo. Column chart of FDI flows (£bn) showing UK foreign direct investment to Africa has doubled since 2008 The UK meanwhile, has quietly been on the offensive. Over the past year it has recruited 400 staff, both locally and from the UK, to trade,

security, and development positions across its African diplomatic network, according to Emma WadeSmith, commissioner for Africa at the UK’s department for international trade. To take advantage of changing times it needed to expand its footprint, she said. The summit will include a focus on renewable energy, housing and

technology, with the City of London at the heart of the UK government’s aim of leveraging more investment into Africa. Britain retains a strong suit, Ms Wade-Smith argued. It is the second largest G7 investor on the continent. Trade with the continent was up 13.8 per cent last year to £36bn, while investment, dominated by the energy

sector, increased by 7.5 per cent to £38.7bn, according to the DIT. There is some scepticism however, about what is new about Britain’s offer. It cannot strike out on its own trading terms until it has established future relations with the EU. For now London is scrambling to roll over trading agreements on the same EU terms it already has.

Scientists warn over China virus outbreak

Significant uncertainties remain about the severity and spread of illness, say experts TOM HANCOCK AND SARAH NEVILLE

oncerns are rising over an outbreak of a virus that originated in China as leading scientists suggested that more than 1,700 people may already have been infected, far more than had been thought. Chinese health authorities said this weekend that they had discovered 21 more suspected cases in the central city of Wuhan, bringing the total number of suspected cases of the pneumonia-like illness in the city up to 62. But experts warn that there is significant uncertainty about the severity and spread of the illness, which has already killed two people and evoked memories of the Sars outbreak that killed hundreds of people more than 15 years ago. A study by the respected MRC Centre for Global Infectious Disease Analysis concluded that a total of 1,723 people in Wuhan City would have had onset of symptoms by January 12, the last reported onset

date of any case. Neil Ferguson, a public health expert from Imperial College London, who founded the centre, told the BBC he was “substantially more concerned than I was a week ago”. Prof Ferguson and his colleagues have made a number of assumptions in arriving at their estimate, including that Wuhan International Airport has a catchment population of 19m. Later Prof Ferguson told the Financial Times there were “a number of uncertainties. The key one is whether the travel of the three international cases was at all related to their illness. This does not appear to be so, but without more detailed information, we can’t be completely sure.” The second important factor, he said, was the catchment of Wuhan airport “and whether we have underestimated travel by other routes, [for example] train then plane from elsewhere”. The three international cases had flown directly from Wuhan. It was also possible that the number of cases were being underwww.businessday.ng

reported because in younger or fitter patients the symptoms might not be serious enough to warrant seeking treatment. Two people from Thailand diagnosed with the disease after travelling from Wuhan did not appear to have been severely ill, although they had both had a fever. It was “quite possible” they would not have been hospitalised if they had not travelled since most people did not seek medical care for flu-like symptoms. “But we just don’t know the spectrum of severity at the moment. Much more detailed surveillance data will be needed to assess that,” warned Prof Ferguson. Dr Mike Turner, director of science at Wellcome, an independent research foundation in the UK, said the outbreak was in its early stages and there had been “some excellent and very speedy work by authorities in China”, with the research results rapidly made available to the world. Estimates of the size of any outbreak “are very difficult to predict at this early stage but it is clearly still spreading. We are all more

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concerned than we were three days ago,” he added. On Friday it emerged that three US airports — New York’s John F Kennedy, Los Angeles and San Francisco — were screening passengers arriving from central China but whether health screening at airports made a useful contribution to reducing spread was “a moot point”, Dr Turner argued. Screening usually looks for a raised temperature but this is a symptom common to many different conditions, he pointed out. People who are sick generally do not board planes so the screening would probably only pick up those who had fallen ill in flight, “which will be a very small fraction”, he added. Dr Jeremy Farrar, director of Wellcome, said “uncertainty and gaps” in understanding of the disease remained “but it’s clear that there is some level of person-toperson transmission”. More cases were emerging in China and other countries and it was likely there would be “many more cases, in a number of countries”, he said. @Businessdayng

It was possible that the often mild symptoms could mask the true numbers of people infected, and the extent of person-to-person transmission. Wuhan is a big transport hub “and with travel being a huge part of the fast approaching Chinese new year, the concern level must remain high. There is more to come from this epidemic,” warned Dr Farrar. On Sunday, Li Gang, director of the Wuhan Center for Disease Control and Prevention, told state broadcaster CCTV that the information available “does not rule out the possibility of limited human-tohuman transmission.” “The infectivity of the new coronavirus is not strong,” he added, referring to how rapidly the virus may spread between individuals. “The risk of continuous human-tohuman transmission is low”. Most patients have presented relatively mild symptoms, Mr Li said, and no cases had been found in more than 700 people who came into close contact with infected patients.

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Africa looms large for UK’s development finance unit Impact investments can generate solid returns, says chief of CDC OWEN WALKER

eaders from more than 20 African countries will descend on a hotel overlooking London’s O2 entertainment complex for the inaugural UK-Africa Investment Summit on Monday morning. It will be the first international trade event for Britain’s newly elected government — and a chance to see how the country will approach the task of building relationships with global allies — as it prepares to sever ties with the EU. While Prime Minister Boris Johnson will take centre stage, among the more influential attendees on the sidelines will be Nick O’Donohoe, chief executive of CDC Group, the UK government’s development investment arm. “There is a reason so many leaders will be showing up to the summit — African leaders really value the development support that they get from the UK,” he says. “It’s a really important part of having influence in those countries, and CDC is an important part of that development offer.” The softly spoken Liverpudlian, who grew up in Dublin, stresses that CDC works independently of the government, despite the Department for International Development being the sole shareholder in the organisation. But he adds: “Clearly, post-Brexit, we have more flexibility to form trade relationships. Africa has to be a significant priority for UK business and UK investment.” For most of his career, Mr O’Donohoe appeared to be riding the golden escalator towards the upper echelon of a Wall Street bank. An MBA at Pennsylvania’s Wharton Business School was followed by

long stints at Goldman Sachs and JPMorgan, where he rose to become global head of research. But 2007 was what he describes as the “inflection point” in his career. JPMorgan decided to move into social finance, which attempts to produce societal benefits as well as economic returns. Mr O’Donohoe was given the job of overseeing the new venture, which was not expected to take up much more than 5 per cent of his time. However, attending a conference put together by the Rockefeller Foundation at the Bellagio Center in northern Italy around this time had a profound influence on his career. It was here that the term “impact investing” was coined for the type of investing that follows the social finance model. “This was just post the global financial crisis,” he recalls. “There was a disillusionment in finance, disillusionment in banks, disillusionment in investment, and a much greater recognition among the public that the choices made around investment, asset allocation and capital had a huge impact on people’s lives.” Through dedicating more of his time to impact investing, he got to know Ronald Cohen, the prominent venture capitalist who had undergone his own road to Damascus conversion to social finance. In 2010, Britain’s new coalition government asked the pair to set up what would become the world’s first social investment bank, called Big Society Capital. Sir Ronald became chairman and Mr O’Donohoe chief executive. Within five years of setting up BSC, Mr O’Donohoe moved on for a brief stint as a senior adviser at the Bill & Melinda Gates Foundation, which gave him his first taste of working in development, before taking what he describes as his “dream job”

People and companies in [the UK] need to look at Africa as a hugely important investment destination and investment opportunity, says Nick O’Donohoe © Tony Healey

as chief executive of CDC in 2017. The organisation, which was founded in 1948 by Clement Attlee’s postwar government to help British colonies develop agriculture, was undergoing a significant upheaval. For several years it had been accused of being too focused on turning a profit and enriching managers, with little regard for development outcomes. It attracted criticism for its investments in hotels and casinos, channelling investments through tax havens and ploughing too much money into more advanced economies such as China. Under pressure from the government, CDC responded by refocusing its energies on African and south Asian countries, and making more direct investments rather than rely-

ing on funds. When Mr O’Donohoe joined he was charged with expanding the group, deploying more capital, taking a more rigorous approach to measuring impact and increasing its presence in the countries in which it invests. CDC plans to invest an additional £2bn in Africa in the next two years, making it the largest private equity investor in the continent. Those investments include a large solar farm in Egypt, a forestry company in Sierra Leone and hydroelectricity in Congo. Eventually Mr O’Donohoe expects CDC to have up to £10bn invested globally. But the shift in strategy has led to lower returns. Between 2011 and 2015, CDC averaged annual returns of 7.5 per cent, compared with an average 6 per cent

between 2012 and 2019. While CDC is more focused on development than profit, Mr O’Donohoe insists there are still attractive investment opportunities in Africa. He points to the fact that eight of the 15 fastest-growing countries are in the continent, which will be home to a quarter of the world’s population by 2050. “People and companies in [the UK] need to look at Africa as a hugely important investment destination and investment opportunity, and that’s both for the sort of investments we’re doing, but also as a growing number of middle class consumers,” he adds. CDC is principally focused on investing in infrastructure, financial services, agriculture and manufacturing.

Donald Trump’s trade wars have not been ‘easy to win’ The US-China phase one trade deal will ease some self-inflicted economic damage GAVYN DAVIES

he phase one trade agreement between the US and China signed on Wednesday is only a truce in the trade war, rather than a major reversal of the tariffs imposed since 2018. Nevertheless, it halts a dangerous political momentum. US President Donald Trump tweeted on 2 March 2018 that “trade wars are good, and easy to win”. That assessment has proven wide of the mark. While there may be some longterm gains for the US from China’s concessions, the main immediate benefit is simply that the self-inflicted damage to the American economy caused by the tariffs will begin to be reversed. Jan Hatzius of Goldman Sachs describes this as a “subtraction of the negatives”. Paradoxically, the worse the effects on US growth rates in the past two years, the greater the scope for a bounceback this year. Mr Trump’s initial confidence about the effects of trade protection

was based on a belief that China’s bilateral trade surplus with the US would force President Xi Jinping to make major policy concessions to safeguard his own export sector. The outcome was rather different: China retaliated with similar measures and this damaged American manufacturers. The US trade balance, a litmus test of the success of the Trump initiatives, has not changed much overall, and is barely improved against China. Some of the benefits from the tariffs to the competitiveness of US-manufactured products were offset by a decline in the renminbi exchange rate. A new study by Federal Reserve Board economists has concluded that the net trade effects of tariffs on US output have been slightly negative. This is because the gains from a drop in Chinese imports have been more than cancelled by reduced US exports and higher input costs because of Beijing’s retaliation. Other Fed studies have shown that almost all the effects of the US tariffs have been passed on to American consumers in higher prices, rather

than being partly absorbed by Chinese producers. This has led to a reduction in US real incomes and consumer spending. The damage to financial and business confidence triggered by the trade announcements hurt US growth still further. The tightening in financial conditions caused by the rising dollar and the collapse in equities late in 2018 would probably have been more severe if the Fed had not reduced policy interest rates by 75 basis points since then. Worst of all, US fixed investment growth has slowed sharply, taking the manufacturing sector close to recession. Some of the policy uncertainty caused by the trade war will remain entrenched for a long while, so there may be little immediate catch-up of postponed investment projects. Estimates by Fed economists suggest that these uncertainty effects may alone have subtracted almost a full percentage point from global gross domestic product. Overall, the trade war can therefore be described as a large negative shock to US aggregate demand, offset

in part by an easing in monetary policy. Annualised real GDP growth in the UShas slowed from 3.0 per cent in the first half of 2018 to about 2.0 per cent in the second half of 2019. Goldman Sachs suggests that around half of this slowdown has been caused by the tariff increases but the larger Fed estimates of the uncertainty effects might imply an even bigger overall impact. The good news is that part of this overall drag may disappear before the end of 2020, boosting American GDP growthby at least half a percentage point. What about the longer-term benefits of the trade deal? The purchase of $200bn of additional US exports in the energy, agriculture, manufacturing and services sectors, spread over two years, will reduce the bilateral trade deficit with China. But many of these exports will probably be redirected from elsewhere and will not boost US domestic output in those sectors. Longer term, China’s business restrictions, including alleged unfair trading practices, appear to be eas-

ing. Given the political boost from the phase one deal, Chinese economic reformers such as vice-premier Liu He may be in the ascendancy in Beijing for a while. US trade representative Robert Lighthizer has suggested that the strength of the reformers will determine whether the phase one truce is ultimately successful, but the road is long and treacherous. The knotty problems surrounding protection of intellectual property, cyber theft and China’s industrial subsidies have been parked in the “too difficult” box. They may prove just as intractable in phase two. Unfortunately, now that trade protection has been viewed by a US administration as a legitimate weapon to use in international economic diplomacy, the genie is out of the bottle. The US and China have been left with average tariffs on the other’s exports of about 20 per cent, an unprecedented restriction on global free trade in recent decades. Mr Trump is now threatening similar tariffs on car imports from Europe. The trade wars are far from over.

Monday 20 January 2020

BUSINESS DAY

ANALYSIS

The upstart unions taking on the gig economy and outsourcing Cleaners, couriers and security guards flock to grassroots groups that challenge the rules of workplace organisation BETHAN STATON

oreta Younsi had been working as a cleaner at St Mary’s Hospital in central London for 12 years when she joined a new union and organised her first strike. For nine days in October last year she and her colleagues, who are employees of outsourcing firm Sodexo, stood in front of the hospital with a banner reading: “We are not the dirt we clean.” They beat drums and used a megaphone to denounce low wages, turning the protest into a party with food and music. Then they crashed a board meeting to insist on their demands. “We had to knock and knock. Nobody paid attention to us,” she says. “But if you make a big noise they have to hear you.” The cleaners at St Mary’s are members of United Voices of the World, a new trade union of mostly precariously employed migrant workers at the heart of a movement disrupting labour organising. Their demonstration was a typical UVW action: jubilant, noisy, confrontational and uncompromising, led by workers at the sharp end of insecure, low-waged employment. After Ms Younsi and her colleagues took action, Imperial College Healthcare NHS Trust, the body that runs St Mary’s, brought forward plans to increase the £8.21 minimum wage to the London Living Wage, which is now £10.75, and suspended the process for renewing the outsourced contract. Members are now waiting for a decision on their main demand — that they become in-house NHS staff. An offer of anything less, they say, will result in another strike. The upstart unions are a reflection of several powerful trends in modern economies such as the UK’s. As insecure and gig economy work becomes more common, especially among migrant and young workers, newer groups are developing to meet demand from workplaces with few protections — and in the process, they are leaving established unions struggling to protect their turf. Since it was founded in 2014, UVW has organised more than 20 workplaces and won in-house contracts, wage rises or sick pay at organisations including the Daily Mail Group, the Royal Borough of Kensington and Chelsea and the London School of Economics. It now has more than 3,000 members and says it is attracting 200 more every month. Its sister union, Independent Workers’ Union of Great Britain, has 4,800 members. It has challenged Uber’s classification of drivers as“partners” in court and won pay rises and recognition rights for couriers’ unions. Jason Moyer-Lee, the general secretary of IWGB, believes that the scope for unions like his to grow is huge. “People are really craving representation and to change the conditions they are working under,” he says. The energy of these small, confrontational labour associations follows decades of decline in workplace organising and mainstream unions — even if the bigger unions have enjoyed greater influence in the Labour party in recent years. In 2018, 23.4 per cent of employees in the UK were

union members, half the 1979 peak. At the same time, the growth of unstable gig-economy contracts have transformed the world of work. The Trade Unions Congress, the UK’s federation of trade unions, estimates that around one in nine UK workers — 3.8m people — are now in precarious employment, including zero-hours contracts, agency work or self-employment for low pay. While the upstart unions have scored notable successes, they face challenges both from outsourcing groups and gigeconomy companies such as Uber and Deliveroo, which have sought to disrupt organisation by workers and deny them the status of employees; and from mainstream unions suspicious of their tactics. Both factors could hamper their ability to grow. Michael Dooley, a membership development officer for GMB, a union with a 130-year history which has 630,000 members, says the union has been focused on building up its membership base at St Mary’s. He believes UVW has been quick to strike despite the significant risks: days of lost wages and the risk of a demoralising failed campaign. “You get your army first, then your army leads the way,” he says. “We weren’t going to commit people to taking serious industrial action until we had sufficient numbers to make a short, sharp shock. Bar chart of Share of employees with the right to bargain, 2017 or latest year (%) showing Collective bargaining: where workers have the most influence The “precariat”, a term popularised by economist Guy Standing, has little or no in-work benefits, are likely to be in nonpermanent contracts and have low pay. They are both always on-call and never guaranteed work. They are also less likely to be organised. UK union membership is weighted toward middle-income earners in permanent, full-time, professional jobs, and 77 per cent of members are over 35. Across OECD countries union membership has dropped from nearly 30 per cent to 16 per cent since 1985, and people in “non-standard” jobs, including those on fixed-term contracts or temporary workers, are 50 per cent less likely to be members than other workers. The UK’s largest unions are trying to respond to this changing world. Last year, GMB secured holiday pay, improved pay structures and representation for couri-

ers working for Hermes, the delivery company. As far back as 2008 Unison won the London Living Wage for cleaners at Soas, part of London University, and both unions represent low-paid workers at St Mary’s alongside UVW. Ms Younsi, however, believes the big unions do little for the cleaners, even if they are members. “They don’t make meetings,” she says. “They just take people’s money and disappear.” Mr Dooley says this is “simply not true”, saying GMB is doing the invisible work of building a strong membership capable of winning campaigns. But Ms Younsi’s disillusionment is shared by many activists. UVW co-founder Petros Elia says he set up a new union because others were not changing their approach for workers beyond the traditional sectors they cover. Workers such as Ms Younsi face major challenges if they want to unionise. They often work in disparate locations at unsocial hours, with no employer contact beyond an app. Insecure contracts make them easy to replace. Many migrant workers speak limited English, and working more than one job is common. UVW and IWGB have adapted their tactics for this precarious workforce. They run breakfast stalls where cleaners can drink coffee and meet colleagues when they finish a shift at 7am. Meetings feature not just union business but language classes, childcare, music, food, games and legal clinics. Strike action is colourful and loud, usually with a soundtrack of Latin American music and flares of red smoke. Speeches, casework and community activities are done in both English and Spanish, and members are encouraged to get active and lead campaigns quickly. Line chart of Share of employees with a membership (%) showing Trade unions now represent more women than men They also take an uncompromising approach to their demands. Both unions are quick to call strike action, often with short work stoppages of several hundred employees that take place alongside protests designed to generate a social media buzz and exert public pressure on an employer. IWGB also uses litigation as a tool — in 2016 it successfully challenged Uber’s characterisation of its drivers as independent contractors. “We tell workers that they need to take action, serious action, protracted action

until they win,” says Mr Elia. “The demands we make are non-negotiable. We want everything we ask for.” Uber, which is appealing the decision at the Supreme Court, says “drivers are at the heart of our service and our focus is on how to make their experience better”, while Deliveroo says “our riders have a strong voice within the company and our flexible model is based on their direct feedback”. The confrontational route means negotiations look different to those of established unions. Both IWGB and UVW are ambivalent about recognition agreements, which oblige employers to negotiate directly with the union: so far they have two agreements between them. Mr Elia describes the focus on recognition as a “red herring”, diverting resources from the high-pressure tactics that force bosses to come to the table. For established unions with upwards of 1m members, the gung-ho approach of upstart unions is unsettling. Becky Wright, of Unions21, a think-tank, says unions that do not have recognition agreements and take confrontational action put members at risk. “Collective bargaining is important. If you want a long-term approach to industrial relations you need that approach,” she says. The different methods have generated tensions. At University College London, IWGB represents several hundred cleaners and security guards, but employers refuse to negotiate with them, opting only to talk with its officially recognised union, Unison. After IWGB declared strike action last October, demanding an end to disparities in benefits like pensions and sick pay between in-house and outsourced staff, UCL announced it would meet requests within two years. But while IWGB declared a partial victory, Unison and UCL announced the changes were a result of negotiations between themselves, making no mention of the smaller union that had put pressure on its employers. When IWGB cleaners and security guards picketed UCL on a freezing cold morning last November — pushing for improvements to be introduced sooner than the two-year timetable proposed by the university — they said the new union had already transformed their working life. Issues that had been stuck with middle Continues on page 60

Friday 17 January 2020

BUSINESS DAY

NATIONAL NEWS

Calls to sack senior minister reveal split in South Africa’s ANC Party factions are pushing for Pravin Gordhan’s removal over crisis at state power utility JOSEPH COTTERILL

actions within the African National Congress are pushing for a senior minister to step down in the latest sign of challenges to President Cyril Ramaphosa’s grip on South Africa’s ruling party. South Africa’s biggest trade union federation, which has backed the ANC since 1990, singled out Pravin Gordhan, minister for state-owned enterprises, when it said last week that “heads have to roll” over the government’s failure to revive the struggling state power monopoly Eskom. “Time has arrived for him to allow some people with fresh ideas to come,” said a spokesperson for Cosatu, the labour federation. Others in the ANC have called for oversight of Eskom to be transferred from Mr Gordhan to the energy ministry, in a move that analysts said would also be a likely precursor to the minister’s removal. The co-ordinated attacks on Mr Gordhan, a former finance minister and one of the country’s most respected pro-business officials, come as Mr Ramaphosa’s government faces growing pressure over its failure to revive the economy. Mr Ramaphosa came to power in 2018 promising a “new dawn” after a decade of stagnant growth under Jacob Zuma. He pledged to reverse the fortunes

of Eskom and other state-owned enterprises hollowed out by years of corruption but has so far struggled to implement major change. Eskom last month announced the biggest rolling power blackouts in its history as it failed to meet power demand. Jabu Mabuza, the utility’s chairperson, then resigned after publicly apologising to Mr Ramaphosa for Eskom’s failure to prevent further shutdowns. The ANC’s management of Eskom has always been politically sensitive but now threatens to unravel Mr Ramaphosa’s fragile coalition of support. Mr Ramaphosa defeated Mr Zuma’s preferred successor to be ANC leader in 2017 with the narrowest of margins, secured only through Cosatu’s support and deals with other ANC politicians, including current deputy president David Mabuza. In 2017 Mr Mabuza had backed Mr Zuma’s pick for president but then switched sides during the vote to support Mr Ramaphosa. He recently joined Cosatu in criticising Mr Gordhan’s management of Eskom. Mr Ramaphosa’s supporters see the attacks on Mr Gordhan as part of a sustained attempt by the president’s enemies to regain control of the party. “Those clamouring for the head of comrade Pravin Gordhan fool no one,” said a group of 20 ANC veterans this month. “We know, as do most rightthinking members of the ANC and the citizenry, that these

The Cosatu trade union federation singled out Pravin Gordhan, minister for state-owned enterprises, when it said that ‘heads have to roll’ over the government’s failure to revive Eskom © Waldo Swiegers/Bloomberg

elements are engaged in a longterm project of state capture and regard the Ramaphosa presidency as a necessary interval before they are once more in power.” Mr Ramaphosa’s record will be assessed at a party meeting in June. The ANC cannot remove him as leader at that point but could censure the president for weak leadership, analysts said, a move that would threaten to undercut his bid for a second term in 2022. The need to maintain Cosatu’s support ahead of 2022 is one of the biggest reasons Mr Ramaphosa has failed to deal with Eskom’s problems, said Khaya Sithole, an independent

political analyst. “It is impossible to do the things that he wants to do without alienating Cosatu,” said Mr Sithole. Mr Ramaphosa last year unveiled a radical plan to break up Eskom’s monopoly and open more supply opportunities to independent power producers but little progress has been made; at each step, the unions have blocked such moves as privatisation. However, the longer Mr Ramaphosa struggles to change Eskom, the more public trust in the president is eroding, said Mr Sithole. “People now struggle to trust him,” he said. Anthony Butler, professor of political studies at the

University of Cape Town, said Mr Ramaphosa would be able to hold on to power. “There’s no alternative faction or set of candidates to replace him,” he said. But he added that different groups in the ANC have a common interest in blocking the clean-up of state-owned enterprises. They include those implicated in the systematic looting under Mr Zuma and officials and party members who have allegedly continued to profit from supply contracts with the different state companies. “The ANC is probably becoming more dependent on SOE supply chain interests than ever before,” said Mr Butler.

to court over workers’ rights, it called a “precarious workers strike back”, action, bringing private-hire drivers, couriers, security officers and other low-paid workers out in solidarity. These members are being joined by workers in different sectors. UVW has recently launched branches for workers in the architectural and legal sectors as well as the sex industry. IWGB is now organising foster carers, and has a branch for producers of video games. A graphic with no description With no shortage of potential members in low-paid, unstable work, the membership of both unions has the potential to grow significantly, bringing a bigger range of workplace problems and long-term employer relationships that will shape their development.

Jamie Woodcock, an academic researching precarious work, is a member of both IWGB and UCU, a much larger union for academic staff. He says he thinks of unions such as UVW as “laboratories”, where members can take risks and challenge the status quo. In November tens of thousands of UCU members went on strike in universities across the UK as part of a long-running dispute over pensions and workload. On the final day of the strike, at UCL, academic staff angered by low pay, insecure contracts and overwork stood on the picket line with security guards and cleaners. “It’s showing people they can do things at work,” Mr Woodcock says of the new unions. “They become powerful examples of how the rest of us can do it.”

The upstart unions taking on the gig economy... Continued from page 59 management went straight to the top, and workers had grown in confidence. “Unison never raised a flag here,” says Adam Lunat, a security guard. “They’re more about meeting and talking and eating.” His colleague Bendor Ansa-Otu agrees. The new union, he says, is “seen as a bit more radical” and has been “marginalised”. He hopes the university will negotiate directly with IWGB, which is stepping up its campaign to push for outsourced staff to be brought in-house. IWGB’s Moyer-Lee cited Justice for Janitors as an inspiration for the new unions in London. The US social movement used direct action and “extralegal tactics” such as shutting down roads and

city hall offices to win significant wage hikes and improved working conditions in the 1990s. “We wouldn’t win if we kept to the law,” says Stephen Lerner, who founded the campaign as an offshoot of Services Employees International Union, a larger union. A graphic with no description At St Mary’s, Ms Younsi, who was organising protests within months of joining the union, says she relishes her UVW responsibilities. “We become family. If you’re disappointed you feel it as a group,” she says. “I really feel like I’m working with the union. My job is not boring any more. It’s a social life.” Imperial College Healthcare NHS Trust says it has “always been committed to good workwww.businessday.ng

ing conditions for all employees”. Sodexo says: “We listened to staff concerns at St Mary’s about pay and conditions. We have ensured all our staff are entitled to standard employment benefits and, with the Trust’s agreement, pay everyone at least the London living wage.” According to Mr Elia, the new unions want to show that these precarious workers do have power to win improvements for themselves and others. Perhaps most importantly in Mr Elia’s eyes, direct action brings them together with other workers. When St Mary’s went on strike last year, it did so as part of a coordinated action with low-paid staff at the Ministry of Justice, ITV and Channel 4, the Royal Parks and Greenwich University. In 2017, when IWGB took Uber

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Monday 20 January 2020

BUSINESS DAY

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 383,888.44 10.80 4.35 428 47,474,935 UNITED BANK FOR AFRICA PLC 304,374.85 8.80 -1.12 522 65,738,173 ZENITH BANK PLC 693,862.51 22.30 2.29 480 38,284,887 1,430 151,497,995 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 263,830.40 7.35 -0.68 238 17,476,962 238 17,476,962 1,668 168,974,957 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,576,881.35 126.60 2.93 110 893,684 110 893,684 110 893,684 BUILDING MATERIALS DANGOTE CEMENT PLC 2,982,088.80 175.00 - 118 727,044 LAFARGE AFRICA PLC. 256,113.95 15.80 -0.94 235 19,503,791 353 20,230,835 353 20,230,835 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 346,005.40 588.00 - 7 3,174 7 3,174 7 3,174 2,138 190,102,650 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 1 104 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 1 219 UPDC REAL ESTATE INVESTMENT TRUST 9,338.94 3.50 2.94 7 685,875 9 686,198 9 686,198 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 9 686,198 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 62,958.06 66.00 - 6 3,678 PRESCO PLC 52,250.00 52.25 - 13 47,682 19 51,360 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,650.00 0.55 - 7 111,964 7 111,964 26 163,324 DIVERSIFIED INDUSTRIES JOHN HOLT PLC. 217.92 0.56 - 6 2,442 S C O A NIG. PLC. 1,903.99 2.93 - 6 1,062 TRANSNATIONAL CORPORATION OF NIGERIA PLC 42,273.91 1.03 -0.96 51 9,308,564 U A C N PLC. 30,829.87 10.70 7.00 49 1,085,330 112 10,397,398 112 10,397,398 BUILDING CONSTRUCTION ARBICO PLC. 521.24 3.51 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 28,314.00 21.45 - 14 91,209 ROADS NIG PLC. 165.00 6.60 - 0 0 14 91,209 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 - 13 69,215 13 69,215 27 160,424 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,672.91 0.98 - 3 125,000 GOLDEN GUINEA BREW. PLC. 220.45 0.81 -8.99 2 4,411,040 GUINNESS NIG PLC 66,149.56 30.20 - 24 58,295 INTERNATIONAL BREWERIES PLC. 78,222.34 9.10 -1.10 33 1,892,924 NIGERIAN BREW. PLC. 408,641.69 51.10 - 30 195,629 92 6,682,888 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 175,800.00 14.65 - 53 852,579 FLOUR MILLS NIG. PLC. 96,358.92 23.50 - 56 913,650 HONEYWELL FLOUR MILL PLC 8,168.10 1.03 - 5 138,387 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 3 7,721 NASCON ALLIED INDUSTRIES PLC 39,741.58 15.00 - 16 91,872 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 133 2,004,209 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,782.02 10.00 - 22 135,259 NESTLE NIGERIA PLC. 1,165,125.42 1,469.90 - 18 6,943 40 142,202 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 6,204.19 4.96 - 39 566,237 39 566,237 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 23,227.29 5.85 - 45 585,269 UNILEVER NIGERIA PLC. 106,282.60 18.50 -1.60 61 1,007,563 106 1,592,832 410 10,988,368 BANKING ECOBANK TRANSNATIONAL INCORPORATED 138,539.11 7.55 0.67 68 2,096,384 FIDELITY BANK PLC 64,613.80 2.23 -0.45 72 6,538,266 GUARANTY TRUST BANK PLC. 985,944.50 33.50 3.55 268 12,585,758 JAIZ BANK PLC 19,151.76 0.65 -4.41 20 2,223,629 STERLING BANK PLC. 54,701.79 1.90 - 48 2,935,425 UNION BANK NIG.PLC. 176,180.55 6.05 -1.63 51 1,491,086 8,065.64 0.69 -7.25 11 2,425,500 UNITY BANK PLC WEMA BANK PLC. 27,773.62 0.72 - 20 1,266,100 558 31,562,148 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 2 100 AIICO INSURANCE PLC. 5,405.56 0.78 1.30 16 1,091,137 AXAMANSARD INSURANCE PLC 22,050.00 2.10 - 1 25 CONSOLIDATED HALLMARK INSURANCE PLC 2,926.80 0.36 -7.69 3 500,000 CORNERSTONE INSURANCE PLC 8,543.11 0.58 7.41 14 546,000 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,904.09 0.26 3.85 17 1,425,345 LAW UNION AND ROCK INS. PLC. 2,148.17 0.50 - 0 0 LINKAGE ASSURANCE PLC 3,840.00 0.48 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 4 825,000 NEM INSURANCE PLC 10,349.79 1.96 -4.39 28 859,187 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,906.58 0.54 - 1 20,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 1 250,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 2,800.00 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 2 100 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 2 200 WAPIC INSURANCE PLC 4,683.96 0.35 - 23 753,002 114 6,270,096

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,812.56 1.23 - 5 6,616 5 6,616 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 1 50 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 50 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 9,280.00 4.64 0.87 35 500,603 CUSTODIAN INVESTMENT PLC 34,997.09 5.95 - 4 32,500 DEAP CAPITAL MANAGEMENT & TRUST PLC 540.00 0.36 - 4 38,000 FCMB GROUP PLC. 38,615.29 1.95 -2.01 106 21,231,622 1,697.97 0.33 - 0 0 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 446,461.11 42.50 2.41 24 652,401 UNITED CAPITAL PLC 16,140.00 2.69 1.13 68 2,126,993 241 24,582,119 919 62,421,029 HEALTHCARE PROVIDERS EKOCORP PLC. 2,592.72 5.20 - 2 5,667 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 710.63 0.20 -4.76 3 9,999,651 5 10,005,318 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 5,424.54 2.60 -1.89 24 855,994 7,175.26 6.00 - 31 1,001,308 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 3,743.76 2.17 - 9 73,887 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 968.57 0.51 - 5 57,659 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 69 1,988,848 74 11,994,166 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 852.48 0.24 4.35 3 1,809,500 3 1,809,500 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,206.13 0.41 -8.89 2 20,010,000 2 20,010,000 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 437.40 4.05 - 2 2,300 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 2 1,633 4 3,933 PROCESSING SYSTEMS CHAMS PLC 1,549.70 0.33 - 8 692,599 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 8 692,599 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 1 6 1 6 18 22,516,038 BUILDING MATERIALS BERGER PAINTS PLC 1,956.31 6.75 - 2 50,107 BUA CEMENT PLC 1,219,116.75 36.00 -2.78 95 2,106,301 CAP PLC 17,500.00 25.00 - 26 170,561 MEYER PLC. 244.37 0.46 - 3 34,024 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 2 4,617 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 128 2,365,610 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,395.40 1.36 - 9 166,216 9 166,216 PACKAGING/CONTAINERS BETA GLASS PLC. 31,948.21 63.90 - 5 2,137,590 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 2,137,590 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 142 4,669,416 CHEMICALS B.O.C. GASES PLC. 2,060.41 4.95 - 5 75,000 5 75,000 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 30,800 2 30,800 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 7 6,801 7 6,801 14 112,601 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 30 1,295,185 30 1,295,185 INTEGRATED OIL AND GAS SERVICES OANDO PLC 45,996.23 3.70 -1.33 47 1,073,597 47 1,073,597 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 7 2,406 CONOIL PLC 13,879.04 20.00 - 17 1,897 ETERNA PLC. 4,694.92 3.60 - 1 10,000 FORTE OIL PLC. 26,831.11 20.60 - 52 418,340 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 10 2,440 TOTAL NIGERIA PLC. 36,328.84 107.00 - 12 32,369 99 467,452 176 2,836,234 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 235.27 0.20 - 6 6,450 6 6,450 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 2 1,000 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 0 0 2 1,000 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 2 50 IKEJA HOTEL PLC 2,328.25 1.12 - 2 13,001 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 TRANSCORP HOTELS PLC 33,821.80 4.45 - 3 10,050 7 23,101 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,320.00 0.36 - 2 100 2 100 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 0 0 LEARN AFRICA PLC 933.45 1.21 - 2 65,537 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 560.83 1.30 - 2 12,643 4 78,180 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 745.97 0.45 - 0 0 0 0

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Monday 20 January 2020

BUSINESS DAY

Returns On Sources And Utilization Of Foreign Exchange For The Week Ended January 17, 2020 Sources Of Foreign Exchange For The Week Ended January 17, 2020 S/N

Source

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE

Date Of Fund Purchase 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20 15-Jan-20

Exchange Rate

Amount

S/N

315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00 315.00

100.00 120.00 129.61 150.00 154.59 219.28 219.28 219.28 250.00 259.22 328.92 400.00 548.21 761.00 761.00 1,520.00 1,123.24 100.00 100.00 105.71 109.58 133.90 133.90 158.57 170.00 174.43 189.05 194.01 200.00 258.68 266.98 273.95 286.50 310.24 390.11 439.24 475.00 500.00 521.00 928.89 1,000.00 1,000.00 1,099.39 1,200.00 1,250.00 1,500.00 2,994.00 109.93 150.00 256.84 300.00 428.57 444.44 444.44 514.29 550.00 1,487.00 1,487.00 1,838.96 31,746.04

61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 119 120

Source

OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA CENTRAL BANK OF NIGERIA FBN MERCHANT INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION INTL MONEY TRANSFER ORGANIZATION OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE OTHER AUTONOMOUS PURCHASE

Date Of Fund Purchase

Exchange Rate

Amount

15-Jan-20 16-Jan-20 16-Jan-20 16-Jan-20 16-Jan-20 16-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 14-Jan-20 10-Jan-20 15-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 10-Jan-20 13-Jan-20 13-Jan-20 13-Jan-20 13-Jan-20 13-Jan-20 13-Jan-20 13-Jan-20 13-Jan-20 13-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 14-Jan-20 15-Jan-20 15-Jan-20 10-Jan-20 14-Jan-20 15-Jan-20 16-Jan-20

315.00 315.00 315.00 315.00 315.00 315.00 345.14 343.00 342.50 342.00 341.00 340.00 336.00 335.00 333.00 331.00 357.00 357.00 307.45 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 355.00 315.00 315.00 315.00 315.00

36,627.72 125.58 130.44 510.71 888.81 982.00 2,598,000.00 966,000.00 1,829,000.00 967,000.00 1,711,000.00 793,005.30 3,364,000.00 168,800.00 79,000.00 570,000.00 2,000,000.00 3,500,000.00 20,000.00 21,950.15 13,751.03 79,286.14 330,000.00 342,251.86 6,709.31 16,000.00 577,816.36 25,825.24 7,956.61 65,583.70 120,000.00 290,283.18 559,742.55 22,625.37 13,752.25 88,506.49 259,506.42 516,373.55 24,434.76 13,812.49 650,000.00 125,000.00 183,279.33 600,000.00 794,209.00 738,241.89 14,435.79 29,452.64 12,477.31 100,000.00 72,486.92 1,568,204.96 137,168.00 317,684.93 95,000.00 240,000.00 4,890.86 9,554.47 2,113.01 10,076.92

Utilization Of Foreign Exchange For The Week Ended January 17, 2020 S/N

CUSTOMER NAME

ITEM OF IMPORT

DATE OF FUND UTILIZATION

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

16,462.61

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

10,313.27

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

59,464.61

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

247,500.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

256,688.90

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

5,031.98

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

12,000.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

433,362.27

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

19,368.93

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

5,967.46

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

49,187.78

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

90,000.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

217,712.39

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

419,806.91

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

16,969.03

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

10,314.19

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

66,379.87

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

194,629.82

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

387,280.16

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

18,326.07

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

10-Jan-20

356.00

10,359.37

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

487,500.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

93,750.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

137,459.50

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

450,000.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

595,656.75

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

553,681.42

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

10,826.84

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

22,089.48

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

13-Jan-20

356.00

9,357.98

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

14-Jan-20

356.00

75,000.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

14-Jan-20

356.00

54,365.19

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

14-Jan-20

356.00

1,176,153.72

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

14-Jan-20

356.00

102,876.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

14-Jan-20

356.00

238,263.70

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

15-Jan-20

356.00

71,250.00

CENTRAL BANK OF NIGERIA

IMTO SALES TO CBN

15-Jan-20

356.00

180,000.00

CENTRAL BANK OF NIGERIA

SME FUNDS SALES TO CBN

10-Jan-20

357.00

3,300,000.00

CENTRAL BANK OF NIGERIA

INVISIBLE FUNDS SALES TO CBN

14-Jan-20

357.00

1,800,000.00

ROOSKEY ELECTRICALS LIMITED

A C MOTOR SINGLE PHASE

10-Jan-20

308.50

20,000.00

NOSAK DISTILLERIES LTD (COLLECTION ACC)

RAW MATERIAL

10-Jan-20

356.00

374,858.13

AMOLI EXIM WEST AFRICA LTD

PHARMACEUTICAL RAW MATERIAL

13-Jan-20

315.50

25,000.00

EUROCHEMCO VENTURES LIMITED

POLYETHYLENE BLOW LOTRENE

13-Jan-20

356.00

154,880.00

EUROCHEMCO VENTURES LIMITED

POLYETHYLENE BLOW LOTRENE

13-Jan-20

356.00

87,099.62

13-Jan-20

356.00

147,166.27

INDORAMA VENTURES PACKAGING (NIG) LTD HIGH DENSITY POLYETHYLENE RESIN

EXCHANGE RATE

AMOUNT ($)

G.I & DISTRIBUTION LIMITED

INK POINT SHAVERS LIGHTERS

13-Jan-20

356.00

49,657.52

DARAJU INDUSTRIES LIMITED

MATCHES BRAND MYMY 1000 BOXES CTN

13-Jan-20

356.00

64,265.61

CFAO MOTORS NIGERIA LIMITED

NEW MITSUBISHI FUSO TRUCK

13-Jan-20

356.00

34,280.00

CFAO MOTORS NIGERIA LIMITED

PASSENGER LIFT

13-Jan-20

356.00

37,522.63

SHONGAI PACKAGING INDUSTRY LTD

PE HDPE KT10000UE PMLA BG5525 KG

13-Jan-20

356.00

102,960.00

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCT

13-Jan-20

356.00

11,789.00

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCT

13-Jan-20

356.00

17,740.00

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCT

13-Jan-20

356.00

26,635.00

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCT

13-Jan-20

356.00

9,362.00

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCT

13-Jan-20

356.00

9,316.00

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCT

13-Jan-20

356.00

5,345.00

www.businessday.ng

S/N

CUSTOMER NAME

ITEM OF IMPORT

DATE OF FUND UTILIZATION

EXCHANGE RATE

AMOUNT ($)

57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCTS

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCTS

13-Jan-20

356.00

39,606.00

13-Jan-20

356.00

ASSENE-LABOREX LTD ASSENE-LABOREX LTD

43,409.66

PHARMACEUTICAL PRODUCTS

13-Jan-20

356.00

12,786.02

PHARMACEUTICAL PRODUCTS

13-Jan-20

356.00

20,446.60

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCTS

13-Jan-20

356.00

34,522.20

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCTS

13-Jan-20

356.00

9,936.00

ASSENE-LABOREX LTD

PHARMACEUTICAL PRODUCTS

13-Jan-20

356.00

17,788.00

BOULOS ENTERPRISES LIMITED

PIAGGIO APE THREE WHEELED VEHICLES

13-Jan-20

356.00

7,000.00

HANA PACKAGING LIMITED

RAW MATERIAL

15-Jan-20

307.95

20,000.00

WANDEL INTERNATIONAL (NIG) LTD

MOTORCYCLES IN CKD

15-Jan-20

315.50

1,000.00

WANDEL INTERNATIONAL (NIG) LTD

MOTORCYCLES IN CKD

15-Jan-20

356.00

63,263.77

SHONGAI TECHNOLOGIES LIMITED

RAW MATERIAL

15-Jan-20

356.00

81,133.00

WANDEL INTERNATIONAL (NIG) LTD

MOTORIZED TRICYCLES

15-Jan-20

356.00

73,817.02

WANDEL INTERNATIONAL (NIG) LTD

MOTORIZED TRICYCLES

15-Jan-20

356.00

243,500.00

BENEDICT OFILI

EDUCATION

10-Jan-20

357.50

7,601.33

HENRY BENJAMIN

EDUCATION

10-Jan-20

357.50

1,939.64

GALADANCHI SANI

EDUCATION

10-Jan-20

357.50

11,900.00

LILIAN ANIEMEKA

EDUCATION

10-Jan-20

357.50

8,168.78

UCHE OFOMATA

EDUCATION

10-Jan-20

357.50

8,619.65

UCHE OFOMATA

EDUCATION

10-Jan-20

357.50

8,619.65

CHIJIOKE UGOCHUKWU

EDUCATION

10-Jan-20

357.50

11,679.64

CYRIACUS ONYEKWERE

EDUCATION

10-Jan-20

315.50

2,500.00

FELICIA ANYA

EDUCATION

10-Jan-20

315.50

3,970.20

AIRTEL NETWORKS LIMITED

TECH SERVICE FEE (PVT)

10-Jan-20

315.50

139,756.01

AIRTEL NETWORKS LIMITED

TECH SERVICE FEE (PVT)

10-Jan-20

351.00

4,000.00

UCHENNA UBOSI

EDUCATION

10-Jan-20

357.50

14,302.73

KASH NUR NIGERIA LIMITED

EDUCATION

10-Jan-20

357.50

1,688.70

ALBERT AND COMPANY

EDUCATION

10-Jan-20

357.50

7,800.05

OBOITE EHIGE

EDUCATION

10-Jan-20

357.50

1,200.00

FED POLY NEKEDE MICROFINANCE BANK LTD

EDUCATION

10-Jan-20

357.50

7,808.06

TELLGATE COMPUTERS

EDUCATION

10-Jan-20

357.50

10,013.00

CHINWEOKE ONUMONU

EDUCATION

10-Jan-20

357.50

8,852.25

TELLGATE COMPUTERS

EDUCATION

10-Jan-20

357.50

15,000.00

RAFIU OGUNMOLADE

MORTGAGE

13-Jan-20

315.50

4,000.00

K. K. KOBINA ENTERPRISES LTD

EDUCATION

13-Jan-20

357.50

7,591.00

OMOLOLA SETHDAVID

EDUCATION

13-Jan-20

357.50

4,700.00

KENNETH OKAFOR

EDUCATION

15-Jan-20

357.50

7,335.45

ABBEY SUNDAY

EDUCATION

15-Jan-20

357.50

2,636.60

ANDY VENTURES LIMITED

EDUCATION

15-Jan-20

357.50

11,098.32

MARTINS IZUOGBE

CREDIT CARD REPAYMENT

16-Jan-20

315.50

9,377.14

AIKENZUA ALENKHE

EDUCATION

16-Jan-20

357.50

2,535.00

IFEYINWA OGUGUA

EDUCATION

16-Jan-20

357.50

6,965.00

ABDULLAHI BABAYO USMAN

PTA

10-Jan-20

357.50

4,000.00

IZUCHUKWU BENERDIN ACHUSI

PTA

10-Jan-20

357.50

4,000.00

CHUDI NELSON OJUKWU

PTA

10-Jan-20

357.50

1,326.10

IDOWU OLUKOREDE AKINOLA

PTA

10-Jan-20

357.50

4,000.00

CHIDIEBERE DAVID AJAERO

PTA

10-Jan-20

357.50

4,000.00

ANITA NKEMDILIM OBIANWU

PTA

10-Jan-20

357.50

1,000.00

HAUWA UMARU YAHAYA

PTA

10-Jan-20

357.50

4,000.00

IKECHUKWU PROSPER ANI

PTA

10-Jan-20

357.50

4,000.00

CHUKWUEMEKA GABRIEL AGBO

PTA

10-Jan-20

357.50

4,000.00

BLESSED LAWRITA ONYEGBARI

PTA

10-Jan-20

357.50

3,000.00

KELVIN IFY OGOR

PTA

10-Jan-20

357.50

3,500.00

SUCCESS CHINYERE MADUAGWU

PTA

10-Jan-20

357.50

3,000.00

DABA ALAIYIBA GRAHAM-DOUGLAS

PTA

10-Jan-20

357.50

1,500.00

NNENNA EZINDU AMECHI

PTA

10-Jan-20

357.50

4,000.00

https://www.facebook.com/businessdayng

@Businessdayng

625

Monday 20 January 2020

BUSINESS DAY

Continued S/N

113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 163 164 165 166 167 168 169 170 171 172 173 174 175 176 177 178 179 180 181 182 183 184 185 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 213 214 215 216 217 218 219 220 221 222 223 224 225 226

CUSTOMER NAME

ITEM OF IMPORT

DATE OF FUND UTILIZATION

EXCHANGE RATE

AMOUNT ($)

IHUOMA ADANNAYADI AMECHI

PTA

10-Jan-20

357.50

4,000.00

DABA ALAIYIBA GRAHAM-DOUGLAS

PTA

10-Jan-20

357.50

1,500.00

ABAYOMI JOHN OYEDOLA

PTA

13-Jan-20

357.50

4,000.00

OZIOMA SIMON NWEKE

PTA

13-Jan-20

357.50

4,000.00

AMINU SALISU MUAZU

PTA

13-Jan-20

357.50

4,000.00

IFEANYICHUKWU NGOZI JIDEONWO

PTA

13-Jan-20

357.50

4,000.00

STANISLAUS CHIDI AMADI

PTA

13-Jan-20

357.50

4,000.00

ANTHONIA YETUNDE BADEJO

PTA

13-Jan-20

357.50

2,500.00

JANEFRANCESS EJIRO ONUORAH

PTA

13-Jan-20

357.50

4,000.00

IFEATU EVEREST OKONKWO

PTA

13-Jan-20

357.50

4,000.00

PASCHAL OBIORAH ONUORAH

PTA

13-Jan-20

357.50

4,000.00

NKEMDILIM EZENWA IHEANACHOR

PTA

14-Jan-20

357.50

4,000.00

MOHAMMED BASHIR SHEHU

PTA

14-Jan-20

357.50

1,971.30

EBELE TERESA CHIATULA

PTA

14-Jan-20

357.50

2,000.00

VICTOR EDOSA OMOZUWA

PTA

14-Jan-20

357.50

4,000.00

OKECHUKWU STEPHEN IHIM

PTA

14-Jan-20

357.50

4,000.00

CHUKWUNENYE CLAUDE EKE

PTA

14-Jan-20

357.50

1,000.00

IFECHUKWU BEN OKOLIE

PTA

14-Jan-20

357.50

4,000.00

JOSHUA MAINASARA YANG

PTA

14-Jan-20

357.50

600.00

PRINCE CHIEMEKA DURU

PTA

14-Jan-20

357.50

4,000.00

AMAECHI PAUL TAGBO

PTA

14-Jan-20

357.50

4,000.00

FRANKLIN AFAMEFUNA OKONKWO

PTA

14-Jan-20

357.50

4,000.00

OLUCHUKWU ADELINE AJOUNUMA

PTA

14-Jan-20

357.50

4,000.00

VINCENT MADU OKOLO

PTA

14-Jan-20

357.50

4,000.00

NWANDO CHIROTALU OKWUOSA

PTA

14-Jan-20

357.50

4,000.00

SOLOMON OKPA ITA

PTA

15-Jan-20

357.50

4,000.00

OMOLADE IFEDAYO ODUKOYA

PTA

15-Jan-20

357.50

3,000.00

TOBI EMMANUEL GBADEBO

PTA

15-Jan-20

357.50

3,000.00

CHUKWUJIOKE DAMIAN OBI

PTA

15-Jan-20

357.50

3,954.90

AUGUSTINE IFEANYI IKECHUKWU

PTA

15-Jan-20

357.50

4,000.00

PHILOMENA CHINWE UWANDU

PTA

15-Jan-20

357.50

4,000.00

OGHOMWEN JULIET ODIASE

PTA

15-Jan-20

357.50

4,000.00

CHIJIOKE UGOCHUKWU

ESTACODE

16-Jan-20

315.50

20,934.38

NNAMDI OKONKWO

ESTACODE

16-Jan-20

315.50

20,934.38

ODINKEMELU AKU PAULINE

ESTACODE

16-Jan-20

315.50

20,934.38

GBOLAHAN SIMISOLA JOSHUA

ESTACODE

16-Jan-20

315.50

20,934.38

HASSAN IMAM

ESTACODE

16-Jan-20

315.50

20,934.38

ODEGHE OBARO ALFRED

ESTACODE

16-Jan-20

315.50

20,934.38

SHERIFF AMINU ENTERPRISES

CONTACT ADHESIVES

10-Jan-20

357.50

17,400.00

POLLYCARP INTERNATIONAL

SYNTHETIC DYE

14-Jan-20

357.50

20,000.00

DON - DUBEMUZO VENTURES

IMITATION JEWELLERY

15-Jan-20

357.50

20,000.00

KARAS WATER TECHNOLOGY LTD

INDUSTRIAL MACHINES

15-Jan-20

357.50

20,000.00

LABANA GLOBAL VENTURED

PADDY STORAGE SILOS

10-Jan-20

330.50

100,000.00

AGBOOLA FARMS LTD

10000MT YELLOW SOYBEANS

10-Jan-20

330.50

90,000.00

COLEMAN TECH. IND. LTD

POLYETHYLENE COMPOUND

10-Jan-20

330.50

11,000.00

JOHN HOLTS PLC

GENERATING SET

10-Jan-20

330.50

30,000.00

THE PAPILON PLASTICS COMPANY LIMITED

PARTS FOR GAS ENGINE GENERATOR

10-Jan-20

330.50

40,000.00

THE PAPILON PLASTICS COMPANY LIMITED

SUPERMARKET TRAY MOULD

10-Jan-20

330.50

40,000.00

YEMFUN INTEGRATED SERVICES LTD

POLYETHYLENE RESIN

10-Jan-20

330.50

5,000.00

AIR WAVE LIMITED

POLYETHYLENE GRADE

10-Jan-20

331.00

2,000.00

AIR WAVE LIMITED

HDPE MARPOL HDB502

10-Jan-20

331.00

4,000.00

CLEMSON W/A LTD

TOBACCO FOR SNUFF PRODUCTION

10-Jan-20

331.50

12,000.00

N.N. FEMS INDUSTRIES LTD

80.64MT LANETTE WAX AO

10-Jan-20

331.50

1,000.00

BHOJRAJ INDUSTRIES LTD

ROTOGRAVURE PRINTING PRESS

10-Jan-20

332.50

170,000.00

BHOJRAJ INDUSTRIES LTD

DUAL SPINDLESILISTER REWINDING MACHINE

10-Jan-20

332.50

30,000.00

DEEKAY AND SONS NIG LTD

CHEST FREEZERS

10-Jan-20

332.50

9,000.00

HAANO INDUSTRIES LTD

FAT FILLED MILK POWDER

10-Jan-20

332.50

2,000.00

HAANO INDUSTRIES LTD

FAT FILLED MILK POWDER

10-Jan-20

332.50

2,000.00

MAPLE LEAF PRESS LTD

RAW MATERIAL

10-Jan-20

332.50

3,000.00

NEXUS FOR LIFE NIG LTD

RAW MATERIAL

10-Jan-20

332.50

5,000.00

NEXUS FOR LIFE NIG LTD

RAW MATERIAL

10-Jan-20

332.50

14,000.00

CFAO YAMAHA MOTOR NIGERIA LIMITED

YAMAHA OUTBOARD MOTOR

10-Jan-20

333.50

4,000.00

CFAO YAMAHA MOTOR NIGERIA LIMITED

YAMAHA MOTORCYCLE

10-Jan-20

333.50

25,000.00

CFAO YAMAHA MOTOR NIGERIA LTD

YAMAHA OUTBOARD MOTOR

10-Jan-20

333.50

50,000.00

OLAM NIG LTD

AGRICULTURAL EQUPMENT FOR RICE FARMING

10-Jan-20

335.50

2,000.00

OLAM NIG LTD

AGRICULTURAL EQUPMENT FOR RICE FARMING

10-Jan-20

335.50

4,000.00

OLAM NIGERIA LIMITED(IMPORT ACC)

AGRICULTURAL EQUIPMENT FOR RICE FARMING

10-Jan-20

335.50

3,000.00

OLAK ROOFING NIGERIA LIMITED

HOT ROLLED STEEL SHEET

10-Jan-20

335.50

7,000.00

OLAK ROOFING NIGERIA LIMITED

HOT ROLLED STEEL SHEET

10-Jan-20

335.50

7,000.00

OLAK ROOFING NIGERIA LIMITED

HOT ROLLED STEEL SHEET

10-Jan-20

335.50

36,000.00

OUTSPAN NIGERIA LIMITED

MILK POWDER

10-Jan-20

335.50

7,000.00

SHIV LILA POLYMERS LIMITED

PLASTIC RAW MATERIAL

10-Jan-20

335.50

101,800.00

SHIV LILA POLYMERS LTD

PLASTIC RAW MATERIAL

10-Jan-20

335.50

1,000.00

MATRIX LPG LIMITED

LPG NIGERIAN SPECIFICATION)

10-Jan-20

336.50

500,000.00

AIDA ENERGY LIMITED

BITUMEN (NIGERIAN SPECIFICATION)

10-Jan-20

336.50

190,000.00

CROWN FLOUR MILLS LIMITED

RUSSIAN MILLING WHEAT

10-Jan-20

336.50

70,000.00

CROWN FLOUR MILLS LIMITED

ARGENTINE BREAD WHEAT

10-Jan-20

336.50

150,000.00

CROWN FLOUR MILLS LIMITED

Wheat US No.2 or better hard red winter wheat

10-Jan-20

336.50

19,000.00

CROWN FLOUR MILLS LIMITED

RUSSIAN MILLING WHEAT.

10-Jan-20

336.50

70,000.00

CROWN FLOUR MILLS LIMITED

RUSSIAN MILLING WHEAT.

10-Jan-20

336.50

150,000.00

CROWN FLOUR MILLS LIMITED

RUSSIAN MILLING WHEAT

10-Jan-20

336.50

900,000.00

HONEYWELL FLOUR MILLS LTD

ENZYMES AND ADDITIVES

10-Jan-20

336.50

10,000.00

HONEYWELL FLOUR MILLS LTD

NON OIL CHICKEN FLAVOUR 803

10-Jan-20

336.50

11,000.00

HONEYWELL FLOUR MILLS LTD

RED WINTER WHEAT

10-Jan-20

336.50

80,000.00

HONEYWELL FLOUR MILLS LTD

RED WINTER WHEAT

10-Jan-20

336.50

300,000.00

HONEYWELL FLOUR MILLS LTD

RED WINTER WHEAT

10-Jan-20

336.50

300,000.00

HONEYWELL FLOUR MILLS PLC

40,000.00MT WHEAT

10-Jan-20

336.50

200,000.00

RECHNITA INTEGRATED SERVICES LIMITED

RED SPRING WHEAT

10-Jan-20

336.50

26,000.00

RELIANCE CHEMICAL PRODUCTS LIMITED

MACHINERY

10-Jan-20

336.50

6,000.00

DANGOTE CEMENT PLC - OBAJANA PLANT

CONVEYOR BELT

10-Jan-20

338.50

30,000.00

DANGOTE CEMENT PLC - OBAJANA PLANT

AH-NEOMAG TZ CEMENT

10-Jan-20

338.50

48,000.00

DANGOTE FERTILIZER LIMITED

SWITCH GEAR

10-Jan-20

338.50

32,000.00

DANGOTE FERTILIZER LIMITED

MACHINERY

10-Jan-20

338.50

100,000.00

DANGOTE INDUSTRIES LTD

INDUSTRIAL SPARE PARTS

10-Jan-20

338.50

6,000.00

DANGOTE OIL REFINING COMPANY LIMITED

PREFABRICATED BUILDING

10-Jan-20

338.50

76,000.00

DANGOTE SUGAR REFINERY PLC

RAW SUGAR

10-Jan-20

338.50

90,000.00

EKO SUPREME RESOURCES NIGERIA LIMITED

ACUTEX, ODORIFEROUS SUBSTANCE.

10-Jan-20

340.50

100,000.00

EKO SUPREME RESOURCES NIGERIA LTD

SODA ASH LIGHT

10-Jan-20

340.50

52,000.00

ELIZADE NIG LTD

SINGLE CABIN LIGHT DUTY TRUCK

10-Jan-20

340.50

7,000.00

ELIZADE NIG LTD

SINGLE CABIN LIGHT DUTY TRUCK

10-Jan-20

340.50

19,000.00

ELIZADE NIG LID

DOUBLE CABIN 4X2 PICKUP

10-Jan-20

340.50

70,000.00

ELIZADE NIG LID

DOUBLE CABIN 4X2 PICKUP

10-Jan-20

340.50

165,000.00

ELIZADE NIG LID

SINGLE CABIN LIGHT DUTY TRUCK

10-Jan-20

340.50

6,000.00

ELIZADE NIG LTD

13 SEATS MINI BUS

10-Jan-20

340.50

16,000.00

ELIZADE NIG LTD

JAC PASSENGER CAR SKD

10-Jan-20

340.50

197,000.00

MOB INTEGRATED SERVICES LTD

1600MT COMMERCIAL REFRIGERATED BUTANE

10-Jan-20

340.50

3,000.00

NATURAL PRIME RES. NIG LTD

SPECKLES AND SODIUM CARBONATE (DENS)

10-Jan-20

340.50

15,000.00

NATURAL PRIME RESOURCES NIGERIA LIMITED

ODORIFEROUS SUBSTANCE

10-Jan-20

340.50

23,000.00

NATURAL PRIME RESOURCES NIGERIA LIMITED

ODORIFEROUS SUBSTANCE

10-Jan-20

340.50

95,000.00

NATURAL PRIME RESOURCES NIGERIA LTD

SODA ASH LIGHT 1 000 50

10-Jan-20

340.50

19,000.00

OILSERV LIMITED

VALVES AND INSTRUMENTS

10-Jan-20

340.50

5.30

RHINE INDUSTRIES NIGERIA LIMITED

503 ROLLS OF SELF ADHESIVE VINYL PLAIN WHITE,

10-Jan-20

340.50

2,000.00

TONGDA IND LTD

RECYCLING MACHINES

10-Jan-20

340.50

4,000.00

EDO CEMENT CO LTD

MACHINERY AND EQUIPMENT

10-Jan-20

341.50

41,000.00

www.businessday.ng

S/N

227 228 229 230 231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 251 252 253 254 255 256 257 258 259 260 261 262 263 264 265 266 267 268 269 270 271 272 273 274 275 276 277 278 279 280 281 282 283 284 285 286 287 288 289 290 291 292 293 294 295 296 297 298 299 300 301 302 303 304 305 306 307 308 309 310 311 312 313 314 315 316 317 318 319 320 321

CUSTOMER NAME

ITEM OF IMPORT

DATE OF FUND UTILIZATION

EXCHANGE RATE

AMOUNT ($)

EDO CEMENT CO LTD

MACHINERY AND EQUIPMENT

10-Jan-20

341.50

70,000.00

EDO CEMENT CO LTD

RAW SUGAR IN BULK

10-Jan-20

341.50

800,000.00

EDO CEMENT CO LTD

MACHINERY AND EQUIPMENT

10-Jan-20

341.50

800,000.00

AIR PEACE LIMITED

AIRCRAFT

10-Jan-20

342.50

190,000.00

AROWOLO GROUP OF COMPANIES LTD

12500 MT OF JET FUEL

10-Jan-20

342.50

15,000.00

AROWOLO GROUP OF COMPANIES LTD

3,200MT +/-10% BITUMEN

10-Jan-20

342.50

6,000.00

AVON CROWNCAPS AND CONTAINERS NIG LTD

TIN FREE STEEL

10-Jan-20

342.50

50,000.00

AVON CROWNCAPS AND CONTAINERS NIG LTD

RAW MATERIALS

10-Jan-20

342.50

4,000.00

CYBERNETICS INTL SERVICES LTD

BITUME 60 70

10-Jan-20

342.50

28,000.00

GLOBE SPINNING MILLS (NIGERIA) LIMITED

EPOXY

10-Jan-20

342.50

12,000.00

GLOBE SPINNING MILLS (NIGERIA) LIMITED

GAS ENGINE GENERATOR

10-Jan-20

342.50

62,000.00

KAM INDUSTRIES NIGERIA LIMITED

INDUSTRIAL RAW MATERIAL

10-Jan-20

342.50

3,000.00

KAM INDUSTRIES NIGERIA LIMITED

INDUSTRIAL RAW MATERIAL

10-Jan-20

342.50

20,000.00

KAM INDUSTRIES NIGERIA LIMITED

INDUSTRIAL RAW MATERIAL

10-Jan-20

342.50

200,000.00

LIFE FLOUR MILL LIMITED

ARGENTINE BREAD MILLING WHEAT

10-Jan-20

342.50

170,000.00

MASTERSTROKE PACKAGES LIMITED

ULTRA CLEAR PP 50 TC-CL700-PET CLR 30 D, PP WHITE 60 TC2-WS820WG J,PP METALLISED 50 TC3-WS820-WG D AND COATED-P100-WG 70 D

10-Jan-20

342.50

17,000.00

MASTERSTROKE PKG LTD

RAW MATERIALS FOR FOOD PRODUCTION

10-Jan-20

342.50

80,000.00

NISPO PORCELAIN COMPANY LIMITED

MACHINERY PARTS

10-Jan-20

342.50

110,000.00

AUTOMEC BUSINESS IDEALS LTD

AGRICULTURAL MACHINERY PARTS-CONDENSERS

10-Jan-20

343.00

100,000.00

BUREY SERVICES LTD

AGRICULTURAL INDUSTRIAL FILTER AND CONDENSER

10-Jan-20

343.00

100,000.00

MERCURY AUTO INVEST CO LTD

AGRICULTURAL MACHINERY PARTS-CONDENSER

10-Jan-20

343.00

150,000.00

SYLDINE AGENCY SERVICES LTD.

AGRICULTURAL MACHINERY PARTS

10-Jan-20

343.00

110,000.00

MATRIX ENERGY LTD

GAS OIL(NIGERIAN SPECIFICATION0

10-Jan-20

343.00

200,000.00

MATRIX ENERGY LTD

GAS OIL(NIGERIAN SPECIFICATION0

10-Jan-20

343.00

1,000,000.00

MATRIX LPG LIMITED

LPG NIGERIAN SPECIFICATION)

10-Jan-20

343.00

6,000.00

MATRIX LPG LIMITED

LPG NIGERIAN SPECIFICATION)

10-Jan-20

343.00

53,000.00

MATRIX LPG LIMITED

LPG NIGERIAN SPECIFICATION)

10-Jan-20

343.00

70,000.00

AIDA ENERGY LIMITED

5,000 METRIC TONS OF BITUMEN

10-Jan-20

343.00

40,000.00

5 STAR AGRICULTURAL MACHINERIES LTD

AGRICULTURAL MACHINERY

10-Jan-20

343.50

100,000.00

CLEAN DEALS INTEGRATED BUSINESS LIMITED

AGRICULTURAL MACHINERY PARTS-CONDENSER

10-Jan-20

343.50

110,000.00

EASTERN HORIZON LIMITED

POULTRY MEAL 64

10-Jan-20

343.50

1,000.00

EASTERN HORIZON LIMITED

POULTRY MEAL

10-Jan-20

343.50

8,000.00

EASTERN HORIZON LIMITED

BLOOD MEAL

10-Jan-20

343.50

19,000.00

FOOD VIEW NIGERIA LIMITED

PARAQUAT DICHLORIDE

10-Jan-20

343.50

2,000.00

FOODVIEW NIG LTD

BISPYRIBAC SODIUM

10-Jan-20

343.50

4,000.00

FOODVIEW NIG LTD

AGRICULTURAL HERBICIDE

10-Jan-20

343.50

30,000.00

DAG INDUSTRIES NIGERIA LTD

AUTORICKSHAW IN CKD

10-Jan-20

343.50

90,000.00

DAG INDUSTRIES NIGERIA LTD

AUTORICKSHAW IN CKD

10-Jan-20

343.50

170,000.00

DARAJU INDUSRIES LIMITED

PLAIN PAPER FOR WRITING AND PRINTING

10-Jan-20

343.50

2,000.00

DARAJU INDUSRIES LIMITED

SODIUM SULPHATE

10-Jan-20

343.50

18,000.00

DARAJU INDUSTRIES LIMITED

NON-WOVEN

10-Jan-20

343.50

2,000.00

FIRST ALUMINIUM NIG PLC

LAMINATE TUBE MAKING MACHINE

10-Jan-20

343.50

18,000.00

INDORAMA PET (NIGERIA) LIMITED

AMORPHOUS PET CHIPS AMORPHOUS BC3020

10-Jan-20

343.50

60,000.00

NIPCO PLC

INSTRUMENTATION EQUIPMENT

10-Jan-20

343.50

2,000.00

ONWARD STATIONERY STORES LTD

RAW MATERIAL

10-Jan-20

343.50

4,000.00

ONWARD STATIONERY STORES LTD

RAW MATERIAL

10-Jan-20

343.50

20,000.00

ONWARD STATIONERY STORES LTD

RAW MATERIAL

10-Jan-20

343.50

48,000.00

ONWARD STATIONERY STORES LTD

RAW MATERIAL

10-Jan-20

343.50

130,000.00

PURECHEM MANUFACTURING LTD

RAW MATERIAL

10-Jan-20

343.50

10,000.00

R.T.BRISCOE NIGERIA PLC

TOYOTA FORKLIFT TRUCKS

10-Jan-20

343.50

18,000.00

SUMAL FOOD LTD

HYDROGENATED VEGETABLE FAT

10-Jan-20

343.50

38,000.00

SUMAL FOOD LTD

HYDROGENATED VEGETABLE FAT

10-Jan-20

343.50

45,000.00

WEST AFRICAN PACKAGING LTD

BOOK BINDING PLANT MACHINERY

10-Jan-20

343.50

17,000.00

ALBESIG AFRO FARMS

SALMO-NIL(R) DRY

10-Jan-20

345.50

7,000.00

NDU-IZU BUSINESS CONCEPT LIMITED

DRIED ANIMAL FEED

10-Jan-20

345.50

1,000.00

NDU-IZU BUSINESS CONCEPT LIMITED

DRIED ANIMAL FEED

10-Jan-20

345.50

7,000.00

NDU-IZU BUSINESS CONCEPT LIMITED

DRIED ANIMAL FEED

10-Jan-20

345.50

10,000.00

NDU-IZU BUSINESS CONCEPT LIMITED

DRIED ANIMAL FEED

10-Jan-20

345.50

18,000.00

BODEJ INV LTD

5000MT OF GASOIL

10-Jan-20

345.50

18,000.00

AIFY GLOBAL ALUMINIUM LIMITED

PLAIN ALUMINIUM

10-Jan-20

345.50

9,000.00

AIFY GLOBAL ALUMINIUM LIMITED

PLAIN ALUMINIUM

10-Jan-20

345.50

71,000.00

ALBESIG AFRO FARMS

BACITRACIN METHYLENE DISALICYLATE

10-Jan-20

345.50

9,000.00

CYBELE COSMETICS LIMITED

DYES INTERMEDIATES

10-Jan-20

345.50

22,000.00

DE-UNITED FOODS IND LTD

ARGENTINE MILLING WHEAT IN BULK

10-Jan-20

345.50

120,000.00

DOZZY OIL AND GAS LIMITED

Base Oil PALE 2000 (Industrial Raw Material)

10-Jan-20

345.50

260,000.00

EURO GLOBAL FOODS AND DISTILLERIES LTD

HERB BITTER FLAVOUR PS

10-Jan-20

345.50

30,000.00

FLOUR MILLS OF NIGERIA PLC

HARD RED WINTER WHEAT

10-Jan-20

345.50

800,000.00

FOOD, AGRO AND ALLIED INDUSTRIES LTD

AUTOMATIC HOPPER SCALE MSDM 80

10-Jan-20

345.50

4,000.00

G.I & DISTRIBUTION LIMITED

BALL POINT PART OF PEN

10-Jan-20

345.50

1,000.00

G.I & DISTRIBUTION LIMITED

BALL POINT PART OF PEN

10-Jan-20

345.50

1,000.00

GZ EQUIPMENT PARTNERS LIMITED

FORKLIFT ATTACHMENT

10-Jan-20

345.50

6,000.00

GZ EQUIPMENT PARTNERS LIMITED

TCM BRAND FORKLIFT TRUCKS

10-Jan-20

345.50

94,000.00

JAMARA OPERATIONS LTD

HOME APPLIANCES IN CKD

10-Jan-20

345.50

23,000.00

JMG LIMITED

RAW MATERIALS

10-Jan-20

345.50

40,000.00

JMG LIMITED

GENERATING SETS IN CKD FORM

10-Jan-20

345.50

200,000.00

JMG LIMITED

GENERATING SETS IN CKD FORM

10-Jan-20

345.50

28,000.00

LEMON PRESS LIMITED

DUPLEX BOARD GREY BACK 230GSM 850 X 690MM

10-Jan-20

345.50

7,000.00

MANWEB NIGERIA LTS

UNSATURATED POLYESTER RESINS

10-Jan-20

345.50

6,000.00

POLY PRODUCTS (NIGERIA) LTD

LINEAR LOW DENSITY POLYETHYLENE

10-Jan-20

345.50

18,000.00

RH PLASTICS LTD

OTHER POLY ETHYLENE TEREPHTHALATE

10-Jan-20

345.50

6,000.00

SHIRIDI SAI IMPORTS LTD

CAUSTIC SODA PEARLS PRILLS

10-Jan-20

345.50

3,000.00

SHONGAI TECHNOLOGIES LIMITED

RED LITHOGRAPHIC TAPE

10-Jan-20

345.50

9,000.00

SHONGAI TECHNOLOGIES LIMITED

KRAFTLINER

10-Jan-20

345.50

26,000.00

SONA AGRO ALLIED FOODS LIMITED

MILK POWDER

10-Jan-20

345.50

8,000.00

STALLION NMN LTD

NISSAN PICK-UP

10-Jan-20

345.50

80,000.00

STALLION NMN LTD

NISSAN PICK-UP

10-Jan-20

345.50

40,000.00

TOSAM INTEGRATED SERVICES LTD

DL-METHIONINE

10-Jan-20

345.50

5,000.00

ULYSSES NIGERIA LIMITED

PARADICHLORO BENZENE FLAKES

10-Jan-20

345.50

3,000.00

ULYSSES NIGERIA LIMITED

PARADICHLORO BENZENE FLAKES

10-Jan-20

345.50

2,000.00

YOKOHAMA CONSTRUCTION LTD

HOT ROLLED SHETS

10-Jan-20

345.50

160,000.00

YOKOHAMA CONSTRUCTION LTD

PRIME STEEL BILLETS

10-Jan-20

345.50

170,000.00

EMZOR PHARMACEUTICAL INDUSTRIES LTD

PHARMACEUTICAL RAW MATERIALS

10-Jan-20

346.50

57,000.00

WANDEL INTERNATIONAL (NIG) LTD

MOTORCYCLES IN CKD

10-Jan-20

346.50

160,000.00

CCC CONTRUCTION NIGERIA LTD

CONSTRUCTION EQUIPMENT

10-Jan-20

347.50

50,000.00

CCC CONTRUCTION NIGERIA LTD

SURVEY EQUIPMENT (USED)

10-Jan-20

347.50

9,000.00

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Company IN FOCUS

BUSINESS DAY Monday 20 January 2020 www.businessday.ng

BUA Cement plc: What’s next after merger for the ‘King of the North’ OLUFIKAYO OWOEYE

n Thursday 9th January, Abdul Samad Rabiu, c ha i r ma n , C e ment Company of Northern Nigeria, CCNN and Founder/CEO of BUA Cement rang the traditional closing gong on the floor of the Nigerian Stock Exchange to mark the end of trading for that day and also signals the successful completion of the scheme of merger CCNN/Kalambaina Cement and listing of the shares of the expanded entity. By implication, the entire 13.14billion ordinary shares of CCNN was delisted from the daily official list of the nation’s bourse, while the entire 33.86 billion ordinary shares of 50 kobo each of BUA Cement Plc was listed. With a merger deal size of about N1.185trillion, BUA Cement becomes the third most capitalized stock on the bourse, displacing consumer goods giant, Nestle. The new entity, BUA Cement, becomes the second-largest producer of cement in Nigeria by volume with factories in Sokoto State, (2million mtpa) and Okpella Edo State, (6million mtpa), leaving the total volume production at 8mtpa with a new 3million mtpa plant which it started constructing in 2018 worth $450 million Sokoto Kalambaina II currently being constructed in Sokoto State is scheduled to become operational in the second half of the year. This is expected to takeoff alongside another 48MW power plant to complement the existing assets and take advantage of a growing cement market in Northern Nigeria and the West African region. Industry analysis In the past, Nigeria’s cement demand outstripped available installed capacity, and the market relied heavily on importation. In recent times, with the advent of favorable policies such as tax relief programs, indigenous cement companies have risen to the challenge of meeting the deficit. Currently, the sector has grown from just an importdependent to a growing hub for cement export on the continent. Since the ban on importation of bagged cement into the country, cement makers have double down on their various expansion plans aimed at capturing the huge market available in the country.

Cement remains at the core of infrastructural development across the world, and the Nigerian cement market continues to offer room for growth into the nearest future this with the level of infrastructure and housing deficit in the country, especially in terms of demand for roads, real estate and construction activities, the headroom for growth is clearly compelling. The competitive structure in the cement industry has allowed for a non-aggressive rivalry as each cement maker appears to serve distinct market as the Nigerian market is big enough to accommodate the three players. While BUA cement is focused on the Northern market, the other two cement makers serve the Southern part of the country. Public sector demand is perhaps one of the strongest drivers of cement consumption in Nigeria. However, in the face of shrinking revenue generation keeping revenues below budgeted figures making the implementation of budgeted capital expenditure to lag that of recurrent expenditure. Analysis of performance in 2019 shows surge in cement demand in Q1 on the back of increased pre-election CA-

PEX spending in a bid to woo electorates. However, demand tanked in Q2 caused by the prolonged 2019 general elections postponements, together with the raining season in the country. Consequently, performance improved markedly in Q3 even as the double whammy hammer of heavy rainfall in the period and land border closure, had put a cap on sales uptrend. Intense competition in the cement industry means that producers remain price-sensitive as they struggle to maintain market share. With cement makers such as Dangote Cement introducing promotional launch during the period in a bid to drive sales volume in the country. Already reaping fruits of increased volumes Figures from its nine months result for the period ended 30th September shows that its net profit ballooned 118.3percent to N8.76bn from 4.01bn the same period in 2018. C C N N re c o rd e d s t ro n g growth in revenue in Q3’19 up 38.5percent, buoyed by a ramp-up in volumes as capacity utilization increased at the Kalambiana plant. However, energy cost almost doubled from N7.45bn in third

quarter 2018 to N13.65bn the same period this year. Kalambaina Cement plant uses primary fuels such as coal, heavy oils and AGO, which helps to solve the power problem with limited downtime and further opportunities for growth and expansion. According to Mustapha Wahab, an analyst at Cordros Securities the upside risk for the industry in 2020 is a stronger demand growth, with average cement prices to rise by 1bp to NGN2,197/bag. “While we acknowledge the significant shortfall from the NGN2.93 trillion budgeted in the prior year, our optimistic view hangs solely on a higher implementation rate, given better revenue prospects,” “However, the downside risk to our prognosis remains the possibility of significant cost pressure occasioned by currency devaluation, which would force players to re-think their pricing strategies,” he said. Cement demand holds many opportunities Over the long term, the potential for cement demand growth is hinged on economic prosperity, political stability, increasing investment in housing and infrastructure

The good news is that the early signing of 2020 budget into law by President Muhammadu Buhari would eliminate slowdown in government spending on critical infrastructure across the country. In the 2020 budget, a total of N2.14 trillion has been earmarked for Capital Expenditure (CAPEX) spending, excluding CAPEX components of statutory transfers. The government has also vowed to prioritise in favour of critical ongoing infrastructural projects in the power, roads, rail and agricultural sectors. If the government could keep to his promise, it could further spur the growth of cement makers in the country. Notable projects in 2020 budget which would be heavy cement consuming projects include the National housing program which is expected to gulp N17.5billion while the social housing scheme (family homes fund) would cost N30billion. While over N210 billion has been earmarked for the construction and rehabilitation of roads across the country. Interestingly, there is a growing preference for cement paved roads by the government as evident in the 28km Itori-Ibese road in Ogun State which was commissioned in 2016 and the 43km long Obajana-Kabba road in Kogi State, the 32km ApapaOshodi-Oworonshoki-Ojota road in Lagos State is almost done. In aviation, N1 billion has been set aside for the construction of terminal building at Enugu Airport and N10 billion for the construction of the second run-way at the Nnamdi Azikwe International Airport in Abuja. N67.17 billion is also set aside for the counterpart funding for new and ongoing railway projects Also, in the 2020 budget, N2billion has been set aside for the Mambila hydropower project, a 3.05GW hydroelectric facility being developed on the Dongo River near Baruf, in Kakara Village of Taraba State. The project is being undertaken by Nigeria’s Federal Ministry of Power, Construction and Housing, with the help of Chinese investments The new entity is expected to benefit from its current market leadership positions in its key regional markets of the North West, South-South and SouthEast Nigeria due to its location and proximity to those markets and a huge export market in Western Africa.

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