BusinessDay 20 Sep 2018

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news you can trust I **THURSDAY 20 SEPTEMBER 2018 I vol. 15, no 144 I N300

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CBN working with banks, MTN to resolve CCI saga APC moves Presidential HOPE MOSES-ASHIKE

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he Central Bank of Nigeria (CBN ) on Wednesday said it is working with the Deposit Money Banks (DMBs) and MTN Nigeria to arrive at an equitable resolution of sanctions it imposed recently on four banks and MTN. In a statement signed by Isaac

Says integrity of CCI regime sacrosanct Primary to Sept. 25 as No retroactive application of FX rules Ambode left to carry cross

Okorafor, director, corporate communications, the CBN said the recent sanctions on the banks arose due to irregularities with respect to repatriations

made on behalf of MTN Nigeria Limited and were not in any way designed to restrict access to investor returns.

“We wish to restate that the

CBN will continue to welcome foreign investments and investors. Indeed, some of our recent Continues on page 33

... Agbaje to contest in Lagos under PDP JOSHUA BASSEY, Lagos, James Kwen, Abuja

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resident Muhammadu Buhari’s ruling All Progressives Congress (APC) postponed its presidential primary Continues on page 33

Nigeria’s petrol subsidy one of the most expensive globally EMEKA UCHEAGA

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igerians may not feel it nor know it but the pump price of petrol is currently the eight cheapest in the world Continues on page 33

Inside Impact investors sidestep Nigeria for African peers P. 2 L-R: George Oko-Oboh, regional executive, Abuja and North, Heritage Bank plc; Emmanuel Adesoye, chairman, NPA board member; Ifie Sekibo, MD/CEO, Heritage Bank plc; Hadiza Bala-Usman, MD, NPA/vice president, International Association for Ports and Harbours (Africa), and Ijeoma Uche-Okoro, director, legal services, FMOT, at the day-one International Association of Ports and Harbours (IAPH) Africa regional conference, themed, ‘African Ports and Hinterland Connectivity’ in Abuja.

FG suspends national carrier project indefinitely P. 35

Forte Oil shares rally after billionaire owner linked with Lagos job LOLADE AKINMURELE

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orte Oil’s stock price has climbed to a near onemonth high since the billionaire owner of the indigenous oil company- Femi Otedola- was rumoured to be in contention to prise Nigeria’s commercial hub, Lagos, away from incumbent governor Akinwunmi Ambode in next year’s

... Otedola’s wealth increases by N3bn election.

At close of trading Wednesday, the stock was the best performer on the Nigerian Stock Exchange, after rising 10 percent to N22.

The company’s stock price has now gained 16 percent since Tuesday, Sept. 12, when news of Otedola’s political aspirations

first broke. At the time, the stock traded at N18.9.

Otedola held 1.02 billion shares in Forte Oil as at the end of 2017, valuing his holdings in the company at N22.44 billion, up N3.17 billion from an initial valuation of N19.27 billion as at Sept. 12.

Wednesday’s closing price is

the highest since August 28. On the day alone, the stock not only gained 10 percent but outperformed the industry average of 0.32 percent and was one of the top 3 best performing stocks for the third day running, leaving analysts scratching their heads on the driver of the rally.

It would have been easy to

ascribe the rise to the recent oil price rally, but Forte Oil plays in the downstream sector.

“The rally is clearly not driven by fundamentals, so perhaps this is a case of investors cheering the likelihood of Otedola contesting and probably even winning,” a Lagos-based pension fund manager told BuisnessDay. “The company is not doing Continues on page 33

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Low cost phones, affordable data, competition improve Nigeria’s internet affordability BUNMI BAILEY

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owcostphones,affordabledata packagesandhighcompetition among telecommunication companies may be the reason for Nigeria being among the only four African countries having affordable mobile broadband plans, analysts say.

A recently released survey by Alliance for Affordable Internet (A4AI), a global coalition of private sector, public sector, and not-for-profit organizations which analysed 60 Low and Middle income countries (LMIC) in the world showed that at the end of 2017, only four African countries (Tunisia, Nigeria, Mauritius, and Egypt) had continuous improvements in affordable mobile broadband plans (i.e, 1GB plans available for less than 2 percent of average monthly income).

Ayodeji Ebo, MD, Afrinvest Securities Limited said, “Internet penetration in Nigeria has been made possible with the availability of low cost, mobile phones which provides the opportunity to access internet. In addition, the telecommunication operators have also come up with low cost and affordable packages for Nigerians.

“Withthecontinuousimprovement in internet coverage in Nigeria, we expect the internet penetration to remain on the uptrend,” Ebo further added.

Jumia,Africa’sleadinge-commerce Company’s 2018 Mobile report stated that the number of mobile subscribers grew astronomically in 2017 and its penetration increased to 84 percent in comparison to 53 percent in 2016.

“The availability of lower price points’ phones has paved way for more Nigerians to own mobile phones, with an increase in the number of affordable phones entering the Nigerian market and looking at the trajectory of growth between 2016 and 2017 (31 percent growth year-on-year),” Jumia said.

“There is enough of broadband internet due to a number of optic fiber lines that has terminated in Lagos all the way from Europe that is carrying data. That is why the data cost has dropped materially and also because there is competition among the telecommunication companies which makes it affordable,” Johnson Chukwu, CEO, Cowry Asset Management Limited said on phone.

•Continues online at www.businessdayonline.com

GE reiterates commitment to Nigeria’s Power, Health, Aviation sectors ... says investments not affected by reorganisation OLUSOLA BELLO

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eneral Electric (GE) has reiterated its commitment to Nigeria saying that its recent reorganisation will not affect obligations to the country, which are largely in the Power, Health and Aviation sectors.

The reorganisation would rather strengthen the relationship between the company and Nigeria, Alex Dimitrief, senior vice president, GE, president and CEO, GE Global Growth Organisation, told BusinessDay. The GE boss who paid an official visit to Nigeria in an exclusive interview with BusinessDay said the exercise would make the company’s operations in Nigeria and Africa more efficient and focused.

“It may affect how our team is structured but it will not affect the level of our operations or investments in the country and Africa.

The customers would not see any changes in the way the company operates in Nigeria,” he said.

He said his discussions in Nigeria with government officials, customers and other stakeholders focused on the future of GE in the country and Africa. But more importantly on the distribution, transmission and generation aspects of the power sector.

He said the company believes in bringing the best technology to Nigeria so as to ensure sustainability in its operations across board, adding that GE control about 40 per cent of the power equipment in Nigeria.

GE Power Services signed a Service Agreement with Shell Petroleum Development Company (SPDC) for its 650MW Afam VI combined cycle power plant located in the Southeastern part of the country. The plant will be expected to improve its availability, reliability and output for up to 200,000 Nigerian homes, while decreasing its operational costs.

The GE Hydro team also recently

commenced the general rehabilitation of the 80MW Hydro Turbine Generator unit -1G7 at Kainji through its partnership with Mainstream Energy.

It signed an MOU with Mainstream at the beginning of the year to deliver renewable power projects in Nigeria. Under the MOU, both companies will jointly work to implement the Kainji and Jebba Power Plants Recovery Plan, as well as improve the generation and evacuation infrastructure for grid connectivity of Kainji to the West African Power Pool. In addition, it will lead to the development of other Hydro Power potentials in Nigeria and West Africa There was also an MOU signed with the Northern States Governors Forum to deliver 500MW of Solar Power across Northern Nigeria through captive and utility scale projects. These critical initiatives will increase the electrification rate in Nigeria and provide the needed power for industrialization and economic growth.

In the health sector, GE Healthcare’s MOU with the Federal Government is focused on 5 areas for Healthcare infrastructure development in Nigeria: developing diagnostic centres and specialist hospitals; rural health solutions; smallholder medical facility scheme.

In the last 5 years, GE’s milestones in transportation include modernization and expansion of Nigeria’s locomotive fleet. Right now, GE is working with private sector participants to develop a locomotive assembly facility. That facility would modernize 30 old locomotive engines and assemble 170 new locomotives. The company is also acting on the order to supply locomotives to the NigerianRailCorporation(NRC)aspart of the country’s fleet renewal program.

Other milestones include, training of 10 NRC engineers in Brazil (June 2010); Training over 100 NRC maintenance and service engineers in Lagos and supporting Eko Rail Company with the Lagos Metro Blue line light rail project.

L-R: Sunny Oputa, CEO, Energy and Corporate Africa; Chidi K.C Izuwah, chairman/CEO, Nestoil Limited; Ernest Azudialu-Obiejesi, president, Pipelines Professional Association of Nigeria ( PLAN); Geoff Onuoha, partner, Kerogen Ventures; Stefano de Stefano, COO, commercial and investment, NNPC; Victor Babatunde Adeniran, COO, downstream; Henry Ikem-Obih, and Gina Gina, general manager, communication, NCDMB, at the opening ceremony of Nigerian International Pipeline Technology and Security Conference ( NIPITECS) in Abuja.

Nigeria needs to double pipeline network for 20,000mw power target – Nestoil CEO DIPO OLADEHINDE

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he Chairman/Chief Executive Officer Nestoil Limited Ernest AzudialuObiejesi has called on the Federal Government to increase construction of huge and secure network of pipelines to enhance access to natural gas supply by power generating stations and other areas where gas is needed.

This advice if considered by the Federal Government is expected to boost power generation to 20,000 megawatts (MW) needed to drive the needed industrialization that spurs economic development, according to Azudialu-Obiejesi.

Azudialu-Obiejesi gave the advice in a paper delivered during the second edition of the Nigerian International Pipeline Technology and Security Conference (NIPITECS) in Abuja on Tuesday.

According to him, the current method of using domestic gas cylinders is outdated and had been scrapped in industrialized nations.”

Nigeria, with its abundant reserves of petroleum and gas, stands on the threshold of its own industrial revolution. To kick-start this industrialization, we must not only extract these resources in the most efficient manner, but also refine and deliver

them efficiently, and in a secure and cost effective manner,” he said.

The CEO added that investment in more pipelines by the Federal Government will serve to eliminate dangerous exposure suffered by the general populace when oil and gas is evacuated through road transport infrastructure.

For instance, he lamented dilapidation of roads and great havoc caused in the past couple of months by road transportation of petroleum products following the explosion of petroleum tankers in Lagos and Nasarawa state.

“When the proper pipeline network exists and runs reliably, products are always delivered on time, eliminating the need to build hundreds of storage/holding facilities all over the country,” he noted.

He identified vandalism, sabotage, and ageing stock and integrity issues as great challenge to construction, maintenance and operation of the existing current pipelines in the country.

According to him, sabotage and vandalism have resulted to oil spills with the attendant environmental, health and safety implications as well as negative impact on agricultural and fishing activities.

Speaking about the new approach by the Federal Government for major pipelines projects to be

contractor financed, Azudialu noted that the funding of these projects is a very big limiting factor for Nigerian Engineering, Procurement and Construction and Commissioning (EPCC) companies willing to participate in the construction of these modern pipelines infrastructure.

Other suggestions include audit of pipeline network and where appropriate, recommending those due for decommissioning and replacement; adoption of Horizontal Directional Drilling ( HDD) method for pipeline construction; burial of pipelines to ensure restricted access, utilization of fibre optic monitoring systems for monitoring and security; and timely maintenance and repairs to avoid unnecessary shut downs.

In his welcome address the Chairman of Pipelines Professional Association of Nigeria (PLAN), Geoff Onuoha, lamented the low level of pipelines in Nigeria compared with other countries having lower population.

To develop the economy and fast track growth, he called for encouragement of Public Private Partnership (PPP) in the establishment of new pipelines. “In order to reduce current challenges of pipeline maintenance, the private sector must be allowed to become owners of pipelines for stricter control and effective monitoring,” he said.

Impact investors sidestep Nigeria for African peers ABISINUOLA DAVID-OLUSA

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n 2007, the term impact investing was coined at a Rockefeller foundation convening in Bellagio centre and since then, has begun to gain commendable traction globally.

The concept which is clearly differentiated from philanthropy, focuses on a new form of investment that generates sustainable financial returns and environmental or/and social impact with none taking precedence over the other.

This enables investors approach sustainability from a profitability point of view rather than an altruistic one.

Nigeria, although the biggest impact investing player in West Africa, still holds enormous promise with attractive growth prospects as there exists a huge gap from what is obtainable in other countries of the world.

In a Global Impact Investing

Network (GIIN) report published in 2015, Nigeria recorded about 28 impact investors which is a low number when compared to South Africa and Kenya which have about 46 and 95 impact investors respectively.

Putting into perspective the deal size and capital deployed in the impact investing sector, Nigeria recorded a total of $3.97 billion capital deployment and 235 deals in from 2005 – 2015, while South Africa recorded an impressive $29.08 billion in 7,358 deals.

Kenya, on the other hand attracted some $4.25 billion in 357 deals.

In per capita terms, Nigeria got $20.9; given it has a population of 190 million while South Africa (55 million) and Kenya (51.2 million) boasts $528.7 and $83 respectively.

This shows that the impact ecosystem in Nigeria is lagging African peers- South Africa and Kenya.

This slow growth has been attributed to various factors with a

major one being the low presence of indigenous fund managers or fund managers with local presence.

The low presence of foreign fund manager with local space is due to an unclear regulatory environment, high cost of living and doing business, amongst others.

Some other factors include: lack of large investment-ready enterprises, reluctance of domestic investors to provide funds for “impact” investments as it is usually confused with philanthropy and as such might lead to compromise of financial returns, difficulty for investors to find creative exits options apart from through Initial Public Offerings etc.

Based on the immense growth experienced in other countries and regions, there is a lot of growth potential in the impact investing industry in Nigeria and hence, the reason for the convening.

•Continues online at www.businessdayonline.com

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Tension rises in OML 25 area but Shell says spending N263m on projects to appease Kula people IGNATIUS CHUKWU, Port Harcourt

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illagers who occupied Shell facilities more than one year ago have stayed put but attempts by rival groups to push them out have increased tension in Oil Mining License (OML) 25.

Shell says it is not behind violence in the area but it is rather spending N263 million in a new special project to give the Kula community more economic benefits through projects as recommended by a state government intervention committee.

One year ago, the people of Kula community in AkukuToru local government area of Rivers State occupied facilities in the area and have remained put. They had demanded the handover of the oil field to a company formed by their son, Belemaoil, saying Shell’s license on OML 25 had expired.

On Sunday September 16, 2018, the group reiterated its call on Shell to vacate their community. Sources said the agita-

tion was made by thousands of women from the community.

They were said to have explained that for over 40 years of Shell’s operation in their community, nothing had been done for the development of their land. They insisted that for the company to operate in their land SPDC, NNPC, the state government and local government who allegedly brought Navy and JTF and over 10 gun boats be ready to kill all of them.

The women who led the protest at the company operational base in the community shut down since August 11, 2018, vowed never to allow Shell operate in their land again.

Reacting, Shell Petroleum Development Company of Nigeria Limited (SPDC) debunked what it called allegations in paid radio announcements falsely linking it to reported incidents of clashes between a group of invaders who have been in unlawful occupation of the company’s production facilities at Belema flow station.

L-R: Patricia Omotomilola-Osunde, treasurer, Ibadan Chamber of Commerce and Industry (ICCI); Sola Abodunrin, 1st deputy president, ICCI; Babatunde Paul Ruwase, president, Lagos Chamber of Commerce and Industry (LCCI); Ismaila Alapa, president, ICCI, and Agnes Yeye Shobajo, vice president, LCCI, during a courtesy visit of the Ibadan Chamber of Commerce and Industry to LCCI in Lagos.

FG suspends National Carrier indefinitely IFEOMA OKEKE

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obberman Nigeria has upgraded its platform, in order to provide an easier and more effective job search experience for jobseekers, and a refined recruitment experience for employers.

Since going live in August 2009, Jobberman has grown to become Nigeria’s preferred online recruitment platform, West Africa’s most popular job search engine (Forbes) and one of Africa’s top 5 recruitment sites (IT News Africa).

For over 9 years, Jobberman has helped job seekers find job opportunities, provided career tips, given employers access to qualified candidates & administered recruitment advice.

As a brand that listens, Jobberman has taken its audience feedback consisting of over 2 million career professionals and 50,000 employers who connect daily

on the platform by including new features that can help employers and jobseekers accomplish more of their career and company goals.

Employers on the Jobberman platform can now manage their job ads and applications better with the newly designed Applicant Tracking System (ATS) and create candidate databases for future use.

Jobseekers can now: set up or update their profiles with a Profile Picture, which is visible to employers; create a Career Summary & Professional Headline that summarises education, experience, skills and goals; specify preferred jobs for easier job matching; let recruiters know their Job Search Availability status; add Projects & Portfolio to their profiles, allowing employers to see samples of previous accomplishments, amongst other new features.

he Federal Government has suspended the National Carrier, Nigeria Air’s procurement indefinitely.

Disclosing this to newsmen in Abuja, Hadi Sirika, the minister of state for aviation, noted that the decision to suspend the project was strategic and has nothing to do with politics or pressure from stakeholders.

According to Sirika, the decision to suspend the procurement of Nigeria Air, was taken at the Federal Executive Council (FEC) meeting. He also took to his Twitter feed to confirm the development.

“I regret to announce that the Federal Executive Council has taken the tough decision to suspend the National Carrier Project in the interim.

“All commitments due will be honoured. We thank the public for the support as always,” he tweeted.

The project had generated major controversies over the months with a lot of unresolved issues from the payment of the former workers of the liquidated Nigeria Airways to the fact that the airline had not started processing its certification from the Nigeria

Civil Aviation AuthSirika, had revealed and assured that the airline would take off in December, 2018 after the airline’s unveiling in July 18, 2018 even without the commencement of any certification for the project to be legal entity.

Also a fortnight ago, Muktar Usman, director general of the Nigeria Civil Aviation Authority (NCAA), said the Nigeria Air Project was on track stating that as far as the regulatory agency is concerned the two major certificates, the Air Transport Licence (ATL) and the Aircraft Operators Certificate (AOC), to be issued by it can be done within 90 days all things being equal.

With so much funds expended for road-show at the London air show where the logo and name was unveiled, the country has once again jettison a project many Nigerians perhaps thought would help to create jobs and stimulate economy activities in the industry.

The National Carrier was one of the roadmap for turning the fortune of the sector around. Many Stakeholders had said the project would not fly because of the seemingly lack of transparency and the process shrouded in secrecy.

Osun Guber: Police file fresh charges against Adeleke, others INNOCENT ODOH, Abuja

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he police have claimed they have established a case of examination malpractice against the governorship candidate of the People Democratic Party (PDP) in this Saturday’s election, Ademola Adekele, stressing that the federal lawmaker alongside four others were found to be complicit in the act.

A statement issued on Wednesday by Jimoh Moshood, force public relations officer, noted that the case against them range from “examination malpractice, criminal conspiracy, impersonation, breach of duty, aiding and abetting crime against Adeleke Other accused by the police are Sikiru Adeleke, Aregbesola Mufutau (principal of Ojo-Aro Community Grammar School, Egbedore; Gbadamosi Thomas Ojo (school staff responsible for the registration of candidates for NECO) and Dare Olutope (school teacher who facilitated the commission of the crime).

The statement disclosed that on July 21, 2017, the Osun State Police Intelligence Bureau (SIB) received and acted on an actionable intelligence about an ongoing examina-

tion malpractice involving Ademola Adeleke and Sikiru Adeleke at Ojo/Aro Community Grammar School in Osun State.

The statement said further that when the police operative arrived at the school, only Sikiru Adeleke was found seated for the examination while Ademola Adeleke’s seat was vacant and was suspected to have escaped before the arrival of the police operatives.

The police said that further investigation revealed that both Ademola Adeleke and his brother Sikiru Adeleke registered and were sitting for the National Examination Council Examination (NECO) 2017 as internal candidates impersonating students of the school at the ages of 57 years and 42 years respectively.

“This crime was facilitated by the principal of the school, and two other members of staff of the school for which they are under investigation and being charged to court.

“The Principal of the school, Aregbesola Mufutau, the staff responsible for registration, Gbadamosi Thomas Ojo and a teacher, Dare Olutope were arrested on 21 July 2017. Ademola Adeleke was arrested on July 27, 2017 and Sikiru Adeleke was arrested on August 8, 2017,” the statement said.

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Experts see upsurge in domestic gas market as NNPC finalises funding terms Africa urged to explore investment HARRISON EDEH, Abuja opportunities in land-locked countries

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nergy experts are foreseeing upsurge in domestic gas market in Nigeria as the Nigerian National Petroleum Corporation (NNPC) says it is close to wrapping up funding arrangements on the Ajaokuta-Kaduna-Kano (AKK) gas pipeline project.

Adeola Adenikinju, a professor and the acting director of the Centre for Petroleum, Energy Economics and Law (CPEEL), University of Ibadan, told BusinessDay that the development would open up the vast gas market given Nigerian market size and economic value accruable if there are adequate gas infrastructure in the country.

“Because of its strategic importance, the gas pipeline project always takes the lead in infrastructure, while allowing for third party investments. It would open up commercial enterprises along the way given the large market in Nigeria. Government is taking the lead in opening up the gas market and there must be a way of opening up the gas infrastructure,” Adenikinju said.

Also, Austin Onuoha, an energy expert and executive director, Africa Centre for Corporate Responsibility, hailed the initiative. Onuoha told BusinessDay that the government needed to under-study every detail of the terms of the arrangement in order not to be exploited by its partners.

Maikanti Baru, group managing director of NNPC, who confirmed the closing up of the financial terms for the Ajaokuta-Kaduna-Kano pipeline project, during the 30th edition of gas technology conference in Barcelona, Spain, Tuesday, explained that tremendous progress was recorded towards securing funding for the project

during the last visit of President Muhammadu Buhari to Beijing, China.

Baru, who was represented at the event by Saidu Mohammed, NNPC chief operating officer, Gas & Power, revealed that the corporation had gone far in negotiating the terms of funding as well as the best payback structure for the project, affirming that the financial partners were willing to collaborate with the corporation on the matter.

The AKK gas pipeline is designed to enable gas connectivity between the East, West and North, which is currently inadequate. It would also enable gas supply

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He described the coming of Train 7 of the Nigeria Liquefied Natural Gas (NLNG) as a “big bang” that would usher in new developments for Nigeria’s energy sector and expand the nation’s economy, adding that the project was also capable of unlocking new vistas for country’s LNG potentials.

Baru, who said the corporation had been looking forward to the FID on Train 7 in the last ten years, revealed that the wait would soon be over, even as he commended the Federal Government and the various shareholders for their support towards the NLNG project.

Saidu Mohammed, NNPC chief operating officer gas & power (r), in a chat with Ronald Cochrane, director/board member of the Nigerian Liquefied Natural Gas (NLNG) Ltd, on the sidelines of the 30th edition of the Gas Technology Conference (Gastech), Barcelona, Spain.

Expert decries low revenue from aviation sector

homas Ogungbangbe, pioneer chairman of the Aviation Fuel Marketers Association of Nigeria (AFMAN), on Wednesday lamented that the Nigerian economy was not earning enough revenue from the nation’s aviation industry.

Ogungbangbe, in an interview in Lagos, said on the contrary, the industry was boosting the economies of other countries.

He said the sector was facing several challenges which had weakened the capacity of the sector to perform up to international standard and contribute to economic growth. He enumerated the challenges facing the industry to include funding, weak regulation, poor maintenance, inad-

and utilisation to key commercial centres in the Northern corridor of Nigeria with the attendant positive spinoff on power generation and industrial growth.

Baru said the groundbreaking ceremony for the project was near, explaining that Nigeria was focused on expanding its critical gas infrastructure such as pipelines which would lead to a gas grid covering the entire country.

“Once you have the whole nation covered with a gas grid, industries will naturally spring up along the way and litter the entire country. That is our target in the long run,” Baru noted.

equate personnel, multiple taxation and high cost of aviation fuel, among others.

According to him, the Nigeria’s aviation industry which is supposed to be a major boost to the nation’s economy is working for the economies of other countries. “The aviation industry is a catalyst for socioeconomic development in both developing and developed nations. It provides the fastest and safest means of transportation of people and cargo locally and internationally.

“With a population of over 180 million, an aviation sector that can adequately cater for the nation’s demands could generate increased income from both its citizens and international travellers.

AMAKA ANAGOR-EWUZIE

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frican ports authorities have been encouraged to take advantage of the investment opportunities provided by landlocked countries to grow their respective countries economies.

This position was contained in a communique reached at the end of a 3-day conference of the International Association of Ports and Harbour (IAPH) hosted by the Nigerian Ports Authority (NPA) in Abuja.

The conference themed “African Ports and Hinterland Connectivity” raised some fundamental issues hindering seamless trade between littoral states and landlocked countries.

According to communique, all 20 African nations in attendance agreed that African ports are first and foremost strategic national assets and that for economies to grow in the right direction, there is need for government of the different littoral states to invest in port and cargo evacuation infrastructure which would facilitate hinterland connectivity.

The communique, signed by participants from the African countries in attendance and mid-wifed by AIPH member states, noted that hinterland connectivity for economic growth, expansion and integration should be viewed from the perspective of domestic, sub-regional, continental and international trade domain.

Part of the communiqué reads: “There is need to develop sustainable multimodal transport linkages with emphasis on rail, inland waterways and pipeline infrastructure.

“To overcome the cumbersome and difficult expe-

riences on intra-Africa trade route occasioned by heavy infrastructural deficit and unfriendly border post procedures, there is need for ministerial/ inter-government collaborations across sub and regional levels.

“African countries need to leverage on the support platforms provided by international bodies such as the IMO, WTO, UNCTAD, ACMA and others to build technical, financial and operational competence and capacity to raise standards and efficiency levels.”

In the area of funding, the communique encouraged port service providers to form viable consortiums to provide the required size for credit guarantees, adding, “There is need promotion of the use of ICDs and off-dock facilities as a measure of promoting hinterland connectivity.

It further tasked African ports to develop the right capacity to take investment opportunities in landlocked countries. “There is need for African ports to adopt best practices in terms of human capacity and expertise.”

The participants, however, agreed on the need to develop capacity in ICT and port community systems in order to improve efficiency and reduce corruption.

The participants further agreed that African ports needed to take advantage of opportunities afforded by infrastructural financial institutions such as AfDB, ADF and NTF to access funds required to address the menace of infrastructural deficits.

“There is the need for sustained promotion of the ideals/ objectives of Corridor Management Institutions (CMIs) as promoted

by ACMA,.

FG goes to sleep on Ijora Bridge rehabilitation JONATHAN ADEROJU & JEREMIAH MBATA

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n a show of insensitivity to the suffering of motorists and sundry road users in Apapa, Ijora and environs, the Federal Government has apparently ‘abandoned’ the rehabilitation work on Ijora Bridge which it started some months ago .

Since after the scraping of the bridge surface and closing that stretch to traffic, no visible work has been going on there, except construction workers sitting in clusters, chatting, sleeping and waking up.

Expectation when the ministry of power, works and housing started the rehabilitation of that dilapidated bridge in the heat of the choking Apapa gridlock, was that it would finish the project expeditiously so as not to add to

the challenges posed by that gridlock which has defied solution including presidential order.

However, Adedamola Kuti, the Federal Controller of Works in Lagos, explained to BusinessDay on telephone that “the delay in the rehabilitation of the bridge is as a result of the delay in the procurement of the materials, being that they are imported”.

Kuti also explained that work on the Leventis end of the Bridge, which was caught by fire, was equally being delayed because the contractor was awaiting approval from the government as the beams of the bridge needed to be changed, assuring that “as soon as the materials are shipped into the country, work would commence in earnest”.

The Ijora Bridge is one of

the two major routes to Apapa ports which are the busiest sea ports in Nigeria. This explains why Apapa as a port city is not only congested but also suffocating businesses and residences many of whom are now seeking alternative locations.

The closure of the bridge has heightened the notorious Apapa gridlock and added more stress on motorists who have been compelled to use equally bad and narrow alternative routes, spending over four hours commuting to the port city each day they put their cars on road.BusinesDay recalls that the rehabilitation on this bridge began since April 10, 2018 but seems to have been neglected as there are visible and progressive activities on the project.

When our correspondents visited the rehabilitation site,

it was discovered that construction workers only come each day without doing any tangible work on the project and have turned the Bridge to a relaxation centre, sitting at the middle of the closed road and chatting or ‘pressing’ their phones.

The unhealthy parking of trucks in that axis has led to the unending Apapa gridlock also attributed to the closure of the bridge, making it difficult for commuters to move freely in and out of Apapa.

BusinessDay gathered from a truck driver, who pleaded to be anonymous, that “it has been difficult for us truck drivers ever since this bridge was closed as we cannot easily go to Ojuelegba; the closure of the bridge is actually a major cause of the gridlock we experience on the way to Apapa Wharf”.

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Thursday 20 September 2018

Lagos commends FBRA’s intervention on environment CHUKA UROKO

L L-R: Leonard Kange, general manager, large enterprises, Bank of Industry (BoI); Olukayode Pitan, MD/CEO, BoI; Simbi Wabote, executive secretary/CEO, Nigerian Content Development and Monitoring Board (NCDMB); Rose Chukwuonwe, coordinator legal service, NCDMB; Isaac Yalla, executive director, finance, NCDMB, and Obinna Offili, general manager, finance and account, NCDMB, during the BOI/NCIFUND Stakeholders’ Forum held in Lagos.

NEXIM appraises applications for N500bn non-oil export fund ONYINYE NWACHUKWU, Abuja

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he Nigerian Export Bank (NEXIM) has started receiving and processing applications under the N500 billion Non-Oil Export Stimulation Facility (NESF) as well as the N50 billion Export Development Fund (EDF), recently approved by the Central Bank of Nigeria (CBN).

This follows the bank’s recent approval for over N25 billion for applicants under the EDF while those that have met the pre-disbursement conditions have drawn down the facility.

Abba Bello, managing director of NEXIM Bank, who announced the new interventions, also affirmed the bank’s continuous support to the small and medium enterprises, through financial support to exporters in manufacturing, agroprocessing, solid minerals and services which are their target sectors. He said since inception in 1991, the bank has supported over 1,000

SMEs, many of which have grown from start-ups to become enlisted among the top 100 exporters published annually by the CBN. Explaining how these funding schemes have been designed to drive the bank’s new philosophy to produce, add value and export, Bello urged export oriented enterprises with eligible transactions to leverage the benefits of these new schemes as well as other products and services of the bank.

Speaking at SME exhibition and international investment forum, the NEXIM boss lamented huge skills gap in the SMEs sector and urged the private sector through the Chambers of Commerce, the Nigerian Association of Small & Medium Enterprises (NASME) and such other relevant business associations to partner the Small & Medium Enterprises Development Agency (SMEDAN) and similar institutions to continuously build relevant business management skills.

The forum sought to showcase Nigerian entre-

preneurs, particularly the SMEs, while providing a platform for the exchange of views towards developing the SME non-oil export value chains.

Bello posited that the education curricular should incorporate entrepreneurship development as well as emphasise science and technology, while more attention should be given to the support of research and development, given the global trend towards knowledge economy.

He argued that the main problem of SMEs is improper project conception, coupled with poor project implementation and poor management practices, which essentially are issues of innovativeness and entrepreneurship development, rather than those of access to finance as widely quoted.

Other challenges include poor access to market, poor/lack of record keeping, lack of corporate governance practices and absence/lack of proper business plans, he said.

He also highlighted the

critical problems of infrastructure such as access roads, power, water, as major constraints, however, while these are often cited as problems and challenges impacting SME growth and development, these to me also present opportunities, though for medium to large organisations, where the private sector could tap into through Public Private Partnerships (PPPs).

“Once these issues have been addressed, entrepreneurs will have access to finance and incidents of business failure will reduce, while sustainable growth and development can be achieved,” he stated.

He said the broad-based coverage underscores the fact that the current efforts of government to diversify the economy and achieve rapid economic growth under the Economic Recovery and Growth Plan (ERGP), cannot be achieved without proper focus and policy responses to the issues and challenges affecting the growth and challenges of the SME sector.

agos State government has commended Food and Beverage Recycling Alliance (FBRA) for its intervention on environmental challenges in the state, pledging collaboration with the alliance to ensure a clean, safe and healthy environment in the sprawling city.

At no better time than now does the state need intervention in its environment which has been overrun by waste of all descriptions from homes and industries whose solid waste output is conservatively estimated at 13,000 kilograms per day.

Founded in 2013 as the Producer Responsibility Organisation (PRO) for the food and beverage sector, FBRA has been adhering to the environmental protection policy of government which transfers significant responsibility to producers for the entire life-cycle of their products, especially at the post-consumer stages.

The Alliance has membership drawn from beverages producing companies including the Nigerian Bottling Company Limited, The ‘Coca-Cola’ Company Nigeria, Nigerian Breweries Plc, Seven-Up Bottling Company Limited and Nestle Nigeria Plc. As part of activities marking this year’s World CleanUp Day, volunteer staff of FBRA member-firms led traders and other users of the Arena Market in Oshodi, Lagos to collect waste from used polyethylene terephthalate (PET) bottles to ensure a cleaner and healthier trading environment.

That initiative, which received the collaboration of the Lagos State Ministry of Environment, was organised in partnership with Re-

cycle Points, FBRA’s partner involved in the collection of plastic waste for recycling.

The clean-up campaign provided opportunity for the Alliance to enlighten traders, shoppers as well as members of Nurses-ofAir Foundation on crucial issues relating to proper disposal and separation of plastic from metal and food waste, recycling, healthy lifestyle and other measures aimed at curbing environmental pollution.

Tolulope Adeyo, an Assistant Director of Environmental Services, Waste Management Division of the Lagos State Ministry of Environment, noted that the campaign was worth emulating. “The state government will be interested in working with FBRA to get rid of plastic waste from the environment, especially PET bottles from the lagoon and canals, in order to save aquatic lives”, she assured.

She noted that the industrialisation level in the state had generated huge waste and raised concerns from the public and private sectors, adding that FBRA’s intervention, either in collection or recycling, has saved the situation to a considerable extent.

Folasade Morgan, FBRA chairman, explained that the initiative was executed to demonstrate exemplary steps for others to follow as PET bottles caused blockage of drainages in many Nigerian towns and cities.

Morgan, who was represented by Nwamaka Onyemelukwe, Public Affairs and Communications Manager at ‘Coca-Cola’ Company Nigeria, said that in order to achieve environmental preservation, Nigerians should imbibe the culture of proper waste disposal and separation for easy recycling into other useful products.

‘Private sector investment will spur competiveness among youths’ Power Nigeria conference to connect utilities with enhanced networking systems KELECHI EWUZIE

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ontinuous private sector investment towards educational development will help to grow the next generation of globally competitive youth population, industry experts have said.

Jordi Borrut Bel, managing director, Nigerian Breweries Plc, while speaking at the presentation of a block of six classrooms, convenience and textbooks to Itolo Girls Junior Secondary, in Surulere, Lagos, said private sector involvement in education was to complement the efforts of the government in providing necessary infrastructure to boost learning.

Borrut Bel said that the project was one of many that have been executed in line

with the company’s vision of winning with Nigeria.

He said: “Our company’s aspiration is to play a more active role in the development of education in the country, a situation that led to the establishment of the Nigerian Breweries-Felix Ohiwerei Education Trust Fund in 1994.

Since that time, the fund has impacted over 25,000 students across Nigeria, built over 300 classrooms and over 30 libraries equipped with furniture and books in both primary and secondary schools”.

Idiat Oluranti Adebule, deputy governor of Lagos State commended Nigerian Breweries for contributing towards the enhancement of learning in Lagos state through its numerous corporate social responsibility pro-

jects in the education sector.

Adebule who was represented by Elizabeth Adekanye, permanent secretary, Lagos State ministry of education, urged the management of the school to put to proper use the learning facilities to realise the objectives for which they were donated.

On her part, Ayeni Omolara, the principal of the school, lauded Nigerian Breweries for the donation assuring that the facilities would be utilised for the benefit of the students.

Desmond Elliot, a member representing Surulere constituency 1 in the Lagos State House of Assembly, thanked Nigerian Breweries for the support and appealed to the authorities and students of the school to take good care of what has been provided.

ISAAC ANYAOGU

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he Power Nigeria exhibition and conference, which takes place in Landmark Centre in Lagos from 25-27 September, will offer utilities an opportunity to benefit from enhanced network, monitoring, automation and control, the organisers and exhibitors say.

“Given the developments in the Nigerian power sector, we will have a range of products to demonstrate at the show to help utilities with enhanced network monitoring, automation and control,” said Connie Ochola, regional marketing manager, SubSaharan Africa for Lucy Electric, a first time exhibitor.

According to Ochola, “we will also be presenting our industry-leading Gridkey LV/ MV monitoring system and associated analytics which enables customers to identify actionable information from the data on their network. We have launched a new graphical user interface for Gridkey too, unlocking greater network potential and making network data more accessible and easier for operators to quickly interpret.”

The Power Nigeria Conference brings together segments of the power market value chain, from decision makers and business leaders to experts and trade professionals, to deliberate on the latest trends and progression within the Nigeria’s electric-

ity sector.

Power Nigeria draws on the strengths of informa Industrial Group’s geographical foothold in the MiddleEast and Africa through its partner events Electricx in Cairo, Middle East Electricity Saudi in Riyadh, and Middle East Electricity in Dubai, one of the world’s largest power exhibitions.

Over 3 days, a range of subjects including minigrids, solar and the use of blockchain within the power sector, will be covered. James Momoh, chairman of the Nigerian Electricity Regulatory Commission (NERC ), and Osita Aboloma, director general of Standards Organization of Nigeria (SON), Olawale Oluwo, Lagos state.

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CityFile

Commuters decry collapsed Lagos-Abeokuta Expressway JOSHUA BASSEY

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ommuters plying the Lagos-Abeokuta Expressway have expressed concerns over the deplorable state of Iyana IlogboOwode axis of the highway.

Commuters, who spoke on the state of the road, said the Iyana Ilogbo section needed complete reconstruction.

Femi Faboyede, a passenger travelling from Abeokuta to Sango, said it was frustrating spending more than one hour between Iyana Ilogbo and Owode, a stretch that should not take more than five minutes.

According to Faboyede, the road has become a death trap for both commuters and motorists, which made them to also be prone to armed robbery attacks.

“I beg the government to find a lasting solution to the problems we are facing on this road, especially the Iyana Ilogbo-Owode axis.

“Just few months ago, palliative measures were done on the road by Julius Berger PLC, but as you can see, everything has been washed away by the rain,’’ he said.

Similarly, Abdullahi Sherif, who plies the road regularly, recalled how he missed a job opportunity because of time wasted on traffic on the bad portions of the road.

He appealed to the appropriate authority to do the needful on the road, saying the construction of drainage should be their first assignment.

Patrick Oduntan, another commuter, however, observed that bad portions on the LagosAbeokuta expressway were not limited to Iyana Ilogbo-Owode axis. According to him, the Lafarge axis of the road is also in a poor state.

He said that commuters and motorists lose man-hours daily on the road.

“I heard that the contract for the reconstruction of the expressway has been awarded by the Federal Government. I want to beg them to hasten the construction,’’ Oduntan said.

Meanwhile, Clement Oladele, Ogun sector commander, Federal Road Safety Corps (FRSC), has advised motorists to adhere to traffic regulations and drive cautiously in such areas.

102 Niger, Edo communities ravaged by flood …locals rendered homeless, appeal for aids

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total of 102 communities in both Niger and Edo States have been submerged by flood with hundreds of locals rendered homeless and now taking refuge in Internally Displaced People (IDP) camps.

Ibrahim Inga, the director general of Niger State Emergency Management Agency (NSEMA) said 160 communities have been submerged since the rains began in June.

Inga disclosed this when officials from the United Nations Children’s Fund (UNICEF), Kaduna Field Office, visited Niger to assess the extent of damage caused by flood in the state.

He said that the state government has approved N28 million to NSEMA to cater for the displaced flood victims in various IDP camps.

According to him, the agency has established seven IDP camps for the victims.

The IDP camps are located at Zungeru Central Primary School, Maikakaki, Muye, Ceku, Ebbo, Gbaciku and Gungu.

“The flood situation confronting us in Niger is beyond the state’s capacity, even one year of the state’s budget cannot solve the problem, and children and women are the most vulnerable,’’ he said.

Inga said that the Nigerian Air Force, Nigeria Association of Medical Practitioners, Red Cross and the State Child Rights Agency were partnering the agency to give aid to victims, especially children and women.

Rabiu Musa, communication officer and focal person emergency, UNICEF Kaduna field office, said that the team was on assessment of the flood situation in the state.

Flooded community in Ilushi, Esan South East Local Government Area of Edo on Tuesday.

9 kidnapped persons rescued as calm returns to A’Ibom communities ANIEFIOK UDONQUAK, Uyo

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elative calm has returned to Ukanafun and Etim Ekpo local government areas of Akwa Ibom State following the intervention of the security operatives working in partnership with the state government.

Nine abducted persons have also been rescued unhurt by the security forces and the cult and banditry syndicate ring smashed.

Governor Udom Emmanuel who disclosed this in Uyo, the state capital, said: “We made a remarkable breakthrough in Ukanafun and Etim Ekpo. It’s been calm, and we can now feel the peace across the entire state.”

Declining to speak further on the fate of the alleged culprits, Governor Emmanuel said security strategies and action were best not disclosed publicly. He, however, said there has been a remarkable show of

repentance by some young people who had been members of the gangs.

“A whole lot of them have repented.

They have come out to say they are sorry.

If God says we should forgive, I think we may find a way to forgive those who have come out to repent. They might be the best evangelists.”

He said from his interaction with one of them, so many of them had not acquired formal education, and were carrying out the heinous activities out of ignorance.

The governor charged religious leaders and parents to do a lot more in moulding and shaping young people to grow up in sound morals and godly principles.

“If they did not go to school, the church through Sunday school would have done in them what formal education could not do.”

He said the country deserves to fare better than it is doing today just as he stressed the need for improved leadership.

“Nigeria should not have been where we are today. If you take the pains to go

through what God has blessed us with as a country and then you look at the past years, you would drop sentiment and look for leadership as soon as practicable.

“It is never too late to change, every country of the world runs a campaign based on her economy. A nation where you use our crude oil money to settle Paris Club and London Club, and when it came to a time for refunds, no single oil producing state could be considered, rather a state that did not contribute anything was given N17 billion, and they gave us the oil producing states nothing” Citing such an action as injustice, Governor Emmanuel echoed the biblical aphorism that “righteousness exalts a nation, but sin is a reproach.”

While commending the Akwa Ibom people for the relative calm in the state despite the political season, he appealed to politicians to always take cognizance of the God factor in all their dealings, adding: “We should not think that we are God in all that we do.”

Fulani chief urges Buhari to disarm herdsmen

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sa Adamu, the Lamido of Zugobia in Guri local government area of Jigawa has appealed to President Muhammadu Buhari led Federal Government to disarm nomadic herdsmen allegedly unleashing terror in the area.

Adamu made the plea in Guri at a stakeholders’ meeting organised by the Jigawa mediation committee on herdsmen and farmers on Tuesday.

According to him, the herdsmen, who hail from northern Bauchi, have been coming into the community, destroying farmlands and attacking innocent people.

He dismissed the claim that encroachment on cattle routes and grazing reserves by farmers was responsible for the frequent clashes between farmers and herdsmen in the area, insisting that the herdsmen had a hidden agenda.

“The crisis between farmers and herdsmen in Guri has nothing to do with encroachment on cattle routes and grazing reserves.

“The truth is that herdsmen wielding guns, machetes, bows and arrows are coming to our area from northern Bauchi, attacking our people and destroying their farmlands at will.

“We are also Fulanis; but these criminals are strangers to us and that is why I am calling on the state and Federal Government to wade into this matter and disarm them immediately before it is too late.

However, the secretary of the committee, Rabiu Miko, noted that the state government had received complaints detailing encroachment on cattle routes and grazing reserves by farmers in the area.

He said it was imperative for the

council’s authorities to ensure that cattle routes, ponds and grazing reserves were not used for farming in order to de-escalate the conflict.

Also speaking, the committee chairman, Aminu Babura, said the committee was constituted by Governor Badaru Mohammed, whom he said, was deeply worried by the spate of violent conflicts between farmers and herdsmen.

He said the state had recently provided motorcycles to the leadership of farmers and herdsmen across its 27 local government areas to facilitate dialogue between them in the hinterland.

Barkwano Adiyani, the local government chairman, urged both farmers and herdsmen in the area to live in peace, stressing that there can be no development without peace.

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COMMENT POSITIVE GROWTH WITH BABS

BABS OLUGBEMI Babs Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa

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t is my birthday! I am towing the lane of p e r s o na l l e a d e r s h i p in today’s article. The responsibility for personal and career development is individual and not collective. Some employees will be lucky to meet workplace mentors who will identify their strengths and push them to realise their dreams.

In most cases, people who succeed first discover the area of their gifting. They discover what they have been created to do through selfdiscovery exercise. No matter your level as an employee or as a business owner, you have strengths that can give you an unquantifiable level of fulfillment in life.

The common question I have been asked as a workplace coach is how to be fulfilled on the job, especially if your daily job routine is not what you love to do consistently. My answer is: find your strength and volunteer it to

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Volunteer your strengths your organisation without expectation. In other words, do more than you are expected to do and do what you might never be paid for.

In the book, Take the Lead, with a subtitle how to live, energize, activate and develop your strengths, I shared a story of how a C-level executive officer of a bank approached me and lamented how unfulfilled he sometimes feels despite his career success. His dissatisfaction is from his unused synapses, which might not be required for his job but, which must be used for his fulfillment. I wrote the book after coaching this person to show you how to live a fulfilled life irrespective of your daily routine at the office.

It is essential to earning a living doing what you are doing or through what you have studied at the schools. Being fulfilled in life is rather a different journey. Your fulfillment lies in utilising your talents. Talent is nothing more than an activity you love to do and derive satisfaction from doing it. It is what you will do and do without minding the time. A talent developed with knowledge, and skill is the strength. People who lived fulfilled lives are people who utilised and operated in their strengths’ zone. An unutilized strength breeds dissatisfaction.

A typical example of volunteer ing of strengths is found in the story of Gareth Bale of Real Madrid FC. Bale started his career with South-

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By volunteering your strengths in the workplace, you will become more visible, exude ownership mentality, become a dependable gogetter and above all derive personal fulfillment which is above the joy of doing your job and the accomplished pay cheques

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ampton FC on April 17th 2006 as a left-full back. He moved to Spurs FC on May 25th 2007.

However, as a left fullback, he showed a penchant for pace and often leaves his position to join the attacking forces. Why a left full back would leave his position often to join the offensive players? Would he have been cautioned in the past for causing a goal? My answer is dissatisfaction! Gareth was often called by something within

him to move forward, to take the risk. Know this, there is more to you if you dare live, energize, activate and develop the strength in you! Your dissatisfaction is a signal that there is a place for you in the forward. It is a stimulus, and it is time for you to move forward strategically.

Harry Redknapp saw the pace and flair to move out of the dissatisfaction stage in Gareth. He converted him to a left-winger, and his career took an upward turn.

He scored more goals and became an icon in the likes of Christian Ronaldo. There is more to you! There is something you need to do to move out of your current state.

I know there are bills to pay. I do not expect you to quit your job, but you can find fulfillment on your job and with your current employer.

All you need to do is to: Find your strengths. Your strengths are the activities you admire when others do them. It could be a financial analysis, speaking, writing, comedy, teaching or what I did not mention. The trace of the strength in you is called talent. Identify what you are talented at is crucial to your job satisfaction. You cannot be a go-to employee in the workplace without been fulfilled.

Develop talent into strength. At your spare time, identify the knowledge and skills necessary to take your talent to strength. Talent is strength in its raw state. The people you admired are not

exhibiting talents. No. Christiano Ronaldo is not showing talents. He is operating in his strength zone. You can only move talent to strength by taking action. Taking action on the activity of your talent is an important complement to the skills and knowledge of the talent.

Understand the business of your talent. There is talent and there is a business of the talent. You must go beyond just developing your talent to strengths but have the understanding of the business of your talents.

Volunteer your talents now.

There is a transition period.

Within your organization are the activities that require the use of your strengths. These activities might be outside your job description. What do you do? Volunteer your strength to the employer. If you can write, write for the workplace magazine. You can create jokes, be the comedian at the end of the year party.

One of my protégés is the anointed master of ceremony at his workplace.

By volunteering your strengths in the workplace, you will become more visible, exude ownership mentality, become a dependable gogetter and above all derive personal fulfillment which is above the joy of doing your job and the accomplished pay cheques.

Wouldn’t you rather volunteer your strengths today?

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Spotlight Nigeria 2018: The diaspora effect

BLESSING OKORO Okoro is the Communication’s Manager, Spotlight Nigeria 2018

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he Senior Special Assistant to the President on Foreign Affairs and Diaspora, Mrs. Abike Dabiri, as part of her mission to promote the international recognition of Nigeria, has confirmed to be in Paris this October for the Spotlight Nigeria-France Forum, the foremost forum for Nigeria-France companies, investors and businesses.

With a trade balance of 3.6

billion euros between Nigeria and France, and the heightened cultural interactions between both countries in recent months, the role and impact of the diaspora will be one big subject at this forum.

Taking cognizance of the impact of the diaspora at this forum, taking place from the 4th to 5th October, this year at the Marriott Rive Gauche Conference Center in Paris, the international collaboration between Nigeria and France is set to take a heightened level.

According to a press release in January 2018, the Ambassador of Nigeria to France, Dr. Mrs. Modupe Irele, stated that there were about 30,000 Nigerian professionals and students living in France.

S p o t l i g h t Ni g e r i a 2 0 1 8 seeks to translate these figures into increased partnerships.

With sectors of focus cutting across agribusiness, manufacturing, & processing, energy, real estate and hospitality,

fast moving consumer goods (FMCG), digital technology, creative industry, education and capacity building, a number of sector-based case analysis will be done by industry leaders and expert from Nigeria and France.

Some Nigerians in France and honorary board members of Friends of Nigeria (FON), Europe, who are creating impact include Wale Gbadamosi Oyekanmi (CEO & COO of Dare.

Win), Dr. Anino Emuwa (Founder of Avandis Consulting), Elé Asu (French-Nigerian Journalist), Dr. Emmanuel Igah (Founder and CEO, Phobos), Maître Okpokpo-Ebenezer (Professional Lawyer in Paris), among other industry leaders. Most of whom would also be present at Spotlight Nigeria 2018.

The forum is set to create top of mind awareness about the investment opportunities within Nigeria, facilitate conversations with French investors and select Nigerians in the diaspora who are interested in investing in

their home country. It will also support the government’s drive to attract foreign direct investment and create a call to Nigerians in the diaspora to give back and build the economy through direct and indirect means. With the realization that investors are willing to participate in the Nigerian economy, an involvement pull will be triggered for the implementation of a number of indigenous projects and opportunities from Spotlight Nigeria.

In other words, when strategic MOUs are signed at the Forum, there would be a case for the long-term monitoring and implementation of the business ideas, opportunities, and projects. Talking about the key performance indicator of the B2B meetings and conference sessions, Abiodun Odunuga who is the Vice-President of FON puts it this way, ‘French companies will be meeting with Nigerian counterparts and they will be signing deals.’

From this edition of Spotlight Nigeria, the diaspora outlook held by Nigeria in France and in extension Europe will go beyond a hidden contribution made by Nigerians abroad towards the economy of their resident and home country, to a spotlight on the works, achievements and substantial economic contributions of Nigerian nationals in France.

Planned as an annual forum for matchmaking business leaders, Mrs. Abike Dabiri is expected to deliver a keynote address and also meet with the Nigerians creating diaspora impact here in France, and other industry experts joining the delegation from Nigeria.

This two-day event is expected to close with a cocktail for interactions and networking, including a personal opportunity tour of the beautiful city of Paris.

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Thinking aloud on the Adeosun-NYSC certificate scandal

MOHAMMED DAHIRU AMINU M.D. Aminu (mohd.aminu@gmail.com / @mdaminu) wrote from Yola, Nigeria.

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he ousting of Mrs. Kemi Adeosun from her position as Nigeria’s finance minister, to serve as a deterrent to other people like her who may want to shortchange the system (by the way, the system did not fail her as some people say—rather it uncovered her!) will not deny Nigeria and Nigerians any capable hands that are required for the country to progress. The reason is that the largest concentration of people who possess the capacity and skills to move Nigeria forward is not found outside Nigeria.

The largest camp where you can find capable Nigerians to move the country forward is Nigeria. I believe that there are more Nigerians in Nigeria who are more capable than Adeosun than there are outside Nigeria.

The NYSC was enacted for reasons of community service. It may need reviewing perhaps for other reasons, but that review, in my view, is not needed for reasons of making it convenient for Nigerians in the diaspora to indulge in it. Community ser-

vice is a sacrifice and sacrifices are not meant to be convenient for people—whether they are diasporean or not. Some people lost their lives in the process of national service; the service was not a matter of convenience for these lost souls. Asking for the NYSC Act to be made in such a way that diasporean Nigerians can only come home and serve at a time convenient for them makes a joke of the NYSC as a corporate body. The NYSC Act cannot be more convenient—to both the diasporean and the home-based Nigerians—than it currently is. It is a simple law that stipulates that a person must serve if they obtained a university degree or equivalent qualification before attaining 30 years of age. To think that a person deserves an exemption after attaining 30 years of age simply because they were not ready to serve before 30—despite having graduated before the said 30—is akin to calling for the scrapping of the NYSC as a corporate body since they—whether diasporean or not—may not even find a convenient time for national service throughout their lives.

This is especially possible if an opportunity to occupy high offices did not present itself to them—if we are to go by the case of Adeosun.

The Adeosun-NYSC scandal is not the same as President Muhammadu Buhari’s inability to produce his own certificate of secondary education. The first is a case of forgery—as Adeosun has no business holding an exemption certificate, real or forged, having graduated before 30 years of age—while the sec-

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Community service is a sacrifice and sacrifices are not meant to be convenient for people—whether they are diasporean or not.

Some people lost their lives in the process of national service; the service was not a matter of convenience for these lost souls

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ond is a case of loss or damage of document. As opposed to Adeosun’s case, the Nigerian Army, a branch that Buhari served, has not come out to declare that at any time during its existence, the criteria for enlisting into the officer cadre did not involve the presentation of a certificate of secondary education. The school Buhari attended has issued a statement of result as proof of his education. President Buhari also swore to an affidavit for the loss of his certificate. Thus, by law, Buhari has satisfied the criteria to run for office based on educational requirements. Therefore, if any person has a doubt on the genuineness of Buhari’s educa-

tion at the moment, the onus is on them to show that he did not have secondary education—the onus is no longer on Buhari.

It is also disingenuous for Adeosun to claim, as contained in her letter of resignation, that she did not know that her certificate was forged, prior to the revelation by Premium Times.

This cannot be true given that her faking of the certificate was used as an item for blackmail to lure her into paying money as bribe for that blackmail. This can be substantiated by a correlation with impossibility. It is safe to say that it is impossible for all 109 senators who had copies of Adeosun’s fake NYSC certificate, yet none of them could notice that she had no business holding an exemption given her age at the time she graduated from the university.

I have seen a senate screening for potential ministers in the past where a senator rose up to say that he noticed an illogic in a candidate’s NYSC certificate serial number. He said that the previously screened person graduated before the person they were screening right before them and considering that NYSC certificate serial numbers are known to increase by the years, the serial number for the candidate being screened had reduced, relative to the person who graduated—and served— before him. Being aware that a person who obtained a degree before attaining 30 years must serve is very common knowledge, and I knew these years before I was ready to serve. I believe this information is so basic that it will be available

on the NYSC website. That 109 senators from across Nigeria will not be aware of this common information and spot it on Adeosun at a time they were tasked with the responsibility to screen her is unimaginable to me. It is more logical for me to believe that those who spotted this red flag used it to enrich themselves through blackmail as reported by Premium Times.

There are other arguments that seek to defend Adeosun on the basis that she could still be exempted from the national service had she not be found to be in possession of a fake certificate which amounted to forgery.

Proponents of this argument say that within the Act establishing NYSC, there is the possibility of exempting certain persons from national service even though those persons earned their degrees before attaining 30 years of age. If that Act exists, it is also safe to say that the Act is only applicable to other people who are at parity with the Adeosun circumstance. If anyone is to be exempted from national service under that category, then that person may have served in the Nigerian military or must have received the national honours of Nigeria. Adeosun neither served in the military nor was she a recipient of the national honours prior to her arrival to work in Nigeria. She needed to serve the nation, but even though she did not serve, she was found to be in possession of not only a certificate of exemption, but to make matters worse, a fake one.

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Dear quick service restaurants (QSRs), take your menu online to become a sustainable business OLUKAYODE KOLAWOLE Kolawole is the Head, PR & Communications - Jumia Group Nigeria Phone: 08134793695 | Skype: kayode_ kola

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read with keen interest a story published by New Telegraph newspaper on Monday September 17, 2018, with the headline, ‘Tantalizers: Operational Costs, Competition Cut Earnings’. The publication reported the financials of the company which were released a couple of days ago at its 20th Annual General Meeting (AGM). It is not surprising to read such news about how most companies’ balance sheets continue to remain in red, at least for a number of reasons: (1) Nigeria is not one of the easiest countries to run a profitable business year in, year out. It is possible, but difficult. You just have to find a smart strategy. (2) Finding qualified skills can be relentlessly difficult: mostly, under-qualified workers are more readily available and affordable than the right fits; finding

a balance is key. (3) Infrastructure deficit still remains most businesses’ headwind: bad roads and epileptic power supply - the real killers of today’s businesses. (4) Insecurity in certain regions still hamper expansion plans: Boko Haram insurgency in the north; despite the enormous population in the north, no businesses are keen on setting up their operations or even expanding to the north. But, to be fair, Tantalizers is not the only company in Nigeria plagued with these sad realities. There are hundreds of them. Some stay afloat, with no sustainable impact, while others just die a natural death after years of fighting to stay alive. What a paradox!

According to the Chairman, Board of Directors of Tantalizers, Dr. Jaiye Oyedotun, three major challenges rendered the company unprofitable at the end of 2017: (1) Reduction in credit opportunities. (2) Weak consumer demands. (3) Stiffer competition. The chairman made an excellent point so articulately on what the company plans to do in the next financial year to change its fortunes for good: (1) Corporate revenue - open new stores, remodel existing stores to become more attractive. (2) Menu recipe revamp. (3) Franchise programmes intensified.

(4) Improve marketing communications strategy to increase share of voice and mind in the marketplace. These are laudable ideas and a good start to usher in a breath of fresh air towards making the business profitable again.

As I can recall, I have been a huge fan of Tantalizers since I was a child. And, I must say, with due respect, that while Mr. Chairman’s action plans seem good for a change, I am not sure he and other board members took into account the changing needs of today’s consumers, and the ever evolving ways of reaching them. The old tricks (methods) might not be sufficient to fight today’s marketing wars. Legendary marketing experts, Al Ries & Jack Trout in their book, ‘Positioning the Battle For Your Mind’ stated that “to be successful in today’s marketplace, you must touch base with reality”.

So, what are the realities in today’s business environment that can help organisations such as Tantalizers and other restaurants win in this cluttered market?

The 21st century consumers are as nomadic as the Fulani herdsmen; they no longer sit in mortar and bricks restaurants to fetch food. In my opinion, expanding Tantalizers franchise or building new stores doesn’t necessarily guarantee patronage. And the math is simple: what is the average

sales you record yearly from all your existing franchises combined? If the existing franchises are effective, it would have reflected in green on your balance sheets. And the recent AGM where you apologised to the board for a poor business performance would have swung in the opposite direction.

Expanding your franchise or remodelling existing restaurants to become more attractive will not do the magic; it will only scratch the surface. Doing that does not explain why people are not patronising your network of restaurants as they ought to. Tantalizers is one of the oldest Quick Service Restaurants (QSRs) in the history of Nigeria, and honestly, they serve good food. But, do people still eat offline? Yes, a tiny fraction of the QSR market still does. And this tiny fraction does not have the purchasing power you need to scale; you do not get a repeat purchase or patronage from them as often as you would expect.

Most of the customers who still go to your restaurants to eat are typically parents who like to give their family a treat once in a while - maybe twice in 3 months. They have very limited household wallets. They cannot be your primary audience for sustaining a fast moving business like Tantalizer, or any other QSR. Mr. Biggs used to be a leader in this market. What led to Mr.

Biggs losing its market leadership is a conversation for another day.

‘Consumers now live online’ is no longer news The real audience Tantalizer or any other quick service restaurant should be targeting are the Millennials: upwardly mobile young executives between ages 21 and 34 years.

Online is where they all congregate, live, socialize and network; it’s their new habitat. There is a digital revolution and businesses only survive by tapping into the power of big data which will help them to stay close and understand their market better.

This is the age of digital, where almost everything is done online. Leverage the digital intrusion to stay ahead of competition. Smart businesses today are leveraging the power of eCommerce. The offline market is cluttered already - too many brands saying different things all at the same time. And the attention span of each consumer is extremely short; so is their retention lifespan. So, invariably, brands and businesses are speaking to everyone and to no one. Quite sad.

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

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Thursday 20 September 2018

Doing business in Nigeria is becoming uneasy for multinationals

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hen Muhammadu Buhari became President of the Federal Republic of Nigeria in 2015, Nigeria ranked 170th in World Bank ease of doing business annual ratings. In the two years that followed, Nigeria’s ranking improved considerably, moving up 25 places to rank 145th in the world in 2017.

It seemed like in spite of the economic stagflation and currency crisis in 2016, Nigeria had somehow managed to create a better economic environment than other countries or the other countries just grew worse than Nigeria.

Either way, theWorld Bank saw an improvement and marked the country higher.

While the Bretton Wood institution’s rankings insinuate the business environment in Nigeria has improved, multinational companies may have a contrasting opinion. After Nigerians voted with their PVCs in 2015, multinationals have been voting with their legs ever since.

The first to walk out the door was South African largest food company, Tiger Brands in 2015. Tiger Brands pull out of its struggling Nigeria Venture in 2015, following an unfruitful $181.9 million acquisition of 63.35 percent stake in Dangote Flour Mills (DFM), a Nigerian company

that produces flour, noodles and pasta, and is partly owned

by Africa’s richest man, Aliko Dangote.

Tiger Brand cited the tough economic conditions in Nigeria, which include naira devaluation and the fuel crisis in May and June 2015, for the company’s woes as the company struggled to meet its customers’ demands on time.

When the losses became unbearable, Tiger Brands took the decision to end the pain and go home. Since it left, Nigeria has suffered another currency devaluation in 2016 and one of its worst and longest fuel scarcity between December 2017 and February 2018.

Next out of the door also in 2015 was Brunel services plc, a Dutch stock exchange-listed staffing agency who according to its chief executive struggled to do business in an unpredictable environment marred by continuous bribery and corruption.

At the time, the Buhari administration was in its first year at the helm, still vibrant with what Nigerian’s perceived to be will-power in fighting corruption. Why will a foreign company leave when things were about to get better? Now in hindsight, it seems like these multinationals had better foresight. In no time the year was gone and 2016 wasn’t any better for the multinationals and for many the economic recession delivered the final blow

to their Nigerian operations as the rush for the door was far beyond what any economist anticipated.

The year had barely begun in January 2016 when South Africa based clothing giant Truworths International closed its two remaining Nigerian stores at the southeastern cities of Enugu and Warri over stringent regulation of stock imports and foreign exchange controls as rising costs made it too difficult for the South African retailer to operate in Nigeria.

Then the airlines found the exit doors. Spanish national carrier, Iberia Airline withdrew its services from Nigeria citing huge financial difficulties repatriating proceeds made in Nigeria back to its parent countries. In similar fashion, United Airlines, Chicago-based American airline pulled out of Nigeria in 2016 over difficulty in recovering monies made from tickets sales, due to Nigeria’s foreign exchange policy.

The Naira devaluation caused Etisalat’s $1.2 billion debt to implode which caused the Abu Dhabi owners to terminate its management agreement with its Nigerian arm. Nigerian regulators were forced to intervene to save Etisalat Nigeria from collapse after talks with its lenders to renegotiate the $1.2 billion loan failed.

This year, UK based InterContinental Hotels Group (IHG), operator of InterContinental Hotels brand had with-

drawn from Nigeria four years after it opened its first site in Nigeria due to the difficulty in operating a luxury hotel business in a country struggling to grow its economy.

As the multinationals exited, few dared to enter the country as they quickly learnt that although Nigeria is blessed with abundant human and natural resources, converting resources to finished goods in an infrastructure deficient country with regular policy somersaults is definitely no stroll in the park.

South Africa’s MTN Group Ltd, Africa’s largest telecommunications provider is currently facing its toughest year in Nigeria after regulators asked the company to cough out $10.1 billion in alleged unpaid taxes and illegal repatriation.

The company has vehemently denied any wrongdoing.

How the World Bank will reassess Nigeria’s position in the new ease of doing business after the failed sojourns and current struggles of foreign companies in Nigeria is anybody’s guess. What we know for sure is that attracting foreign capital or businesses into Nigeria over the next few years will be even more difficult than the past considering the recent failures major players. Sadly, the Nigerian government is going ahead antagonising businesses as if foreign investors are queuing and begging the come and do business in Nigeria

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BUSINESS DAY

Thursday 20 September 2018

Harvard Business Review

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Global Business Perspectives CONNEC TING

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How companies can take a stand against bribery RAVI VENKATESAN

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n 2016, the International Monetary Fund estimated that corruption amounted to roughly 2% of global economic output, or between $1.5 trillion and $2 trillion. Consider that in India alone, nearly 7 in 10 citizens recently reported paying a bribe to access basic public services such as education and health care, according to Transparency International. Despite the many laws against corruption, and increases in enforcement of those laws, bribery in particular continues to thrive and the costs to business and to society continue to escalate.

Since having laws on the books isn’t enough, anti-corruption and anti-bribery efforts need further traction from the private sector. Business needs to play a more powerful role in supporting responsible practices throughout every aspect of their operations. After all, those that find themselves embroiled in bribery scandals face a host of consequences, including business disruption, steep legal costs and harm to their reputations.

Companies usually manage bribery and corruption risk through a mix of internal processes, certification requirements and basic good practices. External standards can be a powerful tool in support of those efforts, helping companies strengthen ethics and compliance practices by offering a clear framework for action. One example of such an external tool is the ISO 37001 anti-bribery management systems standard, published by the International Organization for Standardization in 2016 and designed by a committee of global business leaders and other stakeholders. The standard offers a company a structure for setting up or benchmarking an effective anti-bribery program aligned with its own risk profile, and building a culture that values

ethical behavior. The program can stand alone or be integrated into a company’s existing management system, and it offers a common language and approach that stretches across borders and industries. It covers bribery in all of its forms — direct and indirect, inbound and outbound.

There are five important ways a standard like this can help companies strengthen their practices: DEFINING CLEAR ROLES FOR BOARDS AND TOP MANAGEMENT. The ISO standard focuses on leadership roles as central to an effective anti-corruption system. It spells out the responsibilities of the board and top management, including ensuring that the organization’s strategy and anti-bribery policy are aligned. It also requires that the compliance function be staffed by those with the right level of skills, status, authority, independence and resources. Having clearly defined roles and the right resources makes it more likely for anti-bribery and anticorruption policies to succeed.

EMBEDDING A CULTURE OF COMPLIANCE. The standard’s preventive aspects support companies’ efforts to build cultures that value ethics and compliance. In addition to the leadership role requirements, the standard requires communication and training to bolster the

compliance program, and continual improvement to ensure the program does not become stagnant but rather responds to changing risks.

Siemens was able to rebuild trust after a bribery scandal that reached the top of the organization, in part by implementing an effective compliance program. This included strict new anti-corruption compliance processes, appointing competent compliance professionals across the organization, launching a comprehensive training program and a compliance hotline, and investigating and monitoring to ferret out wrongdoing and ensure continual improvement. Through these efforts, the company sought to move away from a culture that has been characterized as “openly tolerant of bribes” to one that is “driven by ethical standards.” Siemens implemented the types of processes required by ISO 37001 (although it did so before the standard was issued).

SUPPORTING A CONSISTENT APPROACH. Sincechief compliance officers are often monitoring business in more than one location, it’s critical to ensure a consistent approach.

In 2010, during a review of its global anti-corruption compliance program, Ralph Lauren discovered evidence that its Argentine subsidiary had been

paying bribes to local government officials. The company promptly disclosed this information to the U.S. Department of Justice and the Securities and Exchange Commission, and ended up paying $1.6 million in combined penalties, a relatively light fine due to Ralph Lauren’s focus on self-disclosure, cooperation and remediation.

The ISO standard offers a uniform framework with measurable, trackable indicators that promote consistency organizationwide. The standard intentionally does not favor the legal regime or regulatory architecture of one country over another, but rather outlines a set of practices that can be used by companies regardless of where they are based.

CASCADING GOOD PRACTICES THROUGH THE SUPPLY CHAIN. In addition to having subsidiaries and workers around the globe, many companies today have a complex web of third-party partners that support their businesses. This carries benefits and risks — bribery by a business partner being a major one. In addition to performing the regular due diligence, an organization can also measure the strength of a third party’s compliance program using the ISO standard.

This can be done by relying on certification or by asking the third party to demonstrate compliance with the standard.

Because the standard is a global tool, developed by an international stakeholder group without ties to the laws of any one country, it may be more readily accepted by some parities as a common language to fight bribery and corruption.

COMPETITIVE ADVANTAGE. Fighting bribery builds an organization’s reputation and brand value. Companies that can demonstrate conformity to an internationally accepted anti-bribery standard may more

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easily attract business partners and investors who expect greater financial transparency and disclosure of activities to determine bribery risks. According to data collected by the Ethisphere Institute, companies that implement effective programs realize a 10.72% “ethics premium.” Research also demonstrates that ethical companies have lower employee turnover.

And consumers are increasingly placing a high value on whether a company has ethical practices.

Companies are beginning to realize these benefits, and many are using the ISO standard to bolster their anti-bribery efforts. The list of certified companies includes Legg Mason, Alstom, Mabey and CPA Global, among others. Even so, the standard is at an early stage of adoption and it will take more time for it to gain traction. The pace of certifications has been slow to date, perhaps because of the small number of accredited auditors available to perform certifications. The standard may see wider adoption if governments start requiring certification for bidding on public contracts.

We will have to wait and see whether ISO 37001 becomes more widely adopted. In the meantime, the more companies use the standard and share their experiences, the more they can help reduce corrupt business practices around the globe.

Ravi Venkatesan is the former chairman of Microsoft India and Cummins India, and a board member of the Center for Responsible Enterprise and Trade. Leslie Benton is vice president of the Center for Responsible Enterprise and Trade and one of the drafters of the ISO 37001 antibribery management systems standard.

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BUSINESSTRAVEL ‘Demand, infrastructure determine type of aircraft we deploy into a country’ Afzal Parambil is the Emirates regional manager for West Africa. In this interview with Ifeoma Okeke, he speaks on the airline’s upgrade of its Abuja route’s operating aircraft to a Boeing 777-300ER from the 777-300 classic, amongst other industry issues.

You plan to take Airbus aircraft to Ghana as part of the activities to launch the commencement of the new terminal. Is this going to be a regular operations and comparatively, how many passengers do you airlift from Ghana compared to Nigeria? e will be taking our flagship aircraft to Accra. The most important thing is that we also want to provide that experience to our customers in West Africa. The Airbus 380 is a different product, although some of the other aspects such as the entertainment are a little different.

So, we are working with the airport authority in Ghana. We are taking this aircraft to Ghana showing our commitment to Ghana and West Africa. We upgrade our aircraft based on the demand of the market. In comparison, Nigeria is still far bigger than Ghana in terms of the size of the population and number of fleet taking off and emanating from there.

But the most important thing in West Africa is regional hub, be it Ghana or Lagos, it can act like a hub for West Africa. Traffic from Nigeria is largely driven by Nigeria but for Ghana, it is not just Ghana, we have other countries like Ivory Coast, Cameron, amongst others.

Nigeria is larger in terms of the number of passengers and it is also growing. What determines the type of aircraft we operate are the demand of the market, approvals from the government and the infrastructure of the country to support the huge aircraft. When passengers arrive, we should be able to clear them within a certain time.

What products are imported and exported in Nigeria through

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Emirates airline?

Nigeria exports kolanuts, chocolate drinks, popularly known as Milo. These are the two main products exported. These are perishable items, so you need to have a reliable carrier to take them and reach their destinations in time. We ensure we have adequate facilities at the airport here in Nigeria and also in Dubai and we ensure it doesn’t take more than the required time to get to Dubai as this can impact on the quality of the product. So, customer satisfaction is key in this.

How come there is a reduction from 12 first class seats to eight in the new aircraft you are deploying?

If you look at the size of the aircraft we are using, it is wider and longer than the 777-300 classic that we carry already. We spend actually the same amount of space for the first class seats with the new aircraft because it is a private suite.

So, each passenger has his own private suite and it consumes the same space which we normally use for the 12 seats. This is the configuration of this aircraft. The 777 aircraft we have actually have the same configuration of eight private suites. And this does not amount to increase in fares. We have a pricing strategy which we use for Nigeria and not specifically to Abuja or Lagos. We will continue to use the same strategy and what we are doing is giving our customers a better experience.

As a foreign carrier, how will you access the level of infrastructures in Nigeria’s airports?

The infrastructure in Dubai is super and this is an experience customers love. Infrastructures are critical for the airline and for the country to be successful. We have challenges like any other

Afzal Parambil

business and infrastructure is one of them. When passengers come from the rest of the world, they should be able to connect to any part of Nigeria without any delays and we like to see that improve. I can say certain measures have been taken by the Nigerian authorities, which is impressive. I believe there have been significant improvements in infrastructure, as some of the bottle necks have been removed. So, it means government is not just listening to us but to our customers. So, we are working together with the government to improve the situation.

In terms of airport charges, how will you compare it with what you pay in other countries?

It is very difficult to identify cost of operations by a country. I will say it is almost the same with global standards and we will always like to see cost efficiency improving and better customer experience. This

will encourage more foreigners coming into the country. The online visa with the Nigerian government recently introduced seems to be accepted by the United Nations positively. We like to see these initiatives and I’m sure we will see more of these initiatives.

Nigeria will soon be launching its own national carrier before the end of the year, how do you feel about this new carrier?

A national carrier will always bring in a lot of benefits for the country and this way, they will also be investing in infrastructures. Everyone will benefit from it. Competition is always welcome in the global market. We continue to reinvest in our products and services so that we see our customers come back to us. As a new airline comes in, everyone will have their own space in the market, so we welcome any new carrier, including national carrier.

Which of the airports in West Africa is more convenient for you to operate from as a hub?

There are certain airports which are impressive and one of them is the Ghana airport from infrastructure perspective. Dubai is a regional hub but it wasn’t when it started. We carry almost 60million passengers. So, with the proper investment and planning any of these airports can be a regional hub. Whoever does that first will benefit from it.

Two years ago, you reduced operations because of the economic downturn and one year after that, you restored all your services, is it that you now have confidence in the economy?

What other expansion plans do you have for this market?

You are right that at a time, we reduced our frequency into Nigeria for multiple reasons because we are a commercial business and we need to make decisions based on the profitability of the airline otherwise, we will not be able to sustain the business. The reduction of the capacity was for multiple reasons which include economic reasons and constraint on the Abuja airport.

The decision we made to come back was because the government addressed the Abuja infrastructure issues that we raised. As soon as the runway was restored, we came back. For the economic perspective, we faced repatriation issues and government eventually supported us. We got commitment from the authorities, so we came back. As passengers increase, we will surely increase our capacity. If the infrastructure supports this, we will continue to increase our capacity. This is also in line with Emirates growth plan for the future.

NCAA hails AirPeace on its firm order of 10 B737 MAX aircraft

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he Nigerian Civil Aviation Authority (NCAA) has congratulated the nation’s largest carrier, Air Peace for making a firm order of brand new B737 MAX 8 from Boeing Corporation INC. Commending the airline, Muhtar Usman, the director general of the NCAA, said the regulatory authority has been urging Nigerian airlines to go for such modern aircraft, which are more efficient so that they would be able to compete with international carriers.

Usman said that by ordering 10

more aircraft into its fleet, Air Peace has increased the number of aircraft in the country.

“I commend Air Peace for ordering modern aircraft. This is what we have been asking the airlines to do because modern aircraft are more efficient and will enable them to compete with international airlines and with that number of aircraft on order, Air Peace has increased capacity,” he said.

Reacting to the protest by airlines operators recently over the use of aircraft owned by regional airline, Asky by Dana Air, Usman said that

the regulation allows the need to fill a gap when an airline takes its aircraft away for maintenance but this is meant to last for a short time provided that it is in tune with the provisions of the regulation.

He said that one of the objectives of NCAA is to provide level playing field for all operators, noting that any other airline that has similar challenge can approach the regulatory authority tomorrow and if the conditions are met, NCAA would allow it.

The director general noted that the improvement being recorded

by different agencies in the sector is made possible because of strong regulation of the sector by NCAA. He said that there are a lot of things that are done to ensure that there is collective goal to keep the nation’s airspace safe and these include self-regulation, effective regulation of other agencies and airlines.

“That the aviation industry is safe and that other agencies in the industry are getting approval is because of the strong regulation of NCAA. We work together to make the industry save and this is testified by the good performance of the agencies in the

industry,” he said.

Usman also said that the recent safety award given to the Nnamdi Azikiwe International Airport, Abuja by the Airport Council International (ACI Africa) is a testimony of the strong regulation of the industry by NCAA, which certified the airport last year.

He also expressed appreciation by the action being taken by the Enugu state government to work with the Federal Airports Authority of Nigeria (FAAN) to upgrade facilities at the Akanu Ibiam International Airport, Enugu.

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LASACO Assurance to raise capital from 40bn shares issuance MICHEAL ANI

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he Board of directors of LASACO Assurance Plc says it is planning to raise an additional capital through the issuance of 40 billion ordinary shares of 50 kobo each that will be subject to shareholders’ approval.

In a document filed on the Nigerian Stock Exchange and signed by the company’s secretary, Gertrude Olutekunbi, the insurance firm said the issuance will be by way of public offering, private placement or preference shares.

The offer price was however not stated as the firm said it needed the approval of shareholders at an extra-ordinary general meeting (EGM) that is scheduled to on the 10th of October, 2018 in Lagos. The proposed shares to be issued shall rank pari-passu with the ordinary shares held by existing members of the public, the

company said.

The shareholders are also expected to approve an amendment of Clause 6 of the Memorandum of Association and Article 43 of the Articles of Association to “reflect the new Authorized Share Capital of N25 billion divided into 50 billion ordinary shares of 50 kobo each.”

In addition, the board said it wants an approval to “modify and/or conclude the terms of the public offer, private placement or preference shares, seek approvals from the relevant regulatory authorities appoint Professional parties and Advisers, finalize and execute all agreements or documents and to do all such acts and deeds which the Board of Directors in its absolute discretion may deem necessary and expedient for the purpose of the public offer, private placement or preference shares without being required to seek further consent or approval of members of the company or otherwise to the end and in-

tent that they shall be deemed to have given approval thereto expressly by the authority of the resolution.”

The regulatory body of insurance company in July announced a tier-based risk capitalisation requirements for life, non-life and composite insurance firms . Each of the categories has three tiers.

Following this announcement, insurance companies are strategising with plans to raise capital or merge in a bid to move from one tier to another.

AIICO Insurance Plc, last month announced it will be holding an Extra Ordinary General Meeting on Friday the 5th of October 2018, Sovereign Trust Insurance, in a notice sent to the NSE on its upcoming AGM also disclosed plans to raise capital The capital injection by LASACO analyst say is in response to the new capital mandate given to all insurance firms by the National Insurance Commission (NAICOM).

L-R Josh Bamfo, partner and head of the transfer pricing group, Anderson Tax; Mathew Gbonjubola, head of international tax department, FIRS; Sabastine Odimma, head of tax, West Africa MAERSK ; Mofoluke Agbeyangi, finance and tax controller, Splendor Professional Consult, and Lawrence Emeka Ihebie, representing professor Abiola Sanni at the Anderson Tax Transfer pricing sensitisation session in Lagos.

PicbyPiusOkeosisi

CompexAfrica releases upgraded tool for business valuation Jumoke Akiyode-Lawanson

Allianz to provide insurance solutions in Olympic movements from 2021 Modestus Anaesoronye

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he International Olympic Committee (IOC) and Allianz have announced that the insurer will join the “Worldwide Olympic Partner” (TOP) Programme in 2021.

Through this sponsorship agreement, Allianz will work with the IOC to provide innovative and integrated insurance solutions to support the Olympic Movement, including the Organising Committees of the Olympic Games, with the ambition of providing those insurance solutions to the National Olympic Committees around the world and their Olympic teams and athletes.

The support will include existing products, such as fleet and property & casualty insurance, but also insurance solutions for future products and services, driven by technological changes.

The partnership will run from 2021 through to 2028.

The ambition of both partners is to use the power of sport to connect with new audiences via digital channels, including the Olympic Channel.

Engaging with the next generation in their preferred way gives Allianz the opportunity to cover their insurance needs.

Having supported the International Paralympic Committee since 2006, most recently as an international partner, Allianz will also become a “Worldwide Paralympic Partner” from 2021 as part of this agreement.

IOC President Thomas Bach said: “This new partnership demonstrates the global appeal and strength of the Olympic Movement, and we are delighted to be working together in the long term with Allianz to support sport around the world. Allianz has built a global business founded on trust. With this partnership,

together we are building a foundation based on mutual trust.

Allianz also has a strong sporting heritage and, in line with the Olympic Agenda 2020, we share a digital ambition of connecting with young people around the world to promote the Olympic values and the power of sports.”

Allianz CEO Oliver Bäte said: “I am thrilled that we are joining a global community of athletes and people enthusiastic about sport and team work – in addition to our existing strong partnership with the International Paralympic Committee (IPC). Through the IOC’s digital and social channels, we can connect with more people than ever before and offer them our expertise in insurance. We believe the world is a better place when people have the courage to leave differences behind and stand together to achieve better outcomes for themselves and for the societies they live in.”

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ompexAfrica, an online market place for businesses on sale has upgraded its digital solution to enable accurate valuation in the Nigerian business ecosystem.

The company which is built to deploy technology with extensive capacity to connect a wealth of capital seekers and business sellers to capital suppliers and business buyers respectively, says that the newly upgraded tool will allow for business owners to determine the fair value of their business based on current and future cash flows generated from and expended on existing business

assets and liabilities.

Speaking on the tool capabilities, Chukwudumije Igwe, chief operating officer CompexAfrica, says “Our business valuation tool is well suited for commercial and regulatory purposes. Some of which includes; raising capital from investors, measuring business position / performance and preparation of annual financial reporting requirements.”

On the tool uniqueness, Igwe says, “The easy to use nature of the CompexAfrica business valuation tool ensures minimal input from professional advisers, it’s a cheaper alternative to traditional business valuations and its online availability makes it more accessible.

The incorporation of previous

performance records and identifiable growth patterns directly into the valuation methodology reduces the need to develop separate business cash flow projections and minimizes the subjectivity involved in valuing a business. This reduced subjectivity makes the results more reliable for commercial and regulatory purposes.”

CompexAfrica received seed money and incubation from Sasware, the technology investment subsidiary of Signal Alliance. Leveraging on Signal Alliance’s over 20 years’ experience in the tech industry, the company seems well positioned to continue to deliver innovative solutions to fill the gaps in Nigeria business environment.

ECA, AfDB, INSEA partner to launch agricultural statistics HOPE MOSES-ASHIKE

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he Economic Commission for Africa, the African Development Bank (AfDB) and the National Institute for Statistics and Applied Economics (INSEA) of Morocco have launched a joint training on agricultural statistics.

Agriculture currently contributes more than 40 percent of Africa’s GDP and employs more than 70 percent of its population while current priorities include the Sustainable Development Goals and regional in-

tegration through Agenda 2063.

“Statistics will play a key role as a measurement and control tool to observe countries’ progress towards these goals”, said Lilia Hachem Naas, director of the ECA Office for North Africa in her opening speech.

For a week, about 70 experts, trainers and officials from African national statistical institutes and Ministries of Agriculture will study and share their experiences in the field of agriculture, fisheries and aquaculture, and post-harvest loss statistics.

Some twenty countries benefit from the training includ-

ing Benin, Burkina, Burundi, Cameroon, the Central African Republic, Comoros, Congo Brazzaville, Congo DRC, Côte d’Ivoire, Gabon, Equatorial Guinea, Mali, Mauritania, Morocco, Niger, Sao Tome, Senegal, Togo and Tunisia.

The ECA African Center for Statistics is organizing this training in collaboration with the ECA Office for North Africa as part of the UN Global Strategy to improve agricultural and rural statistics-Action Plan for Africa; and in support to the implementation of the Sustainable Development Goals in the region.

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COMPANIES & MARKETS Bank overdraft erodes earnings as Briscoe records losses David Ibidapo

T

he half year of 2018 appears not too good for Briscoe plc as the company has recorded loss in its earnings when compared to H1 2017.

Profits of the firm were largely affected by higher levels of bank overdraft recorded in 2018 as compared to 2017 period.

According to its financial reports released by Briscoe to the Nigerian Stock Exchange (NSE), the company further saw its loss after tax increase by 32 percent from N1.15 billion in H1 2017 to N1.53 billion in H1 2018.

Meanwhile, higher bank overdrafts recorded in the

first half of the year pushed up net finance cost recorded by the firm. Net finance cost was up 66 percent from initial cost of N1.01 billion in H1 2017 to N1.68 billion in H1 2018.

BusinessDay analysis of Briscoe’s finance cost components reveals that the firm’s continued withdrawal from bank account was in excess of N11.4 billion compared to N6.99 billion recorded in previous year. To this end, bank overdraft for H1 2018 represented 88 percent of N12.9 billion total borrowings for the period.

Amount realised from the issuance of commercial papers for the period declined significantly by 67 percent from N4.69 billion to N1.53 billion.

As a result of increased bank overdraft by Briscoe plc, interest paid on bank overdrafts and loans surged 122 percent from N667 million to N1.48 billion in H1 2018 leading to finance cost upwelling by 66 percent from N1.02 billion to N1.71 billion in H1 2018.

Stocks of the firm appear to be underperforming as stock prices have declined 8 percent YTD from N0.50 to N0.46.

A look into past reports revealed that the company has consistently recorded loses since 2015 till date and recorded downward trend in its share prices since 2014.

RT Briscoe Nigeria Plc is a leading provider of automotive products, industrial equipment and real estate.

Ford Foundation plans capacity building for Aba shoemakers, others …As BoI kick starts loan scheme to support artisans GODFREY OFURUM, Aba

F

ord Foundation West Africa, one of the largest and most influential private foundations in the world, is to improve capacity of artisans in the Aba finished leather cluster, comprising shoe, bag and belt makers, BUSINESSDAY reliably gathered.

This is to enable majority of the artisans to qualify for the N500 million Bank of Industry (BoI) loan to support the sector to produce seamlessly and improve quality.

As a strategic partner on the programme, Ford Foundation would ensure the provision of capacity development activities to the artisans to align with the organisation’s focus, to promote equality, ensure inclusive economic and free expression for citizens.

The Bank of Industry (BoI), in August, officially launched the N500m Aba finished leather goods (FLG) cluster financing programme.

The Aba FLG Cluster Financing programme provides

affordable working capital credit to qualified members of the Leather Products Manufacturers Association of Abia State (LEPMAAS) with the aim of affording th artians the opportunity to reduce the level of manually completed tasks, by purchasing small scale production tools.

It will also help improve quality of finished leather products and promote job creation within the cluster.

About 1,000 artisans in the cluster, comprising shoe, belt, bag and trunk box makers and 10 service providers are expected to benefit in the first phase of the programme.

Successful artisans in the FLG cluster will each get a minimum of N300,000 loan, for working capital, while 10 service providers, would get N10 million loan, each, for procurement of equipment.

About 600 entrepreneurs in the cluster have so far applied for the loan, only about 20 people have benefited from the programme, due to irregularities in documentation.

BoI in September, 2017, signed a memorandum of Un-

derstanding (MoU) with the Aba finished leather cluster, represented, by the Leather Products Manufacturers Association of Abia State (LEPMAAS), an association of shoe, belt, bag and trunk box manufacturers in Aba, to support the sector to boost local production of finished leather goods.

The agreement, which was facilitated, by the Market Development in the Niger Delta (MADE) a DFID sponsored project, entails that the BoI, would provide funding for the Aba finished leather cluster, to produce seamlessly, as well increase their volume of production.

Betsy Obaseki, managing director, BoI Investment and Trust Company Limited, in an interview with BUSINESSDAY, described Aba, as a potential hub for finished leather goods with good prospects to put Nigeria on a global shoe manufacturing map.

She expressed joy over the collaboration, which according to her would give the cluster financial advisory and funding support with the intention to grow the sector, improve quality and quantity of their products.

Thursday 20 September 2018

BUSINESS

COMPANIES & MARKETS

DAY

17

Business Event

Global steel production, consumption growth to slow – Fitch MIKE OCHONMA

G

rowth in global production and consumption of steel is expected to slow over 2018/19, following a significant rebound since early 2016, Fitch Solutions Macro Research’s said in a report.

Under the report ‘Global Steel Outlook’, the global market will post a narrowing deficit of 7.4 million tonnes this year, following 2017’s deficit of 10.7-million tonnes.

The global surplus is forecast to average 700,000 tons from 2018 to 2027, compared with an average deficit of 1.9 million tonnes from 2013 to 2017.

Global production growth will remain positive at 1.9 percent for this year, notwithstanding slower than production growth

from 2016 to 2017.

China will remain the driving force behind global steel production, but India is posited as the global steel production growth bright spot, with the country’s share of global steel production to rise from 6 percent this year to 8.6 percent in 2027; with output growing from 106-million tonnes this year to 173-million tonnes by 2027.

Production in the US and Europe will continue on 2016’s gradual recovery. Rising protection will play a part in this recovery, especially in the US. Overall, this will drag prices lower over the next five years, states the report.

Global steel consumption will grow by 4.2% this year and by 2.2% in 2019, compared with 5.1% in 2017, and is expected to increase from 1.79 billion tonnes this year to 2.01-billion tonnes

by 2027.

A slowdown in China’s construction-centric demand is expected to offset a modest acceleration in developed economy demand and relieve the tightness that has developed in the global market.

The country’s consumption is forecast to grow by 7.1 percent this year, with infrastructure continuing to be the driving force.

India is not expected to post strong steel consumption rates over the coming years, averaging a yearly growth of 5.4 percent from 2018 to 2027.

US consumption, meanwhile, will accelerate in the coming years owing to infrastructure spending picking up, following a decade of stagnation.

Consumption in other major economies, including Japan and South Korea, will remain relatively weak.

L-R: Permanent Secretary, Ministry of Tourism, Arts and Culture, Fola Adeyemi; Honorable, Commissioner for Tourism, Arts and Culture, Lagos State, Steve Ayorinde; Director-General, National Council of Art and Culture, Otunba Segun Runsewe and Sales and Marketing Manager, Southern Sun Ikoyi, Ubong Nseobot at the 14th edition of the AKWAABA Africa Travel market in Lagos in which Southern sun Ikoyi was an Exhibitor

NIBSS, DigitalJewels advances software capacity development for financial ecosystem KELECHI EWUZIE

N

iger ia Interbank Settlement System (NIBSS) Plc as part of its commitment to render improved payment service platforms with better value proposition that will comply with international best practice has announced the commencement of its maiden Hackathon competition for software developers across the country.

Hackathon 2018 hosted by NIBSS and managed by DigitalJewels Nigeria limited is a social coding event that brings computer programmers and other interested people together to collaborate intensively on software projects.

Uchenna Nwanyanwu, Hackathon Project manager while speaking about the competition in Lagos said the objective of

this first edition is to develop solutions that will identify and implement different finger print authentication and validation methods.

Nwanyanwu says the competition will also provide solution to payment innovation using fingerprint authentication and also provide valuable collaboration with stakeholders and partners in banks and Fintech.

According to him, “NIBSS’s Hackathon will focus on authentication, identification and validation with fingerprints”.

“This is because of the global adoption of biometrics as means of identification due to the accurate identification and accountability easy time saving and safe for use; user- friendly systems, scalable and secure and convenience and versatility”.

He says the Hackathon portal for interested software developers to register their innovative ideas will be open till Friday 21st

September. The developers are expected to register as a group. “It is not a competition for individuals. Each group should be made up of a minimum of two people.

They can use any programming language of their choice. The groups with the best ideas will be invited for briefing on 29th September, 2018.

He further said that on the 6th of October, the competition proper will start with the grand finale holding on the 7th of October where the selected final groups will pitch their ideas for selected judges drawn from across all sectors of the economy.

At the end of the competition, the group with the best idea that meet the judges’ evaluation will go home with three million naira while the second position and third position will also be rewarded with two million naira and one million naira respectively.

Top corporates, NGOs to receive African Quality Achievement Awards

I

n recognition of their Management Best practice to analysis, planning and implementation and control of policies, The African Quality Achievement Awards has concluded plans to honour selected profit and non- profit making organisations.

The award is aimed at identifying, recognising and rewarding companies, personalities and products that apply Quality Culture to achieve corporate objectives. Ifeoma Emeka, award general secretary says the award is an annual event initiated at celebrating leadership innovation and creativity in quality management in Africa.

Emeka says the event scheduled for 28th September 2018 at Sheraton Hotel & Tower is initiated by the Africa quality institute in collaboration with World Quality Alliance, a global quality organisation consultant with the support of the Chartered Quality Institute (U.K) and Pan Africa Quality Organisation.

She observe that quality is important to our everyday life adding that quality brings to mind terms like inspection, process control, auditing, standards and ISO 9000.

According to her, “Management systems and continuous improvement, customer satisfaction and market focus,

teamwork and the well-being of employees”, are key to corporate success. The winner of the award will be published in major African media like Africa investor, Africa Reports, Africa Business, and Business Africa Journal as well as major electronic media that has international coverage.

“A special quality journal called Quality Standards featuring the awards recipient will be published and delivered to the award winners on the Award day. While the current award will be held in Nigeria, subsequent ones will hold in any of the other African counties such as South Africa, Ghana, and Egypt”, she said.

L-R, Dangote Cement Plc, Ibese Plant General Manager Ham/ Admin, Abdumalik Sehhu,HRM Oba Gbadebo Oni, Olu of Imasayi, HRM, Oba Adio Kusoro, Olu of Aga Olowo, HRM Oba Mathew Ajibulu, Olu of Onigbedu,Adele of Ijako Orile,Tokunbo Akinsanya, Jointly Present Scholarship Award to one of the Beneficiary,Olorode Funmilola, Student of National Open University , at The Dangote Cement Plc, Ibese Plant Presentation of 2018/2019 Scholarship Award to the Host Community Students in Ibese over the weekend

L-R: Niyi Ajao; executive director, Business Development, Nigeria Interbank Settlement Systems (NIBSS), Ade Shonubi; managing director and Christabel Onyejekwe ; executive director, technology and operations during a media briefing on the forthcoming Hackathon to develop new Innovation using fingerprint authentication in our payment system, in Lagos. from Yahoo Mail on Android

L-R:. Opeyemi Agbaje, CEO, RTC Advisory; Fidelis Ayebae, CEO, Fidson Healthcare Plc; Kola Ayeye, CEO, GDL; Nadu Denloye, Chairman, GDL; Oye-Hassan Odukale, MD/CEO, Leadway Assurance Company Limited; Simon Aranonu, Executive Director, Bank of Industry; and Adedotun Sulaiman, executive chairman, Arian Capital Limited at the GDL business conference in Lagos

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Thursday 20 September 2018

BUSINESS DAY

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Investor

19

In association with

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

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (17 – 08–18)

35,266.29

N12.941 trillion

2,527.30

1,572.19

809.92

Week close (24 – 08–18)

35,426.17

N12.933 trillion

2,527.30

1,544.54

809.92

Percentage change (WoW) Percentage change (YTD)

0.45 -­7.37

3.15 1.66

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

835.80

296.07

2,428.66

1,716.66

1,314.12

817.57

295.38

2,455.40

1,750.30

1,288.23

NSE Banking Index

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

1,746.68

475.44

139.37

1,589.77 1,582.08

438.14

137.87

424.84

138.95

NSE 30 Index

-­1.76

0.00

-­0.48

-­9.87

-­25.51

-­9.42

-­3.04 -­10.64

0.78 -­0.30

976.10

-­2.18 -­16.24

-­0.23

1.10

1.96

-­1.97

-­10.68

-­4.10

-­11.40

-­6.63

Investors still make money in stocks …C&I Leasing, CCNN, Cutix, Fidson, NEM, others HEANYI NWACHUKWU

T

hough the ‘losing spree’ seen reign lately on Custom Street resulted to negative return of 15.80percent year-to-date (ytd) but the reality is that some longterm investors still reap from capital appreciation seen in some stocks.

INVESTOR check on analysts’ stock price list for September 17 revealed that some investors have reaped bountifully in the stocks, chief among them are C&I Leasing Plc, Cement Company of Northern Nigeria Plc, Cutix Plc, Fidson Healthcare Plc, and NEM Insurance Plc. Truly, many stock investors are cautious in approaching the nation’s bourse after a record loss of circa N2trillion this year, but the best time to invest is when stock prices are declining. The value of listed stocks on the Nigerian Stock Exchange (NSE) had opened this year at N13.609trillion but closed at N11.781trillion as at Monday September 17, 2018.

C&I Leasing Plc stock price at N3.15 represents an increase of 144.2percent this year; Cement Company of Northern Nigeria Plc at N22.60 represents an increase of 137.9percent; Cutix Plc at N4 represents 99percent in ytd gain; Fidson Healthcare Plc at N6 has

gained 62.2percent this year; while NEM Insurance Plc at N3 represents 80.7percent in ytd capital appreciation.

These growths show that the stocks defied the negative trend seen on stocks trading floor to offer impressive returns to investors in form of capital appreciation.

Other stocks that have increased in prices this year include AIICO Insurance Plc (53.8percent); Beta Glass Plc (52percent); Caverton Offshore Support Group Plc (39.5percent); Cu s t o d i a n I n v e s t m e n t P l c (41.4percent); and Eterna Plc (49percent).

Likewise, investors have reaped gains from capital appreciation in Ikeja Hotel Plc (27.5percent); Learn Africa Plc (25percent); AXA Mansard (18.1percent); Nigeria Police Microfinance Bank Plc (24percent); Okomu Oil Palm Plc (18percent); Skye Bank Plc (34percent); Sterling Bank Plc

(34.3percent); and Unity Bank Plc (60.4percent).

“Considering that the market is currently in an oversold region, according to technical indicators, we expect investors to hunt for bargains on cheaply valued stocks”, Continues on page ...

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Investor

Helping you to build wealth & make wise decisions

United Capital investment views

Bulls call the shots as trade tensions ease

…Domestic Financial Markets Review and Outlook …Politics and EM rout continue to ‘hog the limelight’

B

ears continued to dominate sentiments on the Nigerian bourse as the All Share Index (ASI) shed a whopping 5percent week-on-week (w/w), exiting its 33,000 points thresholds to close the week at 32,327.6 points.

Year-to-date (YtD) return sank to -15.5percent while market capitalization decreased to N11.8trillion, upon losing N624.4billion. Furthermore, activity level heightened as average volume traded recovered 7.6percent to 192.2million units while average value traded rebounded 40.2percent to close the week at N3.6billion.

All sector indices logged weekly declines; the Industrial Goods (-7.6percent), Insurance (-5.9percent) and Consumer Goods (-5.4percent) indices bore the brunt of the bears bite on the backdrop of sell-off in WAPCO (-10percent), CCNN (-9.9percent), DANGCEM (-5.8percent), CORNERST (-11.1percent), AIICO (-10.1percent), CONTINSURE ( - 1 0 p e rc e nt ) , H R M A R K I N S (-15.8percent), DANGSUGAR (-13.1percent), NESTLE (-8.7percent) and FLOURMIL (-11.6percent).

The Banking (-4.4percent), Oil & Gas (-1.7percent) and Agriculture (-0.1percent) indices also trended southwards as declines in UBA (-6.3percent), STANBIC (-6.1percent), ZENI TH (-4.1p ercent), FO (-16.7percent), OANDO (-4.8percent) andLIVESTOCK(-4.8percent)weighed.

Investors’ sentiment remained underwhelming as indicated by market breadth which declined to 0.2x (previously 0.9x); 13 stocks advanced w/w while 57 declined w/w. Considering that the market is currently in an oversold region, according to technical indicators, we expect investors to hunt for bargains on cheaply valued stocks.

Macro Highlights and Outlook Aug-18 Inflationhigher,Minister of Finance resigns During the week to 14th of September 2018, the National Bureau of Statistics (NBS) published Nigeria’s Inflation report for the month of August; headline inflation inched higher - for the first time since Jan-17 - to 11.2percent y/y (in line with our forecastof11.2percenty/y).TheAug-18 number was 9bps higher than the rate recorded in Jul-18 (11.1percent y/y).

Elsewhere, the Federal High Court ordered NAICOM to halt the Oct-18 deadline for the implementation of its tier-based classification for insurance operators in Nigeria. In another development, the week ended with the announcement of the resignation of the Minister of Finance - Mrs. Kemi Adeosun - over the allegation relating to her NYSC certificate. President Buhari has, however, accepted the resignation and appointed the current Minister of State Budget and National Planning, Mrs. Zainab Ahmed to oversee the affairs of the ministry with immediate effect. This week, the domestic job market will be in focus as the NBS is scheduled to publish the Q4-17 & Q1-18 Employment by Sector report on Tuesday.

Money Market: CBN offers the longest OMO maturity in 12 months Markets remained sufficiently liquid, albeit with a light squeeze as OBB and overnight rates averaged 8.4percent compared to an average of 3.8percent in the preceding week.

Liquidity was braced by outflows from CBN’s wholesale FX intervention and OMO interventions (N193.7billion) which more than offset inflows from OMO maturities (N240.6billion) and

coupon payments on the March 2024 bond.

The CBN carried out only two successful OMO auctions during the week. Notably, the CBN offered a longer maturity (324-day) – the longest in over a year. Subscriptions during the auction were underwhelming (bid-to-cover: 0.4x) and the apex bank ended up selling only 25.9percent of its N400.0bn intended sale. OMO rates averaged 12.7percent during the week, compared to 11.3percent in the preceding week. In the coming week, inflows from OMO and NTB maturities (N400.7billion) are expected to hit the system but we expect the CBN to maintain its pace on OMO and FX interventions in the market.

Yields: Bears rule the roast amid CBN’s seeming desperation In the primary market, the Apex bank conducted its bi-monthly NTB auction, wherein it successfully refinanced N136.3billion. Demand was robust with an average bid-to-cover ratio of 1.6x compared to 1.0x in the previous auction. The auction was carried out at the following stop rates: 91-day (11percent versus 11percent at

as Brent price rebounded to $80/b during the week amid a sharp drop in U.S crude oil inventories and sanctions on Iran. Also, in a bid to support the naira, the CBN sustained its weekly FX intervention, selling $100.0mn in the wholesale FX market, further pressuring the nation’s FX reserves to $42.5billion as at Thursday. Thus, the parallel market traded sideways to settle at N360/$1, while the Interbank and Investors’ & Exporters’ FX windows inched lower marginally by 2bps and 12bps respectively to finish at N306.3/$1 and N363.2/$1.

Looking ahead, the outlook of the naira is expected to remain tied to the spate of CBN’s intervention in the spot and forward market, as well as the better price discovery in the I & E FX window. Also, we expect the sustained weekly FX intervention by the CBN to continue to put pressure on reserves.

Global Market Review and Outlook Global equities benefited from a slight fall in trade tensions between the U.S. and China. This was predicated on news-flow about the U.S. Treasury Secretary leading a new round of trade negotiations with China, as well as reports that the U.S government

RSA fund price of PFAs as at August 3, 2018 S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs.

Stanbic-IBTC Pensions Legacy PFA NLPC PFA PAL Pensions First Guarantee Pension Trustfund Pensions SigmaVaughn Pensions AIICO Pension Managers Leadway Pensure PFA APT Pensions Fidelity Pensions AXA Mansard Veritas Glanvlls Pensions OAK Pensions Investment One Pension Mgrs.

IEI Anchor Pension Managers Radix Pension NPF Pensions

the last auction), 182-day (12.3percent versus 12.3percent at the last auction) and 364-day (13.5percent versus 13.05percent at the last auction).

In the secondary market, three themes guided sentiments in the T-bills space during the week; firstly, expectations of higher stop rates at the PMAauctionguidedsomeearlysell-offs.

Secondly,CBN’selongatedoffering(324days)-whichmarketplayersinterpreted as a sign of desperation– also stocked somebearishnessandthirdly,the45bps hike on the 364-day tenor at the PMA auction. Consequently, average T-bill yieldinchedhigherby72bpstoclosethe weekat13.4percent.(91-day(up185bps to 13.6percent), 182-day (up 37bps to 13.3percent) and the 364-day (down 6bps to 13.5percent). Developments in the T-bills space basically guided sentiments in the bonds space. As such, average bonds yield edged higher by 31bps to end at 15.3percent.

We continue to hold a bearish outlook on the bonds space in light of the recent uptrend in inflation amid continued weakness in EM assets.

Nevertheless, we may see pockets of demand from locals looking to snap up bargains on the long end of the curve.

Foreign Exchange: Naira depreciates marginally across FX windows In the Foreign exchange market, the naira traded within a tight band across all the FX windows, depreciating marginally w/w even

CURRENT PRICE 3.9820 3.9805 3.9034 3.7542 3.6384 3.4638 3.4618 3.3070 3.2793 3.1244 3.0571 3.0502 2.7911 2.7460 2.7331 2.6680 2.5785 2.4792 2.3461 2.0434 1.4670

invited Chinese officials for another round of negotiations. These developments guided sentiments that the two governments were probably heading towards a truce.

Consequently, the S&P 500gained 1.2percent w/w, while the DJIA rose 0.9percent w/w. The tech-laden NASDAQ index also advanced 1.4percent w/w, following APPLE’s (+1.1percent) strong performance on its new launches.

Theeaseoftradetensionsbetween the U.S. and China also rubbed off on European stocks as the Pan European STOXX (+1.1percent), France’s CAC (+1.1percent), Germany’s DAX (+1.4percent), and UK’s FTSE (+0.4percent) all advanced w/w.

In Emerging markets, Turkey’s central bank ended up hiking rates to 24percent from 6.25percent, after its initial hesitance as the lira tumbled.

Sentiments across emerging markets were mixed. In China, monthly data readings signaled slowing growth which dampened trading sentiments (China’s SCHOMP -0.8percent).

Political uncertainties were the talking points for Brazil in light of the upcoming October-18 election.

Resultantly, Brazilian assets remained under pressure (Brazil’s IBOV -1.3percent). South Africa’s JALSH (-0.9percent), and India’s SENSEX (-0.8percent) also declined w/w while Russia’s RTSI (+4.2percent) index closed the week higher.

Investor’s Square •Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

GTI Economic Coverage

How far can the Nigerian stock market fall?

T

he Nigerian Stock Market began 2018 on a high, recording over 17percent in the first few weeks. This was on the back of strong optimism of sustained recovery and growth which was expected in global economies.

For Nigeria in particular, many variables were in our favour such as, rising crude oil prices, accruing FXreservesandrelativelystableFX. Despite these favourable conditions which still exist, Year to date (YTD), the stock market has performed poorly recording a negative. The first reason for this decline was the US double rate hike in March and June.

The second is the political risk associated with the upcoming Nigerian elections in 2019. All these have resulted in foreign portfolio investors exiting the country.

Considering the bearish state of the market, most investors have become very cautious. According to Warren Buffet, a seasoned investor who is among the Top 10 richest men in the world, this is the time to start investing in stocks. It is a known fact that the best time to invest is when stock prices are declining. But now the question is, how far will the Nigerian Stock

Market fall?

For now, it is almost uncertain to say when the market will stop its bearish trend and start its recovery, due to the many uncertainties that exist and are predicted to come globally and domestically. Some of these uncertainties include Crude Oil price fluctuations, Trade war initiated by the US, Expected increase in US rates, Nigeria’s Elections, etc.

However, we advise that investors can begin investing in stocks bit by bit, especially those with strong fundamentals. Some

of these stocks have declined by over50percentwhichmakesthem very attractive. Spreading your investments in such stocks at different low prices reduces your averageentryprice,increasingyour profit potential once it rebounds.

In 2019, our expectation for the performance of the stock market is bullish. We believe as the political situation of the country gets clearer and shows signs of stability the market will experience a rebound.

Inadditiontothis,webelievecrude Oilpriceswithinthisperiodwillnot fall below $60 which is positive for the country.

Investors still make money in ...

Continued from page 19

said United Capital research analysts in their September 17 note investment view.

In their latest recommendation, Afrinvest Research analysts anticipate bargain hunting in some stocks this week “as investors’ position for a rebound in the medium term”.

Afrinvest wants investors to ‘buy’ the shares of Access Bank Plc, ‘hold’ ETI Plc, ‘hold’ FCMB Group Plc, ‘reduce’ FBN Holdings Plc and Stanbic IBTC Holdings Plc, ‘accumulate’ Union Bank of Nigeria Plc, ‘reduce’ We ma Ba n k P l c , ‘ b u y ’ Dangote Sugar Refinery Plc, ‘reduce’ Nestle Nigeria Plc, and ‘buy’ Dangote Cement Plc. “Our outlook for equities in the near-to-medium term is negative, and we guide investors to trade cautiously, amidst absence of a nearterm positive catalyst and political jitters ahead of the upcoming 2019 elections.

However, macroeconomic fundamentals remain stable and supportive of recovery in the long term”, said Lagosbased Cordros Research analysts in their September 14 note to investors.

GTI Research believes that considering the bearish state of the market, it is rational to every discerning investor to tread with some degree of caution; though they noted that “according to Warren Buffet (a seasoned investor and the third wealthiest man in the world), such a time as this still presents a good opportunity to invest in stocks with good fundamentals.” “ We gu i d e i nve sto r s to trade cautiously in the shor t-to-medium term amidst continued s e l l o f f . H o w e v e r, w e believe investors can take advantage of the current cheap price(s) of stocks with strong fundamentals in order to reap mediumlong term benefits”, GTI

Re s e a rc h s a i d i n t h e i r September 14 note.

FBN Quest Research in its September 12 note said, “PenCom’s latest data do not point to a stampede into domestic equities. The NSEASI rose by 15.6percent in the 12 months to endJune while Asset Under Management (AUM) in the asset class increased by 21.6percent over the same period.”

“Revised Pencom regulations stipulate that retirement savings accountholders under the age of 49 must have at least 10percent exposure to equities by end-2018.

If we add foreign equities to domestic, we arrive at a total of 9.4percent at endJune in aggregate –that is accountholders of all ages including those with a smaller or zero requirements to hold equities. Those aged 50 or above represented 25.8prcent of total accountholders,” according to FBN Quest Research.

Thursday 20 September 2018

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Cordros Research company update

PZ Cussons Nigeria: Trading conditions remain tough heading into 2019

U May & Baker gets NSE nod for N2.45bn Rights Issue …T.Y. Danjuma, Odumodu, Dankaro hold more than 5% of issued share capital IHEANYI NWACHUKWU

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he Nigerian Stock Exchange (NSE) on September 10, 2018 approved the N2.45billion Rights Issue proposed by May & Baker Nigeria Plc. Listed on the pharmaceuticals subsector of the NSE healthcare sector, May & Baker Nigeria Plc manufactures and distributes pharmaceutical and consumer goods.

The company will be issuing to its existing shareholders 980million ordinary shares of 50 kobo each at N2.50kobo per share on the basis of one new ordinary share for every one ordinary share held (1 for 1).

Capital Assets Limited and Compass Investments & Securities Limited are stockbrokers to May & Baker Nigeria Plc proposed Rights Issue while Cordros Capital Limited and Afrinvest (West Africa) Limited are Issuing House(s)/ Financial Adviser(s) to the Rights.

The Rights Issue is priced at a premium when compared with N2.3kobo per share which the company’s stock closed as at Tuesday September 18, 2018.

Though, May & Baker

Nigeria Plc stock price had reached a 52-week high of N3.42kobo and 52week low of N2.05kobo.

The company’s current market capitalisation is N2.254billion with shares outstanding of 980million.

The Company commenced operations in Nigeria in 1944 after it was incorporated as a private limited liability Company and was converted to a public company in 1979.

It w a s l i s t e d o n T h e Nigerian Stock Exchange on November 10, 1994.

May& Baker unaudited consolidated financial statements for the half-year (H1) period ended June 30, 2018 released to investors at the Niger ian Stock Exchange showed group revenue at N4.609billion representing an increase when compared to N4.465billion in the same period of 2017.

The Company which manufactures and distributes pharmaceutical products such as diagnostic e q u i p m e nt, re a g e nt s, consumer products and human vaccines has three subsidiaries : Osworth Nigeria Limited, Tydipacks Nigeria Limited and Servisure Nigeria Limited.

Aside T.Y. Danjuma, G.I. Odumodu, and David Dankaro, no individual shareholder held more t h a n 5 p e rc e n t o f t h e

issued share capital of the Company as at December 31, 2017.

A look at those who have substantial interest in the company’s shares revealed that T.Y. Danjuma indirectly owns 254,841,302 units of May & Baker Nigeria Plc shares.

This is as follows : T.Y. Holdings Limited (238,928,128 units o r 2 4 . 3 8 p e rc e nt ) ; O i l Te ch Nig e r ia L i m i te d (12,127,133 units or 1.25 percent); and Osis Yuvic Limited (3,696,000 units or 0.38percent).

G.I. Odumodu indirectly through Seravac Nigeria Limited owns 54,124,958 units or 5.52percent of May & Baker Plc shares while directly he own 3,627,198 units or 0.37percent.

David Dankaro directly owns 56,023,695 units or 5.72percent of May & Baker Plc shares while through MayDav Multi Resources Limited, he owns 1,609,000 units of the company’s shares representing 0.16percent.

Also, the group gross profit increased to N1.515billion against N1.344billion in H1’17; operating profit increased to N587.3million from N452.2million in H1’17; profit before tax (PBT) also increased to N388.9million from N139.5million in H1’17.

Following shareholders’

approval at the Extraordinary General Meeting of the company held on November 23, 2017 and SEC approval on February 5, 2018 the foods division of May & Baker Nigeria Plc ceased operations and was subsequently disposed in April 2018.

The Federal Government had last year formalised its partnership with May & Baker Nigeria Plc for the production of vaccines with the signing of a Joint Venture Agreement (JVA) on Bio Vaccines Nigeria Limited.

In the first-half of this year (June to be precise), May & Baker Nigeria Plc signed an agreement with the National Institute for Pharmaceutical Research and Development (NIPRD) for commercial production of anti sickle cell drug, NAPRISAN. The federal executive council had ratified the memorandum of understanding (MoU ) between NIPRD and May & Ba ke r Ni g e r i a which led to the signing of the commercialisation agreement.

“We expect this product to be a commercial success and a leading product of our company as we intend to give it all the attention required,” said Nnamdi Okafor, Managing Director, May & Baker Nigeria Plc.

pdate: We update on PZ following a challenging 2018FY, with Q4 earnings particularly showing persisting difficult trading conditions.

PZ Group (the parent company) did confirm that trading conditions in Nigeria have been the “toughest” it has experienced “in many years”, with less optimistic outlook. In response, the group is implementing a number of revenue improvement initiatives, including cost savings, but the immediate impact on earnings is difficult to adapt into our model, given the extremely uncertain economic and consumer recovery, as well as inflation outlook.

Revenue improvement initiatives: The group said pack resizing and new launches have taken place across the HPC portfolio, with a view to improving revenue going forward.

In Electricals, a new range of energy efficient models “suitable” for the Nigerian market has been launched to offer a competitive hedge in 2019E. Overall, we believe the focus is on portfolio expansion, accessibility, affordability, and push for higher margin - a trend we have observed among our universe of local consumer goods companies. That said, for PZ, we are conservative with a forecast 5percent revenue growth in 2019E, as the group’s trading statement in June suggests trading conditions are yet to improve in Nigeria as at early Q1-19. However, we retained our average 10percent revenue growth forecast for 2020-2021E on better economic outlook, and as we expect the new launches would have gained stronger acceptability among consumers.

Margins. Focus on cost savings and mix: At 23.7percent in 2018FY (on LFL basis), PZ’s gross margins have now declined for three years in a row. EBITDA and EBIT margins have also weakened by over 500

bps each between 20152018FY. Margins have largely been impacted by low utilization and cost inflation, although management said that prolonged lack of liquidity at the consumer level, amidst intense competition, has resulted in lower prices across some HPC product categories. Elsewhere, opex is increasing at a faster pace than revenue at 6percent 3-year CAGR (vs. 3percent revenue CAGR), and way-above UNILEVER’s 1percent 3-year CAGR (with 3-year revenue CAGR of 18percent).

The margin improvement initiatives underway, according to management, cover (1) mix – focus on launching and pushing higher margin products and (2) cost savings – via reduction of packaging, overheads, and plastic consumption, as well as optimization of product portfolio across the HPC segment. We forecast gross, EBITDA, and EBIT margins to rise slightly to 24percent, 7.4percent, and 4.1percent respectively in 2019E (2018FY: 23.7percent, 7percent, and 3.7percent respectively), although we do not see these margins reaching the recent year highs of 28percent, 12percent, and 9percent respectively achieved in 2015FY over our forecast period.

Changes to earnings estimates and TP: Our adjusted PBT estimate is NGN3.2 billion in 2019E (-43percent), on lower revenue (-9percent), gross margin (-50bps), and net finance costs of NGN330.4 million (previously NGN184.5 million net finance income) estimates.

But on our revised TP of N14.60/s, the stock trades at 11.2percent upside, with HOLD rating. PZ’s stock has lost 41percent since we last updated in March with a SELL recommendation.

Whilst the company’s challenged earnings have been largely priced-in, we believe the stock’s current price is also reflective of the overall bearish market condition.

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BUSINESS DAY

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Thursday 20 September t 2018

Spending Trends

Samsonite tells retailers prices will rise on Trump’s tariff hit …Samsonite warns vendors that price hikes linked to new duties …U.S. imported more than $3 billion in luggage, travel bags

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he trade war arrived at Sun Y. Park’s doorstep the day a letter from Samsonite International SA was delivered to her Manhattan luggage and leather goods shop.

In the letter dated Aug. 13, Samsonite North America President Lynne Berard notified wholesale buyers that a 10 percent price increase is imminent if the U.S. follows through with more tariffs on Chinese goods -- a measure that’s been threatened for months and that will now take effect Sept. 24.

The levies will hit more than $3 billion in luggage and travel bags that’s imported by the U.S. from China.

U.S. President Donald Trump pulled the trigger late Monday evening to slap a 10 percent tariff on about $200

billion of Chinese goods that will be hiked to 25 percent next year. The new levies will send the retail industry brac-

ing for impact. While shoppers have been insulated from previous tariffs that hit prices for steel, aluminum

and other goods, the new round will include more products that Americans buy directly.

a costly market share battle with Amazon and Walmartowned Flipkart dominate the country’s online food market.

Bumper sales Outdoors retailer Kathmandu has reported a 32% net profit jump to AUD 50.5 million for the 2018 financial year. The dual Australia and New Zealand listed company said it would pay one-off performance bonuses of AUD 1000 to all permanent team members.

Lavish ambience Home furnishings stores are shaping up as fertile ground for restaurants. Have a look at RH’s (formerly Restoration Hardware) new location in Manhattan. Retailer Crate & Barrel, owned by Germany’s Otto Group, is going a similar way and will open its first instore restaurant soon.

African venture With an investment of EUR 7.6 million, Spanish grocer Mercadona has opened its first supermar-

ket (in Spanish)in the African continent in the autonomous city of Ceuta. The grocer plans to launch another outlet in the region. Click here for a video clip of the store.

Leadership appointments in Europe Carrefour has revealed that digital chief Marie Cheval will take the helm of its French hypermarket stores. Meanwhile, UK wholesalers Today’s Group and Landmark has unveiled the leadership structure of the newly formed Unitas Wholesale with Sam Wilcox and Simon Hannah appointed as chair and deputy chair respectively.

Political impacts Britain’s sixth largest supermarket group, The Co-Operative, has sparked concerns after it revealed it cannot assure customers there wouldn’t be food shortages on some products, in the event of a ‘no deal’ Brexit.

“We just don’t think tariffs are the right approach,” Jon Gold, vice president of supply chain and customs policy for the National Retail Federation, said in an interview on Monday before the tariffs were announced.

“There certainly is concern going forward on the impact of the tariffs: The tariffs are paid by U.S. companies and then they’re passed onto the consumer.”

Wider Scope The wider scope of the latest tariffs means that merchandise ranging from handbags to rain gear to refrigerators are likely to start costing more for U.S. shoppers. Suitcases, travel and sports bags will also face levies. Samsonite brands including its High Sierra backpacks and American Tourister luggage will be subject to the price

hike, it said.

Samsonite is ready to act, with a price increase of 10 percent on new shipments starting on or after the date that tariffs go into effect, according to the letter. Increases on orders from warehoused inventories will start 30 days after that date.

The company declined to comment on the letter and its pricing plans.

Park, the owner of Mitsosa Luggage in midtown Manhattan, said she will have to pass the higher prices on to consumers. She’s concerned that other brands could follow suit with their own hikes.

“It’s not good,” said Park, when asked about the higher prices. “Samsonite is a worldwide brand, so we definitely have to have it. It’s the most popular.”

Culled from bloomberg

Global retail update

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atering to the needs of time-strapped consumers either through offering meal and delivery options is a must for retailers to stay on top of their game. British grocer Morrisons and US online retailer Peapod reveal their latest foodservice moves. American home furnishing chains bet on in-store restaurants and Starbucks partners with Ubereats.

Also, An Australian e-commerce Company has hosted an unusual online shopping event that attracted thousands of participants and Canada Goose is connecting with consumers by offering an immersive retail experience.

Below are the updates Ambitious plans in Europe Lidl increases its investment in Romania. The German discounter aims to grow by “15 stores per year”, and intends to move into rural areas. Currently, the retailer operates 230 outlets across the country and will open five more stores this year, and a further 20 locations next year.

Strategic decisions Britain’sTesco plans to close a series of city centre stores and convert dozens of others to its new discount format, putting thousands of jobs at risk. Meanwhile, Dublin-based retailer Dunnes Stores has reportedly ended talks to buy upmarket Irish grocery chain Donnybrook Fair.

Food service offer Following its rivals into the highly competitive meal kits sector, British grocer Morrisons has launched food delivery service Eat Fresh. The supermarket group has also sealed a supply partnership with Thai grocery chain Big C as part of its inter-

national wholesale strategy.

Powerful partnerships in US, Canada US retailer Staples will acquire office and workplace supplies wholesaler Essendant for USD 996 million. Online grocer Peapod has teamed up with a leading Chicagoland meat purveyor to offer its customers a ‘virtual butcher shop’, and Starbucks is testing delivery options in Florida in partnership with Uber Eats.

Shopping features Amazon has launched Storefronts, a new store that allows customers to shop exclusively from small to medium-sized businesses in the United States, with a variety of product categories. Social networking service Instagram makes it easier to shop with two updates to its app.

Eyeing the cannabis market Coca-Cola is looking into a marijuana soft drink and reportedly discussing a cooperation with Canada’s Aurora Cannabis. The soft drink giant is the latest beverage company to tap into surging demand for marijuana products as traditional sales slow.

Sharing data in Asia, Australasia As part of its effort to revolutionise global commerce, Chinese e-commerce major JD.com is offering its big data analysis capabilities to offline retailers through a new service platform, called Zu Chongzhi, which is said to help them with every step of the retail process.

Merger talks Indian grocery start-up BigBasket and competitor Grofers have revived negotiations for a merger as their investors, Alibaba and Japan-based SoftBank, look to join forces, ahead of

Price, screen size, camera matter as Apple releases new iPhone brands BUNMI BAILEY

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pple, the world’s largest information technology company unveiled three of its latest new iPhone in the market last week which are iPhone XR, iPhone XS and iPhone XS Max BusinessDay analysed and compared these apple products based on price, screen size, camera, display technology, weight and color.

Starting with the cheapest among the three phones is the iPhone XR which costs $750.It has a screen size of 6.1 iches and its body size is slightly smaller than iphone 8 plus. Its camera has a single 12 MP, smart high dynamic range (HDR). The display technology is LCD with 120Hz.It has a weight size of 6.84 ounches. It comes with different colors such as blue, white, black, yellow, coral and red Then there is the iPhone XS which is relatively more expensive than the iPhone XR. It is priced at $1,000. It has a screen size of 5.8 inches and its size is just about the size of iPhone X. One unique thing about this is that it is a dual-Sim support. Most

iPhones are known to just be a single sim but this one is different. The camera is a dual 12 MP, one lens for 2X zoom, smart HDR. Display tech is LCD, 120Hz and has a weight of 6.24 ounces. Colors are available in sliver, space grey and gold.

The iPhone XS Max is the most expensive one among the three phones. With a screen size of about 6.5 inches, it is currently priced at $1,100.it has the same camera size, display tech and colors has the iPhone X. The Max phone is about the same size of iPhone 8 Plus and its weight is about 7.34 ounces.

Please note that the pricing of these phones ranges is based on internal storage.

These iPhones have internal storage of 64gigabyte (GB) These latest Apple products is a big moment for the tech giant, which shook up its iPhone range in 2017 when it introduced the iPhone X, iPhone 8 and iPhone 8 plus.

According to the company, preorders for the iPhone XS and XS Max begun last week Friday. The phones will be on sale this Friday, September 21st.The iPhone XR pre orders will begin in October 19th and will be going on sale on October 26th.

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IFA 2018: LG Centum system raises bar on energy efficiency

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G Electronics (LG) has raised the standards with the unveiling of its new bottom-freezer refrigerator at IFA, the world’s leading trade show for consumer electronics and home appliances.

The innovative bottomfreezer refrigerator with market-leading energy efficiency, durability and an array of convenience-enhancing features stands out from the competition.

The refrigerator, which is the first in the industry, comes with a 20-year warranty for its internal compressor. With centum system technology inside, this appeals to consumers desirous of an advanced, efficient and durable refrigerator.

These benefits are achieved by integrating several advanced technologies to form dynamic customer-oriented solutions. The refrigerator’s powerhouse is the LG Inverter Linear Compressor which is 32 percent more energy efficient than conventional compressors. ‘‘This and a range of other efficient features combine to cut the bottom-freezer refrigerator power consumption and give an energy rating of A+++-40 percent, far superior to the competition,’’ the company said. ‘‘This means that the refrigerator uses 40 percent less power than models with an A+++ energy rating and will make it easier than ever to save on electric bills.’’

According to LG Electronics, the advanced Inverter

linear compressor significantly boosts reliability and durability. ‘‘Rigorous product testing found that LG’s Inverter linear compressor-equipped Centum System refrigerator was subject to notably less wear and tear from daily use while also producing up to 25 percent less noise,’’ said the company. ‘‘This same research also placed the average lifespan of the refrigerator’s core technology at roughly 20 years, far exceeding the competition.’’

Internally, the new Centum System bottom-freezer refrigerator is also equipped with a range of freshnessenhancing features that put LG’s user-oriented philosophy into practice. ‘‘Linear cooling™ keeps

temperature fluctuation within ±0.5˚C while Fresh Balancer and Fresh Converter give users simplified control over the humidity and temperature to create ideal conditions for each food type. ‡ In addition, DoorCooling+™ circulates cold air from the top of the machine to ensure uniform temperatures even in hard-to-reach areas like the front door basket.

With elegant design cues befitting its advanced internal technology, Centum System bottom-freezer refrigerator boasts stunning matte black and stainless steel finishing.

The seamless metal touch display on the front and full metal designed interior complete the design by adding a subtle touch of unique elegance.

“LG has long worked to develop a bottom-freezer refrigerator that set new standards in not just energy savings and durability, but also design and the new Centum System bottom-freezer refrigerator represents the culmination of these efforts,” said Song Dae-hyun, president of LG Electronics and Home Appliance & Air Solution Company.

“Our premium Centum System bottom-freezer will help cement LG’s long-standing leadership in the global premium refrigerator market.”

The company said visitors to its IFA booth in Hall 18 of Messe Berlin from August 31 to September 5, had a chance to see the new bottom-freezer refrigerator, and other home innovations for themselves.

BUSINESS DAY

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Retail petrol price hits seven-month low BUNMI BAILEY

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he average retail price of petrol has risen for the first time this year, after a seven month decline, according to a rencent National Bureau of Statistics (NBS) Premium Motor Spirit (PMS) monthly report.

Based on the report, it reduced marginally (monthon-on month) by 0.1 percent to N146.90 per litre in August 2018 from N146.80 in July 2018.

Johnson Chukwu, CEO, Cowry Asset Management Limited, said “Well what I think may have happened is that in some states, there must have been some distribution bottlenecks properly in the northern states as a result of the destruction of transport infrastructure by the insurgency in the north east region and we also know that there was armed theft in some northeast states like Zamfara and Sokoto.”

“The level of insurgency may have constrained the distribution of petrol products to those states and that may have affected their prices in those states. So I think it is more of destruction bottlenecks and not necessary because there was not enough petroleum products available in the country,” Chukwu said.

Since the beginning of the year, it had been on a decline till it picked up in August. In January, it was N190.9 per litre, in February it fell to N172.5 and in March it was N163.4.

In April it was N151.4, in May it fell to N150.2, in June it was at N148.1 per litre, in July it was N146.8 and in August it was 146.9.

States with the highest average price of petrol were Borno which was N157 per litre, Kebbi had N152.9 and Kwara had N152.9.

In addition, states with the lowest average price of petrol were Ekiti which had N144.2, Katsina had 144.1 and Bauchi and N143.89.

Living under poverty line How Nigerians are struggling to survive

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

Cancer patient needs help to pay medical bills Name: Patricia Ebenuwa State of Origin: Delta Age: 38 Dependents: Parents and siblings Occupation: Trader After trying to get a job with my University degree without success, I started dealing in female clothing and accessories. With the proceeds from the business, I took care of my aged parents and siblings. But I quit trading when I took ill and all the money I had went on medical bills.

What was the nature of the illness?

I was diagnosed of cancer of the breast in June 2017 at Lagos University Teaching Hospital, LUTH. I completed

my chemotherapy in January, 2018 and had a mastectomy (surgery to remove the breast) in April, 2018. My doctor said I need at least two sessions of chemotherapy before I could proceed to Abuja for radiotherapy, but I am still trying to raise money for both the chemotherapy and radiotherapy.

What is the cost implication?

I need N188,000 for chemotherapy, and radiotherapy costs N600,000. I have to travel to National hospital in Abuja because that’s only hospital that has a functional radiotherapy machine in the country. I still have to worry about transport fare and where to stay for a month

while receiving radiotherapy.

How have you coped so far?

It has not been easy.

When I exhausted all my savings, I had to rely on my

poor family for financial aid. My family has incurred over N800,000 debt since I

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Fifen Famous

commenced treatment last year, and they can borrow no more because no one is willing to lend.

What’s your greatest challenge?

I spent all I have, and had to go borrowing for more to enable me pay for my medical bills. My family and I are currently in debt, but the treatment is not yet over. I was told to commence chemotherapy after which I have to go to Abuja for radiotherapy. All these cost the money that I, my aged parents and siblings don’t have. I am appealing to kind-hearted Nigerians to assist me get this treatment so I can return to business and be able to take care of my family.

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Thursday 20 September 2018

Why Africa doesn’t have 5 years for 5G internet readiness FRANK ELEANYA

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ecently, at the I T U Te l e c o m World 2018 in Durban South Africa, MTN’s CEO, Rob Shuter laid Africa’s vulnerabilities bare in an interview with Reuters.

For him, Africa is simply not ready for next-generation 5G network but would likely be able to embrace the super-fast technology in the next five years.

The African continent for many years has played catch up in nearly all major technological development known to man. The first television set, computer, laptop, mobile phones, smartphones, internet; 2G networks up to 4G network, have all arrived on the continent years after other people have begun using them.

It is therefore not surprising that as countries in other continents are putting plans in place for 5G technology, Africa’s readiness clock is once again set 5

years in an unknown future.

Would the rest of the world wait for Africa to make its way up a five years ladder before they move on to other things?

What is 5G? 5G is the name given to the next generation of mobile data connectivity, succeeding 4G. It is designed to greatly increase the speed and responsiveness of wireless networks. It is important to note that 4G network is still getting faster, but with 5G, data transmitted over wireless broadband connections could travel at rates as high as 20 Gbps by some estimates – exceeding wireline network speeds – as well as offer latency of 1 ms or lower for uses that require real-time feedback.

The International Telec o m mu n i cat i o n Un i o n (ITU) sees 5G as an opportunity for policy-makers to empower citizens and businesses. When deployed, 5G is expected to build on the successes of 2G, 3G and 4G mobile networks, which have transformed societies,

The ITU projects that commercial 5G networks will start to deploy after 2020. By 2025, the GSM Association (GSMA) expects 5G connections to reach 1.1 billion, some 12 per cent of total mobile connections.

supporting new services and new business models.

“5G provides an opportunity for wireless operators to move beyond providing connectivity services, to developing rich solutions and services for consumers and industry across a range of sectors – at an affordable cost,” the ITU noted in a report released at the forum in Durban.

The world is not waiting Come 1 October 2018, Ve-

rizon will be demonstrating how affordable the technology can be in the US with the launch of its 5G Home with speeds of 300 Mbps and peak speeds of 1 Gbps at $50 a month. The company has promised to thrown in free router installation, three months of complimentary service, a free Chromecast or Apple TV 4K, and three months of free YouTube TV for first signups.

There are already discussions around regulation be-

Winners emerge at Cashless Lagos Hackathon CALEB OJEWALE

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hree winning solutions have emerged from the Cashless Lagos Hackathon organized by Visa, a global leader in digital payment, in partnership with the Lagos State Employment Trust Fund (LSETF).

The three teams; Blended, Maverick and LagosPay, were according to the organizers, selected based on impact, design, innovation, user-interface and customer validation.

The finalists emerged after a three-day hacking boot camp hosted at the Vibranium Valley in Lagos, beating three other contenders to emerge as champions.

Team Blended won the grand prize of N2 million with its solution that allows merchants get validation of transactions via USSD with mobile phone numbers as User pass and authentication.

Maverick took the second position of N1million with a mobile-based solution that allows merchant pay in advance for services, schedule appointments, while also helping them keep track of

their payment inventories.

The third prizewinner, LagosPay developed a solution that collects payments electronically, by leveraging already existing payment channels, and incentivizing payments with rewards and points, clinching a N500, 000 reward in the process. The grants are to be used for the development of the solutions, courtesy of Visa.

Kemi Okusanya, general manager, Visa West Africa, while speaking at the event, expressed Visa’s deep commitment in ensuring that

merchants have access to innovative technologies to make and receive payments.

“We constantly strive to reduce reliance on cash, and encourage the development of a digital payments ecosystem for both individuals and businesses. I am very impressed with the quality of solutions developed by these teams and look forward to seeing them adopted by businesses across Nigeria,” said Okusanya.

Also speaking, Akintunde Oyebode, the executive secretary LSETF, expressed plea-

L-R: Akin Oyebode, CEO, LSETF; Bunmi Akinyemiju, CEO Venture Garden Group; Ibiang Okoi, first prize winner, Visa LSETF Cashless Lagos Hackathon; Kemi Okunsanya, General Manager, Visa West Africa; at the 2018 Cashless Lagos Hackathon in Lagos recently.

tween providers of 5G and regulators in the US and China. China is reported to have made 5G a priority after failing to keep pace with Western countries in developing previous generations of mobile networks. The US dominated 4G, built in the late 2000s, while Europe controlled 3G standards. To keep up with its 5G ambition, China has since 2015 built about 350,000 cell sites, compared with fewer than 30,000 in the US.

Where is Africa?

Largely, many countries in Africa are still hugging and kissing the ‘wonders’ of 2G and 3G networks.

The reality is widespread 4G and 5G networks adoption could elude the continent beyond the target 5 years so long as infrastructural development in many African countries remains a bye-word. However, creating an enabling environment for private operators could significantly change the trajectory of the continent in technology. Vodacom in August launched the first commercial 5G network in the tiny kingdom of Lesotho.

Although the launch is very limited, it demonstrates the possibilities of a private sector led strategy.

But is the continent ready?

DellEMC to support new age banking summit sure with the winning teams and the possibility of using these solutions to solve payment issues experienced by small businesses. According to Oyebode, “If we are able to help businesses optimize payments and grow, it will not only improve the State’s economy, but also create new jobs.

“Lagos Innovates will continue to build platforms that develop homegrown technology solutions usable in Nigeria and beyond. I will like to thank our partner, Visa; and other implementation partners, Passion Incubator and Venture Garden Group.

This hackathon further demonstrates how partnerships between Government and socially responsible companies can spur development and create double or triple bottom line impact.”

The hackathon hosted an array of Nigerian software developers, programmers, coders, data specialists and designers who developed technology-based financial solutions to allow MSMEs make and receive payments, make bulk purchases and keep transaction inventory.

D

ellEMC has announced it would be lending its support to the New Age Banking Summit, scheduled to hold in Lagos this month, as part of efforts to keep banking services in Nigeria at par with global trends and ensure optimum value to all stakeholders, Annie Odo-Effiong, integrated marketing manager, East, West and Central Africa, described the support as part of DellEMC’s commitment “to changing the narratives of how technology is helping individuals and businesses grab opportunities for digital banking in Nigeria, in keeping with emerging global trends.”

She further highlighted that support for the summit, now in its eighth edition is “driven by the need to properly harness the notable transformation in the changing landscape of financial technology, which is bound to impact consumer behavior and consumption habits in the financial services industry in Nigeria.”

The summit will focus on how technology is impacting financial services, with emphasis on mobile and internet banking, biometrics,

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

cloud, artificial intelligence, internet of things, etc., which have left banks and financial institutions with no choice but to undergo digital transformation in order to thrive in this rapidly evolving digital age.

According to the organizers, UMS Conferences, the summit is put together to equip financial services provides with the necessary knowledge to keep pace with modern day requirements in line with global trends. They also want to help financial services providers remain in harmony with Nigeria’s Vision 2020 of being among the top 20 economies, for which the Central Bank of Nigeria initiated the cashless Nigeria policy, which has given a boost to digital innovation.

The organizers note that the digital revolution has given birth to enhanced efficiency, security and reliability of existing banking services for current and potential customers, leaving the Central Bank of Nigeria with no choice but to encourage collaboration between banks and emerging fintech companies with an aim to accelerate the progress of financial inclusion in the country.

Thursday 20 September 2018

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BUSINESS DAY

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Legal year will be anything but ordinary as elections approach – NBA President tells judges INSIDE Employment & industrial relations experts chart course for labour law practice in Nigeria

26 PIGB: Why the President must re-consider his decision

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Nigerian legal community gather in Port Harcourt to pay last respects to late Attorney General

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ells Judges to beware of political mischief aimed at embarrassing the justice sector The President of the Nigerian Bar Association (NBA), Paul Usoro, SAN has urged judges to resist attempts by the political class to drag them into the murky waters of politics - a position which he says is prone to embarrassing the Justice subsector.

The President made this pronouncement during the 2018/19 Legal Year ceremony of the Federal High Court in Abuja.

Speaking at the event, the NBA President noted that with the imminence of the 2019 national elections, the Legal Year would be anything but ordinary, with specific reference to the tendencies of politicians to reduce the quest for office and positions as do-or-die affairs.

He said, “As we go into another season of elections with its attendant contentions and cases, we respectfully urge Your Lordships to always keep in mind the weighty responsibilities that rests on Your Lordships’ shoulders to continually save us from ourselves through Your Lordships’ pronouncements and in the process which, in no small measure, assists in maintaining the peace, unifying and welding us together as one nation.”

Usoro expressed hope that the judges would maintain their forthright positions in the coming weeks and months, starting from the imminent cases that would be filed before them in regard to parties’ primaries and pre-election matters; right up to the election petitions and other

ancillary post-election matters.

“Your Lordships have always, in the main, resisted these attempts and it is our hope that Your Lordships will maintain this stance and position in the coming weeks and months, starting from the imminent cases that would be filed before Your Lordships in regard to parties’ primaries and pre-election matters and right up to the election petitions and other ancillary post-election matters,” He said.

The President thus pointed out, that the Judges’ pronouncements in these cases, more than the handiwork of the political class, have kept the nation united and prevented strife, chaos

Consumer Protection Council applauds CBN fine over failed electronic transactions THEODORA KIO-LAWSON

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s consumers continue to jubilate over the decision by the Central Bank of Nigeria (CBN) to place a ten thousand naira fine on banks for every failed electronic transaction without reversal to the customer’s account within 24 hours, the Consumer Protection Council (CPC) has also

come out to express its satisfaction over this development.

The Council in a statement on Monday, described the move as “an unprecedented measure in holding banks accountable and protecting consumers by the EFTS circular.”

It went on to state that “this new season of enhanced consumer protection is what nation building and citizens’ rights are about.

We will collaborate to strongly enforcement the Circular.”

The CBN on Monday released a ‘Circular on the Regulation on Instant Interbank Electronic Funds Transfer Services in Nigeria’ telling all Nigerian banks that any failed electronic transaction without reversal to the customer’s account within 24 hours would attract a fine of ten thousand naira (N10, 000 .00).

and commotion in the different States of the Federation.

Earlier in his remarks, Usoro had felicitated with the judges, stating that the vacation the court had just taken was well deserved.

According to him, it was not for nothing that the Federal High Court is described and looked upon in terms that suggests its ranking as primus inter pares in the hierarchy of High Courts in the Nigerian Federation.

“The gamut of its jurisdiction, both exclusive and concurrent, stands it out. But more than that, it is the only High Court in the Federation that has jurisdiction over the entire Federation, with

its Divisions dotted all over the country. Your Lordships therefore have the unique advantage of being periodically transferred from one Division of the Court to another and in that process, Your Lordships get to work in, know and understand all the different component units of the Nigerian Federation and also appreciate the different quirks and idiosyncrasies of the peoples that make up this great country,” the President said.

He further commended the judges for stepping forward at critical moments to reaffirm and cement the bonds of the Nigerian unity through the various pronouncements and decisions of their Courts.

“Your Lordships are therefore in a prime position to pronounce, as Your Lordships always do, through this Honorable Court’s decisions, that, though tribes and tongues may differ, we remain one great country and are strong in spite of and indeed because of both our diversity and unity. “…My Lords, the Bar wishes Your Lordships a most fulfilling 2018/2019 Legal Year, in good health and good humor coupled with Divine Wisdom and guidance for the dispensation of justice by Your Lordships to all manner of men (and women, of course), without fear or favor.

And we assure Your Lordships that we, the members of the Bar, will remain ever loyal and faithful officers at the temple of justice, always ready and available to aid and assist Your Lordships in the arduous task of meting out justice to all parties,” the NBA President said in closing.

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Thursday 13 September 2018

BDLegalBusiness

Employment & industrial relations experts chart Bripan set to host international conference and Gala/Award nite course for labour law practice in Nigeria

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he Business Recovery and Insolvency Practitioners Association of Nigeria(BRIPAN) is scheduled to hold its 2018 International Conference and Gala/ Award Nite on 27 and 28 September 2018 at Four Points by Sheraton, Oniru, Lagos.

According to the Chairman of the Conference Planning Committee, AyodeleAkintunde SAN, FBR, the Conference with the theme “Driving Business Rescue in the Shadow of the Law” will feature seasonedresource persons who will examine business rescue mecha-

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he Employment, Labour & Industrial Relations Committee of the Section on Business Law of the Nigerian Bar Association recently held its national seminar with the theme, “Employment & Industrial Relations: a changing landscape” at the Radisson Blu Anchorage Hotel, Victoria Island, Lagos.

The seminar which featured a rich faculty of experts in employment and industrial relations law and practice was attended by over 100 stakeholders.

The panelists comprised judges of the National Industrial Court led by the Presiding Judge, Lagos Division, Honorable Justice Benedict Kanyip, lawyers, human resource executives, and members of theacademia amongst others.

The tone for the seminar was set with a riveting “General Overview Of The Changing Face of Employment Law & Industrial Relations in Nigeria and other Jurisdictions” by the lead discussant, Professor Chioma Agomo, Head, Department of Commercial and Industrial law and former Dean, Faculty of Law, Unilag and was followed by three (3) very exciting sessions that kept participants glued to their seats till the end of the program.

Topical issues discussed by the panelists at the very interactive sessions included “Emerging trends in labour litigation”, “Employment Relations in an era of Global Economic Uncertainty” and “Coping with changing Dynamics in the Workplace”, the latter of which resonated with the millennials who were present at the event.

In his opening remarks, the Chairman of the ELIR Committee, Mr Anthony Nwaochei noted that labour and industrial relations have become more critical when viewed against

Tony Nwaochei-Chairman Employment & Industrial Relations Committee of the NBA SBL, Olu Akpata- Chairman, NBA Section on Business Law; Oke Umemuo- Head, Advocacy & Dispute Resolution, The Law Crest LLP, Prof Chioma Ajomo- former Dean, Faculty of Law, Unilag; Chukwuka Ikwuazom- Chairman, NBA Lagos Branch & Partner, Aluko & Oyebode; Justice Benedict Kanyip- Presiding Judge, Lagos Division of the National Industrial Court; Godwin Omoaka- Partner, Templars; & Ose OkpekuVice Chairman, Employment & Industrial Relations Committee of the NBA Section on Business Law.

the backdrop of current economic challenges in Nigeria brought about by the on-set of an economic recession last year.

He said, “Nigeria, like other countries of the world that have been affected by a global slow-down in economic growth, is faced with the challenge of supporting and promoting business activities of employers in order to stimulate the economy on the one-hand, while ensuring at the same time, that the rights of employees and every person who provides labour in any form is protected.”

According to him, the last few years have seen major employers of labour restructure their organizations in order to stay afloat which in certain instances, have led to down-sizing and substantial job losses. These he

said, have concomitantly resulted in an increasing number of disputes between employers and employees as mi Lords here will attest to.

Nwaochei thus posed a question to the panel of discussants as to whether Nigeria’s labour laws, policies and practices evolved with the changing landscape.

He however continued, stating that there exist a school of thought which holds the view that Nigeria labour laws, particularly the Labour Act which came into force over 40 years ago are out-dated and do not serve our current needs while others are of the view that with the 3rd alteration to the constitution of the Federal Republic of Nigeria and the application of international best practices by the National Industrial Court in

Olu Akpata- SBL Chairman; Bina Idonije- Snr Labour & Employment Counsel, GE Sub-Sahara Africa; Hon Justice Osato Obaseki-Osaghae, National Industrial Court; Patrick Osu- Partner, Ajumogobia & Okeke; Abimbola AtilolaManaging Partner Hybrid Solicitors; Chinwe Odigboegwu, Head, Litigation, Tony Nwaochei, Chairman, NBA Section on Business Nigerian Bottling Company; and Tony Nwaochei-Chairman Employment & Law welcoming participants.

Industrial Relations Committee of the NBA Section on Business Law.

Bosan Pre-Swearing-In Induction BOSAN Pre Swearing-In Induction Programme for Lawyers who will be conferred with the rank of Senior Advocates of Nigeria on the 24th of September 2018.

nisms and reforms required for a vibrant and fit-for-purpose corporaterescue regime in Nigeria. Some of the confirmed speakers/panelists at the two-day event which would have five plenary sessions include Mrs Mary Uduk (acting DG of SEC), Chief Anthony Idigbe SAN, Professor Fidelis Oditah, QC, SAN, Mr Mike Igbokwe SAN, Dr Okey Nwuke, Dr Kubi Udofia, Dr Sam Etukakpan and a host of others.

The Conference will be rounded off on 28 September 2018 with a Great Gatsby-themed Gala/Award Nite.

Hogan Lovells, others recognised for excellence and innovation in the business of law

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nternational law firm, Hogan Lovells and four others have been named as ‘AmericanLawyer’ Award finalists in the “Best Law Firm Business Team” category.

These awards recognise excellence, innovation and progress in the legal profession across the full spectrum of legal services delivery.

Announcing a newly revamped set of recognitions in this year’s Awards, ‘AmericanLawyer’ stated that these these categories were aimed at recognising the exceptional work which goes on across the entire legal services delivery spectrum.

It further congratulated Hogan Lovells, Cleary Gottlieb, Cooley adjudicating disputes brought before it, case law is gradually bridging the perceived gap between our labor and employment related legislations and best practices all over the world.

Stakeholders at the event tbus engaged in very constructive panel discussions, shedding light on emerging trends in the employment and industrial relations space and its effect on employer-employee relationship.

Former Dean of the Faculty of Law, University of Lagos, Professor Chioma Agomo who delivered the lead paper provided a general overview of the changing face of employment law and industrial relations in Nigeria and other jurisdictions.

The Employment & Industrial

LLP, Cravath Davis Polk, and Kirkland_Ellis & Paul WeissLLP, whose exceptional client work and innovation in the business of law it states, “have made them finalists for Best Law Firm of the Year.”

Relations Committee is one of 20 specialist committees of the Section on Business Law which were established to enhance commercial law practice amongst Nigerian lawyers. You will no doubt agree with me that labour and the employment relationship is an integral part of commercial activities, as we know them today.

The core objectives of the committee are two-fold; to deepen the capacity and knowledge of lawyers and all stakeholders on employment law and practices as they stand in Nigeria today and to positively influence as much as possible, legislation and policies relating to or affecting labour, employment and industrial relations.

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PERSPECTIVE with TOLULOPE ADEREMI

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LegalBusiness

PIGB: Why the President must re-consider his decision

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he passage of the longawaited Petroleum Industry Governance Bill came into fruition after a period of 17(Seventeen) years of rigorous consultations and reviews, appear to have come to a halt yesterday, August 28, 2018,as news filtered from the Office of the President of the Federal Republic of Nigeria that it would appear the President has withheld Assent to the PIGB. According to media reports, the PIGB was returned to the National Assembly on three grounds: • The PIGB will whittle down the President’s control and power of arguably the most profitable industry in Nigeria • All the Ministers consulted by the President over PIGB refused to support the grant of Assent to the bill.

• Lack of “fiscal content” in the bill.

It is impossible to overstate what a significant setback this development is to the ongoing reform of the petroleum industry in Nigeria as well as the attraction of both foreign and local investors to Nigeria. The PIGB is a product of a reform process which has passed through several aspersions, consultations and revisions and is about to culminate into what will birth a stable Energy Institution in Nigeria which stakeholders have always yearned for.

With the benefit of hindsight, it will be recalled that the ‘famous’ Petroleum Industry Bill (PIB) was fragmentedinto different bills namely the: the PIGB, the Petroleum Industry Administration Bill (PIAB), Petroleum Industry Fiscal Bill (PIFB) and the Petroleum Host Community Bill (PHCB) to surmount many of the challenges posed to the successful passage of the Bill.

It is therefore a mystery why, hav-

Tolulope Aderemi

ing been through years of legislative lobbying, His Excellency, President Buhari would withhold assent to making this a law; one which we all yearn for. This short paper will therefore attempt to examine each of the reasons allegedly adduced by the President for not giving his assent to the bill and the consequences attaching to such decision.

In prefacing this opinion, it is important to remind ourselves that one of the reasons for withholding presidential assent is the alleged whittle-down of the ‘President’s control’; as a President OR as a Minister of Petroleum Resources?

Is the President/Minister’s Powers diluted?

Section 2(1) of the PIGB provides the following powers for the Minister: a) determination, formulation and monitoring of Government policy for the petroleum industry; b) general supervision over the af-

fairs and operations of the petroleum industry subject to the provisions of this Act; c) advise the Government on all matters pertaining to the petroleum industry; d) promotion of the development of local content in the Nigerian petroleum industry; e) representation of Nigeria at international organisations that are primarily concerned with the petroleum industry; f) negotiation and execution of international petroleum treaties and agreements with other countries, international organizations and other similar bodies on behalf of the Government; g) and to do all such other things as are incidental to and necessary for the performance of the functionsof the Minister under this Act. Section 3 of the Bill (which is similar to Section 7 of the Petroleum Act), similarly grants the Minister

the power of pre-emption of all petroleum and petroleum products obtained, marketed or otherwise dealt with under any license or lease granted under the Act, in the state of national emergency.

The new Regulator, the Nigeria Petroleum Regulatory Commission (NPRC), pursuant to Sections 5(e) and 15(1) of the PIGB would now be required to submit detailed mid-year and annual reports of its operations and finances to the Minister. This will be in addition to the Minister’s powers to issue directives to guide The Equalisation Fund(TEF).

The Minister, by the provisions of Sections 77, 88, 126 of the Bill, is also responsible for incorporating and capitalising the Nigerian Petroleum Assets Management Company, National Petroleum Company, and the Nigeria Petroleum Liability Management Company in which assets and labilities of the NNPC, DPR and NAPIMS are to be transferred and warehoused. The above, as is evidence, are some of the sweeping powers retained by the Minister under the proposed law. To some critics, these are powers which should still be re-considered and diluted.

What may appear to be the ‘offending provision’ could be found at Section 127(4) of the Bill. This provides that all regulatory functions conferred on the Minister pursuant to the Petroleum Act and the Oil Pipelines Act or on the chief executive of the Inspectorate pursuant to the Nigerian National Petroleum Corporation Act, shall be deemed to have been transferred to the NPRC. This at best, could be interpreted to be the usurpation of Ministerial powers/control.

On closer and more technical scrutiny of these concerns (and on account of the fusion of both the offices of the President and Minister of Petroleum Resources), these are

unfounded concerns as Section 13 of the Bill provides that the President shall appoint members of the NPRC’s Governing Board, subject of course to the Senate’s confirmation, for a renewable period of four years.

Evidently, from a combined reading of the foregoing provisions, the President and the Minister (given that the President is currently the Minister) retain substantive control over the composition and direction of the NPRCand would therefore be technically wrong to withhold assent to the Bill for the reasons it had set out before now.

The other reason(s) adduced for not giving his assent; being the absence of a ‘fiscal content’ advanced, must have been made in error or misguided as to the relevance of such a reason. This is because, the Petroleum Industry Fiscal Bill (PIFB) is currently under legislative scrutiny and would ordinarily not have formed part of the PIGB, as this (the PIGB) is a proposed law mainly to reform the governance structure of the Nigerian Oil & Gas Industry. If this were to be relevant, then the Host Community Funds Bill must also be a reason why Assent must be withheld. These are unjustified and untenable reasons to withhold assent, with respect.

At any rate, should the merit of the need to re-consider this position not find favour with Mr. President (as dangerous as that may be for investment purposes for the Sector), the National Assembly may have no choice but to invoke the provisions of Section 58 (5) of the Constitution of the Federal Republic of Nigeria (CFRN), override the President’s decision and pass the Bill into law. We would rather the former

THEBAR Nigerian legal community gather in Port Harcourt to pay last respects to late Attorney General Inime Aguma is the current National President of FIDA Nigeria, the umbrella body of Female Lawyers in the country, rising from being a one time State Chairperson of the Organisation. She was called to the Nigerian Bar as a Barrister and Solicitor of the Supreme Court of Nigeria in 1990 and has practiced Law for over 28 years.

She served in the Rivers State Ministry of Justice from 1992 to 2007 and voluntarily retired as an Assistant Director upon her appointment as Commissioner for Social Welfare and Rehabilitation in the government of His Excel-

THEODORA KIO-LAWSON

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embers of the legal profession from across the nation gathered in Port Harcourt over the weekend to pay their last respects to the late attorney General And Commissioner For Justice Of Rivers State, Emmanuel Chinwenwo Aguma, SAN, who died in a London hospital last month.

The President of the Nigerian Bar Association (NBA), Paul Usoro, SAN led a special delegation of bar leaders and elder to the valedictory court session held in honour of the late Aguma, whom he described as a very distinguished colleague.

Speaking at the ceremony, the NBA President informed the audience that while there were people who died un-mourned and unloved, the late Attorney General was not one of them.

“His passage has touched the core of all of us. Clearly, he affected people’s lives across all divides. Indeed our hearts go to Emmanuel’s loved ones, his wife and children, to His Excellency Nyesom Wike, the Governor of Rivers and the people

lency, Sir Celestine Ngozichim Omehia.

Prior to then, she had been the Financial Secretary of The Adolescent Project (TAP), the pet project of former First Lady of Rivers State, Her Excellency, Hon. Justice Mary Odili.

Until her current nomination into the Rivers State Cabinet by His Excellency, Nyesom Ezenwo Wike, CON, GSSRS, POS, she was Managing Solicitor of Aguma & Co, a law firm she co-managed with her now late husband, Emmanuel Chinwenwo Aguma, SAN, of blessed memory.

Late Emmanuel Chinwenwo Aguma, SAN

of Rivers State, we mourn with you and pray for Divine strength and fortitude for you all,’ the NBA President said.

He urged family, friends and colleagues to be consoled in the knowledge that Emmanuel as his name suggests, was now with His

maker and at peace, “even as we continue to pray for his repose. May he rest well,” Usoro said in closing.

In another development, the River state Governor, Nyesom Wike On Tuesday, nominated wife of the late Attorney General of the State, Inime Aguma to his cabinet.

NBA President, Paul Usoro, SAN speaking at the Valedictory Court Session in honour of Late Emmanuel Chinwenwo Aguma, SAN

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

Thursday 20 September 2018

In association with research@businessdayonline.com

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Assessing the impact of merchant banking on the Nigerian economy UJU IKEDIONU

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erchant banks play a very essential role in the provision of long-term funding to companies. The uniqueness of merchant banking lies in providing long-term public funds to small scale businesses through Initial Public Offering (IPO). In addition to funding businesses, merchant banks carry out wealth and asset management services, equity underwriting, credit syndication etc.

The merchant banking services in Nigeria was reintroduced in 2010 (after the sweeping reforms in 2008

by Central Bank) through the new banking model i.e. the repeal of the universal banking regime to provide solutions and financial options to reduce some of the challenges affecting the country’s economic growth to its minimum level.

With the volatile conditions facing Nigeria’s economy as demonstrated through exchange rate, inflation, interest rates volatility, as well as over-dependence on oil and obsolete infrastructure, the country has experienced gross unemployment, slow growth and development. In order to surmount these challenging issues, the need to sustain the growth of corporations and individuals through long-term strategy and financial options becomes pertinent.

Merchant banking in preconsolidation and post-consolidation periods Merchant banks were established to provide services consisting of advisory and investment-related services, majorly in form of equity stakes and subordinated facilities for companies and trade finance. This segment provides corporate investments, corporate loans, portfolio management, loan syndication, bond financing, and merger and acquisitions advisory to even real estate investment as well as trade finance.

“Since the return of the merchant bank in Nigeria, the system has undoubtedly, in spite of critics, made tremendous contributions to the general development of Nigeria’s economy; particularly to the development of the country’s financial

environment and has increased the size of financial claims in issues and helped broaden the country’s financial infrastructure,” according to research by Rand Merchant Bank, one of the leading merchant banks in Nigeria.

“The ‘second coming’, as it were, of merchant banks has no doubt opened opportunities for increased investments and trade facilitation – roles that have been hitherto left to only commercial banks. We dare to say that merchant banking system remains the livewire through which the Nigerian economy grows,” RMB added.

In Nigeria, there are only five licensed merchant banks as against 24 commercial banks and over 30 primary mortgage institutions according to the Central Bank of Nigeria (CBN). Considering this discrepancy and size of small scale businesses in Nigeria, we can say that there are huge amount of unutilized opportunities in the industry.

N39.2 billion net interest income and loans to customers respectively.

Nova reported N1.2 billion net interest income but had no record on its loans to customers.

Pre-tax profit of RMB Nigeria is highest in the industry. The bank accrued a pre-tax profit of N7.3 billion in 2017. FBN Quest and FSDH recorded PBT of N6.2 billion and N5.6 billion respectively. Coronation on the other hand amassed N5.1billion while Nova’s PBT is N0.42 billion.

year; FBN Quest recorded N113.5 billion, Coronation, N107.2 billion; RMB, N105.1 billion and Nova with N1.5 billion.

In terms of deposits from customers, FBN Quest tops the other banks in the Nigerian merchant banking industry with deposits worth N88 billion. Coronation Merchant Bank followed with N76.4 billion, FSDH with N54.6 billion, and RMB Nigeria, N20.4 billion.

Net interest income and loans to customers vary across the 5 merchant banks in Nigeria. RMB Nigeria recorded N5.2 billion net interest income and N42.8 billion loans to customers in 2017. Coronation Bank reported N8 billion and N32.3 billion while FSDH reported N7.7 billion and N38 billion. In addition, FBN Quest reported N7 billion and

banking system has broaden the country’s economic base and reduced its reliance on crude oil for revenues.

Therefore, the emergence of merchant banks in Nigeria reflects the changing structure of the economy due to the increasing need for specialized and sophisticated banking services from various corporate institutions with a view to positioning their respective businesses within their chosen sectors and also paving the way for economic diversification.

In the last 5 years of operations, several landmark transactions have been successfully executed by merchant banks in Nigeria, of which the notable deals executed are in alignment with the Federal Government’s growth plan.

Merchant banking impact on the economy In discussing how the industry has impacted the Nigerian economy, it is obvious that the merchant

12734BDN

Facts and figures From 2012 to date, merchant banking licenses have been issued to Coronation Merchant bank, FSDH Merchant Bank, Rand Merchant Bank Nigeria, FBN Quest Merchant Bank and Nova Merchant Bank. The 2017 data gathered from various banks’ audited annual report show that the Nigerian merchant banking industry recorded a total asset of N581.4 billion, total liabilities worth N444.4 billion, and N29.1 net interest income. In terms of cash

and bank balances, the industry recorded N49.2 billion. The industry also made a pre-tax profit of N24.6 billion, post-tax profit of N22 billion; recorded N239.4 billion deposits from customers and N152.3 billion loans to customer in 2017.

Leading the industry in terms of total assets is FSDH Merchant Bank with N151.7 billion followed by FBN Quest with total assets of N140.7 billion. Coronation Merchant Bank had N136.7 billion; Rand Merchant Bank with N134.3 billion while Nova Merchant Bank, the newest firm in the industry, reported total asset worth N18 billion in eight months.

FSDH reported N117.1 billion total liabilities for the 2017 financial

WIDE OPEN MINDED RMB Nigeria. Solutionist Thinking.

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We believe in stretching ourselves.

In broadening our horizons and embracing the unconventional to consider every possibility. Solutionist Thinking means deliberating together and collaborating with our clients to unlock exceptional prospects for the future. It’s the magic that inspires everything we do.

www.rmb.com.ng

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Thursday 20 September 2018

Oyetola: On a consolidation mission in Osun ZEBULON AGOMUO

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he stage is set. The Independent National Electoral Commission (INEC) appears ready.

The Inspector General of Police (IGP), Ibrahim Idris, has deployed 40,000 policemen to Osun State to ensure a hitch-free gubernatorial election on Saturday. About 48 candidates of different political parties are jostling to succeed Governor Rauf Aregbesola who will be leaving office in the next two months.

From the word “go” many of those who purchased their parties’ forms for the race knew their chances were very slim, they are perhaps in the contest to use their gubernatorial aspiration as a bargaining chip in the days to come.

Of all the candidates, one stands out from the crowd. The business of governance demands tutelage, because it is dangerous to thrust power into the hands of a man who never has undergone any form of training on how to manage power. Power, like a mad bull, can destroy even the owner who is not tutored on the technique of taming the rowdy animal. Like a sweet swine that intoxicates, power can destroy a man who embraces its sweetness without being mindful of its destructive influence.

Gboyega Oyetola has learned the ropes of power. For eight years he had studied the ABC of power under the skillful leadership of Governor Rauf Aregbesola, and has been well acquitted to succeed him.

His boss said of him, “Oyetola has justified his capacity and capability as a man of impeccable character and worthwhile personality who remains dogged and forthright to all policies that had impacted positively the lives of the citizens.

“We are not in doubt about Oyetola’s competence and ability. He is calm and much more reserved.

He knows the job and he will serve our people well. He will advance the development programme of our party.”

The All Progressives Congress (APC) standard bearer does not stammer over what he intends to do in office should the good people of Osun State vote for him on Saturday, which he so much believe they would.

“Our core agenda is continuity and consolidation. The six integral action plan of the outgoing administration has transformed the Osun landscape and changed the face of infrastructure in the state,” he said.

“We shall be guided by the invaluable experiences we have acquired from the implementation of the 6-point integral action plan of banishing hunger, poverty, unemployment; restoring healthy

Oyetola

living, promoting functional education and enhancement of communal peace and progress enunciated by the Rauf Aregbesola-led administration. We will ensure that the plan is objectively reviewed for effectiveness and efficiency in order to learn from what worked and what did not quite work,” Oyetola further said.

According to him, “My approach shall be innovation, quality, accountability and effective teaching. Technical and vocational education will be strengthened to provide technical skills for our people. Higher education will not be left out. The focus of higher education will not be left out. The focus of higher tertiary education will be to produce self-reliant individuals.”

He sees bright chances for himself and said even if there were alliances or coalition anywhere; he would embrace victory.

“Coalition, alliance and merger are part of the antics of power struggle in a democracy. But obviously that is and can never be a threat to my ambition. Sovereignty rests with the people.

They are the ultimate judge who will, on Saturday, decide who gets their mandate. The people are sufficiently knowledgeable and conscious of what they want.

The APC has served them transparently and inclusively in the last eight years. The people want continuity of governance. They want their children to continue to eat free and nourishing food in schools. They know that we value education. They want to continue to enjoy soft loan for business, and they know we are the ones that can serve them better. They know such alliance is a mere conspiracy to impose people with little or no capacity to provide the required leadership. They know we are not pretenders. I am confident that come Saturday, good people of Osun State will return the APC

government to the Government House.”

On Oyetola’s chances in the election, an indigene of the state, who spoke on condition of anonymity, said: “We don’t really need to lose sleep over the election concerning Oyetola’s victory on Saturday. It is a fait accompli. It is a payback time.

The good people of Osun State would use the election as a parting gift to His Excellency, Rauf Aregbesola. One good turn deserves another. If you look at the work the outgoing administration has done in the state, particularly in the areas of education, infrastructure, social re-engineering of the state, you would appreciate the commitment to governance. We anchor our campaign on continuity.

“The Oyetola administration will continue with the strides the Aregbesola government has made.

You know in Nigeria, the brand of politics people play is a bad one.

People appropriate government and personalise it rather than making it a continuum which it is actually what it is; that is why we see abandoned projects in many states because a new administration that does not understand the meaning of development would just come on board and begin to jettison progressive foundation instead of building on it. They would start another foundation which they would not be able to complete. We do not want such a thing in the state of Osun. Oyetola will build on the successes Aregbesola has made, and that is continuity; no dislocation. This is the message we have continued to drive into the consciousness of our people. I am glad they have really understood that message perfectly. So, Saturday is just going to be a formality; an endorsement by the good people of Osun.”

Unlike many politicians that have no second address, but depend solely on politics and pecks of office to survive, Oyetola is a

self-made man, who had achieved in other fields of endeavour before venturing into politics.

It is widely believed in Osun that despite the array of contestants, Oyetola’s victory is a fait accompli given the sterling performance of the Aregbesola administration and the yearning of the people for continuity and consolidation on the progress already made.

“The Osun people will not want a backward journey to Egypt after eight years of good governance in which Oyetola was part and parcel of,” an observer said.

“The fact that Osun Central

where the candidate comes from, has the largest number of voters and also has Osogbo and Olorunda Local Government Areas, whose votes gave Aregbesola almost 40 percent of the votes that made him governor in 2014, is also to the advantage of the APC candidate,” he further said.

The candidate has the backing of the National Leader of the APC, Asiwaju Bola Ahmed Tinubu, who is expected to throw his weight behind him in everything, including financials. Oyetola himself is said to have the financial wherewithal to prosecute his ambition.

The man Oyetola Gboyega Oyetola was born in Iragbiji, Boripe Local Government Area of Osun. He attended Ifeoluwa Grammar School in Osogbo for his secondary school education which he completed in 1972. He proceeded to the prestigious University of Lagos where he bagged a Bachelor of Science (Honours) degree in Insurance in 1978. Oyetola capped his illustrious education pedigree with a Master of Business Administration (MBA) in 1990 at the same University of Lagos, Akoka, Lagos.

He had his mandatory one year National Youth Service between 1978 and 1979, at Potiskum, in the present day Yobe State, where he lectured at the Staff Training Centre.

In 1980, he joined Leadway Assurance Company Limited as Area Manager and worked there till 1987. He took another step by taking his expertise to Crusader Insurance Company Limited as Underwriting Manager between 1987 and 1990. He moved again in 1990 to Alliance and General Insurance as Technical Controller and served in that capacity until 1991.

However, he took a giant step in 1991 by establishing his own Company, Silvertrust Insurance Brokers Limited. He was the Managing Director since its founding until his appointment as Chief of Staff in 2011.

His other forays in business include Executive Vice-Chairman, Paragon Group of Companies which has interest in Oil and Gas, Mining and Real Estate from 2005 until 2011. He was also Chairman of Ebony Properties Limited. He had been a Director of Pyramid Securities Limited, until 2011, among other business interests, before his appointment as Chief of Staff.

Gboyega Oyetola is a pronounced Technocrat as well as a progressive politician. He was a founding member of Alliance for Democracy (AD) in the state of Osun and has been a chieftain of the party through its metamorphosis to Action Congress (AC), Action Congress of Nigeria (ACN) and now All Progressives Congress (APC). Also, he has assisted the party nationally, particularly in the State of Osun.

He is an effective grassroots mobiliser. He’s a philanthropist of note,

many of his gestures are geared towards empowerment through sponsorship of students for university education, without sounding immodest, over 400 persons have been touched via this initiative in the last 25years.

He has received an array of honours and awards for his public service and philanthropic acts.

These include: Distinguished Merit Award by his alma mater, Ifeoluwa Grammar School, Osogbo, February 2014; The Guardian Award for Exceptional Chief of Staff in the Federation 2017; Distinguished Award of Excellence in Public Administration by Nigeria Union of Journalists, Osun State Council, August 2015; Leadership Award for Outstanding Performance by the Nigerian Society of Engineers (NSE), Osogbo Branch, March 2016; Award of Excellence by Osun State University, College of Law, Ifetedo, January 2016; Award of Excellence as ICON of Good Governance by Network of Non-Governmental Organisation (NETNOS) State of Osun Branch.

November 2017; Award for Exemplary and Exceptional Support and Fellow of Osun State College of Technology, Esa Oke, January 2017; Grand Patron of the Local Government Chapel of Osun State NUJ, November 2016; Leadership Award by International Association of Lions Club, District 404B2, Nigeria, February 2016; NAOSS-NHQ Award of Excellence in Administration and Good Governance, May 2016; Award of Excellence in Public Administration

by Rotary Club of Osogbo, Rotary International, July 2016.

Meritorious Award by NAOSS, Obafemi Awolowo University Chapter, February 2017; African Students Union Parliament (ASUP), Pan-African Distinguished Leadership Honour as Icon of Nation Building in Nigeria 2018.

Gboyega Oyetola is an Associate Member, Chartered Insurance Institute in London and Nigeria.

He is also a member of the Nigeria Institute of Management (NIM).

Oyetola is a Socialite, Philanthropist, a lover and promoter of Arts. He is a member of the prestigious Ikoyi Club. He is married with children.

BUSINESS DAY

Thursday 20 September 2018

31

HBSAN life impact series with Adedotun Sulaiman, chairman, financial reporting council of Nigeria (FRCN) HBSAN Life Impact Series is an initiative of Harvard Business School Association of Nigeria (HBSAN), and is a series of interview sessions with prominent alumni of the prestigious Harvard Business School (HBS) who have had a major part of their career pursuit and business initiatives in Nigeria. The series is designed to showcase how the learning experience at HBS has influenced these business leaders in their endeavours, particularly the impact they have made in Nigeria, and by extension Africa. It is also aimed at inspiring the younger members of the HBS community who aspire to pursue their careers and grow their business initiatives in Nigeria. The maiden edition of the HBSAN Life Impact Series features an insightful interview session with Adedotun Sulaiman, Trustee Board Member and former President of HBSAN, who attended the Programme for Management Development (PMD) at HBS in 1990. The session held in his office at Arian Capital Management Limited, where he serves as the Executive Chairman. Adedotun Sulaiman, Chairman, Financial Reporting Council of Nigeria (FRCN), is a founding member of the Nigerian Economic Summit Group (NESG) and member of the Summit’s Board since inception in 1993 until December 2006, a member of the Board of Governors of the Musical Society of Nigeria (MUSON) until December 2006, and a Trustee of the Corona Schools Trust. He was honoured by the Federal Government with the award of Member of the Order of the Federal Republic [MFR] in 2000, and chairs the board of several companies, traversing several sectors of the economy. Excerpts:

W

hat is your career background?

My engagement in business dates back to 1978, meaning we turned 40 years this year. I finished school in 1975 and we were the third set of people to do the NYSC. When I finished my service call in 1976, I joined the Foreign Service. This wasn’t my plan. I had wanted to pursue a career in banking. Before long, I was in Washington DC as a Consular Officer, but I didn’t quite enjoy my job.

I came back to Nigeria in 1978 and the idea was for me to go back to school. I had gained admission into a school in Colombia and I had a scholarship up to PHD level. I was all set to go and suddenly I saw this advert in the Nigerian Press that seemed to be talking to me specifically. It was as though they were describing me, so I applied to this company that I didn’t know about. I got scheduled for an interview and that’s how I met Dick Kramer. He made me an offer and then it became a choice of ‘should I pursue my MBA/DBA at the Colombian university or should I stay and work here in Nigeria’? Long story short, I chose to stay.

I stayed, and I was one of the first 5 employees at that time.

We built what all of us know today as Accenture Nigeria. This was done over a career span of about 32 years (1978-2010).

For my key milestones; I became a Manager in 1983, became a Local Partner in 1984, and in 1985 I became a Worldwide Partner. I took over from Dick Kramer as Country Manager in 1993. The firm separated in 1999 and I gave up the responsibility for accounting and tax businesses. I focused all my energy on the consulting part of the business, starting from 1999, and this later became Accenture in 2001. I retired as Country Manager in 2005, and stayed on the board as Chairman until I completely dis-engaged from Accenture in 2010.

Why Did You Make The Decision To Attend Harvard Business School (HBS)?

When I attended the Harvard Business School in 1990, I did a programme that was known as Programme for Management Development. My reason for attending HBS is quite simple, I was sent there. It wasn’t entirely my decision to go but my then boss and mentor, Dick Kramer

wanted me to.

Looking back at why I attended HBS, I think part of my reasons would be because I didn’t make Partner in 1988 as expected, and HBS was like my compensation.

Another reason would be, I was being prepared for higher responsibility, PMD was a 3 month programme at that time (February – May) and for me, because of my career background, the programme was more of a validation. I enjoyed my stay there and learned a lot from my contemporaries, my course mates from different fields and walks of life.

Lastly, HBS built up my self-esteem. For everything I thought I knew and was being taught there, I became stronger and even more grounded. Meeting Michael Potter in person and reinforcing all my knowledge meant a great deal to me.

As a Nigerian/African, what did you take away from HBS? The experience at Harvard was world-class and there are many things I took away from there; Knowledge is universal.

You may have to adapt the application to your situation, but in terms of theory it’s the same.

These are some simple truths I took away from Harvard Business School.

Also, I learnt that there is no way as a leading company or country that you can excel without playing at the highest level. I had the opportunity to go to the Olympics two years before I went to Harvard (1988) and I took something away from there; there is no standard peculiar to Nigeria.

There is no shortcut to success. You either do it how they did it and make it better, or you don’t do it how they did it, in order to avoid the potholes they fell into. The Nigerian brand is not one to match up with international standard and we’ve always known this. The only times African countries featured in contexts was when it involved corruption. Harvard indeed showed me that there is a lot of work to be done in the Nigerian economy, for us to be globally recognized.

A lot has changed about Africa since you went to Harvard, so what advice will you give a person looking to go to Harvard now?

Everyone who goes to Harvard

L-R: Collins Onuegbu, Communications Secretary, HBSAN & Executive Vice Chairman, Signal Alliance, Adedotun Sulaiman, Trustee Board Member and former President, HBSAN, Chairman of the Financial Reporting Council of Nigeria (FRCN), and Executive Chairman, Arian Capital Management Ltd., Chika Nnadozie, Program Manager, HBSAN, and Fola Ogunsiakan, President, HBSAN & Managing Director, Cedar Capital.

has a business or job ground or are looking to start one up. So in order to prepare their minds, first they must know that the Harvard experience in terms of business education is the best you can get around the world.

I’ll tell them to take maximum advantage of the opportunity, suck up all the knowledge that they possibly can, and as you hear the case studies and theories, in your own mind keep asking yourself, ‘so how will this apply to my country, industry and situation at large?’

Lastly, before you leave Harvard, you must ask yourself what you will do differently when you get to Nigeria, and how will you maintain the relationships that you have established, bearing in mind that you have the best minds from across the world as course mates.

How has your HBS influence affected your career, family and society?

It’s been a significant impact for sure. The first thing it did was to make me part of a network (an alumni of the most prestigious business school in the world). I was an officer of the Harvard Business School Association of Nigeria even before I went to Harvard, most people don’t know that.

In my time, our economy

wasn’t liberalized. The Harvard alumni, who were majorly capitalists, were propagating the idea of a liberalized economy.

We provided inputs during the preparation of the pre-budget, and then lobbied the military government to ensure that some of the inputs found their way into the actual budget. Upon the release of the budget, we usually held an enlightening forum on how the budget can impact different sectors of the economy.

This was a very engaging group and that was the pre-cursor to the Nigerian Economic Summit Group.

So it gave exposure to my career and increased my influential contact base.

How can a Harvard Alumni make an impact?

What I will recommend to your generation is what I learnt from Dick, which is; ‘you have to engage in the principle of giving back, even when you don’t have much’. When you see all the roles I played at a really young age, it wasn’t because I had all the time in the world, but the firm I worked in actively encouraged us to do what we did, so I had to.

What I find today is that everyone is so self-centred about building their own wealth that they don’t care about what’s going on in the larger community.

If you are a Harvard alumni, you

are a privileged person. Don’t sit in your bullet proof SUVs and high fenced houses and think you’ve made it. You have an obligation to give back to this country, so part of your resources and time have to be dedicated to courses outside of your business line. Be a volunteer in business, politics, or another field. Be willing to sacrifice and stop waiting for the system to do something for you.

How can today’s generation be more involved?

Be involved!

How will you advise the HBS Association of Nigeria to do better?

I’ve always wanted the younger executives to be in charge. So you all need to be organized, make an impact and deal with an issue pending in the country.

You have the training and capability, so do more.

Yes we can’t solve the problems of Nigeria, but we can make a move. Take up a project and just do it!

HBSAN is the HBS alumni group of Nigerians and resident non-Nigerians driven by a primary objective to provide members with resources, relationships and opportunities to enable them build and lead organizations that will create transformational impact in Nigeria and beyond.

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BUSINESS DAY

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Thursday 20 September 2018

GARDEN CITY BUSINESS DIGEST Soot: Rivers State fishermen decry economic decline as CSOs petition UN, others INNOCENT ETENG

F

ishermen have fired off a petition to the United Nations (UN) on the menace of soot and the silence of the authorities. Civil Society Organisations (CSOs) in Rivers State thus converged in Port Harcourt for an engagement meeting that intimated citizens on issues of black soot (fine particles or particulate matter) that has been descending from the sky for more than two years.

Facilitated by the #Stopthesoot campaign, a group canvassing for an end to the downpour, the engagement also offered citizens the opportunity to sign petitions to the Secretary General of the United Nations, the United States, the United Kingdom and Pope Francis.

Some of the CSOs involved were: Health of Mother Earth Foundation (HOMEF), Stakeholder Democracy Network (SDN), Trust Africa, We the People, Nigeria Medical Association (NMA), National Coalition of Gas Flaring and Oil Spills in the Niger Delta (NACGOND), National Association of SeaDogs (NAS), Society for Women and Youth Affairs (SWAYA), Environmental Right Action (ERA) amongst others.

The petitions, according to Eugene Abels, the co-coordinator of #Stopthesoot, are meant to attract the attention of the petitioned organizations and countries so they can prevail on the federal government to

Governor Wike

respect environmental charters and treaties it signed and end the downpour of black carbon. “We have left soot as just a matter. We want the UN to respond to what (complaints) we have raised,” Abels said.

However, the petitions being referred to were officially sent in August. Abels said the signing of the petition by more citizens is to help mount more pressure for the petitioned organizations and countries to see the need

for rapid response, especially as the petitions were backed with results of scientific studies showing what citizens are exposed to.

Soot or black carbon is a combination of tiny solid and liquid gaseous particles trapped in the air. Its is a product of incomplete combustion. In Nigeria, the soot is primarily attributed to legal and illegal oil refining activities.

Because the particles are as tiny as between 10 and 2.5 microns, they can easily slip into the

lungs through inhalation, resulting to such ailments as cancer, asthma, cardiovascular (heart) diseases, respiratory infections, bronchitis, amongst others. In China, a 2014 study found soot to be responsible for a sharp up-tick in birth defect and low child weight. Already, a recent study by consultant pediatrician, Agnes Fienemika, shows that between 2015 and 2017, respiratory infection among under-five children rose to near 50%. This

suggests that Rivers State’s five million population is facing an emergency situation that should be addressed without delay.

Abels said it was because governments at state and federal levels have failed to respond satisfactorily to the deadly haze that the group and CSO’s are upping their game to the United Nations despite pressure by the CSOs. “By September (2016), we brought (the soot) problem to the notice of the state government and they promised to do certain things and by April this year, we felt dissatisfied with what has been done, so we came out with a protest and a march to intimate the world of what has been going on here in Rivers State. We then collaborated with government agencies and informational groups like the Nigerian Medical Association.

“By May, we issued a press statement that we were dissatisfied and that there was no action plan. By August, we did a petition to the Secretary General of the United Nations as the leader of the World Health Organization and to Pope Francis and world leaders, European parliaments and all climate groups,” Abels said. No sign that petition has been read.

He is however hopeful that if the world body deploys half of the efforts it exerted in fighting smoking in public places, compelling the Nigerian government to nip the soot at source will be a minor job.

Meanwhile, fishermen at the event said their personal and family economies have taken a backward slope due to excessive pollution of Rivers State waters.

They lamented why many years after,stateandfederalgovernments have not been able to fine a lasting solution to the issues of pollution primarily attributed to oil spillage (frombothlegalandillegalsources).

One of the fishermen who also signed the petition said: “For now, nobody will tell you in this axis, from Okrika to Bonny, that there is fish. There is no fish. No more aquatic life. The fishermen are finding it difficult. Our children can no longer be trained in the school. There is no more fish.

Before we get fish, I and my uncle would have to go to Oron (in Akwa Ibom state) to buy fish and sell here” (in Port Harcourt), he said.

He blamed the pollution on the current spate of illegal refining, which he said the government can control by putting certain measures in place.

“The current condition of the waters is unbearable. I will love it if you can come to the water and see for yourself what is happening. There is no aquatic life anymore. The crude has taken over our river. The crops are dying.

Fishes are dying, the crayfish are dying, the crabs are dying. There is now way we can swim even in the river. Our children cannot even be taught how to swim.

“Some of them (illegal refiners) feel going through the process (of illegal refining) is the only way they can enrich themselves. But if the government can come up with change, employment, opening industries, give our children business opportunities, you will see that it would bring down the kpo fire (illegal refining) issue” he said.

week testimonies fly into television sets of the sick healed, mad persons being freed and rehabilitated, children studying free, and food for all.

Many ask, if a man is down with hunger and sickness, what does he need first, food/ healing or salvation? Some churches choose the later, but at OPM, the former seems to be the choice.

The founder and general overseer of OPM, the apostle, Chibuzor Chinyere, shouts himself hoarse everyday asking those not getting these benefits from their churches to change. He thinks that a church should strive to give, not always taking, to feed the body also not only the souls, and to intervene in the affairs of men such as human wants, not just pave the road to another world (heaven).

Many give testimonies of many miracles there but many more thank the church for the education their children are getting, the free food, the training from the skills centre. They now settle for the food of the soul through preaching and

gospel teaching. It is catching fire like nothing else. Yet, the ultimate is salvation. According to Gershion, this too is the focus of OPM. Truth is, some other churches in the Garden City also offer help, but help is not the focus. They concentrate on teaching and winning souls for the kingdom but the pressure on humans in this generation seems to press people so hard that they care more about surviving and escape from shame than where their souls would be tomorrow.

This morning, a family asked their way to this writer’s home in Elelenwo and begged for financial support to send the wife and two children home so the man of the house can squat anywhere and fight for a new job. He lost his job and now lost his tenancy.

Destitution is knocking on the door and home is the last destination. Too tough, but this writer scratched everywhere and handed in the last card in the house to this threatened family. Now, he can listen to your preaching!.

Does the Church care?

Port Harcourt by Boat With IGNATIUS CHUKWU

H

appenings in most churches these days have left some critics wondering whether the Church is still a solution or has joined the problem. A mail flew in to my box on this matter and it provoked this line of thought further.

It was sent in by a friend and master journalist and teacher, Dagogo Gershom Josiah, who is not only a Christian but was an adjunct professor of Language Arts in the US. His worry: “Nigerians are presently going through a lot of pain. It is reported that the Ni-

gerian economy is shrinking, instead of expanding, while the population is exploding.

Successive governments have not properly addressed these issues resulting in preventable poverty. Year after year, budgets are piously read giving hope that is dashed again and again. Enterprise itself is in the throes of death due to the climate of palpable fear created by joblessness of teeming millions of youth across the country.

“Thus, a great number of people seek refuge in the Churches. But what can these religious organizations do to alleviate the suffering? There are nine million persons who have lost jobs in the past three years and additional two million children out of school since 2015. In the face of this gory contraction of our economy, can our pastors come to the rescue? A good number of church leaders have given up trying but an insignificant few do everything to touch and change lives.

“The Omega Power Minis-

try headquartered in Port Harcourt has proved to deeply care for the people by providing free schooling services (elementary and secondary), free and quality training in crafts and trade.

The church has also done the impossible by giving free restaurant services. Those without food can go there and eat every day and not pay anything.

“Young people who trained in welding, rigging, pipe lining are gaining jobs in prestigious oil firms. At the same time some other churches impose huge fees that disable many from getting admission. It has been observed that our present missionary proprietors in this bracket enjoyed free schooling in their time. Because this group is in the majority, our compassionate Christian faith is recently misunderstood.

“Christian leaders are encouraged to do more for the people at this time.

When this happens they will justify their calling and advance the Great Commission..

Until then all they do is smile to the bank and confine the

majority to feed from dustbins.

God forbid!”

Of a truth, OPM is making waves in Port Harcourt for the south-south and south-east with its brand and style of evangelism. Although no organization is without critics, the majority of people in the region agree that the church frowns at destitution, poverty, affliction and satanic bondage. Every

Chibuzor Chinyere

Thursday 20 September 2018

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NEWS CBN working with banks, MTN to resolve ...

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innovations and reforms of the Foreign Exchange regime such as the introduction of the NAFEX window are designed to simplify foreign exchange regulations.

“In response to the recent regulatory actions, the Banks and MTN are engaging the CBN and have provided additional information which is currently being reviewed with a view to arriving at an equitable resolution,” the statement said.

Johnson Chukwu, managing director/CEO, Cowry Asset Management limited, said any form of engagement that will bring solution to this issue is actually welcomed.

“I should be quite happy that such is going on now,” Chukwu, who has advocated some level of engagement said.

Chukwu was concerned that foreign investors, especially, South African investors are hav-

ing a perception that Nigeria is not welcoming foreign direct investments (FDI).

The CBN statement added, “We assure all investors that the integrity of the CCI regime remains sacrosanct and there shall be no retroactive application of foreign exchange rules and regulations. The CBN welcomes all legitimate investors to take advantage of the enormous investment opportunities in Nigeria,” the CBN said.

The Apex bank had in August 29, 2018 imposed heavy sanctions totalling N5.87 billion on four banks under its regulatory purview and asked same to refund the sum of $8,134,312,397.63 for what it described as ‘flagrant violation of extant laws and regulations of the Federal Republic of Nigeria, including the Foreign Exchange (Monitoring and Miscellaneous Provisions) Act, 1995 of the Fed-

eral Republic of Nigeria and the Foreign Exchange Manual, 2006’.

The CBN said in its statement that the delegation of the issuance of Certificates of Capital Importation (CCIs) to commercial and merchant banks some years ago was done to instil confidence in the investor community and encourage the flow of foreign direct and portfolio investments into the Nigerian economy.

Responding to the development, Ayodeji Ebo, managing director, Afrinvest Securities Limited, said the CBN decision to engage MTN may further amplify the negative perception this saga has caused.

“Foreign investors may have that impression that a proper assessment may not have been done before the pronouncement was made. However, we are positive the engagement may favour MTN and ensure sustainability of its business,” Ebo added.

APC moves Presidential Primary to Sept. 25 as...

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election to Sept. 25 because of logistical delays, the party said in a

statement yesterday.

Buhari, 75, is seeking a second term andiscurrentlytheAPC’ssolecandidate.

Emma Ibediro, APC National Organising Secretary who conveyed the decision of the National Working Committee (NWC) said, governorship primaries now hold 29th September while 2nd October is the new date for Senate Primary Elections.

Ibediro announced that 3rd October is the date for House of Representatives Primary Elections and 4th October is for State House of Assembly Primary Elections.

According to the statement, 6th October is National Convention to ratify theelectionofthepresidentialcandidate earlier elected through direct primaries.

The APC’s presidential primaries were initially scheduled for Thursday. Nigeria will hold general elections in February and electoral rules require that political parties elect their presidential candidate even when they have only one.

Meanwhile Akinwunmi Ambode, governor of Lagos State, is seen as being left alone amid crisis rocking his second term ambition, as every big wig in Lagos politics particularly within the APC has seemingly deserted the embattled governor.

Since the news of the alleged disagreementoftheparty’sleadershipwith his ambition to return to office in 2019 cametothefore,andcontinuestomake major headlines in the media, none of the major leaders in the party has been heard speaking for Ambode, a sign that the embattled governor may have offended not a few in the three years +

so far spent in the Government House.

Indeed, the situation is such that those who initially backed Ambode’s re-election and spoke glowing of his ‘superlative performance’ including a prominent traditional ruler in the state have withdrawn their voices, leaving the governor to carry his political cross.

Curiously,GbengaAshafa,aserving senator representing Lagos East, who waswithAmbodeonMonday,September 10, the day the governor picked up his nomination form and formerly declared his intent to seek re-election, has since realigned with Jide Sanwo-Olu, the alleged anointed candidate of the APCleadershipinNigeria’sricheststate.

On Sunday, September, Ashafa was seen with other stalwarts of the APC at the formal declaration of Sanwo-Olu at the City Hall, on Lagos Island.

Another serving senator, Oluremi Tinubu, representing Lagos Central, who was among the first set of people to declare Ambode fit for a second term in office, has also lost her voice.

Oluremi, whose husband, Bola Ahmed Tinubu, is the national leader of the APC and kingmaker in the Lagos politics, has not been heard or seen drumming support for Ambode since the governor openly took a dive into the murky waters of his reelection on Monday, September 10.

Last week, Ambode reportedly met with class Lagos traditional rulers at the Government House, Alausa, Ikeja. The meeting was said to have discussed, among other things, the crisis rocking the governor’s second term ambition.

But since after the meeting, the monarchs have kept sealed lips.

•Continues online at www.businessdayonline.com

Nigeria’s petrol subsidy one of the most expensive...

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according to data compiled by BusinessDay.

L-R: Frank Aigbogun, publisher/CEO, BusinessDay; Anthony Osae-Brown, editor, and Russell Brooks, public affairs officer, US Consulate, Lagos, during the visit of Russell to BusinessDay head office (The Brook) in Lagos, yesterday.

Pic by Olawale Amoo

Forte Oil shares rally after billionaire owner...

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well, so it’s hard to separate this rally from market sentiments,” the

person, who did not want his name in print, said.

Despite the modest gain, however, Forte Oil shares sit at a five-year low and the stock is down 58 percent this year alone, making it one of the worst performing stocks since 2016.

Dele Momodu, publisher of celebrity lifestyle magazine, Ovation, tweeted Tuesday, Sept 12, that Otedola was going to run for the governorship seat of Lagos State, Africa’s sixth largest economy, under the platform of opposition party People’s Democratic Party (PDP).

Momodu was the first to inform Nigerians that Senate President Bukola Saraki will join the 2019 presidential race on the platform of the PDP, months before Saraki publicised his presidential aspirations.

“Lagos2019promisestobeinteresting. PDP offers Femi Otedola governorship ticket. He’s accepted and personally confirmed to The Boss newspaper,” Momodu, who’s also publisher of Boss newspaper twitted via his handle @ DeleMomodu late on Tuesday.

Otedola, 55, has neither denied

nor endorsed Momodu’s statement.

Forte Oil’s share price has been tumbling since February 2016 when it hit a peak of N342 per share.

The company’s downward spiral on the NSE started when investor sentiments for Nigerian stocks soured, following a lengthy collapse in oil prices and Nigeria’s first economic recession in a quarter of a century.

The All share index which tracks price movements of all listed companies closed in the red in 2016, recording a year to date loss of 6 percent.

In 2017, higher oil prices and stable local production helped stocks recover but Forte Oil did not share in the rally, losing half of its value to close the year at N43 from N80.6 at the start of the year. That was despite stocks posting a 42 percent return in 2017.

Originally a Nigerian subsidiary of British Petroleum (BP), Forte Oil has more than 500 gas stations across the country.

It owns oil storage depots and manufactures its own line of engine oils.

Otedola is also one of Nigeria’s most popular philanthropists and over the years has given millions of dollars to causesineducation,healthandthearts.

Since acquiring this stock some five

years ago, the company has undergone massive transformation under majority shareholder and Chairman, Otedola who featured in the 2016 ranking of Forbes billionaires with a net worth of $1.8 billion at the time.

The company has since returned to profits and wiped out the accumulated losses it had reported since when it was called Agip.

ForteOilhaspostedanaveragesales growth of 7.31 in the five years through 2017 and a net profit margin of 4.3 percent.Thecompany’searningspershare grew 25 percent in that period while the company recorded an average return on investment of 20.76 percent and returnonassetsof5.05percent,according to data compiled by the BusinessDay Research and Intelligence Unit.

The company reported revenue of N61.83 billion for the period ended June 2018; a 32 percent increase from the N46.70 billion reported for the period ended June 2017, according to the company’s financial statements filed at the NSE. However, Profit before tax fell 42 percent to N390.82 million for the period ended June 2018, from N677.43 million the year before.

Net profit declined 75 percent to N95.55 million, from N333.74 million recorded in H1 2017.

Everyday Nigerians go to a gas stationtobuypetrol;theypayanaverageof N146.9 per litre (according to National Bureau of Statistics August average pump price) which is a 65 percent discounttotheaverageglobalprice,thanks largely to expensive government subsidies and crude oil swaps deals which have helped supress petrol prices.

But although popular, subsidies are very expensive and lead to misallocation of capital in the economy.

This is why in 2016, Former Governor Lagos State and a national of the All Progressives Congress (APC), Bola Ahmed Tinubu hailed the proposed removal of petrol subsidy by President Muhammadu Buhari as a courageous decision to reallocate funds to other more socially productive services and undertakings.

Unfortunately, he was too quick to sing praises as Nigerians are still purchasing petrol at prices far below the landing cost of petrol motor spirit (PMS) in Nigeria.

Currently, the landing cost for petrol is around N212.7 according to BusinessDay estimates using available NNPC data, with the average PMS Price of N158.8 this year, the Federal Government has covered around N54 per litre for every Nigerian.

Petrol consumption in the country was estimated by NBS to be exceed more than 10 billion litres in the first and second quarter this year, putting estimate subsidy payments at around N540 billion, an unnecessary expense for a country with a budget deficit of almost N2 trillion.

Although the size of the subsidy payment is high, it is not uncommon for oil producing countries to heavily subsidize gasoline prices for their citizens. Organisation for Petroleum exporting countries (OPEC) which is a cartel of some the world’s largest

oil producers have six of its members included in the top 10 cheapest countries to buy petrol.

Nigeria’s petrol price is the sixth cheapest among OPEC countries.

According to International Energy Agency (IEA), OPEC countries spent more than $585 billion on fossil fuel subsidies between 2014 and 2016 to make the product more affordable for their countrymen. Nigeria alone spent $8.5 billion (N3.06 trillion) during this period.

The average price of gasoline around the world is N424.72 per litre. However, there is substantial difference in these prices among countries. The differences in prices across countries are due to the various taxes and subsidies for gasoline.

Economists have warned the government on numerous occasions to cut fuel subsidies in order to liberate capital for investments in strategic sectors of the economy but all such suggestions have fallen on deaf ears.

The super-rich oil producers have learnt not to overburden the government coffers with unreasonable subsidies which has allowed the government have more freedom to channel funds earned from oil exports to developing the economy.

For instance, Saudi Arabia which produces more than 9 million barrels of oil per day and internally refines its petroleum sells petrol at N197.16 per litre.

In Qatar, petrol is even more expensive as it is sold at N209.07 per litre while super rich United Arab Emirates sells at N244.75. Indonesia, another big oil producer sells at N247.51 while Angola sells for N208.98.

For a non-OPEC member like Russia PMS retails at an average of N243.24.

Callingintoquestionthestrangemotive for Nigeria’s Federal government to continuallysuppresspetrolpriceswhich iscausingmarketinefficiencyandsometimesleadstolongperiodsofscarcitydue to subsidy non-payments.

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Investing in Rivers State

Nigeria’s first perfume compounding lab now in Port Harcourt Valerie Young-Harry says it takes up to N100m to achieve such feat and that there is huge investment opportunity in growing the plants that give the rare oils and setting up the extraction business that may replace imported oils Ignatius Chukwu

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he Woji section of Port Harcourt, near the Trans-Amadi Industrial zone, may fast be transforming into a continuation of the industrial range.

Just last week, this newspaper unveiled ALCON centre in Woji where power equipment especially low voltage accessories are being manufactured to ABB standards.

Now, we uncover Nigeria’s first perfume compounding lab which take between N30m and N100m to set up. Welcome to Valia Calleries Limited where oil and perfumes meet for a handshake that leaving lingering scents almost forever. This all due to the decades of untiring

strives of a woman known as Valerie Young-Harry, formerly Valerie de La Fontaine.

Under the brand name of Euphoria Scents, Valia Calleries rolls out a range of oils and perfumes that compete with the best odours anywhere in the world, including the home of alluring couture, France.

She brought this discovery to the 2018 exhibition of the Manufacturers Association of Nigeria (MAN) in Port Harcourt in August at the Atrium Event Centre on Stadium Road.

Euphoria Scents range is said to be founded in 2015 as a range of specially blended, long-lasting perfumes, and aromatherapy products. They are said to be from handcrafting production techniques and procedures. The experts at

Valerie Young-Harry with MAN national VP, E.E. Akpan

House of Nigeria’s first perfume compouding lab in Nigeria located at Woji, PH

Euphoria are said to top delivery service, and specialize in research and development. This is said to be for continuous improvements in the finest traditions of perfume production, utilising dedicated production hand-operated tools, and maintaining strict quality control for every production process, which includes incoming material checking, in-process checking, semifinished products checking and finished products checking. “This is meant to eliminate any quality problems during production, and to ensure product quality. Euphoria Scents is NAFDAC-approved and IFRA-compliant.”

Euphoria Scents are said to be from natural plant-based products to the exclusion of harmful chemicals.

In an exclusive interview, the CEO said Euphoria Scents is a range of highly differentiated, specially blended, long-lasting perfumes, and aromatherapy products, all delicately blended and exquisitely bottled in Nigeria by Valia Galleries Ltd. Euphoria Scents is NAFDACapproved, IFRA-compliant, and a council member of MAN. On whether Euphoria line is locally made, the CEO said: “Yes, our fragrances are fully blended, cured and bottled in our laboratory in Port-Harcourt. We are equally NAFDAC registered as our Standard Operating Procedures conform with international best practices, Euphoria Scents result from several months of culturing.

Our basic ingredients include pure essential/perfume oils cultivated from rare plants extracts; stabilizers; and bases selectively sourced from different parts of the world, including Africa, Europe, UAE, the Middle and Far East. Essentially, we produce “Esprit de Perfum” and “Extraits de Parfum” to the exclusion of aqua. This means that water; an oxidation trigger, is excluded from our fragrances. Our perfumes are thus not just concentrated and long-lasting but will neither oxidise nor expire. Indeed, they will last for millennia. We are writing history.”

She went on: “It is important to note that this is the first time somebody is compounding perfume in Nigeria. It is a slow process. And, you know this attitude of oh, this is made in Nigeria, but when they come and test, they fall in love immediately. That is why we allow people to sample the perfumes here at the exhibition so as to come to terms with the reality of quality made in Nigeria fragrances.”

It was made clear that perfumery is a new industry in Nigeria with gaping holes of opportunities. Port Harcourt seems to grab the first slot with the setting up of Valia Calleries.

She said; “Sadly, most of the extracts are sourced outside the country, as local farmers concentrate on

Valerie Young-Harry

agriculture. There are no known large scale horticulturists; hence the production of perfume extracts from flora is still a dream. We are at the end of the value chain, and sourcing our extracts outside is driving up our costs. We will therefore be happy should people start thinking about how to engage in activities that would broaden the perfume production activity in Nigeria; and that includes production of polished bottles.”

She said that extraction would create another layer of business in the value chain. “If you plant a large farm of jasmine, lavender, rose etc, you will extract some little oil from it. It’s a whole lot of process but whoever wants to go into such farming will also be able to acquire the plant that would extract and bottle the oils.

It is however lucrative as perfume oils do not come cheap; and to produce a fragrance could require up to 30 different extracts.”

She was reminded that most mothers advise their daughters not to spray perfumes in some areas of the body (especially armpits) because of breast cancer. It was important to hear from an expert in the field. She said: “When perfumes started last century, I think they were using some dangerous components but lately, regulatory agencies have excluded all of that.

So, there is nothing dangerous in perfumes anymore. All the components now are all organic. There is nothing synthetic in them.”

Valeria Young-Harry is a fragrance designer and founder of Euphoria Scents. With over 30 years’ experience in the perfume industry and market, she has indeed enjoyed a life-long relationship with scents.

From a very early age Valerie has been fascinated by scents. She started experimenting with flowers, spices and special oils in a bid to culturing the ultimate perfumes, and often she kept her results to a select few. Sequel to decades of

pursuing an informal obsession with fragrances, and her exposure to the Parisian society, (with its intense romance with huate couture and sweet, long-lasting scents) in the mid-eighties, Valerie’s love for unique perfumes blossomed to even greater heights, propelling her into a becoming a full time professional perfumer.

In the same vein, being an MBA (Liverpool) holder, Valerie, as she is popularly called, is ever conscious of the importance of meeting the value expectations of customers.

Frustrated by increasingly diminishing odour life of a great number of available perfumes in today’s marketplace, she expanded her scope and started culturing perfumes for a larger audience in 2015. The result is Euphoria Scents’ multi-note, multiproduct fragrance creations; made possible by rare and exquisite natural ingredients, and acute olfactory talents. Valerie is in charge of fragrance design and quality control.

For Alcohol-Based Products: We use specially Denatured Alcohol or SD is a high grade ethanol; in essence super refined vodka. It’s also called “perfumer’s alcohol”.

The inclusion of Bitrex in SD, gives a uniquely bitter taste that acts as deterrent for those who would want to consume it.

For Oil-Based Products: Oilbased scents are the most ancient form of perfumes, being the perfume of choice for ancient GrecoRomans, and Egyptians. Indeed the earliest perfume yet discovered was found in Cyprus in 2003 and was dated to over four millennia.

These priceless perfumes of antiquity were observed to have been oil based! More interestingly, they very aptly were discovered on the island reputed to be the birthplace of Aphrodite-the ancient Greek symbol of love and attraction. Special oils such as sweet almond oil, grapeseed oil, and fractionated coconut oil, are used as carriers as it was then, and as it is now at Euphoria Scents.

Thursday 20 September 2018

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NEWS Trial judge to give first ruling in corruption case over $1.3bn Nigeria oil field DIPO OLADEHINDE

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n Thursday, a court in Milan, Italy will starts trial against executives of two oil giants Royal Dutch Shell Plc and Italy-based Eni S.p.A. in an on-going bribery scandal of Nigeria’s OPL-245 offshore oilfield, one of Africa’s most valuable oil blocks worth about $1.3 billion.

In a case running parallel to the main trial, a judge in Milan will decide, for the first time, whether $1.1 billion of the sum paid was siphoned in bribes to win the license to the field as latest developments thicken the plot further with a briefcase seized in a raid on a Swiss financier’s apartment belonging to a Nigerian Emeka Obi could be crucial to the case.

“It’s clear the ruling will become a first building block in favor of the prosecution or the defense ... it will be a first verdict by a third-party judge on the matter,” a source told Reuters. Inside the briefcase, Swiss prosecutors found a

laptop, two Nigerian passports, five sim cards and a hard drive containing 41,000 documents that prosecutors believe could be crucial to the trial playing out on the other side of the Alps.

The Geneva apartment belonged to Olivier Couriol, a former Credit Suisse banker who has been named in two other international corruption cases and also under investigation for his role in a separate deal that involved allegedly paying bribes to sell defence equipment to the Malian government.

Olivier Couriol said Nigeria’s Emeke Obi was merely a friend who left the bag at his flat by mistake while on holiday. Geneva prosecutor Claudio Mascotto said he believes it was stashed there to keep it hidden from authorities.

The significance of the briefcase is underlined by the actions of Geneva prosecutor Claudio Mascotto.

After inspecting its contents, he swiftly opened his own

investigation into money laundering and bribing a foreign public official. He then contacted his counterpart in Milan to tell him he thought it may be important.

Authorities believe the documents may also contain details of other questionable deals for Nigeria’s oil fields.

The case, which has been repeatedly delayed, involves the 2011 purchase by Royal Dutch Shell Plc as Eni’s current CEO Claudio Descalzi, former CEO Paolo Scaroni, and Chief Operations and Technology Officer Roberto Casula are standing trial alongside four former Royal Dutch Shell staff members including former executive director for Shell’s Upstream International operations Malcolm Brinded and two former MI6 agents Guy Colegate, a business adviser; and John Copleston, a strategic investment adviser employed by Shell for allegedly paying millions of dollars in bribes in order to acquire a lucrative oil exploration and drilling license in Nigeria.

Minimum wage: NLC begins strike September 26 KEHINDE AKINTOLA, Abuja

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he National Executive Council (NEC) of Nigeria Labour Congress (NLC) has mandated all its organs and state chapters to embark on nationwide strike from Wednesday, September 26, 2018 should the Federal Government fail to conclude ongoing negotiation on the new national minimum wage.

The council which is the highest decision making organ of the labour centre, passed the resolution at the NEC meeting held in Abuja.

It also tasked all the state governments to prioritise payment of pensions and gratuity to retired civil servants.

Ayuba Wabba, NLC president, read the communiqué

issued at the end of the meeting after over six hours deliberations.

The NEC mandated the National Action Council (NAC) of the congress to declare industrial action at the expiration of the 14- day ultimatum given to reconvene the tripartite negotiation for new minimum wage for workers’ which was adjourned sine die.

The reports of the negotiation committee was expected to be concluded at the end of September but the meeting was adjourned indefinitely because of inability to arrive at a definite figure of minimum wage, but Labour faulted the adjournment and issued a 14- day ultimatum for negotiation to continue of face industrial action.

Wabba said that the report of the labour committee to the negotiation table was very clear that the decision to adjourn indefinitely was not a collective one and therefore resolved to insist on the ultimatum.

We received the report from the congress committee that participated in the negotiation and the union was impressed because they defended the interest of workers at the negotiation table, that was why the union was worried over the adjournment sine dine , which was against ILO Convention.

“We therefore applauded and approve the 14- day ultimatum and the reconvene of the tripartite meeting to recommend the minimum wage.

Abuja trade fair targets 1m participants HARRISON EDEH, Abuja

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onia Soyede, the director general of the Abuja Chamber of Commerce and Industry (ACCI) says the 2018 edition of the Abuja international trade fair targets to host over one million visitors with about 1,500 exhibitors across sectors of the economy.

Tonia, who spoke at a pre-event conference, Wednesday, in Abuja, also said that 43 foreign exhibitors and 11 embassies would be at the event which has as theme “enhancing SMEs in agribusiness through innovative technology.”

According to Tonia, the fare will seek to strengthen business relationship between local and foreign investors and further leverage on the success of the 2017 edition to promote Nigerian products.

“Last year, we had 1350 exhibitors, we were able to capture a couple of countries which are interested in one or two things made in Nigeria, particularly

CHANGE OF NAME

I, formerly known and addressed as Ojo Oluwatoyin Janet now wish to be known and addressed as Abiodun Oluwatoyin Janet. All former documents remain valid. General Public please take note.

agricultural produce, and some level of vehicle assembly which we are still pursuing till this moment.

“The expectation this year is to be able to further concretise on the relationship formed last year. We hope to bring to fruition the assembly of vehicles in Nigeria and also hope new relationship will be formed this year,” she said.

CHANGE OF NAME

I, formerly known and addressed as Odekwo Ruth Oniovosa now wish to be known and addressed as Odeku Ruth Oniovosa. All former documents remain valid.

General Public please take note.

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A1

How the promise of electric power could transform aviation

Emerging markets whack-a-mole is a distraction

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Page A4

World Business Newspaper

US business groups rail against Trump’s China tariffs

Trade associations support pushing Beijing to open markets but say tactics ‘ineffective’ ANDREW EDGECLIFFE-JOHNSON

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onald Trump’s newest round of tariffs on Chinese imports puts off the worst of the impact until after US retailers’ critical Christmas season and spares a few businesses, including smartwatches and high chairs, but corporate America still decried the move as costly and counterproductive.

Washington’s largest trade associations have spent months ramping up campaigns against the escalating trade war, identifying state by heartland state how many jobs and export dollars would be put at risk. In public hearings, small business owners making everything from fishing nets to wooden crates urged Washington to reconsider, but Mr Trump tuned out the chorus.

“As thousands of businesses have testified and explained in comments to the administration, tariffs are a tax on American families,” National Retail Federation president Matthew Shay lamented after the new 10 per cent tariff on $200bn of Chinese imports was announced. It was “disappointing” that the administration had ignored the voices of those affected, he said.

Gary Shapiro, president of the Consumer Technology Association, said his industry appreciated the exemption of some connected devices but was still worried about the impact on printed circuit assemblies, routers and networking equipment.

Tariffs were an ineffective — and possibly illegal — too, he argued. “Congress has not given the president or the [US trade representative] a blank check to pursue a trade war.”

The Trade Act of 1974 says that the president must consult with the private sector and “shall take the advice received” into account in setting trade policy, John Murphy, senior vicepresident for international policy at the US Chamber of Commerce, echoed on Twitter.

Several US business groups support the idea of pushing China to open its markets to US imports, and penalising it for intellectual property infringements, but disagree with Mr Trump’ tactics.

“The administration has correctly identified the real problem of China’s discriminatory trade practices. But unilaterally imposing tariffs is the wrong way to achieve real reforms,”

the Business Roundtable said, urging Washington to work with its allies to push for long-term reforms in China.

Craig Allen of the US-China Business Council, which represents about 200 US companies that do business with China, said the administration’s focus on market access, IP rights and technology transfer was correct but using tariffs was “counterproductive”.

Tom Donohue, the Chamber’s president, agreed the US had “serious issues to resolve with China on market access, unfair subsidies, technology theft, and cyber security” but expressed dismay that the administration did not heed US companies’ warnings about rising costs and lost jobs.

Before announcing the latest measures, Mr Trump played down the extent to which tariffs were increasing prices, tweeting that “cost increases have thus far been almost unnoticeable”.

Companies from Coca-Cola to Whirlpool have announced price increases, however, expressing confidence in a strong economy allowing them to pass the burden to customers.

“We cannot afford further escalation, especially with the holiday shopping season right around the corner,” Mr Shay said. The administration’s decision “has not gone the way we hoped it would”, Macy’s chief executive Jeff Gennette told a CNBC conference on Tuesday: “We’re going to see how the customer votes on this.”

China unlikely to back down in Trump trade war Some business groups said the biggest disruption came from the uncertainty produced by the trade dispute. “With every day that passes without progress on a rules-based, bilateral trade agreement with China, the potential grows for manufacturers and manufacturing workers to get hurt,” the National Association of Manufacturers said. “Now is the time for talk — not just tariffs”.

The escalation of the trade tensions comes at the start of the US reporting season, when companies are expected to spell out the impact on their earnings and outlook. FedEx, the Memphisbased courier that is seen as a bellwether of global business confidence, said on Monday it had started to see economic activity “moderate” in China as a result of the trade tensions.

Italy’s League brings ‘racism’ defamation case against black Cécile Kyenge faced abuse when she became minister in previous government MILES JOHNSON AND DAVIDE GHIGLIONE

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hen Cécile Kyenge was appointed as Italy’s first black government minister in 2013, she was likened to an “orang-utan” by a politician from the country’s hard right League Party. Five years later the League is Italy’s most popular party and has

brought a defamation case against her for accusing it of racism.

Ms Kyenge, integration minister in the liberal government of Enrico Letta, is fighting the case in a court in the northern city Piacenza brought by the League and approved by Matteo Salvini, the party’s leader and Italy’s powerful interior Continues on page A2

Critics call President Trump’s latest tariffs ‘a tax on American families’ © Getty

EU opens probe into Amazon use of data about merchants Group serves in dual role as host and competitor to other sellers on its site ROCHELLE TOPLENSKY AND SHANNON BOND

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mazon’s business model is under the spotlight in Europe after the EU’s antitrust watchdog launched a preliminary investigation into how the platform uses data about merchants.

The informal probe concerns the ecommerce group’s dual role as a competitor but also host to third-party merchants, which sell goods on Amazon’s websites, Margrethe Vestager, EU competition commissioner, said on Wednesday.

The move came on the same day that Brussels ruled that an arrangement between McDonald’s and Luxembourg, which allowed the fast food group to pay almost no tax on its European royalties in both the EU and US, did not break the bloc’s laws.

In the case of Amazon, the commission sent questionnaires to merchants this week to gather

information. The action was not prompted by a complaint but rather initiated based on the commission’s own market observations and the results of its ecommerce sector inquiry completed in 2017.

Preliminary investigations can sometimes lead to a formal investigation. Google’s antitrust troubles began with an informal probe in 2010 Amazon’s website sells its own products as well as those from other businesses. Its marketplace business lists the products of third-party sellers on its websites, alongside the company’s own items. The independent sellers can choose to use some or all of the platform’s fulfilment, payment and advertising services.

Last year, for the first time, more than half of all items sold on Amazon came from third-party merchants, chief executive Jeff Bezos told shareholders earlier this year. European businesses used the

service to export more than €5bn worth of goods last year, according to company figures.

Amazon earns revenues for the services it provides but also benefits because the third-party sellers increase the selection and range of products available on Amazon’s websites. The independent sellers can expand their reach and start selling online with limited initial investment.

Although EU officials have stressed that this is not a formal probe, the action indicates that the commission does have concerns.

The questionnaires will be returned in the next month or two, after which time EU officials will determine their next steps, if any.

Amazon declined to comment.

The company has in the past played down antitrust concerns, noting that it competes in large markets with multiple competitors and that online sales are a small fraction of the overall retail market.

Danske Bank chief Thomas Borgen quits over money laundering scandal Bank admits to a ‘series of major deficiencies’ in systems at Estonian branch RICHARD MILNE AND CAROLINE BINHAM

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anske Bank’s chief executive has resigned after Denmark’s biggest lender said about €200bn in questionable money flowed through its Estonian branch in one of the largest money laundering scandals ever seen.

Denmark’s largest bank said “a series of major deficiencies” in its control and governance system allowed its Estonian branch to be used for suspicious transactions from 2007 until 2015.

Danske said about €200bn of payments had flowed through its Estonian branch from non-resident customers — from countries such as Russia, the UK and the British Virgin Islands — but that it could not yet estimate how many of these were suspicious.

An analysis of 6,200 of the riskiest customers — out of 15,000 nonresident clients in total — showed that the “vast majority have been found to be suspicious”.

Thomas Borgen, who was in charge of international banking including Estonia from 2009 to 2012 and has

been chief executive since 2013, faced allegations he ignored warning signs of trouble.

“It is clear that Danske Bank has failed to live up to its responsibility in the case of possible money laundering in Estonia,” said Mr Borgen. “I deeply regret this. Even though the investigation conducted by the external law firm concludes that I have lived up to my legal obligations, I believe that it is best for all parties that I resign.”

Danske said it would donate the gross income from its Estonian operations during the nine-year period — estimated to be about DKr1.5bn — and thus cut its profit forecast for 2018 from DKr18bn-DKr20bn to DKr16bn-Dkr17bn. The donation will go to an independent foundation that will be set up to combat international financial crime.

Shares in Danske fell 4.4 per cent to DKr167.30 in early trading. The shares have fallen by almost 30 per cent in the past six months.

Ole Andersen, Danske’s chairman, said: “The bank has clearly failed to live

up to its responsibility in this matter.

This is disappointing and unacceptable and we offer our apologies to all of our stakeholders — not least our customers, investors, employees and society in general. We acknowledge that we have a task ahead of us in regaining their trust.”

Danske has been under the spotlight for its slow reaction to its money laundering problems. The Financial Times revealed last week that Mr Borgen had rejected calls in October 2013 to review and potentially reduce its non-resident portfolio in Estonia.

The Estonian non-resident business had a return on allocated capital of 402 per cent compared with 60 per cent for Estonia as a whole and 7 per cent for neighbouring Latvia.

Among the striking revelations in the report is that Danske received a warning from Russia’s central bank in 2007 via Danish regulators. The Russian central bank said Danske customers “permanently participate in financial transactions of doubtful origin” estimated at billions of roubles monthly.

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NATIONAL NEWS

Italy’s League brings ‘racism’ defamation...

Wall Street shake-up scatters US tech behemoths

Continued from page A1 minister. She could face a large fine if found guilty.

The case comes as Mr Salvini’s anti-migration League is surging in popularity — overtaking the Five Star Movement, its coalition partner, in recent polls.

“All these attacks had the same objective: attacking me as a person, and they were racial attacks,” Ms Kyenge told the Financial Times.

“That’s why I asked the leader of that party, Matteo Salvini, to distance himself from what was going on within his own party, to condemn those people and sanction them according to our law and our constitution to prevent racism from becoming a political weapon.

I never had an answer from him.”

Ms Kyenge, now a member of the European Parliament for the Democratic party, said that she had relinquished her legal immunity as an MEP to face the defamation case as a way to take a stand against racism.

Mr Salvini’s office declined to comment on the case.

Claudia Eccher, a lawyer assisting Mr Salvini and the League in the case, said the party had “a critical attitude towards those who generalise and call the party racist. Matteo Salvini is very precise on this. This is not only an action against Ms Kyenge but has become a matter of clarification; racism is not part of the Northern League foundations and Matteo Salvini is very clear on this.”

When Ms Kyenge was appointed in 2013 she faced a barrage of abuse from several League politicians.

Roberto Calderoli, a League senator and veteran of the party, in 2013 said: “When I see Ms Kyenge I am unable not to think about, although I don’t say that it is, the appearance of an orang-utan,” while a League MEP in the same year said Ms Kyenge would impose “tribal traditions” on Italy and called the then government a “bongo bongo” administration.

Fabio Rainieri, a former League member of parliament, in 2014 posted a picture of Ms Kyenge on to his Facebook page with a picture of a monkey superimposed on her face.

The defamation case is tied to words spoken by Ms Kyenge at an event in 2014 following the publication of the photo by Mr Rainieri.

Ms Kyenge, who was born in the Democratic Republic of Congo and moved to Italy as a student, said Mr Salvini’s anti-migration rhetoric had opened a “highway” for far-right groups in Italy to voice racist abuse.

Mr Salvini has repeatedly hit back at accusations of racism from critics, arguing instead that he is trying to crack down only on illegal migration to Italy.

“Since the current government took office, it’s like if any type of verbal violence has become legitimate,” she said. “Some people are no longer ashamed, and say what they think out in the open. I have always said that Italy is not racist but there are hotbeds of racism, xenophobia that should not be underestimated.”

The integration ministry headed

by Ms Kyenge was attacked by Mr Salvini as a waste of government spending when it was created in 2013. He called it “a useless expensive entity, a factory of hypocrisy”.

A reclassification of S&P 500 sectors will see likes of Alphabet and Facebook moved MAMTA BADKAR AND NICOLE BULLOCK

T Germany’s Angela Merkel, left, and Donald Trump of the US, second right, at the Nato summit in July. Trump’s infidelity to the postwar system is disquieting but perhaps he is doing through choice what future presidents will do through necessity © Reuters

America can no longer carry the world on its shoulders Relative decline and domestic exhaustion create an opening for realpolitik JANAN GANESH

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o become a “normal country” is the dream of more than one republic. The world is familiar enough with the German case. Having atoned for the war and put Europe first, its next step as a common-orgarden nation is to pursue its narrow interests without embarrassment.

Because he is so peculiar, we cannot credit that Donald Trump’s project is the normalisation of his own country. For all their shock value, that is what his foreign policies amount to: the restoration of the US as a selfish state among selfish states, not an over-worked governess with the entire free world as her mewling wards.

This realpolitik can be selfdefeating. It misses the national interests that are served through such nominally high-minded works as the Paris climate accord. But it is still more coherent than its critics. Liberals chafed at American power until its threatened retreat, at which point Nato and the Washington Consensus on trade became sacraments to be saved from populist menaces.

As for mainstream Republicans, at least Mr Trump does not go in for mystical hokum about the US as a special nation ordained to uphold freedom.

Realism has more going for it, though, than internal coherence.

It also fits the external conditions. To lead a world order takes a nation in the full plumage of its powers. That is a better description of the US in 1948 than 2018, much less 2048. Mr Trump’s infidelity to the postwar system is disquieting, but perhaps he is doing through choice what future presidents will have to do through necessity.

Pax Americana is not the natural order of things. It is a phase born of the most extreme circumstances. The US accounted for a third of the world’s output when it set up the Bretton Woods institutions, revived Japan and secured Europe. Because its absolute power remained so awesome, we forget that its relative position began to decline soon after. It now accounts for about 20 per cent of global output. It does not have the wherewithal to underwrite the democratic world forever. At some point, a president was going to construe the national interest in narrower terms. The most recent three were elected on a pledge to do so.

Whether Mr Trump-as-statesman understands the relative decline he has lived through — he was born in 1946 — Mr Trump-as-politician understands something just as relevant. The taxpayer still awaits the peace dividend that was said

to be in the mail when the Berlin Wall turned to debris.

The US has spent most of the post-cold war era in expensive conflicts in another hemisphere.

These “forever wars” rolled on as the home land endured a financial crash and the kind of infrastructure that should be beneath the dignity of the nation that built the Hoover dam.

The two trends — relative decline and domestic exhaustion — have created the best atmosphere for realpolitik since the post-Vietnam years. The difference is that this time it should last, as China and other powers trim America’s room for manoeuvre.

There is no demand for isolation. There is plenty for a focus on interests over values. Mr Trump’s is the first (and therefore the worst) attempt to service that demand. There was no need to humiliate allies as blameless as Canada or to impose, as his government did this week, new limits on the annual intake of refugees. But the underlying logic of selfishness will outlast him. Realists smell a chance to temper the crudities of America First into a serious, interest-led, foreign policy. The foremost among their academic tribe, John Mearsheimer and Stephen Walt, each have books out to encourage their nation’s retirement from “liberal hegemony”.

South African rand rallies after inflation data Now all eyes are on the country’s central bank FEDERICA COCCO

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he South African rand rallied on Wednesday, after new inflation data showed consumer price growth easing to lower than expected levels and amid a broad rise among emerging market currencies.

The rand rallied 1.7 per cent against the dollar on Wednesday morning to R14.64. Several other EM currencies that are actively traded during the European day, including the Turkish lira, also advanced.

The inflation release comes ahead of Thursday’s rate decision from the South African

Reserve Bank’s monetary policy committee. Economists polled

by Reuters expect the central bank to keep rates on hold for the moment.

The headline consumer price index showed prices were 4.9 per cent higher in August compared to the same period last year. Economists had predicted the index would increase to 5.1 per cent, according to a poll by Thomson Reuters.

The country’s core inflation — which strips out volatile energy and food prices — came in at 4.2 per cent for August, softer than the 4.3 per cent reported for July.

The rand has lost about 16 per

cent of its value since the start of the year due to a mixture of poor domestic growth and weak commodity prices. The currency has also borne the brunt of souring sentiment on emerging markets as a heavily exposed currency — the equivalent of nearly a fifth of South Africa’s GDP trades in the rand every day.

Africa’s most industrialised economy slid into recession for the first time since 2009 in the first half of 2018. Data on economic growth and industrial figures published earlier this month disappointed investors, as it suggested the economy was much weaker than previously thought.

ech investors are braced for what some have called a “deFaanging” of the sector, a reference to the handful of major US tech companies that have led Wall Street to record highs in recent years.

Next week index provider S&P Dow Jones Indices will move Facebook and Alphabet from info tech into communication services, a revamped sector whose creation is the most striking change in a shake-up of the widely tracked classification system investors use to help navigate the world’s biggest stock market.

When the dust has settled, seven tech stocks that represent roughly a fifth of the S&P 500 information technology sector will be reclassified as communication services, according to State Street Global Advisors.

Some 16 stocks, including Netflix, whose combined market cap currently accounts for about 22 per cent of the consumer discretionary sector, will also join the renamed sector that is currently home to just three companies, including Verizon and AT&T. Given the explosive rise in passive investing over the past decade, the changes pose a challenge to investors who have used the sector system to gain exposure to the tech sector and the more defensive telecoms sector, as well as the active fund managers who use the sectors as benchmarks.

In the short term some are expecting volatility as portfolios are rebalanced.

“There is no question we will see elevated volumes in most of these stocks,” said Rob Nestor, the president of Direxion, an ETF provider, “whether that is enough to affect prices dramatically, it is hard to tell in advance.”

Chart showing the changing sectors of the S&P 500 As a rough estimate, he expected the entire sector reclassification to drive about $20bn in trading volume.

The changes mean that the tech sector, which has swelled to account for about quarter of the total market value of the S&P 500 thanks, in part, to the meteoric rise of the Faangs, will shrink to about a fifth.

What is left in the info tech sector will have a greater weighting towards hardware companies, including Apple, as well as chipmakers and traditional tech stalwarts like Microsoft.

While the overhaul will scatter Facebook, Apple, Amazon, Netflix and Alphabet across more sectors, analysts say that in other ways it will sharpen the prominence of the tech behemoths.

Alphabet and Facebook’s departure for communication services will see trillion-dollar Apple’s sector weight within info tech rise to 22 per cent, from 17 per cent, according to analysts at UBS. The weighting within info tech of Microsoft, which is closing in on a $1tn valuation, will rise to 16 per cent up from 13 per cent at present.

While the exit of Netflix means that Jeff Bezos’s ecommerce behemoth Amazon will account for almost a third of the consumer discretionary sector, up from the current 26 per cent.

Thursday 20 September 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

A3

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Emerging markets whack-a-mole is a distraction ‘Turkgentina’ has grabbed the headlines but it is the US and China that matter PAUL GREER

D

uring much of this year, emerging markets have resembled a giant game of country whack-a-mole. Just when you thought one idiosyncratic story was temporarily under control, another one popped up. Whether it was Turkish policy mistakes, Argentine capital flight, Brazilian political risk, South African land reform or Russian sanctions fears, there has been no shortage of negative headlines.

The result has been “EM contagion” fears hitting levels not seen in years. While the collection of country fragilities has not helped, however, we do not believe they have been the cause of EM’s weakness this year.

Instead, they are a symptom of the overarching investment theme for 2018: US dollar liquidity withdrawal.

Tighter, faster, stronger As the US economy expands rapidly and price pressures build, the Federal Reserve has kept its monetary policy tightening on autopilot.

With recent activity data showing little sign of easing up, the pace of rate hikes looks set to continue into 2019, pushing front-end US yields to levels not witnessed since the global financial crisis.

Perhaps of more relevance to EM investors, however, is what the Fed has been doing with its balance sheet.

With the pace of Fed quantitative tightening set to accelerate to $50bn a month in the fourth quarter, the continued contraction in the dollar value of world money supply will speed up.

This drainage of global dollar liquidity, especially offshore dollar liquidity, is hitting EM disproportionately hard. Non-resident portfolio flows into EM have dried up while US corporates are repatriating capital back home. All of this is likely to continue benefiting the US dollar, given the divergence in growth and interest-rate differentials between the US and the rest of the world. This remains a significant hurdle for the EM universe.

Trade, growth and inflation

Global trade tension is another dominant concern. It seems likely the escalating Sino-US tariff war will continue as Donald Trump plays to his core support ahead of November’s midterm elections. Given the unpredictable nature of US policy, and the heightened sensitivity of EM growth to global trade, the investment climate will remain uncertain.

Of course, EM growth momentum has already cooled this year as non-energy commodity prices drop, consumer sentiment wanes and monetary policy is tightened.

Many EM central banks have responded this year, either proactively or reactively, to currency weakness and rising inflation expectations, while others will soon do so. It is clear that the extraordinary rate easing cycle of 2017 is over and the path of travel is higher.

EM inflation has risen this year and is set for further upside as the dollar strengthens and the risks of another near-term El Niño weather event in the Pacific Ocean grow. This has the potential not only to impact domestic price pressures adversely in several EM countries, but also to push food prices higher globally.

Given this triple whammy of weaker currencies, slowing growth momentum and rising price pressures, EM inflation break evens still look cheap. Real yields appear attractive and the defensive characteristics of inflation-linked bonds can offer drawdown protection for dedicated investors during periods of risk aversion.

‘Turkgentina’ While these “big picture” themes have been playing out, it has been easy to focus solely on the litany of idiosyncratic horror stories across EM. Understandably, “Turkgentina” has been front and centre for the financial press given the extraordinary volatility of both the Turkish lira and the Argentine peso. The vulnerabilities of both countries have been well publicised but, even at this juncture, the worst may not yet be over, given the looming recessions in both countries and the political fallout from Argentina’s IMF programme.

Orange Bank CEO to step down from French online bank DAVID KEOHANE

A

ndré Coisne, the chief executive of Orange Bank, which was launched in France to great fanfare last year, is to leave the online bank in the coming weeks.

The news of Mr Coisne’s resignation was first reported

by Reuters and confirmed by people familiar with the matter.

An official announcement is expected as early as the first half of October.

According to people familiar with Mr Coisne’s thinking, his departure is not related to the performance of Orange Bank.

Instead it is due a planned re-

organisation of the management structure of the online bank — Paul De Leusse, a new group head for mobile financial services with previous banking experience, arrived in May and has been reconsidering how the bank should be organised.

Mr Coisne is expected to stay on in advisory role.

Orange Bank was the latest big entrant into France’s online banking market. Its 650 stores and the Orange brand have been put forward as an advantage — two-thirds of customers are also clients of the mobile phone operator. Mr Coisne had previously suggested it would take “five to six years” to hit profitability.

Presidents Doland Trump of the US and Recep Tayyip Erdogan of Turkey at the 2018 Nato summit in July. The travails of Turkey and Argentina have dominated EM headlines but it is policies made in the US and China that matter © Getty

KPMG tax event boycotted by academics and campaigners ‘Advisers on avoidance’ criticised for hosting ‘festival of tax’ in London MADISON MARRIAGE

T

ax campaigners and academics have boycotted a “festival of tax” held by KPMG on Wednesday over concerns about the firm’s past role in helping large multinationals minimise their tax bills and the inclusion of a rightwing think-tank as a speaker.

The event, which KPMG held in central London alongside consultancy Jericho Chambers, was billed as an “idea exchange” where a range of participants including politicians, academics, campaigners and policymakers would discuss the topic of “responsible tax”.

Paul Monaghan, chief executive of the Fair Tax Mark, which lobbies companies to adopt ethical tax practices, said he and two

prominent academics focused on this issue had boycotted the event.

Mr Monaghan said it was “beyond a joke” that KPMG had decided to co-host the event “given they are active advisers on tax avoidance”.

He added: “We have no problem with them being involved in the conversation [on responsible tax practices], but it is beyond daft for them to try and lead the conversation.”

Prem Sikka, professor of accounting at the University of Sheffield, also declined to attend.

He said: “I have long boycotted events organised and colonised by unethical organisations. I can’t recall any commitment from KPMG saying that they have abandoned the tax avoidance business.”

KPMG has been criticised in

the past over the advice it has given to large companies on structuring their tax affairs, including Stagecoach in 2016, Pendragon in 2015 and P&O Cruises in 2013.

The Big Four accounting firm was also criticised by the UK public accounts committee in 2012 and in 2013 over its tax advice while it advised individuals and companies named in the Paradise Papers last year.

Mr Monaghan was also critical of the inclusion of the Institute of Economic Affairs as a prominent speaker at the event. The IEA is known for being outspoken on Britain’s tax policies, and in 2016 published what it described as a “groundbreaking report” calling for “the abolition of a raft of taxes”, including inheritance tax, council tax and the TV licence fee.

Farfetch to be valued at as much as $5.5bn in IPO ALIYA RAM AND NICOLE BULLOCK

F

arfetch is set to be valued at between $4.9bn and $5.5bn in its initial public offering this week after the London-based start-up increased its expected price range amid strong investor interest for technology stocks.

The online luxury fashion retailer will be the first major European tech company to go public after Adyen, the payments group, listed on public markets this summer with its shares more

than doubling on their debut.

Farfetch, which will list in New York this week, has set a price range of $17 to $19 a share, according to an updated regulatory filing published on Monday. The range is an increase from the $15 to $17 range mooted earlier in the year and will give the start-up a proposed valuation of around $5.2bn on a diluted basis, compared with expectations of around $5bn.

At the middle of the price range Farfetch will have a

market value of $4.4bn, which is lower than its diluted valuation because the company will also sell stock and options.

Farfetch declined to comment.

Founded a decade ago by Portuguese entrepreneur Jose Neves, Farfetch runs a shopping platform that ships to 190 countries, selling clothes for luxury brands including Gucci, Fendi and Valentino. It is one of the three main luxury ecommerce companies in the world, alongside Yoox Net-a-Porter and MatchesFashion.

Oil climbs as US crude stocks fall to 3½ year low PAN KWAN YUK

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il bounced higher on Wednesday, finding support after US gasoline stocks posted a surprise weekly drop and crude inventories fell to their lowest levels since February 2015.

Inventories of US motor gasoline fell by 1.7m barrel for the week ended September 14, the Energy Information Administration said on Wednesday, confounding expectations for

an increase of 31,420 barrels.

US crude stockpiles clocked a 2.05m barrel decline for the week, following a 5.2m barrel drop the previous week. While the latest decline is smaller than the 2.6m barrel draw the market had forecast, at 394.1m barrels, US crude supplies are now at their lowest levels since February 2015. They are also about 3 per cent below the five year average for this time of the year, the EIA says.

West Texas Intermediate, the

US oil benchmark, extended earlier gains to trade 1.5 per cent higher at $70.90 a barrel, a one-week high. Brent crude, its global counterpart, is up 0.4 per cent at $79.31 a barrel after having been down by as much as 0.7 per cent earlier in the day.

While oil prices have been under pressure this summer, they have received recent support from the US restoration of Iran sanctions as well as Hurricane Florence last week.

A4

BUSINESS DAY

FT

C002D5556

Thursday 20 September 2018

ANALYSIS How the biggest private equity firms became the new banks

After the crisis the largest groups launched huge lending arms.

But will they falter when interest rates rise? ibson Brands is the legendary guitar maker based in Memphis that has made instruments for Jimi Hendrix and Keith Richards. Now, a legal brawl between two of America’s biggest investment firms means the faltering rock’n’roll emblem has also become a symbol of the shifting hierarchy in global finance.

Bankruptcy proceedings in Delaware have brought a crashing end to Gibson’s plan to reinvent itself by selling smart speakers and guitars that tune themselves. They have also set up a courtroom battle between Blackstone and KKR, two of America’s most powerful financial firms, which are among the biggest lenders to the company.

Which firm wins this skirmish matters less than a bigger victory that belongs to them both. Founded by former bankers, they are part of a group of private equity firms which has spent the years since the financial crisis quietly supplanting their former colleagues in the banking world. By setting up huge lending arms, they have been transformed from heavyweight dealmakers that took stakes in companies into the principal bankers for a large tract of corporate America.

Guns and Roses guitarist Slash

If the company doesn’t repay the investors will lose, and that’s where it ends.”

Howard Marks, the founder of Oaktree Capital Management who has made billions of dollars investing in distressed debt and profiting from the fallout of credit busts, agrees — up to a point.

“The raw material of this lending boom is not as fallacious as subprime [mortgages],” he says, comparing the borrower-friendly terms of today’s corporate loans with the fraudulent loans obtained by tens of thousands of homeowners whose defaults later brought the banking system close to collapse.

But he adds that such judgments must always be uncertain. The precrisis mortgages were “something nobody caught”, he recalls. “You say: ‘What idiots. It’s obvious that was all fallacious. Why didn’t anybody catch it at the time?’ Because we don’t see the flaws until the things are tested.”

As the US enters a 10th year of economic expansion with interest rates still near historic lows, some believe the harshest test is about to start.

Michael Patterson has more reason than most to worry about the potential fallout when that growth streak ends. From his position in

plays a guitar made by Gibson, which is caught up in a legal brawl between Blackstone and KKR © Getty Until the financial crisis, private equity investors hewed closely to the “buyout” playbook pioneered by Henry Kravis and George Roberts when they founded KKR in the 1970s.

Acquiring companies whole, they would cut costs and load them up with huge amounts of debt while paying the bank back at a low interest rate.

Now the biggest firms have all but pivoted from private equity to private debt, joining a new breed of lightly regulated asset managers that have filled the void as banks are forced to retreat from risky deals.

Unlike banks, which are dependent on deposits and other short-term funding, these funds raise money from long-term investors such as insurance companies and pension funds.

Many of the companies they lend to are owned by other private equity investors. The funds provide a crucial source of credit for companies that cannot tap the bond markets, their advocates contend.

“Banks have had to recapitalise and build larger capital cushions, and combined with recessions and weak recoveries, they really weren’t extending a lot of credit,” says Susan Lund, a partner at the consultancy McKinsey.

Ten years after the crisis, the rapid expansion in private credit raises the question of whether risks have simply been transferred to a different, less regulated part of the market. “It’s true that this is opaque,” says Ms Lund.

“But it does not have systemic risk.

charge of senior lending funds at one of America’s biggest private credit firms he has watched rivals make bullish calls, relying on economic expansion, he says, to cover their mistakes. “[People think that] things usually grow and therefore if I’m overly aggressive lending today it’ll kind of catch up over time,” he says. “That has worked for a decade. We are acutely aware of it.”

Mr Patterson is a partner in a firm that was once known as Highbridge Principal Strategies. That changed in 2016 when the former owner, JPMorgan Chase, sold the business to its senior staff. Regulators insisted on a change of name, fretting that investors might assume America’s biggest bank still stood behind the newly independent firm, according to a person briefed on the deal.

The rebranded HPS has raised debt funds worth $20bn in the past decade, according to data from Preqin, putting it alongside private equity firms Blackstone, Apollo and Ares among the 10 biggest providers of private credit.

Private credit funds are still small in comparison with the $12tn global non-financial corporate bond market which now accounts for one-fifth of borrowing by companies other than banks. There, too, credit quality has been deteriorating; most of the growth in bond issuance has involved companies that are either on the lowest rung of investment grade ratings or else firmly in junk territory.

MARK VANDEVELDE

How the promise of electric power could transform aviation The industry is on the brink of the biggest revolution since the 1930s PEGGY HOLLINGER

A

irbus thought it was about to make aviation history. When the company’s battery-powered E-Fan aircraft lifted into the air with barely a sound on a summer day in 2015, a cheer went up from those on the ground at Lydd airport in southern England. Just over a century after Louis Blériot made the world’s first aeroplane flight across the English Channel, an electricallypowered crossing was on its way into the record books.

Except, it was outsmarted. After hearing of the Airbus plan, a French stunt pilot had taken off in his own small aerobatic e-plane a few hours earlier and crossed the channel from the other direction.

Aviation is on the brink of the biggest revolution since Frank Whittle invented the jet engine in 1937. After decades in which jets have been powered by fossil fuels, advances in materials, battery technology and electrical systems are holding out the promise of cleaner, cheaper commercial flight.

Yet in this revolution, the established players in the industry are not guaranteed to retain their positions.

Three years after the first trial runs across the Channel, the biggest aerospace companies are racing to bring electrically-powered aircraft to the market — and to stave off competition from a new generation of would-be aircraft manufacturers.

Last year, more electric aviation projects were announced than in all of the previous nine years, according to consultants Roland Berger. Of the 100 in the public sphere since 2009, only 30 per cent come from established players such as Boeing, Airbus, or Rolls-Royce.

The rest are start-ups or new entrants to aerospace, and those are only the ones that have gone public.

“Those that have been announced are probably just the tip of the iceberg, especially in China,” says Robert Thomson, aerospace partner at Roland Berger. “So much information about this is so closely held. Even in the western world many of the announcements have been forced [after projects were leaked].”

In this new era of electric aviation, the market will not just be for so-called flying taxis — small vehicles carrying a handful of passengers over very short distances. A growing number of projects are focusing on the potential for regional aircraft carrying dozens of passengers with ranges of up to several hundred miles — with the larger aircraft aiming at 100 passengers.

Limitations to electrical systems mean that for the foreseeable future these aircraft will mainly be hybrids, combining traditional gas turbines with power from on-board generators. But even hybrids will enable designers to reimagine the modern aircraft. Instead of jet engines hang-

ing off a wing, multiple motorised fans could be distributed across an aircraft, offering a new canvas for designers to dream up more aerodynamically efficient and potentially safer vehicles.

Without the roar of big turbines to wake residents on take-off, airports might be able to operate virtually around the clock or even closer to urban areas, with less noise pollution.

There may still be noise on approach, but this can be alleviated by descending at a steeper angle.

The revolution will not just be in the way people fly or the aircraft’s design. Electric aviation could also upset the aerospace hierarchy, undermining the business models of leading engine makers such as RollsRoyce and General Electric.

The possibility of using a smaller gas turbine to drive a generator — providing power not just for thrust but for on-board functions such as air conditioning — means that propulsion may no longer be a distinct system, separate to other power-consuming functions. It is likely to be integral to the very fabric of the aircraft, demanding expertise in electronics and systems that may go beyond the core skills of existing aero-engine makers.

So who will be better placed to claim the value from integrating an electric or hybrid electric system into an airframe — the traditional gas turbine maker, electrical systems specialists or the aircraft makers themselves?

“Definitely the distribution of the value in an aircraft will change,” says Frank Anton, head of eAircraft at Siemens, which has been testing electric and hybrid-powered aircraft for several years. “From a technical point of view, there will be reasons to change how integration is done and which systems are to be considered just components, as opposed to complete systems.”

Mark Cousins, the Airbus executive in charge of flying prototypes, says: “Being a gas turbine maker is no longer enough.”

While this battle is being fought, pressure on the industry to resolve its growing emissions problem is intensifying. Air travel accounts for 2 per cent of global emissions. But with air traffic doubling every 15 years, aviation emissions are increasing by 4.5-6 per cent a year, according to the EU’s Clean Sky public-private research partnership. Roland Berger estimates that aviation emissions could reach 10 per cent of the total by 2050.

The EU’s Flight path 2050 programme calls for a 75 per cent reduction in carbon emissions per passenger kilometre by 2050. But without electric technology those targets will be missed, says Ric Parker, Clean Sky chairman.

“It has to be a major part of that equation. Otherwise we fall a long

way short,” says Prof Parker, who believes the next Clean Sky programme will focus on electric aviation. “You can argue that aviation can make up the gap by carbon trading . . . but that is just pushing the problem off somewhere else.”

The dream of electric flight is not new. The French adventurer Gaston Tissandier became the first aviator to fly an electrically-powered vehicle when he attached a Siemens electric motor to an airship in 1883. But the puzzle of how to make a battery and the accompanying electrical systems powerful and light enough to propel a passenger aircraft has confounded aerospace engineers ever since.

The difference now is that the push for electric cars is driving such improvements in batteries and systems that what once seemed impossible in commercial aviation may now be within reach — at least in a hybrid form and for shorter flights of up to 1,000 miles, perfect for many of the routes flown by low-cost airlines.

“We see electric aviation as a matter of when it will happen, not if,” says Chris Essex, head of fleet and procurement at EasyJet, Europe’s second-biggest low-cost carrier by passenger numbers.

EasyJet is advising Seattle-based start-up Wright Electric on its plan for an electric aircraft seating about 120 passengers. Israel’s Eviation is also pursuing an all-electric nine-seater that it says will fly routes of up to 650 miles by 2021.

But they are outliers. Even with recent improvements in the storage capacity of batteries, there are fundamental constraints on flying bigger passenger aircraft using wholly electric systems.

“Batteries have an energy density 60 times less than kerosene [jet fuel],” says Stéphane Cueille head of innovation at Safran, the French aeroengine maker which this year ran its first ground test of a distributed hybrid-electric propulsion system.

“Even if you multiply the current density by five — beyond what labs say we can achieve in future — you would need 180 tonnes of batteries to fly an A320 single aisle aircraft more than 3,000 nautical miles. The aircraft’s take-off weight is only 80 tonnes, so that gives you an idea of the challenge.”

As in the car industry, hybrid technology will be the stepping stone.

Airbus has teamed up with Siemens and Rolls-Royce to develop a commercially viable 50 to 100-seat hybrid electric aircraft that it wants to enter service by the 2030s. Boeing, meanwhile, is bolstering its own research with stakes in start-ups such as Washington-based aircraft developer Zunum and battery group Cuberg.

Last year it acquired Aurora Flight Sciences, which has worked extensively for the US government on electric and autonomous aviation.

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Thursday 20 September 2018

C002D5556

BUSINESS DAY

A5

Live @ the Stock exchange Prices for Securities Traded as of Wednesday 19 September 2018 Company

Symbol

Deals

Current Price

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 229,977.37 7.95 - 44 281,080 UNITED BANK FOR AFRICA PLC 256,495.66 7.50 -2.60 171 6,053,852 651,477.25 20.75 -1.45 258 24,169,907 ZENITH BANK PLC 473 30,504,839 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 305,109.99 8.50 -2.86 193 5,450,299 193 5,450,299 666 35,955,138

BUILDING MATERIALS DANGOTE CEMENT PLC 3,578,506.56 210.00 - 30 11,957 179,539.96 20.70 - 46 102,122 LAFARGE AFRICA PLC. 76 114,079 76 114,079

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 357,009.32 606.70 - 51 321,843 51 321,843 51 321,843 793 36,391,060 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,217.41 79.90 - 12 11,055 OKOMU OIL PALM PLC. PRESCO PLC 60,000.00 60.00 - 4 2,395 16 13,450 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 - 8 263,987 8 263,987 24 277,437

DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,085.39 0.41 - 3 55,959 JOHN HOLT PLC. 206.25 0.53 - 2 35,262 S C O A NIG. PLC. 2,111.93 3.25 - 1 100 50,809.99 1.25 3.31 119 9,886,287 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 29,389.23 10.20 2.00 44 758,487 169 10,736,095 169 10,736,095

BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 33,000.00 25.00 - 8 33,649 165.00 6.60 - 0 0 ROADS NIG PLC. 8 33,649 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,417.27 1.70 - 8 57,490 8 57,490 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 24,014.43 9.00 - 0 0 0 0 16 91,139

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,701.62 1.75 - 4 12,116 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 188,372.92 86.00 - 21 571,837 INTERNATIONAL BREWERIES PLC. 257,875.86 30.00 -6.25 6 1,519,857 NIGERIAN BREW. PLC. 720,520.87 90.10 0.11 56 147,687 87 2,251,497 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 38,000.00 7.60 - 44 289,787 DANGOTE SUGAR REFINERY PLC 168,600.00 14.05 0.36 56 946,604 FLOUR MILLS NIG. PLC. 79,137.33 19.30 0.78 88 697,580 HONEYWELL FLOUR MILL PLC 11,498.79 1.45 3.57 33 566,862 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 1,158.30 6.50 - 0 0 NASCON ALLIED INDUSTRIES PLC 49,279.55 18.60 -0.54 62 4,117,453 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 283 6,618,286 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 17,655.10 9.40 - 20 63,681 NESTLE NIGERIA PLC. 1,094,261.96 1,380.50 - 48 33,596 68 97,277 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 1 100 VITAFOAM NIG PLC. 3,439.82 3.30 - 10 194,450 11 194,550 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 49,630.96 12.50 -7.41 31 319,225 UNILEVER NIGERIA PLC. 247,035.23 43.00 - 14 99,429 45 418,654 494 9,580,264

BANKING DIAMOND BANK PLC 29,413.69 1.27 - 23 1,024,437 ECOBANK TRANSNATIONAL INCORPORATED 330,291.92 18.00 - 24 115,758 FIDELITY BANK PLC 47,808.42 1.65 -1.20 87 6,282,595 GUARANTY TRUST BANK PLC. 1,000,660.09 34.00 0.89 167 4,069,378 JAIZ BANK PLC 14,732.12 0.50 4.00 27 4,244,604 SKYE BANK PLC 9,716.21 0.70 6.06 79 5,466,369 STERLING BANK PLC. 41,746.11 1.45 - 42 645,938 UNION BANK NIG.PLC. 168,900.37 5.80 6.42 29 672,793 UNITY BANK PLC 11,338.66 0.97 4.30 7 138,236 WEMA BANK PLC. 22,373.19 0.58 -3.33 17 2,126,264 502 24,786,372 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 5,890.67 0.85 6.25 21 1,515,102 AXAMANSARD INSURANCE PLC 21,630.00 2.06 -9.65 7 1,016,657 CONSOLIDATED HALLMARK INSURANCE PLC 2,100.00 0.30 -6.25 2 200,000 CONTINENTAL REINSURANCE PLC 14,936.75 1.44 - 3 104,400 CORNERSTONE INSURANCE PLC 2,945.90 0.20 -4.76 5 282,850 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,964.80 0.32 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 1 10,000 LASACO ASSURANCE PLC. 2,416.73 0.33 -3.03 16 1,266,000 LAW UNION AND ROCK INS. PLC. 2,835.58 0.66 - 4 210,760 5,120.00 0.64 8.47 6 520,000 LINKAGE ASSURANCE PLC MUTUAL BENEFITS ASSURANCE PLC. 2,240.00 0.28 - 5 14,020 NEM INSURANCE PLC 16,158.34 3.06 2.00 11 137,270 NIGER INSURANCE PLC 2,399.24 0.31 - 4 207,134 PRESTIGE ASSURANCE PLC 2,366.80 0.62 8.77 2 150,000 REGENCY ASSURANCE PLC 1,600.50 0.24 9.09 12 2,098,862 SOVEREIGN TRUST INSURANCE PLC 2,001.80 0.24 9.09 9 806,113 4,483.72 0.48 - 0 0 STACO INSURANCE PLC 2,582.21 0.20 -4.76 7 1,245,715 STANDARD ALLIANCE INSURANCE PLC. SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 3 88,300 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 1 31,360 UNIVERSAL INSURANCE PLC 3,680.00 0.23 - 2 100,000 VERITAS KAPITAL ASSURANCE PLC 3,605.33 0.26 - 1 2,000 WAPIC INSURANCE PLC 4,951.61 0.37 2.78 27 1,170,630 149 11,177,173 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,567.15 1.56 - 1 8,000

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Trades

Volume

1 8,000 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,914.00 1.17 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 5,664.87 0.50 - 0 0 RESORT SAVINGS & LOANS PLC UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,600.00 3.80 - 23 130,464 32,938.44 5.60 - 15 105,898 CUSTODIAN INVESTMENT PLC DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 33,664.61 1.70 1.80 39 3,735,059 FCMB GROUP PLC. NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 ROYAL EXCHANGE PLC. 1,183.44 0.23 - 3 12,076 424,774.33 42.00 0.96 33 1,547,499 STANBIC IBTC HOLDINGS PLC 16,860.00 2.81 -0.35 50 2,320,468 UNITED CAPITAL PLC 3,312.39 103.20 - 0 0 VALUEALLIANCE VALUE FUND 163 7,851,464 815 43,823,009

HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,350.19 0.38 8.57 10 768,535 10 768,535 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 9,000.00 6.00 - 1 15,396 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 17,101.03 14.30 - 22 144,507 2,254.00 2.30 - 7 80,000 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,070.43 0.62 - 3 51,150 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 411.96 1.90 - 3 33,091 PHARMA-DEKO PLC. 36 324,144 46 1,092,679

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 2 125,200 2 125,200 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 680.40 6.30 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 1 5,614 1 5,614 PROCESSING SYSTEMS CHAMS PLC 1,314.90 0.28 - 0 0 16,590.00 3.95 - 0 0 E-TRANZACT INTERNATIONAL PLC 0 0 3 130,814

BUILDING MATERIALS BERGER PAINTS PLC 1,898.34 6.55 - 4 2,351 CAP PLC 19,845.00 28.35 - 12 25,023 CEMENT CO. OF NORTH.NIG. PLC 31,165.61 24.80 9.73 37 385,986 654.21 0.31 -6.06 3 188,620 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 361.24 0.68 - 1 1,100 2,364.38 2.98 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 57 603,080 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,610.71 4.10 - 16 159,129 16 159,129 PACKAGING/CONTAINERS BETA GLASS PLC. 38,997.82 78.00 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 2 50 2 50 75 762,259

CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 55.00 0.25 - 0 0 0 0 0 0

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,503.05 0.24 4.35 33 3,401,184 33 3,401,184 INTEGRATED OIL AND GAS SERVICES OANDO PLC 64,643.34 5.20 4.00 79 22,105,496 79 22,105,496 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 64,546.55 179.00 - 9 1,993 CONOIL PLC 15,197.55 21.90 - 16 40,401 ETERNA PLC. 8,150.90 6.25 - 13 14,734 FORTE OIL PLC. 28,654.58 22.00 10.00 73 416,470 MRS OIL NIGERIA PLC. 8,701.65 28.55 - 2 800 TOTAL NIGERIA PLC. 64,407.29 189.70 - 18 12,934 131 487,332 243 25,994,012

ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 18,818.75 1.93 - 2 105 2 105 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 541.12 0.46 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,652.74 4.50 10.00 39 60,326,697 TRANS-NATIONWIDE EXPRESS PLC. 365.70 0.78 - 1 18,000 40 60,344,697 HOSPITALITY TANTALIZERS PLC 674.44 0.21 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 4,718.87 2.27 - 0 0 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 51,302.73 6.75 - 4 70,000 TRANSCORP HOTELS PLC 4 70,000 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,280.00 0.44 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0 LEARN AFRICA PLC 848.60 1.10 - 3 33,883 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 823.99 1.91 - 6 27,138

A6

BUSINESS DAY

C002D5556 Thursday 20 September 2018

Live @ The Exchanges Top Gainers/Losers as at Wednesday 19 September 2018 GAINERS Company

LOSERS Opening

Closing

Change

N22.6

N24.8

2.2

N20

N22

2

STANBIC

N41.6

N42

0.4

UBN

N5.45

N5.8

0.35

GUARANTY

N33.7

N34

0.3

CCNN FO

Market Statistics as at Wednesday 19 September 2018

Company

Opening

INTBREW

Closing

Change

ASI (Points)

N32

N30

-2

PZ

N13.5

N12.5

-1

FBNH

N8.75

N8.5

-0.25

VOLUME (Numbers)

MANSARD

N2.28

N2.06

-0.22

VALUE (N billion)

N7.7

N7.5

-0.2

UBA

32,375.12

DEALS (Numbers)

2,780.00 190,353,890.00 1.773

MARKET CAP (N Trn

11.819

Stock market halts uptrend, records 0.02% marginal decline Stories by Iheanyi Nwachukwu

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igerian stock market failed to sustain Tu e s d a y ’s rally following 0.02percent decline recorded on Wednesday September 19, 2018.

The Year-to-Date (YtD) returns closed at -15.34percent as only 24 stocks gained against 12losers.

In what seems like waning sell pressure on the Lagos Bourse, the value of listed stocks decreased marginally

by N3billion.

RedStar Express Plc, Zenith Bank Plc, Oando Plc, Transcorp Plc and Fidelity Bank Plc were actively traded stocks.

The stocks of Interna-

L-R: Dapo Arogundade, musician; Osundare Simeon(Asiri), comedian, Bayegun Oluwatoyin Abimbola (Woli Arole), comedian; Pai Gamde, chief human resource officer, The Nigerian Stock Exchange (NSE); Bunmi George, CEO Shredder Gang and Titi Oyinsan (Titi the dynamite), On air Personality, during a Closing Gong Ceremony in honour of our wonderful race ambassadors for their participation in the 5th edition of NSE Corporate Challenge at the Exchange.

tional Breweries offered for sale on the Nigerian Stock Exchange outweighed the

demand, thereby impacting its pricing.

International Breweries

IOSCO issues policy measures to protect investors of OTC leveraged products

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he Board of the International Organization of Securities Commissions (IOSCO) today issued a final report providing measures for securities regulators to consider when addressing the risks arising from the marketing and sale of OTC leveraged products to retail investors.

Simultaneously, the Board issued a public statement on the risks of binary options and the response of regulators for mitigating the risks and harm to retail investors transacting in these products.

The Report on Retail OTC Leveraged Products includes three complementary toolkits containing measures aimed at increasing the protection of retail investors who are offered OTC leveraged products, often on a crossborder basis. The report

covers the marketing and sale of rolling-spot forex contracts, contracts for differences (CFDs) and binary options.

The toolkits set out guidance for regulators on: policy measures that can help to address the risks arising from the marketing and sale of OTC leveraged products by intermediaries; educating investors about the risks of OTC leveraged products and the firms offering them; and

enforcement approaches and practices to mitigate the risks posed by unlicensed firms offering the products.

Retail investors typically use these products to speculate on the shortterm price movements in a given financial underlying. Typically, the products are offered through online trading platforms – often through aggressive or misleading marketing campaigns. Most retail investors trading in these complex products lose money.

The measures in the three toolkits draw largely on IOSCO members’ experiences and practices.

The report also includes various policy, educational and enforcement initiatives that IOSCO members have taken to specifically address unauthorised cross-border and online offerings of OTC leveraged products.

Plc led the laggards table after its share price declined

by N2 or 6.25percent; from

N32 to N30.

PZ Cussons Nigeria Plc followed after its share price declined from N13.5 to N12.5, down by N1 or 7.41percent.

Likewise, FBN Holdings Plc share price declined from N8.75 to N8.5, down by 25kobo or 2.86percent; AXA Mansard Insurance Plc stocks price declined from N2.28 to N2.06, down by 22kobo or 9.65percent.

Also, the value of UBA Plc stocks decreased from N7.7 to N7.5, down by 20kobo or 2.60percent.

The NSE market capitalisation closed at N11.819trillion from a preceding day high of N11.822 trillion. The All Share Index (ASI) decreased from 32,381 points to 32,375.12 points at the close of trading.

Cement Company of

Northern Nigeria Plc led advancers after its share price increased from N22.6 to N24.8, up N2.2 or 9.73percent.

Forte Oil Plc followed after its share price increased from N20 to N22, up by N2 or 10percent.

Stanbic IBTC Plc stock price increased from N41.6 to N42, up by 40kobo or 0.96percent. Union Bank of Nigeria Plc stock price also advanced from N5.45 to N5.8, gaining 35kobo or 6.42percent.

GTBank Plc rallied from N33.7 to N34, up by 3okobo or 0.89percent.

Volume of stocks traded decreased from 269.8million to 190.353million, while the total value of stocks traded decreased from N2.65billion to N1.773billion in 2,780 deals.

Geo-Fluids repositions, appoints Jacob Esan as chariman

G

eo-Fluids Plc in a bid to reposition its operations and enhance shareholder value has appointed Jacob Esan as its new Chairman and Chief Executive Officer.

The appointment takes effect from September 1, 2018. This is the outcome of the unanimous decision of the Board of the Company, which is an indication of the absolute confidence on Esan and his team to steer the company on a new growth path towards the implementation of strategic initiative’s to foster the Company’s growth and refocus the company from its current challenges.

Geo-Fluids Plc, a wholly Nigerian indigenous oil and gas field servicing company focused on drilling fluids, mud engineering, work-over, well completion and specialized chemical supplies and production chemical engineering, marketing and project management services.

Geo-Fluids also engages in the supply of barites, bentonite, calcium carbonate and general slurry products. Geo-Fluids Plc currently trades on the NASD under the symbol SDGEFLUID. The company has contracts with major IOCs in the upstream subsector of the oil and gas industry. The new Chairman also effectively takes over control of GFL Marine Services Limited, a subsidiary of Geo Fluids Plc, which supplies Marine Vessels, Tugs, Barges and offers other Marine Logistics Services to the Industry.

In a letter jointly signed

by Odoliyi Lolomari and Ala Ibanibo, both outgoing Chairman and retiring Managing Director| Chief Executive Officer respectively, the Board unanimously handed over the Company to Jacob Esan, stating that the Board was confident in his abilities following his antecedents and performance on the rehabilitation and current

restructuring of DEAP Capital Management & Trust Plc. They expressed high optimism for the future growth of the company given the goodwill it built over the years, which can be harnessed for profitability and further enhance shareholder value.

Although the company is currently working its way out of a receivership process, the Board firmly believes that the injection of fresh ideas and a change of leadership at this point would further enhance the company’s prospects enormously with the emerging opportunities opening up in the industry. The Board also expressed its confidence that the company will overcome the current economic challenges.

Jacob Esan, commenting on his appointment said it is a major challenge to take up a company undergoing a receivership process but would focus on the opportunities to overcome the challenges.

Thursday 20 September 2018

BUSINESS DAY

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BUSINESS DAY

C002D5556

Thursday 20 September 2018

News Extra

I will join other intellectuals to rescue the country from socio-economic woes – Mark While declaring that he is the bridge between the Northern and the Southern Nigeria, he stated that he knows the problems of Nigeria and has the “courage and capacity to tackle the problems”.

The former Senate President, however, stated that for PDP to win the 2019 presidential election, leaders of the political party must ensure free and fair credible primaries.

Mark, who was received by leaders of the Oyo PDP led by its Chairman, Kunmi Mustapha, said: “If all Nigerians see that we conduct credible, transparent, free and fair primaries, we will be sure of victory in the presidential election”.

Mark remarked that he was in the race not because of his personal interest but for the interest of all Nigerians. “It is not about myself, but about Nigeria. Mark my words.

I may be the last aspirant to obtain

AKINREMI FEYISIPO, Ibadan

F

ormer Senate President and People’s Democratic Party (PDP) Presidential aspirant, Senator David Mark on Wednesday said he was ready to work with other intellectuals to rescue Nigeria out of the present unfavourable socioeconomic challenges.

Mark, who revealed that he was currently working with a team of young Nigerians, noted that the recommendations of the team would be implemented to turn around the fortunes of the country within just 730 days if elected.

Mark made this declaration while addressing PDP delegates and members in Ibadan, the Oyo State capital, ahead of the PDP Presidential primary election billed to take place first week of next month.

David Mark

Kogi APC: 80 aspirants jostle for 25 tickets

‘If equity, justice prevail, I remain the best candidate for Kogi central’ VICTORIA NNAKAIKE, Lokoja

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ne of the All Progressives Congress (APC) leading aspirants for the Kogi East Senatorial District, Yahaya Audu Oyidi has said that if the principles of equity, fairness and justice were allowed to prevail in the choice of who represents the Igala Bassa nation in the National Assembly, he remains a candidate to beat.

Yahaya, younger brother of the late Abubakar Audu, the acclaimed winner of the 2015 gubernatorial

election, stressed that the district is not an animal kingdom, as he called on the leadership of the All Progressives Congress (APC) at the state and national levels, to guard against marginalisation and oppression, describing such tendencies as inimical to the ideology of the APC. Yahaya, while addressing journalists in Lokoja, called for a level playing field that would enable the Bassa/Igala nation’s best candidate to emerge, as he warned against imposition and anointing of candidates.

He said that the delegates should

18 political parties indicate interest for Ondo LG poll YOMI AYELESO, Akure

Y

omi Dinakin, chairman, the Ondo State Independent Electoral Commission (ODIEC), has said that 18 political parties have so far signified interest to field candidates for the local government election in the state scheduled to hold on December 1, 2018.

Dinakin, while speaking in Akure, the state capital on Wednesday, said 18 political parties had sent in their ‘letters of intent’, and they were received by the Commission’s secretary.

He, however, noted that the electoral body was still waiting to compile the list of candidates, as more political parties in the state are still expected to submit names of their candidates.

He said: “18 of them (political parties) have so far shown their interests in the local government election that is fixed for December 1.

“Although, the Commission is still expecting more registered political parties to come in with their letters of interest and sponsor candidates for the election, now, we are working

towards making the exercise a very smooth one because these political parties will conduct primaries in their various camps.

“We are waiting for parties that have shown interest to submit the list of their candidates vying for the different elective positions either as chairmen or councillors.”

The ODIEC boss further added that the officials of the commission would monitor the conduct of primaries of the political parties, adding that independent candidacy is not allowed.

He advised the leadership of parties to ensure that issues which might arise from primaries are resolved amicably before submitting names of their candidates.

According to Dinakin, the commission would soon commence the mobilisation and sensitisation of the general public, including eligible voters and other stakeholders on the local government election.

“We also want these relevant stakeholders to play their roles and help us as we prepare for this election by ensuring that all play the game according to rules and the law,” he said.

nomination form. There are 13 of us jostling to get the Presidential ticket of our great party. But let me tell you that if either me or any of the remaining aspirants emerges as the party’s candidate at the end of the day, I am ready to work for the party.

“It is not about me, it is about the interest of our great party and our dear country. I have remained in the PDP since it was formed, and I have never for one day thought about leaving the political party for another one. At the end of the primaries, either I win or lose, I will remain in PDP and support whoever that emerged.

“I am the bridge between the North and the South; I am the bridge between the old and the youth; I am the bridge between men and women in politics. This is the time for all of you to acknowledge the bridge and give him the opportunity to serve our country “.

…Sign peace accord VICTORIA NNAKAIKE, Lokoja

be made to have freedom of choice, in free, fair, credible and transparent primaries.

He lamented a situation where the Eastern Senatorial District has allegedly suffered underdevelopment which he claimed had brought agony to majority of its citizenry, noting that the challenges facing the eastern senatorial district demand collective responsibility, while calling on the people to rise up and provide a new concept of representation.

He further said that he had the will and vision to offer quality people-oriented representation.

A

head of the All Progressives Congress (APC) primaries, all aspirants for state and National Assembly election in Kogi have pledged their readiness to support whoever emerges candidate of the party during the exercise.

The aspirants, who converged on Government House, reached a compromise for “fair play and peace accord” which is aimed at moderating the behaviours of aspirants and their supporters.

Governor Yahaya Bello, while addressing the aspirants made it clear that APC has all it takes to win landslide in all its elections in the

2019 polls, and revealed that the “fair play and peace accord” was meant to extract the commitment of the aspirants to support the party and its candidates after the primaries.

He commended party members and supporters for the success recorded over the years, especially the successful Congresses witnessed in the state, and equally warned against violation of the agreement.

Speaking also, the party Chairman in the state, Abdullahi Bello, revealed that 80 aspirants would be jostling for the 25 tickets of the State House of Assembly, as well as several others for the National Assembly tickets, noting that this speaks of the strength and popularity of the party in the state.

Job creation, healthcare, infrastructure my priorities - Bafarawa ...Receives Lagos PDP support INIOBONG IWOK

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Presidential Aspirant on the platform of the main opposition People’s Democratic Party (PDP), Attahiru Bafarawa, has said that the major goal of all the presidential aspirants under the PDP is to remove the ruling All Progressives Congress (APC) in power by 2019, saying that he would support whoever emerges from the primaries.

Bafarawa, who stated this at the party’s secretariat in GRA, Ikeja, yesterday said that he was not aspiring to become President because of making money, stressing that his antecedent and performance are there to speak for him.

He added that he would not leave the PDP even if he loses the primaries, stressing that he would support any of the aspirants that clinches the presidential ticket of the party and work towards the victory of the party in the election.

Bafarawa, who was a former governor of Sokoto State, said

that his administration would give priority to creation of jobs, providing basic healthcare and revamping the education system in the country if he is elected as the president of the country in next year’s election.

Speaking further, the Presidential aspirant, stressed that having been in governance and politics for decades, he had the requisite experience to the lead the country out of its current woes, while urging Lagos PDP to support his bid to clinch the party’s presidential ticket.

“We may have several aspirants in the PDP for the Presidential ticket, but let me say that our main aim is to dislodge the APC from power in next year’s election. And that is what we would do.

“I would not dump the party if I don’t pick the Presidential ticket of the PDP, I would work for whoever emerges and the eventual victory of the party in the overall elections.

“My administration would focus on providing jobs, improving

health, infrastructure and revamping the education system if I am elected the President”.

According to him, “My government would be for the masses and I have been in governance for long and have the requisite experience to lead our party to victory in the election,” Bafarawa said.

Speaking on behalf of the party, the Lagos State PDP Secretary, Muiz Dosunmu, said that the former governor was an experienced politician who had worked assiduously for the progress of the party and overall development of the country.

Dosunmu said that the state chapter of the party would support his effort to clinch the presidential ticket of the party, calling for unity among party leaders ahead of the general election in the country.

“Welcome to Lagos State and the Secretariat of our party. You are an experienced politician who has seen it all and we are with you, but our party must be united ahead of the general election,” Dosunmu said.

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I THURSDAY 20 SEPTEMBER 2018

Opinion

Governance by alternative facts CHRISTOPHER AKOR Chris Akor, a First Class graduate of Political Science, holds an MSc in African Studies from the University of Oxford and is BusinessDay’s Op-Ed Editor christopher.akor@businessdayonline.com

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ime was when facts were sacred and we often differ to ‘expertise’. The rise of populism, anarchists and far right groups across the world has resulted in absolute lack of interest in evidence, an erosion of trust in traditional institutions and politicians and the consequent rise of ‘alternative facts’ and a society where trusted populists could offer well-regarded opinions on virtually everything. What began as isolated movements in far-flung corners of the world is now a real threat in most countries thanks to the ubiquity of social media.

Welcome the era of the posttruth society!

Defined by the Oxford Dictionaries as “relating to or denoting circumstances in which objective facts are less influential in shaping public opinion

than appeals to emotion and person belief”, the post truth movement reached its apogee with the dramatic election of Donald Trump as United States president. Donald Trump was quick to learn about the nature and character of ‘post-truth’ society and the key role social media could play in mobilisation and tailored his politics and rhetoric to appeal to the hoard of discontented Americans, growing by the day, who felt ignored and neglected by the Washington elite on both side of the political spectrum.

Trump’s populist, hyperbolic and demagogic rhetoric was all they needed to propel him to the White House even when polls and the US media believed he could never win.

Just after Trump’s inauguration, the White House Press Secretary, Sean Spicer, was caught lying and when questioned, Kellyanne Conway, counsellor to President Donald Trump, replied with the now famous phrase that the White House press secretary only gave “alternative facts”. That set the standards for the administration’s communication with its supporters.

Although, at first glance, president Buhari may appear very different from Trump, as Olu Fasan, once argued,

they are significantly similar in their personality, politics and rhetoric. Just like Trump’s administration, the Buhari administration has adopted a communication strategy of presenting only its “alternative facts” secure in its knowl-

‘

...the Bill and Melinda Gates Foundation released its 2018 Gatekeeper report which estimates that by 2050, more than 40 percent of the extremely poor people in the world will be living in Nigeria and DR Congo

,

edge that Buhari’s image as a pro-poor, honest and antiestablishment individual is cast in the minds of his core supporters. The administration has continued to operate as if it is still an opposition party. After repudiating virtually all its campaign promises, which well-informed Nigerians knew then to be “half-baked

ideas that shouldn’t be part of a credible programme for government”, the government has continued to make needless and vague promises and when results aren’t quick in coming, they blame the previous administration. With elections coming, they have now resorted to peddling “alternative facts”, half-truths, and outright falsehood.

Take, for instance, its reaction to the Brookings Institution report, drawing data from the World Poverty Clock, which showed that Nigeria has overtaken India as the country with the most people living in extreme poverty in the world, and that the material conditions of Nigerians have continued to worsen with approximately six Nigerians sliding into the extreme poverty gap every minute. The government’s initial response was to send out otherwise sensible ministers to counter the report by trying unsuccessfully to fault the methods, processes and timing of the data and by peddling lies.

When that strategy seems not to work and most Nigerians were now quoting the data as fact, they had now manufactured their own “alternative facts”.

The narrative now is that it has successfully lifted 10.073 million Nigerians from poverty to

prosperity.

The minister of budget and national planning, Udoma Udo Udoma was the one sent to give this alternative fact. According to him, government is feeding 8.98 million school children under the Home Grown School Feeding Programme; supported over 297, 000 poor and vulnerable Nigerians with cash transfer of N5000; successfully disbursed more than 308, 000 loans of N50, 000 and above under the Government Enterprise and Empowerment Programme (GEEP) and 200, 000 Young Unemployed Graduates Empowered through the N-Power scheme, while over 308, 000 have been selected for consideration for the second bath.

Please hear the rest in Udoma’s own words: “To combat hunger and achieve food security, we have raised capital provisions for agriculture from N8.8 billion in 2015 to N149.2 billion in the 2018 budget. Over N82 billion has been disbursed as credit to more than 350, 000 farmers under the Anchor Borrowers’ programme. 14 moribund fertilizer blending plants have been revitalised through the Presidential Fertilizer Initiative (PFI) with a total capacity of 2.3 million metric tons of NPK fertilizer.”

But just as Udoma was reel-

2019: Muo for president!

IK MUO Ik Muo, PhD, Department of Business Administration OOU, Ago-Iwoye muoigbo@yahoo.com; 08033026625

T

his is my third attempt at running run for the highest political office in the land (first in 1992 and then in 2006). Some people have said that the office of the citizen is the highest office in the land but we all know that this is very far from the truth, even in the US, especially since the advent of Trumpocracy.

I am propelled to run again because PMB succeeded on his third attempt. Furthermore, ever yone is now a presidential candidate and in some parties, there are more candidates than party members. Even APC has on paper, more than a dozen candidates, though most of them are what our people call ejilim guzulu (just to make up the numbers). So, why should I be left out? And while the political space was choking before, it is now so liberalized and there are many options

for me including defection, forming a new party, buying up all the votes, and planting moles in other parties. Defection is out of it because I am not an attractive defectee since I do not have rigging and financial capabilities.

I cannot buy up the votes because the money-bags and godfathers do not trust me.

And even though I am rich, I currently have some liquidity challenges and in any case, I don’t want to throw money around to the extent that EFCC et al will place me on their watch list.

So, I have perfected plans to register my own party (Muo Peoples Party, AKA Chop Alone) and to adopt the Rochas family-business model in running the party.

I will be the chairman and presidential candidate while my beloved will become my running mate and director of finance. Other party positions will be assigned as follows: my daughter (party secretary); my first son, (director of organization); my second son (campaign director); my third son (director of publicity); my elder brother, a professor of public administration, (Director of strategy); and my younger sister, who trained at Gani Fawehinmi Chambers (Legal adviser). And to show that my party is different from other parties, we shall create new party positions like Director of Defections, Director of Doublespeak and Disinformation (reserved for

the current occupant of the post) and Director of Political Attack (reserved for Ayo Fayose). Furthermore, unlike before when I was cautious with my promises, I can now promise anything and everything, because as we have seen in the past three years, I can deny or cancel all the promises, blaming the purveyors of hate-speech and fake news for putting words into my mouth or making promises on my behalf. I can also restructure the 1001 promises into one or two.

Having dealt with preliminary issues, I now present my declaration speech.

Fellow oppressed and marginalized Nigerians, officials of INEC, staff of World Bank & IMF, members of the international community, fellow aspirants, the representatives of the Chinese government, our ever generous benefactor and all registered area boys; I hereby wish to declare my intention to seek your mandate as a successor to PMB. You may be wondering why you have not heard from or of me up to this moment. Well, the political stalwarts around which I built my political hopes suddenly started suffering from defection-mania, some zigzagging into three parties within a week. My political structure was thus thrown into disarray and in order not to leave the sheep without a shepherd, I decided to throw my hat into the ring. I have already ordered ‘100 black and

white’ campaign posters on credit, to be displayed at my former and present offices and residences, my father’s house and village square at Igbo-ukwu and at the houses of few trusted friends and relatives. So, do not be worried if you do not even see my poster.

My ideology is contractocracy-government of contractors for contractors by contractors. This indigenous ideology ensures that everything-even governance itselfis contracted out, that there should be no repairs and maintenance so that fresh contracts will flow continuously, and mobilization fees of at least 70%. My campaign slogan is everything is possible. I am qualified for this post having managed my personal and family finances without recourse to borrowing, rescheduling or IMF. I have 4 honourary degrees from abroad and a dozen of chieftaincy titles from all over the country. I have also successfully managed my numerous business that cover backwarding and forwarding, over-invoicing consultancy, and partnership with greedy and shady foreigners.

On the economy, there is overwhelming evidence that the present change agenda is a resounding success. Millions of jobs have been created, millions of Nigerians have been lifted out of poverty, the quality of education has improved tremendously and prices of petroleum

products have never been so low, while the anticorruption war has been firmly and fairly fought. I pledge to expand the frontiers of this change agenda. There shall be absolute privatization and commercialization. All schools, hospitals, and roads, shall sold for enhanced performance. All government offices and houses shall be sold to the public while the government shall rent the few

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I note that only women finance ministers do resign in this country (the first being Dr OkonjoIwealla), though the circumstances are different

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it still needs. All ministries shall be abolished to curb waste. Only the directorate of contracts, which shall be under the presidency, shall exist. Governance itself shall be awarded to the most qualified contractors, who are most likely to be Chinese!

Otto Von Bismarck had warned that People never lie so much as during a war or before an election. We are in an election season, which is also a war; a war to corner the

ing his “alternative facts”, the Bill and Melinda Gates Foundation released its 2018 Gatekeeper report which estimates that by 2050, more than 40 percent of the extremely poor people in the world will be living in Nigeria and DR Congo and that Nigerians living in extreme poverty will continue to grow to 152 million by that time. Of course, the report situates the reason for such surge on the insufficient investment in human capital that will correspond to the increasing population.

The government may have come to power through propaganda and has continued to govern through propaganda and now through “alternative facts”. It may rely on propaganda and the supply of “alternative facts” to keep its support base or even when another election, but it cannot rely on propaganda and alternative fact to stave off “The Coming Anarchy” as a result of extreme poverty, joblessness and hopelessness of millions of young Nigerians.

The entire Nigerian security apparatus will be no match to the army of these disempowered, stunted, and bitter youth. The development of the country may not mean much to these politicians, but their (and their family’s) survival should propel them to action.

Nigerian commonwealth. So, be warned; this is a season of lies! (To be concluded) Other matters Last week, this column dwelt on accidental operations and as a matter arising, wondered why the Federal Government should spend two months investigating Mrs Adeosun’s NYSC status. Well, two days after I concluded that piece, Mrs Adeosun resigned… and fled the country. I note that only women finance ministers do resign in this country (the first being Dr Okonjo-Iwealla), though the circumstances are different. So, is the Adeosun matter over? We are watching how this anti-corruption government will bring a closure to this matter. That same last week, officials of EFCC brazenly raided a bank in Lagos but in line with the principles of accidental operations, the EFCC washed its hand off the whole affair, declaring that ‘The raid ..might have been the handiwork of errant officers who acted without authorisation. The action is in flagrant violation of the standard operation procedures of the Commission…The Commission will investigate the circumstances leading to this illegal raid by errant officers...” Another accidental operation, another denial and another investigation! The government needs to act, and fast too, on this worrisome trend. Unfortunately, the government and governance is on sabbatical; everything is about 2019!

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana.

Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

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Impact Investing is important to africa, but what is it?

Innocent Unah and Sandra Okougbegun

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Understanding impact investing n a world where government resources and charitable donations can never be sufficient to meet social and environmental needs, it becomes imperative to evolve a plausible alternative for directing capital to meet these needs; impact investing may be this alternative.

The term impact investing was invented in 2007 by the Rockefeller Foundation at the Bellagio Conference held in Italy. According to the Global Impact Investing Network (GIIN), impact investing can be defined as investments aimed at generating positive social and environmental impact alongside financial returns. It has the singular objective of unlocking private investment capital to complement public resources and philanthropy in addressing pressing global challenges. Thus, impact investments are those investments made in companies, organisations and funds with the intention to make various social and environmental impacts, while deriving financial returns in the process.

Impact investing can simply be seen as investing to create positive impact. While impact investing might be a new term, it is certainly an old idea.

The GIIN and some philanthropic organisations such as the Ford Foundation have been playing vanguard roles in growing the impact investing space. An initiative of the Rockefeller Foundation, and established in 2009, GIIN is a network of impact investing stakeholders around the globe, who aim to change the way the world thinks of using investment capital to create positive social and environmental benefits. These

stakeholders are constantly seeking to develop the impact investing space. Impact investing challenges the long held view of social and environmental issues being addressed only by philanthropists and governments. As the impact investing markets continues to grow, it has unlocked capital to solve many of the world’s most pressing problems in such sectors as sustainable agriculture, renewable energy, conservation and microfinance. It has also addressed issues bordering on affordable and accessible basic services such as housing, healthcare and education, advancing the push towards achieving the Sustainable Development Goals (SDGs).

A survey conducted by the GIIN in 2017 revealed that close to USD 114 billion of impact investing assets is currently being managed across the world.

For many years, investing for social and financial gains has been seen as two dichotomous disciplines. Philanthro-

pists and those seeking social gains make it their sole focus while traditional investors seek to make financial gains.

However, the two ideas can be unified as one, and they complement each other for sustainability- that is what impact investing does.

Impact investing versus social responsibility investing Some people may misconstrue impact investing as Social Responsibility Investing (SRI), but these are not concepts to be used interchangeably. They don’t mean the same thing even though they are both mission-driven approaches to generating positive outcomes through investment vehicles. While SRI integrates social and environmental factors within investment analysis to avoid investing in companies that have negative impacts on the environment and/ or society, impact investing deliberately looks for investments that will positively impact the environment and/or the soci-

ety. So positive/negative screening is the key difference between SRI and impact investing as they indicate an investor’s level of activity in pursuing positive impact through investments. The GIIN further defined Impact investing to include four core criteria. These include: • Intentionality: Investors usually have diverse investment objectives.

The intention to create positive social or environmental impact is a key element of impact investing. Impact investors should always think of solution-oriented ideas that will create problem-solving approaches in tackling challenges in areas such as poverty, clean energy, health, education, etc. The intention to make such impact is indispensable to impact investing.

• Investment with return expectation: Impact investments have financial returns and the level of returns and the level of returns varies from one investor to the other. Investments are expected to generate return on capital either at minimum rate or at the market rate.

• Range of return expectation and asset classes: • The rate of returns from impact investment ranges from below market rate to risk-adjusted market rate, and can be made across asset classes such as fixed income, equities, venture capital and cash equivalents.

• Impact measurement: The impact created from such investment should be measured. The various social or environmental objectives should be identified and measured against results in order to track performance. The social and environmental performance should be reported together with the progress of the investment, ensuring transparency and accountability.

Who are those involved in the impact investing ecosystem?

The impact investing ecosystem involves actors from both the supply and demand side. It has attracted a wide variety of investors including High Networth Individuals (HNIs), foundations, asset managers, impact organizations

and non-governmental organisations.

Banks, pension funds, financial advisors and wealth managers can provide client investment opportunities to both individuals and institutions with an interest in general or specific social and/ or environmental causes. Moreover, institutional and family foundations can leverage significantly greater assets to advance their core social and/or environmental goals, while maintaining or growing their overall endowment. The various government and development finance institutions can provide proof of financial viability for private-sector investors while targeting specific social and environmental goals. The supply side of the impact investing ecosystem provides the impact capital. This comprises the foundations, HNIs, government, companies, retail investors, employees, and asset managers etc.

On the other hand, the demand side of the impact investing use impact capital and includes the development banks, microfinance banks, consulting firms, government programs etc.

Why do we need impact investing?

A number of factors drive the need for impact investing across the globe.

According to the United Nations Development Programme (UNDP) report on impact investing in Africa, a number of trends contributed to the initial interest in and momentum behind impact investing. We discuss a number of these trends in the paragraphs below: • The growing recognition of the need for responsible finance: Impact investment aims at generating positive social and environmental impact and such investments are seen as financially responsible. Impact investing can also be viewed as one manifestation of the drive towards the incorporating broader considerations beyond the financial bottom line into investment decisions.

• The growing recognition of the need for private capitals potential to supplement philanthropic funding and goals: In solving socioeconomic problems and creating social and environmental impact, government and philanthropic resources can never be sufficient. As a result, the need for a private capital flows is inevitable.

• Public sector need to more efficiently deliver products and services: There is a growing need for the government to deliver efficient products and services and to do so they need to devote time and resources in providing such needs. Impact investment presents an opportunity for governments to save more and deliver quality products and services to the people.

• The need to solve the myriad of social, economic and environmental problems: As poverty, terrorism and other social issues ravages the world, the need for capital to tackle them has heightened. Impact investing has been demonstrated to have the capacity to supply the capital that can be used to combat these challenges and achieve the sustainable development goals.

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IMPACT INVESTING Impact Investing: Nigeria, renewable energy and the journey thus far Innocent Unah & Abisinuola David-Olusa

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t has been established that Nigeria is among the countries in Africa with the lowest electricity per capita electricity generation capacity. According to the United Nations, Nigeria has a population of approximately 195 million people with a population growth rate of 2.6 per cent.

The World Bank estimates Nigeria’s installed electricity generation capacity from both hydro and thermal sources at 12,522 Megawatts.

This implies a per capita electricity generation capacity of 64.22 Watts.

This compares with South Africa that has a per capita electricity generation capacity of 839.29 Watts. South Africa’s population is projected at close to 56 million and the country has a power generation capacity of 47 thousand Megawatts.

Worse still, the electricity generation sources are operating at 55 per cent capacity utilisation, barely at 4000MW generation with the peak being about 5090MW in April 2018, as millions of Nigerians are left yearning daily for electricity to power their lives in various ways. Given that electricity is at the heart of almost all the economic activities in the country, this means that Nigeria’s output (GDP) growth will be curtailed.

According to the Chairman of the Nigeria National Committee of the World Energy Council, planning experts estimate that the Nigerian power generation needs to grow at close to 10 per cent per annum in order to sustain the population. Hence, the country’s electricity generation capacity must reach 30,000 MW by 2020, and 78,000 MW by 2030.

Given that impact investing aims to create measurable benefits in the community through investments in sustainable social projects, renewable energy is a vital area that Nigerian impact investing gladiators should channel their investment arsenal to.

As the Nigerian Electricity Regulation Commission targets to generate a minimum of 2,000MW of electricity from renewable sources in 2020, several impact investments have been made in the sector by different investors as described below.

Nigerian National Petroleum Corporation (NNPC): Renewable Energy Division (RED) RED was established in 2005 to develop solar and other renewable energy sources as well as to pioneer and coordinate the Automotive Biofuels Industry development in Nigeria by engaging in commercial production of Biofuels, exploiting other renewable energy sources and earn carbon credits from Clean Development Mechanism (CDM) projects.

Dr Rabiu Suleiman, Group General Manager of the Corporation’s Renewable Energy Division, said that the corporation has acquired 20,000

hectares of land in Benue State to establish a $400 million dollar project for the cultivation of sugarcane and other agro-products to generate ethanol, as a renewable energy source.

Rensource Rensource, Nigeria’s fastest growing provider of off-grid power, raised $3.5 million from a syndicate of energy investors for investment in a clean energy project. The company provides clean and reliable power to consumers, small businesses and industrial clients. It has a subscription-based Power-as-a-Service (PaaS) model that used solar-hybrid systems installed on the user’s premises, through which it delivers clean energy to consumers. It is anticipated that upon completion of the project, the 1.3MW of standalone solar system will generate clean and sustainable energy to over 12,000 SMEs. All-On All-On is an impact investing company that works with partners to increase access to commercial energy products and services for underserved and unserved markets in Nigeria. With a start-up capital of $3 million partnership with the U.S Africa Development Foundation (USDAF), All-on seeks both financial returns and social impact to provide or improve access-to-energy for millions of households and SMEs. The company has provided a debt facility to Lumos Global BV to facilitate a quick rollout of its Solar Home Systems (SHS) in the Niger Delta, and also provided a convertible debt facility to ColdHubs, another indigenous clean energy service provider, to enable it expand its solar-powered marketplace cold storage business to new markets in the same region.

Nigerian Solar Capital Partners (NSCP) In September 2016, NSCP entered into a Joint Development Agreement with Globeleq Advisors Limited and

the ARM-Harith Infrastructure Fund to finance and co-develop a 100MW solar PV project in Bauchi State, Nigeria.

The project has a signed 20-year Power Purchase Agreement (PPA) with the Nigerian Bulk Electricity Trading plc.

NSCP chose to develop this project in northern Nigeria to bridge the region’s yawning power gap. Northern Nigeria has the largest power deficit and highest costs of electricity in the country.

Clean Technology Fund (CTF) In 2010, the CTF Trust Fund Committee validated a $250 million Clean Technology Fund Investment Plan for Nigeria for various projects such as Bus Rapid Transit Lagos (LUTP2), Busbased mass transport support for Abuja, Kano and Lagos (NUTP), Financial Intermediation for clean energy/energy efficiency, Utility-scale solar PV (World

Bank), Utility-scale Solar PV (AfDB).

Also, some impact investments are carried out on hybrid energy projects.

AIIM and Helios African Infrastructure Investment Managers (AIIM) and Helios Investment Partners have invested $30million in StarSight Power Utility, a Nigeriabased energy company providing solar-diesel-battery hybrid and efficient cooling and lighting solutions to commercial and industrial clients.

StarSight is currently planning to offer its services to a number of core clients in the financial services and energy sectors, focusing on a target pipeline of over 1,000 sites.

Lumos Global Lumos, an off-grid solar provider operating in Nigeria, recently partnered with telecommunication operator MTN, to provide solar kits which com-

prise a solar panel, a battery, a phone charger and LED lights obtained by customers from their local mobile operator store for a one-time commitment fee. Payments are made in small instalments, with their mobile airtime credit and as such are able to use the system to power their home. Lumos is one of Nigeria’s biggest pay-as-you-go solar players, with a record of about 40,000 solar systems installations. In 2016, it attracted a US$90 million investment from The Overseas Private Investment Corporation (OPIC) and the Pembani Remgro Infrastructure Fund, which it plans to use to grow its service in Nigeria and expand to other African nations.

Prospective Impact Investment Areas in Nigeria Nigeria presents the biggest and most attractive off-grid investment opportunity in Africa. With a population of 195 million people, GDP of $405 billion that continues to grow at close to 3 per cent each year, it is the largest economy in Sub-Saharan Africa. A significant amount of the country’s economy is already powered largely by small-scale generators (10–15 GW) and almost 50 per cent of the population have limited or no access to the national grid.

As a result, Nigerians and their businesses spend almost $14 billion annually on expensive, inefficient, polluting, poor quality electricity sources.

Developing off-grid alternatives to complement the grid could create a $9.2 billion market opportunity each year for mini-grids and solar home systems, saving Nigerian homes and businesses up to $4.4billion every year.

Furthermore, there is large potential for scaling as 10,000 mini-grids of 100 kW each could be installed in the next 10 years to meet 30 per cent of anticipated demand. The combination of large revenue opportunity (USD $9.2 billion per year), a supportive government, and a dynamic entrepreneurial environment make Nigeria the ideal location for impact investing in renewable energy.

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Impact Investment In Education: A bedrock for sustainable growth Abisinuola David-Olusa

The extent of the decay in the educational sector igeria accounts for the highest number of out-of-school children in the world, as there are currently more than 8.7 million children out of school, according to United Nations Education and Children Fund (UNICEF). Also, according to a United Nations Educational, Scientific and Cultural Organization (UNESCO) survey, it was stated that over 65 million Nigerians are illiterates with just 57 per cent of the adult population as literates, which is very low compared to other African countries such as Botswana (88.5 per cent) and Ghana (76.6 per cent).

These above statistics are compelling enough to establish, without a doubt, the fact that the educational sector is in an alarming state and actions need to be taken in this sector so as to prevent a brewing disaster.

The above statistics focused on illiteracy and lack of education but a more devastating fact showed that in a competency test conducted on primary school teachers in Kaduna State, two-third of these teachers failed to score 75 per cent or higher on assessments usually given to their students. This data makes it unsurprising that four out of every five children that has completed primary school are not able to read a three-sentence passage fluently with no help.

So the problem not only lies on the access to education but also on the quality of education provided. Quality education has been the backbone of development in countries of the world because it

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boosts both economic and social development as nations of the world agree that the way out of issues that plague individual countries and their citizens is through quality education. According to VVOB, a Belgian organisation which fo-

cuses on promoting education, quality education is defined as one that provides all learners with capabilities they require to become economically productive, develop sustainable livelihoods, contribute to peaceful societies and enhance

The country’s problem of underfunding, low quality and poor access of education has been further strained due to the explosive growth in population as on the average, there is just one qualified teacher for every 46 primary school students

individual well-being. A World Bank survey also found out that primary school teachers are unavailable in their scheduled classes at approximately 25 per cent of the time. It is estimated that actual teaching time is on the average of 33 per cent or less than what is timetabled.

Poor funding has been identified as one major problem that has resulted in the decay of the sector and the federal government has not done so much to improve the sector in that regard as a miserly 7 per cent of the country’s budget in 2018 was allocated to education which is well below the UNESCO recommendation of 26 per cent of a country’s budget.

With all of these numbers out there, it is quite glaring at this point that for the educational sector to begin to experience trajectory growth, the private sector has to play a complementary role in the core delivery of education and there is a need for investors to begin to enter into the market which would not only yield sustainable returns but also impact positively socially.

Opportunities that lie ahead Benjamin Franklin once said, “An investment in knowledge pays the best interest” The country’s problem of underfunding, low quality and poor access of education has been further strained due to the explosive growth in population as on the average, there is just one qualified teacher for every 46 primary school students. However, some of the factors that form the bedrock of the challenges in this sector also provide an opportunity to drive improvements. Some of which are: Huge demographic shift as the median age in Nigeria is 17.9 years; rapid urbanization which would improve the percentage of individuals seeking education as the proportion of literate urban individuals far exceeds the proportion of literate rural individuals; and the proliferation of technology.

A research report, the business of education in Africa, showed that 21 per cent of African children and young people are being educated in the private sector with this percentage to rise to 25 per cent in 2021. It also identifies an investment need in private sector education in the region of about $16 billion- $18 billion over the next five years. The future of the sector within Africa would be a hybrid of both the public and private sector provisioning. Investing in education has exciting prospects for potential investors, some of which are: Demand for education is always larger than the supply, which means there would always be a demandsupply gap. There is a long-term and sustainable revenue visibility and barriers to entry are high.

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Invoking Impact Investing for environmental protection: The Nigerian imperative Innocent Unah & Abisinuola David-Olusa

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ur Earth is considered an ecosystem on a large scale. When we introduce external factors such as carbon dioxide, it upsets the balance of this ecosystem and affects the inhabitants. One of the consequences of such upsets is global warming, water shortage, extinction of species, etc.

These have tremendous negative impacts on humans, threatening their very existence.

Nigeria is a country faced with upsets arising from such external factors, which have caused a number of national environmental crises such as soil degradation, urban air and water pollution, rapid deforestation, oil pollution and loss of arable land. The crises have manifested in various forms in different parts of the country, some of which we explore in the following paragraphs.

Pollution in the Niger Delta: living with death After more than fifty years of negligence by the oil industry, the Niger Delta has been rendered the 9th most toxic environments in the world as a result of oil spills and pollutants from continuous gas flaring, according to Pure Earth, an organisation that focuses on identifying and cleaning up the poorest communities in developing countries with health-threatening concentrations of toxins.

As a country that generates over 90 per cent of its revenue from the sale of crude oil, Nigeria constantly witnessed activities ranging from oil prospecting to exploration, which often lead to negative environmental impacts such as oil spillages, land degradation, and air quality degradation due to gas flaring and drilling

It is fairly obvious that any serious attempt to enhance the quality of life of Nigerians through a clean-up of the environment will need huge funding

rig explosion.

Combined with the industrial waste discharged into the atmosphere, the pollution has had damaging impacts on host communities, evidenced by polluted water bodies (eliminating aquatic life) and ubiquitous health hazards.

Ogoniland: Blessed with oil, cursed with spillage An assessment carried out by the United Nations Environment Programme (UNEP), showed that pollution from over 50 years of oil operations in the Niger Delta region has permeated through the entire environment. In at least 10 Ogoni communities where drinking water is contaminated with high levels of hydrocarbons, public health has been immensely battered.

In Nisisioken Ogale, a community in the west of Ogoniland, families drink water from wells contaminated with benzene at levels over 900 times above WHO guidelines. In this community that is close to a Nigerian National Petroleum Company pipeline, an 8 cm layer of refined oil, a product of an oil spill which occurred more than six years ago, could be seen floating on the groundwater serving the wells.

While experts agree that some attempts to clean-up the environmental mess could yield immediate results, the report estimates that countering and cleaning up the pollution and catalysing an ecological recovery of Ogoniland could take 25 to 30 years. In 2016, Hilary Inyang, a professor of environmental engineering and science, stated that

Nigeria had 3,920 contaminated sites that would cost the government about $520 billion over the next 30 to 35 years to clean up.

Onitsha air pollution: delivering debilitating doses WHO estimates that up to 7 million people die every year from exposure to fine particles in polluted air as these particles mostly lead to diseases such as stroke, heart ailments, lung cancer, chronic obstructive pulmonary diseases and respiratory infections.

According to the 2018 Environmental Performance Index (EPI) report, air quality is the leading environmental threat to public health. This is corroborated by the Institute for Health Metrics and Evaluation (IHME). In 2016, IHME estimated that diseases related to airborne pollutants contributed to two-thirds of all life-years lost to environmentally-related deaths and disabilities.

Similarly, the United Nations Environment Programme (UNEP) estimates that about 600,000 yearly recorded deaths in Africa are related to air pollution. In 2016, the Organization for Economic Co-operation and Development (OECD) noted that annually, close to 712,000 people are at risk of being killed prematurely by polluted air across Africa.

According to WHO, Onitsha, Nigeria, has the highest levels of Particulate Matter (PM)10 in the world followed by Peshawar in Pakistan and Zabol in Iran. The WHO uses the PM measure to gauge the level of concentration of particles in the

air. Other cities which were ranked

by WHO for high PM10 levels are Kaduna, Abia and Umuahia; these ranked fifth, sixth and sixteenth on the WHO PM 10 scale, indicating that these cities are grossly polluted, not just in terms of air quality but also in terms of solid wastes that litter the streets and block the drainage system.

Lagos automobiles fumes and their hydrocarbon discharge Vehicular exhaust emissions are the greatest single source of urban air pollution in Nigeria since most of the automobiles plying Nigerian roads are run with worn out combustion engines that emit over-bearing quantities of fumes.

Diesel fumes contain about 10 times the amount of soot particles contained in petrol exhaust fumes, with the potential to cause cancer.

In the short term, high level and/or persistent exposure to diesel fumes can irritate the eyes and increase the risk of lung cancer.

Port Harcourt: A Sooty garden Soot is a mass of impure carbon particles resulting from the incomplete burning of hydrocarbons.

When inhaled, the soot particle becomes an irritant and cause cough.

Persistent cough leads to an injury in the lungs. Soot, currently experienced by Port Harcourt residents was triggered by incessant activities of illegal oil refining and bunkering as burning of tyres compound the malaise.

Environmental Protection Projects In the face of the numerous

onslaughts on the various aspect of the Nigerian environment, it is marginally comforting to observe that a number of projects targeted at environmental restoration and protection. One of such projects is the Clean Lagos Initiative (CLI) of the Lagos State Government.

Clean Lagos Initiative The CLI was launched by the Lagos State Government in 2016 through its Ministry of Environment. Its mandate is to ensure a clean (Lagos) city through a viable waste management framework. As the name indicates, this initiative is expected to eliminate indiscriminate waste disposal by enthroning effective waste management and recovery systems.

Environmental analysts say that this measure should substantially contain, and eventually eliminate, the health hazards that often arise from wanton waste disposal practices. The reform is a type of public private partnership model, involving the engagement of private contractors in the waste management process. The CLI is backed by an enabling act, the Environmental Management and Protection Law recently passed by the Lagos State House of Assembly.

Call for Action: the role of Impact Investing According to a 2016 World Bank report The average life expectancy of Nigerians was 53 years, a far cry from that of average for low and middle income countries, which the organisation put at a little above 70 years. A major cause of the short life expectancy is environmental pollution, with more than 9 million people are killed annually.

From the foregoing, it is fairly obvious that any serious attempt to enhance the quality of life of Nigerians through a clean-up of the environment will need huge funding. This is an opportunity that impact investors should embrace as it has the potential of delivering good returns while offering portfolio diversification alternatives. With impact investing, it is possible to shrink the negative impacts on the environment and also generate positive returns on investments.

Impact Investing environmental intervention tools A critical situation analysis shows that Impact investing for the protection of the environment is possible.

It can be achieved through investments in organizations, bonds, funds and other instruments whose primary objective is to improve social and environmental conditions.

An example of such instruments is the green bond, which was initially introduced in Nigeria in December 2017. Green Bonds are typically debt instruments issued to raise capital for specific clean power projects or projects aimed at reducing threat of climate change.

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Impact Investing and Financial Inclusion: The imperative for alliance Innocent Unah & Abisinuola David-Olusa

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inancial services have a major role to play in the activities of individuals and the economy as a whole. Achieving financial inclusion is not an end in itself, but a means to an end. It is broadly recognized as an important tool for reducing poverty and achieving inclusive economic growth.

Regardless of the income level, individuals and businesses should have access to the appropriate financial services products but with problems around financial literacy, perception of financial products, disability and self-exclusion; this has led to the huge financial exclusion numbers. According to World Bank’s 2017 Findex Report, about 1.7 billion adults remain unbanked; the unbanked are consumers who do not have access to basic financial services and products.

Most of these people are resident in regions where there is a huge proportion of informal economy as opposed to formal such as Africa, Asia and Latin America. Due to the widespread of account holders in developing economies, most of the unbanked adults are concentrated in the developing countries with about half of this number living in 7 countries namely: Bangladesh, China, India, Indonesia, Mexico, Nigeria and Pakistan with Nigeria having a record high of 100 million adults who are non-account holders.

Financial exclusion tends to increase the risk of poverty and social exclusion as studies have shown that people who are unable to access basic financial services, tend to incur high costs when trying to manage their money and often makes them vulnerable to illegal or high lending costs. Exclusion from the formal financial system has been identified to be a major barrier to ensuring the poverty-rid world.

Poverty extends beyond the lack of money to a lack of access to the products or channels through which the poor could meet his basic needs so as to improve his wellbeing. As at early 2018, Nigeria had over 87 million people living in extreme poverty with extreme poverty growing at 6 persons per minute. This is the highest in the world as it recently overtook India who had 73 million people in this group.

Inclusion has become very necessary topic as we talk about eradicating poverty in the world and financial inclusion seeks to provide solutions to the constraints that ex-

clude people from participating in the financial sector. With the advent of technology, results have shown an improvement in the access to financial services which has notably lowered costs and extended financial products to areas that physical bank may not exist.

Consequent upon the foregoing realities, impact investors have intervened in various parts of the world in order to ensure that previously excluded members of the population are availed access to financial services.

One of the impact investors currently embarking on financial inclusion investments is Ford Foundation, the foundation dedicated $1 billion out of its endowment of $13 billion over 10 year period to explore mission-related investments among which is financial inclusion across the world.

In Cambodia also, PG Impact Investments, a global impact investment firm, has made debt investment to a microfinance institution facilitate the growth of loans to low income clients living in rural

With growing population, potential for economic growth combined with other equally favourable factors, Nigeria is laden with opportunities for impact investing that can be deployed as a vehicle to fund, galvanise, and increase measures that improve millions of lives

Cambodia.

Similarly, NN Investment Partners, the asset manager of the Dutch financial corporation NN Group, has also deployed global equity impact strategy for investing in companies that are helping to unlock the social and economic potential of previously financially excluded people.

Over the years, many countries in Sub-Saharan Africa have also taken great steps in extending financial services beyond the formal structure, as Kenya the lead with its mobile money payment M-Pesa to reach about 80 per cent of Kenyan households in 4 years, and ensure that over 30 million users in 10 countries and processed over 6 billion transactions in 2016 alone.

Financial inclusion policies that focus majorly on transactions and mobile money platforms rather than the whole intermediation process such as access to credit may not effectively lead to financial deepening which should aid economic growth.

In a bid to increase access to finance in Nigeria, one of the major strategies is to boost the microfinance sector since the sector has a strong potential in promoting entrepreneurship.

It should be noted that some impact investors have been committed to increasing the dragnet of financial inclusion in Nigeria by making significant investments in microfinance services, which account for up to 50 per cent of capital deployed in financial services.

Microfinance institutions are the major providers of finance to the Micro, Small and Medium Enterprises (MSMEs). MSMEs being the largest job creators and contributors to economic growth have placed microfinance institutions at the centre of financial inclusion. Institutions such as LAPO Microfinance Bank have focused mainly on the social and economic empowerment of low-income households through the provision of access to responsive financial services on a sustainable basis.

With growing population, potential for economic growth combined with other equally favourable factors, Nigeria is laden with opportunities for impact investing that can be deployed as a vehicle to fund, galvanise, and increase measures that improve millions of lives; financial inclusion is definitely beckoning on impact investing in this regard.

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IMPACT INVESTING

Leveraging Pension funds for Impact Investing in Nigeria Abisinuola David-Olusa

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ension funds comprise a large pool of assets in the form of contributions made by pensioners and employees.

Hence, if fund managers invest a fraction of these in investments that yield both financial and social returns, the effect on impact investment, an emerging sector, will be significant.

The custodians and managers of these large assets therefore have the ability to shape the impact investing space in Nigeria by increasing the scale of the market and influencing intermediaries such as the investment banks to design more social impact products that will create varieties for investors.

Pension funds have for a long time played a crucial role in providing security for retired individuals.

They also have the potential to unlock capital for entrepreneurs and businesses that are impact-driven.

Globally, the largest pension funds have signed onto the Principles for Responsible Investment (PRI), a pact within which they have accumulated own trillions of dollars of assets under management; many institutional investors have also committed to integrate the environmental, social and governance (ESG) practices into their investment decision processes.

As at 2017, the total assets of the global pension fund industry amounted to $41.3 trillion, a significant portion of which is deployed to productive use through impact investment products that yield sustainable returns.

The National Bureau of Statistics recently reported that Nigeria’s pension fund assets increased by N428 billion to N7.94 trillion by the first quarter of 2018. However, a breakdown of the allocation showed that 69.50 per cent of these assets were invested in government securities, with only 0.10 per cent invested in green bonds.

Existing impact-driven pension funds Global cases indicate the way that the Nigerian pension industry should go in terms of impact investment, with many impact-driven pension funds, some of which are examined below, already achieving desired results.

Environment Agency Pension Fund (EAPF) EAPF is a pension fund that serves the employees of the U.K. Environmental Agency and one of the largest local government pension schemes, with around £3.5 billion of assets. It is at the fore-front

in ensuring sustainable investments and stewardship of which over a third of these funds are invested in companies that make positive contributions to ensuring a sustainable economy.

Church Pension Fund (CPF) The Church Pension Fund (CPF) is a financial services organization in New York that serves the Episcopal Church has been actively involved in impact investing for nearly two decades and possesses over $13.2 billion in assets under management.

In 2018, the fund committed $1 billion to impact investments, of which $840 million is invested in all asset types. The fund has an asset allocation of 71.8 per cent equities and 28.2 per cent fixed income. For equities, 31.3 per cent were allocated to global equities, 14.1 per cent to specialized strategies, 14.9 per cent

to private equity and 8.7 per cent, 2.8 per cent to real estate and real assets respectively for equities, 23.9 per cent to global bonds, 4.2 per cent on Treasury Inflation-Protected Securities (TIPS). CFS had annualized total returns of 6.6 per cent in the last 10 years with specific investments of $100 million, $369 million and $364 million in Environmentally Responsible Investments (sustainable forestry, clean technology and green buildings), economic targeted investments (microfinance-related initiatives, affordable housing, sustainable farming and urban redevelopment) and women or minority owned investments respectively.

The fund has invested $17 million in a fund that provides loans to microfinance institutions, manufacturers and distribution companies in the off-grid solar sector in sub-

Saharan Africa and South Asia.

Impact investments in Africa are dominated by foreign investors; this goes to show the level of market confidence of impact investors in the continent, and that there are lots of impact investment opportunities

bridge in 2017, titled “Growing a Culture of Social Impact Investing in the UK”, emphasized the need for educational information around impact investing as 82 per cent of the pension trustees interviewed felt they lacked data on social impact investment while many fail to appreciate the potential diversification benefits of impact investing as many pension fund trustees seem to believe that ESG investing is a barrier to diversification which further leads to underperformance.

According to the Law Commission, key barriers to social impact investment by pension funds are structural and behavioural rather than legal as there are no regulatory barriers preventing pension funds from making social impact investments provided that they have good reason to think that scheme members share the concern and there is no risk of significant financial detriment to the fund. Arguably, it is the potential long term investment benefits that carry the greatest weight both in terms of risk reduction and, potentially, of outperformance.

Pension fund trustees have a fiduciary obligation to their members as fund investment decisions must

Pension scheme trustees are being called upon to do more to engage scheme members with their pensions to help them connect with the social impacts of the investments being made on their behalf that can be tapped into by local investors.

Allaying the fears of pension funds regarding Impact Investing A major reason for the resistance from pension trustees towards impact investing is lack of proper understanding of the concept. There is a misconception that there is always an imbalance between impact and a financial return as one has to be forfeited for the other. Considering that pension funds have a fiduciary responsibility to deliver investments with the best risk-adjusted returns, impact investing might not, on the face of it, look quite attractive to them. However, impact investing has made noteworthy progress in recent years, with ground-breaking and impactful strategies now available to deliver acceptable level of financial returns whilst having positive impact on society.

A report published by Allen-

serve the interests of all beneficiaries. Fiduciary duty is the governance tool that aligns the interests of investors with beneficiaries, and ensures a sound decision-making process. Pension scheme trustees are being called upon to do more to engage scheme members with their pensions to help them connect with the social impacts of the investments being made on their behalf.

The funds can invest directly in unlisted companies or utilities within agriculture, renewable energy, healthcare sectors for instance.

They can also co-invest with other like-minded pension funds in projects aligned to their desired impact.

Impact investors need to work with the pension funds to develop systems that evaluate prospective sectors for impact investment, and to link long-term financial performance to social and environmental considerations.

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IMPACT INVESTING Expanding access to healthcare in Nigeria: Impact Investing as a strategic model Innocent Unah & Abisinuola David-Olusa

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alf of the global population lack access to basic health services and based on this, many families are continuously pushed into poverty because they have to personally foot their health bills. As at December 2017, 800 million people spent at least 10 per cent of their budgets on health expenses and for almost 25 per cent of these people, these costs are high enough to drive them below the poverty line.” These statistics was published by the World Health Organization (WHO) in its 2017 Global Monitoring Report.

In developed countries, health expenditure account for the second-largest category of government spending. Also, developing countries like China and India are set to increase healthcare spending significantly so as to meet the growing demand. This goes to show the level of importance placed on healthcare services in other countries but this has not been the case in Nigeria, as it was recorded that in 2017, South Africa spent 5 times as much on healthcare services per capita compared to Nigeria. Also, in 2015, the total expenditure spent on healthcare in Nigeria amounted to 3.56 per cent of GDP, which was lower than the continent’s average spending of 5.95 per cent.

In 2001, Nigeria was a signatory to the Abuja declaration, of which the Country and other African nations pledged to commit 15 per cent of their federal budgets toward health needs. Out of this total spending, 75 per cent was traced

to out-of-the-pocket spending i.e. spent by individuals, and this goes to show that the proportion of funds spent on healthcare through public

sources is inadequate and minimal.

Studies also show that public health services are inefficient and provide inconsistent quality, which has

The private sector accounts for around two-thirds of health care spending, of which 95 per cent is paid for out of pocket. Only around 4 per cent of the population, most of whom are government and parastatals employees, have formal health insurance

greatly contributed to the search of many individuals at the Base of the emerging markets’ population Pyramid (BOP) to go in search of private healthcare. BOP is the largest but poorest socio-economic group of 7 billion people in the world.

Impact investing is a concept that debunks the idea that either financial or social returns take precedence in investment decisions. It advocates for the fact that sustainable financial returns can be made, while ensuring social and environmental returns from investments made into the society. Guaranteeing that both financial and social returns will be made in the healthcare sector can be a very daunting task because of the following reasons: Healthcare services are generally considered public goods and as such it would be difficult for investors to take a business approach relying on market-driven solutions alone. This is why government regulations and subsidies are necessary in this sector as those at the BOP in emerging markets are price sensitive and have the limited capacity to pay for healthcare services. In this regard, blended strategies have been adopted on how impact investors can key into the healthcare sector.

Some of these include investments that support microfinance organizations that provide primary healthcare services such as cancer screening. Global Partnerships has pursued this model successfully over years. Another strategy is funding low-cost healthcare clinic chains that have a network hub of service points which provide basic healthcare services at minimal cost and can reach people at the BOP. Dalberg has pioneered such investment strategy.

With a blended value approach, impact investing has a role to play in ensuring the benefits of healthcare services reach the people who need them. Impact investors can take the lead in bringing affordable, accessible and quality healthcare to a Nigeria that needs it. On the part of the government, major initiatives have been proposed while some are in the early roll-out phase that could dramatically reshape health regulations and redesignate roles and responsibilities for more effective outcomes.

Some of these were the recently signed National Health Bill (NHB) that was aimed at expanding private sector participation; and the framework for drug distribution that is set to reduce the sale of counterfeit and sub-standard drugs in the local market. Although, implementation and execution of these reforms will form a critical part of the policy success.

WHO stated that Universal Health Coverage (UHC) can significantly reduce the number of people who lack access to healthcare service. UHC is a healthcare system which means that all communities can use the preventive, curative, rehabilitative and palliative health services they need while ensuring that they are not exposed to financial hardships. UHC ensures that everyone obtains the essential health service they need, when and wherever they need it. The private sector accounts for around twothirds of health care spending, of which 95 per cent is paid for out of pocket. Only around 4 per cent of the population, most of whom are government and parastatals employees, have formal health insurance. With a per capita income of around $2,700, private care and comprehensive medical insurance are beyond the means of the average Nigerian. As such, for universal coverage to be achieved, it would need to come via a more comprehensive and widespread roll-out of the NHIS. Impact Investors in the healthcare sector Flint Atlantic Capital Flint Atlantic is an impact investment firm and is continually in search of innovative solutions to improving the access and quality of healthcare services in Africa that also has the potential for financial returns. They make investments through equity, quasi-equity and debt instruments in companies across the healthcare value chain.

One of their investments is in Africa Healthcare Network.

Private Sector Health Alliance of Nigeria (PHN) PHN seeks to transform the Nigerian healthcare sector by facilitating impact investments and market shaping engagements in critical segments of the healthcare value chain that reach the BOP.

BUSINESS DAY

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Thursday 20 September 2018

IMPACT INVESTING Green Bonds: A pathway to resolving major climate changes sovereign bond issue was to finance projects in the 2017 appropriation act.

The mitigation of the effects of climate change such as desertification, flooding, erosion, erratic rainfall, etc., would be driven through energy, transport and agriculture projects. And as at March 2018, the bonds had funded three projects which are Energizing Education Project and Rural Electrification Municipal Project, both of which are registered under the Ministry of Power; the Afforestation Project registered under the Ministry of Environment.

This bond issue resulted in positive assessment by the International Climate Bond Initiatives and named Nigeria as the first African country to issue a climate bond certified sovereign green bond and the world’s fourth sovereign green bond issuer, behind Poland, France and Fiji.

Due to the success of the debut green bond issue, the minister of environment announced that the ministry is set to issue another N150

Abisinuola David-Olusa

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reen or climate bonds a re f i xe d i n c o m e securities which are used to finance projects targeted at environment conservation such as energy efficiency, sustainable agriculture and environmentally friendly technologies. Green bonds can be issued by either government or private corporations, of which case referred to as corporate green bonds. To qualify for a green bond status, bonds are usually verified by a climate bond standard board so as to certify that such bond(s) meet set standards and they would be used for the required environmental projects. They usually come with tax incentives which make them a more attractive investment unlike their taxable counterparts.

Climate change, or global warming as it is popularly referred, is not just a threat to the environment but also a massive threat to economic development which would distort decades of global development gains. According to research from University of Sussex and La Sapienza economists, global warming would slow productivity in the poorest countries, as the world’s 100 poorest countries would be worse off by 5 per cent at the end of the century than they would have been without climate changes. This would result into trillions of dollars being wiped off the global economy annually and also lead to a huge disparity between the rich and poor economies. So therefore, a lack of prompt action

by global actors would lead to a higher cost in the medium and long term while leading to a greater risk exposure.

For many years, capital markets have been a major source of funding for green investment and until recently, equity financing was a major component, as private equity funds, venture capital funds and government funds were the most accessible capital sources at the early stages of green technologies development.

As these technologies were tried, verified and refined, funders began to progress towards debt financing to support growth and technology

scaling.

Global green bond market The global market for green bonds took off in 2005 with an issuance by the European Investment Bank (EIB) and since then, the green bond market has grown to about $100 billion in annual issuance and over $200 billion total outstanding. With this growth, sustainable investment market has expanded from equities into bonds. The market has proven that there are sustainable investing opportunities in fixed income, and that bonds can be used as a tool to drive transition from a hazardous

The resources needed to arrive at Nigeria’s set targets in the NDCs by 2030 are put at $142 billion, translating to about $10 billion annually environment towards a low carbon and climate resilient economy.

Multilateral Development Banks (MDBs), the only issuers of green bonds until 2013, have and would continue to play a significant role in financing green investment, of which they would need to leverage on significant resources from the private sector so as to carry out such functions accordingly.

Nigeria’s green bond market At the Paris Agreement, Nigeria made commitments to reducing carbon emissions by 20 per cent unconditionally and 45 per cent with international support by 2030. In partial fulfilment to that commitment, Nigeria had a debut issuance of green bonds, a N10.69 billion issue with a tenor of 5 years in December 2017 of which investors receive 13.48 per cent annual coupon. The bonds were listed on the Nigerian Stock Exchange (NSE) and FMDQ as the purpose of this

billion green bonds in 2018 which would potentially finance climaterelated work for women and nonstate actors in Nigeria.

Call to action Bond issuances from corporate and deposit money banks (DMBs) have experienced growth over time but demand from institutional investors still outweighs supply.

There is significant headroom for quality green issuance, particularly from banks and corporations and these institutions play a vital role in meeting climate finance targets and achieving the country’s Nationally Determined Contributions (NDCs).

The resources needed to arrive at Nigeria’s set targets in the NDCs by 2030 are put at $142 billion, translating to about $10 billion annually.

Therefore, corporate organizations and institutional investors should begin to critically consider issuing bonds that are specifically targeted at a climate change solutions.