BusinessDay 21 Feb 2019

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NEWS YOU CAN TRUST I **THURSDAY 21 FEBRUARY 2019 I VOL. 15, NO 251 I N300

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States pump N251bn into non-viable airports amid infrastructure deficit B IFEOMA OKEKE

ad roads, poor healthcare services, collapsing schools, inadequate housing and a lack of municipal services like

waste collection or pipe-borne water have not deterred most Nigerian states from embarking on white elephant airport projects.

Apart from the 22 airports built by the Federal Government through the Federal Airports Authority of Nigeria

(FAAN), many state governments are building such facilities, usually as a status symbol.

At the last count, 13 states have spent or propose to spend a total

Continues on page 38

Market I&E FX Window CBN Official Rate Currency Futures

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NGUS APR 24 2019 363.30

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Political desperation, fiery rhetoric battering Nigeria’s image CHRISTOPHER AKOR

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t would have been thought that the two main political parties and their candidates would have shrugged off the disappointment of the postponed elections and returned to campaigning to sway voters to their sides and encourage massive turnout on February 23. It would also have been thought that with the signing of the peace pact by the candidates and their political parties, they would have eschewed violence or any act that might in any way jeopardise the collective vision of a free, fair, Continues on page 38

Inside FIRS’ searchlight on 2,933 companies’ bank accounts raises industry dust P. 2

L-R: Tunde Owolabi, group executive, retail banking group, Lagos & West, FirstBank; Akin Olawore, president, Nigerian-British Chamber of Commerce (NBCC); Adesola Adeduntan, chief executive officer, FirstBank, and Kayode Falowo, deputy president, NBCC, during a courtesy visit by officials of the NBCC to FirstBank in Lagos.

Understanding the economy of Nigeria’s 36 states – Delta & Edo

2 BUSINESS DAY NEWS

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Nigeria’s cassava bread policy falters as millers jettison initiative ... but bakers still pay N1,000 per 50kg flour for development of the policy JOSEPHINE OKOJIE

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igeria’s flour millers have continued to shun the Federal Government’s cassava flour inclusion policy as the unavailability of high quality cassava flour (HQCF) and high cost of the raw material weigh on production.

Despite modest increases in processing facilities and drying operations of cassava by processors, Nigeria’s capacity to produce industrial-grade cassava flour remains limited. As such, the cost of cassava flour is considerably higher than imported wheat.

As a result, flour millers are compelled to buy cheaper wheat imports from Argentina, Ukraine, Russia and other parts of the world, BusinessDay checks show.

This has made Africa’s most populous nation a dumping ground for sub-standard wheat, with the resultant depletion of foreign reserves and rising unemployment.

“We have no record to the effect that any flour miller in the country is adding even 1 percent of HQCF to its production of flour currently,” Ayo Olubori, chairman, National Cassava Processors and Marketers Association (NCAPMA), said in a telephone interview.

“The millers are not buying from us and are not willing to off-take at the price we are offering to sell,” Olubori said.

Cassava requires less labour than all other staple crops. However, it requires considerable post-harvest labour because the roots are highly

perishable and must be processed into a storable form soon after harvest, experts say.

This has made processing of cassava tubers into flour expensive, translating into high prices of the commodity.

Similarly, the Nigerian bakers association says that despite the fact that no flour miller in the country is currently adding HQCF to their flour, the government is still collecting N1,000 per 50kg bag for the development of the cassava bread initiative from millers.

“No flour miller in Nigeria is adding cassava flour into their flour as we speak. Yet, the government is still collecting N1,000 on every 50kg bag of flour sold in the country,” Jude Okafor, national publicity secretary, Association of Master Bakers and Caterers of Nigeria, said.

“The fund collected by the government is meant for development of the cassava bread initiative. What then is the government developing when the policy has been abandoned for more than four years now?” he asked.

Okafor said prices of flour would have been cheaper if the extra N1,000 paid on each 50kg bag was not included, adding consumers would have been paying less for bread than they are paying now.

He called on the Federal Government to terminate the payment and use the already-collected funds to support bakers and cassava flour processors across the country.

•Continues online at www.businessday.ng

Elections, access to forex, global trade output to shape Nigeria’s port business in 2019 AMAKA ANAGOR-EWUZIE

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he outcome of the 2019 general elections, availability of and access to foreign exchange, as well as global trade output are macroeconomic indicators that will drive growth in Nigeria’s maritime industry in 2019.

By estimation, international developments as they relate to growth in global output and trade, situation in the global crude oil market and international maritime regulatory conditions will have serious economic implications on the nation’s maritime sector.

The above projection by the recent Nigerian Maritime Administration and Safety Agency (NIMASA) report reemphasises the earlier prediction by industry analysts that stable economic growth would encourage the importation of various inputs, including raw materials, spare parts, equipment and machineries for the manufacturing sector, and that foreign exchange stability would determine the volume at which manufacturers would import more input into the country.

“The domestic economic conditions and the associated growth in trade, availability of and access to foreign exchange, as well as the evolving factors in domestic maritime regulation will impact on maritime business,” the NIMASA report said.

“Precise forecast estimates are difficult enough. As such, planners and economic operators typically

resort to scenarios in anticipating future conditions,” it said.

The report said the economy is expected to pick up, albeit at limited speed, from growth this year.

However, growth in the maritime industry has still not recovered to its pre-recession levels of competitiveness and activity, but is expected to be in tandem with the projected growth in the economy.

The report further stated that growth in the global maritime sector is expected to slow over the next five years with crude oil projected to decline by 0.1 percent; containerised trade to decline by 0.4 percent, and seaborne trade by 0.2 percent.

It was also estimated that total fleet will increase at slightly over 4 percent for both 2019 and 2020; total trade will increase to N28.55 trillion in 2019 and N30.11 trillion in 2020, while foreign reserves, at $44.7 billion in 2019, are projected to be $61.7 billion in 2020.

“We expect the uncertainty surrounding the 2019 elections and the time lag possibly required to activate growth-stimulating policies after the inauguration of the newly elected government to impact on economic growth. Growth will also rely on recovery in agriculture, the largest sector of the economy, to once familiar levels above 3 percent. At the baseline, we foresee 2 percent GDP growth in 2019,” said Doyin Salami, CEO of Kainos Edge Consulting Ltd, which prepared the NIMASA report.

•Continues online at www.businessday.ng

L-R: Idongesit Nkanga, chairman, Ibom Air; Obong Victor Attah, former governor, Akwa Ibom State; Bukola Saraki, Senate president; Sunday Mbang, former prelate of Methodist Church, and Udom Emmanuel, governor, Akwa Ibom State, at the unveiling of Ibom Air in Uyo, yesterday.

FIRS’ searchlight on 2,933 companies’ bank accounts raises industry dust IHEANYI NWACHUKWU

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f the plans of Nigeria’s taxman finally work out, Nigerian banks will need to seek its approval to execute transaction in the accounts of no fewer than 2,933 companies said to have been identified for not paying taxes, BusinessDay can disclose.

Though associated pressure may have reduced lately due to elections, but the Federal Inland Revenue Service (FIRS) had asked that banks should within 72 of receipt of the notice forward detailed bank statements and financial records for the said companies and/or any of their subsidiaries holding accounts with the banks.

Banks were also asked to provide records of all principal officers related to any of these companies.

In a January 22, 2019 letter signed

by Tunde Fowler, executive chairman, FIRS, the taxman appointed

banks as collecting agents for the full recovery of the said tax debts.

“The statement should cover the period from the date the accounts were opened to the date of receipt of this notice,” the FIRS told banks, adding that they had just seven days from the receipt of the letter to respond to issues contained in the notice. The taxman also threatened to sanction banks that fail to comply with the notice.

In line with its N8 trillion revenue target this year, FIRS last month said it would expand its dragnet and tighten noose around tax evaders.

“I wish to inform you of the failure of the listed 2,933 companies (see attached page 1-90) to comply with provisions of the tax laws by not paying taxes due to the Federal Inland Revenue Service,” a copy of the letter from FIRS to banks, seen

by BusinessDay, read.

“Pursuant to my powers under section 49 of the Companies In-

come Tax Act Cap C12 LFN 2004 as amended and Section 31 of the FIRS (Establishment) Act No. 13 of 2007, I hereby appoint your bank as Collecting Agent for the full recovery of the amount displayed on the attached schedule payable to the FIRS. “In this regard, you are kindly required to set aside the aforesaid sum and pay same to the credit of these attached companies in full or partial amortization of its aforesaid tax debt.

This should be done prior to execution of all or any related transactions involving these companies or any of its subsidiaries. I further request that the FIRS be informed of any transactions prior to execution on the accounts, especially transfer of funds to or from offshore or local accounts of these companies or any of its subsidiaries.

Only on my authority should such transactions be exited,” the letter said.

Just last week, the FIRS directed

Continues on page 38

FEC hinges Q4’18 economic performance on early release of funds

...as INEC to declare winner of presidential race Wednesday TONY AILEMEN & JAMES KWEN, Abuja

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he Federal Executive Council (FEC) on Wednesday hinged last quarter’s economic growth on early release of funds, saying the statistics recently released by the National Bureau of Statistics show that the economy attained strongest growth in recent times.

Udoma Udo Udoma, minister of Budget and National Planning, told State House correspondents after the weekly FEC meeting presided over by President Muhammadu Buhari that the Council expressed happiness that real GDP grew at 2.38 percent, services sector at 2.99 percent, while agriculture grew at 2.46 percent.

“FEC received the good news that Nigeria’s economy received a positive performance report, with the gross domestic product (GDP) growth at about 2.38 percent in the fourth quarter of 2018. It is very

heart-warming that the economy is on the path of growth,” Udoma said.

He attributed the growth to the impact of early release of funds by the Federal Government.

This is as the Independent National Electoral Commission (INEC) said it would declare the winner of this Saturday’s presidential election on Wednesday.

INEC assured Nigerians that even with 73 presidential candidates and over 84 million voters, it would announce results of the presidential election the same period as it did in the 2015 general elections.

The electoral umpire had announced the final result of the 2015 presidential election at exactly 2.55 a.m. on Wednesday, April 1, 2015, after days of collation of results from across the 36 states of the federation and the Federal Capital Territory.

“Let me repeat here that even though this time around we have more presidential candidates than

2015, we have more registered voters than we had in 2015, the size of the result sheet is bigger than we had in 2015, but we are committed to concluding the process for the presidential election roughly around the same time that we concluded the 2015 general elections,” Mahmood Yakubu, INEC chairman, told journalists and election observers in Abuja on Wednesday.

“I understand that there is greater urgency, particularly following the extension and particularly for those who are covering the election so that they do not stay more than is expected for the outcome of the election. We will do whatever we can to speedily conclude the election consistent with the provisions of the law. We won’t sacrifice due process for speed. But, we will make sure we balance speed and what we are supposed to do under the law,” he said.

•Continues online at www.businessday.ng

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Lagos and the tourism goldmine

Tayo Ogunbiyi

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rom all indications, the several investments of the Lagos state government in the tourism sector is steadily but surely paying off. For instance, according to reports, activities within the tourism sector contributed about N800billion to the State’s Gross Domestic Product (GDP) in 2017.

Similar in a recent statement, the state Commissioner for Tourism, Arts and Culture, Mr. Steve Ayorinde, revealed that the tourism sector recorded major success in the last quarter of 2018. According to the Commissioner, developments and details of activities as keenly observed by the Lagos State Government captured total spending in excess of N50bn in cash transactions, especially in weeks preceding and following the Yuletide season.

Interestingly, this development seems to be following an already established one, as similar trend was recorded towards the last quarter of 2017. According to a report, a large chunk of noticeable spending in the last two years in the sector transpired in hotel lodgings, local in-bound flights and taxi/chartered transportation, alcohol and beverage consumption; culinary business; visits to resorts, parks, clubs and lounges, live theatre and cinemas; concerts and clubs as well as ancillary businesses like fashion and clothing, kiddies’ games and toys, and private security guards, which are

all now part of the tourism and entertainment ecosystem.

No doubt, this latest surge in economic activities in the sector is an indication that recent efforts by the state government geared towards strategic development and growth of the sector are, after all, not in vain. Of late, the state government has demonstrated sufficient capacity to explore the limitless potentials of the sector through deliberate interest in and commitment to the development of infrastructure, security and ideas that impact positively on tourism, entertainment and shopping.

Naturally, global top players in the tourism industry are intensely observing development in the state tourism sector. For instance, a report in the British Daily Mail of April 2018 listed Lagos along with Nairobi, Kenya as the top non-European destinations among British travelers planning for summer holiday.

Similarly, the MasterCard Global Travel Index released in October 2018 categorized Lagos as the most visited city in sub-Saharan Africa in 2018.

To sustain current momentum in the industry, in January 2018, the state government released the innovative Calendar of Arts and Culture events purposely to help visitors from across the world in planning their itinerary within and outside Lagos. The Calendar, with a comprehensive guide of festivals and art events available in each month of the year, is, without a doubt, quite instrumental to recent boost recorded in the sector.

An integral part of the strategies being deployed by the state government in developing the sector is the improvement of Lagos night economy. New research from across the world has indicated that many cities, over the past two decades, have deliberately put in place a strategy to run a 24 hour economy. In major cities of the world, socio-economic activities take place 24 hours around the clock. A 24 hour economy is one in which socio-economic activities do not halt at night. The hospitality

and entertainment industries, in particular, thrive better in a 24/7 economy.

Presently, Lagos boasts of a relatively thriving night economy. In terms of crime management and security, night activities in Lagos have become relatively stable. Today, if compared to cities like Cairo, Nairobi and Johannesburg, the security indicators for Lagos are high up despite the obvious fact that there is still work to be done. Cheerfully, the state government is not resting on its oars as the long term plan is to create a vibrant and safer Lagos that offers something for everyone – from a street bar with live music, a mechanic service, fashion businesses, to an all-hours bookshop.

In the next ten years, it is expected that the state’s economy will be transformed away from a focus on younger people and entertainment. It is hoped that 40% of people taking advantage of the improved 24/7 activities in the state will be aged over 40 and that 40% of operating businesses at this time will be chiefly anchored on formal business concerns. This is why the state government is encouraging a larger variety of retailers and attractions to stay open late, to broaden people’s choices of things to do at night. By 2025, the state hopes to double its 24/7 economy turnover and increase employment by 55% through the creation of several new jobs.

As previously affirmed, the fresh impetus being witnessed in the tourism industry is a reflection of deliberate tactics evolved by the state government. For instance, in a bid to further explore the State’s tourism potentials, the state government a first-ever Tourism Summit in April, 2018. With the theme: “Destination Lagos: Towards a Sustainable tourism-driven economy”, the Summit major paper was delivered by Professor I. A. Ayodele of the Department of Wildlife and Ecotourism Management, Faculty of Agriculture, University of Ibadan, while Professor Pat Utomi, of the Lagos Business School, talked on “Financing tourism, the paths and possibilities for Lagos State”.

The summit attracted the former President of Ghana, John Mahama, who delivered the keynote address; the Minister of Information, Culture and Tourism, Alhaji Lai Mohammed; Aare Ona Kakanfo of Yoruba, Chief Gani Adams; the Director-General, Nigeria Tourism Development Corporation (NTDC), Folorunso Folarin Coker and other distinguished personalities.

A significant outcome of the Summit is the making of a 15-20 years tourism master plan that will steer the tourism potentials of the state. The master plan, which was designed

by Messrs Ernst & Young, focuses on culture and heritage, film, art and entertainment, business tourism, nature and adventure, medical and wellness and beach and leisure.

The strategic document, which will soon be unveiled by the state government, is poised to transform the vision of the state in becoming one of the foremost tourism destinations in Africa.

There is potential billions of naira in revenue that Lagos State could earn in the next several years, baring the successful implementation of the plan. From the point of view of the nearly $7trillion that is supposed to be earned from tourism, with the initiative of the tourism roadmap and several other strategies, Lagos State is definitely positioning itself as a favourite destination for tourism and invariably a huge beneficiary in the massive global tourism income. Cheerfully, the state is currently upgrading and expanding critical infrastructure as a way to really catch in on its enormous tourism possibilities.

With the idea of its tourism roadmap and many other such positive indicators, Lagos is definitely positioned, not only to explore its huge tourism potentials, but to benefit immensely from the global billion dollars tourism earnings.

Ogunbiyi is of the Ministry of Information & Strategy, Alausa, Ikeja

As Lagos steps up on health insurance scheme

RASAK MUSBAU

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he startling and scary trend of avoidable health blunders by Nigerians in this information age should ordinarily provoke every responsible government into deep introspection and action. Cases abound of situations where sick persons are paraded on streets or publicized in the media with a call to support them financially to pay medical bills or be flown abroad for better healthcare.

In the absence of health insurance scheme, the price being paid for medical service can be very abrupt. Admission to a hospital can involve various costs such as charges for a range of diagnostic tests, drugs and even a re-examination fee. Though going to governments’ hospital is cheaper yet when surgery –major or minor is involved, paying off the expenses can still drain one’s savings.

While ability of a government to meet and cater for the health needs of its citizenry remains a sure proof of a caring and worthy leadership, it is a reality that health sector is very huge and resource-demanding for government to make all services absolutely free.

The dominant arguments in the recent time have been the option of symbiotic financing scheme to mobilize funds for the health sector.

Borrowing from how patients pay for

healthcare around the world and the general standard of care they get in return, it behoove on Nigerians as well to start saving and investing in a suitable health insurance. This is because with a proper financing scheme, a number of things would be taken care of, one of which is access to quality healthcare.

Generally, insurance is a relatively new concept to us in Africa, and Nigeria is not an exception. Insurance is just a culture that we are not used to and health insurance is not an exception. When you tell people to come and pay money for a health event that might take place in the future, the quickest thing that comes to mind is that there is a sickness/illness. So, the likely question might be: Why do I want to pay for sickness in advance? Am I praying for illness? With our religious background, the first reaction would be: “God forbid! I reject it! It is not my portion.” So, it becomes very hard to convince people.

The irony of it is that it is a practice that is common among our people. For instance, if someone in a group runs into compounded and costly health related trouble, the usual thing is for others to start rallying for financial support on his/her behalf. So, the concept is there with us.

Health insurance is just putting that practice that is already with us in a well structured manner. It is, therefore, in wanting to follow this honorable path of ensuring a healthy population, that the Lagos State Government in 2015 introduced the mandatory health insurance scheme in the state. Of course if the health insurance is fully implemented, it would change the entire picture of the health sector because it will address the core issues and people soliciting support to offset medical bill would be near to nothing.

The new Lagos State Health Scheme is a state-wide, mandatory and pre-paid health

insurance scheme aimed at providing financial protection against catastrophic healthcare spending. However, it is important to note that there is no health insurance programme that covers all health conditions. The scheme will cover treatment of common adult and childhood ailments (like malaria, typhoid, measles as well as immunization), maternal and child services, preventive healthcare services, selected non-communicable diseases and surgeries.

Before the law came onboard, Community Based Health Insurance Scheme (CBHIS) was test-run in three communities. The first in Ikosi Isheri at the Olowora Primary Health Care (PHC) in July 2008 with over 19,000 people reportedly enrolled as at 2011. The second community was Ibeju Lekki, which was launched in March 2011 in two facilities Awoyaya and Iberekodo PHCs with over 10,000 enrolled as at 2014, while in Ajeromi Ifelodun, which was launched at Tolu PHC on January 15, 2013, 9300 enrolled as at 2016.

It could also be recalled that in support of the Scheme, a proof of concept, supported by the PharmAccess Foundation took place in 2017. The proof of concept which mirrored the Insurance Scheme was implemented to demonstrate how the scheme can improve the lives of the most vulnerable population at scale.

The Fiscal Space Analysis to identify available and additional resources for the scheme in short and medium term to safeguard sustainability was also satisfactorily done. Also, Poverty Probability Index identification tool was administered to identify those eligible for the pilot programme.

The result of the pilot had shown that the scheme is doable and is a step in the right direction towards achieving Universal Health Coverage for the residents of Lagos State. It is on the strength of concerted groundwork, the government is convinced and now expediting

action on full implementation of the scheme.

This is even as the state is targeting an enrolment of at least 2.5 million residents in 2019 with a projection to reduce health issues by 10 per cent. Expectedly, government is presently doing a lot of publicity to communicate the scheme to the citizens.

On affordability, with the sum of forty thousand naira (N40, 000), a family of 6 is taken care of on a yearly basis. If it is quickly embraced, it will reduce mortality rate including maternal, newborn and child mortality; ameliorate the health condition of so many people especially the poor; reinvigorate the economy especially the insurance sector; improve health care delivery, among others.

The State government made the scheme mandatory because it doesn’t want to toe the line of the federal government’s National Health Insurance Scheme (NHIS) which was made optional. Countries that have successfully implemented health insurance scheme made it mandatory. Again, the health sector requires a lot of investment. But the government will set aside equity fund to cater for the poor and vulnerable. For residents already under NHIS, the arrangement is that the State would not force them to join the new scheme, but focus on the people who don’t have at all.

In sum, irrespective of financial class people belong to, health insurance scheme is a way to save for the raining days, as a citizen may not know when he or she may fall sick. It would also help to eliminate out-of-pocket payment for health, which is the way to go, as most developed countries started it many years ago.

It is, however, incumbent on health providers to creatively plug all the loopholes that make or might make people averse to the scheme.

Musbau is of Features Unit, Lagos State Ministry of Information and Strategy, Alausa, Ikeja

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INEC and the business continuity plan (BCP) Positive Growth with Babs

Babs OlugbemI

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he postponement of the February 16, 2019 elections by INEC is a national planning disaster no matter the excuses given for the action. No doubt, free and fair elections are desirable and that is what Nigerians are craving for to replace the existing selection of candidates among the parties. However, for a country with resources and endowment like Nigeria to postpone elections with its daunting consequences is an affirmation that we are not doing things right and a lot must be done to sail the ship of our nation in the right direction. The giant of Africa is not expected to fail in her preparation given the enormous resources that has been expended and the four years at her disposal for the conduct of the election.

To avert an unwanted loss of service and income, the private sector organisations in Nigeria and as it is all over the world have business continuity plans and disaster recovery management processes. I know this is one of the mandatory compliance departments in the banking and the aviation sectors, just to name a few.

The fear of public and social media outcry by customers have made the private business organisations to invest a huge sum of money into preventing or recovering from incidence

that could cause service disruption and failure.

Just as a customer dissatisfaction could damage the reputation of a private or public quoted company, INEC postponement of the election had caused immediate and remote reputational damage to Nigeria. INEC had once again justified the reasons why things are not working in Nigeria, why our students can fail their exams at will and how porously unorganised our public institutions are even with huge allocation of taxpayers’ money.

The economic loss of the INEC decision includes the cost of the citizens’ economic time, travelling expenses to election locations, loss of business and the emotional agony and distrust in the leadership of the country.

The postponement is a caution notice to foreign investors that things could go wrong irrespective of the rate of return on investments and the potency of the risk mitigating measures in place. INEC had successful expose us as a nation where planning to succeed is difficult than planning to fail.

Thus, investors’ confidence in Nigeria is eroded beyond the estimated loss of $1.5billion or 2.5% of the gross domestic products.

INEC had successfully disenfranchised some of the adults with valid permanent voters’ cards in a universal adult suffrage system. A substantial percentage of voters who had travelled to their villages or the place they registered to vote and had the cause to return to their primary place of business will not dare to travel again after five days to vote for the future they are not certain of. This will affect the credibility of the election no matter how perfect the outcome is.

We are a country where everything including mediocrity can be justified.

I’m sure the current INEC leadership would have taken solace in the fact

that the 2011 and 2015 elections were postponed by the Professor Attahiru Jega’s administration. As comforting as this might appearto INEC, it is a failure on its leaders for nothing identifying what led to the previous postponements of elections and plan to avert it.

Nigerians are without a choice in this situation. We should not be deterred by the inefficiency of our leaders.

We should all go out to elect leaders who can at least add to us reasonably even we don’t trust their credibility. Our public institutions’ credibility is in doubt already and all we can do is to elect the best available candidates.

No matter the outcome, the political class and electoral institutions have left much to be desired. The recent claims and counter-claims of plans to rig the elections by the two leading parties are absurd. At a time, the Governor of Ogun state, Ibikunle Amosun claimed his party is planning to rig the state election against his preferred candidate. His claim is an attestation that previous elections must have been rigged in his favour and we should not discard his comments for lack of experience or justifications.

For Nigeria, we need to start the process of reinventing the core business values and ethics of our public institutions starting with INEC. No matter the reasons for INEC’s decision, a child who failed his or her examination after four years of preparation should not be promoted.

The INEC chairman and its top aides should take responsibility for this, apologise for the colossal failure and reputational damage done to Nigerians, honourably vacate their positions after the conduct of the 2019 elections or provide an acceptable strategy for moving the INEC forward. If they take the lead and step down, they will set

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INEC had successfully disenfranchised some of the adults with valid permanent voters’ cards in a universal adult suffrage system

the pace and be the example in the new Nigeria where public officers step down for failure to prevent what is preventable and for lack of current best management practices in serving the people. If they are pardoned given our sentiments, they should provide us with the strategic directions and innovations for INEC. It is obvious with the last week’s event that Mahmood Yakubu’s leadership of INEC had not taken a step ahead of where his predecessor left the enterprise.

The restructured INEC after the election should present a roadmap to ensuring timely and credible elections in Nigeria. We cannot be active social media users and be unable to use technology to conduct elections. The excuses of electronic rigging shouldn’t be a showstopper. We should develop systems and process for securing the electoral database, avert compromise and educate the voters who are substantially uneducated in the current dispensation. INEC should set up a department to see to its business continuity and disaster recovery management process as in the business and private sectors and avoid future postponement that is now a legacy of our electoral process.

For this to happen, a board of trustees with members who have experience in the private sectors could be appointed to oversee INEC’s preparation, process and make valuable input into the INEC contingency plans. This will build a strong institution and reputation for the electoral umpire and avert the postponement of elections which has become the culture rather than the exceptions to the rule.

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

Nigerian VAT Act, Non-Resident Companies (NRCs) and Multiple Location Entities (MLEs): The Unsettled Matter of Imported Services (Part 3)

Glenn Ubohmhe

T

he purposive view is not without precedence as Mohammed Bello JSC once expressed in Mobil Oil (Nig) Ltd and Federal Board of Inland Revenue that “in construing a statute, regard shall be given to the cause and necessity of the Act and then such construction shall be put upon it as would promote its purpose and arrest the mischief which it is intended to deter”. To align with this view is togive a benefit of the doubt to the purposive interpretation of section 10(3) since the ultimate intent of the VAT Act is not the creation of VAT invoices but the payment of tax? If we agree that the overarching objective of VAT is to impose tax on consumption and that consumers or users bear the burden, it may not be illogical to state that the duty to remit presupposes the duty to ensure the deduction of VAT where an NRC fails to invoice the applicable amount.

In any event, since the incidence of VAT is on the final consumer or user who perhaps has the rational incentive to avoid the burden, it creates a compelling argument for proponents of purposive approach. Therefore, if one follows this strain of thought, it could be argued that the normative validity of the duty imposed on a Nigerian Company to ensure that an NRC is registered for VATand also ensure the deduction of VAT, derives from the second part of S10(3)which states thus; … and the person to whom the goods or services are supplied in Nigeria shall remit the tax in the currency of the transaction.

In view of the observed inconsistency, the question that agitates the mind is whetherthe FIRS will, in the same breath, defer to the International VAT Guideline and allow crossborder recharge of external costs between establishments of the same MLE for the purpose of VAT, and therefore cede the taxing right to other jurisdictions? Or viewed from another perspective, what rule of interpretation will the FIRS urge the court to adopt in the construction of section 10(3) in a hypothetical case of an establishment of an MLE in Nigeria that acquired service for use wholly or partially by other establishments of the same MLE in other jurisdictions? Section 10 (3) reads; a non-resident company shall include the tax in its invoice and the person to whom the goods or services are supplied in Nigeria shall remit the tax in the currency of the transaction.

Based on precedence, it is perhaps not difficult to speculate that FIRS will pitch tent with strict interpretation of “the person to

whom the goods or services are supplied in Nigeria”. The section as drafted tends more towards the direct delivery approach and does not envisage an internal recharge mechanism, both recommended by the International VAT Guideline under different circumstances.

Within the scope of the Guideline, when a service or intangible acquired by an establishment of an MLE is used wholly or partially by other establishments of the same MLE in other jurisdictions, supported by an internal recharge mechanism for the allocation of external cost of the service, the allocation should form the basis to allocate the taxing rights by/ to tax administrations where the establishments of use are located.

Therefore, if the entity to whom the goods are supplied in Nigeria is not the only user of the service based on internal recharge arrangement within an MLE, strict interpretation of section 10(2) could result in double taxation for the MLE. It is not unlikely that the Gazprom case has some features of internal recharge (please note that internal recharge for the purpose of VAT is, in principle, different from recharge for the purpose of Company Income Tax (CIT) and as such, conclusion should not be drawn based on the judgement of the Tax Appeal Tribunal in the case between VF Worldwide Holdings Ltd vs FIRS).

The implication therefore is that businesses with centralized functions in Nigeria whose objective is to gain efficiencies and improve competitiveness could face the potential risk of double taxation. Therefore, to guide against

this kind of potential exposure the necessity for a robust tax strategy as an integral part of corporate strategy cannot be emphasized enough. On the flip side, the Revenue Authorities in Nigeria also face the risk of unintended non-taxation and revenue loss since Nigerian establishment of an MLE may also be the final user of services imported by establishments of the same MLE in other jurisdictions.

Hence, disclosures may be required from Nigerian entities on recharges from other establishments of the same MLEs in other jurisdictions for proper VAT accounting in Nigeria. Perhaps, the Country-by-Country Reporting (CbCR) Regulations released by the FIRS in 2018 suffices for this purpose. If not, this may be included as part of the compliance requirements in line with section 8(2) of the Regulation.

In conclusion, it is expedient that steps be taken to clarify the legal position with respect to the requirements for internal recharge for the purposes of VAT and steps should also be taken to align the VAT Act with current business realities. This should be done through an amendment to the relevant sections of the VAT Act in order to remove any burden, current uncertainty and potential risk, on both sides, associated with VAT compliance on imported services.

• Concluded Glenn is a tax practitioner. He has B.Sc (Acct), MSc (Energy Fin.), LLM (Petroleum Tax. & Fin), MBA, ACA, ACTI.

Thursday 21 February 2019

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I

NEC announced the postponement of the Presidential, Senate and House of Representatives elections a few hours to the commencement of voting on Saturday, 16 February, moving it a week to Saturday, 23 February. The electoral body simultaneously announced a similar one week move for state level elections. The electoral umpire cited logistical problems as the key driver of this move.

While this is not the first time in Nigeria’s history that elections will be moved, the manner and timing of this postponement has left many stakeholders in the lurch, as all had committed financial resources to playing their roles as political parties, citizen voters, electoral observers and media. International observers arrived in anticipation of the polls, media houses had deployed their people and INEC itself had committed financial resources to the conduct of the postponed elections, and further funds will be used to withdraw sensitive

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What did INEC’s action cost us?

Tunde Leye

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materials already deployed to the field as well as to redistribute them in the week the elections are now scheduled to hold.

My firm, SBM Intelligence was not left out as we are working on providing data for various observer groups, which meant that we had sent people out to various parts of the country. Following the announcement, we carried out a high level analysis using publicly available data to provide an overview of the possible financial losses in terms of the opportunity cost, and loss to GDP. It is important for Nigeria to start having these conversations about cost, so that we can take the right decisions to avoid waste.

For our analysis, we took three headers, which is by no means exhaustive, in order to focus the parties, both government and INEC on this matter in order to engender greater responsibility to the stakeholders going forward. We looked at the cost incurred by political parties, INEC and the entire country at large.

For the political parties, there are 119,974 Polling Units across 8,809 Wards in 774 Local Government Areas (LGAs) of Nigeria. For the major political parties they must mobilise at least one Polling Agent per Polling Unit per party.

Individual candidates may choose to mobilise their own polling agents. Each Polling agent may earn around N15,000. One Senior Agent in each ward monitors the collation of PU results at ward level. We estimated that a senior agent will collect N30,000. One LGA level Agent in each LGA to monitor the final collation at the LG level. He

may expect N100,000. Based on the political parties active in each state, and assuming that few fringe parties fielding some agents, we estimated that the political parties would spend N42.7 billion, just to hire polling agents for the three elections originally scheduled for last Saturday.

In calculating the cost to INEC, we have identified the budget components which were impacted as either already been spent for conducting the elections, or incurred to manage the fallout of the postponement. We then estimated the additional cost that INEC incurred to conduct the elections at the new date. Budget items like logistics, allowances for both INEC regular and ad-hoc staff, as well as security agencies, managing the Situation Room and stakeholder engagement. We concluded that INEC would spend an additional N6.23 billion on the postponed polls.

It is clear that the postponement disr upted business and social activities, drove up wage to revenues ratios of organisations particularly in the formal sector, caused inconveniences to daily life, and reduced consumer spending from restrictions on movement.

Many firms shutdown early on the Friday preceding election day, while schools took early mid-term breaks.

For GDP losses, SBM Intelligence estimates Nigeria’s GDP at $420 billion as at end 2018, and we estimated the foregone GDP for the various economic sectors in line with NBS data. By calculating the daily contribution each sector makes to GDP and estimating the level of operation of each sector

‘

Our inability to properly plan and carry out elections 20 years into our democracy speaks much about our lack of institutional maturity

on polling day, we determined how much productivity is lost to the postponed elections, we worked out that Nigeria’s economy lost $2.23billions in economic activities that cannot be recovered.

However, the biggest losses have been in the institutional reputation that was battered by the act.

Every general election since 2011 has been postponed for various reasons. It is instructive that different corporate bodies have adopted a wait and see approach while the elections run their course. This affects everything from staff hiring to capital investment and corporate social responsibility sponsorship.

Our inability to properly plan and carry out elections 20 years into our democracy speaks much about our lack of institutional maturity.

Naturally, the markets reacted as the Nigeria Stock Exchange AllShare Index lost 1.61% of market capitalisation, or N196 billion on the first full day of trading after the announcement of the postponement.

It is clear that a stable and secure political environment is key to promoting economic activities.

The prosperity of a country is dependent on the ability of leaders to ensure that a clear and consistent direction is provided for all seeking to do business therein. Nigeria has constantly remained near the bottom in the ease of doing business index (146th in 2018). The latest postponement of this election does not show we are ready to go higher, regardless of what government says.

Tunde Leye is a partner at SBM Intelligence

Entrenching trust in Nigeria’s oil, gas downstream FEMI NWANNI

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esearch has shown that trust drives about 22 percent to 44 percent of the overall customer loyalty that an organisation enjoys. Furthermore, organisations that have loyal customers are more likely to achieve and exceed their sales plans provided other conditions are favourable to them. It is therefore imperative for businesses in the retail space to invest in the conversion of its customers into loyal followers and believers in their brand and its products and services.

Trust is essential for repeat patronage, much more than other perceptions of the brand from customers, trust is one of the greatest currencies for any business. It has been argued that it is difficult to quantify exactly how important this factor is for a business, but a lack of it also becomes the businesses’ biggest expense. Without trust, transactions cannot occur effectively, influence may become ineffectual, leaders may

lose their followers and even good sales teams could lose their market share.

Over its long history, Nigeria’s oil and gas downstream has been tainted by accusations of unethical practices. The idea of a shady industry is deeply ingrained in public’s imagination. This has further been reinforced by stories of exploitation of customers by few unscrupulous petrol station attendants.

There are different theories of how some attendants have perfected their skills to manipulate their dispensing pump metres such that it becomes difficult for officials of the Department of Petroleum Resources (DPR) and other regulatory agencies to eliminate these harmful practices despite their best efforts. It is important to stress that the DPR and other agencies leave no stones unturned in their efforts to canvass the lengths and breaths of the country, engaging, training, inspecting and even sanctioning operators all in a bid to ensure that consumers of these products receive their money’s worth of products paid for. Despite all these, the fuel retailing business still remains one of the most challenging when it comes to enforcing measurements and instilling the discipline of accurate dispensing of products to customers.

A few organizations have however

bucked the ugly trend of profiteering and benefiting from the naivety of their customers. They appreciate that their service to the public is not only to make their products and services available but ensure that consumers receive in full all quantities paid for. Though few, the industry does have examples of organisations with the reputation of quality products and trust worthy measurement systems and at their locations, despite the presence of competition, the heavy patronage they enjoy is evidence of the loyalty they have based on the trust placed on them.

One of these organisations is a recent new comer into the distribution space called Enyo Retail and Supply Limited. The brand is fast establishing itself as a player in the fuels’ distribution space and most importantly as a brand that can be trusted. To emphasize its commitment to contributing to the efforts of the DPR and other agencies to rid the sector of some of the sharp practices taking place at the pump by some of the attendants, Enyo has launched a campaign themed FuelledBy-Trust to stress its commitment to operate within the tenets of honesty and integrity.

Enyo Retail as it is popularly known, benefits from the heritage of its shareholders led by Folawiyo Energy and other first class local and international players. It utilizes the assets and expertise from its shareholders

and the energy from a young and dynamic management team to provide a unique offering to the downstream which has allowed it grow and rapidly gain market share within a very short timeframe. Following a few visits to Enyo Retail’s filling stations, one is left in no doubt that despite all the negative perceptions of players in the fuel’s distribution space, there are still some players intending to not only restore the glory days of the sector but also set a new tone for it leveraging technology, visibly sophisticated branding and commendable customer services.

This type of initiative should be encouraged as it would have a long term impact on the consumer culture. It would also have an indirect pay-off for the Nigerian economy in terms of establishing a culture that will uphold the image of the industry globally.

For any player in the industry to be seen as a partner in energy solutions, it will need to continually show cause in addressing the serious trust concerns created by the infamous few among its ranks. It is crucial to understand that trust is fundamental to the genuine success of any kind. Beyond the fact that it can bring your business immeasurable benefit, there is a more ethereal reason at stake - building lasting legacy.

Femi Nwanni writes from Lagos

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Thursday 14 February 2019

No to presidential incitement to violence

P

resident Muhammadu Buhari once again reverted to the extra-legal when on Monday, 18 February 2019 he called for violent reprisals to persons who snatch ballot boxes.

The President affirmed that he had ordered the military and the police “to be ruthless”, saying persons guilty of those acts do so at the expense of their lives.

Mr President’s remarks are chilling, intemperate, unjustifiable and amount to incitement and a call for illegal and unconstitutional actions.

The President spoke at the Caucus Meeting of the All Progressives Congress the first part of which they broadcast live. In the past, the president had canvassed going beyond the law on some matters of national interest. He has acted contrary to the law in several matters, including raids on the homes of judges and the suspension of the Chief Justice of Nigeria contrary to the processes stipulated in the constitution.

Buhari stated, “Anybody who decides to snatch boxes or lead thugs to disturb the election, maybe that would be the last unlawful action you would take.

I have given the military and police the order to be ruthless. ”I am going to warn anybody who thinks he would

lead a body of thugs in his locality to snatch boxes or to disturb the voting system; he would do it at the expense of his/her own life.”

Many things are wrong with the presidential declaration. First, it is an invitation to anarchy and abuse of process. Unfortunately, the declaration gained more negative resonance as Mr President made it on a day Nigerians on social media and professional groups rued the killing of a harmless citizen by an operative of the Nigerian Customs Service on the Shagamu-Ore road. Videos of the killing caused outrage and citizens.

The order circumvents the constitution and electoral laws. The 1999 Constitution in Section 33(2)(a) and (c) speaks of the right of citizens to life. Deprivation of the right to life can only happen “in execution of the sentence of a court in respect of a criminal offence of which he has been found guilty in Nigeria”. Some have tried to defend the order by the provision of subsection 2. It states that “A person shall not be regarded as having been deprived of his life in contravention of this section, if he dies as a result of the use, to such extent and in such circumstances as are permitted by law, of such force as is reasonably necessary (a) For the defence of any person from unlawful violence or (b) for the defence of property, and (c) for

the purpose of suppressing a riot, insurrection or mutiny.”

Such persons seek to extrapolate ballot snatching as an act of riot, insurrection or mutiny. It is a stretch.

The Independent National Electoral Commission lists 18 electoral offences. They range from offences in voter registration, nomination of candidates, ballot papers and ballot boxes, and disorderly behaviour at political meetings. Others include improper use of voters cards, improper use of vehicles, impersonation and voting when not qualified, and announcing results without authorisation. Disorderly conduct at elections attracts a fine of N500, 000 or three years imprisonment while ballot snatching fetches two years imprisonment.

The snatch ballot box and die proclamation of the president also directly invites the Nigerian Army to play a central role in a purely civil matter. He has asked them to be at polling centres. It is the militarisation of our democracy.

The presidential order is a direct invitation to the military to carry out acts of violence against citizens in flagrant disregard of the laws.

He has asked persons notorious for disregarding the laws of the land to now go ahead with their bad practices. It is unfortunate and unacceptable.

Realising the enormity of the presidential faux pas,

APC National Leader Bola Tinubu tried to ameliorate by claiming that the media and citizens misinterpreted the essence of Buhari’s statement. It will not pass muster.

The order is an encouragement of jungle justice and invitation to chaos. What if a soldier mistakes an INEC officer with a ballot box outside the voting booth and shoots him? Or shoots a party official? The presidential order does not take cognisance of the processes of arrest, interrogation and trial of offenders as provided in our laws.

It is an invation to barbarism.

It comes after even the Presidency disclaimed a similarly intemperate statement by Kaduna State Governor asserting that foreign observers would return home in body bags if they meddle in the Nigerian elections.

President Buhari continues to evince a preference for going outside the prescribed confines of constitutional democracy anchored on the rule of law. He told the Nigerian Bar Association last year of his willingness to go outside of the law in pursuit of national interest. Now, he is willing to order open execution supposedly to protect the ballot.

We say no to the presidential incitement to violence.

It is an unworthy call and unbecoming of a president in a democracy. Nigeria must continue to follow the rule of law, due process and decorum.

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Newrest ASL moves to delist, sets up account to settle minority shareholders

Pg. 14

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

BONDS

Nigeria’s yield curve inverts as investors dump short term bonds David Ibidapo

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olitical uncertainties surrounding the 2019 general elections and post-election confidence in the equity market have taken a toll on the Nigerian fixed income space, with the normal yield curve turning inverted on sell-off pressure.

Yields on shorter term instruments rose above longer term instruments for the first time this year in mid-January as the general elections drew close.

Rebounding from pressured down All Share Index performance by 17.81 percent in 2018, analyst believe that foreign investors are also taking position to enjoy resultant effects of good financial results by companies listed on the exchange.

Sell-off pressure on short term bonds has led to higher yields on 2 year government bonds as investors take position on longer term bonds especially the Nigeria 10 year government bonds.

While an inverted yield

curve theoretically signals an abnormality in the economy and a predictor of economic recession, analysts opine that current trend noticed in the yield curve is short lived as a recession is unlikely.

On Tuesday, 19 February 2019 yields on 2-year government bonds stood at 16.605 percent against the 14.758% yield of the 10 year bond.

Yields on 2-year government bonds rose 184.7bp during last week, having climbed 111.9bp in the last one month and 251.3bp in the past year. Current yield is close to a one-year high of 16.8 percent as at the 13th of February 2019.

Meanwhile, 10 year government yield declined 3.5bp during last week, having dipped 27.8bp in the last month, 105.3bp in the past year. Current yield is close to a six-month low of 14.653 percent as at the 11th of February 2019.

Yields on longer term securities could be trending down when market interest rates are set to get lower for the foreseeable future to accommodate ongoing weak economic activities.

“We expect this trend to normalise after the general elections, as this is more of a reaction to political dramas in the country,” an analyst who pleaded anonymity told BusinessDay. The inverted nature of the Nigeria yield curve further

portrays that foreign investors perceive a more risky economy in the short term and prefer to take positions on the longer term.

However, Segun Afolabi, an investment analyst at Afrinvest said, “What we are seeing is investors positioning

more in the equities market ahead of earnings season.”

This, in his view, has caused foreign investors to exit short term positions in the fixed income space and focus more on the equities market on post-election confidence.

To this end, “we expect to see yields on shorter term bonds rise some more compared to longer term bonds,” Afolabi opined.

Year to date analysis of the All Share Index shows that the equity market is up 2.42 percent.

BANKING

Zenith Bank soars to 7-month high after posting 11.3% profit growth in 2018 OLUWASEGUN OLAKOYENIKAN

F

ollowing the release of its 2018 audited financial statements which showed an 11.30 percent rise in profit, shares of Zenith Bank, Nigeria’s second-biggest lender, jumped Tuesday, to their highest level in more than seven months.

The stock gained 5.63 percent to N25.35 after the close of business on the floor of the Nigerian Stock Exchange (NSE), causing the year-todate return of the tier-one lender to improve to 9.98 percent, outperforming the NSE Banking Index which stood at 8.8 percent as well as the All Share Index at 3.1 percent.

The surge was “on the back of the results released by the bank,” said Fola Abimbola, an equity research

analyst at Lagos-based investment bank, FBN Quest.

“There is more buying interest on the stock.”

Zenith Bank had shed 3.03 percent to N24 in the previous trading session amid sell-offs witnessed by most stocks that traded at

the Lagos bourse in reaction to last weekend’s election postponement by the Independent National Electoral Commission.

According to Abimbola, the stock would likely continue to rally in the coming days as “there is nothing

negative on the stock in particular.”

Besides Zenith Bank’s profit growth in 2018, the improved valuation was also seen as a reaction from investors seeking higher returns from their investment in the form of dividend

payment.

A final dividend of N2.50 for every share of 50 kobo proposed by the lender for its shareholders translates to a dividend yield of 10.1 percent, higher than the market’s average dividend yield of about 5 percent.

This implies investors can get more cash flow for every Naira invested in a stock.

“You will expect investors who are looking at cash flows arising from dividend payment to hunt for bargains,” said Gbolahan Ologunro, an analyst at CSL Stockbrokers Limited.

In the financial statements filed at the NSE, the lender grew pre-tax profit by 16.24 percent to N231.69 billion despite gross earnings paring by 15.41 percent to N630.34 billion from N745.19 billion.

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: CHINEDUM ONYEMA

Profit after tax rose to N193.42 from N173.79 billion recorded in the preceding year, while earnings per share also grew 11.21 percent from the previous year to N6.15.

These profits were triggered by net interest income, which increased to N277.22 billion from N159.76 billion reported in the previous year, reflecting improved macroeconomic fundamentals.

“The risk of default in the environment has enabled their customers to service their obligation as and when due,” said Ologunro.

At the sound of closing gong on Tuesday at Customs Street, Zenith Bank was the second-most traded stock by volume as over 37 million units of shares valued at N925.54 million were traded in 691 deals.

14

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Thursday 21 February 2019

Business Event

HOSPITALITY

Newrest ASL moves to delist, sets up account to settle minority shareholders SEGUN ADAMS

T

he Nigerian Stock Exchange (NSE) on Tuesday, advised dealing members of the delisting of Newrest ASL Nigeria Plc, a leading provider of catering and hospitality services to international airlines and airports in Nigeria.

According to the report signed by Head of Listings Regulation, Godstime Iwenekhai, Newrest has submitted an application for voluntary delisting of the entire 634,000,000 ordinary shares of the company from the Daily Official List of the Exchange through Helix Securities limited, its Stockbroker.

Newrest would be delisting on the grounds of its inability to meet up with the 20 percent free float requirement of the Exchange.

Free Float means the number of shares of an Issuer outstanding and available to be traded. In other words, it is the number of shares held by the investing public as opposed to those held in lock-up by Parent, Subsidiaries, Directors, and Insiders of the company.

The rules of the NSE governing compliance with free float requirements requires that every Issuer maintains a minimum free float level which ‘’shall at all times be held in the hands of the public, in accordance with the Listing Standards under which the shares were admitted on the Daily Official List of The Exchange,’’ The provision for free floats varies as NSE requires compa-

nies listed on the Main Board to maintain a 20 percent minimum free float of their market capitalisation.

On the other hand, companies in the Alternative Securities Market (ASeM) have a 15 percent free float benchmark.

For companies on the Premium Board, the rules require a minimum free float requirement of 20 percent of its issued share capital, or the value of its free float shares is equal to or above N40 billion on the date the Exchange receives its application to list.

The provision however outlined grounds for granting a waiver on the minimum free float requirements.

Penalties for erring listed companies range from publishing issuer’s name on The Exchange’s periodic “X-Compliance Report” as operating “Below Listing Standard” to commencing the process of delisting such issuer.

As at December 31 of 2018, Newrest Group (22.98%), Rical Enterprises Ltd (9.99%0, Rifkind Ltd (17.18%), Roswello Limited (17.18%) and Harrowditch limited (14.31%) held 81.64 percent shares of Newcrest ASL Nigeria.

Shareholders of the company on January 29, earlier in the New Year authorized the voluntary delisting at the Extraordinary General Meeting (EGM) of the company in Lagos.

To that end, Newcrest according to the report filed on the Exchange has set up and deposited sufficient funds to settle minority shareholders in an Escrow Account with Zenith

Bank Plc and assigned Meristem Registrars Ltd to manage the fund.

The amount in the fund was not given, however, a likely estimate could amount to N751 million based on the remainder 18.36 percent- not held by the aforementioned major stakeholders-measured as a percentage of the market capitalisation (N4.1 billion) as of Tuesday.

The process of setting up the account is in line with provisions of section 1.10 of the Rules for Delisting of Equity Securities from the Daily Official List of The Exchange which requires that such accounts be set up to purchase the interest of all shareholders opposed to the voluntary delisting.

Newcrest Consolidated and Separate Financial Statements for the Year ended 31 December 2018 show an improvement in top line and bottom line as revenue grew 38 percent to N5.43 billion in 2018.

Despite a 43 percent surge in Cost of Sales to N1.88 billion, Newcrest improved its gross profit to N3.56 billion, an increase of 36 percent from the figures for the full year 2017.

Profit Before Tax increased significantly some 285 percent from N392 million in 2017 to improve Profit After Tax by 285 percent compared to N387 million in 2017, despite the increase in tax of over 300 percent in 2018.

Newcrest proposed a final dividend of 20 kobo per 50 kobo ordinary share, subject to appropriate withholding tax and approval.

L-R: Oladimeji Ojo, author and poet, panelist; Tunde Leye, author, Afonja The Rise; Elizabeth Ajayi, retired chief lecturer at Adeniran Ogunsanya College of Education; Kunle Kasumu, presenter, Channels TV; Tunde Kekani, cinetograoher, executive producer, Mianframe Productions, at the Launch of the book, Afonja The Rise written by Tunde Leye in Lagos.

L-R: Emem Ema, chief executive officer Vzhun Media &One Management; Samuel Salako, partner; Sandra Oyewole, founder, Feemo Vision Limited; James Omokwe, life strategist and coach, Skillsultants Nigeria Limited; Oluwatoyin Ademola, consultant to the ecosystem; Adebiyi Mabadeje and Abasiama Idaresit, chief executive officer Wild Fusion, all panelists at the first edition of The Expo Series organized by Olajide Oyewole LLP and Mest Incubator Nigeria for Creative and Innovators in Lagos Nigeria.

INDUSTRIAL

CAP plc appoints Omolara Elemide as Acting Group Managing Director OLUFIKAYO OWOEYE

C

hemical and Allied Products Plc. (CAP Plc) has announced some changes on its Board of Directors.

In a release, it announced the resignation of Abdul Akor Bello as Director of the company and Oluwakemi Ogunnubi as the Managing Director of CAP Plc. Ogunnubi’s resignation took effect from the 18th of February 2019 as Akor Bello’s resignation from the board is coming on the heels of his retirement as the Group Executive Officer of UAC of Nigeria Plc. Th e re l e a s e a l s o a n nounced the appointment of Omolara Elemide, the acting Group Managing Director/

Chief Executive Officer of UAC of Nigeria as the acting Managing Director of CAP Plc. The new Acting Group Managing Director joined UAC in October 1983 and has worked in various capacities within the UAC Group.

These include Group Audit Manager, Finance Director of UACN Property Development Company Plc from where she joined the Board of CAP Plc as Finance Director/Company Secretary in February 2005.

She is also a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN). She was appointed the Managing Director of CAP Plc in May 2009, a position she held until December 2017.

CAP Plc, a subsidiary of UACN Plc is in the paintings and coatings business. The

company was established originally as ICI investments limited in 1957 but became ICI Nigeria Limited in 1965.

Following the promulgation of the Indigenization decree in 1972 and 1977, ICI Nigeria Limited sold 40%, and then 60% to the Nigerian Public and changed its name to Chemical and Allied Products Limited. In 1992, ICI Nigeria Limited finally disposed-off its minority 40% shareholding in CAP Plc when it sold 35.7% of its equity to UAC of Nigeria Plc and the rest to the Nigerian public on the floor of the Nigeria Stock Exchange.

Currently, UAC of Nigeria Plc holds about 50.09% of the company’s equity. The shares of the company are traded at N34 on the Exchange with the one year return up 1.83 percent

L-R: Solafunmi Oyeneye, senior channel manager, MTV Base ROA; Bright Okpocha (Basketmouth), comedian/ actor; Bada Akintunde-Johnson, country manager, VIMN Africa; Folu Storms, MTV Base VJ, and Steve Babaeko, CEO, X3M Ideas, at the VIMN Africa Social Media Week Session.

L-R: Toheeb Azeez, media manager, NB Plc.; Sarah Agha, portfolio manager, National Premium Brands NB Plc.; Kolawole Akintimehin, senior brand manager, Gulder NB Plc., and Freya Doessel, brand manager, Support Gulder, NB Plc., at The Unveil of Gulder’s New Brand Positioning – “Own Your Journey”

BUSINESS DAY

Thursday 21 February 2019

15

CITYFile

10 killed as Anambra records 30 fire incidents IDRIS UMAR MOMOH

N

o fewer than ten persons have been killed in 30 fire incidents that occurred in Anambra State between January 1 and February 15, 2019.

The chief fire officer in the state, Martin Agbili, who made this known on Tuesday, said the fire cases included the recent one at Independent National Electoral Commission (INEC) Headquarters in Awka, card readers were burnt.

According to Agbili, three persons died at Ihiala and seven at Amawbia fire incidents which were caused by explosions from petrol-laden articulated vehicles.

Agbili said that the service recorded 110 fire outbreaks across the state in 2018, with only two persons sustaining injury.

“In January, we received 35 fire calls, nine in February; March, 10; April, five; May, eight; June, seven; July, four; August, one; September, one; October, one; November, five and December, 24.

“The estimated savings in the process of fighting fire in 2018 was N16, 585, 650, 000 while an estimated N790, 072,500 was lost to inferno during the period.

“From all indication, most of the fire incidents have been as result of carelessness by those involved”.

He noted that the service has intensified fire safety campaigns in schools, churches and markets to educate the people and reduce fire cases in the state.

He, however, added that recruitment of more firemen and provision of fire trucks would help the agency to deliver more services to the people.

He advised the people to “avoid anything that can cause fire’’, urging them not to hesitate to call the service during fire outbreaks.

10 suspected drug peddlers nabbed in Gombe

T

en suspected drug peddlers have been arrested by Gombe State command of the National Drugs Law Enforcement Agency (NDLEA). The drug peddlers were rounded up during a pre-election raid on black spots in the state.

Aliyu Adole, the commandant of the agency in Gombe said the suspects were arrested in Akko, Billiri, Gombe and Kaltungo local government areas and four of them were charged to court while six were referred for counseling.

Adole said that the agency had also identified some major drug dealers following their operations and were being tracked.

“We are going round again to ensure that drugs are not being distributed during the election period and beyond,” he said.

He advised the youth to stop drug abuse because of its harmful effect while also stressing the need for parents to monitor their wards.

A child arranging fire wood on Yakubu Gowon Way in Jos on Tuesday.

NAN

Contractor charged with N4.6m fraud JOSHUA BASSEY contractor who deals in tiles, Ugochukwu Chukwuma, has been charged before an Ikeja Chief Magistrate Court for allegedly collecting N4.6 million from his church member on the pretext of executing a contract for him.

Chukwuma, 40, a resident of Ketu, Lagos, is facing a three-count charge bordering on conspiracy and fraud.

The police prosecutor, Peter Nwangwu, said that the defendant committed the offences on February 2, 2017 at 11.34 p.m, at Elsa Quest International Limited, Alapere, near Ketu.

He said the defendant conspired with

A

others, now at large, to collect the sum of N4.6 million on trust from the complainant, Chinedu Ndumanya, their church member, under the guise of executing a contract for him knowing fully to be false.

Nwangwu said that the defendant collected the said amount from the complainant and diverted it to his personal needs.

“Based on trust, because they are both members of the same church, the complainant gave the defendant the money as a contractor to buy tiles and transport it from Imeko in Ogun to Benin,” the prosecutor said.

Nwangwu alleged that whenever the complainant reached out to the defendant on his cell phone, he was threatening

to kill him.

“Chukwuma failed to refund the money, hence, the report,” the prosecutor said.

The prosecutor said that the offences contravened sections 280, 314 and 411 of the Criminal Law of Lagos State, 2015. The defendant, however, pleaded not guilty to the charges.

The chief magistrate, Yewande AjeAfunwa granted the defendant bail in the sum of N850, 000 with two responsible sureties in like sum. She said the sureties should be gainfully employed with evidence of tax payment to the Lagos State government, and one of them should be a relation of the defendant. Aje-Afunwa adjourned the case until May 5 for mention.

Man bags 4 years for cutting off neighbour’s hand

A

Lugbe Magistrates’ Court, Abuja on Tuesday sentenced Suleiman Ayuba to four years imprisonment for cutting off his neighbour’s hand.

Ayuba, a resident of Aso Sabo Lugbe Airport Road, Abuja, was arraigned alongside his brother, Suleiman Zakari, on a three-count charge of disturbance of public peace, assault and causing grievous hurt.

The magistrate, Idharhi Samuel, in his judgment, sentenced Ayuba to four years imprisonment without option of fine.

Samuel ordered that the convict should be taken to Kuje Prisons where he is expected to serve the prison terms.

The magistrate also sentenced Suleiman Zakari to six months imprisonment with an option of N6, 000 fine. He warned

the convicts to desist from committing crimes after serving out their punishment.

The magistrate said that the punishment would have been more severe if they had not pleaded guilty and saved the court the pains of prolonged prosecution.

He held that his judgment would serve as deterrent to others and ordered the police to bring Iliyasu Abdullahi, whose hand was cut off to the court after his treatment.

The prosecutor, Ukoha Ndidi, had earlier told the court that the three men were arrested and brought to Lugbe Police Station on February 2.

Ndidi said that on the same date, at about 9: p.m, Ayuba, Zakari and Abdullahi for no reason, violently engaged themselves in a fight resulting in disturbance

of public peace.

She said in the process of mediating peace by Rakiya, surname unknown, Abdullahi brought his cutlass and cut her.

The prosecutor said in return Ayuba intentionally and violently used the same cutlass and cut off Abdullahi’s hand.

The prosecutor explained that as a result, Abdullahi sustained grievous hurt and was rushed to the hospital.

She said they were immediately apprehended and handed over to the police.

Ndidi said that during police interrogation, they could not give a satisfactory account of their actions.

According to her, the offences contravene the provisions of Sections 79, 113 and 247 of the Penal Code. The convicts did not deny the charges preferred against them after their arraignment.

16

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In association with

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

Market capitalisation

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,165.23

399.27

793.81

Week open 08 – 02–19)

31,070.0 31,529.92

N11.721 trillion

N11.758 trillion

2,161.26

1,465.57

791.76

Week close (15 – 02–19)

32,715.20

N12.200 trillion

2,255.10

1,514.11

793.13

Year Open

Percentage change (WoW)

3.76

Percentage change (YTD)

4.09

4.34 2.74

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

300.24

2,218.37

1,222.99

1,201.80

725.31

286.18

2,253.54

1,262.09

1,219.43

764.57

303.17

2,340.53

1,282.53

1,264.17

NSE Banking Index

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

1,399.64

399.27

124.82

1,421.80 1,485.14

428.72

126.86

435.55

128.78

NSE 30 Index

3.31

0.17

4.45

5.16

-0.09

4.80

1.59

1.51

731.57

5.41

1.82

9.18

5.94

2.10

0.31

3.86 4.77

1.62

3.67

3.61

4.70

Full Year Earnings:

Investors snap up Zenith Bank shares as analysts maintain ‘buy’ rating heanyi Nwachukwu

O

n Tuesday February 19, Zenith Bank Plc became the earliest bird among the Tier-1 lenders to release its audited full year financials for the period ended December 31, 2018.

Zenith Bank Plc, which is among the seven companies listed on the Premium Board of the Nigerian Stock Exchange (NSE) berthed the Exchange with full year gross earnings of N630.344 billion, which represents a decline of 15.4 percent, from N745.189billion it had reported in 2017. Analysts had expected the bank to report subdued earnings in the review year.

Zenith reported profit before taxation (PBT) of N231.68billion as against N199.319billion in 2017 represents 16.2percent increase in the review year. The bank’s after tax profit for the year increased by 11.30percent to N193.424billion in 2018 financial year, from N173.791billion in 2017.

Basic and diluted earnings per share stood at N 6.15 in the review financial year as against N5.53 in 2017. The bank’s non-performing loan ratio increased to 4.98percent from a low of 4.70percent in 2017. Interest and similar Income of N440.052billion in 2018 against N474.628billion in 2017 represents 7.28percent decline.

Net interest Income (NII) of N295.594billion in 2018 as against N257.991billion in 2017, represents an increase of 14.58percent. The bank’s Impairment Charge for Credit Losses decreased by 81.30percent to N18.372billion against N98.227billion in 2017.

Operating Expenses (opex) at N225.500billion against N223.411billion in 2017 represents just 0.9percent increase. Loans & Advances decline to N2.497trillion from N2.596trillion in 2017,

down by 3.8percent. Zenith Bank Plc grew deposits by 7.3percent to N3.690trillion in 2018 against N3.437trillion in 2017.

Cost to Income Ratio (CIR) increased slightly by 4.5percent to 47.4percent from 42.9percent in 2017. Loan to Deposits at 67.7percent in 2018 against 75.5percent in 2017 implies a decline of 7.8percent.

Shareholders’ fund increased by 0.45percent to N815.751billion, from a low of N812.116 billion recorded in 2017. Return on Assets (ROA) increased to 3.25percent from 3.11percent ; while Return On Equity (ROE) rose to 23.71percent from 21.40percent in 2017.

Zenith said in its third-quarter presentation to investors and analysts said it “Competes aggressively for market share, but focuses on high quality assets and top-end relationships while adopting cost reduction strategies”. In doing this, the bank focuses on cost effective deposits from the retail end of the market to lend to the corporate end with emphasis on emerging business opportunities. It also encourages strong risk management and corporate governance practices.

Historically, the bank’s strong risk management has resulted in a contained non-performing loan (NPL) ratio, with robust coverage levels that compare favourably with peers and the sector.

The Group adopts a complete and integrated approach to risk management that is driven from the Board level to the operational activities of the bank.

“We have a Buy rating on Zenith Bank with a target price of N33.41 per share.

Current price N24 per share”, said CSL Research in its February 19 note following the bank’s release of its audited full year 2018 results.

“Zenith Bank’s FY 2018 Pre-tax profit was up 16percent year-on-year (y/y) and 8percent above our estimate mainly on the back of lower Interest Expense and a significant reduction in Impairment Charge. The bank also put a rein on expenses as operating expense (opex)

Per share Data Current Price (N) 24.00 52 Weeks High/Low (N) 32.90/19.60 31,396,493,786 Shares Outstanding Market Capitalisation 753,515,850,864.00 remained flat y/y. On the flip side, Interest Income remains pressured while the bank reported a loss on derivatives”, CSL Research noted.

S&P Global Ratings had last year (September 13) forecast that Zenith Bank’s asset quality will remain stronger than that of its domestic peers and that

Period Income Statement Gross Earnings Interest and similar Income Interest and similar Expense Net interest Income

see a material deterioration in the bank’s asset quality indicators. An upgrade appears remote in the next 12 months, because it would hinge on an upgrade of Nigeria or a material strengthening of the bank’s capitalisation, all other factors remaining equal”.

Research analysts at Cordros

FY’18 N’ Million 630,344

FY’17 % Growth N’ Million 745,189 (15.41)

440,052

474,628

(7.28)

(144,458) 295,594

(216,637) 257,991

(33.32) 14.58

despite the slow economic recovery in Nigeria, it will report sound earnings generation. “We are affirming our ‘B/B’ global scale and ‘ngA/ngA-1’ national scale ratings on Zenith. The stable outlook on Zenith reflects that on Nigeria and our expectation that the bank’s financial and risk profiles will remain broadly stable over the next 12 months”, S&P said.

In their outlook on Zenith Bank, the rating agency said, “The stable outlook on Zenith reflects that on Nigeria, and our expectation that the bank’s earnings and asset quality metrics will remain broadly stable over the next 12-18 months. We would lower the ratings on the bank if we lowered the ratings on Nigeria, or if we

Securities had in their October 26, 2018 note to investors resumed coverage for Zenith Bank Plc with a ‘Buy’ rating on a Target Price of N33.96. Their ‘Buy’ implies that over the next twelve months, they expect the stock to return at least 20percent above the current market price.

The analysts’ valuation outlook for the bank got a boost from “lower cost of funds, despite weak income lines”. They had expected the bank’s group 2018 full year earnings to be hinged on (1) lower cost of funds and (2) lower impairment charges. On the flip side, declines across major revenue lines, especially in firsthalf (H1) were expected to weigh on the Zenith Bank’s full year earnings.

Analysts had expected that deliberate efforts by the bank management to ensure a low-cost deposit-mix by cutting off expensive deposits during the review year will improve the bank’s cost of funds (CoF). “Many of the deposits, in nine months to September 30 2018, were repriced downward. For example, in H1, management had stated during the conference call that interest paid on US Dollar deposits had reduced to the 4-5percent range, as against a range of 6-7percent previously. Compared to full year 2017, expensive fixed and domiciliary deposits were down 24percent and 15percent respectively in 9M-2018, while focus shifted to growing cheaper savings (+20percent) deposits,” Cordros analysts noted.

Investors snap up shares on dividend proposal From the retained earnings account as at December 31, 2018, the board of directors of Zenith Bank Plc recommended a final dividend of N2.50kobo for every 50kobo share, in addition to the 30kobo per share paid as interim dividend, bringing the total dividend for the financial year in review to N2.80kobo. This represents 3.70percent increase as against N2.70kobo total dividend paid in 2017. This dividend proposal will be presented for ratification by the shareholders at the bank’s next Annual General Meeting. Dividend Yield is 10.4percent.

Zenith Bank traded at N25.35kobo per share as at close of trading on Tuesday February 19, indicating an increase of N1.35kobo or 5.63percent.

The stock had reached a 52-week high of N32.30 and a 52-week low of N19.60. Zenith, which is among analysts stock picks for the year 2019 trades at a positive return of 4.1percent year-to-date (ytd). The market cap of Zenith Bank Plc is in excess of N753.515billion on shares outstanding of 31,396,493,786 units.

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Nigerian Breweries: Stock still good to buy despite disappointing scorecards heanyi Nwachukwu

T

hough the audited full year to December 31, 2018 results of Nigerian Breweries Plc may have disappointed many investors, the stock remains in some of analysts picks for 2019. Most of their positions were premised on positive factors they feel should warrant investors to rethink buying the stock.

Early this week, Nigerian Breweries berthed at the Nigerian Stock Exchange (NSE) with negative topto-bottom line results for the year ended December 31, 2018 majorly due to the prevailing stiff competition in the industry, the current weak consumers’ spending p o w e r, a n d d i f f i c u l t operating environment.

In recent years, Nigerian Breweries faced i n c re a s e d c o m p e t i t i o n from incumbent operator Guinness Nigeria Plc and the new industry challenger, Anheuser-Busch InBev (AB InBev).

The company reported a disappointing after tax profit (PAT) of N29.42billion as against N46.63billion in 2017, representing a decline 36.9percent. The brewer posted net revenue of N324.38billion in 2018 against N344.52billion in 2017, down by 5.8percent.

Nigerian Breweries Plc is primarily involved in the brewing, marketing and selling of lager, stout, nonalcoholic drinks and soft drinks. The company is noted for its large market share and continuous product innovation.

Profit Before Tax (PBT) of N29.42billion in 2018 as against N46.63billion in 2017 implies a decline of 36.9percent; while its Profit After Tax (PAT) which stood l ow e r at N 1 9 . 4 3 b i l l i o n against N33.04billion in 2017 implies a decline of 41.2percent.

The company recorded Gross Income of N126.90billion from a high of N143.49billion, repres enting a de cline of 11.6percent. On shares outstanding of 7,996,902,051 units, the market capitalisation of Nigerian Breweries Plc

stood at N599.767billion as at close of trading on Monday.

Meanwhile, the Board of Directors of Nigerian Breweries will be recommending to the Company’s Shareholders at the Annual General Meeting coming up on May 17, 2019 a total dividend of N19.4 billion, that is, N2.43kobo per share representing a hundred percent dividend pay-out ratio.

The Company had earlier, in 2018, paid an interim dividend of N4.8 billion which translated to N0.60kobo per share; thus, the final dividend will be N14.6 billion, that is, N1.83kobo per share. If the proposed final dividend is approved, this will become payable on the 20th of May, 2019 to all Shareholders whose names appear on the Company’s Register of Members, at the close of business on the 6th of March, 2019.

Considering this result, many of the equity holders headed to Custom Street with the intension to sell, leading to its price touching a new low of N75 as at close of trading on Tuesday February 19, 2019 from a preceding day high of N83.

“We place a BUY rating on the shares of Nigerian Breweries Plc. Our target pr ice for the shares of Nigerian Breweries in the next one year is N110”, equity research analysts at Lagos-based FSDH noted in their November 14 report a h e a d o f t h e b re w e r ’s full year scorecards.

The analysts added that “Though the following risks may affect the price target: increase in the yield on fixed income securities and drop in market liquidity”.

At this price, the stock nears its 52-weeks low of N74 as against a 52 week high of N136. The yearto-date (ytd) returns from Nigeria Breweries stocks furthered into the negative territory at -12.28percent.

This development pushed t h e y e a r- t o - d a t e ( y t d ) returns from Nigeria Breweries stocks further into the negative territory of 12.28percent.

Ahead of this result, FSDH research analysts still see positive factors that can impact Nigerian Breweries

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Plc future earnings. The positive factors according to the analysts include: local substitution strategy across the value chain, sourcing sustainability - creating

Lagos Brewer y, Ibadan Brewer y, Kudenda (Kaduna) Brewery, Ijebu – Ode (Imagbon) Brewery, Aba Brewery, Ama Brewery, Onitsha Brewer y, Awo-

has brands like Guinness, Harp, Dubic, Satzenbrau, Smirnoff, Snapp and Orijin. AB InBev recently acquired SAB Miller that operates: Pabod Breweries

The introduction of supplier finance scheme with benefits of extended payment terms and quicker access to cash for suppliers should help to

shared, sustainable value for all stakeholders, strategy to control price increases, market leadership - strong brands, affordable prices, increased market share, cost leadership -strong c e nt ra l b a ckb o n e w i t h efficient processes, and cost/hl increases below inflation.

Other positive factors are that the company will reap benefits of economics of scale, as well as its innovative p ro d u c t o f f e r i n g s a n d revenue management – this programme is f o c u s e d o n i m p rov i n g revenue per hectoliter.

Nigerian Breweries earning will also improve if it increases volumes, and further optimise commercial investments like discounts and promotions. The analysts believe that the growth of new hypermarkets and supermarkets is another positive for the company, in addition to growth in the economy brands, aggressive advertisement, and electioneering spending in 2019.

Nigerian Breweries Plc has eleven breweries to date. The breweries are:

Omma Brewery, Kakauri (Kaduna) Brewer y, Ota Brewer y and Makurdi Brewery.

The company also has two malting plants, a standalone malting plant in Aba and another that is par t of th e Ku de nda (Kaduna) Brewer y. It also has Sales Offices a n d D e p o t s a c ro s s t h e country. Nigeria Breweries portfolio includes the follow ing brands : Star, Gulder, Maltina, Maltina Sip-it, Legend Extra Stout, Amstel Malta, Heineken, Fayrouz, Climax, Goldberg l ag e r, Ma l t a G o l d , Ac e Passion, “33” E xpor t, W i l l i a m s, Tu r b o K i n g , More, Maltex, Hi Malt, Life Continental, Strongbow (Gold Apple), Star Triple X, StarLite, Star Radler, Ace Roots, Ace Rhythm, Ac e D e s i re a n d St e l l a.

The company currently exports to the United Kingdom, Netherlands, United States of America, other parts of Africa as well as part of the Middle East and Asia.

Major competitors for Ni g e r i a n B r e w e r i e s i n these categories include Guinness Nigeria and AB InBev. Guinness Nigeria

Limited (PBL) in Port Ha rc o u r t R i v e r s St a t e, Intafact Beverages Limited (IBL) in Onitsha Anambra State, International B re w e r i e s Pl c ( I BP ) i n Ilesha in Osun State, and B e v e ra g e Ma na g e m e nt Services (BMS) –the Sp i r i t s bu s i n e s s b a s e d in Port Harcourt, Rivers State.

Specifically, increase in cost of operations, weak consumers’ purchasing power, substantial oneoff cost due to rightsizing exercise and new tariff regime are major factors that affected the performance of the company. As part of its strategy to finance shortterm capital requirements, Nigeria Breweries in 2018 established a N100billion Commercial Paper (CP) Issuance programme. The programme was meant to enable the company take advantage of the relatively low interest rate in the market.

“The planned focus and execution of its twin agenda of costs leadership and market leadership supported by innovation should help improve its results in coming years.

boost sales going forward.

The company also plans to continue the use of commercial papers to raise short term funds to meet its financing needs,” equity research analysts at FSDH further noted.

The analysts’ fair value for the shares of Nigeria Breweries is N133.76. “This is the price that we believe the shares of the company will trade within our time horizon. Other risk factors may affect the attainment of this price. This price may or not be different from the intrinsic value.”

“Although we recognise the impact of the stiff competition, we believe each player will fight for survival. Nigeria Breweries may lose some market share in the process, it will remain a market leader in the next 5 years. Looking at the medium to long-term outlook of the company a n d t h e i mp a c t o f t h e aforementioned factors, we are of the opinion that the impact of the positive factors would be higher on both the revenue and the profitability of the company than the negative factors,” FSDH analysts said.

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Company Focus

United Capital: Investment Banking division shows strength in meeting clients’ specific needs …in project finance, structured trade/SME finance, capital markets, others heanyi Nwachukwu

U

nited Capital P l c h a s successfully built its service o f f e r i n g around Africa’s economic growth. The Group, through i t s bu s i n e s s d i v i s i o n s : Investment Banking, Asset Management, Securities Trading, and Trustee Service has proven to be a leading African investment banking group in providing capital and financing solutions to African governments, companies, and individuals.

This is in line with its belief that African private sector has the power to transform the continent, thereby creating both economic prosperity and social wealth for the continents inhabitants. Through its wide network spanning 20 African countries, including Nigeria, United Capital Plc is able to raise capital for projects across the continent.

At N3.35kobo per share which United Capital Plc traded on the Nigerian Stock Exchange (NSE) last Monday February 18, the shares of the company have yielded impressive positive returns of 18.79percent year-to-date (ytd), thereby outperforming the NSE ASI which stood at 2.42percent on the same day. Listed on the Main Board of the NSE, with shares outstanding of 6billion units, United Capital Plc has market capitalization of N20.100billion.

Peter Ashade, Group CEO of United Capital Plc noted the group’s ability to deploy its balance sheet to help clients meet their funding objectives. “It is worth noting that it has placed approximately N75billion of its funds in s everal transactions executed in the Nigerian Money and Capital Markets in the last three (3) years”, he said.

“Our core values are excellence; execution and enterprise and our leadership is committed to delivering services of exceptional value to clients,’’ the Group CEO stated.

Specifically, through its Investment Banking division, United Capital Plc has met the specific

Babatunde Obaniyi, Managing Director, United Capital Investment Banking

Peter Ashade, Group Chief Executive Officer, United Capital Plc

needs of its clients, more especially around Structured Trade/SME Finance, Project Finance, Capital Markets and Mergers & Acquisitions.

Project Finance The Project Finance desk provides cross border bespoke financial advisory, structuring and arranging services to clients across Africa by leveraging on its extensive expertise, unrivalled track record and vast network of relationships with providers of capital.

“Our expertise cover i n d u st r i e s a n d s e c t o rs which are critical to economic growth; oil & gas, power, infrastructure and mining”, said Babatunde Obaniyi, Managing Director, Investment Banking at United Capital Plc. “In the Power sector, we are the leading power sector financial advisers in Nigeria, having structured the financing of 50percent of the electricity generation companies privatized in the 2013 privatisation exercise conducted by the Nigerian government,” he said.

In the Oil & Gas sector, Obaniyi said, “Our Project Finance desk has raised capital for industry leaders across the oil & gas value chain - upstream, midstream and downstream companies – in Nigeria and other parts of Africa. In 2015,

key infrastructure to drive economic growth”, he added.

Mining is not left out.

The Investment Bank re c o g n i z e s t h a t A f r i c a has tremendous potential within its mining sector due to the scale of its mineral endowment. United Capital Investment Bank is also positioned by virtue of its continent-wide reach to help mining companies meet their financing requirements on mining projects.

“We are an industr y leader in project financing and have, in the past 6 years, provided advisory, structuring arranging services on deals worth over $7 billion”, Obaniyi noted.

Here, the Investment Banking service offerings include: Debt & Equity Arranging and Structuring, Facility Agency, Financial Advisory, and Negotiation Support.

“We offer innovative debt and equity solutions to meet project’s funding requirements, drawing on our extensive relationships with providers of capital.

We assist our clients in structuring the financing the y require to pursue acquisitions, growth oppor tunities, working capital requirements or restructurings.

‘

We are an industry leader in project financing and have, in the past 6 years, provided advisory, structuring arranging services on deals worth over $7 billion

we structured the biggest financing arranged by an African Investment bank that year”.

Also, the Investment Bank acknowledges that quality infrastructure is the backbone of any developing economy. “We are partnering w i t h g ov e r n m e nt s a n d private sector stakeholders across Africa to develop

“Upon a successful capital raise through a loan syndication, we are often appointed as Facility Agent to act as administrator of the facility. This role involves the coordination of information flow between the borrower and the lenders in a syndicated facility as well as monitoring of financial covenants and information undertakings following execution of the finance documents.

“Our expertise enables us to adopt a whole-life approach to project finance.

Guiding clients from the initial stages of a capital raise all the way to financial close. We develop critical supporting packages including financial models, term sheets, teasers, Information Memorandum.

We also supervise, monitor and coordinate work streams involving other transaction parties.

“We understand that negotiation is a key part of any successful financing process.

We p r o v i d e m a x i m u m support to our clients by providing negotiation support backed up by the up-to-date market research and intelligence to ensure that the most favourable terms possible are secured” Structured Trade & SME

Finance Through its structured finance desk, United Capital Investment Bank provides capital solutions outside the traditional and conventional forms of collateral. “We have expertise in trade finance, s e cur itization and commodity finance”.

A comprehensive Suite of its Structured Trade/SME Finance Services include: A s s e t- b a c k e d s e c u r i t y (ABS), Sales and Finance Leasing, Invoice Financing/ Discounting, Supply Chain Finance (SCF), Merchant Cash Advance (MCA), and Revolving Credit.

Capital Markets, Mergers & Acquisitions United Capital Investment Bank’s Capital Markets, Mergers & Acquisitions desk provides specialist financial advisory, capital raising and issuing house services to clients across Nigeria, by leveraging on its competency and vast network of relationships with regulators and providers of capital. Its service offerings here are in the areas of Debt Capital Markets, Equity Capital Markets, as well as Mergers & Acquisitions.

“Our capabilities cut across a spectrum of sectors including financial services, power, oil & gas, hospitality, real estate, consumer goods and government parastatals.”

S ome of the accomplishments are in real estate, power, parastatals, oil & gas, and FMCG. In the Real Estate, United Capital Investment Bank executed the First Mortgage Securitisation in Nigeria involving a $130.6million mortgage-backed bond. On power, it was the Financial Adviser on the first Power Sector merger in Nigeria.

United Capital Investment Bank acted as the Financial Adviser to the first Bond Restructuring in Nigeria and participated in over 75percent of the total bond restructuring by subsovereigns till date. In the Oil & Gas sector, the company was the Lead Issuing House in the first Bond Issuance in the downstream segment of the Nigerian Oil and Gas Sector; while in the FMCG sector, it was the Lead Issuing House on one of the largest corporate bond issuance in West Africa.

20

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Leadership

Thursday 21 February 2019

Shaping people into a team

How to orchestrate change from the bottom up Katherine C. Kellogg

O

rganizational change is difficult. It’s challenging to get people who are set in their ways to go about their jobs differently. So what types of interventions might actually change people’s behaviors?

To answer that question, I conducted a two-year ethnographic study of the primary-care departments in two U.S. hospitals. The hospitals were part of the same parent organization, did similar work and employed doctors and clinical staff with similar backgrounds. In addition, both hospitals had received grants of $750,000 to implement a change within their organizations: patient-centered medical home, or PCMH, reforms that are being rolled out across the United States. PCMH requires primary-care doctors to change their daily work practices by moving from reactive care to prevention (vaccinations, Pap smears, mammograms, colonoscopies and so on) and by using evidence-based guidelines to treat patients with chronic illnesses like diabetes.

I observed the day-to-day work at both hospitals for three months before the start of their PCMH initiatives. Specifically, I observed strategic planning meetings, in which managers, doctors and medical assistants talked about how to best implement the reforms, and activities such as “huddling,” where doctors and medical assistants discussed the conditions and progress of patients coming in for office visits that day. I shadowed and interviewed 48 doctors, 10 managers and 24 medical assistants. I also analyzed documents the managers developed to facilitate the implementation of PCMH. Initially, a small number of doctors were adamantly opposed to the PCMH reforms, while the majority believed the changes had merit.

Even for those who had a positive view of PCMH, however, many felt the reforms might run counter to

their ability to apply their specialized expertise to help the ill, and to use their discretion and autonomy to treat patients. In other words, while widespread pushback wasn’t common, some degree of resistance was.

In the end, managers at one hospital were much more successful in changing their doctor’s behavioral practices than were managers at the other hospital. Specifically, across three phases of the study, the adoption rate for PCMH practices at the successful hospital soared from 6% to 65%, while the rate at the other hospital remained relatively flat from the initial low 6%. Why the huge difference?

From an analysis of the data, I was able to identify the most significant factor: On the teams that were most successful, managers had enlisted the aid of medical assistants to help change the doctors’ behaviors.

At both facilities, the medical assistants were responsible for bringing patients from the waiting area to the exam room, weighing them and taking their blood pressure. And yet despite having no formal authority over doctors, the medical assistants had a high capacity for influence

because they had a lot of structural power.

First, the medical assistants occupied a central position in the doctors’ workflow. They could both remind doctors to implement new practices such as delivering particular vaccinations, and could give doctors opportunities to review and approve suggested changes before they were implemented.

Second, they performed tasks that were critical to doctors’ daily work, making it relatively easier for them to ask the doctors for favors; this led doctors to see themselves as implementing the new practices to help their medical assistants rather than to meet managerial demands.

Third, the medical assistants were central in the doctors’ peer network, enabling them to spread the word about those doctors who had adopted the new practices.

And fourth, they were positioned between the patients and the doctors, so they could suggest changes in doctors’ practices while also shielding doctors from the emotional challenges of upset or angry patients.

But it wasn’t just that the medical assistants had a lot of structural

power; they were given tools to leverage it. The managers at the successful hospital provided the medical assistants with things like visual prompts, which helped indicate whether a particular patient was due for a certain procedure or test.

For example, each patient packet included a purple checkout form, in which the medical assistants could mark any required colonoscopies or mammograms as a helpful reminder to the doctors. “The purple sheet is helpful,” said one doctor.

“There is so much going on [at the time of the visit] that it’s good to be reminded.”

Another effective tool was “favor scripts” provided to the medical assistants. One script was to help persuade doctors to implement a particular reform for treating diabetes. In the script, medical assistants would pose the change as something a doctor could do as a favor to them (“It’s very helpful for me if you would...”) as opposed to being a policy imposed by management (“We need to do this...”). As one doctor noted, “We want to keep the MAs happy because we depend on them.” Doctors were willing to make changes to help their MAs, as long as

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

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these decisions did not run counter to their clinical judgment.

These tools were effective because they significantly lessened the degree to which the reforms threatened the doctors’ expertise, autonomy, individual responsibility for patients and engagement in complex work.

Importantly, the managers at the successful hospital freed up time for their MAs to engage in the new work associated with influencing the doctors. They also established a dialogue that allowed MAs to tell the managers about the hurdles they were facing and to ask for the resources they needed to address them. While the MAs at the successful hospital reported that the quality of their work life had improved from using these tactics, they do raise possibility of manager exploitation of semiprofessionals. Future research could explore the costs for semiprofessionals that stem from engaging in influence attempts with more powerful professionals on behalf of managers, and how these might be prevented.

I believe the idea of leveraging the structural power of low-level workers to push change from the bottom up has broader implications, especially for other organizations employing professionals, such as law, accounting or consulting firms. Could a law firm more effectively alter the behavior of its lawyers by enlisting the aid of its paralegals in the change initiative?

And might companies do the same with their administrative assistants when implementing organizational change?

Given the dismal success rate of change initiatives at many companies, enlisting low-level semiprofessionals to help change the practices of the professionals they work with is an approach worth considering.

Katherine C. Kellogg is a professor at the MIT Sloan School of Management.

Thursday 21 February 2019

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21

Energy Report Oil & Gas

Power

Renewables

Environment

TCN insists that it transmitted 5,000mw ....blames Discos for not sustaining it

Olusola Bello

T

he Transmission Company of Nigeria (TCN) has insisted that the country generated 5,000 megawatts of electricity on February 7,2019 but that the challenges of distribution companies did not allow the impact of the improvement to be felt by Nigerians .

TCN also stated that it has the capacity to wheel 8,000 megawatts of electricity currently but that it is handicapped by the challenges facing distribution companies.

Ndidi Mba , general manager, public affairs TCN told BusinessDay that her organisation is in the best position to know what was generated in the country at any particular time by the various generating companies. “All of them send what they generate to TCN individually. We collate these figures and add them up. So now you see that we know what we are saying”.

Stakeholders have questioned the essence of TCN

celebrating the transmission of 5,375mw that lasted just a few minutes.

TCN transmitted a peak generation of 5,375MW on the 7th of February 2019 which was regarded as peak generation for that day. Peak generation is actually the generation for a particular day to meet maximum demand for the day, which is usually for a couple of minutes and not for the whole day. Over a day, load demand and utilisation change on a

second by second basis, an industry operator said.

The nation has the capacity to generate 13,000 megawatts.

Average available generation capacity has been on the average 8,000 megawatts daily.

But Load approved for daily distribution has been between 3,700 megawatts - 4, 800 megawatts and on very rare occasions 5,000mw.

The limitation or inability to go beyond these thresholds are linked to the dynamics of Tariff Shortfalls ; Market

Nestoil AES could save oil and gas industry $75bn Temitayo Ayetoto

O

il and Gas innovation such as the Alternative Crude Evacuation System (AES) powered by Nestoil Limited could save the industry $75 billion a year by 2023.

The company decided on the innovation so as to find a means of curbing the constant problems of pipeline vandalism, oil theft and grow the revenue base of the country.

The AES is a process where the regular downtimes caused by technical issues to the pipelines carrying crude oil, and vandalism which make oil producers unable to meet export targets, will be negated through another method of evacuating the oil by barges With the modified system and facilities designed and built by Nestoil Group of Companies and its affiliates, the liquid that comes out from the wellhead has four constituents - oil, water, gas, and sediments known as wet crude, and the wet crude needs to be processed to get export grade crude oil.

But in the first step, the processing wet crude oil is fed into a 3-phase separator where sediment, oil, water, and gas are separated with the crude further fed into an electrostatic heater treater where it is further treated to remove gas and water to meet export requirements (dry crude).

The ready-for-export dry crude is then pumped to the loading platform where it is stored in a dump barge/Vessel. Shuttle vessels come to load the crude and transport to the FSO Ugo Ocha offshore, where buyer’s vessels load the crude.

This process bypasses crude handling charges and potential theft through the Trans Forcados Pipeline (TFP).

Ifeanyi Ezuka, Chief Technical Officer, Neconde Energy limited, a subsidiary of Nestoil said the innovation is the latest testament to Nestoil’s growing reputation as an innovative company that constantly seeks proprietary ways of working in difficult terrains and also borne out of necessity due to the downtime recorded on Forcados terminal when

moving their products there.

Elucidating the importance of the innovation to the country’s oil industry, he said the usual losses or leakages associated with pipeline issues are eliminated, meaning that they now have control of the complete value chain to deliver specific volumes from the well-head to the terminal.

Also, bankers now take them seriously than before because they know and appreciate the certainty of their operations, while there is also a significant drop in redundancy.

The challenge of developing the system, he posited, was a combination of technology, logistics, and resilience as they looked at the fundamentals of what is required to be able to carry it out rather than putting it on a pipe, then they put it on a barge and send it out. So from the technical side, what are the type of barges needed?

What is the draft of the river?

How deep is the river from the place of loading to where they want to go? So how far is where they are to the closest terminal? So all of those technical assessments and analysis they got right.

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

Shortfalls ; Market Settlement Crises which borders on Low Market Remittances of between 25% - 30% attributed to the foregoing.

She however lamented that distribution companies are the weakest link in the power value chain, as either they are not able to take the load because of infrastructural problems or they out rightly reject the supply meant for them because they fear they may not be able to make available the monetary

value of electricity they take to the market operator.

According to her, TCN will continue to improve on the infrastructure on ground so that more electricity can be wheeled to stakeholders for the benefit of all.

“We will continue to increase the capacity of transmission which is what the agency has been doing for some time now”, she said.

Meanwhile, in line with President Muhammadu Buhari’s policy on incremental power,TCN has completed the installation and commissioning into service of one brand new 300MVA 330/132/33kV power transformer in its Alaoji Transmission Substation and has also successfully transported a brand new 150MVA, 330/132/33kV power transformer from the port to Kumbotso Transmission Substation in Kano, to replace one of the four (4) 150MVA transformers taken out for repairs.

The brand new 300MVA power transformer, energised on February 12th, 2019 in its Alaoji Transmission Substation, has increased the sta-

tion’s installed capacity from 450MVA to 750MVA which makes it the biggest substation in the southern part of the country and has also made the station consistent with redundancy requirement of N-1.

With this development, TCN has increased its capacity to supply Enugu Distribution Company for onward supply to particularly Abia North (Ohafia, Arochukwu, Item, Abriba) Imo State (Okigwe, Arondi-izuogu), parts of Ebonyi and Rivers State.

TCN further stated that the following projects under construction will also benefit from the newly energised 300MVA transformer; 4No 132kV substations at Okigwe (Imo state), Mbalano, Ohafia and Arochukwu (Abia State) which are awaiting completion. The newly energised 300MVA transformer will also enhance evacuation of power generated into the 132kV grid network from the Alaoji NIPP and Afam Power Stations. The installation of the transformer was carried out by Messrs Power Control with active support of TCN.

CrossBoundary Energy Access announces first close on $16m facility for mini-grids FRANK UZUEGBUNAM

C

rossBoundary Energy Access (CBEA), Africa’s first project financing facility for mini-grids, has announced its launch, with funding commitments from The Rockefeller Foundation and Ceniarth.

The company will initially invest $16 million into minigrids serving 170,000 people, providing first-time power to homes and businesses. The focus is on markets with supportive mini-grid regulatory frameworks, such as Tanzania, Nigeria, and Zambia.

CBEA has an innovative blended finance structure that demonstrates a pathway to unlocking more than $11 billion dollars for mini-grids needed from investors to connect at least 100 million people.

“Mini-grids are critical to achieving universal electrification in Africa at the least cost. We believe long-term project finance structures will allow mini-grids to scale.

We’re building investment portfolios that will attract the long-term, infrastructure-

type capital the sector needs from institutional investors,” Gabriel Davies, Head of Energy Access at CrossBoundary, said.

Over 600 million people in Sub-Saharan Africa still lack access to electricity.

CrossBoundary conservatively estimates that at least 100 million of these people can be most cost effectively served by mini-grids today, and that using private sector development and investment could accelerate the buildout of those grids.

However, so far, private sector mini-grids have not attracted the needed funding. Like all energy infrastructure projects, minigrids require a significant upfront investment while delivering predictable returns over a 10–15 year period. To scale, the capital provided must be long-term, affordable and accept lower yield returns. Operating in an emerging asset class with smaller balance sheets, mini-grid companies have so far struggled to raise that kind of financing.

CrossBoundary Energy Access bridges the gap to

commercial scale, allowing private capital to invest today by blending it with patient equity from impact-first investors such as Ceniarth and development-focused debt from institutions such as The Rockefeller Foundation. The facility also allows private investors to invest in the projects themselves, similar to how most of the world’s 1,000 gigawatts of wind and solar projects have been financed.

“We’re proud and excited to be an early investor in the CBEA facility because it represents an ambitious, concrete effort to realize the comparative advantage mini grids have to serve over 100 million people in Africa. The opportunity cost of energy poverty is huge, both in terms of suppressed human wellbeing and lost economic development. We believe that CBEA brings a muchneeded sense of urgency, and provides a platform for more effective public and private sector coordination that can transform the pace of lastmile electrification,” Ashvin Dayal, Managing Director, Power, The Rockefeller Foundation, said.

Email: energyreport@businessdayonline.com, Tel: +234-8023020011; +234-7037817378

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Thursday 21 February 2019

Energy Report

Natural gas as ultimate solution to manufacturing sector problems Olusola Bello

A

ccording to the Ni g e r i a n Na t i o n a l P e t ro leum Corporation (NNPC) Nigeria has proven natural gas reserves of 202tcf plus much more in undiscovered gas reserves. Consequently, Nigeria holds an enviable position as the ninth largest proven gas reserves in the world and the most proven gas reserves in Africa. The Ministry of Petroleum Resources estimates Nigeria’s reserves to production ratio, which measures the remaining amount of a non-renewable resource expressed in time, at 46 years for crude oil and 102 years for natural gas.

This explains why many have described Nigeria as a gas province with some oil. Gas produced in the country has primarily been utilised for LNG export, re-injection for crude oil recovery and domestic utilisation by power and gas-based industries. A significant amount of natural gas is flared.

In 2014, natural gas accounted for 25 percent of the world’s energy consumption.

British Petroleum’s Energy Outlook 2035 forecasts that about a third of the probable rise in global energy demand will be supplied by natural gas. This rise in the importance of natural gas as a fuel of the future owes much to its intrinsic properties— it is plentiful, cleaner, safer and environmentally friendly.

Natural gas has proven to be one of the fastest paths to industrialisation and there is evidence of a correlation between GDP growth and gas consumption by produc-

L-R: Ibe Kachikwu, Minister of State for Petroleum; Maikanti Baru, GMD, NNPC; and Obi Uzu, CEO, GPPSL, during the ministerial visit to the GPPSL exhibition stand at the Nigerian International Petroleum Summit (NIPS) held in Abuja recently.

tive sectors of the economy.

Global, demand for gas has risen significantly over the past decade, led by Asia which contributes about onethird of the total. China’s gas demand makes up the largest within Asia and is driven by the country’s coal-to-gas substitution policy targeted at addressing environmental concerns arising from carbon emissions. According to the International Energy Agency (IEA), natural gas is expected to overtake coal as the world’s second largest energy source by 2030.

Before widespread utilisation of gas, the main sources of energy were liquid fuels (mostly by-products of crude oil), and in Nigeria, predominantly Automotive Gas Oil (AGO), Low Pour Fuel Oil (LPFO) and Premium Motor Spirit (PMS). For industrial production, AGO and LPFO have been the fuels of choice. These fuels however, are plagued by issues such as scarcity, labour strikes, pilferage, port delays, refinery

shutdowns and unpredictable product pricing, especially for deregulated fuels.

Many of these issues are exacerbated by the linkage to crude oil and very recently, at the height of the all-time high crude oil prices at over $100 per barrel, prices of liquid fuels were unsustainable and partly responsible for the shutdown of some manufacturing concerns.

Then came gas, the cheaper and much cleaner alternative with an entirely domestic value chain. The advent of gas solved the issues associated with liquid fuels including reliability, price predictability and local abundance, and as the manufacturing industry gradually embraced gas, manufacturers have become more profitable and productive overall.

In this article, the focus is on the economic benefits and “Messiah” status of natural gas to the domestic manufacturing sector which has been shortchanged by liquid fuels.

Key benefits are that gas is a solution to fuel pilferage and adulteration, a reliable energy source, cleaner alternative and an enabler for increased profit due to its relatively lower cost compared to alternatives Compared to liquid fuels, the incidence of fuel theft is relatively non-existent with natural gas. Liquid fuels are mostly transported via trucks and so, are usually untraceable and difficult to track in the event of theft.

With these incidences of theft come spillages that result in the pollution of farmlands and water bodies, and overall environmental degradation with the associated costs of clean ups.

A second consequence of pilferage is the problem of product adulteration where stolen fuel is mixed with other substances and resold to unsuspecting users. This results in equipment breakdown and incomplete combustions, and the attendant implications to human lives

and properties.

The application of natural gas completely solves all of these. Gas is mostly transported via underground pipelines, therefore making pilferage (and follow-on consequences such as product adulteration) unlikely.

Also, given that gas must usually meet a specific quality threshold to be transported to last mile users, the likelihood of product adulteration is further limited.

With gas, incidental leaks on pipelines are relatively easier to detect and can be easily managed by proper ventilation of the facilities, since gas is lighter than air, after leak is arrested.

As stated earlier, liquid fuels are susceptible to a myriad of issues that make them unreliable. Port delays, labour strikes, the underperformance of refineries etc. make it difficult to predict when products will be available. Also, because these fuels are mostly imported, scarcity of foreign exchange impacts availability, and a lack of predictability will usually make it difficult for manufacturers to plan operations. With liquid fuels, the issue of end product stock-outs is prevalent because manufacturers are not able to effectively manage inventory. This ultimately results in loss of sales, profits, customers and market share.

The fact that gas is locally sourced solves these issues.

The entire gas value chain – from upstream production to transportation and final delivery to last mile users – is domestic. Save for a few militancy attacks, for many years, there were no gas supply interruptions. Natural gas therefore comes to the res-

cue, making it easier for companies to effectively manage production schedules with minimal interruptions and ultimately run very efficient and predictable operations.

The combustion of liquid fuels typically produces 2-3 times more carbon dioxide than natural gas, thus polluting the atmosphere and accelerating global warming. In addition, liquid fuels also produce other harmful substances such as soot, sulphur oxide (SOx) and nitrogen oxides (NOx) and sometimes deadly carbonmonoxide due to incomplete combustion. All these affect the health and productivity of staff of manufacturing organisations, as well as present them in a bad light as contributors to environmental pollution. Consequently, such organisations may find it more difficult to attract financing from global financiers and staff attrition and absenteeism may also be high, leading to unstable operations.

The introduction of natural gas as the “saviour” solves most of these issues because it is environmentally friendly, odourless, colourless and produces only water vapour and small amounts of carbon dioxide during combustion.

The combined effect of pilferage, high cost of maintenance of equipment, and overall unreliability associated with liquid fuels, places a heavy cost burden on the manufacturing industry. Natural gas is generally about 30 to 40 per cent cheaper than diesel. Manufacturing concerns that have switched to natural gas have immediately experienced a positive impact on their bottom line.

ENYO Retail and supply expands footprint

EKEDC assures safety, reliable power supply to electricity consumers

nyo Retail and Supply has announced its focus-driven expansion plans in Nigeria with the recent launch of its #FuelledByTrust initiative.

The expansion and launch of the initiative aims to solidify its brand identity and revolutionise the downstream retail space.

FuelledByTrust is an Enyo ‘1 litre is 1 litre’ initiative targeted at ensuring consumers are provided with their products value worth.

Leveraging on the words ‘trust’ and ‘fuel’, Enyo Retail & Supply is reinforcing its commitment as a truly customer focused brand. Its continuous delivery of authentic and innovative products/services is fuelled by positive stakeholder experiences.

Enyo Retail and Supply currently distributing over

A

E

1% of the national consumption of fuel consumed in Nigeria operates in up to 13 states nationwide and serves over to 50,000 customers daily.

In 2019, the company plans to further expand its retail outlets, market share and services, while continuing to set the pace in the use of technology in the fuels’ distribution sector, to better serve the Nigerian market.

The company provides a range of other products and services such as: Premium Castrol Lubricant, Superior Liquefied Gas (SL-GAS), VEHICON, REELAX and DIESEL2DOOR: This is Enyo Retail’s mobile enabled diesel request and delivery service, capable of delivering within 24 hours at competitive rates across the country. D2D is fast becoming the most reli-

able diesel delivery solution for homes and corporates as a result of its convenience and quality offering.

Abayomi Awobokun, Chief Executive Officer (CEO), Enyo Retail and Supply limited stated that the company’s goal is to focus on expanding its distribution capacity to more states in the country and continue to deploy affordable technology to bring consistent value to its customers. “We are investing profoundly in improving the customer experience at all our points of sale. Our primary determination is to deepen the customer services experience in the fuels retailing industry with the assurance to all customers that at our points of sale and filling stations, a litre is a litre. We seek to be the most trusted brand in the Nigerian market.

...Sign Conditions of Service with unions

deoye Fadeyibi, the Chief Execultive Officer, Eko Electricity Distribution Company Plc (EKEDC) has assured electricity consumers within it’s network of safety and reliable supply.

Fadeyibi gave the assurance during the signing of workers conditions of service with the National Union of Electricity Employees (NUEE) and Senior Staff Association of Electricity and Allied Companies (SSAEAC) in Lagos on Tuesday.

The managing director, lauded the unions support towards ensuring workers conditions of service in the Disco without rancour.

He said the official signing of the documents was a great success to the company and power sector in general, urged workers to reflect that in ensuring effective services delivery to consumers “Am celebrating today, be-

cause both the management and the unions are agreeing on mutual understanding for the betterment of the company and workers.

Fadeyibi said: Both leaders had agreed to signed for the development and growth of the organization geared towards improved power supply in the network.

He reiterated the management’s support to the growth and improvement of workers welfarism in the organization.

The EkEDC’s boss said that activities within operations of the company’s has increased, adding that everybody should be committed to the job in ensuring better services to the teaming consumers.

He added that the company’s had improves on it’s effective customer’s services delivery to the consumers confidence and to boost revenue.

The Electricity workers

union and EKEDC signed a new Condition of Service for workers with an understanding to improve performance and growth the organisation.

The union and management started dialoguing on the agreement from 2014.

Recall that the sector was privatised in November 2013.

And only EKEDC has signed a condition of service for workers in the country.

Joe Ajaero, General Secretary, National Union of Electricity Employees (NUEE) said that the agreement was long over due as there would not be performance without incentives He advised EKEDC management not to pay attention to machine alone but equally motivate workers to develop the organisation.

“There is a written code now. It marks the beginning of the job. Handle all the issues well for things to work well,’’ Ajaero said.

Thursday 21 February 2019

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Corporate Social Impact

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BUSINESS DAY

23

Onuwa Lucky Joseph (08023314782) Editor.

How Saro-Wiwa vs. Shell Helped Birth Contemporary CSR Onuwa Lucky Joseph

K

en Saro Wiwa was a larger than life character whose outsized courage, not to mention ego, propelled him to take on two formidable goliaths all at once: the Shell Petroleum Development Company (SPDC) and the Federal Government of Nigeria, then under the autocratic leadership of General Sani Abacha.

His resource control fight which he undertook under the aegis of the Movement for the Survival of the Ogoni People, (MOSOP), caught fire and was a worldwide cause celebre that helped birth many other resource control agitations both locally as well as in other countries where indigenous people felt they were being unfairly treated and their resources stolen from them even though they bore the brunt of the environmental and health side effects of the resource exploitation activities.

Unfortunately, Gen Sani Abacha would countenance no such ‘uprising’ for too long, considering the unsavoury precedence it was setting for other agitators and ‘nations’ within Nigeria. And so in 1995, quite unexpectedly, the chilling announcement was made by the government of the day that Ken Saro Wiwa and the rest of the Ogoni 9 – Saturday Dobee, Nordu Eawo, Daniel Gbooko, Paul Levera, Felix Nuate, Baribor Bera, Barinem Kiobel, and John Kpuine – had been executed by hanging.

Nigerians were scandalized and the International Community aghast.

Civil society organisations such as Greenpeace and Amnesty International ratcheted up the noise against Abacha’s government, but even more telling, against Shell, which they had reason to believe was all the while behind Saro-Wiwa’s travails, despite the company’s denials.

On account of Wiwa’s execution, Nigeria was expelled from the Commonwealth of Nations. And this at a time when a Nigerian, Chief Emeka Anyaoku, was Secretary General of the Commonwealth.

The iconic Anita Roddick, late founder of The Body Shop, one of those who, though running a successful business herself, felt compelled to call big business to order with regards to their responsibility to stakeholders outside of government and shareholders, she took up the cause of the Ogoni 9. In her book, Business as Unusual, she said: “For Gordon (her husband) and me, the Ogoni became a powerful symbol of big business running roughshod over the interests of small people and I had no doubts that we should do everything in our power to help them. We never felt any anxiety about going up against a company as big as Shell, even though everybody else seemed to be nervous about it.”

After Saro Wiwa and others were picked up in the aftermath of the murder of some Ogoni chiefs, something the government pinned on Saro Wiwa and MOSOP, the Body Shop’s Ogoni campaign escalated rapidly. “We put posters in our shop windows and on our trucks.

We staged demonstrations, organized cultural events, advised the Ogoni, talked to the press, lobbied politicians and waved banners outside Shell’s headquarters in London”.

In a heartfelt letter smuggled from Mr. Wiwa’s cell, he had written to Anita and her team to say “I am fully aware of all that you have done for the Ogoni cause and will thank you forever for it… The Ogoni are down and out, but for The Body Shop,

Gen Sani Abacha

might well have gone under. You give us a lot of hope. I pray that you succeed in keeping the momentum going.”

All the effort seemed to have come to naught with the eventual execution of Saro Wiwa and the other 8 men. However, the coalition from that event was the lightning rod that, according to some who should know, launched Corporate Social Responsibility, CSR, as we know it today.

According to Bart Mongoven, in his article for the Stratfor Worldview Journal titled A Death in Nigeria, Ken Saro-Wiwa and the CSR Movement, “Though it was not apparent at the time, Saro-Wiwa’s death — by hanging, at the hands of Abacha’s forces — sparked what might be considered the contemporary corporate social responsibility movement.”

Mongoven, an expert on corporate and public policy issues, goes on to say, and here we quote him copiously: “Corporate social responsibility (CSR) is a concept drawn from the notion that with great power comes great responsibility — and that corporations have great power.

In the United States, the notions of charity and stewardship embodied by philanthropists like Andrew Carnegie eventually evolved into a “soft” idea of CSR — one that placed expectations on corporations to contribute positively to their social and physical environments, beneath the canopy of a government that could es-

sentially be counted on to preserve basic justice and people’s core rights to life, liberty and property. In more recent times, however, the presence of multinational corporations in countries with oppressive governments and failed legal structures has given rise to difficult questions about spheres of responsibility, influence and even complicity between corporations and the governments of host countries.

Ultimately, this has generated a much more serious set of CSR expectations than that common in Carnegie’s day.”

The fact that there was and remains a generally wide held view that Shell Petroleum Development Company was complicit in the arrest and execution of the Ogoni 9, and the fact that local and international civil society organisations took up the matter, helped many organisations do some soul searching on their own approach to stakeholder relationships especially with their host communities.

Let us also not forget that for too long Africa and the third world has been the playing ground of miners of all descriptions. In gold, uranium, diamond, petroleum, etc. Where those countries are not destabilized via wars and unrests, the multinationals tend to live like lords in the communities and treat the natives as the proverbial hewers of wood and drawers of water. There is no technology transfer and poverty rather than wealth is the drip

down effect of such relationships.

A business is richer when its community is richer; when citizens can point to gains accruable only from their relationship as host community to the business.

A business that poisons the water source and livelihoods of its host community is a bad business, and its no wonder 5that the host community is up in arms, having exhausted the Nigerian judiciary option now going to the UK, the Hague, Netherlands to secure get justice. This is not a work for the corporate affairs department of SDPC, it’s a business model problem that Shell needs tackle from the root. Only when its relationship with the Ogonis and others is positive will the company enjoy a measure of perceptual credibility.

Amnesty International and other civil society organisations local and international have insisted that an investigation be launched in Nigeria, UK and The Netherlands over Shell’s role in the atrocities that took place under the military government of the 1990s culminating in the execution of Ken Saro Wiwa and the others.

So far, Shell, in connivance with the Federal Government has done very little to make living easier in the Niger Delta region of Nigeria. A lax regulatory climate has enabled the company to mess with people’s lives.

Last week, widows of four of the activists who were executed alongside Saro-Wiwa were at The Hague, having dragged Shell to the World Court for what they termed complicity in their husbands’ deaths. The widows allege that Shell played a role in the arrest of the

has since become a fixed notion that big businesses especially those involved in the extractive industry leave pain in their wake while amassing fortunes for themselves and the governments that issue them their operating licenses.

The very idea of CSR and Sustainability is to rein in the excessive fixation of business on the bottomline while deemphasizing the long term health of the people and environment where the business is situated. Although Shell today has a strong communications department which churns out information on interventions by the Anglo Dutch giant, what is yet missing is the focus on the fundamentals. Oil spillage is still, unfortunately, a recurring fact of life in Ogoniland and other places where Shell operates. Flaring is still a fact of life, poisoned waters is a fact of life; the eco diversity of the area is still suffering to adapt and survive the unremitting pollution that affect sources of water and food.

The much touted Ogoni cleanup is supposedly squarely in the government domain but for most people it’s about Shell which has been drilling oil in Ogoniland since 1958. After all, which other oil company is responsible for the spillage and environmental pollution that now requires such a monumental cleanup, which according to Robert Petri, Ambassador of the Netherlands to Nigeria would be the largest clean up in the world? If anything, the general feeling is that there is collusion between the Federal Government and Shell, and that the purported cleanup may not go far enough.

Shell needs to address these environmental concerns head on. That is all the

Saro Wiwa

men, who, purely because of health and environmental concerns, had sought to peacefully disrupt the oil giant’s work in the Ogoni region. Shell stoutly defended itself, saying it was ‘inconceivable’ that it could have been involved in the death of the activists.

Before now, there had been other cases, one time requiring a payment by Shell of $15.5 million dollars to the families of Saro Wiwa and the others. But every time these cases come up and wherever they come up, Shell is the worsted party, if not within the perimeters of the courts of law, then certainly in the courts of public opinion. It is a moral burden that is not going away anytime soon despite the plethora of effort from Shell, efforts which would have been better directed at resolving the roots of the matter. Going

by Africa’s unfortunate long history as a destination for extraction of raw materials that is often processed elsewhere, it

reassurance the communities need, so that they can once again count on their land and their waters for sustenance. A situation where, according to a 2011 UNEP Report, groundwater contamination in Ogoniland is 4,500 times Nigerian recommended levels, is unjustifiable, and life in such a place, be it for plants, animals or humans, is clearly unsustainable.

It is in the best interest of the SPDC to show commitment to a better Niger Delta, not just in words and presentation slides, but in deed. Only when this is done can Shell be held up as a case study of a multinational that turned its perception misfortunes on its head and became the reference point for other such companies, extractive or not, cancelling out the atmosphere of mutual distrust with their host communities and creating a win-win environment for company and community as well as the ecosystem that supports everything.

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Thursday 21 February 2019

Corporate Social Impact

Advance Cancer treatment centre commissioned in Lagos Stories by Onuwa Lucky Joseph

T

he Nigeria Sovereign Investment Authority (NSIA) is partnering with LUTH to commission the advanced cancer treatment centre in Lagos with a pledge that facilities for the prevention, early diagnosis and treatment of the disease will become available to many more Nigerians.

According to President Buhari, despite the increasing number of Nigerian cancer patients, there only two working radiotherapy machines in the country, hence the need to “celebrate the successful completion of the most modern and best equipped cancer treatment centre in West

Akachukwu Wins Interswitch SPAK National Science Competition

H

e is now nationally admired big brain; the young chap from Apostolic Faith Secondary School, Anthony. Give it up for Akachukwu Anumudu who beat eight other contestants to emerge winner of the InterswitchSPAK National Science Competition that was held in Lagos.

For his efforts, he went home with N7.5million worth of tertiary

education scholarship that’s spread over five years, a laptop and a monthly stipend spread over the five year course of the scholarship.

Henry Umunna, also 16, and from Loyola Jesuit College, Abuja, was second, while Onyedikachi Kanu, another 16year old from Dority International School, Aba came third.

President Buhari commissioned the NSIA-LUTH Cancer centre

Africa.

We think that is good progress and that the maintenance of the facility should be of utmost

concern to those concerned. Evidently, there are still avenues for further partnership with corporates who indicate interest.

Ex-Navy Boys visit hearts of Gold Orphanage

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Dangote to reconstruct Ofeme road with Dangote Cement

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an’t say we have a full grasp of Executive Order #7 of 2019 titled Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme.

However, it seems designed to throw up some good things for the generality of Nigerians. It says that “Participating investors will use tax credits to reduce corporate taxes payable to government until they recoup the value of their investments in roads and bridges.”

That’s not a little convoluted, and there’s no knowing if that implies a return to toll gates on the highways. But CSI assures its teeming readers that we will get to the root of this. How the investors

will recoup the value of their investments need to be fully spelt out.

However, it’s good to know that just like what Dangote is doing at the Obajana stretch, the Ofeme Road will be all concrete.

According to Okoro George, South South Regional Director for Dangote, the deplorable state of the Ofeme Community roads will soon be a thing of the past as, according to him, “the entire road network will be built on concrete pavement instead of earth pavement.” The concrete roads according to him, “gives a lifespan of 40 years and will contain drains on both sides while the surface will be made of concrete also instead of asphalt”.

The other very useful thing Mr. Okoro said was that “Countries that have achieved self-sufficiency in cement production have found it expedient to adopt the construction of concrete roads because they are cheaper, more durable and environment friendly.” He ended by saying that he believed that “Nigeria should not be an exception. We must move with the times.”

This intervention, which is at the behest of the Federal Ministry of Power, Works and Housing, coming as it is, so close to the election, needs to be closely monitored, to ensure that the promises are truly actualised for the benefit of the people.

s part of the activities to mark their annual reunion, members of the Nigerian Navy Secondary School, Abeokuta (NNSSAB) 1996 set Ex-Boys Association on Sunday March 17, visited Hearts of Gold Children’s Hospice, in Surulere.

The children and minders of the home were all smiles as they glimpsed the Old Boys and their contributions which were presented in the form of staple food, groceries, clothing and toys.

The Chairman of the Association Femi Adekola who described his members as ideal citizens of the world, said the reason they came was because ‘We have a responsibility as a group in providing basic living amenities to the needy, especially children with special needs’, many of whom have been neglected by the society.

While been given a tour round the facility where they interacted with the children and their caregivers in their wards, the Founder and Proprietress of the hospice, Mrs. Laja

Adedoyin, took out time to narrate her motivation for relocating from the United Kingdom to begin the charity which provides care and emotional support to abandoned babies and young children with life limiting and life threatening conditions.

In a vote of thanks delivered by the Secretary General of NNSSAB class of 1996, Dr. IniAbasi Usoroh, the group expressed heartfelt appreciation to the founder and staff of the hospice for their diligence and fortitude in carrying out the mission to drive support and create a safe haven for the children. The Old Boys then treated the minders and some children of the Hospice to some a military-style parade and hearty cheers. A grateful Mrs. Adedoyin prayed for the Old Boys and invited them to the 15th anniversary of Hearts of Gold Children’s Hospice which takes place in December 2019.

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

96 Set of Navy Secondary School, Abeokuta, giving their hearty cheers while entertaining the hospice with a military-style parade

Thursday 21 February 2019

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Malls

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Companies

Deals

25

Spending Trends

Trade sector foreign investments pick up in 2018 …after three years of declining capital inflows Stories by BUNMI BAILEY

F

oreig n investments into the trade sector picked up in 2018 booking $131.6 million after a downward trend since 2015.

Capital importation report released by the National Bureau of Statistics (NBS) and analysed by BusinessDay showed that foreign investments declined to $55.7 million in 2017 from $385.6 million in 2014 but rose to $131.6 million in 2018.

Ayo Akinwunmi, head of research, FSDH Merchant Bank attributed the rise to the stability in the foreign exchange market in 2018.

“Throughout 2017, we saw a lot of devaluation and currency depreciation. And therefore when there is no

stability in your currency, people will not want to bring in their money,” Akinwunmi said.

Vivian Alozie, an equity research analyst at Capital Bancorp Plc said that the increase could be as result of a bit of confidence in the macroeconomic environment despite the election and slight moderation of the growth rate.

According to the NBS, the trade sector has been in recession since 2016.

It recorded three years of negative growth; -0.24 in 2016, -1.05 in 2017 and -0.63 in 2018.

Johnson Chukwu, CEO, Cowry Asset Management Limited said that the low purchasing power of consumers in the economy, lack of increment in the wages and salaries of workers and the bottlenecks in the importation of goods and ser-

Source: NBS vices were the reasons why the sector is still in recession The trade sector recorded low positive growth in

Maritels Limited, makers of Funq Yue seasoning rewards loyal customers

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aritels industries limited, makers of Funq Yue seasoning, recently rewarded their loyal customers to mark its 10th anniversary of the product launch in Nigeria.

In a ceremony held in Oke Arin market in Lagos Island and trade fair market were standby prizes of: tricycle (keke Marwa) deep freezers, electric fan, mini buses and the grand prize of a Toyota corolla car, which customers smiled home with.

Isaac Essien, general manager, Maritels Industries Limited, said the event was aimed at rewarding their loyal customers, as the company mark its 10th anniversary.

“Last year we ran a promo in commemoration of the anniversary. We slated today for the presentation. Today, we are here to keep our promises,” Essien said.

He said that a good number of customers participated in the promo, adding that for qualifying for the prizes, customers who bought 5,000 cartons of the season brand were entitled to get the corolla car while those with 3,000 cartons were entitled to get mini buses and 2000 cartons for tricycles.

He noted that same ceremony and gift items took place in the South East and South South zones few days before shifting to Lagos to appreciate their loyal customers in the South East

zone and South South zone.

Okpala Francisca, CEO, Maxfranc International, Trade Fair Complex and winner of the grand prize said her joy knew no bounds: “I am highly excited. It was not easy but for the grace of God. I sensed that would make it. On the 23rd of December we had a ghastly motor accident on Lagos or Ibadan expressway, it was really serious but to God be the glory, we all survived.

Today, Go has rewarded me with a beautiful car”.

Enendu Maduka Eugene, another winner and CEO of Nobleman ventures Oke Arin market was highly elated as he got reward of a mini bus at the ceremony held a day before trade fair presentation.

the third and fourth quarters of 2018, but the positive growth was not able to offset the negative growths

recorded in the first and second quarters of the year.

Insight from the NBS report showed that the

sector grew by 0.98 percent in the third quarter of 2018 and 1.0 percent in the fourth quarter after contracting by -2.14 percent and -2.57 percent in Q2 and Q1 respectively.

“There was a delayed impact of CBN’s intervention in the FX market. So we are now beginning to see the effect now. Dollar supply has improved for businesses generally. For example, there are some businesses in Nigeria that do not produce, they just buy from abroad and sell,” Ibrahim Tajudeem, head of research, Chapel Hill Denham said “So for those ones, a lot of them have been able to have access to FX because of CBN’s intervention in the market. It has begun to have positive impact in the economy,” Tajudeem added.

Kebbi, Delta, Ondo tops highest food inflation list for January 2019

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igeria’s food inflation (Food prices) on a yearon-year basis was the highest in Kebbi, Delta and Ondo states recording rates of 16.45 percent, 16.27 percent and 15.63 percent respectively, according to the National Bureau of Statistics (NBS) January 2019 food inflation report .

And on month- on -month basis however, January 2019 food inflation was highest in Delta having 2.73 percent, Kwara had 2.50 percent , and Ondo had 2.22 percent, while Anambra, Ekiti, Enugu, Imo, Nasarawa, Osun and Zamfara all recorded food price deflation or negative inflation (general decrease in the general price level of goods

and services or a negative) Additionally the general composite food index rose by 13.51 percent in January 2019 compared to 13.56 percent in December 2018.

Food items such as Fish, Bread and cereals, Vegetables, Meat, Fruits, Potatoes, yam and other tubers, oils and fats, soft drinks contributed to the rise in the food index On month-on-month basis, the food sub-index

increased by 0.83 percent in January 2019, up by 0.02percent points from 0.81 percent recorded in December 2018.

The average annual rate of change of the Food sub-index for the twelve-month period ending January 2019over the previous twelve-month average was 13.93 percent, 0.42 percent points from the average annual rate of change recorded in December 2018 (14.35) percent.

Coca -Cola Nigeria launches Limca Cola

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Okpala Francisca, CEO, Maxfranc International, Trade Fair Complex and winner of the grand prize.

oca-Cola Nigeria has announced the launch of Limca Cola, a new variant introduced to expand the footprint of the Limca range.

Limca Cola is a good quality sparkling soft drink with a unique cola taste to deliver refreshment to consumers on-the-go.

Commenting on the

new variant, Gbolahan Sanni, Franchise Marketing Manager, Coca-Cola Nigeria explains: “We are excited about the introduction of Limca Cola to the Nigerian market.

Limca Cola is a reaffirmation of our commitment to innovatively refreshing our consumers’ on-the-go with a good quality prod-

uct, unique cola taste at an affordable price.

Limca Cola gives the invigorating carbonated taste of Cola in 60cl PET bottles at the affordable price of N100 and is available in wholesale and retail outlets nationwide.

The Limca range is also available in Lemon-Lime, Bitter Lemon and Soda Water variants.

26

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Retail firms see a drop in profitability amid reduced consumers’ purchasing power OLUFIKAYO OWOEYE

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everal retail outlets in the country are worried about a decline in profitability the one not seen in years as they continue to grapple with several challenges undermining sales across the markets The slump in the purchase by consumers has escalated rapidly over the past year as the 13 largest listed consumer firms saw inventory turnover ratio fall to 2.27 times or 161 days on average in Q3 2018, from 4.50 times or 81.11 days in the corresponding period of 2017.

The figure stood at 3.09 times or 118.11 days in 2016 when a precipitous drop in crude oil price stocked dollar scarcity that paralysed business and tipped the country into its first recession since 1999.

Consumer goods firms are struggling to grow sales and bolster margins as Nigeria, with a population of 180 million people, has 87 million people nearly half its population in extreme poverty as high inflation environment continues to erode discretionary income.

Nigeria’s economy remains fragile as GDP grew by 1.80 percent in the third quarter of 2018, a downturn from 2.10 percent in the fourth quarter of 2017.

Inflation for the month of December stood at 11.44 percent, which is higher than the 11.28 percent figure for November 2017.

Recently, Shoprite, one of Africa’s biggest retail outlets, in a trading statement said it expects headline earnings per share (HEPS) including an adjustment for hyperinflation to fall by as much as 26 percent to 388.6-441.1 cents for the 26 weeks which ended on Dec. 30.

According to the statement, the outlet has seen a 17.24% fall in non-South Africa revenue for the quarter end-December and described it as a setback for the group, which has long seen its expansion into the rest of Africa as a major driver for its growth.

Consumer Goods giant, Unilever revealed that it reported a-lower-than-expected fourth-quarter sales as a result of flat volume growth in developed markets. While looking ahead 2019, Unilever said it expects the 2019 market condition to remain challenging.

The dwindling purchas-

ing power of Nigerian consumers means many manufacturers cannot spread the growing cost of production to consumers.

According to Emmanuel Asika, an equity research analyst said most Nigerians suffered significant erosion from naira devaluation and an increase in the price of fuel while wages are yet to be at par with inflationary consequences of those events.

“After the recession, a lot of middle-income class left the country in search of greener pastures, thus dampening sales volumes as patronage reduced,” he said.

Living under poverty line How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 8030814083

Bailey.oluwabunmi@businessdayonline.com

48 years old widow need help

C

hristiana Rufai is a 48 years old mother with six children, who has little or nothing to cater for herself and her children. She suffers verbal and psychological abuse from her husband’s relatives. Presently she sells pure water and soft drinks that she takes on credit from suppliers and pay later; right now she is in debt.

She is seeking for support to expand her business or go into a new line that can help to send her children to the highest level of education. It is through her every day hustle and struggles that she had a burn on her hand.

Rufai is a woman who needs help from the society to help put her children through school so as to eradicate poverty and illiteracy from the society.

Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous

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Thursday 21 February 2019

WhatsApp to sort status updates from contacts based on relevance

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hatsApp, a free and cross-platform messenger and voice over IP (VoIP) application is testing algorithm-driven Status listing with select users on Android and Windows platform.

The update will allow users to see status from the contacts they frequently interact with.

According to Mashable, a global, multi-platform media and entertainment company, WhatsApp is testing a new feature where the upcoming status feature is going to sort the updates based on whom the user interacts the most.

Whatsapp is already testing out this feature with a few iPhone users in India, Spain and Brazil.

Once, the test run is successful the instant messaging platform plans on rolling this feature out to Android and Windows user. This new algorithmic sorting will be determined through a variety factor like whose statuses you view frequently, whom you message frequently etc that WhatsApp will retain this information, collect it and send it out of WhatsApp’s servers.

Your preferences will be saved as a part of backups.

Algorithm-based sorting or changes have never been Facebook’s forte. Facebook has been often criticised for trying to change sorting preferences, whether it be on

Facebook or Instagram. So, it will be interesting to watch how Whatsapp users react to the upcoming changes.

Apart from algorithmdriven Status listing, WhatsApp is also going to bring advertisements to the section. The feature, however, may not be rolled out immediately.

“So for WhatsApp, we don’t have ads in Stories.

It’s not available. Ads are something that’s more of a future thing for WhatsApp. We remain much focused on the consumer experience there.

We do have the WhatsApp Business app, which is helping businesses connect with consumers, and that’s growing well but that monetisation opportunity is not available,” Facebook COO Sheryl Sandberg said last month.

Two years ago, Whatsapp launched its story-based status feature to stay ahead of its competitors. The instant messaging app copied the status feature from Snapchat. The Status feature on Whatsapp has grown in popularity, riding on the number of users on the messaging platform.

Currently, the status feature on Whatsapp shows updates from family, friends, and all contacts in the reverse chronological order with the most recent one showing first even the contacts you hardly interact with.

Thursday 21 February 2019

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27

BUSINESSTRAVEL Attaining the RTCE status has given NCAT visibility worldwide - Mohammed Abdulsalam Mohammed is the rector of the Nigerian College of Aviation Technology (NCAT) in Zaria. NCAT is Nigeria’s foremost aviation school. In this interview with Ifeoma Okeke, he speaks about the achievements of the college.

How many aircraft have you acquired in the past few months and what are your plans to improve on this? n the issue of aircraft acquisition, the approval we have from the government is to acquire 20 Diamond aircraft, five of which are the twoengine DA42 and 15 Assembly engine DA 40 aircraft. When I assumed office in 2017, we took delivery of one DA 42 aircraft in the April of 2017. The college placed orders for additional aircraft but we were informed by the contractors that the Diamond Aircraft Company was bought over by another company and that new owner decided to relocate the production place from Austria to Canada and they told us that they won’t be able to produce another aircraft until nine to 10 months, which is when the assembly line would have been completely relocated.

That is what affected the delivery of the additional aircraft because we asked for four additional DA 40 aircraft, which is what we have on order now. That company is up and running in Canada now and we expect to take delivery of those four DA 40 aircraft before the end of this year. We also have additional DA 40 aircraft that was given to the college by an insurance company as part from an insurance settlement. So, by the time we have the four aircraft delivered, we will have one DA 42 and five DA 40. As of today, we have eight aircraft that are serviceable.

NCAT was recently named as the Regional Training Centre of Excellence by the International Civil Aviation Organisation (ICAO), how has this impacted on your operations?

The Regional Training Centre of Excellence (RTCE) has given NCAT more visibility worldwide.

For instance, I was in China last December and a Chinese man asked me where I worked from and immediately I mentioned NCAT, he said ‘oh, RTCE’. There are just few RTCEs in the world and it takes a lot of efforts and process before any institution is recognised as an RTCE. Now, when you have this status, it affords you the opportunity to develop courses in all the ICAO Annexes. We can also import courses from any part of the world that are ICAO approved courses and conduct them here.

With RTCE, the sky is actually the limit for us as we can run any

O

Abdulsalam Mohammed

of Macdonald University with us in 2018 and it wants to set up an aircraft maintenance engineering school there and they have approached us for help in seeing this dream come to reality.

NCAT attempted to acquire a simulation aircraft, Boeing 737, how far has the institution gone with this process?

The initial plan for the Boeing 737 simulator aircraft was for it to be based in Lagos when the contract was awarded, but when this administration came into power, they took the decision to relocate it to Zaria. As we speak, the simulator is being installed in Zaria. So, when that decision was made, we had to move because the contract did not include the housing of the simulator. The contract was for ac-

‘

As part of our efforts to expand our client base and increase our Internally Generated Revenue (IGR), we have two teams, which are called Reach Teams to interact with the airlines and other industry players on their training needs

‘

course. Right now, we have some foreign students in the college; some from Cameroon, some from the Gambia who are doing training and we expect more.

I am supposed to meet with the representatives of the Western and Central African Region of ICAO. The countries that are in this region have headquarters in Dakar.

They have indicated interest in whatever NCAT is doing. I am supposed to have a meeting with them on the training opportunities here at the college. A lot of them that I met recently had this misconception that Zaria is insecure and that is the main reason they are reluctant to come. We have gone to great length to convince them that Zaria is totally safe. We have had a lot of foreigners come and go. Some of these people claimed that it is their embassies that tell them that Zaria is not safe, but we are making efforts to disabuse people’s minds in this regards.

What is your collaboration with Babcock University and other institutions in the country offering aviation courses?

We don’t have any collaboration with Babcock but we are making a lot of efforts to collaborate with some of the universities around. I just returned from Tunisia and I was actually asked to join the Bilateral Air Services Agreement (BASA) team between Nigeria and Tunisia, at the request of Tunisia. Tunisia wants a representative of NCAT to be part of the team because the country wants to collaborate with the institution.

So, we are making efforts on this issue. We had the Vice Chancellor

quisition and installation of Boeing 737simulator. So, we looked at our existing facilities; if they were adequate to house the simulator, but the simulator manufacturer after seeing the dimension, said the building was inadequate. When we looked at the cost of modifying and building another one to accommodate the simulator, so, we decided to make an arrangement to build a new complex that will house the simulator. So, we have to now start the process from the scratch; we have to get consultants, get the plan approved by the manufacturer before we could go forward. We had to go to the Federal Executive Council (FEC) for the contract to be awarded.

It was only last year that we got FEC approval for the building. We have awarded the contract and it is our belief that the building would be completed and the simulator would be installed this year.

The simulator has been constructed, but it is waiting for shipment; it is too big to enter a container. So, when they bring it in the counter, they won’t be able to cover it. So, if they bring it in and the building is not ready, it would be exposed to the elements and that is why the manufacturer advised us not to expose it until the building is ready. This simulator is very sensitive to temperature and humidity and all the parts were made by Boeing. We believe that the stimulator would be installed this year.

In addition, we also have another simulator that is being installed in Zaria this year. The simulator is for firemen. It is automatic fire simulator. As you may be aware, we have never had fire simulator in Nigeria in spite of the number of firemen that we have in this country, all these years, we have been sending our firemen to Cameroon for training. So, this administration felt it is more economical for us to have our own simulator here in Nigeria and this decision was taken to house it here because we have the land.

The simulator is being built in the United Kingdom.

There was an advert in the media recently where NCAT said it wants to commence Post Graduate Diploma (PGD) programme in aviation in Lagos. Can you throw more lights on this?

NCAT is not going to have a campus in Lagos; if you remember, this administration suspended all works for campuses outside Zaria for the college, rather, we

are concentrating on developing NCAT first before moving anywhere. We have a Memorandum of Understanding (MoU) with a sister organisation in Lagos that has training schools. We hope to use their training facilities and send the instructors to Lagos to conduct this.

As part of our efforts to expand our client base and increase our Internally Generated Revenue (IGR), we have two teams, which are called Reach Teams to interact with the airlines and other industry players on their training needs.

A lot of them showed interests in the courses that we are running here, but the major constraint is that they don’t want to leave Lagos. For these courses that we will be running outside Lagos, we intend to be running them on a regular basis. That way, we also have some aircraft engineers who have indicated interest in running some of these Higher National Diploma (HND) programmes that we have been accredited to do. They have indicated interest in pursuing those programmes.

So, you will be seeing some of these programmes being run out of Lagos in the near future.

What are the sustainability plans the school has for the RTCE? ICAO that gives you the RTCE status has a lot of expectations from you. There are a lot of things you have to do to retain the status and if you don’t do, they will yank it from you. One of such is that you have to develop an ICAO Training Package (ITP); we have to be able to train people from outside the country since it is for the region.

We are not a local organisation, but now a regional organisation.

During the certification process, you are required to develop a certain number of other training packages. The minimum requirement to qualify as an RTCE are three. It used to be one and we were the first to go to three when it was changed from one to three. At the time NCAT became an RTCE, we had developed six standard training packages and we hope to develop three additional packages before the end of this year.

Right now, we are about one of the institutions with the highest number of packages developed, which is what has been acknowledged by ICAO in their reports to the President of the Council.

There are lots of things that we are doing and we are up to the task of sustaining this RTCE status.

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Interview

Thursday 21 February 2019

‘Opportunity Network’s collaboration with Sterling Bank will impact Nigeria’s GDP’ Recently, Sterling Bank Plc, a Nigerian commercial bank unveiled a partnership with Opportunity Network, a business matchmaking platform with headquarters in Barcelona, offices in London and New York City and representatives in over 30 other countries. The partnership forms part of an effort by the bank to put its customers on a global platform and enhance their ability to do business in a collaborative manner with other investors across the globe.

Adriana de la Cruz Duffo, Opportunity Network’s Regional Director for Sub-Saharan Africa, in this interview, says the collaboration with Sterling Bank will help to grow Nigeria’s Gross Domestic Product (GDP) through the five key sectors of the economy already identified in the bank’s new business model.

The key sectors which will drive investments by the bank are health, education, agriculture, renewable energy and transportation (HEART).

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hat is Op portunity Network all about?

O p p o r tu n i t y Network is an exclusive deal matchmaking platform for vetted companies to share and connect to global trade opportunities, as well as strike reliable investment deals.

For instance, there are existing opportunities for any Nigerian company looking for an opportunity to export soya beans and other commodities, or any company looking for investment to grow. There are also deals for any company in tech, healthcare, education, oil and gas and any company in Nigeria looking for buyers, suppliers, distributors or clients of any sort.

Sterling Bank, as our partner, invites their business clients to the platform for them to publish their deals, looking for investment, partners or clients. Member companies in Nigeria can also search amongst the thousands of deals already posted by any of the global members on the platform.

Once someone connects to a deal posted on the platform, both parties will receive an email and then go into discussion privately to work out the details of the deal. It is not a transactional platform, it is just a deal match-making platform, so there are no intermediary or transactional fees on any deal concluded between two members.

What inspired the creation of Opportunity Network?

Opportunity Network started at Columbia Business School where Boston Consulting Group had sponsored Brian Pallas, Managing Director of Opportunity Network to do his MBA after spending two years at the firm in Milan. There, Pallas created a monthly newsletter where members of the Business School’s Family Business Club could anonymously list the business transactions they were interested in.

The idea grew very fast and Pallas decided to create a tech platform in order to allow it to grow. Since its formation in 2014, it has helped to solve important problems and there are huge opportunities for businesses all over the world.

Now, people don’t have to travel in order to find these opportunities anymore. Sometimes CEOs don’t have the knowledge of how to do business in new countries. As a business consultant, I have been in Nigeria for many years and helped European businesses succeed in the Nigerian economy. In many cases, the conversation starts with trust because some of those companies did not know how to do business in Nigeria or who to partner with.

Opportunity Network solves the trust issue. It bridges the cross border gap and it allows anyone in the world to be able to do business independently without the need to travel or with little knowledge about

a particular market.

What were the challenges at the beginning?

The initial challenge was the huge investment needed in technology to ensure scalability is a safe way, making sure that every single member on the platform was vetted properly and represented a trustworthy and reliable company. Many of our members run multimillion-dollar companies and are CEOs of some of the biggest companies in the world. They are looking for an opportunity to fund or raise millions of dollars. They are looking to sign important trade deals.

Also, the whole idea of matchmaking only works when there is a lot to choose from. Opportunity Network’s first joins where the family office club members at Columbia and then expanded to other family office clubs at Harvard and other leading schools.

The next step was to make the platform truly global so the CEO, Brian Pallas, decided to partner with banks who offered scalability and could introduce the best cor-

porate clients. Most importantly, banks have a Know Your Customer (KYC) process and can ensure that they meet our requirements. The banks help us to ensure that the clients that come on to the platform are trustworthy and reliable. At the end of the day, the more companies that come onto the platform, the more deals are posted, the more the connections and the more deals are closed.

What does this portend for African and Nigerian businesses?

The whole idea is to help companies do business with partners that are not often easy to access. I talked earlier about the challenges that investors face and how Opportunity Network bridges those gaps. When you are on Opportunity Network, you have immediate access to 18,000 CEOs and to thousands of deals posted from the comfort of your office.

European and American members for instance, are always asking us to partner with banks in regions where they have trouble entering.

Investors want to do business in

Nigeria but they do not know how to proceed and they know that if we bring Nigerian companies onto the platform, these will be reliable vetted clients of Sterling Bank for example, companies they can trust.

On the Nigerian side, I am personally involved because I have been here for many years and I know the possibilities and potential of Nigerian businesses and the opportunities they have on the platform.

Moreover, Opportunity Network’s mission is to help every country’s GDP growth through private sector development and most importantly to contribute to job creation. Is it our vision to create a hundred million jobs globall. If we help companies grow, these companies will employ more people, will partner with companies that will, in turn, hire people and all of these will eventually help the GDP of the country to grow.

Why are you partnering with Sterling Bank?

We are partnering with Sterling Bank because it is an innovative trustworthy bank that understands the benefits of using technology to help its customers grow. It is a bank

that is thriving on technology to improve performance and for example, recently launched a fantastic application for their customers.

Also, Sterling Bank’s growth strategy as a bank fits perfectly with our vision. It is one of the banks in Nigeria that is truly helping diversify the economy beyond oil and gas. The bank is supporting what they call the HEART sectors (Health, Education, Agriculture, Renewable energy and Transport) and these are five incredibly important sectors to grow the country’s GDP and create employment. They are also sectors that international investors are interested in even more than oil and gas.

Looking at your partnership with Sterling bank, what do you think is the potential for the Nigerian market and economy at large?

We are looking at bringing the first 200 selected Sterling Bank’s customers over the next few months and grow them. We are carefully selecting these companies across the different sectors that can truly impact the development of Nigeria and investors are interested in. Key companies in oil and gas, but also, agriculture, healthcare, education, transportation and renewable energy.

So what excites you about the future of Opportunity Network?

What excites me the most is to truly see a global economy impacted by technology. It is to see Opportunity Network being the enabler of all the best companies across sectors and geographies doing business through the platform and I believe we will achieve it. I believe that Opportunity Network will impact development, the GDP of the countries where we are actively operating and I believe we will able to create a hundred million jobs directly and indirectly in the next few years.

What has been your experience working with Nigerian businesses?

It has been mostly very positive. I came to Nigeria for the first time in 2012, and it was quite different, things have improved immensely over the last few years. I have been helping European companies do businesses in Nigeria across sectors, focusing mostly on a technology that could help and develop in different sectors and it has been an amazing experience.

In every single project, I have worked with Nigerians and I have always insisted on building Nigerian teams, not expat, to run those projects after I brought them in. I have had the chance to train junior teams of Nigerians in order to sell or continue growing the different companies and it has been a very pleasant experience. I think that there are so many misconceptions about Nigeria and I believe that it is a great country to do business in, as long as you do business with the right partners and that is where Opportunity Network comes in basically.

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

INSIDE FIDA encourages women to go to the polls on Saturday

Ahead of Saturday elections, NBA warns INEC to hold new date sacrosanct!

Theodora Kio-Lawson

30 CSNAC calls on EFCC to probe Ekiti Assembly aspirant for alleged financial crimes

30 84 female lawyers qualify for Stage 3 of Abimbola Akeredolu

32 Court to hear suit against FIRS spending on April 15

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s the new date for the national elections draw close, the Nigerian Bar Association (NBA) has warned the Independent National Electoral Commission (“INEC”) to uphold this scheduled date, following the sudden cancellation of last Saturday’s election only hours to the opening of polls.

In a statement signed by the president of the Bar, Paul Usoro, SAN, the body urged INEC to ensure that its preparations were foolproof and glitch-free.

It read, “Our democracy can only prosper and be strengthened if our electoral umpire does not give room for disputation of election results through sloppy arrangements and inadequate preparations. Our elections can only be adjudged free, fair and credible if INEC does not give room for speculations or concerns about its readiness and preparations for the elections.

“Nigerians can only have faith in the electoral process if, amongst others, there is no room for suppositions as to the motives – hidden, ulterior or unknown – of INEC for taking certain actions, including but not limited to the postponement of elections.”

The NBA President also noted the cost in man-hours; resources and inconveniences to the nation and to Nigerians, which according to him cannot be quantified not to mention the risk to personal safety.

Youth Corpers stranded at polling units last Saturday

“Worse, we run the risk that some who may have to return to their work stations early next week may not be able to travel again for the rescheduled polls next weekend. We read the INEC announcement and listened to its broadcast to hear how INEC intends to mitigate that possibility and nothing was said in that regard,” he said Describing the act of announcing the postponement only hours to the opening of the polls as “unkind”, the leader of the Nigerian Bar, further called on the electoral body to carry out its functions with discipline and foresightedness.

He said, “INEC needs to be reminded that a free, fair and credible

election starts with the preparations therefor by the Electoral Commission. If the Commission is unable to exercise its functions without avoidable glitches, it is difficult to see how it could justifiably impose sanctions on infracting political parties who give excuses for their infractions similar to the ones that INEC has given today for the postponement of the elections. Regulatory authorities such as INEC require discipline and foresightedness to carry out their functions. It is only by imbibing those twin virtues, amongst others and showing same by conduct that they can justifiably sanction infracting parties over whom they exercise regulatory control.”

In conclusion, Usoro urged Nigerians not to give up or tire out.

“We must give INEC the benefit of the doubt and turn out in our numbers to vote for the parties of our choice on the rescheduled dates for the elections i.e. 23 February 2019 and 09 March 2019. As the NBA pointed out in its 2019 New Year Message: “This is the year that we would decide both at the national and States levels how we wish to be governed and into whose hands we will entrust our affairs and lives . . . The decisions of our rulers directly impact and determine the course of our lives. It determines the quality of our lives, not only from an economic standpoint but also from our health, longevity and developmental standpoints.

Our decisions at the polls will determine the quality of life for ou youths and children from an educational prism as well as from the perspectives of employment and self-development opportunities.

The quality of rulers that we will vote into power this year will determine whether we move from a perennially consumptive economy into a productive and hopefully an industrialized economy; it would determine whether we would, in our lifetimes ever be assured of such basic necessities like pervasive energy supply and provision of potable water and primary health care for our citizens. The Elections of 2019 should and must therefore serve as a defining moment for our country.”

Quote from Africa Tech Summit in Kigali …As DOA, SAP, Farmcrowdy, others, lead discussions

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ith the advent of the information age and the unknown nature of new forms of investing vehicles and potential widespread interest, it has become important that the legal industry understands the dynamics of what is now being referred to as the gig economy as it relates to investments. The new forms of investments include equity crowdfunding, franchising, revenue agreements, bond issues, etc.

The major role of the lawyers in supporting their clients with non-traditional sources of investments is facilitating investment opportunities and ensuring smooth process of the transactions while also safeguarding the interests of clients by ensuring transparency and educating clients about the dynamics of their investment options.

Lawyers should also seek to provide capacity building support and value addition by ensuring that operational controls, management quality and capital sufficiency of their clients are set up in accordance with globally established standards.”

Adeleke Alex-Adedipe, partner, DOA, speaking on "Regulating for growth: Providing the appropriate legal framework for tech disruption in Africa" at the Africa Tech Summit

L-R, Adeleke Alex-Adedipe, partner, Duale, Ovia, Alex-Adedipe; Alice Namuli-Blazevic, partner, Katende Ssempebwa & Co Advocates, Uganda; Innocent Muhizi, CEO, Rwanda Information Society Authority; Kenneth Muhangi, partner, KTA Advocates, Uganda. Kenneth is an IP and TMT and dispute resolution lawyer. KTA is one of the co-founders of the TechHub, Kampala which provides legal and business support to the start-up community and Nankunda Katangaza, Co-founder Africa Legal Tech Network (ALT Network).

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he Africa Tech Summit which took place in Kigali, from February 13th – 15th 2019, provided insight and business opportunities for African and international tech leaders and investors who want to business in Africa.

The three-day Summit featured three tracks – The Future Summit, The Africa Start-up

Summit and The Creative Summit. Each of these tracks explored latest trends, whilst connecting 400+ digital leaders, tech corporates, MNO’s, banks, investors, regulators, start-ups, creatives media and leading tech ventures from across Africa over an actionpacked three days of insight, networking and entertainment.

The Future Summit delivered a cross-sectional view of new tech-

nologies, solutions and opportunities across the African mobile, digital and tech landscapes, while an array of keynotes, panels and breakout sessions from future thinkers, industry leaders and global corporates provided a future line of site to drive business forward. Agenda included amongst other things, FinTech, Legal Tech, Blockchain, Cloud & IOT, VR & AR, Mobility, etc.

The track for Africa Start-Ups was held in partnership with Disrupt Africa brought together stakeholders in the tech space across the continent to explore opportunities and challenges within the ecosystem, while showcasing investment opportunities. This track encouraged collaboration, with the aim of furthering the development of Africa’s vibrant entrepreneurship and innovation ecosystem while connecting investors, corporates and startups.

Bringing together key makers, marketers, communicators and creators who make content in a variety mediums and industries, for an itinerary of dynamic ses-

sions, the Creative Summit delivered spirited discussions from creative innovators, thought leaders, and experts.

Amongst those present at the 2019 summit were DOA Partner, Adeleke Alex-Adedipe; Dr Adriana Marais, theoretical physicist, Head of Innovation at SAP Africa; Justin Spratt, Head of Business Development at Uber (Sub-Saharan Africa); and Ifeanyi Anazodo, Co-Founder and VP of Product, Data & Intelligence at Farmcrowdy, Nigeria’s First Digital Agriculture platform; Tom Jackson Co-founder Disrupt Africa; and Nankunda Katangaza, Co-founder Africa Legal Tech Network (ALT Network).

Others were, Yele Bademosi, Founder & Managing Partner, Microtraction; Kola Aina, Founder and CEO, Ventures Platform; Kwame Acheampong, Head of Africa, MallforAfrica; Ron Kawamara, Uganda CEO Jumia; Gregoire de Padirac, Investment Manager Orange Digital Ventures Africa; and Ryno Rijnsburger, CTO Microsoft 4 Afrika.

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FIDA encourages women to go to the polls on Saturday …Advocates against voter apathy

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he International Federation of Women Lawyers (FIDA) Nigeria has called on all Nigerians particularly women to go out and vote on Saturday.

In a statement on Tuesday,

the group made a case for the participation of women in the upcoming elections, which according to them, translates to “empowerment.”

It read, “If we want the rights of women to be better protected in the law, then we

need more women to participate in the political process.

We salute the courage and confidence of the female political candidates and we encourage them not to be deterred by the occurences but to persevere to the end.”

The group urged INEV to create and maintain an enabling environment so that all Nigerians, particularly women and other vulnerable groups would have confidence in the process and come out to fully participate

in the elections.

“We encourage women to not only go out to vote but to be alert and report all infringements and cases of coting manipulations an ciolence in their localities,” FIDA adviced.

CSNAC calls on EFCC to probe Ekiti Assembly aspirant for alleged financial crimes

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he Economic and Financial Crimes Commission, (EFCC) has been asked to probe allegations of financial crimes said to have been committed by a House of Assembly aspirant in Ekiti State, Otunba Lekan Akinleye.

The candidate who seeks to be a lawmaker in Ekiti State Assembly was declared wanted by the London Metropolitan Police after he had jumped bail while awaiting trial for cross border crimes.

A petition by the Civil Society Network Against Corruption, (CSNAC), a coalition of over 150 civil right groups want the EFCC to investigate the grievous allegations.

The Chairman of CSNAC, Olanrewaju Suraju on behalf of the group stated that Nigerians deserve to know if the man they may elect as a lawmaker in Nigeria has

indeed flouted the legal provisions in England and other international conventions against illicit funds.

Akinleye was been accused of impersonating a business tycoon, Tony Woods alongside his wife, Mrs Stephanie Woods leading to his defrauding unsuspecting potential investors.

The money was said to run into hundreds of British pounds.

He was said to have been arrested on November 24 by the Paddington State Police in London.

Impeccable sources said Mr Akinleye jumped bail and reappeared in Nigeria where he now wants to emerge as one of Nigeria’s potential statesmen.

CSNAC said “We strongly believe that the above allegation is one deserving of thorough, immediate and urgent investigation; the citizens during every election period vote candidate they believe

to hold integrity, selflessness and honesty as virtues.”

The group’s said that the case

in point is very critical and fundamental to the choice to be made by the electorate in relation to the

forthcoming election adding that the public deserves the veracity or otherwise of the allegations in deciding who to vote into lawmaking chamber because voting a fraudulent or fugitive individual into power is a disaster waiting to befall the nation CSNAC said though the law presumes any allegation as a suspicion until the suspect is so proven guilty but that the electorate is anxious to see transparency and accountability actualized and due process deployed in investigating corruption and financial crimes.

It added “we hereby appeal that the EFCC uses its good office to ensure that this matter is properly, effectively and painstakingly investigated with the view to forestalling fraudulent and likely corrupt individuals from getting elected into positions of authority.”

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globalreport

India arbitration reform will restrict foreign lawyers

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former attorney general and now partner at an international law firm has urged India’s government to delay controversial amendments to the country’s arbitration law, arguing that the proposals ‘appear to prohibit foreign lawyers’.

In a speech in New Delhi, Lord Peter Goldsmith QC said changes contained in The Arbitration and Conciliation (Amendment) Bill 2018 could ‘set back the cause of Indian arbitration by many years, perhaps a generation.’ Goldsmith also took aim at India’s ‘notorious’ conservatism in opening its legal market.

Delivering the inaugural address at the 11th Annual International Arbitration Conclave in New Delhi on Saturday, Goldsmith said previous progress, including the Supreme Court ruling of March last year, had given hope that India could establish itself as a ‘leading hub’ or international arbitration.

But the drafting of the 2018 bill has put that under threat, he warned.

The relevant passage of the bill states: ‘A person shall not be qualified to be an arbitrator unless—(i) is an advocate within the meaning of the Advocates Act, 1961 having 10 years of practice experience as an advocate…’

The wording, according to Goldsmith, would ‘appear at a stroke to prohibit the appointment of foreign lawyers as arbitrators in Indian seated arbitrations. Because you would have to be an Indian advocate to qualify.’

Not only would this restrict for-

BUSINESS DAY

Beware of IP pitfalls in merger deals, law firm warns I

ntellectual property assets are being increasingly leveraged as a negotiating tool in mergers & acquisitions (M&A) but businesses should be careful they do not fall foul of competition law, an international firm’s annual bellwether has suggested.

According to the 2018 M&A trends report, produced by magic circle firm Clifford Chance,

last year for $245m (£189m).

‘Where prior ownership has made title to the IP unclear, obtain confirmatory assignments or protection before completing the deal,’ the report suggests. It adds: ’Gather evidence early to counter potential objections, e.g. to show that the parties’ data is replicable and non-unique and that the deal will not lead to anticompetitive withhold-

the rise of ‘data as an asset class’ means that some of the ‘most exciting’ deals today involve IP-rich businesses. However, the report warns that regulators are ’increasingly viewing IP and data-focused M&A deals with suspicion’ and that lawyers should ensure IP ownership is clear before companies try and reach a deal.

The report says antitrust (competition) regulators are beginning to show their teeth and a greater interest in smaller IP-driven deals when they have been ’historically permissive’.

The report analyses Uber’s acquisition of Otto, a startup specialising in technology for self-driving trucks.

Otto’s main founder, Anthony Levandowski, was a former engineer at Waymo, another autonomous driving company. Waymo alleged that Levandowski had misappropriated its IP and trade secrets and implemented that technology at Otto. The company subsequently sued Uber for infringement and ‘calculated theft’ of its self-driving technology but the case was settled in February

ing or bundling of IP. Where appropriate, develop tailored remedies that address concerns with minimum business disruption, e.g. access, interoperability or non-assertion commitments.’

Ling Ho, IP partner at Clifford Chance, said: ‘We are seeing more tactical ways of mobilising IP to engineer, structure and control a deal. Putting pressure on a business to get and test the best price, or take pole position in a competitive sale, can be a highly effective strategy.’

Overall there has been a slight drop (3%) in the number of deals completed in 2018 (around 16,000) compared with 2017.

However, the global value of deals increased by 12% to $3.5tn (£2.7tn).

According to the report cross border M&As comprised 38% of the total. The largest cross-regional M&A investment flows in 2018 were from North America into Europe – worth $238bn (£183bn) and Asia-Pacific into Europe – worth $213bn (£164bn).

13 stipulates that commercial sites and apps where users can ’post material’ must first obtain authorisation. But Reda, a member of the Pirate Party, which is against over-regulation of the internet, said this would mean having to ’pre-emptively buy licences for anything that users may possibly upload – that is: all copyrighted content in the world’. She described this an ‘impossible feat.’

Francine Cunningham, senior public affairs manager at in-

ternational firm Bird & Bird, said it would likely end up being the courts who decide whether platforms have made ‘best efforts’ to avoid copyright infringement and what ‘very short extracts’ are excluded from the new press publishers’ right under article 11.

Uploading protected works for purposes of quotation, criticism, caricature or parody has also been protected, according to the agreement.

Lord Peter Goldsmith

eign lawyers, it would also prohibit the appointment of many ‘experienced and able arbitrators’ including ships’ masters, architects and doctors, he warned.

The bill has passed the Lower House, the Lok Sabha, but has yet to be considered by the Rajya Sabha (Upper House).

Turning to the proposed relaxation of India’s legal market he added: ‘Why should anyone believe that will happen?

‘The conservatism of the Indian legal regulatory bodies in not allowing foreign legal professionals in is notorious. I first came to India nearly 25 years ago as chairman of the English Bar to argue for a relaxation of the rules on foreign lawyers practicing in India. Due to the opposition of some Indian professional legal bodies we are still waiting. So I do not hold my breath for the monopoly of arbitration appointments to Indian lawyers once given by statute to be easily given up.’

The bill also proposes that the Arbitration Council of India will regulate the practice of arbitration in the country. According to Goldsmith: ‘the idea that a government appointed body should regulate arbitration and arbitrators is anathema to the idea of free and autonomous arbitration.’ ’Having pushed the Sisyphean rock of Indian arbitration painfully step by step up the steep slope of international acceptability it [the amended bill] will release that boulder to plummet in free fall back down again.’

However he said: ‘It is not too late. There is a good chance that this bill will not pass before the election. It should be delayed so better advice can prevail and these pernicious elements removed.’

Goldsmith, a former chair of the Bar Council, is now chair of Asian and European litigation at international firm Debevoise & Plimpton.

EU copyright reform indicates let-off for news aggregators

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he European Parliament has agreed to sweeping reforms to copyright law, confirming a deal in principle on the European Copyright Directive.

The agreement is yet to be signed off but appears to offer a compromise to news aggregators who had feared they may have been penalised for displaying short snippets of news items from third parties.

However, one critic said the proposed changes could leave some commercial websites facing an ‘impossible feat’ to obtain licences.

In a notice yesterday, the European Parliament said trilogue discussions between the EU council, commission and parliament, had resulted in a deal. The reforms have been more than two years in the making.

The full text has not been published and still awaits final review from council representatives and the parliament’s plenary session.

The most controversial as-

31 BDLegalBusiness

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pects of the proposals were in articles 11, drafted to deal with the reproduction of news ‘snippets’ and article 13, which covered third party use of protected content on sharing websites.

Article 11 will now ensure that aggregators such as Google News can freely share ‘snippets’ of news articles, provided they do not ’abuse’ this right. The original proposals suggested they have to obtain a licence first.

‘The “snippet” can continue to appear in Google News newsfeeds or when an article is shared on Facebook, provided it is “very

short”’, a European Parliament statement on the reforms said.

Kathy Berry, professional support lawyer at magic circle firm Linklaters, said the amendment to article 11 may mean that news aggregators will not be required to change their business model and therefore the article ‘no longer has any real teeth’. ’If article 11 does not require news aggregators to compensate press publishers, it is not clear what it will, or is intended to, achieve in practice,’ she added.

In a statement on her website, MEP Julia Reda said article

-Law Society Gazette

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Court to hear suit against FIRS spending on April 15 Theodora Kio-Lawson

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ollowing an action brought by the trustees of Laws and Rights Awareness Initiative against the Federal Inland Revenue Service (FIRS), challenging its power to provide commercial sponsorship or support to entertainment concerts and shows, the Abuja Division of the Federal High Court on Tuesday February 19, 2019 adjourned hearing to Monday, April 15, 2019.

Entering an appearance before Justice Binta Nyako on Tuesday, Counsel to FIRS, Thihwi Dauda, raised an objection to the court’s jurisdiction to entertain the action, on the ground that the Plaintiff lacks locus standi to bring the action as it is not a taxpayer, by virtue of being exempt from companies income tax.

The defendant also argued that its sponsorship of concerts and entertainment events is permissible under the law for the purposes of promoting the payment of taxes by taxpayers.

In the originating summons filed by the plaintiff’s counsel, Olumide Babalola and Mofesomo Tayo-Oyetibo, the group alleged that the FIRS has been spon-

soring and supporting entertainment events and concerts, such as the Festival of Lights, Davido Live in Concert and King Coal in Concert, when it has no power to do so under the Federal Inland Revenue Service Act, as a result of

which it has acted beyond the scope of its powers under the Act. The plaintiff is asking the court for a declaration that it is ultra vires the FIRS and unlawful for it to defray any money towards the sponsorship or any other form of

support howsoever called, of concerts, entertainment shows or any other event howsoever called, which are not stipulated as part of the statutory expenditure of the FIRS under section 16 of the Federal Inland Revenue Service Act.

It also seeks an Order of injunction restraining the FIRS from defraying any amount towards any event not mentioned in section 16 of the Act or any other Act of the National Assembly.

The case will be heard on April 15, 2019.

84 female lawyers qualify for Stage 3 of Abimbola Akeredolu Courtroom Mail Prize

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ut of the 280 lawyers who registered for the Abimbola Akeredolu SAN Courtroom Mail Prize for female Lawyers, 185 answers were received and 84 participants emerged at the second stage of the quiz. They will proceed to the next state on Saturday 23rd of February.

According to the organisers, a total 102 correct answers were received out of the 185 answers. 18 answers were disqualified for not registering for the competition by answering the first question and/or for giving two different answers.

Participants who gave the same answer twice qualified in line with the rules of the competition released before Saturday.

The following questions were asked in last Saturday’s quiz: 1. Every public company shall within a period of …… months from the date of its incorporation, hold a general meeting of the

Abimbola Akeredolu, SAN

members of the company known as statutory meeting: A. 6months; B.12 months; C.15 months; D.18 months 2. Mr Kunle filed a case against

the Nigerian Police yesterday for violating his rights in 2010.He stated in his affidavit that he did not file it since 2010 because he did not have the funds to pay a

lawyer. The Counsel representing the Police has filed a notice of Preliminary objection challenging the suit that it has been affected by limitation statute. Considering the provision of limitation in the enforcement of fundamental human rights, how long does Kunle have under the law to institute his action? A. 6 YEARS; B. 3 YEARS; C. 10 YEARS; D. No LIMITATION 3. When there are before a court affidavits that are irreconcilably in conflict on crucial facts, the court shall for the purpose of resolving the conflicting affidavits arising from the affidavit evidence, ask the parties to: A. File a further and better affidavit; B. Address the court on points of law; C. Proffer oral evidence; D. To file a counter affidavit Answer to Question (1) is A: 6 MONTHS. Refer Section 211 of the Companies and Allied Matters Act. Answer to Question (2) is D: No Limitation. Refer to Order 3 Rule 1 of the Fundamental Rights enforcement Procedure Rules.

Answer to Question 3 is C: Proffer Oral Evidence. Refer to Section 116 of the Evidence Act The 83 Participants have qualified for the third stage coming up on Saturday 23rd of February at 8am. The first 30 contestants to post the correct answer will qualify for the grand finale.

A special notice has also been given to contestants to note that courtroommail operates on GMT. Therefore, a post made at 8:00am Nigerian time, will display 7:00am, which is GMT. Another point of note was the fact that questions on the site, are in some cases, scheduled. In other words, questions could be posted any day before the competition day but will not be visible to anyone until 8am when the quiz begins. When it becomes visible, it will bear the date it was scheduled.

Prospective participants have been asked to get ready for the Monday Ubani Prize, which will follow at the end of the Abimbola Akeredolu, SAN Prize.

Thursday 21 Febrauary 2019

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Law in tears?

Law scholar raises alarm, says Nigerians must vote out ‘Lego-Nihilism’ or Hitler would emerge IGNATIUS CHUKWU

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law scholar and researcher, has raised alarm, saying research has revealed that Nigeria is exactly at the take-off point of Hitler’s Germany when the judiciary was destroyed in the name of fighting corruption.

He has thus called for mass action through votes on Saturday to save Nigeria.

According to Cyprian EdwardEkpo, author of an upcoming book based on a research work, evidence shows a striking pattern with what happened in Germany during Hitler’s early days when anti-corruption was launched.

The author holds a doctorate degree in law and heads a law firm in Wuse, Abuja, called Law Icons Office. He is the Registrar, International Institute for Humanitarian $ Environmental Law; the Principal Partner/Dean of Research, MultiIntelligence Company (Legal Con-

PORT HARCOURT

BY BOAT

sultants & Administrators), Abuja, Nigeria; and the Proterm Director, Institute of Law Research and Development of United Nations, Washington DC, USA. Addressing newsmen in Port Harcourt, Rivers State capital, Wednesday evening, February 13, 2019, Edward-Ekpo said there is cause for alarm and fear in the land. He said the research has led to the book titled: ‘Law in Tears; Lego-Nihilism and the Systematic Decimation of Judicial Supremacy in Nigeria’.

His introduction says; “The book invokes a germinating experience of the present Nigeria, which, led by the persona-leadership eccentricity, tends to confound the base-approach of justice system and trammels judicial practice to fearsome prejudicial ideology that burry deeper and deeper the “inner morality of the law’, caging it into insensibility.

It is a legal literature that helps trace the socio-genetical linkages between power politics and legonihilism related to attack on the

judiciary; demonstrated by Nigeria’s experience of lego-nihilism – the octopus of Adolf Hitler’s Nazis phenomena – how the high effects of lego-nihilism undermine democratic principles and the Rule of Law in rendering judicial institution so incapacitated.

“The book also holds profound analytical revelations to concepts such as ‘law’, ‘inner morality of

the law’, ‘inherent functions of the court’, ‘judicial independence’, ‘judicial integrity’, ‘separation of power’, ‘judicial review’, ‘legonihilism’, and ‘judicial apocalypse’ amongst other conceptual belvederes.”

In his lamentations, the researcher insisted on the concept of the ‘supremacy of the judiciary’, wondering where the citizens would run to if the judiciary is destroyed. “I blame the Nigerian Bar Association (NBA) for devoting more energy to organise conferences than in developing the law.

Since the senate cannot impeach President Muhammadu Buhari, let Nigerians use this opportunity this Saturday to sack him”.

He said the present era is worse than the Sani Abacha era and made it clear that the Code of Conduct Tribunal (CCT) has no power to invite the Chief Justice of Nigeria (CJN). He warned that anarchy was around the corner when a man could be taken away from his wife. “Adolf Hitler started

with anti-corruption agenda, and used it to destroy the judiciary and other institutions of government that would have stopped him” On what to do, the researcher mentioned voting out the president on Saturday. He said the book has the solutions. He also suggested what he called peoples power through uprising as well as prosecuting presidents and governors that breached rule of law or committed contempt of court even after office.

He warned that if due process in law and rule of law are allowed to be subject to the whims and caprices of the president, anarchy would envelop the nation and evil would take over.

He said the first sign trouble was the arrest of judges at night, followed by a speech by the president at an NBA conference asking for arrest of senior advocates of Nigeria (SANs) that defended the judges. Now, he said, it is the turn of the highest judicial officer of the land.

How we die in Port Harcourt

...15 people killed by avoidable stampede in 2011 ...15 more killed last week same way ...Six allegedly killed in Onelga on eve of shifted elections ...Soot ensures gradual death for all by the year 2030 IGNATIUS CHUKWU

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he thing we seem best to do these years in Port Harcourt or Rivers State is to die, in fact, to kill ourselves. Last week, we killed some of our best 15, some of them very bright persons; about 12 women and three men.

How did we do it? We failed to carry out a simple and basic requirement of crowd control: to open the exits 20 minutes before end of a programme as said by experts familiar with international standards. This error or criminal negligence for which some persons ought to be in detention was committed at the presidential rally of the APC last week Tuesday at the 40,000-capacity Adokiye Amasiemaka Stadium in the mega-city section of Port Harcourt.

What makes it more unpardonable is that it was a grade ‘A’ rally, being a presidential event, which ought to attract the best hands in planning and crowd control. What they seemed to care for was security, which to us in Nigeria means loading the place with gun-totting and stern-looking security operatives whose duty is to show extreme wickedness and unforgiving spirit.

For instance, when we (journalists) went out to buy water, we were

never allowed to come in with it.

That, to them, is strict security, but safety nko? Nobody can say he saw signs of safety measures anywhere; such as how do people eat since you asked them to come by 8am, how do they enter safely and leave safely? If any person collapsed out of fatigue or exhaustion, how fast could he be rushed out to hospital? Which hospital actually was mandated to await such casualty, what treatment was in place to avoid what happened to surviving victims of the building collapse?

Now, cities or organisations learn by experience. That is why responsible countries conduct military exercises during which they test their response timing, deployment fluidity ratios, etc. PH had a taste and test of how stampedes occur and what to do in 2011 at the Liberation Stadium at Elekahia when then president, Goodluck Jonathan, visited and then Gov Chibuike Rotimi Amaechi was the strongest man around then, just as he was this time around. At that event, 15 persons died, mostly women, including a woman very close to Amaechi. They died due to failure to open the gates early. An inquiry was conducted and insiders said that the visiting security details from the presidency hijacked functions from the well-prepared and fa-

miliar home-based operatives as per ‘Abuja Boys’ and this led to only one gate being made open. Tragedy! After the inquiry, no lesson was learnt. The knowledge rested in between covers of files, the money sunk.

So, if we needed 15 heads to learn a simple lesson in 2011, why did we need another 15 heads to confirm the lesson in 2019? Who has been indicted, who has been blamed, or who shall be prosecuted? None! So, we will wait for another few years to kill another 15 to see if we are doing well? Pity!

Now, in the Omoku area of Rivers State, some six persons were reportedly shot dead on the eve of an election that did not even hold. More were waiting to be killed. Other whispers are being heard here and there. Some say bombing was to happen. This is nothing in these parts because election is war.

They will sign peace pledges and hug for photos but their instructions to their foot soldiers and their armouries are down and set. If the US and EU want to see hugs, they will see plenty of it, but the war plan is final. Killing to get power or retain it is biggest dividend of democracy for the masses. When a leader finishes his preparation, he is free to shout out loud against the opponent and divert attention, and then settle to do what he wanted. War songs go

‘

When a leader finishes his preparation, he is free to shout out loud against the opponent and divert attention, and then settle to do what he wanted

on and threats continue. Nothing will happen to those who do these things. If you die, you die. We attract one investment, we scare away 10.

Economy grows, even if backward.

Those who escape the bullets and bombs are still going to die, anyway, because if you escape ‘shoot’ you wont escape ‘soot’. The waters of most places in the state are poisoned to 900 degree above WHO rates. This permeates the soils and water base and poisons all plants and water sources. We drink eagerly to our good health in peril.

Now, ‘KPOfire’, the heating of crude oil into gas and condensate as a new illegitimate business waiting to become legitimate, is on show.

The boys burn crude all night and we inhale the soot all day. The lungs are no longer long, now blackened by the smoke from black gold. The foot soldiers make about N50k per day.

The poison eats our skin and bones through cancer; most persons are scratching, and hospitals are overflowing with cancer patients. It is silent and does not carry the staccato noise of guns, but it is a mass killer of epidemic proportions. In about 15 years to come, some say, it may be death to for all. This is the legacy this generation may bequeath to the next generation; if there will be a next generation, that is.

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Investing in Rivers State Industrialisation, seaports attract Rivers to Atiku Completion of N726Bn East West Road, revival of ports, job creation, industries, economic revival, to decide Rivers votes, says Wike Ignatius Chukwu

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he Rivers State government said the people of the state were in need of economic development and rapid industrial development. The state governor, Nyesom Wike, said in Port Harcourt on Monday, February 11, 2019, that infrastructure needed to develop the oil state was urgently needed and this would inform the choice of the next president. He also mentioned the need to revive the ports in Port Harcourt.

Thus, when over 100,000 persons gathered on Monday from the 23 local council areas in the state to the newest stadium in the state capital to listen to PDP Presidential Candidate, former Vice President Atiku Abubakar, they ended up endorsing the former VP. The Rivers People who took over the Adokiye Amiesimaka Stadium in Port Harcourt and its environs displayed several PDP campaign promotional materials, sang pro-Atiku and Pro-Wike songs to emphasise their preference . Governor Wike assured that Rivers people will vote for Atiku Abubakar. He said Rivers people believe in the capacity of Atiku Abubakar to develop the country.

Governor Wike said that PDP represents the light the country is craving for, while APC is neck deep in darkness. “PDP is light; PDP means freedom. Rivers people have chosen to vote light and freedom, hence all our votes are for the PDP. Rivers State is Atikulated”.

Governor Nyesom Wike

Former Rivers State Governor, Celestine Omehia, said the choice of Atiku as PDP presidential candidate was divine. He said God has chosen Atiku Abubakar to solve the problems of Nigeria.

Rivers State PDP Chairman, Felix Obuah said that Rivers people will vote 100 percent for Atiku . He said that rally is a rehearsal for the victory party after the election of Atiku as the President of the country.

Atiku Abubakar, in his address, assured that his incoming administration will address the infrastructural needs of Rivers State and the SouthSouth. He announced that the ports in Rivers State will be revived for the purpose of job creation, economic growth and the massive development

of the state.

The PDP Presidential Candidate noted that the incoming administration will complete the East-West Road started by the Obasanjo/Atiku administration, but abandoned by the failed APC Federal Government.

“APC has not done anything for Rivers State, South-South and the Niger Delta”. Atiku Abubakar vowed to protect the constitution, saying he will uphold the rule of law, separation of powers and checks and balances.

“I will protect the constitution. I will not interfere with the National Assembly because I believe in the Separation of Powers. I will not interfere with the judiciary because I believe in checks and balances. I will uphold the rule of law “, he said.

He condemned President Muhammadu Buhari for preaching violence in Zamfara State.

“We are not going to allow anyone to knock our heads and make us fight in this country. We want peace, we want development, we want jobs. We are not ready to fight ourselves again.

Any leader who has come to instigate to fight, we will use our ballot papers to throw them out. Buhari must go “, he said.

Atiku Abubakar described Governor Wike as a true leader and devoted politician who has transformed Rivers State and defended the survival of the PDP. Former President Goodluck Jonathan declared that Nigerians are working for the election of Atiku Abubakar because he has the capacity to lead the country out of its stagnation.

He said: “In 2015, I mentioned that the choice before Nigerians is either to move forward or backwards.

Within the past four years, all the indices of development, we have not made progress in any of them.

“I believe that you all know that as a nation, we cannot continue to stay where we are. We believe that the only person that can get us out of the woods, is Alhaji Atiku Abubakar”.

Jonathan said that Atiku will move Nigeria forward and will not discriminate against any section of the country. He said that Atiku will treat all geo-political zones fairly.

PDP Vice Presidential Candidate and Former Anambra State Governor , Mr Peter Obi said only Atiku Abubakar can restore the Niger Delta

because he believes in restructuring.

He noted that Atiku Abubakar will create jobs and make the country to start working again.

Senate President Bukola Saraki declared that Atiku Abubakar will develop Nigeria and drive away poverty. He urged Nigerians to defend their votes.

PDP National Chairman, Prince Uche Secondus said despite the desperation of the APC, Buhari is heading to a woeful defeat because of his failure in governance.

He, however, stated that the Rivers State Governor, Nyesom Ezenwo Wike on the strength of his performance, will be re-elected for a second term. Wife of the Presidential Candidate, Jennifer Atiku said Rivers people are fully Atikulated and would come out to vote Atiku Abubakar.

Sokoto State Governor, Aminu Tambuwal said that the North West Zone has resolved to vote out failed President Muhammadu Buhari because he promotes prison yard democracy and retrogression.

Highpoint of the occasion was the formal withdrawal from the governorship race by 57 Governorship Candidates who endorsed the re-election of Governor Wike. Spokesman of the Governorship Candidates, Pastor Samuel Ihunwo said that their decision was premised on the outstanding performance of Governor Wike.

Gov Wike received the Governorship Flag with the declaration that he will lead PDP to victory in the state.

Ace Musicians, Davido and Duncan Mighty thrilled the crowd with their songs.

NDDC to drive a new vision for Niger Delta – New boss

European Foods Market in PH coming up fast

he Acting Managing Director of the Niger Delta Development Commission (NDDC), the professor, Nelson Brambaifa, says the new dawn at the Commission is an opportunity to do things differently for the development of the Niger Delta region. Officials of the Rivers State government who seem to be versed in how governments operate with funds, have countered, saying the timing of release of funds must be for political missions.

Brambaifa spoke during a reception in honour of the NDDC Acting Executive Director Finance and Administration (EDFA), Chris Amadi, at the Palace of the chairman of Supreme Council of Ikwerre Traditional Rulers, the Eze, Blessing Wagor, Nye-Nwe Ali Isiokpo.

The NDDC CEO described the Acting Executive Director Finance and Administration as a worthy, brilliant and smart son of the Niger Delta region. “You can be sure that he would perform creditably in his new assignment,” he assured.

Responding, Amadi assured that the executive management led by Bambaifa would deliver faithfully on the mandate of the NDDC, stating that it would endeavor to enlist the support and cooperation of all stakeholders in the Niger Delta region.

The Acting EDFA stated that NDDC as a regional development agency had been undertaking development projects and programmes for the benefit of the people of the

he European Foods Market in the D-Line area of Port Harcourt, also called Fruits and Vegetables Market, is coming up fast, sending the owners of the over 600 burnt shops into steady jubilation. The market estimated at N15.3Bn was gutted by fire in the evening of September 27, 2018, by what was suspected to be electrical sparks. The public fire service was on strike.

The Rivers State governor, Nyesom Wike, picked up the challenge and rescued broken traders with N400,000 each to some and N300,000 support to each of 200 others and promised immediate rebuilding of the market to modern standards. True to his promise, he started construction of a world class fruits and vegetable market structure that has no wood nor inflammable materials in October 24.

The structure under intense construction has provision for four buildings (one storey each) and eight buildings (bungalow), designed to promote commercial activities, according to the Special Adviser to the Rivers State Governor on Special Projects, Dax George Kerley.

Other facilities in the market would include: 232 open stalls, 72 lock up shops, toilet blocks, car park, drainage, internal roads, a warehouse, generator, transformer, perimeter fence and a security

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region. He added: “I can assure Ikwerre people that we will do our best within the time available to ensure that everyone got their due.”

Amadi said that the NDDC Acting Managing Director had asked him to raise the issue of vandalized power infrastructure in Isiokpo at the next executive management meeting.

He assured that the light situation in Isiokpo and other Ikwerre communities would be treated with dispatch.

He said further: “We are requesting Ikwerre people to identify areas that require intervention from the NDDC as soon as possible, so as to assist us to ensure equitable distribution of infrastructural development across the region.

“The Acting MD is from Bayelsa State, the Ag. Executive Director Projects is from Delta State and I am from Rivers State. What that means is that we will ensure that no state in

Nelson Brambaifa, acting managing director of the Niger Delta Development Commission

the region is marginalized or short changed.”

Amadi said that as the new management team came on board, it realized that there were school desks and chairs that were already delivered to the NDDC for distribution to primary and secondary schools across the region.

Consequently, he said, the management directed the immediate distribution of the desks and chairs for schools in Rivers State. According to the EDFA, the first schools to benefit will be those in Akpor kingdom.

“We will continue in that vein to cover other communities in Rivers State since the Commission had already distributed the items in other states in the region.” He said.

Speaking on behalf of the Isiokpo kingdom, Eze Wagor, said the appointment of Amadi as NDDC EDFA was the first real “patronage” of an Isiokpo son since 1999. For this position of trust extended to our son, he declared: “We shall reciprocate and continually show appreciation and support to the Federal Government of Nigeria.”

The Eze appealed to the NDDC to step up infrastructural development in the Ikwerre Local Government Area. He particularly pleaded for the rehabilitation of the vandalized electricity supply to Isiopko from the national grid, noting that “the entire area has been without power supply for more than 18 months.”

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house.

When BusinessDay visited the site this week, workers were busy doing construction jobs despite the heat and frenzy of the elections.

One of the traders who lost shops and goods said they have remained grateful to the governor for his intervention.

He said the steady progress of work coupled with the financial support has restored their hopes in government business and in democracy. He however said they still believed that the governor would fulfill his promise to ensure that the actual shop owners would be the first to get allocations and without additional payment since they paid to acquire the burnt shops in the first.

It was gathered that the traders and nearby business community have since reached a secret pact amongst themselves to deliver block votes to a particular political party in all the elections.

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35

How Nigerian content creators are finding goldmine on YouTube CALEB OJEWALE

F

rom making videos on YouTube as a hobby to finding an avenue to augment meagre incomes, Nigerian content creators on the popular video sharing platform have now found what appears to be a goldmine. YouTubers as they are called have found a platform where they are paid for their creative efforts, but beyond this, one that has showcased them to a clientele base, sponsors and brands they never would have secured on their own.

At an event tagged Dinner with a YouTuber, BusinessDay got to interact with a couple of creators, who shared their success stories so far, their anticipations for the future, and the biggest limitations to recording more success.

These are young Nigerians, mostly below 30 and even the older ones still fall within the broad categorisation of Millennials.

“YouTube can make you a millionaire,” said Mark Angel, who runs Nigeria’s biggest YouTube channel with 715 million views and 3.5 million subscribers. “The same money musicians are making off their content, you can also make it on

YouTube,” he said in an interview.

The Mark Angel Channel was opened in 2013, with the intent of distributing his comedy content, and monetise while at it, having started content creation since 2011.

“We were creating content for free, with no one paying for it,” Mark recalled, before making the decision to launch on YouTube. At the time, he was in paid employment and using his salary to run the comedy production, but he says after researching on YouTube, he figured

it could be a means to start making money .

Is it safe to assume that as perhaps the biggest content creator in Nigeria, you get up to $10 million a month?

BusinessDay asked whimsically. “Not yet”, he said, “we are coming to that”. However, pressed a little further it slipped that there is a very good chance the content creator makes more than a million dollars every year.

But then, he is ahead of other content producers in Nigeria by a very long mile.

“The money I earned working 9 to 5 cannot be

compared to working as a YouTuber,” said Tobi Ayeni, described as Nigeria’s number one female tech blogger who has recorded 936,000 views and 10,000 subscribers on her Miss Techy channel.

Her first job paid N70,000 per month, and after probation became N100,000 but as a vlogger, she told BusinessDay she can make five times that amount. From unboxing reviews to app streaming battles and speed tests, she helps her audience make informed decisions in purchasing gadgets, par-

ticularly mobile devices.

Still a hobby for her, but it has also become a source of livelihood.

“I like talking, and YouTube gave me that platform,” said Adenike Adebayo, a US trained lawyer who has her own YouTube Channel with 3.3 million views and 20,000 subscribers. Adenike is a movie and lifestyle blogger who says she loves Nollywood movies. Through her platform, she engages and entertains her audience through movie reviews.

But, how commercially successful has she been as a YouTube creator, “It is commercially in progress,” was her response.

Akah Nnani, who runs the Akahbants channel is also looking to become more commericla, saying “this year I’ll get more serious”.

He is yet another example of the content creators using technology to distribute content in entertaining their audiences.

Dodos Uvieghara, started her IamDodos channel in 2015, where she shares her love of fashion, makeup and beauty with her 12,000 subscribers. Beyond the video platform, she has been able to attract clientele for herself in the film and fashion industry, as YouTube has offered a platform to showcase her talents to earn a living.

“There is a direct correlation between when I make a new video and customers showing up at my store,” said Dodos.

Eric Okafor, now a fullt i m e You Tu b e r hav i ng ditched paid employment, has 24,000 subscribers and 5.4 million views. He advised, “If you plan on ever doing YouTube fulltime, you have to start by retaining whatever it is that is making money for you”. This could be a day job, side hustle, or anything else.

As he explained, YouTube cannot start out as what a content creator will use to make money for a living, until he/she has reached a certain level where the platform starts paying a lot of money.

“Right now I feel what I get from YouTube is not enough, I mean, there is never enough, right?” Eric said, “But it is paying me enough money to sustain myself and pay all my bills.”

However, for content creators like Eric and even Mark to make more money, it was a common theme that; internet has to get cheaper and faster in Nigeria. In the next TechTalk article, this limitation will be explored and how it is limiting these millennials from digging dip into their newly found gold mine.

perhaps best of all, feels very light with its 151g weight. Its size (excluding camera) is 147.2 x 70.98 x 7.99mm, and including camera is 147.2 x 70.98 x 8.59mm.

It spots a Full-HD 5.8 inch screen with a display that is crisp and gives a great viewing experience when streaming a video.

Battery and Operations The Nokia 6.1 Plus has a 3060 mAh battery. Not the largest available in the market, but has so far not disappointed.

Officially, it is expected to deliver a maximum talk time of up to 20.5 hours, maximum standby time up to 14.5 days, music playback time up to 9.5 hours, and video playback time up to 9 hours.

Nokia 6.1 Plus review: a budget phone with impressive specs CALEB OJEWALE

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irst impression after taking the Nokia 6.1 Plus out of the box is a sleek looking device, designed without the bright coating around the edges spotted by some of its older siblings like the Nokia 7 plus. The phone can be described as a good attempt in offering a device in the budget Smartphone segment, with great specs at moderate pricing.

Both front and back of the phone is made of Glass, with the Corning Gorilla Glass 3, which provides more scratch resistance, reduced scratch visibility, and better-retained strength once a scratch occurs. The Nokia 6.1 Plus ships with Android 8.1 (Oreo) but on first use, was instantly upgraded to Android 9 (Pie).

Like other Nokia devices, the 6.1 Plus delivers the Android One experience to the user. This means no unnecessary apps, no hidden processes eating into the battery

life, no skins or UI changes.

According to Nokia, what is offered is “Just a clean, pure version of Android that stays secure with all the latest updates, powered by latest Google services”.

HMD and Google have a deal that makes current Nokia devices (and potentially future models) Android One devices. Being on the Android One program means users will get faster updates, as well as the same stock Android experience with no bloatware.

Since the phone comes without any bloatware — just Google apps — the software experience is stock Android (Pie), guaranteeing access to faster versions and security updates. Very important to note is that absence of bloatware implies there is a lot more space on the device for the user, to store more media, and get apps considered important.

In the box, one finds a basic packaging that comprises of;

• Nokia 6.1 Plus (of course) • 5V/2A charger • USB Type-C cable • Quick guide • SIM door key • He a d s e t ( p ro b ab l y shouldn’t have been includ-

ed as it is quite a letdown) Design and Display The Nokia 6.1 Plus like already said is sleek, and the reviewed unit, which was black, has a classy feel to it. It fits nicely into the palms, and

Camera The average Nigerian user is very particular about the camera their device offers and technically, the Nokia 6.1 Plus did not disappoint. It has dual cameras at its rear, with a primary camera of 16MP and the second camera of 5 MP. Its Front-facing camera, also called the selfie camera is 16MP. In terms of actual output, the cameras perform significantly well in environments with good lighting. However, in lowlight conditions, output may be disappointing, particularly indoors where the flash is not quite strong.

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

Storage and Performance With a CPU powered by Qualcomm Snapdragon 636, an internal memory of 64 GB and a 4GB RAM, the device packs enough punch for its market segment. It also has a MicroSD card slot, which can support up to 400 GB, or used for a second SIM card.

So far, the device runs smoothly and no lags have been experienced. Some other prospective users may be interested to know that the Nokia 6.1 Plus has FM radio, and well, this often comes in handy when stuck in traffic or one needs to get important news updates.

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TechTalk

CcHUB looks beyond Nigeria as it plans $11m tech investment in Rwanda …Launches state-of-the-art design lab FRANK ELEANYA

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o-creation Hub (CcHUB), one of the pioneering tech accelerators and incubators in Nigeria, is ready to become a continental force with the launch of its stateof-the-art design lab in Kigali, capital of Rwanda on Thursday.

The company has also set a target of $11 million investment in the Rwandan tech scene.

The lab is expected to be led by a multidisciplinary team of product designers and engineers who will collaborate with scientists and stakeholders globally, to explore the application of emerging technologies that will solve Africa’s systemic problems in public health, education, governance and the private sector.

It is the first time CcHUB is venturing beyond the Nigerian shores since it was founded eight years ago by Bosun Tijani.

In a countdown message on Twitter, the company suggested its choice of Rwanda, noting that the accelerated growth of the country rests heavily on the country’s competitive advantage in innovation through ICT to provide solutions for agricultural productivity, technology infrastructure, and openness to international trade.

Tijani the CEO of the company confirmed that choice of Rwanda was as a result of the ease of doing business in the country. CcHUB is also collaborating with the government of Rwanda which it said has an aligned vision.

“We’ve been building tech businesses alongside African en-

trepreneurs for almost a decade and in that time, we’ve identified a common challenge that businesses face when it comes to sustainable growth – Design and innovation,” says Tijani in a statement BusinessDay received.

“With the CcHUB Design Lab, we will be collaborating with organisations that may not have the capacity to design, build and innovate as quickly as leaner startups would.”

The lab will also leverage CcHUB’s extensive global and pan-African network of partners, research institutes and governmental organisations to execute practical design projects that will solve some of the social and business challenges in Africa at scale.

The statement disclosed that

CcHUB has built a community of over 13,000 technologists, entrepreneurs and thought-leaders, and has incubated and provided support to a portfolio of over 110 early stage ventures providing solutions to social problems with technology. Companies that have passed through its pre-incubation portfolio include digital blood bank, Lifebank; recycling venture, WeCyclers and Budgit, a web platform that simplifies the Nigerian budget and public data.

Paula Ingabire, minister of ICT and Innovation, Rwanda described the development as a landmark for the country’s growing tech community.

“Rwanda is keen on collaborating with world-class partners to establish ourselves as a lead-

ing destination that nurtures innovation-driven enterprises,” Ingabire said. “We see technology as an integral gateway and means of developing society. As we strive to become a knowledge-based economy, we will continue to build longlasting, strategic partnerships that celebrate excellence, forge ahead with progress and that are, essentially, a force for good that will impact thousands of people across the continent.”

As part of the launch, CcHUB will also announce the Rwanda Biomedical Centre as its first local company to partner, joining the likes of Go-Ga Lab, Nimcure and Safe Online.

The major focus areas for the Design Lab include the

public health; this involves collaboration with a cross-sector of stakeholders including scientists, researchers, health professionals and developers to use technology in accelerating the adoption of locally-created solutions for better detection and surveillance of diseases, and improving adherence to treatment.

It will also focus on improving students’ interests, participation and learning outcomes in STEM education, with attention paid to teaching methods and use of creative content. Finally, the lab will focus on the role of technology in helping the government promote participatory governance, transparency and more effective public services for social and economic prosperity.

• Investment: Visa continuously evaluates and invests in companies that have the potential to advance digital payments for its clients and their customers. Recent fintech investments globally have included Klarna, Paidy, Marqeta and PayStack in Nigeria.

• Partnership: Many payment platforms and fintechs are already collaborating with Visa globally to create new consumer and merchant experiences, including YellowPepper, NovoPayment, Stripe, Conductor, Flutterwave and Revolut.

• Engagement: Visa’s Everywhere Initiative, a global innovation program that tasks startups with solving some of the most challenging issues in payments and commerce, has been running in CEMEA since 2017.

In Sub-Saharan Africa, Visa will work with Global Technology Part-

ners (GTP), to design and enable turnkey end-to-end packaged solutions jointly for the Visa Fintech Fast Track program. The enterprise solution will include bin sponsorship, issuer processing services, acquirer QR code processing services and program management services.

Rich Bialek, CEO of GTP, said the company is excited to work with Visa to bring new digital products to banks and cardholders. According to him, Fintech companies in the CEMEA region are developing innovative solutions to meet the needs of this rapidly growing consumer base. By expanding the fast-track program to CEMEA, Visa and GTP will enable these companies to rapidly deliver new technologies and services to consumers, improving and expanding how commerce works in this dynamic market.

Visa announces Fintech Fast-Track Program in CEMEA CALEB OJEWALE

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isa Inc. has announced it is expanding its Fintech FastTrack Program in the Central and Eastern Europe, Middle East and Africa (CEMEA) region as part of its efforts in developing the next generation of digital payment solutions. Already rolled out in Europe, Latin America and Asia Pacific, the program according to Visa, provides innovative fintechs with a faster and easier integration process with VisaNet, Visa’s global network, in addition to a suite of tailored digital solutions and growth capabilities.

With the Visa Fast-Track program, fintechs based in CEMEA can now onboard to Visa’s global network in as little as four weeks. The program has been tailored to the needs of fintechs, adapting to their realities and

providing them with processes that are faster, which include reducing the number of on boarding conditions.

The program also links fintechs to platforms that are already certified by Visa and connects fintechs to sponsoring banks, providing fintechs with scaling opportunities through Visa’s global network.

Andrew Torre, regional president, CEMEA, Visa, described the payments ecosystem as one that is evolving at an unprecedented pace with some of the most exciting innovations coming from our region.

He said Visa is actively engaged with passionate, entrepreneurial communities to understand where synergies exist in order to foster and bring new experiences to life in a secure and scalable manner in its pursuit of a digital future.

“Our aim is to connect new players

and ideas with our network partners, so that we can deliver intuitive and relevant payment, banking and retail experiences to customers and merchants,” Torre said.

The Fintech Fast-Track program provides a new commercial framework that includes access to Visa’s payment capabilities, reduced fees and streamlined processes. After successful launches in Europe, Latin America and Asia Pacific in the second half of 2018, the program is now available to fintechs in CEMEA. Visa is inviting all innovative fintechs in the region to apply to the program by registering online through the program website – www.visa.com/ fintechcemea.

The Fast-Track program is one of several Visa initiatives designed to support fintech and startup companies. These include:

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BUSINESS DAY

Educational reform: ‘Make investment in Rwanda’s education infrastructure, digital minister in Edo to economy utmost understudy implementation

Banks’ staff rising by 1.8% in economy with 23.1% unemployment rate

he on-going reforms in the Edo State basic education sub-sector have attracted the attention of education managers in Rwanda, as the Minister of Education in the East African country arrives Benin City, Wednesday.

Special Adviser to Governor Godwin Obaseki, Crusoe Osagie, said “the Edo State Government is happy to play host to the Minister of Education of Rwanda, Dr. Eugene Mutimura, and share our modest achievements in the implementation of the Basic Education Sector Transformation (EDOBEST) programme, with our East African brothers.”

Osagie added: “The advancement in information and communication technology has turned the world into a global village where we can scan happenings and developments in other parts of the world for best practice, in order to improve on our systems.

“We feel proud that our work in Edo has caught the attention of the managers of education in Rwanda and we are happy to share our knowledge and experience with them.

“We are delighted at the positive feedback we are getting from all parts of the world with regard to Obaseki’s developmental strides in critical sectors such as education, job creation, youth empowerment and institutional reforms, amongst other areas.”

During the minister’s visit, he will pay a courtesy visit to the Edo State Governor, Godwin Obaseki, and visit Enikaro Primary school, in IkpobaOkha Local Government Area of the state, for an interactive luncheon with teaching staff, non-teaching staff, as well as field officers of the school.

HOPE MOSES-ASHIKE & MICHAEL ANI

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priority if voted in’

ANNA OMALE

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he chief executive officer of Jumia Nigeria, Juliet Anammah, has called on all the presidential candidates and those vying for the National Assembly seats in the 2019 general elections to prioritise investment in infrastructure development as well as promote bills that will foster the country’s digital economy, if voted in.

Anammah made the call against the background of how the outcome of the elections might impact e-Commerce businesses, considering that the industry has the potential of becoming a top contributor to the country’s GDP, which recorded a 1.90 percent growth in 2018, compared to 0.80 percent in 2017.

For Nigeria to win the race to achieving economic growth and its millennium development goals, she emphasised in a statement that huge investment must be committed to addressing the infrastructure deficits in the country, because the bulk of most business transactions - citing Jumia as an example - depends heavily on logistics.

“The outcome of the 2019 elections will have enormous impact on investment policies, debt management, public sector spending, security and governance reforms etc.,” she said.

She noted that one of the fundamental areas of the economy that needs urgent attention is infrastructure.

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he total number of banks’ staffs increased by 1.80 percent quarter-on -quarter (QoQ) to 104,669 in the fourth quarter (Q4) 2018 from 102,821in Q3 2018 according to the National Bureau of Statistics (NBS) on Wednesday.

This is seen by analysts in the financial services sector as a positive development considering the high unemployment rate in the country.

The unemployment rate has remained high at 23.10 per cent as at the third quarter of 2018, compared with 22.73 per cent during the previous quarter.

The increase in the number of bank staff in the quarter under review may not be unconnected with improved operating environment enabled by stable foreign exchange market and lower inflation rate, said Uche Uwaleke, professor of finance and capital

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ith the signing into law of the Federal Competition and Consumer Protection Bill this month, “The consumer has become king”, says the National Assembly Business Environment Roundtable (NASSBER), which has been at the forefront of ensuring the legislation becomes law.

The bill, which has been described as very important to many stakeholders who encourage competition and consumer protection as a tool to boost the Nigerian economy and the business environment, is expected to spur increased job creations and reduce poverty. According to NASSBER, competition between businesses has been shown to increase ef-

ficiency, expand consumer choices and influence pricing.

Laoye Jaiyeola, CEO, Nigerian Economic Summit Group (NESG), while speaking on the signing of the Federal bill, stated that based on global research evidence, the new Competition Act may result in a 10 percent reduction in prices in uncompetitive sectors and a 1 percent economywide price reduction, both of which manifests as an income effect.

For poor households especially, this implies 318,021 additional employment over 5 years, with average yearly job creation of 63,604 and total income effect estimated at an average of N148.30 billion annually; and N741.52 billion projection in 5 years. A resultant ef-

Saharan Africa has become the global leader in mobile money innovation, adoption, and usage, with close to 40 out of 45 sub-Saharan African countries actively using this new financial technology (FinTech).

IMF said technological innovation and infrastructure development can play key roles in allowing the continent to transform its demographic dividend into jobs, growth, and rising living standards for all.

“Real estate, education, and manufacturing sectors all are labour- intensive sectors that can absorb people,” Akinwunmi added.

An analysis by BusinessDay from the report indicated that Nigerian banks are cutting down on their top echelon workers but adding more to the numbers of both their junior and contract staffs, as they devise measures in countering high administrative cost that might weigh down their earnings.

Despite an overall increase in their staff numbers by 1.08 to 104,669 as at the December 2018, the strength of its executive staffs fell by 5.63 per cent to 210 from 213 in the previous quarter, with commercial banks executive staffs falling the most amongst others.

On the other hand, both contract staffs and junior staffs were up 1.69 per cent and 1.77 per cent, respectively in the quarter under review.

The combined staffs of both contract and junior were 86,349 in Q4 2018 from 84,879 in the last quarter, while those of both the executive and senior staffs was 18320 from 17942, according to latest NBS data.

Analysts say the reduction in top-heavy staff was aimed at reducing cost amid improvement in the level of technology as banks have realised they could maintain deposit levels with fewer locations in a digital age where customers often prefer banks’ mobile applications and ATM.

L-R: Funke Opeke, chief executive officer, MainOne; Niyi Ajao, Acting CEO, Nigeria Inter-Bank Settlement System (NIBSS); Abiola Ogunsakin, general manager, market development, Inlaks Limited; Adedayo Adesanya, lead consultant, Virtual Nigeria; Oluwole Oyeniran, West African systems and integration lead, Deloitte; Funto Olasemo, general manager, Infoware and Victor Okigbo, chief technology officer, FBN Quest, during the Cloud/Cybersecurity session at Nerds Unite 2019, MainOne’s annual Technology conference.

Federal competition, consumer protection bill expected to spur employment, reduce poverty CALEB OJEWALE

markets, and chair, banking and finance department at the Nasarawa State University Keffi, Nasarawa State.

A breakdown of the NBS report released on Wednesday shows that the Nigerian Deposit Money Banks (DMBs) employed a total of 197 executive staff in the sector in the Q4 2018.

Further breakdown reveals that commercial banks employed 171 executive staff, merchant banks 16 and noninterest banks 10 staff.

“Increase in the number of staff members in the banking industry is a positive development as this will help to reduce the unemployment rate in Nigerian,” Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited, said. More so, there have been reports of job losses in the financial services sector as a result of innovations in financial technology.

The International Monetary Fund (IMF) said on February 14, 2019 that sub-

fect may induce decrease in poverty, higher employment rates, and lower prices may precipitate an 11.8 percent reduction in relative poverty within 5years.

As noted by NASSBER, as Nigeria strives towards achieving a diversified private sector-led economy, it became essential to have effective legislation that encourages and regulates competition. The bill will create an opportunity for relatively small businesses to compete and thrive in the markets alongside the larger ones.

According to the Economic Impact Assessment Report developed by NASSBER, competition law and policy is based on clear insights from economic history that public interest is best served by free competition in trade and industry.

NCAA to sanction telecoms operators over N1bn debt IFEOMA OKEKE

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he Nigerian Civil Aviation Authority (NCAA) has threatened to sanction operators of Global System for Mobile Communications (GSM) over one billion naira debts owed it by them.

The GSM operators in the country jointly owe NCAA over N1bn in the past few years, which they have refused to remit to the regulatory agency despite several warnings.

BusinessDay gathered that Muhtar Usman, the director-general, was uncomfortable with the huge debts owed to the agency and had written numerous letters to all the GSM operators, but to no avail. This prompted a meeting between the agency and the GSM operators through its umbrella body,

Association of Licensed Telecommunications operators of Nigeria (ALTON).

A statement yesterday by Sam Adurogboye, General Manager, Public Affairs at NCAA, warned that GSM operators with arrears of payments should endeavour to remit such without further delay to avoid sanction.

The statement hinted that Usman had called on all telecom operators who were yet to remit their outstanding payments to NCAA to do so without further delay.

It said that under the Nigerian Civil Aviation Authority (Establishment) Act, Section 7(1) (n), the NCAA was empowered to prohibit and regulate the installation of any structure, which by virtue of its height or position was considered a danger the safety of air navigation.

He emphasised that

pursuant to the above provision, NCAA required an Aviation Height Clearance (AHC) approval for every high-rise structure, mast, tower installation, irrespective of the height and location.

According to the Nigerian Civil Aviation Regulations (Nig.CARs) Part 12.1.7.1.11, ‘the AHC shall remain in force for a period of one year when it shall be due for renewal unless suspended or cancelled by the authority.”

“Similarly, the holder of an AHC certificate shall ensure proper records of AHC granted to it and the renewal of the AHC at least 30 days to the expiry date.”

He stated that the warning from NCAA prompted a call for a meeting with it by ALTON in order to resolve certain perceived grey areas.

38 BUSINESS DAY NEWS States pump N251bn into non-viable...

Continued from page 1 of N251 billion on establishing

largely non-viable airports.

For instance, Bayelsa State spent N60 billion, Akwa Ibom (N20 billion), Delta and Jigawa (N17 billion each), and Bauchi and Kebbi spent N15 billion each on airport projects which stakeholders say have done little or nothing to improve their economies.

Also, Ogun, Ekiti, Abia, and Nasarawa States have proposed to spend N20 billion each in building and completing new international or cargo airports, while Osun has proposed N15.5 billion and Zamfara has proposed N12 billion for a similar project.

Anambra State in South Eastern Ni-

geria also plans a $2 billion (N720bn) cargo airport. However, the state government says a private company, Elite International Investments, will provide all funds under a build, operate, manage and transfer agreement.

Bayelsa State is the latest subnational entity to gleefully launch an airport.

Last week, Seriake Dickson, Bayelsa State governor, opened the Bayelsa International Airport, which he said gulped N60 billion.

Aviation analysts have said huge investments such as this are a misallocation of public resources and should have been invested in basic infrastructure such as roads, schools, housing and health care, amongst others.

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BusinessDay checks show that up till now, the government of Bayelsa State has failed to provide basic housing and potable water for its communities, so residents rely on personal boreholes or water vendors.

An average borehole and tank stand, BusinessDay checks show, will cost between N200,000 and N250,000.

Bayelsa State will require about 600 boreholes to cater for a good number of its citizens. Therefore, it will require between N120 million and N150 million to provide potable water for communities in Bayelsa.

If the N60 billion was channelled to housing, the government can provide a minimum of 12,000 low-cost housing units for the citizens of Bayelsa at the rate of N5 million per unit, BusinessDay analysis shows. This, to a reasonable extent, will have taken

INEC election materials being loaded into a lorry to be taken to different polling units ahead of the coming election, Lafia, Nasarawa State.

Pic by Tunde Adeniyi

Political desperation, fiery rhetoric...

Continued from page 1

transparent and credible election.

But no, the parties and leading candidates, including the president, are doing the exact opposite.

They have been showing unusual desperation in the way they accuse each other and the electoral umpire, the Independent National Electoral Commission (INEC), of attempts to rig the elections. They have also engaged in unusually fierce and belligerent rhetoric which is heating up the polity and increasing the likelihood of voter apathy.

The bigger picture, which has escaped all the parties and candidates in their desperation to win the election, is the negative image they are giving the country. The accusations and counter-accusations and the impugning of the integrity of the umpire is showing Nigeria to the world as a country without mature institutions and one that cannot be trusted to carry out a routine task as simple as conducting elections.

INEC had on February 16, few hours to the commencement of voting, announced the postponement of the elections by one week due to what it said were logistics and operational difficulties and also subtly hinted at sabotage. Many INEC personnel in some states confided in journalists that there was practically no way elections could have held simultaneously in all parts of the country due to the late or even non-arrival of sensitive election materials in some states.

Investigations by a national daily also showed that the postponement of the polls late in the day was a result of late ordering of the production of some sensitive electoral materials due to the plethora of court cases,

their late arrival to the country, lack of capacity on the part of the Nigerian Air Force to evacuate them on time, poor weather conditions in some parts of the country, the mysterious setting ablaze of sensitive electoral materials in some states, and the movement of presidential aircraft necessitating the closure of some airports.

Almost immediately, the two main political parties began trading blames, accusing INEC of working in concert with the other to disrupt or rig the polls. But while the opposition PDP had gradually warmed up to the reasons given by INEC for postponing the polls and is showing more understanding with the electoral umpire, the ruling APC has doubled down, accusing INEC of playing the script of the opposition PDP and even threatening to boycott the elections in about three states (Abia, Akwa-Ibom and Cross River) unless the resident electoral commissioners are changed.

Adams Oshiomhole, APC national chair, insisted that INEC must be prevailed upon to immediately reshuffle state RECs, whom he alleged had been compromised. Oshiomhole went as far as accusing INEC of alerting the PDP of the intending postponement of the elections even before it was announced.

The APC found an ally in President Muhammadu Buhari, its presidential candidate. The 76-year-old on Monday could barely conceal his irritation with the electoral umpire for postponing an election that was only six hours away.

In further making the point that he would not allow anyone rig the elections, the former military ruler ordered the military and police to administer jungle justice on election riggers or those who may want to

snatch ballot box.

The president did not mind that his orders contravened the provisions of the constitution for a fair trial for all accused persons, the Electoral Act that stipulates only a two-year jail term for convicted ballot-box snatchers, and INEC’s guidelines that prohibit all security agencies, including the army and police, from shooting at polling booths.

Many fear that with this carte blanche, the military and police could be influential in the election as they could lend themselves to the services of politicians to instigate violence, thus suppressing voter turnout.

The PDP, on its part, has accused the ruling APC of deliberately sabotaging the election and wanting the electoral body to proceed with the elections in spite of the fact that elections would not be taking place in all states of the federation. Uche Secondus, its chairman, alleged that having failed in scuttling the elections by burning down INEC offices in some states and destroying electoral materials to create artificial problems, the ruling party “had to force INEC to agree to a shift in the election or a staggered election” like it did in Osun State, which could give room for voter suppression and result manipulation in the rerun election.

Just on Tuesday, Atiku Abubakar, PDP presidential candidate, accused the APC of training operatives in China to hack INEC’s smart card readers to slow them down in key opposition strongholds while allowing them to work faster in the ruling party’s strongholds.

The smart card reader is an innovation introduced by INEC during the 2015 elections and is used to authenticate the permanent voter cards without which a voter won’t be allowed to cast his/her votes.

care of housing challenges in the state.

“Potable water, health care and housing are the basic challenges in Bayelsa State. The people of Bayelsa are not pleased that the government can invest such huge sum to the construction of an airport, which is reserved for the few rich people in the state,” Essien Bassey, a resident in Bayelsa, told BusinessDay. Experts argue that the viability of these multi-billion naira projects remains questionable, considering passenger and aircraft traffic originating and terminating from them.

John Ojikutu, aviation security consultant and secretary-general of the Aviation Safety Round Table Initiative (ASRTI), told BusinessDay that the first thing to look at before constructing any airport is the passenger traffic around the airports that surround the prospective airport.

Ojikutu further explained that Osubi airstrip in Warri and Port Harcourt International Airport, which are around Bayelsa, do not generate as much traffic when compared to Lagos and Abuja airports.

“Bayelsa does not require an international airport because passenger traffic at Port Harcourt airport is not up to 1.5 million annually and that of Osubi is about 500. Passenger traffic between Rivers, Bayelsa and part of Delta annually is in the region of 2 million, so why waste resources that should have been channelled to providing health care and water, which are missing in Bayelsa?” Ojikutu said.

“Anambra State is also building an airport. Anambra is close to Asaba and Enugu, which both process less than 2 million passengers annually.

These airports have no benefit rather than political ego. Total air traffic passengers across all airports in Nigeria are less than 16 million. Johannesburg airport alone manages 22 million passengers. Lagos alone barely takes 10 million passengers, followed by Abuja. Other airports are just complementary,” he argued.

Thursday 21 February 2019

The states, however, argue that the existence of such facilities in their domains would help to stimulate socio-economic activities. They believe airports would shore up business activities and attract investments, adding that the existence of airports will enhance the creation of hubs to facilitate export of agricultural produce from the hinterlands to urban centres.

But Tayo Ojuri, an aviation consultant and CEO, Aglow Aviation Support Services, said although Bayelsa has a lot of opportunities for tourism and oil and gas businesses to thrive, what matters is how the airport is put to use.

“After investing so much in the construction of an airport, it will be a shame not to put the facilities to use as a result of low passenger traffic in and out of the airport,” Ojuri said.

The Asaba airport, for instance, has not been put to optimal use. A few airlines, including Arik Air, Aero and Overland Airways, were flying into the airport before it was downgraded by the Nigerian Civil Aviation Authority (NCAA).

The Akwa Ibom Airport in Uyo was completed a few years ago. The airport has relatively been unviable as only a few airlines, including Arik Air, and now Ibom Air, operate flights into it. The maintenance repair centre proposed for the Uyo airport has not been achieved.

In the Northwest, the Dutse airport in Jigawa, built by the administration of former Governor Sule Lamido for N15.5 billion, remains one of the nonviable terminals in the country. Its closeness to Yobe, Bauchi and Kano States has not attracted the envisaged patronage for the new airport which is only serviced by Overland Airways.

With skeletal flight services between Abuja and Dutse, the state capital, the dream of facilitating agro-allied exports from the airport remains largely a pipe one.

FIRS’ searchlight on 2,933 companies’ bank...

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banks to suspend its lien on bank accounts of alleged tax defaulters for a periodof30dayswithimmediateeffect.

The FIRS had recently directed banks to place a lien on the bank accounts of a number of taxpayers for alleged non-paymentoftaxes.Thisexercisehad resulted in hardships for many businesses, including some tax-compliant businesses, within the period. This attracted comments from many tax experts, particularly those at Andersen Tax, KPMG Nigeria, and PwC Nigeria.

In a chameleonic move, FIRS in its letter dated February 15, 2019 noted that the suspension of the lien was due to the large numbers of taxpayers visiting FIRS offices for reconciliation and the resulting inconvenience.

“There are key questions regarding the powers of the FIRS to place a lien on a taxpayer’s bank account and the lack of due process in doing so in many cases. We are of the view that the substitution power granted the FIRS under the relevant laws does not support the freezing of bank accounts in the way and manner the power is being exercised by the FIRS,” said PwC Nigeria.

“Based on the letter written by the FIRS, taxpayers whose bank accounts were previously frozen pursuant to FIRS’ directive would now be able to access their accounts for a period of 30 days,” said Andersen Tax. “Notwithstanding the controversies regarding the powers of the FIRS to freeze taxpayers’ bank accounts and the silence on whether such bank accounts would be frozen after the suspension, affected taxpayers should take advantage of the next 30 days to resolve their outstanding tax issues

relating to pending assessments. They are also advised to engage their consultants and regularise their tax positions to avoid similar hardships on their businesses after the said period,” it said.

KPMGNigeriaexpectsthattheFIRS will use the opportunity of the break to refine the process of exercising its statutory power of substitution in a manner that respects taxpayers’ rights and ensuresthatthesanctityofbank-customer relationship is not jeopardised.

“Doing this will repair any damage that might have been done, and thereby revamp the credibility of the Nigerian tax system and restore investors’ confidence in the economy.

This is a welcome development as the suspension should allow the banks to notify their customers of the directive so that they can engage with the FIRS to resolve their outstanding tax issues, and enable a positive outcome for all the parties,” KPMG Nigeria noted.

“While it is doubtful that the 30-day window would be sufficient to resolve the disputes involving the acknowledged large number of affected taxpayers, it is a positive response by the FIRS to complaints from taxpayers and other stakeholders, and a demonstration of its willingness to engage with them when occasions demand,” it further noted.

It will be recalled that the FIRS had in August 2018 directed banks to freeze the accounts of defaulting taxpayers to prevent them from drawing funds, and lately the Service appointed agent banks for collection of taxes due from alleged tax defaulters.

•Continues online at www.businessday.ng

Thursday 21 February 2019

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FG cautions int’l community on interference as INEC restates readiness for rescheduled polls ...Police threaten ballot box snatchers, other electoral offenders with severe penalty INNOCENT ODOH, Abuja

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he Federal Government on Wednesday advised members of the International Community to respect the sovereignty of Nigeria by not doing anything that will suggest interference in its electoral process as the country goes to the rescheduled Presidential and National Assembly polls on Saturday.

Foreign Affairs Minister, Geoffrey Onyeama, gave this advice during an interactive session with members of the Diplomatic Corps in Abuja on Wednesday. Onyema said that while Nigeria welcomes partnership and support from the international community, the country will not allow its sovereignty to be

compromised and neither would it allow any nation to dictate to it since it does not interfere in the internal affairs of other nations.

“We welcome very much your engagement, we appreciate your support, we acknowledge how important your engagement for us in 2015 helped us to deliver probably one of the most free and credible elections we have had in this country for a very long time.

“But we have cause to be concerned with the way the engagement has been communicated because at the end of the day, we are a sovereign country, the line should not be crossed from exalting us and wanting this to succeed and really be a democratic process to dictating to us and getting to the nitty gritty of

how we run the country”, he added.

Onyeama also admonished the International Community, particularly election observers, to carry out their function with impartiality, stressing that they should not show preference for any candidate or political party in the election.

He disclosed that the briefing which was organised by the Ministry of Foreign Affairs in conjunction with the Independent National Electoral Commission ( INEC) was aimed at engaging with friends and partners of Nigeria on the rescheduled election and together proffer solutions to some of the challenges to a hitch-free election.

He however, expressed dismay that despite government’s huge support to INEC,

providing all it requested for on time and never interferring in its operations, the administration was disappointment that INEC had to postpone the election by one week, citing logistics challenges.

“It is absolutely important for the message to be communicated that the government is extremely dissappointed and just cannot understand why after three and a half years, we still are unable to deliver the process on time”, Onyeama told the foreign envoys.

He therefore called on INEC to ensure that the rescheduled election unfailingly holds, come Saturday February 23. “We will not accept any excuses or any other reason, the election must be held on Saturday. Nothing else would be acceptable to government”, he added.

L-R: ijeoma Ude, Advert manager, BusinessDay; Oghenevwoke Ighure, executive director, strategy and partnership, BusinessDay; Abosede Alimi, director of strategy, funding and stakeholder management, Lagos State Employment Trust Fund (LSETF); Frank Aigbogun, publisher/CEO, BusinessDay; Akin Oyebode, executive secretary, LSETF; Adeola Ajewole, general manager, adverts, BusinessDay, and Odion Aleobua, CEO, Modion Communications, during a courtesy visit by BusinessDay to the LSETF head office in Lagos.

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39 NEWS

BUSINESS DAY

WHO says spending on health increases faster than rest of global economy ANTHONIA OBOKOH, wire report

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pending on health is growing faster than the rest of the global economy, accounting for 10percent of global gross domestic product (GDP). A new report on global health expenditure from the World Health Organisation (WHO) reveals a swift upward trajectory of global health spending, which is particularly noticeable in low- and middle-income countries where health spending is growing on average 6% annually, compared with 4 percent in high-income countries.

Health spending is made up of government expenditure, out-of-pocket payments (people paying for their own care), and sources such as voluntary health insurance, employerprovided health programmes, and activities by non-governmental organisations.

Governments provide an average of 51 percent of a country’s health spending, while more than 35 percent of health spending per country comes from out-of-pocket expenses.

The report highlights a trend of increasing domestic public funding for health in low- and middle-income countries and declining external funding in middle-income countries. Reliance on out-ofpocket expenses is declining around the world, albeit slowly.

“Increased domestic spending is essential for achieving universal health coverage and the health-related Sustainable Development Goals,” said Tedros Adhanom Ghebreyesus, WHO DirectorGeneral. “But health spending is not a cost, it’s an investment in poverty reduction, jobs, productivity, inclusive economic growth, and healthier, safer, fairer societies.”

In middle-income countries, government health ex-

penditure per capita has doubled since the year 2000. On average, governments spend US$60 per person on health in lower-middle income countries and close to US$270 per person in upper-middle income countries.

When government spending on health increases, people are less likely to fall into poverty seeking health services. But government spending only reduces inequities in access when allocations are carefully planned to ensure that the entire population can obtain primary health care.

In low- and middle-income countries, new data suggest that more than half of health spending is devoted to primary health care. Yet less than 40% of all spending on primary health care comes from governments.

“All WHO’s 194 Member States recognised the importance of primary health care in their adoption of the Declaration of Astana last October,” said Agnes Soucat. “Now they need to act on that declaration and prioritize spending on quality healthcare in the community.”The report also examines the role of external funding. As domestic spending increases, the proportion of funding provided by external aid has dropped to less than 1% of global health expenditure.

Almost half of these external funds are devoted to three diseases – HIV/AIDS, Tuberculosis (TB) and malaria.

While the report clearly illustrates the transition of middle-income countries to domestic funding of health systems, external aid remains essential to many countries, particularly low-income countries.

The new WHO report points to ways that policymakers, health professionals and citizens alike can continue to strengthen health systems.

FG grants APM Terminals Apapa approval to engage female staff in night shift INEC under pressure to replace EOs with APC members - PDP AMAKA ANAGOR-EWUZIE

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he Federal Government has issued an order allowing APM Terminals Apapa, a leading terminal operator in Nigeria, to hire female employees to work at night – furthering the terminal management’s efforts to promote gender diversity and inclusion.

Akpan O.U., director of Trade Union Services & Industrial Relations under the Federal Ministry of Labour and Productivity, signed the grant of permit order on 21 January 2019, citing sufficient physical provisions and the company’s robust maternity policy, as criteria for the approval.

The ministry order also requires APM Terminals Apapa to comply with the provisions of Convention 171

or the Night Work Convention of the International Labour Organisation, a United Nations specialised agency aimed at promoting rights at work, encouraging decent employment opportunities, enhancing social protection, and strengthening dialogue on work-related issues, owing to the fact that Nigeria is a member state of International Labour Organisation (ILO).

“APM Terminals is deeply committed to advance diversity and inclusion across the organisation and we are delighted to have the support of the government in cultivating this culture. Securing this permit is an important step in building an inclusive workplace where all talents have the same opportunity to grow and achieve their full potential,” says Aniemeka Umeonyido, head, Human Resources of APM Terminals Apapa.

BusinessDay understands that APM Terminals Apapa filed the permit application in April 2018, expressing that many qualified female employees over the years have indicated interest and willingness to work the graveyard shift.

However, a provision in the Labour Act in Nigeria prohibits night work for women in industrial setting.

With the permit, Aniemeka Umeonyido says they anticipate an increase in the number of female candidates for posted vacancies.

Citing example, Umeonyido said that a female candidate has been considered as the top choice in a pool of applicants for the role of Reach Stacker and Empty Handler Operator, who operates yard handling equipment for moving containers between vessels and yard operations.

OWEDE AGBAJILEKE, Abuja he Peoples Democratic Party (PDP) has raised an alarm over purported pressure on the Independent National Electoral Commission (INEC) to replace Electoral Officers (EOs) with All Progressives Congress (APC) loyalists in PDP strongholds, ahead of the rescheduled national elections this Saturday.

The PDP alleges it is aware of plans of secret meetings at the Presidential Villa where the leadership of INEC was ordered to ensure the replacement of EOs with APC members.

Addressing a press conference on Wednesday in Abuja, PDP National Publicity Secretary, Kola Ologbondiyan, accused

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the Department of State Services (DSS) of interfering with operations of critical departments of INEC, including the ICT Department to do the ruling APC’s bidding.

Ologbodiyan said that at a meting attended by top government officials on Tuesday at the Presidential Villa, “Resident Electoral Commissioners (RECs) were directed to issue out result sheets to APC agents to falsify and declare results in favour of the APC. “Intelligence at our disposal reveals that the INEC chairman has succumbed to back channel bullying by the Buhari Presidency and APC to accede to their demand to replace Electoral Officers (EOs) in various critical states with APC agents who will vehe-

mently execute President Buhari’s rigging plans in the February 23, Presidential election”.

The PDP also claims to have details of the meeting last night by President Buhari, some APC northern governors and service chiefs, where pressure was mounted on the service chiefs in connection with the APC rigging plans.

“We alert Nigerians that the INEC chairman has been intimidated with threat of ‘Onnoghen’s treatment’ to accept a list of APC members and agents and post them to serve as EOs in various states including Kano, Kaduna, Rivers, Bauchi, Akwa-Ibom, Zamfara, Benue, Sokoto, Lagos, Plateau, Taraba, Borno, Adamawa, Kogi, Delta, Ebonyi among others.

40 BUSINESS DAY NEWS

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Nigerian Presidential poll headed to run-off – Damina Advisors forecasts VINCENT NWANMA

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igeria’s presidential election, rescheduled to hold February 23, is headed for a run-off between the incumbent president and the main opposition candidate, Damina Advisors has predicted.

“Nigeria’s main opposition party, the center-right Peoples Democratic Party (PDP), and its leader Former Vice President Atiku Abubakar, as well as third party minor candidates are enjoying a late surge in electoral support, but neither the government nor the opposition will likely win the required 50%+1 of the votes cast in the upcoming poll,” Damina wrote in an emailed state-

ment at the end of a conference call Wednesday on the Nigerian polls.

Damina in a January 7 note predicted that the elections would be shifted, citing a number of possible factors, including logistics challenges.

The Independent National Electoral Commission (INEC) postponed the polls in the wee hours of Saturday 16, when the polls were scheduled to hold, citing logistics challenges that had made distribution of electoral materials throughout the country difficult.

Nigeria’s 1999 Constitution requires that for a presidential candidate to be deemed elected, he or she must score 50%+1 of the national vote, and at least 25% of the votes in

two-thirds of the 36 federal states.

The Constitution also requires that a runoff be held within seven days of the declaration of results if no candidate meets the criterion above.

INEC has announced that the presidential results will be announced on Wednesday, February 27.

“If Nigeria goes to a second-round vote in early March, the gubernatorial polls currently scheduled for March 9 will also have to be postponed,” Damina said.

“Nigeria is poised to have another 6-8 weeks of intense capital markets volatility as the country, Africa’s most populous, elects a divided government for the first time in a generation,” it added.

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DIPO OLADEHINDE, DAVID IBIDAPO & BUNMI BAILEY

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igeria’s Deposit Money Bank (DMB) seems to be succeeding in shying away from its intermediary activities by cutting back on credit allocations to the private sector as aggregate non-performing loans in Q4 2018 recorded the lowest in the last nine quarters.

In 2016 when the economy was reeling in recession, credit to the real economy rose by 23.2 percent over the amount granted to firms and individuals in the private sector in 2015. The decrease in 2018 beat the imagination of analysts and stakeholders, particularly at a time the worst was said to be over for the Nigerian economy.

Banking sector credit to the economy declined 2.9 percent quarter-on-quarter from N15.6 trillion in Q3 2018 to N15.1trillion in Q4 2018,

Nigeria’s government isn’t giving money to education, banks too

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igeria’s Federal Government has been criticised for giving less money to education than would be needed to make the sector vibrant and banks think the sector is unripe for investment, latest data from the NBS show.

The National Bureau of Statistics’ ‘Selected Banking Data’ report for the fourth quarter of 2018 said total banking sector credit to education for the quarter was 0.38 percent, representing N57 billion. The sector that got the least credit from the banking sector was mining and quarrying at 0.14 percent, which represented N20 billion.

Banking sector credit to education for 2018 in the three months ending March

was 0.47, same as for three succeeding months ending June. It dropped to 0.39 percent in the third quarter.

“In Nigeria, investors in general and financial institutions in particular shy away from investing in education because they have a hard time measuring return on investment. Bankers do not understand what schools are doing and schools seem not to understand the language of investors” said Bunmi Lawson, Managing Director/ CEO Accion Microfinance Bank Ltd. Since 2015, banking credit to the education sector has remained below 1 percent.

Compared to other sectors such as oil and gas with an average of 8 percent and the government with an average of 9 percent, education is clearly not a darling of Nigeria’s lenders.

“A lot goes into building and running a school beyond putting up classrooms.

Education investing is definitely more profitable at the secondary school level than at the university level” Chidi Nwagu, Manager, University Development at the Pan-Atlantic University, Epe, Lagos said on a phone interview for an earlier report.

Federal Government’s spending on education has also been declining. In the 2015 fiscal year, N392.2 billion was allocated to education, representing about 8 percent of the N5.068 trillion budget.

In 2016 the sector got N369.6 billion representing 6 percent of the total budget of N6.061 trillion. In 2017, it was N550 billion representing 7.4 percent of the N7.444 trillion total budget, while in the 2018 appropriation bill of

Thursday 21 February 2019

Juicy opportunities in rising yields scale down banks’ credit to private sector in 2018

L-R: Heineken Lokpobiri, minister of state for agriculture; Solomon Dalung, minister of sports and youth development, and Chris Ngige, minister of labour and employment, during the Federal Executive Council Meeting at the Presidential Villa in Abuja, yesterday. NAN

STEPHEN ONYEKWELU

@Businessdayng

about N8.612 trillion, N605.8 billion was proposed for capital projects in the education sector representing 7 percent.

Experts say one way to reverse this trend is by finding a public-private-partnership that works. Already, private schools are overtaking public ones in numbers.

In 2014 there were an estimated 18, 000 private schools in Lagos state and about 1, 800 public schools.

Proprietors of these private schools often have an informal approach to managing their schools. They do not see these schools as businesses and have historically found it difficult to tap into the formal financial sector to access financial services and products such as loans, a Developing Effective Private Education Nigeria (DEEPEN) survey showed.

according to data from the Nigerian Bureau of Statistics’ (NBS) banking sector report.

On a year on year basis, total banking sector credit to the economy declined 2.5 percent to N61.7trillion in 2018 from N63.3trillion in 2017.

Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers said a sluggish rate in the economy does not enable banks to increase the flow of credit to the private sector borrowing due to their concern of a risk to default.

“We saw increase in the yield of government instruments and that was on the back of the tightened in global financing commissions,” Ologunro told BusinessDay by Phone.

Ologunro said as at Q4 2018, banks did not have access to the Q4 GDP figures and they had to rely on the growth figures for Q3 as their credit decisions were based on GDP growth figures at the

end of Q3 2018.

Ayo Akinwunmi, Head of Research, FSDH Merchant Bank, said the latest NBS banking sector report is an indication that the economy is not growing well.

“What we have noticed is that there are two quality risk assets outside there and everybody is trying to play safe and when economy is not expanding strong, then banks will not be aggressive to lending to the real economy,” Akinwunmi said.

Ayodeji Ebo, managing director of Afrinvest Securities Limited, said banks were not willing to provide enough loans for businesses due to Nigeria’s general elections.

“You can see from Zenith Banks 2018 annual report that their loans also declined.

So, a lot of banks did not do as much as expected in Q4 which may be favourable to the upcoming elections that amplified the risk involved in lending,” Ebo said.

FG approves CIBN disciplinary tribunal rules HOPE MOSES-ASHIKE

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he Federal Government has approved the rules governing the conduct of the Disciplinary Tribunal of the Chartered Institute of Bankers of Nigeria (CIBN).

The approval has further strengthened members/ customers’ confidence in the industry. The Attorney General of the Federation and Minister of Justice, Abubakar Malami consented to the rules on behalf of the Federal Government.

The Rules prescribes the proceedings to be observed by the Tribunal in the hearing and determination of complaints as well as recommending appropriate sanctions to be meted out to erring members of the Institute upon establishment of a prima facie case by the Investigating Panel.

The Tribunal which also looks into cases of ethical and professional misconducts by members of the Institute, has the following provisions: appointment of chairman and other members of the Disciplinary Tribunal; reference to the Disciplinary Tribunal; convening of the Tribunal; composition and proceedings of the Tribunal; parties to the proceedings before the Tribunal, service of processes, mode of entering appearance, decision in the absence of a party and the application for re-hearing; additional, substitution and removal of parties; restriction on abatement of processing; directions and case management; practice directions; failure to comply with rules, practice directions or tribunal directions;

general powers of the Tribunal, lead compliant, petition or matter; consent Orders; amendment of processes before the Tribunal and withdrawal.

Other provisions of the Rules include: striking out of a case brought before the Tribunal; Fixing of listing of hearing date and service of notice, among others by the secretary; legal representatives, holding proceedings in public or private hearings; provision of disclosure or publication of documents and information; hearing of witnesses, sending and delivery of documents, disclosure, evidence and submissions; written evidence; penalty for giving false evidence, adjournments, decision with or without a hearing; decisions; findings of not guilty, records of proceedings; publication of decisions of the Tribunal; retention of exhibits and books pending the institution of an appeal and the computation of time and extension of time.

The Rules stated that “any complaint, written allegation or petition that relates to professional or ethical misconduct or breach of any of the provisions of the Banker’s Code of Conduct in the Nigerian Banking Industry, shall be addressed to the Registrar/Chief Executive Officer of the Chartered Institute of Bankers of Nigeria”.

The Disciplinary Tribunal adjudicates on cases of ethical and professional misconducts by members of the Institute. The Rules are expected to further improve and promote ethical practice and professionalism in the Nigeria Banking industry.

Thursday 21 February 2019

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NEWS Marketers defy IPMAN’s directive, sell PMS at N145/litre JOSHUA BASSEY & HARRISON EDEH

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ost independent p e t ro l e u m marketers in Lagos and the Federal Capital Territory (FCT) have defied the supposed directive of the Independent Petroleum Marketers Association of Nigeria (IPMAN) to sell Premium Motor Spirit (PMS) at the price of N140 per litre, as against the official regulated price of N145.

IPMAN had in a statement issued earlier on Sunday directed its members across the country to sell petrol at N140 on the back of the postponed February 16 Presidential and National Assembly polls as a support palliative to Nigerians in easing transportation costs to those who may have travelled to cast their ballot.

However, an on-the-spot assessment around Lagos and Abuja confirmed marketers are selling at N145 pump price.

“Forget that we are not going to shift ground and sell at lower price. Most of us have our stock earlier before the directive and there is no way we could recoup our money otherwise we would have shortfall. We must keep selling at N145 per litre. A Total filling

station manager in Kubwa who pleaded anonymity told BusinessDay. “As far as am concerned, we have not gotten any official notice in writing directing us to sell at that price. On the other hand, I see the directive as a political statement from IPMAN since the marketers are buying at N141 in Lagos, so how do they recoup their money and make gains if they sell at N140.”An official at NIPCO filling station also said on Wednesday.

Also at IBWAS filling station in the Outer Northern Expressway by Kubwa Abuja, the pump attendants told our correspondent that the directive was no officially communicated to them, hence they can’t implement such orders.

“The communication was not properly done.I heard it in the media the way you did, and as I speak to you, there has not been any official communication to us on the modalities of the enforcement and how possibly we could recoup our money, because we cannot buy our stocks at a higher price and sell as a lower cost” a pump attendant told BusinessDay. In Lagos, motorists who woke up Wednesday hoping to buy fuel at a reduced across the country were also

disappointed, as marketers ignored the directive by IPMAN to cut down the official price of N145 to N140 per litre.

The controversial directive was announced on Sunday by Chinedu Okoronkwo, national president of IPMAN, represented by Bashir Tahir, Northwest zonal chairman of the association in Kano. IPMAN controls 80 percent of petroleum marketing in the country with membership cutting across the 36 states and Abuja.

Checks showed product marketers maintaining the official pump price of N145 per litre.

Marketers who spoke with our correspondent in different parts of Lagos m queried the powers of IPMAN to slash pump price of fuel. They noted that such directive was not binding on any marketer, as they were not in business to make a loss.

Filling stations visited also sought to know who pays for the difference between N145 official price and N140 directed by IPMAN. Some station managers also claimed that they received their supply from the NNPC at N142 and wondered how they would turn around to sell at N140 per litre.

Akwa Ibom acquires 3 aircraft, unveils Ibom Air ANEFIOK UDONQUAK, Uyo

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n a major step taken to boost development in the aviation sector, Akwa Ibom State has acquired three Bombardier aircraft for the commencement of Ibom Air, a commercial airline undertaken in partnership with private investors.

At the unveiling of the airline at the Victor Attah International Airport in Uyo, the state capital, which was witnessed by dignitaries and captains of industry, Governor Udom Emmanuel

said the airline was in line with his vision of developing three critical sectors needed to fast-track economic and industrial development of the state.

According to the governor, apart from the aviation sector, the government is also focusing on the development of a seaport as well as the construction of road infrastructure across the state.

In addition to the aviation sector, he said the state government was building logistics centre in Ikot Abasi local government area, adding that

work on the Ibom deep seaport would soon commence.

Emmanuel described Ibom Air as a dream come true, saying that more aircraft were being expected before the end of 2023 and that the airline would be run as a commercial venture as part of efforts to create wealth and boost economic activity.

The Governor disclosed that the aircrafts, C-FWNK were only six years old with a sitting capacity of about 90 passengers and constituted the newest and modern fleet of the industry.

Travelstart slashes flight rates to election travellers MIKE OCHONMA

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n line with its avowed commitment to providing very cheap flights, seamless and excellent service, Travelstart, Africa’s leading online travel agency has unveiled the Based on Logistics Campaign.

Due to the postponement of the general elections, Travelstart is helping to ease the financial burden of travel by giving customers discounts on flight tickets.

From 19-21 February, 2019, all local flights booked on the Travelstart platform will be discounted by up to 25%.

The travel period is not solely

for the upcoming election weekends, but it is open until the end of the year, December 31, 2019.

For customers who want to voluntarily change their flights from departing or arriving on February 23 to March 9, 2019, Travelstart is waiving its admin fee. This is to further reduce the cost and the impact the postponement has had on many travel plans. Though customers may still be liable for any airline penalties and ticket price differences, Travelstart will work with all its customers to minimize these necessary fees.

Commercial Manager, Travelstart Nigeria, Bukky

Akomolafe stated that the Based on Logistics discount campaign is a testament to the company’s commitment to delivering excellent customer service as well as saving its customers’ time, money and stress with its simple online booking platform.

“At Travelstart, we empathize with our customers and the financial burden that the additional travel expenses may have. We care very much about their welfare, which is why we have put together this campaign, especially at such crucial time. We are also extending our working hours on Friday to enable us treat all incoming customer requests.”

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BUSINESS DAY

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BUSINESS DAY

NATIONAL DISCOURSE

MAURICE OGU

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n social media, a woman was captured on video crying and rolling on the floor. She was a kunnu (local juice) seller who had apparently produced more products for the purpose of selling at her polling booth. She was devastated on hearing of the postponement of the elections.

Memuna, as she was identified, lost everything.

For the three straight national elections it conducted in 2011, 2015 and 2019, the Independent National Electoral Commission (INEC) had cause to postpone all the national elections in those

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Thursday 21 February 2019

Nigerians were more disturbed by the timing, mere hours before the election was scheduled to take-off.

INEC apparently indicted itself when it alluded that it was aware of the logistics problems days before the elections.

“Unfortunately, in the last one week, flights within the country have been adversely affected by bad weather. For instance, three days ago, we were unable to deliver materials to some locations due to bad weather,” said Yakubu.

The commission equally blamed the postponement of the elections on some people working against the interest of the nation.

“We also faced what may well be attempts to sabotage our preparations. In a space of two weeks, we had to deal with serious fire incidents in three of our offices in the Isiala Ngwa South Local Government Area of Abia State; Qu’an Pan LGA of Plateau

State and our Anambra State office at Awka,” Yakubu said.

Many Nigerians have endured a lot of losses due to the sudden postponement of the presidential elections on February 16. But the real loss for Nigeria and Nigerians is if their votes do not count on the new election dates, February 23 and March 9.

INEC has to redeem her image.

This year’s election has to reflect the true choice of the Nigerian electorate. That is when Nigerians will accept whatever pains and losses they experienced as sacrifice they had to make for their darling country.

That is when Memuna, the kunnu seller, will console herself and see her losses as a sacrifice for the development of democracy in her country.

Anything otherwise will be a tragedy and major loss for Memuna, all other Memunas and the country.

@

INEC, let February 23 and March 9 count years.

The postponement of 2011 and 2015 elections seemed to have moderate economic impacts on the nation, however the postponement of the 2019 elections had huge economic and psychological impacts on Nigerians and Nigeria.

For the 2019 general elections, just five hours to the commencement of polls, INEC decided to postpone the elections, a decision that cost the nation an estimated N239.93bn, according to BusinessDay findings published on Monday, February 18.

The loss was the cumulation of the impact of the postponement of the elections on the nation’s Gross Domestic Product (GDP), cost to INEC and total cost of mobilising polling agents for the elections.

Really, all the losses cannot be quantified and captured in the GDP. People who lost their lives in the course of traveling

to their base to vote; people who had to postpone their social engagements arising from the postponement of the election; journalists, politicians, observers, INEC staff and other stakeholders who stayed awake for the purpose of the elections would have to undergo the stress again.

According to the electoral umpire, it became necessary to take the painful yet bold decision if Nigeria is to have free, fair and credible elections, identifying ‘logistics’ problems as the reason for the rescheduling of the elections.

“Following a careful review of the implementation of its logistics and operational plan and the determination to conduct free, fair and credible elections, the Commission came to the conclusion that proceeding with the elections as scheduled is no longer feasible”, Mahmood Yakubu, the INEC chief said.

Beyond the postponement,

Nigeria: Where we were before and where we are now BISI OGUNWALE

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our years ago, the All Progressives Congress (APC) candidate, President Muhammadu Buhari, assumed office as the first Nigerian politician to defeat an incumbent in the democratic history our country, having campaigned vigorously on three main cardinal issues – fighting corruption, growing and diversifying the economy, as well as securing the territorial integrity of our dear country. This administration under the leadership of President Muhammadu Buhari has not only kept its word to Nigeria and Nigerians, but he surpasses previous administrations in addressing the fundamental challenges that will confront the country in those three major areas.

It is important we remind ourselves where we were before and where are right now to truly appreciate that this administration is genuinely working for the poor masses of Nigeria who are in the majority. Before this administration, the main opposition party, the People’s Democratic Party (PDP) had the excellent opportunity to rule the country for 16 uninterrupted years.

The presidential candidate of the PDP, Atiku Abubakar, was one of the principal promoters of the party in those years. Atiku was in charge of the economy. Instead of investing the windfalls of oil wisely and pivoting the affairs of the country in the right direction, Atiku Abubakar and

his boss at the time, who is one of his major supporters today, were busy fighting themselves for power to the extent that they both lost focus on laying the needed foundation for the country. Nigeria has not recovered from that incidence to date.

President Olusegun Obasanjo gave damaging remarks about his deputy and went on to foster Umar Yar’Adua on the country alongside Goodluck Jonathan as the lieutenant president. The rest is history. The Nigerian state under the subsequent PDP governments kept tanking, but the brazen corruption in the system did not make the effect show until the party was booted out of power.

The administration of President Muhammadu Buhari has been deliberate on infrastructure development across the country, leaving no region unattended. This APC-led government is working assiduously to keep its promise in growing and diversifying the Nigerian economy by laying the foundations that drive the country towards production and away from consumption. Unlike the People’s Democratic Party (PDP) that had the opportunity to rule this country for 16 years, many of which crude sold at astonishingly high prices, the APC government is investing heavily in infrastructures that will drive ease of doing business in Nigeria.

These investments in real infrastructures such as roads, rail, portable water, irrigation for agriculture in the desert region, power generation, in addition to the social investment initiatives of this current

POLITICS administration are steps in the right direction to facilitating a productive economy that creates jobs for our bulging youth population.

Also, I think the Agriculture initiative of this administration is vital to get our young people busy and economically self- sufficient. However, we need to be very deliberate about it and provide the necessary incentives and support such as high yield inputs, mechanised equipment and tools, amongst other things. Beyond farming, we need to take agriculture to the next level, which is light manufacturing - processing our produce for local consumption and export, to derive long-term economic gains from agriculture.

With the investment in rail and road transport networks, access to the market for rural farmers to move goods and wares becomes more comfortable while those in the city can commute better, transporting their products and services better. In 2015, while attending an investment summit in Addis Ababa, I met a rural farmer who told me that the newly constructed rail service has cut her travel time by over two hours and also reduces transportation cost by nearly 45 per cent. Imagine how moving a container by train from Apapa Port to Kaduna will impact the bottom line of any business.

There is no limit to what we can achieve when all these initiatives come into full operation.

In the area of power, this ad-

ministration has increased power generation significantly since coming to power in 2015 while also increasing distribution capacity.

With the current and ongoing initiatives across the country, there is assurance that the government of Muhammadu Buhari will double the current generation and triple the distribution capacity by 2022 if re-elected. The Mambilla Power Plant, capable of generating over 3,000MW of electricity, that has been neglected for about 40 years, was re-awarded (for US$5.8bn) in 2017 and is due for completion in 2022. If present-day $US5.8bn can generate that much electricity, I wonder what US$16.9bn squandered awarding fictitious electricity contracts under 16 years of PDP rule would have achieved.

In addition to increasing grid generation, the government is taking energy mix with high priority by considering power generation from other sources of energy such as solar, wind and biomass. Also, the government has launched a scheme known as the Energising Economies Initiative (EEI) to support small and Medium Enterprises (SMEs). The EEI programme was developed to aid the rapid deployment of clean and sustainable off-grid electricity solutions to economic clusters in Nigeria.

With the full implementation of Treasury Single Account (TSA) by the administration of Muhammadu Buhari, a lot of leakages and corruption activities have drastically reduced.

Also, the strict adherence to the use

of Bank Verification Number (BVN) has significantly exposed hidden funds stashed in different accounts, thereby enabling the anti-graft agencies to go after those who looted our treasury and recover assets in the process. For the first time during this fourth republic, the incumbent government did not do a fundraiser in the presidential palace neither is the government breaking the Central Bank to fund its campaign.

I believe the team of Muhammadu Buhari and Yemi Osinbajo are working tirelessly to ensure that the masses get a fair share of good governance in Nigeria. The PDP ruled Nigeria when oil prices were at an all-time high, but instead of investing, they were looting with reckless abandon, whereas the APC, on the other hand, has continued to consistently and prudently fund in the future of the country, even when prices have been at the lowest in the last decade.

As we go to the polls, you need to think about the massive investment in the future of the country by way of infrastructure, social investment initiative and security in the land.

You should ask yourself, where were we before and where are we now? Do you want to go back to the days where US$16bn was allegedly spent on electricity but no power to show for it?

The future of Nigeria is in your hands, choose wisely!

•Bisi Ogunwale is an investment banker, business analyst facilitator. He writes from Lagos.

Thursday 21 February 2019

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2019: Is Nigeria preparing for war?

Zebulon Agomuo

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n a warning message to Nigerian “bigmen” titled, ‘Intervene now, clouds of war gathering over Nigeria’, credited to Bashir Othman Tofa, a former National Republican Convention (NRC) candidate in the June 12, 1993 presidential election, the Kano-born politician said that Nigeria was “fast ascending to the very path that Freetown took; the path that ruined Congo and Libya; the expressway to Rwanda.”

According to Tofa, “…It’s either history is unfair to us or our leaders are blind to it. Indeed, the death meant to kill a dog does not allow her to smell faeces. And, like the saying goes, those who do not understand history are bound to repeat it.”

Tofa said: “Ask Samuel Doe, when Rwanda arrived at Morovia, he hit the streets from the presidential palace in search of food after slaughtering his lions for meal. That was how he was captured and slaughtered. Rwanda does not respect big men and big office holders; as there are no big men in Libya today, but war lords that are selling the children of even the rich into slavery.

“When Rwanda arrives, there will be no strong man, no community leader, big men or small men.

In Rwanda, there were not even religious leaders. Everyone will be to himself and God to all us. For the bigmen aides will desert them and run to take their families into the bush for safety. Then, the high fences of the local almighties will be climbed, their strong padlocks broken, their properties stolen, their wives and daughters violated before them.”

The vibrations ahead of the Saturday’s elections are as ominous as they are dangerous.

For some months now, many of those who have followed political activities in the country and utterances of political actors speak in tandem that the presidential

Adamu Mohammed

election is not going to be easily won and lost.

The level of contestation this time around has been so high and apprehension-soaked that all manner of things are being insinuated.

Although the political parties that are on the ballot have signed the two-layer peace accord and pledged to, not only give peace a chance, but also ensure their supporters do not stoke violence, the parties have not behaved in accordance with the letters of that accord.

Moreover, despite the claim by the Federal Government that hate speech had become a criminal offence, the government at the centre is still neck deep into the offensive rhetoric. The narrative has not changed.

To d ay , e ve n c h i l d re n a re shocked at the kind of words coming out of the mouths of highly placed individuals in government, all in the name of politics. All manner of gutter languages are being employed just to score cheap political goal.

The election process has since been militarised. The deployment

Yusuf Buratai

of huge number of soldiers and policemen to some states raises some fundamental questions.

The threat issued by the President last Monday when he ordered a shoot-on-sight order against anybody suspected to be engaging in ballot snatching or any other form of electoral fraud has raised the apprehension level in the polity.

Members of the opposition and observers have since condemned the directive, noting that it is a recipe for anarchy. Some members of the opposition alleged that it was a way the ruling party tried to frame up “key opponents”.

“Don’t be surprised to see security agents whisking some people away from the polling booths on the trumped-up allegation of trying to commit electoral fraud. It is a calculated attempt to clamp down on the opposition and to tell the world that the opposition was frustrating the process. Don’t forget that the Federal Government has alleged that the PDP was working in cahoots with the INEC to rig the election. They may want to create a scenario to justify their allegation,” an analyst, who asked not to be

named, said.

The tenor of utterances and body language of the government in power show that the election on Saturday is war, not just a game in which the players can lose or win.

The shoot-on-sight order, which the nation’s security agencies have also given indication of obeying, may likely result in voter apathy.

There are indeed dangerous vibes ahead of the election. The ruling APC is being accused a blocking all means of opposition accessing funding for their campaign, whereas the Federal Government is leveraging the public purse to fund the return bid of the President.

The EFCC has since swung into action, hounding real and perceived friends and acquaintances of opposition presidential candidates.

The PDP also alleged that it was frustrated from carrying but elaborate campaign because of intimidation from government.

An observer, who spoke on the low-key campaigns occasioned by poor funding, said: “Ordinarily, it should have been a positive thing that expenditure on campaigns are reduced to the barest minimum

because people are saying that Nigerian politics is becoming very expensive; but if that was to be a policy to check and restrict all the parties, it would have been okay.

But in a situation where you are blocking the source or sources of funds against the opposition and you are spending excessively and lavishly on your own campaign; that is not good enough; it is immoral, and it questions the integrity of those in government.”

The polity is so tense ahead of the election that fear of violence and of inconclusive election has become so widespread that the Christian Association of Nigeria (CAN) declared six-day prayers for Nigeria, urging all Nigerians at home and in the Diaspora to pray.

Samson Ayokunle, a reverend and president of CAN, explained that the prayers became necessary following some dangerous developments in the polity.

“The excuse INEC gave for the postponement of the elections does not go down well with all stakeholders,” he said.

According to him, “The unfolding scenario on the political scene is not ordinary and there is the need for the Church to intercede for Nigeria.

“If it is about the things we see in the spirit, I am not sure that elections will hold at all. We should rise up and ask for transparent, free, fair and credible election that will even be better than those of 2015.”

Ayokunle further said: “About the elections, we will pray that they will not result in war, bring hardship and suffering unto the populace.”

However, a former Chairman of a defunct national newspaper told BusinessDay that the country had in the past inched closer to war than where it is now, but it never happened.

“The divine aura over Nigeria, in spite of everything, has seen her through every single problem, no matter how threatening. This will not be an exception,” he said.

Tinubu slams PDP, says party lacks capacity to win elections Iniobong Iwok

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o-Chairman of the All Progressives Congress presidential campaign council and National leader of the ruling All Progressives congress (APC), Bola Ahmed Tinubu, has said that the main opposition People’s Democratic Party (PDP) was a drowning party which lacked the capacity to win Saturday’s presidential election.

Tinubu, who was a former gov-

ernor of Lagos State, stated this Wednesday while speaking at a stakeholders’ meeting of the party supporters at the party’s secretariat on ACME Road Ikeja, alleging that the PDP lacks the support across the country to win the general elections.

The APC national leader further urged party members to mobilise residents towards the victory of President Muhammadu Buhari, stressing that the party was not bothered about the Independent National Electoral Commission

(INEC) and its antics but was only interested in the PDP which was its main opponent in the general elections.

According to him, “Muhammadu Buhari is our president ; we must mobilise from house to house for his victory. INEC is not our opponent, it is PDP, that is our opponent and we would join hand and beat them at the polls. They don’t have our strength in Northwest, North-east and North-central where are they going to pass, we are

going to win.

“All of you that have problems go and see the leaders in your wards; you must have the membership register of people in the wards, tonight there must be meeting of your wards and you must give instruction to all members in the wards, we know how many polling booths are in your areas you must deliver them,” Tinubu said.

Speaking further, the APC leader appealed to Igbo indigenes in Lagos State to vote for candidates of

the APC in the general elections, stressing that he had blocked actions against them in the state in recent years.

“We appeal to our Igbo brothers, this is the state where you are doing business, working, your children are in our schools, we don’t discriminate against them.

“We don’t discriminate against them in WAEC fees in our school, they are in our university, we don’t discriminate them, now this is the time we say help us vote for APC.”

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FG cautions Int’l Community on interference as INEC restates readiness for Saturday rescheduled polls ...Police threaten ballot box snatchers, other electoral offenders with severe penalty Innocent Odoh

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he Federal Government on Wednesday advised members of the International Community to respect the sovereignty of Nigeria by not doing anything that will suggest interference in Nigeria’s electoral process as the country goes to the rescheduled Presidential and National Assembly polls on Saturday.

Foreign Affairs Minister, Geoffrey Onyeama, gave this advice during an interactive session with members of the Diplomatic Corps in Abuja on Wednesday. He said that while Nigeria welcomes partnership and support from the international community, the country will allow its sovereignty to be compromised neither would it allow any nation to dictate to it since it does not interfere in the internal affairs of other countries.

“We welcome very much your engagement, we appreciate your support, we acknowledge how important your engagement for us in 2015 helped us to deliver probably one of the most free and credible elections we have had in this country for a very long time.

“But we have cause to be con-

Geoffrey Onyeama

cerned with the way the engagement have been communicated, because at the end of the day, we are a sovereign country, the line should not be crossed from exalting us, and wanting this to succeed and really be democratic process to dictating to us and getting to the nitty-gritty of how we run the country,” he added.

Onyeama also admonished the International Community particularly election observers

to carry out their function with impartiality stressing that they should not show preference for any candidate or political party in the election.

He disclosed that the briefing which was organised by the Ministry of Foreign Affairs in conjunction with Independent National Electoral Commission (INEC) was aimed at engaging with friends and partners of Nigeria on the rescheduled election and together proffer

solutions to some of the challenges to a hitch-free election.

He however, expressed dismay that despite government’s huge support to INEC providing all it requested for on time and never interfered in its operations, the administration was disappointment that INEC had to postpone the election by one week citing logistics challenges.

“It is absolutely important for the message to be communicated that the government is extremely disappointed and just cannot understand why after three and a half years we still are unable to deliver the process on time”, Onyeama told the foreign envoys.

He therefore, called on INEC to ensure that the rescheduled election unfailingly held, come Saturday February 23. “We will not accept any excuses or any other reason, the election must be held on Saturday. Nothing else would be acceptable to government”, he added.

The Independent National Electoral Commission (INEC) on Wednesday also restated its readiness to conduct the polls on Saturday stressing that “only an act of God can stop Saturday’s polls.”

INEC Chairman Mahmood Yakubu stated this while address-

ing the diplomatic community and international election monitoring groups in Nigeria, for the 2019 general election.

Yakubu, who was represented by an INEC National Commissioner, Mustapha Lecky, categorically stated that everything possible to ensure the elections hold on February 23, have been put in place, adding that the commission have no reason to feel things would go wrong.

According to him, the commission has developed a 6 point agenda of what needed to be done to ensure success, adding that it has completed the deployment of materials as at today.

“We have no reason to believe that anything except an act of God, and we believed that as a prayerful nation the act of God has been assuaged and that things will go right, we have no reason to feel that anything will go wrong. We have received all the materials, they have been checked, audited people have been informed, party agents have gone there to check”, he said.

Why he stated that INEC has already taken responsibility for the postponement, he reiterated that the body is committed to surpass achievement of previous elections in the country.

Kwara ACPN suspends National Chairman; adopts Atiku, Saraki, Atunwa 2019: Bello breeding fake SIKIRAT SHEHU, Ilorin

F

or adopting President Muhammadu Buhari as the presidential candidate of the Allied Congress Party of Nigeria (ACPN), the Kwara State chapter of the party, yesterday suspended its National Chairman, Ganiyu Galadima.

The ACPN chairman in the state, Kuti Kayode announced the suspension of Galadima at a press conference in Ilorin.

Elder Kuti claimed that the national chairman of ACPN took

a unilateral decision in adopting President Buhari of the All Progressives Congress (APC) as the official presidential candidate of their party.

He also announced the decision of ACPN members in the state to pitch their tent with the People’ss Democratic Party (PDP) in the forthcoming general election.

The ACPN chairman added: “The Kwara State chapter which is the stronghold of ACPN in the country has decided to pitch its tent with the People’s Democratic Party (PDP). We adopt the presi-

dential candidate of the PDP, Atiku Abubakar, Razak Atunwa as the Kwara State governor, Senator Bukola Saraki as Senator representing Kwara central and all other PDP candidates in the state.

“Furthermore, our candidates are willing to step out and work with the PDP candidates across the board. We have held meetings with our members across the 16 local government areas of the state and they are on the same page with us in our decision to adopt all the PDP candidates for elective offices in the 2019 general elections.”

2019 poll: PANDEF dissociates self from Atiku endorsement IDRIS UMAR MOMOH/CHURCHILL OKORO, Benin

E

do State chapter of PANNiger Delta Forum (PANDEF) has dissociated itself from the purported endorsement of the People’s Democratic Party (PDP) presidential candidate, Atiku Abubakar for the next Saturday’s elections.

A statement by the state chapter of the group signed by Paul Ogbe-

bor and Efosa Aguebor, chairman and national organising secretary, respectively, said the endorsement of PDP presidential candidate by some members of the group was not in tandem with the aims and aspirations of PANDEF. Ogbebor, who said PANDEF was apolitical and non-partisan, noted that its objectives was amongst others to liaise with oil producing areas, prevent the destruction of oil facilities and increase the requisite develop-

ment of the areas.

“The action of those that endorsed Atiku was not in tandem with the aims and aspirations of PANDEF as stated in Article 1 of the organisation which banned the organisation from being in partisan politics and or belonging to any religious body”, Ogbebor said.

He noted that there has never been any National Executive meeting or state general meeting where such decision was taken.

policemen – Kogi PDP

…It’s falsehood taken too far, says Fanwo Victoria Nnakaike, Lokoja

T

he People’s Democratic Party (PDP) has accused the Kogi State Governor, Yahaya Bello of breeding fake policemen ahead of Saturday general elections.

The party equally cautioned INEC Resident Electoral Commissioner in Kogi State, Prof. James Apam on his alleged plans to compromise the forthcoming Presidential and National Assembly elections by substituting trained ad-hoc staff for preferred APC candidates.

According to a press statement signed by Idris Abubakar, chairman of PDP in the council which was made available to newsmen in Lokoja on Wednesday, the party expressed worries over the way and manner thugs were being armed with guns and dangerous weapons to unleash terror on oppositions in the state.

The party also accused the REC of giving out the unclaimed PVC of the local government area to the ruling APC, hinting that the action was a

ploy to rig the elections.

Abubakar therefore, called on the agents in all the polling units of Lokoja not only to be vigilant about persons that would present the unclaimed PVC allegedly given to them by the REC, but reject such PVCs and raise the alarm and report to security agencies.

“We have it on a good authority that the ad-hoc staff replaced by the APC members have been directed to accept such PVCs, but we will resist such attempt.

“As a political party and major opposition in the state, we are worried by the fact that the fake police and soldiers were escorted out of the Government House, Lokoja by genuine policemen,” the statement said.

Reacting to the allegations however, the Director-General Media and Publicity to the Governor, Kingsley Fanwo said: “It was falsehood taken too far”.

According to him, PDP has reduced itself to allegations-peddling party instead of campaigning as hard as the APC.

Thursday 21 February 2019

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World Business Newspaper

Three pro-EU Conservative MPs defect to independent parliamentary group Move by Europhiles is a big setback for Theresa May and her Brexit policy Laura Hughes

T

hree Europhile MPs on Wednesday resigned from the Conservative party and pledged their allegiance to a new independent parliamentary group aiming to seize the centre ground of British politics.

Heidi Allen, Anna Soubry and Sarah Wollaston will work with eight MPs who quit the Labour party on Monday to form the Independent Group.

In a major challenge to Prime Minister Theresa May, the three Europhile MPs said they were leaving the Tory party over its “shift to the right” and Brexit policy.

They added in a letter to Mrs May that the Conservatives were now “in the grip” of the European Research Group of Eurosceptic Tory MPs and the pro-Brexit Democratic Unionist party, which props up the prime minister’s minority government.

“We no longer feel we can remain in the party of a government whose policies and priorities are so firmly in the grip of the European Research Group and Democratic Unionist party,” said

the three MPs. “Brexit has re-defined the Conservative party — undoing all the efforts to modernise it. There has been a dismal failure to stand up to the hard line ERG which operates openly as a party within a party, with its own leader, whip and policy.”

The eight MPs who quit Labour to form the Independent Group — including the former shadow business secretary Chuka Umunna — have complained about the leftwing policies of party leader Jeremy Corbyn as well as his stance on Brexit and anti-Semitism.

The Independent Group said in a tweet: “Welcome to the Independent Group @heidiallen75 @Anna_Soubry and @sarahwollaston Both our parties are broken.

We are going to #ChangePolitics for the better.”

Ms Wollaston, Ms Soubry and Ms Allen, who supported Remain in the 2016 EU referendum, have had substantial differences with Mrs May over Brexit.

They were among the Conservative MPs who rejected her Brexit deal during the so-called meaningful vote in the House of Commons in January.

China’s domestic lenders have good reasons to resist the state’s call to supply credit Gabriel Wildau and Yizhen Jia

P

ity the Chinese state-owned bank trying to obey everchanging instructions from policymakers in Beijing.

For years, banks preferred to lend to giant state-owned enterprises — both because of the implicit government guarantee that such debt has traditionally carried, and because SOEs were seen as national champions that deserved support.

But now the script is shifting as China’s economy slows. Many foreign investors are focused on the impact of the trade dispute with the US, but the effect of a domestic crackdown on shadow banking — which has closed off access to credit for privately owned companies that relied on nonbank channels — is probably more important. Private companies generate 60 per cent of China’s economic growth and 90 per cent of new jobs, according to an industry association that represents them.

That is why China’s cabinet last week issued guidelines urging banks, among other intermediaries, to step in to the void to increase support for private companies. Yet it is doubtful whether moral suasion alone will do the trick. After a string of bond defaults by private groups, lenders are hesitant.

Sarah Xu, analyst for rating agency Moody’s in Shanghai, says the prospect of continued government support for private groups is positive only for “fundamentally sound” companies, “of which there are only a few”. As for the weaker ones, the “increased availability of credit will not significantly affect [their] overall

financing situation”, she says.

Some 124 bond issues with principal worth Rmb121bn ($18bn) defaulted last year, compared with only Rmb34bn a year earlier, according to data from Wind Financial Information. Among the defaulting issuers, about four-fifths were private groups, even though SOEs comprise a majority of all bond issuers.

Banks may be wary of backing private groups because they lack confidence in the reliability of their financial statements.

Last month Shenzhen-listed Kangdexin Composite Materials, for example, defaulted on a Rmb1bn onshore note. Yet the company’s most recent quarterly report showed the group held Rmb15bn in cash and near-cash assets at the end of September — raising doubts about the accuracy of its reported accounts.

“It could be that the financial statement was fabricated. A typical technique is to obtain cash temporarily” so that it can be recorded on the balance sheet, says Shi Min, chief credit officer at Lakefront Asset Management, a Beijing-based hedge fund. He adds that the disclosure from Kangdexin, a manufacturer of laminating films, could have omitted the fact that these were “restricted” cash holdings, not available for immediate use.

The company has denied issuing false financial statements and said in an exchange filing that an internal investigation had revealed a “situation in which large shareholders occupied funds”, without providing further detail. China’s securities regulator is also investigating the company, according to the filing.

Sarah Wollaston, Heidi Allen and Anna Soubry have left the Tory party over its ‘shift to the right’ and Brexit policy © PA

They are also supporters of a campaign for a second Brexit referendum called the People’s Vote.

Mrs May has repeatedly rejected the case for another plebiscite.

The three MPs said the “final straw” that pushed them to quit had been the government’s “disastrous” handling of the UK’s departure from the EU, and the risk of a no-deal Brexit.

“We find it unconscionable that a party, once trusted on the

economy, more than any other, is now recklessly marching the country to the cliff edge of no deal,” they said in the letter.

Mrs May said in response to the three MPs’ resignations: “I am saddened by this decision — these are people who have given dedicated service to our party over many years, and I thank them for it.

“I am determined that under my leadership the Conservative Party will always offer the decent,

moderate and patriotic politics that the people of this country deserve,” she added.

As members of the Independent Group, Ms Wollaston, Ms Soubry and Ms Allen will have an opportunity next week to use the latest parliamentary votes on the prime minister’s Brexit plan B to table an amendment calling for a second EU referendum. They have not yet announced whether they will do so.

Glencore vows to cap global coal production Trading and mining group has faced investor pressure over polluting fossil fuel Neil Hume, David Sheppard and Henry Sanderson

G

lencore has vowed to cap its coal production in the face of pressure from big investors who are pushing natural resource companies to take firmer action on climate change.

The mining and trading group led by Ivan Glasenberg on Wednesday said it would cap its production of thermal and coking coal at about 150m tonnes per year, close to its planned output level in 2019, with further expansion of its coal business largely ruled out.

The move is likely to send shockwaves across the coal industry because of the company’s bullish stance on the highly polluting fossil fuel. Glencore is the world’s top coal exporter and one of the biggest producers outside of China. Mr Glasenberg is a former trader and vocal champion of coal, which is used to generate electricity and also produce steel.

Glencore is stopping well short of abandoning coal altogether like rival mining group Rio Tinto. It will continue to operate its mines, which are largely based in Australia and produce high-energy coal, for at least another 15 years — or around the time leading forecasters expect demand for the fuel to peak.

The move is part of plans by Glencore to align its business with the goals of the Paris climate change agreement. The company has also pledged to publish new

long-term targets for reducing its greenhouse gas emissions and review its membership of trade associations that lobby for fossil fuels, among other measures.

Although Glencore couched the move as part of its commitments to the Paris agreement, it may also benefit from forestalling coal investments across the industry, which could lead to tighter supplies — and higher prices — should demand for the fuel rise more quickly than forecast.

“Glencore had a market share of nearly 25 per cent in the seaborne trade last year. It also has a dominant position in the premium thermal coal segment”, said Prakash Sharma, research director at consultancy Wood Mackenzie.

“In that regard, capping coal production is significant because prices could remain high amid tighter supplies. Glencore is chasing value over volume.”

“In a 2-degree scenario, premium thermal coal demand is expected to be resilient compared to other coal types. That means companies holding on to high energy thermal coal assets stand to gain and will realise higher prices,” he added.

Glencore’s coal operations contributed almost a third of its underlying earnings in the past year and generated billions of dollars of cash that were used to fund dividends and share buybacks.

The only circumstances under which Glencore will now increase coal production is if a joint venture partner decides to sell, and the

company has the first right of refusal on a buyout.

The Church of England, which has led investor engagement with Glencore on behalf of the Climate Action 100+, an initiative led by investors with more than $32tn of assets under management, said the move would send a powerful signal to the rest of the sector that coal was “no longer a sustainable part of their portfolios”.

“Glencore has been . . . pretty bullish on coal. The fact that they have agreed not to grow their coal capacity sends a very clear message, ” said Edward Mason, head of responsible investment for the Church Commissioners of England.

“Investors will now want to hold Glencore to its commitments.”

Glencore plans to invest cash generated by the coal business in metals that are likely to benefit from the rise of electric vehicles, battery storage and renewable energy.

These include copper, cobalt and nickel, markets where the company already has strong positions.

Tony Hayward, Glencore chairman, said the miner was increasingly focused on maintaining its “social licence to operate”.

“Glencore’s portfolio of commodities allows the company to play a key role in enabling the transition to a low-carbon economy,” he said.

The coal industry has faced unprecedented pressure in recent years, with most western banks stopping the funding of new coal mines because of shareholders’ concerns about the fossil fuel’s contribution to climate change.

46

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Thursday 21 February 2019

NATIONAL NEWS

FT EU agency must comply with London lease despite Brexit move, judge rules

Kenya succession battle sparks renewal of political infighting

European Medicines Agency loses court case to Canary Wharf Group

Spat between deputy president Ruto and Kenyatta ally exposes rupture in ruling party

Judith Evans

Tom Wilson

T

A

he European Medicines Agency must comply with the lease on its London headquarters despite the UK’s exit from the EU, a judge ruled on Wednesday in a closely watched case dealing with the validity of contracts after Brexit.

The judge, Marcus Smith, handed down a victory for Canar y Wharf Group, the EMA’s London landlord, which had refused to accept that Brexit would invalidate the sector regulator’s 25-year lease and an associated £500m of costs.

Mr Justice Smith said: “I conclude that the lease will not be frustrated on the withdrawal of the UK from the EU . . . The EU remains obliged to perform its obligations under the lease.”

The regulator, an agency of the EU, is in the process of relocating to Amsterdam, following a decision made by the remaining 27 member states, so that it can remain within the union after Brexit.

It will therefore vacate its London headquarters in the 25-30 Churchill Place building in Canary Wharf, which is leased until 2039.

Canary Wharf Group, the developer of the London Docklands financial district, lodged the High Court case, asking the court to enforce the contract after the EMA argued that Brexit would “frustrate” the lease.

Frustration is an English legal term meaning an unexpected event has made a contract impossible to fulfil, or has drastically changed the original reason for signing it.

The judge sped up the case to ensure a ruling before the UK’s scheduled departure from the EU on March 29, but said on Wednesday that the questions of costs and permission to appeal would be adjourned until another hearing.

Sir George Iacobescu, chairman and chief executive of Canary Wharf Group, welcomed the decision.

“We have always firmly believed that Brexit did not amount to a frustration of EMA’s lease,” he said. “If EMA had been successful it could have undermined fundamental principles of English law and set an unfortunate precedent.”

The EMA said it “respectfully takes note” of the judgment and would “take some time to carefully study this judgment, its implications and the most appropriate way forward”.

But it suggested the case should be referred to the European Court of Justice. “In the agency’s view, a preliminary reference to the Court of Justice of the European Union in order to receive an authoritative interpretation on those issues would have been, and still is, the most appropriate way forward,” the agency said.

Alison Hardy, partner in dispute resolution at Ashurst, said she expected the EMA to appeal.

“Given the amount of money in dispute . . . I’d be amazed if the EMA didn’t appeal. The next question is whether the appeal will go straight from the High Court to the Supreme Court,” she said.

“Given the importance of this case, I think there is every chance that it will.”

Chuka Umunna: chief convener in the most significant schism in leftwing politics for nearly four decades © Vickie Flores/EPA

Chuka Umunna: driving force behind the Independent Group Rallying role in Labour breakaway is culmination of his journey to the political centre Sebastian Payne

N

o one knew who was going to break away from the Labour party on Monday morning. But when the seven disenchanted MPs solemnly filed into their press conference, there was one figure who was both expected and instantly recognised.

Chuka Umunna is the chief convener and rallying force behind the most significant schism in British leftwing politics for nearly four decades. The split would not have happened without him.

The newly christened Independent Group has yet to decide how it will elect its leader. When it does, the 40-year-old member for Streatham is the favourite to become the figurehead, although two other breakaway MPs, Chris Leslie and Luciana Berger, are vying for the position.

Ms Berger, who is expecting her second child, may pose the greatest challenge (she launched the breakaway group while Mr Umunna watched on). The group may conclude it needs a female leader, given that their former party has always been led by men. If not, Mr Umunna is the more obvious choice.

Born in 1978, Mr Umunna is of Nigerian, English and Irish heritage. He was brought up in the south London suburb he represents in parliament. After attending Manchester and Nottingham Trent universities, he had a brief career in employment law. In his late twenties he emerged as a prominent Labour campaigner. By the age of 30

he had been adopted by the party as its candidate for Streatham. He was duly elected in 2010 with a comfortable majority.

Nine years on, Mr Umunna’s true beliefs remain somewhat ambiguous. Prior to his career in elected office, he was on the management committee of Compass, a leftwing pressure group critical of Tony Blair’s governments. He was also associated with the “Blue Labour” movement, which aimed to reconnect the party with its provincial working-class electorate.

Soon after he entered parliament he began his journey towards the political centre. As he made his name in Westminster — first as a backbench MP and then as a core member of Ed Miliband’s shadow cabinet — he came to be labelled a “Blairite”, now one of the harshest insults for a Labour MP. His leading role in the Independent Group is the culmination of that political journey.

“I completely admire his bravery. It is not an easy thing to do to walk away, although I think they’re misguided,” said Neal Lawson, who chairs Compass. “But what is perplexing is the speed and scale of the shift Chuka has made in his politics. He’s clever and charming but it is hard to think how you can therefore maintain deep intellectual roots.”

Before Mr Umunna was elected to the Commons, he was described by the New Statesman magazine as “Barack Obama for Britain”.

He has rare qualities for a British politician: charisma and star appeal. He is an engaging television

performer; savvy on social media; and always armed with a pertinent thought. To some in the Labour movement, however, his rapid rise is not born out of campaigning graft.

One Labour party stalwart described an episode of how Mr Umunna failed to live up to expectations at a Labour fundraiser before the 2015 general election.

Speaking at the dinner in Leeds, he “starts talking about how great the buses are around here, where it was obvious he never goes on buses. He then went on to try and applaud each of the local candidates but clearly had no idea of who they were. To say he fluffed it doesn’t do it justice: it was terrible.”

“I have met him 10, 15, 20 times. He still has no idea who I am,” said the party insider. “You cannot be a successful top-flight politician and act like that. Everybody in the room realised that night he doesn’t have ‘it’.”

Others in his former party see him differently. “He was a Labour member before he arrived at university. There was nothing contrived about Chuka’s politics,” said a parliamentary colleague. “Chuka is a democratic socialist: Keynesian in economics, a believer in public services. Sure, his interpretations have changed but are still within a traditional Labour party position. That was until yesterday.”

Tristram Hunt, formerly a Labour MP and now director of the V&A Museum, added: “He’s a clever man but he also put the hours in. He shouldn’t be regarded as dipping in and out of the hard work of politics.”

Putin says honest businesses should not live in fear

Comments come after the arrest of US private equity executive Michael Calvey Henry Foy

V

ladimir Putin has said honest businesses should not live in fear of prosecution in Russia, a week after the country’s most prominent foreign investor was arrested.

American private equity executive Michael Calvey was arrested last week for allegedly defrauding mid-sized Vostochny Bank of Rbs2.5bn ($38m). Mr Calvey, whose private equity fund Baring Vostok owns 52.5 per cent of Vostochny, claims the charges are related to a struggle for control

of the bank with two Kremlinconnected businessmen, Artem Avetisyan and Sherzod Yusupov.

The case — brought less than a week after Mr Yusupov complained to Russia’s security services — has sparked an outcry among western investors and liberal technocrats alike that prompted the central bank to intervene this week.

Without mentioning Mr Calvey by name, Mr Putin used his annual state-of-the-nation address to lawmakers on Wednesday to call for fair treatment of business.

“Honest businessmen should

not go around being afraid of criminal prosecution,” he said.

“This is a big issue for the economy. The business community point to many issues in our legal framework,” he said. “So-called economic crimes have to be treated in a fair way. Very often people are kept in jail simply because investigators are not competent enough.”

Mr Avetisyan was appointed

by Mr Putin in 2011 to a position at a Kremlin economic think-tank and later convinced the president to back his plans to create a statebacked small business bank.

split in Kenya’s ruling party over President Uhuru Kenyatta’s successor is reigniting political tensions and threatening to hobble the government’s ambitious reform agenda.

Alliances in Kenyan politics are often in flux but analysts say the current spat between deputy president William Ruto and an ally of Mr Kenyatta is particularly worrying and exposes a rupture between Kenya’s two most senior politicians.

David Murathe, a former vicechairman of the ruling Jubilee party, launched a series of stinging public attacks on Mr Ruto this year. He has accused the leader of the politically influential Rift Valley region of embezzling public funds and declared him unfit to succeed Mr Kenyatta as the party’s next candidate for head of state.

Kenya is one of east Africa’s biggest economies and an important commercial hub for many of the region’s biggest companies. Analysts warn that renewed political infighting could curtail development, less than two years after a disputed election rattled investors and suppressed growth.

Mr Kenyatta and Mr Ruto joined forces in 2013 when they were both under indictment by the International Criminal Court for their involvement in post-election violence in 2008. Mr Ruto delivered his Rift Valley voters to help elect Mr Kenyatta in 2013 and backed him again four years later on the understanding that he would succeed the president in 2022.

While the alleged deal was always unpopular with some sections of Mr Kenyatta’s support, it was accepted as a necessary compromise. But Mr Murathe’s attacks, which analysts say are designed by the party’s leadership to torpedo the arrangement, have divided the alliance and threatened to plunge the country into a premature succession battle.

“I am convinced he is not fit to run for president”, Mr Murathe told the Financial Times repeatedly in an interview at his private residence in Nairobi.

He added that Mr Ruto had focused on strengthening his own political and financial position and failed to support the president’s agenda.

“If he can behave like this when he is number two, how will he behave when he is number one, because then he would have the absolute power to ride roughshod over everybody,” said Mr Murathe.

Mr Murathe insisted that his opinions were his own but many observers say he is acting as a proxy for his friend Mr Kenyatta. He stepped down from his position in the ruling party in January, saying he could no longer work with Mr Ruto in good faith.

“The importance of Murathe is that nobody thinks he is speaking for himself,” said Murithi Mutiga, a Kenya expert at the International Crisis Group. “In the minds of the public he is seen as speaking for a powerful camp within Jubilee that is mobilising against Ruto.”

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Recession rises to top worry of credit investors, BofA survey shows Concerns over global economy despite sharp recovery this year in corporate bond market

Caroline Grady

C

oncerns over global recession jumped to the top of the worry list for investors in corporate bonds as market stress in late 2018 and expectations for further weakness in economic data dent investor confidence, a new poll shows.

Almost a third of credit investors surveyed by Bank of America Merrill Lynch see the risk of a global recession as their top worry, the highest for a single concern since mid 2017.

The results of the survey of 58 BofA clients come on the back of a slew of weak economic data, with Germany, Europe’s biggest economy, only narrowly avoiding a technical recession in the second half of last year. At the same time, growth in China slowed in 2018 to a 28 year low. Next week’s release of fourth-quarter gross domestic product data in the US is expected to show a sharp drop in growth from the highs in the second quarter.

Economic data out of the euro area are expected to remain weak according to survey respondents with half of high-yield investors expecting the single currency bloc to dip into recession.

A bout of market volatility sent spreads on global investment grade bonds rising from around 116 basis points in September to a peak above 162 bps in early January, according to an ICE Data Services index. But as risk sentiment has improved in recent weeks, spreads, or the premium in yield demanded to purchase corporate bonds over ultra-low risk government debt, have eased back to 135 bps.

China stimulus is the key to lifting the eurozone from its current malaise according to 40 per cent of credit investors, the BofA survey showed. Although high-yield investors, who trade corporate bonds deemed to be riskier than investment grade peers, are less convinced this will be the case without higher bank lending.

Meanwhile, with expectations for further Federal Reserve rate rises largely priced out of markets, concerns about rising yields have disappeared. Brexit fatigue was evident with the survey showing only 2 per cent thinking this was newsworthy.

Despite this gloomy picture, “investors have added meaningful risk” this year, BofA said. Overweight positions are “almost back to their post-Lehman average”, the survey showed.

Barrick to approach Acacia with proposal to settle Tanzania dispute Henry Sanderson

B

arrick Gold has said it will approach the board of Acacia Mining to back its formal proposal to settle a long-running dispute with the Tanzanian government.

Barrick, which owns 64 per cent of Acacia, said it had agreed on a proposal with the government of Tanzania that would include the payment of $300m to resolve outstanding tax claims.

Barrick said “work is under way” to finalise a series of definitive agreements that would bring the proposal into effect.

Acacia has been unable to export the majority of its gold from the east African country since 2017, following charges that it had underpaid $190bn in taxes over a 17-year period.

“Significant amounts of real value have been destroyed by this dispute and, in Barrick`s view, this proposal will allow the business to focus on rebuilding its mining operations in partnership with their respective stakeholders, and most importantly long-suffering investors, includ-

ing Barrick,” Mark Bristow, chief executive of Barrick, said.

Barrick gave no indication of whether Tanzania’s president John Magufuli would accept the deal, however.

The proposal is based on an agreement struck between the government and Barrick’s executive chairman John Thornton in October 2017. It proposes the creation of a local operating company to manage Acacia’s mines, a 50/50 split of the economic benefits, and a payment of $300m to be paid over time.

“Work is under way to finalise the definitive agreements needed to give effect to the proposal. To become effective, the proposal and those agreements must be approved by Acacia and the Government of Tanzania, in keeping with applicable laws and regulations,” it said.

Shares in Acacia rose by 3 per cent on the news to trade at 231.8p in London.

Acacia said in a statement that any proposal would be reviewed by an independent committee of its board.

Ireland alarmed by UK’s food tariff plans under no-deal Brexit Agriculture minister says Dublin has discussed with Brussels the assistance it would need Arthur Beesley

I

reland has responded with alarm to UK plans for tariffs and quotas on agri-food imports in a no-deal Brexit, as worries grow about the potentially grave impact on the country’s annual €4.5bn food and drink sales to Britain.

Leo Varadkar’s government is facing demands to seek emergency aid from Brussels after Michael Gove, UK environment secretary, said reports that Britain would operate a zero-tariff regime in a no-deal were “not accurate”.

Mr Gove is preparing tariffs and quotas on beef, lamb and dairy products ahead of Britain’s scheduled exit date of March 29, sending shockwaves through an industry that sends 37 per cent of its exports to the UK. Irish beef could be hit with tariffs of up to 53 per cent if Britain applied World Trade Organization rates, which would translate into a €750m hit in the beef sector alone.

No-deal fears have spurred deep anxiety in Irish business amid concern in government that the failure of Brussels-London talks — which have recently shown little sign of movement — would trigger a “substantial

slowdown” in Ireland’s economic growth.

Michael Creed, Irish agriculture minister, told the Financial Times he had already discussed “the kind of assistance that will be required” with the European Commission if Brexit talks failed.

Industry and farm organisations have pressed for a definitive commitment from Brussels to support a sector that fears big output cuts and the loss of thousands of mainly rural jobs if UK tariffs are applied. “[Tariffs] would decimate much of Ireland’s agri-food exports to the UK,” said Paul Kelly, director of Food Drink Ireland, an industry lobby that has called for a special stabilisation fund to help offset any UK tariffs. He added that, for the €4.5bn of food and drink that Ireland exports to Britain, the UK could place an additional €1.7bn in tariffs.

Mr Creed said Phil Hogan, the Irish national who is EU agriculture commissioner, has reiterated Brussels’ “readiness to respond and support Ireland” to meet the challenges facing farmers and food producers, adding: “We are in regular contact on these issues and that will continue as the situation evolves.”

A senior European Commission

official cited the precedent of special aid for European food producers hit by a Russian ban on EU imports in 2014.

“We’ve had crises in the past such as the Russian embargo and we responded. The potential scale of the response is difficult to gauge just now, but we’ll deal with whatever arises,” the official said.

The clamour for European support comes as two of the biggest Irish food companies, Kerry and Glanbia, warned of increased Brexit risks despite global expansion that has seen them reduce their reliance on UK markets.

Kerry said it was concerned about weakening UK consumer demand since late last year. The company had moved to stockpile “weeks” of raw material supplies in Britain and mainland Europe in a bid to trade smoothly through a no-deal, even though it believed a “managed transition” was still the most likely outcome to Brexit talks.

Edmond Scanlon, chief executive, said that, if the UK imposed WTO tariffs on food imports, the likely impact “would be extreme”.

He added that the company would seek to pass on price increases to customers.

Europe makes case for competition with pushback on Sainsbury’s Asda deal Preliminary ruling is so severe UK supermarkets are unlikely to be able to move forward Arash Massoudi

M

ike Coupe, the chief executive at UK grocer J Sainsbury, could hardly contain his joy. In April, he was caught on camera before an interview on his just-announced plans to acquire rival Asda humming a showtune, “We’re in the money”. Now, Mr Coupe is likely looking for a more downbeat song to sing.

UK competition authorities on Wednesday all but killed the £7.3bn supermarket deal, making it the second time this month European regulators have moved to prevent big corporations from getting even bigger.

Pushback from antitrust enforcers had been expected. But the scope of the Competition and Markets Authority preliminary ruling is so severe that there is likely no way for Sainsbury’s and Asda to find a way

forward. Shareholders responded by wiping out nearly a sixth of Sainsbury’s market value.

The move comes fast on the heels of a European Commission decision to block a planned “Railbus” combination of Siemens and Alstom, the German and French train manufacturers, and raises new questions about whether big mergers are becoming anathema in Europe.

The twin crackdowns stand in sharp contrast to the US, where big business has had its way with the Trump administration. Tax breaks, regulatory rollbacks and a decline in antitrust enforcement have been celebrated by corporate interests in Washington.

If Europe and the US are turning to Venus and Mars on merger approvals, the next test will be the combination of American mobile telecom rivals T-Mobile and Sprint.

In telecoms, Europe has consistently

rejected similar so-called four-tothree consolidations in recent years.

The Trump administration is unlikely to follow suit.

While the grocery and industrial sectors share little in common, there are some takeaways from Europe’s resistance.

Both deals would have created more powerful standalone European companies. A combined “Sainsda” would be able to fully challenge market leader Tesco in size and scale.

Siemens and Alstom were aiming to become the dominant train and signalling companies in Europe as China threatens to intrude into the market.

Consolidation deals are always cast by advocates as a means to pass on cost savings to consumers, but the reality is that shareholders are generally the biggest winners. Brussels and London have argued that consumers ultimately incur higher prices from the decline in competition.

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Thursday 21 February 2019

ANALYSIS India’s Anil Ambani found guilty of contempt in Ericsson case RCom chairman faces prison if $77m payment not made within 4 weeks Simon Mundy

H After ‘El Chapo’: Mexico’s never-ending war on drugs Despite the conviction of its most important boss, Joaquín Guzmán, the narcotics trade is booming Jude Webber

P

resident Andrés Manuel López Obrador received a blunt warning earlier this month: a crude hand-painted sign strung up on a bridge in the border city of Tijuana.

It was the work of an ally to Mexico’s most aggressive cartel, the Jalisco new generation (CJNG) which is waging a brutal fight with the Sinaloa cartel for supremacy in the Pacific coast gateway to the US drugs market.

The turf battle, a replay of Mexican mafia wars from a decade ago, has turned Tijuana into Mexico’s most murderous city with 2,404 homicides last year and prompted a recent deployment of 1,800 troops by Mr López Obrador to try to stop the escalating violence.

“You can’t do anything to us . . . not with all your f***ing people,” the narcos’ message baited Mexico’s new president.

“Get the f*** out of Tijuana. We don’t want you here . . . this isn’t your war.”

Recent news headlines might lend the impression that the authorities on both sides of the border are making progress against the illicit drugs trade that runs through Mexico. In New York last week, Joaquín “El Chapo” Guzmán, the once all-powerful former head of the Sinaloa cartel, was convicted on 10 counts of drug trafficking and money laundering.

He was the highest profile drug boss to ever stand trial in the US. At the same time, Mr López Obrador has sought to refocus the fight against the drug trade. Shortly after Guzmán’s conviction, he visited the drug lord’s hometown of Badiraguato in the northwestern state of Sinaloa to inaugurate a trio of public projects including a treeplanting scheme. One of his campaign slogans was “hugs not bullets” and he is aggressively pushing social programmes he says will help keep young people out of the clutches of organised crime.

He maintains it is not his job to go after cartel bosses — a stark reversal of the “kingpin” strategy Mexico has assiduously pursued.

“Officially, there is no war any more,” he said last month.

Yet even if Guzmán may be spending the rest of his life in jail, the illicit drugs trade shows no signs of diminishing. Instead, business is booming. The US Drug Enforcement Administration estimates that Mexican heroin production increased 37 per cent to 111 tonnes in 2017. Cocaine production in

Colombia also reached a record high in 2017.

Rising drug busts on the US border also point to increasing supplies heading north. According to the DEA, most heroin is sent over in the San Diego corridor near Tijuana — the majority smuggled through legal points of entry, suggesting that President Donald Trump’s planned border wall would be of scant use in deterring what he calls an “invasion” of drugs. Heroin seizures in the San Diego corridor rose nearly 60 per cent in 2017.

Cocaine seizures rose by nearly a quarter to reach a five-year high in 2017, the third straight year of increases. Border seizures of fentanyl, a powerful synthetic opioid produced in China and Mexico and increasingly mixed with heroin to make it more powerful, also rocketed 135 per cent in 2017, the DEA said, the majority again trafficked through the San Diego region.

That was also the gateway for most methamphetamines, seizures of which shot up 255 per cent in the five years to 2017.

Despite the challenge from new rivals, the Sinaloa cartel still has the biggest overall drug distribution footprint in the US. On the DEA website, just below a news release celebrating Guzmán’s conviction as a “huge victory”, is a most wanted fugitive notice for Ismael “El Mayo” Zambada, Guzmán’s longtime partner who is believed to be now running the Sinaloa cartel.

“You won’t end drugs trafficking in Mexico. With 30m US consumers, it’s utopia to think you could,” says Guillermo Valdés, a former Mexican intelligence chief. “It’s all about what type of drugs trafficking you tolerate.”

Rising trade has led to rising violence. Mexico saw a record 30,499 murders last year, up more than 15 per cent on 2017. In just over a dozen years, since Mexico’s then president Felipe Calderón launched a disastrous war on drugs, more than 250,000 people have been killed and 40,000 have disappeared.

Tijuana’s murder toll last year was roughly double levels a decade ago.

“As long as, by US government estimates, $19bn-$39bn in illicit drugs’ profits are returned to Mexico [a year] and there is a $150bn US market, that will create a gravitational pull and the conditions for organised crime activities in Mexico,” says Bruce Bagley, an expert on cartels at the University of Miami.

“We aren’t going to see an end to violence and drug trafficking out of Mexico. Very likely we’ll see more because the drugs trade is so

profitable.”

Chart on the US illegal drug trade El Chapo, 61, who rose from being a semi-literate farm-hand to international criminal mastermind, is an old school drugs boss, who spent billions buying protection from officials up and down the country. According to testimony heard in the trial, that went right up to former President Enrique Peña Nieto, who was accused of receiving a $100m payment from the Sinaloa cartel. (He denied the claim).

These connections helped Guzmán bust out of prison twice — first in 2001, either hidden in a laundry cart or disguised as a policeman, depending on whom you believe; then in 2015 via a tunnel under his cellblock shower. His largesse ensured he could live apparently invisible to the authorities for 13 years after escaping jail the first time. He also bought local loyalty by funding churches, roads and schools; some locals who revered him as a Robin Hood figure embarked on a prayer marathon for his acquittal as the jury in New York deliberated.

An incorrigible womaniser, Guzmán jetted to Macau to gamble, to Switzerland for expensive anti-ageing skin treatments or to Acapulco where he had a private zoo, the court heard. Mr Zambada, however, keeps a much lower profile. “He never leaves his mountain lair,” [in Sinaloa and neighbouring Durango] says Mexican security expert Alejandro Hope.

There are plenty of challengers to the throne. The fugitive 52-year-old CJNG boss Nemesio Oseguera, alias “El Mencho”, has made his upstart cartel a watchword for brutality in the years since it came to prominence.

A former local policeman from the state of Michoacán who grew avocados as a boy and did not finish primary school, he served three years in a US jail for heroin trafficking before returning to Mexico and ramping up the presence of CJNG in the synthetic drug trade while forging a chilling reputation for violence.

According to Mexican media reports, he ordered the murder of 35 people and the dumping of their bodies outside a shopping centre in the southeastern state of Veracruz in 2011 as a warning to the now largely defunct Zeta cartel. Now he is waging war on the Sinaloa cartel he used to support. While the latter’s nationwide presence has shrunk to 15 or 16 of Mexico’s 32 states, CJNG has expanded to about 23, according to Eduardo Guerrero, a security analyst.

igh-profile tycoon Anil Ambani has been found guilty of contempt of court by India’s supreme court and told that he will face prison if his company does not complete a $77m payment to Sweden’s Ericsson within four weeks.

Ericsson has been pursuing Mr Ambani over unpaid dues for services to his Reliance Communications, which said this month it would pursue insolvency proceedings. The businessman had personally assured the court that RCom and two subsidiaries would pay Rs5.5bn ($77m) to Ericsson

by September.

After they failed to make the payment — despite extending the deadline to December — Ericsson launched a new suit asking for Mr Ambani to be detained for contempt of court.

On Wednesday, the supreme court found Mr Ambani guilty of the offence, along with Satish Seth and Chhaya Virani, who chair RCom subsidiaries Reliance Telecom and Reliance Infratel.

The court declined to have them detained immediately but said they would face three months in prison if the outstanding amount was not paid within four weeks.

“The Reliance companies are able to pay this amount, but are wilfully refusing to do so,” the court said, criticising Mr Ambani’s “cavalier attitude . . . to the highest court of the land”.

In a brief statement, RCom said it respected the judgment and would comply with it. A spokesman for the

company said that Mr Ambani, Mr Seth and Ms Virani had no further comment.

Ericsson said it welcomed the judgment and looked forward to RCom’s compliance.

The ruling comes as Mr Ambani faces growing challenges to maintain his hold on his heavily indebted group. He has controlling stakes in his major listed companies through wholly owned investment vehicles but most of those stakes are now pledged to lenders as collateral for loans.

After the group’s share prices fell following RCom’s insolvency announcement on February 1, two of Mr Ambani’s nine lenders started selling pledged stock. Shares in his infrastructure and power companies subsequently fell by more than 50 per cent.

Mr Ambani’s group has filed a number of lawsuits against financial group Edelweiss, whose mutual funds sold a large quantity of pledged shares, alleging that these actions were illegal.

Edelweiss denies wrongdoing.

On Sunday, a statement issued

by Mr Ambani’s office said he had reached an “in-principle standstill understanding” with most of his lenders. It said they would not sell any more pledged shares until October and Mr Ambani would liquidate his direct stake in his power business to repay loans.

However, three of the lenders subsequently told the Financial Times they had given no assurances to Mr Ambani regarding the pledged shares.

Spokespeople for Mr Ambani’s group did not respond to repeated requests for comment.

Anil Ambani has been pursued by Ericsson over unpaid dues for services to his company Reliance Communications © Punit Paranjpe/AFP/Getty

South Africa plots $5bn bailout of state-owned power company

Country’s move to rescue embattled utility deals fresh blow to rand Joseph Cotterill

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outh Africa unveiled a $4.8bn bailout for Eskom, the struggling state-owned power monopoly whose blackouts have throttled the economy and is skirting collapse.

The government will inject 69bn rand ($4.8bn) over three years to stabilise Eskom’s $30bn debt as it attempts a turnround, Tito Mboweni, South Africa’s finance minster, said as he delivered the national budget on Wednesday.

“The national government is not taking on Eskom’s debt. Eskom took on the debt. It must ultimately repay it. We are setting aside 23bn rand a year to financially support Eskom during its reconfiguration,” Mr Mboweni said.

The South African rand fell more than two per cent against the US dollar as the bailout was announced.

The currency has dropped almost 7 per cent this month after a rally in January.

Eskom imposed its most severe rolling blackouts in years this month as a long financial crisis at the utility grew acute, throttling Africa’s most industrialised economy which receives nearly all of its power from its ageing coal-fired plants.

The risk of Eskom’s collapse is seen as the biggest threat to South Africa’s stretched public finances as most of its debt is state-guaranteed.

But without a plan to control Eskom’s rising costs a bailout could also imperil the country’s last remaining investment-grade credit rating, bestowed by Moody’s.

Thursday 21 February 2019

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BUSINESS DAY

49

understanding the economy of nigeria’s 36 states

T

he purpose of this series is to present evidencebased picture of Nigeria vis-a-vis the current presentations by politicians and various interest groups which are not backed by facts and figures. Such presumptuous speculations have driven the various national discourses or debates on the future of Nigeria, including such thorny issues as restructuring, whether fiscal, political, geographical or administrative.

Facts are sacred, they say, and as such must be given priority in our search for national viability and survival.

‘Understanding the Economy of Nigeria’s 36 States’ series presents such an objective, dispassionate picture of the state of the economy and so viability and sustainability of the various component parts, sub-nationals or federating units of the country going forward. This series will serve to either buttress or discountenance some of the claims made on both sides of the restructuring argument.

The series, written by Cambridge-trained economist, Dr. Ayo Teriba, looks at each state at a glance in the

context of its geopolitical zone and as it compares to other states. The data present irrefutable facts about each region and its component states and raise the question: are they viable as constituted today and going forward?

Each series examines a state’s realities from the perspectives of economy, resource endowment, state of wellbeing of its populace, and its budget (revenue and expenditure profile).

Today’s edition covers an overview of Delta State and Edo State in the South South region.

Delta Delta State Summary • Economy Delta’s GSP was 2.9 percent of Nigeria’s GDP in 2017, 3rd in the South-South, 4th in the South, and 8th in Nigeria. Oil Industry and Services jointly accounted for 85 percent (Oil, 44 percent, Services, 41 percent) of the State’s GSP, Non-Oil industry was 12 percent while Agriculture was 3 percent.

• Endowments Delta State’s Land Area is 1.88 percent of Nigeria’s land mass, 3rd behind Cross River and Edo in the South-South, 4th in the South and 22nd in the country. Delta has an Atlantic coastline, no boarder, and is bounded by six States; three from its own region, Rivers, Bayelsa and Edo, two from the SouthEast, Imo and Anambra, and Ondo from the South-West.

• Wellbeing Total population of the State is 2.9 percent of national population, 2nd in the South-South, 5th in the South and 12th in the country. With 22nd land area, Delta is 15th most densely populated, 4th most literate and has the 19th life expectancy of 49 years in the country, with a Per Capita GSP that is the 4th in the South-South, 5th in the South and 10th in the country.

in the country, 2nd in the South-South, 3rd in the South 4th among the 36 States and the FCT. Manufacturing (mainly Food, Beverage and Tobacco, and Textile, Apparel and Footwear) was 42 percent of the State’s Non-Oil output, Utilities was 38 percent, Construction, 19 percent and Solid Minerals, 1 percent. * N1.3 trillion Service output of Delta State accounted for 2.1 percent of Nigeria’s Service sector, 2nd in the South-South, 3rd in the South and 5th in the country.

Inter-State Comparisons With a Gross State Product (GSP) of N3.3 trillion or 2.9 percent of Nigeria’s GDP in 2017, Delta State is the 3rd in the South-South, 4th in the South and 8th in the country. Delta’s 5.8 million Population is 2.9 percent of national population, 2nd in the South-South, 5th in the South and 12th in the country.

The State’s Land Area of 17,100/km2 is 1.88 percent of Nigeria’s land mass, 3rd in the South-South, 4th in the South and 22nd in the country. Revenue of N167.9 in the State was 5.6 percent of all States’ total revenue in 2017, 3rd in the South-South, 4th in the country and the South.

• Budget In 2017, Delta State retained 5.6 percent of States’ revenue, the 4th in the country, spent 4.1 percent of States’ outlays, 6th in the country, maintained a surplus, and held 5.7 percent of total debt, 3rd in the country.

1. Economy Structure Delta’s estimated Gross State Product (GSP) in 2017 was N3.3 trillion or 2.9 percent of Nigeria’s GDP, the 3rd in the South-South, 4th in the South and 8th in Nigeria. Oil Industry and Services jointly accounted for 85 percent (Oil, 44 percent, Services, 41 percent) of GSP, Non-Oil industry was 12 percent while Agriculture was 3 percent.

2. Endowments Delta State was created in 1991 from the splitting of old Bendel State into Edo and Delta States.

Delta State has a coastline with no boarder and shares boundaries with six other States. Edo to the North, Ondo to the North-West, Bayelsa to the North, Anambra and Imo to the East, and Rivers to the South-East.

Delta State’s land area of 17,100 km2 is 1.88 percent of Nigeria’s land mass, 3rd in the South-South, 4th in the South and 22nd in the country. Major towns are cities in Delta State are; Warri, Sapele, Asaba, Agbor, Abraka, Ughelli.

* N100 trillion Agricultural output in Delta State was 0.4 percent of all agricultural out in the country, 4th in the South-South, 10th in the South and 27th in the country.

• N36 billion in forestry was 36 percent of the State’s agricultural output,

• N34.5 billion in fishery was 34 percent,

• N28 billion in livestock was 28 percent,

• N2 billion in crops was 2 percent. * Delta State’s N1.4 trillion Oil production was 13.88 percent of all Oil production in the country, 4th among the 6 Oil producing South-South States, the South and in Nigeria. * N40 trillion 2017 Non-Oil Industrial output in Delta State was 2.5 percent of all Non-Oil output

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understanding the economy of nigeria’s 36 states 3. Wellbeing

3.1.2.1 Revenue Delta State’s 2017 actual total revenue of N167.9 billion was 5.6 percent of all States’ actual total revenue, 3rd in the South-South and the South, 4th among the 36 States and FCT. The revenue components in 2017 were: • Statutory Allocations of N109.8 billion was 7.5 percent of the total allocations to all States and FCT, and the highest in the South-South, the South, and the country.

• Internally Generated Revenue of N28.5 billion was 3.7 percent of total, 2nd in the South-South and the South, 3rd in the country.

• Value Added Tax of N11.3 billion was 2.4 percent of States’ total, the 2nd in the South-South, 4th in the South and 8th in the country.

3.1.2.2 Spending Delta State’s actual total expenditure of N153.3 billion in 2017 was 4.1 percent of actual total spending by all States, 3rd in the South-South, 4th in the South and 6th in the country. The spending components in 2017 were: • Recurrent Spending of N113.5 billion, 4.2 percent of the recurrent outlays of all the States and the FCT, 2nd in the South-South, 3rd in the South and 6th in the country.

• Capital Spending of N39.8 billion in Delta State was 3.8 percent of States and FCT’s total capital outlays, 3rd in the South-South, 4th in the South and the country.

3.1.2.3 Deficits Delta State is one of the only 11 States in Nigeria that had surpluses in 2017. The State made an overall surplus of N14.6 billion, 2nd among the 3 States in the South-South that had surpluses, the 3rd among the 8 States that had surpluses in the South and the 11 States that had surpluses in the country.

3.1.2.4 Debt Delta State’s total outstanding debts of N246.1 billion was 5.3 percent of the States and FCT’s total debts, the highest in the South-South, 2nd in the South and 3rd in the country.

• Domestic Debt of N228.3 billion in December 2017 was 6.8 percent of States and FCT’s domestic debts, the highest in the South-South and the South, 2nd to Kwara State in the country.

• Foreign Debt of N17.8 billion in December 2017 was 1.4 percent of the total foreign debts of the States and FCT, 4th in the South-South, 14th in the South, and 20th in the country.

4.1.3 2013-2017 Trends Delta’s Total Revenue: Total Revenue declined from N247.5 billion in 2014 to N167.9 billion in 2017.

The decline in revenue came largely from gross statutory allocations (GSA) and partly from internally generated revenue while value added tax proved resilient.

5.8 million Population of Delta State is 2.9 percent of national population, 2nd in the SouthSouth, 5th in the South and 12th in the country. With a land area of 17,100 per km2, density in Delta State is 342 people per km2 compared to the country average of 219 people/km2, is 2nd in the South-South, 9th in the South and 15th in the country. Delta’s literacy rate is 3rd in the South-South, 4th in the South and the country. Delta’s life expectancy of 49 years is 4th in the South-South, 13th in the South and 19th in the country. Female life expectancy of 52 years is 4th in the South-South, 13th in the South and 21st in the country. Male life expectancy of 47 years is 4th in the South-South, 13th in the South and 19th in the country. Per Capita GSP of N558 thousand in the State is the 4th in the South-South, 5th in the South and 10th in the country.

Delta’s Total Spending: Total Spending fell from N238.1 billion in 2014 to N153.3 billion in 2017.

Recurrent spending grew very slightly from N110.9 in 2014 to N113.5 billion in 2017, while capital spending fell rather steeply from N127.2 billion in 2014 to N39.8 billion in 2017.

4. Budget 3.1 Fiscal Realities of Delta State 3.1.1 2018 Aspirations Delta State’s N308 billion 2018 budget is 3.3 percent of all States’ and FCT 2018 budget aspirations, 5th in the South-South, 7th in the South and the country.

3.1.2 2017 Realities

Revenue Use: Except for 2016 when it incurred an overall deficit, Delta maintained current surpluses that were large enough to fund its capital projects and post modest overall surpluses.

Financing: • Revenue financing: overall surplus of 3.8 percent of total revenue in 2014 gave way to an overall deficit of 14.9 percent of total revenue in 2015 and an overall surplus of 8.7 percent of total revenue in 2017.

• Spending finance: overall surplus of 3.9 percent of spending in 2014 gave way to an overall deficit of 17.5 percent of spending in 2015 and an overall surplus of 9.5 percent of spending in 2017.

• Capital finance: overall surplus of 17.3 percent of capital spending in 2014 gave way to an overall deficit of 65.2 percent of capital budget in 2015, and an overall surplus of 36.6 percent of capital budget by 2017.

Delta’s Debt • Domestic debt stock rose from N102.1 billion in 2013 to N228.3 billion in 2017; from 40 percent of revenue in 2013 to 135.9 percent in 2017.

• Foreign debt stock rose from N3 billion in 2013 to N17.8 billion in 2017; from 1.2 percent of revenue in 2013 to 6 percent in 2017.

• Total debt stock rose from 41.3 percent of revenue in 2013 to 146.6 percent in 2017.

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BUSINESS DAY

51

understanding the economy of nigeria’s 36 states

Edo Edo State Summary • Economy Edo’s GSP was 0.9 percent of Nigeria’s GDP in 2017, 5th in the South-South ahead of Cross River, 10th in the South, and 22nd in Nigeria. Services were 59 percent of the GSP, Agriculture, 23 percent, Non-Oil Industry, 16 percent, and Oil, 2 percent.

• Endowments Edo State’s Land Area is 2.1 percent of Nigeria’s land mass, 2nd only to Cross River in the SouthSouth, 3rd in the South and 21st in the country. Edo State has neither a boarder nor a coastline, being landlocked between four States, one of which is from the same region, and the other three are from three other regions: Delta from the same South-South, Ondo from South-West, Kogi from North-Central, Anambra from South-East. Thus, the State.

• Wellbeing Edo State’s population is 2.3 percent of Nigeria’s, 4th in the South-South, 12th in the South and 24th in the country. Edo is 22nd most densely populated State, 7th in literacy and has the 24th life expectancy in the country, with a Per Capita GSP that is 5th in the South-South (only higher than Cross River), 9th in the South and 21st in the country.

and the FCT. Manufacturing (mainly Cement but Food, Beverage and Tobacco and Textile, Apparel and Footwear) produced 90 percent of the State’s Non-Oil output while construction was 10 percent. * N609.8 billion Service output in Edo State accounted for 1.0 percent of Nigeria’s Service sector, 4th in the South-South, 11th in the South, and 15th in the country.

Inter-State Comparisons With a Gross State Product (GSP) of N1.02 trillion or 0.9 percent of Nigeria’s GDP in 2017, the 5th in the South-South, 10th in the South and 22nd in Nigeria. Edo State’s 4.6 million Population is 2.3 percent of national population, the 4th most populated State in the South-South, 12th in the South and 24th in the country. Land Area of 19,200 in the State is 2.1 of Nigeria’s land mass, the 2nd in the South-South after Cross River, 3rd in the South and 21st in the country.

Edo’s Revenue of N71.8 billion was 2.4 percent of all States’ total revenue in 2017, the 5th in the South-South, 7th in the South and 10th amongst the 36 States and the FCT.

• Budget In 2017, Edo State retained 2.4 percent of States’ revenue, the 10th in the country, expended 2.4 percent of States’ outlays, 19th in the country, incurred a deficit, and held 3 percent of States’ total debt, 13th in the country.

1. Economy Structure Edo’s estimated Gross State Product (GSP) in 2017 was N1.02 trillion or 0.9 percent of Nigeria’s GDP, 5th in the South-South ahead of Cross River, 10th in the South, and 22nd in the country.

Services were 59 percent, Agriculture, 23 percent, Non-Oil Industry, 16 percent, and Oil, 2 percent.

2. Endowments Edo state was formed in 1991 from the northern portion of Bendel State, with the Southern portion becoming Delta State. Edo State has neither a boarder nor a coastline, being landlocked between four States: Ondo to its West, Kogi to its North, Delta to its South, and Anambra to its East. Towns are Cities in Edo State are: Akoko-Edo, Egor, Esan, Etsako, Igueben, Oredo, Ovia, Owan, Uhunmwonde.

Edo State’s land area of 19,200 km2 or 2.1 percent of Nigeria’s land mass is the 2nd in the SouthSouth after Cross River, 3rd in the South and 21st in the country.

* N233.6 billion Agricultural output in Edo State was 0.98 percent of total agricultural output of all Stats and the FCT, the largest in the South-South, 2nd in the South and 14th in the country.

• N139.4 billion in crops was 60 percent of the State’s agricultural output in 2017,

• N48.9 billion in forestry was 21 percent,

• N33.1 billion in livestock was 14 percent and

• N12.2 billion in fishery was 5 percent. * Edo State’s N24.4 billion Oil production was 0.24 percent of all Oil production in the country, 6th among the 6 Oil producing South-South States, the 6th in the South and in Nigeria. * N158.8 billion 2017 Non-Oil Industrial output in the State was 1.0 percent of all Non-Oil output in the country, 3rd in the South-South, 5th in the South and 11th among the 36 States

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Thursday 21 February 2019

understanding the economy of nigeria’s 36 states 3. Wellbeing

• Statutory Allocations of N33.9 billion was 2.3 percent of the total allocations to all States and FCT, the 5th in the South-South ahead of Cross River State, 7th in the South and 13th in the country.

• Internally Generated Revenue of N22.5 billion was 2.9 percent of total, 3rd in the South-South, 4th in the South and the country.

• Value Added Tax of N10.6 billion was 2.24 percent of States’ total, the 4th in the South-South, 9th in the South and 17th in the country.

4.1.2.2 Spending Edo State’s actual total expenditure of N88.6 billion in 2017 was 2.4 percent of actual total spending by all States, 5th in the South-South, 9th in the South and 17th in the country. The spending components in 2017 were: • Recurrent Spending of N69.7 billion was 2.6 percent of the recurrent outlays of all the States and the FCT, 4th in the South-South, 8th in the South and 16th in the country.

• Capital Spending of N19 billion in Edo State was 1.8 percent of States and FCT’s total capital outlays, 5th in the South-South, 9th in the South and 20th in the country.

4.1.2.3 Deficits Edo State is one of the only 26 States in Nigeria that had deficits in 2017. The State made an overall deficit of N16.8 billion, the 2nd among the 3 States in the South-South that had deficits, 5th among the 9 States that had deficits in the South, and 12th among the 26 States that had deficits in the country.

4.1.2.4 Debt Edo State’s total outstanding debts of N139.3 billion was 3.0 percent of the States and FCT’s total debts, the 5th in the South-South, 10th in the South and 13th in the country.

• Domestic Debt of N68.5billion in December 2017 was 2.0 percent of States and FCT’s domestic debts, 5th in the South-South, 10th in the South and 22nd in the country.

• Foreign Debt of N70.8 billion in December 2017 was 5.6 percent of the total foreign debts of the States and FCT, 2nd in the South-South and the South, 3rd in the country.

Edo State’s population of 4.6 million is 2.3 percent of national population, the 4th in the SouthSouth, 12th in the South, and 24th in the country. With a land area of 19,200/km2, density in Edo State is 239 people/km2 compared to the country average of 219 people/km2, 5th in the South-South, 14th in the South and 22nd in Nigeria. Edo’s literacy is the 5th in the South-South ahead of Akwa-Ibom, 7th in the South and amidst the 36 States and FCT. Life expectancy of 49 years in the State is the 5th in the South-South, 14th in the South and 24th in the country.

Female life expectancy of 49 years is the 5th in the South-South, 16th in the South and 30th in the country; while Male life expectancy of 46 years in the State is 5th in the South-South, 16th in the South and 26th in the country. N223 thousand Per Capita GSP in the State is 5th in the South-South, 9th in the South and 21st in the country.

4. Budget

4.1.3 2013-2017 Trends Total Revenue: Edo’s Total Revenue declined from N84.9 billion in 2014 to N71.8 billion in 2017.

Bulk of the decline was due to the decrease in gross statutory allocations (GSA). While internally generated revenue increased, value added tax proved resilient in the face of global oil price slump and concomitant recession in the national economy.

Edo’s Total Spending: Total Spending increased from N85.4 billion in 2014 to N88.6 billion in 2017. Recurrent spending grew from N58.9 billion in 2014 to N69.7 billion in 2017 while capital spending as well fell from N26.6 billion in 2014 to N19 billion in 2017.

4.1 Fiscal Realities of Edo State 4.1.1 2018 Aspirations Edo State’s 2018 budget of N150 billion is 1.6 percent of all State’s spending aspirations for the year, the least in the South-South, 14th in the South and 25th in Nigeria.

4.1.2 2017 Realities

Revenue Use: Edo State maintained a current surplus to fund capital outlays between 2014 and 2015 but all revenue was spent on recurrent items since 2016, with the State having to borrow to fully fund its capital projects.

Financing: • Revenue financing: overall deficits were 0.59 percent of total revenue in 2014 and 23.4 percent in 2017.

• Spending finance: overall deficits as a percentage of total spending were 0.59 in 2014 and 18.9 percent in 2017.

• Capital budget finance: overall deficits as a fraction of the capital budget were 1.8 percent in 2014, and 88.4 percent in 2017.

Edo’s Debt • Domestic debt stock grew from N48.1 billion in 2013 to N68.5 billion in 2017, from 51.6 percent of revenue in 2013 to 95.4 percent in 2017.

• Foreign debt stock had risen tenfold from N6.9 billion in 2013 to N70.8 billion in 2017, from 7.4 percent of revenue in 2013 to 98.8 percent in 2017.

• Total debt stock rose from 59 percent of revenue in 2013 to 194.3 percent in 2017.

4.1.2.1 Revenue Edo State’s 2017 actual total revenue of N71.8 billion was 2.4 percent of all States’ actual total revenue, 5th in the South-South, 7th in the South and 10th among the 36 States and FCT. The revenue components in 2017 were: For enquiries, please call Teliat 08098710024, Chuks 08116759816 or teliat.sule@businessday.ng

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

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How treasury yields and spread affect the Nigerian economy Lastly, a scenario where the yield spread falls below zero suggests the presence of an inverted yield curve.

Here, the yield on the short term debt is rising faster and higher than that of the long term bond. This is mostly common during periods of economic recessions.

It can be clearly seen that the direction of the yield curve can be used by investors and economists to gauge how the economy will fare in the future. An inverted yield curve could suggest an imminent recession, whereas a normal curve depicts the likelihood of continuous growth and expansion.

OMOBOLA ADU

O

ne way the Federal Government can raise funds to finance developmental projects is by issuing debt instruments such as the treasury bills, notes or bonds.

Treasury bills are short term debt obligations that mature within a year, while treasury notes typically mature within 10 years or less.

On the other hand, treasury bonds are more long term in nature with maturity date as high as 30 years.

The return on investment from owning these debt instruments is regarded as the treasury yield which is expressed in percentages.

Hence, the treasury yield represents the interest rate at which the Nigerian government pays to borrow money.

One important thing to note is that treasury yields and its corresponding bond values move in opposite directions. That is, when there is high demand for a particular treasury bill, its price rises above its face value such that the yield starts to decline.

On the other hand, low demand pushes the price below its face value, thereby induc-

ing an increase in the yield.

In addition, the government is only obligated to pay back the face value of the bond plus the stated interest rate.

The yield spread The yield spread is the difference between the yield on the short and long term debt obligations of the government and it also serves as an important indicator for investors in trying to gauge the future direction of the economy. This is because it illustrates how much more yield investors will require to invest in the

long term bond.

When the spread is plotted on a graph, it translates into the yield curve. A rising yield spread calculated by the difference between the treasury note and the treasury bill suggests that the yield curve is steepening or normal. This means that the long term bond has a higher and rising yield in comparison to the short term bond.

Why is this so one may ask? This is because investors will expect a higher return for investing over a long period of time than over a short period

of time.

At this point, investors are optimistic about the market economy and are foreseeing stronger economic growth in the coming quarters or the future.

Conversely, a declining yield spread signifies that the yield curve is flattening as the difference between the treasury bill and note starts to fall. At this point, the yields in the economy are usually low.

This typically reflects a period of weak economic growth as investors are careful about the economy.

How the treasury yield affects the Nigerian economy To understand how treasury yields affect the economy, it is necessary to understand that these debts are backed by the Nigerian government; hence they are the safest forms of investments.

Therefore, as treasury yields rise, there is the tendency for the interest rates on other bonds to rise because they are more risky than the government bond. This implies that, in order to remain competitive, the interest rates on other bonds and loans tend to rise as the treasury yield increases.

In the short term, the effect could hamper economic growth as other business loans starts to rise. This is due to the fact that the cost of borrowing as disincentive to companies from making investment and expanding production.

12734BDN

The yield spread in Nigeria BusinessDay Research and Intelligence Unit (BRIU) compiled data on treasury yields on both the 2 year govern-

ment bond and the 10 year government bond from January 18 to February 18, 2019.

The data on the 2 year bond yield averaged 15.56 percent, while the 10 year bond yield averaged 14.94 percent during the reference period. This shows that the 2 year government bond has been rising higher than the 10 year government bond.

From the graph, it can be seen the yields on the 2 year bond have largely been greater than that of the 10 year bond. Further observations show that the 2 year bond clearly surpassed the 10 year bond starting from the 13th of February.

Computing the treasury spread, the difference between the 10 year and the 2 year government bond during the reference period, we find out that yield curve in Nigeria is inverted. This situation reflects that investors are demanding more yields for the short term bond than for the long term bond.

In order words, it can be said that investors in the Nigerian bond market are anticipating that the economy will do much worse in 2 years than in 10 years, hence, the less demand for the 2 year government bond.

The next question is why are the yields on the 2 year bond greater than the 10 year bond? One way of explaining this is the presence of a huge public debt. When debts are constantly increasing and very high, investors begin to question the ability of the economy to repay back. According to the data compiled from Debt Management Office (DMO), Nigeria’s public debt has increased to $72.2 billion in September 2018 from $66.6 billion in September 2017 representing an 8.41 percent increase.

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

Thursday 21 February 2019

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What does the new minimum wage imply for Nigerians?

AMAMCHUKWU OKAFOR

I

f increasingly, workers cannot afford the product of their labour, whether by outright exploitation or by worsening economic conditions–which is income confiscating, it provides the ground for economy-wide wage review. Minimum wage is legislation on the lowest remuneration payable by employers to employees. On the side of the worker, it is the wage below which employees should not offer their labour. Typically, labour exploitation, rising inequality and poverty are reasons for minimum legislation.

The expectation is that legislation on the minimum wage payable to workers would improve their standard of living, reduce poverty and inequality.

A satisfied worker would be more efficient at work, and output would increase. But the standard representation of the labour market shows that the application of minimum wage disrupts the efficient working of a competitive market, resulting in a glut in unemployment. An increase in the minimum wage above the market clearing level would increase the wage bills of firms. Firms adapt by cutting down on employment and/or transfer the cost to consumers in case of inelastic demand, signifying the inflationary effect of minimum wage.

In all, the evidence is mixed as to the effect of minimum wage on employment and therefore poverty as empirical studies show contradictory results in different economies.

In clear terms, minimum wage increases the wages of those who retain their jobs. Therefore, the effect on poverty is overall, ambiguous.

What we know about minimum wage: • The effect of minimum wage

varies from country to country depending on the pre-existing labour market condition and the economy at large.

• High unemployment can condition the average wage payable to workers, the effect of minimum wage and existence of black-market in the labour market.

• Minimum wage increases the supply of labour, if not demand.

• Rising misery level influences/ necessitates a review of minimum wage The case for Nigeria Minimum wage negotiation in Nigeria is never gentlemanly as it is often a brawl between the government and the labour union, degenerating into a nationwide strike. In 2010, the Nigerian Labour Congress (NLC) had organised a nationwide protest for an upward review of the minimum wage which at the time was N7, 500 and did not reflect the realities of the time.

It ended in a one-day strike following the Belgore Committee report and a minimum wage of N18, 000 (a deviation from the N52, 200 demanded) was ap-

proved by the National Council of States.

Before then, the Wage Review Agreement of 2000 which outlined the stages of wage review: 25 percent in 2001, and 15 percent in 2003 on the existing wage was abandoned; only 15 percent review was made in 2007, increasing the amount to N7500.

Earlier in 1981, Hassan Sunmonu began an agitation for minimum wage review to N300.

The agitation culminated in a nationwide strike under the Shagari Administration. The eventual settlement was at N125, less than half of the sum demanded.

The agitation for better remuneration for Nigerian workers was strongest this time; perhaps the forthcoming elections presented the opportunity to back the political class into a corner. The agitation began to brew in 2016, when the NLC leaders, in a press briefing, called for a review of the minimum wage to N56, 000 on grounds that the five-year

periodic review as laid out in the Belgore Committee report was long due since the last one in 2011. The scenario as it plays out in Nigeria leaves the discerning mind wondering why governments – federal and states – are vehemently antithetical to wage reviews as against what obtains in other climes where governments and political parties debate the implications and willingly act on the outcome of the minimum wage reviews to curb labour exploitation in industries.

In the United Kingdom, the Low Pay Commission advises the government every October about the future of the national minimum wage. In 2015 in Germany, setting a wage floor was a key agenda in the demands of the Social Democrats (SPD) to enter a coalition with Angela Merkel. This led to the establishment of a minimum wage commission, Mindestlohnkommission. In an ideal situation, it is the organised private sector and the manufacturers association that should decry inability to pay a wage considered too high; but a good majority of the private employers who are constitutionally obliged to pay the minimum wage already exceed it. The implication is that it is the government, in our case, who is the chief exploiter of labour.

Clarifying the implications The major grounds for strong resistance against a wage review especially by state governments include the inability to pay, inflation and the unemployment implication. A number of state governments have openly declared their inability to fulfil a reviewed wage and evidence are available about states who are unable to pay the current wage

against a backlog of arrears. But should government’s inability to meet its own obligation excuse mass immiseration? The situation is an indictment on the size of governments and its slack maximizing bureaucracy.

In the light of the current high unemployment, downsizing is not much an option. State governments must be efficient in allocating resources and ingeniously increase revenue streams.

The inflation argument is that the quantum of money to raise the minimum wage would cause an increase in price level. Firstly, it is not stylized to argue that a wage review would increase unemployment and inflation simultaneously– Philips curve. Minimum wage reviews are ideally targeted at the low-income group to increase welfare and reduce inequality. The marginal propensity to consume (MPC) of low-income earners is high for a small increase in income.

Therefore, this consumption spending due to the increase in wage would increase aggregate demand, output and employment, such that the inflation

pointed out excludes employers in the informal sector, and SMEs all of which constitute a major employer of labour, the unemployment effect in our case may be well exaggerated–limited only to government employees.

For instance, the survey conducted in 2013 by Small and Medium Enterprises Development Agency Nigeria (SMEDAN) and Nigeria Bureau of Statistics (NBS) revealed that the total number of MSMEs stood at 37,067,416 (Micro: 36,994,578; Small: 68,168; and Medium: 4,670). The total number of persons employed by the MSME sector as at December 2013 stood at 59,741,211 (Micro: 57,836,391), representing 84.02% of the total labour force and contributing 48.47% to nominal GDP. Interestingly, 97.74% of the total number of microenterprises is sole proprietorship.

expectation may not hold.

Again, in the light of the Minimum Wage Act, the review would not affect firms with less than 50 employees, part-time workers, workers on commission, and those in seasonal employment. Since a significant number of the private sector employers pay above the minimum wage, one can argue that the review affects only a relatively small group of workers, such that any inflationary implication is infinitesimal.

The unemployment implication argues that an increase in wages would increase the wage bills of firms, therefore necessitating a cut in overhead and employment. But as argued above, firms already pay higher wages and are not significantly affected by the review. And since the minimum wage act as

day and is insufficient per se given the economic realities.

This N900/day at N360 per dollar only slightly exceed the extreme poverty threshold of $1.90/day We have recently learned that South Africa would pay the equivalent of N126, 480 as minimum wage effective January 2019. Another rather interesting aspect of the matter should be the insufficiency of the minimum wage act to reflect the flexibility in the work environment and changes in the future of work. The work environment is not as rigid as it used to be; more and more people are engaged in freelance employment, contract jobs, commission-based employment, and part-time employment. The Act, as it excludes these groups, creates room for labour exploitation.

Conclusion The direction of the debate on minimum wage is not founded on sound economic principles.

In fact, the resolve to pay N27, 000 as minimum wage by the government reduces to N900/

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Live @ The Exchanges Top Gainers/Losers as at Wednesday 20 February 2019 GAINERS Company NB MOBIL UACN

Market Statistics as at Wednesday 20 February 2019

LOSERS Opening

Closing

Change

Company

Opening

Closing

Change

ASI (Points) ASI (Points)

32,614.05 30,821.80

N75

N82.5

7.5

NESTLE

N1600

N1580

-20

DEALS (Numbers) DEALS (Numbers)

N168.2

N170

1.8

UNILEVER

N43.6

N43

-0.6

N8.5

N9

0.5

GLAXOSMITH

N12

N11.55

-0.45

VOLUME (Numbers) VOLUME (Numbers) VALUE (N billion) VALUE (N billion)

443,784,210.00 359,091,422.00 5.642 4.828

MARKET CAP (N Trn MARKET CAP (N Trn

12.162 11.493

DANGFLOUR

N9.45

N9.95

0.5

CUSTODIAN

N6.55

N6.1

-0.45

ZENITHBANK

N25.35

N25.8

0.45

FLOURMILL

N21

N20.75

-0.25

4,697.00 3,319.00

Nigeria Breweries, Mobil, 24 others push stock market to new highs …investors position in value stocks ahead of post-election recovery Stories by Iheanyi Nwachukwu

N

igeria stock m a r k e t gained about N77billion on We d n e s d a y February 20, 2019 as investors snapped up the shares of Nigerian Breweries Plc and that of 25 other companies.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 0.64percent, while the Yearto-Date (ytd) return stood at 3.77percent.

The All Share Index closed at 32,614.05 points against the preceding day high of 32,406.18 points while Market Capitalisation increased to N12.162 trillion as against preceding day close of N12.085 trillion.

“Our investment case for Nigerian equities suggests that if the risks already

priced into markets do not materialize – which is our view - this might drive a bullish momentum,” said analysts at United Capital Plc in their February 20 noted titled “2019 Equity Strategy: Piloting a hazy flight”.

In their investment case, they highlighted the potential for the equity market to rally after elections “since equities could likely respond once the jittery political climate that characterised most of 2018 clears up.” “Furthermore, valuations are looking attractive. Investors looking to increase their long-term equity allocations could consider buying ahead of a postelection recovery story.”

At the close of trading on Wednesday, the volume of stocks traded increased by 22.65percent, from 361.8million to 443.7million, while the total value of stocks traded increased by 35.63percent, from N4.160 billion to N5.642 billion in 4,697 deals.

Sterling Bank Plc, GTBank Plc, UBA Plc, Access Bank Plc and Transcorp Plc were actively traded stocks on the NSE. Nigerian Breweries Plc recorded the highest gain

A

has been deploying its evoting platform to ensure cost-effective and seamless voting system for some reputable organisations in Nigeria.

Femi Williams, Group Managing Director and Chief Executive Officer who addressed journalists on the company’s current status yesterday in Lagos explained

Dangote Flour Mills Plc also rallied from N9.45 to N9.95, adding 50kobo or 5.29percent; UAC of Nigeria Plc stock price advanced from N8.5 to N9, adding 50kobo or 5.88percent, while

L–R: Mojisola Bakare, divisional head, Client Coverage and Wealth, Sterling Bank Plc; Abubakar Suleiman, managing director/CEO, Sterling Bank Plc; Olumide Bolumole, head, Listing Business Division, The Nigerian Stock Exchange (NSE); Justina Lewa, company secretary, Sterling Bank Plc and Enabruke Oju, capital management, Sterling Bank Plc during the listing of Sterling Investment Management SPV Plc N32,899,000,000 Series 2, 7 years 16.25% Fixed Rate Unsecured Bonds due 2025 under the N65,000,000,000 Debt Issuance Program at the Exchange.

Chams explains success of restructuring frontline Information and Communications Technology (ICT) company, Chams Plc has assured its shareholders of better days ahead following the successful outcome of restructuring which covers the company’s business model, products and financials.

Besides, the company

after its share price increased from N75 to N82.5, adding N7.5 or 10percent. Mobil Nigeria Plc followed after its share price increased from N168.2 to N170, adding N1.8 or 1.07percent.

that the company embarked upon restructuring to sustain its competitive edge and deliver value to all stakeholders.

Williams noted that the restructuring became necessary in view of the challenging operating environment in Nigeria and the need to grow the company’s balance sheet on sustainable basis.

L – R: Yusuf Gyallesu, first national vice president, National Association of Microfinance Bank (NAMB); Oscar N. Onyema, OON, chief executive officer, The Nigerian Stock Exchange (NSE); Rogers A.I. Nwoke, national president, NAMB; and Joshua Ukute, second national vice president, NAMB during a Closing Gong Ceremony to address the grey areas or limitations that Microfinance Banks have in listing on The Nigerian Stock Exchange.

the share price of Zenith Bank Plc advanced from N25.35 to N25.8, adding 45kobo or 1.78percent.

Nestle Nigeria Plc stock price declined most by N20, from N1600 to N1580, losing 1.25percent. Unilever Nigeria Plc followed after its share price declined from N43.6 to N43, losing 60kobo or 1.38percent. Custodian Investment plc lost 45kobo, from N6.55 to N6.1, losing 6.87percent.

GlaxoSmithKline Consumer Nigeria Plc declined from N12 to N11.55, losing 45kobo or 3.75percent; while Flour Mills Nigeria Plc dipped from N21 to N20.75, losing 25kobo or 1.19percent.

The Financial Services sector led the activity chart with 362.3 million shares exchanged for N3.298 billion; while Conglomerates followed with 28.704 million shares traded for N65million.

Group takes agitations for Gwarzo’s prosecution to Presidency

A

s agitations by civil society groups that the fraud cases leveled against the suspended Director General of the Securities and Exchange Commission (SEC), Mounir Gwarzo, continued to gather momentum, another civil society group, the Concerned Industry Watchers, on Wednesday petitioned President Buhari that he should use his good offices to ensure that all cases against him are pursued with renewed vigour to ensure justice.

The group’s demand came barely 24 hours after the Centre for AntiCorruption and Open Leadership (CACOL) called on the Independent Corrupt Practices and Related Offences Commission (ICPC) to commence thorough prosecution of the suspended SEC boss over fraudulent allegations leveled against him.

The Concerned Industry Watchers, in a statement by its National Coordinator, Abdullahi Idoto, urged President Buhari to, as a matter of urgency, direct the ICPC to charge Gwarzo on the abuse of office by the award of contracts to his companies as well as being a director in the said companies.

The group alleged that the suspended Director General breached public service rules by using his position to abuse the due process in contract awards in the commission and awarding various contracts to his companies and other cronies as well as paying substantial sums to himself as severance packages when still serving in office.

It noted that Gwarzo used his office to award contracts to Outbound Investment Limited; Northwind Environ-

mental Services Limited; Medusa Investments Limited; Acromac Nigeria Limited and Balfort International Investment Limited all of which he had interestsin as a Director while his wife, Khadija and another relative are Directors in Medusa Investments Limited .

The civil society group alleged that up until the time of his suspension as Director General of SEC, Gwarzo solely contracted Outbound Investment Limited as the sole supplier of diesel to the commission while also supplying air conditioners, fridges and involved in several other contracts.

This is even as it noted that the suspended Director General also used Northwind Environmental Services Limited, which was registered by his younger brother in 2016 shortly after he assumed office as SEC boss, to siphon funds from the commission.

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Live @ the Stock exchange Prices for Securities Traded as of Wednesday 20 February 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 183,692.62 6.35 -0.78 266 29,393,900 UNITED BANK FOR AFRICA PLC 271,885.40 7.95 -0.62 343 33,033,052 810,029.54 25.80 1.78 470 16,799,958 ZENITH BANK PLC 1,079 79,226,910 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 294,341.40 8.20 1.23 224 22,423,283 224 22,423,283 1,303 101,650,193 BUILDING MATERIALS DANGOTE CEMENT PLC 3,278,593.62 192.40 -0.05 43 2,110,230 112,754.57 13.00 - 82 680,044 LAFARGE AFRICA PLC. 125 2,790,274 125 2,790,274

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 364,247.18 619.00 - 48 45,305 48 45,305 48 45,305 1,476 104,485,772 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 15,876.20 5.95 - 2 18,030 UPDC REAL ESTATE INVESTMENT TRUST 2 18,030 2 18,030 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 3,312.39 103.20 - 0 0 VALUEALLIANCE VALUE FUND 0 0 0 0 2 18,030 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 5,000 OKOMU OIL PALM PLC. 81,082.35 85.00 - 4 3,000 PRESCO PLC 75,000.00 75.00 - 27 480,877 32 488,877 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 1 10 1 10 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,890.00 0.63 -3.08 8 431,108 8 431,108 41 919,995 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 - 6 221,881 186.79 0.48 - 2 990 JOHN HOLT PLC. S C O A NIG. PLC. 1,903.99 2.93 - 0 0 60,565.51 1.49 7.19 244 25,477,532 TRANSNATIONAL CORPORATION OF NIGERIA PLC 25,931.67 9.00 5.88 82 3,003,920 U A C N PLC. 334 28,704,323 334 28,704,323 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 34,980.00 26.50 - 19 80,870 ROADS NIG PLC. 165.00 6.60 - 0 0 19 80,870 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,365.30 1.68 - 0 0 0 0 19 80,870 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,683.78 1.62 - 4 107,450 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 142,593.92 65.10 0.15 40 265,040 INTERNATIONAL BREWERIES PLC. 249,280.00 29.00 - 7 4,689 NIGERIAN BREW. PLC. 659,744.42 82.50 10.00 86 2,672,038 137 3,049,217 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 49,750.00 9.95 5.29 145 5,120,881 DANGOTE SUGAR REFINERY PLC 181,800.00 15.15 - 42 592,599 FLOUR MILLS NIG. PLC. 85,082.88 20.75 -1.19 61 1,324,235 HONEYWELL FLOUR MILL PLC 10,309.26 1.30 5.38 46 2,346,640 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 3 602 NASCON ALLIED INDUSTRIES PLC 48,352.25 18.25 - 27 193,943 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 324 9,578,900 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 21,599.32 11.50 - 17 48,713 NESTLE NIGERIA PLC. 1,252,396.88 1,580.00 -1.25 70 743,921 87 792,634 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,003.38 4.00 - 40 4,695,467 40 4,695,467 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 50,226.53 12.65 - 19 221,968 UNILEVER NIGERIA PLC. 247,035.23 43.00 -1.38 72 3,534,858 91 3,756,826 679 21,873,044 BANKING DIAMOND BANK PLC 55,816.54 2.41 -0.41 94 14,150,419 ECOBANK TRANSNATIONAL INCORPORATED 255,058.76 13.90 -0.71 54 1,720,531 FIDELITY BANK PLC 71,567.75 2.47 0.40 146 15,419,823 GUARANTY TRUST BANK PLC. 1,118,384.81 38.00 0.80 323 37,432,441 JAIZ BANK PLC 17,973.19 0.61 8.93 34 4,563,753 SKYE BANK PLC 10,687.83 0.77 - 0 0 71,976.05 2.50 4.60 111 105,753,878 STERLING BANK PLC. UNION BANK NIG.PLC. 203,845.27 7.00 - 45 1,018,658 UNITY BANK PLC 11,572.44 0.99 -3.88 36 2,841,739 WEMA BANK PLC. 34,331.27 0.89 5.95 157 11,615,738 1,000 194,516,980 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 5 AIICO INSURANCE PLC. 4,989.75 0.72 1.41 24 1,238,016 AXAMANSARD INSURANCE PLC 21,315.00 2.03 - 5 3,205 CONSOLIDATED HALLMARK INSURANCE PLC 2,276.40 0.28 - 2 60,000 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,093.20 0.21 4.76 42 15,758,616 GOLDLINK INSURANCE PLC 2,183.97 0.48 -9.43 5 2,101,125 GUINEA INSURANCE PLC. 1,228.00 0.20 - 1 2,000 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,416.73 0.33 3.13 21 3,451,648 LAW UNION AND ROCK INS. PLC. 2,362.98 0.55 7.84 9 360,678 LINKAGE ASSURANCE PLC 5,600.00 0.70 - 3 100,000 MUTUAL BENEFITS ASSURANCE PLC. 2,160.00 0.27 - 1 678 NEM INSURANCE PLC 12,831.62 2.43 1.25 13 1,135,828 NIGER INSURANCE PLC 1,702.69 0.22 9.09 2 925,624 PRESTIGE ASSURANCE PLC 2,906.58 0.54 8.00 5 150,857 REGENCY ASSURANCE PLC 1,667.19 0.25 4.17 15 2,449,155 SOVEREIGN TRUST INSURANCE PLC 1,918.39 0.23 4.35 32 4,312,541 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 9 564,050 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,912.00 0.21 - 2 3,900 WAPIC INSURANCE PLC 5,620.75 0.42 2.44 16 450,988 208 33,068,914 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,750.09 1.64 - 11 135,046

11 135,046 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,116.00 0.98 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 2,265.95 0.20 - 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 8,340.00 4.17 -4.58 50 2,454,079 35,879.37 6.10 -6.87 22 13,497,740 CUSTODIAN INVESTMENT PLC 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 44,556.10 2.25 -1.32 98 8,396,406 1,697.97 0.33 - 1 383,252 ROYAL EXCHANGE PLC. STANBIC IBTC HOLDINGS PLC 496,666.82 48.50 - 83 6,082,992 20,820.00 3.47 6.77 71 2,114,351 UNITED CAPITAL PLC 325 32,928,820 1,544 260,649,760 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 1 10 1,030.41 0.29 7.41 5 248,500 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 6 248,510 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,050.00 4.70 - 9 3,600 13,812.37 11.55 -3.75 26 244,316 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 4,140.56 2.40 - 12 219,710 1,329.41 0.70 - 7 42,200 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 2 1,178 56 511,004 62 759,514 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 1 10 1 10 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 3 16,716 648.00 6.00 - 0 0 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 0 3 16,716 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 15 8,625,935 12,306.00 2.93 - 0 0 E-TRANZACT INTERNATIONAL PLC 15 8,625,935 19 8,642,661 BUILDING MATERIALS BERGER PAINTS PLC 2,391.04 8.25 - 3 4,025 23,800.00 34.00 - 7 18,179 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 262,870.02 20.00 - 11 70,895 612.00 0.29 7.41 4 404,500 FIRST ALUMINIUM NIGERIA PLC MEYER PLC. 286.87 0.54 - 2 250,000 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 0 0 1,279.20 10.40 - 0 0 PREMIER PAINTS PLC. 27 747,599 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 1 10 CUTIX PLC. 3,364.13 1.91 - 12 58,065 13 58,075 PACKAGING/CONTAINERS BETA GLASS PLC. 39,497.79 79.00 - 15 13,759 GREIF NIGERIA PLC 388.02 9.10 - 1 1,053 16 14,812 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 56 820,486 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 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. 50.60 0.23 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,440.42 0.23 4.35 47 6,921,058 47 6,921,058 INTEGRATED OIL AND GAS SERVICES OANDO PLC 78,317.90 6.30 5.88 151 6,507,275 151 6,507,275 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 61,301.19 170.00 1.07 44 101,690 CONOIL PLC 15,960.90 23.00 - 16 37,211 ETERNA PLC. 6,259.89 4.80 5.49 18 230,692 FORTE OIL PLC. 36,469.47 28.00 - 27 159,905 6,354.80 20.85 - 10 8,107 MRS OIL NIGERIA PLC. TOTAL NIGERIA PLC. 64,509.15 190.00 - 57 388,253 172 925,858 370 14,354,191 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 16,576.10 1.70 - 1 157 1 157 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 411.72 0.35 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 2 1,510 TRANS-NATIONWIDE EXPRESS PLC. 295.37 0.63 - 1 300 3 1,810 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 1 86 IKEJA HOTEL PLC 3,762.62 1.81 - 2 6,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 46,362.46 6.10 - 8 6,301 11 12,387 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 1 1,000 1 1,000 PRINTING/PUBLISHING ACADEMY PRESS PLC. 241.92 0.40 - 4 126,826 LEARN AFRICA PLC 1,195.75 1.55 3.33 9 134,081 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 1,013.81 2.35 - 6 56,000 19 316,907 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 795.70 0.48 - 8 206,424 8 206,424

58

BUSINESS DAY

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Thursday 21 February 2019

Thursday 21 February 2019

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BUSINESS DAY

59

MADE in aba

Aba shoemakers chase local inputs as tanneries look outwards ODINAKA ANUDU

S

hoemakers in Abia State industrial city are struggling to access local raw materials, but tanneries in Nigeria’s north prefer to export animal skins to earn dollars.

Weakened local currency encourages tanneries to own large herds of cattle and goats in the north and then process their skins for export to their largest markets in Europe and Asia.

Naira has lost more than 50 percent value since 2016 when the economy went into recession. One dollar exchanges for N360 in the major markets.

Export of animal skins, how ever, forces shoemakers in Aba to seek dollars regularly to import same, especially synthetic leather.

“What happens is that the tanneries in Kano and Kaduna process animal skins and sell them as leather in the global market, earning foreign exchange,” said Chinatu Nwagbara, coordinator of Made-in-Aba Project, who produced shoes for O lusegun Obasanjo in 2016.

“So we go to China and other countries to buy.

Sometimes, we buy our products and re-import,” he said.

Nigeria has 131 million cattle, goats and sheep,

according to the Federal Ministry of Agriculture (2011 figures). But herders are threatened by the dryup of the Lake Chad Basin, which has forced them to move down south.

D a i r y m a k e r FrieslandCampina WAMCO says that constant movement of cows from one location to another affects their health and lowers productivity.

Aba shoemakers u s e s y nt h e t i c l e at h e r, soles, rubber, adhesives, cardboard sheets, magnetic hammer, utility knife and pincers, among others, as inputs.

But synthetic leather and adhesives are often imported from China.

Shoemakers admit that some of the inputs they import from China are substandard, though cheaper than European prices.

Ken Anyanwu, national s e c re t a r y , A ss o c i at i o n o f L e at h e r a n d A l l i e d Industrialists of Nigeria (ALAIN), told BusinessDay that export of raw materials needed locally deindustrialises Nigeria.

He said such export was hurting shoemakers in Aba and also the finished leather sector in Lagos and Onitsha.

Utilisation of local rawmaterials by manufacturers stood at 56.6 percent in the first half of 2018, down by 4.12 and 9.1 percentage points from 60.72 percent of the same half in 2017 and 65.7 percent of the preceding half respectively, according to data by the Manufacturers Association of Nigeria (MAN).

This was ascribed to the general sluggishness of the economy and a renewed ability for importation of raw-materials by manufacturers, especially as the foreign exchange market stabilises, MAN said in an economic review.

One million pairs of shoes are produced in Aba each week by shoe and bag makers that number more than 80,000. The industry is estimated at N120 billion, contributing significantly to the gross domestic product (GDP).

More than 80 percent of the shoe makers are micro and small players but produce shoes that soughtafter across the world.

T r a d e r s f r o m We s t African neighbours storm the industrial city every w e e k to bu y d i f f e re nt p ro d u ct d e sig n s, w i th Southern African schools placing orders directly from

the shoe makers.

Aba shoes are already online, with the likes, of Gada Africa, Jiji.ng and abanaijamade.com.ng, among others, handling marketing and distribution of those shoes, including belts and trunk boxes, after online orders are taken.

Online shops take 20 to 50 percent cuts from sellers, BusinessDay gathered from the shoe makers in Aba. “We have built partnership with local and some international logistics handling companies,” said Ben Chiobi, a retired air vice marshal, who is founder of newly birthed Gada Africa.

The leather industry is made up of shoes, trunk boxes and belts. It provides employment for tens of thousands, w ith many specialising in different stages such as designing, patterning, cutting, skiving, stitching, peeling and finishing. It is made up of clusters such as Powerline, Imo Avenue, Bakassi, Aba North Shoe Plaza, Omemma Traders and Workers, ATE Bag, and Ochendo Industrial Market, comprising input supplers, among others.

However, the industry is in thriving in chaos as the majority of shoe makers in the industrial city are poorly structured and are not registered at the Corporate Affairs Commission. Exports are made informally, making tracking and planning difficult.

Aba leather industry needs foreign investors to achieve desired growth Gbemi Faminu

N

i g e r i a ’s s h o e hub, Aba, needs to partner with international companies in order to foster the desired growth and development needed.

Ken Anyanwu, national secretar y, Association of Leather and Allied Industrialists of Nigeria (ALAIN), told BusinessDay in Aba that entrance of foreign investo rs an d par tn ers would enable the industry to compete globally and make funds for expansion easily accessible.

When Huajian one of Chinese largest shoe exp or ters to the w orld showed interest in entering Aba, market watchers said it would provide support for the majority of small-scale players, thereby putting Aba products on the global map.

Analysts say Aba getting

more investors and foreign partners could reduce its infrastructure deficit as new investors will throw in money to improve this area. They add that it will attract funding to small-scale players.

They say that investors will put money in acquiring ma chi n e s a n d bui l d i ng infrastructures to aid the manufacturing process and increase output.

The presence of investors in Aba will give the industry global recognition, which w i l l i n tu r n e x p a n d i t s reputation, experts say.

Okechukwu Williams, president of the Leather Producers Manufacturers Association of Abia State (LEPMAAS), mentioned r e c e n t l y t h a t “O u r b i g challenge is market access.

Market is a force and when it begins to develop, it goes with ever ything you are doing. Even the standard and quality of our products go with the market.”

A re p o r t s h o w s t h a t Huajian exports shoes worth $20 million to the US market annually from Ethiopia where they have a factory.

Analysts say its presence in Nigeria could encourage

more output especially into the global market, thereby bringing foreign exchange into an economy in dire need of it.

This will also make the economy attractive.

As a result of this, other foreign investors will enter, aiding and growing the diversification process.

Furthermore, entrepreneurs, employees and the artisans will receive necessary training that

will inspire new innovations and designs.

Babajide Ipaye, founder of Project Keexs, was of the opinion that Nigeria lacked the necessary investments needed in Aba unlike Ethiopia. The result of this is that Aba has not been able to perform well especially in terms of product branding.

He opined that there should be someone who will step in and correct this error.

This also brings up the i s su e o f i mp o r t i ng raw materials that are readily available in the country.

Manufacturing companies such as Nestlé Niger ia, Promasidor, and Unilever Nigeria, among others, source for their materials locally. Aba should be encouraged to do so.

Presently, Aba is worth N120 billion but has the capability to do more with the presence of foreign investors who will the various challenges it encounters.

BUSINESS DAY

news you can trust I THURSDAY 21 FEBRUARY 2019

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Opinion Our strange likeness for dictators in Nigeria

CHRISTOPHER AKOR

P

rior to 2015, one of the major weaknesses Nigerians identified with Goodluck Jonathan, beyond his inability to tame grand corruption, is his supposed weakness or softness.

The opposition was always quick to described him as ‘clueless,’ ‘soft,’ ‘weak,’ and a ‘coward’ with ‘weak biceps’ who was incapable of tackling the wide range of challenges faced by the country then. We may have forgotten now, but then, we often compared him with former president Olusegun Obasanjo who, during his rule, sent troops to kill and destroy entire communities in Odi (Rivers State) and Zaki-Biam (Benue State) after 19 security operatives were abducted and killed there.

Although the killings were condemned by the international community as clear cases of extrajudicial executions by the Nigerian military, which contravened the country’s obligations under international law, Obasanjo had defended the killings as ‘legitimate’ actions of ‘self defence’. During the Jonathan era, many Nigerians presented this incident to Jonathan as an example of how to deal with insurgencies at their roots before they got the opportunity to blossom. Not a few Nigerians saw Obasanjo’s actions as a show of decisive leadership compared to Jonathan’s indecisiveness and con-

ciliatory approach to the Boko Haram threat.

So stringent were the attacks against Jonathan that even revealed on national television that he was under pressure from many Nigerians to govern like a dictator.

Nigerians clearly needed a strongman and have always pushed their leaders to become one. Despite an apparent preference for participatory, democratic governance, Nigerians harbour a deep and atavistic yearning for a ‘strong-man’ ruler or what Guillermo ODonnell refers to as delegative democracy. Being a vocal and assertive lot, Nigerians will criticize the authoritarian tendencies of their leaders, but they expect leaders to act swiftly or even brutally and bypass laws, if necessary, in pursuance of the common good. The tendency is to equate ‘effective’ or ‘good’ governance with dictatorship or authoritarianism.

That was the motivation for the election of Muhammadu Buhari as president in 2015. Although his antecedents were well known; that he was a brutal dictator who has no regard for rules or laws; who is ready to turn the demands of natural justice on its head and declare people guilty and then placed on them the burden of proving their innocence (which even when proven is not enough to free the suspect – a perfect example is Adekunle Ajasin); who is helplessly clannish and sectional in outlook.

However, to satisfy our artificial cravings for democracy, Buhari was packaged to appeal to our modern taste. He falsely told us he was a converted democrat and regaled us with the story of his Damascene conversion. But we did not really care. What we wanted was a strongman like Obasanjo or more appropriately, J.J Rawlings of Ghana who will be brutal with perceived enemies of the state regardless of what the law says.

And, of course, since coming to power in 2015, Buhari has acted true to character. He has perfected the art of disobeying court orders,

refusing to release people he clamped to jail even when the courts ordered so in the name of fighting corruption. sadly, we clap for him!

He disobeys the constitution and laid down procedure by ordering a raid of the houses of top judges in a supposed fight against corruption and we clap for him. That encouraged him to take the fight a step higher by unilaterally suspending the Chief Justice of the federation even against the dictates of the law and the constitution. Still, some of us clapped. The army is ordered to massacre a religious minority and we clapped saying the group was a nuisance and needed to be dealt with. He also attempted to change the leadership of the national assembly by ordering a raid of complex.

He nearly succeeded but for the smartness of the leadership of that arm of government.

He pleaded with lawyers to stop defending those accused of corruption and when they refused he famously informed them that “where national security and public interest are threatened the individual rights of those allegedly responsible must take second place in favour of the greater good of society.” Yet we still clapped.

Few days ago, he dropped all pretences to democratic norms by ordering the military and police to visit jungle justice on anyone seen attempting to snatch ballot box – and some people are still clapping.

Like I have argued in the past, Nigeria’s intelligentsia and thought leaders have been at the forefront of voices urging leaders towards authoritarianism. At independence, the British bequeathed to Nigeria a federal state and a Westminster parliamentary system of government in which the Prime-Minister was only ‘primus inter pares’ and not an ‘all-powerful’ President. But the military incursion into politics in 1966 changed all that. The military boys, inexperienced in the art of governance, relied heavily on civil servants, academics, lawyers and politicians for policies and advice

‘

...dictators – especially socalled repentant or converted dictators “eat out democracy from within.”

on governance. These civilians, however, only encouraged the military’s tendency to cultivate a centralized system of government with less devolution of power.

Towards the end of the first phase of military rule in 1978, Nigerians got another opportunity to fashion a new constitution. The constitutional drafting committee, nicknamed ‘49 Wise Men’, was made up of the ‘crème de la crème’ of Nigerian academics, lawyers and politicians.

Crucially, the 1979 constitution jettisoned the Westminster parliamentary system for an American-style presidential system of government, and vested of disproportionate powers with the federal government in a context of weak institutional restraints.

The reasons given for the shift were quite revealing of the push for democratisation and strongman politics. On the one hand, the committee highlighted the structural elegance and deeper democratic character of the presidential system. On the other, they also agreed with Leopold Senghor that sharing power between a President and a Prime Minister was not feasible in Africa. Presidentialism, the committee argued, was more compatible with African indigenous kingship/chieftaincy traditions. It also had the capacity to overcome the conflict of authority, personality and ethno-political interest between the ceremonial President and the Prime Minister, which citizens had witnessed in Nigeria’s First Republic. What was more, they reasoned that a developing country like Nigeria needed a strong president who could serve as a symbol of national unity and a custodian of the national interest.

Continues online at www.businessday.ng

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

PVC for auction: Request for expressions of interest

ik MUO

A

fter concluding my write-up the previous week, I had planned to focus on ‘beyond the elections’ for this week. It was meant to draw the attention of the Atikulators or the Change-masters on the issues that they had to face for the next 4 years. My friend, Magnus Nmonwu had already provided me with a good background to the studies. I based my plans on the promises of INEC, which had in 2015 promised to improve on the previous electoral experiences and as at bedtime on Friday, 15/2/19, had assured that there was no shaking! But lo and behold, INEC met at in the middle of the night and served us with a bitter dish of poorly explained, disgracefull and embarrassing postponement. The fact that they met at mid night, when witches, wizards and senior spirits do their things actually foreshadowed the postponement and its calamitous outcomes. It was a typical thief in the night scenario. I would have interrogated this matter this week but because of the high level of uncertainty that currently pervades the land, nobody is sure of anything and it is not normal for an elder to start chewing a piece of meat that is not yet done. But there are other interesting and related issues and one of them is the sale, and of course, purchase, of PVCs. Nobody can sale if nobody is buying, unless we do the usual Nigerian magic in which people are charged for offering bribes without anybody charged for collecting the wetin-call! I had offered to sale my PVC, then called voters card 9 years ago ( Ik Muo Voters Card for Sale, BusinesDay, 5/4/19) but the bidders were not serious. Now that the 2019 election is in the injury time, and despite

the fact that PVC sale has been classified as a criminal enterprise, I am boldly re-offering my PVC to desperate and loaded politicians. I am making it public because I want to optimise the deal, garner enough to enable me retire and live on comfort for the remaining 30 years of my life, together with my beautiful wife and for extraordinary children( who by the way, are adults now).

Ezeodojili is a masquerade in Igboukwu who carries ‘remote-control’( charms et al) in the forehead (while others hide theirs in every imaginable and unimaginable places). The reason (as explained in tongues understood only by fellow spirits and the initiated) is that everyone should carry the consequences of his action mis-actions and inactions-with his head. Today, I am in an Ezeodojili mood; for while others a selling their PVCs in secret and both the buyers and sellers are busy denying, I am announcing to the whole world that my own PVC is for sale and to do so in a wellorganised transparent manner, I am calling for Expressions of Interest(EOI)from the general public so that the bidding documents will be dispatched accordingly.

Why do I want to sell my voter’s card? The same reason why others are selling theirs!

Because my economy is not very buoyant, because the dividends of democracy have become limited to the Daura and Bauchi axis; because all the promises by politicians remain unfulfilled, and because this is the only time the politicians will listen to anybody. You see how they have been pretending to be humble and friendly, visiting everywhere-including government rejected areas- shaking hands, jumping on Okadas and taking photographs with anybody and everybody. So when I tell them the unique value of my PVC, they will play ball, either because they believe it or out of desperation, because once you are desperate, everything looks real and possible. The key reason is that all the trillions coming to the Federal, State and the Local governments have not impacted on me or my area. In the past 25 years, I have resided at Dele Orisabiyi and Samuel Ekunola streets, both in Okota; you can go check them out as at this morning. There is no government water, hospitals, or schools (for the whole of Okota); the street bears the

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Being patriotic, all my estimates are based on Nigeria; I don’t intend to check out-and be insulted by Trump!

resemblance of a street due to self efforts, and for light,(as epileptic as it is) the transformer is also self generated. At the federal level, it is the more you look, the less you see and I believe that if we have been sharing the raw cash in the past 20 years( 1999-2019, I would have been better off than I am now. Don’t tell me that certain things are better done collectively and that I benefit from the ultramordern bus terminals (which nobody knows how to use) or from the impressive Okota-Amuwo way. In this clime, we think of the direct and personal; not the collective.

Anyway, because of the reasons above, I am offering my card for sale. I have perused the advice of all the parties to the offer on what it will cost to take care of myself until year 2050 because by then, we will be living in heaven on earth (even when there are no serious coordinated efforts in that direction). Being patriotic, all my estimates are based on Nigeria; I don’t intend to check out-and be insulted by Trump!

For my transportation needs, the current presidential jet supported two small helicopters for local runs and 5 armoured vehicles will do. These amount to N25bn. For accommodation, N500m(less than what government officials spend on furnishing) and 10% of that for annual maintenance; medical-N500m (retainership with Reddignton hospital for self and immediate family); feeding and personal comfort, N50m monthly(very meager compared with the NASS and Presidency figures); education; N225m for the best universities and post graduate studies at Lagos Business School for my four Kids. I will take care of other items not listed here because I don’t want to frighten the potential bidders with an intimidating price tag. The above totals N37.5bn which we can round up to N50bn.

Why would people be willing to pay N50bn for this particular voter’s card? Well, you note that this offer comes just before the rescheduled presidential elections and it is indeed, for the presidential candidates. Money is not a problem both for the incumbent and the aspiring candidates. There is so much money flowing around and we have budgeted N8trn for this year( don’t ask me when the year starts to count)! N50bn is actually a petty cash especially, given the ‘definite capability’ of this

my card to deliver It is not just that N50bn is petty cash for a potential Nigerian president; it is the fact that whoever my card is voted for will win! That is a sure banker. Paul the Octopus, before his unfortunate death, transferred his predictive powers to me. Thus, standing on the powers transferred and conferred to and on me by Paul the great, any candidate whose party symbol is impressed on my voter’s card will definitely win the elections. The only caveat is that it cannot be used twice and that is why I am offering it for the presidential elections. I had recorded some failures before in this predictive business. I had failed to predict that deodorant would be used for herdsmen and pesticides on IPOB; that my car’s engine would knock along SagamuBenin express way, that my landlord would increase the rent at a season I was down and out financially; and that my kids would leave home so soon and turn me into an adult house boy-serving myself! But this one-on presidential elections-is 100% guaranteed.

And as a proof that this is serious business, I have engaged two high profile consultants to manage the bidding process on my behalf.

These consultants are technically sound and of undoubted integrity. They are Professor Mahmood Yakubu of INEC( wey no fit do ordinary elections) and Mr Magu, the actingpermanent chairman of EFCC. Interested parties should send the technical bids to Professor Yakubu and the financial bids to Mr Maku through www.troubledoncome.com The hotline for this auction is 080419419419 and all documents must be received within 48 hours……. How does the successful bidder recover his investment after the elections? Just record it as petty cash, security vote for madam or as the accountants would say, pre-incorporation expenses! May Saturday( 23/2/19) come and go in peace; may a definite result be announced, and may it reflect our aspirations.

Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye 08033026625; muoigbo@yahoo.com, muo. ik@oouagoiwoye.edu.ng

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