Businessday 21 jun 2018 by BusinessDay

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Buhari takes on NASS over padded 2018 budget

Legislators add 6,403 projects worth N578bn National Assembly says ‘padding’ done with Presidency’s consent

ENDURANCE OKAFOR , MICHEAL ANI, Lagos, OWEDE AGBAJILEKE & Kehinde Akintola, Abuja

wo hundred and twenty-five days after the President Buhari submitted a draft copy of the 2018 appropriation bill to the National Assembly, he finally signed it into law yesterday but not without the usual contro-

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Italian court adjourns Shell, Eni bribery trial to July 20 …as Nigeria seeks to become party to hearings DIPO OLADEHINDE

n Italian court yesterday fixed July 20 as the next trial date for alleged bribery charges against executives of oil giants (ENI and Shell) and Nigeria’s ex-oil minister

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NERC suspends Ibadan DisCo board of directors on N6bn insider loan HARRISON EDEH, Abuja

he Nigerian Electricity Regulatory Commission (NERC) has, via its Order No NERC/181/2018 of June 19th 2018, suspended the Board of Directors and other key management staff of Ibadan Electricity Distribution Company (IBEDC). NERC said, the suspension is coming on account of the company’s default in the recovery of an inappropriate shareholder loan of N6billion granted to Integrated Energy Distribution and Marketing Group (IEDMG) Ltd by the utility. IEDMG, it would be noted is the core investor in IEBDC following the privatisation of electricity distribution companies by the Federal Government. Vivian Mbonu, who heads NERC’s Media Unit said the loan

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World Cup Result L-R: Aliko Dangote, chairman, Dangote Cement plc; Joseph Makoju, group managing director/CEO; Olakunle Alake, non-executive director, Dangote Cement plc, and Brian Egan, group chief financial officer, Dangote Cement plc, at the 9th annual general meeting of Dangote Cement plc in Lagos, yesterday.

Portugal Uruguay Iran

1 - Morocco 0 1 - Saudi Arabia 0 0 - Spain 1

Nigerian doctors head for England in renewed exodus of professionals CALEB OJEWALE

… 1,000 more may leave soon

s doctors and nurses attended to patients coming in ahead of the recent long weekend Thursday, the Medical Director of an upscale clinic on Victoria Island welcomed two of his young doctors into his office. Their mission – to convey news they were heading to the United

Kingdom to continue their practice. The two are among the new wave of Nigerian doctors abandoning their home for a greener pasture in the UK, US, Canada and other countries. More than 1,500 Nigerian doctors entered for a qualifying examination commonly known as

PLAB1 with about 1,000 emerging successful. BusinessDay learnt that a pass in the examination will enable the 1000 successful doctors to practice in the UK. This data could however not be assertively established as the UK General Medical Council’s website only provides a daily

updated register on the number of doctors joining the country’s medical workforce. As at yesterday, 12 Nigerian trained doctors have been registered to practice in the UK within a week of BusinessDay’s health

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2 BUSINESS DAY Banks’ information technology expenses up 35.14% in bid to improve efficiency …Zenith, Access Bank lead IT spend BALA AUGIE

igerian banks are increasingly spending on the acquisition of latest technology with a view to curbing future costs and magnifying shareholders’ returns. For the year ended December 2017, information technology expenses of 9 big lenders increased by 35.15 percent to N54.19 billion from N40.11 billion the previous year. The banks are Zenith Bank Plc, Access Bank Plc, Fidelity Bank Plc, First City Monument Bank (FCMB) Plc, Stanbic IBTC Holdings Plc, First Bank Nigeria Holdings Plc, Sterling Bank plc, Wema Bank Plc, and United Bank for Africa (UBA) Plc. This means they are asking investors to pay today to benefit from greater cost savings tomorrow. Investors pay a high premium for banks that are efficient because there is a correlation between the cost to income ratio (a measure of efficiency), profitability and stock performance. Drilling down the financial statement of these companies shows Zenith’s info tech expenses surged by 116.62 percent to N12.68 billion in December 2017 from N5.85 billion the previous year. The lender’s cost to income ratio (CIR) of 52.50 percent as at December 2017 beats industry average,

based on data gathered by BusinessDay. Total operating expenses were up 30.25 percent to N212.83 billion as at December 2017. UBA’s spent N5.35 billion in December 2017; this represents a 12.44 percent from last year’s figure. The Pan African bank’s CIR of 58.60 percent in the period under review is above the industry average, while total operating expenses were up 24.84 percent to N178.51 billion in the period under review. Stanbic IBTC is one of the most efficient lenders in the country as its CIR of 49.80 percent is among the lowest in the industry. The lender’s total operating expenses increased by 25.23 percent to N86.56 billion as at December 2017. Access Bank’s information technology expenses were up 14.97 percent to N16.0 billion in December 2017 from N13.98 billion the previous year. Its CIR of 62.1 percent lags industry average. “I think with the advent of tech, any bank that doesn’t invest in it may not be relevant in the future. If you are talking about financial inclusion, you need a solid system,” said Ayodeji Ebo, managing director and CEO of Afrivest Securities. “GTBank’s CIR is low as a result of technology as most of their transactions are done on line.

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Thursday 21 June 2018

Shareholders in over 70 eligible PLCs shun NASD OTC market Iheanyi Nwachukwu

he failure of many shareholders in over seventy (70) identified eligible unlisted public liability companies (PLCs) to exchange their shares on NASD Over-The-Counter (OTC) platform could be responsible for a lull in that market. As part of the capital market regulatory efforts to check exchange of securities through the ‘black market’, Nigeria’s Over-The-Counter market for unlisted securities was officially launched on July 1, 2013 and its activities are regulated by the Securities and Exchange Commission (SEC). Growing interests in the market attracted about 218 Registered Brokers and 127 Participating Institutions (PIs) but despite that, there are only 38 unlisted securities that are admitted on the NASD till date. Currently, admitted securities on this platform are Friesland Campina WAMCO Nigeria Plc, Arm Life Plc, Afriland Properties Plc, Central

Securities Clearing System (CSCS) Plc, Trustbond Mortgage Bank Plc, Mixta Real Estate Plc, Nigeria Mortgage Refinance Company Plc, Ensure Insurance Plc, NASD Plc, Niger Delta Exploration and Production Plc, Air Liquide Plc, Nipco Plc, Fan Milk Plc, AG Mortgage Bank, CR (Credit Bureau) Plc, Lighthouse Financial Services Plc, and Acorn Petroleum Plc. Also, the NASD has admitted securities like Dufil Prima Foods Plc, Fumman Agric Product Industries Plc, Free Range Farm Plc, Vital Products Plc, FAMAD Nigeria Plc, Food Concepts Plc, Jaiz Bank Plc, Partnership Investment Company Plc, Golden Capital Plc, Industrial and General Insurance Plc, Spring Mortgage Plc, GEO-Fluids Plc, Riggs Ventures West African Plc, International Packaging Industries of Nigeria Plc, Resourcery Plc, Swap Technologies and Telecomms Plc, Mass Telecom Innovation Plc, Costain West Africa Plc , and Cappa and D Alberto Plc. The NASD Unlisted Securities Index (USI) decreased by 0.9percent to 660.03 points as at trading week

to June 14, up from 666.24 points recorded the preceding trading week. The market’s total capitalisation closed at N446.65 billion. Aside these admitted securities, BusinessDay’s recent checks revealed that NASD OTC Securities Exchange has since identified about 78 eligible unlisted companies that their shareholders can automatically trade their shares on the OTC market. Some of the PLCs it said to have registered with the Securities Exchange Commission (SEC) are Investment And Allied Insurance Plc, Nexans Kabelmetal Nigeria Plc, Poly Products Plc, Union Assurance Company Plc, Hebn Publishers Plc, Vital Product Plc, Antonio Oil Plc, Okitipupa Oil Palm Plc, Propertygate Development and Investment Plc, Impresit Bakolori Plc, Wema Securities And Finance Plc, Oando Marketing Plc, Starcomms Plc, 5 West African Alluminum Products (Waap) Plc, Allied Energy Plc, Free Range Farms Plc, Pan African Capital Plc, Afroil Plc, and Nipco Plc. Continues on wwwbusinessday online

Continues on wwwbusinessday online

Dangote pays 90% of net profits as dividend …shareholders get N10.50 per share payout

hareholders of Dangote Cement on Wednesday at the company’s 9th Annual General Meeting (AGM), held in Lagos were full of praise for the Board, Management and staff of the company after approving the dividend payout of N10.50 per 50k share, representing 90 per cent of net profit and an increase of 23.5 per cent on the N8.5 per share paid last year. The shareholders described Dangote Cement as a very reliable company that has consistently demonstrated its love for the shareholders. They unanimously urged the regulators to give special award to Dangote Cement and its Management for keeping faith with the shareholders. President of Progressives Shareholders Association of Nigeria, Boniface Okezie, said the shareholders were pleased with Aliko Dangote and his team. He said for the company to still pay a robust dividend despite the recession in the economy, which also affected their operations shows the doggedness and the fighting entrepreneurial spirit of the Management. According to him: “We are very happy and pleased with this result. 2017 was very tough with the recession and fluctuation in the foreign exchange market which the Chairman also said affected their operations, but despite all these challenges, the company was still able to pay us a very good dividend, better than last year, and even gave us hope of better returns on our investments in the years to come. This is very commendable and it is only a com-

pany like Dangote Cement that can achieve this laudable feat.” Umar Farouk, another shareholders’ association leader expressed optimism on the pan African plants, especially now that the Plants are contributing significantly to the turnover of the company. “It is a statement of fact that we are lucky to be shareholders of this great company. If you see what our subsidiaries across Africa are contributing to the turnover, then you will understand what I am talking about. I am very happy and our members are upbeat for the future, knowing fully well that it will only get better.” Chairman of Dangote Cement, Aliko Dangote however attributed the 31 per cent increase in the company’s revenue to N805.6 billion to its pan African operations growth which also recorded a significant increase in revenue from N195 billion to N258.4 billion in 2017. He said: “Pan African operations increased volumes by 8.4 per cent, with Ethiopia, Senegal, Cameroon and South Africa all performing strongly and close to their operating capacity.” No t i ng t hat t h e c o mp a ny experienced some challenges in operating in sub-Saharan Africa, Dangote said the Management responded in robust fashion and benefited from “… the diversity we have created across our business and because of our local knowledge and attitudes towards doing business in neighboring countries in Africa.” Continues on wwwbusinessday online

L-R: Colin G. Raccah, business development manager, Sahara Energy Resources DMCC; Valery Guillebon, chief executive officer, Sahara Energy International Pte. Ltd. Singapore (Geneva Branch); Mohammad Sanusi Barkindo, secretary general, OPEC; Wale Ajibade, director, Sahara Group, and Bethel Obioma, head, corporate communications, Sahara Group, at the ongoing 7th OPEC International Seminar in Vienna, Austria, yesterday.

OPEC, non-OPEC members converge over future energy threat Bashir Ibrahim Hassan & Vienna Austria

wenty-four countries from OPEC and Non-OPEC groups yesterday converged at Vienna, Austri’s Capital, to seek for solutions for the future oil and gas challenges. At a seminar, titled: Petroleum –Cooperation for a Sustainable Future, the ministers and heads of national oil companies as well as chief executives of global energy companies, academics, energy experts and media practitioners gathered to address challenges of the 21st century that are considered a threat to the industry. Recently there were two concerns over the future of oil as many countries are adopting electric vehicle plans as a strategy to phase out the hydrocarbon usage in the near future. Countries like France, Denmark, Germany and China among others are coming up with deadlines to end vehicles using hydrocarbon on their roads while some global leaders like US President

Donald Trump frown at the rising prices of the oil in the international markets in recent tweets. The Secretary General, of Organisation of Petroleum Exporting Countries (OPEC), Mohammed Sanusi Barkindo said the seminar will seek to reinforce OPEC’s longstanding commitment to strive towards a secure and stable market in support of a healthy global economy. Some of the key oil and gas issues discussed at the seminar include the Sustainable Global Energy Future; Energy Cooperation; Global Oil Market Balance Metrics, Energy Transition and World Economy and the Future of oil. Russia, Saudi Arabia - the two leaders among the oil producers groups, have called for the expanded cooperation between the OPEC and non-Opec member countries in order to keep the global energy market more stable. Also, China and India the two biggest consuming nations, supported the declaration for Cooperation of the producers but called

for the expansion of the alliance to include the consumer nations in taking energy decisions. Saudi Arabia’s Minister of state for Energy Affairs, Prince Abdulaziz Ibn Salman said at the meeting that the cooperation between the OPEC and Non-OPEC members have a great deal in achieving the stability in the global energy market. Barkindo said the importance of sustainable stability will no doubt be apparent over the course of the Seminar, as OPEC and nonOPEC members tackle such issues as evolving a sustainable energy future; technology breakthroughs; the energy transition; the environment; oil industry challenges; investments; and, the global economy. “What is central to all of these topics is one word: cooperation, it is vital all stakeholders work together to meet the challenges, as well as the opportunities before us, as the overall theme of the Seminar underscores,” Barkindo said. Continues on wwwbusinessday online

Thursday 21 June 2018

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Thursday 21 June 2018

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Thursday 21 June 2018

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Thursday 21 June 2018

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Thursday 21 June 2018

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Oil mono economy: Lessons for the communications sector

ADEDAYO OJO Adedayo Ojo is the Chief Executive Officer of the Caritas Communications, a reputation management consultancy with offices in Nigeria and Ghana.

he Nigerian oil and gas industry has grown steadily since the first significant oil discovery in 1956 and has since become the mainstay of the Nigerian economy. The country boasts of 28.2 billion barrels of crude oil reserves and total proven gas reserves of 165 trillion standard cubic feet (scf ), including 75.4 trillion standard cubic feet (scf) of non-associated gas. The country is usually referred to as a gas province with pockets ofoil as its maximum production capacity stands at 2.5 million bpd. Over six decades after the discovery of oil in commercial quantities, the economy has however remained largely dependent on oil. The implication is that Nigeria’s ‘oil mono-economy’ status portends that oil still accounts for about 90% of exports and over 80% of total governmentrevenues. With this, the economy has been

BOLAJI ODUMADE Odumade is of the Features Unit, Lagos State Ministry of Information & Strategy, Alausa, Ikeja

uman wants are so innumerable. Beginning from the basic necessities of life such as food, clothing and shelter, other secondary demands compels mankind to explore other avenues to create wealth for future use. From farmer, business man/woman, fisherman, the story is the same as everyone aspires for better life which can only be realized through meaningful investments. Muhtar Kent once said: “Without investment, there will not be growth, and without growth, there will not be employment’’. Invariably, the need to expand the frontier of meeting ever increasing compelling needs has brought about various investment innovations. It is bad to live from hand to mouth, worse still it is dangerous for one not to plan for future. As age increases, status changes come with demand for scarce resources, hence the need to be strategically positioned for financial stability. Among various finance sources that have helped many to fulfill their dream of attaining financial solidity is cooperative society. Apart from savings which usually takes time to gather enough for specific projects, cooperative societies have fast tracked the process of building investment for many families.

substantially unstable. More disturbing is that financial resources accruable from the oil industry have been plundered by politicians and government officials in connivance with multi-national oil companies. This shocking news emanated from a communiqué issued at the end of The Savings and Stabilization Mechanism for Nigeria, by the Shehu Musa Yar’Adua Foundation after a roundtable forum inLagos. A glimpse of the communiqué recalled that given relatively high price of crude in favour of oil producing Nigeria, the Obasanjo led administration established the Excess Crude Account (ECA) as a savings mechanism “a rainy-day fund”, to ensure fiscal stability. This ECA was to be invested in a Sovereign Wealth Fund, into any of three vehicles: Future Generation Fund (FGF), Nigerian Infrastructure Fund (NIF) and the Stabilization Fund. The communiqué sought to gauge the transparency of government in the ECA administration and analyzed an 11-year period between 2007 to 2017; it also split the review period into 2007-2014 and 2015-2017, to cover successive economic governments. The study, however discovered inconsistencies with public data as a difference of 22.8 million barrels (cumulative value ofover $1b) in NNPC’s report between an initial edition

Interestingly, Nigeria has most of the required ingredients to support mass broadband penetration all over the country. With 5+ submarine cables, the country accounts for $7 billion of Africa’s $10 billion subsea investments providing significant wholesale capacity to access the internet published in 2014 and a subsequent edition published in 2016. Also, it was observed from an account by the Minister of Finance, Kemi Adeosun that within a space of 10 months, ECA funds were depleted from$3.93b in July 2016 to $2.45b in April 2017 without an explanation how the funds were spent. The sources were reports from the Central Bank of Nigeria (CBN), the Nigerian National Petroleum Corporation (NNPC), the Budget Office and the National Bureau ofStatistics. So, within eleven-year period 2007-2017, $167.5 billion (N24.27 trillion naira) was expected to have accrued to the ECA. Re-

grettably, approximately N11.6 trillion is unaccounted for! As only USD$2.32 available as at December2017, based on statistics by the Federal Ministry of Finance. A total of$82.26 billion or N11.579trillion (49%) developed wings. We don’t need a national conference before we can appreciate what N11.6trillion would have done for this economy. Is oil actually a blessing or curse to Nigeria? The study also highlighted the inability to account for higher ECA despite the rallying oil prices. As other nations march into the industrial revolution 4.0 where technological disruption commands economic interests, Nigeria clings to its‘leaking cup of oil’. Yes, the cup leaks because very soon revenue accruablefrom oil would become quite meagre and unattractive. While other economies are sustaining technological exploits by adoptingblock chain technology, artificial intelligence, machine learning, Big Data,biometrics, and others powered by broadband penetration, Nigeria’s economicdiversification mantra has been marred by legislative somersaults and a lackof political will to pursue a futuristic agenda. While the oil sector has over the last few decades contributed significantlyto our foreign exchange earnings, it has attracted what has been called the‘Dutch disease’, a resource curse with negative impact on an economy.

Thecountry’s over dependence on oil is not only responsible for the downturn inthe economy but it is also behind the emergence of a redundant humanresource base and economy vested with level of corruption. The Mono-economy grip of crude oil led to the neglect of agriculture, an over-bloated public sector, financial indiscipline, corruption, nepotism andlack of accountability. For Nigeria to attain the pinnacle of her success,its economy has to be diversified. Diversification does not come in avacuum; sustainable development of other sectors of the economy can only be achieved if we divest from the current mono product economy. With oil price volatility and its severe impact on the Nigerian economy,diversification is actually not an option. We are one oil crash away fromanother economic depression and may sooner than later, be unable to meet ourbasic social and infrastructural needs. Nigeria must open up various sectorsof the economy and decentralize its attention from a mono-crude oil economy.It is time to look beyond oil and into other sectors that can improve the country’s economy. Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/

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Cooperative societies in contemporary era In the communities of low income and medium income earner, cooperative societies have been made famous by its abilities to supplement/support members’ capacity to acquire property for domestic and commercial purposes. The advantage of pulling resources together for the good of all have made tremendous impact in the growth of members’ financial, by boosting their purchasing power of subscribing members. According to a popular biblical saying, ‘a good man leaves inheritance for his children’s children’. But then, how can a man whose income is barely sufficient to meet basic needs of the day leave inheritance or secure a better future for his children, not to talk of grandchildren? Recently, a friend had lofty plan about how to cope with several financial issues ranging from ever increasing house rent, children’s school fees to other domestic burdens. He discovered that his ‘takehome’ could not really take him home. Every time there was opportunity to take loan facility from bank officials who hover around to offer succor, he was first to apply, thus placing himself under further financial strains. This continued until a friend advised him to join a cooperative society where he could save certain percentage of his monthly salary to a point where he would draw double of his savings for investment that would bring about passive income. And alas, through this simple advice brought about an incredible financial transformation to his family.

Among other avenues of investments, cooperative societies continue to play prominent role as investment channel for those that subscribe to them. Despite its popularity among many, few understand the way it operates while those that have taken advantage of it continue to explore enormous opportunities it offers. It has come to be associated to a commonwealth of people’s resources for the business, economic and improved welfare of its members. According to International Co-operative Alliance, ‘’a cooperative society is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.’’ Historically, cooperative society came to being as a result of people who have similar needs came to find a way to augment their meager salary. To this end, Rochdale pioneered the first cooperative society in England in 1844, where 28 men (weavers and skilled workers in other trades) established a shop in which they sell goods. Increased pressure from changing market demand system became a driving force in running the cooperative. From paltry selection of butter, sugar, flour, oatmeal and few candles, within few months expanded into selection of tea, tobacco and later transformed into conglomerate of high quality products. Spanning over 200 years of existence, it has remained vibrant. In Nigeria, cooperative societies play significant roles in the liberation of individuals and families from pov-

erty, especially low income earners who see it as the way to economic salvation, invest and improve their welfare. Many wouldn’t have acquired enduring assets if not for the advantage of bulk purchases made available by the societies. Different savings plans provided members options products to access. Cooperatives services now range from ordinary saving which qualifies members for loan and target savings which is intended for specific projects. Many lives would have been lost to curable diseases with children out of school if not for the support of cooperative societies’ contingency facility. In Lagos alone, the collective capital base of cooperative societies has increased to over N152billion with increasing membership base of over 2million. The State government has in the last three years been developing template for cooperative societies in the State to be used as instruments of economic growth and business prosperity that is capable of investing in critical sectors of the economy. In view of the perception of land as major asset in Lagos State, many cooperative societies succeeded in acquiring estate for its members, while some others are developing housing estates, extending beyond the frontiers of the State into neighboring Ogun State, thus complementing Lagos State government’s effort in addressing housing deficit of the State. Similarly, while young entrepreneurs are being encouraged to align themselves into multipurpose

cooperative societies to access credit facilities without collateral have resulted in appreciable upscale in the number of cooperative societies duly registered in the state to 1045, consequently making it possible for the State government to monitor and support their activities. Capacity of practitioners and drivers of cooperative societies in the State got a boost with a total of 1,607 so far being trained at Lagos State Cooperative College to enhance best practice. The Lagos State Cooperative College bill recently signed into law is expected to further consolidate on the capacity of the college which has hitherto been training to transform into a full-fledged diploma awarding institution which will commence admission before the end of year 2018. This laudable development in the State will continue to place demand on the various practitioners to up their games through diploma certification available. It is imperative for all tiers of government in the country to continue to provide enabling environment and intervention to support cooperative societies. It is no doubt a sure way of creating and securing a better future for its members as its benefits are just there to explore. It is important for all and sundry to subscribe to a vibrant cooperative society for an assured future while the unregistered ones should be integrated into relevant in their best interest.

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Sustainable rural development is pivotal to Nigeria’s socio-economic viability OLUWADARA ALEGBELEYE Oluwadara is a writer as well as an academic researcher. She is currently a PhD student at the Department of Food Science, University of Campinas

igeria is one of the most difficult countries to live in, consistently scoring low on the most important life quality metrics/indices. Although socio-economic conditions are dismal in the rural areas and the so-called urban centers alike, the situation in the rural areas is much worse, typified by unimaginably brutal living conditions and overall poor life prospects. The rural-urban divide therefore continues to widen, driven by survival rather than by opportunity. Poverty is evidently one major influencer of migration, but biased policy and political attention is another important issue. Whether inspired by genuine intent, or the more common hypocritical scramble to impress and attract votes, when our political leaders (incumbent or aspiring) get round to doing anything useful, the capital or other major cities are usually the beneficiaries. In the more formal scheme of things, the bulk of govMUHAMMAD AJAH Muhammad Ajah is an advocate of humanity, peace and good governance in Abuja. E-mail mobahawwah@yahoo.co.uk.

ow Nigeria can get back the football squad she had of 1994 through 1996 is part of my worries about the Super Eagles. From the onset, I must confess that I have nearly lost interest in the Nigerian football team. I have not been able to figure out what could be responsible for the decline of the Super Eagles. If not for patriotism and the inborn love for the “Pele’s toy”, I would have stopped watching football matches. To get relief, I sometimes prefer to watch matches of foreign clubs than our local tournaments. Yet, though not a fan of any, I belong to every serious club but never a diehard for any. That was me when Nigerian clubs and tournaments were interesting. Can our past football history return? Sometimes, I feel that the politics surrounding the choice of players is responsible; politics in different ways. Either because in the course of choosing the players, the harmful idea of federal character is placed on board or the consideration of godfathersim/ who-knows-who comes to play. Or corruption is responsible in the sense, as alleged, that players have to pay immediately to be selected or sign pacts to forfeit parts of their match allowances. It is bad and whatever is responsible for this, I think the federal government has the responsibility to

ernment funding, private investment and even research goes to the big cities. Other factors such as poor and fraudulent land management, which has displaced farmers, pushing some into the agrarian underclass have also stimulated rural depopulation. The repercussions have been dire including social degradation, significant agricultural distress (albeit poorly characterized) and ‘slumification’ of urban centers. The young especiallyhave relocated in droves creating a professional and mental chasm, which has made it virtually impossible to replace local doctors, other health workers, teachers and business personnel whom have retired, in recent past. Withering rural populations also mean labour shortages and fragmented families. In the case of agricultural families, this has disrupted knowledge transfer from one generation to another, a problem aggravated by inadequate support and resources as well as climate-change related circumstances generating significant agrarian stress and a stunted agricultural sector. Slums in cities such as Port Harcourt and Lagosare expanding rapidly and uncontrollably as poor and uneducated rural workers relocate in pursuit of better life prospects. Many of these migrants undertake mostly unskilled, informal, manual jobs such as cleaning, security and construction

Bottom-up policies to boost agriculture and forestry conditions, therefore, are an important first line of action. Subsidizing cultivation costs; seeds, fertilizers, pesticides and other inputs to improve farming conditions and yields should be considered work. This largely ignored migration trend also strains the already weak infrastructural amenities, public services and social welfare in the mostly poorly planned cities.Needless to say, social vices have climbed to dangerously high levels. Sustainable rural development is vital to Nigeria’s overall economic, social, cultural and environmental viability and is indeed possible. One crucial issue, central to achieving any useful output, is the attitude of Nigerians, especially the so-called elites. It baffles me that seemingly educated, even sophisticated, well-meaning Nigerians continue to tolerate the mediocrity and mendacity of the political class. In the past, we have been bamboozled by some of these knaves, who set up, with so much fanfare, bogus, hypocritical policies, doomed to fail from the outset. For in-

stance, do we not know that putting individuals who know absolutely nothing about farming or land matters and agricultural production in charge of rural agricultural schemes is a sham? Henceforth, we need to resist such duplicitous tendencies. Government officials and their collaborators have to demonstrate dedication and genuine interest in rural issues. Local governments, set up purportedly to bring the government closer to the people have been mostly irresponsible and dysfunctional. Ministries, institutes and enterprises created specifically to solve rural-related problems, some of whom receive financial support from international organizations, but shun their obligations, are no exception. We have to task them on delivering on some of their responsibilities. Improving infrastructure, investment in public health and education, developing local resources and cultivating tourism, special products and crafts are some potentially useful strategies. Subsidies for setting up or relocating industries and other commercial ventures,as well as otherstrategies for attracting businessesshould also be explored. Unemployment is a national crisis and it will take several years of sustainable, meaningful development for rural areas to be capable of providing employment opportunities. However,

agriculture is an important alternative, which, if approached with the desired industrious seriousness, can yield significant benefits. Fundamentally, it will address food shortages and our burgeoning food insecurity crisis and will keep a substantial proportion of the population, gainfully employed. Bottom-up policies to boost agriculture and forestry conditions, therefore, are an important first line of action. Subsidizing cultivation costs; seeds, fertilizers, pesticides and other inputs to improve farming conditions and yields should be considered. Resolution of land disputes and other poverty-triggered conflicts, appropriate land attribution and land consolidation are an absolute necessity. Projects to enhance soil fertility, manage flooding and prevent disasters are research proven and empirically verified strategies, which have boosted agricultural yields and incomes in several other developing countries. Although research is poorly funded through the entire Country, rural issues are much less studied than urban ones. Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline. com/

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Yearning for Super Eagles of 94 sanitize the system in the glass house. I have never wept for Nigerian football like that of France 98 when Nigeria lost woefully on June 8 to Denmark by 4-1 in the round 16. This followed the loss to Paraguay 3-1 on June 24 at the stage matches. Nigeria had earlier defeated Spain 3-2 on June 13, defeated Bulgaria 1-0 on June 19. Hopes were very high for Nigeria to defeat Denmark. I prayed for the Eagles after the first and second goals hit Peter Rufai’s net in the third and 13th minutes. I still prayed that Nigeria could make it in the second half as usual until hopes were dashed by the third and fourth goals in the 60th and 76th minutes by Ebbe Sand and Thomas Helveg respectively. I took to memory every bit of the happenings in 98 Super Eagles’ outing. And since that year, Nigeria has been unable to build a strong team. Any hope for Nigeria in Russia 2018 with Croatia on June 16, Iceland on June 22 and Argentina on June 26 at the group D stage? It cannot be that Nigeria has no qualified players. Nigerian players are doing very well in many renowned teams across the world. If this is unarguable, why is it difficult to assemble these Nigerian stars to form a formidable Nigerian football team as other countries with history in the game have maintained. What will it take Nigeria to study the way the South Americas have sustained their supremacy over the round leather. I know that reading or even learning culture in Nigeria is low, but football is a game that is more practical than theoretical. There are all assurances that Nigeria can build

a strong football team that can last long, if all the factors enumerated above are arrested or eliminated. I dearly yearn for the Nigerian Super Eagles of 1994. I feel for those days of Rashid Yekini, Steven Keshi, Jay Jay Okocha, Emmanuel Amunike, Daniel Amokashi, Sampson Siasia, Victor Ikpeba, George Finidi, Tijani Babangida, Augustine Egwavon, name them. Those were the days Nigerian matches thrilled the world and many non-football lovers would spare the time to watch Nigerian matches. Those were the days I would not eat, even when hungry, until I watched the last action in any Nigerian match. Those were the days I used to conduct a personal prayer for the Eagles before any of their matches. Those were the days that if the Eagles lost a match, one would be convinced that they actually did play the game. And those were the days Nigerian footballers were selected/appointed to represent Nigeria on merits and they were cared for. There was less or no wicked conspiracy against them. There was no compromise over their entitlements. Unity and patriotism were their watchwords. And in 1996, the team, strengthened with some powerful football “magicians” like Kanu Nwankwo, conquered the world at Atlanta. Many of these Nigerian super stars are still alive. Some of them, though retired and not tired, have been contributing positively to the development of the younger footballers. The question is: With such vast experienced game masters, why are the new breeds not performing or replacing them. A reported problem is that some of these retired big players have influenced the team formation

negatively because they insist that their blood brothers or relatives make the Super Eagles squad, thus causing confusion during the selection processes. And I ask: Must everybody in a family be footballers? This means that some of the players are imposed on the coach or technical adviser. As a lover of the game and a player too, who knows what would have been of me when as a student in Egypt, I had some opportunities to play in the top Egyptian teams in the early 1990s when Nigerian football stars like Emmanuel Amunike and John Utaka, amongst others, kept the Nigerian flag high in the Egyptian soccer leagues. As a member of the Foreign Students’ team which had friendly matches with the Egyptian football clubs, few of us were often invited for trainings by the clubs. But it was a herculean task or an impossibility to combine studies with professional football in the land of the Pharaohs. I can still remember a colleague, Abubakar Haidara from Mali and Ibrahim Mujambera from Malawi who accepted to play for clubs. Haidara played for the junior team of Al-Ahly club and later played for his country. The Mandela Cup that used to be hosted by the Egyptian authorities for African students in Egypt seemed to be a property for Nigerians because the Super Eagles in Egypt then were often the champions. Though captured in my book “My prayers, hopes for Nigeria”, I discovered something strange while in Egypt, about how Africans take Nigeria and Nigerians. Whenever there is a football match between Nigeria and any other African country,

all the students from other African countries would boldly not support Nigeria. Even as they could not affect any change in the course of the match, they colluded against Nigeria. Instances were whenever there were competitions between Nigeria and any other country within the students’ sport activities. The Mandela Cup was a handy example. No one doubted what Nigeria stood for in football then. So, African students would gang up against Nigerians, despite the fact that Nigerian team must have its way. Really, I was disturbed by this attitude. It caused skirmishes between my friends and me. But gradually I became used to it and Nigeria still remained a giant in whatever contest we undertook on behalf of the country over there. Besides, I took time to find out the reasons behind such acrimony towards my country by my African brothers and sisters. I got the answer in “Nigerian people feel too big. They think they are everything. They think they know everything. They say they are Giant of Africa”. Yes, we sometimes feel too big to learn. But anything that requires talent and practice can only be sustained with practice. It is said that “practice makes perfect”. Let the administrators of Nigeria’s football learn why the South Americas have remained superior over the round leather since memorable times. I believe the Super Eagles of 1994 can be built, if corruption, nepotism and frivolities in the sector can be fought to a standstill.

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BUSINESS DAY

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Editorial

Thursday 21 June 2018

PUBLISHER/CEO

Nigeria’s revenue crisis and challenge of funding infrastructure

EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie

lth oug h th e Nigerian government keeps reminding everyone that cares to listen that its debt to GDP ratio is still low and it has “headroom to borrow” and is “doing so aggressively in the short to medium term in order to address our infrastructure deficit and to stimulate growth,” the reality is more nuanced. Due to its low revenues, it has a higher debt servicing to revenues ratio, which is estimated to stand at 66 percent. What this means is that the country is spending approximately two thirds of its revenues in servicing its dept. To compound the problem, the rest one third of the country’s revenues is not enough to finance even recurrent expenditure not to talk about capital expenditure. The government necessarily have to resort to more borrowings without a realistic and sustainable debt repayment plan. But this is not sustainable. There is a more sustainable approach, which, besides drastically reducing recurrent expenditure,

Frank Aigbogun

EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

involves the funding of infrastructure through robust public and private partnerships or PPPs. And Nigeria is desperately behind in its infrastructure stock. The international benchmark for infrastructure stock as a percentage of GDP is 70 percent, but Nigeria currently stands at 25 percent. This, perhaps, explains the country’s low ranking in the Africa Competitiveness Report by the World Economic Forum, which ranks Nigeria’s infrastructure 134th out of 144 countries. Again, the World Bank’s latest Ease of Doing Business Index ranks Nigeria 169th out of 189 countries. It has been estimated that for Nigeria to close its infrastructure gap and bring itself up to the international benchmark for infrastructure stock, it needs to spend as much as $2.9 trillion in the next 30 years and 48 percent of this sum, representing $1.4 trillion, has to come from the private sector. A breakdown of the $2.9 trillion shows funding sources that include private sector contributing 48 percent, which equals $1.392 billion; Federal Government, 29 percent, $841million; states

and local governments, 23 percent, $667 million, and donor agencies, 0.4 percent, $11.6 million, giving a total of $2.911 trillion This realisation that both the government and the private sector must contribute their quarter towards building Nigeria’s infrastructure is now mainstream and all progressive governments are designing policies to ensure a robust public-private partnership where the private sector can invest massively in infrastructure. But not so with the Nigerian government. This is a country where the president came out to say matters-of-factly that he does not trust individuals in the private sector. In his words: “We are averse to an economic team with private sector members” because such persons “frequently steer government policy to suit their narrow interests rather than the overall national interest”. Buttressing the president’s position further, the media adviser to the vice president, Laolu Akande further explained that the presidency considers economic management as purely “a government affairs”.

Sadly, PPPs have not been very successful in Nigeria basically because the government has shown over the years that it does not regard validly executed contracts as sacred. In many cases, the government has resorted to self help in a bid to do away with contracts that it considers not favourable to its interest. The result is a lack of trust in government and therefore reluctance by the private sector to participate in PPPs. With low interest in PPPs, the government is forced to fund infrastructure from its low revenues budget that could easily be funded through PPPs and from borrowing, sometimes, at exorbitant interest rates. There is just no running away from the reality that the government must partner the private sector to provide modern and world class infrastructure. The government must begin to rebuild trust and get the private sector on-board efforts to invest in Nigeria’s infrastructure. Private capital has alternative uses and many countries are competing for them. The sooner we develop an attractive PPP model the better for us.

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Thursday 21 June 2018

BUSINESS

COMPANIES & MARKETS

DAY

EFInA highlights Fintech opportunities in promoting access to financial service

Pg. 14

Co 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

ENGIE targets off-grid energy provision in Africa MIKE OCHONMA

lobal utility, ENGIE, says it wants to focus on providing off-grid energy in Africa, with plans to expand its solar home system (SHS) and mini-grid activities. For over 50 years, ENGIE has been active in many African countries through its energy engineering business, its natural gas purchase agreements with Algeria, Egypt and Nigeria and more recently as an independent power producer in South Africa and Morocco with a total capacity of 3 000 MW either in operation or under construction. ENGIE, which is participating in the Africa Energy Forum beginning in Mauritius, is launching new minigrid projects in Zambia and starting commercial sales of

SHS in Ivory Coast with its subsidiary Fenix, part of its goal to provide 20 million people around the world with access to decarbonised, decentralised energy provision by 2020. Ac c o rd i ng t o Yov e n Moorooven, ENGIE Africa CEO, “Advances in decentralised energy put universal access within reaching distance, but the scale of the challenge is significant. As governments work hard to improve electrification rates, decentralised solutions must be part of the mix,” . “Demand for clean and safe energy across Africa is continuing to increase, and the supply needs to rise in both speed and quantity.” Moorooven said a number of African governments and regulators were putting renewable energy at the core of their energy policies and ENGIE would work with them to expand energy access faster and sustainably.

In 2015, ENGIE launched PowerCorner, an innovation which provides electricity to

rivate Equity Africa (PEA) has announced the winners of the 2018 GP & Advisor Awards. The awards saw 26 firms collect the much coveted accolades at the 7th Annual PEA Awards Gala Dinner hosted at London’s prestigious Langham hotel on 12th June, which attracted over 200 industry professionals. KPMG won the special recognition as Global Financial Advisor, and Perigeum Capital as Corporate Finance Advisor. Old Mutual Alternative Investments walked away with the LP Award for its investments across private equity funds. The much coveted Sub-Saharan Africa House of the Year was picked up by Carlyle’s Africa team. In the house category Investec Asset Management held on to its crown as Credit Investor of the Year, also taking the Credit Deal of the Year for Akuo Kita Solar. Investec also received the Venture Philanthropy Af-

rica Award, for its corporate social work in the continent. In the Advisory category, Clifford Chance continued to reign as king in the legal space, winning the much contested Overall Legal Advisor of the Year, covering aggregated advisor work across funds and deals. Clifford Chance also scooped the Deals Legal Advisor of the Year, while Funds Legal Advisor of the Year went to Simmons & Simmons. Trident Trust was awarded Fund Administrator of the Year. The final winners were chosen by an independent panel of leading industry professionals with representation from Proparco, Morgan Stanley, FMO, Swedfund, Hamilton Lane, Mbuyu Capital Partners, HarbourVest, IFC and Cebile Capital. The recipient of this year’s Outstanding L eadership Award was Papa Madiaw Ndiaye, Founding Partner and CEO at AFIG Funds, for his contributions to the growth of the industry. This is the only award given to an individual and voted on by industry peers.

mini-grid in Zambia after the success of the model in Tanzania where it has 8

mini-grids currently in operation or in final construction stage.

L-R: Wole Obayomi, partner and head, tax regulatory and people services, KPMG Nigeria; Tayo Ogungbenro, partner and head, transfer pricing and industrial markets (Tax), KPMG Nigeria; Nike Oyewole, head, market operations, KPMG Nigeria; M.O. Gbonjubola, head, international tax department, Federal Inland Revenue, (FIRS), and Nike Yomi - Faseun , associate director, tax regulatory and people services, KPMG Nigeria,during KPMG tax breakfast seminar on transfer pricing impact of BEPS and other reforms in Lagos yesterday. Pic by Pius Okeosisi

KPMG, Old Mutual, Carlyle’s Africa, Investec, others shine at Private Equity Africa show in London Iheanyi Nwachukwu

rural areas via sustainable mini-grids, and will launch the construction of its first

Runa Alam, co-founder and chief executive officer at DPI, was recognised with the Woman Investor Award. She is also the 2015 Outstanding Leadership award winner. The 2018 PEA Awards received a record number of entries, the highest since the awards were launched. Based on 2017 achievements, the self-entries were complemented by editorial recommendations from the Private Equity Africa team and industry data. The nominations were in partnership with the London Business School Private Equity Institute. Commenting on the awards, Gail Mwamba, the Awards Chair and Managing Editor at Private Equity Africa, said: “Well done to all the Winners of the 2018 Private Equity Africa Awards. The quality of the entries we saw this year shows that Africa continues to offer immense opportunity for private equity, and demonstrates and the resilience of the industry. Congratulations and we look forward to gathering again next year.

Shell Company urges contractors to prioritise safety in operations Olusola Bello

eter Costello, vice president of Shell Companies in Nigeria (SCiN) and Gabon, has charged contractors working for and with Shell Companies to prioritise safety and be relentless in discussing the challenges and dilemmas, noting that the international oil giant was poised to help improve safety performance throughout the energy industry. “Safety is our top priority. Everyone who works for us, or with us, has an important part to play in making SCiN a safer place to work. We cannot succeed in isolation and we must share the challenges by building strong partnerships to further improve our safety culture,” Costello said at the 7th edition of annual SPDC JV Contractor CEO Safety Leadership Conference held in Lagos last week. He added: “We expect our staff and contractors to comply with safety rules and regulations relevant to their work;

to intervene to prevent unsafe conditions; and to respect fellow workers and the communities in which we work.” Osagie Okunbor, managing director of The Shell Petroleum Development Company of Nigeria Limited (SPDC) and Country Chair, Shell Companies in Nigeria, in his remarks described the annual event as an opportunity to share learning and ensure alignment, common ground and shared commitments on Health, Safety and Environment (HSE) in Shell’s joint operations. “We cannot be too careful with safety issues. Through engagement, we ensure that the right competence is in place and we create opportunities for our staff and contract staff to speak openly about dilemmas. The collaboration must be continually strengthened so as to make Shell a safety model in the Nigerian oil and gas industry.” Okunbor said, adding that SPDC “more than ever before, is committed to delivering energy responsibly and

safely, with total prevention of harm to our employees, contractors, local communities and the environment.” Chidube Nnene-Anochie, general manager, Safety and Environment of Shell Companies in Nigeria, while setting the conference scene said the two-day conference was informed by SCiN’s mission to constantly work in partnership with contractors, regulators, industry trade associations and professional bodies to share Shell’s global safety experience, standards and knowledge. She said the conference had over the years helped to increase safety awareness among contractors working for SCiN particularly in the areas of safety hazards that are peculiar to oil exploration and production activities. Highpoint of the conference was the presentation of the 2018 SCiN Safety Leadership Awards to contractors who have distinguished themselves as safety champions in the areas of personal, process and transport safety, among others.

BUSINESS DAY

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Thursday 21 June 2018

COMPANIES & MARKETS EFInA highlights Fintech opportunities Business Event in promoting access to financial service HOPE MOSES-ASHIKE

o further promote financial inclusion in Nigeria, Enhancing Financial Innovation and Access (EFInA) a financial development organization funded by DFID and Bill and Melinda Gates Foundation, has highlighted significant fintech opportunities that could redefine access to financial service landscape in the country. The untapped opportunity Fintechs were exposed to is the 41.6 percent of the population that are currently financially excluded and have no access to formal financial service even though they have access to mobile phones. Segun Akerele, EFInA’s board chair, said the company is willing to support them in tapping into the opportunity through its Research, Advocacy, Innovation Grant and Capacity. EFInA recently organized a FinTech Breakfast forum in Lagos, where stakeholders across the financial services

sector, discussed extensively on issues around access to financial services in Nigeria. The FinTechs that attended the forum generally agreed that there was a need for constant dialogue between all stakeholders so that the current obstacles to financial inclusion can be removed and the FinTechs can play an important role in the development and promotion of financial inclusion in Nigeria. Through its Innovation Fund, EFInA targets the economically deprived population. Launched in 2009, the fund shares risks with Financial Service Providers (FSPs) by providing grant subsidies through the Technical Assistance Grant and the Innovation Grant to the amount of $250,000 and $2,000,000 respectively. The focus areas include agent networks, electronic payment, financial inclusive products and services especially across Northern Nigeria, women and financial literacy projects. Akerele said that the “essence of the forum is to request information from FinTechs

on how EFInA can stimulate innovation targeted at the financially excluded through its grants, advocacy, research and capacity building” she addressed over 40 different FinTech companies, regulators and digital financial service consultants that attended the forum. Akerele also appealed to the forum to see the financially excluded as partners and an asset to boost economic growth and increase GDP. Presenting on “Potentials For Driving Financial Inclusion Uptake through FinTechs”, Folasade Agbejule, EFInA’s Programme Specialists – Payments, stated that “According to the EFInA Access to financials survey of 2016 which covers about 23,000 respondents across Nigeria, 41.6 percent of adults are financially excluded even though they have access to mobile phones. Also, these adults do not have access to formal and informal financial services. The digital financial service system has a role to play in this situation to reach low income earners and people in the rural areas.

Ecobank seeks partnership with ACCIMA to promote Sub-Saharan trade GODFREY OFURUM

cobank Transnational Incorporated (ETI), a pan African bank, is proposing a partnership with the Aba business community, represented by the Aba Chamber of Commerce, Industry, Mines and Agriculture (ACCIMA) to promote African trade. Consequently, Ecobank intends to design a product, specifically tailored towards the needs of manufacturers in Aba, to aid production and increase Nigerian-made-goods in the international arena. Abel Ajayi, a senior staff, at the corporate headquarters of the bank, located in Lome, Togo, who led a team, to a business meeting with ACCIMA in Aba, the commercial hub of Abia State, observed that the South-East region is the engine of Nigeria’s economy, noting that the people are born with the gift of economic production. He stated that products from Aba dot all the major markets of Africa, but regretted that they are marked with foreign labels and urged local manufacturers to be proud of their products, by embossing made-in-Nigeria on it. According to him,”Today we have many of our products around all the African countries, but because of the way we have been perceived, our products are marked with made-in-China, made-in-Italy

and sometimes made-in-India, even though we all know that they were made in Nigeria and Aba to be precise”. He stated that the focus of Ecobank is to dominate African economy, which is why any business that comes to Africa wants to leverage on the bank, because of its presence in some of these countries. In his words, “Our focus is to develop Africa, our focus is to support business in Africa, because we believe strongly that if we don’t do it by ourselves, nobody will do it for us and that is why we are here. “Wherever you go, we see the movement of business across Africa. I am sure that so many of you have customers in Cote d’Ivoire, Togo, Ghana,

Liberia, among other West African countries. “In fact, the last time I was in Rwanda, I saw people from the South-East region of Nigeria, doing business in Rwanda. “I’ve been to several countries in Africa and one of the things that we have noted was that most of the products in the market, originated from here”. He explained that Ecobank intends to build a strong profitable and sustainable commercial bank that will forge ahead Africa’s private sector and economic integration. According to him, “We want to channel African entrepreneurs to create positive and sustainable market for our continent and to build a strong commercial bank.

Vice President Yemi Osinbajo (m); Bernhard Schlagheck, German ambassador to Nigeria (3rd l); Okechukwu Enelamah, minister of industry trade and investment (4th r); Yewande Sadiku, executive secretary, Nigerian Investment Promotion Commission (NIPC) (2nd l); Ulrich Konstantin Rieger, head of delegation, German Industry & Commerce in Nigeria (r), and others members of the delegation, during a courtesy visit by delegation of German Industry and Commerce in Nigeria to Vice President in Abuja.

L-R: Chinedum Oluwadamilola, principal, Corona Secondary School, Agbara; Adeyoyin Adesina, CEO, Corona School Trust Council; Oluwakorede Akande, 2018 valedictorian; Amelia Dafeta, director of education, Corona School Trust Council, and Ebenezer Oniyide, executive chairman, Agbara/Igbesa L.C.D.A during presentation of gift to Akande at thegraduation and Valedictory Ceremony of the Class of 2018 of Corona Secondary School, Agbara

L-R: Mike Itemuagbor, the organizer of Okpekpe Road Races, Senior Special Assistant to Governor Ambode, Anthony Adeyinka Adeboye, Project Consultant Bukola Olopade, Head of Prosperity Fund and Deputy Head of Mission, British Deputy High Commission Lagos, Mr. Andrew Davidson, General Manager Marathon Yussuf Alli and Head of Communications and Media Olukayode Thomas, during their visit to British Deputy Head of Mission in Lagos. L-R: Datti BabaAhmed, founder/ pro-chancellor, Baze University Abuja, Dele Ogun, author of the book ‘A Fatherless People’,Esther Ogun, wife of the author, Jamla Shuiera, director strategy Baze University and Inuwa Idris, registrar Baze University Abuja during the public presentation of the book title “A Fatherless People: the secret story of how the Nigerias missed the road to the Promised Land” in Abuja. Pic by Tunde Adeniyi

BUSINESS DAY

Thursday 21 June 2018

CityFile

Six die of generator fumes in Edo IDRIS UMAR MOMOH, Benin

ragedy struck at Akpata Street in Egor local government area of Edo State, as six members of a family were found dead in their sleep on Tuesday. The dead include mother and her five children while the survivor and father of the family, Tochukwu Okwueze said to be in critical condition, was rushed to an undisclosed hospital Eweka area of Benin, the state capital. He was found to be in a state of coma while the corpses of his death wife and five children have been deposited in a mortuary at the Central Hospital in Benin. Among the dead children were a set of twins. It was learnt that the family left a generating set running in their kitchen on Monday night over Tuesday. Some neighbours were said to have raised an alarm when the bodies of the family were seen lying lifeless in the apartment when the door was opened. Johnson Babatunde Kokumo, Commissioner of Police (CP) in charge of Edo command, confirmed the incident. One of the relatives of the victims identified as Vincent, said: “My younger one called me on a telephone to ask what was happening. I said that I did not know. He then told me to go to the house. “So I called her (deceased woman) on a telephone. Somebody picked the call and said that they (victims) slept and did not wake up. I stay at Evbuotubu area, so I went to the place. “The whole family was affected. But the police told me that the father survived it.

Cross section of the All Progressives Congress Local Government and Ward executive committee members during their inauguration, at the APC secretariat, Ibadan.

Police nab suspected gun runner in Bayelsa

he police in Bayelsa have arrested a suspected gun runner who sold an AK 47 riffle for N500,000 and a Berrata pistol for N250,000. Asinim Butswat, spokesperson of Bayelsa police command, said that the suspect was arrested in a sting operation on June 16 at a hotel in Ekenfa 3, Yenagoa, the state capital. The operation, according to Butswat, was in furtherance of the directive by the inspector-general of police, Ibrahim Idris, to police commands to mop up arms and ammunition from unauthorised persons.

Egunguns sign non-violent pact with police in Oyo Akinremi Feyisipo, Ibadan

wenty-three out of the twenty-seven Egungun cultural groups in Oyo have signed a non-violent agreement with the state police command to ensure peaceful outing during the 2018 festival in the state. Security agencies in the state have also pledged their commitment and readiness to maintain peace, law and order during the festival period.

This is as Oyo State government has appealed to the custodians of the Egungun festival not to renege on their promise of celebrating a festival devoid of violence and hooliganism. The government in a joint statement by the commissioner for information, culture and tourism, Toye Arulogun and the special adviser to Governor Ajimobi on community relations, Bidemi Siyanbade stated that an atmosphere of peace was needed before, during and after the festival.

Boy, 13, drowns in a pond in Kano

13-year-old boy, Usman Faisal, has drowned while having his bath in a pond at Gadam village of Ungogo local government area in Kano State. Saidu Mohammed, the spokesman of Kano State Fire Service, said the incident happened on Tuesday morning when the deceased went to take his bath. “We received a distress call from one Haruna Hamza at about 9:10 a.m. that a body was found floating on a pond. “On receiving the information, we

quickly sent our rescue team to the scene at about 9:20 a.m. “Faisal was found dead and his corpse was later handed over to the ward head of Dandishe, Salisu Almustapha,’’ he said. The spokesman advised members of the public, especially children who could not swim to stop bathing in ponds. Mohammed also advised parents and ward heads to enlighten their wards to stay away from open water bodies to prevent harm, including contracting of diseases. NAN

He said that the police recovered one AK47 rifle and two Barreta pistols from the suspects who sourced the arms from the Republic of Cameroon. He explained that police detectives lured the suspected gun runner, who hails from Ekeremor local government area of the state, under the guise of purchasing arms from him. Butswat said that the suspect was arrested with a 34-year-old man from Oboro town in Delta, who usually introduced him to buyers. “The suspect confessed that he usually travelled to the Republic of Cameroon to

buy arms and ammunition in a community called Okwa, a border town with Bakassi Peninsula. “He also admitted that he sells an AK 47 riffle for N550,000 and Berratta pistol for N250,000 in Nigeria,” he added. The police spokesperson said that efforts were underway to recover some of the guns the suspect earlier sold and arrest the buyers. He also appealed to members of the public to provide to the police useful information that might lead to the recovery of arms from unauthorised persons.

Stand up for your rights, Ambode’s wife tell women JOSHUA BASSEY

omen in the country have been urged to rise above challenges that tend to frustrate their innate potentials and stand up to defence their rights irrespective of cultural and social backgrounds. Bolanle Ambode, wife of the Lagos State governor, threw the challenge at a forum for women, with the themed “woman: your health, your social environment” held at the Police College, Ikeja, Lagos, on Tuesday. The event was oganised to sensitise women on issues relating to healthy lifestyle, domestic violence, teenage pregnancy and child abuse. Addressing thousands of women who turned up at the event, Ambode lamented increasing rate of domestic violence some of which have resulted in deaths. “By publicly speaking out against domestic violence, together we can challenge attitudes that breed violence in the homes and everywhere. We must insist that domestic violence is a social crime and not acceptable in our society.” She said there was also the need for women to pay greater attention to their health and children upbringing. “Health is wealth because good health is the gate way to everything. It is when we have good health that we can run around for business, take care of our homes, our children or engage in political activities. When we have sound health, we can better attend to all issues

and concerns,” she said. Speaking also, the deputy governor of Lagos State, Idiat Adebule said the forum provided a platform for women to engage, increase knowledge and enhance their awareness on health and well-being as participants. Adebule said it was unfortunate that 23 years after countries signed pledges in 1995 Beijing Declaration and Platform of Action, women still faced many health-cum-social problems, saying that there was need for recommitment to address them. “We should no longer be stereotyped into silence but become vocal advocates for improved health delivery system and social justice for women in Lagos State and the country. As critical stakeholders, our role must be focused on investing and increasing access of more girls and women to good health, quality education; ensuring that laws that respect and ensure the rights of women are enforced and help create gender-posture media messages that support women and girls in distress,” she said. Modupeola Adebambo, one of the facilitators at the event, said children sexually abused tended to be sexually active and exposed to teenage pregnancy. Olayinka Adeyemi, director, Office of Public Defender, (OPD) urged women to speak out against domestic violence and report such cases to the OPD for legal action.

BUSINESS DAY

Thursday 21 June 2018

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0.95 10.91

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

915.75

336.76

2,562.51

2,019.81

1,502.28

907.99

349.68

2,607.69

2,017.37

1,508.07

NSE Banking Index

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

1,746.68

475.44

139.37

1,750.44 1,761.28

489.66

140.76

490.95

144.33

NSE 30 Index

0.41

0.00

0.62

-0.47

-12.67

0.84

0.26 3.26

2.54 3.56

976.10

-0.85 -6.98

3.84

1.76

-0.12

5.74

1.85

2.11

0.39 9.30

Analysts favour bargain hunting for stocks at lower prices HEANYI NWACHUKWU

e s p i t e a re c o rd early week loss, the Nigerian stock market is still expected to close this week on a positive note as analysts’ foresee increased bargain hunting in value stocks that are currently priced low. Investors had moved into Cu sto m St re e t la st w e ek to hunt for bargains following preceding weeks of loss which created entry opportunities in value stocks. Notwithstanding uncertain political backdrop, Nigerialisted equities performed well as increasing buy sentiment in the trading week to June 14 enhanced stocks value by N95billion. “We foresee bargain hunting as investors swoop on slightly beaten down stocks,” according to Vetiva Research analysts in their June 19 breakfast report. Also, GTI research analysts are of the view that “bargain hunters will also continue to hunt for stocks to buy at lower prices.” In the meantime, they strongly advise investors to take a keen interest on firms’ fundamentals before taking an investment position. The analysts equally advis e d investors to take a long term view of the market, especially during this period

where the p olitical climate will cause stock prices to t re n d d ow nwa rd s “c re at i ng an opening for long-term investors to take position at cheaper prices as they wait f or t he end of th e p olitical season.” T h e v a l u e o f N i g e r i a ’s listed stocks increased by N95billion to N14.102 trillion from N14.007trillion despite that it was a four-day trading session as markets were closed for public holidays (on Friday June 15 and Monday June 18, 2018) to mark the end of the Holy Month of Ramadan and commemoration of the Eidal-Fitr celebrations. Forty (40) equities appreciated in price last week, lower than 49 in the preceding week ; 28 equities depreciated in price, lower than 29 equities in the preceding week, while 101 equities remained unchanged higher than 91

equities recorded in the preceding week. Afrinvest research analysts in their June 19, 2018 stock recommendation for the week said their weekly sentiment indicator declined last week to 2.4 points, from 3.4 points recorded in the preceding week, “largely due to weaker market breadth which fell to 0.8x (33 stocks advanced c o m p a re d t o 4 2 d e c l i n e r s ) from 1.7x in the previous week.” “Following two days of successive losses in the market, we expect a rebound this week as investors seek for bargain hunting opportunities. In light of this, we expect investors to take position in market bellwethers currently trading at attractive entry prices”, according to Afrinvest researchers. Their equity watch-list for the month of June remains Guaranty Trust

Ba n k P l c , D a n g o t e C e m e nt Plc, Okomuoil Palm Plc, United Bank for Africa Plc and Dangote Sugar Refinery Plc. G T I re s e a rc h e r s i n t h e i r outlook for the week ending June 22, 2018 expect to see a mixed performance in the current week “as portfolio and fund manag ers continue to reposition their portfolios in light of the expected secondquarter (Q2) 2018 results from companies listed on the Stock Exchange.” Market review In the trading week to June 14, the Nigerian Stock E x c h a n g e ( N S E ) A l l -S h a r e Index (ASI) appreciated by 0.67 p ercent and clos e d at 38,928.02 points from 38,669.23 points the preceding week. All other indices finished higher last week with the exception of the NSE Corporate G overnance Rating System, NSE Consumer Goods and NSE Industrial Goods Indices that depreciated by 0.08percent, 0.85percent and 0.12percent respectively, while the NSE ASeM Index closed flat. The stock market recorded a total turnover of 1.738 billion shares worth N18.462 billion in 14,790 deals in contrast to a total of 1.749 billion shares valued at N31.183 billion that exchanged hands the preceding week in 24,604 deals. The Financial Ser vices Industry (measured by

volume) led the activity chart with 1.170 billion shares valued at N9.695 billion t ra d e d i n 7 , 8 0 9 d e a l s ; t hu s contributing 67.35percent and 52.51percent to the total equity turnover volume and value respectively. The Services Industry followed with 293.492 million shares worth N733.407 million in 531 deals; and the Consumer Goods with a turnover of 154.093 million shares worth N4.997 billion in 3,002 deals. Trading in the To p Th re e Eq u i t i e s na m e l y – U n i t e d Ca p i t a l P l c , I k e ja Ho t e l Pl c a n d Un i t e d Ba n k for Africa Plc (measured by volume) accounted for 811.74million shares w or th N3.88billion in 986 deals, contributing 46.71percent and 21.05percent to the total equity turnover volume and value respectively. A total of 9,850 units of Federal G overnment (FGN ) Bond valued at N9.999 million were traded last week in 10 deals, compared with a total of 10,561 units valued at N10.381 million transacted preceding week in 20 deals. Also traded during the review week were a total of 62,392 units of Exchange Traded Products (ETPs) valued at N1.004 million executed in 1 3 d e a l s, c o m p a re d w i t h a total of 202,916 units valued at N1.168 million that was transacted the preceding week in 19 deals.

Thursday 21 June 2018

C002D5556

BUSINESS DAY

Investor

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United Capital investment views

Investor’s Square

Local equities stay bullish …average TBills yield falls 95bps

he local bourse extended the prior week’s gains, in the holiday-shortened week to 14th of June. The Nigerian equity benchmark Index inched higher by 0.7percent weekon-week (w/w) to end at 38,928.02 points, supported by gains in the earlier part of the week which offset marginal losses in the last two trading days. Year-toDate (YtD) return improved to 1.8percent while market capitalisation increased to N14.1trillion after adding N93.8billion w/w. Sector performances were also broadly bullish as four of the five sectors we cover advanced w/w. The Oil & Gas (+4.3percent), Insurance (+3.2percent) and Industrial Goods (+1.3percent) indices led the bullish run consequent on significant w/w gains in JAPAULOIL (+22.6percent), SEPL AT (+6.2p ercent), MOBIL (+5.0percent), NEM (+6percent), L ASACO (+8.6percent), CCNN (+3.4percent) and DANGCEM (+1.4percent) while the Banking Index recorded a 5basis points (bps) marginal gain w/w. On the other hand, the Consumer Goods (-0.9percent) index trended southwards due to massive profit taking in NB (-6percent). Investors’ sentiment stayed afloat as market breadth closed the week at 1.9x relative to the week before’ 2.0x. 37 stocks advanced w/w while 20 declined. Activity levels were mixed, as average value traded fell 26percent w/w to N4.6billion while average volume traded advanced 24.2percent w/w to 434.4million units. This week we expect activities to be positive. Money Market: Average MM rates surge 8percent w/w System liquidity opened N176bn long while OBB and O/N rate rates closed at 12.6percent and 11.8percent as dealers made provision for the FX wholesale auction on Monday. MM rates, however, trended northwards by midweek, averaging 15.4percent on Wednesday as system liquidity continue to thin out, at N133.6billion long on Wednesday. Buoyed by OMO maturity worth N224billion which was surprisingly not mop-up by the CBN, average money market rate close at 4 percent last Thursday. Meanwhile, Nigerian Treasur y Bills primary market Auction worth N180.8billion (91-Day: N6.2billion at 10.2percent,

182-Day: N50billion at 10.5percent and 364-Day: N124.6billion at 11.5percent) on Wednesday with rates closing slightly higher amid a bearish undertone. Overall, MM rate average 11.9percent for the week, up 8percent w/w. With further OMO maturities expected in the week ahead, we expect MM rate to stay within the current band amid expected OMO mop the CBN. Yields: Average TBills yield falls 95bps Activities in the secondary market segment of the Fixed Income space witnessed a mixed outing in the week to 14th June. Although inflation report for the month of May 2018, published mid-week, indicated that headline inflation rate eased further to 11.5percent, investors sentiment improved marginally relative to a bearish sentiment for

N305.85/$1 vs. N305.9/$ on Monday. The outlook of the naira remains tied to the spate of CBN’s intervention in the spot and forward markets as well as the better price discovery in the I & E FX window. Global equities mixed as cautious mood prevails Global equities performance was mixed in the week that ended 15th June 2018. In the US market, contrary to the volatility seen in recent times, stock prices fluctuated within a small band for the major part of the week. Also, in contrast to the positive reaction to series of important geopolitical events that took place during the week, investors reacted negatively to a perceived hawkish Federal Reserve. Thus, the S&P 500 Index recorded 2bps gain w/w and the tech-laden Nasdaq Composite Index was up 1.3% w/w, while the Dow

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

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs. Stanbic-IBTC Pensions Legacy PFA PAL Pensions NLPC PFA First Guarantee Pension Trustfund Pensions Leadway Pensure PFA SigmaVaughn Pensions AIICO Pension Managers APT Pensions Fidelity Pensions AXA Mansard FUG Pensions OAK Pensions Investment One Pension Mgrs. IEI Anchor Pension Managers Radix Pension NPF Pensions

TBills. Accordingly, Average TBills yield fell 95bps while average bond yield rose 1bp w/w. Average, TBills yield closed at 12.4percent while average Bonds yield settled at 13.5percent on Thursday. The 10Yr and 20Yr Bonds instruments recorded the highest buy interest as the yields on the bills fell 16bps and 2bps respectively. Going into the new week, we expect a mix to bullish sentiment in the fixed income space. Currency Market : Parallel market rate closes flat Activities in the foreign exchange market w ere slightly stable in the prior week. While the mid-price for parallel market rate closed the week flat at N361/$ from Monday to Thursday, FX rate at the Investors and Exporters FX window (I & E window) depreciated to N361.1/$ relative to N360.9/$ on Monday. On the other hand, the domestic currency appreciated at the official market segment to end at

CURRENT PRICE 3.9852 3.9371 3.8958 3.7498 3.6114 3.4451 3.4246 3.2820 3.2594 3.1325 3.1280 3.0311 2.8054 2.7307 2.6855 2.6398 2.5608 2.4499 2.3164 2.0125 1.4642

Jones Industrial Average fell 0.9percent w/w. European stocks were broadly bullish in the previous week as the European Central Bank (ECB) announced plans to taper asset purchases f u r t h e r by S e p t e mb e r, though noted it will wait until the middle of 2019 to begin hiking interest rates. Consequently, Germany’s DAX (+1.9percent), PanEuropean STOXX 600 (+1percent), and France CAC (+0.9percent) trended higher w/w while the UK’s FTSE was down 0.6percent w/w amid parliamentary votes on amendments of the Brexit legislation. Emerging markets equities performance was largely bearish as most indices within the BRICS classification trended southward save India’s BSE which advanced 0.5percent w/w. Brazil’s IBOV (-3percent), Russia’s RTSI (-2.3percent), China’s SCHOMP (-1.5percent), and South Africa’s JALSH (-1percent) all closed the

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

Chemical and Allied Products shareholders approve N1.435bn dividend payment IHEANYI NWACHUKWU

he shareholders of Chemical and Allied Products (CAP) Plc at the company’s 53rd annual general meeting held on Tuesday June 19, 2018 in Lagos approved the payment of N1.435billion as dividend. This amount represents 205 kobo per share paid to shareholders on the Register of Member at the close of business on Friday May 25, 2018. At the annual general meeting, the shareholders also received and adopted the report of the directors, the financial statements of the company for the year ended December 31, 2017 with the reports of the auditors and the audit committee thereon. Despite the difficult operating environment in 2017, Chemical and Allied Products Plc ended the year with a impressive performance. In the financial year under review, Chemical and Allied Products Plc reported revenue growth of 4 percent, from N6.81billion in 2016 to

Larry Ettah, chairman, Chemical and Allied Products Plc

N7.11billion in 2017. Profit Before Tax (PBT) declined by 5 percent, from N2.29billion in 2016 to N2.18billion in 2017. “The successful commissioning of our automated in-plant tinting factory was a noteworthy achievement in 2017. The automated factory will ensure that emulsion paints are promptly and readily available to customers. The colour retention attribute of emulsion paints was also enhanced as a result of the in-plant tinting formulation,” said Larry Ettah, chairman, Chemical

and Allied Products Plc. Speaking to shareholders on the business outlook, he said “the recovery recorded in the Nigerian economy in 2017 is expected to be sustained in 2018. This will be driven by the trickle-down effect of the upsurge in oil output as observed in 2017.” “The growth in other sectors of the economy especially the service and manufacturing sectors remains weak, therefore making the overall growth outlook vulnerable to the fortunes of oil”, Ettah added.

Leapfrog takes stake in ARM Pensions for undisclosed amount … new investment taps Nigeria’s fastest-growing financial services sector

eapFrog Investments, the leading global impact investorincompaniesthat deliver financial services and healthcare for emerging consumers has invested in ARM Pension Managers (PFA) Limited. The undisclosed sum invested in ARM Pensions will tap a rapidly growing pensions market, with a particular focus on deepening reach into the vast group of emerging consumers in Nigeria. In February 2018, Leapfrog exited another West African pension company, Petra Trust, after helping the firm achieve 76percent average compound annual revenue growth over the course of a four-year investment period to become Ghana’s largest independent pension provider. The investment in ARM Pension Managers is a continuation of LeapFrog’s success in bringing pensions and financial services to the millions of people in the region who are rising toward the middle class. ARM Pensions, which is a high growth company that is one of the largest pensions fund administrator in Nigeria with about $1.8billion in funds under management reaches 700,000 people. Clients are served through 57 locations across all 36 states of Nigeria. The company has mobile offices that reach consumers on the go as well as innovative

digital channels ensuring swift access to accounts and assistance. ARM Pensions is well positioned to expand in Nigeria’s underpenetrated pensions market. ARM Pension Managers (PFA) Limited is one of the first seven Pension Fund Administrators (PFA) granted license by the National Pension Commission in December 2005. It is part of the Asset & Resource Management Company Limited (ARM) Group, one of Nigeria’s most prominent and respected financial service brands. ARM Pension has an authorized and fully paid up share capital of N 1.2billion, which far exceeds the N1billion minimum share capital for Pension Fund Administrators stipulated by the National Pension Commission. Since 2007, Leapfrog has invested more than $1 billion in companies in Asia and Africa that reach more than 125 million emerging consumers with financial services and healthcare. Nigeria, a country of over 180 million, requires companies to provide retirement plans to workers, yet 89percent of those employed have not registered for one. In the past nine years, pension assets have quadrupled to $22 billion. That makes pensions one of the fastest growing segments in Nigeria’s

financial industry. K a r i m a O l a , Pa r t n e r at LeapFrog Investments, commented: “ARM Pensions is a well-established first-class pension fund administrator with an impressive track-record of both profitability and growth. Our team brings significant operational skills to bear on the development of ARM Pensions’ market presence. We have identified valuable opportunities to support the company’s digital strategy, to facilitate partnerships and to increase the firm’s brand awareness in ways that further strengthen customer retention and acquisition.” In partnership with LeapFrog, ARM Pensions’ management team will drive the firm’s growth in Nigeria’s most attractive financial services market. This investment is a continuation of LeapFrog’s success in the West African pensions market, following its successful exit from Petra Trust in February 2018. LeapFrog worked closely with the Petra Trust team to enhance the business to become the largest independent pensions provider in Ghana, seeing 76% average compound annual revenue growth over the period of LeapFrog’s investment. The financial terms of the new transaction are not disclosed.

BUSINESS DAY

C002D5556

Thursday 21 June 2018

Investor

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‘Our drive is for vessels utilisation to reach 95 percent’ Andrew Otike-Odibi, managing director/chief executive officer, C& I Leasing Plc spoke to Iheanyi Nwachukwu and Michael Anih at the signing ceremony of the company’s N7bn bond issuance. Excerpts

EC said that corporate bond sales will hit an all-time high of about N200billion. What percentage of this amount is C&I going to capture as it was earlier mentioned that apart from the N7billion, there will be another tranches of bond issuance, we would like to know when the next tranche will be issued. I don’t think it is going t o b e t h i s y e a r, a s t h e N 7 b i l l i o n i s a l l w e a re going to be issuing this year. The N7billion is to help partly refinance existing debt; we will like to know what it is going to take-off from your cost of debt and how is that going to impact on you profit margin? It will positively impact on profit margin by adding another N20million to N25million to our bottom line over the 12 month period. With the record of 23 percent growth that was posted as pre-tax profit in 2017, do you see that sustaining in 2018? I think we will su st ai n re su l t f o r 2 017 and hopefully surpass it which will also help in the performance of the business and business. One of them is to acquire vessel and also enter the Ghanaian market. Yo u c u r r e n t l y h av e about 23 vessels, can y o u t e l l u s h o w m a ny are operational and the current capacity utilisation. Our current utilisation is about 80 percent and all are working as we don’t have any vessel that is not operational, our drive this year is to go up to about 90-95 percent as we are hoping to get some back to new contract and this will help us take care of our projection for the 95 percent. If you are putting money in vessels, it means that you are trying to meet up demand. What is the business outlook like that is making you

expanding your market horizon? The outlook is very positive if you notice, oil prices are heading north, creating new demand for asset in the oil and gas industry which can only get better over time and being a Nigerian company playing in that space, there is a niche market for Nigerian companies that are well structured because the international oil companies do not want to deal with you just because you are a Nigerian company but want to see structures on ground that will support your service delivery and that is one advantage that C&I is going to be having. Can you give us an idea what your revenue guidance for your Ghana market will contribute? It is going to be very d i f f i c u l t a s w e have n ’ t done any serious review regarding the Ghana market. It is just an opportunity that we tend to take advantage of, but if you look at the maritime business, there are always several blocks so which ever opens, we will try and play in that space. The N7billion is part of your N50billion capital raise programme, we will like to know which other transaction option that your company is looking out. Besides paying out some of the existing loans and the expansion of growth for the business that is the only thing we plan to use the N7billion on, beyond that, we might be looking at raising further funds for business expansion because we think that the business is very ripe for growth in terms of the opportunities in the market currently. Most of the N7billion will be going into refinancing existing debt that positions the business to grow in the next five years as we won’t be under pressure to pay existing debt and w ith revenue coming in monthly, it then h e l p s to p ay d ow n t h e bond and channel bonds

Andrew Otike-Odibi, managing director/chief executive officer, C& I Leasing Plc

again for growth, over all it is a positive development for the company. Your company shares doubled performance l a s t y e a r. C u r r e n t l y , its shares have outperformed the NSE All Share Index . What would you tell a new value investor coming to hunt in the market? I will tell them to buy C&I Leasing.

The outlook is very positive if you notice, oil prices are heading north, creating new demand for asset in the oil and gas industry which can only get better over time

Are there other areas you inten d exp an d ing your business activities aside Ghana? Nigeria is interesting as our operating environment that we have also a lot of opportunities. So we intend to dig deeper into our three main businesses and extract as much value as we can from these business we still have a lot to do in Nigeria. Your advisers to this transaction gave you a quality rating in terms of corporate governance, what do you hope to do or what are you doing to ensure that this rating does not go down? The same thing we h av e d o n e i n t h e p a s t which is run the business with integrity and have a clear focus on where we are going to carrying everybody along. The past 27 years have been a change of mind, of baton as the former MD is now vice chairman and I am the MD for over 3 years so in the future, I also expect to pass the baton to somebody else so like I said, w ith the current Nigerian business environment, if you have a company that has a structure behind them. When you have a structure,

you can actually do that handover and you don’t fear and that is what we expect that in the couple of years that is what we will continue to see. The 133 percent take up rate for your N7billion bond. How you see it? It is a show of confidence from the market because the market probably must have looked at our business and understands our business economics and have seen the corporate governance issues, they have seen the structure, and have seen the cash flow. So to me, it is a sign of confidence from the market. 3 years down the line sinc e you assume this office, what can you say are your biggest achievement and what is your future outlook? My major achievement I will say …none! But as a team, I think we have done fantastic as I came in just before the recession and we had to come together to pull the company through. That is why you find out that last 3 years, our finances was nothing to look at and last year, we came out much better, this year the output was also much better as we had to cut off those loss making

unit like the C&I Motors, and channel res ources into those profit making units, so that now reflated the business and the outlook is to keep looking at areas of improving efficiency so that we can keep giving out good returns to shareholders. I was just wondering what informed your decision in exploring the bond market this time. I f e e l i t i s a ca s e o f timing as one goes about having a foresight is that when others are running away might be when you have the oppor tunities as we saw the market as a lot were running away in terms of raising funds. There are also some others who want to invest in good o p p o r t u n i t i e s w e hav e a good story to tell. We hav e a hu g e ca s h f l ow patte r n s o p e o p le wh o really know how to invest in cash related activities know the story so when we show them the story that this is what we do and this is whom we are, then they see it as a good investment for them and that was why we had a huge subscription. What will you say are the positives or negatives to Abraaj Exit? For the positive aspect, Abraaj has been there for over 7 years and had given us value in the form of direction and their name added value in terms of corporate governance. So you have people say because Abraaj is there that means you guys must be doing something right, they have added value to the company. Also, the investment came in as a loan stock and as so in placing in our balance sheet, people can’t really tell whether it is a loan or equity so w ith their exit or conversion it was clear that it was equity so that was a positive side of their exit. I think that helped in our leverage ratio and further boosted confidence on the part of investors. However, I do not think there was any negative effect to their exit.

Thursday 21 June 2018

C002D5556

BUSINESS DAY

NCAA makes substantial efforts to ensure robust regulation of aviation Industry - Usman Stories by IFEOMA OKEKE

he director general, Nigerian Civil Aviation Authority, NCAA, Muhtar Usman last week stressed that the Agency has made considerable efforts in recent years to ensure a robust regulation of the aviation Industry. Speaking at the Aviation Safety Round Table Initiative (ASRTI), Q2 2018 Breakfast Meeting in Lagos with the theme: Evaluation and Security Performance of Aviation Agencies in the last four years, the NCAA director general observed that as the aviation regulatory authority, it believes that Safety and security are key to an efficient air transport Industry. Usman who was represented at the breakfast meeting by Adamu Abdulahi, the director of Consumer Protection Unit of NCAA, said the Aviation Industry in Nigeria has witnessed exponential growth in recent years. The DG put the ticket sales from January – December 2017 both for domestic and international airlines at ₦505,170,290,201.40. This represents an increase of ₦ 82,763,686,301.09, from ₦411,564,564,692.80 value of tickets sold in 2016.

The breakdown of this amount showed that ticket sold for domestic airlines stood at ₦93,605,725,508.60, while the International stood at -₦411,564,564,692.80, summing up to ₦505,170,290,201.40. He gave the 2016 ticket sales from January -December as ₦79,482,958,601.60 for domestic and ₦342,923,645,298.71 for international, with a total of N422, 406, 603, 900.31. Usman said this was despite low January 2017 sales and Abuja Runway rehabilitation. He gave the total Cargo Sales Charge for 2017 for both domestic and international as ₦400,900,439.09, while the total for 2016 was ₦285,169,979.79. The cargo charge 2017 was higher than 2016 with a difference of ₦115,730,459.30. NCAA boss disclosed that the industry has 2, 226 licensed pilots from January 2016 to December 2017 in active service. He gave the number of expatriates pilots as at December 2016 as 631 which dropped to 609 from January to December 2017, while aircraft maintenance engineers was 1532 in 2016 and dropped to 1484. The licensed dispatchers in 2016 were 543 and rose to 602 in 2017, the Air Traffic Controllers were 313 and 329 in same period respectively.

Muhtar Usman, director general, Nigerian Civil Aviation Authority, NCAA

Muhtar listed achievements of NCAA under his watch to include: sustenance of FAA Category 1 Status, certification of Lagos and Abuja Airports, while Kano And Port Harcourt to follow next, then others to follow, review of Weather Minima in 18 Airports, re-certification of 86 Heliports/Helidecks and Helipads. He said the Authority has 29 Air Operators’ Certificate (AOC) applications with three airlines Issued

AOC, while 11 Airlines renewed their AOC and others at various stages of processing He stated that 25 foreign airlines are flying into Nigeria, while 80 Aviation Security instructors have been certified by NCAA to deliver security training in Nigeria. Others are certification of 507 Screening Personnel from various entities, including the certification of 80 Aviation Security Instructors to deliver security training in the

country. He said 90 applications for registration of Remotely Piloted Aircraft System (RPAS) have been received, 26 Drones/Remotely Piloted Aircraft System(RPAS) undergoing security clearance at the office of National Security Adviser (ONSA) with five issued, while two remote Operating Certificates (ROC) have been granted license. The NCAA boss stated further that a total of 90 sanctions have been applied, they include 15 Pilots, 5 Cabin Crew Members, four Engineers, one private security outfit, four approved Maintenance Organisations (AMO) and five airlines. He put the average daily arrivals at the 21 airports to include – 12,761, average daily departures – 12,767, total passenger daily – 25,528, aircraft movement daily- 305. January – December 2016 passenger for domestic 10,657,950. Passenger (foreign), 4,257,327, Flight Frequency, (Domestic) 176,947, (foreign) 43,386. While the figures for January – December 2017 include:(Passenger Domestic) 10,135,009, (Passenger Foreign) 4,006,644, Flight Frequency, January – December 2016 (Domestic) 183,216, (Foreign) 39,197, January – December 2017 (Passenger Domestic) 10,135,009 (Passenger Foreign) 4,006,644.

Ethiopian airline to start flights to Barcelona, 13th destination in Europe

thiopian Airlines, (ET), one of the largest Aviation Group in Africa and SKYTRAX certified Four Star Global Airline, has finalized preparations to launch new flight services to Barcelona, Spain as of July 01, 2018, deploying the ultra-modern B787– 800 Dreamliner. Barcelona, the capital and largest city of Catalonia and the second most populous municipality of Spain, is also the second largest trade fair and exhibition Centre in Europe. Tewolde GebreMariam, Ethiopian Airlines Group CEO, said, “We are very happy to spread our wings to Barcelona, which will be our second

destination in Spain, after Madrid, and the 13th city in our European network. “The start of this new flight to Barcelona is part of our global route network expansion plan in line with our strategic roadmap, Vision 2025. The new flight to Barcelona will provide seamless connectivity options for business people as well as tourists from Barcelona to our extensive African network of 58 destinations via our main hub in Addis Ababa.” Ethiopian Airlines is one of the fastest growing Airline in Africa. In its seventy plus years of operation, Ethiopian has become one of the

continent’s leading carriers, unrivalled in efficiency and operational success. ET commands the lion’s share of the pan-African passenger and cargo network operating the youngest and most modern fleet to more than 110 international passenger and cargo destinations across five continents. ET’s fleet includes ultra-modern and environmentally friendly aircraft such as Airbus A350, Boeing 787-8, Boeing 787-9, Boeing 777-300ER, Boeing 777-200LR, Boeing 777-200 Freighter, Bombardier Q-400 double cabin with an average fleet age of five years. ET is the first airline in Africa to own and operate these aircraft. Ethiopian airline is currently implementing a 15-year strategic plan called Vision 2025 that will see it become the leading aviation group in Africa with eight business centers: Ethiopian Regional Services; Ethiopian International Services; Ethiopian Cargo & Logistics Services; Ethiopian MRO Services; Ethiopian Aviation Academy; Ethiopian Inflight Catering; Ethiopian Ground Services and Ethiopian Airports Services. Ethiopian is a multi-award winning airline registering an average growth of 25% in the past seven years.

Airbus, Côte d’Ivoire ink new partnership deal to develop aerospace industry

irbus and the government of Côte d’Ivoire have signed a Memorandum of Understanding (MoU) to establish a framework of collaboration to support the development of the country’s aerospace industry which has been identified as strategic for its economic development. The MoU was signed last week by Amadou Koné, Minister of Transport of the Republic of Côte d’Ivoire and Mikail Houari, President Airbus Africa Middle East in the presence of Daniel Kablan Duncan, Vice President of the Republic of Côte d’Ivoire and Guillaume Faury, President Airbus Commercial Aircraft. Under the terms of the MoU, Airbus and the government of Côte d’Ivoire will explore channels of cooperation in developing the aerospace sector in Côte d’Ivoire in various areas. “We are confident that this partnership with Airbus will contribute

to Côte d’Ivoire’s economic growth as well as support us build a stronger framework for industrial development, creation of jobs and capacity building for our country,” said Daniel Kablan Duncan, Vice President of the Republic of Côte d’Ivoire. “We are committed to deliver on our vision and make Côte d’Ivoire a hub for aerospace technology in Africa,” he added. “Collaboration between the public and private sector is essential to facilitate economic and industrial growth. Through this MoU we will work closely with Côte d’Ivoire’s government, share expertise, discuss opportunities and support efforts in building a robust and sustainable aerospace sector. At Airbus, we are committed to supporting the sustainable socio-economic development of Africa through partnerships such as this,” Guillaume Faury, President Airbus Commercial Aircraft said.

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Bank IT Security Thursday 21 June 2018

How to avoid paying for refurbished laptops instead of brand new CALEB OJEWALE

t could be very disheartening when you purchase what should be a brand new laptop only to discover what you have indeed paid a big chunk of money for is nothing but a refurbished PC. Buying a new laptop recently showed that many laptop dealers at the computer village in Ikeja, have absolutely no scruples when it comes to playing ‘this scam’ on unsuspecting buyers. It is especially rampant for laptops one could consider expensive, from the N150,000 range upwards. It was observed that with refurbished laptops, sellers will be making a kill. One vendor even said “more than 80 percent of laptops in that range are refurbished.” While refurbished computers are not technically faulty, the bottom-line is, they had gone back to the factory at some point and had to undergo some ‘re-working’ to come back into the market. The standard practise is for these refurbished laptops (and even other devices) to

The red arrow shows the Product ID, note the ‘R’ in it.

be sold 30- 40 percent less the market price. But then, greedy retailers want to cash in all they can, and damning ethics in the process. In essence, a N200,000 laptop in refurbished value should not sell more than N140,000 and can in fact go as low as N120,000. But the retailers still want to sell it at N200,000 by misleading the buyer to think what is being sold is brand new. Before making payment for your next laptop, inspect

the carton. On the side, the laptop specifications are printed, often on a white stickon paper. Check the portion where product ID is written and ensure it is not blurred out; either completely or partially. What some dubious computer sellers now do is to blur out either part or all of the Product ID, since without it, you will not be able to see at first glance if a computer has been refurbished or not. So, if you detect any alteration or erasing in the product

ID, activate your FBI mode. Also, since some sellers are trying to get smarter, completely false labels that do not exactly match the product could be placed on the carton or other packaging material. The main objective with doing this is to put a product ID that would not easily give them away. Before we proceed, please take note that whatever product ID is written on the carton MUST be the same as what you find inside the laptop

itself in the next few steps that will be described. In addition, check underneath the laptop, where the product name, model, and other information are written. If that place has somehow been blurred out, that should be an important red flag to also note. For a laptop you’re yet to take out of the store, before paying, confirm the authenticity of its Product ID and warranty information online. From this url; https://support.hp.com/us-en/checkwarranty you can input the product number and be sure it returns with a valid response that corresponds with what you have with you. Equally important is the warranty that should come with it. First, if the warranty information shows 30 days, that laptop is refurbished because this is what manufacturers provide for such. For New PCs, it is One year. You should at that point also check the product ID showing online does not denote refurbished, which will be explained shortly for you identify. F o r H P, t h e P r o d uct ID is written like this; 4GV82UA#ABA. Note that:

there CANNOT be “R” before the # symbol. For instance, if the product number reads; 4GV82UAR#ABA (note the R before # symbol), in this case it will certainly be a refurbished laptop. If you already have the laptop with you, bought as new but want to be sure if it is refurbished, you can still check. 1. Click on the windows icon to display start menu or click on search 2. Type run, and this will open a dialog box for you to search 3. Type msinfo32 and click ‘Ok’ 4. In the dialog box that will be shown, locate where ‘System SKU’ is written. This is the Product ID. Here, you are to ensure what is shown matches the Product ID printed on the carton, and more importantly, does not have the refurbished denotation. This practise of selling refurbished products as new is common in at least computer village, Ikeja where TeckTalk had quite a lot to witness recently. It is wrong, and buyers need to be informed. Hope you have.

pact targets for some or all of their investments. “Respondents that set targets cited a number of reasons to do so, including to drive social and environmental impact management, to inform investment decisions, to hold investees accountable, and to hold their own teams accountable to impact,” the report stated. An innovative tech startup can actually attract investment from impact investors. Impact investors often – but not exclusively – invest in innovative businesses and enterprises in sectors such as sustainable agriculture, affordable housing, healthcare, energy, clean technology, and financial services for the poor. Examples of impact investors, according to the UNDP, include high net worth individuals, foundations (e.g) Bill & Melinda Gates Foundation, Ford Foundation, Dangote Foundation), pension funds, institutional investors (e.g. JP Morgan, AfDB, South Africa PIC) and retail investors that

invest capital directly in social enterprises or in impact investment funds (e.g. Acumen Fund, Bridges Ventures, Elevar Equity, Ariya Capital) and instruments (e.g. Social Impact Bonds). Impact investment in emerging markets like Nigeria is on the rise. The GIIN report showed that out of the 226 respondents, 103 of them allocate 75 percent of their current impact investment assets under management (AUM) to emerging markets, while the rest 97 allocate to developed markets. Despite allocating over half of total AUM to emerging markets (56%), only about ten percent of the respondents (25) say they allocate 75 percent of AUM to sub-Saharan Africa region. Some of the challenges highlighted by impact investors include lack of professionals with relevant skill sets in impact investing (90%), sophistication of impact measurement practice (88%), lack of high quality investment opportunities (86%) and research and data (85%).

What impact investors look for in startups FRANK ELEANYA

he Annual Impact Investor Survey 2018 released in June showed that the sector (impact investing) doubled by $114 billion year on year. The report which was prepared by the Global Impact Investing Network (GIIN) captured investment assets from 226 respondents in developed and emerging markets. It noted that a total of $228.1 billion in impact investing assets under management (AUM) were realised in 2017. Interestingly, the report highlighted what some of the impact investors targets in businesses they invest in. “Nearly two-thirds of respondents target risk-adjusted, market-rate returns (64%),” the report revealed. “The remainder seek belowmarket-rate returns that are either closer to market-rate returns (20%) or closer to capital preservation (16%). An impact investor, ac-

cording to GIIN, is a person who invests in companies, organisations, and funds with the intention to generate social and environmental impact alongside a financial return. The United Nations Development Project (UNDP) highlights three characteristics of impact investors. First, they expect to earn financial benefits from the capital invested, below the prevailing market rate, at the market rate or even above it.

In other words, they are different from ordinary philanthropists. Inasmuch as they expect return on investment, impact investors also are attracted to businesses or solutions that address social or environmental challenges. In essence, their goal for investing is to achieve a positive impact on society and the environment. Finally, they commit to measure performance using standardised metrics. Impact investors are not

limited by to specific asset class or sector. Areas they can be found include fixed income, venture capital, private equity and social and development impact bonds. The GIIN report noted that over half of respondents target both social and environmental objectives. An additional 40 percent primarily target social objectives, and 6 percent primarily environmental objectives. To achieve these objectives, the majority of respondents (76%) set im-

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

BUSINESS DAY

Thursday 21 June 2018

Harvard Business Review

Global Business Perspectives CONNEC TING

THE

WORLD

ONE

BUSINESS

TIME

Russia, FIFA and the power of sports AMINA EL ABED

ARSAW, Poland — Most football fans around the globe impatiently count down minutes to the beginning of the World Cup. With Russia as the tournament’s host, politics may share the spotlight with soccer more than usual. Over the past four years Moscow has contributed to shaking the foundations of the global international order and skillfully utilized sport as a tool. Russia, in its constant search for international legitimization, sees megasports events as a way to prove to the world that it is a guardian of universal norms. Both the International Olympics Committee and the Fédération Internationale de Football Association are officially flagbearers for tolerance, peace, diversity and human rights. For governments, sporting events are an opportunity to project a positive image of the country. Even the Vatican state set up a sports department in 2004 to open new frontiers for evangelization. In recent years, the Kremlin has organized an impressive series of sporting events, from the 2013 Universiade in Kazan to the 2014 Sochi Winter Olympics. The FIFA World Cup, with 11 host cities in Russia, is next in line. Yet by invading Ukraine in 2014 and intervening in the Middle East on Syria’s behalf, Moscow could not be farther away from the high-minded principles of international sporting organizations. President Vladimir Putin prides himself on his athleticism, and he does not shy away from Russian state media

Russian President Vladimir Putin before addressing the United Nations General Assembly, Sept. 28, 2015. (CREDIT: Damon Winter/The New York Times)

releasing images of him diving bare-chested into icy lakes or horseback riding. However in interviews and speeches, the Russian leader emphasizes a desire to separate sports and politics. Before the Olympic Games opened in Sochi, Putin complained about political questions from reporters, insisting the games “are intended to depoliticize the most pressing international issues.” Other world leaders disagree, suggesting that any attempt to depoliticize sports is impossible. Juan Antonio Samaranch, former Spanish ambassador to Moscow and later the president of the International Olympic Committee for more than two decades, described the Olympic Games as a microcosm of international relations, stressing that sport serves a role in the “harmonious development of mankind.” Former U.N. Secretary-General Kofi Anan suggested that football in particular, given the number of FIFA members, is more universal than the United Nations, with the power to transcend borders, culture and socio-economic status. Sports have long impacted

politics and vice versa. The Ping-Pong diplomacy of the 1970s between the United States and China, a series of table tennis games played in both countries, paved the way to open dialogue. Boycotting or banishing a state from sporting events has also been utilized as a way of political protest. Americans did not attend the 1980 Summer Olympics in Moscow to object to the Soviet invasion in Afghanistan. More recently, South Korea, host of the 2018 Olympics in Pyeongchang, proposed a joint hockey team and a march for the opening ceremony to its northern neighbor, paving the way for the summit between the leaders of North Korea and the United States. The United States will not have an opportunity to use the World Cup in Russia for diplomacy since the U.S. football team, surprisingly, did not qualify. Football, played in more than 200 countries, is the globe’s most prominent and popular sport, and Putin welcomes that all eyes will be fixed on his country through

July 15. Such sporting events serve domestic objectives, boosting national pride and allowing for redistribution of financial assets through government contracts — in Russia’s case, the situation is especially rewarding for entrepreneurs with close links to the Kremlin. Mass-scale events in Russia require mobilization of significant administrative resources, often lacking an economic rationale, like the construction of a 48,000-seat stadium in Sochi, a city that has no professional football team. With tight deadlines, major government contracts in play and a leader’s reputation on the line, corrupt practices and mismanagement are commonplace. Putin personally questioned Dmitry Kozak, deputy prime minister in charge of the 2014 Winter Olympics — the costliest Olympics at $51 billion — about construction delays and rampant corruption. No one was held responsible, and Kozak remains at his post. Any battle against extortion and waste of state funds is a masquerade, and corruption continues unhindered. Quality of construction is often poor, like at the Information Center in Kazan that was damaged by heavy rain. Preparations for the 2018 World Cup did not go without scandal either. Vitaly Mutko resigned from his role as the chairman of the 2018 World Cup organizing committee in Russia in December due to the investigation into state-sponsored doping. Mutko, a deputy prime minister, is still in charge of the Russian Football Union despite being removed from the FIFA Council and banned for life by the International Olympic Committee.

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

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Corruption has dogged other construction projects related to this year’s World Cup. The final price for the Zenit Arena in St. Petersburg amounted to 700% of the initial cost estimate, with multiple contractors changing along the way and the city being forced to reduce social services to conclude the project. Three holdings run by Putin associates, including members of the ruling party United Russia, account for 80% of infrastructure contracts related to the tournament. Sports, and football in particular, have both benefited from and contributed to the process of globalization. Widespead media coverage, the advent of professionalism and the explosion of commercialization have made football a lucrative business where transnational corporations raise the profiles of their brands. Global sports market revenue exceeded $90 billion in 2017. Today modern sport has lost its early romanticism, when amateurs honorably competed for glory. Sporting events are a global phenomenon, serving governments’ political purposes as well as the commercial objectives of FIFA or the IOC. The World Cup will flatter Russia’s ego but will not conceal the nation’s systemic corruption and inefficiency. Hosting the World Cup helps Russia demonstrate that the country is not isolated by the West. Yet the mercantile factor matters most, and for the sport governing bodies like the IOC and FIFA, such events are business as usual, a mere guise for dialogue, human rights or peace. Moscow will again gladly exploit this opportunity for its own international ambitions.

BUSINESS DAY

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Spending Trends

Consumers ditch La Casera for Bigi Apple …expired La Casera reported in circulation Stories by Chinwe Agbeze

onsumers’ love for La Casera, a carbonated soft drink (CSD), produced by The La Casera Company Plc., is waxing cold as many have dumped the legendary apple drink for Bigi Apple. Bigi drinks from the stables of Rite Foods Limited comes in four variants—Bigi Lemon-lime, Bigi Cola, Bigi Apple and Bigi Orange. BusinessDay survey around retail stores in Lagos metropolis over the weekend revealed that Bigi Apple which is barely two years ago in the market has warmed its way into the hearts of consumers and has become the darling of many. Retailers who spoke with BusinessDay said the demand for Bigi Apple drink far exceeds that of La Casera. Both drinks are retailed at N100 per Pet bottle. So, consumer shift is not about the price. In some of the big stores visited, Bigi Apple drinks was visible on the shelves with no bottle of La Casera drink in sight. Other stores had both drink displaced but it was more of Bigi Apple drink and less of La Casera. ‘‘If I buy twelve cartons of Bigi Apple and three cartons of La Casera, I will sell off all the Bigi Apple drinks and still have a carton and half of La Casera left,’’ said a manager at a big retail store in Ikeja. Another retailer in Mushin area

of Lagos who gave her name as Damilola said consumers are shying away from La Casera because of the strong chemical used in producing the drink. ‘‘We had to stop selling La Casera because customers don’t buy it. If we buy La Casera, it can stay here (our store) for months,’’ said Damilola. ‘‘They (consumers) told me the chemical in La Casera is very strong and the drink is used to loosen bolts that have rusted for many years. I tried it and found it to be true,’’ she said. At Lekki, a retailer told BusinessDay that consumers only demand for La Casera when Bigi Apple is not available. ‘‘When customers ask for Bigi Apple and I tell them it’s finished, they walk away but a few buy La Casera,’’ the retailer said. On why they prefer Bigi Apple drink to La Casera, consumers say the taste is unique. ‘‘I was a huge fan of La Casera for years. I always enjoy the drink with gala sausage roll,’’ said Adeola Oladiran, a nurse. ‘‘But when I tasted Bigi Apple, I was hooked. I just love the taste.’’ Ifunanya Uzoma said: ‘‘Bigi Apple has this unique taste that gives you the feel that you are drinking freshly juiced apple. La Casera is too harsh. If I must drink it, I have to dilute in water.’’ BusinessDay got hints of expired La Casera drinks retailed in some markets for half the price

under the guise that the company has plans to phase-out the bottle and introduce a new one. When BusinessDay visited the markets, retailers confirmed the story but said the retailer disappeared when someone drew buyers’ attention to the expiry date.‘‘A man came here two Saturdays ago, and sold a bottle for N50,’’ said a retailer at Ketu market who deals in watermelon. ‘‘I had already drank some when I learnt the drink expired August last year.’’ But consumers who were wise enough did not fall for this gim-

mick. ‘‘The man stood beside me while he sold but I did not look his way,’’ said a middle-aged woman who sold Alvacado pears. ‘‘I knew there was something wrong with the drink.’’ While some consumers who bought the drink were angered to know they were sold expired drinks, a few weren’t. ‘‘I tasted the drink and it still tastes like La Casera,’’ said an Orange retailer. ‘‘If your time to die has come, you will die. An expired drink does not harm anyone.’’

Price Check: GB offers the cheapest prices

usinessDay visited four grocery giants- Shoprite, Spar, Prince Ebeano and Grocery Bazaar, in Lagos metropolis to track prices and see which store offer consumers the cheapest prices. Although all the stores had good deals, Grocery Bazaar had the cheapest prices on more items, and consumers can benefit from this. The table shows that as at June 19, 2018, the price of 400g of Peak milk at Shoprite was N1,299.99 as against N1,230 sold at SPAR, N1,200 at Prince Ebeano supermarket, and N1,200 at Grocery Bazaar on that same day. Also a 500g tin of Quaker oat within the same period at Shoprite was N849.99, N910 at SPAR, N730 at Prince Ebeano, and N700 at Grocery Bazaar. Likewise, 415g of Heinz beans went for N399.99 at Shoprite, N410 at SPAR, N380 at Prince Ebeano, and N355 at Grocery Bazaar. A tin of 125g of Titus sardine

Thursday 21 June 2018

stood at N239.99 at Shoprite, N240 at SPAR, N230 at Prince Ebeano, and N240 at Grocery Bazaar. Similarly, a tin of 500g of Bournvita was sold for N1,299.99

at Shoprite, N 1,115 at SPAR, N 1,120 at Prince Ebeano, and N1,150 at Grocery Bazaar. Grocery Bazaar ended up being more affordable for five out

of the 15 items surveyed and the prices were tied for two more. Prince Ebeano emerged the second with four lowest prices followed by SPAR, and Shoprite.

Global retail update Positive progress in Europe and Africa esco has announced its commitment to diversity at the highest level, with a promise to end the entirely Caucasian make-up of its 14-member board. Meanwhile, the British supermarket is celebrating its tenth consecutive quarter of sales growth, following its recent consolidation with Booker. Consumer voice McDonald’s will no longer offer plastic straws in its 1,361 UK outlets, following a hefty petition with over half a million signatures. The fast food behemoth uses 1.8 million straws daily across Britain, and from next year paper straws will be used instead. Online developments Portuguese retail group Sonae has partnered with CTT, the national postal service of Portugal, in an ecommerce venture. The agreement follows a raft of similar deals between retailers and delivery providers such as the partnership between Carrefour and Google (paywall). Name change ‘Pepkor’ is the new brand set to replace South Africa’s ‘Steinhoff Africa Retail’ (STAR). The name change is designed to create some distance between its embattled parent company Steinhoff International, which has faced backlash after accounting irregularities were uncovered last year. Bitter battle Beer brewers MillerCoors and Pabst Brewing are set to duke it out in court in November, to try and settle a dispute over a decades-old collaboration which expires in 2020. Pabst is accusing the former of breach of contract, fraud and misrepresentation. But the accused contests the claims. Mall entertainment Internationally renowned entertainers Cirque du Soleil have created a family-based show designed to be performed in shopping malls. It is set to open in Toronto in September with more locations to follow. It is hoped the collaboration will bring more foot traffic to shopping centres. Tech Transformation Alibaba-owned RT-Mart is getting a ‘digital makeover’. The brick and mortar chain, which boasts over 400 stores, is set to improve features such as mobile ordering, hastier delivery times, and instore access to shop on Tmall. Malaysian commitment Meanwhile, competitor Alibaba continues its overseas expansion in Southeast Asia and has opened its first country office in Malaysia, after having already established an international eHub in the country, where the Chinese e-tailer has invested over USD 100 million in recent years. Luxury acquisition Reliance Brands, owned by India’s largest retail chain, is in the final stages of negotiations to buy out Genesis Luxury, one of the country’s top luxury groups. The acquisition is likely to give Reliance a dominant space in the booming luxury market and other benefits. Bidding war in Europe Coca-Cola is reportedly one of a number of multinational firms interested in bidding for Horlicks, the milk drink brand put up for sale by British pharma giant GlaxoSmithKline. Experts reckon the unit could fetch up to GBP 3 billion. Nestlé and Kraft Heinz are also potential bidders.

Thursday 21 June 2018

C002D5556

BUSINESS DAY

Okpako taps into ecommerce market

Consumers still unaware 17 days after shisha ban

…introduces RewardsNG

BUNMI BAILEY

awrence Okpako, a sales expert has launched RewardsNG, an online marketplace where people can sell, buy, refer other people and make money. The ecommerce firm is designed to empower students in higher institutions, entrepreneurs, the unemployed and underemployed, housewives, and anyone who desires to earn additional income. ‘‘We intend to empower people through this platform. We see ourselves as a reward and empowerment company,’’ said Okpako, CEO, RewardsNG. ‘‘We don’t just want to make money; we also want to touch lives. We not only buy and sell, but we have also created a reward,’’ he said. Some of the products on RewardsNG include airtime and data, tickets such as flight booking, electricity bill payment, fashion, groceries, cargo and shipping, television and cable, professional services such as laundry, amongst others. ‘‘We have four free pickup centres in Lagos for those who do not want to pay for N1,000 door-

eventeen days after the federal government had banned the sale and use of shisha (waterpipe smoking), consumers of this flavoured smoke still patronise pubs, restaurants and hotels were the banned substance is served. This sort of smoke seen as fun to some of its consumers has been banned in countries such as Pakistan, Jordan, Singapore, Saudi Arabia and now Malawi. At a famous Chinese restaurant in Sulurere, Lagos, a bartender who pleaded anonymity said, “I am not aware of this ban ma. People still smoke Shisha here. Even as at yesterday a number of people smoked quiet a lot of Shisha here.” On June 4th 2018, the Federal Government banned the use of flavoured tobacco, especially Shisha, in public places, and directed security agencies to arrest anyone found inhaling the substance. “Let me stress that the ban on tobacco products with characterising flavours is still in place and the ban includes shisha because it has flavour. I, therefore, urge the Consumer Protection Council (CPC) and the law enforcement agencies to intensify arrest of defaulters.” Isaac Adewole, minister of health said during a press conference in Abuja to mark the 2018 world No-Tobacco Day. Babatunde Irukera, the Di-

rector-General of the CPC, said that a committee had been set up to look into the issue of Shisha and other matters and further recommendations would be made soon. Shisha (waterpipe smoking) industry is fast gaining traction in Nigeria as more consumers find it cool and trendy. There are no hard data on this. Shisha is typically smoked in social settings, very frequently smoked by urban youth, young professionals, and university and college students. Shisha, also called hookah, narghile, or hubble bubble smoking, is becoming an increasingly popular method of tobacco use worldwide. It originated in the Eastern Mediterranean region and is now gaining popularity in many western countries including Australia, the United Kingdom, Canada, and the United States of America, and also in Southeast Asia. Shisha smoking is a growing threat to public health. The reason is because, there is a common misconception that smoking shisha is relatively less hazardous than smoking tobacco cigarettes, and most outlets offering shisha remain largely unregulated. A review of the health effects of smoking shisha show that shisha smoking leads to significant exposure to polycyclic aromatic hydrocarbons (PAHs), volatile aldehydes, carbon monoxide, nitric oxide, nicotine, furans and nanoparticles.

off the tracheostomy (a device inserted in the lower neck into the airway to provide oxygen). The humanitarian organisation supported us financially for one year. Current situation: Now, it’s time to find another hospital that specializes in treating children diagnosed with chronic airway diseases and vocal cords repair. While in Nigeria, we did some test via referral from University of Port Harcourt Teaching Hospital (UPTH), and we found out that Jesse has a hearing defect in one ear. Due to lack of funds, we haven’t been able to progress with any treatment for the ear. We went for a broncoscopy today (June 2, 2018), just to update our reports and the diagnosis is still the same-- another laryngotrachea resection surgery has to be done.

Challenge: Getting Jesse to a paediatric hospital in the United States that specializes in managing children diagnosed with airway defects, ear and speech problems. We cannot find adequate treatment in Nigeria for Jesse. If this campaign to raise an estimated sum of N24m succeeds, Jesse can get the surgeries and rehabilitation he needs so that we can return to Nigeria. The family has been apart for 16 months. We spent over N2m in private hospitals during the first one year of Jesse’s life. My husband’s salary provides for our basic living expenses in Italy and back home in Nigeria for our older son, Jaden. We have spent over N2m of our personal savings. So far, we have realised N180,000 from donations since I initiated the #savejesse campaign five days ago.

CHINWE AGBEZE

The Rewards NG Team, Raymond Okpako, Mabel Ebu, Lawrence Okpako (CEO/ Co-founder, Rewards NG) (middle), Ruemu. O and Dolapo Orire during the launch of RewardsNG in Lagos recently.

to-door delivery fee. We tend to extend it to other cities,’’ the CEO said. ‘‘The consumer picks the closest pickup centre for delivery. We have over 50,000 products and services available.’’ Consumers are very sensitive about pricing but the RewardsNG boss assures that their product prices are pocket friendly when compared to others. ‘‘We did a lot of research and we tried to make sure our prices are very competitive,’’ he said. ‘‘We are confident that what we have is good enough to present to the public.’’ A lot of people have trust

issues when it comes to using their cards to shop online but Okpako said they have taken care of. ‘‘We have created multiple payment options for those who do not want to pay with their cards,’’ he said. On the issue of complaints of fake and substandard products retailed online, RewardsNG CEO said their partners are vetted and carefully selected. ‘‘Any partner that wants to join our platform is subject to our quality control check because our trademark is our solution. We have quality standards that we have set for

ourselves to make sure the items are genuine,’’ he said. ‘‘We have a screening section. If we are not satisfied, the product will not be listed on the platform.’’ Okpako invites people to visit the website to start shopping, referring people and earning money. ‘‘At RewardsNG, every transaction made earns the person a free cashback. The person earn cash in his/her wallet and we also reward the person with points,’’ he said. ‘‘The more transactions the person makes, the more money he/she will make as well.’’

Living under poverty line How Nigerians are struggling to survive

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

Jesse in dire need of funds for surgery CHINWE AGBEZE Name: Faith Olue (Jesse’s mother) State of Origin: Delta state Dependants: Two children- Jaden and Jayden, and my aged parents Occupation: I am a legal practitioner and my husband is an electrical engineer. We are just a young couple who work regular jobs that in the present Nigerian reality could only cater for our immediate needs. History of problem: Jesse was born on the December 14, 2015 at Professor Kelsey Harrison hospital in Port Harcourt. At birth, the doctors discovered that he had congenital heart disease and very noisy breathing, but they could not diagnose why. He was immediately transferred

to Paediatric care hospital where he was on admission for two weeks before he was discharged. And after he was discharged, we made frequent trips to the hospital for a year. Jesse was born with two holes in the heart, and later developed a pulmonary arterial hypertension which was diagnosed in a paediatric hospital in Italy as tetralogy of fallot. He was also diagnosed with severe Trachea stenosis and vocal cord malformation. Prior to this examination, Jesse couldn’t utter any word. He only made very low sounds with great difficulty. Progress: In February 2017, a humanitarian organisation known as ONG POBIC HEART came to our rescue. At a little cost to us, this organization made arrangements for Jesse and two other sick children to be flown to Italy. In Italy, Jesse had two major

surgeries-- open heart surgery and laryngotrachea reconstruction. The heart surgery was a success, but the second sur-

Jesse

gery wasn’t as successful as we hoped for. Jesse spent eight months in the hospital where several procedures were done in a bid to save his life and get

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

Thursday 21 June 2018

BUSINESS DAY

Thursday 21 June 2018

C002D5556

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

YOUNG BUSINESSLAWYER

Adjustments! It is half year! ou may have started the year with broad spectra of personal promises, resolutions and determinations and you are far along in the actuation of these dreams and plans. That is great! Your kind is rare! I am however sure that for most of us this is not the same. You may be looking at your great list of to-dos and wondering how time “has run” without commensurate traction on your path or tangible results, you are not alone. There is energy that comes with new ideas, new years, new projects which, if not micro-managed, will dissipate over time. There is also a lethargy that seeps in with trends that makes us easily forget what we set out to do as time lapses. However, the responsibility to deliver on the promise of your life never wanes nor fades. As such, the will-power to make these things happen must be sustained and renewed. Neither willpower nor enthusiasm are enough to sustain growth. Caroline Arnold, writer, in her book “Small Move, Big Change” alludes to the fact that most of us are always setting goals and rarely attaining them and determination is not strong enough to beat the force of ingrained habits. She advocates that there must be a systemic inclusion of micro behavioural targets which would move you towards permanent improvement detail by detail. I totally agree; in my opinion, capacity and excellence are not static and do not happen in quantum leaps.

To be continued next week

ICC Africa: Experts explore ways to stop flight of arbitral disputes out of Africa IFEOMA OKEKE

xperts in arbitration at the recently concluded 3rd International Chambers of Commerce (ICC) Africa Conference on International Arbitration explored ways to foster growth of trade and investments and to ensure that Africa is the preferred ‘Seat’ of arbitration for all disputes within the continent. The conference which brought together not less than 350 participants from 15 countries provided an indispensable update on developments in the region and how best Africa countries can leverage arbitration for fast, cost-effective and peaceful dispute resolutions. The conference had in attendance dignitaries such as Yemi Osinbajo, the Vice President of Nigeria, who was represented by Jumoke Oduwole, Senior Special Assistant to the President on Industry, Trade and Investment, Office of the Vice President; Babatunde Savage, Chairman, International Chamber of Commerce; Alexis Mourre, the President, ICC International Court of Arbitration; Opeyemi Oluwafunmilayo Oke, the Chief Judge of Lagos State; and Gabriel Olawoyin, the Chair of the ICCN Commission on Arbitration & ADR amongst others. Speaking during the conference, Jumoke Oduwole who spoke in the stead of the vice president, said that existence of strong and effective dispute resolution mechanism is a crucial driver for economic growth and investment in Africa, as investors, whether domestic or foreign look beyond pure economic fundamentals,

L-R, Tunde Ogunseitan, Counsel, ICC International Court of Arbitration, France; Sami Houerbi, Director, ICC Dispute Resolution Services, Mediterranean, Middle-East & Africa, International Court of Arbitration; and Funke Adekoya, SAN, Partner, Aelex and Chairman, Conference Organising Committee; Karl Henessee and Xavier Nyssen. Ilham Kabbouri, Lawyer, Hogan Lovells, delivering a presentation on how Africans can secure more Arbitration Seats in Africa.

Dorothy Ufot, SAN (L) and Alexis Mourre, President, International Court of Arbitration at the 3rd ICC Africa Arbitration Conference in Lagos.

to require assurances of effective legal frameworks for enforcement of awards and a credible judicial system, which gives them a reasonable level of comfort and confidence. “Undoubtedly, arbitration is favoured by the business and investing community in Africa because of its flexibility, relative speed, privacy and cost. This in turn encourages invest-

ment flows and supports economic development, particularly in critical areas such as infrastructure. “In the past few decades, there has been an undeniable expansion in global trade and investments, resulting in significant increase in the volume of arbitration cases on the continent. “Given the 253% in the rise of Foreign Direct Investment in Africa

from six billion dollar in the mid 90 to what is today barely two decades later, and an estimated growth rate of the region at 2.4% for 2018, the case for investing in Africa remains strong,” he said. The vice president who was represented by Jumoke Oduwole, Senior Special Assistant to the President on Industry, explained that as a natural by-product there has been an increase in the number of international arbitration proceedings resulting from investment disputes involving African parties or interests, particularly in the mining, oil and gas, telecommunications and construction sectors. He however noted that this situation is not peculiar to the African Continues on page 27

NBA elections 2018, Afam Osigwe and the disqualification saga AIKHUNEGBE ANTHONY MALIK, ESQ.

“Our lives begin to end the day we keep silent about things that matter” ~ Martin Luther King Jr.”

he date for the election of a fresh set of national officers to take over the running of the affairs of the Nigerian Bar Association is almost upon us. By now, the administration of Abubakar Balarabe Mahmoud, SAN should be preparing its endcue. Expectedly, activities on the lawyers political landscape are at fever pitch, albeit one hears constantly monotonous warning refrain: “ban on campaign has not been officially lifted”. I wonder whether there was a ban in the first place to warrant the avowal. Anyway, that’s a discussion for another day. But whether the “ban” is lifted or not, the blind can see and the deaf can hear that all the candidates have in several clever ways, intensified campaigns and solicitation for votes. So true that

Abubakar Balarabe Mahmoud, SAN

Mazi Afam Osigwe

since men have learnt to shoot without missing, birds have learnt to fly without perching! Of all the positions in contest in the forthcoming elections, none has generated so much debate and diatribe as that of the President. As at the last count, four contenders, Paul Usoro, SAN, Prof. Ernest Ojukwu, SAN, Arthur Obi Okafor, SAN and Mazi Afam Osigwe, a former General Secretary of the NBA, have been screened by the Electoral Committee (ECNBA) constituted by the incumbent President. Headed

by Professor Auwalu Hamish Yadudu, a Professor of Law and former Legal Adviser to the late Head of State, General Sani Abacha, the ECNBA in a publication dated 13th June, 2018 and titled “SCREENING RESULT SHEET OF THE 2018 NBA NATIONAL OFFICERS ELECTIONS” cleared all but one of the four contenders for the office of President. It was indicated that Mazi Afam Osigwe was “not cleared”. The following day, the ECNBA addressed a letter to Osigwe, conveying the outcome of the screening exercise to him

The ECNBA’s decision above has sparked off a raging debate amongst members of the NBA. Supporters of Mr. Afam Osigwe are all over the media space contending the injustice, incorrectness or wrongness of the electoral umpire’s decision and calling for the immediate reversal of same and a reinstatement of their hero as a candidate. Quite significantly, supporters of the other “cleared” candidates are also outdoing themselves in the social media over this development. There are several aspects from which one can view this decision and it really is not important whether the decision is ultimately reversed following the appeal, which has now been lodged by Mr. Afam Osigwe. In some quarters, it is being contended that the decision is a product of the political intrigues in the NBA. For the record, Afam is the youngest of the four contenders. He is equally the only one who has not attained the enviable rank of “Senior Advocate of Nigeria”. Apart from a few occa-

sions, which can be counted on the mutilated fingers of a leper, the NBA the administration and control of the affairs of the NBA have been held by the members of the exclusive club of Senior Advocates of Nigeria. Albeit, there is no written law anywhere suggesting that only the SANs can be President of the NBA, but over the years, members appear to have ceded or yielded that position to the learned “Silks”. Thus the emergence of Mr. Afam Osigwe as a contender for the office is viewed in some quarters as an affront and a challenge to the old order. Some persons have also made the age of Mr. Osigwe an issue. At 46 years, he is considered as being “too young to run” even when the constitutional age to contest election to the office of President in Nigeria has been sliced down significantly to 30 years! It has even been suggested in some quarters that the decision of the ECNBA is only Continues on page 27

BUSINESS DAY

RIGHTSWATCH

Capital Projects Funds: HEDA petitions ICPC, seeks probe of Gbajabiamila

he Human and Environmental Development Agenda (HEDA), which is a is a non-governmental and non-partisan human rights Resource Center, has asked the Independent Corrupt Practices and Other Related Offences Commission (ICPC), to investigate the capital projects allocated to Surulere 1 Federal Constituency as represented by Honourable Femi Gbajabiamila. In a letter forwarded to the antigraft agency and signed by HEDA’s chairman, Mr. Olanrewaju Suraju, the Center said like other concerned members of the society, the organisation have really expressed shock and worries about the recent report of lavish spending of Honourable Femi Gbajabiamila who is the Majority leader of the House of Representatives. The letter reads: “According to Vanguard of May 28th and 29th 2018, Honourable Femi Gbajabiamila has been reported to have surprised his wife, with a gift of Mercedes GWagon, selling for between N75M and 100M in Nigeria. “The gift on the 27th May, 2018 was to commemorate the wife’s 50th birthday. He was also reported to have rocked a N1.2M Gucci suit when giving this gift to his wife. The stylish Gucci Heritage web tape crepe wool jacket that costs $3,450, approximately N1.2M. Though his intention could have been right but in a country where the minimum

wages is N18, 000 with hunger and unemployed youths roaming the streets, his actions were seen as insensitive to Nigerians especially from his Surulere Constituency.” HEDA said Nigerians have kept wondering how it is possible, within the legitimate salaries of the parliamentarian, to lavishly expend such amount of money on luxury items by a public office holder, especially recalling the fact that a total of N1.3B was allocated for constituency Projects in Surulere1 Federal Constituency, represented by Hon. Gbajabiamila, in the year 2017 Appropriation Budget. “HEDA Resource Centre believes that no room must be opened for any person to abuse public trust while in public office. Corrupt practices and misapplication of public funds must be abolished in all fronts by relevant government agencies charge with the responsibilities of investigating allegation or suspicions of corrupt practices. “On this account, HEDA is calling on your good office to open a wide investigation into the utilization of funds for capital projects allocated to Surulere 1 Federal Constituency under Honourable Gbajabiamila to ensure and convince discerning Nigerians that public funds were not used for private family services and benefits by people elected into offices for service,” the letter said.

SERAP asks court to compel Fashola to account for spending on power

ocio-Economic Rights and Accountability Project (SERAP) has sued the Minister of Power, Works and Housing, Babatunde Fashola, SAN over “failure to account for the spending on the privatisation of the electricity sector and the exact amount of post-privatisation spending on generation companies (GENCOS), distribution companies (DISCOS) and Transmission Company of Nigeria to date, and to explain if such spending came from budgetary allocations or other sources.” In the suit number FHC/L/ CS/972/18 filed last week at the Federal High Court, Ikoyi, Lagos, SERAP is seeking “an order for leave to apply for judicial review and an order of mandamus directing and/ or compelling Mr Fashola to provide specific details on the privatization of the electricity sector, the names of all the companies and individuals involved; and to publish widely including on a dedicated website any such information.” The suit followed SERAP’s Freedom of Information request dated 7 May 2018 to Fashola giving him 14 days to provide “information on the status of implementation of the 25-year national energy development plan, and whether the Code of Ethics of the privatization process which bars staff of the Bureau of Public Enterprises (BPE) and members of the National Council on Privatization (NCP) from buying shares in companies being privatized were

deliberately flouted.” The suit filed on behalf of SERAP by its counsel, Bamisope Adeyanju read in part: “Publishing the information requested and making it widely available to the public would serve the public interest and provide insights relevant to the public debate on the ongoing efforts to prevent and combat a culture of mismanagement of public funds, corruption and impunity of perpetrators.” “Enforcing the right to truth would allow Nigerians to gain access to information essential to the fight against corruption and provide a form of reparation to victims of grand corruption in the power sector. The UN Committee on Economic, Social and Cultural Rights in its General Comment 3 has implied that privatization process should not be detrimental to the effective realization of all human rights, including access to regular electricity supply.” “SERAP has the right to request the information under contention on the basis of several provisions of the Freedom of Information (FOI) Act, 2011. By Section (1) of the FoI Act, SERAP is entitled as of right to request for or gain access to information, including information on post-privatization spending by the Federal Government and accounts of spending on the private entities such as GENCOS and DISCOS.” No date has been fixed for the hearing of the suit.

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Thursday 21 June 2018

MORTGAGE,FINANCEAND DEVELOPMENT Making Mortgage accessible to the informal sector (2): Management and repayment

aving considered the basic requirements for mortgage loan in the informal sector, another sets of factors considered important to mortgage lenders and borrowers, as well as the general public, are the management of loan portfolio and repayment process; as prescribed under the Underwriting Standards. Essentially, this article analyses the various rule-based mechanisms for limiting credit risks; structuring workable repayment plans; determining suitability for refinancing; and resolving disputes arising from mortgage loan transactions originated in the informal sector of the Nigerian economy. CREDIT RISKS MANAGEMENT As prescribed in the Underwriting Standards, a mortgage lender is under obligation to minimize risks associated with loan advancement to informal sector borrowers. Accordingly, mortgage origination is expected to be guided by the following measures: Credit Bureau Report In determining the credit worthiness of a borrower and the viability of a loan proposal, a mortgage lender is required to obtain a credit report from two independent credit bureau agencies licensed by the Central Bank of Nigeria (CBN), showing a minimum credit score of “satisfactory”. This, in essence, will strengthen the credit appraisal procedure of the mortgage lender as it will provide accurate and reliable credit information on a borrower with regards to repayment capability. This will reduce the granting of loans to customers with no capacity to repay or those who have contracted debts in excess of their repayment capabilities and/or already having non-performing loans involving other mortgage lenders. Maximum Permissible Ratios of a Borrower’s Payments and Debt to Income Two important credit risks required to be well managed by a mortgage lender are the ratio of a borrower’s total monthly housing expense to income on the one hand, and the ratio of the borrower’s total debt to income on the other hand. Total monthly housing expense comprises of the monthly mortgage repayment together with all other housing-related costs such as real estate taxes and insurance. The ratio of this to income of a borrower is commonly referred to as Payment to Income (PTI) ratio. Similarly, a borrower’s total debt includes other payment obligations in a month such as car loans and other personal loans. The ratio of this to income of a borrower is termed Debt to Income (DTI) ratio. The prescribed PTI and DTI ratios for borrowers differ from one recognized cash income band to another. Prospective borrowers who approach their chosen mortgage lenders for further information will be counselled on the applicable PTI and DTI ratios. Mortgage Loan Computation – Valuation of Property Another credit risk at the level of mortgage origination is that associated with computation of the Mortgage Loan in relation to the value of the connected property. To limit the risk, the Purchase Price (PP) of the property will be compared to its Fair Market Value/Open Market Value (OMV). As prescribed in the Underwriting Standards, the lower of the PP and OMV is to be used for computation of the Mortgage Loan.

However, in determining these values, Property Valuation shall be carried out by a licensed, independent Valuer who is a member in good standing with the Nigerian Institution of Estate Surveyors & Valuers (NIESV). The Valuer is also required to get a Professional Indemnity Insurance with an Insurance Company licensed and in good standing with the National Insurance Commission (NAICOM). Borrowers’ Cash Flow Another risk factor is the determination of a borrower’s cash flow. Given that income and expense data are not feasible for calculation of income for most operators in the informal sector, mortgage lenders are therefore required to determine the cash flow of affected borrowers through the deposits in their bank accounts prior to applying for mortgage loans. To this effect, borrowers are to provide appropriate and acceptable bank statements for previous twelve (12) months, showing regular deposits with the last deposit not more than thirty (30) days old. The credit inflow into a borrower’s account shall be discounted at 95% for Trade in Fast Moving Consumer Goods (FMCG); 85% for Manufacturing; and 80% for Services. The average of the discounted credit inflow for the previous twelve (12) months shall be the recognized monthly cash inflow for a particular borrower. This shall also be taken to represent the monthly profit of the borrower that can be utilized for loan repayment, after netting off costs of sales. But where a borrower is a salary earner, the net income will be used. LOAN REPAYMENT The Underwriting Standards make prescriptions as to the mode and structure of mortgage loan repayment for informal sector borrowers as follows: Form of Repayment For seamless repayment process, proceeds of the borrowers’ business shall be domiciled in the obligors account operated with the mortgage lender, from where the regular monthly payments shall be deducted. Repayment can also be done through the use of Direct Debit Mandate drawn on an account with a minimum of three (3) months PITIA in reserves, supported with three (3) months of postdated cheques or through the use of Bank Verification Number (BVN) linked with other bank accounts operated by the borrower. PITIA means the sum of monthly Principal, Interest, Taxes, and Insurance payable under a mortgage loan. Amortization Structure The structure of a mortgage loan is to be planned in such a way that the loan will be fully repaid by the end of the period for which it is written. There shall be no negative amortization, meaning that in no circumstance shall the remaining principal amount owed increase during the time that the loan is outstanding. In essence, a mortgage lender may charge default interest but such shall not be added to the Principal sum. After default payment is made, any other payment shall only

be applied to interest. Prepayment Option As stated in the Underwriting Standards, informal sector borrowers may repay outstanding principal balance at any time, subject to payment of a penalty fee as may be charged by the mortgage lenders. However, where a lender’s product line includes a penalty fee, information on all charges shall be made available to the borrower before closing. Furthermore, the applicable charges shall be a nominal fee not designed to achieve yield maintenance. MORTGAGE REFINANCING The Underwriting Standards also make provisions for the refinancing of existing mortgage loans. However, qualified loans shall meet, among others, the following two conditions: Seasoning & Delinquency Proper “Seasoning” is required for a mortgage loan submitted for refinance to be so qualified. In this regard, the loan shall have existed and run smoothly for at least six (6) months. In addition to this, there must have been at least six (6) consecutive monthly payments on the loan, from the date of origination to the time the application for refinancing is made. Equally important is the need to satisfy the provisions of the Underwriting Standards on “Delinquency”, before a mortgage loan can be qualified for refinance. Accordingly, a mortgage loan submitted for refinance shall be current in monthly repayments and have no record of delinquencies in the last six (6) months prior to the time application for refinancing is made. CONCLUDING REMARKS The Uniform Mortgage Underwriting Standards for the Informal Sector is without doubt a major milestone, in the various efforts aimed at inclusive growth of the mortgage industry and wider distribution of opportunities for affordable home ownership among Nigerian citizens and residents. By bringing mortgage facility closer to the people, the much-needed formalization of the informal sector has also been enhanced. Like all other contractual relationships, there are possibilities of dispute arising between parties to mortgage transactions in the informal sector. It is commendable that the Underwriting Standards puts this into contemplation and prescribes that where this occurs, “Arbitration” or other acceptable Alternative Dispute Resolution (ADR) mechanisms shall be put in place to resolve the issues. The coast is now clear for operators in the informal sector to take advantage of the framework in acquiring their own homes easily and affordably. All that needs to be done is to approach a mortgage institution for proper guidance. Mortgage, Finance & Development is an initiative of the Nigeria Mortgage Refinance Company (NMRC)

Thursday 21 June 2018

LEGALINSIGHT

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BDLegalBusiness

Lawpavilion partners Alegeh Law Foundation to provide resource for young lawyers ...As Ex-NBA president opens new purpose-built office in Ikoyi, Lagos

igeria’s Foremost Legal software solution provider, Lawpavilion has partnered with the Alegeh Law foundation to provide a wide range of software solutions to young lawyers across Nigeria. According to Ope Olugasa, Managing Director of Grace Infotech Limited, owners of Lawpavilion, the Practice Support Scheme by the Alegeh Foundation was created to offer legal support to young lawyers by equipping them with various tools and practice solution for a successful career in law. “We are committed to the core ideals of the Foundation, which is rooted in a belief in the undeniable fact that the foundation for a successful practice of Law begins essentially from the universities and to a considerable extent the Law school,” Olugasa said. The immediate past president of the Nigerian Bar Association (NBA) and Founding Partner, Alegeh & Co, Augustine Alegeh, SAN who also opened his new office in the highbrow environs of Ikoyi, Lagos disclosed that the AlegehLaw Foundation was aimed at designing programmes that would benefit a greater number of the younger ones in the legal profession. He said, “We would embrace and apply available communication platforms and alternative and revolutionary methods to ensure that help gets to the majority. That is our focus. That is our quest. That is our dream. “To the Young Lawyers, the learned silk said, “we believe firmly in your future as successors of our Noble profession, and that is why we are investing in your future. We hope that the Foundation’s impact would be immeasurable, remarkable and enviable. The growth and development of our Country is dependent on the work that we do as Lawyers. If Lawyers do their work the Country and its people would benefit. Our Country needs a lot of lawyering and our young lawyers must be made ready to fight the battles that we have failed to win. Our support to them is our contribution to the legal Profession and our Country.” Speaking at the event, the Chair-

Former NBA president, Augustine Alegeh , SAN and Wife Ferishat flanked by their daughters.

man of the Nigerian Bar association Section on Business Law (NBA-SBL), Olumide Akpata, bemoaned the lack of attention to the re-training and retooling of young lawyers, stating that this was a source of concern to some senior lawyers in the country. “New wigs are thrown into the deep end and are expected to be successful at their craft without the required training and preparation for the challenges of the legal Profession.” He thus congratulated the Alegeh Foundation for this major milestone and addition to the legacy of the former NBA president. He said, “This is not just about Augustine Alegeh. This is about legacy. I share with him that passion for capacity building for young lawyers. The real issues have nothing to do with the number of lawyers in Nigeria. Rather, it is having too many lawyers do the same thing. And if we are able to continuously build capacity and encourage specialisation, we would find out that even as a profession there is not enough of us to service the large economy of this nation.” In his remarks, former president of the NBA, Okey Wali, SAN described Augustine Alegeh as a passionate legal practitioner whose interest is the issue of the welfare of young lawyers and the need for remuneration for lawyers in pupilage is quite commendable. He however expressed contempt at what he described as uncouth and ill-mannered the behaviour of some young lawyers in the profession.

The objectives of the Foundation include, the support of Law Faculties in the various tertiary institutions in Nigeria to proffer support to Law undergraduates; providing adequate 1(one) month training programmes for young Lawyers in collaboration with established Law firms; and collaborating with other advisory groups and interested stakeholders, to champion the agitation for the improvement of the standard of young lawyers for the overall sustenance of excellent practice of Law. Other are, identifying and securing the support of leading but willing Law Firms in as well as accredited Law Faculties and the Nigerian Law School in providing necessary but sustainable support for young and aspiring lawyers; collaborating with the National Universities Commission, the Council of Legal Education and Law Faculties to develop appropriate curriculum for the advancement of Law practice and the Legal profession in general, amongst other things The new office of Alegeh & Co. on 35, Cameron Road, Road, Ikoyi – Lagos, was opened last Thursday amidst a small crowd of key members of the legal profession, family, friends, and well wishers amongst whom were the Attorney-General and Commissioner for Justice, Lagos State, Adeniji Kazeem; Ferdinand Orbih, SAN; Oghogho Akpata, Very Rev. Fr. Ethelbert Ukpabi; former governor of Delta State, Onanefe Ibori, Mena Ajakpovi,

BUSINESS DAY

ICC Africa: Experts explore ways to stop flight of arbitral disputes... Continued from 29

region, adding that as a result, emerging economies have expressed concern about the perceived domination of international arbitration structures and practice by the northern hemisphere. He reiterated that ICC needs to do more to enhance its position as the foremost worldwide trade organisation by championing issues of diversity and regional representation in the arbitration community, or international arbitration as a dispute resolution will likely will likely lose its credibility in this region the coming years. On the development of arbitration in Nigeria, Osinbajo noted that the Nigerian arbitration community has been working very hard to push a bill through the National Assembly to repeal and replace the current Arbitration and Conciliation Act with a more modern piece of legislation. “On February 1, 2018, the Nigerian Senate considered and passed into law the “Arbitration and Conciliation Act CAP A18 LFN 2004 (Repeal and Re-‐enactment) Bill, 2018 (S.B.427)”, to reflect the United National Model Law on International Commercial Arbitration as amended in 2006, enshrine party autonomy3, enabling the parties to appoint any arbitrator of their choice or designate or appoint an appointing authority of their choice,” he added. The vice president assured that Nigeria is fast becoming a leading seat of arbitration and the settlement of investment disputes between contractual parties. A synergy between government and the arbitration community can achieve a lot more link enforcing contracts to arbitration reform. He noted that the PEBEC is poised to collaborate with the arbitration community to do what is necessary to make Nigeria a more attractive seat, stressing that the current administration has been focused on delivering on economic growth for Nigeria. Babatunde Savage, Chairman, International Chamber of Commerce during his address said business relationships are based on agreements and these relationships sometimes do not end well and that is why when disputes arise, it is very important to resolve these disputes amicably. Savage explained that the ICC

conference is very important in this regard as it gives a platform for professionals to meet and suggest better ways of ensuring that crisis that come up as a result of disputes in transactions are resolved amicably without any problem. “We also know that it is cheaper and better for us to carry out this type of relationship management through alternative ways of dispute resolutions. It gives confidentiality, allows for finality of decisions, it is easier to enforce and allows people to use expertise they choose. All these make arbitration better,” he said. He advised that local players in arbitration should get the skills that are required for Nigeria to function in the global standard. “We need to improve our skills to be able to recognise the destinations for this type of operations where dispute resolution centres can also be cited in Africa. As we continue to improve on our skills, Africa will be a destination for this practice,” he said. Savage stressed that the ICC advance training that will take after the conference will help to grow the capacity of people and ensure they become global practitioners. He explained that the role of government in improving the legal and regulatory sector to aid the ease of doing business is very important to the success of arbitration. “As people continue to train one another from one country to the other, disputes that involve cross border relationships need to be tackled well. Therefore governments have to be seen encouraging that type of method rather than litigation. Various governments in Africa are helping to ensure that arbitration is relevant in dispute resolutions in Africa as a whole,” he said. Also speaking at the event, Alexis Mourre, the President, ICC International Court of Arbitration said ICC has increased its footprints in Africa, as Africa remains key to the future of international arbitration. Mourre said that the projected number of Africa population call for high quality dispute resolution through arbitration. He advised that Africa needs to innovate to establish highest level of ethics and Nigeria should be central and play fundamental roles in this evolution.

NBA elections 2018, Afam Osigwe and the disqualification... Continued from page 25

but an affirmation of the resolve and determination of a ‘powerful’ clique to stop the young Afam Osigwe from running for election. This much was alluded to in the letter written to the ECNBA on 14th June, 2018 by Afam Osigwe in response to his disqualification. Now given the clear provisions of the NBA Constitution and the facts, which are now in the public domain on this issue, can one really say that the ECNBA got its decision spot on? This write-up will attempt to provide answer to this catholic question by an examination of the relevant provisions of the NBA constitution and a juxtaposition of same with the available factual trajectory of the issue. In doing so, I will preface my intervention by, first, seeking to know whether the extant

or operative Constitution of the NBA, i.e. the Nigerian Bar Association Constitution, 2015 has been amended. This question has become pertinent in view of the reference to an “NBA Constitution as amended” in the ECNBA’s letter to Afam Osigwe and which imply that its decision was impelled by the provisions of the said amended Constitution! Truth is the ECNBA is sorely wrong on this. What is correct is that the NBA Constitution remains in the form in which it was adopted on 27th August, 2015. It has not been subjected to any form of amendment since its adoption. Therefore, it is misleading, outrightly erroneous and totally preposterous for the ECNBA to predicate its triadic reasons for the disqualification of Afam Osigwe on the provisions of a nonexisting constitution. It is not only embarrassing, it is scandalous. On

this score alone, the decision of the ECNBA is vitiated and should not be allowed to stand. But I will not dwell much on this. The provisions of the NBA Constitution, 2015, which are relevant to this discussion are sections 3, 8(4), 9(2) and Paragraph 2.6 of the Second Schedule thereof. From a global scanning of the entirety of the 2015 NBA Constitution, the foregoing are the only provisions, which are useful in the determination of the vexed issue of “qualification” to or “disqualification” from holding any national office in the NBA. Thus the next germane question is which of these provisions did the nomination of Mazi Afam Osigwe infract upon to necessitate his disqualification? Although the ECNBA was not generous enough to expressly refer to any section, it is not difficult to deduce that at the heart of the issue is the application or

proper interpretation of the provision of section 3(a) of the constitution in which the requirement of payment of practicing fees/branch dues as at when due for 3 consecutive years is enshrined. It is a notorious fact that Afam Osigwe was a member of the Abuja branch in 2016 and 2017. He was a member of that branch when he contested election as General Secretary of the NBA and remained so even after leaving office. At least we now know that Osigwe “relocated” or transferred his membership to the Nnewi branch in January this year. This fact has been corroborated by the Nnewi branch leadership who equally confirmed that Osigwe paid his branch dues and settled all other financial obligations to the branch for the year 2018 as and when due. In my view, therefore, once Mr. Osigwe has submitted to the ECNBA proof of payment

of both his practicing fees and branch dues (Abuja for 2015, 2016 and 2017) and Nnewi (for 2018), the stipulation of law in section 3(a) is satisfied. To require him to produce proof of payment of annual dues in respect of Nnewi branch for three years is, with respect, absurd and unjust. There is nothing in section 3(a) of the constitution, which makes it mandatory for a member to belong to a particular branch for 3 years consecutively before he can qualify to contest a national office. Indeed, any interpretation along this line will do violence to and stifle other provisions of the Constitution and negate its general principle or objective. Quite significantly, section 13(4) makes it possible for a member who changes his place of practice or residence to also change his branch as he desires. To be continued next week

BUSINESS DAY

Thursday 21 June 2018

FEATURE

Corporate hunt for bonds on lower interest rate There has not been much activities in the corporate bond market in the past three years due to sudden drop in oil price in mid-2014 that saw investors dump naira assets. However, the gradual economic recovery combined with the continuous drop in inflation have helped reduce bond yields thus paving the way for firms to tap the corporate bond market to raise funds for the purpose of business expansion. Bala Augie in this write up looks at the issues around the bond market.

igerian regulator is seeing record bond bonanza as companies in Africa’s largest oil producer are taking advantage of lower rates and a gradual economy recovery to raise capital. Corporate bond market has been reignited after the country exited its first recession in 25 years, thanks to a rebound in crude oil price and output and the introduction of a flexible exchange rate regime. The International Monetary Fund (IMF) is predicting an expansion of 2.1 percent this year. The gradual economic recovery saw bond yields drop while price increase as inflation rate continues to recede. “It is not surprising that there has been a rush by corporates to tap the market as rates have been lower than where they were last year,” said Olalekan Olabode, head of research at Vetiva Capital Management. “Bond yields have been down 300 basis point from where they were last year while Yields on short term securities have been dipped by 700 basis point from where they were last year,” said Olabode. Yield on 3-7-10 year bond hovers between 13.30 at 13.50 percent, Treasury bill yields hovers between 11.20 percent and 13.80 percent. The bond market remained relatively stable with yields compressing slightly by c.2bps, following some client demand on the short to medium end of the curve. Analysts expect yields to remain relatively stable at these levels with some sell pressure still witnessed on the longer end of the curve in recent sessions. C&I Leasing Plc, a finance leasing company, say its N7 billion bond issuance was oversubscribed by 133 percent, amid plans for expansion across its various business segments. The amount is part of a N20 billion bond issuance. “As you all know, this N7 billion bond issues is the first tranche of several transactions we are launching,” he said. “We had an extremely successful outing… we had 133 percent subscription to our required N7 billion. But of course as a disciplined company, we are accepting what we set out to raise,” said Chukwuma Okolo, chairman of C&I Leasing Plc. C&I raised N700 million at about 16 percent in 2016, which was below 3 billion naira it had targeted because of the high costs. Analysts are of the view that the continued fall in inflation has made it easy for firms to tap the market since inflation is a bonds worst enemy. Nigeria’s inflation drops to 11.61

percent in May for 16th consecutive month, leaving the rate less than 3 percent to fall within CBN’s single digit target range of 6 percent to 9 percent. Coronation Merchant Bank plans to issue bonds to fund its future expansion plans and retire debt. Seplat Petroleum Development Company, an indigenous oil and gas firm has priced its offering of $350 million in aggregate principal amount of 9.25 percent senior notes due 2023 as it seeks to retire some of its existing debt. The company said earlier it plans to tap the international debt market for funding with a view to managing its dollar cash flow repayment. Cement makers are aggressively hunting for bond to reduce debt and fund working capital requirement. Dangote, the largest producer of the building material in Africa’s largest economy is looking to raise $500 million from a Eurobond sale and will also issue N300 billion in local-currency bonds to refinance debt and boost expansion. “Some of them will want to refinance existing debt. There will be a lot of refinancing at a cheaper rate,” said Ayodeji Ebo, managing director and CEO of Afrivest Security. Meanwhile Nigerian banks have some $1.3 billion out of a total of $3.72 billion in outstanding Euro bonds due in the next two years and a rising global interest rate environment expected for the period may lead to higher refinancing costs.

Analysts are of the view that tighter monetary policy in the United States could potentially raise borrowing costs for banks that plan to tap the international bond markets in the future. But they add that the direction of oil price, external reserve and broad macroeconomic environment are also important determinants on pricing. Wale Okunrinboye, a fixed income and FX analyst at Ecobank says since benchmark U.S Treasury’s are trending up and there is the possibility of a rate hike, Nigerian banks may have to pay a higher risk premium to refinance maturing bonds because the market is becoming more risk conscious. “GTBank has offered to redeem

It is not surprising that there has been a rush by corporates to tap the market as rates have been lower than where they were last year

its loans while Fidelity Bank has already rolled over theirs last year. Diamond Bank may look to refinance theirs,” Okunrinboye said. “For Tier one lenders that are going to refinance, they will have to pay close to 9 percent while Tier 2 lenders will have to pay close to 10 percent given the rate at which they issued few years ago,” said Okunrubonye. Fidelity Bank a tier – two bank rated B- by S&P Global Ratings and Fitch Ratings, or six steps into junk territory, issued $400 million of fiveyear securities with a 10.75 percent yield in October 2017. Proceeds from the new Eurobond were partly used to repurchase $256 million of the bank’s $300mn Eurobond due in May 2018 (coupon 6.875%), implying new cash of $144mn and outstanding value of $44.50 million. “Fidelity was a beneficiary of the high interest rate environment that prevailed in FY17; however, we believe its Net Interest Income in 4Q17 will be pulled lower by the interest expense on its recently issued $400mn Eurobond (maturing in October 2022, coupon 10.5%). The new cash introduced from the bond raise will be used to drive trade financing activities, according to management,” Renaissance Capital analysts led by Olamipo Ogunsanya said in a Feb 5 report on the sector. Guaranty Trust Bank (GTBank), the largest lender by market value, has $276.93 million in outstanding

Eurobonds due November 8 2018 and Zenith Bank has $500 million in Eurobonds due April 22 2019. Diamond Bank has $200 million in 5 year unsubordinated unsecured Eurobonds maturing on May 21 2019 and First Bank of Nigeria Plc has $300 million in Eurobonds, maturing on August 7 2020. “I think the need for dollar liquidity has reduced considerably compared to the last 2 years, due to improved FX availability in the domestic market. So banks are not necessarily under pressure to reissue these bonds as they mature,” said Kayode Tinuoye Portfolio Manager/Head of Research at United Capital Limited. “The outlook appears positive at the moment, and should ease any pressure on pricing, especially as most of the banks have decent credit risk ratings,” summed Tinuoye. The Nigerian economy is recovering slowly from its worst slump in around 30 years, triggered by the 2014 collapse in crude prices. Ratings agencies also downgraded the Nigerian sovereign at the height of the oil shocks. However, a rebound in oil production on the back of relative peace in the Niger Delta region and the adoption of a flexible exchange rate policy that eased dollar shortages were responsible for the country existing a recession as GDP expanded by 0.55 percent and 1.42 percent in the second and third quarter of 2017, according to the National Bureau of Statistics (NBS). Nigeria’s external reserves have hit a 4 year high of $42.50 billion, according to recent data from the Central Bank of Nigeria (CBN). Benchmark sovereign bond yields have fallen to 13.10 percent as at February 2018 from 17.10 percent high of 2015 as the economy continues to improve. Ayodeji Ebo, managing director and CEO of Afrinvest Securities Limited says based on the expected rate hike by the U.S Federal Reserve, they expect that any re-issuance by banks will be more expensive. “So banks will now have to decide whether to pay off the loans as at maturity or if they have the dollar lending opportunity, they may decide to reissue new ones at the prevailing rates,” said Ebo. Since the dollar is a global reserve currency, changes in its valuation can have a tremendous impact on everything from foreign reserves at global central banks to corporate balance sheets containing dollardenominated debt. “GTBank says it will only redeem and they may not issue new ones. But Diamond Bank is bit of a worry. Recently, they issued a $200 million Eurobond,” said Okunrubonye.

Thursday 21 June 2018

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Live @ The Stock Exchange UACN gets shareholder nod to pay N1.86bn dividend Stories by Iheanyi Nwachukwu

he board of directors of UAC of Nigeria Plc got the approval of the company’s shareholders to pay a dividend of N1.86billion in respect of the 2017 financial year, representing 64.58kobo per share. UAC of Nigeria Plc is a leading diversified company, operating in the Food and Beverages, Real Estate, Paint and Logistics sectors of the economy. The company has been a foremost participant in the Nigerian economy since 1879. The shareholders gave the approval at the company’s annual general meeting held in Lagos on Wednesday June 20, 2018. At the meeting, the shareholders received and adopted the report of the directors, the consolidated statement of financial position of the company as at December 31, 2017,

together with the consolidated statement of comprehensive income for the year ended on that date, and the reports of the auditors and the audit committee thereon. The group revenue grew from N82.6billion in 2016 to N89.7billion in 2017, an increase of 8 percent. This growth was below the Group’s target of achieving growth in excess of the rate of inflation. Operating profit decreased by 19 percent, to N7.03billion from N8.6billion in 2016. Profit before tax (PBT) was down by 61 percent, from N8.3billion in 2016 to N3.2billion in 2017. Profit after tax declined sharply from N5.6billion in 2016 to N963million in 2017, reflecting the compression in the margins of the group’s operating subsidiaries. Earnings per share declined from 195kobo to 50kobo. Dan Agbor, chairman, UAC of Nigeria Plc told shareholders at the company’s annual gen-

eral meeting (AGM) that the board will begin to tackle the root causes of the company’s historical declining performance and implement initiatives to drive future profitable growth. “Specific areas of focus will be on, capital allocation and portfolio composition, human capital, operating company strategy and, most importantly, reinforcing a group-wide culture of accountability and responsibility. We will also seek to better link employee compensation to creation of long-term shareholder value,” the chairman said. “I am excited by the challenges as well as by the opportunities that lie ahead, and I assure you that your Board and the Management of your company, are well equipped to meet these challenges and take advantage of the opportunities in the Nigerian economy generally, and in our existing businesses more specifically”, he said.

C&I Leasing N7bn Series I bond issuance programme records success

&I Leasing Plc N7billion Series I bond which opened on Monday the 21st of May and closed on the 4th of June 2018 recorded a success as the issue was fully subscribed. The bond which is a five year bond will mature in December 2023. This was revealed at the issuance signing ceremony which held on Monday, 11th June, 2018 at the company’s Head Office in Lagos, Nigeria. The ceremony was attended by the Board of Directors of the Company, the Issuing Houses, Trustees and other stakeholders involved in the process. The bond which is the first series in a N20billion debt issuance programme is a Senior Secured Bond with a fixed rate of 16.54 percent and was issued at a price of N1,000 per unit. According to Efe Akhigbe, Managing Director, Planet Capital – the Lead Issuing House, “The offer was very successful be-

CHANGE OF NAME

I, formerly known and addressed as Miss Atanda Oluranti Omowummi now wish to be known and addressed as Mrs. Oderinde Oluranti Omowunmi. All former documents remain valid. General Public please take note.

cause of the track record of C & I Leasing Plc as a business with over 25 years of operations in Nigeria. The company’s investment in marine assets serving Oil and Gas Companies in various mid to long term contracts, which was attractive to investors. In addition, the timing of the issuance was instrumental to the success of the bond which was largely patronized by top pension fund managers and insurance companies.” At the ceremony, the Managing Director of C& I Leasing Plc, Andrew OtikeOdibi stated that the N7billion will largely be invested in business expansion and restructuring of the company’s debts over a period of five years therefore relieving the current debt profile on the group’s balance sheet while increasing profit margins and returns for shareholders. According to the MD, “The success of the bond is indicative of the market’s confidence in our business, they

CHANGE OF NAME

I, formerly known and addressed as Eniola Shoka Olatigbe now wish to be known and addressed as Esther Ola Bashiru. All former documents remain valid. General Public please take note.

have seen our structure, focus and consistency with corporate governance in 27 years of operations and they can tell we have a good story unfolding. There is a niche market for Nigerian businesses in the Maritime sector to serve Oil and Gas companies, but it is not enough to be a Nigerian Company. Proper structure is also very critical, and this is one of our strengths at C & I Leasing Plc”. C&I Leasing Plc has evolved to become a valuable resource and business partner for several indigenous and multinational blue-chip organizations. The company currently provides support services along three lines; Fleet Management, Personnel Outsourcing and Marine Services.

CHANGE OF NAME

I, formerly known and addressed as Edun Adijat Omobolaji now wish to be known and addressed as Omidiji Edun Omobolaji Lydia. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Oloshunde Francis Akanbi now wish to be known and addressed as Olorunde Francis Akanbi. All former documents remain valid. General Public please take note.

BUSINESS DAY

Politics & Policy

BUSINESS DAY

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Thursday 21 June 2018

Court refuses to stop Balogun-led APC Lagos faction from participating in national convention FELIX OMOHOMHION, Abuja

Fe d e r a l h i g h court in Abuja, Wednesday, refused to stop the Babatunde Balogun-led executive of Lagos State All Progressives Congress (APC) from participating in the national convention slated for Saturday, June 23 in Abuja. Justice Binta Nyako, who declined to stop the Balogun-led faction, said principle of fair hearing would be breached if the court stopped the group since one person instituted the court action. Delivering ruling in an ex-parte motion, filed by an aggrieved contestant in the May 12 Lagos APC congress, Bunmi Tayo Church, Nyako said it would be unfair to stop the participation of Lagos chapter of the party, in view of the national conven-

Former president Goodluck Jonathan and former vice president and PDP presidential hopeful, Atiku Abubakar, at Atiku’s courtesy visit to Jonathan at his country home in Otuoke, Bayelsa State on Wednesday.

tion to be held on June 23, at the Eagle Square. In declining to grant the ex-parte motion, the judge held that the plaintiff was

just one out of 1, 085 aspirants who vied for positions during the congress. Justice Nyako said that the plaintiff did not help himself

in his claims that he was prevented from participating in the state congress, adding that it is trite law that anyone who did not participate in an

Akwa Ibom assembly plans summit as last ditch effort to curb insecurity ANIEFIOK UDONQUAK, Uyo

he Akwa Ibom State House of Assembly says it will hold a security summit to find a lasting solution to the challenge of insecurity in two local government areas of Ukanafun and Etim Ekpo in which many residents have fled their communities. Besides taking refuge in neighbouring local government areas of Abak and Ikot Ekpene, scores have been killed and kidnapped as the insecurity in the two affected local government areas appears to be escalating. Checks revealed that though the ring leaders and the brains behind the insecurity in the areas have been gunned down by security operatives, the areas have known no peace. In January, the kingpin known as Iso Akpafid was killed and his body displayed at the state police headquarters followed by his second in command called stainless who was also killed , there appears to be no respite for the residents of the affected areas, not even with the deployment of a special squad by the police. The decision of the state assembly to hold a security summit appears to be the last ditch effort in restoring sanity to the area and is coming on the heels by callers on a private radio station in Uyo, the state capital demanding that

soldiers be deployed in the area. The two local government areas share a boundary with Abia State. It was repor te d that schools have been closed in the area, though this has not been confirmed. Two students of a private University in the area were kidnapped but they were later released. The state legislature is called for all efforts towards resolving the lingering security crisis and it is expected to engage heads of security agencies in the state as well as create an oportunity between stakeholders and security agencies, Onofiok Luke, speaker of the assembly was quoted as saying. The resolution for a security summit follows a matter of urgent public importance brought before the House by the lawmaker representing Etim-Ekpo/Ika State constituency, Gabriel Toby who decried the persistent activities of criminal elements who he said have made live unbearable for his constituents in Etim-Ekpo and environs. According to him, the perpetrators are allegedly involved and connected with series of crimes such as armed robbery, rape, cultism, kidnapping, unlawful possession of firearms in the area While commending the efforts of the security agencies in the state, the lawmakers expressed worry about the continued agony suffered

by the people of the affected local government areas. They urged the police and other security formations in the state to step up actions to ensure that criminal activities are thoroughly checked. The Speaker said while a lasting solution is being sought, the security Agencies in the state should ensure that the safety of citizens is guaranteed. The assembly therefore mandated its committee on Security, Youths and Sports to convene the proposed security summit while the speaker in statement hoped that summit would help in unravelling of the challenges faced by the security agencies, as well as the immediate and remote causes of the crimes. Though many have expressed doubts about the real motive behind the summit saying it is tantamount to a vote of no confidence on the executive arm of the state government, Luke however thanked the sponsor of the motion for being sensitive to the plights of his people and re-echoed the commitment of the state legislature in partnering with Governor Udom mmanuel to ensure the security of lives and property in the state. “I appreciate the member representing Ika/Etim-Ekpo for rising to the occasion, and this goes to show the disposition of the sixth assembly which is pro people and to

always bring to the fore the issues and challenges that affect both indigenes and non indigenes who are residing here or doing business in our state. “This House of Assembly understands the primary responsibility of government, which is security of lives and property. This House in the last three years has had cause to pursue this clear goal of government with vigour and without fear and favour. “This House in totality deprecate the destruction of lives and property by criminals in Etim-Ekpo, Ukanafun and its environs. We are pushing for a multilateral action for the resolution of this crisis. We will have an engagement of the heads of the security architecture with the House, and we are confident that we will help the security agencies contain the situation because the security and safety of the people is at the heart of this government’s agenda.” Corroborating the Speaker, Victor Udofia of Ikono state constituency and chairman, house committee on security youths and sports said: “No government wants to play politics with security of lives and property. It is good that we the House of Assembly ask security agencies what are their needs, what have they done so far and then find out how they are containing the situation”.

election cannot challenge the outcome of that election. The court held that plantiff, who did not participate in the May 12 APC congresses, cannot use the exparte application to challenge the outcome of the congress. Beside, the court said: “Hundreds of others who participated in the congress will be denied fair hearing if the application is granted because they (contestants) were not brought before the court by the applicant, who instituted the action in his personal capacity. “If the court wave the Congress that means all parties involved would have been disenfranchised. “It is premature to grant the application. It therefore fails because all parties involved have not been brought to the court.” As a way out, Justice Nyako ordered that the originating summon filed by the

plaintiff through his counsel, Chief Akin Olujimi, will be given accelerated hearing. However, Justice Babatunde Quadri, who read the ruling on behalf of Nyako, who was said to be bereaved, did not give a definite date for hearing of the originating summon, saying Justice Nyako will fix a convenient date. The Uche Ekwunife-led State Congress Committee had declared Babatunde Balogun as the Lagos State APC Chairman on May 12 after the election at the party’s secretariat, Lagos. Recall, a faction led by Fouad Oki, challenged the other faction of the party led by former Governor of the state, Bola Tinubu, which produced Balogun as Chairman Oki, until recently a loyalist of Tinubu, was the campaign director for Governor Akinwunmi Ambode’s 2015 gubernatorial contest.

Osunbor steps down from APC national chair race, thanks all KEHINDE AKINTOLA, Abuja

major contender for the post of the National Chairman of the All Progressives Congress (APC), former Governor of Edo State, Senator Osereimhen Osunbor, yesterday announced his resolve to stepped down from the race. Osunbor who disclosed this barely 72 hours to the APC’s National Convention holding in Abuja, explained that his decision was out of respect for President Muhammadu Buhari. In a statement issued yesterday, Osunbor noted that the decision became necessary “to avoid any rancour in our great party.” “It is common knowledge that I am vying for the position of National Chairman of the All Progressives Congress at the forthcoming national convention for reasons I stated in my press release last week. “However, after extensive discussions and consultations across the various levels in the party and amongst my family, friends and associates, I hereby issue the following statement: “Out of respect for President Muhammadu Buhari and other leaders of the party as well

Osunbor

as the need to avoid unduly prolonging the voting exercise during the national convention. “In the interest of a rancour-free national convention and to ease the work of the National Convention Committee and in the overall interest of our party the All Progressives Congress I have decided to withdraw from the race and also endorse Comrade Adams”. Aliyu Oshiomhole. “Accordingly, I hereby withdraw my candidature. “I thank all those who have expressed support for my candidature but who may feel disappointed by this development. I crave the understanding of everyone,” Osunbor said in the statement.

Thursday 21 June 2018

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BUSINESS DAY

Politics & Policy

2019: We need new polling units, but lack funds, logistics - INEC Oyekanmi, stressed that the commission had limited time to create any new polling units before the 2019 general election, adding that the commission would initiate modalities for creation of the new polling units shortly after the 2019 general election. He stressed that the creation of new units would require a change of the current permanent voters card (PVC), and a holistic review of the current voters exercise. “We have had demands for the creation of new polling units across the country and what we did was to mandate our states’ resident electoral officers to investigate how feasible this is in their states and the report was that we need them. “But the commission realised that it could not do that because we don’t have time, the general election is here and we don’t

INIOBONG IWOK

head of the 2019 general election, the Independent National Electoral Commission (INEC), has disclosed that paucity of funds and logistics have hampered any plan by the commission to create additional polling units across the country which was desirable to accommodate new settlements. Rotimi Oyekanmi, Chief Press Secretary to the INEC Chairman, Mahmood Yakubu, stated this in a telephone interview with BusinessDay yesterday, noting that the commission last year mandated its states’ Resident Electoral Officers (REC) to investigate the need for creation of 30, 000 new polling units due to increasef agitations, stressing that the report shows that the new polling units were needed.

Yakubu

have enough personnel and logistics for that. “But it is something we would do after next year’s election, because if you want to create new polling units now you need new PVCs and several other logistics we don’t have”. Oyekanmi also disclosed that the commission has registered more than nine million Nigerians in the on-going continuous voters registration exercise, adding that the commission was collaborating with several organisations, religious bodies to sensitise Nigerians about the ongoing voter registration exercise. “We have registered over nine millions Nigerians in the continuous voters registration exercise so far since we started last year, but we have realised the challenges and that is why we have step up effort by using the religious leaders and institutions to sensitise Nigerians”.

Olapade faults FG’s plan to spend N197bn to end farmers-herders crisis

APC Convention: Kwara raises alarm over alleged fake delegates’ list

...says expenditure is more of 2019 vote-catching

SIKIRAT SHEHU, Ilorin

AKINREMI FEYISIPO, Ibadan

lapade Agoro, national chairman/ Presidential Candidate National Action Council (NAC), has faulted the Federal Government’s 10-year National Livestock Plan which according to government would cost about N179 billion, saying the grand intention behind the expenditure is more of 2019 vote-catching and “or rigging that as announced plan at assuaging the politicians-induced Fulani herdsmen-farmer crisis”. According to him- “with a well laid out master plan of investment on animal production, one can beat his chest that with far less than N 179 Billion and in fact with

Agoro

about half that sum shall be able to set up a modern agro allied non hoofed, high yielding meat and milk producing cows high wool, meat and milk yielding sheep and goats ranches for the entire 36 States of the Federation”. “Thinking the plan seriously out it becomes apt pointing out that the total sum of the whole and entire hoofed cows in Nigeria cannot be up to N7 billion” he added. In a statement signed by Olapade and made available to journalists ,Olapade said “how on earth therefore can reasonable, nationalistic conscious and the Almighty God fearing persons come up with the idea of N179 billion expenditure simply meant to curb the menace of herders and farmers crisis where and when our

workers and teachers are owed salaries, factories are working under facilities utilization, power generation is producing at abysmal low level, mounting debts to foreign creditors, most roads dilapidated begging for repairs, kidnapping for ransom on the daily increase, Federal Universities and Institutions begging for developmental support and attention, hospitals not well equipped informing Muhammadu Buhari President, Commander In Chief of the Armed Forces of Nigeria, the largest country in Black Africa shamelessly spending months at undisclosed huge cost in far away United Kingdom Hospital for medical attention abusively depriving respect and honour to our best of brains and globally respected Nigerian Medical Doctors”. Olapade said spending the whooping sum is like day dreaming to curb the menace of AK assault rifles wielding Fulani herdsmen’s murderous incursions, untamed rampage and wastage of lives. The NAC presidential aspirant said “the economic interests of innocent farmers can only be seriously classified as nothing than ‘Man’s inhuman treatment of Man’ under the reckless supervision and mad house insensitive plan of the Federal Government of Nigeria throwing water into the basket”.

h e A l l P ro g re s s i v e s Congress (APC) in Kwara State has raised alarm that two different groups, led by some aggrieved members of the party were compiling fake list of delegates ahead of the Saturday national convention of the party in Abuja. The par ty in a statement signed by its certified state publicity secretary, Sulyman Buhari said it had it on good authority that the decision to compile a fake list of delegates for the convention was reached at a meeting held on Tuesday in the house of a chieftain of the party in GRA, Ilorin, the state capital. It added that it was was also aware that another group led by some Abuja-Aased politicians has procured branded buses and banners, vest and Ankara to be used by the fake delegates for the convention. The party added the group has even went to the extent of making accommodation arrangement at Wuse area of Abuja for the fake delegates. The statement reads in part:”To show how unpopular they all are, the two groups have been fishing for people on the streets of Ilorin to use as delegates and begging them to follow them to Abuja with a promise that they would be handsomely

Oyegun

paid on their returns. “As a party, we are not bothered by the evil antics of those 3-months to elections politicians. But we believe we owe it as a duty to the leadership of our party at the national level to expose the evil machinations of these politicians whose only mission is obviously to disrupt the National Convention in Abuja with multiple delegates list as against the one officially sanctioned by the party. “We like to reiterate for the umpteenth times that there is no faction in the Kwara State chapter of the APC. The APC in Kwara state is one. “ Therefore, any group or groups laying claims to factionalisation are mere jokers and dreamers who have refused to wake up to the reality that they cannot put something on nothing and expect it to stand.”

BUSINESS DAY

Thursday 21 June 2018

GARDEN CITY BUSINESS DIGEST Aveon records another high-tech breakthrough in $16bn Egina project •••As Wabote promises more jobs for Aveon’s fabrication yard in PH IGNATIUS CHUKWU

s countdown to the flag-off of the $16bn Egina oil field project gets closer, Aveon and its partners have made ready what industry insiders described as a technological breakthrough. A first-ever Nigerian made buoy capable of delivering one million barrels of oil per day has been unveiled in a part of Port Harcourt by Aveon and the main contractor, National Oilwell Varco (NOV). The contract to fabricate the buoy was awarded by Total in 2017 and Nov gave it out to Aveon as sub-contractor. Already, the $16Bn Egina Project has been speculated to be an award-winner in local content initiative and Aveon could easily become a ‘company of value’. NOV, Aveon’s partner, is said to be a global beater with 150 years experience. It is said to have brought this to bear in its partnership with Aveon to deliver this buoy. CEO of NOV, Mogens Moller, said the buoy is made of 15 tons of steel and achieved 8,000 training man-hours. “It was tested in Norway. We are building Nigerian capacity. Total’s safety policies are one of the toughest in the industry. They carry out monthly safety assessment and award exercise.” He went on, “Aveon has proved to be a very competent sub-contractor for your scope, and your workers are wonderful. This is a piece of technology and the quality is impressive. It is an oil offloading terminal, and it is an integrated piece of technology. This is a great deal for Nigerian content desires and a good idea to trust Nigerian company to fabricate this.” Also speaking at the event, John Borres Sannaes expressed NOV’s utmost

satisfaction working with Aveon Offshore, through the course of the project. “Before we decided to work with Aveon Offshore, we had a clear understanding of their high standards and their attention to details, so the decision to work with them on this project was so easy. The engineers that where engaged in the execution of this project are some of the best around and that was primarily because we wanted the best quality and scale through every QC test without any concerns.” Aveon Offshore is said to be one of the best oil-servicing firms in the country, with a focus on total clientsatisfaction that is achieved through the provision of products and services of the top-most quality, which is delivered through an unyielding firmness on safety and environmental principle, which has remained second to none. The delivery ceremony, which took place at Aveon fabrication yard, Rumuolumeni Port Harcourt, was attended by several keyplayers in the Nigerian oil and gas industry, which included prominent members of NNPC, and the Executive Secretary of NCDMB Engr. Simbi Wabote. Speaking, Aveon board chairman, Tein George, praised Total and the Executive Secretary (ES) of the Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, for showing what he called ‘overwhelming keenness’ on accomplishing local content milestones. “We at Aveon are very happy for this opportunity to deliver this very important vessel.” He appealed to the National Assembly to fast track the passing of the Petroleum Industry finance Bill (PIFB) to save investments in Nigeria. He said: “Do not allow this facility and skill already

acquired to go waste. Let the PIFB be fast-tracked to allow new projects to start in the oil region. The quick passage would allow IOCs to consider new projects for approval. Let there be clear oil and gas policy framework in Nigeria so that investors would have a complete picture with which to consider investments. I am now 30 years old in the oil and gas industry and I do not understand this situation. It is the FIB that would determine whether we make investments or not. Aveon will however continue to invest in our people and continue to maintain our facilities.” In his address, NCDMB’s Wabote said; “This is very important in the sense that it is another first by Total. Total is highly committed to Nigerian content policy of

the federal government. To them, every challenge is an opportunity. We have seen the photographs showing where Nigerians went to Norway and Norwegians came to Nigeria in order to build capacity. The strategy helped to ensure that Nigerians got maximum Nigerian content scope and compel the EPCI contractors to seek out local service companies with capacities to execute scopes, which were embarked for completion within the country.” He went on: “The Board is delighted at the completion of this package by a Nigerian service company; Aveon Offshore. It is another proof of the effectiveness of the strategy we adopted to develop local capacities and capabilities under the Egina project.

“What excites me is the success story of some of the things we pushed for. I agree that some bit of problems in certain areas where people have not seen the challenges as opportunity and they fall out. But I can tell you that on Egina project, all the trials we have done in terms of pushing the boundaries have been extremely successful. The completion of the OLT buoy is another feather to the cap of Aveon Offshore and I urge you to please keep the flag flying and improve on your corporate governance structure and let it remain that way.” He added: “We are working with NAPIMS; we have never seen the level of cooperation between NCDMB and NAPIMS this way ever before. We are working together to ensure that we get

projects through the funnel as quickly as possible. I can tell you that more projects will soon come on stream. This flagship project has given Aveon and other companies the opportunity to demonstrate their capacity since the enactment of the Nigerian Oil and Gas Industry Content Development Act.” Buhari’s deep commitment to Nigerian content policy revealed - Wabote The ES of the NCDMB used the opportunity of the unveiling of the buoy that would serve as oil terminal with capacity to deliver one million barrels of crude oil per day to reveal what he called President Muhammadu Buhari’s deep commitment to the Nigerian content drive. Wabote said: “I also wish to tell you the commitment of this current administration to enforcing the implementation of the act itself. I can proudly tell you that nothing goes to the Federal Executive Council that concerns the oil and gas sector that is not referred back to NCDMB to give their endorsement. “With the achievements so far, I believe that other projects in the funnel such as Zabazaba, Bunga SouthWest, Ekike, Owowo and others will find the capacities already developed very handy in meeting and exceeding the Nigerian Content targets stipulated in the NOLGIC Act. “I am also very happy to note that Shell has started moving with regards to the Bonga South-West project and I believe that in no time, they will launch the tendering process. Let me once again commend ‘Total Upstream Nigeria Limited’ for their excellent disposition towards the development of local content in the Nigerian oil and gas industry.”

NCDMB’s Simbi Wabote: Up, up Total; down, down other IOCs

Port Harcourt by Boat With IGNATIUS CHUKWU

arri-born Simbi Wabote seems to be not just an oil engineer of repute within the oil industry but a man with strong opinions whenever he has reason to take a position. He is now the Executive Secretary of the Nigerian Content Development and

Monitoring Board (NCDMB). On two occasions when he found himself at Aveon’s world class fabrication yard in PH to flag off two different home-made facilities for the $16Bn Egina project, Wabote raised a toast for Total and flogged other IOCs. For a man who came from Shell, many looked over their shoulders when he gave all the kudos in his bag to Total. He said at the event on September 19, 2017, “Let me promote the ideals that Total has brought about in terms of local content in the history of this country. In the Egina project, Total took risks, took every beating they could take from those naysayers who said the kind of thing Total was trying to do

was not possible in Nigeria.” Who could those ‘na-sayers’ be, we wondered. The project afforded Nigerian companies the opportunity to demonstrate their capacity and maturity since the Nigerian Content Act of April 2010. It afforded the NCDMB the opportunity to get fully involved in contract initiation and precontract award phase”. Oil industry reporters still wondered about this when their jaws dropped wider on June 13, 2018, at same venue (Aveon). Wabote came as special guest again to flag off a buoy fabricated in the same Aveon yard. He said: “Total remains at the forefront of pushing the boundaries of the local content practice and we are proud of the various

Nigerian Content achievements under the Egina project despite initial challenges. I call on other operators to adopt similar attitude in the delivery of their projects.” As we wondered who the other IOCs could be, he hit bulls’ eye: “I am happy I saw some Shell representatives, who are here and not been told, but they are seeing for themselves. I am sure they will carry the message beyond the Shell office in Nigeria to perhaps the Shell office in The Hague.” He went on: “This approach must be what can be done to comply with the law rather than looking for ways to circumvent the provisions of the law.’ Serious!. He went on; “Let me also call on other

Nigerian oil and gas service providers to deliver and finish strong on any project they are contracted to do. That is the kind of news and company you want to be associated with. I urge you to conscientiously build a profile that portrays you as a company that delivers, so that jobs will continue to come your way.” He added: “Aveon has fabricated this buoy. Aveon has a huge corporate culture. Their people do the right things. Other IOCs always claim that local fabrication yards are not up to standard and so, they choose to import. Total would rather ask, how do we work with you to meet up with standards. Aveon fabrication yard can meet standards anywhere in the world. See

the slipway of this buoy; it’s very innovative. Others only give excuses of impossibilities.” This man must have the heart of a lion. Every journalist hissed when he mentioned Shell, his former employers. Being once a Shell executive, an insider for that matter, especially the pioneer GM of Shell’s Local Content Division, those who knew his background knew this was a serious remark. He a d d e d ; “ Bu t m o st often than none, when you have people who don’t want to do the right thing, they tell you only of impossibilities.” The event ended on a note of celebration but some of us left pondering over these words.

Thursday 21 June 2018

NERC suspends Ibadan DisCo board... Continued from page 1

was granted by IBEDC from funds released to all DisCos by the CBN under the Nigeria Electricity Market Stabilisation Funds (NEMSF) for the purpose of improving the networks and reducing aggregate technical, commercial and collection losses. The Commission had earlier fined IBEDCasumofN50milliononthe18th of September 2017 for non-compliance with Order No NERC/173/2017 directing the company to fully recover the outstanding sum of N5.7bn being the balance of the loan granted by the utility to IEDMG. An examination of the financial statements of some of Nigeria’s electricity distribution companies (DisCos) indicate that they are veering dangerously close to full blown bankruptcy with reported losses of over N196.23 billion to end the 2016 financial year. This compares with a loss of N104.69 billion they recorded the previous year. DisCos in Africa’s most populous nation and largest economy are being squeezed by surging operating expenses and finance costs. The NERC had compelled the firms to post financial results on their websites. The firms are Eko Electricity Distribution Plc (Eko Disco), Kaduna Electricity Distribution Plc (Kaduna Disco), Ikeja Electricity Plc (Ikeja Disco), Abuja Electricity Distribution Plc (Abuja Disco), Ibadan Electricity Distribution Plc (IKeja Disco) Plc and Benin Electricity Plc (Benin Disco) Plc. A breakdown of the figures in the financial statement shows Eko Disco, Kaduna Disco, Ikeja Disco, Abuja Disco, Ibadan Disco, and Benin Disco recorded losses of N28.66 billion, N17.90 billion, N65.63 billion, N47.44 billion, N24.98 billion and N11.62 billion as at December 2016. Continues on wwwbusinessday online

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Italian court adjourns Shell, Eni bribery...

Buhari takes on NASS over padded 2018...

Continued from page 1

Dan Etete in what seems to be the biggest corruption scandal facing Nigeria’s oil sector. The judge is also to decide on July 20 if the Nigerian government becomes a part of the hearings as a party that suffered damages. The case involves the 2011 purchase by Shell and Eni of Nigeria’s OPL 245 offshore oilfield, one of Africa’s most valuable oil blocks with reserves of to 9.3billion barrels of crude oil and gas reserves. Eni’s current CEO Claudio Descalzi, former CEO Paolo Scaroni, and Chief Operations and Technology Officer Roberto Casula are standing trial alongside four former Royal Dutch Shell staff members including former executive director for Shell’s Upstream International operations Malcolm Brinded and two former MI6 agents Guy Colegate, a business adviser; and John Copleston, a strategic investment adviser employed by Shell for allegedly paying millions of dollars in bribes in order to acquire a lucrative oil exploration and drilling license in Nigeria. The case is likely to shed some light on the murky dealings of international oil companies to access resources, including paying governments large sums of money in exchange of securing licensing rights. Barnaby Pace an investigator at Global Witness, an independent investigative Non-Governmental Organisation (NGO) said the trial could be “a turning point” for the oil industry. “Some of the most senior executives of two of the biggest companies in the world could face prison sentences for a deal struck under their watch,” Pace added. Last month, Barnaby Pace reported that a briefcase seized from a Geneva apartment two years ago could be the key to the case. Swiss prosecutors found the

brief case during a raid for an unrelated investigation in 2016 and Pace has been trying to get it Italian prosecutors, who are prosecuting Emeka Obi, a sole shareholder of the company that acted as an intermediary between Eni and Etete. “The bag held SIM cards, Nigerian passports, a laptop and a hard drive containing more than 40,000 documents, and belonged to Emeka Obi,” according to a spokesman for the Geneva Prosecutor’s Office. After the seizure, Obi’s lawyers persuaded a Geneva judge which is yet to decide on the matter to put the contents of his briefcase under seal, citing his rights to privacy. The corruption case in Milan also highlights the role played by London in facilitating the transfer of money from oil companies to government officials. Earlier this year, a special investigation by DeSmog UK revealed how small oil and gas companies are using London’s junior stock market, the Alternative Investment Market (AIM), to finance sometimes unsavoury business activities in frontier markets across Africa. DeSmog UK’s Empire Oil investigation used the example of Sirius Petroleum, a small oil investment company listed on AIM and operating in the Niger Delta to shed some light on the exchange’s regulatory flaws and the City’s enabling role. For years, Shell had claimed that it only paid the Nigerian Government for the OPL 245 oil block. But after the joint investigations of Global Witness and UK investigative journalism group Finance Uncovered, Shell confessed it had dealt with convicted money launderer and former oil minister Dan Etete. Etete had awarded the OPL 245 oil block to his secretly owned company, Malabu, while serving as Oil Minister. Continues on wwwbusinessday online

L-R: Taiwo Oluseyi, vice president, industry, Abuja Chamber of Commer and Industry (ACCI); Abubakar Al-Mujtaba, 1st vice president; Tinuade Awe, executive director, regulation, Nigerian Stock Exchange (NSE); Adetokunbo Kayode, president, ACCI; Tonia Shoyele, acting director general; Roseline Obiageli Nwosu, vice president, mines; Johnson Anene, vice president, commerce, and Jummia Oluyode-Mohammed, vice president, women development, during the closing gong ceremony by the ACCI president at the exchange in Lagos, yesterday. Pic by Olawale Amoo

versy that has become a tradition surrendering the budget in his administration. On the 7th of November 2017, President Muhammadu Buhari submitted a budget proposal of N8.621 trillion but after more than seven months of holding unto it, the legislative returned a budget of N9.12 trillion, inflated by N508 billion. Now the controversy is if this additional amount approved with the consent of the president or not. Buhari while signing the budget, claimed that he knows nothing about the additional amounts and projects inserted in the budget, but the national assembly says he is not being absolutely honest with the truth. In his speech at the signing of the 2018 Appropriation Bill into Law at the presidential villa in Abuja, Buhari criticised the national assembly over some of the changes made in the budget claiming that they have cut down provisions for 4,700 projects that was to cost N347 billion and substituted them with a 6,403 projects of their own worth N578 billion. Because of the additions, Buhari signalled that the 2018 budget might be difficult, if not impossible to implement. “The logic behind the constitutional direction that budgets should be proposed by the Executive is that, it is the Executive that knows and defines its policies and projects. The 2018 Appropriation Bill targets to consolidate the achievements of previous budgets and deliver on Nigeria’s Economic Recovery and Growth Plan (ERGP) 2017-2020,” Buhari said. “Unfortunately, that has not been given much regard in what has been sent to me. Many of the projects cut are critical and may be difficult, if not impossible, to implement with the reduced allocation. Some of the new projects inserted by the National Assembly have not been properly conceptualized, designed and costed and will therefore be difficult to execute.” “Furthermore, many of these new projects introduced by the National Assembly have been added to the budgets of most Ministries Department and Agencies (MDAs) with no consideration for institutional capacity to execute them or the incremental recurrent expenditure that may be required.” “As it is, some of these projects relate to matters that are the responsibility of the States and Local Governments, and for which the Federal Government

Continued from page 1

Nigerian doctors head for England in renewed exodus...

reports, bringing the number of Nigerian doctors practicing in the country to 5,351. Many sources inform BusinessDay that on graduation, young doctors shun the local professional exams, opting for those that could give them leverage to practise abroad. One source who pleaded anonymity, said “the March and April Primary exams of the National Postgraduate Medical College of Nigeria, and West Africa College of Physicians, NPMCN & WACP

respectively, recorded the lowest enrolment figures ever. Rather than pay for the Primary exams, the smarter young doctors invest their money in enrolment and preparation for PLAB. “The implications of this development are as diverse as they are challenging. The more serious problem is that nobody, at any level, really cares,” said our source. The PLAB test is for doctors who have qualified overseas and wish to practise medicine in the

UK under limited registration. The test assesses your ability, as a doctor, to work safely as a senior house officer (SHO) in a UK NHS hospital. There are others such as the, United States Medical Licensing Examination (USMLE) and Medical Council of Canada Evaluating Examination (MCCEE), which also record a high level of interest from young Nigerian doctors seeking better work environments. Francis Faduyile, president,

Nigerian Medical Association told BusinessDay that when many of the specialists conclude their training, they sit for one or two exams, then leave the country for foreign destinations where he says “they are doing very well”. Ogbonnaya Igbokwe, CEO, Heartwells Group, had also remarked on the desperation of doctors to work in a better environment, saying “We are in a deep problem to say the least. Most doctors have never seen

should therefore not be unduly burdened,” the president said in his speech. The President pointed out that another area of concern was the increase in the provisions for Statutory Transfers by an aggregate of N73.96 billion by NASS. According to him, most of the increases are for recurrent expenditure at a time when the administration is trying to keep down the cost of governance. He said “an example of this increase is the budget of the National Assembly itself, which increased by N14.5 billion from N125 billion to N139.5 billion without any discussion with the Executive.’’ According to him, the provision for security infrastructure in the 104 Unity Schools across the country were cut by N3 billion at a time when securing students against acts of terrorism ought to be a major concern of government. The provision for the Federal Government’s National Housing Programme was also cut by N8.7 billion. A total of N5 billion was cut from the provisions for Pension Redemption Fund and Public Service Wage Adjustment; the provisions for Export Expansion Grant (EEG) and Special Economic Zones/Industrial Parks, which are key industrialization initiatives of the Administration he said, were cut by a total of N14.5 billion. Also the provision for Construction of the Terminal Building at Enugu airport was cut from N2 billion to N500 million which will further delay the completion of the critical project, he said. Also raising concerns was the fact that the take-off Grant for the Maritime University in Delta State, a key strategic initiative of the Federal Government, was cut from N5billion to N3.4 billion. Also, about seventy (70) new road projects have been inserted into the budget of the Federal Ministry of Power, Works and Housing. In doing so, Buhari said the Nat i o na l A s s e mb l y ap p l i e d some of the additional funds expected from the upward review of the oil price benchmark to the Ministry’s vote. Regrettably, however, in order to make provision for some of the new roads, the amounts allocated to some strategic major roads have been cut by the National Assembly, Buhari said. But in an exclusive chat with BusinessDay, a member of the Senate Appropriations Committee, Rafiu Ibrahim (APC, Kwara Continues on wwwbusinessday online

physically, most of the machines that they are required to use in the course of their practice and they have been in practice for a long time.” BusinessDay’s earlier report had indicated that the unfriendly work environment has implied health workers in Nigeria continually find every possible way to exit the country, leaving behind a health system which many in the mildest of descriptions, say is simply not working; not for the patients and not for the medical practitioners.

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Thursday 21 June 2018

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Nigerian fashion industry to deepen with N1bn BoI fund Enugu terminal to face delay over USA deports 34 SOBECHUKWU EZE & CYNTHIA IKWUETOGHU

nterested Nigerian fashion designers at the micro, small and medium scale level in search of funds for growth and expansion can now access them as the Bank of Industry (BoI) announces a N1 billion fashion fund. Last week, the BoI announced a N1 billion credit facilities for fashion entrepreneurs involved in but not limited to garments, women’s shoes, handbags and jewellery/accessories to be expanded in future. The objective of this fund is to improve financial literacy and industrial entrepreneurship development of Nigerian entrepreneurs. The fund is one of the numerous funds released by the bank for boosting businesses operating in the fashion industry. Other funds introduced over the years include - Nollywood fund, Cottage Agro Processing fund and Graduate Entrepreneurship fund. This fund is to address the major challenge faced by fashion entrepreneurs, which is the inaccessibility of credit facilities. According to an online report of an interview with a Fashion promoter and cultural ambassador, “Fash-

ion industry in Lagos is no longer a mere hobby. It has grown from being a handiwork of interest into a feasible and viable economic industry that could contribute enormously to the nation’s GDP if properly developed and channelled. Most of the designs that made waves in years past were from the creativity and genuineness of the young fashion designers.” When our analyst tried to reach the bank of industry on how previous loans have been subscribed to and if interested parties have been able to meet up with the requirements for this loan, the bank failed to give a response. However, Enakirerhi Oreva, founder of Eva Green Wardrobe, appears excited about the opportunity and is looking forward to taking advantage of this fund. According to Oreva, she hopes to meet up with the criteria as this opportunity could pave way for her. In ter ms of cr iter ia needed to access the fund, BoI says retailers would be expected to have at least one outlet where products could be displayed, while the wholesalers must have contacts with retail shops with wide scopes around the

nation. Also, distributors being the middlemen who will buy goods from the funds would have been developed in their own business. The maximum amount that can be given to a person is N30 million, of which the bank would make provision of 75 percent and the interested parties to contribute 25 percent of the fund equity. Furthermore, they are also required to pay 1 percent appraisal fee, 1 percent commitment fee, 0.125 percent monitoring fee (paid quarterly), and a 9 percent interest rate per annum, payable at the end of every month. The maximum tenure of the loan is five years, and it is payable from a maximum period of 12 months from the date of loan disbursement. Other conditions listed are: Security arrangement, Lien on stock of trade and items of equipment. The interested party is also to deposit 5 percent of the loan amount in an interest yielding joint account, opened by the company with a designated bank and with BoI as a sole signatory, notarised statement of net worth of two guarantors, and strong and reliable monthly net cash flows that can support monthly loan repayment at ratio 3 to 1.

reduction in cost IFEOMA OKEKE

resident Muhammadu Buhari yesterday said the ongoing terminal construction in Enugu airport would be delayed as a result of reduction in the cost of construction. Buhari in his twitter handle yesterday said, “The provision for Construction of the Terminal Building at Enugu Airport was cut from N2 billion to N500 million, which will further delay the completion of this critical project.” The $500 million terminal buildings in Abuja, Lagos, Port Harcourt, Enugu and Kano were said to have stalled in their initial plan of completion of the facilities in 18 months, but lack of coordination by the last administration, coupled with delay in Nigeria’s little financial commitment led to delay, according a source conversant with the entire project, but pleaded anonymity. Since 2015, several completion dates had been set for the ter minals’ completion for the Lagos and Abuja aerodrome, being the two airports with the biggest passenger traffic. While the Abuja facility has reached 80 percent completion stage, Lagos is said to be within 75 and 80 percent stage.

Nigeria and China had, five years ago, signed a $500 million loan pact for the construction of the four new international airport terminals in Abuja, Lagos, Port Harcourt and Kano. The 20-year, 2.5 percent interest loan for the project has a grace period of seven years before payment. The project was expected to have been completed a year ago, but Nigeria’s default in paying its counterpart funding had delayed it. The loans reflect the deepening economic ties between oil-rich Nigeria and China, which already is involved in building major roads and railway projects in the country. Adamu Aliero, one of the project handlers, who led the team for the terminal construction, said: “The ministry is already aware of the power and water challenges and I think that they are doing something about it. Once they bring it to the notice of the legislature, we will do the needful and give them the necessary support, because we need this building to be put to use immediately after completion.” According to Aliero, the building is 80 percent completed and what is left to be done is the finishing and the pieces of equipment to be used are already on ground.

Nigerians over several offences IFEOMA OKEKE

overnment of the United States on Wednesday sent 34 Nigerians back home for committing various offences in the country. The deportees, comprising 32 males and two females, arrived the Murtala Muhammed International Airport (MMlA), Lagos, at about 2.30pm aboard a chartered Omni Air International aircraft with Registration Number: W342AX. Joseph Alabi, spokesman of the Lagos Airport Police Command, confirmed the development to newsmen, saying, “At about 14.30 hours (2.30pm), we received 34 Nigerians who were brought back from the United States. They were made up of 32 males and two females. “ He said the 25 of deportees were alleged to have committed criminal offences; one was allegedly involved in narcotics while the others were alleged to have committed immigration-related offences.

hampering Not Too Young To Run law

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World Cup Result

Brazilian star Neymar sets new World Cup record ANTHONY NLEBEM, Reporting from St. Petersburg

In 2014, an injury-causing tackle by Colombian defender Juan Zuniga ended the 2014 World Cup for Neymar. Without Neymar, the Brazilian team went on to get destroyed 7-1 by Germany in the semi-final, marking the worst defeat in the country’s history. Neymar’s performance prompted mixed reactions on Twitter. Many fans have sent their support to Neymar, saying the referee was partly to blame. I actually agree with Lalas. Wow. That was a hack-a-shack type approach with Neymar and the ref empowered it with no deterring, @JasonLaCanfora tweeted. @BleacherReport tweeted; Switzerland was out to stop Neymar by any means. @BlazingCold; Poor refereeing. Ref needs to step in after first couple fouls and start giving cards, even for innocuous fouls. Protect ALL players, not just Neymar. There needs to be a message sent from ref to players that this is not ok.

Sweden 1 - S/ Korea lthough Brazil team failed Belgium 3intheir- Panama to beat Switzerland

A England

L-R: Abdul Bello, group chief executive officer, UAC Nigeria plc; Daniel Agbor, chairman, and Godwin Samuel, company secretary/legal adviser, at the 2018 annual general meeting of the company in Lagos, yesterday.

Mauritania, Senegal develop LNG market as Nigeria lags on infrastructure burden STEPHEN ONYEKWELU

auritania and Senegal have disposed of both political and infrastructural resources to develop their new discoveries of gas reserves, as Nigeria, Africa’s largest proven gas reserves holder, struggles with a burden of infrastructure inefficiencies. For Nigeria, infrastructure challenges have slowed down the development of its 185 trillion cubic feet (tcf) of gas reserve. The plans to build the Nigerian Liquefied Natural Gas (NLNG) Train 7 have remained on the drawing board for over eight years. ThoughpartnersintheNLNG say they hope to take a final investment decision (FID) on building the much awaited 7th train by the fourth quarter of this year, the entrance of Mauritania, Senegal and Cameroon into the LNG space should be a wakeup call. In February 2018, Mauritania and Senegal signed an inter-governmental cooperation agreement, which improves the chances that British Petroleum (BP) and Texas-based Kosmos

Energy will make a positive final investment decision (FID) on the Greater Tortue project in the coming months. Kosmos in 2015 made significantdiscoveriesinMauritaniaand Senegal, the largest of which was the Tortue field, around 15tcf of gas in high quality reservoirs. And there is more to come, with four exploration wells drilling in 2017. “For Kosmos, it was time to ask: ‘Do we keep doing what we are doing, stick to our knitting as a great explorer, or do we try and branch out and do the development ourselves?’ And they went down the road of, ‘Let’s find a really good partner to do the development,’ which is where BP comes in,” Emma Delaney, regional president, Mauritania and Senegal, said in an interview with BP Magazine. The FID for the Tortue development offshore Mauritania and Senegal will include a floating liquefied natural gas (FLNG) production unit by the end of 2018. This will be the second FLNG facility in Africa. The first in the world was Malaysia, launched in 2016, and first in Africa was Cameroon’s $1.2 bil-

lionFLNGproject,whichshipped its first LNG cargo in May 2018. Some experts have suggested a number of solutions to deal with this gas transportation challenge. For instance, one solution is to find alternative transport systems in addition to existing pipeline networks. “We can take the gas offshore and bring it onshore, re-gasification makes this possible. If you can take gas from wherever it is, freeze and reconvert wherever it is needed, then we would have solved most of these problems,” Ebi Omatsola, an international petroleum explorationist, said at an event in Lagos, recently. “Europe has about 35 re-gasification terminals. In terms of population, Europe is 192 million people; Nigeria is 195 million, yet we have none. So, we need build clusters, this involves huge capital expenditure. In this context, shuttle tankers come in handy. This requires a re-gasification plant onshore. Every city with more than one million people should have a power plant, according the International Energy Agency’s guidelines,” Omatsola said. The re-gasification terminals

can run on the plans to develop port infrastructure in Badagry, the free trade zone in Lekki and Olokolaexportprocessingzone(EPZ) in Ondo State, and these points canserveasterminals,”theformer chief geologist for Shell plc, said. The biggest single change in developing Nigeria’s gas market in a hub for West Africa’s energy has been infrastructure, as some recent events have shown. September 2017, Ghana signed a memorandum of understanding with Russia’s Gazprom for gas supply, again because the pipeline infrastructure for the West African sub-region is inefficiently run. “The gas that will come from Russia to Ghana’s regasification plant will cost $12 per standard cubic feet (Scf). I can put gas at $3 per Scf into the West African Gas Pipeline if it were efficiently managed and with an extra cost of $2 per Scf for transportation cost I can deliver gas to Ghana at $5 per Scf, less than half of what the Russian gas will cost,” Austin Avuru, CEO of Seplat, a Nigerian oil and gas exploration and production company, said.

Reforms: Chinese ambassador projects boom in growing Edo-China relations … state discloses $500m auto plant deal with Chinese investors

hinese government has pledged to deepen its growing relationship with Edo State government through direct investment and other initiatives to leverage the business friendly environment that has been created by the Governor Godwin Obaseki-led administration in the state. The Chinese ambassador to Nigeria, Zhou Pingjian, made the pledge during a visit to the Edo State governor in Benin City, the state capital. Pingjian expressed his delight at the state’s steady progress in diversifying her economy through industrialisation, and commended the administration for opening its doors to Chinese investors. He disclosed that he had been looking forward to visiting Edo State following the positive

feedbacks from Chinese investors that had been operating in the state. Earlier this month, the state government disclosed a $500-million auto assembly plant deal with Chinese investors. The auto assembly plant deal followed similar investments in the Benin Industrial Park, the Benin River Port project in Gelegele by Chinese companies, which will add to the existing ceramic and steel companies owned by Chinese investors. “My impression of the state is that this is one state that welcomes investors. The Edo State government under Governor Godwin Obaseki has shown that Chinese companies have a place here,” he said. The ambassador announced the award of scholarship to 47

brilliant students of Edo origin, to mark the 47 years of diplomatic relations with Nigeria. The scholarship, which he christened October 1st scholarship, derived its name from the day both Nigeria and China got their independence. “We want to remind our students that China and Nigeria share so many things in common, that are responsible for the strong bond between us,” he said. According to Pingjian, the visit of President Muhammadu Buhari to China in April 2016, expanded the scope of the relationship between Nigeria and China that paved the way for a more robust relationship between both countries, adding that his country is interested in promoting the cooperation programme between both countries.

“By September a Forum on China-Africa Cooperation (FOCA) will be held in Beijing, China, and it will be a major opportunity to boost our cooperation at all levels while in November, China is going to hold the first ever China international import export exposition in Shanghai,” the ambassador said. Obaseki assured his guests that his administration would continue to leverage its existing relationship with China, which had given birth to several deals and commitments to invest in developmental projects in the state. “We have good relationship with our Chinese brothers in Edo State particularly the private Chinese investors. There are over five Chinese companies in the state that have invested over $100 million in various sectors,” he said.

first group game of the 2018 FIFA World Cup in Russia, Neymar has set yet another record with the most fouls received since 1998 edition of the tournament. Football fans took to twitter to claim that the Brazilian icon should be protected. In Sunday’s 1-1 draw with Brazil, Switzerland committed 19 fouls. The 26-year-old star striker received as many as 10 of them, more than any other player in the last 20 years since the 1998 World Cup in France, when England’s Alan Shearer was fouled 11 times by Tunisia. It is also the most fouls suffered by a Brazilian player in a World Cup match since 1966, when Portugal’s rough tactics led to the legendary Pele being kicked out of the tournament. Neymar’s ability often makes him a target of rough defenders.

2 - Tunisia

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Eagles in need of a miracle to qualify for round of 16 ADEROJU JONATHAN, DAVID IBIDAPO & DAMILARE ASIMIYU

ollowing a 2 nil defeat of the Super Eagles by Croatia in Nigeria’s opening game at the World Cup, Africa’s most populous nation needs more than a miracle to get 4 points in their two games in order to qualify for the knockout stage of the World Cup. The path of the Super Eagles has been set, to likely follow past occurrences in previous World Cup games, which they had participated. The odds are now against them as history has shown that

their qualification has been largely determined in the first match performance of the World Cup. In the 1994 World Cup games hosted by the USA, Nigeria was placed in the same group as Bulgaria, Argentina and Greece, where Nigeria won their first match and went ahead to qualify. In 1998 World Cup hosted by France, Nigeria was paired with Spain, Bulgaria and Paraguay where they also won their first game against Spain and went ahead to qualify from the group stage.

1994 Nig 3 vs Bul 0 Nig 1 vs Arg 2 Nig 2 vs Gre 0 qualified for round of 16 1998 Nig 3 vs Esp 2 Nig 1 vs Bul 0 Nig 1 vs Par 3 qualified for round of 16 2002 Nig 0 vs Arg 1 Nig 1 vs Swe 2 Nig 0 vs Eng 0 did not qualify for the round of 16 2010 Nig 0 vs Arg 1 Nig 1 vs Gre 2 Nig 2 vs Kor 2 did not qualify for the round of 16 2014 Nig 0 vs Iran 0 Nig 1 vs Bos 0 Nig 2 vs Arg 3 qualified for the round of 16

Thursday 21 June 2018

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NEWS

FG issues executive order on removal of VAT from air transport, others IFEOMA OKEKE

L-R: Shehu Aliyu, regional head, retail banking, north, FirstBank; Aisha Bubaram, group head, commercial banking, north, FirstBank; Abdullahi Ibrahim, executive director, public sector, FirstBank; Friday Oke, technical adviser, Vision Spring Nigeria, and Ismail Omamegbe, head, corporate responsibility and sustainability, FirstBank, at a partnership launch between FirstBank and Vision Spring on providing vision screening and eye glasses for low-income earners in commemoration of the 2018 Corporate Responsibility and Sustainability Week.

57% of Africans lack access to electricity - Aggreko MIKE OCHONMA

n estimated 57 percent of the African population does not have access to electricity, the largest of such concentration in the world. This is as the pace of electrificationinAfricahasnearlytripled since 2012, relative to the previous decade, with electrification in sub-Saharan Africa surpassing population growth for the first time in 2014. Making this disclosure to delegates attending the Africa Energy Forum in South Africa, Chris Weston, CEO, Aggreko, lamented that, there was still a long way to go to realise continental electrification. Weston highlighted progress towards bridging that gap, including through the establishment of the Impact Hub, in Kigali,Rwanda,whichlaunched a nationwide search for new solar energy solutions. Further, in Nigeria, the government has outlined plans to deploy 10,000 new microgrids. Weston noted clear trends in energy that include the move towards renewables. “Between 2000 and 2012, there were 3.5-million people who enjoyed renewables-basedpowerinsubSaharan Africa. “Between 2012 and 2015, this increased dramatically to around 18-million people, particularly from large-scale hydropowerandgeothermalsources.” He added that much of the policy and economic focus had been on renewables over the last few years, and with good reason. “The cost of renewables continues to drop and energy storage is maturing – which, in turn, increases the utility of renewables solutions.” Renewables, taken in the contextofasecondtrend,namely decentralisation, will have a big impact on Africa’s energy mix, said Weston, noting that power is increasingly being generated exactly where it is needed, which means the need forcentralisedpowergeneration from large-scale power plants delivering base-load through national grids is decreasing.

Another $20bn investment opportunity may elude Nigeria ... as activities on Ogidigben gas revolution park stall OLUSOLA BELLO

he inertia that has characterised President Mohammadu Buhari-led government towards the Ogidigben Gas Revolution Industrial Park (GRIP) in Delta State may make Nigeria lose about $20 billion private sector investment opportunity. Low level activities or lack of it currently on the side of the government are sending mixed signals to investors as to when the project will be set in motion. This is invariably delaying investments and putting the country at a risk of losing over 4 million jobs and more than 150,000 direct and indirect jobs that could possibly come along with the project during construction. Industry analysts are worried that if the government fails to act fast it will be like the same fate that has befallen the oil and gas industry, where international investors frustrated by government’s inaction over the handling of the Petroleum Industry Bill (PIB) decided to turn their back against the country and invest their money in other climes that are more investment friendly. The economic importance associated with the project made the former President Goodluck Jonathan to perform the groundbreaking of the project on March 26, 2015, after securing the con-

sent of a lot investors across the world that have agreed to set up businesses in the park. The cost of the project then was put at $16 billion. However, the last time this current government decided to visit issues relating to the project last year more investors had shown interest with the potential investment from them peaking at $20 billion. The gas city will serve as the regional hub for gas-based industries. With the country’s abundant natural resources, Nigeria should be among the most industrialised nations in the world. It is expected to be developed by a consortium comprising the GSE&C of South Korea, the China Development Bank, Power China, and several other global operators from Asia and the United Arab Emirates. Sources close to the project say that apart from the slow action of the government that is affecting the project, there are other issues that are affecting it and they must be resolved before the project can effectively take off. One of the issues is the ethnic rivalry between the Ijaws and Itsekiris over the location of the project. David Ige, former executive director, Gas and Power at the Nigerian National Petroleum Corporation (NNPC) alluded to this at the last Nigeria Gas As-

sociation Forum (NGA) when he said: “One of the problems we had while inaugurating the project was the constant conflict between the two major ethnic tribes that are dominate in the area over where the project was to be sited.” He said after Julius Berger had cleared over two kilometres of 2,700 hectares at the park designed for fertilizer, methanol, petrochemicals, and aluminium plants, this major investment had to be stopped based on this rivalry. Aside these, the rivalry between the Nigerian Port Authority (NPA) and Nigeria Export Processing Zone Authority (NEPZA) over who has control over the site was also frustrating the projects. The issue of gas supplier to the industrial park is yet to be resolved despite the fact that Chevron Nigeria Limited appears to be one of the major oil and gas producers close to the project. The gas producers have not agreed on gas price. The industrial park would be a cluster for several industries in one location benefiting from an efficient, costcompetitive and abundant supply of natural gas, proximity to a deep sea port and centralised utilities, and services such as uninterrupted power, world-class telecoms service and processed water.

African Athletics Championship: Obiri, Yego battle for Asaba 2018 ticket

thletics Kenya is set to host a three-day selection process to pick her representatives to the 21st African Athletics Championship to be staged in Asaba, Delta State. Kenya’s javelin star Julius Yego and world 5,000m champion Hellen Obiri are among the elite athletes eyeing a return to the African Athletics Championships having missed out in the 2016 edition in Durban. It is understood that only the top two athletes in each discipline will secure automatic tickets to representKenyaattheAsaba2018. The championships will run

from August 1 to 5, and will feature athletes from every one of Africa’s 54 countries. Speaking in Nairobi, Yego said he had gained tremendous ground since returning to action after he battled groin and ankle injuries that saw him lose the world title last year in London. “I have returned to action and managed to throw the javelin over 80 meters twice in Ostrava and Finland. Now the focus will be to make the Kenya team, compete in one more Diamond League event and head to Nigeria to try and win the Africa title,” he said on Tuesday However, for Obiri, the attrac-

tion of competing at the Athletics World Cup in Ostrava, the Czech Republic in September is what motivates her to return to the continental championships. Four years ago, she made the cut, but ultimately failed to win the 1,500m race. “In my two previous appearances at the Africa Championships, I always competed in the 1,500m race. This will be my first time at the Africa Championships as a 5,000m athlete. In 2014 I won the 1,500m title in Mauritius but did not manage a podium finish during the World Cup,” said Obiri on Tuesday in

he Federal Government has issued an Executive Order for the removal of Value Added Tax (VAT) from “All Forms of Shared Transportation,” which we believe includes air transport. The Airline Operators of Nigeria (AON) appreciated President Muhammadu Buhari for listening to the cries of domestic airlines in the country by issuing an Executive Order for the removal of VAT from “All Forms of Shared Transportation,” which includes air transport. Nogie Meggison, AON chairman, said: “We as Nigeria have been crying out for decades now for discussions on the immediate removal of VAT from domestic air transportation in line with global best practice, but we have barely been heard over the years. VAT is an added burden on our passengers who have limited disposal funds and have reached their elastic point in this difficult time in the nation’s economy. “This adversely affects the sector by reducing the number of those who can afford to travel by air due to high fares in this tough economic time. This has been shown to be true according to a recent report from the Federal Airports Authority of Nigeria (FAAN) that passenger traffic dropped by 27% in 2017 and by another

7% in the first quarter of 2018 making it a total of 34% drop in passenger traffic within a span of one year.” Furthermore, he noted that: Domestic Air transportation in Nigeria is the only mode of commercial transportation that pays VAT. Road, rail, marine and even foreign airlines operating in Nigeria don’t pay VAT in their home country or in Nigeria with reference to an information circular by the Federal Inland Revenue Service (FIRS) which grants them VAT exemption (Information No.: 9701; Circular Dated 1st Jan. 1997); Part L (b) No. 8. VAT on commercial air transportation is a huge departure from what obtains worldwide and an increased burden on the Nigerian travellers. Ghana, Benin Republic, Togo and Cote d’Ivoire located next door to us have all abolished VAT for air transportation. He said the recent decision by the Federal Government to remove VAT from Domestic Air Transportation will go a long way to bring succour to groaning Nigerian travellers to be able to afford to travel by air and the growth in demand for domestic air travel will lead to the creation of jobs by the whole air transport service chain (airlines, airports, ground handlers and catering companies) as well as increase revenues for government.

New investment opportunities beckon on Lagos waterways … as state concessions Ikorodu terminal, operators begin test-run cessionaire, operators and JOSHUA BASSEY passengers,” said Emmanuel. aterways are throwThe managing director ing up new opportu- explained that the test-run nities for investors, operations from the termias Lagos State has conces- nal, which commenced on sioned the long completed Tuesday, June 19, would run multi-million naira state- till the end of this month, of-the-art Ikorodu ferry ter- adding that majority of boat minal. operators in the state had Already, boat operators already signed an agreement have commenced test-run with the concessionaire, and operations from the terminal set to roll out. to connect different destinaEmmanuel believed that tions across the state. the commencement of opLagos, Nigeria’s smallest erations from the Ikorodu state by landmass, contains terminal would add to inabout 25 percent of water crease ridership on the Lagos that offers huge investment waterways which is currently opportunity in water trans- put at 2.2 million passenger portation. But this has been per month, and also attract largely untapped, as the state new investors who will want still currently depends, over to take advantage of the high 98 percent, on road to move concentration of people witha population well over 21 mil- in the Ikorodu axis, most of lion people, leading to heavy whom gravitate to the island gridlocks and an estimated in the morning and return in economic loss of $45 million the evening. monthly. While it takes an average Damilola Emmanuel, of 25 minutes to connect Vicmanaging director, Lagos toria Island from Ikorodu usState Waterways Authority ing the waterways, a journey (LASWA), who confirmed the by road could go for as long concession of the terminal to as two hours. BusinessDay on Wednesday, The Ikorodu terminal is said the conssionaire, Eguus, one of the major ferry termiwill be managing the terminals built by the state govnal for a period of 25 years, ernment in the bid to open subject to renewal if their up the water transportation performance was considered sector to new investments satisfactory by the authority and encourage ridership on (LASWA). the waterways. “They are to remit yearly Other terminals include to the state government an Osborne terminal close to the agreed percentage of funds Osborne Foreshore Estate, generated. The concesion Ikoyi, Ebute-Ojo ferry termiis renewable based upon nal, close to Volkswagen area satisfactory performance as in Ojo local, while the Mile assessed by the authority 2 terminal was in 2017 con(LASWA) and stakeholders’ cessioned to Crowns worth feedback. But more impor- Nigeria Limited, to local firm, tantly, the concession is ben- on Build-Operate-Transfer eficial to the authority, con- (BOT) agreement.

BUSINESS DAY

Presidential Committee on AfCTA consultation report ready this week HARRISON EDEH, Abuja

ederalGovernment’stechnical committee on widening stakeholders’ consultation onAfricanContinentalFreeTrade Agreement(AfCTA)isexpectedto submit report of its findings this week, BusinessDay learns. Okechukwu Enelemah, minister of industry trade and investment, gave the information on Tuesday in Abuja, after a closeddoor meeting of the Presidential Committee on AfCTA. Enelemah in a statement issued directed the technical drafting group led by Chiedu Osakwe, the director-general of the Nigeria’s Office for Trade Negotiation, to ensure the draft report on the stakeholders’ wider consultations was ready this week for onward transmission to the President. It would be recalled that the Presidential Committee charged with the responsibility of widening consultations on the framework agreement establishing the AfCTA initially met on April 4, 2018, during which it reviewed the substance of the AfCTA and received an update on the legal status of the AfCTA. The meeting followed a directive by President Muhammadu Buhari on stakeholders’ wider consultations before Nigeria signs the AfCTA to ensure maximum benefitsfortheNigerianeconomy. Nigeria made last minute withdrawal on March 21 in Kigali, the Rwandan capital, at the African meeting of Heads of States and Governments on signing of the AfCTA, citing inadequate stakeholders’ consultation before committing to the pact, forcing stakeholders to raise eyebrow on government’s seriousness. Vice President Yemi Osinbajo had in recent industry stakeholders meeting in Lagos assured economic watchers that Nigerian government was not pulling out onsigningtheAfCTA,butconsulting with stakeholders to ensure Nigeria reap maximum benefit.

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NEWS Stakeholders urge Lagos to invest in basic education SEYI JOHN SALAU

oncerned stakeholders in the basic education sub-sector in Lagos State have urged the state government to invest more in basic education by ways of intervention to improve the overall educational outcomes in the state. The group, comprising parents and guardians, retired civil servants, members of School Based Management Committees, Parents’ Forum, Community Development Associations (CDAs) and Civil Society Organisations (CSOs), however commended the Lagos State Universal Basic Education Board (LSUBEB) on the implementation of the year 2015 Universal Basic Education (UBE) projects across the state, as a timely intervention towards the development of basic education in Lagos. With support from Human Development Initiatives (HDI) and USAID Strengthening Advocacy and Civic Engagement (SACE) project, the group embarked on a monitoring tour of UBE projects in Lagos State following the release of the year 2015 Lagos SUBEB Action Plan by the UBE and subsequent approval from Lagos SUBEB to monitor UBE projects in the state. Toyin Pender, a member of the independent monitoring group while speaking at a press conference said the aim of the monitoring exercise was to track the utilisation of UBE grants in Lagos State. “We attest to the fact that we visited all projects sites captured in the action plan for real-time monitoring between November, 2017 and March 2018, and submitted details of findings from our monitoring activities to HDI,” Pender said.

Nigeria needs N295bn to fix 4.1m meter deficit - Discos

States’ domestic debts increase Nigeria’s debt by 4.5% in Q1 2018

RAZAQ AYINLA, Abeokuta

BUNMI BAILEY

igeria’s total public debt as of March 31, 2018, stood at N22.7 trillion or $74.3 billion, according to the Debt Management Office (DMO) report released Wednesday. This represents a marginal increase of 4.5 percent from N21.7 trillion in December 31, 2017. The increase was largely accounted for by the increase in the Domestic Debts of States and the Federal Capital Territory (FCT), as well as the $2.5 billion Eurobond issued in February 2018, whose proceeds were still being deployed to redeem maturing domestic debt. “It is not significant and there is no cause for a crisis. But seri-

xecutive director, Association of Nigerian Electricity Distributors (ANED), Sunday Oduntan, says about N295 billion will be required by all the electricity distribution companies (Discos) to cater for identified 4.1 million energy meters deficit. This is if the perceived abnormalestimatedenergybillingsusually complained of by consumers are to be properly addressed. The spokesperson of all 11 Discos in Nigeria says credible andaccuratepopulationcensusis indispensable at this trying period of nationhood, if adequate and constant electricity generation, transmission and distribution are to be guaranteed. He says government and private sector efforts on power may be a mirage if there is no provision for credible head count. Speaking at a stakeholders forum organised by the Ogun State House of Assembly, tagged, “Estimated Billings, Inability to Provide Pre-Paid Meters, Erratic Power Supply by IBEDC and Non Compliance with National Electricity Regulation Commission (NERC)” held in Abeokuta on Wednesday, Oduntan said Nigeria must generate between 20,000 and 180,000 megawatts of energy to fight epileptic power supply, saying everybody must be involved to ensure stable and adequate power supply.

ously I thought it was going to reduce because they would use some of the proceeds of the Eurobond to clear some of the domestic debt,” Bismarck Rewane, managing director, Financial Derivatives Company, said on phone. According to the DMO, the debt figures show that the implementation of the debt management strategy that entails an increase in the external debt stock through new external borrowing and the substitution of high cost domestic debt with low cost external debt, is achieving the desired results in several areas among which are: The share of the External Debt Stock in the Total Public Debt rose to 30 percent as at

March 31, 2018, compared to 17 percent in 2015, 20 percent in 2016 and 27 percent in 2017. A decline in market interest rates from 13 – 14 percent p.a. in December 2017 to 11 – 13 percent p.a. in Q1 2018 due to the redemption of N279.67 billion of Nigerian Treasury Bills (NTBs) using some of the proceeds of the $2.5 billion Eurobond issued in February 2018. While the redemption of NTBs made more funds available to banks for lending to the private sector, the decline in Interest Rates implies lower cost of borrowing for the private sector. Thus, the Government is actively enabling the private sector through the instrumentality of financial markets, to play a leading role in economy.

World Refugee Day: Edo harps on global action, synergy to curb refugee crisis

do State governor, Godwin Obaseki, has called on global leaders to join hands in building structures to provide support for people forced to flee from crisis and other forms of social and economic issues that cause dislocation from homes. Thegovernor,whosaidthison the occasion of the commemoration of the World Refugee Day, marked every June 20, by the United Nations and its various organs, stressed that support should be provided for refugees so that they don’t succumb to the harsh

conditionsofforcedresettlements, such as malnutrition, poverty and all forms of rights’ abuse. The governor said the rising cases of refugees within Nigeria and across the world is an indication of the need for governments to strengthen institutions to protect and provide for conditions necessary for inclusive development. He noted, “On this day, we are reminded of the need to shun ideas, practices and agendas that promote strife, violence and crisis, all of which are conditions that

force people out of their natural settlement and seek refuge elsewhere. “In Nigeria, we have had to contend with the issues of Internally Displaced Persons as a result of the insurgency in the Northeast. The imperative to continue to support our fellow countrymen cannot be overemphasized and in Edo State, we have extended a hand of support to the IDPs in the various camps built in the state to shelter them and we will continue to make provision for them.”

OPEC, Sahara Group, others to chart future of petroleum at Vienna seminar

ahara Group will join world leaders and other stakeholders to underpin the importance of collaboration in safeguarding the future of oil at the Organisation of Petroleum Exporting Countries (OPEC) 7th International Seminar scheduled to take place from June 21 -22, 2018 in Vienna, Austria. Sahara Group is one of the frontline participants at the OPEC seminar, a position that reinforces Sahara’s thought leadership role and its commitment to facilitating conversations that will bolster the sector with key considerations for transparency, market balance, safety and environmental protection. Thematically speaking, the 2018 edition mirrors the subject of the first OPEC International Seminar held in September 2001, which focused on sustainability within the sector. This year’s theme, “Petroleum - Cooperation for a Sustainable Future”, will be discussed by over 800 delegates, including 100 ministers, chief executives, leading scientists and energy experts. Speaking ahead of the event, TopeShonubi,executivedirector/ co-founder, Sahara Group, stated: “Sustainability may be more crucial to the future of energy than any other field. Since OPEC was formed in 1960, we have con-

tinued to witness the impact of energy sector market forces on global socio-economic and political outlook. This all important conference provides a platform for the most influential stakeholders to discuss the sustainability of oil through the bonds of global cooperation.” Shonubi said it was imperative for all stakeholders in the sector to embrace the quest for delivering petroleum products in a manner that aligns with global best practice for safety. “At Sahara Group, it is always safety first for us; safety for consumers and of course, the environment. This is what provides the foundation for the sector’s sustainability as we continue to seek new frontiers for expansion and alternative energy sources.” OPEC’ssecretarygeneral,Mohammad Sanusi Barkindo, said the Organisation was delighted to receive the support of Sahara Group and other stakeholders, adding, “The support of our valued sponsors such as the Sahara Groupisabsolutelyvitaltothesuccess of OPEC’s 7th International Seminar. I have no doubt that they will make an immense contribution to this historic event. We are very appreciative to Sahara Group and all other corporate sponsors of the 7th OPEC International Seminar.”

President Muhammadu Buhari signing the 2018 Appropriation Bill into law at the Presidential Villa in Abuja, yesterday. Standing with him are: Suleiman Kawu, senior special assistant to the president on National Assembly Matter (House); Ibn Na’ala, representing of the Senate president; Ita Enang, senior special assistant to the president on National Assembly Matter (Senate); Vice President Yemi Osinbajo; Danjuma Goje, chairman, Senate Committee on Appropriation; Ado Doguwa, representing of speaker, House of Representatives; Abba Kyari, chief of staff; Boss Mustapha, secretary to the government of the federation, and Udoma Udo Udoma, minister of budget and national planning. NAN

Clearing agents accuse Apapa Customs of late cargo examination AMAKA ANAGOR-EWUZIE

learing agents operating at the Apapa Port have accused officers of the Nigeria Customs Service (NCS), Apapa Area 1 command, of late cargo examination. John Oboh, a representative from the Presidential Enabling Business Executive Council (PEBEC), said recently that Customs officers do not come to office on time for examination of cargoes. Speaking on joint physical examination of goods at the ports, hepointedoutthatsomeCustoms officers do not come to the office on time, saying for instance, “an examination billed for 12 noon does not start till about 2pm.” Confirming this, Emeka En-

welu, Apapa chapter chairman of the National Council of Managing Directors of Licensed Customs Agents (NCMDLCA), said examination of cargoes at Apapa had gone down from 300 to 200 containers per day due to the officers’ attitude to work. “Customs officers come for examination around 12pm - 1pm daily; that is the actual time they come for examination, and we have said so much on the need for them to come early for examination, and for us to get our cargoes outingoodtime.Instead,wespend awholedayonexaminationbefore coming the next day for release. That is not trade facilitation, except they can start by 10am as advised by the government,” he said. AccordingtoEnwelu,thedelay

experienced makes it difficult for clearing agents to get their cargo examine and release the same day. He said agents were forced to return the following day for the release of their consignments, therebycausingincreaseinstorage charges. “If Customs conducts examinationandwritethereport,wecan getourcargoes,butwhentheystart late they find it difficult to write the report because the whole day has already been wasted. “If they start by 12noon, they can never cover up. They used to do 300 containers but now it is less than 200 containers per day because of the three-hour delay by customs examination officers.” Chijioke Ebuka, another clear-

ing agent, urged the Federal Government to ensure that customs adhere strictly to the implementation of the executive order. He also stated that delay experienced at the examination bays affect the number of cargoes released daily. “Doing away with delay is part of the vision of PEBEC, but the Apapa Customs officers are making the gains disappear. We want officers to come in good time so that goods can be released same day after examination.” Nkiru Nwala, the command publicrelationsofficer,whorefuted the claims, said the examination bays were not owned by the Customs but the terminal operators, just as there were other federal agencies involved in the cargo examination process.

Thursday 21 June 2018

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BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

CSU attacks Merkel’s eurozone budget concession to Macron Criticism of German chancellor adds to tension between coalition partners GUY CHAZAN AND CLAIRE JONES

he Bavarian sister party of German chancellor Angela Merkel has attacked her agreement with French president Emmanuel Macron on creating a eurozone budget, opening up a new front in the escalating conflict within her conservative bloc. Markus Söder, premier of Bavaria and a senior figure in the state’s Christian Social Union, a close ally of Ms Merkel’s Christian Democrats, in effect accused the chancellor of trying to buy the support of other EU countries over the issue of asylum seekers by making them financial promises. He said Berlin should not “try to use German payments to arrive at certain solutions”. “We can’t now launch additional shadow budgets or try to soften the currency’s stability,” he told reporters. At a summit outside Berlin on Tuesday, Ms Merkel and Mr Macron agreed to set up a eurozone budget, which they said would strengthen economic convergence within the single currency area. It was one of a number of reform proposals first set out by Mr Macron last year, aimed at overhauling and strengthening the EU. But many in Ms Merkel’s CDU/CSU bloc fear such a tool would lead to bigger financial risks for German taxpayers. There was, however, cautious backing from Ms Merkel’s CDU parliamentary group. Eckhardt Rehberg, spokesman of the CDU/CSU parliamentary group for budgetary policy, said it was in line with ideas Ms Merkel had already put forward for deepening the single currency area. However, he added that “a lot is still unclear and must be spelled out in greater detail — such as how big the budget will be and how big Germany’s contributions will be”. Though there were few details on the eurozone budget, the fact that Ms Merkel accepted the concept at all was seen as a big concession to Mr Macron. In exchange, Mr Macron offered his support on the issue of asylum seekers, saying France was prepared to do a bilateral deal with Germany to take back some refugees turned away at the German border.

The issue is at the heart of a rumbling dispute between the Bavarian CSU and Ms Merkel’s CDU that last week flared up into a full-blown crisis. The row began when Ms Merkel rejected a proposal by Horst Seehofer, the interior minister and CSU leader, to give German border police powers to turn away refugees who had already ap- The CSU’s Markus Söder, left, in effect accused Angela Merkel, right, of trying to buy the support of other EU countries over the issue plied for asylum in other EU countries. of asylum seekers Ms Merkel said the move would trigger a “domino effect”, endanger the Schengen passport-free area and ultimately undermine the “whole project of European integration”. She Sweetened deal comes as it tries to fend off competing Comcast bid has instead called for a pan-European networks, including FX, and its over Disney’s prior offer. Fox noted ERIC PLATT solution to the asylum issue. stakes in pan-European media that its merger agreement with The two parties called a truce on alt Disney raised its bid group Sky and streaming television Disney, which includes standard Monday when Mr Seehofer gave the no-shop provisions, allowed the for some of the most provider Hulu. chancellor two weeks to strike bilatDisney would also assume Fox’s Fox board to evaluate competing prized assets of Twentyeral deals that would allow for rejected nearly $14bn of outstanding debts, bids. asylum seekers to be sent back to the First Century Fox by nearly $20bn lifting the enterprise value of the “We are extremely proud of the on Wednesday, as an intensifying EU countries where they had first been businesses we have built at 21st bidding war with rival Comcast transaction to $85.1bn. registered. “The acquisition of 21st Century Century Fox, and firmly believe The EU will hold a mini-summit pushed the value of the businesses on Ms Merkel’s initiative this weekend put up for sale by Rupert Murdoch Fox will bring significant financial that this combination with Disney value to the shareholders of both will unlock even more value for to discuss the matter. Mr Seehofer has to more than $71bn. Walt Disney said it had agreed companies, and after six months shareholders as the new Disney warned that he would unilaterally enforce his new policy if Ms Merkel fails to with Fox to both increase its offer of integration planning we’re even continues to set the pace at a dyreach satisfactory deals with other EU and include a cash component more enthusiastic and confident in namic time for our industry,” said states. The chancellor said that would worth $35.7bn, above a competing the strategic fit of the assets and the Mr Murdoch, executive chairman infringe on her powers, a hint that she $65bn all-cash bid from US cable talent at Fox,” Disney chief execu- of Fox. tive Robert Iger said. Disney shares were up about 2 would be forced to sack Mr Seehofer group Comcast. The new deal values the assets per cent in pre-market trading in if he went ahead. Such a move could The deal would include the 21st trigger a split between the CDU and Century Fox movie and television at $38 a share, which Fox charac- New York, while Fox shares rose CSU, and bring down a government studios, a collection of Fox’s cable terised as a “significant increase” 5.23 per cent. that has only existed for three months. At Tuesday’s meeting, Ms Merkel said she expected to win support from her CDU/CSU parliamentary group for all the agreements reached during Refugees would have only a ‘marginal impact’ on EU jobs markets if shared around the bloc the summit. been rejected were to remain il- pan-European response to the miBut some officials were sceptical. DELPHINE STRAUSS legally, inflows of this magnitude gration crisis, even as politicians in “Personally I’m concerned that the esearch by the OECD has would be “totally manageable” Austria, Italy and her own coalition asylum issue is now being linked to suggested refugees could in aggregate, according to Jean- issue calls to turn refugees back at the question of eurozone reform, since distort the jobs market for Christophe Dumont, who leads the borders. the two things are happening in parallower-skilled workers in a small OECD’s work on migration. In the past, big flows of refugees lel,” said one official. “And that could In Sweden, Austria and Ger- have generally made little differmake it even harder to get it through group of European countries, highlighting what is at stake for many, countries that have received ence to wages or employment for the CDU/CSU.” Meanwhile, some economists EU member states as they grapple higher numbers of asylum seekers native workers, the OECD notes. expressed disappointment with the with how to deal with migrant relative to their population, they However, there is some evidence results of the Merkel-Macron summit. numbers. could increase the working-age — albeit heavily disputed — of Vítor Constâncio, a former vice-goverThe recent influx of refugees population by at least 1 per cent a short-term impact on groups nor of the European Central Bank, said would have only a “marginal” imby 2020. already at the margins of the laon Twitter that while there were “a few pact on European labour markets But the inflows would increase bour market, for example on high positives on defence and migration”, if the EU could agree on a mechathe number of young, less-educatschool dropouts in Miami when on economic and monetary union the document that emerged from the sum- nism to spread their numbers ed men more significantly — by 10 the Mariel boatlift brought large more evenly across the bloc, the per cent in Sweden, 18 per cent in numbers of Cuban refugees into mit was “not fit for purpose”.

Walt Disney raises offer for Fox assets to $71.3bn

OECD warns of migrant impact on northern Europe

Pope hits out at Trump administration’s child migrant policy Pontiff castigates populist leaders around the world for creating a ‘psychosis’ around immigration described the US crackdown as “imJAMES POLITI

ope Francis has criticised the Trump administration’s policy of forcibly separating children from their parents at the US-Mexico border, as he blasted populist political leaders around the world for creating a “psychosis” around the issue of immigration. In an interview with Reuters, the 81-year old Argentine pontiff said he supported recent statements by the US Catholic bishops conference that

moral” and “contrary” to the values of the Church. “It’s not easy, but populism is not the solution,” the Pope said. The remarks by Pope Francis — who throughout his five-year papacy has consistently spoken of the need to welcome refugees and migrants — add to the chorus of outrage at the US policy, which involves the arrest of adults crossing the Southern border illegally, while taking their children Continues on page A6

OECD research shows. But in reality refugees are disproportionately likely to be young, male and less-educated, and concentrated in a handful of countries, where the OECD says their arrival could have a much bigger impact on certain segments of the labour market. The surge in inflows of asylum seekers since 2014 is likely to increase the number of working age refugees in European countries by up to 1.2m by 2020, the OECD said in its annual report on international trends in migration. This net effect would amount at most to an increase of 0.36 per cent in the working-age population. Even if a similar number of asylum seekers whose claims had

Germany and more than 20 per cent in Austria. Because refugees often take years to make their way into regular employment, the impact on the labour force of young, less-educated men is likely to be smaller, but the OECD said it could lead to a net increase of 15 per cent in Austria, 14 per cent in Germany and 9 per cent in Sweden. Since this group is already struggling, any worsening of their job prospects as a result of migrant competition would have a big impact on public perceptions of refugees, the OECD warned. The analysis, published on Wednesday, underscores the scale of the challenge facing Angela Merkel, who is fighting to forge a

the US in 1980. More recently, the arrival of almost 2m working-age Syrians in Turkey has had a clear effect on the informal economy in the south-eastern cities where most have congregated. Women, young people and low-skilled workers in particular have been pushed out of employment. There is a clear read-across to Italy’s large informal economy, where many migrants work in construction, cleaning and domestic service. However, the OECD argues that governments must shoulder their responsibilities by offering support for the less-educated men in their own populations as well as helping migrants to integrate.

BUSINESS DAY

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Thursday 21 June 2018

NATIONAL

US consumers poised for impact of Trump’s China tariffs Republicans mindful of political fallout from raising prices for everyday goods SHAWN DONNAN

hen the Trump administration last Friday announced a $50bn list of Chinese imports targeted for tariffs, it stressed that it excluded “goods commonly purchased by American consumers such as cellular telephones or

televisions”. But as Donald Trump escalates his trade spat with Beijing by threatening tariffs on a further $200bn in Chinese imports and pursues possible automotive tariffs, the US president may find it difficult to repeat this pledge.

So far, with the already imposed steel and aluminium tariffs and the initial China list, the Trump administration has largely focused on raw materials and components. Its target has been supply chains and the impact upon US consumers has been indirect. Yet proposed tariffs on the

$191bn in new cars and light trucks that US consumers bought from overseas last year, and a new $200bn round of import taxes aimed at China would have a more direct impact on US consumers. Asked on Tuesday how the Trump administration planned to avoid hit-

Combative Salvini seizes control of Italy’s political agenda

Pope hits out at Trump administration’s child migrant... Continued from page A5 away to separate government facilities. On Tuesday, Tom Donohue, the head of the US Chamber of Commerce, the biggest business lobby group in the US, denounced the practice. “This is not who we are and it must end now,” he said. Pope Francis’s comments will not only resonate in the US but also in Europe, including in Italy, where a new populist government has taken a tough line on immigration, recently turning away a rescue boat carrying nearly 630 migrants. “I believe that you cannot reject people who arrive. You have to receive them, help them, look after them, accompany them and then see where to put them, but throughout all of Europe,” Pope Francis said. The Italian backlash against immigration is being led by Matteo Salvini, the head of the far-right League and the country’s new interior minister, who has attacked the Pope and Church officials for being too welcoming towards refugees. The pontiff, however, said European populists were creating a “psychosis” over immigration, and warned that Europe needed immigration as it faced a “great demographic winter”. “Some governments are working on it, and people have to be settled in the best possible way, but creating psychosis is not the cure,” Pope Francis said, adding: “Populism does not resolve things. What resolves things is acceptance, study, prudence.” The Pope’s renewed emphasis on protecting refugees and migrants is increasingly at odds with public opinion in Italy, where large chunks of the electorate — including practising Catholics — have embraced Mr Salvini’s crackdown. Mr Salvini — who is aligned with conservative clerics within the Church opposed to Francis’s vision of a reformed, more open Church — has been rising in the polls partly by arguing that immigrants are threatening Italians’ security, jobs and access to social services. As well as denying rescue boats access to Italian ports, Mr Salvini has vowed to deport thousands of illegal immigrants after detaining them in closed facilities. Pope Francis has clashed with Donald Trump on immigration ever since the 2016 US presidential campaign, when the pontiff celebrated mass on the Mexican side of the US border. Catholic clergy in America have led the charge against the new enforcement policy. “Forcibly separating children from their mothers and fathers is ineffective to the goals of deterrence and safety and contrary to our Catholic values,” said Joe Vasquez, the bishop of Austin and chairman of the US Conference of Catholic Bishops, in a statement on June 1. “Family unity is a cornerstone of our American immigration system and a foundational element of Catholic teaching,” he added.

ting consumers with higher prices as part of its trade fight with Beijing, Peter Navarro, a senior White House trade adviser, pleaded good intentions. “What we’re trying to do here is simply defend ourselves against Chinese economic aggression and bring about structural change,” he said.

League chief eclipses senior coalition partner with anti-immigration

JAMES POLITI

Recep Tayyip Erdogan is trying to finesse a shift from a parliamentary model of government to a presidential one © Reuters

Why Turkey’s election matters for its democracy and for investors The president will assume sweeping powers if he wins as the economy continues to suffer LAURA PITEL

urkey will go to the polls on June 24 for snap elections that could radically alter the nation’s future direction. President Recep Tayyip Erdogan brought polling day forward by almost 18 months in the hope of securing an easy victory in both parliamentary and presidential contests that will take place on the same day. But a flagging economy and an energised opposition have shaken up the campaign, with polls suggesting a close finish. What is Turkey voting on? President Recep Tayyip Erdogan is not only asking for five more years after a decade and a half in power. If he wins, Turkey will also complete a transformation from a parliamentary model of government to a presidential system. The role of prime minister will be abolished and sweeping powers will be placed in the president’s hands. Mr Erdogan says the system will bring stability and prosperity to the nation of 81m. Opposition candidates say it would be the final nail in the coffin for Turkey’s beleaguered democracy. All sides agree that June 24 will be a turning point. So Erdogan is going to win, right? Not necessarily. It might be more complicated than that. Polls suggest that the ruling Justice and Development Party (AKP) and its allies could struggle to win a majority in parliament. Mr Erdogan might be forced into a second round of the presidential race, which would take the form of a head-to-head contest between him and one other candidate on July 8. Most analysts think he would win the run-off. But he would prefer to win outright in the first round to avoid taking any risks. Why is the AKP struggling? Mr Erdogan and his centre-right, socially conservative AKP remain the leading political force in Turkey. But

the party has struggled to sustain its 2011 peak, when it won almost 50 per cent of the vote. Some voters have been put off by Mr Erdogan’s authoritarian tendencies and his adoption of a harsh nationalist stance in recent years. Studies suggest that the party has lower support among young people who, unlike their parents, do not remember the days before the AKP, when pious Muslims — who make up the bulk of the party’s core support — complained of restrictions on religious dress as well as social and economic marginalisation. There are also concerns about the economy, with a lira that has lost a fifth of its value this year, double digit inflation and youth unemployment of 18 per cent. What about the opposition? Sunday’s election is different from previous polls because Turkey’s usually fractious opposition has united. Secularists, Islamists, Turkish nationalists and Kurdish rights campaigners are working together to try to prevent the AKP from winning a majority in parliament. At the same time, Muharrem Ince, the presidential candidate for the long-derided Republican People’s party has outperformed expectations with a combative, witty and energetic campaign that has put the Turkish president on the back foot. He is seen as the most likely challenger to Mr Erdogan if there is a second round. In that scenario, his opposition rivals have suggested they would rally round him. Most analysts still believe, however, that Mr Ince would struggle to beat him in a head-to-head. Does it matter for Erdogan if he wins the presidency but doesn’t control parliament? Experts are divided on this. According to the rules of the new system, it does matter. MPs have the power to propose, alter and block legislation, including the budget, and

grant or deny permission for foreign military interventions. Some analysts say Turkey could face gridlock if the opposition has a majority. But others believe that, in reality, Mr Erdogan would find a way around the issues. One of the arbiters of any disputes, the constitutional court, is widely seen as under his sway. AKP officials have suggested that they could call fresh elections to regain parliament if necessary, although this would also be complicated under the new rules. Mr Erdogan might instead seek to peel off parts of the opposition bloc, either as part of a formal coalition or on a vote-by-vote basis. Will the election be free and fair? Opposition parties say the campaign has been deeply unfair. It has taken place under a state of emergency, imposed following the violent attempted coup of July 2016, that allows restrictions on public gatherings. The media is dominated by progovernment outlets that devote hours to Mr Erdogan’s speeches and rallies while giving little or no time to his rivals. Selahattin Demirtas, the presidential candidate for the pro-Kurdish Peoples’ Democratic Party (HDP), is campaigning from behind bars, where he is awaiting trial on terrorism charges that he denies. Mr Erdogan’s rivals have also said they are worried about fraud on polling day. Civil society activists are working to ensure they have observers on every ballot box to guard against that possibility. What does this all mean for the economy? Whoever is in charge of Turkey one month from now will have numerous challenges on their plate, with the economy at the top. Turkey is seen as one of the most vulnerable of all emerging markets at a time of shifting global sentiment.

atteo Salvini heads the junior coalition partner in the populist government that took office in Italy on June 1. Yet the leader of the far-right League has seized control of the political agenda — eclipsing the anti-establishment Five Star Movement led by Luigi Di Maio, which won nearly twice as many votes in the March elections but is struggling to project its voice in power. This week, Mr Salvini — the new interior minister — captured the spotlight as he launched a broadside against Italy’s Roma population, calling for a “census” to determine which of them should be deported. The move overshadowed a visit by Giuseppe Conte, prime minister, to Berlin to meet German chancellor Angela Merkel. “I’m moving straight ahead,” Mr Salvini wrote on Facebook on Tuesday, as he faced criticism that he was fuelling ethnic discrimination. “Italians and their security come first.” Last week, he dominated the headlines by denying the Aquarius migrant ship access to Italian ports, forcing it to reroute to Valencia in Spain. The move triggered diplomatic clashes with France and Malta and accusations that Rome was defying international law and ignoring rights. But Italian voters were firmly on his side: according to a survey by Demos published on Monday, 58 per cent supported the decision. Another poll by SWG the same day showed the League narrowly overtaking Five Star as the most widely supported political party in the country, with support of just over 29 per cent compared to 17 per cent in the March election. “Salvini is able to impose himself because immigration is the prevailing theme and he has a clearer political platform,” says Luca Comodo, a pollster at Ipsos in Milan. “While the League is rising rapidly, Five Star is tending to decline.” Mr Salvini’s soaring influence could signal an even more unpredictable and boisterous executive in Rome than expected given that he holds more radical views, and has a more unorthodox style, than the Five Star leader. Concerns are rising that Mr Salvini’s confrontational, Trump-like grandstanding could extend to policy areas other than immigration as Italy prepares for a pivotal EU summit at the end of the June. Asylum policy and eurozone reform are due to be thrashed out. Tensions are surfacing with Five Star lawmakers, who are beginning to fear that he could cannibalise their vote share. “From foreign policy to migrants, from economic to social policy, we are hearing just one voice: that of the head of the League,” said Claudio Tito, a columnist at left-leaning daily La Repubblica. Last week, it was Mr Salvini who nearly forced the cancellation of a

Thursday 21 June 2018

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Chinese defaults: the absentee guarantor State support for issuers, real or assumed, can prove disturbingly unreliable

hina’s dream is to restore its ancient greatness. A debt crisis is one way that dream could unravel. Bond investors are therefore fretting at rising defaults. State support for issuers, real or assumed, can prove disturbingly unreliable. Two groups have defaulted in the past month: China Energy Reserve and Chemicals Group; and a subsidiary of CEFC China Energy. The first had trumpeted state backing to the market. The second had emphasised its lack of political connections. Back in January their three-year bonds yielded about 5.5 per cent, an unexceptional 2 percentage point premium to comparable government bonds. It is rare that companies emphasise their links to the state explicitly. An implied party blessing enhances their creditworthiness. But a private sector culture is seen as dynamic. True ownership is often hard to ascertain. Naturally, businesses exploit the ambiguity. Private conglomerates HNA and Anbang enchanted bankers and investors, in part because of rumours about party links. Both are now shedding assets.

Analysts at Morgan Stanley count a total of Rmb20bn ($3bn) of domestic bond defaults in the year to date. That represents a sharp acceleration compared with last year. But the ratio of defaults to outstanding bonds is a mere sixth of the global default rate of 1.2 per cent last year. Given the official push to reduce leverage, a spike in struggling creditors is to be expected. Almost all of the defaulting companies this year nominally belonged to the private sector, compared with two-thirds in the three years to 2017. The risk of corporate defaults will remain elevated this year. Aside from the regulatory tightening, the economy is slowing. But it is in better shape than two years ago, when markets were last hit by a sell-off. A debt meltdown is therefore a nightmare fast dispelled by daylight. Foreigners lured to China by the emerging markets fashion may learn a more nuanced lesson. Tread warily when a private sector entrepreneur starts bragging how well he knows the party secretary.

Grocery delivery specialist Ocado will become ‘the Microsoft of retail’, says Peel Hunt BRYCE ELDER

erkeley missed out on a FTSE 100 rally after the housebuilder posted a slightly sharper than expected 16 per cent decline in second-half revenue and said the market remained “subdued” in London and the South East. Berkley’s pre-tax profit for the full year rose 15 per cent, better than the consensus forecast thanks largely to joint ventures, and its long-term targets were nudged higher. “The company has now passed peak earnings for this cycle,” said Davy, the stockbroker. “Despite the material fall in earnings, the company has flagged this well ahead of time, and a return to more normal margins (18-20 per cent) is now expected.” Sirius Minerals, the developer of a polyhalite mine project in North Yorkshire, led the FTSE 250 gainers after announcing a take-or-pay agreement for the fertiliser. Intercontinental Trade DMCC Dubai agreed a seven-year deal to buy up to 350,000 tonnes of polyhalite annually, as well as securing exclusive marketing rights into Nigeria. Liberum called the news “a small incremental positive for Sirius” because it means the group has secured binding agreements in place for 4.7m tonnes of fertiliser a year, against a target of 6m-7m tonnes to satisfy lenders as part of stage-two project financing. In the US, Starbucks dropped after warning overnight that sales in the US and China had disappointed. Global same-store sales were up just 1 per cent for the fiscal third quarter due in part to the timing of promotions in the US, said Starbucks, which responded by promising more innovation and slowing its unit growth as well as boosting

shareholder returns. Slowing Chinese sales played “only a very small role in the miss (we estimate only circa 10 per cent of profits) but deceleration was a negative surprise, and believing in the long term opportunity in China is important to the long-term thesis,” said Morgan Stanley, which downgraded Starbucks to “equal weight”. Cost control, margin improvement and capital returns will play larger roles in the Starbucks story than in the past, suggesting the stock deserves a 25 per cent discount to its trailing five-year average relative valuation, Morgan Stanley said. US broadcasting stocks gained after Disney sweetened its takeover bid for 21st Century Fox assets to $38 per share, from $28 per share in December. Comcast, which has offered $35 a share for Fox, also edged higher. Walgreens Boots climbed on demand from tracker funds following news that it would replace General Electric in the Dow Jones Industrial Average. Sellside Stories Peel Hunt raised its target price on Ocado to £17, repeated “buy” advice and called the grocery delivery specialist “The Microsoft of Retail”. “It doesn’t happen very often, but we believe Ocado Solutions has potential to become the standard platform for retail logistics across all sectors as the operating system of retail,” said Peel Hunt. “Whilst the company is currently focusing on exclusive contracts within the food retail vertical, we would advocate an eventual shift in its focus towards becoming the open industry standard; just like the Windows operating system, which has more than 80 per cent market share as it didn’t restrict itself to just IBM manufactured computers.”

New York regulator fines Deutsche Bank $205m Penalty comes in connection with its foreign exchange trading business KADHIM SHUBBER

eutsche Bank will pay $205m for violations of New York banking law stemming from its foreign exchange trading business, the New York Department of Financial Services said on Wednesday. The fine is part of a consent order agreed after the regulator found “improper, unsafe, and unsound conduct” in the bank’s foreign exchange business between 2007 and 2013, when Deutsche Bank was the largest

forex dealer in the world, DFS said. “Due to Deutsche Bank’s lax oversight in its foreign exchange business, including in some instances, supervisors engaging in improper activity, certain traders and salespeople repeatedly abused the trust of their customers and violated New York State law over the course of many years,” said Maria Vullo, financial services superintendent, in a statement. The DFS said Deutsche Bank forex traders used online chat rooms to attempt to manipulate currency prices and benchmark rates. Some traders

attempted to manipulate prices by making large trades before and during the window when they were fixed, a practice called “jamming the fix”, according to the DFS. A spokesperson for Deutsche Bank said the settlement was fully covered by its existing provisions. “Deutsche Bank is pleased to resolve the NYDFS’ investigation into historical practices relating to its FX business and that the NYDFS has recognised our extensive cooperation and remediation,” said the spokesperson.

Tribunal knocks FCA over pursuit of senior managers in Libor probe CAROLINE BINHAM

he UK financial watchdog has been taken to task by a tribunal for its apparent attitude to pursuing senior managers over the Libor rigging scandal. The Upper Tribunal, which hears legal challenges to actions taken by the Financial Conduct Authority, said in a decision on Wednesday that it found “troubling” a suggestion that senior managers were not being pursued because they were not in the UK or that they were not implicated by readily available evidence. The tribunal was deciding a case brought by Arif Hussein, a former junior sterling rates trader at UBS, the Swiss bank that paid more than $1.5bn to settle Liborrelated penalties. The FCA wanted to ban Mr Hussein on the grounds that he was reckless. He challenged that decision at the tribunal, arguing that the regulator had scapegoated him, relying on incomplete evidence and doing a “cosy deal” with the bank. The tribunal dismissed Mr Hussein’s case. It found that he had not acted dishonestly

or without integrity in relation to internal UBS messages that were the key evidence in the FCA’s case. However, it did find that he had misled not only the watchdog but also the tribunal so recommended a ban for a period of time. “We should, however, add that there are other aspects of this case which are troubling,” the decision reads. “Mr Hussein was a relatively junior trader at UBS and he was put under investigation in relation to a limited number of chats which took place over a very short period. This was against a background of widespread manipulation of Libor within UBS for which senior managers bear ultimate responsibility and which, as shown by the Final Notice was widely condoned.” It cites an explanation by the FCA’s lawyer during the tribunal about why senior managers at UBS were not investigated, in which he said it was often because they were not in the UK or “the senior people somehow manage to keep their fingerprints off the relevant documents sometimes”. The decision continues: “It is hoped that the observation

referred to above is not a true reflection of the Authority’s attitude to pursuing senior management either in this jurisdiction or elsewhere when it is necessary to do so.” Mr Hussein said in a statement on Wednesday that he did not ever seek to personally manipulate Libor. “I welcome the Judge’s serious criticism of the FCA’s decision to pursue me but not the senior managers, whom he described as bearing the ‘ultimate responsibility’ for Libor manipulation at UBS,” he said. “I ask the FCA to observe the Judge’s findings and investigate and bring to account those senior managers at UBS and reconsider its policy of pursuing only the most junior, impecunious and vulnerable.” The remark will be a boon to another former UBS trader embroiled in the Libor scandal, Tom Hayes. He became the first trader in the world to be convicted by a jury over Libor manipulation and is taking his case to the commission that hears alleged miscarriages of justice. He has consistently alleged that senior managers knew of and condoned his behaviour.

BUSINESS DAY

Thursday 21 June 2018

BUSINESS DAY

Opinion

IK MUO Ik Muo, PhD. Department of Business Administration, OOU, Ago Iwoye, Ogun State

f Prof Utomi agrees to supervise me, I will go for another doctoral degree on Institutions and Economic Development and write my thesis on The mediating effect of political activities on the perceived effectiveness of EFCC with the key hypothesis as: There is a significant and positive relationshipbetweenpoliticalactivities and the perceived effectiveness of EFCC. I have peeped into the bag with the proverbial eye of an elder and I can declare without equivocation subject to my supervisor’s concurrence, that the above topic is researchable and that it will contributeimmenselytoknowledgein the field of governance and politicaleconomy.Butthat’sbytheway. On 4/3/07, the Lagos Justice, Peace and Development Commission, invited me to speak on EFCC: Democracy’s best friend or worst enemy, as a part of its 2007 Annual Week. For those who might have forgotten, OBJ established the EFCC in 2003 to

STEVE JOHNSON, Johnson is with the Financial Times

uring a private meeting at April’s Commonwealth summit in London, Australia’s representatives were keen to push the oft-repeated message that the “Lucky Country” has now chalked up a record-beating 26 yearswithoutarecession,surpassing the previous tally held by the Netherlands. Not so, shot back Pravind Jugnauth,primeministerofMauritius, who pointed out that the Indian Ocean island state has gone an impressive 37 years without a recession and had its eyes on becoming only the second highincome country in Africa. Annual economic growth has notdippedbelow1.6percentsince the 1980s, as seen in the first chart — in a country with a population growth rate of just 0.6 per cent (albeit this was higher in the 1980s and 1990s). As a result, real per capita GDP (at purchasing power parity, 2011 dollars) has quadrupled from $4,529 in 1980 to a projected $20,404 this year, according to the IMF. This took the nation of 1.3m people from 82nd in the world in terms of income per head to 53rd, based on countries included in the 1980 data (eg not including the post-Soviet or post-Yugoslav states that did not exist in 1980). Mauritius’ rise has been impressive, considering “it doesn’t have any natural resources apart from its beaches,” in the words of Ian Matthews, head of business development at Bravura, a Mauritius-headquartered boutique investment bank. Indeed, James Meade, a Nobel Prize-winning economist, wrote in the 1960s that “it is go-

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NEWS YOU CAN TRUST I THURSDAY 21 JUNE 2018

EFCC and Politrics: As it was in the beginning…! underline his declaration that it would no longer be business as usual in the war against corruption. But as at 2007, there was a consensusthatEFCChadderailed largely because it redefined its mandatetobecomethekoko(key player) in the political landscape. It was involved in impeachments, disqualification of candidates, and determination of the kind of leaders Nigeria needed. It also appropriated judicial powers and becameanarmoftheamorphous presidency.TheEFCCbecamean impeachmentconsultantandenforcerinBayelsawherelegislooters served impeachment notice on the Governor General of Ijaw nation from EFCC cell in Lagos; in Joswhereonly6wereempowered to impeach the governor, in Ekiti whereitendedupinstateofemergency and in Adamawa where it failed to click. The EFCC also did a lot of summersaults and suffered from selective amnesia especially as it affected the probe of IBB, the number of corrupt governors which was as the spirit directed, screening of political aspirants, whether Ebeano Nnamani was corrupt or not, and whether to act only on petitions, on allegations or as directed. Of course its star war was against Atiku, which extended to his tenants, classmates, his newspaper vendors and just anybody.Inarrowlyescapedbeing probed just because I went on an excursiontohisAmericanUniversity of Nigeria in Yola. The EFCC’s recordonruleoflawwaswoefulas

it detained people as it pleased (or as it pleased the master), treated court orders with contempt, convicted people whose cases were notevenincourtandworseofall,it was an illegal offspring as it started operations before it was legalized. Italsobecameshortorlongsighted depending on who was involved. Thus it did not notice the COJA contracts, El-Rufai’s indictment by the NASS, petitions against Kwankwso, or the embarrassing 3rd term bribery. Its list of death (a list of banned politicians) showed EFCC at its best: there were many versionsofthelist;somealreadyin court for corruption were not on the list while some not yet charged to court made the list, including those indicted by OBJs panel even while the courts had not made pronouncements.Ofcourse,Atiku was the numero-uno on the list, which formed the basis of INECs questionable disqualifications andthepoliticalrigmaroleof2007. In the aforesaid 2007 paper, I called some witnesses, including Senator Nnamani who declared that the war against corruption waslopsided,warningthat nocorrupt politician is more important than the other!; Human Rights Watch which declared that the anti-corruption efforts had lost much of their credibility because theEFCCselectivelyindictedsome candidates and not others whom it has acknowledged as meriting investigation; Vincent Obia who reminded us how EFCC radar eludedAndyUba,despitehisconfessions that money was illegally

deployed to rig elections in AnambraState(SundayIndependent ,3/3/05) and peter Clever Opara who drew a parallel between the houndingrolesofNapoleon’sdogs as he strived for unfettered power in the Animal Kingdom and the role of the EFCC in subverting the laws of the land to please its master?(SundayIndependent11/2/07 pB12). Other witnesses included Abukakar Tsave who argued that since the politicians did not follow due process in their lootocracy, there was no need for EFCC to follow due process in dealing with them but advised Ribadu to talk less, work more and leave the job of pronouncing his victims guilty to the courts(TheNews, 26/6/06); Atiku Abubakar who lamented that while EFCC claimed it was investigating Jefferson, the name did not appear at all in its final report while he ( Atiku) was mentioned 19 times, concluding that ..EFCC has become a willing tool in the hands of my traducers! (TheNews, 2/10/06,p22). The Sun condemned the undue bravado and arbitrariness which the EFCC has brought to bear on its job… as it has expanded its operational horizon… prosecutes and passes judgments… and noted particularly that it was relying on the PTDF report which had been set aside by 3 courts..(TheSun Editorial,12/2/07) Femi Adesina was the Editor in chief then . Chief Umezeoke, Chairman of Buhari’s ANPP accused the EFCC of being pliable tool in the hands of the ruling party, drawing global atten-

tion to the conscienceless double standardinwhich GoodluckJonathan, no 9 in the original EFCC list was eventually forgiven and canonized,anaccusationendorsedby ANPPwhenitdeclared that EFCC has been turned into a haunting dogagainstPDPopponents(Vanguard, 8/2/07,p15). In the opinion of The Nation, the EFCC turned itselfintothepolicemandetailedto goafterthepresidentsenemies...Its harshest criticism was for Ribadu who carried his functions with messianic airs and carriage of a monarch who has the power of life and death…highly unmindful of the dictates of the law (Editorial, 22/3/07) With all these evidences, I indicted EFCC for leaving the economic/financial field and positioning itself in the 18 yard box of the political pitch, creating the indelible impression that it was an instrumentofpresidentialwarfare, engaginginself-destructivedouble talks, forgetting some issues while working overtime on others and forming an unholy alliance with INEC. I concluded that EFCC had done more harm to the political process; heightening the political tension and polluting the usually troubled political waters and that it could therefore not be a friend to democracy! That was in 2007 11 years later and as we enter another electoral season, I was reminded of my 2007 paper by the recentstatement(22/5/18)of Victor Uwaje, special anti-corruption investigator, that he was fired for refusing to go after Atiku, Saraki,

Wike, and Ekweremadu . This surely sounds similiar? EFCC has suddenly become very active again, with some of its regular customers like Patience Jonathan, Shakarau, Jang and Olisa Metu who handcuffed like dangerous and unrepentant criminal. It has also decided to conduct a forensic examination of OBJs power projects just because PMB asked: where is the power ( and this is 11 years after it had probed OBJ). EFCC also has newer customers like Eze Iyamu, Lucky Imasuen, Gamawa, and Yaro. But before then, Lai Mohammed, usurping thepowerofthejudiciary, released alistoflooters,includingthosewho areyettobeaccusedandexcluding Mrs Madueke, the Government had been haranguing for the past three years,. Uzor Kalu who is on trial and Lawal, the grass-cutter who had been sacked on account of corruption. Of course, the PDP released its own list and it is left for the reader to compare the two lists. It is also alleged that EFCC has deployed its operatives to intimidate and harass contractors handling projects in some PDPcontrolledstates.Wearenowinthe era of politics of arrest( Comrade Odeyemi 18/6/18) or according to PDP, a police state where any Nigerian, who holds a divergent view to PMBs 2019 re-election bid, becomes endangered.. Note: the rest of this article continues in the online edition of BusinessDay@https:// businessdayonline.com/

Mauritius goes 37 years without a recession, leaves a lesson for Nigeria and rest of Africa ing to be a great achievement if [an independent Mauritius] can find productive employment for its population without a serious reduction in the existing standard of living,” adding that “the outlook forpeacefuldevelopmentisweak”. VS Naipaul, Nobel laureate for literature, was equally dismissive. “Two Nobel Prize winners said it was going to fail, there is too much ethnicdivision,theyareinthemiddleoftheocean,theyhavenothing to offer anybody,” said Charles Robertson, chief economist at RenaissanceCapital,anemerging market-focusedinvestmentbank. Yet development has been so strong that Joseph Stiglitz, a leftleaning former chief economist of theWorldBank,coinedthephrase the “Mauritius miracle” in 2011, writing that it had built “a diverse economy, a democratic political system, and a strong social safety net,” and that 87 per cent of Mauritiansowntheirownhomes,pointedly adding that “many countries, not least the US, could learn from its experience”. Of more relevance might be whether there is anything other emerging countries, particularly those elsewhere in sub-Saharan Africa, can learn from Mauritius’ example. At independence from the UK in 1968, the mainstay of the economy, as in many poorer countries, was agriculture, specifically the sugar industry. Mauritius started to industrialise and diversify its economy in the 1970s, abandoning a policy of import-substitution that failed, in part, due to the small size of the domestic market. Instead, it embraced exports, with an ambitious export processing zone act that fast-tracked approvals for exportfocusedmanufacturers,according to analysis by the World Bank. Mr Robertson noted that

many other African states have still not prioritised export industries (which tend to be the most productive) to this extent, an approach that could benefit the likes of Nigeria, although the latter does at least have the benefit of a large domestic market. Mauritius’ industrialisation and export push was founded on the textile industry, a relatively low-skilled sector that involved converting imported fabrics into finished goods. “A lot of people talk about the tourismsidebutthebiggestindustryistextiles,”saidMrMatthews.Simultaneously,though,thecountry embarkedonapushtoimproveits human development indicators, preparing the ground for a move up the skills chain. School enrolment rates were raised, life expectancy jumped from62in1970to74.6today,infant mortality fell from 64 per 1,000 live births in 1970 to 10 and the Gini coefficient, a measure of income inequality, dropped from 0.50 in 1962 to 0.36 (ie closer to perfect equalityof0),evenasthismeasure has risen in many countries. This improvement in the quality of its workforce paved the way for Mauritius to move into higher-skilled, higher-value added sectors, such as business process outsourcing and financial services Mr Robertson, who has extensively researched the links between countries’ literacy rates and their subsequent ability to develop, said: “You need to get to 70 per cent literacy to industrialise. This happened in the 1970s, and [Mauritius] then moved on to financial services in the 1980s and 1990s. “That has got them to be the third-richest country in Africa,” behind only the Seychelles, another Indian Ocean island state,

and Equatorial Guinea, although in the case of the latter so much of the income is grabbed by a kleptocratic elite that the bulk of the population still lives in abject poverty, rendering its high GDP/ capita somewhat meaningless. Mauritius is “an example for Africa of how you can be written off when your literacy rate is sub70 per cent but it doesn’t take long forthingstocometogether,maybe a decade”,Mr Robertson added. “They are a good 50 years ahead of some African countries. Ethiopia still hasn’t got the literacy rate Mauritius had in the 1950s. Some countries are three generations behind,” he said. Mauritius has not rested on its laurels, with its desire to attract foreign businesses, particularly in the financialservicessector,evidenced by its standing at 25th, out of 190 countries,intheWorldBank’s2018 Doing Business report, enough to place it highest in Africa. “South Africa was the gateway to Africa because of its sophisticated financial services industry but we have seen a lot of the international banks opening offices in Mauritius in the last few years. It has made itself a much more attractivejurisdiction[andis]putting pressure on South Africa,” said Mr Matthews. “Itdoesn’thaveexchangecontrols, which is a problem most of Africa has. It’s relatively tax benign andisaneasyplacetodobusiness, soalotoffiduciarybusinesseshave sprungup.Alotoffundsthatinvest in Africa invest via Mauritius.” Mr Matthews also praised Mauritius’ strong rule of law. Noting that the Supreme Court has granted permission to the state prosecutor to challenge Mr Jugnauth’s acquittal in a corruption casebyappealingtotheUK’sPrivy Council — retained as the highest

court of appeal after independence — Mr Matthews said this was “an exemplary example of how politically important figures are still subject to the rule of law, which I don’t think is the case in the rest of Africa”. Mauritius still has challenges, ofcourse.Oneoftheissuesflagged up in the IMF’s 2017 review of the country is that “lacklustre productivity and rapid real wage growth in recent years have reduced cost competitiveness”, as depicted in the third chart. To some extent, Mr Robertson sees the nation as being a victim of its own success, with wages being pushed up by a tight labour market. “The result of [Mauritius’] success is that the labour market has stopped growing. They don’t have many kids and haven’t for some decades and their population is ageing,”hesaid.“Theyarepossibly the first country in sub-Saharan Africa that is confronting the challenges that China and Europe are facing. They have lost their demographic dividend.” Mr Robertson argued that the short-termsolutionwastoopenup the economy to foreign workers, while in the longer run Mauritius should focus on raising productivity levels by improving education levels still further. Mr Matthews agreed, saying the country “will lose more of the blue-collar jobs to other places in the world, especially Africa [but] increasingly take on value-added jobs,” mirroring the way China has moved up the skills chain. Mauritius clearly has some natural advantages some other Africancountriescannotnecessarily replicate, such as its attractions as a tourist destination and large Indiandiaspora,whichhashelped develop links with India’s financial sector. The latter could prove less

fruitful in the future, however, after an amendment to the country’s double taxation avoidance agreement with India means capital gains taxes will, for the first time, be levied on Mauritius-based investments in India. More broadly, Mauritius has been caught up in a global clampdown on offshore tax havens. The country has, so far, managed to keep on the right side of the OECD, which is leading the crackdown, but only by agreeing to review some of its existing tax treaties. With the country now on the OECD’s “white list” of tax jurisdictions that co-operate with other countries, Mr Matthews said the Paris-based body “seems to have become comfortable with Mauritius as an investment destination, not as unfair tax competition”. Mr Robertson argued that many of the steps Mauritius is now taking are not overly relevant for the rest of Africa because its education levels are so far ahead, but that some of the measures it took to get to this stage of development are worth its regional peers studying. Some have already taken that step,withIvoryCoast,Madagascar, Ghana and Senegal all asking for Mauritius’ help and advice in setting up special economic zones, somethingthancouldproveawinwin if Mauritius ends up providing banking services to such projects. As for Mauritius’ hope of reaching high-income status by 2023, a target that would require raising its GDP per capita from $9,794 last year to more than $12,000 in order to meet the World Bank’s definition, Mr Matthews felt 2023 “might be a bit ambitious,” even if the country can extend its recordbreaking recession-free run to an impressive 42 years.

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