BusinessDay 21 Mar 2019 by BusinessDay

businessday market monitor FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

FOREIGN EXCHANGE

Biggest Gainer Access N6.5

9.24pc

Biggest Loser Nestle N1500

-1.74pc

31,040.84

Foreign Reserve - $43.41bn Cross Rates - GBP-$:1.32 YUANY-N53.85 Commodities Cocoa

Gold

Crude Oil

US$2,143.00

$1,313.40

$68.36

₦1,438,557.72

+0.52pc

NEWS YOU CAN TRUST I **THURSDAY 21 MARCH 2019 I VOL. 15, NO 271 I N300

BUY

SELL

$-N 357.00 360.00 £-N 466.00 475.00 €-N 398.00 405.00

www.

Market I&E FX Window CBN Official Rate Currency Futures

($/N)

FGN BONDS

TREASURY BILLS

Spot ($/N)

360.40 306.90

-0.04 11.93

-0.36 13.58

0.00

10 Y 0.12

20 Y 0.00

14.47

14.41

14.12

NGUS MAY 29 2019 362.05

NGUS AUG 21 2019 362.50

NGUS FEB 26 2020 363.40

New N30,000 minimum wage means renewed stress on FG, states’ finances Weak economy means firms likely to lay-off than pay

LOLADE AKINMURELE

ith the approval of a 67 percent hike in the minimum wage for workers now

behind Abuja, focus is shifting to the implication of the increase for the Federal Government and states’ finances. BusinessDay attempted to glean some insight from the last wage hike, which

was in 2011, to see the impact it had on the FG’s wage bill. In 2011, when a 100 percent minimum wage increase from N9,000 to N18,000 was implemented, personnel costs rose

18.54 percent (N290 billion) to N1.85 trillion, from N1.56 trillion in 2010, according to data obtained from the Central Bank’s 2011 annual report. Continues on page 38

ANALYSIS

Nigeria’s future generations face grim reality on low oil savings …Serial depletion of ECA leaves nothing to cheer …Owowo oil reserve field with one billion barrels of crude still idle DIPO OLADEHINDE

L-R: Valentine Ozigbo, president/CEO, Transnational Corporation of Nigeria plc; Tajudeen Yusuf, chairman, house committee on capital market; Zainab Ahmed, minister of finance, and Mary Uduk, acting director-general, Securities and Exchange Commission (SEC), at the SEC awards night in Lagos. Pic by Pius Okeosisi

he future prospects for unborn generations in Africa’s largest oil producing country are beginning to look ugly due to little or non-existing oil savings, lack of exploration of new oil fields and serial abuse of the Excess Crude Account (ECA). In an oil producing country like Norway, the government is toiling night and day to protect its unborn generation by reducing the aggregate exposure of its economy to oil price volatility and insulating its rainy-day fund from political pressure which has promoted fiscal prudence. However, for Nigeria, actions by its government show it is often less con-

cerned. Nigeria’s ECA has long been exploited to fund non-budget expenditure, particularly national elections – all under the name of security. The primary objective of stabilisation funds like Continues on page 38

Inside Solar energy firm Daystar Power raises N9.3bn to expand services across Nigeria

P. 2

AMCON MD calls for reintroduction of Failed P. 39 Bank Act

2 BUSINESS DAY NEWS

C002D5556

Thursday 21 March 2019

Solar energy firm Daystar Power raises N9.3bn to expand services across Nigeria ISAAC ANYAOGU

olar energy firm, Daystar Power said it has raised over N9 billion in equity and debt as it gears up to expanding its services across Nigeria under the Federal Government’s plan of sourcing 30 percent of the country’s energy needs from renewables by 2030. The Lagos-based company said it secured N3.6bn ($10 million) in an equity round with investments from Verod Capital Management and Persistent Energy Capital LLC and has lined up an additional N5.7 billion ($16 million) in debt financing as it seeks to accelerate its expansion across West Africa. The successful fundraising highlights the growing appetite of investors in Nigeria’s renewable market. According to the company, the investment is significant because Nigeria’s banking sector could save up to N20bn of annual electricity costs by using solar power solutions. One-third of all Nigerian banks are the company’s clients. “Daystar Power provides solar power solutions to Nigeria’s corporates, including the banking, consumer goods, agriculture and manufacturing sectors. By the end of the year, we expect to have more than 400 solar power sites operational and are eager to deliver to our clients 15-25 percent and sometimes more cost savings, while maintaining our close to 100 percent uptime for all systems across Nigeria,” Christian Wessels, a founder of Daystar Power, said. The Nigerian Rural Electrification Agency (REA) says Nigeria’s minigrid market is worth $9.2 billion a year, creating a vast opportunity for off-grid investors to bridge the prevailing power gap from a grid incapable of wheeling all the power generated and sent to it. This has created a situation where Nigerians spend $14 billion annually on diesel and related equipment to bridge the power supply gap, according to a study by the Rocky Mountain Institute, a US-based sustainable energy research organisation. These costs constrain competitiveness of Nigerian businesses and growth of the wider economy. Daystar Power seeks to plug this gap by providing cost-effective and

reliable solar power solutions to commercial and industrial clients in Nigeria with systems ranging from 20 kWp to 5MWp. It is also hoping to place its stamp across the West African region. “The additional capital raised by Daystar Power will accelerate our growth and help us satisfy the significant demand we see among West African corporates for solar power solutions and reduce both cost and carbon footprint,” Jasper Graf von Hardenberg, a founder and CEO of Daystar Power, said. Hardenberg further said, “With Verod Capital Management, one of West Africa’s leading private equity investors and Persistent, a leading investor and venture builder in the off-grid sector, we have attracted two major investors who share our excitement for solar power for commercial and industrial customers in Africa.” Last month, electricity generation fell to 3,456 megawatts losing 1,108MW in seven days, according to data from the Nigeria Electricity System Operator, an arm of the Transmission Company of Nigeria. Total power generation dropped from 4,564.60MW on February 19 to 3,456.20MW on February 24. In October last year, 15 power plants were idle for weeks. This situation has put paid to any hope that large scale power plants will dent Nigeria’s energy crises. Analysts say decentralised distributed renewable energy, especially solar power solutions, could provide a better alternative. “Harnessing the power of the sun can be a huge step forward in ending the energy shortage in Nigeria,” Daniel Adeoye, investment manager at Verod Capital said. Since inception, Daystar Power, founded by Christian Wessels and Jasper Graf von Hardenberg and incubated by African venture builder, Sunray Ventures, has installed 1MW of off-grid solar energy solutions to commercial, and industrial customers across Nigeria and Ghana. “The commercial and industrial segment presents a credible path to scale and profitability in the off-grid market,” said Olu Verheijen, partner at Persistent. “Daystar’s solutions enable companies to redirect significant power cost savings into business growth while reducing their carbon footprint.”

L-R: Olumide Olayinka, CRM member, BOT Risk Management Association of Nigeria (RIMAN)/partnership and risk consultant, KPMG; Magnus Nnoka, CRM president, RIMAN/chief risk officer, Coronation Merchant Bank; Ahmed Lawan Kuru, MD/CEO, Asset Management Corporation of Nigeria (AMCON); Abieyuwa Erediauwa, and Tajudeen Ahmed, both of AMCON, when RIMAN paid AMCON MD a business visit, yesterday.

Emefiele, Enelamah, others to outline reforms to shape 2019 at BusinessDay post-election outlook conference DIPO OLADEHINDE

ith the 2019 general elections over, Nigeria’s economic managers, government officials, business leaders and other stakeholders will today gather at the BusinessDay postelection outlook conference to discuss the agenda that will drive economic growth and business confidence in Africa’s most populous country. Godwin Emefiele, governor, Central Bank of Nigeria; Okey Enelamah, minister of Industry, Trade and Investment; Yemi Kale, statistician-general, and Patience Oniha, director-general, Debt Management Office (DMO), are among economy managers attending the conference holding from 9am at Four Points By Sheraton, Victoria Island, Lagos. The Post-Election Outlook Conference by BusinessDay, West Africa’s most authoritative business daily, themed ‘An Agenda for Economic Growth and Business Confidence’, will provide expert insights on the task ahead and main areas of urgent focus for the President Muhammadu Buhari administration during its second term in office. With a distinguished line-up of speakers and panellists from across key sectors of the economy, the conference will provide private sectorgenerated inputs for the Federal Government’s economic management

strategy over the next four years. Ayo Teriba, CEO, Economic Associates; Ayodeji Balogun, country manager, Afex Commodities; Bismarck Rewane, managing director/ CEO, Financial Derivatives Company, and Franklin Ngwu, senior lecturer in strategy, finance and risk management, Lagos Business School, will be among the panellists at the conference. Others panellists include Guy Czartoryski, head of research, Coronation Merchant Bank; Nonso Obikili, chief economist, BusinessDay, and Saeed Husaini, analyst at Control Risks. Along with informed analysts and business leaders, these panellists will shed light on Nigeria’s economic indices as well as provide insight on the direction of the economy for the next four years. They will also explore prospects for growth amid a projected stabilisation in energy and commodity prices, which may provide a small tailwind for Nigeria this year. Recall that much of the nation’s economic activities in the past months were piloted against the backdrop of electoral uncertainty. But taking a cue from the outcome, emphasis has now shifted to what President Buhari’s second term holds for the economy in 2019 and beyond. President Buhari won a second term in the February 23 presidential polls, defeating his main challenger, Atiku Abubakar of the People’s

Democratic Party (PDP), with 15.19 million votes to 11.26 million. A feature of Buhari’s first term as president was weak economic growth from 2015 to 2018, when GDP grew well below trend and the country fell into recession in 2016. One key cause was the oil price collapse in late 2014 and 2015 which put pressure on government revenues, the naira exchange rate, the trade account, and Nigeria’s ability to import critical industrial inputs. Although there was a combination of uncertainty, confusion and anxiety following Buhari’s election victory, that has faded as focus returns to macroeconomic conditions. Buhari’s re-election suggests continuity, something that offers the nation a chance to build on its economic recovery and growth strategy, analysts say. Buhari faces an extensive to-do list within a four-year timeframe, including rekindling economic growth, boosting infrastructure and, most importantly, diversification. On top of all of this, there are external risks in the form of trade tensions, slowing global growth and lower oil prices, all of which have the potential to threaten the nation’s recovery. This year’s conference, as with previous editions, provides a unique platform for the attendees and delegates to debate and exchange ideas on the issuesandtrendsimpactingonNigeria’s economic growth and development.

Government robs Peter to pay Low investment, rising demand spotlight Paul with hike in VAT rates BALA AUGIE

he plan by the Federal Government to finance the increase in the wage burden through a hike in consumption tax would lead to affected companies shifting burden to the final consumers in form of price increases. Analysts have suggested that the proposed hike in Value Added Tax (VAT) would dampen consumer spending in a country where 87 million people are living below $1.93 a day while unemployment rate is at an all-time high of 23.80 percent. The Federal Government, in collaboration with the Federal Inland Revenue Service (FIRS), is planning to raise funds to finance the additional wage burden by raising consumption tax (VAT) to 6.75 percent from the current 5 percent.

Johnson Chukwu, managing director and CEO of Cowry Asset Management Ltd, has said that the new policy could lead to depression in the rate of economic growth. The economic stimulus of effect of an increase in wages will be largely offset by increase in general price level as a result of rising inflation, according to Johnson Chukwu. Inflation rate for the month of January now stands at 11.38 percent, but the figure is higher than the CBN’s range of 6 percent and 9 percent. While the country’s GDP expanded to 2.38 percent in the fourth quarter of 2018, the figure is lower than the 8.2 percent average growth rate between 1999 and 2014. Analysts at CSL Stock Brokers Ltd said the proposed tax policies also serve

Continues on page 38

opportunity in Nigeria’s N777.4bn seed market JOSEPHINE OKOJIE

here is a growing business opportunity for suppliers in Nigeria’s seed industry valued at N777.4 billion as the country has failed over the years to invest in seed production despite rising population and quest for food security. Nigeria’s seed demand is above 350,000 metric tonnes yearly, according to the National Agricultural Seed Council (NASC) estimates, with current production less than a quarter of the national demand. To this end, millions of smallholder farmers in Nigeria do not have access to quality seeds of most grains, legumes and tree crops, a situation that has made the country’s average farm

yield far below the global standard. “Inadequate access to quality seeds is the major problem facing Nigeria’s agriculture today. Most of the seeds in the market are imported because we do not produce enough of the seeds farmers need for farming,” AfricanFarmer Mogaji, chief executive officer, X-Ray Consulting Limited, said. “Our population is growing fast and farming population is increasing daily but the seeds farmers need to feed Nigerians are insufficient because the level of investment in the seed industry is still low despite the huge demand. We need to bridge our seed gap to achieve self-sufficiency in food production,” Mogaji said. The Federal Ministry of Agriculture

in 2015 estimated Nigeria’s seed industry to potentially stand at N777.4 billion and local production at N252.3 billion, leaving a N525 billion seed gap. Experts suggest that the figure may have risen by 15 percent or more given the number of new farmers as well as rising population growth rate. Nigeria’s population is estimated at 190 million with a population growth rate of 3.2 percent per annum. These 190 million inhabitants must be fed with staple foods ranging from yams to rice, cassava, beans, bananas and tomatoes, but the seeds to do this are not readily available, according to experts.

•Continues online at www.businessday.ng

Thursday 21 March 2019

BUSINESS DAY

BUSINES DAY

Thursday 21 March 2019

BUSINESS DAY

BUSINES DAY

Thursday 21 March 2019

BUSINESS DAY

BUSINES DAY

Thursday 21 March 2019

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

comment

@Businessdayng

Thursday 21 March 2019

comment is free

Send 800word comments to comment@businessday.ng

The case of the missing N1.6 trillion Meet Nigeria’s new budget, same as the old one

Feyi Fawehinmi

igeria’s Budget Office put out the Q3 2018 budget scorecard which showed that the Federal Government of Nigeria (FGN) posted a fiscal deficit of N2.5 trillion (2.7 percent of GDP) – well clear of the N1.4 trillion it had projected in the 2018 budget for the period. While the feat is not surprising as Nigeria regularly runs fiscal deficits, what is shocking is that the FGN only raised finance to plug N908 billion of the budget shortfall leaving a whooping N1.6 trillion unfinanced. Since the 2014 oil price shock, it has been clear that the FGN struggles to generate the revenues needed to match the scale of its aspirations. This point is clear in the released Q3 2018 numbers with fiscal revenues over the first three quarters of 2018 at N2.8 trillion - a mere 3 percent of GDP – missing budget projections by 48 percent. Again, regular watchers of Nigerian budget revenue forecasts in recent years are unlikely to be surprised. These budget revenue deviations are not unbiased: the original targets are

deliberately set at too high a level to ensure that the overall budget looks digestible to the clueless legislators who approve it and a hapless Nigerian populace unable to do much. Understanding the game For instance, in 2018, while a recovery in oil prices and stable oil production implied that oil receipts should be in line with natural levels of Nigeria’s exploration, the budget planners made sure these natural levels were set higher to match the scale of the hopeless fiscal aspirations in the annual gaming challenge that has come to pass for budgeting. As part of the gaming of the 2018 budget, the Buhari government claimed that it would seek to generate extra revenues from an oil field licensing round (Nigeria has not held one in over a decade) even as it made no arrangements in the budget for scheduled joint-venture cash call payments it promised to international oil companies to clear out the backlog of JV capital contributions. Though it did make those payments, by deliberately excluding them from the budget it overstated its planned budget revenue estimates. In all, the FGN reported a 36 percent variance between actual and budget oil revenues. On the non-oil side, the misses were starker – as total receipts of N1.1 trillion missed budget targets by a whopping 63 percent. In a similar parallel to the oil revenue games, the Budget Office inserted all manner of wishful items such as N533 billion from proceeds of oil assets privatisation/restructuring (even though Buhari had no such plans and

would later campaign against oil asset sales in the 2019 elections), the now regular projected recoveries (N380 billion) and an ambitious independent revenue target of N636 billion from perennial loss making Government Owned Enterprises (GOEs). Naturally, all these items failed to deliver leaving the FGN facing a gaping shortfall. How do you solve a problem like N1.6 trillion? In response, the FGN was faced with two choices: borrow like crazy to gain credibility (as they did in 2017 when the FGN posted a fiscal deficit of 3.3 percent which was in excess of the 3 percent ceiling imposed by Nigeria’s Fiscal Responsibility Act) or cut back on capital spending. From the Q3 2018 report, they chose the latter with a reduction in capital spending of 57 percent to N930 billion. Interestingly, capital execution over the period included a N739 billion carry-over from the 2017 budget implying that actual 2018 capex spending was 88 percent off target. In addition, the FGN trimmed recurrent spending to under 5 percent of its planned target of N4.3 trillion. Put nicely, the FGN dropped whatever pretences it had regarding fiscal expansionism which had informed the move to a record level budget of N9.2 trillion for 2018. In the middle of all this, the whole point of the game remained: debt-service to revenue ratio remained at an eye watering 64 percent. As keen observers of Nigerian data would likely have observed, the key driver of recent upsurge in fiscal deficits has been the unrestrained

‘

Beyond servicing debts and barely meeting salary payments of the civil service, Nigerian budgets do not mean much

growth in expensive local borrowings with local debt service now over N2 trillion. Beyond servicing debts and barely meeting salary payments of the civil service, Nigerian budgets do not mean much. So whodunit? Though the FGN raised N908 billion from local and Eurobond markets, the unfinanced shortfall of N1.6 trillion had to have been sourced somewhere and the Central Bank of Nigeria (CBN) is the likely culprit. Although the CBN slowed down on back-door fiscal deficit financing in 2017, these underhand dealings resumed in full swing in 2018 with CBN loans to the FGN exceeding FGN deposits by circa N1.6 trillion in April 2018. The pattern in the line item and the appearance of interest expense associated with Ways & Means (the official name for CBN deficit financing) suggests the FGN leaned heavily on the CBN to provide it cash to fund its spending over 2018. If this is the case, then Nigeria’s fiscal affairs are in a much worse shape than feared and recent increments to the minimum wage for federal workers and continued plans to tap offshore markets for debt suggests problems further down the road. President Buhari recently admonished his ministers at a recent cabinet meeting that his second four years will be tough. This time, he appears to know what he was talking about. Brace for headwinds. Feyi Fawehinmi is an accountant and political analyst.

Building inclusive financial system via national microfinance bank

UCHE UWALEKE

oing by recent reports, the nation’s microfinance landscape is about to change following the nod by the Central Bank of Nigeria for the establishment of a National Microfinance Bank. The new financial institution is a joint effort of the Bankers’ Committee- an umbrella body of the CBN and the Chief Executives of banksexpected to contribute N5 billion as equity from its N60 billion Agricultural Small and Medium Enterprises Investment Scheme (AGSMEIS) Fund, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and the Nigerian Postal Service (NIPOST) leveraging its widespread offices across the country. The rationale for birthing a National Microfinance Bank (NMFB), in spite of the plethora of microfinance institutions in the country, is to ‘deepen financial inclusion, provide easy access to credit and other financial services to SMEs, reduce unemployment rate in the rural areas as well as curb rural-urban migration’. As noted by Godwin Emefiele, the Governor of CBN, the NMFB has also become necessary in view of the high and ‘outrageous’ interest rates charged by existing microfinance banks. However, this initiative is not going down well with some stakeholders, especially operators of Microfinance Banks (MFBs), who argue that the role of the CBN in the microfinance space should

be restricted to supervising its National Microfinance Policy Framework instead of participating directly as a competitor. In their contention, if MFBs charge exorbitant interest rates as being alleged, it is because of the high-risk environment under which they operate including the enormous operating costs associated with maintaining a minimum of 80 per cent for micro loans and a maximum of 20 per cent for SMEs in line with the prudential guideline regarding the composition of a MFB’s loan portfolio. There is also this apprehension that the NMFB will crowd out existing MFBs thereby creating a monopoly with all the attendant inefficiencies. Be that as it may, there is a widely-held view that the contribution of the microfinance sector to the nation’s economic growth and development leaves much to be desired. In a country like Nigeria with a relatively low rate of formal financial inclusion, rural outreach represents one major indicator of the economic impact of Micro Finance Banks. As revealed in the recently launched ‘revised National Financial Inclusion Strategy’ report, over 80 per cent of financially excluded adult population in Nigeria reside in rural areas. Also, while the South West geopolitical zone had the least exclusion rate of 18 per cent, financial exclusion rates were highest in North East and North West regions at 62 per cent and 70 per cent respectively. Regrettably, the geographical spread of MFBs has not helped to change this narrative. Driven primarily by profit motive, it is not surprising that many MFBs are located in urban centres. Sometime in October last year, the CBN published a list of 882 licensed MFBs in Nigeria and their locations which showed that in the city of Lagos alone, there were 170 MFBs in operation. Other states with relatively strong presence of these banks include Anambra (75), Oyo (53) and Ogun (49). In contrast, Bayelsa and Taraba each had three MFBs while Yobe had only one MFB operating in the state as of 30th September 2018. This gap is expected to be narrowed with the plan to have the branch of the

National MFB in all the 774 local government areas of the country. It is pertinent to note that the objective of the CBN’s revised (2011) Microfinance Policy, Regulatory and Supervisory Framework policy include to ‘increase financial inclusion rate in the country, improve access to financial services for the active rural poor and pursue poverty eradication’. The achievement of this objective has remained a far cry due, in part, to the myriad of challenges facing the microfinance banking sub-sector namely ‘inadequate capital base, weak corporate governance, ineffective risk management practices, dearth of requisite capacity and mission drift’. It goes without saying that many MFBs operating in the country are under the yoke of huge non-performing loans to the extent that late last year, the CBN disclosed it was revoking the operating licenses of 154 MFBs among which were some 62 that had already closed shop; 74 which became insolvent; 12 that were terminally distressed and 6 that voluntarily liquidated. It was against this backdrop that the CBN thought it wise to jerk up their minimum capital requirement such that a Unit MFB now needs a minimum capital of N200 million while a State MFB and National MFB licence require N1 billion and N5 billion respectively. This is with effect from April 2020 for existing MFBs expected to explore the possibility of mergers and acquisitions and/or direct injection of funds. Considering that many MFBs may fold up due to their inability to meet up with the new capital requirements, the establishment of the NMFB will go a long way in repositioning the microfinance sector to meet the critical targets set out in the Microfinance Policy. As the experience in other climes have shown, the NMFB can share the microfinance space with existing MFBs in a mutually beneficial manner especially with the assurance coming from the apex bank that MFBs that ‘meet the capital requirements as well as demonstrate the existence of strong corporate

governance in their operations would be channels for micro funding activities of the CBN and the Development Bank of Nigeria’. The case of National Microfinance Bank of Tanzania, established by the government of Tanzania in 1997, is a good example. Existing alongside other micro finance institutions such as the PRIDE, SEDA, Tanzania Postal Bank, FINCA and Tanzania Women’s Bank, the National Microfinance Bank Plc has grown to become Tanzania’s leading banking institution, both in terms of customer base and branch network with strong presence in more than 95 per cent of Tanzania’s districts. At present, government’s interest in the bank has been whittled down considerably following the listing of the bank’s shares on the Dar es Salaam Stock Exchange (DSE) which has brought about a diversified ownership structure. So, it is not out of place for government institutions, in collaboration with the private sector, to champion a National Microfinance Bank and later beat a gradual retreat. In fact, it is on record that Malaysia’s microfinance landscape evolved from being government-driven into one with vibrant private sector participation benefiting more than one million micro enterprises according to Bank Negara Malaysia. Indeed, the National Microfinance Bank is a welcome development as it promises to be a reference point for other micro finance institutions in the country with respect to meeting the targets of the Microfinance policy. It will also facilitate the revamping of the postal system as a platform for agent banking. As was the case in Tanzania, the strategic plan for the NMFB should include a time line for getting it listed on the Nigerian Stock Exchange in order to enable a diversified ownership structure. All said, the NMFB will help foster inclusiveness in the country’s financial market ecosystem. Uche Uwaleke of Nasarawa State University Keffi is Nigeria’s first Professor of Capital Market and the President of the Association of Capital Market Academics of Nigeria

Thursday 21 March 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

comment is free comment Political defection or psychological egoism

Send 800word comments to comment@businessday.ng

Positive Growth with Babs

Babs OlugbemI

he fact that lives were lost during the 2019 elections should shame us at this age and time of our democracy. Nigeria as a country and the giant of Africa should have risen above electoral violence, claims of rigging and counter-rigging by the two major political parties-PDP and APC. Where the foundation is weak, the collapse of the building is inevitable. The foundation of our electoral system is based on weak voters’ education and awareness. The political class is taking advantage of this as most of the voters’ votes on the whim of cash or other gratifications from the influential politicians. Political campaigns and promises are vague and not valueoriented. The educated ‘alakada’ who are the literate and can discern the politicians without value from few with contents are too busy analyzing events on social media platforms rather than voting on election date. We are in the season of defection. The defection of politicians from one political party to another in Nigeria is a mockery of our democracy and is a major factor inhibiting us from benefitting from the ideals of a democratic system of governance. In Nigeria, defecting from a political party to another is never on policy or political ideology but primarily for the interest of the politicians and their

followers. It is our type of defection that makes our political parties look the same and appear without any difference. The people who are in PDP today are at a time the founding members of APC or vice versa. Politicians are defecting not on ideology but for personal, political, positional, financial and influential gains which are not in the interest of their followers and the country. A few exceptions of politicians who appeared to have rooted political ideologies and have never run here and there in search for power and protection have made impacts in their political careers. Undoubtedly, the generalissimo of politics and the national leader of the APC Senator Bola Ahmed Tinubu have no record of defection from one party to another. Though he had merged his party with other parties to give electoral advantages and seize power at the state and federal level, this is different from ‘porting’ from the loser party to the winning party after every election. In political merging or alliance, the ideals of the parties will be retained to some extent unlike where people abandoned what they have claim allegiance for in the name of defection. I am not surprised with the content the governor-elect of Oyo state, Engineer Seyi Makinde is showing since being elected. His public messages so far show he has a political ideology which he stood by in the PDP for years until he got what he wanted recently. Without a doubt, he might do well for being propelled by ideology to stay with the opposition party for years unlike those who shift parties based on where the power is. Politicians with a penchant for defection are psychological egoists. They are defecting not on principle or any political belief but to meet their

needs for relevance, power, money and whatever they can get. To them, being in government is more of a business for personal gains rather than a platform to serve their people and the country. Our democracy is porous and designed to meet the aspirations of the powerful politicians. Whereas defection cannot be legislated on, our political parties have huge roles to play in ensuring the defectors do not take advantage of the systems for their personal benefits and in the process weaken the structure upon which democracy can be effective as a form of governance. The governing political party at every level should stop celebrating and accepting defectors as a show of strength. Nigeria is not and will never be a one-party state. No matter the perceived strength of the defecting politicians, it could not compete with credible performance and the delivery of visible dividends of governance to the people. The ruling party should rather focus on achieving its election promises rather than celebrating people who will add problems to the existing winning team. After all, you do need to add a new player to a winning team except there is exceptional value the player can bring to the team. For our democracy to be institutionalized, losing elections should be seen as the opportunity to form a credible opposition that scrutinizes the policies of the governing party in the interest of all the electorates. Hence, being in the opposition party should be a call to serve. It is an opportunity to show you believe in the ideology of your party, and an avenue to checkmate those who are saddled with the management of the people’s resources for a period of time. The electorates especially the

‘

To them, being in government is more of a business for personal gains rather than a platform to serve their people and the country

educated group should mark the politicians with a constant history of defection. They are like hawks with no good intention for the people except for themselves. Check these politicians out, they move with the power like a prostitute and have no credible records of performance while in power. All their actions are in their best interest. They are weakening our democracy by making it ‘jeunjeun’ (chop I chop) game. They are bereaved of ideas and should not be allowed to hold leadership positions even at the ward or the party level. Our political parties must be structured and operate like institutions. As free as freedom of association is, it is ridiculous to have over seventy political parties contesting elections in Nigeria. Nigeria does not need seventy political ideologies to be great. We need few and strong political parties with checks and balances against behaviours that are detrimental to the objectives of the parties and governance. Our political parties must be governed by ideologies, beliefs and structure that ensure top members are not defectors but people who are with the party come rain or sunshine. If we want to see the dividend of democracy beyond the current level of governance, the political elites must be driven by value and not by their survival. They must take political steps for and in the interest of their community. They must be accountable to the people and stop the political prostitution. No defection, please. Stay in the party you are now for strong democratic and political structures. Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

At what stage does a business enterprise create value?

Uyiosa Omoregie

have often had heated discussions with professionals who believe that a business enterprise not (yet) making money is not creating value. Proponents of this view go as far as saying that employees who work for such an enterprise are paid 100 % above what they should be remunerated. Basically saying that if a company is not making money everyone involved is just wasting time. I disagree. I believe that the purpose of an enterprise is value creation. Value creation is mostly defined by monetary profits, but not every time and not in all enterprises. Value creation in an enterprise is defined by the stated goals of the enterprise, usually articulated by the business owner(s) and or management or stated by legislation (in the case of some public/government-owned enterprises). A non-profit enterprise (e.g., a non-governmental organization) creates

value without exchanging goods or services for monetary gain. Therefore, monetary gain cannot be pre-requisite to value creation in every enterprise. There are various stages in the lifecycle of an enterprise. This is most obvious in the case of a ‘startup’, a special type of enterprise (or stage in the lifecycle of an enterprise?). Startups face high risk and uncertainty, notable startup success stories of this generation: Facebook, Google, Amazon and many similar enterprises did not become ‘profitable’ until after many years, in some cases remained unprofitable for up to 10 years or more after commencement of operations. At the earliest stage in the lifecycle of a startup, the ‘value’ that is created is simply the ‘idea’ or ‘purpose’ that the startup has brought to the financier. This idea or purpose can actually be given a monetary value, an estimate of the future stream of income (valuation) that the startup could bring during the life of the enterprise. However, at this stage in the life of the enterprise almost everything is abstract. Even in the ‘operation’ or ‘producing’ or ‘transactional’ phase of an enterprise (or project), when there is direct monetary gain or ‘profit’, an enterprise could change strategy to sacrifice short-term monetary profit for longer-term profit and viability. This is frequently the case when an enterprise cuts the price of its goods or services in order to gain more customers – greater market share. The stream of new loyal customers is indeed ‘value: ’New

customers can be charged a higher price in future resulting in more money profit for the enterprise later. This type of strategy could be life-saving for the enterprise, as failure to do this could leave the enterprise irrelevant in the market. So, an enterprise can create value without producing monetary gain. Value is determined by what the owners of the enterprise desire to be accomplished not only when the enterprise is in ‘operational’ or ‘producing’ or ‘transactional’ phase. In addition to the overarching goal of the enterprise (its ‘mission’), at every phase in the life cycle of an enterprise, the accomplishment of the goals of a specific phase results in value creation for the owners of the enterprise. “People make it happen” is a popular refrain stressing the importance of human resources if the goals of an enterprise will be achieved. Some enterprises have tried to tie employees’ remuneration directly to the impact the employees make to the bottom line (profit). This is possible only when the nature of the employee’s job description allows for his or her daily or monthly or annual work results to be measured accurately. A salesperson can be remunerated based on a percentage of the sales of goods achieved. However, not all job tasks can be so easily analyzed to give such a direct quantitative value. Most job tasks are carried out within a team and separating the specific quantitative value created by each team member would be almost impossible.

This would imply that the value created by an employee in such a team could be mostly abstract. A particular employee could simply be an ‘ideas’ woman, known for creative and strategic thinking. Another employee could be known more for being an ‘implementer’ with valuable project management skills, taking an abstract idea and bringing it to reality. Probably the best and most reliable way to measure employee value creation is through the use of key performance indicators (KPIs). KPIs can be established for each employee during annual business planning sessions. KPIs can also be established for each business unit/department and for the enterprise as a whole. KPIs are developed based on agreement between management and the entity whose performance will be measured. KPIs established during annual business planning should also be integrated to enterprise risk management (ERM). This integration of KPIs and ERM ensures that during the execution of day-to-day activities, the employee will intentionally manage risks: minimize threats to accomplishing set targets and maximize every opportunity presented. This will ensure that value is created by the employees at every stage in the life cycle of the enterprise. Ultimately, value is not in the eye of every beholder but in the eye of the shareholders: The shareholders state what they want the enterprise to achieve. Omoregie is a petroleum economist

BUSINESS DAY

www.businessday.ng

Editorial Publisher/CEO

Frank Aigbogun editor Patrick Atuanya DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua ASSIST. SUBSCRIPTIONS MANAGER Florence Kadiri GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Thursday 21 March 2019

Nigeria’s declining FDI

o one really doubts that every country which seeks to develop these days seek to attract foreign direct investment (FDI) to complement the level of domestic investment. FDIs not only enables investments in critical sectors of the economy, it also helps in “securing economic-wide efficiency gains through the transfer of appropriate technology, management knowledge, and business culture, access to foreign markets, increasing employment opportunities and improving living standards.” Even the Nigerian government is gradually coming round to this realisation as it realises it does not have the huge funds needed for even the physical infrastructure needed to support Nigeria’s burgeoning population and it has to increasingly rely on FDIs. Indeed, the government’s Economic Recovery Growth Plan (ERGP) captured the problem well: “The value of Nigeria’s total infrastructure stock (road, rail, power, airports, water, telecoms, and

seaports) represents only 35 per cent of GDP. This is far below the level of peer emerging market countries, where the average is 70 per cent” 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. The plan stated clearly that Nigeria needs to invest $3 trillion in infrastructure over the next 30 years if it wishes to remain competitive. This has led to the realisation that both the government and the private sector must contribute their quarter towards building Nigeria’s infrastructure. Like other progressive governments, the Nigerian government is beginning to design policies to ensure a robust public-private partnership where the private sector can invest massively in infrastructure. But just as this is being done, figures indicate that FDI flow into Nigeria has consistently been on the decline in the last four years. From a high of $8.9 billion in 2011, FDI has declined to a paltry $2.2 billion in 2018.

This is not surprising. 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”. What is more, PPPs have not been 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. Then there is the greater

problem of disregard for the rule of law and unpredictability in government policies, regulation and the undermining of the judiciary as an impartial arbiter in disputes. These reckless behaviours have consequences, which will deeply hurt the country and its corporate image among the comity of nations. First, no selfrespecting country will do business with a countr y that doesn’t respect its laws. Second, no foreign investor will invest in a country that has no regard for its laws and where the courts are not independent or cannot be trusted to arbitrate on contract and trade disputes impartially and efficiently. 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.

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

EDITORIAL ADVISORY BOARD Dick Kramer - Chairman Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Keith Richards Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo

Enquiries NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

ADVERTISING 01-2799108 08034743892 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 Legal Advisers The Law Union

Mission Statement To be a diversified provider of superior business, financial and management intelligence across platforms accessible to our customers anywhere in the world.

OUR Core Values

BusinessDay avidly thrives on the mainstay of our core values of being The Fourth Estate, Credible, Independent, Entrepreneurial and Purpose-Driven. • The Fourth Estate: We take pride in being guarantors of liberal economic thought • Credible: We believe in the principle of being objective, fair and fact-based • Independent: Our quest for liberal economic thought means that we are independent of private and public interests. • Entrepreneurial: We constantly search for new opportunities, maintaining the highest ethical standards in all we do • Purpose-Driven: We are committed to assembling a team of highly talented and motivated people that share our vision, while treating them with respect and fairness. www.businessday.ng

Thursday 21 March 2019

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

COMPANIES & MARKETS

BUSINESS DAY

NB hits 8-year low after confirming court case with Nigerian government Pg. 15

C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

FINANCIAL SERVICES

Stanbic IBTC on course to be top broker in Q1 2019 … lead peers in terms of volume and value of trades completed IFEANYI JOHN

tanbic IBTC Stockbrokers Limited (SISB), a member of Stanbic IBTC Holdings Plc, started the year ahead of its peers, and is currently leading the pack of brokerage firms in both volumes and value of stocks traded for clients. Analysis of the weekly broker performance report by the Nigerian Stock Exchange from the beginning of the year to date reveal that Stanbic IBTC Stockbrokers Limited has completed over N77.42 billion worth of trades since the beginning of the year, the most for any brokerage firm in the country and N24.6 billion above second place RenCap Securities (NIG) Limited. In terms of volumes traded on the local bourse, Stanbic IBTC Stockbrokers Limited is also ranked as the best performer with over 4.3 billion trades completed. 62.8 per-

cent more than the second placed CSL Stockbrokers Limited with 2.6 billion trades. Leveraging on the expertise and experience of their parent company, Standard Bank Group, SISB has maintained an advantage in the brokerage business and has ranked top two in terms of volume and value of trades completed on the bourse for the last 3 years. According to the NSE data, RenCap Securities (NIG) Limited, EFCP Limited, CSL Stockbrokers Limited, FBN Quest Securities Limited complete the top five brokers in terms of value of trades completed since the beginning of the year with N52.74 billion, N36.65 billion, 30.87 billion, and N16.48 billion respectively. In terms of YTD volumes, the brokerage companies behind Stanbic IBTC Stockbrokers Limited was as follows; Chapel Hill Denham Securities Ltd, CSL Stockbrokers

Limited, RenCap Securities (NIG) Limited, Cardinalstone Securities Limited with 2.76 billion, 2.65 billion, 2.44 billion, 1.80 billion trades completed. SISB leading its peers after 3 months is similar to the performance of the first quarter of last year save for the fact that as at the end of March 2018, SISB ranked as the second best in terms of volumes traded with United Capital Securities Limited clinching the top spot at the end of Q1 in 2018. However, at the end of 2018, SISB had regained momentum and overshadowed its competitors by a wide margin recording over N466.53 billion and N17 billion in value and volume of trades completed for the calendar year. RenCap Securities (NIG) L i m i t e d re c o rd e d o v e r N290.4 billion (2nd) and 9.1 billion(5th) in value and volumes traded respectively

L-R : Folake Ani-Mumuney, group head, marketing and corporate communications, First Bank ; Kayode Akinkugbe, MD, FBN Quest Merchant Bank; Adesola Adeduntan, CEO, First Bank; Seyi Oyefiso, group executive, commercial banking group, First Bank; Ibukun Awosika, chairman , First Bank, and UK Eke, GMD, FBN Holdings, at the First Bank 125th anniversary relay walk in Lagos. Pic by Pius Okeosisi

at the end of 2018 followed by CSL Stockbrokers Limited, N238.8 billion (3rd) and 14.3 billion (3rd), EFCP Limited,

N218.8 billion (4th) and 5.92 billion (8th) and FBN Quest Securities limited with N123.8 billion (5th) and 5.88 billion

(9th) rounded up the top 5 brokerage firms in terms of values traded on the local bourse for the year ended.

BANKING

Tier-2 lenders lead banking stocks amid waning interests in equities DAVID IBIDAPO & SEGUN ADAMS

o far in 2019, the tier1 lenders are trailing other listed deposit money banks, while Sterling and Union Bank stand out on a stellar share performance in the New Year to lead the entire banking sector even though the sector is taking a hit as stock apathy increase. Excluding Access bank due to peculiarities surrounding movement in its stock price prior merger conclusions with Diamond Bank, the tier-1 lenders; UBA, Zenith, GTB, and First Bank recorded an average return of 1.06 per cent whereas Mid-tier lenders average about 10 times on Year to Date (YTD) share gain. Although the banking index have outperformed other sectoral indexes on the exchange with an index appreciation of 2.24 per cent year to date, GTB and First Bank are the only two toptier lenders to have outperformed the banking index while Stanbic and Ecobank

are the only Banking 10 index tier-2 lenders trailing sector’s average. “Most tier one banks have released their scorecards which has shown only a decent performance and investors are turning to tier-2 banks now partly because of the marking down of tier-1 stocks exdividend,’’Gbolahan Ologunro, Equity analyst at CSL Stockbrokers explained. Ologunro explained that stock market was broadly bearish at the start of the year, owing to, among other things the 2019 presidential elections. The negative sentiment at the start of the year, he said, weighed on the tier1 banking stocks where Foreign Portfolio Investors (FPI) prefer to pool fund in. “The relatively cheap price of many tier-2 stocks at the start of the year also have contributed to the gains in share price you so far have seen,’’ The stocks market which was bearish in the first few trading days of the year picked up momentum gradually as the general elections approached on the

back of declining political risks and in spite of a few politically coloured events that bit the market at some point. However, the market has been mostly bearish post elections and our analysis of sectorial index performances on the exchange reveal

that the banking index has been the most affected. The Banking sector, where FPIs have the most exposure to, has declined 7.77 per cent since February 27, underperforming the all share index (ASI) which dipped 4.95 per cent during the same period under

review. “This reaction shows foreign investor’s concern on the current administration’s policy to boost the Nigeria private sector, hence the performance of these firms to maintain status quo,’’ Paul Uzum, a stockbroker on the floor of the NSE.

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: David Ogar

Gbolahan also commented that there is little impetus to drive the market currently as policy direction remains unclear. Even though Nigeria’s economy in Q4 2018 saw its biggest quarterly growth since the 2016 recession according to reports by the National Bureau of Statistics, Nigeria’s fragile annual growth of 1.93 percent still remains a concern especially since the country can still easily slip into recession, given its recession gap of 1 percent as a Lagos Business School report in March show. The poor state of infrastructure, power, low consumer spending and lack of government policies to drive growth in the real sector were some of the challenges businesses had to contend with in the previous year. ‘’ Unless we see a Uturn in the attitude of government towards driving growth in the real sector, there might be no real catalyst to support the market when the earning season is over’’ Uzum said.

BUSINESS DAY

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

Thursday 21 March 2019

COMPANIES & MARKETS APPOINTMENT

Meyer announces changes to board, confirms appointment of new MD GBEMI FAMINU

eyer Plc, one of N i g e r i a’s leading brands in the manufacturing industry recently announced some effected changes in its administrative structure. In a public statement sent to the Nigerian stock exchange (NSE), the company stated that “We hereby notify the exchange that the board of directors at its meeting held on Tuesday ,19th March 2019 appointed Mr. Devashish Nath as the new managing director with effect from 1stFebruary 2019” The notice further stated that, Kehinde Yusuf who was appointed as the company’s Chief Financial Officer (CFO) on the 3rd of September 2018 has tendered his resignation which

became effective from December 31st 2018. The recently appointed managing director has over two decades of experience in the manufacturing and production space, having served in various positions and diverse companies in India and West Africa Including Berger Paints India where he served as the general manager for manufacturing from April 2011 till January 2019, rainbow paints and chemicals sierra Leone where he served as the general manager for operations. BusinessDay’s analysis of Meyer’s financials for nine months 2018 showed that the company’s revenue recorded a decline by 3.34 percent having had N 778 million in 2017 and N 752 million in 2018. the company recorded another decline it its cost of sales by 11.6 percent with N 556 million

in 2017 and N 491 million in the corresponding period of 2018. Gross profit for the company grew by 17.64 percent having had N221 million in 2017 and N 260 million in 2018, while its profit for the period recorded a growth of 19 percent to N 186 million as against the N 221 million the company recorded the previous year. Nath has an M.B.A in marketing and systems from the Sikkim Manipal University Health Medical And Technological Sciences and also an M.Sc in organic chemistry from the university of Lucknow India. Meyer Plc was founded in 1940 and was formerly known as DN Meyer Plc, until the company changed its name in August 2016 to Meyer Plc. The company was incorporated may 20th 1960 and was listed on the Nige-

L-R: Prem Sankar, chief trainer, Panasonic Marketing Middle East & Africa FZE; Brian Hew Tze Vuen, assistant chief, Room Air Conditioning Marketing Department, Panasonic Corporation; Oyeleye Oluwaseun, a trainee, and Mahesh Keswani, manager, Panaserv Nigeria Limited, during the aircon technical seminar organised by Panasonic in conjunction with its Nigerian Partner, Panaserv Nigeria Limited held in Lagos.

rian Stock Exchange (NSE) in 1979. As a giant in the manufacturing industry, it has been

manufacturing and marketing wide-ranging, high quality industrial/marine paints, road lining paints,

architectural paints, wood paints, roof lining paints, tube coatings, adhesives, etc. for years.

COMPANY

BANKING

Home lottery Limited unveils raffle to ease housing burden in Lagos

RMB expands operations to India

SEGUN ADAMS

wning a home in Lagos is now a raffle draw away courtesy of The Home Lottery Limited, owners of the Home Lottery brand and a pioneer home lottery brand in Nigeria. The brand associated with quality home lottery scheme and synonymous with affordability says the motivation is to contribute its quota to reducing housing deficit in Lagos. ‘’Sourcing for the housing needs of over 23million Lagosians and 86 migrants per hour into the city is the brainchild of this concept’’ the company said. According to the National Bureau of Statistics, Lagos has a short fall of 2.5millions homes which represents 14.7% of the total housing deficit of the country which stands at 17million as at 2016. Home lottery limited says it is the solution to the craving need of making ownership of home affordable and accessible

to every Nigerian starting with those in Lagos. Home lottery plans to create homes to all segment of the population from the super-rich premium home owner’s city dwellers to the upwardly mobile suburban dwellers. With that, the company seeks to address this need by offering the opportunity to own a home in a most accessible and affordable way providing hundreds of homes annually through a credible, sustainable and trusted lottery scheme properties in Lagos developing to all over Nigeria. According to the company, the core target market is male and female adults between the ages of 25 and 75 who have a flare for lottery brands and are able to start participating in the exercise because they desire a reason to win a home. “The activation mechanism is simple. All you have to do is to send an SMS ‘home’ to 718 on an MTN network and this qualifies a participant a single entry for the monthly raffle that

has a star prize of a home.”, said Oladayo Oyelaja, the Project lead of Dreamview Enterprises. “Multiple play increases the chance of winning the star prize at the monthly raffle where a winner would emerge. Next draw comes up on April 1, 2019.” He said. According to Oyelaja, subsequent draws will be conducted monthly (Home) and quarterly (Mega) as the scheme progresses. Dreamview Enterprises is a consulting firm into i nt e g rat e d ma rk e t i n g communication activities, marketing research, brand marketing, and mystery shopping activities. It provides tailor-made solution that helps brands engage their markets and create product trials which in turn generate consumer loyalty and improve market shares of the brands and it intends aiding the Home Lottery Limited to achieve its aim of informing and educating a large percentage of its target audience.

GBEMI FAMINU

alu Ajene, Head of Investment Banking, Rand Merchant Bank Nigeria (RMBN), has disclosed that the bank has expanded its operations to India adding that it is an important and valued proposition for both countries considering the recently signed bilateral trade agreement. Speaking at the Indian professional forum dinner, Ajene said that RMB will leverage on that position by engaging significant businesses that have operations in Nigeria and also interact with India either through trade, capital flows or partnership, to foster the success of the trade. He said “Capital formation and business success is very key to grow value proposition for a bank like RMB.” Ajene also had his say on the government policy that mandates financial institutions to contribute 10 percent of its profit before tax to the national housing fund. “It is a very interesting way by the government to address the housing shortfall that exist in Nigeria, as long as it bridges the funding gap in terms of people being able to afford houses and also being able to get

effective cost financing to acquire those houses.” He added that RMB as a bank is interested in partnering with and is looking forward to working with the government on bridging the housing gap in Nigeria. Doyin salami, chief executive officer of Kainos Edge Consulting is of the opinion that 2019 has better prospects for the business environment in 2018 because the uncertainties surrounding the country’s elections has been resolved. Salami, who was the keynote speaker at the Indian professional forum dinner said, “Investments were not encouraging in 2018 due to the uncertainty surrounding the elections, but the successful conduct of the recent election has laid to rest investor’s fear of a change in government and change in policies”. Speaking on the Nigerian economy, he stated that the Nigerian economy is going through its recovery mode from recession although at a snail pace, he said the GDP in 2018 grew at 1.9 percent which was an improvement from 2016 and 2017 when recession was experienced and the economy contracted. He disclosed that although Nigeria is an oil

stream, it remains an oil dependent country and not an oil rich country, speaking in comparison to Saudi Arabia, he said, “Nigeria is an oildependent country unlike Saudi Arabia which is an oilrich country, Nigeria does two million barrels of crude oil per day, then at least 365 days roughly 800 million barrels of crude oil annually. If there are 200 million Nigerians, that means each person is entitled to four barrels of crude oil every year” “Saudi does 10 million barrels of crude oil daily which means four billion barrels annually, Saudi has 30 million citizens which means each citizen is entitled to six thousand US dollars which is a large difference to Nigeria” He advised that the government needs to source for revenue aggressively, because what happens to crude oil prices shapes the direction of the domestic Nigerian economy and Nigeria is not in a position to determine oil prices coupled with OPEC’s policy on oil output. He said oil prices for 2019 will probably be 61 $ per barrel but considering the occurrences around geopolitics and the slow growth of the economy it may fall below 60 per barrel.

Thursday 21 March 2019

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

COMPANIES & MARKETS CONSUMER GOODS

NB hits 8-year low after confirming court case with Nigerian government

OLUWASEGUN OLAKOYENIKAN

ollowing the confirmation of a court case between Nigeria’s largest brewer, Nigerian Breweries Plc, and the Nigerian government over copyright violation, shares of the beer maker, Tuesday, fell the most in a month to over eight-year low on the floor of the Nigerian Stock Exchange (NSE). The stock, which opened for trading at N75 at the Lagos bourse, closed 6.67 percent lower to N70, the firm’s lowest share price since September 29, 2010. “The company hereby confirms that it is defending an action filed against its former Managing Director/Chief Executive Officer, Mr Johan A. Doyer, by the Nigerian Copyright Commission,” the company said in a notice filed at the NSE on Monday. The court action by the Nigerian Copyright Com-

mission, which the brewer said was still pending at the Federal High Court, Abuja, was initiated in October 2017 based on a complaint by Paul Allen Oche. According to Nigerian Breweries, Oche is laying a claim to the copyright supposedly contained in a book he “wrote” and which has, as part of its title, the trademark of one of the firm’s non-alcoholic drinks, Amstel Malta. The country’s largest beer maker further explained that Oche subsequently filed a personal action with respect to the same issue at the same court, claiming damages against it and others. The firm also confirmed it would be defending the action with a view to protecting its legal rights as well as upholding its reputation. “As a law abiding corporate citizen, we restate our respect for the laws of the Federal Republic of

Nigeria and our commitment to seeing each court action through to its logical conclusion,” Nigerian Breweries further stated. NB shares have lost as much as N123.95 billion since the start of the year, implying 18.13 percent year-to-date loss thereby underperforming the market at -1.11percent. Sales of the company fell 4.26 percent to N350 billion in 2018 from N365.79 billion with a decline in the cost of goods sold to N197.48 billion as against N201.03 billion expended in the previous year. This is despite increasing its spending on marketing and distribution to N70 billion from N66.86 billion in 2017. As a result, Nigerian Breweries’ 2018 post-tax profit stood at N19.4 billion, about 41.2 percent lower than N33 billion it recorded as after-tax profit a year earlier.

@Businessdayng

BUSINESS DAY

Business Event

L-R: Tunde Olayeni, regional trade marketing manager, Nigerian Breweries Plc.; Samuel Chiboka, winner all expense paid trip to UEFA Champions League 2019 Semi-Final, and Hilary Oboh, regional business manager Enugu, Nigerian Breweries Plc., at the Heineken UEFA Champions League premium viewing event in Enugu.

L-R: Aminat Babalola, skills development executive, IBM; Victoria Etim-Bassey, java developer, SystemSpecs Limited; Mercy Agada, senior, quality assurance analyst, SystemSpec Limited; Olawumi Onawunmi, director of success, Andela, and Funmi Aliyu, manager, Ingressive, at the Fempower International Women’s Day celebration sponsored by SystemSpecs in Lagos. Pic by Olawale Amoo

HOSPITALITY

Transcorp Hotels bullish on Africa market amid impressive 2018 result OLUFIKAYO OWOEYE

hief Executive Officer of Transcorp Hotels Plc, Mrs. Owen Omogiafo, has assured on the company’s commitment to position Nigeria as the preferred destination for local and international tourists. Omogiafo made the remarks at the company’s 5th Annual General Meeting, which took place in Abuja. According to her Transcorp Hotels Plc. is redefining the hospitality landscape in Africa through the company’s commitment to quality, global standard, and customer experience. She also added that the company will continue to leverage its unique value proposition to achieve new heights. The Managing Director/ CEO, Mrs. Owen Omogiafo, reiterated the company’s commitment to quality and global standard customer experience, drawing on the

varied international awards conferred on the Company. “We are redefining the hospitality landscape in Africa and positioning our continent as a preferred destination for local and international tourists. Our numerous awards and recognition are proof of this,” she said. On the prospects for 2019, Omogiafo said Transcorp Hotels will continue to leverage on its unique value proposition and proven strategies to exceed 2018 performance. Chairman of the Board of Directors, Mr. Emmanuel N. Nnorom noted the company exceeded the bar with an impressive turnover of N17.4billion from N13.8 billion recorded in 2017, representing an improvement of 26 percent. Gross Profit increased to N12.24billion in 2018 as against N9.52billion in 2017. Profit Before

Tax (PBT) increased to N5.18billion in 2018 from N3.16billion in 2017; while profit after tax (PAT) stood at N3.87billion in 2018 from a low of N2.63billion in 2017 Transcorp Hotels Plc (“Company”) is the hospitality subsidiary of Transnational Corporation of Nigeria Plc. The Company owns and operates Transcorp Hilton Abuja, which provides luxury accommodation. Its hotels comprise Transcorp Hilton Hotel, a 5-star hotel with 670 rooms located in Abuja; and Transcorp Hotels with 146 rooms located in Calabar. The company formerly known as Transnational Hotels and Tourism Services Limited and changed its name to Transcorp Hotels Plc in 2014. The company was incorporated in 1994 and is based in Abuja, Nigeria.

L-R: Matthew Grigg, partner, Clifford Chance, Derivatives and Structured Trades; Bola Onadele. Koko, managing director/CEO, FMDQ OTC Securities Exchange; Samuel Ocheho, Chairman, Swaps & Derivatives Workgroup and Financial Market Dealers Association (FMDA) President, and Brett Gallie, International Swaps and Derivatives Association Africa Chairman, during the financial market workshop on derivatives organized by FMDA in Lagos.

L-R: Akinpelu Gbenga, fitness instructor; Olaobaju Omotayo, junior brand manager, Three Crowns; Fadaka Bolanle, employee relations manager, and Gbenga George, consumer activation manager, all of Friesland Campina Wamco, at the Three Crowns Fitness Challenge, Friesland Campina Wamco in Lagos.

BUSINES DAY

Thursday 21 March 2019

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

Investor

BUSINESS DAY

@Businessdayng

In association with

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

Market capitalisation

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,241.37

1,456.29

801.09

Week open 08 – 03–19)

31,924.51 31,924.51

N11.721 trillion

11.905 trillion

2,241.37

1,456.29

801.09

Week close (15 – 03–19)

31,142.72

11.614 trillion

2,194.44

1,433.41

802.79

Year Open

Percentage change (WoW)

-2.45

Percentage change (YTD)

-0.92

-2.09 -0.03

-1.57

-0.21

-0.44

1.13

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

723.46

291.84

2,272.45

1,254.54

1,212.79

720.32

292.09

2,261.12

1,240.46

1,193.08

NSE Banking Index

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

1,438.19

426.64

130.95

1,438.19 1,401.60

426.64

130.95

400.48

129.91

NSE 30 Index

- 2.54 -1.10

- 6.13

-1.30 2.71

0.39

723.46

- 0.79 -3.81

0.09 -3.36

-0.50 1.22

-1.12 0.21

-1.63 -1.19

Access Bank: Delivering value to shareholders …movement to topmost position gains traction Iheanyi Nwachukwu

ecently, Access Bank Plc released its audited financial statement for the full year ended December 31, 2018. The results released to the investment public at the Nigerian Stock Exchange (NSE) shows Access Bank Plc grew its Profit After Tax (PAT) by 58.07percent to N95billion as against N60.1billion the bank recorded in 2017. The bank’s Gross Earnings increased 15percent to N528.7billion in full year 2018, compared to N459.1 billion in full year 2017, with interest and non-interest income contributing 72percent and 26percent respectively. Profit before Tax (PBT) for the period was N103.2 billion, showing 32percent growth from N78.2 billion in 2017 while Return on Average Equity (ROAE) stood at 19percent with a Return on Asset of 2.1percent in FY 2018. The asset base of the Access Bank remained strong and diversified with growth of 21percent year-to-date (YtD) in total assets to N4.95 trillion in December 2018 from N4.10 trillion in December 2017. Loans and Advances totaled N2.14 trillion as at December 2018 (December 2017: N2.06 trillion). Customer deposits increased by 14percent to N2.57trillion in December 2018, from N2.25trillion recorded in December 2017. Capital Ade quac y (C AR) remained adequate at 20.8percent, taking into consideration the regulatory transitional arrangement of IFRS 9

implementation. On a full impact basis, CAR stood at 19.9percent. Similarly, liquidity ratios of 50.9percent against December 2017 level of 47.2percent remained well above regulatory requirements. Reward to shareholders Access Bank proposed a final dividend of 20 kobo per share bringing the total dividend for the financial year ended December 31, 2018 to 50 kobo. Management speaks Herbert Wigwe, Group Managing Director/CEO Access

Bank Plc while commenting on the bank’s performance during the review period said, “2018 marked a significant year of progress for the Bank amidst an unfavourable macro climate. We made solid progress throughout 2018 in line with our 2018-2022 five-year strategy, and we remain committed to the achievement of our strategic imperatives going forward; as we continue to invest in our people and technology in order to improve operational efficiency and service touch points with earnings growth in 2019”.

A c c o r d i n g t o G M D, t h e c o nt r i bu t i o n o f t h e ba n k ’s subsidiaries to Group profits grew 116percent to N27.9 billion, underlined by the effective i m p l e m e n t a t i o n o f ov e ra l l strategy. “In pursuit of our vision to be one of the leading Banks in Nigeria, we took accelerated strides in the last quarter of the year towards achieving our overall retail strategy. “The merger with Diamond Bank will enable us to fully entrench ourselves in the retail market with a view to lowering

our funding cost. This transaction is anticipated to be completed by April 2019, resulting in the creation of an enlarged, efficient and digitally led tier 1 retail banking franchise” Wigwe stated. Trading information The shares price of Access Bank Plc at N5.85 sums up to N169.228billion in market capitalization. The share price had reached a 52-week high of N11.35 and 52 week low of N5.20. The stock price has declined by 14percent year-to-date (ytd). E xc erpts from group’s fundamental statistics Access Bank Plc is a full service commercial bank operating through a network of about 402 branches and service outlets located in major centres across Nigeria, Sub Saharan Africa and the United Kingdom. The bank has 28.9billion shares outstanding; N491billion in shareholders’ funds; and 10million plus customers. The group, which serves various markets through four (4) business segments: SME, Commercial, Corporate, and Personal also has a wide range of channels to deliver seamless banking experience… 1,870 ATMs; 5.4million cards; 19,843 POS, and 402 branches. Re sult s p re s enta t ion to investors and analysts… Key takeaways Following the released full year 2018 scorecards of Access Bank Plc, it held its investors and analysts’ conference call as well as earnings presentation Continues on Page 19

BUSINESS DAY

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

Thursday 21 March 2019

Investor

Helping you to build wealth & make wise decisions

United Capital Investment View

Investor’s Square

Year-to-date return turns negative as bears storm the NSE

•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

he local bourse drew the curtain for last week ended March 15 on a bearish footing as consistent losses recorded on almost all the trading sessions in the week largely outweighed the mild gain recorded on just one of the sessions during the review week. Overall, the Nigeria Stock Exchange (NSE) All Share Index (ASI) declined by -2.4 percent week-on-week (w/w) to a onemonth low of 31,142.7 points. Investors’ wealth suffered losses over the review week as market capitalisation trimmed N291.5billion to N11.6trillion while year-to-date (YtD) return worsened to -0.2percent. Performance across sectors was broadly bearish; the Banking (-6.1percent) sector index led laggards as sell-off in GUARANTY (-5.1percent) and ZENITH (-11.8percent) majorly dragged the index.

The Industrial Goods (-1.1percent), Insurance (-0.8percent), and Consumer Goods (-0.4percent) sector indices also trended southwards largely owing to price declines in DANGCEM (-2.6percent), UNILEVER (-5.6percent) and LINKASSURE (-6.4percent). On the flip side, the Oil and Gas (+0.1percent) sector index was the lone gainer for the week, buoyed by price gains in OANDO (+2.6percent). Meanwhile, the Agricultural sector closed flat. In terms of earnings, ACCESS (Revenue up 5.2percent to N528.7billion and profit after tax (PAT) up 58.1percent to N95billion) and UBA (Revenue up 4.7percent to N465.9billion and PAT up 1.4percent to N78.6billion) both

declared dividends of 25kobo and 65kobo respectively. Market breadth - a proxy for investors’ sentiment- was underwhelming as it closed below the market threshold of 1.0x at 0.4x; 16 stocks advanced over the review week against 40 decliners. Considering the overly bearish theme that was witnessed last week (Relative Strength Index: 48.6), the market may likely see a rebound this week as investors take advantage of badly beaten stocks on the exchange. Money Market: Repricing continues in the wake of 2019 polls The week to March 15 featured yet more buying interests as repricing of money market rates continued in the wake of 2019 polls. In the primary market, the CBN issued fresh OMO papers worth N400.4billion, resulting in a marginal rise in average money market rates (Open Buy

Back and Overnight rates) for the week to 10.7percent from 10.5percent in the preceding week. Interestingly, the CBN took advantage of the modest demand (bid-to-cover:1.2x) to cut OMO rates; 91-day from 11.90percent to 11.84percent, and 175-day from 13.44percent to 13.20percent. On another note, the bank conducted its bi-monthly NTB auction, wherein it successfully re-financed N89.5bn. Demand was intense as bids worth 6.7x of the offer amount, turned up, though most of the demand was concentrated at the 364-day paper which saw bids worth 7.7x of the offer. Expectedly, the CBN was able to roll over the auction at relatively lower stop rates (91-day (10.75percent versus 10.90percent at the last auction),

182-day (12.50percent versus 13.01percent at the last auction) and 364-day (12.845percent versus 14.37percent at the last auction). In the secondary market, NTB yields tracked lower by an average of 18bps to close at 13.3percent, as yields repriced. This week, the CBN would most likely continue its spate of OMO issuances to check system liquidity and we expect the tempo of this event to guide trading sentiments in the money market. Bond Market : Orderdriven theme amid preference for T-bills An order-driven theme guided sentiment in the bonds market with investors maintaining a preference for treasury bills. Consequently, FGN bond yields inched higher fractionally by 1bp on average to close at 14.4percent. In another development, the average yield for FGN Eurobond moderated to 6.8percent compared to 7.1percent while the average yield in corporate Eurobonds moderated to 8.4percent from 8.7percent. Looking forward, we expect a lull theme to guide sentiments in the bonds space. However, declining yields in the T-bills market should support some buying interest. FX: NAFEX rate trades at a low of N356/$ In the week to end March 15, 2019, the rate of exchanging the naira for a dollar at the I & E Window, traded within a low of N356/$1 and a high of N364.2/$1 to settle at N360.2/$1, implying a 0.1percent week-on-week (w/w) appreciation. Activity level at the window tapered 39percent w/w to $1.6billion (from $2.7billion) – but remained buoyant. On the other hand, exchange rates declined 2bps at the official window to N307/$1 while an inch-like appreciation of 0.1percent was seen at the parallel market to close the week at N358.0/$1. In the light of renewed offshore interest in Nigerian fixed-income assets, evidenced by the massive FPI inflow we have seen in recent times, FX reserves pickedup again (+0.8percent w/w to $43.0bn). Overall, the FX market is expected to remain stable in the near-term.

FMDQ OTC Market Summary:

Fixed Income, Currency market turnover rises to N19.18trn … Increases by 52.4% year-on-year, 27.2% month-on-month Iheanyi Nwachukwu

urnover in the Fixed Income and Currency (FIC) markets for the month ended Febr uar y 28, 2019 was N19.18trillion, representing a 27.19percent or N4.10trillion month-on-month (MoM) increase as against turnover of N15.08trillion recorded in January 2019. Also, the record FIC market turnover in February represents 52.38percent yearon-year (YoY) increase from N12.59trillion recorded in February 2018. The Treasury Bills (T. bills) and Foreign Exchange (FX) market segments remain the major drivers of turnover in the FIC markets, jointly accounting for 77.88percent of turnover in February 2019, which was 0.81 percentage points (ppts) lower than their contribution in January 2019 (78.69percent) FX Market Total FX market turnover i n Fe b r u a r y 2 0 1 9 w a s $14.59billion (N5.28trillion), representing a 20.63percent ($3.79billion) month-onmonth (MoM) decrease from the turnover recorded in January ($18.38billion). Analysis of FX turnover by trade type indicates a decline across all three (3) segments, as FX turnover for InterMember, Member-Clients and Member-CBN trades declined by 11.61percent, 25.52percent and 11.59percent respectively. Conversely, turnover at

the Investors & Exporters ( “ I & E ” ) F X Wi n d o w i n Februar y recorded a 232percent ($6.96billion) MoM increase to close at $9.96billion from the $3billion recorded in January 2019 and an 82.75percent ($4.51billion) YoY increase from the $5.45bn recorded in February 2018 respectively, as inflows from foreign investors picked up in the week following the conclusion of the presidential elections Analysis of FX turnover by product type showed a decline for both FX Spot and FX Derivatives, with FX Spot recording a MoM decrease of 23.33percent ($2.67billion) and accounting for 70.44percent of the total MoM decline in FX turnover. The MoM decrease of 16.14percent ($1.12billion) in FX Derivatives was driven by a 57.04percent decline in FX Futures turnover, despite MoM increases in FX Swaps and FX Forwards turnover by 5.89percent and 0.99percent respectively. In February, the 32nd Naira-settled OTC FX Futures (FX Futures) Contract (NGUS FEB 27 2019) with total open contract size of $563.55million matured and was settled on FMDQ, bringing the total value of FX Futures contracts settled on FMDQ since inception to circa $14.34billion; out of FX Futures contracts worth $20.05billion traded to date. A new 12-month Futures contract (NGUS FEB 26 2020) with a notional principal of $1.00bn and futures price of $/ N363.40 was listed on FMDQ.

In February 2019, the Nigerian Naira appreciated against the US Dollar at the Investors’ & Exporters’ FX Window (“IEFW”) and the parallel market, gaining N2.04 and N1 to close the month at $/N360.99 ($/N363.03 in January) and $/N361 ($/ N362 in January) respectively, driven by the MoM increase in FX inflows in the IEFW. Conversely, the CBN Official Spot rate depreciated by 10 kobo to close at $/ N306.85 (from $/N306.75 recorded in January) Fixed Income Market (T. bills and FGN Bonds) Total T. bills (including OMO bills) outstanding recorded a MoM increase of N1.08trillion to close at N16.10trillion, with OMO Bills accounting for 100percent of the MoM increase while actual T. bills outstanding remained unchanged, as the CBN continued its liquidity mop up via OMO auctions to curtail build-up of inflationary pressure. Similarly, FGN Bonds increased MoM by N260billion to close at N8.52trillion as at February 28, 2019. Furthermore, the split in sovereign debt between longand short -term debt as at February 2019 was 76:24 (long versus short term), higher than the target ratio of 75:25 outlined in the Debt Management Strategy Monthly Trading Intensity in the T. bills and FGN Bonds markets increased from 0.46 and 0.08 in January 2019, to 0.54 and 0.12 in February 2019 respectively.

Thursday 21 March 2019

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Investor

Helping you to build wealth & make wise decisions

Capital market can lead Nigeria Access Bank: Delivering value... out of poverty - experts Continued from Page 17

Iheanyi Nwachukwu

ederal Government has been urged to make the capital market the fulcrum of its industrialisation agenda and economic development in a bid to urgently lead the country out of poverty . This was part of the resolutions at 3rd Annual Bu dg e t S e m i na r o f t h e Securities and Exchange Commission (SEC) with the theme “Budgets, Elections and Capital Markets: Risks and Opportunities in 2019”. In her remarks, Mary Uduk, acting Director General of the Securities and Exchange Commission, SEC said government budget affects the economy and the economy in turn affects the capital Market. A c c o r d i n g t o h e r, “Stakeholders both local and foreign are interested in the budget and try to analyse

how it affects them. Investors also sit down and analyse the budget and that is why the capital market is looking at the impact of the budget and how the market can aid its implementation. “The capital market is very important in funding for a lot of projects in the economy. The capital market is important in raising these money to fund the budget. We want to be in the driver seat and contribute to the budget if the Federal Government “We are interested in driving and contributing to this economy and that is why we are having this seminar. We believe there are a lot of opportunities for the capital market in this budget. There is need for us to seat down again as a capital market community and find ways of driving the budget”. In his lead presentation, Afolabi Olowookere, Head Economic Research, SEC said that opportunities exist for equities and sub- national

issuances and urged state governments to explore the capital market for funding of their project. Olowookere said that opportunities exist for equities and sub-national issuances as a means to fund the budget while urging a lower FGN domestic borrowing to make room for private issuances. He said some of the ways the budget can be funded include “Creation of money market-based instruments and trading, Commodity trading and derivatives, Investing in eligible companies under Tax Credit Scheme as well as attracting restructured oil assets to list. Discussants on the panel opined that Infrastructure development is of optimal importance for the achievement of development of sustainable prosperity adding that all sectors are dependent on infrastructure to attract investment and ensure the active participation of the private sector.

L-R: Olumide Orojimi, heead, corporate communications, The Nigerian Stock Exchange (NSE); Bekeme Masade-Olowola, GRI board member, CEO, CSR-in-Action; Bola Adeeko, head, Shared Services Division, NSE and Douglas Kativu, director, GRI Africa during Sustainability Reporting Workshop and the Unveiling of the NSE Sustainability Disclosure Guidelines at the NSE in Lagos.

ACTN holds its breakfast meeting

he Association of Corporate Treasurers of Nigeria (ACTN) will on March 28, 2019 hold its breakfast meeting where participants will review and discuss the Nigerian economic and business outlook for 2019. The breakfast meeting which holds at the Lagos Continental hotel Victoria Island by 8.30am is a forum for the Corporate Treasurers of the buy side of the Nigeria economy to have an in-depth discourse on the possible impacts of the business environment within the year and ways of restoring confidence in the financial markets. The theme of the breakfast meeting is “2019 Economic and Business Outlook”, while

the keynote address shall be presented by a renowned Economist, Adnrew Nevin, the Chief Economist and Advisory partner of Pricewaterhouse Coopers (PWC). The 2019 general elections have come and gone, and it is expected that it is now time to put politics aside and let governance take the centre stage. The re-election of President Muhammed Buhari for the second term obviously has some implications for business and the economy which the Corporate Treasurers would be considering at the forthcoming meeting. The Association of Corporate Treasurers of Nigeria (ACTN) is an association established to

foster the interests of Corporate Treasurers in the Nigerian financial markets by providing a platform for policy advocacy, discussions on issues of mutual interest, education and standard development of the corporate treasury function. As part of the efforts of the association towards the education and enlightenment of its members, the association regularly host breakfast meetings where issues on economic policies as well as policy directions and their impacts on the activities of the corporates are reviewed and discussed with regulators, economists and financial markets experts as lead speakers/discussants.

which many leading market analysts and professionals participated. Balance Sheet snapshot Access Bank total assets grew 21percent to N4.95trillion as at December 2 0 1 8 ( D e c e mb e r 2 0 1 7 : N4.10trillion). The bank has a well-structured balance sheet management, with interest earning assets and noninterest assets accounting for 70percent and 30percent respectively. Loans and advances of N2.14trillion, up 3percent year-to-date (ytd) reflect macro realities and cautious loan growth strategy. Customer deposits grew 14percent y/y to N2.57trillion in December 2018 from N2.24trillion in December 2017 with low cost deposits accounting for 50percent Subsidiary performance overview Subsidiaries continued to improve their contribution to the group’s performance, recording total subsidiary PBT of N27.9billion up 116percent y/y (FY’2017: N13billion), accounting for 27percent of Group’s PBT (-12bps, FY ’ 2017: 39percent). UK and Ghana accounted for 88percent of total FY’18 subsidiary PBT. Total loans for the subsidiaries stood at N500.9billion (+29percent YTD), with total deposits at N1.07trillion (+25percent) due to enhanced deposit mobilization. Total assets from subsidiaries at N1.29trillion (December 2017: N1.04trillion). Bullish in financial targets In 2019, Access Bank has set targets for itself. For instance, it is targeting 20 percent Return on Equity by end of 2019. On Asset Quality, the bank eyes less or equal to 1.5percent in Cost of Risk (CoR); and nonperforming loan (NPL) ratio of less or equal to 10 percent. Its efficiency ratios targets show: Cost-to-Income Ratio (≤60percent); Net Interest Margin (6percent); and Cost of Funds (5percent). Its prudential ratios targets show Capital Adequacy Ratio (≥20percent); Loan-toDeposit Ratio (60percent); and Liquidity Ratio (≥50percent). Merger deal with Diamond Bank The merger deal between Access Bank Plc and Diamond Bank Plc is expected to be completed in April 2019. Come April 1, the bank hopes to accelerate value creation from the merger as well

Herbert Wigwe, group managing director/CEO Access Bank Plc

as processes integration. The shareholders of Access Bank Plc had at a Court Ordered Meeting held in Lagos on Tuesday March 5, 2019 approved the scheme of merger with Diamond Bank Plc. A total of 1,569 shareholders of Access Bank Plc who own 14.405billion units voted. While 1,529 voted for the merger, 10 voted against it; while 30 shareholders were absent. The shareholders that voted represent 97.89 percent while those that voted against represent 2.10 percent. Recall that both banks had signed Memorandum of Agreement and announcement of h e a d l i n e te r m s, w h i ch valued Diamond Bank at approximately N72.5 billion ($200million) and will see Diamond Bank shareholders receive N3.13 per share in cash and 2 of Access Bank’s shares for every 7 of Diamond Bank. Chapel Hill Denham Advisory Limited and Union Capital Markets Limited are acting as Financial Advisers in respect of the Scheme of Merger between Access Bank Plc and Diamond Bank Plc. The merger will form a leading Tier 1 Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries and 29 million clients. It will bring together treasury, risk management and corporate banking expertise with strong retail and digital banking capabilities to create a financial institution operating across the full suite of products for all customer segments. T h e m e r g e r ’s c o s t synergies conservatively estimated at N30 billion per annum, pre-tax is to be fully realised within three years post-completion. Issues N15billion Green Bond Earlier this week (precisely on Monday March

18) Access Bank Plc issued a 5-year Fixed Rate Senior Unsecured N15billion Green Bond; the first ever Climate Bonds Standard fully certified corporate Green Bond to be issued in Africa. The new funding will be directed towards financing new loans and refinancing existing loans in accordance with the bank’s Green Bond Framework, and support projects directed at Flood Defense, Solar Generation facilities and Agriculture. Chapel Hill Denham was the Lead Issuing House on the Green Bond Issuance, while the Joint Issuing House was Coronation Merchant Bank. The 5-year Fixed Rate Senior Unsecured Green Bond has been awarded an Aa- rating by Agusto & Co, the underlying framework verified by PwC (UK) and the Bonds certified by the Climate Bonds Initiative as having met the global Climate Bonds Standard. The offer for the Green Bonds was achieved by way of a Book Build which was fully subscribed. The Bonds priced at a coupon of 15.5percent, with participation from a wide range of asset managers and pension fund administrators. The management of Access Bank had, in anticipation of the Issuance, launched the Nigerian Green Bond Market Development Programme in June 2018, in partnership with FMDQ OTC Securities Exchange and the Securities & Exchange Commission. “With our pacesetting experience in the mainstreaming of sustainability in our business operations, we are confident that this issue with further help in supporting environmentally friendly investors to meet their investment objectives whilst simultaneously s u p p o r t i n g t h e Ba n k ’s customer towards realizing growth opportunities in fast-developing low carbon economy”, Wigwe said.

BUSINESS DAY

www.businessday.

www.facebook.com/business-

@businessDayNG

@Businessdayng

Thursday 21 March 2019

BUSINESSTRAVEL

Naira devaluation will hurt airlines - Med-View CEO Stories by IFEOMA OKEKE

uneer Bankole, Chief Executive Officer (CEO) MedView Airline has warned that any further devaluation of the naira will affect the earnings of airlines in Nigeria and drive some into extinction. Bankole has advised the Federal Government to map out strategies to prevent further depreciation of the naira against major currencies, especially the US dollar in order to save the nation’s airlines from total collapse. Speaking in an interview at the 2019 Quarterly Business Meeting (BBM), last week organised by the Aviation Safety Round Table Initiative (ASRTI) held in Lagos, Bankole, lamented that the crash of the naira against major currencies in 2015 led to the deplorable state of the operating airlines in Nigeria. He warned the government that any further rise in the exchange rate would negatively affect the fortunes of the airline sub-sector in the country. He said the crash of the naira

Muneer Bankole, chief executive officer (CEO) Med- View Airline

led to the depletion in the fleets of Nigerian carriers as maintenance cost which is paid for in dollars skyrocketed.

He called on the government to introduce policies that would make the naira stronger against foreign currencies adding that if this hap-

FAAN maps out plans to boost nonaeronautical revenues

he Federal Airports Authority of Nigeria (FAAN) has set up a committee to map out plans to boost revenue generation for the agency, especially the non-aeronautical sources. This is as the agency said that it is going through some processes that would eventually lead to the approval of its Aviation Security (AVSEC) to bear arms in 2019. Saleh Dunoma, the Managing Director, FAAN disclosed these to aviation journalists yesterday in an interview at the agency’s headquarters at the Murtala Muhammed Airport (MMA), Lagos. Dunoma said it was high time airport authorities on the continent diversified their revenue generations away from aeronautic to nonaeronautic, stressing that other airport managers across the world had already keyed into this. He insisted that the committee, which he chaired, consisted of relevant directorates and departments responsible for revenue generation for FAAN and would come out with a roadmap to enhance revenues for the agency. He declared that FAAN as an agency could not be left behind in development of its airport infrastructure, stressing that the only way to achieve this was for it to diversify its revenue generation and tap into the myriad of opportunities in the system. He explained further that apart from Nigeria, other airport authorities across the continent were also deliberating on how to increase their non-aeronautical revenue services,

which he said formed the theme of this year’s Airports Council International (ACI) held in Egypt. He said: “What we intend to do is to diversify our revenue sources. In Africa, we have not tapped into non-aeronautical sources and we are encouraging African airports to look at non-aeronautical revenue sources of revenue because aeronautical sources of revenues have limitations; they are highly dependent on flight operations. “The non-aeronautical revenues are being developed so much that they can be in pari-passu with the aeronautical sources of revenues. This is what we want African airports to develop. Some papers were presented to guide African airports to develop that area. “As a matter of fact, I just finished a meeting with my team. I set up a team on revenue generation and this team is chaired by me. It is very sensitive to the survival of African airports, especially FAAN. We started the meeting today (yesterday) and we

will continue to meet every week until we get to where we want to be. “We have not come up with a target yet but the committee will come up with that. There are lots of departments involved, including engineering and commercial. By the time we develop some projects, we will have revenue targets that we want to achieve. This will be done by the committee.” He explained further that before the end of the year, AVSEC personnel would have been approved to bear arms in order to increase their surveillance of the sector. He, however, said that before this could be achieved, the department required some training and approvals, especially from the National Security Adviser (NSA), stressing that background checks would also be carried out on some of the personnel before the approval. He said: “There are certain projects that we need to implement before we can start carrying arms. Number one, we have to get the arms. Number two, we have to store the ammunitions somewhere. We need to embark on projects that will enable us to have storage somewhere at the airport. Number three, we need to profile and train. “It is not everybody that will bear arms. This, we must apply. We cannot train ourselves. We have to be trained by those that have been long in the system; the State Security Service and the Nigeria police. Also, we want to make sure that we get certification from the office of the National Security Adviser. We have to go through these processes.

pened, more domestic airlines would spring up and provide jobs for the teeming population. “As you are aware, before this administration came into being, the naira was N150 to a dollar and that was the target of everything we were doing, including leasing of aircraft and others, but, suddenly, it went to N500 and more. Then, a lot of challenges came in and you still have to pay your money back in the same value of the currency of which you took before. “We are praying now that the exchange rate should go down and not increase as predicted by some people. This will create better life for Nigerians. What government should do today, is to bring the value of the naira back to the minimal level by which we can grow our economy. It should go back to N250 or maximum N280. This can be done gradually”, he said. He further disclosed that nine months after the Federal Government approved the removal of Value Added Tax (VAT) from air transport, the decision is yet to be implemented. The Airline Operators of Nigeria (AON), had lamented that its

members paid at least N10 billion annually as five percent VAT to the coffers of the Federal Government through the Federal Inland Revenue Service (FIRS). Bankole, explained that the umbrella body of the airline had made attempts to ensure its implementation without success, stressing that government still needed to inform the Ministry of Finance through memos which he said had not yet been done. He called on the government to hasten the implementation to further reduce the financial burden on airlines operating in the country, adding that while the Nigerian government was collecting five percent VAT from the indigenous airlines, their foreign counterparts that operate in the country don’t remit such, either in the country or at their bases. He said: “As at today, the answer is negative. Nothing is being done in that direction. All we are praying for is still to have the relevant authorities to do the right thing. “The government will still need to talk to the Ministry of Finance, budget and everybody, including the National Assembly, to have it down and become a law.”

NANTA to focus on strategic policies for downstream section at 43rd AGM

he National Association of Nigeria Travel Agencies (NANTA) has announced that it will hold its 43rd Annual General Meeting (AGM) with a focus on developing strategic policies for the sustainability and growth of the travel and tourism industry. This event is coming at a time when the downstream sector of the aviation industry has lamented over weak policies of the government, making it impossible to protect the travel agencies. Speaking at a press conference to announce the AGM in Lagos, Bernard Bankole, president of NANTA said the event which will holds on

the downstream sector to ensure it implements policies that protect indigenous players, encourage professionalism and ensure the industry is rid of fraudulent practices,” Bankole added. He said the key note speaker for the event will be Muhtar Usman, the director general NCAA, while Hadi Sirika, minister of state, aviation and Lai Mohammed, Nigeria’s Minister of Information and Culture will be Special Guests of Honour at the occasion. Also speaking at the event, Susan Akporiaye said that in Nigeria, the tourism industry has taken a back stage and there is a need for the private sector to get close to the

March 27 at the Muson Centre, Lagos will draw government’s attention to implementing policies that will sustain and grow the travel and tourism industry. “We are hoping that at the next level of the President Muhammadu Buhari administration, we will have a road map for the travel and tourism industry. Ethiopia is sustained by their aviation sector. Why can’t Nigeria thrive and survive on aviation if the right policies are in place? “Government needs to look at

government so they can also influence policy implementation for the downstream sector. “A lot of countries thrive on tourism and travel and Nigeria cannot be left behind. People need to know the potentials inherent in the sector. If we don’t have the right policies, there is little we can do to realise these potentials. This is why this AGM will address policies that can help us a as a nation realise these huge potentials inherent in the downstream sector,” Akporiaye added.

Thursday 21 March 2019

C002D5556

BUSINESS DAY

Olam announces acquisition of Indonesia’s BT Cocoa 24

My agenda for MAN – Mansur Ahmed

Global manufacturing slows

Why Warren Buffett is staunch supporter of index funds 23

Beauty of digital disruption SIAKA MOMOH

emi Osinubi, Partner and Leader, Data and Analytic/Artificial Intelligence, PWC West Africa, calls it ‘Leveraging Emerging Technology for improved Business Performance’; I call it ‘Beauty of Digital Disruption’. This, unquestionably, is what it is. Take the media turf for instance. During my pupilage days at the University of Lagos in the 70s/80s, newspaper production was ‘cut and paste’. It was so in the newspapers that existed then. Now it is digital production galore – computer typesetting and printing; newspaperready copies can be moved within the countries and inter-countries – across continents! Digital journalism is now the vogue. This comes with high product quality and speed; and of course, cost cutting. Femi Osinubi, who spoke at the Nigeria-South Africa February 2019 Breakfast Meeting in Victoria Island, Lagos, has a mouthful. Said he: “Technological breakthroughs are significantly changing the way we live and do business. Our world is rapidly changing. 64 per cent of CEOs believe technology will disrupt how they do business in the next five years, according to PwC 21st CEO Survey.” The dynamics of disruption He reels out: “Waves of disruptive change are rolling in. Colliding megatrends, from rapid urbanization, to climate change and resource scarcity, to technological breakthroughs, are impacting business and society. For business based on the economics of mass production, the question isn’t if, it’s when.” Technological breakthroughs For him, “The impacts of digital disruption are now so pervasive that no business in any sector is im-

mune from them. Oxford University predicts that 45 per cent of jobs will be automated by 2030. Your ‘official’ future no longer applies. The world is at an inflexion point, economically, politically and socially. The future is to be made. We can see the effects all around us. We know that these shifts – and the collisions between them – are reshaping societies, economies and behavioural norms across the world. “We know they are redefining whole industries at a headlong pace. We also know that technology is the core driver of many of these impacts – from Artificial Intelligence (AI) to Augmented Reality, Virtual Reality (VR), to 3D printing, and from autonomous cars, to stem cell rejuvenation, to drones – and that their combined effect is creating a new range of future

pathways for societies, governments and businesses.” But he notes: “What we can’t be sure of is how, as business leaders, we should be planning for what’s to come.” At the center of this transformation, he lists eight emerging technologies as follows: Virtual Reality, Augmented Reality, Robots, Drones, 3D Printing, Internet of Things, Block Chain, and Artificial Intelligence. For 3D printing for instance, Osinubi cites Aeroswift, a collaborative project between Aerosud and the South African Council for Scientific and Industrial Research (CSIR), launched in 2011. Its Goal, he says, is to build the world’s largest and fastest additive manufacturing system that can 3D print titanium aircraft parts from powder. The printer purport-

edly prints up to ten times faster than other commercially available laser melting machines. Using these 3D printed titanium parts in their aircrafts will significantly reduce weight and lower costs for airlines, he says. And for IoT (Internet of things), he explains network of objects – devices, vehicles, etc. – embedded with sensors, software, network connectivity and computing capability, that can collect and exchange data over the Internet. IoT, he says, enables devices to be connected and remotely monitored or controlled. IoT represents any device that is now “connected” and accessible via a network connection. 73 per cent of companies are making IoT investments today. 47 per cent say it will be the most important tech

Advertise here

for cutting costs. There are more from him: Custos Media is a South African company that is poised to help the African entertainment industry tackle piracy by providing a simple and sustainable solution using bitcoin. Their technology uses imperceptible watermarking technology and the bitcoin blockchain embedded into media entrusted to customers. Media owners are instantly notified when an infringed copy of their work is detected. Custos gives a new level of protection to the owners of any content project. On Artificial Intelligence, China

Continues on page 23

BUSINESS DAY

Thursday 21 March 2019

C002D5556

Business Chief

My agenda for MAN – Mansur Ahmed Mansur Ahmed, Mechanical and Industrial Engineer, current President Manufacturers Association of Nigeria (MAN), has made his mark in the Nigerian business space, particularly in the textile and petroleum industries. He was MD Kaduna Textile Mills Limited, Divisional Director Northern Nigeria Development Company(NNDC), MD Kaduna Refinery and Petrochemical Company, MD Port Harcourt Refining Company, Director General Nigerian Economic Summit Group (NESG), and DG Infrastructure Concession Regulatory Commission (ICRC). Engr Mansur Ahmed here reels out his agenda for MAN. The report is excerpt from an interview published in a recent MAN quarterly magazine.

SIAKA MOMOH

Vision for MAN ansur Ahmed’s vision is to “increase the contribution of the Manufacturing sector to the National Economy”. He explains: “Today, as you are aware the manufacturing sector is contributing less than 9 per cent of the Nation’s Gross Domestic Products (GDP) that is not good enough. In countries that are even less developed than Nigeria, we have seen higher rates of contribution by the manufacturing sector and at any rate, for any country to be regarded as industrialized, the manufacturing sector being the productive sector that produces the goods that generate value and wealth, must be contributing significantly to the growth of the economy.” He cites the example of our peer countries like Malaysia, Indonesia, Brazil, South Africa, where manufacturing contributes something in the range of 30 per cent of their GDP. “Part of the contribution comes from, not only the scope or depths of the sector, but also from the operational efficiency of the productivity, that is, the capacity utilization. Consequently, we need to make sure that we eliminate those things that on a day to day basis tend to impede the operations of members and therefore reduce their capacity utilization,” he says. For him, therefore, under his administration, members should expect expansion of the sectors - bringing more manufacturers into the fold and ensuring that sectoral groups are made vibrant. “We have about ten sectoral groups, but if you look at the relative contributions you will observe that not more than 4 or 5 sectoral groups are responsible for most of the contribution of the manufacturing sector to the economy and for most of the employment as well,” he explains. He argues. “The textile sector used to be very vibrant, but it has declined significantly. So, we must broaden the sector to ensure that sectors that are not adequately functioning are restored to good health.” Value addition He starts off with leather: “In leather and

footwear there is tremendous capacity but today it is not being fully exploited, we are stopping at the production of wet leather. Value addition is the key to success in manufacturing, for instance, if you take the process from hide to finished leather and compare the value that is added from that finished leather to a pair of women’s handbags, the difference is huge. Hence there is need to deepen the sectors. The same scenario is applicable to food processing; you produce cocoa, turn it into cocoa butter and you export it, what you get from that cocoa butter when converted into chocolates is huge - for the same quantity of cocoa butter the manufacturers of chocolate will make literally a thousand times more than you do.” One of his goals is to work with the National Council and Government to ensure that “we continue to grow the manufacturing sector both in depths and scope through increase in value addition and thereby better the contribution of the manufacturing sector to the Nation’s GDP”. For Ahmed, there is also the need to constantly improve on the technology of our manufacturers particularly today with growth in technology. “It is not enough to have a factory you must also watch what

technology is doing to that factory, if you don’t update your technology very soon your processes will become obsolete and therefore your products will not be competitive,” he argues. He says his administration: Making sure that the economic policies Government puts in place are policies that will enable us achieve our goal; and We must be willing to take advantage of policies, creating the right interface between sectors and the policy makers in Government and ensuring that there is some level of understanding. Paramount policies that can catalyze industrialisation He argues: “First, we must consider what policies will make this vision feasible. When you are manufacturing, the first step is making an investment, so you want to look at the conditions that will make that investments worthwhile. The investment climate is key, and I think we all know this over the years. This Government has been working on improving the business environment as there have been several initiatives to improve the investments climate and thereby making investments and businesses easier for investors.

Manufacturing

Global manufacturing slows

The slowdown is mainly attributed to emerging trade and tariff barriers involving the USA and China, as well as the USA and the European Union (EU), which has exposed markets to a significant amount of uncertainty, limiting investment and future growth.’

SIAKA MOMOH

he rate of global manufacturing growth has slowed, mainly as a consequence of trade and tariff barriers, according to the International Yearbook of Industrial Statistics 2019 published by the United Nations Industrial Development Organization (UNIDO). The report notes that world manufacturing value added rose by 3.6 per cent in 2018, slightly lower than the 3.8 per cent recorded in the previous year. It explains the slowdown is mainly attributed to emerging trade and tariff barriers involving the USA and China, as well as the USA and the European Union (EU), which has exposed markets to a significant amount of uncertainty,

limiting investment and future growth. China, the EU and the USA account for over half of global manufacturing production. It states: “The slowdown in production in 2018 was observed in industrialized economies as well as developing and emerging industrial economies. The manufacturing value added (MVA)

growth rate for industrialized countries rose by 2.3 per cent in 2018, compared to 2.6 per cent in 2017. For the group of developing and emerging industrial economies, the MVA growth rate in 2018 was 3.8 per cent, down from 4.1 per cent in 2017. “In North America, manufacturing production maintained relatively higher growth, mainly thanks to the USA where manufacturing production rose at the higher pace of 3.1 per cent in 2018, compared to 1.8 in 2017. However, in the European Union and East Asian countries, the annual manufacturing growth rate decreased, from 3.5 per cent to 2.6 per cent and from 3.1 per cent to 1.9 per cent, respectively.” Manufacturing sector level The International Yearbook of Industrial Statistics 2019 also presents data at

“The second are policies governing the development of infrastructure because as manufacturers depend on basic infrastructures such as electricity, water, transportation etc. The poorer the infrastructure, the higher the cost at which they can produce and deliver products to the market. So, building infrastructure is one of the most critical responsibilities of the Government for industries as a whole to be more competitive. Thirdly is improving the spending power of the ordinary people because the higher the spending power, the more demand for products. So, putting more money in the pocket of ordinary Nigerian clearly creates more market for the manufacturers. Policies that help improve the income of the ordinary person are very important. The fourth is policy against trade malpractices. Such practices undermine the market and part of our major task is to ensure that Government continues to make laws and regulations that discourage these practices particularly smuggling, counterfeiting, and dumping.” He also touches on the issue of finance saying one major constraints of the manufacturing sector in Nigeria is that the cost of financing which is very high. He argues, if you borrow funds to invest at 20 per cent interest rate, you must make more than 20 per cent for that investment to yield benefit. “In other countries, it is less than 10 per cent interest rate for investments, this means that you will have problem competing with manufacturers from those countries. Cost of financing is very important and we must continue to work with Government to encourage the financial systems to continue to bring down cost of finance.”

plan your operations,” he says. Combating smuggling, counterfeiting etc He notes that MAN is already engaging government on this, and that there are initiatives that have been started under President Buhari’s administration which try to focus on taking necessary measures to discourage all these malpractices. But he thinks that “one thing is having the regulations and policies; the other is making sure that people who are engaging in these things are identified and dealt with according to the law.” “Therefore, the implementation of the regulation is key. We have been pushing and working with the key regulators that are involved in ending these malpractices such as the Customs Services, NAFDAC, SON, and will continue to work with all these regulatory agencies to ensure that the regulations put in place are effectively implemented,” he says. He sounds a note of warning: “I also believe that we have our own responsibility as manufacturers; our members ought to know that you can’t eat your cake and have it, so we must ensure that we don’t get involved in these malpractices.” Funding MAN, he says, will continue to advocate for initiatives that will put more funds in the hands of the Small and Medium industries at lower cost or lower interest rate and on a longer-term basis because investments in manufacturing is on a long-term basis.

Foreign Exchange According to Ahmed, very important to the manufacturing sector where a huge amount of manufacturing resources is spent importing inputs such as raw materials, spare parts, components, machinery etc is Foreign Exchange not only in terms of rate but whether it is steady or fluctuating. “As much as possible we want a competitive foreign exchange rate and also to remain reasonably stable, if it fluctuates it makes it difficult for you to

African Continental Free Trade Agreement (AFCFTA) MAN’s position, according to Ahmed, is that ultimately trade is good and that there are opportunities for manufacturers to grow if trading is expanded and made easier. “However, in the context of the ‘Continental Free Trade Agreement’ what we have said is that before you go into an agreement you must access your capability to benefit from that expanded trade and your readiness to go into that kind of agreement. I think this is just the fairest thing to ask in any situation like this,” he says.

manufacturing sector level by country. For example, if China is excluded from a global ranking of developing countries, Indonesia ranked top among food manufacturing and rubber and plastic products, while India took first position in production of textiles, pharmaceuticals and basic metals. Similarly, Bangladesh stood as the largest producer of wearing apparel. Increasing share of high-tech sectors Overall structural change in manufacturing was characterized by the increasing share of high-tech sectors in manufacturing output. For example, the medium-high and high-technology sectors accounted for more than 75 per cent of manufacturing of Singapore. Japan and the Republic of Korea were among other leading manufacturers in high-tech sectors. African countries struggling African countries continue to struggle in their efforts to catch up with the industrial development of the rest of the world. The average share of manufacturing in GDP of African least developed countries (LDCs) has further dropped

to 8.3 per cent compared to the 19.6 per cent average of the developing countries and emerging industrial economies group. This represents a serious challenge to the Sustainable Development Goal 9 target of doubling the MVA share in GDP in LDCs by 2030. UNIDO’s Yearbook presents detailed, country-specific, business structure statistics, which provide empirical evidence for formulating industrial policy and carrying out comparative analysis of structural change and productivity. An analysis of global manufacturing’s current growth trends is provided by quarterly reports. UNIDO maintains an international industrial statistics database covering mining and quarrying, manufacturing, electricity gas and water supply and the international trade of manufactured goods. UNIDO data can be accessed online or obtained in CD products. The International Yearbook of Industrial Statistics 2019 is a joint publication of UNIDO and Edward Elgar Publishing Limited. ISBN 978-1-78897-788 3 (cased) 978-1-78897-789 0 (e-book).

Thursday 21 March 2019

C002D5556

espite his legendary stock-picking abilities, Warren Buffett remains a staunch supporter of index funds. He favours them over most other investing options. Here’s why Buffett’s favourite investment can be a smart choice for almost anyone, especially those who are new to the market. What index funds are Index funds are a form of passive investing. They hold every stock in an index such as the S&P 500, which includes big-name companies such as Apple, Microsoft and Google, and they offer low turnover rates, so fees and taxes tend to be low as well. You can think of an index fund as a basket of stocks with hundreds or thousands of different ones inside, explains Nick Holeman, a certified financial planner at Betterment. “It’s the cheapest and easiest way to diversify your money that you’re investing,” Holeman says. The rate of return for each index fund is determined by the performance of the companies that are in it, which can balance each other out. Say you buy an index that contains only two companies, and one goes up by 3 percent but the other goes down by 2 percent. In that case, you’re still up by 1 percent overall.

Why they can be a great bet A major benefit of index funds is that they’re low-cost. That’s because they don’t require much effort to manage: You just purchase the index and let it do its thing instead of following, buying and selling shares in particular companies. Index funds are also tax efficient because they don’t require much trading. Managers are “not constantly buying and selling within that fund,” Holeman says. “Anytime that you do a lot of buying and selling, there’s the potential to cost yourself a lot in taxes.” That can translate to more money in your pocket. Because you aren’t paying an advisor as much as you would for actively managed funds, you’re probably saving money in fees that could cut into your returns, Holeman says. Another advantage to index

funds is that they aren’t tied to the success of a single entity. “The trick is not to pick the right company,” Buffett told CNBC’s “On The Money” in 2017. “The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently.” Remember, diversification is key. Always make sure that you’re doing your homework, and consider working with a financial professional (as long as they’re a fiduciary) to craft an investment plan that makes the most sense for you.

This article is adapted from a story that was first published by CNBC https ://www.cnbc. com/2019/02/26/warren-buffett-wants-90-percent-of-hisestate-invested-in-index-funds. html?recirc=taboolainternal

Editor’s Note

Investment opportunity

Why Warren Buffett is staunch supporter of index funds

BUSINESS DAY

or Femi Osinubi of PwC West Africa, waves of disruptive change are rolling in, colliding megatrends, from rapid urbanization to climate change and resource scarcity, to technological breakthroughs, are impacting business and society. He argued, for business based on the economics of mass production, the question isn’t if, it’s when. He said this at the Nigeria-South Africa February 2019 Breakfast Meeting in Lagos. He said more. Find out in our cover story. Engr. Mansur Ahmed, current president of MAN, has occupied several top positions in the Nigerian business space – the textile and petroleum industries in particular. As MAN’s president, his vision is to increase the association’s contribution to Nigeria’s economy. He is very resolute about this. How does he want to go about this? Check out for this in our interview section. Despite his legendary stockpicking abilities, Warren Buffett remains a staunch supporter of index funds. He favours them over most other investing options. Why and what is index fund? The story on investment opportunities tells it all. Bill Clinton’s My Life, a 957page autobiography, is one book that leaders and those aspiring to be one will find useful. My Life is a must reference book for our myriad of politicians who, from the way we have seen them going about the business of governance, need political tutorials.

Siaka Momoh

In the US, as revealed in Clinton’s autobiography, you do not just come from nowhere and start gunning for top political office. You must go through the mill; you must cut your teeth in politics by starting off from the grassroots and then move up. Bill Clinton and many of his peers, who became top politicians, did just that. He started right from school – he was in student union politics. He lost and won elections. Check for all above and more in our edition for this month. For advert placements, sponsorship, reactions, editorial contributions, please contact SIAKA through siakamomoh@ yahoo.com; 2348061396410; 23408023033988.

Beauty of digital... Continued from page 21 and America will see the biggest gains by 2030 $15.7 trillion Potential GDP: China: 26.1% North America: 14.5% Southern Europe – 11.5% Developed Asia – 10.4% Northern Europe 9.9% Africa, Oceania, and other Asian Markets - 5.6% Latin America – 5.4% Financial Services Artificial Intelligence chatbot A large multinational bank sought to push the limits of digital business by creating a chatbot that would allow it to better interact with its customers. PwC designed and developed a powerful AI-driven virtual assistant which helps the bank to identify potential new customers and opportunities… Agriculture – Precision Agriculture Zenvus is a Nigerian intelligent solution for farms which uses proprietary nutrients, pH, etc. It then sends the data to a cloud server via GSM, satellite or WiFi. AI Algorithms in the server then analyze the data and advice farmers on farming processes. This helps farmers understand the soil con-

ditions of their farmlands, enabling need to apply these insights to tackle effective management of fertilizer potential challenges with truly innovaapplication, irrigation and in general tive thinking. take guesswork out of farming. PwC, he says, has been undertaking this journey: extensively anTime to look disruption in the alyzing disruptors and emerging technologies, both in general and eye Osinubi’s advice: Developing a deep through the specific lenses of our secunderstanding of the nature of disrup- tor practices.”We’ve created a series tion and the emerging technology be- of tools – including a Virtual Reality hind it is key for all organisations as is world– to help you spot, analyze and gaining the capability to monitor and monitor the ‘Black Swans’ that could interpret the often very faint signals be on future horizons. And we’ve imof forthcoming disruptive impacts. agined four scenarios for the world’s It is then that these organisations future, each offering a very different

trajectory for your organisation. The future is now The key is to start now, he says. “All Essential Eight technologies, and many beyond, are already being used as a source of competitive advantage by businesses today. Strategic responses to disruption involve both defensive moves to ward off risks, and proactive innovation to seize opportunities. “However, to be effective, responses to disruption will need transformation across multiple dimensions. It’s not just about the technology; it’s

about changing your operating model. This could mean taking a new look at fundamental enterprise elements including product and service mix, customer experience, asset base and skills. It may even mean looking outside of your own company walls. Success could as easily depend on collaboration and co-creation with other organisations as it could on monetizing data, demystifying blockchain, or deploying drones. Take this last note from Femi Osinubi: “According to a PwC study from our Polish colleagues on the commercial applications of drone technology, the emerging global market for business services using drones is valued at over $127 billion. This is the value of current business services and labour that are likely to be replaced in the very near future by drone powered solutions.” How drones will affect business Infrastructure - $45.2bn Agriculture - $32.4 bn Transport - $13.0 bn Security – $10.5bn Entertainment & Media - $8.8bn Insurance - $6.8bn Telecommunication - $6.3bn Mining - $4.3bn.

BUSINESS DAY

C002D5556

Thursday 21 March 2019

Agribusiness

Olam announces acquisition of Indonesia’s BT Cocoa SIAKA MOMOH

Bill Clinton’s ‘My Life’: A political tool book

he acquisition adds 120,000 metric tonnes of cocoa bean processing capacity and 30,000 metric tonnes of cocoa mass pressing capacity to serve increasing demand for cocoa products in Asia, especially cocoa powder and brings together a world leader (Olam Cocoa) in traceable cocoa sourcing and processing, with one of Asia’s leading cocoa processors (BT Cocoa) Global food and agri-business Olam International Limited announced, at close of February 2019, that it has acquired an 85% share of YTS Holdings Pte Limited for a consideration of USD$90 million which is 100% owner of PT. Bumitangerang Mesindotama (“BT Cocoa”). The remaining 15% of shares are to be held by the founding members of BT Cocoa, Piter Jasman and family. The acquisition adds 120,000 metric tonnes of cocoa bean processing capacity and 30,000 metric tonnes of cocoa mass pressing capacity to serve increasing demand for cocoa products in Asia, especially cocoa powder and brings together a world leader (Olam Cocoa) in traceable cocoa sourcing and processing, with one of Asia’s leading cocoa processors (BT Cocoa). It will also strengthen brand portfolio offering by adding strong Indonesian national brand BT Cocoa and enables the further development and growth of Olam Cocoa’s Huysman brand. The

significant synergies derived and a competitive cost advantage will add further value. CEO of Olam Cocoa, Gerard A. Manley said: “We are excited to have the opportunity to rapidly expand our footprint in Asia and to develop this business with the founder and family of BT. Our longstanding relationship will enable us to deliver world class cocoa ingredients and services to our expanded customer base and look to strengthen these relationships in the future in one of the fastest growing regions in the world.” A strong strategic fit The acquisition satisfies increasing customer demand for full integration within the cocoa supply chain by bringing together Olam Cocoa, a world leader in traceable cocoa bean sourcing and a leading processor of cocoa ingredients, and BT Cocoa, the largest cocoa processor in Indonesia. Olam Cocoa offers breadth, depth and scalability from origin

sourcing, trading, risk management, value chain processing and supply chain solutions, to sustainability, research and development, and cocoa ingredient innovation. BT Cocoa supplies size and scale in Indonesian cocoa processing with a total installed cocoa bean grind and cocoa mass capacity of 150,000 metric tonnes and a facility equipped with the latest processing technology. Olam Cocoa has been working closely with BT Cocoa for nearly three years through a Business Collaborative Agreement and has already made considerable financial and operational improvements; including helping BT Cocoa achieve a 30% reduction in energy consumption. This acquisition supports the worldwide positive growth trend of chocolate and cocoa ingredient consumption and the expectation that the need for cocoa processing will continue to grow, supported by additional investment in cocoa producing and consuming countries.

Agribusiness

FAO to curb global hunger with $940m investments

ood and Agriculture Organisation (FAO) is soliciting for $940 million to invest in programmes and projects to curb global hunger and reduce the effect of food insecurity on some of the affected world’s population. FAO revealed that it is antici-

pating outstretching its intended investments to over 32 million people who depend on agriculture for their survival and livelihoods. It said the target would be achieved through a range of interventions, aimed at improving local food production

and enhancing nutrition while strengthening communities’ resilience to crises and that it would provide agricultural inputs such as seeds, tools, fertilizer for crop farming, livestock restocking, animal feed and veterinary care.

Hard facts on sesame seeds •Total production (2016): 461,000 tonnes (7.5% of total global output), valued at ($737.6mn) •Rank: Global- 6th, SSA- 2nd, West Africa- 1st •Nigeria’s production increased by 6.5% from 2015, outperformed

global growth by 16.8% •Potential output: Approximately 1mn tonnes •Nigeria’s most exported non-oil commodity •Accounts for 35.3% of Nigeria’s agricultural exports

•Mainly exported to China, Turkey and Japan •Major producing states: Jigawa, Nassarawa, Benue, Taraba

Source: FAOSTAT, FDC Think Tank.

his piece was first published in 2007 by this writer in BusinessDay under the heading ‘You can do it the Bill Clinton way’. It is being re-published on these pages today because it still remains as relevant as ever in our political climes. Have a good read: It is good to be on vacation. Yours sincerely just came back from one and enjoyed every bit of it. It gave one time to catch up with one’s reading. Bill Clinton’s My Life, a 957-page autobiography, came in handy. This is one book that leaders and those aspiring to be one will find useful. My Life is a must reference book for our myriad of politicians who, from the way we have seen them going about the business of governance, need political tutorials. In the US, as revealed in Clinton’s autobiography, you do not just come from nowhere and start gunning for top political office. You must go through the mill; you must cut your teeth in politics by starting off from the grassroots and then move up. Bill Clinton and many of his peers, who became top politicians, did just that. He started right from school – he was in student union politics. He lost and won elections. Bill had a humble beginning. He was born William Jefferson Blythe III on August 19, 1946, three months after his father had died in a traffic accident. His mother remarried, wedded Roger Clinton. Bill had to adopt his step father’s name. Bill new where he was coming from - so was determined to be a success in life. Bill Clinton met John Kennedy while in high school in White House Rose Garden. The encounter made him enter a life of public service. As an undergraduate, he shuttled between school and work. He worked with senators, undergoing political pupilage. He learnt the ropes; he thus got himself equipped for the turf political terrain ahead. This was beside the intellectual empowerment he got in school. He graduated from George Washington University in 1968, won Rhodes Scholarship to Oxford, had a law degree in Yale in 1973, and entered politics in Arkansas, his state, kicking off with the State’s Congress ) the equivalent of our own State House of Assembly. Rhodes Scholarship was established in 1903 by Cecil Rhodes’ will. Rhodes, who made a fortune in South Africa’s diamond mines, provided for scholarships for young men from former British colonies who had demonstrated outstanding intellectual, athletic and leadership qualities. Bill Clinton was defeated in his campaign for Congress in Arkansas’s Third District in 1974. He was elected

Arkansas Attorney General in 1976, and won the governorship in 1978. After losing a bid for a second term, he regained the office four years later, and served until he defeated incumbent George Bush and third party candidate Ross Perot in the 1992 presidential race. Thus Clinton served several terms as governor of Arkansas, the state’s constitution allowed this. This looks like what OBJ wanted to predicate his quest for a third term on. Under Bill Clinton (full name William Jefferson Clinton) US enjoyed more peace and economic wellbeing than any time in history. He remains first Democratic President since Franklin Roosevelt to win a second term. Good enough, Clinton had heroes, which kept him focused, a good thing for a purposeful politician. John Kennedy was one, J. William Fulbright was another. His political outlook and operation reflected what these two stand for, what they stand for is in consonance with his beliefs. He liked Fulbright for example, because Fulbright was interested in things besides politics. For Fulbright, the purpose of politics was to enable people develop all their faculties and enjoy their fleeting lives. The idea that power was an end in itself, rather than a means to provide security and opportunity necessary for the pursuit of happiness seemed to him stupid and self-defeating. Fulbright believes great nations get into trouble and can go into long term decline when they are arrogant in the use of their power, trying doing things they shouldn’t do in places they shouldn’t be. He thinks for instance that when US “brings its power to bear in the service of an abstract concept like anticommunism, without understanding local history, culture and politics, this will do more harm than good”. No wonder Clinton soft-pedalled over Iraq and was against America’s exploits in Vietnam. His testimony: “I had certainly tried to make America the 21st century’s leading force for peace and prosperity, freedom and security. I had tried to put a human face on globalization by urging other nations to join us in building a more integrated world of shared responsibilities, shared benefits and shared values, tried to lead America through its transition into the new era with a sense of hope and optimism about what we should do, and a sober sense of what the forces of destruction could do to us. Finally, I had tried to build a new progressive politics rooted in new ideas and old values and to support like-minded movements around the world”. I believe a myriad of our adolescent politicians will find ‘My Life’ a handy political tool book.

Thursday 21 March 2019

www.businessday.ng

https://www.facebook.com/businessdayng

Corporate Social Impact

@Businessdayng

BUSINESS DAY

Onuwa Lucky Joseph (08023314782) Editor.

Onwuka Kalu and that Landmark G Children of Africa Concert

Greta Thunberg, Climate Change Activist, Nominated for Nobel Peace Prize

ONUWA LUCKY JOSEPH

ack in the 1980s/90s Benefit concerts were not exactly the thing to do in these parts. Parties were mostly for fun and for a heartfelt display of joie de vivre, to reassure oneself that one was alive and well and not having life pass them by. Would you know anyone back then who would block streets just because they were trying to raise funds for the less privileged? And as you know that was when our soon to be ex-senator, Ben Bruce was bringing in Shalamar, Kool and The Gang and that whole tribe of American entertainers to Nigeria. Lekki Sunsplash was also making waves and people like Blackky (Edward Inyang) were getting discovered and riding the wave. All of this was going on when Onwuka Kalu decided in 1991 that there had to be something for the proverbial African Child who, going by artistic and psychological depictions, was anything but happy. He/she was missing out big time from all the fun. While others were kicking it at the beach, at the club and other places, the African Child was thinking about the next meal, the next place to lay his/her head, the next school fees, the next foster family (if any), etc. So much pathos is built into the misfortunes of the African Child that it’s a wonder some make it to adulthood. Now for clarity, it’s important to situate the Africa Child properly. He/she is a mental construct that may have no relationship with the person reading this piece even if that person so happens to be an African who was once a child and grew up in Africa. We all have accepted that mental imagery of the African Child as deprived, hungry, uneducated, in the dark, full of potential but with no way of harnessing them, forever needing support from non-Africans as Africans have proven themselves incapable of looking after their young. As I said, it’s a mental construct which many Africans especially the educated and urban dwelling, add Diaspora African to it, are at odds with. They kick against and fight it with all their being. But the evidence for that construct not being far from reality is overwhelming. Back when Chief Kalu organised the concert in 1991, the United Nations estimated that 1 million African children died each year from diseases preventable by vaccine. Chief Kalu drove this home further when he said “there is hardly any family in Africa that has not felt the pains of losing a child”. True. And what’s the case today? According to USAID: Sub-Saharan Africa has the highest risk of death in the first month of life and is among the regions showing the least progress Sub-Saharan Africa, which accounts for 38 percent of global neonatal deaths, has the highest newborn death rate (34 deaths per 1,000 live births in 2011) The highest rates of child mortality are still in Sub-Saharan Africa—where 1 in 9 children dies before age five, more than 16 times the average for developed regions (1 in 152). So while we argue back and forth on the propriety or not of the African Child tag, there clearly is a lot to do by Africans for Africans. Despite the famed African extended family system, that traditionally manages vulnerabilities occasioned by

disease and decease, too many kids fall through the cracks leaving us a situation where Africa has become the world headquarters for NGOs and with most of them seeking to give the African Child meaning. The energy we’ve used to fight the stereotype should be deployed to doing what needs be done so our kids can live meaningful, well-adjusted lives like their counterparts in other parts of the world. That was something Onwuka Kalu back then wanted to right. It needs be said that he had traducers aplenty. He was, after all, the whip smart young man who had taken Onwuka Hi-Tek public, the very first indigenous company to do so. Was the foray successful? Maybe not, as it was eventually delisted from the stock exchange after many years of subpar performance. Not to forget, he was also the founder, or as some have said, co-founder of Fidelity Bank. Ideas were his forte, but as well was the fortitude to execute. It is for his presence of mind which helped catalyse this whole new movement of Africans being there for Africans, that we remember him. Being a natural showman, he pulled out all the stops to ensure that the Who is Who of the day was present to give out of their abundance or just to grace with their presence. Listed to make an appearance was then ANC President, Nelson Mandela, who had just been released from a 27 year incarceration at Robben Island. He was to come along with his wife, Winnie. Also on the roster was General Ibrahim Babangida, the then military president of Nigeria, as well as Paul Boateng and the late Bernie Grant two black MPs from the UK. The late Augustus Aikhomu, then Chief of General Staff, also had a prominent role penciled in. On the bandstand for three days of extravagant music were the hit makers of the day: Dionne Warwick, the late Miriam Makeba, the late Blues king, BB King; Gladys Knight (without The Pips), the late Natalie Cole, The Commodores,

Eddy Grant, Third World, Aswad, Color Me Badd, the late Nina Simone, Kool & The Gang, Shabba Ranks and Yvonne Chaka Chaka. The big plan included an album from the event, a la We Are the World and Live Aid. The 3-day concert was also to be taped and the rights sold to foreign broadcasters for additional revenue. The plan was for the moneys raised to be disbursed to “a lot of individual organisations that are doing a lot of good work that we are affiliated with”. This was according to Faith Isiakpere, the Vice President of Children of Africa. But it was not all about the concert. A full day before the instruments and voices ignited, there was a plan to have a seminar to look at practical ways to ensure that governments and individuals did the needful to end the almost inevitable victim status that the African Child could expect to be his/her lot. Unfortunately, that time (and not much has changed, doubly unfortunately), was known for promissory notes/pledges and cheques that could never be cashed. In fact, the story is told of an ex-governor, now soon-tobe senator, (subject to the outcome of the election tribunal judgment), who infamously put a few actual currency notes on top of what was a pile of well-cut paper all contained in a briefcase which he donated at an event, and to thunderous applause. In the end, the Children of Africa concert didn’t yield anywhere near what it had promised, and that, for all kinds of reasons which are beyond the ambit of this write-up. Visionaries are known to have those blind spots that leave them susceptible to self-destructing. Again, they sometimes come up against way too many obstacles that leave them and their vision worse for wear. But we commend his big vision and ask that those who’ve come after him avoid the missteps while consolidating on the virtues.

reta Thunberg, the 16 year old fiery, straight-talking founder of the Youth Strike for Climate movement, was nominated for the Nobel peace prize, just before the biggest day yet of global action. Thunberg, who began a solo protest in Sweden in August that has since inspired students in different parts of the world, now leads a movement expected to execute strikes in 1,659 towns and cities in 105 countries involving hundreds of thousands of young people. “We have proposed Greta Thunberg because if we do nothing to halt climate change it will be the cause of wars, conflict and refugees,” said Norwegian Socialist MP Freddy André Øvstegård. “Greta Thunberg has launched a mass movement which I see as a major contribution to peace.” Over here in Nigeria, President Buhari is on record for saying that one reason adduceable for the herdsmen/ farmers clashes is climate change, in view of Lake Chad drying up and herdsmen needing to move ever southward for water and fresh vegetation for their livestock. If we were to believe the president,(who, it must be said, has espoused several conflicting theories for the conflict), how worse can it get in the future? Nigeria, unfortunately, is in the cross hairs of these kids as they believe fossil fuels are a major reason for climate change. Like Greta said in one of her speeches, ‘we need to keep the fossil fuels in the ground’. Can Nigeria afford to keep its fossil fuels in the ground? In light of the lip service our governments pay to the issue of revenue diversification, it is clear that there’s no real traction, beyond hype, behind slogans like Nigeria Beyond Oil. Successive Nigerian governments clearly have not seen the possibility of a Nigeria beyond oil. And while it may be argued that we must use the resource we have to benefit our country men and women, the oil wealth has consistently, over many decades, been the preserve of the well connected rich who have cornered the oil wells, with very few of these wells, be they local or foreign run, benefitting the host community and the larger Nigeria community. It’s an argument for another day, but you can be sure that many Nige-

rians will line up behind ‘The Oil Curse’ as against ‘The Oil Blessing’, should this be put to the vote. Thunberg, meanwhile, is “honoured and very grateful for this nomination,” she said on Twitter. Tomorrow we #schoolstrike for our future. And we will continue to do so for as long as it takes.” She has already challenged leaders in person at the UN climate summit in late 2018 and at Davos in January. “Change is coming whether they like it or not,” she said. National politicians and some university professors can nominate candidates for the Nobel peace prize, which will be awarded in December. There are 301 candidates for the 2019 prize: 223 individuals and 78 organisations. In 2014, the peace prize was awarded to 17-year-old Malala Yousafzai, “for the struggle ... for the right of all children to education”. She survived a Taliban assassination attempt in 2012. While some politicians have opposed the school strikes, many have supported them, including Germany’s Angela Merkel and Ireland’s Leo Varadkar. The mayors of Paris, Milan, Sydney, Austin, Philadelphia, Portland, Oslo, Barcelona and Montreal added their backing on Thursday. No African countries in the mix just yet. “It is truly inspiring to see young people, led by brilliant young women, making their voices heard and demanding urgent climate action. They are absolutely correct that our actions today will determine their futures,” said Anne Hidalgo, the mayor of Paris and chair of the C40 group of cities. “My message to young citizens is clear: it is our responsibility as adults and political leaders to learn from you and deliver the future you want.” The strikes have also been supported by the former head of the Anglican Church Rowan Williams and the head of Amnesty International, Kumi Naidoo. “Children are often told they are ‘tomorrow’s leaders’. But if they wait until ‘tomorrow’ there may not be a future in which to lead,” said Naidoo. “Young people are putting their leaders to shame with the passion and determination they are showing to fight this crucial battle now.

(Adapted from The Guardian UK report)

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 21 March 2019

Corporate Social Impact

Why are Osun and Ondo farmers leaving Cocoa for Marijuana? retailing for N10, 000 per kg. The religious and morally straitlaced might view this as a distressing report. On the other hand, a pragmatic market-driven individual might see in this the sign of things to come if the farmer is to get his due. First, there’s no buyer’s cartel as you have for cocoa where the big chocolate makers decide the price. Now, we don’t advocate for breaking the law. However, there is need for periodic review of our statutes to ensure that we are not shooting our farmers and national treasury in the foot, financially speaking. The United States, for instance, despite still having many people in jail for marijuana possession, saw the weed legalization process begin under Obama. At the moment, more than 10 states have legalized marijuana both for recreation and medicinal purposes. As usual, the market is now cornered by white folks who have rebranded

Stories by ONUWA LUCKY JOSEPH

e just came across a documentary online by Lolo Cynthia Ihesie recently that, depending on where you stand, may sound distressing or seem like progress in the works. It said reports in 2016 revealed that Ondo and Osun, states known for massive production of cocoa and rice had gone from being the highest producers of the crops in the country to being the highest producers of marijuana. According to the report, the farmers who are dumping cocoa in droves say it’s easier and more lucrative to plant marijuana than cocoa, as it takes them 3-4 years to plant and sell cocoa at the low price of N500 per kilogramme compared to marijuana that takes just 6 months with little labour and

iCreate Africa puts vocational & technical skills on showcase ONUWA LUCKY JOSEPH

t last year’s inaugural iCreate Skill Fest, excellent craftsmanship and technical wizardry was on display. It was the perfect marriage of the seeming old and the decidedly modern. Old in the sense that Nigeria was renowned for its artisans – carpenters, plumbers, tailors, bricklayers, etc. But for reasons not far removed from flatulent ego tripping and a willful lack of prioritisation, these skills became passé, becoming associated only with the not so educated. In the meantime, the world is at another epoch, one that also requires a deft employment of hands and brain. And here we are talking essentially about computer related skills such as Graphics, Web Development, App Development, Robotics, etc. These are new age skills, no less requiring of diligence and self-application to achieve success. These old and new world skills, so to speak, are the building blocks with which the developed nations keep raising themselves to higher pedestals of development. An undue fascination with certificates is not the route to nation building. If anything, certificates without skill is the fastest route to producing a menacing army of unemployed and unemployable young people. iCreate Africa just announced that its second edition has effectively kicked off with its portals thrown open for interested participants to register. Candidates, who must be practicing artisans and between the ages of 18-28, should visit www. icreateafrica.com and fill the form. Participation is free.

This year, iCreate Africa is hosting regional Technical and Vocational Skills Competitions, starting on 19-20 April in Kaduna (Northern region), followed by Enugu (South East) on 15-16 July and Lagos (South West) on 11-12 October. Well-spaced out for effective management. Winners of the regional competitions will qualify to compete at the iCreate National Skill Competition in Abuja FCT in December 2019 and stand a chance to become iCreate Skill Champion 2019. Young skilled Nigerians can compete across various industries including Building & Construction, ICT, Creative Arts and Fashion, Culinary, Agriculture, Hospitality and Social Services. The event will also feature exhibitions and panel discussions around TVET and youth empowerment. Winners from last year in 14 skill

trades were awarded cash prizes, equipment, endorsement deals, internship and job placements, training and mentoring. The 14 Gold medalists were crowned iCreate Skill Champions representing each trade. It is not for nothing that it is called the Olympics of Skills. The upshot of this initiative is that vocational studies and apprenticeship will become cool again as practitioners enjoy new found visibility, respect and wealth. The initiative is supported by Robert Bosch Nigeria Ltd., Sterling Bank Plc, Industrial Training Fund, giz, MAFITA, Kaduna Investment Promotion Agency, Trace TV, Fashion Academy Abuja, Cachez Group, BON Hotels Abuja, German Embassy Abuja, Nigeria Embassy Berlin, SEREDEC, and trade and artisans unions and associations across industries.

marijuana as a sine qua non for certain ailments. It won’t be long before more states get in the act. Nigeria according to the documentary is now third highest consumer of marijuana in the world. This despite or because of the tepid efforts of NDLEA, the police, etc. Truth be told, there isn’t much effort to curb its recreational consumption in the country. Those who need it don’t have a problem finding it. We therefore agree with the documentary makers who suggest that Nigeria might be losing a huge revenue stream by insisting on destroying the crops and the processed equivalent meant for export. Omoyele Sowore didn’t make it to Aso Rock, but the government might want to review his comments about Ekiti, and by extension, Nigerian weed having enormous export potential, hopefully for medicinal purposes.

Azim Premji’s Contribution to Philanthropy now $21 billion

zim Premji is India’s second richest man, the Indian equivalent of Nigeria’s Mike Adenuga. He is reportedly worth $18billion, according to the Bloomberg Billionaires Index. He was a young man in the 1980s when he successfully converted the vegetable oil company founded by his father in 1945 into a major player in the technology industry. Under his visionary leadership, the company, Wipro, has more than 160,000 employees worldwide and caters to clients in several cutting edge industries. What’s of interest to us at CSI is how Azim has been putting his enormous wealth to good use. His philanthropic activities have consistently focused on contributing “to developing a just, equitable, humane and sustainable society in India”. Aside being the first Indian billionaire to sign the Giving Pledge, brainchild of Warren Buffet and Bill & Melinda Gates, Mr. Premji has significantly raised his contribution by earmarking an additional 34% of his Wipro shares to his eponymous foundation. As things stand, the Foundation now controls 67% of Wipro and the shares

proceeds therefrom will automatically redound to it. According to a company press release, “Premji, chairman of Azim Premji Foundation, announced today that he has increased his commitment to philanthropy, by irrevocably renouncing more of his personal assets and earmarking them to the Endowment, which supports the Foundation’s philanthropic activities. He has done this by additionally earmarking all economic benefits for philanthropic purposes, in approximately 34% of the shares in Wipro Ltd (current market value Rs 52,750 crore or $ 7.5 billion), held by certain entities controlled by him.” The press release further said that “the Azim Premji Foundation works directly in education and supports other not-for-profits working in some specific areas through multi-year financial grants. The Foundation’s extensive field work in education has been in some of the most disadvantaged parts of India, to help contribute to the improvement of quality and equity of the public (government) schooling system. All this work has been in close partnership with various State Governments.”

Thursday 21 March 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

Energy Report Oil & Gas

Power

Renewables

Environment

How lack of investment in gas stalled Nigeria’s power sector Stories by Olusola Bello

igeria has abundance of gas, but this has not robbed off positively on the country, as it wallows in shortage of power. This is the reality in Africa’s top oil and gas producer. Realigning these two issues for the benefit of the country has been a daunting challenge due to lack of investment in infrastructure needed to take the gas to the power plants. Getting gas to power plants would require huge financial commitments by investors. For the country to meet the power requirement of Nigerians, government must court the relationship of investors with deep pockets who can invest for a long period, which is what both the gas and power sectors require to be able to provide stable and reliable power supply. The investors must also

be guaranteed good returns on their investments and a stable policy that would also guarantee an enabling operational environment for them. It was for this reason that Centre for Petroleum Information (CPI) Energy Finance Forum decided to organize a workshop with a theme: “Financing Gas and Power: Deploying strategies that work,”

where financial experts and operators in the oil and gas met to explore the various opportunities available to investors in the country. According the operators, the demand for gas will continue to rise especially as the invention of electric car is on the rise. Victor Eromosele chief executive officer of ME Consulting, said that Nige-

First solar powered brewery debuts in Ibadan

igerian Breweries Plc (NB) and Cross Boundary Energy are today announcing the signing of Heineken’s first solar project in Africa. Cross Boundary Energy will be installing and operating a 650 kW solar plant located at NB’s Ibadan Brewery, the solar energy plant will become operational in 2019. The landmark project is the first of its kind for Nigeria – a fully-financed solar Power Purchase Agreement for a major Nigerian business customer. Cross Boundary Energy will operate the rooftop facility on behalf of Nigerian Breweries as part of a 15-year solar services agreement. Under the agreement, NB will only pay for solar power produced, receiving a single monthly bill that incorporates all maintenance, monitoring, insurance and financing costs. The solar plant will supply 1GWh annually to the Ibadan brewery at a significant discount to their current cost of power, while reducing the site’s CO2 emissions by over 10,000 tonnes over the lifespan of the plant. Jordi Borrut Bel, managing director of Nigerian Breweries Plc stated “We are delighted to be a pioneer in

the adoption of solar energy in Nigeria. The solar plant will help power our world-class brewery in Ibadan, enabling us to deliver on commitments under our ‘Brewing a Better World’ initiatives and supporting Heineken’s global ‘Drop the C’ programme for renewable energy.” Heineken’s Drop the C programme for renewable energy aims to grow its share of production related energy sourced from renewables from the current level of 14% to 70% by 2030. “NB’s Brewing a Better World initiative has further targeted a 40% reduction in CO2 emissions by 2030”, according to Martin Kochl, Supply Chain Director, Nigerian Breweries Plc. Femi Fadugba, Head of Business Development for Cross Boundary Energy said: “We’re excited to be helping Nigerian Breweries go solar and to be providing the site with cleaner, cheaper power with no upfront investment or technical risk. I’m also proud that this flagship project – the first of its kind in Nigeria – will be launched in my family’s hometown of Ibadan.” Cross Boundary Energy has commissioned TPN to design and build the plant as well as performing operations and maintenance immedi-

the sector, which they trace to investor apathy. This amount of gas can make a lot of impact on the power supply situation in the country if it is delivered to power stations. On the power sector, Anthonia Okoh of Standard Chartered Bank, advised that the government must get its act together in order to attract the interest of international financial institutions “We must create the environment that makes international investors have trust in our system and operational environment that government would not change the goal post in the middle of the game.” She said the government must de-risk the sector by making the power value chains to work, stressing that unless this happened financial institutions would not participate in the power sector. “If there is a break in the value chain the investors would be discouraged and they will withdraw.”

Oil producers to decide in June on extending cuts

ately after commissioning. Ruud van Milligen, general manager for TPN said: “We are grateful that we, as an Energy Solutions partner for Nigerian Breweries, and Cross Boundary Energy can contribute to the renewable goals of Nigerian Breweries with our custom-made energy solutions and best-in-class operations and maintenance operations.” The plant will support the local employment of at least a dozen engineering, construction and maintenance professionals during installation and the 25+ year lifetime of the system, while supporting the Nigerian Electricity Regulatory Commission’s (NERC) target of having 2,000MW of power capacity from renewables by 2020. Through financing packages like the one being offered by Cross Boundary Energy, Nigeria’s renewable energy sector can provide much-needed green jobs, tap global capital, improve access to affordable, reliable power for businesses, and enable Nigeria to fulfil its enormous economic potential. Support for the project has come from Shell Foundation and the Solar Nigeria programme, an initiative implemented by Adam Smith International with funding from UK Aid.

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

ria needs power from all sources, either from fossil fuel or off grid, adding that there was about $4 billion investment opportunities that can be tapped into by investors to bring power to Nigeria homes by adding value to the gas resource . He said there were huge gas resources in the Niger Delta, adding that much of this should have ended up

in form of power in our various homes if the necessary investments are made. We must monetise the nation’s gas by putting it into values that can enhance the economy. A l re a d y t h e re a re a number of gas projects earmarked for execution in the country by the Nigerian National Petroleum Corporation NNPC. Only two of these projects have had their Final Investment Decisions (FID) taken. These gas projects are valued at $14 billion while between $2.2 to $2.7 would be required for pipeline infrastructure alone to move gas molecules. Currently, the amount of stranded gas in Nigeria is about the equivalent of 5.2 Gigawatts or 5000 megawatts. Stranded gas is the gas that cannot be delivered to power plants because of infrastructural challenges, such as lack of pipelines. Industry operators blame this on lack of investments in

ajor oil producers led by Saudi A r a b i a h av e agreed to keep working together to prop up crude prices but said they would decide only in June on whether to extend production cuts, according to AFP Meeting in Azerbaijan’s capital Baku, members of the OPEC+ alliance said they would continue coordinating efforts to “stabilise” the oil market through production cutbacks. But they postponed a planned April meeting and said a decision would be made in June on whether to extend production cuts into the second half of 2019, once the impact of US sanctions on Iran and Venezuela is more clear. In a joint statement after the talks, members of the alliance stressed the need to “restore market stability and prevent the recurrence of any market imbalance” -shorthand for keeping prices from dropping too low. The 24-nation alliance came together in 2016, when the Saudi-dominated Organisation of Petroleum Exporting Countries and Russia agreed on the need to limit production in the face of tumbling prices.

The OPE C+ alliance has endured, with regular meetings and agreements to extend production limits, helping oil prices rise from around $40 per barrel in 2016 to an average of $70 per barrel last year. The meeting in Baku brought together the group’s monitoring committee to review the latest extension, which saw OPEC+ nations agree to cut production by 1.2 million barrels per day from January to June. The committee was due to meet again next month but on Monday that meeting was postponed until May. The joint statement also said that the decision “on the production target for the second half of 2019” would be taken at an OPEC conference meeting on June 25. The move to wait until June took place amid confusion over the impact of US sanctions on OPEC members Iran and Venezuela, with Russia saying more time was needed due to high volatility. Addressing Monday’s meeting, Saudi energy minister Khalid al-Falih urged OPEC+ members to maintain the alliance. “It is more important than ever that we continue

to collaborate,” he said. OPEC, and mainly Saudi Arabia, have made it clear they would like to formalise longer-term cooperation with Russia, though Moscow has been hesitant. Falih raised the issue again in Baku, saying that “institutionalising a framework for longer-term cooperation” was very important. The alliance said after the talks that Iraq, Kazakhstan, Nigeria and the United Arab Emirates had also become new members of the committee. The pact has breathed fresh life into OPEC and brought Russia new influence as an arbiter on the oil market. Creating the alliance was not an easy decision after years of fierce competition for market share that lead to overproduction. Russian energy minister Alexander Novak said it was hard to plan for months ahead because of the volatility due to the sanctions against Iran and Venezuela. “We have to take these uncertainties into account in making decisions on the market,” he was quoted as saying ahead of Monday’s meeting.

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

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Thursday 21 March 2019

Energy Report

Stakeholders express apprehension over gas flare commercialisation programme Olusola Bello

ome stakeholders in oil and gas industry have expressed apprehension over the success of the government Gas Flare Commercialisation programme. According Victor Eromosele, chief operating officer of ME Consulting Limited, the gas sites are located in remote areas and he wonders how the investors are going to move the gas out to the market place. Other stakeholders who spoke on condition of anonymity said they are waiting to see the miracle investors are going perform to get the gas out from the site. Over 700 prospective investors have registered with the Department of Petroleum Resources (DPR) while about 200 have actually indicated Expression of Interest as just before the deadline at the weekend for the Gas Flare Commercialisation Programme (NGFCP). It is however possible that more investors may have shown

interest. The deadline for Expression of Interest (EoI) was March 15, 2019, (last Friday). A source which said that the interest shown was encouraging, also stated that it should be noted that registering is not the same thing as Expression of Interest. Investors that would be off- takers of the gas being flared by joint venture companies would save the country some $800 million annually, while the gas flared can provide additional 3,000 megawatts (MW) of electricity to the country per day. This has also led to the loss of around $350 million emission credit value. When Justice O. Derefaka, Program Manager, Nigerian Gas Flare Commercialisation Programme was asked when the frame work for the programme would be out for investors to key into it, he said: “”Investors are already registering for the programme and Expression of Interest have been sent by many investors”. He said whoever is interested should go the website of the programme and do the

necessary things. Another source at the Ministry of Petroleum Resources told BusinessDAY that immediately after the deadline, the DPR would begin the evaluation of the proposals submitted by interested parties and this would lead to the selection of those that meet the criteria laid down by the government. “ We want to be sure that

Nigerian Content Board, OGTAN collaborate on human capital development

he Oil and Gas Trainers Association of Nigeria (OGTAN), i n c o l l ab o rat i o n with the Nigerian Content Development and Monitoring Board (NCDMB) has concluded arrangements to host its second annual international conference and exhibition. The Association during the conference with the theme, “Human Capital Development: as a Driver for National Transformation”, billed to take place in April in Lagos, will also feature awards where former head of state, Yakubu Gowon would be honoured alongside Maikanti Baru, the group managing director of

the Nigerian National Petroleum Corporation (NNPC). Speaking on the upcoming program, Afe Mayowa, OGTAN recognised the link between the quality of a nation’s workforce and its economic growth, noting that an onslaught of complex and broad ranging socio-economic challenges including poor governance, corruption, inadequate infrastructure, outdated educational curriculum, poor funding of research centres, social unrest and increasing poverty, just to mention a few, have affected Nigeria’s human capital over the years. Mayowa said in identifying this gap, the association would assemble resource

persons to deliberate on the solutions as it relates to generating sustainable employment with a direct impact on the country’s GDP. “While it admits the urgent need to address the widening debt profile of states and unemployment among Nigeria’s young population, OGTAN is also using this conference to address the rapid advancement of digitalisation, automation, artificial intelligence, and how it compounds the increasing concern about the future of job security, wealth redistribution, and comparatively rising cost of implementing of local content where these advancements are lacking”, he said.

Ibadan Disco decries rate of assault on staff

he Management of Ibadan Electricity Distribution Company (IBDEC) has strongly condemned the spate of assaults and robbing of its staff in three different offices in Ilesa Business hub, Osun region within the past week. The company said, the dastardly act was carried out by some hoodlums from Bolorunduro and Olomilagbala Communities, adding that as a customer friendly company which is always ready to attend to custom-

ers’ complaints and resolve them, it was disappointed at the attitude of the hoodlums who attacked the staff of the company at their various offices in Isare Service unit, Isokun Service unit and Ilesa Business Hub office, OkeOmiru in Ilesa metropolis with various weapons such as guns, cutlasses and cudgels. “They had attacked the staff there, beating, shooting guns into the air, forcefully gained entrance into the cash office and carted away with the money from collections

and handsets of some staff.” The company insisted that the act was uncivilised and unacceptable to the management of IBEDC and that while it is ready to serve its customers better, it would not jeopardisee the safety of its staff at the expense of satisfying its customers. It advised its esteemed customers to always use its complaint channels to register their grievances in a civil way rather than resorting to violence as this would not yield any positive result.

it is those investors that are serious that are actually selected for the programme”, he said. He said the Department of Petroleum Resource (DPR) is very serious about the implementation of the programme and would ensure that it is only investors that have what it takes that would participate. Some stakeholders have recently called on the Fed-

eral Government to release the framework for the gas flare commercialisation programme. They also want the government to hands off the price of gas and allow the forces of demand and supply to determine the price. This action, they said, would allow for active participation of the privates sector operators since the idea is to market associated gas. They

emphasised that the right price for gas is important. Key Driving Principles of the NGFCP are to reduce gas flaring, benefit Niger Delta communities, impact the Nigerian economy, present a market-driven solution for the flares and it should be bankable for investors and lenders. The NGFCP has been designed to implement various government policy positions on gas flaring, commitments for stricter regulation of flaring, and a pathway to ultimate flare – out, including the Paris Agreement. The goal of the NGFCP is to attract competent third parties to access and use flared gas through a competitive open bidding process to access and use gas that is currently being sent to flare and convert into Flare Gas to Market Products. Third parties to demonstrate project development experience and proven technology in commercial application. A structure has been devised to provide project bankability for the Flare Gas Buyers.

Axxela gets landmark IMS certification Trifecta

xxela Limited (“Axxela”), has successfully achieved a trifecta implementation, evaluation, and certification of Integrated Management Systems: ISO 9001:2015, ISO 14001:2015, and ISO 45001:2018. Underscoring its longstanding commitment to Environmental, Health, Safety and Quality (EHSQ) management, Axxela is the first organisation in the Nigerian oil & gas space to hold all three certifications simultaneously as indicated by the Standards Organisation of Nigeria (SON). An Integrated Management System (IMS) collates all of an organisation’s systems and processes in to one holistic framework, enabling it

function as a single unit with streamlined objectives. Speaking on the remarkable accomplishment, Axxela CEO, Bolaji Osunsanya said: “We constantly strive to apply global best practices across all facets of our enterprise to maintain a high standard of quality, occupational health and protection of the environment. My commendations go out to the Axxela team for continually pushing the envelope, and as we advance economic empowerment and industrialisation across the region, these integrated certifications are testament to our collective efficacy as an organisation.” Axxela’s EHSQ Manager, Uche Okpala also said: “We actively engage SON, the frontline certification body and Nigerian representative of the

International Organisation for Standardisation (ISO), to provide objective assessments of our management systems. Since 2009, our Quality Management System was certified in accordance with the requirements of ISO 9001:2008.” “This heralded subsequent efforts to consolidate this achievement with certifications in Environmental Management System (ISO 14001:2004) and Occupational Health & Safety (ISO 45001:2018). In keeping with the maintenance requirements of these standards, we have always maintained our certifications to the latest revisions, culminating in our most recent implementation, transition and certification across the three Integrated Management Systems.”

Electricity generation dips by 215.18 mw

lectricity generation companies (GenCos) in the country released an average of 3,982 megawatts of electricity into the national grid according to the latest data made available which was for Saturday 16 March 2019. This was down by 215.18 MWH/hour from the previous day according to the Advisory Power Team, Office of the Vice President. The previous figure was 4,114 megawatts.

About 1,844 megawatts could however not be generated due to unavailability of gas just as lack of inadequate transmission infrastructure also accounted for non-generation of 43.4 megawatts during the period. Similarly, 889.5 megawatts was not generated due to high frequency resulting from unavailability of distribution infrastructure. It said that 300 megawatts was recorded as losses due to water management pro-

cedures. If this figure is translated to monetary value it means that the power sector lost an estimated N1.4billion due to insufficient gas supply, distribution and transmission infrastructure. As usual the the dominant constraints for generatio on sector reform and activities, is lack of availability of gas. However, the peak generation attained on the day was 5,043 megawatts

LegalBusiness BD Thursday 21 March 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Business Law Industry Report Practice Intelligence Partnerships

Net-neutrality provisions of the draft Internet industry code of practice: a commentary CHUKWUYERE EBERE IZUOGU

et-neutrality, the foundation of an open internet seems to be a very topical telecommunications policy issue for several national governments. In the European Union (EU), the European Commission (EC) in April 2019 will present to the European Parliament, its report of a study aimed at collecting information about the implementation of the net-neutrality provisions of Regulation (EU) 2015/2120 (the EU Regulation) across the EU. In the US, the Federal Communications Commission (FCC) rolled back the Open Internet Order of 2015 which imposed net-neutrality requirements on internet access service providers (IASPs) and instead enacted the Restoring Internet Freedom Order 2018 which, inter alia imposed disclosure of network management practices on IASPs to ensure that they abide by open internet principles by reducing their incentives and ability to violate those principles. Net-neutrality as a rule requires that IASPs do not discriminate in their treatment of content (or traffic) that they transmit. The policy justification for this no-discrimination rule is that the internet is a dumb network and any traffic passing through an IASP’s network should be treated on a first-come, first-served basis due to the open architectural nature of the internet. In Nigeria, the Nigerian Communications Commission (the Commission) appears to be in support net-neutrality and has accordingly responded by releasing a Draft Internet Industry Code of Practice (the Draft Code) that requires IASPs to comply with net-neutrality requirements once enacted. This commentary provides an analysis of the net-neutrality provisions of the Draft Code and is an excerpt of author’s forth-coming article tentatively titled “A Practical Assessment of Competition Regulation as a Viable Option for Protecting Net-Neutrality in Nigeria”. The Draft Code The Draft Code was released by the Commission in 2017 and has the following objectives, protect the right of internet users to an open internet; provide clear guidelines to IASPs on the use of traffic management practices; outline the obligations of IASPs in relation to the protection of consumers’ personal data; outline the obligations of IASPs in the handling of offensive and potentially harmful content, and the protection of minors and vulnerable audiences online; ensure adequate safeguards are put in place by IASPs against unsolicited internet communications; and establish best practices for internet governance in Nigeria, in line with emerging issues and global trends. Since its release in 2017, the

access contained in the National Information and Communications Technology Policy 2012 and the Nigeria ICT Roadmap 2017 - 2020, in accordance with the provisions of the Competition Practice Regulations 2007, and is done with the approval of the Commission. Absent the approval of the Commission which is required prior to an IASP commencing zero-rating, the rest of the requirements are not cumulative requirements as any of them can form the basis for the Commission’s approval.

Draft Code has undergone several revisions in conjunction with stakeholders. Scope of the Draft Code The Code will apply to IASPs and Internet Access Services within Nigeria. The Draft Code in Section 1.4 defines an IASP to be “Any entity licensed by the Nigerian Communications Commission, engaged in the provision of an Internet Access Service, irrespective of the network technology or terminal equipment used, or the license held”, while Internet Access Services is defined as “A publicly available electronic communications service, irrespective of the network technology or terminal equipment used, that provides access to data communications to or from Network Termination Points with IP addresses that are assigned through delegation from the Internet Assigned Numbers Authority”. Under the Draft Code net-neutrality is deemed protected in Sections 2 – 3, of which a commentary is given below. 2 Right of Consumers to Open Internet Access Section 2 prescribes measures designed to guarantee the rights of an end-user to an open internet, in particular an end-user’s right to have unrestricted and non-discriminatory access to lawful content, applications or services via his internet access services is expressly stated in this section. In accordance with this provision, the end-user is free to send and receive information and content online and use the appropriate terminal device of his choice without restriction from an IASP. This section also prescribes transparency obligations for IASPs when they engage in traffic management practices necessary for the efficient operation of the network. Transparency Section 3.1 seeks to impose specific transparency obligation on IASPs with respect to the performance, technical and commercial terms of its internet access service in a manner that is “sufficient for consumers and third-parties to make informed choices” regarding their uses of such services. Not only does this provision specify disclosure to consumers/end-users, it also requires that information disclosure be made to third-party content application providers (CAPs) who may require such technical information in seeking to create content on the open internet. This disclosure is required to be made in a clear, comprehensible and comprehensive manner in all service agreement with the IASP and on the IASP’s website. Finally, this section sets out the minimum information that must be disclosed by an IASP where it engages in any network management practices. 3.2 No discrimination Section 3.2 seeks to impose a positive obligation on IASPs when providing internet access service,

to treat all traffic equally, without discrimination, restriction or interference, independently of its sender or receiver, content, application or service, or terminal equipment. One of the basic tenets of net-neutrality is the obligation of IASPs to treat all data traffic equally irrespective of its origin or destination. An IASP that engages in discrimination, not only would be in breach of this provision, but also violates the right of an enduser to an open internet access as enshrined in Section 2 (a) and (c) of the Draft Code. 3.3 No blocking Section 3.3 will bar IASPs from blocking lawful content on the internet, unless under condition of reasonable network management. The Draft Code in Section 1.4 defines reasonable network management to be “Network practices designed to enhance or protect quality of experience for end-users while complying with net-neutrality principles and guidelines”. On the other hand, the no-blocking rule applies to only lawful content, applications, services, or non-harmful devices and, this gives clear legal authority to IASPs to block unlawful content such as pornographic articles or content that infringes a trademark and/or copyright on the internet. 3.4 No throttling Section will 3.4 bar IASPs from degrading or impairing lawful internet traffic unless under condition of reasonable network management. Throttling is defined by the Draft Code in Section 1.4 as “Network practices where data upload and download rates for specific services are internationally restricted”. The primary objective served by the no-throttling rule is

to avoid situations where an IASP is able to circumvent the no-blocking rule through the degradation of end-users’ experience by effectively preventing the delivery of particular content and/or services over the internet. 3.5 No preferential data prioritization Section 3.5 will bar IASPs from engaging in preferential data prioritization. The Draft Code in Section 1.4 defines preferential data prioritization as “the practice of granting preferential treatment to selected network data within the same service category based on the data’s origin, business agreements between IASPs and other entities, other commercial considerations, or any other consideration that do not qualify as reasonable network management”. This definition is drafted broadly in that it covers situations in which an IASP accepts monetary consideration from a third-party CAPs to manage its network in a manner that favours the CAP’s content or services. This definition also forbids an IASP from managing its network in such a manner that favors the content, applications, services or devices of an affiliated entity. 3.6 Zero-Rating The Draft Code in Section 1.4 defines zero-rating as “[w]hen an IASP applies the price of zero to the data traffic associated with a particular application or a class of applications (and the data does not count towards any data cap in place on the internet access service”. Under this provision, an IASP is not prohibited from offering zero-rated services, provided such services furthers the objectives of the Communications Act in Section 1 (c), and policy objectives of universal

3.7 Acceptable Traffic Management Practices Section 3.7 sets out circumstances, that warrant the use of, and the specific characteristics of reasonable network management practices. In the light of this, it bears emphasis to note that reasonable network management is an exception to the no-blocking and no-throttling rules set out respectively in Sections 3.3 and 3.4 of the Draft Code to the extent that it is deemed “reasonable”. Thus, whether a traffic management practice is “reasonable” within the meaning of the Draft Code would depend to a great extent on whether the basis of its implementation satisfies the requirements set forth in Section 3.7. In other words, if a traffic management practice meets the criteria set out in Section 3.7, it would constitute reasonable network management and is acceptable to the Commission. Conclusion From the foregoing, it is evident that the Commission has done a thorough work as the net-neutrality provisions of the Draft Code are consistent with the global standard for net-neutrality rules adopted in other jurisdictions. However, the Draft Code is yet to have the force of law, and thus cannot be asserted at this time. Even if it comes into force, the Commission as the chief protector of telecoms consumers must ensure compliance in order to achieve the “right of internet users to an open internet” objective of the Draft Code. Understandably, the telecoms industry is in a state of constant evolution, thus the Commission must pay attention to both technical and market developments and if necessary make meaningful amendments to the net-neutrality provisions that reflect advances in technology and platforms. The reality on ground is that should an open internet be preserved in Nigeria, net-neutrality obligations must exist. Accolades are in order for the Commission for recognizing this fact.

Chukwuyere is a Tech Policy Fellow at Mozilla Foundation, Senior Associate at Streamsowers & Köhn and Research Fellow at the African Academy Network on Internet Policy

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

GLOBALREPORT

@Businessdayng

Thursday 21 March 2019

LegalBusiness

Hijab protest lawyer gets Public-Private-Partnership and Road Infrastructure Development in Nigeria 33 years after secret trial Continued from last week

ew details have emerged of a secret trial in which a prominent Iranian human rights lawyer Nasrin Sotoudeh, who has been held in Tehran’s Evin prison since June last year after agreeing to defend women charged with removing their hijab head-coverings in public, has now been sentenced to 33 years in prison and 148 lashes. Sotoudeh, who is already serving a five-year sentence, was informed earlier this month of a court ruling issued after a one-day hearing in December, the League for the Defence of Human Rights in Iran said. According to rights campaigners, Sotoudeh has been found guilty on seven charges: ‘gathering and collusion against national security’; ‘spreading propaganda against the system’; ‘effective membership of illegal and anti-security splinter groups’; ‘encouraging people to commit corruption and prostitution, and providing the means for it’; ‘appearing without the sharia-sanctioned hijab at the premises of the magistrate’s office’; ‘disrupting public order and calm’; and ‘spreading falsehoods with intent to disturb the public opinion’. The indictment includes charg-

es that Sotoudeh ‘removed her hijab during family visits in Evin prison’; ‘was a prominent, active and organised member of Defenders of Human Rights Centre’; ‘received €50,000 [disguised as the] Sakharov prize for her subversive actions’; and ‘was involved in a call for a referendum’. Judge Mohammad Moqisseh sentenced Sotoudeh to the maximum on every charge, adding up to 29 years. The judge then added four more years under a provision covering multiple offenders. Sotoudeh was unrepresented in court. She has 20 days to appeal the ruling. The sentence attracted widespread condemnation. Amnesty International described Sotoudeh’s treatment as an ‘outrageous injustice’. The Paris bar last week unanimously elected her an honorary member.

Dublin steps up ‘centre of legal excellence’ campaign

reland’s legal community has stepped up its campaign for Dublin to become the EU’s dispute resolution forum of choice following Brexit with a high-profile visit to Washington DC. The Irish government is promoting the message that, following Brexit, Ireland will be the only common law jurisidiction in the EU other than Malta. Two senior figures from the Law Society of Ireland, Ken Murphy, director general and Patrick Dorgan, president, were in the US capital last week as part of a government-backed initiative entitled: ’Ireland: An international legal centre’. Other attendees included the attorney general, Séamus Woulfe SC and the chief justice, Mr Justice Frank Clarke. Murphy told the St Patrick’s Day event that Brexit, and the surrounding uncertainty pose difficult challenges: ’However, we should seek to leverage our distinct advantages for the benefit of Ireland, Irish business and our legal profession. Promoting Ireland as a leading centre globally for international dispute resolution and other legal services is a key initiative in the government’s priority to minimise the impact on trade and the economy.’ One aim of the campaign is to increase the number of international commercial agreements with Irish jurisdiction clauses. The Law Society of Ireland’s numbers have been boosted by

ADMINISTRATION AND OPERATION OF THE SCHEME he Scheme is to be implemented and administered by the Committee established by the EO7. As provided in the Order, the Committee is expected to: be chaired by the Honourable Minister in charge of Finance while the Honourable Minister in charge of Works is to be the Deputy Chairman. The Permanent Secretary, Federal Ministry of Finance is to act as the Secretary; draw its members from specified Ministries, Departments and Agencies (“MDAs”) of Government (not below the rank of a Director or its equivalent). The relevant MDAs include the Federal Ministry of Finance; Federal Ministry of Power, Works and Housing; Federal Ministry of Industry, Trade and Investment; Federal Ministry of Justice; Bureau of Public Procurement; FIRS; Nigerian Investment Promotion Commission; Securities and Exchange Commission (“SEC”); Infrastructure Concession Regulatory Commission; Budget Office of the Federation; National Bureau of Statistics; Nigerian Investment Sovereign Authority; and The Presidency; facilitate publication, in the prescribed manner, of the following documents: (i) a list of Eligible Roads as published in the Official Gazette of the FRN; (ii) design and specification of Eligible Roads; (iii) a list of required documentation by an applicant desiring to be registered as a Participant in the Scheme; (iv) Project Cost and Completion Timeline bid; review and evaluate applications submitted by any company, or a pool of companies operating through a Fund Manager; register Participants in the Scheme pursuant to the execution of appropriate Memorandum of Understanding (“MOU”) executed between Participants and the Committee; register and designate as an Infrastructure Fund, any special purpose vehicle (“SPV”) set up by a Fund Manager in accordance with the provisions of the Order, in conjunction with the SEC and in compliance with applicable SEC rules and procedures, as appropriate; ensure that the contracts for road construction and refurbishment included in the Project Cost bid submitted by Participants are obtained through a competitive bidding process, and thereafter facilitate the review, evaluation and approval of the submitted Project Cost and Completion Timeline bid; applying the standard procedures adopted by the Federal Ministry in charge of Works; facilitate evaluation by the Federal Ministry in charge of Works, the degree of completion of an Eligible Road infrastructure development project and thereupon issue a certificate of work done on an annual basis; facilitate the issuance, on an annual basis, of a Tax Credit Certificate by the FIRS to a Participant or Beneficiary under the Scheme; within fourteen (14) days of the issuance by the Committee of the certificate of work done; do other things, specifically provided in the First Schedule to the Order, necessary for the effective administration and operation of the Scheme.

Patrick Dorgan, president

Ken Murphy

England and Wales-qualified solicitors joining the roll to preserve practising rights in the EU following Brexit. However until now the Irish government has not been as energetic as other EU states notably France - in promoting the jurisdiction as an international dispute resolution centre.

PARTICIPANTS Participation in the Scheme is open to the following set of entities:

any company or corporation (other than a corporation sole) established under the Companies and Allied Matters Act or any law in force in Nigeria, and designated as a Sponsor of an Eligible Road pursuant to the Order; any company or corporation (other than a corporation sole) established under the Companies and Allied Matters Act or any law in force in Nigeria, and certified by the Committee as an eligible participant; a pool of companies – operating through an SPV – which undertakes the construction or refurbishment of any Eligible Road. However, to qualify under the Scheme, a pool of companies must be represented by a Fund Manager duly registered with the SEC and certified by the Committee as an eligible participant while the representative SPV must be registered with, and designated by, the SEC as an Infrastructure Fund set up solely for the purpose of managing the amounts received by the pool of companies; and Institutional Investors duly established as a company/companies under the Companies and Allied Matters Act and operating as Pension Fund Administrators, Collective Investment Schemes, Insurance Companies, Investment Banks etc., and are also certified by the Committee as eligible participants. An eligible participant interested in participating in the Scheme is required to submit an application to the Committee, attaching the required documents which include a written notification of Expression of Interest in respect of an identified road project; a valid and current FIRS-issued Tax Clearance Certificate; and Project Cost and Timeline bids which must include design and specification for the identified road project, as specified. PROJECT COST Project Cost under the Scheme is construed as “any expenditure wholly, reasonably, exclusively and necessarily incurred by a Participant for the construction or refurbishment of an Eligible Road as quoted by the Participant in its Project Cost bid and as certified by the Committee”. However, as provided in the EO7, the Committee has discretionary power to determine what type of expenditure may be allowed as part of the Project Cost. In exercising this discretion, the Committee is expected to give due consideration to certain specified costs, namely: cost of road construction or refurbishment; professional service fees paid by the Participant in the course of executing a road construction/refurbishment contract, subject to a limit of 1.25% of the cost of the construction/refurbishment where such costs exceed ten (10) billion Naira; cost of road maintenance for a period of five (5) years following completion of the construction or refurbishment of an Eligible Road; and any amount in excess of the initial project cost, necessarily and reasonably incurred on an Eligible Road, which excess is certified by the relevant regulatory authority. ROAD INFRASTRUCTURE TAX CREDIT

The amount of Tax Credit due to a Participant under the Scheme – which is reflected on the face of the Tax Credit Certificate to be issued by the FIRS – is determined by the approved Project Cost incurred in the construction or refurbishment of Eligible Roads plus a single uplift equivalent to the prevailing Central Bank of Nigeria (CBN)’s Monetary Policy Rate (“MPR”) plus two (2) percent of the Project Cost. Tax Credit = Project Cost + Single Uplift (MPR) + 2% of Project Cost The uplift granted to a Participant does not constitute a taxable income in the hands of the Participant or a Beneficiary under the Scheme. Tax Credits are to be issued by the FIRS, through the Committee, and in the name of a registered Participant or its Beneficiary. In the case of a pool of companies represented by a Fund Manager or any other person, the Tax Credit shall be issued to each company in the pool separately in proportion to their respective contribution. However, a person not duly registered and certified by the Committee as a Participant or representative of a Participant; or a person not duly designated as a Beneficiary of a Tax Credit by a Participant; or a Participant/ Beneficiary that is unable to provide evidence of certification of the Project Cost by the Committee; shall not be entitled to be issued with a Tax Credit. Required Documentation for Issuance of Tax Credit Certificate Tax Credit Certificates are to be issued by the FIRS to Participants or their representatives, or to Beneficiaries of the Scheme, subject to presentation of a Confirmation of Authorization to Participate in the Scheme (issued by the Committee); an approval (by the Committee) of the Project Cost and Completion Timeline bid; a contract Award Letter; and a certification of Work done (issued by the Committee). At any stage of an Eligible Road project, the value of the Tax Credit Certificate to be issued shall be in proportion to the percentage of project completion as evaluated by the Committee, plus a proportion of the “uplift” due to the Participant (calculated as a percentage of the total uplift due). Utilization of the Tax Credit Tax Credit issued in any year of assessment is eligible for utilization as credit against the Companies Income Tax payable in the particular year, subject to a maximum of fifty percent (50%) of such tax due. However, it is permissible for an unutilized Tax Credit to be carried forward to subsequent tax years, until fully utilized.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

Thursday 21 March 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

LegalBusiness

Conformity to our professional ethics and established standards is no longer negotiable - Dele Adesina, SAN This Interview is a continuation from our last edition, where former General Secretary of the the Nigerian Bar Association, Dele Adesina, SAN spoke about the history of the NBA, Bar interventions in between 1987 and 2012; checking the excesses of government actions and shaping democracy; independence of the judiciary; existence of impartial and incorruptible judges in the today’s Judiciary; views on the Justice Reform Project (JRP) and its agenda, amongst other vital issues.

o you also share the views of the JRP that the challenges of the sector are symptoms of a more fundamental and deep-rooted problem? If so, what are some of these? I have a clear idea of what the problems are. From my own perception and understanding, I also have a fair idea of what I consider to be the root of some of the problems. For instance I have identified the constitutional flaws. I have also identified the inadequacies of the Legal Practitioner’s Act as well as the governmental and societal problems which are militating against an efficient justice system, but if in the view of the JRP there are other fundamental issues, I won’t say no. Two heads are better than one. Whatever those other issues are, I submit that, fundamentally, the State must adequately fund the Judiciary. It must provide necessary infrastructure and facilities and guaranty the necessary independence of the Judiciary. The Legal Practitioner’s Act must be amended to clearly accommodate the modern day needs that will enhance an ethical and accountable legal practice. The Constitution particularly chapter 4 thereof also must be over hauled in relation to the provisions of the Judiciary. It is illogical and in practicable for a Unitary Constitution that the 1999 Constitution as amended is to operate efficiently and successfully in a Federal system of Government. What are your thoughts on the process of appointment of judges in Nigeria? Do you

think it has contributed to the current state Nigeria’s justice system? Presently appointment of Judges into the various High Courts of the State is mid-wived by the State Judicial Service Commission ratified by the National Judicial Council and made by the Governor of the State. In the case of the Federal High Court and the National Industrial Court, the Federal Judicial Service Commission takes the place of the State Judicial Service Commission. Appointments are made into the Court of Appeal from the High Courts and from the Court of Appeal to the Supreme Court by the combined efforts of the Federal Judicial Service Commission, the National Judicial Council, the Senate and the President. I must confess that I have not seriously given it a thought whether this process is faulty or defective. Even if it is a good process, I concede that it can accommodate improvement. After all, the largest room in the world is the room for improvement. Some have suggested advertisement of vacancies; I don’t know what value that is going to add. I will rather prefer to look at the person and the enabling system that will make the person perform his duty as a Judge optimally without fear or favour, affection or ill will. Many argue that those who those who are elevated to the position of leadership, either at the bar or at the bench, must be above board. They must be seen to have sterling qualities and character worthy of emulation. How easy is it to find

such near-perfect individuals in our profession today? I cannot agree less that those appointed in position of leadership must have sterling qualities of character worthy of emulation. I recognise the fact that everything rises and falls on leadership. As a matter of fact, it has been said that the character of the leader determines the character of the organisation that he leads. Leaders must be mentors from who both direct and in direct mentees can draw inspiration. I want to say that you can still find in this profession, very many individuals who possess these sterling qualities in abundance within the profession and they must be searched for and be enthroned. The assignment of leadership is to solve people’s problem and not to compound them. So, in addition to character, the leader must possess a firm knowledge and understanding of the problems and their solutions. The leader must be people who will not be consumed by the alloy of power but who will be driven by the passion to serve the people and move the society forward from one point to another. I honestly believe that both at the Bar and Bench, we have these people in abundance. If you were to do analysis of the situation, how badly would you say corruption affected the progress of the justice sector today? The Justice sector is part and parcel of the larger society. It is generally believed in this Nation today that corruption has been one of the strongest factors militating against the progress and advancement of the Nation and of course this is clearly noticeable

in all areas of our national lives from lack of provision of infrastructural facilities to falling standard in our educational system and so on and so forth. Even, corruption manifested itself in diverse ways and manners in the election we have just conducted. We had cases of people forcing INEC officials to announce results; we have cases where results were announced under duress. We even had cases where INEC officials were locked up and so on and so forth for failure to do their biddings. What I am trying to say is that Impact of corruption in the society including of course the Judiciary is never positive. It is indeed negative and therefore, efforts must be made to stamp it out in whatever way or form it manifests itself whether through appointments or by way of influencing judgments. The truth is that if the judgement of a Court is unsatisfactory, you are guaranteed of a right of appeal against that judgement by the Constitution. I must also add, particularly in sensitive political cases that there must be willingness on the part of the litigants to accept the decision of our Courts particularly the finality of the Supreme Court decision even when they disagree with the reasoning. I think it was Al Gore, former presidential candidate of the United State of America that said concerning the decision of the United States Supreme court on his election that “although I disagree with the decision of the Supreme Court but I accept its finality”. In Nigeria, it is usual to leave the Judgment and be blaming the judges and making wide allegations against the persons of the Judges and Justices. As a senior practitioner what do you do within your law firm to instill good values and practice excellence in your juniors? First, I think intentionally or unintentionally, my juniors mirror me and I am very conscious of that. Don’t forget I said earlier that the character of a leader determines the character of the organization that he leads. I believe in the saying that example is better than precept. So, both formally and informally, I talk to the juniors in Chambers. We relate with each other virtually at the same level. There is no relationship of boss and servant in the office. We have meetings every Friday which we call Friday Meeting, where apart from discussing the work of the office we also discuss other issues and

relate with one another. We talk about the importance of people discovering their potentials. We talk about people identifying their visions because I believe it is when you discover your vision that you give your best in its pursuit. Of course, I make it clear to them that in the profession, certain things are wrong and therefore we must not do them. For example, getting late to Court, writing petitions against any Judge or other Counsel no matter the situation etc. I also insist that they must appreciate that certain things are right and therefore we must fight for them. Those things include but are not limited to self-respect, respect for other colleagues and Judges and the need to behave as nobles of a noble profession. We emphasize the need for candour, truth and integrity as well as impeccable dressing and appearance. We recognize that the way you dress is the way you will be addressed. Indeed I believe that your dressing and appearance must tell the fact that you are a Lawyer. In any event every one of us has leadership responsibilities. Leaders rarely take credit, they share credit with the entire team. So, In Dele Adesina LP, we operate as a team.

Dele Adesina, SAN is a life member of the Distinguished Body of Benchers and a Life member of the National Executive Committee of the Nigerian Bar Association.He was a former member of the Legal Aid Council and Chairman Rule of Law Action Group of the Nigerian Bar Association. He was a former member of the Judicial Service Commission of Ekiti State and presently a member of the Governing Council of the Lagos State Multi-Door Court. Adesina also served as Chairman, Nigerian Bar Association (NBA) Ikeja Branch and General Secretary of the Nigerian Bar Association (National); a former member of the Board of Regents, which is the Governing Council of the Covenant University and the immediate past Pro-Chancellor and Chairman Governing Council of Ekiti State University, Ado-Ekiti.

PHOTOFILE

The law firm of Aluko & Oyebode on Monday March 18, 2019 played host to the Black Law Students Association of Harvard law School at the conference room of its office in Ikoyi, Lagos. SEE PHOTOS...

A croess-section of attendees.

A&O Senior Associate, Oluwafikayomi Ogunrinde discussing “Litigation/Alternative Dispute Resolution” with delegates from the Black Law A croess-section of attendees. Students Association of Harvard Business School.

Beverly Agbakogba-Onyejianya,(r) Head of Sports & Tech at Olisa Agbakoba Legal (OAL) and Founder of Tiger Active Sports and Little Tigers FV, with another member of the Panel at the CNN Africa Freedom Day event at Teslim Balogun Statdium, Lagos, where the discussion centred on sports slavery, trafficking and the need to address these vital issues in the industry.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

INDUSTRYFILE

17th BOA tournament kicks off on a good note with an Aelex win …As ‘FalzTheBadGuy’ plays for Falana & Falana THEODORA KIO-LAWSON

he 17th Annual Bankole Olumide Aluko (BOA) Memorial 5-A-Side football tournament kicked off on Sunday March 17, 2019 with the law firm, Aluko & Oyebode playing the opening match against LEX Legal Practitioners & Arbitrators. The tournament which opened at the Astroturf 2000, Osborne Road, Ikoyi - traditional venue for the BOA tournament, saw eight matches played amongst 22 teams: Perchstone & Graeys LP vs. George Etomi & Partners/FRA Williams; Falana & Falana vs. Wole Olanipekun/ Dele Adeshina; UUBO/ACAS Law vs. LSMJ; and SOOB/NICCOM LLP vs. Pinheiro LP. Other teams were, Olaniwun Ajayi, who played against Olisa Agbakoba Legal; Advocaat vs. Punuka Attorney, and Banwo & Ighodalo, who played against BA Law LLP/Probitas Partners LLP in a game, which ended 3:0 in favour of BA Law

LLP/Probitas Partners LLP. In his opening remarks, Gbenga Oyebode, Chairman, Aluko & Oyebode welcomed participating law firms, most of who have made it an obligation to contribute to keeping the memory of Bankole Aluko alive in the last 17 years. According to him, the tournament was no longer an A&O initiative but that of several law firms together. The 2019 tournament has 19 participating teams with

Gbenga Oyebode, Chairman, Aluko & Oyebode, giving his opening remarks at the opening ceremony of the BOA tournament.

seven (7) mergers. Group A has Africa Law Practice/SPA Ajibade, Aelex, Perchstone & Graeys LP, George Etomi/ FRA Williams, and Aluko & Oyebode, while Group B will feature, Falana & Falana, Udo Udoma Belo-Osagie (UUBO)/ Adepetun, Caxton-Martins, Agbor & Segun (ACAS) Law, Lagos State Ministry Of Justice (LSMJ), Wole Olanipekun/Dele Adesina Group C holds Templars, Sofunde Osakwe, Ogundipe & Belgore (SOOB)/Niccom LLP, Olaniwun Ajayi, Olisa Agbakoba Legal (OAL), Pinheiro LP, while Group D features, Duale Ovia & Alex-Adedipe (DOA)/ Grey Chapel Legal, Banwo & Ighodalo (B&I), Advocaat, Punuka Attorney, and BA Law LLP/Probitas Partners LLP. New comers to this year’s tournament, is the law firm of Perchstone & Graeys. Eight games are to be played every week over a five-week period. Match time for each game is 20 minutes, including half time & change over time.

@Businessdayng

Thursday 21 March 2019

BDLegalBusiness BT&O partner emerges Project Finance Lawyer 2019

anaging Par tne r of BT&O Partners, Osahon Uhuangho has emerged Project Finance Lawyer of the year at the Fintech Awards, 2019 organised by Finance Monthly, a global publication based in the UK. In its Award Winners Edition, Finance Monthly described Uhuangho as a “remarkable commercial lawyer, whose exceptional understanding of what businesses require to strive in a competitive marketplace has been fundamental to the rapid development of the companies he advises.” BT&O Partners is also recognised as a specialist firm committed to providing tailored and highly responsive individual and business support services. “They operate with a wealth of consultancy expertise that spans across diverse sectors including legal consultation, drafting and processing of all forms of contracts, Investment

advice, retirement plan consultancy, procurement of all kind of landed properties, handling landed property documentation, new business setup consultancy, representation & supervision as well as estate and personal asset management,” Finance Monthly reports. The experience of the firm’s management and staff and expertise in various fields, particularly Fintech, has placed the firm in a vantage position to compete favourably amongst peers locally and internationally. Speaking about the award, the firm’s managing partner notes that the attainment of excellence must be the goal of every lawyer in handling briefs and transactions. “If every lawyer tries to attain excellence, the profession would move away from self-centred interests and much closer to quality service delivery.” Finance Monthly is a global publication delivering news, comment and analysis to those at the centre of the

Osahon Uhuangho, Managing Partner, BT&O

corporate sector, globally. Since 2009 the publication has delivered business, financial and legal insight for a select corporate readership made up of business leaders, C-Level executives, lawyers and finance professionals. With almost a decade of covering the legal challenges faced by businesses, Finance Monthly each year, recognises legal professionals and law firms that consistently provide solutions and sound legal advice for the corporate sector.

Hogan Lovells raises the bar for Corporate Social Responsibility Dr. (Mrs) Aluko (L) with Chairman, Aluko & Oyebode, Gbenga Oyebode,(R) in handshakes with the teams

Aluko & Oyebode team during the opening game of the BOA football tournament

Aelex Football Team

Aelex Cheerleaders

lobal law firm, Hogan Lovells is pleased to announce the completion of the second year of its shared value partnership with leading social enterprise Barefoot College. The global partnership, launched in 2016, is a key part of Hogan Lovells’ commitment to Empowering Girls and Women and the UN Sustainable Development Goals (SDGs). The firm’s people continued to help Barefoot College to improve lives by empowering women in rural communities in the world’s most remote locations, training women – known as solar mamas – in 35 countries to become solar engineers and bringing light to 200,000 homes. To date, the firm helped Barefoot College to achieve a number of goals by: Fundraising US $400,000 globally in donations from Hogan Lovells people; Providing over 1,300 hours of pro bono advice to open four new solar training centres in Africa and to educate solar mamas on human rights; Educating 1000+ schoolchildren in 12 countries about Barefoot and the SDGs, with 83% of students reporting that they would like to work on developing new solutions to global problems; Enabling and supporting Barefoot to train over 384 solar mamas from 35 countries. Producing Flip the Switch – A Documentary, a 30-minute film, which follows the journey of the Solar Mamas and explores the importance of shared value partnerships if we are to achieve the SDGs. The film launched at a private screening at BAFTA with a high level panel discussion on the business case for sustainable

development including senior executives from Vodafone, Standard Chartered Bank and Lloyds Banking Group and The Rt. Hon Lord McConnell, Chair of the All-Party Parliamentary Group for SDGs. To date, the film has been nominated for Official Selection at four international film festivals. Susan Bright, Managing Partner of Hogan Lovells in the UK and Africa, said, “We are immensely proud of the life-changing results we have achieved together so far. We’re particularly pleased with the warm reception of Flip the Switch, the documentary designed to raise awareness about Barefoot’s mission and to inspire private sector action towards achieving the SDGs. Our relationship with Barefoot College is a core part of our commitment to Empowering Girls and Women and is an example of what is possible through cross-sector collaboration.” Since its foundation in 1972, Barefoot College has worked to educate the marginalised, exploited, and impoverished rural poor, lifting them over the poverty line with dignity and self-respect. Through its

projects in 100+ countries, Barefoot has brought renewable electricity, clean water, and long-term working opportunities to millions of people. To date, Hogan Lovells has provided Barefoot College with expansion, intellectual property, corporate and tax advice on a pro bono basis, as well as volunteer and financial contributions. Meagan Fallone, CEO of Barefoot College International, added: ‘’Sustainability has become increasingly important for business and is imperative if we are to deliver the UN SDGs. It is a pleasure to collaborate with Hogan Lovells to drive social change.’’ Ana Paula, Solar Engineer from Bahia, said: “I installed nearly 100 solar systems in two communities.” Ako Esther, Solar Engineer from Cameroon, said: “Because I am a farmer in my village, I am not expected to even hold a pen and write. I will be going back to my village as a solar engineer.” Rafea Anadi, Solar Engineer from Jordan, said: “There is nothing that a woman cannot do if she puts her mind to it.”

Thursday 21 March 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Politics & Policy

BUSINESS DAY

I scored 18, 356, 732 as against Buhari’s 16, 741, 530 to win presidential election - Atiku Felix Omohomhion, Abuja

he People’s Democratic Party (PDP) and its candidate, Abubakar Atiku, have vowed to prove at the Presidential Election Petitions Tribunal sitting at the Appeal Court, Abuja, that President Muhammadu Buhari of the All Progressives Congress (APC) did not win in the February 23 presidential election. In the petition they filed to contest the declaration of Buhari winner of the election by the Independent National Electoral Commission (INEC), the petitioners provided figures as proof that Atiku beat Buhari with over 1million votes. Respondents to the petition are INEC, Buhari and APC as the 1st, 2nd and 3rd, respectively. According to the petitioners, from figures collated from their agents in all the polling units, ward collation centres, local government area collation centres, and the state collation centres, in all the states of the federation and the Federal Capital Territory as well as at the national collation centre, Atiku scored a total votes of 18, 356, 732 as against Buhari’s 16, 741, 530. These figures, the petitioners claimed, are available in the server of INEC and are at variance with those declared by the electoral umpire, which credited Atiku with 11,

Abubakar Atiku

262, 430 votes, while Buhari got 15, 191, 847 to emerge the winner. Basing their argument on five grounds, the petitioners contended that the 2nd Respondent was not duly elected by majority of lawful votes cast at the election; and that from the data on each state of the Federation and the Federal Capital Territory, Abuja, in the 1st Respondent’s server, the 1st Petitioner, as opposed to the 2nd Respondent, scored majority of lawful votes cast at the election. According to the petitioners on ground 1: “Smart Card Readers deployed by the 1st Respondent, in addition to accreditation, equally transmitted electronically the results

of voting from polling units directly to the server of the 1st Respondent. The Presiding Officers of the 1st Respondent directly inputted the results from the polling units at the end of voting and transmitted directly to the server, in addition to manually taking the Form EC8As to the Wards for collation. The 1st Respondent is hereby given notice to produce the records of results from each polling unit uploaded and transmitted electronically by officials of the 1st Respondent through smart card readers to the 1st Respondent’s Servers. “The Petitioners plead and rely on the 1st Respondent’s Manual Technologies 2019, and notice is

hereby given to the 1st Respondent to produce same at the trial. The 1st Respondent’s agents at the polling units used the Smart Card Reader for electronic collation and transmission of results. The Petitioners plead and shall rely on and play at the trial, the video demonstration by the 1st Respondent of the deployment of Smart Card Reader for authentication of accreditation and for transmission of data. “The Petitioners hereby plead and rely upon the extract of data as contained on the 1st Respondent’s servers as at 25th February 2019, notice to produce whereof is hereby given to the 1st Respondent. The Petitioners also will rely on the data on the 1st Respondent’s central server between 25th February 2019 and 8th March 2019 and hereby also give notice to produce same before this Honourable Court. “The Petitioners hereby plead the electronic data on the servers of the 1st Respondent and shall at the trial give evidence of the source of the data analysis and data material, including the website: www. factsdontlieng.com. The petitioners further stated that whereas the actual number of voters accredited at the election was 35,098,162, the 1st respondent wrongly suppressed and/or reduced the number of accredited voters to 29,394,209 to the detriment of the petitioners. They also claimed that INEC deliberately refused to adhere to “its Regulations and Guidelines

for the Conduct of Elections, 2019 made pursuant to the Electoral Act, 2010 (as amended) provided for the mandatory use of card readers for the said election. “The 1st Respondent by its press release on smart card readers issued in February 2019 and signed by its National Commissioner, Barrister Festus Okoye, emphasised and reiterated that ‘The use of the Smart Card Reader is NOT ONLY MANDATORY but its deliberate non-use attracts the sanction of possible prosecution of erring officials in accordance with the INEC Regulations and Guidelines for the conduct of elections.’ “This is in addition to the voiding of any result emanating from such units or areas as was done in the Presidential and National Assembly elections of February 23, 2019.” The petitioners therefore, stated that the 2nd Respondent was not duly elected by majority of lawful votes cast at the election. “The election of the 2nd Respondent is invalid by reason of corrupt practices. “The election of the 2nd Respondent is invalid by reason of non-compliance with the provisions of the Electoral Act, 2010 (as amended). “The 2nd Respondent was at the time of the election not qualified to contest the said election. “The 2nd Respondent submitted to the 1st Respondent an affidavit containing false information of a fundamental nature in aid of his qualification for the said election.”

The bitterness is from those who find it difficult to believe that money can be channelled without a ‘cut’ being taken. Leaders must lead by example.” Responding to a former Lagos PDP Chairman, Captain Tunde Shelle, who had accused him of failing to run an inclusive campaign, Agbaje accused him of approaching equity with his questionable records in office. “That this former Chairman of the party in Lagos state can accuse anyone of mismanagement of funds baffles me. He so mismanaged party funds during his tenure that he ‘forgot’ to keep money aside to pay several years’ rent for the party secretariat! Funds to run rallies in the 20 LGAs during the 2015 campaigns were not forthcoming from the party under this chairman”. Dismissing other allegations raised against him, Agbaje pointed out that he relinquished the management of his firm, Jaykay Pharmacy Ltd, in 2005 into the post of non-executive Chairman, adding that neither he nor the company handled any contract from any state or Federal Government; neither is he a government contractor. He also denied being a mole for APC or its National Leader, Asiwaju Bola Ahmed Tinubu, both of whom, he said, suffered from the butt of his campaign.

“My campaigns have been very clear on where the blame of bad governance in Lagos State should lie. It baffles me how the same people I hold responsible for the bondage we find ourselves in Lagos will be funding me to sabotage my party, PDP. “I have never collected a single kobo from the ruling party in Lagos State directly or indirectly nor from its leadership or representatives,” he said. He accused the PDP chairman in Lagos State, Agboola Dominic, of anti-party activities, stressing that the chairman confessed, at an open meeting of leaders to have worked for another candidate at the polls. “It is an open secret that a few party leaders took a position not to support my candidature after my victory at the party primary elections. Their song was, ‘Vote Atiku in and forget Jimi’. “Those party leaders who stood on the side-lines or worked against the party in the elections should not be fooled that the loss at the elections was as a result of their negative actions. They should not arrogate to themselves powers they do not have. “The elections were lost due to the intimidation of people which in turn led to voter apathy such that Lagos recorded the lowest percentage turnout in the country”, Agbaje added.

Agbaje denies dumping PDP … Accuses party leaders of sabotaging his guber ambition Iniobong Iwok

imi Agbaje, the governorship candidate of the People’s Democratic Party (PDP), in Lagos State in the just concluded gubernatorial election, has denied report that he had dumped the party. Agbaje, a trained pharmacist, lost the March 9 gubernatorial election to Babajide Sanwo-Olu candidate of the All Progressives Congress (APC). He had previously contested for the governor of the state in 2007 and 2015 and lost. In a statement by his Director of Media and Publicity, Felix Oboagwina, Wednesday, Agbaje attributed insinuations that he had dumped PDP to mischief-makers who determined to soil his reputation, provoke crisis within the party and dampen the spirit of party members and his supporters. He said that the PDP remained his party, while he remained committed to the party. “I have never discussed with anyone any plan to dump PDP, neither has such a prospect crossed my mind,” he maintained. “There is no reason for it. It is uncalled for,” Agbaje said. He vowed to remain in the party, despite the campaign of calumny being waged against him in the media

by a few leaders. The PDP flag-bearer said he only on Monday released a message encouraging members to rise above the questionable defeats suffered in the last election and maintain faith in the party, and that it would be contradictory for him to suddenly turn tail and flee the same party. According to him, “For a party that has twice accorded me the honour of running on its platform, it should be regarded as uncharitable to say I am abandoning PDP now. “Recent vituperations in the press and social media against his person and his role in the last election were the machinations of political featherweights and did not warrant any response,” Agbaje added. Agbaje also faulted claim by a chieftain of the party in the state, Layi Ogunbambi that he was denied funds as the Director-General of Atiku Abubakar Presidential Campaign Council in Lagos State, stressing that such position did not exist. “Suffice to say that Layi Ogunbambi’s claim of being denied funds as Director-General of Atiku Abubakar Presidential Campaign Council in Lagos State amounted to attempting to build something on nothing. “For starters, the position he lays claim gives him no locus-standi as

no such formal position existed in the entire campaign structure of PDP in Lagos or any of the other 35 states.” Agbaje further alleged that Ogunbambi’s wife, Oluwatoyin Ogunbambi, contested as gubernatorial candidate in Lagos State against PDP on another party platform. “The title of Director-General was reserved for the national campaign council. If there was an Atiku/Obi Presidential Campaign it would have, at best, been a Support Group. Agbaje, also, shrugged off allegations he pilfered campaign funds. “I was not given one kobo by the party or the PDP Presidential Candidate for the gubernatorial elections. We ran our campaign from beginning to end on a shoe-string budget. You cannot steal or divert what is not given,” he said. According to him, resources sent for the Presidential and National Assembly elections were disbursed as per instructions received, and the source had shown satisfaction with the exercise. All the fuss stems from the fact that, contrary to the Lagos PDP tradition of sharing money to leaders, Agbaje disbursed funds direct to candidates, as instructed. “The era of taking a share of what is not ours must stop in our party.

BUSINESS DAY

Luxury

Malls

Companies

Deals

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Thursday 21 March 2019

Spending Trends

How Nigerians groan under failed POS transactions? Fury, frustration litter the path of failed PoS transactions in Nigeria BALA AUGIE

oy Musa, 34 year old single mother of three, walked into the banking hall looking downcast and apprehensive. She told the front desk clerk that her account had been debited three times for a transaction that had not reflected on the merchant’s Point of Sales (POS). The transaction which should have been completed on the first try went on for three times and eventually proved abortive. Joy’s belly roiled and she thought she might retch when the young banker told her it would take a week before the failed transaction would be reversed and her “I don’t have dime on me,” she said, alarm in her voice. “Today is Friday, how do l survive the weekend?” She felt a chill run through her as the bank’s customer

care representative told her there was nothing he could do to about the matter. She watched the young man like a hawk and as she felt a deep throbbing pain in her chest. She calmed her frayed nerves, regained her composure and left the banking hall in disappointment. Joy Musa’s experience mirrors the frustration felt by many Nigerians due to a torrent of failed transactions at the Automation Machine (ATM) and Point of Sales (POS) terminals. A top bank executive who do not want her name mentioned said Nigeria Interbank Settlement System (NIBBS) should be blamed for the situation because the settlement agency lacks the infrastructure to handle the volume of transaction that occur on a daily basis. “We got a message from NIBBS that a total of 15000 transactions we sent for processing had failed and the problem started since October. When we complain

to the agency, they tell us they are upgrading their system,” said the banker. The top executive said that the problem is only peculiar to Nigeria and that in other countries there is no central body that controls transac-

Price of products cheaper at Spar compared to Shoprite BUNMI BAILEY

ypically, retail shoppers are of the opinion that most of the grocery items sold at Shoprite, Africa’s biggest supermarket group are usually cheaper than most stores

in Nigeria. However, BusinessDay findings shows Spar, one of the largest food and retail stores in the country, sell cheaper products compared to Shoprite. From the findings, it discovered that out of the 23 items, 14 were cheaper in spar than in Shoprite. For example, a 5 kg Mama’s

tions between lenders. “In the month of February, 30,000 transactions failed and customers are the ones suffering,” the source said. Data from NIBSS found that volume of PoS transactions in the first two months

of 2019 have outpaced that of 2018 and 2017, an indication that more people are preferring to carry out their day to day transactions using their cards. The volume in January 2019 rose to 28,162 compared

with 16,102 and 7,946 for the same in 2018 and 2017 respectively. Value for January 2019 stood at N222 billion compared with N152 billion and N91 billion for the same period in 2018 and 2017 respectively. Another bank customer said that his POS transaction of February 14 was reversed on March 13 while some customers forfeited their money because they did not have the time to go to bank and complain. Olukoya Oluwaseun also tweeted that he was debited the sum of N5,000 after a failed PoS transaction “two weeks ago” and is yet to receive the sum back from his bank. “I carried out a PoS transaction on February 25, I was debited N4,250 but the transaction was declined,” Love Afinni tweeted from his handle @ loveafinni, “I issued a compliant at the branch in Ijebu Ode on March 25, I was assured of a manual reversal within 8 days. I have been following up but I am yet to receive a reversal.”

Guinness Nigeria set to regain market share with launch of new premium brand pride parboiled rice is priced N2, 379 in Shoprite compared to N2, 075 sold at spar, Golden penny senorita which weighs 5kg is sold at N1, 960 in spar, while at Shoprite, it is sold at N1,999 and a 500ml mamador pure vegetable oil is sold at N399 in Shoprite while at spar, it is sold at N385.

OLUFIKAYO OWOEYE

iageo-owned Guinness Plc. recently announced the launch of a new premium lager beer into the market named Guinness Gold. Before now it only has the Harp brand in the premium lager segment. The new brand according to the company is infused with crystal malt and amber malt, using the same Guinness yeast as the iconic Guinness stout ensuring that the Guinness Gold drinker enjoys the fruity flavours that savour the flavour. Guinness is in dare need of a market penetrating brands because its flagship products “ Guinness Stout” is grappling with demographic shift as young Nigerian no longer drink Stout. Instead they prefer product brewed by rival company International Breweries and Nigerian Breweries. Until recently the beer market in Nigeria was a two horse race between Guinness and Nigerian Breweries. Interestingly the battle in the beer market became more intense with the entrance of the World’s largest beer maker, AB In Bev into the market. The year 2011 ushered in a disruption in the beer market with the arrival of SABMiller,

which was then the world’s second-largest brewer, into the country, and its acquisition of majority shares in International Breweries Plc, makers of Trophy Beer, located in Ilesa, Osun-State. However, in 2017, AB InBev acquired 72.17% of SABMiller’s shares in International Breweries Plc, in a series of transactions which resulted in AB InBev acquiring controlling interests in the company. After the acquisition, a merger arrangement was try. The company recently introduced the Tiger Beer brand into the Nigerian market. Report by a market research group, Global Data, reveals that Africa is the fastest growing region for beer consumption. Nigeria, however, leads the pack of 10 biggest beer drinking countries on the continent. Beer brands make up just 16 percent of alcohol consumption in the country, while other drinks (spirits and locally brewed drinks) make up 84 percent. The dwindling purchasing power of most consumers in the country accounted for the shift from the premium beer brands to value beer brands. Wale, 27, a bar attendant in one of the biggest bars on Opebi revealed that there has been a paradigm shift by consumers from expensive brands to more affordable brands. “Before now the beer par-

lor is a place where people come to show their status with the type of brand they drink, but in recent times, things have changed as most no longer spend like before and they mostly order for the cheap brands,” he said. Guinness said the new Guinness Gold will improve the lager beer drinking experience of consumers in the country and will be available in selected outlets for N350 for a 600 ml bottle. The introduction by Guinness into the premium lager segment is a welcome development and the new the brand must be ready to battle the already existing premium brands in the market. Nigerian Breweries owns several brands in the premium lager segment, Star, Heineken just to mention few, International Brewery has Trophy and the recently-launched global brand, Budweiser, while Guinness Nigeria has Harp in this segment.

Thursday 21 March 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

Jumia contemplates being Alibaba with listing BALA AUGIE

umia contemplates being the Alibaba of Africa as the continent’s largest ecommerce platform seeks listing with the Securities and Exchange Commission for an Initial Public Offering (IPO) on the New York Stock Exchange. This means the ecommerce giant will be the first African ecommerce firm to list outside the shores of the continent. The IPO is valued at $1.20 billion, while its total funding round is about $770 million. The listing is coming at a time that some ecommerce firms are closing shop on the back of a deteriorating macroeconomic environment. For instance, two major players in the industryEfritin and OLX- exited in 2017, as hundreds of young vibrant young workers lost their jobs, raising concerns about the ease of doing business in the country. For ecommerce industry

to thrive, federal government will have to invest in roads, railways, and electricity. Ecommerce firms can leverage on Nigerians young population that crave for consumption and proliferation of internets to increase revenue and magnify shareholders’ earnings. According to the World Bank, the country’s population will hit 400 million by 2050. The Nigerian Communications Commission (NCC) has reported that the number of internet users in the country increased marginally to 108.5 million in November, compared to 107,106,975 users recorded in the previous month. The current Ecommerce spending in Nigeria is estimated at $12 billion, and is projected to reach $75 billion in revenues per annum by 2025 (McKinsey). Experts are of the view that a lot young people prefer to shop online compared to brick and mortal because it is quicker and more convenient, and moreover, the

smart phone makes it very easy to place orders online. A young banker says he cannot remember the last time he went to the market to buy office wears that he orders them from the office and a dispatch rider delivers the goods at his door step.

“I cannot imagine myself going to the market under the scotching sun to shop, it makes a lot of sense to buy online,” said the If the listing is consummated, Jumia will spread the risk of ownership and its cost of capital will reduce. Additionally, the company

will have more capital to expand its operation across the globe, and competing at the global competitive arena means it will rub shoulders with the largest ecommerce firm in the world, Alibaba. Jumia CEO Sacha Poigonnec told Techcrunch:

“You’ll see in the prospectus that last year Jumia had 4 million consumers in countries that cover the vast majority of Africa. We’re really focused on growing our existing business, leadership position, number of sellers and consumer adoption in those markets”.

Spaghetti brands battle for consumers’ loyalty amid challenging environment OLUFIKAYO OWOEYE

n Nigeria, pasta meals have become a popular meal found in homes across the country. The acceptability of this new found love meal has continued to grow and it has also seen the emergence of new brands challenging for mark share. The surge in the number of Spaghetti brands in the market has caused serious competition among manufacturers. To make a comparative analysis, BusinessDay picked Dangote Spaghetti, Honeywell Spaghetti, Golden Penny Spaghetti, and a foreign brand, Bonita Spaghetti. Flour Mills Nigeria Plc, makers of Golden Penny Spaghetti, is the first operator of a pasta plant in Nigeria. The Golden Penny brand was launched about two decades ago in Apapa, with the Iganmu manufac-

turing plant commissioned in 2003. Barely a decade, the second plant became operational in Agbara in 2012. Golden Penny Spaghetti brand remains one of the prominent brands in the market. It gets done in 10 minutes and goes perfectly with little sauce or stew. Other big players in the

spaghetti war include Dangote Spaghetti, manufactured by Dangote Group, Honeywell Spaghetti, produced by Honeywell Nigeria Plc, Crown Spaghetti, produced by Crown Flour Mills and last but not least are the Power Spaghetti brand. In the bid to outperform the competitors in

the market, manufacturers of spaghetti in the country have adopted an aggressive media campaign, leveraging on television commercials, promos, bus branding which stares at consumers while the buses are on the move – a more varied way of reaching their target audience, especially children.

Analyst: Bunmi Bailey Graphics: Fifen Eyemisanre Famous

Other strategies employed include billboards, press releases and radio jingles. With these strategies, it has become apparent that consumers have no choice but to fall head over heels for the product. Mrs. Nneka, a consumer revealed that Golden Penny Spaghetti is her favourite as it doesn’t get soggy (overdone) when cooked, although other brands are not doing badly in the market. Mrs. Godfrey, a food vendor noted that price is a major factor she considers while buying her brand. She also stated that local brands are doing well in the market. Growth hampered by decrepit infrastructure Flour Mills Nigeria Plc a major player in the spaghetti market recorded N297 billion in revenue for the nine months ended 31st December 2018, representing 2% decline compared to N304 billion recorded the same period last year. According

to the company, the drop in revenue is disappointedly related to the logistics upheavals posed by traffic challenges in Apapa. Honeywell Flour Mills, makers of Honeywell Spaghetti and one of the listed flour milling companies on the Nigerian Stock Exchange (NSE), is struggling to remain in the pasta market. According to its recent financial reports, profit from the company’s Ikeja factory (The Ikeja plant is concerned with the production of noodles and pasta) fell sharply to N89.6 million in 2018, as against N780.8 million in the prior year. The company attributed this to the rising cost of sales and the absence of foreign exchange gains. The spike in the cost of sales was due to an increase in the cost of raw and packaging materials. Many industry watchers believe that the sharp drop in revenue is indicative of the fierce competition in that space.

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Thursday 21 March 2019

Live @ The Exchanges Market Statistics as at Wednesday 20 March 2019

Top Gainers/Losers as at Wednesday 20 March 2019 LOSERS

GAINERS Company

Opening

Closing

Change

NESTLE

N1526.6

N1500

-26.6

DEALS (Numbers)

BETAGLAS

N79

N71.95

-7.05

0.3

CADBURY

N12

N11

-1

VOLUME (Numbers)

0.3

STANBIC

N47.8

N47

-0.8

VALUE (N billion)

N22.2

0.25

N70

N69.5

-0.5

MARKET CAP (N Trn

Closing

Change

ACCESS

N5.95

N6.5

0.55

DANGFLOUR

N10.9

N11.3

0.4

GLAXOSMITH

N10.5

N10.8

N7.7 N21.95

UACN ZENITHBANK

ASI (Points)

Company

Opening

31,040.84 3,419.00 2,163,152,525.83 2.163 11.575

Global market indicators FTSE 100 Index 7,311.62GBP -12.38-0.17% S&P 500 Index 2,819.29USD -13.28-0.47% Generic 1st ‘DM’ Future 25,779.00USD -127.00-0.49%

Deutsche Boerse AG German Stock Index DAX 11,629.36EUR -159.05-1.35% Nikkei 225 21,608.92JPY +42.07+0.20% Shanghai Stock Exchange Composite Index 3,090.64CNY -0.34-0.01%

Finance minister reiterates commitment to capital market development ...As SEC awards market operators MICHEAL ANI

igeria’s finance minister, Zainab Ahmed says the Federal Government will continue to strengthen its efforts in ensuring the growth and development of the capital market. Zainab stated this at the maiden edition of the 2019 capital market award night, where the Securities and Exchange Commission rewarded market operators who have contributed immensely to the growth of the market. “The Federal Government of Nigeria particularly the federal ministry of finance reiterates its commitment towards building lasting and enduring capital market. We are standing by and ready to continue to partner with you to provide any support that you might require to ensure that our capital market grows and that our economy succeeds”, Zainab said. According to her, the capital market is a microcosm of the entire economy, hence its development will invariably transform into the development of the entire economy. In November 2014, the Nigerian Securities and Exchange Commission (SEC) mapped out a 10-year plan

for the development of the Nigerian capital market (the Master Plan), aimed at restoring investors’ confidence, deepen the market, accelerate the growth of the capital market and help catalyse the emergence of Nigeria as the top 20 global economy. The core objective of the Master Plan was to map out strategies for the improvement of the Nigerian capital market in key areas such as investor protection and education, professionalism, and product innovation, and for the expansion of the capital market’s role in Nigeria’s economy. “I am pleased to say that

iamond Bank Plc has confirmed that its shares have been placed on Full Suspension. The Full Suspension placed on the shares of the bank on March 20, 2019 enables it determine the shareholders that will be entitled to receive the Scheme Consideration. Shareholders and other investors are requested to please note that following the Full Suspension of March 20, 2019 - the last trade day was Tuesday,

ed, while 55 initiatives are at various stages of implementation and we hope many of them would be concluded by the end of this year. Some of these initiatives she said have been completed include the materialization of shares, the capitalization of capital market operators, setting up of a national investment protection funds and the establishment of the West African securities regulators association among others, the SEC boss said. On her path, the Finance minister noted that when the federal government made copious references to the master plan by the exchange

Mary Uduk, Ag. director-general, Securities and Exchange Commission; Zainab Ahmed, minister of finance, presenting an award plaque to Bola Ajomale, chairman New Listing committee, at the SEC Awards Night held in Lagos.

Diamond Bank shares placed on full suspension Iheanyi Nwachukwu

we have made a great stride in our implementation efforts”, said Mary Uduk, Acting Director-General of SEC. “We have taken up the initiative outlined in the document in a systematic manner while also painstakingly engaging the government, its agencies and other critical stakeholders whose support and collaboration are required to achieve the objectives outlined in the master plan”, Uduk said at the event. Uduk explained that of the over 90 initiatives outlined in the master plan, 66 have commenced since 2016 out of which 13 have been successfully complet-

March 19, 2019 following which there will be no further trades in the shares of Diamond Bank Plc. The Court Sanction of the Merger was obtained on March 19, 2019 The proposed merger between Access Bank Plc and Diamond Bank Plc had earlier been approved by the shareholders at the respective Court-Ordered Meetings held on March 5, 2019. The Merger had earlier received the final approval of the Central Bank of Nigeria (CBN) and the Securities & Exchange Commission (SEC).

commission when it was preparing the Economic Recovery and growth plan. According to her, the ERGP visions for the financial services sector is aimed at strengthening relevant market institutions and mitigate risk by building a competitive healthy financial system that would be a better position to support private sector growth and contribute towards the sustainable development of the economy. “Just like in the capital market master plan, the ERGP policy objective for the financial sector is to further diversify the traded instrument on the stock market, review the capitalization of the financial institution, and encourage lending to the real sector”, the minister said. In order to appreciate the tremendous support the commission has received from market operators and various stakeholders from within and outside the market; the Securities and Exchange Commission awarded 18 market operators for their giant stride in propelling the growth of the market. Among these awardees include Olutola Mobolurin, who chaired the committee on the Capital Market Masterplan Implementation Council (CAMMIC); Emeka Madubike, chairman committee on Full Demateri-

alization; Hajara Adeola, Non-interest Capital market products; Adeolu Bajomo, chairman Direct Cash Settlement; Isyaku Tilde, chairman New Minimum Capital Requirement and Complaints Management Framework implementation; Henry Rowlands, chairman E-dividend Mandate; Bola Ajomale, chairman New Listing; Oluwatoyin Sanni, chairman Financial Literacy; Micheal Oyebola, National Savings Strategy chairman; and Babatunde Ajibade, chairman pension Reforms, Financial Reporting acts and Warehouse Receipt Bill. Others committee chairmen include, Anthony Idigbe, who chaired the committee on Review of the Investment and Securities Act 2007; Abubakar Mahmoud, chairman Companies and Allied Matters Act (CAMA) and Trustees Investments Act (TIA) Review; Adeolu Bajomo, chairman committee on Market Wide Infrastructure Technology, Daisy Ekineh, Roadmap on Commodities Eco-System; Temi Popoola, chairman on Market Liquidity Enhancement; Abubakar Ambursa, chairman committee on Standardization of Capital Market Operators Operational Processes; and Seyi Owoturo, chairman on Electronic Initial Public Offering (e-IPO)

FG says over 1.3m interest-free loans successfully disbursed through GEEP Iheanyi Nwachukwu

ill date, over 1.3 million interest-free loans have been successfully disbursed through Government Enterprise and Empowerment Programme (GEEP), with a little over 1.1 million loans under the TraderMoni Scheme. Zainab S. Ahmed, Minister of Finance noted this at the Central Bank of Nigeria (CBN) 2019 International Women’s Day Commemorative Event themed “Investing for Equality”. Nigeria’s Economic Re-

covery and Growth Plan (ERGP) has prioritised the provision of micro-loans for women through the Government Enterprise and Empowerment Programme (GEEP) and the Women Empowerment Fund. “These Programmes are crucial because access to financing is a key driver of

financial and social inclusion for micro, small and medium-sized enterprises (SMEs) especially for women-owned enterprises”, she said. The event provided a unique opportunity for participants to reflect individually and collectively about respective journeys as women

(and men), and decide what can and must done to ensure that they reach our gender parity goals. The finance minister noted the need to take a long term and strategic approach to establishing gender parity, and ensuring that women are economically empowered, resulting in stronger economies overall. “Gender equality is critical to ensuring inclusive and sustainable development, and achieving our goals under the Economic Recovery and Growth Plan (ERGP) and the UN 2030 Agenda for Sustainable Development”, Ahmed noted.

Thursday 21 March 2019

www.businessday.ng

www.facebook.com/businessdayng

NSE Banking Index outperforms peers since economic recession IFEANYI JOHN

fter seven consecutive quarters of positive albeit slow pace in economic expansion, investors who bought into the NSE Banking Index at the height of the recession will have seen an annual equity risk premium in excess of 10 percent, as the index is up 48 percent since December 2016. The NSE Banking Index, which comprises 10 banks’ stocks, led several classifications of stock indices in the Nigerian Stock Exchange (NSE), in terms of returns. The index is up 133.57 index points, representing a 48.69 percent growth from 274.32 index points at the end of December 2016 to 407.89 at the end of trading on Tuesday, March 19, 2019. In the last quarter of 2016, a sell off by both do-

mestic and foreign portfolio investors had led the All Share Index to shed over 4,000 index points from its June high of 31,071.25 to close at 26,874.62 at the end of the year. Following “buy low, sell high” philosophy, that would have been a good time to enter the market and buy good companies listed on the bourse at a discount. The analysis of 10 NSEbased indices since December 2016 shows only 3 stock indices in negative territory. NSE AseM (-32.26%), NSE industrial Index (-22.28%) and NSE Oil/Gas Index (-6.32%). The NSE All Share Index is up by 15.66 percent and the Banking index outperforms the broad market by a multiple of three. This performance was buoyed by Fidelity Bank, Sterling Bank and United Bank for Africa, who have seen prices rise by an average of 137.44 percent. The

giants in terms of weight of the index did not fail to impress as Guaranty Trust Bank and Zenith Bank also returned 48.95 percent and 47.41 percent, respectively. Wema Bank (42.31%), Ecobank (33.98%), Union Bank (28.04%) and Access Bank (2.94%) complete the banking index performance in that time period. Other NSE indices that showed impressive performance since the recession was the NSE Pension index, which returned 46.46 percent, NSE Premium index (29.40%), NSE Lotus Islamic Index (21.62%) and the NSE 30 Index (17.21%). The NSE Insurance index and NSE Consumer Goods index remained flat, both changed by less than a percent in both directions with the NSE Industrial index growing by three-tenths of a percent and NSE Consumer Goods index at declining by eight-tenths of 1 percent.

@businessDayNG

@Businessdayng

37 NEWS

BUSINESS DAY

Building collapse: NIA wants enacted laws, proffered solutions implemented … as ARCON blames incident on congestion, building abuse CHUKA UROKO

ollowing the recent collapse of a threestorey building at Ita-Faaji, Lagos Island, the Nigerian Institute of Architects (NIA), Lagos State chapter, is calling on the state government to start, without delay, full implementation of enacted laws and solutions proffered for preventing building collapse in the state. The institute notes that these laws and solutions enacted and proffered by relevant professional bodies over the years have been rendered ineffective due to weak or non-implementation by the relevant government agencies, flagrant abuse and deliberate flouting by the general public. The building, which collapsed in the morning of Wednesday, March 13,

left in its trail, death and destruction. Most disturbing was the death of many pupils of Ohen Nursery and Primary School, which was also part of the collapsed building. This explains the concern of the Architects Registration Council of Nigeria (ARCON), the regulatory body for the architecture profession, which blamed the Ita Faji incident on congestion and over use of the building which was, abinitio, designed as a residential building but now serving as both residential and commercial with shops and a school attached. Dipo Ajayi, ARCON president, noted at a press briefing on Tuesday that besides human error, there are extraneous factors that cause building collapse, including structural stability of the building, weak foundation, use of substandard building materi-

als, use of non-professionals for supervision, etc. NIA, Lagos chapter, agrees, pointing out, however, that “the Ita-Faaji disaster clearly shows that bureaucracy and the need to accommodate certain interests are counter-productive in this regard, as the building had been reportedly marked for demolition before the incident”. According to the institute, the building was renovated and managed by a developer who has a lease of 10 years, which started in 2010. “It was gathered on our visit to the site that most of the buildings in the area were already marked for structural audit /demolition, and this building which was approved as a residential development but used mainly for commercial purposes, was one of the marked buildings”, noted Fitzgerald Umeh, NIA chairman.

Group urges women to leverage technology for personal, business growth JUMOKE AKIYODE-LAWANSON

L-R Amine Djouahra, senior sale and marketing manager, Canon Central and North Africa; TY Bello, celebrity influencer, and Omotayo Omodia, country manager, at the launch of three Canon products, EOS R System, Pixma TS9540 and Zoemini in Lagos. Pic by Pius Okeosisi

NIBSS, banks, others resolving PoS transaction failures HOPE MOSES-ASHIKE

ustomers who are finding it difficult to use their debit cards for e-payment transactions or have fallen victim of failed transactions can now enjoy a hitch free transactions as the Nigeria Inter-Bank Settlement System (NIBSS), the Deposit Money Banks (DMBs), payment service providers and other stakeholders are engaging to bring normalcy to the system failure. The e-payment industry has been having some service issues on the PoS since December 2018. Niyi Ajao, acting managing director of NIBSS, explains that NIBSS has been

working to enhance capacity in order to take care of the growing volume of transactions since last year, hence the system problem. Ajao notes that NIBSS recorded 285 million volumes of PoS transactions in 2018, and it is expected to double this number this year. Some of the remedial measures taken to address the problem include fixing of platform application issues in February 21, 2019, network remediation carried out with concerned processor, implementation of a secondary process whereby all reversals for any business day are retransmitted between 10pm and 12 mid-night to return credit back to cardholders

through their banks/processors. The effective date for this is March 22, 2019. Also, implementation of real-time reversal by PoS terminals directly would require that banks are available to receive such online real-time. This would take effect by or before end of April 2019. Speaking Tuesday at a media briefing in Lagos, Ajao said, “We are aware of all the trouble people are going through and we are working very hard to restore normalcy since that December when it started. We have been working with all stakeholders. There are five different parties”. Transaction timeout is the total turn-around-time

(TAT) for a PoS transaction cycle from the time it is received from PoS to the time a response is sent back to the terminal, he said. “This TAT had been configured at 15 seconds in agreement with banks and processors. However, delayed responses from Issuers after this timeout in recent times could cause authorised debits not to return to the terminal before the set TAT, hence the adjustment to 45 seconds,” he said. He said the reversals for failed transactions were one area the NIBSS would henceforth pay more attention to, so as to strengthen e-payment users confidence in the system.

empower Africa has called on women in Nigeria to embrace opportunities found in technology to build up themselves as well as contribute positively to the society at large through technological innovations. The group also encouraged women to be bold and produce innovations in their field and not see technology as a male dominated field, as some people say and imply. Speaking at the Fempower International Women’s Day celebration ‘Balance for Better: Diversity and Inclusion, Women leading in technology’ in

Lagos recently, the keynote speaker Olawunmi Onawunmi, director, Success, Andela Nigeria, said women were special being who could be versatile in all aspects of life as well as make a significant mark in the tech world if they venture into the opportunities found in technology. In the same vein, Ojomo Mercy Agada, software quality assurance, Systemspecs, who shared the story of her technological journey, stated that women could create a niche for themselves in the tech world because it was very vast. She encouraged them to be focused, bold and manage their time well in order to achieve balance in their respective fields.

African art takes centre stage as Miami Art Week looks to Lagos OBINNA EMELIKE

rganisers of Miami Art Week are paying more attention to Africa, and Lagos in particular, as preparations gather momentum for the 2019 edition of the art fairs, which holds annually in Florida, US. This year, Miami Art Week, which holds first week in December, will devote one of its major fairs to African Contemporary Art. Tagged “Èkó Miami,” the name of the fair is derived from Èkó (Lagos), the native name of Africa’s most populous city and one of the world’s fastest growing cities. Èkó Miami is the

premier International art fair dedicated solely to Contemporary African Art during Miami Art Week. This is the first time Africa will be taking centre stage at this global event, which will host over 20 international art fairs, 1,500 galleries and over 15,000 artists. According to Toks Ogun, the organiser, in the first week of December of every year, Miami becomes the epicentre of the art world as it hosts thousands of artists, galleries and international art fairs. “Èkó Miami will bring to the world stage the most prolific and profound works that Africa has to offer. It will feature art from both masters and emerging

38 BUSINESS DAY NEWS

C002D5556

New N30,000 minimum wage means... Continued from page 1

On the basis of the 2011 wage

hike, a 67 percent increase could add N194 billion to the Federal Government’s wage bill. That may be a paltry sum for the Federal Government, whose annual revenue has averaged N2 trillion in the past three years. N194 billion is only 9.7 percent of that. The marginal increase, however, fails to mask what critics say is the bigger problem – an expensive top

echelon civil service that is a drag on public revenues. Personnel costs, at N2.3 trillion, will account for 40 percent of the projected revenue for 2019, according to the Budget Office. In 2018, the FG’s wage bill was forecast to gulp N2.1 trillion, 60 percent of estimated FG revenue of N3.5 trillion, according to BusinessDay estimates. In 2017, some 70 percent of FG’s N2.7 trillion revenue went to personnel costs of N1.86 trillion, according

to the budget implementation data on the website of the Budget Office. It is unclear if the minimum wage hike this year was factored into the 2019 budget, which sets aside N 2.29trn for personnel costs, a 9 percent increase from the N2.1 trillion budgeted in 2018. An email to the Budget Office and Ministry of Finance did not get an immediate response. The burden of a wage hike on the FG’s already strained finances could be underestimated, according to Andrew Alli, former CEO of the Africa Finance Corporation and

Cross section of the awards recipients, with Zainab Ahmed (m), minister of finance, and Mary Uduk (5th l), Ag director-general, Securities and Exchange Commission (SEC), at the SEC awards night in Lagos. Pic by Pius Okeosisi

Nigeria’s future generations face grim... Continued from page 1

the ECA or sovereign wealth fund (SWF) is to smooth fiscal volatility in the economy by ensuring that excess oil earnings are being saved and managed prudently in periods of economic boom. It’s a popular regime in resource-rich countries. The main universal principle guiding a stabilisation fund is to smoothen expenditure within the budget limits. The accruals were expected to be the amount above the benchmark of crude oil sales. “Save for Obasanjo administration, the abuse of the ECA has become serial. It is deeply disturbing that the Buhari government has not demonstrated a better way of handling Nigeria’s ECA,” Charles Akinbobola, a financial analyst at Creditville Limited, said. Nigeria currently has just over $2 billion saved in its SWF ($1.4 billion) and ECA ($637 million) for a population of 198 million people, forecast to more than double to 450 million by 2060, equivalent to a per capita oil savings of only $10 per person. This compares poorly to other oil producers with rainy-day or sovereign wealth funds like Norway, UAE, Russia or Saudi Arabia. According to US-based Sovereign Wealth Fund Institute, Norway has amassed an oil savings of $1 trillion, or roughly $188,000 for each of the 5.32 million Norwegians; UAE has oil saving of $697 billion, or roughly $74,148 for each of its 9.4 million citizens; while Saudi Arabia has oil saving of $875 billion, or roughly $27,343 for each of its 32.94 million people. When former President Olusegun Obasanjo left office on May 29, 2007, he left $25 billion in the ECA. However, between 2007 and 2014, there was an upward trend in withdrawals from the ECA which was particularly incessant right before national elections. Fast forward to 2018, and the stabilisation fund faced a similar fate. The Minister of Finance reported that the revenue accrued to the account had depleted to only $637 million from $2.31 billion in three weeks, a

drawdown of about 73 percent. Just like former Presidents Umaru Yar’Adua and Goodluck Jonathan, President Buhari, a supposed poster child for fighting corruption, also dipped his hand into the stabilisation fund. Between 2016 and 2018, he dramatically increased the monthly security allowance allocated to the 36 states. In 2017, he withdrew $1 billion from the ECA without any formal consultation from the appropriate bodies. When confronted, he played the “Boko Haram” card like his predecessor, an explanation many citizens did not buy. “Nigeria has no reason to continue to allow its economy to be decimated simply because it is endowed with petroleum resources. Nigeria needs to explore development strategies, which Botswana, Chile, Malaysia, and Indonesia utilised successfully to avoid the phenomenon called ‘Dutch Disease’,” Wummi Iledare, a professor of Petroleum Economics and Policy Research at the Centre for Petroleum Energy Economics and Law, University of Ibadan, said. Another major issue that is detrimental to the welfare of future generations of Nigerians is the number of dormant oil fields in the country. Owowo oil field, discovered in October 2012 by United States’ oil giant, ExxonMobil Corporation, with about one billion barrels of oil reserves offshore Nigeria, capable of earning huge oil revenue, has been abandoned. According to energy experts, the field would have boosted Nigeria’s effort in increasing its crude oil reserves from the current 36 billion barrels to 40 billion barrels target, which was set for 2010 but could not be achieved as a result of lack of investment in exploratory activities. Emmanuel Agboola, head of energy infrastructure at Sofidam Capital, said the Owowo oil field has the potential of providing new employment opportunities for Nigerians once production starts. However,

exploration activities are still hanging which is a cause of concern. “Some of the fields are idle because the funding is not in place to develop them, especially the government’s part of the funding,” Agboola said. The Owowo field spans portions of the contract areas of Oil Prospecting Licence (OPL) 223 and Oil Mining Licence (OML) 139. ExxonMobil holds 27 percent interest and is the operator of the OPL 223 and OML 139. Joint venture partners include Chevron Nigeria Deepwater Limited (27 percent interest), Total E&P Nigeria Limited (18 percent interest), Nexen Petroleum Deepwater Nigeria Limited (18 percent interest), and the Nigeria Petroleum Development Company Limited (10 percent interest). Ayodele Oni, energy partner at Bloomfield Law Practice, said apart from the uncertainty and lack of legal framework scaring away investors, many of oil fields went into wrong partnerships because there was also no strong consultant that understands the sector. “Many of these field owners are at war with their technical partners because there were no good agreements,” Oni told BusinessDay. Another scary fact is the delay in regulatory consent on Ogo oil discovery frustrating Africa-focused oil and gas exploration company Lekoil’s $1 billion investment. The OPL 310 licence is in the Upper Cretaceous fairway that runs along the West African Transform Margin. The block extends from the shallow water continental shelf close to Lagos out to deeper water. The crisis which is already a legal tussle between Lekoil and the Ministry of Petroleum Resources may eventually deny the country about $1 billion in upstream investments while several thousands of jobs are likely to be lost in the process. Stakeholders, however, believe that the development is a setback to the ForeignDirectInvestment(FDI)driveof the Federal Government and its Ease of Doing Business initiative, as it may be a deterrent for would-be investors.

now a director at private-equity firm, CDC Group. “After it (the wage hike exercise) is done, there will be agitation that differentials will need to be maintained, meaning that virtually all government employees will have a pay rise,” Alli said. “This is part of our habit of not adjusting things continuously, meaning that we then have to adjust through economy-crushing massive hikes (think exchange rates, fuel prices, government salaries), to name but a few,” Alli told Business Day. Beyond the pressure it piles on public revenues, the implication of a widening wage bill also threatens to leave the government no choice but to borrow just to meet personnel expenses, without adding statutory transfers, overhead costs, debt service and capital expenditure. For a government that already commits over 60 percent of its revenue to debt servicing, the numbers suggest there is little room for wasteful borrowing that isn’t tied to capital projects, critics say. The numbers are indeed damning. The Federal Government spent $3.5 billion or N1.07 trillion paying interest on money borrowed from local and international sources in the first six months of 2018, which implies paying $584 million (N178.7 billion) monthly and $18.8 million (N5.75 billion) daily, according to BusinessDay calculations. At the current pace, economists warn that debt service costs could be the biggest line item in the budget in another two years, surpassing capital expenditure and non-recurrent expenditure. While the FG looks set to struggle with the wage hike, cash-strapped states face an even sterner test. With the implementation of the new minimum wage policy, the personnel cost in no less than eight states will exceed 100 percent of their Internally Generated Revenue (IGR). It means these states could be devoting their entire IGR to the payment of worker salaries alone. They include Osun, Kebbi, Zamfara, Borno, Adamawa, Taraba, Yobe and Benue States. For all eight, their

Thursday 21 March 2019

monthly average personnel costs exceed their IGR. In addition to the eight states listed, 16 others will see average monthly personnel cost accounting for more than 50 percent of IGR. This means more than 50 percent of IGR of the affected states will be used to pay salaries. For the remaining 12 states, personnel costs will remain below 50 percent, with Lagos and Rivers the most comfortable of the pack. Worried by their strained purses, state governors had objected to a N30,000 minimum wage. Instead, they proposed N22,500. For corporations and small businesses already operating in a weak economy and a loose labour market with 23 percent unemployment rate, they won’t be able to afford paying wagesdictatedbylegislativeratherthan marketforcesandmaylayoffworkersor hire cheaper temporary staff. That’s especially true for smaller businesses, which don’t have the same access as larger ones do to capital, analysts say. The implication of a wage hike on the finances of the Federal Government, states and corporations prompted the creation a technical advisory committee headed by renowned economist, Bismarck Rewane. The committee was charged with the task of recommending ways the government can fund a larger wage bill. A local newspaper, quoting unknown sources, reported this week that the committee has recommended two quick solutions – a VAT increment and an adjustment in the official exchange rate of the dollar to the naira. Rewane held back from divulging the recommendations of the committee in an interview with BusinessDay, as he said he was unable to reveal any such details. Minister for Budget and National Planning, Udoma Udo Udoma, said this week that the Federal Government was considering an upward review of the 5 percent currently charged as Value Added Tax (VAT) by 50 percent to enable it fund the new national minimum wage.

Government robs Peter to pay Paul with... Continued from page 2

as a downside for foreign investments in the Nigerian industrial and business space as well as growth of SMEs. “In effect, we see this as a fiscal policy designed to rob Peter to pay Paul. We also expect companies who may not be able to raise prices to layoff workers in bid to manage costs which would significantly impact unemployment,” said the analysts. Fast Moving Consumer Goods firms could be the hardest hit because they had increased the price of key products in 2016 in order to fend off the effects of rising inflation and high cost of production brought on by a precipitous drop in crude oil price that tipped the country into its first recession in 25 years. Data gathered by BusinessDay show the cumulative revenue of 13 largest consumer goods firms quoted on the floor of the Nigerian Stock Exchange dipped by 8.53 percent to N1.04 trillion as at September 2018 while combined net income reduced by 20.20 percent to N85.23 billion in the period under review. “It may be that some companies will try to absorb the increment so that it does not undermine their volumes but in so doing it may impact margins,” said Ifedayo Olowoporoku, consumer goods research analyst, Vetiva Management Ltd. “The new fiscal policy begs the efficacy of trying to support the

economy through a minimum wage increase because many will see prices go up,” said Olowoporoku. After months of tussle between Federal Government and the Nigerian Labour Congress (LNC), the Senate has approved N30,000 as the minimum wage for federal and state workers. The country’s workers currently earn one of the lowest pays in subSaharan Africa (SSA) at N18,000 (or $50), but the amount is higher than some countries plagued by crisis – Uganda ($6/month), Malawi ($49/ month) and Burundi ($7/month). Perhaps more worrisome is that some states are not viable enough to pay the new wage because their internally generated revenue is abysmally poor. Countries with higher consumption tax rates mostly have a higher GDP per capita compared to Nigeria’s $1,994. South Africa’s GDP capita is $6,179 while VAT rate is 15 percent; Gabon’s GDP per capita is $7,373 while VAT rate is 18 percent, and Angola’s GDP per capita $4,465 and VAT rate 10 percent). Experts say they would have the Federal Government to remove subsidy on petroleum products to fund workers wage bill and fix infrastructure than to increase consumption tax that could undermine economic growth.

Thursday 21 March 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

Nigeria seeks policies to address migration HARRISON EDEH, Morocco

oncerned by the increasing rate of illegal migration from most African nations, the Nigerian government at the ongoing World Border Security Congress in Casablanca, Morocco, is pushing for a policy framework that comprehensively addresses migration and its linkage with development priorities. Junaid Abdullahi, executive secretary, Border Communities Development Agency, Nigeria, in a speech called on the various countries to identify and enable migration and development policies that support human resource development rather than simply restricting mobility. Abdullahi further called on various African governments to tackle youth unemployment, restiveness, poor educational systems, and unjustified income disparity through under-employment, many of which were underlying factors that fuel illegal migration. Ibrahim Kwajafa, an official with the Border Communities Development Agency, Nigeria, raised concerns on the risk exposure of the rising number of African’s migrating to the developed world. “In Nigeria alone, it is estimated that close to a million Nigerians find their way outside the country being trafficked. This population is largely made up of youths who are unskilled and uneducated, risking everything just to reach Europe and America,” he said. Statistics from the International Organisation for Migration indicates that Nigerian migrants account

for the highest number of arrivals in Italy by Sea, with about 17 000 Nigerians out of 99,197 total migrants from all countries who arrived in Italy by sea between January and August 2017. According to both ECOWAS and IOM, evidence abounds that most of the migrants are lured into irregular movement by migration syndicates with promises of job opportunities and better pay which turn out to be false. It would be noted that borders in the Marghreb linking

Tunia, Algeria and Morocco are increasingly dangerous, as well as armed with tools designed for the pre-Arab spring environment. Morocco, Algeria and Tunisia face a complex new world of transnational actors that leverage borders for profit. The region is also a main thoroughfare for the West African human trafficking and migration route to Southern Europe, with access to Spaniesh Soila sdnt eh European Union border in the North African enclaves of Milila and Cueta,

Living history of the power sector: Wiebe Boer, CEO, All On, with Christopher DeKretser, MD of NESCO, founded in 1929 as Nigeria’s first renewable energy company, during Boer’s courtesy visit to the NESCO office in Bukuru, Plateau State. DeKretser started working for NESCO in 1957 and has been MD for over 50 years, providing reliable 24/7 powers to rural Plateau State.

AMCON MD calls for reintroduction of Failed Bank Act OLUFIKAYO OWOEYE

anaging director/CEO, Asset Ma n a g e m e n t Corporation of Nigeria (AMCON), Ahmed Lawan Kuru, has called on the Nigerian authorities to revisit the Failed Bank Act so that operatives in the banking sector would be made to account for their actions, and urged banks to immediately strengthen their risk management framework to stem the negative development of non-performing loans. The AMCON boss, who spoke on Wednesday when he played host to officials of Risk Management Association of Nigeria (RIMAN) led by its president, Magnus Nnoka, the chief risk officer, Coronation Merchant Bank, to the AMCON Lagos office, said the reintroduction of

just a short journey from mainland Europe across the Mediterranean, while smuggling of arms and illegal goods across North Africa adds pressure on the government’s and border security forces of the region. The congress supported by the Organisation for Security and Co-operation in Europe (OSCE), European Association of Airport and Seaport Police, African Union Economic, Social and Cultural Council is also looking at current issues in migration.

the Act would not only wipe out the huge toxic loans in the banking sector but also curtail the current trend of financial rascality on the part of some bankers, noting that this would bring discipline to the banking industry in general. According to Kuru, the growing prevalence of weak risk management framework by financial institutions led to the creation of AMCON. Kuru further explained that given the huge resources that are available to financial institutions and the pivotal role they play in the development of the economy makes it mandatory for financial institutions to take the issues of risk management seriously to prevent what happened during the global financial crisis. “The grievous impunity is taking place along the credit process. There is the urgent need to revisit the failed

bank act so that operatives become responsible for their actions. We believe it will bring discipline to the banking industry,” he said. “The damage financial institutions do to the economy when they book fictitious loans were worse than corruption,” he said. He, however, called on the leadership of the association to join in the campaign to bring sanity to the credit process. “We must bring both the obligors and the operators to account for the bad credits,” he said. Asset Management Corporation of Nigeria (AMCON) was established on the 19th of July 2010. It was created to be a key stabilizing and re-vitalising tool aimed at reviving the financial system by efficiently resolving the non-performing loan assets of the banks in the Nigerian economy.

@Businessdayng

39 NEWS

BUSINESS DAY

FEC approves N27.46bn for states ravaged by insecurity, flood TONY AILEMEN, Abuja

he Federal Executive Council (FEC) has approved a total of N27.46 billion for states ravaged by insecurity and natural disasters, including flooding. Governor of Kebbi State and vice chairman of the Presidential Initiatives on Food Security, Atiku Bagudu, disclosed this on Wednesday while briefing State House Correspondents after the weekly FEC meeting presided over by President Muhammadu Buhari. The intervention is under the National Food Security Council for states affected by conflicts and insecurity. The Council considered the importance of helping them and approved N8 billion for Adamawa, Plateau, Benue, Zamfara with 69,872 persons listed as beneficiaries. “FEC considered and approved two memos from the National Food Security Council. First it approved the intervention for states that have been affected by conflicts and insecurity, where many have been displaced from their homes and some are living in Internally Displaced Persons camps. “While support has been given in terms of accommodation, food, welfare, the National Food Security Council considered the importance of helping them restore their livelihood activities, particularly agricultural activity. “Council approved the memo by Mr. President and approved N8,558,529,755 for intervention in Adamawa, Benue, Borno, Plateau, Taraba, Yobe and Zamfara. The beneficiaries are estimated about 69,872 people. The intervention includes provi-

sion of fertiliser, seedlings, chemicals, poultry and animals to enable them resume economic activity.” Last year’s unusual amount of flooding in some states had affected about 14 states which prompted the national food security council to consider the impact of that flooding on the agricultural sector, food security, animal husbandry and fisheries. Bagudu said the council approved an intervention totally N18,942,818,912.14, adding that “Contracts would be awarded to 15 companies to provide seedlings, agro chemicals and fertilizers to 163,117 beneficiaries located in 14 states. The states are Adamawa, Anambra, Beyelsa, Benue, Delta, Edo, Jigawa, Kebbi, Kogi, Kwara, Niger, Rivers, Sokoto and Taraba. “As part of the work of national food security council, other interventions have been considered and are being worked upon by the beneficiary community and also the livestock sector. “ The Council had set up an enumeration committee which considered and approved the beneficiaries. He disclosed that the National Emergency Management Agency (NEMA) had also verified and approved the listed of beneficiaries sent by the states”, adding that “data and the process has lasted for over nine months.” Minister of Education, Adamu Adamu also announced the award of contract for the construction of a faculty of Acts in the Adamawa State University, at the cost of N614m, under the funds provided by the Tertiary Education Funds Tertfund.

Inspired Women converge for 9th Global Possibility Summit THEODORA KIO-LAWSON

very year since 2010, the Inspired Women of Worth (IWOW), a network of loosely connected professional, entrepreneurial and impactful women across multiple continents, has gathered women from all walks of life at an event called the Global Possibilities Summit with the objective to enlighten, encourage, empower and connect them to hone their individual gifts to enable them accomplish a world of good through individual and collective leadership. This year, the IWOW is set to host the 9th edition of the Global Possibilities Summit with the theme: ‘The Year of the Power Woman.’ Speaking about this year’s summit, which will take place on March 22 and 23,

at Oriental Hotel, Lagos, a representative of the organisation said the 9th summit was aimed at educating more women on how to discover a sense of purpose, strengthen their unique voices, and sharpen their sense of personal vision and significance while building successful businesses and careers. She said, “Every woman who attends the 2019 summit will leave equipped to take action towards attaining new heights, while embracing their true power whether as career or entrepreneurial women.” The Global Possibilities Summit 2019 will feature a town-hall session and a series of Masterclasses. According to the organisers, attendees will have practical working sessions, town hall conversations, and keynote speeches along with

one-on-one interviews with a diverse range of female and male leaders from the worlds of business, public service, education, and creativity/entertainment. Some distinguished speakers and panellists to be featured this year include: Audrey Joe-Ezigbo, co-founder and executive director of Falcon Corporation Limited; Steve Harris, CEO of Edgecution; Tara Durotoye CEO of House of Tara; Kate Henshaw the multi-award winning actress; Oke Maduwesi CEO of Zaron cosmetics; and NiyiAdesanya of Fifth gear consulting, Others are, AreseAgwu, the celebrated author of the book, “Smart Money Woman’; Chuka Monye, Consultant par excellence; and Udo Okonjo, CEO of Fine and Country, WA, and founder, iWOW, to mention a few.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

Thursday 21 March 2019

@Businessdayng

RESEARCH & INSIGHT

In association with briu@businessday.ng

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

08098710024

Regional analysis of the telecom sector’s voice subscribers (Part 1) ADEMOLA ASUNLOYE

38.84%

25.26%

172,824,239 9.21%

26.19% Source: NBS, BRIU

tre of Nigeria. Very high network penetration was also recorded in the North central where the total active voice subscriptions amassed amounted to 32.1 million, closely followed is the North West and South-South;

while South East and North East have the least number of subscribers.

Others

accumulated a major0.20% share of the active voice subscriptions. Analysis of the telecom data indicated that MTN dominated in 5 of the 6 regions in Nigeria. Similarly, GLO network dominated only in remaining

Regional distribution of active voice subscribers by network in Q42018 In Q4 2018, MTN network

region—North Central. The regional chart displays the performances of the networks across regions. Part II focuses on the regional analysis of active internet subscription…

Regional distribution of active voice subscribers by network in Q4 2018

34.94%

21.33%

33.27%

31.1m

42.72%

Others

34.94%

35.07%

16.57%

9.21%

0.09%

21.33%

Total Active voice Subscriptions

33.27% 32.1m

29.02%

0.02% Others

51.7m

10.20%

38.70%

Others

0.43%

27.96%

172,824,239

0.20%

Others

10.37% 25.83%

34.52%

5.61%

16.3m

0.09%

25.26%

Source: NBS, BRIU

24.8m 16.9m

25.96% Others

7.28%

0.10%

23.70%

19.88%

Others

0.04%

48.01%

9.09%

Infographics by: Isaac Esowe

12734BDN

ers in Nigeria increased by 6.66 per cent from 162 million in Q3 2018 to 172.8 million subscribers in Q4 2018. This growth is largely attributed to the participation of the Southwestern region as the states therein contributed 31.01 per cent to the figure accumulating 53.6 thousand active voice subscribers. Lagos State stands alone in the country as well as in the region with its total subscriber base amounting to 13.34 per cent and 44.61 per cent of the total active voice subscribers’ base respectively. Other states that contributed most to the number of active voice subscribers by their regions are Rivers state with 27.15 per cent of the total active voice subscribers’ base in the South-South region; Anambra, 27.15 per cent; South East region; Kano, 31.32 percent; North West region; Borno 20.06 per cent; North East region, while FCT contributed 23.91 per cent of the total active voice subscribers’ base in the North Central region. Across the regions in Q4 2018, the number of active voice subscribers recorded in the South West was 51.7 million active voice subscribers which are largely the resultant of the very high number of active voice subscribers in Lagos—the commercial cen-

Source: NBS, BRIU

9.2

States with the highest intra-regional active voice subscriptions The number of active subscrib-

Total Active voice Subscriptions

26.19%

he Nigerian telecommunications sector, a subsector of the service sector, has through technological advancement and introduction of innovative services of GSM (Global System for Mobile Communications) thrived tremendously across the geopolitical zones in Nigeria in 2018. The industry is a major contributor to the growth of other sectors of the economy as it fosters businesses acrossthe-board and cross-borders. By the end of 2018, telecoms contributed 77.42 percent to the information and communication sub sectoral GDP and 9.46 per cent to national GDP. Through mobile connectivity, the telecommunications industry continues to improve the welfare of millions of Nigerians particularly through new digital possibilities. Advancement in the industry concurrently tip the scale for the increasing mobile penetration in Nigeria, as the number of active voice and active internet subscribers’ bases grew enormously in Q4 2018 by 19.13 per cent and 13.54 percent year-on-year (YoY) respectively. Amongst the major networks in Nigeria in Q4 2018, MTN active coverage by persons accumulated the highest with 38.84 per cent of the total active coverage by persons nationwide. Trailing MTN is GLO with 26.19 per cent; AIRTEL, 25.56 percent, 9-Mobile; 9.21 per cent and others 0.20 percent of the total active coverage by persons nationwide in Q4 2018.

WIDE OPEN MINDED RMB Nigeria. Solutionist Thinking.

Rand Merchant Bank Nigeria Limited is an Authorised Financial Services Provider

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

www.rmb.com.ng

Thursday 21 March 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

ECONOMIC MONITOR

briu@businessday.ng

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

08098710024

How PENCOM’s compliance list exposes the challenges of SMEs TELIAT SULE

ne of the ways to examine the challenges of MSMEs in the country is by looking at their level of participation in the mandatory contributory pension scheme. According to the law, a firm is expected to participate in the pension scheme once it employs a minimum of 3 workers. Analysing the 2018 compliant firms released by the National Pension Commission (PENCOM), a total of N34.12 billion was remitted on behalf of 80,394 Nigerian workers as their contributory pensions. Compared with 2017, the compliant firms in that year remitted N63.07 billion on behalf of 178,954 Nigerian workers. On the average, N424, 476.96 was remitted on behalf of an average employee in 2018 while N352, 433.45 was remitted on behalf of an average employee of the compliant firms in 2017. In effect, there was a 55 percent reduction in the number of Nigerian workers whose employers remitted their contributory pensions and 46 percent decline in the amounts remitted between 2017 and 2018. Disaggregating further the 2018 data into big, medium, small and micro enterprises, 66 percent of the employees or 53, 440 individuals worked for big corporations which by definition employ 200 workers or more. Total pensions remitted on their behalf amounted to N26.45 billion representing 78 percent of the total contributory pension funds Nigerian firms remitted in 2018. Also, 14 percent or 10, 978 employees worked for medium sized firms which by categorisation employ between 50 and 199 workers. Their firms remitted N5.67 billion on their behalf representing 17 percent of the total contributory pension funds that compliant firms remitted in 2018. The small firms which by definition employ between 10 and 49 workers remitted N1.25 billion on behalf of 4, 859 workers in 2018, which amounted to 6 percent of the employees involved in the scheme and 4 percent total contributory pension remitted in 2018. The micro enterprises which are regarded as firms that employ a minimum of 1 and maximum of 9 remitted N748.28 million on behalf of 11, 117 workers, representing 14 percent of the total employed involved in the scheme and 2 percent of the total funds remitted in 2018. However, when compared with 2017, there was a sharp variation in the distribution of the employees involved in the scheme and the amount of pensions remitted

Distribution of employees enrolled in Pension Scheme in 2018

across the four categories of firms. Big firms remitted N34 billion on behalf of 100,760 workers in 2017, which means 56 percent of the total employees that featured in the contributory pension scheme in 2017 worked for big firms while 54 percent of the total pensions remitted in the same year came from their employers. Medium firms remitted N15.64 billion on behalf of 26,994 workers in 2017, representing 15 percent of the total employees of that year’s compliant firms and 25 percent of the funds remitted in same period. Furthermore, 14,438 of the employees captured by the scheme worked for small firms, and they

invariably accounted for 8 percent of the total employees captured by the scheme and 18 percent of the total funds remitted in 2017. And micro enterprises’ employees had N2.06 billion remitted on their behalf, and by population, accounted for 21 percent of the employees captured in the scheme and 3 percent of the funds remitted. In 2018, 16 compliant firms registered a minimum of 1,000 employees with the scheme while in 2017, the number of firms having similar number of employees were 27. Julius Berger topped the list in both years in terms of the number of its workers registered with the scheme. It had 7,074 on the scheme

Remittances by firms 2018

in both 2017 and 2018. However, whereas N178, 876.96 was remitted per employee in 2017, an average of N212, 090.47 was remitted on behalf of every worker in 2018. Compliant firms with a minimum of 1,000 employees on the scheme in 2018 were Setraco Nigeria Limited, 3,950; Access Bank, 3,428; GTB, 3,414; Reynolds Construction Company, 3,364; CCECC Nigeria, 2,639; Union Bank, 2,595; Sterling Bank, 2,401; Stanbic IBTC, 2,082; Mothercat, 1,470; CGC Nigeria, 1,407; Hartland, 1,159; Nigeria NLG, 1,133; Gilmor Engineering Nigeria, 1,095; Lafarge Africa, 1,080 and PWC, 1,073. Nigeria NLG remitted the high-

est amount per employee in 2018 as it remitted N9.32 billion on behalf of 1,133 translating to N8.23 million per employee. It was followed by PWC which remitted N4.66 million per employee in 2018. NLNG Ship Management remitted N1.29 million per an employee in 2018 while Lafarge Africa remitted N1.18 million per an employee last year. In 2017, Nigeria LNG topped the list of firms that remitted a billion naira and above into the contributory pension schemes. Other firms in this category include Hydrodive Nigeria Limited, Stanbic IBTC Bank, Ecobank, I.O.Furniture Limited, Haskoning DHV Nigeria, Hyprops Nigeria, Tri Continental Distributions Limited, Access Bank, Julius Berger, GTB, Slva Yeditepe Projects Limited, Saipem Contracting Nigeria, Sterling Bank and MTN Nigeria Communication Limited. How it affected SMEs There are salient trends inherent in the PENCOM data especially when analysed by the size of the compliant firms. Overall, there was a 55 decline in the number of employees registered with the scheme and 46 percent in the amount remitted. The former fell from 178,954 to 80, 394 between 2017 and 2018, while the latter reduced from N63.07 billion to N34.13 billion during the same period. This is the overall performance of the contributory scheme during the period. However, the impact varied from firm to firm. The big firms experienced 47 percent decline in the employees registered with the scheme while in terms of amount remitted, that fell by 22 percent. The impact was much more on the SMEs. The medium enterprises recorded 59 percent decline in the number of employees registered with the scheme and 64 percent fall in the amount remitted during the same period. Remittance by small firms fell by 89 percent while the number of employees registered with the scheme also declined by 66 percent. For micro enterprises, the number of employees registered for the scheme fell by 70 percent while amount remitted fell by 64 percent. The extent of decline in the number of employees enrolled with the scheme and the amount remitted shows the degree of vulnerability of MSMEs in Nigeria. That is why the introduction of micro pension scheme will be helpful as it will not only encourage more firms to be compliant, which will be good for their employees and the economy, the fact that firms enrolled under micro pension have flexibility may reduce a sizable amount of burden on SMEs.

A2 BUSINESS DAY NEWS

www.businessday.ng

www.facebook.com/businessdayng

Over 1.3m interest-free loans successfully disbursed through GEEP - FG IHEANYI NWACHUKWU

ill date, over 1.3 million interestfree loans have been successfully disbursed through Government Enterprise and Empowerment Programme (GEEP), with a little over 1.1 million loans under the TraderMoni Scheme. Zainab S. Ahmed, minister of finance, noted this at the Central Bank of Nigeria (CBN) 2019 International Women’s Day Commemorative Event themed “Investing for Equality.” Nigeria’s Economic Recovery and Growth Plan (ERGP) has prioritised the provision of micro-loans for women through the GEEP and the Women Empowerment Fund. “These Programmes are crucial because access to financing is a key driver of financial and social inclusion for micro, small and mediumsized enterprises (SMEs) especially for women-owned enterprises,” she said. The event provided an opportunity for participants to reflect individually and

collectively about respective journeys as women (and men), and decides what could and must be done to ensure that they reach our gender parity goals. The finance minister noted the need to take a long term and strategic approach to establishing gender parity, and ensuring that women were economically empowered, resulting in stronger economies overall. “Gender equality is critical to ensuring inclusive and sustainable development, and achieving our goals under the Economic Recovery and Growth Plan (ERGP) and the UN 2030 Agenda for Sustainable Development,” she said. She believes that at the government level, it is important to design and implement policies and programmes in a way that ensures women’s participation at all levels. “At the individual level, we each must take the time to support and mentor the women and girls in our lives, and we should each feel empowered as agents of change working towards ensuring

equality. By empowering women and ensuring their full participation in society (particularly in leadership and decision-making roles), we can ensure improved economic development outcomes for all”, the finance minister added. “As we discuss the strategic ways in which we can work to empower women and ensure gender parity, it is important to commend CBN for last year’s updates to the National Financial Inclusion Strategy (NFIS). These updates will ensure, amongst other things, the inclusion of women and other disadvantaged groups in implementation of the NFIS. “Specific strategic initiatives include the tailoring of financial products to serve the needs of women, recognizing that women are traditionally excluded from formal financial services because they cannot meet the account opening and loan requirements. With these and other updates, CBN is well positioned to address the gender dimensions of financial inclusion” she stated further.

Edo backs prison reform, mulls 50-hectare correctional centre

do State governor, Godwin Obaseki, has thrown his weight behind the ongoing prison reform and decongestion by the Federal Government, noting that the state is working on a 50-hectare correctional centre to strengthen the justice system in the state. Governor Obaseki made the submission during a courtesy visit by members of the Presidential Committee on Prisons Reform and Decongestion, led by the Chief Judge of the Federal Capital Territory (FCT), Abuja, Justice Ishaq Bello, at the Government House in Benin City, Edo State, on Wednesday. The governor said the country’s democracy would not thrive without an effective justice system, adding that

his administration was committed to providing needed support to make the entire judicial process more efficient. He stressed that achievements recorded by his administration were largely due to enforcement of law and order in the state, noting that for law and order process to be complete, the prison system must be looked into. “As a state, we are committed to reforms of the prison system. We have decided to acquire 50 hectares of land to establish a correctional centre. We are committing large expanse of land to enable us see our prisons as more of a correctional centre,” the governor said. According to Obaseki, the state government is in talks with Nigeria Prisons

Service in Abuja to design a correctional centre that will provide space for more vocational and educational facilities that will assist inmates or convicts to be reformed. On awaiting trial inmates in the state, he said his administration was determined to reducing the number of inmates awaiting trial by more than 50 percent. He urged the Presidential Committee to develop a sustainable system that would provide solutions to the challenge of overcrowding in prisons across the country. He said the state government’s human capacity development initiative, EdoJobs, was ready to partner the Prisons Service in training inmates to prepare them for reintegration into society.

Urban development issues in focus as NIESV confab explores alternative transport system TEMITAYO AYETOTO & ISRAEL ODUBOLA

s the Nigeria Institute of Estate Surveyors and Valuers (NIESV) holds its 49th annual conference this today, pertinent issues bothering on urban development challenges are set to be tackled. With the focus on “A City that Works,” the conference will bring to fore the need to align city development strategies with standard framework in achieving the

smart city goal, laying emphasis on alternative transport system. Expected to lead the discourse are Babatunde Fashola, the minister of power, works and housing, and Mustapha Zubaru, a professor and expert in urban administration and housing. While the former will address government’s plans for the housing sector in the next administration of President Muhammadu Buhari, the later will see to efficient city management and administration.

Rowland Abonta, NIESV president at a news conference on Tuesday, said one of the objectives was to expose its practitioners and other professionals in the building industry to the challenges and prospects of city management in Nigeria with particular reference to smart cities. According to Abonta, the choice of Lagos stems from the fact that it is home to the estate surveying and valuation profession, as nearly 70 percent of its members operate in the state.

@businessDayNG

@Businessdayng

Thursday 21 March 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

A3 NEWS

BUSINESS DAY

Why other states should emulate Edo, set up NIMASA signs service level agreement FDC advocates increased spending for Nigeria to achieve $550bn economy by 2023 taskforce to curb human trafficking – NAPTIP with stakeholders to enhance efficiency mist explained that for the AMAKA ANAGOR-EWUZIE

n line with the Executive Order one on the Ease of Doing Business, the Nigerian Maritime Administration and Safety Agency (NIMASA) has signed the Service Level Agreement (SLA) with its stakeholders, aimed at enhancing efficiency. The agreement binds NIMASA with its customers to, in the spirit of transparency, publish data on the processes and accessibility of organisation-wide information with regard to cost, timelines, and other requirements for obtaining services in the Agency. Speaking during the signing ceremony organised by the SERVICOM Unit of NIMASA in conjunction with the office of the national coordinator of SERVICOM, Dakuku Peterside, directorgeneral of NIMASA, emphasised on the critical role of effective and efficient service delivery in the country’s quest for development. According to Peterside, the Agency is committed to promptness and excellence in its operations, as quality service is a culture that must be observed at all times.

“The signing marks a new era and significant milestone for the Agency for greater service delivery in quantifiable and measurable terms. It also brings to focus what the leadership of NIMASA stands for on the issues of effectiveness, efficiency, and, most importantly, the credibility of service delivery,” Peterside said. He assured the SERVICOM unit of NIMASA of maximum cooperation, noting that reliable customer feedback was the essence of the Service Level Agreement. Jumoke Oduwole, President Muhammadu Buhari’s special assistant on the Ease of Doing Business, assured on the Federal Government commitment to prompt and effective service delivery, especially in its Ministries, Departments and Agencies (MDAs), an essential condition for economic development. Bashir Jamoh, executive director, Finance and Administration of NIMASA, pledged the Agency’s determination to work with the SERVICOM office to actualise a regime of prompt and efficient service delivery in the maritime sector.

Fintech African press release becomes official newswire of Lagos Fintech Week FRANK ELEANYA

he organiser of Lagos Fintech Week has announced that the fintechfocused press release distribution platform, Fintech Africa Press Release (FAPR), has become its official newswire. As the official newswire of the week-long conference, FAPR will generate awareness for the event and assist the organiser foster engagements across African countries by distributing pro bono all press statements emanating from the secretariat of Lagos Fintech Week via www.fintechafrica pressrelease.com The platform has also identified influential financial technology bloggers that write about financial inclusion, payment, industry regulation, lending technology, insurance technology and other industry influencers to join the conversation in the weeks leading to the Fintech conference. In using traditional and social media platforms, Fintech Africa Press Release will also partner major traditional newspapers, radio and television stations, and social media agencies for effective coverage of the conference.

Chairman of the Fintech summit, Yele Okeremi, says Lagos Fintech Week (http://lagosfintechweek.com.ng) is an invigorating week of distinct FinTech events that will deliver exciting discussions, stimulating demos and insightful debates, bringing together startups, technology companies, investors, financial institutions, research institutes and innovative professional. Okeremi says there will be Open Banking Master Class, Nigerian Fintech Award, Hackcelleration and Investor Summit Demo & Deal day. According to Okeremi, participants at the summit will get an in-depth understanding on of the entire Fintech conference that will showcase innovation as well as firsthand experience that will demonstrate collaboration between Financial Institutions (FIs) and FinTechs to deliver real world applications swiftly to delight customers. The Nigerian FinTech Awards is the most prestigious recognition of excellence for the entire financial technology industry in Nigeria. Join 300+ industry leaders at the gala dinner on April 26, 2019, to celebrate innovation in this dynamic sector.

OLUWASEGUN OLAKOYENIKAN

he Financial Derivatives Company (FDC) Limited, a Lagos-based risk and financial advisory firm, has presented four growth strategies, which majorly focus on increased spending that could help Nigeria achieve $550 billion economy by 2023. In a presentation by the investment firm’s chief executive, Bismarck Rewane, three scenarios comprising growth suboptimal, full employment and transformation and improved quality of life were painted for the country to work upon if it must leapfrog within the next four years. The growth sub-optimal guarantees a $427.5 billion economy, representing 2 – 3 percent growth; full employment, $550 billion economy, translating to a GDP growth of 6 percent; while the third scenario would probably put the nation’s economy at $700 billion by 2023, implying 8 – 10 percent growth. The renowned econo-

country to attain the $550 billion level from $427.5 billion, it must pursue strategies led by the four components of the GDP, which he itemised as consumer-led, governmentled, investment-led and export-led strategies. According to Rewane, increasing spending on the government’s social intervention initiatives like the Central Bank of Nigeria Anchor Borrowers’ Programme, N-Power, among others would help achieve pro-poor growth. He, however, warned that the strategy might heighten inflationary pressures. The FDC helmsman further explained that for the other strategies, the government should aim higher expenditure, increased infrastructure spending and export promotion for increased capital inflows, sustainable GDP growth, and revenue diversification. Investment, according to him, is a catalyst for growth, adding when the right investment is made, it would have a multiplier effect on aggregate income of the economy.

irector-general of the National Agency for the Prohibition of Trafficking in Persons (NAPTIP), Julie OkahDonli, has charged states in Nigeria to emulate the Edo State government’s strategy in addressing human trafficking by setting up a well-equipped taskforce against the menace. Speaking during a courtesy call on the Edo State governor in Benin City, Okah-Donli said Governor Godwin Obaseki had mustered the political will to fight the menace decisively in line with an initiative developed between 2004 and 2007 by the agency and United Nations Children Fund (UNICEF). According to OkahDonli, “NAPTIP is delighted at Your Excellency’s drive and commitment to the eradication of Human Trafficking as illustrated by the setting up of the Edo State Taskforce Against Human Trafficking (ETAHT) on 15th August 2017 and the decision of the 45th National Economic Council (NEC)

Meeting held on 24th January 2013, that states should support NAPTIP’s activities in order to strengthen the National Response to Human Trafficking at the sub-national level.” She said the success recorded by the state so far had inspired NAPTIP to encourage other state governments to set up similar task forces in order to consolidate the efforts of NAPTIP and other stakeholders, noting, “My interaction with the ETAHT and the training session have no doubt further deepened the understanding and cooperation between NAPTIP and the Edo State government.” On his part, Governor Obaseki said the state was partnering NAPTIP to reduce the incidence of human trafficking in the state, and urged donor agencies to support the state in reintegrating and providing shelter for returnees. “We are working to pressure foreign government to create legitimate travel windows that will enable them travel legally,” he said.

A4 BUSINESS DAY NEWS

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Thursday 21 March 2019

Plain Vanilla Derivatives to protect pension, create system stability - FMDQ CEO HOPE MOSES-ASHIKE

he Plain Vanilla Derivatives is seen to protect pension funds, revenue flows and prices, among others, and helps to push financial stability. Plain Vanilla is the most basic or standard version of a financial instrument, usually options, bonds, futures and swaps.

“What we are preaching now is Plain Vanilla Derivatives to protect your pension, to protect your price, Nigeria can protect its revenue flow in future by buying futures or put options, come two years’ time. So, the understanding of this product is not only for business, even Nigeria today can create system stability by having these products,” Bola Onadele Koko, managing director/CEO, FMDQ, said.

Koko spoke on ‘The Need for Derivatives in the Nigerian Financial Market and FMDQ’s Product Roll Out in 2019’ at a financial markets workshop organised by the Financial Market Dealers Association (FMDA), especially the Swap and derivative workgroup of the association, in Lagos. He said the most liquid product in FMDQ market today was the treasury bills trad-

ing, adding that the FMDQ would by third quarter of 2019 launch the treasury bills features, while the interest rate features would be introduced into the market by 2020. Samuel Ocheho, president of FMDA, said the level of adoption of hedging in Nigeria was still very low, as most people do not understand why they need to hedge. “I understand the reason is cost. God also come to play.

Nobody thinks about how to plan, hedging gives you a better way for planning. “In Nigeria, we do not want to lose revenue. One way to ensure that our oil price remains high is by creating a hedge product for the oil price,” Ocheho said. Responding to why adoption of derivatives is low in Nigeria, Koko said, “We have to follow the evolution of the market. There are some basic

elements of the market that are needed before you get to derivative stage. People need appreciation of market risk factors - volatility. “We need to have a repo market that is supported with collateral management and then the corporate, buying side, the corporate institutions buying foreign exchange must have that appreciation because they are the ones that will demand these products.

Thursday 21 March 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Leadership

Thurssday 21 March 2019

SHAPING PEOPLE INTO A TEAM

What it will take to make US child care more affordable MAYA UPPALURU

s soon as I got pregnant, friends told me, “Get yourself on a day care waiting list!” and related stories of their scrambles to find care. So, during my pregnancy, my husband and I toured multiple day care centers in Washington, D.C., where we live. At one, we walked right in because there was no security; the carpets were dirty, and the toddlers sat listening to a recording while a child care provider sat in a corner staring at us. Another looked sunny, safe and clean, but the price tag was more than our monthly mortgage payment, and we faced a waitlist though my child wasn’t due for months. Across the United States, parents struggle to find a care provider they feel comfortable with and can afford; often child care costs more than college, but new parents haven’t had the time to save up for it. Breakdowns in child care (nannies who suddenly disappear or day cares that fail quality inspections, for example) cost our economy an estimated $4.4 billion due to lost productivity. Child care expenses are cited as the No. 1 reason young adults are having fewer children than they would like. Faced with few viable options, it’s mostly women who end up considering an exit from the workforce rather than compromising on quality, particularly when their salaries are not covering day care tuition. Companies, individuals and the government can do something about this pressing challenge. WHAT BUSINESSES CAN DO My family is lucky: I now work for an employer that subsidizes tuition for a day care center across the street, where my daughter is thriving. I can run over to check on her at any moment — a key factor in my decision to take this job. Larger companies should fol-

low suit and should look into offering robust child care benefits, which can improve their bottom line and their retention of women. Some offer on-site or nearby day care centers, which do carry a significant price tag and require regulatory compliance and liability insurance; but considering the lavish benefits that many major corporations bestow upon their employees, this may be less an issue of budget and more of prioritization. Patagonia estimates that it recoups 91% of its costs on its on-site center. Spurred by an employee who had struggled to find day care for her children, Home Depot also boasts an onsite center at its headquarters. For smaller or medium-size businesses, other options for supporting caregiving employees include paid family leave, child care subsidies, backup caregiving networks or helping to coordinate summer care programs, and flexible-spending-account benefits that employees can use pretax toward the cost of child care. WHAT INDIVIDUALS CAN DO Quick caveat: Parents, I know you are tired, overworked and stressed out. The current system is failing you, and this should be your burden to bear or problem to solve. Having said that, systemic

change is not likely to happen overnight. In the meantime, individuals can effectively advocate for smaller but meaningful changes, within their employers and in their broader community. Employees can form caregiver networks to openly discuss the challenges of managing life and work, and collaborate with human resources and management to create solutions. One Best Buy employee who had to bring her infant child into work because of a gap in care catalyzed a new companywide backup care benefit. Individuals can also use their collective voices to advocate for better paid family leave policies, which can help offset child care costs in the short term. Individuals can also make a difference by being open about the struggles of parenting. If more of us are honest about our challenges, it normalizes caregiving and having a life outside of work. Managers and organizational leaders have a particular opportunity to set an example for their teams — for example, by taking their full parental leave or being transparent when they have to prioritize a family member’s doctor appointment. And they should support their employees when they do the same.

Finally, we can all vote. WHAT GOVERNMENT MUST DO Is there a business model for a high-quality, robust child-care system without significant government support? While some may argue that overregulation causes the high cost of child care, it is also clear that quality matters, not only to children and their parents but also to our overall economy. Cutting back on quality to save costs is not the solution. If we leave this issue to the private sector to resolve, the best benefits will continue to be distributed to the most privileged workers, increasing systemic inequities. No matter what action businesses take and how engaged American parents get on this issue, we won’t see systemic change without government leadership. Other countries invest in families by sponsoring or subsidizing early child care. In Quebec, families can expect full-time, year-round, affordable child care at all income levels. It has 20 years of data to show that the program works for the economy, keeping more women in the workforce and ultimately paying for itself. Denmark, France, Sweden, Norway and many other developed countries have imple-

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

mented programs to help families shoulder this burden. While none of these systems is perfect, they offer important lessons and potential blueprints for what we could do in the United States. Universal child care is getting new energy and momentum in the U.S. for the first time in almost 50 years, as candidates seek to differentiate themselves before the 2020 presidential election. Senator Elizabeth Warren of Massachusetts has proposed a universal child care program that would create a network of publicly funded care centers. Families with incomes less than 200% of the federal poverty line would receive care for free. While the price tag may seem steep — $70 billion per year — the program could cover as many as 12 million children, and it would make a huge difference in the lives of those families and strengthen the country’s human capital for decades. And recently, Senator Patty Murray of Washington reintroduced the Child Care for Working Families Act, which would cap the cost of child care at 7% of household income, increase prekindergarten funding and invest in improvement of child-care-provider training. I’m encouraged that there are more women, including more new mothers, in Congress than ever before, some of whom have their own child care challenges. This new class of leaders is uniquely positioned to alleviate issues that are placing their fellow parents across the country in financial jeopardy. I hope to see them collectively raise their voices and invest in our country’s future by expanding access to affordable, high-quality child care.

Maya Uppaluru, an attorney, was a policy advisor in the Obama administration’s White House Office of Science and Technology Policy.

BUSINESS DAY

Thursday 21 March 2019

CITYFile Edo spends N100m healthcare reforms IDRIS UMAR MOMOH, Benin

Members of Kaduna Coalition Against Kajuru Killings protesting at the Unity Fountain in Abuja on Tuesday.

NAN

Enugu: Police arrest 3 suspected kidnappers, rescue victim

he police in Enugu State say three suspected kidnappers operating on the outskirts of Enugu metropolis have been arrested. The command’s public relations officer, Ebere Amaraizu, said the suspects were arrested in the early hours of Tuesday by police operatives. According to him, the police acted

“on well-gathered and coordinated intelligence information.’’ The spokesman said that the suspects allegedly kidnapped their victim on March 16 at about 5: 30 a.m with an unregistered tricycle at Umueze community in Awkunanaw axis of Nkanu West local government Area of the state. “Their arrest was triggered when

their hideout at Umueze community was raided by police operatives based on intelligence information. “Police operatives also rescued their victim identified as one Chime Edeh unhurt. “The suspects are helping the police in their investigations in relation to their nefarious activities,’’ Amaraizu said.

Lagos: Residents want Sanwo-Olu to rehabilitate Epe-Ikorodu road

ome Epe residents and motorists plying the Epe-Ikorodu Expressway have urged the incoming governor of Lagos State, Babajide Sanwo-Olu, to rehabilitate the road on assumption of office. The motorists and residents spoke in Epe, on Tuesday, saying that the only expressway linking Epe with Ikorodu was in deplorable condition. Funke Atoyegbe, a businesswoman, said that the bad Ikorodu-Epe Expressway was affecting commercial and business relationship between the two communities. “We do most of our fishing and agricultural business with Ikorodu people and those in its environs, but the deplorable condition of the road has crippled the business relationship because the place is a no go area; the road is discouraging,” she said. Atoyegbe urged Sanwo-Olu to change their situation when he comes on board. A motorist, Demola Olufowobi, said that the bad expressway had put his ve-

hicle in bad condition. “I spend money on the repairs of my car anytime I pass through the road. I see the road as the shortest to mainland, that is why I ply it, but the condition of the expressway is so bad for vehicles to pass through it. “Most of the motorists try to avoid passing through the road, but we have no choice because it is the shortest road connecting us to Ikorodu and its environs. The other alternative road is Epe-Ibeju Lekki expressway, which is very far to Ikorodu,” he said. A resident, Peju Akanji, said Epe people had gone to the Lagos State government Secretariat, Alausa, to report the terrible state of the roads, but had not received any response. She said the only people that visited the area were the local government officials who tried to construct drainage and used big stones to fill some bad portions of the road. “The patches done by local government did not solve anything, rather it

worsened it. We pray that this government will have the political will to repair the road for us,” she said. A commercial bus driver, Tayo Adams, said many of his colleagues had fallen victim to hoodlums, who seized the opportunity of the bad road to rob them of money and valuables. “Passengers are not spared, they are also robbed of their cash, telephones and other valuables,” he said. Adams said the stones used by the local government to fill up the bad portions of the roads were also puncturing tyres. “It is a pity that the government can allow a major link road that runs from Epe to Ikorodu to get so bad. “The people who are living in these areas are suffering. We charged each passenger N300 from Epe garage to Ikorodu when the road was good, but now, we charge 800 per passenger. We spend more than what we earn on the repair of vehicles at the end of the day,” he said.

do Government says it has committed N100 million, as counterpart fund, to the Basic Healthcare Provision Fund (BHCPF), for responsive, efficient and accessible healthcare through the Primary Healthcare Centres (PHCs). David Osifo, the state commissioner for health, made the disclosure at a workshop on health workforce registry in Benin. Osifo said the contribution was to enable the state government to benefit from the Federal Government fund through BHCPF. BHCPF is the fundamental funding provision under the National Health Act, signed in 2014. He said that the state House of Assembly had passed the Health Insurance Bill to pave way for the smooth running of the fund. The commissioner added that the state was expected to benefit from the fund by the time it met the requisite criteria, including the counterpart fund. According to him, “to ensure sustainability and ownership of BHCPF, states are expected to co-fund the BHCPF, beginning with an initial N100 million as part-expression of interest to implement the BHCPF.’’ The commissioner said the state was also required to create State Health Insurance Agency and State Primary Healthcare Development Boards, to serve as channels through which implementation would be monitored. The state governor, Godwin Obaseki had recently inaugurated a 17-member state primary healthcare board, to deepen the revamp of the state’s primary healthcare system. Obaseki urged members of the board to support the vision of his administration in delivering quality and affordable healthcare to the people.

Anambra delivers 80 roads in 5 years EMMANUEL NDUKUBA, Awka nambra State government has completed the construction of 80 roads across the three senatorial districts in the past five years. Marcel Ifejiofor, commissioner for works disclosed this in to newsmen in Awka. Ifejiofor, who reviewed road construction in the last five years of Governor Willie Obiano’s administration, said the 80 roads were part of the 200 active road sites across the three senatorial districts. ‘’Anambra currently have more than 200 active road construction sites and as we are completing and commissioning some, we are doing more. “At central senatorial district; we are working on Orumba/Achala road, Adazi Ani road, NTA-Nawgu-Ukwulu road, and Nimo/ Abagana road. ‘’For the South; Oluoghoha road in Ihiala, Umuabuchi road in Uli, Orsumuohu road, Jerome Udorji road Ozubulu, Ezira/Umuomaku, Achina road, St. Peter University/ Onneh, and Isuofia road etc. ‘’In the north; we are doing Ogbaru, Ogwuanaocha/Ihiala road with connecting bridge, Ogwuikpere road, Mmiata/Nzam, Aguleri Uno/Aguleri Otu with 280 metre long bridge and rehabilitation of Aguleri Junction/ Anakwu road’’, among others. Ifejiofor explained that 280 metres bridge on Aguleri Uno/Aguleri Otu when completed will be the longest in Anambra. He said that the state had sunk in enormous amount of its resources on road construction.

BUSINES DAY

Thursday 21 March 2019

www.businessday.ng

Tony Elumelu to announce selected 1000 African entrepreneurs for 2019 programme OLUWASEGUN OLAKOYENIKAN

he Tony Elumelu Foundation (TEF) will on Friday announce selected applicants for the 2019 cohort of its flagship entrepreneurship programme, the Tony Elumelu Entrepreneurship Programme (TEEP), in Abuja. The successful applicants would be drawn from a pool of more than 215,000 African entrepreneurs, who applied for the 2019 edition of the programme, representing about 42 percent increase from 151,000 applications received a year earlier. TEEP, launched in 2015, is a 10-year philanthropic initiative that aims to empower 1,000 African entrepreneurs annually with $5,000 in non-refundable seed capital each, access to mentors, a 12-week training programme and opportunities to promote their businesses to a global audience. Since inception, the programme has empowered 4,000 African entrepreneurs directly and an additional 470 entrepreneurs supported by its partners, according to the TEF in a release Tuesday.

The 2019 edition would mark the fifth round of the foundation’s entrepreneurship programme where more than 1,000 African entrepreneurs from 54 countries across the continent are expected to be gathered. The foundation said the TEFConnect, a digital networking platform for African entrepreneurs, which it launched last year now has over 400,000 users, providing opportunities for entrepreneurs to network, receive training and forge business partnerships to scale their businesses beyond physical borders. “All applicants receive access to TEFConnect, Africa’s digital entrepreneurial hub, which provides access to networks, training, further capital sources and business opportunities,” TEF said. Applications for this year’s edition of the programme witnessed an increase in female representation to 90,000 in 2019 compared to 62,000 in 2018, according to Ifeyinwa Ugochukwu, the foundation’s newly appointed chief executive, who is expected to assume office on April 1.

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

A7 NEWS

BUSINESS DAY

Ethiopian Airline crash: We will wait for outcome Buhari declines assent to five bills, as of investigation before taking decision - AirPeace number of rejected bills rise to 26 IFEOMA OKEKE

llen Onyema, chairman/CEO, Air Peace Airline, says it is true the company ordered Boeing 737 MAX 8, which after the airline ordered 10 of the aircraft it was involved in two fatal accidents in Indonesia and Ethiopia, respectively, but like other airlines that have also ordered for the aircraft, the Nigerian carrier will wait for the outcome of investigations before taking a decision on the order. Onyema noted that all the airlines that had ordered the aircraft none had cancelled its order, rather, they were all waiting for the investigation and action that would be taken by Boeing, adding that Nigeria like many other countries had banned the aircraft in its airspace. Air Peace does not have the aircraft in its fleet, he said, wondering why Nigerians were attacking the airline, while nobody had attacked the carriers that had the aircraft and were operating the equipment before the accidents. The Air Peace CEO frowned at the behaviour of

some Nigerians who mischievously created the impression that the airline already had the aircraft in its fleet even when the order it made would begin to arrive in 2023, saying the airline was disappointed at the reaction of some of these Nigerians, remarking that instead of supporting their own they misinform the public in order to damage the image of the company. “We are not saying we are cancelling neither are we saying we are not cancelling because no airline that ordered for the aircraft had said it is cancelling. Everybody is waiting for the outcome of the investigation. What airlines that have the aircraft have done now is to ground them until the result of the investigation comes out. And at the same time countries are banning them from flying in their airspace until the investigation comes out. “But I still wonder that air accident happened in Ethiopia, Ethiopians have never taken their airline that had accident to the cleaners. Ethiopians have never up to this moment attacked Ethiopian Airlines that bought this aircraft.”

OWEDE AGBAJILEKE, Abuja

resident Muhammadu Buhari on Wednesday declined assent to five bills passed by the National Assembly, bringing to 26 the number of bills passed by the eighth National Assembly and rejected by the President. In a letter addressed to Senate president, Bukola Saraki, and read at Wednesday plenary, the President listed the newly rejected bills to include: Nigerian Film Corporation Bill, Immigration (Amendment) Bill, Climate Change Bill, Chattered Institute of Pension Practitioners Bill as well as Digital Rights and Freedom Bill. President Buhari explained that he rejected the Immigration Bill because it would have adverse effect on Nigeria’s position on the Ease of Doing Business ranking if signed into law, adding that the Chattered Institute of Pension Practitioners Bill amounted to duplication of functions with an existing institute. Other bills earlier reject-

ed by Buhari since 2015 include: the Petroleum Industry Governance Bill (PIGB), Stamp Duties (Amendment) Bill, Electoral Act (Amendment) Bill, Industrial Development (Income Tax Relief ) (Amendment) Bill, National Research and Innovation Council (Est.) Bill, National Institute of Hospitality and Tourism (Est.) Bill and National Agricultural Seeds Council Bill. Others are Chattered Institute of Entrepreneurship (Est.) Bill, Advance Fee Fraud and Other Related Offences (Amendment) Bill, Subsidiary Legislation (Legislative Scrutiny) Bill, Nigerian Maritime Administration and Safety Agency (Amendment) Bill as well as five constitution amendment bills. Also rejected are: National Transport Commission Bill, Federal Road Authority (Establishment) Bill, National Broadcasting Commission Amendment Bill, National Oil Spill Detection and Response Agency (NOSDRA) Act (Amendment) Bill and Federal Polytechnics Act (Amendment) Bill.

Innovation

Apps

Fin-Tech

BUSINESS DAY

Start-up

www.businessday.ng

Gadgets

Ecommerce

www.facebook.com/businessdayng

IOTs

Broadband Infrastructure

@businessDayNG

@Businessdayng

Bank IT Security

Thursday 21 March 2019

How Nigerian startup redefines online forms, earns revenue in foreign currencies FRANK ELEANYA

nline forms represent many things to many people, it could be an opportunity to get a job, admission into foreign universities, pay utility bills, or get a loan. However, for Nigerian-based online startup, FormPlus it is an opportunity for businesses to learn more about those they serve and be able to serve them better. Founded by Busayo Longe and launched in 2014 at the Co-Creation Centre (CcHUB), FormPlus is a tech financial services firm that helps companies get to the real business of knowing the customer through collating data from online forms and using those data in a way that helps them improve their services. Online forms may not look like a big business prospect for many people, but Longe sees the peak of Everest when he talks about his company. Over breakfast at the Upbeat Centre in Lekki, the over 6th tall founder said FormPlus was an idea which he never knew was going

to make money much less become a big business that could attract equity investors in the near future. The company ran its services free for about a year before Longe was forced to monetize the service. “Every day we saw people coming to ask us for more; that meant more servers and more manpower, so we started thinking of monetizing,” he recalls. “It was in 2014 that we put a prize on it.”

That decision apparently paid off instantly. On the first day of becoming a paid service, the company earned revenue of $80. “It was a huge validation for us because people did not know who we were, did not know what we’ve done and they did not know we were Nigerians. Most people still don’t know we are Nigerians because it doesn’t appear to be a service that Nigerians are offering,” he said.

3 Nigerian start-ups included in Google’s third launchpad accelerator Africa class CALEB OJEWALE

hree Nigerian startups have been named among 11 others across Africa as Google announced the third class of its launchpad accelerator Africa programme. Described as part of its ongoing efforts to support entrepreneurship on the continent, this third class, according to a statement by Google, starts on April 1, 2019, involving startups from six African countries; Egypt, Kenya, Nigeria, Senegal, South Africa and Uganda. The startups, in alphabetical order, are: 1. 54Gene (Nigeria): Improves drug discovery by researching multiple genetically diverse African populations. 2. Data Integrated Limited (Kenya): Automates and digitises SME payments, connecting the street to high finance. 3. Instadiet.me (Egypt): Connects patients to credible nutritionists and dietitians online to help them maintain a healthy and optimal weight. 4. Kwara (Kenya): Provides

a rich digital banking platform to established fair lenders such as credit unions or savings and credit cooperatives (SACCOs), with an open API to enable and accelerate their inclusion into the formal financial ecosystem. 5. OkHi (Kenya): A physical addressing platform for emerging markets that is on a mission to enable the 4 billion without a physical address to “be included”. 6. PAPS (Senegal): A logistics startup with a strong client-care orientation, focused on last mile delivery in the domestic market that features live tracking, an intelligent address system and automatic dispatch. 7. ScholarX (Nigeria): An education startup that connects high potential students with funding opportunities to help them advance in their studies. 8. Tambua Health Inc. (Kenya): The Tambua App turns a normal smartphone into a powerful, non-invasive diagnostic tool for Tuberculosis and Pneumonia. It uses a cough sound acoustic signature,

symptoms, risk factors and clinical information to come up with a diagnostic report. 9. Voyc.ai (South Africa): Voyc.ai’s CX Research Platform helps companies understand their customers by turning their customer research into insights, personas and customer journey maps. 10. WellaHealth (Nigeria): A pharmacy marketplace for affordable high quality disease-care (such as malaria treatment) driven by artificial intelligence. 11. Zelda Learning (South Africa): Provides free online career guidance for students looking to enter university and then links them to funding and study opportunities. “These companies will join other startups in the Launchpad programme, which are using technology to create a positive impact on key industries in their region,” said Fola Olatunji-David, Google’s head of Startup Success and Services, Launchpad Africa. “We look forward to supporting and connecting them with startup ecosystems around the world.”

Since it began offering its services, the company has integrated a lot of features to enable customers do more. One of the features allows companies receive signature from their customers. In other words, the companies can complete contracts online. It also has a feature that enables businesses receive payment using their PayPal, Stripe or Flutterwave. They can ask their clients to pay for anything including confer-

ences, education etc. Online form filling is a $3 billion industry and Longe believes that FormPlus has the potential to grow in markets like Nigeria. But there is still lack of understanding of the market despite the fact that nearly every Nigerian online have filled at least one form in his lifetime. Longe says it all depends on how it is perceived. People paying for bills online are invariably filling a form. “Your Facebook post is a form, someone has filled it somewhere and you are seeing what they filled on the form. Looking at it that way, forms are really in everything we do,” he says. Although majority of FormPlus customers are outside Nigeria, one of the company’s biggest clients is the Nigerian Investment Promotion Commission (NIPC). Executive secretary Yewande Sadiku of the commission is on mission to engender accountability across the ministry departments. The implication of leveraging FormPlus platform is that anyone cannot throw in data from anywhere, there has to be a reference point for

everything data. This is to enable seamless operations across the department and reduce human errors or discrepancies. “Our biggest market is education, most of the foreign universities use FormPlus to register students and receive data from parents as well. Every year they have events that they need to structure and they do them on FormPlus. We have seen the average lifespan of a customer to be about 12 months. So when someone comes on FormPlus, they stay for about a year. Interestingly we have added a new model to FormPlus. We saw that forms were just one part of the flow of what people need to do. What happens is that you fill a form and someone will have to respond to that form, like a Leave Request form which you fill and it goes to HR. HR receives the form and either responds by approving or rejecting the request. That form then goes to Audit unit who verifies that everything is in place,” he says. It takes less than 15 seconds to create a form on the platform, depending on the size of the project.

Jumia’s African claim: Does it matter? …Experts debate if being African really matter FRANK ELEANYA

ews of Jumia, an ecommerce giant with major operations in many African countries, listing in the New York Stock Exchange (NYSE) has had many tech entrepreneurs and media houses in Africa buzzing. For the startups, it is that feeling of “One of our own is well on its way to winning the coveted price of a unicorn”. However, the revelation that Jumia is filing in NYSE as a German company, and not as a Nigerian company where it first launched its operations has called to question the company’s ‘Africanness’. For startups on the continent there is every reason to be inspired by Jumia IPO move. Portraying Jumia as an authentic African startup, is a morale booster for startups on the continent who aspire for IPO status, although, one may wonder why Jumia is not raising its IPO in any of the stock exchanges on the continent. Maybe it does not matter There is some merit to Jumia’s claim to Africa. First the company is driven by an African

focused mission to improve the quality of life on the continent by leveraging technology to deliver innovative, convenient and affordable online services to consumers. Second, it was launched in Nigeria’s commercial capital, Lagos in 2012 and has since expanded to 14 other countries including Egypt, Morocco, Ivory Coast, Kenya, South Africa, Uganda, Tanzania, Ghana, Cameroun, Algeria and Tunisia. In essence, 100 per cent of Jumia’s customers are in Africa. “Jumia is a German company founded by two French men (Jeremy Hodara and Sacha Poignonnec) in Africa,” Adedeji Olowe, founder of Trium told BusinessDay. “Which nationality to give Jumia shows the conundrum of the connected society, and frankly, does it matter? For those who think it is disingenuous to call it an African company, just ask in reverse – is a company formed by a Nigerian but registered and operating out of America a Nigerian company?” Flutterwave and Paystack are both Delaware LLC companies (a type of business entity that is created by filing the proper Certificate of Formation

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

with the Delaware Secretary of State, in the US). Andela also falls into the category of companies that were founded outside Nigeria but operates exclusively in Africa. However in the case of Andela, one of the six founders is a Nigerian. Segun Adeyemi, founder of Amplify Pay agrees with Olowe. On a LinkedIn post he noted that the debate whether Jumia is an African company or not has become tiring. He paints a scenario: “Let’s ignore the entire legal infrastructure, tax, regulatory, PR, etc narratives for a while. If as a Nigerian, I visit the US, identify a gap and see a market opportunity there, I set up a company to fill the gap. I register the holding company in Nigeria but have an operational head office in America for on the ground execution. I situate my tech team in Kenya and put up my executive team (made up of mostly Nigerians and a few Americans) in London. My investors are global, but my customers are 100 per cent Americans. Is the company a Nigerian or an American company? What makes a company African or Nigerian?” Adeyemi said.

42 Thursday 21 March 2019

C002D5556

BUSINESS DAY

GARDEN CITY BUSINESS DIGEST

Business: Making women do better and do the right things ...Mercy Bello Abu floats EPI to give women entrepreneurs a platform to conquer the world ...Over 1000 women have been trained and primed for loans to boost businesses

ercy Bello Abu came into the limelight as chairperson of the NECA Network of Entrepreneur ial Women (NNEW). NECA is the body of National Employers Consultative Assembly. They use NNEW as an NGO to push more women into businesses and investments. Abu handed over to Tayo Ojesanmi who just dropped dead few weeks back. These women of passion built of NNEW in Port Harcourt and from there pushed many women into viable entrepreneurship. Abu went ahead to set up her own platform to carry on with the passion and the task of discovering women business people and giving them a push to excel. Today, she is the Global Convener, Entrepreneurs Platform Initiative (EPI) headquartered in Port Harcourt. In an exclusive interview with IGNATIUS CHUKWU, the female enthusiast unveiled strategies to put business women on a global platform to excel. What is this gathering of women entrepreneurs for? EPI started in 2015 officially but it has been my dream for long. Its been something we have been cooking over the years. The aim is to bring women of like-minds together; women that are passionate, women that want to impact their generation, and women that will take the focus off themselves and make it about somebody else. Not just that. We are aware that you will tend to be like every five persons you surround yourself with. So, we are women that have come together with

PORT HARCOURT BY BOAT

IGNATIUS CHUKWU

wice (once in the days of Goodluck Jonathan and once since Muhammadu Buhari), this column has advocated for a Victims Compensation Scheme (VCS). This should look at grievous injuries and deaths caused by factors that cannot be sued. The scheme could also help indigent victims to press civil charges to get remedies. The first suggestion was made here when the Boko Haram killings were getting out of hand. We looked at a situation where a man would set up a business or a building or a church in a part of the country only for people he did not offend or even know to clamp down on him, burn the house, and ruin his life. Often, they kill him and render his children fatherless; and nothing happens. It was at a time when a family of six lost the head to Boko Haram and had to return to a rural Imo State village to start a life they did not understand.

same vision and same mindset to see our fellow women do better and do the right things. We have discovered that an empowered woman is one that is careful, confident, can stand her own. You agree with me that most time in the Niger Delta, we have women that have been oppressed, that feel like, is this what life has thrown at me? So, with EPI, we are able to bring them together, nurture them and bring them to that place they will get a sense of fulfillment. They would feel that yes, this is what life should be. That is what EPI brings. I call it a movement of women working together, women pursuing one agenda to celebrate one another. People say, oh, women do not celebrate or support one another. You could feel the vive, the passion when you entered this venue. These are women that have done well in their businesses and are willing to impact the younger generation. That is the vision, and that is what EPI is all about; entrepreneurship, small business owners, its about the ones aspiring and the ones that are established. Let the young ones learn from the established ones. If you are

aspiring, come and be among the established ones and you will grow your business. Is it deliberate that EPI as a name does not have anything to show its for women? We are passionate about women and it is women-based, but since it is about entrepreneurship, we called it so. A lot of people ask why we concentrate on women, but we say we are entrepreneurs but we are womenbiased. Men can come because it’s a platform. I believe so much in platforms. In life, you know many things but without a platform, the world may never get to know. We have a lot of entrepreneurs with so much knowledge but no platform to showcase it to the world and the young. Men attend our seminars, but we are women-biased. Are there challenges at this stage? Oh yes, we have. First, people will ignore you. Legends also passed through this stage and have talked about it. Some will say, is this real? Give her some time, she will fizzle out. Once people do not buy into your person, they won’t buy into your vision. If I know that you have to buy into me for this vision to make sense, it means I

Top women business leaders in PH

Mercy Bello Abu, EPI boss

have to develop myself to that level that I can carry everybody. It becomes a symbol of leadership, the hallmark of leadership. Working with women is journey of emotions, but we have been blessed at EPI with very dedicated and committed women that saw nothing on ground but believed against all odds that this was going to fly. Now, we are in 10 states of the federation running with the dream. We have really been blessed. What do you count as success? We define our success, and mine is to see every woman that comes in contact with EPI have a new life. Some will say, oh, I used to be so timid, so shy, but ever since I joined this organization, my life has changed. I can stand in public or a gathering of a thousand people and be able to sell myself, express myself and sell what I

am. You are your brand as a woman, so, develop yourself. We at EPI build capacity and personal development. We make you know your wine and have clarity. So, we have discovered that so many of our women are like that because that is the group of women we are building; women that are not competing but developing. It is not about feminism but women in their husbands houses but still earn and be relevant in the society and have a voice. We have a voice but many do not know the right place to use that voice. That is what EPI is, the platform to have a voice. Come to EPI and discover and use your voice. People will listen to you. When you develop yourself to the extent you realize you carry something, great. It’s not about me but about my fellow woman. Its about seeing a woman that was totally discouraged but now can pick up and walk. We have some of them here. They see that a fellow sister is doing it, she then picks up and becomes strong with the ‘I can do it’ spirit. Do you help them get loans? We do, and we do this by assisting through partnerships. Right now, we are partnering with ‘Develop You’ which works with the CBN directly. We just finished training about 1004 entrepreneurs since November 2018. We just finished training the last batch of 50 last month. This is to see how our women can access loans and grants. We make it open and show the women. For every business, you need financial support and we at EPI know this and we do it.

Victims Compensation Scheme re-echoes as Wike doles out N200m to lecturer who died as party agent They came home with nothing. We feared that such children could grow into another set of terrorists and militants. The suggestion is that the federal government should set up a powerful body to be headed by a religious cleric. Others would be voluntary organisations, a representative of the Army and Police, etc. They would receive demands and process them and from the fund pay out what has been fixed for lost lives, property, injuries, etc. The fund would be contributed 50 per cent by the federal government and the rest from the state of residence. This could also serve as deterrence as some terrorists would realise that if they killed, their state paid. They call it ‘The Destroyer Pays’, just as they have ‘The Polluter Pays’ theory. The law has already provided for anyone who causes injury or death to pay the victim but this is after a judicial process. Few persons in this country have ever been compensated. The law does not seem to have any provision or remedy for anyone whose killer is not known or is a natural factor. In this case, the NCS would serve as the father of the fatherless or the surrogate destroyer. No Nigerian should be allowed to suffer injury he

did not cause and die like that. It is the worst form of discouragement or disincentive to patriotism. Why should citizens be allowed to die in vain all the time? This makes it look like Nigerian life matters not. Our call came at a time the FG under Jonathan set up a panel to dialogue with Boko Haram and reach agreement for compensation to them to encourage them to stop killing or terrorism. We had thus pointed at the gross inhumanity of paying the killer while the victim dies in vain, unremembered. Jonathan had feebly responded by asking the committee to include Boko Haram victims. This died at the spot, dead on arrival. There was no structure, no gazette or Act of Parliament to back it up. He did not seem to mean it and the administrators did not seize the moment to structure it into action. What has happened is that each time a governor is touched by a killing, he doles out huge amounts to compensate the victim. This alone shows that the idea to compensate a victim is a great and worthy one. What is lacking is structuring it into a policy, else, leaders would use the collective treasury to compensate those liked or had affinity with.

‘‘

A situation where a man would set up a business or a building or a church in a part of the country only for people he did not offend or even know to clamp down on him, burn the house, and ruin his life

The great act of compassion often shown by Gov Nyesom Wike of Rivers State is monumental and commendable. The only issue is that it is selective. Last week, he announced a N200 million scholarship for the four children of the Late Dr Ferry Gberegbe, directing the widow of the deceased to open bank accounts for each of the four children. He said; “We will set up a Judicial Commission of Inquiry to ensure that the culprits are brought to Justice. It is unfortunate that F-SARS killed the PDP Collation Agent. “The State Government will offer scholarship to the four young children left behind by the deceased. The mother of the children should open dedicated account for each of the children. The State Government will pay N50million to each of the four children for their education.” Now, others have started calling for same action on others that also died. The man who died is a party agent monitoring elections for the government party. Others doing so on the other side also died. The money used is not party fund but state money. Those who also died are sons and daughters of same state. There is a gap here.

BUSINESS DAY

www.businessday.

www.facebook.com/business-

@businessDayNG

@Businessdayng

Thursday 21 March 2019

Investing in Rivers State Shell gets rare path on the back on human capital development

Technocrat admits Shell is pro-youth, is foremost in human capital development • Guns cannot feed you everyday but Shell’s skill will – Sokrari Davies • As LiiveWIRE unleashes 7072 youth entrepreneurs in Niger Delta Ignatius Chukwu

hell Petroleum Development Company (SPDC) last week in Port Harcourt unveiled 120 young entrepreneurs who walked away with N400,000 each (or N48m total) to start businesses for which they had received world-class training. As the young men and women drawn from Rivers, Bayelsa, Delta, Edo, Imo, Abia, Akwa Ibom and Cross River waved their cheques and poured out their hearts of relief and appreciation, a female technocrat from the Rivers State government sprang to her feet and declared that Shell is indeed an exemplary multinational corporation, if truth must be told. Sokari Davis, the Director of Secondary School Education, who has followed education and human capital projects of the oil company for years, said at the 2018 Regional LiveWIRE graduation and awards ceremony where another 120 young persons marched into entrepreneurship cokcpit that guns cannot feed any youth everyday but that the skill Shell was giving the thousands of youths will. This is your chance – Sokari Davies The Director made it clear that of all the companies operating in the oil region, SPDC stands tallest in the genuine quest to build a new army of self-assured entrepreneurs and depopulate the army of militants and restive youths. She said : We have been in

L-R: Best graduand 2018, Emi Harry, receiving a plague from Shell’s Gloria Udoh

partnership for long with Shell in education for long. They are proyouth. The new thinking in education is that the child has to know a skill because education is about knowing what to do in any situation or to anything that requires remedy at the right time. Shell has demonstrated unmatcheable level of commitment to educational develoment of the oil region and youth development. If every company coming to the region does one project as Shell does, rstiveness would reduce drastically. Despite oil theft and other problems that hamper their operations,

Shell still helps the youths of the region in their quest to self-accomplihment by consistently promoting programmes that open opportunities to the youths of the region to prosperity. We are here to say the truth, and we will not hessitate to speak out if they do bad. To the youths and entrepreneurs, we say, do not forget Shell tomorrow after getting help from them to start life. We also urge you to train others as you have been trained. Do not allow the circle to beak or stop. Lack of jobs has created havoc in the oil region. Disaster: We do not like what we see these days in our society and re-

gion. Because of insecurity created by youths, most persons do not go home anymore. We now crave for a time when every person can feed himself so that people do not have to kill others to feed. Remember that guns will not feed you everyday. We are in the middle wacting both the multinationals and our youths and we will blame whoever is blameworthy. More applause : More pro-development and proentrepreneurship organisations seemed to abandon their taciturn and conservative nature to heap commendations on Shell’ ability to

steadily support young entrepreneurs in the oil region to set up businesses and to get exposed globally. GroFin Other countries know that Nigeria or Delta is where the gold is. It is only Nigeria that does not know this. Only Shell has cared to respond to our request for partnership to rescue the Niger Delta. No word has come from other companies for the SME fund. This is important to note. Out of 54 companies we have invested in so far, 17 are 17 LiveWIRE companies. First key is ; integrity. If you eat your seed, you regret it. We mentor people, we link people. PIND Foundation for Partnership Initiative in Niger Delta (PIND) official stated this that youth unemployment in Nigeria is 55 per cent at the moment. Rivers State case is worse. We must look for alternative models to tackle the menace. The graduands stand a good point to find solution. Over 7000 graduates of this scheme, and over 3000 recieved financial support to start. Shell has created this, we need to run with it. Look for opening areas and act. You have been given the right information to take action, but information without action is failure. An official from the UBA said thet are ready to partner with the beneficiaries and Shell while the GTB said low interest loan is available to SMEs. Princess Ogan said : «I am estatic that Shell is doing this. Government starts things and stops but Shell has continued this, yet, it is moving steadily.Look for a gap in the society and create a business out it. That is how to go. »

Global award winners from LiveWIRE testify Yolo Bakumor Smith : CEO, DeRabacon Plastics wo global award winners who were almuni members from the scheme came to give account of their success stories. Smith said : I was in LiveWIRE some five years ago. I had no plans whatsover to be a businessman after my university education. There was no job and we were just idling away, looking for a way out. Then, LiveWIRE came. I joined, trained and started a business. How I succeeded : Dont be afraid to fail, or to try. Build insight into the market. Create a clear cut budget for a blue print projecting costs, fixed and variable costs; and add 10 per cent of costs as eventualities. Repitition should be key. Dont be too fast to change a model that works for you. Don’t change for change sake. Draw your goals and commitments; set out a time target for marketing. Dont focus on all segments of the market or public. Choose your market, fight your market. You may need to go into the service side of your chosen business before trying out products for sale. This will help you create an income

line before products and the income would cushion your low moments. Scaling up : Do not scale up for the fun of it. Also, go into the kind of entrepreneurship you enjoy. Adhere strictly to your business plan. Work from home until you are sure you can pay for office. Entreprenuers are game changers, not mere traders. So, find a problem, solve it, make moeny from there. So far, 58 persons have beefitted from De-Rabacon Plastics. He plans to establish a construction company that uses 50 per cent recycled wastes as its building material. This will reduce landfils and blocking of drainage ways. He is tops in a global competition that attracted over 11,000 votes worldwide held in Kuching, Malaysia in November 2018. His firm started by collecting waste plastics of all kinds, sorting, granulating for cosmetics containers, bottles for drinks, construction materials such as paving blocks, pipe and low grade carpets, etc. Henry Chikaogu : CEO, Alternative Energy ‘I never ate my seed’ Altrnative source of power to homes, communities. I was in LiveWIRE in 2016. I was searching for

survival then Live WIRE happened. I had looked for a job to finance my passion. I aplied for LiveWIRE three times without success. I realised one needed to stretch out if one needed help. LiveWIRE thus gave me a platform. I had zeal. I never ate my seed. Instead, i advise you to plant it, leverage it to your destiny, to your breakthrough. Now, I have two branches; Port Harcourt and Warri . Yes, LiveWIRE opens up your mind and opens you up to the world. Malaysia trip launched us and celebrated us. Twitter opened us into inlimited sales opportunities. Now, I operate in the hub (physical market arena) and on social media. Igo Weli & Gloria Udo Igo Weli is the GM (External Relations) of Shell Nigeria. He has demonstrated huge commitment in bridging the perception gap between Shell and its publics especially the host communities, government and the media. He thinks it is better to tell the public the whole truth about happenings in the oil industry and allow them to make form opinions and take decisions. This shift seems to make impact in the way Shell is viewed these days. He was not able to make it to the event but a top manager

under him, Gloria Udo, was on hand to perform the needed tasks. Udo is described as a woman with a passion for the young ; a mentor to the Niger Delta Youth. She demonstrated this when she announced a personal prize of a laptop to the best graduand ; something she is said to do quietly every year. She was excited that the day was March 5, just three days short of the date of the 16th anniversary of LiveWIRE. Speaking through Udo, Weli said they have reached out to banks to support the scheme, saying the scheme enables young people to start their own businesses and create jobs for themselves and others. “It provides budding young entrepreneurs with access to the essential business knowledge and customised support they need to transform their enterprising ideas into a viable and sustainable business.” PHCCIMA’s Nabil Saleh Free incoporation, one-stop-shop created for young entrepreneurs The president of the The Port Harcourt Chamber of Commerce, Industry, Mines and Agriculture (PHCCIMA), Nabil Saleh, a chief, was represented by Erasmus Chukwunda,

the Director-General. The DG made sterling remarks thus : The programme is great, especially as the one to mark its 16 years in progress growing entrepreneurs. It is easy to start something like this but sustaining it is difficult. PHCCIMA is always invited at the graduation ceremonies. To graduands : This is a sure way to proceed to entrepreneurship. SPDC has just launched you. Millions out there are looking for this kind of opening. Please help others and think of how to proceed from here. PHCCIMA is there to take you to the next level. A category has been created for young entreprneurs in the south-south at the PHCCIMA to network. We have a one-stop office for all registrations and government processes. So, go into incorporation (enterprises or limited). It is free and it was created to boost businesses in this region. Its an opportunity for every young entrepreneurs to benefit. There are other benefits for joining the City Chamber. For instance, we have several collaborations with the Rivers State government. There are several projects all over the city of PH now to boost ease of doing business in the state.

BUSINESS DAY

Thursday 21 March 2019

MADE IN ABA

Why FG must initiate single-digit credit for Aba leather industry ODINAKA ANUDU t is hard to see a country where over 80,000 shoemakers are concentrated in one city. Experts believe that if Aba were China, the whole world would be using Chinese shoes. Aba has producers of shoes, belts and trunk boxes, supplying them to the entire West Africa. The number of players in this one city, which is seen by analysts as understated, immediately solves an unemployment problem for Aba and Nigeria. Incidentally, these key economic players cannot access loans from banks which consider them high risk. “Requests come to us every day, but we cannot meet up because we don’t have money to buy good machines,” said Ken Anyanwu, secretary of the Association of Leather and Allied Industrialists of Nigeria (ALAN), who produced shoes for the Nigerian Armed Forces in 2016. “Commercial banks are not interested,” he said. In the first half of 2018, average interest rate charged to Nigerian manufacturers stood at

22.9 percent, representing 0.25 percentage point higher than 22.65 percent recorded in the same half of 2017, according to the Manufacturers Association of Nigeria (MAN). Governments and the private sector are competing for funds in the banks, with federal and state governments crowding out the private sector, especially small businesses. Thirty-seven million small and medium businesses (SMEs) are the worst hit, with many of them seeking offshore funds and equity to pump cash into their business. Banks, however, say many businesses lack of proper documentation, structure, plan, and financial history. Nigeria’s monetar y policy rate (MPR), which is a benchmark interest rate in the country, has remained 14 percent for almost two years. Deposit money banks lend as high as 25 to 35 percent, according to BusinessDay checks. The monetary policy committee (MPC) of the South Africa’s Reserve Bank met in March last year and cut interest rates by 25 basis points. The current repo rate

(central bank lending rate to commercial banks) in South Africa is now 6.5 percent while the prime lending rate (lending rate to customers) is 10 percent. Similarly, Kenya Central Bank’s monetary policy committee cut the determining bank rate in late July to 9 per cent from 9.5 per cent. BusinessDay gathered that Kenyans now borrow at an interest of 13 per cent (as against from 13.5 per-

cent earlier) in line with the interest rate capping rule that limits lending rates to 4 percentage points above the CBR. Zambia is one of the emerging countries in SSA and its central bank cut benchmark lending rate by 50 basis points to 9.75 percent in February this year, citing lower consumer inflation and weaker economic growth, according to Reuters. In October 2017, the

central of Ethiopia raised its benchmark interest rate to 7 percent from 5 percent. At least the benchmark interest rate of most SSA countries have remained single digit, barring few, meaning that it is cheaper for businesses to access funds there than in Nigeria. Even the divided Cameroon has its benchmark rate at. The Central Bank of Nigeria (CBN) has held the MPR at 14 percent for the 11th time, due chiefly to high inflation rate. Inflation rate in June 2018 was 11.23 percent. Nigeria is facing a make-or-mar general election, which will see politicians spending huge sums on campaigns and vote-buying. Analysts see this as one of the main reasons why the CBN is reluctant to cut rates. Players in Aba say with a specialised, single—digit loan package of five to nine percent, they will procure animal skins from any part of the world and get hi-tech machines that will enable them to compete with Chinese and Ethiopian firms. “All over the world, manufacturers, especially SMEs, have access to cheap credit, but this is not the case here,” Chibuzor Aninze, a trunk maker, said.

“A lot of things are not achieved here in Aba because we can’t get loans from banks. All we need is a special fund for the industry here. It is achievable if we are serious with industrialisation ,” he added. “No economy will grow when businesses get interest rate at a very high rate. What we need is a single-digit interest rate as manufacturers. We believe that this is what can stimulate growth,” Frank Jacobs, former president of MAN, told BusinessDay recently. “It is important to fasttrack the recapitalisation of the Bank of Industry (BoI) to enable it to meet up with huge credit demands of the industrial sector,” Jacobs said. Babatunde Paul Ruwase, president of the Lagos Chamber of Commerce and Industry (LCCI), said the current state of the economy shows the government must prioritise stimulation of investment and growth. “The proposition is that low interest rate will stimulate investment, impact positively on growth, create more jobs, increase income, and boost output. This would ultimately have a moderating effect on inflation,” Ruwase said.

Forward Africa builds capacity of Aba shoemakers, others GODFREY OFURUM, Aba

orward Africa, a capacity building and development organisation, with support from Ford Foundation West Africa, has completed the 2nd series of training for zonal leaders of the Leather Products Manufacturers Association of Abia State (LEPMAAS), an association of shoe, bag, belt and trunk box makers in Aba. The three-day works h o p h e l d at O l u a k a Training Institute, Owerri, Imo State capital, is geared towards improving the quality of finished leather products made in Aba, as well as enable the artisans to advocate for programmes and practices that support small business projects in the Aba finished leather cluster (FLC). Chibuzo L Oriuwa, executive director, Forward Africa, also explained that the workshop would enable leaders of LEPMAAS to provide adequate direc-

tion and support to the over 200,000 artisans in the Aba FLC. She observed that building the capacities of young people in the cluster would improve their products, adding that she would advocate for programmes and practices that support small businesses. In her words, “The advocacy and leadership training was designed to empower the participants with skills that would enable them advocate for programmes and practices that support their small businesses, as well as train their members to become finished leather products (FLP) advocates. “It will also build the skills of the leaders, using the executive enterprise education modules (EEEM), and provide participants with necessary information that would enable them and their members advocate for support to small businesses”. Sam Hart, lawyer and

senior special assistant to Abia State Governor on public communications, who represented Governor Okezie Ikpeazu in the opening ceremony, explained that the state government’s efforts at marketing Aba made goods, especially leather and garment products, is to attract fresh invest-

ments into the sector and improve quality of goods made in the commercial city. He u r g e d f i n i s h e d leather manufacturers in Aba to adopt online marketing (e-marketing), invest in branding and improve on their integrity, to compete favorably in the international market.

He informed LEPMAAS leaders that foreign companies are showing interest in investing in the sector and advised them to take advantage of the opportunity to adapt to new technology and improve on the quality of their products. According to him, “if you must compete in the international market, you need to learn to do new things over time, no matter how long you have been in business”. “ You must learn to move from where you are to a new level and this entails completing the chain of production”, he advised. He urged LEPMAAS leaders to always ask for ideas, innovations, skills, and not cash, stressing that money would come when they excel. Hart decried the rancor within the association and urged them to close ranks for the good of the industry. In his words, “There is need also for LEPMAAS

to resolve their internal crisis and work as a team. There is a need for more collaboration with partners to break the monopoly existing in the industry. Some of the training resource persons include Ugochukwu Anozie of Community and Youth Development Initiative (CYDI), Owerri; Chimezie C. Iwuala of the School of Health Technology Federal University of Technology Owerri Imo State; Iya Ikongbe of the Development Finance Office of CBN Owerri; Kenneth Amogu, programme coordinator, Forward Africa, and Kola Ogungbile, manager, Oluaka Institute of Technology Owerri. There were also goodwill messages from the board of governors of Forward Africa, represented by Chinweuba Amachi, Bank of Industry (BOI), represented, by Olayemi Yomi- Tokosi and Oluaka Institute of Technology represented, by Kola Ogungbile.

BUSINESS DAY

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

Thursday 21 March 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

UK heads for cliff-edge showdown on Brexit

Theresa May seeks delay to EU divorce until June 30 but Brussels signals opposition GEORGE PARKER, HENRY MANCE AND ALEX BARKER

ritain is heading for a showdown just days before it is due to crash out of the EU after Brussels signalled strong opposition to a UK request for a three-month delay to Brexit. Theresa May wrote to EU Council president Donald Tusk on Wednesday requesting an extension to the Brexit process to shift the legal cliff-edge back to June 30. The letter comes ahead of an EU summit starting on Thursday. However, Brussels will strongly oppose the British request, saying it would threaten the integrity of the EU, according to a leaked paper. The European Commission sees EU leaders facing a “binary” choice between granting a short delay to Brexit until May 23 or a long extension until the end of the year and beyond, according to the internal note. The leaked paper emerged after comments by Jean-Claude Juncker, the European Commission president, made to German radio, that revealed EU leaders had hardened their position on Brexit, warning they would be unwilling to grant a long-term delay without a “new political process” in London. The hardline stance in Brussels was joined by similar brinkmanship among Conservative Eurosceptics in Mrs May’s cabinet, who have warned the British prime minister they would resign if she requested a Brexit delay beyond June 30. In his remarks to German ra-

dio, Mr Juncker suggested the EU would wait to see whether Mrs May could secure backing for her exit deal in a third vote next week before signing off an extension — a signal Mrs May could bring her deal back to a vote in parliament just days before the scheduled March 29 exit. “Theresa May has neither in her cabinet nor in parliament agreement on anything,” Mr Juncker said. “As long as we don’t know what Britain could say yes to, we can’t make a decision. “So my assessment is that we won’t be able to reach a decision this week and will have to meet again next week.” Mrs May, whose position is already weakened by several cabinet members in public rebellion over her uncertain hold on the Brexit process, may have been dealt a fatal blow to her premiership if she had been forced to concede a longer delay might be needed to develop a completely new plan. “I don’t see how a long delay gives certainty. Actually we’ve had a long time already,” Damian Hinds, UK education secretary, told the BBC on Wednesday. “You can’t keep kicking this ball further and further and further. You need to pick it up and run with it.” However, Mrs May’s decision to seek only a short delay removes the pressure from Eurosceptic Tory MPs to back her plan, since they might now simply run down the clock in expectation that Britain will leave without a deal at the end of June. Some pro-EU critics of Mrs

US orders review of regulator’s approval of Boeing 737 Max 8 Independent inspector general to carry out audit of the jet’s certification process KIRAN STACEY AND PATTI WALDMEIR

he US government has ordered a review into the way in which the Federal Aviation Administration approved the Boeing 737 Max 8 aircraft, as other countries questioned the ability of the US to set global safety standards. Elaine Chao, the US transport secretary, on Tuesday asked her department’s independent inspector general to carry out an audit of the certification process for the now-grounded jet, after two deadly crashes in the space of five months. In a memo to Calvin Scovel, the inspector general, Ms Chao said “safety is the top priority of the department” and an audit was needed “to help inform the department’s decision making and the public’s understanding, and to assist the FAA in ensuring that its safety procedures are implemented effectively”. Mr Scovel would be required to complile “an objective and detailed factual history of the activities that resulted in the certification of the Boeing 737 Max 8 aircraft”, according to the memo. Boeing has suspended delivery of the 737 Max after regulators grounded the planes in the wake of an Ethiopian Airlines crash on March 10 which killed all 157 people on board. An Indonesian Lion Air

flight, involving the same type of aircraft, also crashed soon after take-off in October killing 189 people. As investigators go through the information contained in the black boxes of the Ethiopia Airlines flight, attention has focused on the role played by the US aviation regulator and in particular on the number of tasks that the FAA delegates to the aircraft manufacturer’s own safety staff. The FAA certified the Max 8 as safe to fly in 2017, after five years of work. The agency is now waiting to approve software updates from Boeing which will change the workings of the anti-stall system in the Max aircraft. An initial review into the Lion Air accident found that the system had erroneously pushed the jet’s nose downwards. While the agency is waiting for those updates, its own processes and agreements with other regulators around the world have come into question. Canada, which accepts FAA certifications for new aircraft made in the US, said earlier this week it would review its own validation of the Max certification by the FAA. The country’s transport ministry has also said it will conduct its own checks on the software update once it is released.

May said that might force them to back her plan in a vote next week to avoid leaving the union without an agreement with Brussels. “I’m increasingly coming to the conclusion that the only way to stop ‘no deal’ may be to vote for her deal,” said Gareth Snell, Labour MP for Stoke-on-Trent Central. “I’m not happy about that. I think that was her plan all along.” Mrs May had attempted to use the threat of an extended delay in the two-year Article 50 divorce process to force Eurosceptics into backing her plan in a third vote. But the tactic appears to have backfired, with some of her most hardline cabinet members openly critical on Wednesday. “It is absolutely essential we

are out of the EU before the EU elections [in late May],” Andrea Leadsom, leader of the Commons, said on LBC radio. “It would be extraordinary for the people who voted to leave the EU to find us fielding candidates for these next elections.” Mrs May’s decision to side with the Eurosceptics in her cabinet could mean her Brexit agony extends into the summer, unless there is a dramatic change of heart among Eurosceptic Tories in the coming days. Then as the next cliff-edge approaches, Mrs May will have to decide whether she is prepared to countenance a no-deal exit at that point. Her decision to seek a short delay buys only limited time.

“There is a case for giving parliament a bit more time to agree a way forward, but the people of this country have been waiting nearly three years now,” Number 10 said. “They are fed up with parliament’s failure to take a decision and the PM shares their frustration.” However, one pro-EU minister told the Financial Times: “This will only work if enough people switch to vote for the withdrawal agreement. If not, then we are just creating a new no-deal deadline and there is clearly no Commons majority for that.” If the EU agrees to delay to Brexit, Mrs May will bring forward a simple piece of legislation — a statutory instrument — to change Britain’s exit date in law.

Trudeau increases spending in pre-election budget Plans detailed as prime minister wrestles with stalling economy and political scandal AIME WILLIAMS

anadian prime minister Justin Trudeau has unveiled a pre-election budget designed to “invest in the middle class”, banking on new spending programmes to help him recover from a slowing economy and the biggest political scandal of his career. Mr Trudeau, 47, was elected in 2015 promising to promote economic expansion. But Canada’s gross domestic product rose only 0.4 per cent in the fourth quarter of 2018, down from 2 per cent and 2.9 per cent in the previous two quarters. With a national election scheduled for October, the budget, presented to the House of Commons on Tuesday by finance minister Bill Morneau, promised C$22.8bn (US$17.1bn) in additional spending over five years. A shared equity mortgage scheme for first-time housebuyers, new benefits for retired people and students and extra cash to support services for indigenous people were among the policies announced by the Liberal government. “We’re going to invest in the

middle class and in the things that matter most to Canadians: good jobs, strong communities, a clean environment and better opportunities for future generations,” said Mr Morneau. The new spending comes as Mr Trudeau is responding to allegations he and his top advisers inappropriately pressured the former attorney-general over a corruption case involving a Montreal engineering company, SNC-Lavalin, accused of bribing Libyan officials. Jody Wilson-Raybould, the former attorney-general, has said Mr Trudeau was among those making “consistent and sustained” efforts to secure a favourable ruling for SNC-Lavalin. Mr Trudeau has denied that any “inappropriate” conversations took place. SNC-Lavalin employs about 9,000 people across Canada, with close to 40 per cent of its employees working in Mr Trudeau’s home province of Quebec. On Tuesday, the Canadian parliament’s justice committee voted in a private meeting to end their investigation into the conduct of Mr Trudeau and his advisers over SNC-Lavalin and to

allow the ethics commissioner to complete its study. In a letter to justice committee chairman Anthony Housefather, published on Monday evening, the majority Liberal membership of the committee said they had now heard from the “principle witnesses” and believed the committee had “achieved [its] objectives”. “Tomorrow will be the 11th meeting over five weeks where the committee has discussed this topic,” they wrote. “We heard 13 hours of comprehensive testimony from 10 different witnesses. Canadians can judge for themselves the facts, perspectives and relevant legal principles.” The move attracted widespread criticism from members of the opposition Conservative party, who had been pushing for Ms Wilson-Raybould to make another appearance before the committee. Anne McLellan, former deputy prime minister, has been appointed by Mr Trudeau to advise the government on whether the roles of attorney-general and justice minister should be held by the same person, as was the case with Ms Wilson-Raybould.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

NATIONAL NEWS

FT Algerian opposition calls on army to stay out of politics

South Africans warned to brace themselves for more blackouts

Health workers, doctors and students march to demand president steps

Fears grow that outages will continue into May as state utility struggles to fix old plants

HEBA SALEH

group of opposition figures in Algeria has called on the army to stay out of politics as thousands of protesters took to the streets again on Tuesday to demand that President Abdelaziz Bouteflika steps down. As health workers, doctors and students marched in Algiers, Russia voiced its support for the Algerian regime during a visit to Moscow by Ramtane Lamamra, the deputy prime minister who was appointed last week. Sergei Lavrov, the Russian foreign minister, said Moscow supported plans by Mr Bouteflika to launch a national conference to agree new political arrangements. He said Russia was concerned by what it considered to be an attempt to destabilise Algeria. Mr Lamamra’s visit, part of a tour that will also take him to China, appeared calculated to show that the Algerian regime had support from world powers. Neither Moscow, nor Beijing are likely to urge any political liberalisation in Algeria, analysts say. On Monday night, Algerian political leaders on the National Coordination for Change, a new body which backs the month-long protests against Mr Bouteflika, said the army should adhere to its constitutional role “without interfering in the people’s choice”. Ahmed Gaid Salah, the army chief of staff had said on Monday that the military should take responsibility for finding a quick solution to the crisis. He did not elaborate but analysts detected a change in tone in Mr Salah’s pronouncements since the start of the process when he appeared to side with Mr Bouteflika. The 82-year-old president suffered a stroke six years ago which left him paralysed and impaired his speech. Algerians have not heard him speak for six years and they suspect that others in his entourage are making the decisions. Algerian politicians and analysts believe the Bouteflika regime would fall if the military withdrew its support. The opposition is hoping a final push will come on or before April 28, the date Mr Bouteflika’s term expires. Algerian protesters have already rejected Mr Bouteflika’s offer of a transition under his aegis which he made after weeks of demonstrations against plans for him to remain for a fifth term in office. Elections scheduled for April 18 were cancelled and Mr Bouteflika said he would stay to oversee the transition. On Friday, the first weekend after Mr Bouteflika announced his plan, Algeria witnessed the biggest demonstrations since the start of the crisis, with hundreds of thousands of people taking part in rallies in cities across the vast north African country.

Thursday 21 March 2019

@Businessdayng

JOSEPH COTTERILL

T A woman walks through the devastation caused by Cyclone Idai

More than 1,000 feared dead after Cyclone Idai batters Mozambique Aid agencies warn of humanitarian crisis in some of Africa’s poorest countries JOSEPH COTTERILL

ore than 1,000 people are feared dead after a cyclone tore into Mozambique and its southern African neighbours, in one of the worst weather disasters in the southern hemisphere. Aid agencies warned on Tuesday of a humanitarian emergency as floodwaters continued to rise and hinder the rescue of survivors five days after Cyclone Idai lashed Africa’s poorest countries with highspeed winds and torrential rain. Filipe Nyusi, Mozambique’s president, said that more than 1,000 people may have died in the country. “From the air, many bodies can be seen floating,” Mr Nyusi said after flying over affected areas. If the death toll estimated by Mr Nyusi is realised, it would be “one of the worst weather-related disasters . . . in the southern hemisphere”, a spokesperson for the UN’s World Meteorological Organization said. The scale of the disaster in Mozambique was only just becoming

clear after government and aid agency flights revealed “areas where there should be villages and roads . . . it’s as if the ocean had tipped into them,” said Matthew Cochrane, a spokesman for the Red Cross, which had dispatched workers to the region. About 1.7m people were in the path of the storm in Mozambique, according to satellite imagery of its trajectory. The government estimated that at least 400,000 people have been left homeless. Cyclone Idai has also caused deaths and widespread damage in parts of Malawi and Zimbabwe. At least 98 are dead in Zimbabwe, where President Emmerson Mnangagwa has declared a state of disaster. At least 56 have died and nearly 1m people have been affected in Malawi. Rains that fell in neighbouring countries are now threatening floods in the worst-affected areas of Mozambique. “There is a lot of water that may come from the west,” Mr Cochrane said.

Aid workers for the Red Cross have called the devastation in Beira, the Mozambican port which bore the cyclone’s brunt, “massive and horrifying” with 90 per cent of the city damaged. Beira is one of Mozambique’s biggest cities with a population of 500,000. The port is critical for supplying the region, particularly landlocked Zimbabwe and Malawi. But Beira is only reachable by land via a single road running through a large coastal plain. Relief efforts have been complicated by “inland oceans” forming in the region, a UN World Food Programme spokesperson said. “The priority right now is saving lives” and rescuing people from rooftops and trees as waters rise, Mr Cochrane said. South Africa’s power supply has also been affected by the cyclone. The storm damaged pylons and lines connecting the country to hydropower from Mozambique’s Cahora Bassa dam, exacerbating severe blackouts plaguing the electricity monopoly Eskom.

US business confidence recedes from post-tax cut high Business Roundtable finds executives are scaling back hiring plans ANDREW EDGECLIFFE-JOHNSON

usiness confidence is receding in the US from the heights it reached after Donald Trump’s election, as friction with trading partners and a slowing global economy weigh on chief executives’ expectations for hiring, investment and growth. An index of CEOs’ economic confidence compiled by the Business Roundtable, one of Washington’s most prominent business groups, declined for the fourth quarter in succession, falling 9.2 points to 95.2. That remains above the longterm average of 82.4 for an index that began in 2002, the BRT noted, and significantly above the 50 point level which would signal recession fears. However, it is likely to feed investors’ uncertainty about the sustainability of the conditions that have helped many large companies report record profits. The index, which peaked a year ago after Republicans in Congress cut the headline corporate tax rate from 35 per cent to 21 per cent, showed a particularly pronounced reversal in CEOs’ hiring plans. Its measure of recruitment expecta-

tions dropped 11.3 points to 80.4. Its reading of capital investment plans declined 6.9 points to 91, and the index tracking sales expectations dipped 9.6 points to 114. The findings follow a wary earnings report on Tuesday from FedEx, the Memphis-based logistics company which is widely seen as a bellwether of global economic activity. The company lowered its earnings outlook for the second quarter, citing “slowing international macroeconomic conditions and weaker global trade growth”. Josh Bolten, chief executiveof the BRT, said its members’ outlook remained “solid” but cautioned: “As we encounter a potential softening of global economic conditions, it’s all the more important to advance policies that will promote American innovation and strengthen the US economy for the long term.” The BRT has been advocating investments in infrastructure and workforce training, immigration reform and a “national innovation agenda” including expanding grants for workforce training, accelerating federal funding for research and increasing the availability of H-1B visas for skilled professionals.

On Wednesday it stepped up its calls for Congress to pass a national data privacy law, in response to its members’ concerns about the costs and complications of complying with a patchwork of state-level regulations. Its survey showed 80 per cent of CEOs believed federal action on data privacy was “very” or “somewhat” important. “Both consumers and businesses need a consistent set of data privacy rules that support innovation, safeguard consumer rights and reduce regulatory complexity,” Mr Bolten said, urging lawmakers to make the issue a priority. Earlier this week, Jamie Dimon, the JPMorgan Chase chief executive, who chairs the BRT, highlighted corporate concerns about what he called a “bifurcated” US economy, as his bank announced a $350m investment to boost employment prospects for people in struggling communities. “If you travel around to most neighborhoods where companies live, they’re doing fine,” he said. “I don’t want to be a tone deaf CEO; while the company is doing fine, it is absolutely obvious that a big chunk of [people] have been left behind.”

he minister responsible for Eskom’s power monopoly admitted that cascading failures at the utility’s coal stations meant that South Africans had to brace themselves for more rolling blackouts. Pravin Gordhan, the minister for public enterprises, on Tuesday warned of a “huge struggle ahead of us” on a fourth day of so-called stage four outages scheduled by Eskom, which is responsible for almost all of the power for Africa’s most industrialised economy. To prevent a collapse of the entire power grid, Eskom has imposed rotating cuts of 4,000 megawatts a day, leaving businesses and homes in darkness for hours at a time while it battles to fix broken-down plants. “We are still getting a better grasp of the technical problems and other problems that Eskom power stations are confronting,” Mr Gordhan said. He added that experts would need up to a fortnight to finish assessing multiple breakdowns that have nearly halved Eskom’s capacity to 28,000MW. The warnings by Mr Gordhan, a tough former finance minister, have raised the prospect that there would still be power outages on May 8, when South Africans head to the polls. Fikile Mbalula, head of the election campaign for the ruling African National Congress, had promised on Monday that blackouts would end “permanently” in a couple of weeks. Analysts and pollsters say the ANC will probably win a majority of between 50 and 60 per cent of the vote despite anger at corruption and failures such as Eskom. The ANC’s prospects have been emboldened by infighting in opposition parties, and promises by President Cyril Ramaphosa to undo the legacy of Jacob Zuma, whom he unseated last year. If power is cut on May 8, “not only would it be remarkably embarrassing for the ANC but the opposition would find a way to place the blame squarely at the foot of the ANC and win over some disgruntled voters on the day” said Khaya Sithole, an independent political analyst. “But they will still win even if they plunge us into darkness for an entire month beforehand.” Eskom is buckling under $30bn of debts that have diverted cash from funding proper maintenance of ageing power stations. The debt was largely wasted on building Medupi and Kusile, two huge coal-fired plants that have become defective and unfinished follies. Jan Oberholzer, who was appointed Eskom’s chief operating officer last year, said the lack of cash meant that the contract for the early detection of faults, which had lapsed 18 months ago, had not been renewed. The power system’s fragility was further exposed by a deadly cyclone in Mozambique that cut off hydroelectric supplies to South Africa. Like other state groups Eskom bears the scars of alleged corruption known as “state capture” under Mr Zuma.

Thursday 21 March 2019

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

SoftBank-backed lender OakNorth triples profits NICHOLAS MEGAW

ritish business lender OakNorth Bank more than tripled its profits in 2018, and said it had still not suffered a single default despite more than doubling the size of its loan book. OakNorth reported a pre-tax profit of £33.9m, up from £10.6m the previous year, according to accounts filed with Companies House this week. Net interest income increased 115 per cent, to £53.7m, as the company increased its total lending facilities from a little over £850m to £2.2bn. OakNorth is only one of a wave of new banks that have attracted large numbers of customers — and large amounts of investor cash — in recent years. However, the latest accounts confirm its position as the only one of the UK’s high-profile “neobanks” to turn a sustained profit. Rishi Khosla, OakNorth chief executive, said the company had made “very significant progress” and expected to “meaningfully increase profits this year again”. The company also said it would donate 1 per cent of net profits going forward to charitable causes, with a particular focus on encouraging social entrepreneurship. In addition to its fairly traditional savings and loans business, OakNorth has also started licensing its lending technology to other banks around the world. The accounts reported this week do not cover income from that side of the business, which is incorporated as a separate com-

pany sharing the same holding company. That technology arm remains lossmaking, but Mr Khosla said “overall the business will still be highly profitable”. Last month OakNorth was valued at around $2.8bn in the largest ever fundraising round for a European financial technology company, with an investment led by SoftBank’s Vision Fund. The near $400m primary funds raised will be used in part to bolster the bank’s regulatory capital, while also investing in technology and a planned expansion into the United States. The company is not planning to set up a full bank in the US as it has in the UK, but will use its lending platform to originate loans on behalf of other financial institutions. Mr Khosla said OakNorth had built up a pipeline of more than $100m in initial deals for its launch, with lending expected to begin in earnest in the next eight to 10 weeks. In its home market of the UK, Mr Khosla said economic uncertainty had impacted some companies’ willingness to borrow, but said there was still “a lot of demand” for its loans. The uncertainty had also not affected default rates, which have remained at zero since its establishment in 2015. Mr Khosla attributed the unusually strong performance to OakNorth’s underwriting technology, which he said “ensure[s] we do a wider and deeper amount of work to make a credit decision and then monitor our loans in a different way to how high street lenders monitor”. “There’s no playing with numbers in the background to come up with that” figure, he added.

Greenlane files for IPO in test of market appetite for vaping stocks MATTHEW ROCCO

reenlane Holdings, a US-based supplier of vaping products, filed for an initial public offering on Wednesday, in a move that will test investors’ appetite for vaping stocks amid mounting regulatory concerns. The company is seeking a listing on the Nasdaq under the symbol “GNLN,” according to a filing with the Securities and Exchange Commission. As a place holder, it estimated that the offering will raise $92m. Cowen & Co. and Canaccord Genuity are underwriters for the IPO. Greenlane’s IPO filing comes at a time of heightened scrutiny of ecigarettes and “vaping” products. Under commissioner Scott

Gottlieb, the US Food and Drug Administration in September ordered five large providers of ecigarettes to submit plans to reduce teen use of “vaping” products. Meanwhile, in San Francisco, city officials this week proposed a ban on ecigarette sales until the FDA conducts a health review. Mr Gottlieb, who plans to step down from his role next month, on Tuesday described a recent meeting with executives from Marlboro maker Altria Group and ecigarette manufacturer Juul Labs as “difficult.” He also suggested that regulators could pull nicotine pods off the market if youth “vaping” use continues to grow. Shares of Altria, which owns a $12.8bn stake in Juul, dropped more than 2 per cent on the news.

GoFundMe blocks cash appeals for controversial cancer clinic Crowdfunders face scrutiny over unproven medical treatments MARTIN COULTER

ampaigns to raise money for cancer treatment at a controversial clinic in Germany have been banned by a leading crowdfunding website, after concerns that vulnerable patients and donors are being exploited. GoFundMe said users will not be able to seek donations to cover treatment at the Hallwang clinic in Dornstetten, Germany until it has taken further advice from medical experts. The San Diego-based platform claims to be the world’s largest crowdfunding site by money raised. Hallwang claims to offer “cuttingedge, next generation medicine” to its patients and charges tens or hundreds of thousands of euros. The clinic, which employs a number of oncologists, has been criticised for offering treatments including “highdose vitamin infusions” and “ozone therapy”. GoFundMe has faced pressure for allowing public appeals for alternative cancer cures, with research by the Good Thinking Society, a charity, showing more than £5m was raised for “disproven alternative cancer treatments” on the site between 2012 and 2018. In the same period, £2m was raised for similar treatments on rival site JustGiving. Michael Marshall, project director at the Good Thinking Society, said crowdfunding sites had a responsibility to monitor campaigns on their websites more closely. “They are all too happy to stand back and say, ‘We only provide the space that allows these conversa-

tions, it’s not up to us,’ but I think that’s incredibly naive. A laissez-faire attitude like that doesn’t hold up when you’re facilitating the exploitation of vulnerable people,” he said. GoFundMe’s terms of service explicitly ban donations paying for “products that make health claims that have not been approved or verified by the applicable local . . . or national regulatory body”. But there is little oversight for patients travelling overseas to seek treatment banned in their own countries. The platform said it was “speaking to organisations and experts” in the UK and US as part of a wider effort to combat medical misinformation and was considering whether to offer “trusted and well-researched advice” on the credibility of different treatments. “We know we have a major role to play in big issues like this, and as we to continue to grow . . . our policies will continue to evolve to make sure we are best serving people,” said a spokesman. Jeremy Snyder, a professor in the faculty of health sciences at the Simon Fraser University, in Vancouver, said: “Crowdfunding platforms like GoFundMe have unfortunately become a major source of misinformation, where fundraisers hype up the claims of their desired treatment because they want donors to feel their money is going to a good cause.” He added: “They say things like, ‘This will make a huge difference to my life’, or ‘This is my last chance to find a cure’. And often they get tied up in ‘Big Pharma’ conspiracy theories about why they haven’t been able to find a cure closer to home.”

GoFundMe said: “We are temporarily blocking new campaigns for the Hallwang Clinic while we consult with users and experts.” It added: “GoFundMe respects the decisions of patients and their loved ones about what they choose to fundraise for. We also recognise the tension between that openness and the need to make sure people are equipped to make well-informed decisions, and we’re doing more to help with that.” When asked about the issues with campaigns for unproven medical treatments on its platform, JustGiving said: “We provide information and guidance on how to crowdfund or donate safely to everyone who uses our platform. We have a dedicated team which ensures crowdfunding pages follow our terms and conditions and don’t break the law. We remove pages that do not adhere to our standards and terms of service.” The Hallwang Clinic said: “Thanks to GoFundMe, many patients have received better and individualised cancer therapy abroad. Funding platforms help patients who cannot afford cutting-edge medicine getting access to advanced treatment strategies worldwide, including the Hallwang Clinic.” It went on to claim previous coverage of its work had been “false and misleading”, adding: “It is sad and wearing that cancer patients who are searching for further treatment options based on advanced clinical studies are being refused the ability to fundraise through GoFundMe . . .[It] deprives patients in need of potentially life-saving treatments.”

Stocks cautious on US-China trade negotiations and Fed meeting MICHAEL HUNTER AND ALICE WOODHOUSE

oncerns over US-China trade talks helped take stock markets off multimonth highs on Wednesday, with a looming monetary policy announcement from the Federal Reserve also fostering a sense of caution. Donald Trump’s top trade negotiators will visit Beijing next week in a bid to clear final hurdles in resolving the trade war with China, amid reports that a breakthrough is unlikely until the US matches concessions from China on intellectual property.

The S&P 500 started the session down 0.3 per cent ahead of the Fed decision, where attention will focus on the outlook for the extent and timing of its rate tightening cycle in 2019. Mining stocks were hit in Europe, reflecting the sector’s sensitivity to the outlook for growth in China as well as the prospect of increased supply from the resumption of production at mines in Brazil. The Stoxx index tracking the sector fell 1.9 per cent against a slip of 0.6 per cent for the Europe-wide Stoxx 600. London’s FTSE 100 rose 0.2 per cent, outperforming with

help from a weaker pound. With further uncertainty over the length of a delay to Brexit, sterling down by as much as 0.9 per cent to $1.3143, a four-session low. Frankfurt’s Xetra Dax 30 fell 1.5 per cent, knocked by big losses for two constituent stocks, setting it on course for its biggest single-session fall since early February. Bayer, the chemicals company, fell 11.5 per cent after a setback in a US legal battle over alleged links between a weedkiller it makes and cancer. Carmaker BMW warned on 2019 profits and fell over 5 per cent.

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Thursday 21 March 2019

ANALYSIS Corporate India’s enthusiasm for Modi wanes as elections loom

Business chiefs praise bankruptcy and tax laws but complain about rash demonetisation SIMON MUNDY

D European foreign policy: a new realism on China

Rattled by Beijing’s economic clout, the EU is finally trying to devise a tougher strategy MICHAEL PEEL, LUCY HORNBY AND RACHEL SANDERSON

he last time EU leaders held strategy talks on China was just after the Tiananmen Square massacre in 1989. The 12 heads of state and government imposed sanctions including an arms embargo over what they called the “brutal repression” by the Chinese government. Almost 30 years later, the European Council will use a summit this week to focus once more on China — and decide whether it is time to get tough again. Mounting concerns over Chinese industrial policy, cyber security and trade wars have all combined to put Beijing firmly back on the European agenda. To some in Brussels and member state capitals, this week’s discussion is the EU’s belated awakening to the new sway of China — and to an uncomfortable truth that it has failed to register the full implications of its ascendancy. “It has finally sunk in,” says one senior EU official. “While we were absorbed in our own crises for 10 years, the GDP of China soared and Trump was elected. We entered a different game.” Among the leaders who will sit down to dinner on Thursday in Brussels to discuss China, the sentiment has shifted from what some observers see as years of complacent assumption that China could be milked for economic opportunity while being kept in strategic check. Now European countries are alarmed at how Beijing — like other great powers in history — is using its expanding influence to dictate terms in both commerce and diplomacy. Some EU governments complain that China discriminates against foreign companies and forces them to give up their technology, while Beijing’s foreign investments are opaque and risk leaving recipient countries in debt. There is also growing anxiety about the potential security threats of Chinese investment in sensitive parts of the EU economy. The reassurances from Beijing that these fears are groundless are increasingly falling on deaf ears. “It’s pretty shocking they have never found time to discuss this,” Fraser Cameron, director of the Brussels-based EU-Asia Centre think-tank, says of the EU leaders’ talks. “They are saying: ‘Let’s not try to pretend that we can change China. Sometimes it’s tough and brutal — so we will have to be tough and brutal, too.” Ahead of the summit, the European Commission and the bloc’s diplomatic service has produced a new strategy document on China that makes unprecedented public criticisms — and threats. The freshly-minted paper brands Beijing a “systemic rival promoting alternative models of governance”, as well as an economic competitor and

partner in some spheres. It warns the EU could tighten rules on Chinese investments in Europe if Beijing does not respond to concerns about its behaviour in areas ranging from corporate state subsidies to public procurement. “We have to send public messages because otherwise the Chinese will not take us seriously”, says one EU member state diplomat supportive of the new strategy. “We have a lot of leverage, like the Americans — or we could have.” The stakes for European leaders breaking bread in Brussels will be underscored by a burst of Chinese diplomatic activity on the continent. The same night the EU is are scheduled to discuss China, President Xi Jinping is due to touch down in Italy for the first leg of a European trip that will take in Monaco and France. Rome plans to use the visit to sign a formal endorsement of Beijing’s contentious Belt and Road global investment drive. On April 9, Li Keqiang, China’s premier, is scheduled to be in Brussels for a short summit with EU leaders. He will have a longer stay in Croatia, where he will attend the 16+1 grouping of central and eastern European countries, including 11 EU members — a group that European diplomats have long feared Beijing wants to use to split the EU. “China has discovered it can pick off different EU members and stop the EU having a China policy,” says Robert Cooper, a former adviser to EU foreign policy chiefs Catherine Ashton and Javier Solana. “The larger EU member states have from time to time thought: ‘We ought to take China more seriously.’ But it wasn’t clear they were taking China more seriously themselves.” The EU’s approach to China since Tiananmen Square had largely been one of attempting to reap benefits of the country’s rapid growth. Although the arms embargo remains in place and Brussels has made criticisms of Beijing on human rights grounds, business has been the priority. The EU is China’s largest trading partner; China is the EU’s second-largest, behind the US. In 2018, China accounted for about a fifth of EU goods imports and more than a tenth of its exports. China also became an important investment destination and source. Volkswagen has been the top-selling car brand in China for much of the last two decades and the country accounted for 39 per cent of its sales last year, while companies ranging from BASF to Carrefour to Siemens also have a large presence. But the story has changed as fast-expanding Chinese businesses have shown a growing appetite for European assets. Levels of Chinese direct investment in the EU have soared over the past five years, according to bloc statistics and other research. Beijing’s growing economic clout — and its willingness to use it — has rattled influential EU member

states. Similar debates are taking place in countries ranging from France, the UK and the Netherlands to Denmark and Sweden, but it is Germany that is in the vanguard of the EU’s sharper view. Peter Altmaier, Germany’s economy minister, has argued that China’s growing technological prowess is one of the main reasons why Europe needs a new European industrial strategy that supports the development of regional champions. He has been the most prominent European politician warning of the risks to Germany’s future prosperity from Chinese competition. The BDI, Germany’s main business lobby, called in January for the country’s economy be made more “resilient” to the dangers posed by competition with China’s “statedominated economy”. The group said in a policy paper that Beijing’s subsidies had caused overcapacity and other distortions in markets such as steel. It further claimed that Chinese tax incentives and soft loans from state banks were giving companies the firepower to buy technology companies. High-profile Chinese investments in companies such as Deutsche Bank and Kuka, an industrial robot maker, have raised fears in Berlin about Beijing’s reach into sensitive areas of the economy. Those have been accentuated by concerns across Europe over the use of Huawei equipment in 5G mobile communication networks — worries that China says are unfounded and unfair. In December, Berlin tightened rules on investment screening to give authorities more scope to intervene when non-European companies start to build stakes in German companies. “For a long time the business sector was highlighting the relationship with China as a bonus but they are now highlighting the cost of this kind of engagement,” says Daniela Schwarzer, director of the German Council on Foreign Relations research institute. “The debate now is risk minimisation. What is the risk if a non-democratic country turns against you?” Despite the shifting EU attitude towards China, the scepticism towards Beijing is not uniformly held. The deepening suspicion in many north European member states contrasts with the mood in other parts of the bloc, where countries such as Hungary and Greece have been vocal advocates for Beijing. António Costa, Portugal’s prime minister, warned fellow European countries earlier this month against misusing security procedures for screening foreign investments from China and elsewhere. He said it could lead to the continent becoming more protectionist. Mr Costa described Lisbon’s experience of Chinese investment as “very positive”, showing “complete respect for our legal framework and the rules of the market”.

uring Narendra Modi’s first run for prime minister in 2014, some of his strongest support came from the boardrooms and corner offices of India’s most powerful businesses. Impressed by his economic record as chief minister of Gujarat state, corporate leaders hoped Mr Modi could make similar changes on the national stage, stripping away corruption and bureaucracy and ending the sense of policy drift that set in under the previous government. Five years on, as Mr Modi runs for a second term, their enthusiasm has been tempered by what some see as a mixed record on economic policy. Top executives praise his government for pushing through vital reforms, notably a new bankruptcy system and a national value added tax. But they have been disappointed by progress on other issues,

1990s,” said Sonjoy Chatterjee, India chairman for Goldman Sachs, referring to the reforms that ended the bureaucratic “Licence Raj.” The push towards greater transparency has been a defining theme of Mr Modi’s term, notably in sweeping new regulations for the property sector, seen as prone to money laundering. “It’s creating a different kind of industry, weeding out the players who were taking advantage of the opacity,” said Abhishek Lodha, managing director of the Lodha Group, one of India’s largest developers. Yet the disruption caused by the new real estate regulations, as well as by the new tax system, has hampered the government’s efforts to create jobs for India’s millions of young jobseekers, warned Ritika Mankar, an economist at Ambit Capital. Meanwhile, political opponents point to the involvement of tycoon Anil Ambani in a big defence deal and question Mr Modi’s commit-

such as strained balance sheets at the country’s big state-owned banks and by the disruptive banknote “demonetisation” of 2016. “This government had a clear majority and one felt it could do much more,” said Harsh Goenka, chairman of RPG Group, a tyres-totechnology conglomerate. “Today, I’d say most business leaders are still with Modi — but the main reason is the lack of a strong alternative.” In January, Mr Modi addressed a packed hall at Vibrant Gujarat, the annual investment conference he founded as the state’s leader and used to build a reputation as one of India’s most business-friendly politicians. Mr Modi promised to maintain a focus on reforms and deregulation, arguing that after five years of his government, India was “open for business as never before.” The 2017 introduction of a goods and services tax, notably, replaced a confusing patchwork of state and national levies. The new system forced many small businesses to pay tax for the first time, helping larger companies that compete with the semi-formal sector in areas such as light manufacturing. “These companies had been at a disadvantage before, simply because they paid their taxes,” said Ridham Desai, equity strategist at Morgan Stanley. A new bankruptcy code enables defaulting companies to be sold or liquidated far more rapidly — a historic shift of power away from a well-connected class who kept control of their businesses while forcing losses on state banks. “The last time there was such a transformational period was in the

ment to transparency. Mr Ambani’s older brother Mukesh has also been in the spotlight after his $30bn digital venture Reliance Jio was seen to have benefited from regulatory decisions. These hurt foreign groups including Vodafone and Walmart, which last year made the largest foreign direct investment in Indian history. Most business leaders and analysts agree Mr Modi has introduced a more systematic approach to dealings with big business, for whom success often hinged on personal connections with ministers. “People going off to Delhi for special approvals and all — that has clearly come down,” said Rashesh Shah, chief executive of Edelweiss, a large Mumbai financial group. The new regime has irked those who thrived under the old system. Even its corporate supporters had their confidence knocked by the 2016 demonetisation, which removed larger-denomination banknotes from circulation to cut down on the black economy, causing chaos in India’s cash-driven economy. Some in the financial sector cite this episode to argue that a Modi-led coalition — seen as the most likely election outcome — would dilute his power and reduce the chance of rash policies. In other areas, business has been disappointed by the opposite problem — a lack of action. Adi Godrej, chairman of the Godrej consumer goods conglomerate, warned the government had failed to provide sufficient extra resources for India’s backlogged legal system, leaving businesses bogged down in interminable court cases.

Thursday 21 March 2019

www.businessday.ng

www.facebook.com/businessdayng

@businessDayNG

@Businessdayng

BUSINESS DAY

Live @ the Stock exchange Prices for Securities Traded as of Wednesday 20 March 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 188,031.82 6.50 9.24 504 83,197,038 UNITED BANK FOR AFRICA PLC 263,335.54 7.70 1.99 289 15,093,601 697,002.16 22.20 1.14 377 22,451,904 ZENITH BANK PLC 1,170 120,742,543 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 294,341.40 8.20 -0.61 197 3,181,787 197 3,181,787 1,367 123,924,330 BUILDING MATERIALS DANGOTE CEMENT PLC 3,227,472.10 189.40 - 39 56,403 112,754.57 13.00 - 50 548,265 LAFARGE AFRICA PLC. 89 604,668 89 604,668 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 351,242.56 596.90 - 8 10,010 8 10,010 8 10,010 1,464 124,539,008 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 1 170 11,300.89 45.20 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 1 170 1 170 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 170 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 76,312.80 80.00 - 7 4,980 OKOMU OIL PALM PLC. PRESCO PLC 68,000.00 68.00 - 12 12,460 19 17,440 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,740.00 0.58 -3.33 9 379,650 9 379,650 28 397,090 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 820.66 0.31 - 0 0 JOHN HOLT PLC. 202.36 0.52 - 2 5,201 1,903.99 2.93 - 0 0 S C O A NIG. PLC. TRANSNATIONAL CORPORATION OF NIGERIA PLC 50,809.99 1.25 2.46 82 7,136,000 23,050.37 8.00 3.90 35 2,688,295 U A C N PLC. 119 9,829,496 119 9,829,496 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,300.00 27.50 - 6 4,910 165.00 6.60 - 0 0 ROADS NIG PLC. 6 4,910 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,833.02 1.86 - 5 24,192 5 24,192 11 29,102 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 12,135.72 1.55 - 2 9,725 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 140,184.50 64.00 - 20 50,081 INTERNATIONAL BREWERIES PLC. 206,730.48 24.05 - 7 23,720 NIGERIAN BREW. PLC. 555,784.69 69.50 -0.71 171 3,762,299 200 3,845,825 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 56,500.00 11.30 3.67 107 3,260,181 DANGOTE SUGAR REFINERY PLC 166,800.00 13.90 0.72 50 671,301 FLOUR MILLS NIG. PLC. 77,907.21 19.00 - 52 3,973,029 HONEYWELL FLOUR MILL PLC 9,516.24 1.20 - 56 2,114,797 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 2 38,440 NASCON ALLIED INDUSTRIES PLC 54,843.37 20.70 -0.97 13 210,810 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 280 10,268,558 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,660.22 11.00 -8.33 29 339,218 NESTLE NIGERIA PLC. 1,188,984.38 1,500.00 -1.74 36 34,083 65 373,301 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,978.36 3.98 - 10 121,800 10 121,800 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 41,690.01 10.50 -3.23 22 332,683 UNILEVER NIGERIA PLC. 221,182.71 38.50 -0.52 25 93,543 47 426,226 602 15,035,710 BANKING DIAMOND BANK PLC 56,048.14 2.42 - 0 0 ECOBANK TRANSNATIONAL INCORPORATED 247,718.94 13.50 -2.17 32 540,836 FIDELITY BANK PLC 69,829.26 2.41 9.05 101 16,318,109 GUARANTY TRUST BANK PLC. 1,083,067.40 36.80 -0.14 163 6,328,293 JAIZ BANK PLC 15,321.41 0.52 - 6 161,455 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 64,490.54 2.24 -4.68 20 438,702 199,477.16 6.85 - 21 236,845 UNION BANK NIG.PLC. 9,468.36 0.81 - 10 191,802 UNITY BANK PLC WEMA BANK PLC. 29,702.34 0.77 4.05 51 2,189,578 404 26,405,620 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,504.63 0.65 -8.45 30 2,026,009 AXAMANSARD INSURANCE PLC 23,100.00 2.20 - 5 20,600 CONSOLIDATED HALLMARK INSURANCE PLC 2,357.70 0.29 - 0 0 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,093.20 0.21 - 4 88,390 GOLDLINK INSURANCE PLC 2,001.98 0.44 - 1 100 GUINEA INSURANCE PLC. 1,228.00 0.20 - 1 100 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 -3.23 9 781,525 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 - 2 10,050 LINKAGE ASSURANCE PLC 4,400.00 0.55 - 3 16,380 MUTUAL BENEFITS ASSURANCE PLC. 1,760.00 0.22 -4.35 7 201,896 NEM INSURANCE PLC 12,145.16 2.30 - 17 834,822 NIGER INSURANCE PLC 1,780.08 0.23 9.52 9 2,347,831 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 0 0 REGENCY ASSURANCE PLC 1,733.88 0.26 - 2 83,324 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 -4.76 24 11,483,644 4,483.72 0.48 - 0 0 STACO INSURANCE PLC STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,912.00 0.21 - 2 500,100 WAPIC INSURANCE PLC 5,486.92 0.41 2.50 24 3,185,253 140 21,580,024 MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,429.96 1.50 -5.66 13 281,668 13 281,668

MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 1 6 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,922.05 1.42 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 1 100 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2 106 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,600.00 3.80 - 61 1,177,787 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 - 7 17,175 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC 38,813.31 1.96 2.08 119 13,474,362 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,595.06 0.31 -6.06 6 308,099 481,305.99 47.00 -1.67 23 2,193,547 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 17,100.00 2.85 0.35 55 1,615,853 271 18,786,823 830 67,054,241 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 1 100 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 1,065.94 0.30 - 7 397,100 8 397,200 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,425.00 4.95 - 2 5,000 GLAXO SMITHKLINE CONSUMER NIG. PLC. 12,915.47 10.80 2.86 22 457,930 4,019.80 2.33 - 12 101,040 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,177.48 0.62 -7.46 11 137,596 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 47 701,566 55 1,098,766 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 0 0 0 0 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 100 NCR (NIGERIA) PLC. 648.00 6.00 - 1 100 381.11 0.77 - 0 0 TRIPPLE GEE AND COMPANY PLC. 2 200 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 0 0 E-TRANZACT INTERNATIONAL PLC 11,088.00 2.64 - 2 5,000 2 5,000 4 5,200 BUILDING MATERIALS BERGER PAINTS PLC 2,391.04 8.25 - 5 2,783 CAP PLC 26,180.00 37.40 - 7 1,791 249,726.52 19.00 - 7 17,700 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 633.11 0.30 - 0 0 286.87 0.54 - 1 2,786 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 20 25,060 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 3,258.45 1.85 -9.76 20 571,402 CUTIX PLC. 20 571,402 PACKAGING/CONTAINERS BETA GLASS PLC. 35,972.99 71.95 -8.92 5 230,855 GREIF NIGERIA PLC 388.02 9.10 - 0 0 5 230,855 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 45 827,317 CHEMICALS B.O.C. GASES PLC. 1,577.57 3.79 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 0 0 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 6 546,857 6 546,857 INTEGRATED OIL AND GAS SERVICES OANDO PLC 69,615.91 5.60 -4.27 89 2,446,311 89 2,446,311 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 61,301.19 170.00 - 18 33,363 CONOIL PLC 15,960.90 23.00 - 13 8,328 ETERNA PLC. 5,738.24 4.40 - 14 92,166 FORTE OIL PLC. 36,469.47 28.00 - 14 38,567 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 5 1,979 67,904.37 200.00 - 24 23,344 TOTAL NIGERIA PLC. 88 197,747 183 3,190,915 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 16,576.10 1.70 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 411.72 0.35 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,947.48 5.00 - 3 26,000 TRANS-NATIONWIDE EXPRESS PLC. 323.50 0.69 - 1 724 4 26,724 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 3,242.92 1.56 -8.24 5 114,500 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 5 114,500 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 1 100 1 100 PRINTING/PUBLISHING ACADEMY PRESS PLC. 217.73 0.36 - 1 9,000 LEARN AFRICA PLC 1,010.60 1.31 - 3 40,888 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 884.39 2.05 2.50 9 221,252 13 271,140 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 895.16 0.54 - 0 0 0 0 SPECIALTY INTERLINKED TECHNOLOGIES PLC 766.91 3.24 - 1 100 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

BUSINESS DAY

news you can trust I THURSDAY 21 MARCH 2019

www.businessday.ng

facebook.com/businessdayng

@Businessdayng

Opinion

The folly of the middle class in Nigeria

CHRISTOPHER AKOR

ne of the tragedies of a postcolony like Nigeria is the apparent refusal of leaders to be accountable and the glaring inability of citizens to hold their leaders to account. The leaders, often self-conceited and condescending towards the people they lead, are quick to take the glory for anything positive and refuse responsibility for negative outcomes. These leaders have a surfeit of excuses – colonial condition, external environment, previous governments, and the opposition – for the abysmal fortunes of the country. They unwittingly reduce themselves to helpless victims, who are usually passive and acted upon. What is more, they take advantage of a citizenry who have a warped idea of the underlying social contract, a right-based idea that sees itself more as receiving from, rather than giving to the state. This is complemented by the reality that the Nigerian state does not depend on its people for revenue (about 80 percent of the country’s government revenues and 95 percent of its foreign exchange earnings come from the sale of crude oil). And as research has shown, where governments do not depend on their citizens for revenues, those governments are usually not responsible or accountable to the citizens even if they

claim to be democracies. It is in that light that Wale Adebanwi and Ebenezer Obadare in their edited work, Encountering the Nigerian State argue, for the most part, that the ‘modern’ Nigerian state relates overwhelmingly to its citizens as though they were, at worst, adversaries, or at best, a nuisance. Since the discovery of oil, successive governments no longer felt it necessary for the people to fund the state. Consequently, the taxation system bequeathed by the colonial government was virtually dismantled. Thus relieved of their basic duty, Nigeria citizens were reduced to the status of beggars – those who needed to be helped by the state but with no rights or privileges to state resources. Any wonder then that the state treats its citizens as nuisance and in extreme case, as adversaries! Meanwhile, the ruling elite see the state mainly as a vehicle of accumulation and of exploitation. But even as the tides are changing and the country is starting to demand and depend on tax revenues to fund governments, Nigeria’s leaders are still stuck in their old ways. They see themselves as masters of the people, at best, and demand obedience and respect from the people without subjecting themselves to the rigours of accountability. To make matters worse, they have also mastered the art of manipulating elections thus denying the people the power to hold them accountable at the polls at intervals. A large part of the blame for this turn of events goes squarely to the Nigerian middle class – that class between the oligarchy and the poor, who, in contemporary society, are best positioned to hold the government to account. As I have so often written, the Nigerian middle class are the greatest supporters and defenders of the ruling class and their

oppression of the poor. Being part of the exploited class but with professional knowledge or privileged positions in the civil service, they often offer their services and knowledge to the exploiters for hire. Consequently, they have become the greatest advocates of the ruling class, the greatest defenders of Nigeria’s politics of plunder, neopatrimonialism and prebandalism. Being part of the exploited class themselves, they often speak the language of the downtrodden until they are noticed and called to the service of the ruling class where they have proved especially useful in fashioning strategies to further the exploitation of the downtrodden. In meetings with leaders, instead of asking those leaders tough questions, compelling them to account for every one of their actions, the Nigerian middle class is more preoccupied with establishing contacts and relationships for future contracts, jobs and favours. Of course, to put themselves in prime positions, they compete to eulogise the leader or public official as the best thing to have happened to the country. The average middle class Nigerian is inherently selfish and greedy and is willing to sell the poor for a mess of pottage. They have made nonsense of the well-established theory that a large and strong middle class is essential for economic growth and democracy. Here, the rule of the jungle, and not some fine economic or democratic theory, prevails. To my mind, the main reason for this is the greedy quest by Nigerian middle class to become super rich and owners of capital themselves. Unlike the middle class in Western countries, they are not content with living a happy and moderate life. No! They see themselves as future Dangotes and Adenugas, stupendously rich and enjoying the good things life

‘

They have made nonsense of the well-established theory that a large and strong middle class is essential for economic growth and democracy

and money have to offer. Their main preoccupation therefore, is not the holding of leaders to account. They are more interested in joining the ranks of the ruling elite and will do anything to be incorporated into that privileged class. However, this selfish approach is leading to class suicide. Besides the few that get jobs or contracts with the government, majority of the middle class had had to contend with the sufferings caused by the arrogant political leadership. Just like it happened in the late 1980s and 90s, Nigeria’s robust but fragile middle class that expanded greatly from 2002 due to deliberate government policy is now shrinking and at the risk of disappearing entirely. Their fat salaries have been eroded by the steep decline in the value of the naira and they can hardly afford to shop in foreign boutiques and stores in Victoria Island and Ikoyi again. Even the fanciful cars they had always bought is now largely above their reach and they had to make do with imported used (Tokunbo) and accidented cars. Suddenly, they are realising that Nigeria is no longer working. They now realise they cannot raise their children in Nigeria as the country cannot provide for the education and health needs of their children. The highly skilled among them are now voting with their feet to Canada and other parts of the Western world in search of a better life. But they cannot entirely escape the effects of their actions at home. They will forever be haunted by their failure to collectively build a country they and their children will be proud of. Chris Akor, a First Class graduate of Political Science, holds an MSc in African Studies from the University of Oxford and is BusinessDay’s Op-Ed Editor christopher.akor@businessdayonline.com

2019 elections: Serious matters arising

ik MUO

nybody who thinks that the 2019 elections are over is surely a stranger in Nigeria, or is living in a dream-land or is being mischievous. The 2019 elections are far from over! Like all Nollywood movies, our elections have Parts 1 and 2. We have just finished part one which involves saying and doing all the things that are associated with elections, including budgeting huge sums, producing electoral materials, arranging for the elections, creating awareness, which usually puts all of us in a frenzy, and something like actual voting. After all these genuine and fake steps in Part 1, we then enter the Part 2, which is where the actual elections are done and that is in the tribunals. The major difference between Part 1and Part 2 is that while we are involved in the open aspects of Part 1(and most of the things happening in that part are not open), the Part 2 is restricted to the verbose learned ones, the political gladiators and a few allies. However, while we are getting ready to enter the Part 2, which is crucial part of the Nigerian elections, it is good to examine some of the matters that

seriously arose from Part1 One of the serious matters arising is that INEC was overwhelmed in the 20019 election. And as I had argued before, it did not start today! Surely, the constant element was there: acts of political desperation and gangsterism by pseudo democrats, who detest all democratic ethos. But beyond this, INEC did not do well in several aspects of the operations, especially this mysterious thing called logistics. Materials arrived late in several areas but the most worrisome was the wrong delivery of materials. Materials for Kebbi landed in Kaduna; those of Kastina were delivered in Kebbi, Lagos results sheets were found in Kwara while some meant for Kwara were delivered to the FCT and some in Nassarawa. This is not funny and to think that INEC had four years to prepare for this election. We may need to make expertise in logistics a core competence in the appointment of the next INEC chairperson. We may appoint the logistic director of Nigeria Breweries or Nestle PLC or even my friend, Dele Badejo, a Professor of Transport and allied matters as the next INEC chairman. We may also have to unbundle INEC because it appears that they are involved with many non-core activities. One of the factors that compounded the woes of INEC was the litigation-friendly tendencies of our political operators. Even the failure to extend greetings on the day of primaries ends up in court. Of course most of the parties sowed the wind and the reaped the whirlwind by deliberately violating their own constitutions. One of the things that earned INEC a little sympathy with the shameful postponement was the intimidating statistics

‘

People may be free to form parties but there must be stringent requirements to qualify for being in the ballot

of court judgments it had to contend with: to substitute, remove, replace and maintain the nebulous statues-quo with respect to parties and candidates. And some of the court-rats that caused these distractions knew well in advance that they had no cases! As at that date, INEC had 640 cases and 40 orders hanging on its neck! For instance, 24 hours to the election, INEC was ordered by a ‘court of competent jurisdiction’ to include APC in the Zamfara elections. I am yet to confirm if they did so and how they were able to do so within such a short period. Our people say that when the hunter learns to shoot without aiming, the bird also learns to fly without perching! This matter should be given a technical knockout and the easiest way out is to rearrange the process so that all court cases are disposed off, at least one month to the date of the first election in any electoral year Another serious matter that arose was the number of parties. I think it was Tunji Braithwaite who went to court over the various roadblocks on the route to registration of political parties and opened the current floodgates. Seventy-something political parties appeared on the 2019 election ballot papers. By next elections, I would have successfully registered my own party because parties are now like business names that everybody can register at anytime. Incidentally, people just registered the parties, went to sleep, woke up to participate in the endorsement market and went back to sleep again, probably till 2013. That was why two candidates won more than 95% of the votes. Even an unknown candidate named cancelled votes, had more visibility and numbers than the 70 parties lumped together. And

to think that some of the candidates threw in the towel before the actual fight began! We must do something about this menace. People may be free to form parties but there must be stringent requirements to qualify for being in the ballot. We may also have some local or regional parties (we may learn from the banking industry) or we predicate the continuous ballot appearance on the performance in the previous election. Thus a party that won no seat is deregistered or kept off ballot; a party that one state assembly seat becomes a state party while the one that wins one national seat becomes a regional party. Whatever the case, we MUST do something about this or else before long, the number of parties may exceed the number of voters! When William Clay declared that politics is a game of interest and that in politics, there are no permanent enemies or permanent friends, he might have had Nigeria in mind! One of the serious matters that arose from the 2019 elections was the war of attrition between several political allies or people who were previously political allies or people we thought were political allies. On this matter, the gold medal was won by the sterling performance of Wike and Amaechi of River State. In 2007, after ascending to the Rivers gubernatorial throne, Amaechi allegedly declared ´I owe two people gratitude for contributing to my emergence as Governor. The first is God almighty. Continues online at www.businessday.ng

Ik Muo, PhD. Department of Business Administration, OOU, Ago-Iwoye 08033026625; muoigbo@yahoo.com, muo. ik@oouagoiwoye.edu.ng

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.