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FEC approves €500m facility for BOI to support industry

…loan expected to create 1.2m jobs TONY AILEMEN, Abuja

Gowon says governance is serious business states urged to do more

awardees assure recognition will spur more achievement

Umahi, Ishaku, Okowa, others win BusinessDay States Good Governance Awards overnor David Umahi of Ebonyi State on Wednesday emerged Governor of the Year at the 2019 BusinessDay States Competitiveness and Good Gover-

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L-R: Isyaku Tilde, executive commissioner, operations, Securities and Exchange Commission (SEC); Olufemi Lijadu, board chairman; Mary Uduk, director-general; Oscar Onyema, CEO, Nigeria Stock Exchange, and Lamido Yuguda, nonexecutive commissioner of SEC, at a breakfast meeting between the board members and stakeholders in Lagos, yesterday.

James Kwen, Harrison Edeh, Solomon Ayado & Godsgift Onyedinefu, Abuja

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nance Awards. Umahi, who is chairman of the South-East Governors’ Forum, was named winner of this year’s BusinessDay annual governorship award at an elaborate ceremony in Abuja which had in attendance Yakubu Gowon, former head of state, who was the special guest of honour, His

Royal Highness, Yahya Abubakar, Etsu Nupe and chairman, Niger State Traditional Council, who was the royal father of the day, as well as Femi Adesina, special adviser to the president on media and publicity. Governor Ifeanyi Okowa of Delta State won BusinessDay Governor of the Year (South),

Governor Muhammad Badaru Abubakar of Jigawa State won both the Governor of the Year (North) and Most Improved State in Transparency in Governance, while Governor Kayode Fayemi of Ekiti State won award for the Most Improved State in Social

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ederal Executive Council (FEC) on Wednesday approved the issuance of a Sovereign Guarantee of €500 million (N200bn) from the Credit Suisse AG London Branch. The Council approved a syndicate of international lenders as collateral for the facility to the Bank of Industry. The loan is basically to finance major industrialisation projects and micro-small and medium enterprises value chains in Nigeria for up to five years’ tenure at affordable rates, Clement Agba, minister of state for finance, budget and national planning, said while briefing State House correspondents after the weekly FEC meeting presided over by President Muhammadu Buhari

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Inside

Senate committee accuses FAAN, FIRS, NDDC, FERMA, 21 others of P. 2 funds mismanagement Chinese investors, Visa gift 75% of African tech funding to Nigeria-based startups P. 2

Thursday 21 November 2019

BUSINESS DAY

news Chinese investors, Visa gift 75% of African tech funding to Nigeria-based startups FRANK ELEANYA

I L-R: B.H Sung, chief representative, Bank of Korea; J.H. Lee, chief representative, financial supervisory service, Korea; C.B. Park, GM, KEB Hana Bank, London Branch; K. Ryder, UK head, Nedbank; S. Zubairu, president/CEO, Africa Finance Corporation; W.J. Jung, head, group, global investment banking, Shinhan Financial Group; D.J. Lee, director, investment banking, Nonghyup Bank; H.S Kim, minister of counsellor (economy and finance), Korea Embassy in London, and S.H Seo, GM, Shinhan Bank, London Branch.

Senate committee accuses FAAN, FIRS, NDDC, FERMA, 21 others of funds mismanagement ...issues 7-day ultimatum for the agencies to appear SOLOMON AYADO, Abuja

he Senate Committee on Public Accounts on Wednesday accused 25 government agencies of alleged mismanagement of public funds and refusing to proffer information on the agencies’ expenditures. Chairman of the committee, Mathew Urhoghide, while briefing newsmen in Abuja explained that the summoning of the agencies became imperative to ensure accountability and transparency in the management of public funds, as well as guarantee economy, efficiency and effectiveness in the use of public resources. The named agencies are Of-

fice of the Accountant-General of the Federation, Federal Inland Revenue Service (FIRS), Federal Capital Territory Administration, Assets Management Corporation of Nigeria, Niger Delta Development Commission, National Agency for Science and Engineering Infrastructure, Nigerian Investment Promotion Council, Federal Airports Authority of Nigeria and the Nigeria Football Federation. Others are Federal Roads Maintenance Agency, National Space Research & Development Agency, Nigerian Building and Road Research Institute, Nigeria Maritime Administration and Safety Agency, Petroleum Equalisation Fund (Management)

Board, Ministry of Niger Delta Affairs, Presidential Amnesty Programme, and Nigerian Petroleum Development Company. Also accused and summoned by the committee are Small and Medium Enterprises Development Agency of Nigeria, Federal Road Safety Corps, Nigerian Airspace Management Agency, Nigeria Insurance Trust Fund (NSITF), Industrial Training Fund, Nigerian Railway Corporation, National Primary Healthcare Development Agency and the Central Bank of Nigeria (CBN). Urhogide said the errant agencies were given notice to appear and make submissions on their expenditures and other issues hinged on corrup-

tion but that they defaulted. The committee did not, however, disclose how much the agencies allegedly mismanaged and/or what projects the funds were used to execute. Explaining the rationale behind the summons, Urhoghide said the committee is charged with the responsibility of evaluating activities of all government agencies that enjoy funding from the Federal Government. “Because we have the responsibility to check corruption and mismanagement of funds, we wrote and made calls to these agencies to furnish us with information on their expenditures and fund management and other issues

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UK forges stronger investment future with Nigeria …as ‘Nigeria investment showcase’ attracts major investors in London HOPE MOSES-ASHIKE

he UK’s Department for International Trade, in collaboration with the City of London, recently hosted over 100 Nigerian businesses and potential UK investors at an investment showcase in London, highlighting opportunities in some of the many viable projects in the West African nation across the agriculture, energy, healthcare, infrastructure and ICT sectors. The showcase, which comes ahead of the UK-Africa Investment Summit on 20th January 2020 in London, supports the UK’s clear vision of working together with African countries and forging new investments that will create jobs and boost mutual prosperity through strong and enduring

partnerships. Held at the historic Guildhall, the event outlined progressive investment prospects in the Nigerian market today to UK investors, and brought together leading figures in the public and private sectors, investment funds and financial institutions as the UK pursues its ambition of being the largest G7 investor in Africa by 2022. Charles Bowman, former Lord Mayor of the City of London, in his opening remarks noted that the UK is already a significant direct investor in Nigeria and a strong relationship already exists with the country and the City of London. “Nigeria is the second largest destination of UK investment in Africa, with £5.1bn of investment stock, and one-fifth of FTSE 100 www.businessday.ng

companies having some form of presence in Nigeria,” Bowman said. “In addition, total trade in goods and services between the UK and Nigeria in 2018/19 was £5.1bn, an increase of 19.3 percent from the previous year, which illustrates the size and strength of trade and investment relationship between our two countries.” Adeniyi Adebayo, Nigeria’s minister of industry, trade and investment, said as part of his keynote address that in order to realise its national economic objectives, “the Nigerian government has begun implementing new initiatives to aggressively improve the ease of doing business and is supporting investors through wholesale reforms, tailored investor incentives, bilateral investment agreement and a pipeline of

continuous opportunities”. Harriet Thompson, UK deputy high commissioner to Nigeria, facilitated as Seso Global, Farmcrowdy, Nordica Fertility Centre, jetWest Airways, Channeldrill Resources Ltd, Century Energy Services and other Nigerian businesses presented their projects to investors from Credit Suisse, Infraco Africa, Standard Chartered, Black Rock, CDC, JP Morgan, Helios Investments, Wood Group, among others. Other speakers included John Mahon, DIT’s directorgeneral for exports, Yewande Sadiku, executive secretary/ CEO, Nigeria Investment Promotion Commission, and Uche Orji, MD/CEO, Nigeria Sovereign Investment Authority.

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nvestment activities of investors from China as well as Visa are mostly responsible for 75 percent of total funding attracted by technology firms in Nigeria in 2019, according to data from Maxime Bayen of GreenTec Capital. The data which tracks investment of $1 million and more in startups operating within Africa showed that 77 firms received a cumulative $1.1 billion from 83 deals involving 168 different investors. Fintech startups based in Nigeria received $439 million of the total funding. OPay, Interswitch and PalmPay were the most outstanding firms accounting for 93 percent of the funding and close to 50 percent of the entire funding that went to all African startups across sectors in 2019. OPay, a startup founded by Opera, made a bold statement in July 2019 when it said it has received funding by a group of Chinese investors, including Sequoia China, IDG Capital, and Source Code Capital. Apart from being the largest seed funding of any startup operating from Nigeria, it was also the first time Chinese investors were taking a significant equity in a startup based in the country. Interswitch, a payment

processing company with Nigerian founders, confirmed this month that it has reached unicorn (a privately held startup company valued at over $1 billion) status after Visa acquired a minority equity stake (21 percent) in the firm. Visa was also to partner with PalmPay, a Chinese brand owned by Transsion Holdings, which also announced the funding of $40 billion this month. The investment had participation from Chinese organisations such as Transsion’s Tecno, NetEase, and MediaTek. Barely two days after PalmPay’s announcement, OPay came back with a massive $170 million Series B round from both existing and new investors such as Meituan-Dianping, GaoRong, Source Code Capital, Softbank Asia, BAI, Redpoint, IDG Capital, Sequoia China and GSR Ventures. Although there is barely one month to the end of 2019, some experts have said more announcements may still be heard before December 31, 2019. For one, Alibaba founder Jack Ma appears to be stepping up his interest in the African market with the commencement of his African Netpreneur Prize. Nigerian health tech firm, LifeBank, was one of the winners of the maiden edition.

•Continues online at www.businessday.ng

P&ID $9.6bn judgment: FG opens case against Briton Felix Omohomhion, Abuja

ustice Okon Abang of a Federal High Court in Abuja on Wednesday ordered the Economic and Financial Crimes Commission to open its case against a Briton, James Nolan, who is being accused of tax evasion and money laundering offences. Nolan, a signatory to the account of the Process & Industrial Development (P&ID) Nigeria, is standing trial on 15-count charge. The court ruled on Wednesday that the defendant who is yet to meet the conditions of bail granted him last month has been given enough time to prepare for his defence. Nolan was arraigned on Oct. 21 and admitted to bail on Nov. 7. He is standing trial in the controversial gas supply contract (P&ID) that led to $9.6bn judgment liability against Nigeria. The prosecution said that the defendant was a signatory to accounts of Process and Industrial Developments Limited (P&ID Nigeria), the in-country support manager of P&ID Virgin Island. @Businessdayng

The prosecution alleged that the defendant engaged in money laundering and tax evasion, forgery of immigration documents, running of a trafficking syndicate and was involved in corrupting Nigerian officials. Among his bail conditions was to deposit in the sum of N500m bail bond and a surety in like sum. The judge ordered the Briton who was charged alongside his compatriot, Adam Quinn (at large), to produce a serving senator to stand surety for him in the same bail sum. In addition, the court said the senator must be someone that does not have a criminal case pending in any court in the country and must have a landed property that is fully developed in the Maitama District of Abuja. Justice Abang stressed that an officer of the court will verify the statutory Certificate of Occupancy of the property as issued by the Federal Capital Territory Administration. Besides, he held that the proposed surety must submit three years’ tax clearance certificate and sign

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Nigeria’s Child Rights Act implementation less than 20% ANTHONIA OBOKOH

fter 16 years of Nigeria’s adoption of the Child Rights Act (CRA), the country has achieved less than 20 percent of its implementation, while the prevalence of violence against women and girls is still on the rise, James Ibor, a human rights activist, says. According to Ibor, statistics show that one in four girls and 10 per cent of boys reported to have suffered sexual violence in Nigeria. Of the children who reported violence, less than five out of 100 receive support. Despite these alarming statistics, Ibor said it was sad that the implementation of laws to protect women and girls is poo. He spoke while addressing the media at a two-day workshop held in Ibadan on Monday. The workshop was organised bytheEU-UNSpotlightInitiativeis a global partnership between the United Nations(UN) and the EuropeanUnion(EU)toeliminateall forms of violence against women and girls and all harmful practices in support of the 2030 Agenda on Sustainable Development. These collaboration seeks to focus on legislation policy framework, building institutions , prevention efforts and particularly addressing root causes of gender-basedviolenceandharm-

ful practices; and also ensuring access to inclusive , timely, and affordable, quality service. Meanwhile based on consultation on prevalence of violence, as well as data management, the programme focuses on five states across Nigeria: Lagos, Adamawa, Sokoto, Cross-River and Ebonyi, plus the FCT, says the agency. Violence against women and girls is against the law and survivors do not usually receive full legal support, as they may prefer to stay in abusive relationships than leave to face the ridicule of living outside relationships and/ or wedlock. Women and girls subjected to violence are unwilling to lodge formal complaints due to a lack of trust in the police force and stigmatisation in the society “Nigeria has positive legislationsthatsupporttheprotectionof womenandchildren.Forinstance, we have the Violence Against Person Prohibition Act (VAPP) Act, buttheimplementationislessthan five per cent because we still have cases of violence being reported but little or nothing is done about them,” said Ibor. Nigeria ratified the Convention for the Elimination of Discrimination Against Women (CEDAW) in 1985 but international treaties can only go into effect when parliament has put

in place a corresponding domesticated law thereby limiting the international treaties to disuse. Also speaking, a Child Protection Specialist, at UNICEF, Olasunbo Odebode, said there was a need to sensitise the public on the need to end violence against women and girls. “The discrimination and stigmatisation of survival must stop,” said, adding that people must realise that they should not keep quiet because keeping quiet will make the perpetrators to continue,” she said. Odebode said that the government needs to create an enabling environment so that the laws already in place are implemented and acted upon. Speaking on what international donors were doing to tackle the issue of violence against women and girls in Nigeria, Odebode said that the EU-UN doled out $40 million to support the initiative for four years in Nigeria. To achieve this goal, the child protection Specialist said six comprehensive approaches were developed and they are legislation and policy framework, institution capacity building, prevention and social norms, delivery of quality services by health professionals, data availability and capacities, and supporting the woman movement.

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Gridlock: Lagos orders review of traffic management strategy … as motorists groan JOSHUA BASSEY

agos State government has directed relevant agencies to review traffic management and regulation strategies toward finding lasting solution to perennial gridlocks in Nigeria’s former capital city. Commissioner for information and strategy, Gbenga Omotoso, who said this in a statement on Wednesday, noted that the government was also introducing technology traffic enforcement to address the menace. Journeys within Lagos m e t ro p o l i s t hat s h o u l d ordinary take between 30 minutes and one hour now take between four and five hours in some cases, leaving motorists and commuters drained. It is majorly cause by bad roads, poor driving and sheer number of trucks, cars, tricycles and motorcycles on the roads. The state government has been unable to effectively enforce its traffic laws, especially as relates to the operation of tricycles and motorcycles. Omotoso in the statement said government was aware of the discomfort commuters and motorists had been experiencing since the beginning of the massive road repairs under ‘Operation 116’ across the state. The commissioner, who said there was no deliberate action to cause Lagosians any pain, added that the present situation was temporary. According to Omotoso, the contractors are speeding up their jobs and they are being encouraged to work at night, where possible. He advised motorists to use alternative routes so as to ease the time and stress of staying in traffic. “The administration sympathises with residents on the inconvenience being suffered daily. In fulfilment of its commitment to making the roads motorable immediately the rains subside, resources and equipment have been deployed to fix degenerated roads. The discomfort will be short-lived. “The daily influx of people from other parts of the country into Lagos has contributed to the big human and vehicular pressure on the roads “Government will surely surmount the challenges with technology and enforcement of traffic rules.” He said the government appreciated the perseverance of Lagosians and pledges its commitment to pooling all its resources together to achieve a permanent solution to the problem posed by the rehabilitation of bad roads. “The administration will ensure that majority of the roads become smooth and motorable before the Yuletide,” he said.

Nigerian universities still fail to meet industry demands - Shell STEPHEN ONYEKWELU, with agency report

igerian universities have been consistently criticised for failing to develop curricula that not only deals with problems of the past but in tune with modern technological changes; this view was re-echoed by SPDC on Wednesday. The Shell Petroleum Development Company of Nigeria Limited (SPDC) said undergraduates in Nigerian universities need to be able to master today’s challenges and be at home with emerging technologies to enable

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in-country innovation. Osagie Okunbor, SPDC ma nag i ng d i re c t o r a n d country chairman of Shell Companies in Nigeria, made this call at the ongoing 37th Annual International Conference and Exhibition of the National Association of Petroleum Explorationist (NAPE) in Lagos, themed, “Expanding Nigeria’s Petroleum Landscape: Digitalisation, Innovation and Emerging New Technologies.” Okunbor said Shell was collaborating with the academia in Nigeria in two successful centres of excellence, promoting the emer-

gence of industr y-ready graduates at the university level. He listed the Centre of Excellence in Geosciences and Petroleum Engineering at the University of Benin and Rivers State University Centre of Excellence in Marine and Offshore Engineering as Shell’s involvement in academia. Okunbor said every year since 1980, 10 Nigerian professors and 25 research interns undergo a one-year research programme at SPDC. The scholars share their findings with SPDC in fields such as biodiversity, petroleum engineering, geophys-

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ics, impact assessment, and community health and oil and gas exploration. This way, they contribute to providing critical industry input into higher education in Nigeria. Okunbor called for the right investment climate to enable the expansion of Nigeria’s petroleum landscape and increase Nigeria’s oil production from the current average of 2.3 million barrels per day to 3 million b/d. He added that this would boost the country’s proven oil reserves to about 40 billion barrels through further exploration and appraisal.

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“The right investment climate would also include strengthening our regulatory bodies, giving priorities to research and further enabling the industry’s financials. “I believe that where the investment climate is right, digitalisation and deployment of emerging technologies will enable incremental value creation over the coming years,” he said. Okunbor noted that in Shell, digitalisation was not just about technology but also about people and ensuring more agile ways of working.

Thursday 21 November 2019

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70% of women, girls victim of forced labour - UN

Edo begins ‘Pitch, win, shoot competition’ to harness potentials in film industry

IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

do State government has commenced a twominute short film contest, tagged, ‘Pitch, Win, Shoot Competition,’ to harness the huge potentials in its booming creative industry and open up the state to opportunities and investment. The project, which is billed to reward winners with as much as N7.5 million, is organised by the Edo Creative Hub in collaboration with Edojobs and Market Development in the Niger Delta (MADE). Head, Edojobs, Ukinebo Dare, says the competition is aimed at promoting Edo films to a larger audience and putting the state’s entertainment industry on the world map. She says the two-minute film pitch contest is open to movie entrepreneurs, aspiring film professionals, producers and directors in Edo State to showcase their creative and innovative prowess. “The pitch, win and shoot competition requires interested filmmakers to submit a two-minute short film online. It is designed for all

he United Nations Women Tuesday said 70 percent of women and girls were trafficked worldwide. The UN Women Country Representative to Nigeria and Economic Community of West African States (ECOWAS), Comfort Lamptey, made the disclosure at the launch of UN Women and Government of Italy project on preventing forced migration and trafficking of women and girls in Nigeria. Lamptey, who noted that apart from irregular migration Nigeria also experience increase in human trafficking, said women and children constitute majority of those trafficked to Europe, as well as being irregular migrants to other African destinations and the Middle East. “The starting point for our work is an acknowledgement of the disproportionate impact of trafficking on women and girls, who make up over 70 percent of persons trafficked globally. “Nigeria is simultaneously a country of origin, transit and destination for all streams of migration and trafficking. Women and children constitute the majority of those trafficked, with many poor women migrant workers being trafficked to Europe, especially Italy. “Others have irregularly entered or have been trafficked into the Middle East, including Saudi Arabia, under the guise of holy pilgrimage to Mecca. Important source sites

of forced documented and undocumented migration and trafficking include Edo and Delta states and some Northern states including Kwara and Kano states,” she said. She noted that the initiative would build on the efforts of the Nigerian government to address forced migration and trafficking and support interventions in gender gaps, harnessing the potential of women’s organisation and networks to raise awareness at the community level. She, however, lamented that there had been limited investments in auditing the protection and other front-line services that were delivered to survivors of forced migration and trafficking from a gender perspective. She identified structural inequalities, vulnerabilities and lack of sustainable livelihoods as the major causes of trafficking. In his remarks, Edo State governor, Godwin Obaseki, represented by Yinka Omorogbe, commissioner of Justice and Attorney-General, noted that his administration had made innumerable contributions to curbing the menace. Earlier, the Deputy Ambassador of Italy to Nigeria, Tarek Chazli, who said Edo State had always proven to be a trusted partner in ending trafficking, promised that the Italian government was willing to partner serious organisation like UN Women.

… as governor flags off MCV2 immunisation

creatives in Edo State to participate and win N7.5 million in grant, gain exposure, and opportunity to connect with potential investors.” So far, over 50 entries have been received, while 30 entrants who met the criteria have been shortlisted for the first phase of the competition, which involves a twoday training and seminar program on film production, budgeting and directing. The training, aimed at retraining movie professionals and aspiring movie professionals to embark on film projects on an entrepreneurial level, was facilitated by the renowned movie producers. The participants were also orientated on what exactly their works must entail in order for them to compete and win the competition. The last stage of the event will involve a premiere of the 2 minutes film by the participant accompanied by a short pitch. Five outstanding pitch winners will be selected based on the following criteria: Demand-driven movies (Edocen-

tric epic movies); low budget movies (not exceeding N2 million); evidence of availability of matching fund (N1,250,000); and 50 to 60 percent cast and crew must be returnees and people vulnerable to human trafficking and irregular migration. Meanwhile, the state governor, Godwin Obaseki, has flagged-off the Measles Second Dose Vaccine (MCV2) routine immunisation in the state, stressing on the need to prioritise the reduction of maternal and infant mortality in the state. Speaking during the flagoff ceremony, Governor Obaseki, who was represented by the deputy governor, Philip Shaibu, thanked the Federal Government for its commitment to the prioritisation of Primary Health Care, infrastructure and social development. According to him, “It is our duty to achieve and sustain the reduction in morbidity and mortality of vaccine-preventable diseases.” He urged residents in the state to become advocates and

join in the fight to ensure that children in Edo are protected from all vaccine-preventable diseases through vaccination and having a complete immunisation schedule. The governor also commended the Edo State Primary Health Care Development Agency for ensuring adequate preparation and implementation of the immunisation exercise. In his remark, the Commissioner for Health, Patrick Okundia said, “Measles is a highly infectious disease caused by the measles virus. It is commonly characterised by fever and a rash accompanied by one or more of the following: cough, runny nose and conjunctivitis. Complications may lead to ear infection, diarrhoea and pneumonia. In children, permanent disabilities like blindness may occur.” He further reiterated that measles was transmitted from person to person through the respiratory droplets or direct contact with nasal and throat secretions, noting that vaccination is the only key preventive measure against measles.

Senators support anti-social media law as bill scales second reading Solomon Ayado, Abuja

bill seeking to regulate the use of social media on Wednesday passed second reading in Senate. Senators unanimously supported the bill when it was presented during plenary. They said it will curb falsehood and misinformation. Tagged “a bill to make provisions for the protection from internet falsehood and manipulations and for related matters, 2019”, the controversial bill is sponsored by Musa Sani (Niger East). The bill proposes stiffer penalties for defaulters such as maximum of N10 million fine and a minimum of three years jail term for persons who peddle false information on the social media. Leading the debate, Musa explained that the bill was not aimed to stifle free speech or dissenting views. “It is rather an opportunity to address a growing threat which, if left unchecked, can cause serious damage in our polity and disrupt peaceful coexistence,” he said. Insisting that some persons use social media to spread falsehood, Musa said the need to enact a law to curb the ugly trend is imperative so that proper information dissemination would be enhanced. He further alleged that state and non-state actors engaged in geo-political interests and

identity politics, use internet falsehood to discredit governments, misinform people and turn one group against another. “The hoax about the death of President Muhammadu Buhari in London and his replacement with Jibril from Sudan was a great threat to the peace and security of this country. “Individuals and groups influenced by ideologies and deep-seated prejudices in different countries use internet falsehoods to surreptitiously promote their causes,” Musa said. Citing countries like Singapore that have taken measures to curb the proliferation of fake news, the lawmaker noted the phenomenon of internet falsehood and manipulation is a serious global challenge. Supporting the bill, Senators Abba Moro (PDP, Benue South) and Elisha Abbo (PDP, Adamawa North) said the bill came aptly because it will prevent fake news from causing disunity and fostering collapse of the country. However, Chimaroke Nnamani (Enugu East), was the only lawmaker who opposed the bill. Nnamani said “Section 39(1) of the 1999 Constitution provides that “Every person shall be entitled to freedom of expression, including freedom to hold opinions and to receive and impart information without interference.” He was however over-ruled. www.businessday.ng

L-R: Bala Augie of BusinessDay; Patrick Atuanya, editor; Ginikanwa Frank-Durugbor, business engagement communication manager, Lafarge; Lolade Akinmurele of BusinessDay; Oludare Ogunyombo, associate director, Brooks and Blake, and Odinaka Anudu of BusinessDay, during their visit to BusinessDay head office in Lagos.

With $300m investment, e-Customs platform to boost effective border policing AMAKA ANAGOR-EWUZIE

s part of its technological advancement geared towards adopting international best practices in its operations, the Nigeria Customs Service (NCS) has perfected plans to launch a newly designed electronic platform called e-Customs. The e-Customs, which is an end-to-end electronic flow of Customs processes, will serve as a paradigm shift from paper or manual work processes to automated eflows for bettering the live of the citizen and to securing the lives and properties of the nation. While disclosing this recently, Hameed Ali, comptroller general of Customs, said the deployment of technology would go a long way

in enhancing the activities of the service and also help in changing the NCS operations. According to an online video by the Nigeria Customs Broadcasting Network (NCBN), a copy of which was shared with newsmen by Joseph Attah, national public relations officer of the Customs, the benefit of the e-Customs include helping to boost revenue collection, and improve the security of the borders by controlling the security of import and export goods. It is also expected that the platform will help in reducing evasion of duties and smuggling, and also enable Nigeria Customs to produce accurate economic statistics, the NCBN stated. “E-Customs platform will also bring all players

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involved in international trade including traders, agencies and inspectors together under one platform. And its non-intrusive component will boost the cap a c i t y o f Cu st o m s t o better police the porous borders and ensure better monitoring of what comes in or goes out,” NCBN further said. At the full launch of the e-Customs, the platform will be accessible on web and mobile apps through the Customs website. Recall that President Muhammadu Buhari recently approved the engagement of a consortium of four firms to enter into a 20-year concession arrangement with the NCS and the Infrastructure Concession Regulatory Commission (ICRC) for Customs modernisation project and establishment of digital @Businessdayng

as well as paperless Customs administration. The consortium of four firms include Bionica Technologies West Africa Limited as lead sponsor, Bergman Security Consultant & Supplies Limited as co-sponsor, Africa Finance Corporation (AFC), lead sponsor, and Huawei, lead technical service provider, and are they expected to establish a project special purpose vehicle (SPV) to implement the project. According to the Presidential directive, the Comprehensive Import Supervision Scheme (CISS) and Nigeria Export Supervision Scheme (NESS) revenue sharing arrangement between the SPV and government must commence with immediate effect on a prorata basis against the phase one of the $300 million investment programme.

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Sharing Abacha’s loot: There is God ooo! &… when the rich goes to school

ik MUO

have always been in love with Guinness Book of Records right from my days at UI because of its uncanny ability to discover and publish all sorts of recordbreaking attainments, including weird ones. I stopped reading it sometimes ago because it was becoming very expensive for my lean purse (and that was what I easily afforded as a student!) and because my time has been overcrowded by several other matters. But I believed that it still retained its iconic positioning. However, I have started having my doubts when I checked it of late and did not see any mention of the various earth-shaking attainments of Sani Abacha. Late Abacha is the only one, dead or alive who emerged as the presidential candidate of 5 political parties for the same election; the first person whose death was celebrated by his own people; the first certified “lootist” who was exonerated by the anti-corruption president of his own country and the only exonerated ‘lootist’ whose loot is being shared by the same government which had declared him corruption free. One man from my village said that he knew what to say quite alright but that whenever he wanted to say something, something else would “enter his mouth”. In effect, I digressed! Four weeks ago, it was reported that the federal government, under its famed Social Investment Programme, had shared $103.6 Abacha loot and IDA funds to 621000 poor and vulnerable Nigerians from 29 states. This is to alleviate their plight and probably include the recipients among the 100m, whom President Buhari planned to lift out of poverty. The beneficiaries were taken from the National Social Register prepared by the National Safety-net Coordinating Office. At least, we have a record of some Nigerians we are so sure of

(unlike our population which is a guestimate)! Uwais who made the disclosure said the N5000 monthly alawee was ‘positively changing the fortunes’ of the beneficiaries. The first strange aspect of this story is that the loot-sharing was decided by our external traducers. They criminally allowed our criminals to hide proceeds of criminal entrepreneurship in their vaults. This makes them accessories after the fact or vicariously liable! (I no be loya). Years later, they decided to return such loots but rather than do so with apologies and interest, they tell us how to run our affairs! Of course, this is a self-inflicted national embarrassment. Many years ago, one of our awardwining journalists, Frank Olize, went to town in search of the common man. I think it was a time when politicians did everything for the common man (including rigging, arson and murder!). His search proved abortive, not necessarily because there were no common men, but because he could not discover them. So, I decided to fill the gap by undertaking a similar search about 30 years after his failed effort. I used a different method to search for the poor, a different species of marginalised Nigerians. Frank moved around the country and did face to face interviews aired on NTA (when NTA was in its glory). My own was an online search, through 6 WhatsApp platforms with 969 members from across the country. The question was direct: have you seen any recipient of the “Abacha loot” and to which they were to respond yes or no. Unfortunately, all the responses were a resounding NO, with some of them emphasising it as NOOOO! I also asked my colleagues in the Idu (King’s) Cabinet of Igbo-Ukwu and the answer was also no! So, my study validated the earlier research by the ebullient Frank that even though many Nigerians are poor, it is very difficult to find the poor man, especially those who received the Abacha loot. Even though I have my doubts about the integrity of the process, I believe that Mrs Uwais & the SIP office, under the now diminished VP, would have shared some money and that they would have SURELY shared it to human beings (though everything is possible in this era of ghost-workers!). However, I wanted to

see just one of the beneficiaries to ask a very simple and practical question: how N5000 monthly alawee positively impacted on his or her life. But since I didn’t discover any of them, I am asking no one in particular: how could N5000 monthly move somebody from under the bridge to any type of accommodation; (even if thatched roof); buy food for one month( even if it is garri& groundnut or beans and agege bread), provide water (even if it is sachet water),and Medicare( even if it is the one ‘mixed’ by the know-all semi-illiterate village patent medicine dealer) for a month. In effect, I wonder how N5000 monthly can positively affect somebody’s life in an environment where the stock of social and physical infrastructure is abysmally deficient. In any case, by the 2018 World bank definition, those who live on less than $1.9 daily (N20,000 monthly) are classified as living in extreme poverty. If N20,000 indicates extreme poverty, then what kind of term would describe someone living on N5000? Extreme Poverty +++? As I continue my search for just one of the beneficiaries, I look forward to an empirical research on the effectiveness of sharing Abacha loot as a poverty alleviating strategy, how to improve its transparency and inclusiveness and how to manage the challenges of implementational and political feasibilities; the key issues faced in Latin America where this sharing model started. But the fact remains that I did not receive the Abacha loot; none of my friends and relatives received it and all my acquaintances have not seen anybody who received this amoebic loot. To those who conceived the sharing, those in the kitchen cabinet who cooked the sharing model, those who did the actual sharing and even the lucky ones who received the loot., I just want to remind them that “There is God ooo”! Other matters: When the rich goes to school About 100 years ago, my late father, Ezeamaluchi WO Muo went to school. Nobody heard about it, apart from his parents who were flabbergasted that he had to miniaturise his surname from Muoemenam to Muo, so as to make the pronunciation easier for the white missionary. About 55 years

‘

The first strange aspect of this story is that the loot-sharing was decided by our external traducers. They criminally allowed our criminals to hide proceeds of criminal entrepreneurship in their vaults. This makes them accessories after the fact or vicariously liable

Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

As fruit market goes down

t this time that the need for healthy living has come to the front burner of many people in Lagos, a serious blow has come on people as the Fruit Market located at Ikosi Ketu has been brought down. Many people are in awe seeing the ruins of the Fruit Market, we have been hit below the belt age again but as typical of Nigerians, we will shortly get over it. However, it is many steps behind in the quest for healthy living. The Fruit Market is the hub of fresh fruit purchase in Lagos. Many fruit sellers across the state come to the market to make purchases on daily basis. The market is quite easy to locate and trucks bringing in fruits to Lagos can easily offload and return to the hinterland. It will interest you to know that the prices in the fruit market is almost the same bought in the hinterland. This has even made people coming from other states to buy these perisha-

bles with ease at this market. I am not sure this was put into consideration while carrying out the demolition. Equally, what was the location plan for the market women? Where would the hundreds of sellers meet their buyers? It is unbelievable that every evening, touts are seen extorting money from hawkers and those engaged in street trading. Definitely, the street cannot occupy these women and they are turned into desolates. This market made me know that there are people who are passionate about doing business. I met a fairly old Ijesa woman who sells banana in the market, you would never had thought she could express herself in English until a day when she said, “I attended Adeyemi College of Education. I was once a school teacher.” She had built a house from the proceeds made from this market. How many persons have been sent to an early grave

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of irrelevance? When various markets of this nature are brought down for reconstruction, it has been observed that these markets are overpriced and it will no more be affordable to the people at the lower rung of the society. It gets so pricey that the structures will be left empty, a good example is Tejuosho modern market which has joined the growing list of unoccupied buildings in Lagos. The rising tide of insecurity just got a boost with this step because children who depend on this market for livelihood might take to crime. Unfortunately, there were many jobless young people who depended on the market. They have just been further dispersed into the society. There are various pros and cons to the demolition of an existing facility as such, Lagos aims to achieve a megacity status but everyone in the city needs to be carried along, if not, the

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ago when I registered for Elementary one at St Anthony’s Primary School, Osumenyi, not much was heard about it. In 1992, When my first child registered at school in Kaduna, it was also not newsworthy. But when ElRufai’s son, Abubakar, who at this age looked as combustible as his father, got registered into an elite public primary school, (the Capital School) it became a front-page news! It became a hat-trick achievement for a governor to send his child to a school, which he is overseeing, and which the children of those he is governing beg to attend. I even learnt that the school had just been recently refurbished by the KDSG! But the news-value of the rich going to school did not end with Abubakar. When the governor of Cross Rivers State, Ayade, became a student of law Calabar (probably he is preparing for post-gubernatorial profession), it also made headlines. This is not because of the course he went to read or the university itself, but because he went with a 20-jeep convoy and probably with the usual security details! In this process of going to school, intimidated his fellow students and lecturers, distracted the entire school, caused unprecedented noise pollution in the environment and went about his private business under the cloak of officialdom. Anyway, I wish to remind him of what happened to another GovernorStudent, Orji Uzor Kanu, whose degree was voided by Abia State University for 1001 genuine and/or fake reasons and with the obvious connivance of the Abia State Government under his estranged godson (Ik Muo: Kalu’s certificate, Alamieseghas’s pardon and Nigerian Magic BusinessDay, 19/3/13). And suddenly, media space was flooded with pictures of Yakubu Dogara attending a course at Oxford. I thought that having impacted monumentally on education, he would have attended any of our Universities to reap the benefits of his legislative investments in that sector. Thus, while some quietly slip in and out of school, other move with a 20-jeep convoy, others do so at Oxford while others cause a front-page news. Indeed, all men are equal.

ABOLADE ADEWALE

damage would outweigh the glamour. For people who grew in the marketplace, they will understand the psychology of people from that habitation. The damage done to the fruit market goes beyond the intended beauty that is envisaged. Electorates cannot be suffering with every new administration. Let’s plan right per time because healthy living will nosedive, legitimate business would be affected, prices of fruits will rise and other humans will become prey of this action. The stakeholders need to assure us that when the ultramodern complex is built, it would still be affordable to house fruits from across the country. Adewale is a writer from Lagos. He can be reached on abolz2001@yahoo.com

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Thursday 21 November 2019

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What do we understand by institutions? CHRISTOPHER AKOR

hen President Obama, on his first trip to Africa, made the point that what Africa needed most were strong institutions and not strong men, many Nigerians quickly agreed with him. Since then, the need for strong institutions have become a singsong in Nigeria as columnists, analysts and academics expend valuable time and space showing why Nigeria cannot develop without strong institutions. I can remember only one individual – Professor Ibrahim Gambari – a former Head of the United Nations’ African Union Mission in Darfur, disagreed with Obama. For Gambari, to sustain democracy in Africa, not only strong institutions were needed, but also strong leaders. As he puts it: “Yes, strong institutions are very important and in case of democracy, strong democratic institutions are vital to the sustainability of democracy but also important are strong leaders. So, there must be a distinction between strong leaders and strong institutions but it is important to have a combination of both”. I will return to Gambari’s argument later. However, what leaves me baffled is that these same people who argue for strong institutions are the same people who also support actions that

destroy institutions. They are the first to support actions that promote strong man rule even while vehemently arguing for the establishment of strong institutions. This leaves me confused and unable to understand exactly what these fellows mean by institution. If I am to hazard a guess, and seeing the way most Nigerians use it in arguments, I will say that many Nigerians mean by institutions structures or agencies of government that works. In time, we even begin to call those agencies national institutions – and so when institutionalists argue for the building of strong and enduring institutions, many Nigerians naturally assume that to mean government agencies that are functional. Yes, institutions could mean organisations or agencies, but they are far more. They are principally “rules of the game”; procedures that structure social interaction by constraining and enabling actor’s behaviour. They are the planks on which successful and prosperous societies are built. In their brilliant and engaging study on Why Nations Fail, Daren Acemoglu and James Robinson provide answers to questions that have stumped experts for centuries: why are some nations rich and others poor, divided by wealth and poverty, health and sickness, food and famine? They considered lots of factors ranging from location/geography, weather, culture or even education and knowledge of best policies but discounted them all. For them – and many other academics – the distinguishing factor is the presence of strong and enduring economic and political institutions. These are the guarantors of success. Societies therefore that devoted time to building such institutions (read a capable state that, in the words

of Ricardo Hausmann, “can protect the country and its people, keep the peace, enforce rules and contracts, provide infrastructure and social services, regulate economic activity, credibly enter into inter-temporal obligations, and tax society to pay for it all”) are ultimately successful while those that depend on rule by philosopher kings, moralists and strongmen do are not and ultimately become poor and fail. Even without this engaging study, we know from “history that strong institutions are the best guarantee of progress and sustainable growth and development in any society. Institutions are impersonal and not subject to the whims, caprices, flimsy and erratic nature of human behaviour. Reforms based on personalities, personal rule or individuals fizzle out eventually. What is more, human nature is erratic and does not guarantee consistency. History has shown that it is not always possible to get excellent people to run institutions over time. Weak and sometimes, morally bankrupt individuals get into positions of authority. The key difference however is that in societies where institutions are strong and well entrenched, they withstand or survive such persons without considerable damage. However, where institutions are weak or non-existent, all previous progress is destroyed and the society or organisation had to start afresh after such weak or bankrupt individuals depart.” That is why I get worried when the administration systematically destroys institutions in the name of fighting corruption or national interest(s) and Nigerians who know better keep quiet or even try to justify the actions. It is also shocking to hear one of the leading lights of this administration who

‘ They forget that sooner than later, a “king that does not know Joseph” will ascend the throne and, in the absence of institutions, reverse whatever reforms they think they have enacted. Ultimately, they would only have succeeded in dragging the country back by decades

obviously knows better, Malam Nasir el’Rufai, in 2017, tell the Central Bank of Nigeria to either cut the interest rate or have it cut for it by fiat. Really? That is why I am prepared to cut Ibrahim Gambari some slack because he was open with his preference for strong man rule. But these pseudo intellectuals will argue for institutions with one side of the mouth and act in ways that clearly show their preference for strong man rule. They will argue for institutions – rules that constrains all actors – but they will openly encourage the President to circumvent the law; to detain indefinitely people they consider security threats even against the judgements of competent courts; to refuse bail to suspects even when they have been granted bail by competent courts; to arrest indiscriminately, violate people’s rights (while disingenuously arguing that those people first violated Nigerians’ rights), interfere with the independence of the Central Bank, temper with rules to achieve quick but fleeting results. But they forget that they are actually destroying the country; that any little progress they think they are making will fizzle out with time and the country will be worse for it. They forget that sooner than later, a “king that does not know Joseph” will ascend the throne and, in the absence of institutions, reverse whatever reforms they think they have enacted. Ultimately, they would only have succeeded in dragging the country back by decades. We must be resolute in reminding these pseudo intellectuals that institutions are the only means of building a virile, rich and successful society. This article was first published December 6, 2018

Crowdfunding, alternative sourcing methods and leveraging FinTech solutions in Nigeria (1)

usinesses require capital to fund their operations and entrepreneurs have, in recent times, looked to financial technology (FinTech) solutions to achieve some of these capital-seeking objectives. Globally, FinTech, the internet and social media have collectively made access to capital somewhat easier. One of the ways through which companies raise capital is through crowdfunding. Crowdfunding can be generally defined as the process of funding a project or venture by raising (small amounts of ) money from a large number of people using the internet. There are different types of crowdfunding including, equity and debt crowdfunding, donation crowdfunding and reward crowdfunding. Currently, there is no specific law regulating crowdfunding in Nigeria. Due to restrictions contained in the Companies and Allied Matters Act Chapter C20 Laws of the Federation of Nigerian, 2004 (CAMA) and the Investments and Securities Act No. 29 of 2007 (ISA), the scope of Nigerian companies which may participate in raising capital through the internet is limited. As such, crowdfunding activities in Nigeria may not be carried out in a manner similar to what obtains in other jurisdictions. CAMA regulates the incorporation, administration, and operation of registered companies (private or public), incorporated trustees and business names in Nigeria. By Section 22(3) of CAMA, a private company cannot have more than 50 shareholders. Also, private companies are restricted from inviting the public to (a) subscribe for any shares or debentures of the company; or (b) deposit money for fixed periods or payable at call, whether or not bearing interest (Section 22(5), CAMA). The ISA governs activities in the Nigerian capital market as it establishes the Securi-

ties and Exchange Commission (“SEC”) and regulates investments and securities business in Nigeria. Section 67(1) of the ISA provides that no person shall make an invitation to the public to acquire or dispose of any securities of a body corporate unless such body corporate is a public company, or a statutory body or bank established by or pursuant to an act of the National Assembly of Nigeria. “Securities” are defined in the ISA to include debentures, stocks or bonds issued or proposed to be issued by a body corporate. Further, an invitation shall be deemed to be an “invitation to the public” under the ISA if it is an offer or invitation to make an offer which is published, advertised or disseminated by newspaper, broadcasting, cinematograph or any other means whatsoever (Section 69(1), ISA). However, such an invitation shall not be treated as an “invitation to the public” if it can be regarded as not being calculated to result in the securities becoming available for purchase by persons other than those receiving the invitation. Furthermore, Section 75(1) provides that no person shall, without the prior approval of the SEC issue, circulate, publish, disseminate or distribute any notice, circular or advertisement to the public which offers for subscription or purchase of securities in a company. Thus, equity and debt crowdfunding through the issuance of securities (an “Offer”) can be carried out only by public companies in Nigeria. Also, where such an Offer is undertaken, the approval of the SEC is required. Ultimately, the ISA and CAMA do not permit equity and debt security crowdfunding offers made to the public by private companies. As such, several start-ups and small and medium enterprises set up as private companies cannot undertake crowdfunding activities within the

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existing legal framework. In the US, the Jumpstart Our Business Start-ups Act (“JOBS Act”), which was signed by Barack Obama and enacted in 2012, established a framework for start-ups and small businesses to raise capital through securities offerings via crowdfunding. Also, Title III of the JOBS Act provides an exemption for crowdfunding activities exempting domestic U.S. issuers from the registration requirements under the US Securities Act, 1933 (as amended). In the United Kingdom, equity crowdfunding legislation exists which permits investments by high net-worth/sophisticated investors. Good news on the horizon? The SEC on October 14, 2019 issued rules governing electronic offerings in Nigeria (the “Rules”). The timing of the publication of the rules gives an indication of the willingness of the regulator to further deepen the Nigerian capital market and provide additional flexibility to issuers. Fortuitously, in mid-October 2019, the acting Director-General of the SEC, Mark Uduk, highlighted that regulations to govern crowdfunding by small businesses are currently being considered by the SEC. She also expressed that investor confidence is central to the SEC’s mandate as the regulator of the Nigerian capital market and that such Nigerian crowdfunding platforms will be regulated by the SEC. It appears that the regulator’s vigour in this regard, has been revivified by the boost in market activity witnessed after the listings of major telecoms companies such as MTN and Airtel on the Nigerian Stock Exchange. The Rules seek to govern electronic offerings, defined therein as the use of the internet (or other electronic means including but not limited to, mobile or Unstructured Supplementary Service Date (USSD) platforms), to

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TONI NUMA display and/or provide access to prospectuses, offering memoranda or other disclosure and offer documents, forms, etc., during an offer. An electronic offering platform will also accommodate subscription and payments for such electronic offerings. As such, Nigerian public companies can now issue their securities to the public through the internet and other electronic platforms. The rules require that an Eligible Service Provider (ESP) registered with the SEC to operate as a securities exchange or capital trade point shall be responsible for coordinating and operating e-offerings as well as implementing security measures and systems for such e-offering platforms, amongst others. These ESPs are responsible for implementing platform disaster recovery procedures, ensuring online payment options are integrated into the platforms, and safely processing personal data received users on e-offering platforms. Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Toni is an Associate in the firm of Banwo & Ighodalo, a top tier law firm in Nigeria. He has other published works on capital markets, consumer protection, crowdfunding, financial technology and governance which are available online at www.academia.edu/ToniNuma

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Thursday 21 November 2019

Editorial Publisher/CEO

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

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GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

A further case for opening the western Nigerian border

“

elegates agreed on the establishment of a joint border patrol team comprising the police, customs, immigration, navy and state security services of the three countries”. That was the highlight of the meeting of foreign ministers and other bureaucrats from Nigeria, Benin and Niger Republic held on 14 November in Abuja. The goal remains to resolve the issues and ensure the reopening of Nigeria’s closed borders with her neighbours. The communique reported the resolve of delegates to ensure that people crossing the joint borders will henceforth present standard Economic Community of West African States (ECOWAS) travel documents. Further, Finance and Trade ministers of the countries will set up a committee to promote intra-regional trade. The first meeting of the

joint border patrol team comes up in Abuja on November 25-26. The expectation is that the meeting will pronounce on a date for the reopening of the borders based on mutual agreements on fundamentals. We welcome these positive steps towards the resolution of a significant diplomatic and economic challenge for Nigeria and her West African neighbours. In an earlier editorial, we canvassed the imperative of picking the lessons of this closure and moving forward to maintain continued trade relations with our neighbours. We reiterate our call on the government to assess the situation, learn the lessons, implement but, above all, open the borders. How long can we keep the boundaries shut? The Nigerian Customs Service claims increased collectables and revenue due to the closure. One lesson is to enhance security and tighten avenues for collections rather than a blanket closure. Other reports speak of even heightened smuggling at the closed

borders. The border closure has impacted all the countries to the west of Nigeria. Benin, Togo, Ghana, all the way to Senegal have felt the negative consequences of the closure of the Nigerian border at Seme. In turn, Nigerian businesses and individuals have also suffered from the shutdown. One of the critical issues arising from the closure is the imperative of enforcing rules of origin in the dealings between Nigeria and her neighbours. Nigeria has evidence that our neighbours became trans-shipment ports for goods heading to our country. They imposed and collected duties and taxes on those goods but passed them on to our country without the same courtesy. It is time to have legitimate and proper trading relations with our neighbours that includes playing by the rules. Rice has been central to the closure. The federal government claims the closure was necessary to stop dumping of foreign rice and give a chance to local producers.

Unfortunately, there is no significant change in the market. In the shops and markets, foreign rice still stands neck to neck with local varieties. It only created a gap in supply that has led to rising prices of the commodity ahead of the Yuletide. In the course of this closure, the Nigeria Customs Service claimed several improvements including higher collections and smoother operations. We are glad for them. On the other side, the Customs Service also played the extra-constitutional role of pronouncing on the sale of petrol. It prohibited its sale within 20 kilometres to the border. On what authority does the Nigeria Customs Service stand to make such proclamations? Finally, Nigeria, as the leader in the region must lead. We must ensure compliance with the spirit and letter of the ECOWAS treaty and the new African Free Continental Trade Agreement. It is the call of leadership to do the right thing at all times.

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Thursday 21 November 2019

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The ‘Omoluabi’ in Ekiti State The Public Sphere

CHIDO NWAKANMA

ohn Kayode Fayemi is a true Omoluabi. He earned that description and accolade for several actions highlighted poignantly on Saturday 16 November 2019. On that day, the governor of Ekiti State made a grand appearance at the wedding of the son of his immediate predecessor Segun Fayose in Lagos. His hosts received him with as much grandeur and bonhomie. Their handshakes and show mutual affection and regard for the occasion that brought them together became a significant talking point. It was a demonstration of honour and commitment to cherished values. Marriage is one of three critical junctures in life. The others are birth and death. Individuals are fully conscious of their wedding day. We are too unformed to know about our birth; we certainly are lost in the matter of death. The world over, people celebrate marriage as one of the pathways that enables man to fulfil the commandment of his Maker to increase and multiply. Marriage is thus a communal celebration. Nigerian cosmology states

that we suspend quarrels on significant events such as burials, births and weddings. Those who are so minded can return to the fight, but men of virtue grounded in the culture observe what seems to the uninitiated as a mere nicety. It is a principle-based decision to do the right thing. “An Omoluabi is a person of honour who believes in hard work, respects the rights of others, and gives to the community in deeds and action. Above all, an Omoluabi is a person of integrity. The Omoluabi concept is an adjectival Yoruba phrase, which has the words – ‘Omo + ti + Olu-iwa + bi’ as its components”, is how an author captures this in Wikipedia. The Yoruba concept of Omoluabi equates with Aristotle’s virtue ethics. Other groups in Nigeria have their notions of virtue, the good citizen and normative and consequential ethics. Kayode Fayemi’s presence confirmed his status as leader of all Ekiti people, friend and foe alike. A leader does things that serve the best interests of his people. Once elected to office, he serves all the persons in his constituency and not a percentage thereof. JKF is the James Hardley Chase boy who became Ekiti’s philosopher leader. He epitomises the notion of readers as leaders. He is also very Ekitian in the area of knowledge acquisition, retention and production. A man from the land where scholarship is a virtue, Fayemi has a PhD from the upscale University of London. He taught, deployed his training to investigating and clarifying issues and has produced knowledge captured in no fewer than ten books.

I recently had the privilege of sitting with this leader of the association of governors in our land. The setting was his private office in the elegant building he envisioned as residence for the chief executive of the state. Back on the seat after a four-year hiatus, JKF speaks exuberantly about his vision for the state and his passion for getting things done. However, experience has tempered this exuberance. He, therefore, pauses mid-stride sometimes to be sure nothing escapes from him that critics and opponents can misuse and deploy for noxious politicking. JKF was one of those who thought of empowering tomorrow’s leaders with ICT skills. The state gave a laptop to students. Experience has taught him not to go that route. Ekiti State is now building and equipping ICT labs in schools because they would serve generations of students rather than the patently selfish laptop concept. Courage laced with wisdom and diplomacy inform his engagement with the federal government on the repair of the Ado-Akure federal highway that reminded me so poignantly of federal roads in my South East. Ekiti State has secured the approval in principle to engage of the African Development Bank. It then ran into the wall of the presidential directive stopping states from fixing federal roads. It is a complicated matter. State governments misbehaved by making outrageous expenditure claims. They could not stand scrutiny. An enraged President Buhari then ordered the stoppage. The solution has become an albatross. Federal roads are awful nationwide. Governors bear the brunt of the criticism in most states as

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A leader does things that serve the best interests of his people. Once elected to office, he serves all the persons in his constituency and not a percentage thereof

hose who worry that automation is going to upend our lives are forgetting that we already live in a largely automated world. When was the last time you visited the teller at your bank to withdraw money? Does anyone send handwritten letters to their friends and family around the world anymore? And who lands in a new city and drives around looking for a suitable hotel that may have a room? Automation has touched, transformed, and disrupted each of these examples in ways unimaginable just a few decades ago. Elisha Graves Otis, founder of the elevator, brought automation to the public eye in 1857, with the first commercial production line of elevators that brought humans and machines next to each other in a coordinated process with well-defined roles of just moving up and down and stopping at certain points. This concepts therefore not new and has only grown in complexity and in pervasiveness, bringing us to a world where we have AI writing news articles and movie scripts, directing the performance of physical tasks in inhuman conditions and helping humans scale heights of achievement never thought possible. Of course, it is true that the daily impact of automation is probably going to touch our lives in more obvious ways in the days to come. A recent study conducted by Dell Technologies found that 83 percent of business leaders from Saudi Arabia and UAE expect that they will restructure the way they spend their time, through automation. Imagine the potential that a business unlocks by freeing up some percentage of executive time, to be invested towards planning, skill-building, or

relationships. It is natural to say that the time for action is now, but the truth is that we are all well on our way on this journey, and it is business processes and the customer experience that were the first in line to be transformed. Disruption is driving positive change across industries Take the case of the banking sector. From the ATM being the multi-purpose, multi-location face of the bank, we moved to Internet banking and now mobile applications. If you call your bank these days, chances are an AI system will guide you through most common transactions and requests for information, and only transfer you to human support for extraordinary and complex requests. We also see the same concept in the healthcare sector. Just a few years ago, telemedicine was all the rage, as growing bandwidth ensured that doctors in cities could interact with patients in rural areas via highdefinition video conferencing and provide the local healthcare teams with prescriptions and instructions for care. Today, with AI, a healthcare group can match the patient with the right doctor, and even automate some of the base diagnoses so that the doctor is only brought in on critical cases. Empowering the workforce of tomorrow Machines and AI are not here to take our jobs; they help us function and perform better. I am very enthused about the emergence of solutions such as Robotic Process Automation (RPA), which automates recurring tasks and frees the human to focus on higher-value efforts. Effectively, RPA removes the monotony from the workday, a demand that is as old as the formal work environment. This also

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sets the tone for what Dell Technologies sees as the “Networked Reality” of the future, wherein cyberspace connectivity will be an always-on overlay to our existing reality, with experiences becoming more immersive, and designed to enhance efficiencies. This transition is comparable to the display immersion evolution we’ve seen in our lifetimes; from static televisions, through responsive computers, to interactive smartphones. Imagine the impact that an equipped and empowered workforce can have on your customer experience. A well-defined and designed automated interaction solution enables your customer to get information and guidance at a time and method of their choice, without being limited by working hours and human availability. As these interactions are designed with the most typical cases in mind, it is easy to factor in the milestones at which the interaction will be immediately flagged for human intervention. And this will be a constant top-of-mind expectation for the customer in 2030, according to our research, as the digital cities we know today will become sentient cities, with AI-powered analytics running the infrastructure as well as the citizen experience of every connected individual. This is why you hear that data is the new oil, the new gold, or the new moon dust, depending on who you ask. No question about the value, though. If AI is the rocket-ship, then data is the fuel. The insight uncovered from a well-executed data analysis program is at the very core of ensuring the quality, relevance, and impact of an AI-enabled automation strategy. Paving the way for a digital future

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the person citizens can immediately reach. State governments willing to commit funds to the effort battle with the presidential brick wall. Fayemi, a war scholar, is willing to pursue the matter diligently and patiently. Get the approval first. Do the road in conjunction with his Ondo State counterpart Arakunrin Rotimi Akeredolu. Then follow through to the Federal Government while preparing all documentation to ensure that whenever it happens, Ekiti State will get its refund. No tantrums. The Ekiti Airport sounds like a prestige project on the surface. Fayemi is willing to take the criticisms that stream his way over it. Why? Vision. A 12-year study informs the Ekiti Cargo Airport concept. “The airport is a critical component of our growth strategy to make Ekiti a knowledge hub, a medical tourism destination, an agro cargo vehicle and an Infotech hub as well as a regional hub serving neighbouring states like Kogi, Osun, southern part of Kwara and Akoko part of Ondo State”. Ado Ekiti is gradually becoming a medical tourism hub because of the excellent facilities at the world-class ABUAD teaching hospital. Tie in the projects around the three pillars of agriculture, education and technology as anchors for Ekiti State development, and it makes sense. With an Omoluabi at the helm, significant progress is a specified destination in Ekiti State. Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

The AI paradox: How automation unlocks human potential

Mohammed Amin Every conversation around the user and customer experience ultimately ties back to the technology at the heart of it. Investing in the blueprint for automation and humanmachine partnerships is a sound business strategy from an employee as well as a customer perspective. And the beauty of this strategy is that it is not about defining the right resource – human or digital – for the job; it is about the immense additional potential such as artificial intelligence through big data analytics that the “machine” can provide to the human, enabling them to perform at a much higher plane. As with any significant technology transition, transformation is not a destination, but a never-ending journey. But there are three things to keep in mind when embarking on an organisation’s human-machine partnership journey. Define strategic outcomes, creating the framework, and grow organically. There is no doubt that technology is changing the ways in which we work, live, and play, and this will only get more evident in the future. We should be enthused by the power and potential of technology to change lives for the better and help us move beyond inefficiencies towards inclusive prosperity. organisations around the world have taken steps – within their contexts – to adopt and adapt the most promising emerging technologies to secure their futures. A new chapter in technology-led human progress is within our grasp, waiting to be unlocked. Amin is senior vice president, Middle East, Russia, Africa, Turkey (MERAT), Dell Technologies.

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Thursday 21 November 2019

BUSINESS DAY

COMPANIES & MARKETS

Company news analysis insight

OIL & GAS

Avuru bows out after delivering over 25-fold profit for Seplat OLUWASEGUN OLAKOYENIKAN

ustin Avuru, Chief Executive Officer (CEO) of Seplat Petroleum Development Company Plc, is set to exit the leadership position after a decade which saw the tycoon deliver more than twenty-five times of profit for the Nigerian independent Oil & Gas Company. BusinessDay ran a quick check on Seplat’s financial performance following the company’s announcement of Avuru’s retirement effective July 31, 2020, and discovered the company did not only deliver impressive profit but also created more value for its shareholders. For instance, in the 2010 financial year when Avuru came on board as Seplat CEO, the company recorded a net-profit of N1.93 billion. This grew steadily for a period of three years to N85.42 billion in 2013 but halved to N43.5 billion in 2014, no thanks to a slump in the international crude oil prices below $100 per barrel. While the woes which bedevilled the crude oil value lingered, Seplat’s earnings as well as its net income remained unimpressive, a situation which led the oil and gas company to record a loss of N24.84 billion in the 2016 financial year – the same year Nigeria’s economy entered into a recession. However, the company under Avuru’s leadership came out stronger a year after as Seplat’s

bottom line rebounded to a record N96.42 billion in 2017 and later settled at N49.68 billion in 2018. The implication of this is that Avuru, who is Seplat’s pioneering managing director, has grown the company’s profit by 2,473 percent to N49.68 billion since he took over the company as the CEO. Also, Seplat’s 2018 profit also represents 25.73 times its net profit in 2010. Revenue rose from N12.45 billion in 2010 to N228.39 billion in 2018, while gross profit increased

from N5.6 billion to N119.75 billion over the same period. While the company grew in profitability, its stock became more valuable. Seplat’s earnings per share (EPS) rose from N5.5 to N79 as at the end of 2018 financial year. EPS measures the amount of money each share of stock would receive if all of a company’s profits were distributed to the outstanding shares. Total assets surged by 885 percent to N775.66 billion in 2018

from N 78.73 billion in 2010, shareholders’ fund soared to N526.3 billion against a net value of N7.93 billion recorded by the company in 2010. But besides all these, the Seplat’s helmsman also took some strategic decisions since 2010 which led to the overall growth of the company. Notable among these decisions are the development of a strong organization, the deployment of agile systems, processes and

L-R: Olayinka Atere of The New Practice (TNP), a guest; Paul Payne of African Private Equity and Venture Capital Association (AVCA); Bukola Bankole of TNP; Baba Alokolaro of TNP; Chudi Ejekam of Atreos Investment Holdings and Babajimi Ayorinde of TNP, at a recent cocktail event organised by TNP.

stakeholder relationships that allowed the organization to grow rapidly from a gross production of 22,700boepd as at December 2010 to peaks of 111,368boepd gross production as at December 2018 through major drilling campaigns and major new Oil and Gas plants development. In addition to this, his leadership skills, personal dedication and hard works saw the company acquiring 40 percent of OML 53 and having a successful IPO in 2014. These created an opportunity in partnership with NNPC, to spawn a mid-stream subsidiary, ANOH Gas Processing Company Ltd currently progressing what will ultimately be a 300MMscf/d of Gas, 22,500bdp of condensate and 1,200boepd of LPG processing company, according to Seplat. “Looking forward, Seplat plans to position itself for a next phase growth ambition which would see the expansion of its footprint in terms of energy business activities, a plan to pursue offshore assets as well as opportunity driven entry into different geographies,” Seplat said. As part of the company’s corporate transition plan, its review of current organizational and systems structure led its Board to select Roger Brown as the successor to Avuru, when Avuru steps down on 31 July 2020. Brown joined Seplat in 2013 as the CFO, and has played significant roles in various asset acquisitions by the company.

CONSUMER GOODS

Economic ‘cankerworms’ shrinking consumer wallets drag consumer goods companies’ performance OLUFIKAYO OWOEYE

onsumer goods companies continue their tepid performance in the third quarter on the back of cash-strapped consumers and a faltering economy. Food maker, Nestle Nigeria plc saw its revenue for third quarter surged 2.35percent to N69.4bn from N67.83bn in Q3 2018, this was however below analysts’ expectations given that the third quarter has been a strong quarter for the company. Profit before tax dropped 0.6percent to N16.11bn and Profit after tax plummeted 9.1percent to N10.59bn dragged by rising production and operational expenses. Nestlé’s slower quarter-toquarter revenue growth is linked to the Beverages segment where revenue declined for the first time in three quarters, by 8.1percent quarter-on-quarter but grew 8.3percent when compared yearon-year. This is similar to the corresponding period of the previous year, wherein Beverages revenue

declined by 7.1percent quarteron-quarter, which can be linked to weaker demand in the absence of the Ramadan and Easter festivities, which boosted volumes in Q2. Unilever Plc’s third-quarter revenue slumped 62.9percent y/y which according to management was linked to tighter credit terms with key distributors in a bid to minimize nonperforming receivables. Sadly, its two segments, food, and Home Personal Care (HPC) businesses lost sizeable market share and were down 56percent and down 70percent respectively. Flour millers have the land border closure which helped curbed smuggling activities to thank for their improved performance during the third quarter. Second quarter 2020 result of Flour Mills of Nigeria’s (FMN) for the period ended 30th September, Profit before tax increased slightly by 1percent to N3.1bn. The miller’s food business which accounts for 60-65percent of the group sales plummeted 94percent in Profit before tax to N175m worsened by

intense competition and price of wheat in the global market. The impact was however lessened by marked improvements in the sugar business and agro-allied business.

Sugar Refiner, Dangote Sugar saw revenue increased 13.4 percent, while profit after tax declined 6.7percent. For brewers, performance

remained underwhelming amid tight consumer wallets and intense competitions, with players recording a massive growth in net finance cost.

L-R: Ademola Akinrele, managing partner, F.O Akinrele and Co; Seni Adio, chairman, chairman, Nigerian Bar Association-Section on Business Law (NBA-SBL); Fola Akande, company secretary, Cadbury Plc; Aigboje AigImoukhuede, founder/chairman, Coronation Capital, and Moyosore Onigbanjo, attorney general, and commissioner for justice, Lagos State, during the realigning business strategies for law firms by NBA-SBL, LPMC and in collaboration with Association Of Law Firm Administrators Nigeria (ALAN) in Lagos

Thursday 21 November 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

Nigerian bank stocks jump to 22-month high of 15% in November

igerian stocks resumed gains Tuesday as investors sought more attractive options than the negative real yield on the country’s shortterm debt. The benchmark stock index climbed 0.4% as of 10:47 a.m. in Lagos, leaving it on track for its best month since May. The gauge has risen in the past two weeks, snapping seven weeks

of declines. Gains in banking stocks have been particularly pronounced, with the sector index up 15% in November, the most since January 2018. One-year Treasury bills last week fell to the lowest since April 2016, selling at 10%, below Nigeria’s inflation rate of 11.6%. The drop in short-term debt yields and a central bank’s ban on all but local and foreign banks from participating in its Open Mar-

ket Operations are helping to fuel the rally in Lagos equities, said Mathias Althoff, a money manager at Stockholm-based Tundra Fonder AB. “We’ve seen a sharp move downwards in T-bill yields and most of the maturities now offer negative real yields with inflation above 11%,” Althoff said in emailed comments. “It’s quite natural that some of that money will reallocate into the stock market.”

Abraaj stake in C&I Leasing to drop after share sale

braaj Group, the private-equity firm forced into liquidation last year after being accused mismanaging investor funds, will reduce its stake in C&I Leasing Plc by not subscribing to a share sale to existing investors. “They have made it known to us they are not willing to take up their rights,” C&I Chief Executive Officer Andrew Otike-Odibi said by phone. Abraaj obtained the

approval of Nigeria’s Securities and Exchange Commission to convert a $10 million loan to C&I into equity, which when executed will give liquidators of Abraaj 70% of the Lagos-based company. C&I started the process this week to raise 3 billion naira ($8.3 million) through a rights offering to fund the acquisition of offshore vessels for marine and oil business expansion. Abraaj’s shareholding

in the company could drop to 49% and 51% after the issuance, Otike-Odibi said. Abraaj’s office in Lagos didn’t respond to an email seeking comment. Abraaj, once one of the most high-profile private-equity companies in the Middle East, managed about $14 billion, until its downfall last year, saddling investors with losses of $1 billion. Backers had included the Bill & Melinda Gates Foundation.

L-R: Thomas Bach, president, International Olympic Committee (IOC); Yemi Osinbajo, vice president, federal republic of Nigeria; Kola Jamodu, chairman, Nigerian Breweries Plc, and Sade Morgan, corporate affairs director, Nigerian Breweries Plc, during a State House dinner with the IOC President in Abuja.

OIL & GAS

Sahara Group highlights ‘collaboration for global Impact’ in 2018 Sustainability Report Olusola Bello

ahara Group has released its 2018 Sustainability Report which provides details on the economic, environmental, social, governance and risk impact of the energy conglomerate’s businesses globally. Themed “Collaborating for Global Impact”, the report details Sahara Group’s activities and projects in 2018 which traverse partnerships and collaborations, investments, expansion into further international markets and outreach linking Sahara’s employees with the global landscape. “Our people have been pivotal to the growth and global impact of our organization by effectively establishing, managing and sustaining these international collaborations. It is critical to our sustainability that we attract and retain the right talent to achieve this feat,” said Pearl Uzokwe, Director, Governance and Sustainability while presenting the report to the media. Uzokwe said Sahara expanded its talent pool from 3,281 employees in 2017 to 3,630 in 2018,

noting that the Group enhanced the recruitment and selection processes of pre-existing programmes to cultivate a workforce capable of growing and sustaining the business impact. She said Sahara had since reviewed its safety mechanism for greater efficiency, with the overarching target being a zerofatality rate across the Group’s plants and workplaces. “We will continually channel our resources towards embedding a culture of safety and compliance,” she added. According to Uzokwe, Sahara lent its voice to the rule of law in 2018 with the participation of Oluseyi Ojurongbe, (Manager, Sahara Foundation) at the conference on “The Role of the Private Sector in Fostering Justice, Peace and Sustainable Institutions” at the Bingham Centre for Rule of Law in the Hague. She said Sahara also seconded Babatomiwa Adesida to the United Nations Sustainable Development Goals Fund (UNSDG-F) to strengthen private sector participation and collaboration in the attainment of the SDGs. “Since our partnership with

the UN through Babatomiwa’s secondment, we have remained a committed partner to the UN and provided support to the development and implementation of the SDG Fund’s private sector and philanthropy engagement in Africa,” she noted. She said Sahara Group in the period under review promoted awareness of the activities of the SDG Fund by attending Private Sector related events in Canada, South Africa, India, Nigeria and Rwanda and developing a toolkit on the contribution of sports to the achievement of the SDGs. “In line with our global thought leadership role in the energy sector, we joined world leaders and other stakeholders to underpin the importance of collaboration in safeguarding the future of Oil at the Organization of Petroleum Exporting Countries (OPEC) 7th International Seminar in June 2018 in Vienna. Speaking as a panellist in one of the sessions, Executive Director, Tope Shonubi reinforced the need for cooperation towards achieving transparency, market balance, safety and environmental protection.”

REAL ESTATE

Prindex deepens investors, end users option in real estate investment KELECHI EWUZIE

etermined to deliver innovative, functional structures and real estate products for discerning clients, investors and end users, Prindex properties limited has unveiled another opportunity that availed Nigerians opportunity to invest and earn income within a space of time. Tolu Bawa-Allah, managing director, Prindex Properties says that over the years, as an indigenous real estate development company, it has built competencies by developing commercial and residential real estate projects. Bawa-Allah, while speaking during the public presentation of ‘The Dream Place’ and ‘The

Apple Place’ to investors, said in partnership with our construction company, Blueline Urban Projects Ltd, our creativity and competencies across both the real estate and construction industry enables us to deliver innovative solutions that capture optimal value for our subscriber’s and investors. Commenting on the new properties, Olasupo Jagun, executive director of Prindex Properties, said that both the dream place and the apple place are designed for total comfort and satisfaction in all areas that matter. “The dream place in Lekki area of Lagos state is well situated in a location providing easy access to both business and pleasure. It is the haven aiding in the

culmination of both you and your family’s dreams and aspirations”. “Apple place is also situated in a serene environment. Residents are guaranteed an efficient facility management system leaving no room for bottlenecks and ambiguity. We encourage people to own a piece if this apple that is sure to yield returns in more ways than expected”, he said. Jagun disclosed that the company competitive advantage was trust worthiness, timely delivery of projects, youthful energy and passion for business. “We say what we do and do what we say. We are open and transparent in our dealings with clients and project stakeholders. We are flexible in responding to our subscribers and end user needs and requests,” Jagun said.

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L-R: Tope Oshunkeye, Head, Marketing, MultiChoice Nigeria; Busola Tejumola, Executive Head, Content, MultiChoice Nigeria; Martin Mabutho, Chief Customer Officer, MultiChoice Nigeria and Caroline Oghuma, Executive Head, Corporate Affairs, MultiChoice Nigeria at the Launch of new DStv and GOtv packages for Nigeria

L-R: Eric Sodomka, research scientist, facebook, UK; Victor Ohuruogu, United Nationals SDGs; Ayodeji Balogun, CTO, Terragon Group, and Tomi Amao, CTO, Softcom, at the 2019 Day Science Nigeria Summit at Oriental Hotel Lekki in Lagos.

L-R: Abdullahi Muraina, national treasurer, Nigerian Institute of Management (Chartered); Samuel Edoumiekumo, vice chancellor of Nigeria Delta University/guest speaker; Pat Anabor, deputy president, NIM; Olukunle Iyanda, president/chairman of council, and Ezekiel Ainabe, fellow of NIM, at the 2019 Management Day Lecture of the Institute held in Lagos

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Thursday 21 November 2019

BUSINESS DAY

Research&INSIGHT

In association with

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

briu@businessday.ng

08098710024

Financial highlights of foreign subsidiaries of Nigeria’s tier–one banks ISAAC ESOWE

igerian banks have set their eyes on African nations, to tap into the emerging economic opportunities in those countries. The tierone Nigerian lenders, Access Bank, Guaranty Trust Bank (GTB), United Bank for Africa (UBA) and Zenith Bank Plc, have branches in 21 African countries and their financial highlights for the period ended June 30, 2019, across their African subsidiaries showed a good prospect based on our analysis. The half-year results showed positive

growth rate of 28 per cent over N25.6 billion realised in H1 2018. The growth of its operating income across the subsidiaries showed that Tanzania’s subsidiary recorded the most growth of about 342 percentage points while Liberia’s subsidiary recorded a decline of 20 per cent to N2.6 billion at half-year 2019 from N3.2 billion in the corresponding period of 2018. The 18 subsidiaries of the United Bank for Africa generated a combined operating income of N81.2 billion at half-year 2019. This amounted to a growth rate of 4 per cent over N78.2 per cent made in the corresponding period of 2018. Zenith Bank’s African subsidiaries Source: Financial reports, BRIU

Source: Financial reports, BRIU

growth across some key financial metrics. The combined operating income of their foreign subsidiaries showed noticeable growth. Access Bank Nigeria has its presence in six Africa countries – Ghana, Rwanda, Congo, Zambia, Gambia and Sierra Leone. The combined operating income across its subsidiaries grew by 31 per cent from N17.7 billion as at June 2018 to N 23.2 billion in June 2019. Put differently,

Access Bank’s subsidiaries reported an increase in income growth. At 297 per cent, Sierra Leone topped the rest of its subsidiaries in term of growth in income. However, Zambia’s operating income declined by 19 per cent from N2.0 billion as at H1 2018 to N1.6 billion as at the period ended June 2019. GTB subsidiaries, on the other hand, reported a combined operating income of N32.7 billion in H1 2019, representing a

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made a combined operating income of N35.2 billion, representing a 4 per cent growth when compared with N33.8 billion in the similar period in 2018. The operating expenses (OPEX) of the aforementioned banks stood at N99.9 billion at half-year 2019 from N94.9 billion in the corresponding period June 2018, reflecting a 5 per cent increase. A breakdown of the figures shows that the combined Access Bank’s subsidiaries OPEX declined by 6 per cent from N10.3 billion in June 2018 to N9.6 billion in June 2019. The further insight gained from the banks’ annual reports for the half-year 2019 shows that the operating expenses of the subsidiaries of Nigerian banks in Ghana declined by 40 per cent, closely followed by Zambia where the value declined by 25 per cent from N1.4 billion to N1.05 billion. On the other hand, Sierra Leone’s operating expenses of the foreign subsidiaries of Nigerian banks grew by 174 per cent which was the highest within the category, jumping from a total of N130.3 million to N357.2 million at the end of June 2019. Similarly, Rwanda’s subsidiaries also reported an increase of 130 per cent from a total sum of N629.1 million to N1.4 billion during the reference period, which was more than doubled the value recorded in 2018. Zenith Bank’s subsidiaries’ combined OPEX slipped slightly by 1 per cent, while UBA and GTB’s OPEX increased by 10 per cent and 7 per cent respectively. OPEX of the Nigerian banks’ subsidiaries in The Gambia declined by 24 per cent from N448 million in 2018 to N339 million at the end of H1 2019. In like manner, OPEX of the subsidiaries in Ghana stood

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at N19.4 billion as of June 2018 as against N19.1 billion in the similar period 2019. This reflects a decline of 2 per cent. However, Sierra Leone’s operating expenses rose by 17 per cent fromN1.4 billion in H1 2018 toN1.6 billion to a similar period of 2019. The banks reported a combined profit after tax (PAT) of N53.9 billion, representing a growth of 23 per cent over N43.7 billion recorded in the corresponding period of 2018. In term of PAT growth, Access Bank reported an increase of 98 per cent from a combined total of N5.2 billion in H1 2018 to N10.3 billion in a similar period in 2019. Sierra Leone’s subsidiaries got the most growth as PAT jumped to N136 million, a 3725 per cent growth compared to N3.5 million recorded in the corresponding period of 2018. Ghana’s subsidiaries combined PAT grew by 128 per cent from N3.9 billion in H1 2018 to N9 billion in the corresponding period of 2019. On the other hand, Congo DRC’s subsidiaries got the least growth rate of about 6 per cent, while Rwanda and Zambia’s subsidiaries recorded a decline of 11 per cent and 29 per cent respectively. GT Bank closed the half-year ended June 2019 with a 44 per cent growth in its PAT across its subsidiaries, from N8.8 billion in H1 2018 to N12.7 billion in H1 2019. Observation made showed that Kenya’s subsidiaries got the most growth in PAT by 111 per cent to N1.1 billion from N567 million in the corresponding period of 2018. Other subsidiaries recorded an improvement in PAT except for Liberia and Sierra Leone whose PAT declined by 28 per cent and 2 per cent respectively.

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Thursday 21 November 2019

BUSINESS DAY

Investor

In association with

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

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open (08– 11–19)

31,924.51 26,314.49

N12.810 trillion

2,190.73

Week close (15 – 11–19)

26,851.68

N13.071 trillion

2,233.12

Year Open

Percentage change (WoW) Percentage change (YTD)

2.04 -14.57

2,241.37

1.93 1.74

The NSE-Main Board

1,456.29 1,062.07 1,086.67

2.32 -24.53

NSE ASeM Index

NSE 30 Index

NSE Banking Index

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

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

426.64

756.26

1,079.92 1,117.23

343.49

120.41

475.93

235.12

1,644.89

1,069.22

957.13

366.76

1,009.65

488.07

230.99

1,681.12

1,103.83

1,009.65

6.77

-0.56

756.26

0.00 -4.73

3.45 -21.16

-8.07

-10.83

2.55 -34.82

-1.76

2.20

3.24

5.49

-23.57

-24.75

-10.83

-16.38

Investors trade N1.627trn worth of stocks in 10 months …represents N500bn decline year-on-year Iheanyi Nwachukwu

quities valued at N 1 . 6 2 7 t r i l l i o n w e re exchanged by investors (both foreign and local) in the 10 months ended October 31, 2019, a huge decline of about N501billion as against N 2.128trillion exchanged same period in 2018. During this period, the stock market remained pressured given global risk-off sentiments and weak domestic participation. D espite that most stocks valuations remained attractive during this period, many long-term investors still failed to buy stocks, thereby losing the gains that would have accrued to them amid recent price rally. Despite pockets of profit taken actions by investors, the Nigerian equities market recently witnessed increased buy decisions spurred by CBN’s policy that stopped nonbank financial institutions from participating in OMO auctions. In the review 10 months period, foreigners traded N792.64billion worth of stocks, which represent inflow of N363.9billion and outflow of N428.8billion. The Nigerian Stock Exchange (NSE) has just released its polls trading figures from market operators on their Domestic and Foreign Portfolio Investment (FPI) flows.

Domestic investors exchanged stocks valued at N834.94billion; details show that domestic retail investors accounted for stock trades valued N420.64billion while domestic institutional investors traded N414.3billion worth of equities in the same 10 months period. Earlier this week, the National Bureau of Statistics (NBS) published Nigeria’s inflation report for October 2019, which was much in line with analysts’ expectation. The headline inflation rate rose to 11.61percent

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year-on-year (y/y) compared to 11.24percent recorded in September 2019. “Certainly, a negative interest rate environment will discourage investors from looking for cheap returns, even though risk-averse investors will continue to play in the space. “As such, we expect recent pressure on headline inflation to further spur interest in riskier assets such bonds and equities which are more attractive in terms of real returns

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amid increased system liquidity spurred by the CBN’s decision to shrink its balance sheet”, said Lagosbased research analyst at United Capital in their November 19 note. According to the NSE report, as at October 31, 2019 the total transactions at the nation’s bourse increased by 15.35percent monthon-month (mom) from N141.45 billion (about $461.50 million) in September 2019 to N163.16 billion (about$532.35 million) in October 2019.

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The performance of the review month of October when compared to the performance in the same period (October 2018) of the prior year revealed that total transactions increased by 34.34percent. In October 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 28percent. Still on a monthly basis, further analysis of the total transactions executed between the current and prior month (September 2019) revealed that total domestic transactions increased by 26.45percent from N47billion in September to N59.43billion in October 2019. Similarly, total foreign transactions increased by 9.83percent from N94.45 billion (about $308.2million) to N103.73 billion (about $338.4million) between September and October 2019. The value of domestic transactions executed by institutional investors in October 2019 outperformed that of retail investors by 38percent. A comparison of domestic transactions in the review and preceding months (September 2019) revealed that retail transactions decreased by 21.96percent from N23.36 billion in September 2019 to N18.23 billion in October 2019. However, the institutional composition of the domestic market increased significantly by 74.28percent from N23.64 billion in September 2019 to N41.20 billion in October 2019.

Thursday 21 November 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

Investor’s Square

United Capital Investment Views

Buoyant liquidity buoys equity performance

uring the previous week, the performance of the equity market was buoyed by investors searching for juicy instruments, as the OMO restriction on local players and very high bond prices left investors with limited choices. As a result, the NSE ASI experienced a 204basis points (bps) spike week-on-week (w/w), settling at 26,851.7 points. Also, the year-to-date (YtD) loss improved to -14.6percent (previously -16.3percent). Market capitalisation added a whooping N261.5billion in value, to close at N13.1trillion. It was evident that market players plunged into large stocks, as average volume and values traded moved up by 26.7percent and 130.1percent w/w, to settle at 520.9million and N8.5billion respectively. Across the sectors under our coverage, a mixed performance was observed, as three out of five closed northwards. The week was another awesome week for the Banking sector (+6.8percent), as investors

Total (-10percent) and Seplat (-2.7percent). The Telecoms sector was also down, as MTNN lost (-0.8percent) value while Airtel Africa returned flat. Notably, Airtel Africa announced plans to acquire additional spectrum in Nigeria, in order to expand and strengthen its LTE services across the country. Investor sentiment was extremely upbeat, as shown by a market breadth of 4.6x, as 37 stocks advanced, while 8 stocks declined w/w. This week, we expect investors to continue to lock in gains in stocks with strong fundamentals, as the system remains awash with liquidity. Money Market: NTB stop rate crashes to 3-year low The overall liquidity level in the system last week remained buoyant but weakened slightly when compared to the week before. This was as naira inflows marginal outweighed outflows. The major inflow for the week was in the form of OMO maturities (N405.9billion), which outweighed outflows via OMO sales (N253.8billion) on Thursday. Meanwhile,

locked gains in stocks likes FBNHoldings (+18.1percent), Access Bank (+14.1percent), UBA (+12.1percent), Zenith Bank (+9.9percent) and Wema (+28.8percent). The Industrial goods (+3.2percent) and Consumer goods (+2.6percent) sectors also joined the green party, as CCNN (+14.3percent), Guinness (+22.8percent), Dangote Sugar (+17.6percent) and Lafarge Africa (+1.4percent) gained. However, the Insurance (-0.6percent) and Oil & Gas (-1.8percent) sectors fell, owing to sell-offs in Continental Reinsurance (-5percent),

the Federal Government (FG) successfully rolled-over the total maturing Nigerian Treasury Bills (NTB), worth N125.2billion, on Wednesday. In all, average interbank funding rates Open Buy Back (OBB) and Over Night (O/N) rates edged upwards to 13.6percent (previous Friday: 5percent). At the primary market segment, while stop rates at the NTB auction fell significantly across the board (91-day: 7.80percent; 182-day: 9percent and 364-day: 10percent ; compared to 9.50percent, 10.45percent, and 11.50percent respectively previously), the

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CBN only dropped stop rate for the 82-day OMO bills by 5bps to 11.50percent. Accordingly, the spread between average NTB and O M O s t o p rat e s w i d e n to 3.2percent (previously 1.7percent). Notably, total demand at the NTB auction came in strong, as 4.4x the initially offered amount turned up, with most demand on the 91-day paper (13.3x). Meanwhile, at the OMO auction, demand remained strong for the high yielding 364-day OMO bills (1.2x) but underwhelming, for the 82-day (0.3x) and 173-day (0.2x) bills. Elsewhere, the separation of OMO Bills and NTB on trading platforms, brought some slight relief to money market participants as players were able to appropriately price the different Bills. Though most of the activities were tilted towards the primary market we saw some buying interests in the secondary market. Accordingly, average OMO yields which started the week at 13.49percent fell by 21bps to close the week at 13.28percent amid continued foreign investors’ sell-off of NTB to buy high yielding OMO Bills. Also, average NTB yields declined by 3bps w/w to settle at 10.89percent, as market players who missed out at the NTB auction placed bids at the secondary market. This week, we expect liquidity to stay buoyant amid sizable OMO (N352billion) maturity and retail FX refund on Wednesday and Thursday, respectively. Accordingly, we expect the CBN to float at least one OMO auction to mopup the incoming maturities. Meanwhile, we expect NTB yields to INCH lower as foreign portfolio investors continue to rotate towards OMO bills. Bond Market: Bond prices continue to rally across the curve Sentiments in the secondary bond market stayed upbeat during the previous week, as investors barred from participating at the OMO market hunted for bargains at the bond market as they look for new investment outlets. Accordingly, bond prices rallied across maturities, as average yield dipped 66bps w/w, to settle at 12.3percent.

•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

Vetiva Research

Julius Berger Nigeria continues its year of renaissance … We place a ‘buy’ rating on the stock Continues to report impressive earnings ulius Berger Nigeria Plc recently released its nine months (9M) 2019 results, reporting a 56percent year-on-year (y/y) improvement in profit after tax (PAT) to N5.3 billion, ahead of our N5 billion estimate. While most line items came in flat versus expectations, the earnings beat was driven by smaller than expected operating e x p e n s e s. O ve ra l l , t h e construction giant continued to report solid earnings in 2019, continuing its recovery from a less than inspiring 2018 performance. Business description Julius Berger Nigeria Plc is a leading construction company engaged in the planning and construction of civil engineering works in Nigeria and a foremost contractor to Niger ian Governments. It operates through three segments: Civil Works, Building Works, and Services. The company was founded in 1965 and is headquartered in Abuja, Nigeria. Topline and operations continue to flatter Julius Berger reported a topline of N60.5 billion in the three months (3M) period, 33percent higher year-on-

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year (y/y), albeit 1percent below our expectation. Notably, the strong topline performance was driven by increased revenue from both the public and private sectors in Nigeria, with the public sector contributing the bulk of topline (c.79percent). Overall, 9M’19 topline grew 62percent y/y to N192.3 billion, flat against our N193 billion expectation. Meanwhile, while gross margin fell by 310basis points (bps) y/y to 19percent in third-quarter (Q3), earnings before interest and taxes (EBIT) margin expanded by 390bps y/y to 8percent (Vetiva: 8percent), following a lower than expected operating expense line. In absolute terms, Ju li u s B e rg e r re p o r te d a 158percent y/y jump in EBIT to N4.9 billion (Vetiva: N4.8 billion), taking 9M’19 EBIT 47percent higher y/y to N12.5 billion (Vetiva: N12.5 billion). With the Federal Goverment still accounting for a large portion of topline, Julius Berger continues to rely heavily on short term financing, with the company reporting a 49percent y/y jump in Net financing costs to N5 billion in 9M’19 (Vetiva: N5 billion). After accounting for a 9M’19 tax expense of N2.2 billion (Vetiva: N2.6 billion), PAT @Businessdayng

came in at N5.3 billion. Similarly strong performance expected in fourth-quarter (Q4) Given the strength of Julius Berger contract portfolio and the presence of the Presidential Infrastructure Development Fund (PIDF) which was created to ensure financing for construction projects, we forecast a strong y/y topline growth in Q4. However, according to news reports, work has stalled on the second Niger bridge project due to the civil disturbances, creating a risk to topline in Q4. To that end, we mildly reduce our full year 2019 topline estimate to N249 billion (Previous: N253 billion), representing a solid 28percent y/y growth. We n o t e t h a t w h i l e Julius Berger had earlier commented on a possible large contract in Asia, there has been no update since and thus, we have excluded the impact from our forecast. On the other hand, we have maintained our forecast margins for the quarter, given that they fell largely in line with our expectations in 9M. All in, we forecast an full year 2019 profit after tax (PAT) of N7.2 billion (Previous: N8 billion) and a 12-month target price of N32.52. We place a ‘Buy’ rating on the stock.

Thursday 21 November 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

‘WillPower was conceptualised to demystify Will Writing in Nigeria’ Olufunke Aiyepola, Managing Director/Chief Executive, UTL Trust Management Services Limited spoke with select journalists in Lagos, including Iheanyi Nwachukwu. Excerpts What is UTL doing to support and ease access to financial services? egarding financial ser vices, these are usually limited to banking and investment activities. However, financial services include estate planning which is the ultimate phase in a financial planning cycle. UTL has blazed the trail by introducing our triple award-winning Willpower Platform which is the first dedicated will writing platform in Nigeria. Recently, WillPower won the BusinessDay Banks and other Financial Institutions (BAFI) award as the Best Non-Bank Financial Planning Product/Service of the Year 2019 for a reason summarised by the following quote of the Awards Review committee: “The committee was impressed by the ease, accessibility and flexibility of WillPower. It is clear that the creators of the service had a clear understanding of the challenges faced in preparing a Will” Willpower, as an estate planning solution, has been provided to ensure the completion of the financial planning cycle. It empowers adults to secure the future of their assets, family and dependents seamlessly. Whether from the comfort or privacy of the home or business place adults can create the appropriate estate planning vehicle that meets their requirements. There is this apathy to Will Writing. What are you doing to ensure adoption? WillPower was conceptualized to demystify Will writing In Nigeria. Another statement from the BAFI’s Awards Review Committee on the selection of WillPower, says it all: “The Awards Review committee’s decision to select WillPower as a finalist for this award was informed by its practical approach to solving the

perennial problem faced by most Nigerians who complain of the complexity, and extensive time commitment involved in the preparation of a Will under the traditional model of face time with a lawyer or other confidante”. To encourage the adoption of Will Writing in Nigeria, we have embarked on a nationwide campaign via; radio jingles, short movies on YouTube, newspaper adverts and advocacy to inform the public of the need to write a will. The campaign is aimed at effecting a change of perspective to estate planning. Death is inevitable for all. Since no one is privy to the date of their demise, the when is what requires planning. From our experience so far, Nigerians, especially those in paid employment, are beginning to see the importance of Will writing. How important is the trusteeship function in the chain of financial and nonfinancial transactions? Globally, financial markets thrive on trust. It is well established, that investors will not put their funds in any market where trust is in doubt. Trust services have enhanced the flow of funds in the financial markets, whether for corporates borrowing from banks for expansionary projects or governments borrowing from the public to fund fiscal plans. Statutorily, the trustee function is a requirement for Public Issues. The trustee role is that of an independent third party who protects the interests of the diverse parties. The ancillary roles would include; ensuring that transaction arrangements are properly documented according to the intentions of the parties, covenants are enforced, and obligations honored as and at when due. As regards non-financial transactions, the trustees’ www.businessday.ng

Olufunke Aiyepola

role is akin to that of financial transactions because usually a non-financial transaction would have financial implications. Depending on the transaction, the arrangement could involve several Lenders and Borrowers; Investors and Issuers, or Settlors and Beneficiaries. Besides the popular and statutory requirement of trustees in bonds and collective investment schemes, what other functions and services do you provide? UTL in her 53 years of existence has been offering superior trusteeship services to both local and foreign clients. Aside from our role as Trustees to Bonds and Collective Investment Schemes, we also provide the following services as: Security Trustees holding security interests over assets pledged as collateral for multiple Lenders or Creditors in Bank syndicated/club lending; Trustees to various Employee Welfare Benefits such as Share Trusts, Profit

Sharing Schemes and Superannuation Funds amongst others. On our services as Trustees/Executors to Trusts and Wills, we administer several estates in Nigeria and the Diaspora and are Trustees to many trust arrangements such as Education Trusts, Living Trusts, Family Welfare Trusts as well as other purpose specific Trusts. UTL has also been appointed severally by courts in different States in Nigeria to administer disputed estates. Our members of staff are duly certified in Trust and Estate Planning and are quite adept at rendering private trust services. Our services also include Trustees to Foundations and Endowments. Our trusteeship services to several Foundations include scholarships from secondary to tertiary education in Nigeria. We conduct qualifying examinations, interviews and placements of students across the Federation. Aside from being licensed to pro-

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vide trust services, UTL is also duly licensed by the Securities And Exchange Commission as funds and portfolio managers. You have won awards for innovations and excellent product and services; can you tell us how these products and services and the innovations impact the populace The awards are attestations of our passion to simplify and disrupt the provision of trust services across all segments. Our online will writing service, WILLPOWER, has discredited the myth about Will writing. This service is encouraging the populace to tidy their affairs and protect their loved ones. Nigerians in the diaspora can now write their Will from any part of the world and file same in Nigeria. In addition to the BAFI award, our Company was recognized as the Innovative Trustee Firm of the Year 2019, at the recently held 5th Nigeria Finance Innovation Awards 2019. This further confirms our innovative prowess to simplify Will writing and trusts in Nigeria. The following quote from the BAFI Awards Committee on the selection of WillPower selected for the award truly reflects our intention for creating the service: “Simplifying post-mortality arrangements for loved ones and cherished interests as well as guaranteeing legacy commitments through the ease of digital technology”. We encourage Nigerian employers to step up their staff welfare packages to include WillPower as part of their retirement plans and benefits, such that the issue of dependents suffering untold hardship after the demise of their breadwinner is eliminated. Taking a medium-term outlook, what are your plans and projections for the company? @Businessdayng

Consistent with our Vision and Mission Statements – “To remain the Trustee Company to Trust” and “To provide unique trust services to our clients rendered with integrity on the platforms of expertise and technology”, we intend to create an environment where corporate and natural persons utilize trust solutions for their everyday affairs. What are those (regulatory legislative or otherwise) incentives that you think will enhance adoption of trusteeship? Trustees Act- passing into law the all-embracing proposed Trustees Act, applicable to the Federation, which will include provisions for charity trusts and cure the anomalies of the Trustee investment Act amongst others. Taxation- A more trust friendly tax ecosystem that would reduce stamp duties for the transfer of assets to encourage increased utilization of trust solutions. Also, an allowance for nominal stamping in security trusteeship transactions would ease the burden of borrowing costs for corporate entities. We also want the re- inclusion of trust arrangements in the Pension Reform Act 2004. There is this notion that corporate trustees like your firm renders services alone to corporate entities, government and high networth investors. How affordable are your services and products? Since its inception, UTL Trustees has provided services to all categories of persons. Our product offerings across our trusts and our fund/portfolio functions are designed to cater for all strata of society with a thorough understanding of the peculiarity and value proportion of each segment. For instance, at fifty thousand naira, our Will writing service “WillPower” is quite affordable.

Managing

Thursday 21 November 2019

BUSINESS DAY

Thursday 21 November 2019

BUSINESS DAY

GOVERNMENT

the Executive Governor of the Nigeria’s eastern State of Taraba

Uche Orji

BUSINESS

CEO of Nigeria’s Investment Sovereign Authority (NSIA)

Interview with Public Sector Leaders

Nigeria’s Sovereign Wealth Fund safe, profitable says Orji It’s been seven whole years since Nigeria set up its $1.5bn Sovereign Wealth Fund in search of better ways to manage its oil earnings. Uche Orji, CEO of Nigeria’s Investment Sovereign Authority (NSIA) - managers the fund - says those have been straight years of hard work and profitability, as he tells Onyinye Nwachukwu, BusinessDay’s Abuja Bureau Chief of the journey so far and prospects, in this exclusive and insightful interview.

How far has NSIA come in 7 years? SIA has gradually evolved and I would say in seven years, I am broadly satisfied with the execution of its strategy; of course there are many things I think we can do better and could be done better for and by the NSIA. But I think in all, we had steady progress over the last seven years. All the three funds - Stabilization, Future Generations and Infrastructure funds have had seven years of straight profit. The three funds have been largely invested or committed to their various mandates - the infrastructure fund in particular which is what people want to see. We have built trust with the stakeholders, particularly at the federal level which is supported by the fact that fresh funds for other projects owned by the government are now being managed by us for example the Presidential Infrastructure Development Facility (PIDF) Fund. We have transitioned from one board to another which is always a very good sign that our organization is sizzling. We are grateful for the fact that successive administrations have kept the NSIA largely intact at least at the management level. So I think all of these things make me feel like the NSIA has continued to grow and mature, internationally it continues to be a respected member of the international community of asset managers particularly the Forum of Sovereign Wealth Funds. It is rated for transparency and accountability - one of the few that actually provide quarterly audited accounts to the public, and also seeing us moving to striking that balance between social impact and commercial investments on infrastructure side. So all in all, I think the last seven years for me has been quite humbling also because there are unforeseen challenges that one has had to deal with. Every day brings its new challenge but this has been, first of all an honour and also a humbling experience. I also see how things sometimes don’t work so well in Nigeria because in our infrastructure investment - be it in agriculture, power, gas, roads, fertilizer I have come face to face with challenges. I’ve seen some of the real challenges that investors and business men in Nigeria are faced with. In all of those though, I see investment opportunities will you will not know exist until you have to deal with them. In the 7th year of NSIA, I also now have to think that another area we have been very proud is in our role in filling out institutional voids by creating many other entities. Most Nigerians are not aware that the NSIA seeded and helped incubate the Nigerian Mortgage Refinancing Company, Fund for Agriculture Finance In Nigeria, Infra Credit which is 100 percent owned by the NSIA and is NSIA brain child, that business now is doing extremely well, it’s based in Lagos, we are attracting new investors and we are underwriting many infrastructure bonds that are issued. The NSIA was an anchor investor and actually helped incubate the Development Bank of Nigeria, Family Homes Fund and also more recently the Nigeria Infrastructure Development Fund, NIDF which is run by Chapel Hill Denham. So these entities are filling out institutional voids as they call it, and will enable investment infrastructure ecosystem to thrive. The NSIA has either sponsored, anchored, incubated, or invested in all these entities. And now that we have started to make our foray in health care, so far so good, we are feeling the impact of what NSIA can do in that sector. We’ve deliberately slowed down a little bit programs in Kano and Umuahia cancer centres but they will be up and running before the end of this year. LUTH is running very well after the initial period of hiccup, now it’s gradually ramping. And the more I see those, the more I see more to do in healthcare. In Agriculture, we’ve created our first co-investment fund with UFF and

Old Mutual Fund and they’ve made their first investment, they acquired a farm in Nasarawa state and they are turning it around. They made some initial investment of over $30million to actually revive that farm, grow maize and soy and do feed mill and there are many more projects in the pipeline. The Presidential Infrastructure Development Fund which is run by the NSIA has taken over Lagos-Ibadan Expressway, Second Niger Bridge, Abuja Kano Highway and we are in the active phase of developing Mambilla power plant as well as working with Ministry of Niger Delta Affairs regarding the East West Road. It’s a long list of things that I can talk to, but the last seven years has been interesting, it’s been seven years of growth, consolidation, tackling problems in the country and in our key areas of focus, seasoning the organization, preparing it to withstand what has been a volatile investment environment internationally. So both domestically and internationally we are working assiduously to execute our mandate. How are the Future Generation and Stabilization funds doing at the moment? The stabilization fund has done very well, it has exceeded its benchmark performance. What we have invested altogether in that fund is $300m, as you know the returns vacillate depending on the market environment but initial investment was $200m and subsequently an additional $100m. The asset is doing well, don’t forget the Stabilization Fund was designed to preserve its value in dollars, so the returns benchmark is lower than what we expect for Future Generations Fund which is more risky asset and the infrastructure fund which is even more risky as well. The stabilization fund is such that we can liquidate at short notice and provide money to the government in times of economic stress, which is the philosophy behind it. The investment here is short term, liquid instruments, meaning things that we can call up fairly quickly and it is everything from the US treasuries, corporate fixed income, investment grade fixed income, 25 percent of it is in cash. So that has had a stable steady performance over the last seven years, it is not designed to be the best in terms of earnings for us. Future generations fund is designed to be the most earning asset so we take a bit more risk, for example we will not invest in private equity with stabilization fund because it will take some time before you get your money back, we will rather invest in things we can sell immediately. The idea is that we are able to liquidate the asset and put it back in cash in seven days. How do developments in the global market affect the stabilization fund? Stabilization fund has a lot more fixed income investment, and you have a world today where in most developed markets, interest rate is negative, in Europe - Germany, Switzerland - interest rates are negative. So it’s a little bit tricky to make money these days in the global fixed income market, pretty difficult. The US is one of the lowest yielding environments we have seen as well, so the quantitative easing by global central banks has depressed earnings and interest income in those funds. But the idea is not for this fund to double but to be preserved. So you are right, part of the challenge in earning good returns in this fund is the challenge of the global environment where rates are really challenged. Whereas ten, fifteenth years ago, you were earning low, mid-single digits but these days, if you are making low single digits, that’s not a bad outcome. In fact I feel sorry for those who trade government bonds in the global market. If you are someone whose responsibility is to trade Swiss versus European bonds, every day you are buying things that are going to lose you money. But that’s

the challenge with quantitative easing. We’ve gone through that now since 2008, the most injection of liquidity in the market place by all the major central banks - ECB, Japan, the US Federal Reserve just been pumping cash into the system. The ECB is a particular case in point and the fascinating thing is that the more you pump cash into the system, the more difficult it is for you to come at full growth, it’s almost as if it’s not enough. So today, the single biggest capital providers in Europe is the government and it is strange. What we have today is a very volatile market environment where interest rates have been depressed because of more and more capital being pumped into the market by the global central banks. The concern is that if you are investing in fixed income, yields are low because of excess liquidity. So if you look at the interest rate on US treasuries, it’s been as high as 3.5 percent in the last five years, now we are talking about 2 percent, 1.95 percent. So we have had a high volatile market, and probably the scariest thing is the direction of the yield now which just dropped. Is it a deep concern for us? It’s a deep concern, because you do better in a high yield environment, because these are the safest instruments, the treasury bills, treasury bonds, it’s investment grade bonds, and if you are not able to get the high yields that you use to get before, then your returns will suffer. I think it’s important that people realize that this is the world we are in now and this is the world we will be playing in for some time. So the era where you invest in those things and get reasonably high yields are gone. But the question is why do we still have to invest in those things? The truth is because our intervention currency is the US dollar, so we have to keep these investments in US dollar and in markets

that are safe to make sure we avoid a situation where you look for the money, you can’t get it as quickly. It’s a world where you are looking for safety and also yield. However, it’s been seven years of straight profit for this fund, so I’m not trying to create any reason for worries, I’m just saying that with the market environment right now, yields are generally low, markets are volatile because of everything from trade war to nationalism to all kinds of things. But I’m happy with where we are, we have consistently been profitable with these funds, it’s run conservatively and it’s not designed to blow the lights out but at the same time, it’s not designed for the money to disappear, we minimize the risks in this fund, because this is our stabilization fund and it has to be available in times of economic stress. How about the Future Generations Fund? That is a little bit different, whereas 75 percent of the stabilization fund is in Treasury bonds, corporate fixed income, mostly in dollars and international, the same thing with future generations fund, but here, 20 percent is in equities and 25 percent is in private equity. The private equity funds, you commit and invest in them, they start yielding returns, and the idea is between 5-7 years, they return all your money with sometimes multiples of all the money you gave them. So for the early investments we made say in 2014/2015 in private equity, we are looking that any time from next year some of those funds will start returning. We also have absolute returns on what we call hedge funds, which have so far done pretty well, one or two of them have done around 12-13 percent. The public equity market has done well but we are not heavy in any particular market, two tiers of the fund are in emerging market and one third in the developed market, and is split between US, Europe and Japan. The US has done superbly well, we didn’t put as much in the US, and that is because our private equity exposure is a lot in the US, Japan has been okay and Europe, so so. Equity market this year has been better than last year which was difficult, as most of the markets ended negative, remember, last year was the

beginning of the real trade war issues. This year has been better, even though it’s been volatile. It’s all about the trade war between China and USA, that’s what’s driving most of these markets. In the last few months, say July was a terrible month, but if you look at September, October, it’s been better, especially October when they are now making reconciliation tones, so emerging markets are rallying and we are looking better. For Private equity, you invest in a fund, the fund then invests in private opportunities and many of them would only make returns as time goes on. Generally, if the markets are good, the value of investments made by private equity generally tend to be better, not always though, because they mirror the market. I think so far so good, this year with the Future Generations Fund, it’s been better unlike last year which was very difficult because most markets were down. We also have what we call diversifiers, where we invest in funds and they invest in health care, aircraft leasing, commodities and all that. This is designed to be a diversified pool of assets, so that no one asset takes you down, we have had seven straight years of solid performance with the Future Generations Fund. We are not designing this fund for best returns because that also means we are going to take a lot of risks, meaning in a bad year it could just be destroyed, we are not yet at the point where we can take those kinds of crazy risks. We are designing it to have stable, steady returns from performance standpoint. Risk management for us is a very core principle that we adhere to ensure we don’t make any mistakes. Any major misstep will be a problem, so we are trying to be diversified, manage our risks appropriately, going to these markets with a little bit of care just to make sure that returns are stable and steady. But it has been okay, the third quarter audit just started, the first two quarters were okay. I think in terms of earnings so far, it’s about N25bn in the first six months of the year, but again markets are volatile. I think the half year audit will be completed shortly, and it will be published, but like I said, from what I have seen, it was a good first half of the year but that doesn’t mean the second half will be okay, it doesn’t always

work like that. Like I said July was a bad month, we made money, we were profitable but most markets were down in July. The one message that bothers me as we look into the second half of the year is that our infrastructure fund has made many commitments, and if you don’t have replenishment of capital, earnings will go down because it will take a long time for the infrastructure projects to start making returns. We are responsible and we will run a business that is consistently profitable, however, without replenishment of capital, it will mean we will slow down investments in infrastructure to ensure that we run a stable, profitable business. It also means we will go through a phase where we don’t have enough liquid assets to invest in markets to earn a return and we may see a decline, so if by some miracle the budget is favorable and we are able to get fresh funds, that will be fine because we really do need fresh funds. Are you hopeful of fresh funds? I’m realistic about things, but you know the oil sector is not what it used to be. We have got some funds into PIDF, that is tied to the roads project and we are looking to NSIA’s own capital, we’ll go into those projects as well and we are also looking to raise third party capital into those road projects. I’m hopeful that at least we can conclude the Lagos/Ibadan, Second Niger bridge, Abuja/Kano, these are going to be toll roads. But on whether we are going to get a general pool of funds that will come into the broad NSIA, I’m hopeful, but realistically, I think the environment is challenging. We will continue to work very closely with the minister of finance to look for opportunities to continue to shore up the capital of the NSIA. If there is no fresh capital coming into the NSIA, it will be difficult for the business to really fulfill its mandate. However, in 2020, you will see us create more of these co-investment funds, because part of what we are trying to do is to attract other people to co-invest with us. Look at Infra Credit, it has been able to attract $65 million of fresh capital from other institutions, this is a business that NSIA owns 100 percent. We are looking to use that kind of fund, in agriculture we are going to raise significant capital to bolster our agriculture co-investment fund with UFF to do many more things in the pipeline. So I’m hoping that, that becomes a strategy where we create co-investment funds with other entities, corporates, asset managers who want to invest in same area with us, that is a key strategy that we run. It’s a very challenging environment today that government has to look at all its priorities, it will be good if fresh funds come, but we are also very realistic about the environment and preparing ourselves to look for other ways to bolster our ability to invest through all these co-investment platforms. Are there other plans to expand NSIA capital without necessarily looking to government considering low revenues amid in face of many priorities? There are discussions we have muted, though not in a much more formal setting, like at the National Economic Council, where we said one other way to grow the NSIA - unfortunately that is going put us at the cross heads of the privatization program –will be to grow the organization through asset transfer. There are assets that are owned by the federation that government is looking to improve performance, the federation can choose to contribute those assets to the NSIA. The NSIA then owns the asset, takes the value as agreed between the federal government and the NSIA, and then it can then raise capital and bring managers to make the assets work, that formula has been used by Singapore. There is always an alternative, and that alternative is to look at assets, as a way to grow the fund. However, considering our federal structure, this is not an easy discussion to have but it will be worthwhile. The organization might choose to fix the assets, sell it in the public market and then raise capital or find a trade buyer to buy the asset and raise capital, all of those things are options that the entity can get back to. Getting fresh capital, if cash is impossible, assets is a very possible discussion to have. I can’t mention any assets but it’s everything from real estate to industrial assets that as a federation, trying to fix

it from your budget is a problem. A transfer of that asset to the NSIA is a viable option because NSIA, by its Act is allowed to operate it more freely and independently, can then decide to bring co-investors and external managers to fix and then sell it and realize capital. The country is littered with a countless of those assets, you can choose to sell them through privatization which is fine but you can choose to fix it up first before you sell them. There are many things that can be done. So my sense is, that is a clear and viable option for putting fresh capital into the NSIA is asset transfer, because it has been done in other places. Singapore has done it successfully, China to some extent has done it successfully, the Chinese government decided to transfer all their stakes in banks, industrial bank, agriculture bank into one of their sovereign wealth funds, and the fund now takes a sit on the board, changed management, forced the funds to improve and they were able to grow the asset and whatever dividend or equity sale that they make, they use that to capitalize the fund. So there are many things that can be done here and we need to find our own part but the NSIA will not survive for too long if there is no consistent injection of capital. Many people that work here are ex-bankers, so if we have the liberty to go and raise deposits like other places, we will do that but that’s not what we do, we are not allowed to do that, we have only one client which is the federation of Nigeria. How do you think that’s going to happen, considering controversies that can it throw up? It’s not going to be easy, nothing worthwhile is easy. It’s a difficult conversation but we’ve not started yet. It’s still an idea that says look other people have done it before; let’s look at how it can be done here. It’s a complex idea in our environment, in other places, seems not so complex, but it’s worth working on, and I think we are working on it. You did mention recalibrating how NSIA assets will be allocated, how far have you gone with that? What we said was that going forward, any fresh capital given to us by the government will now have 50 percent in Nigeria and 50 percent international, or more like 20 percent in stabilization fund, 30 percent in future generations fund and 50 percent in infrastructure fund. It used to be 20, 40, 40, now it’s 20, 30, 50. But since we made

that statement, we have not received any fresh capital apart from the PIDF. So any fresh capital that comes now gets allocated because each of these funds is ring fenced meaning we don’t pull money from one fund to the other, once it’s there, it’s locked up, so that we can have clean accounting of each of them. The NSIA Act specifically says it must be ring fenced. The PIDF is a separate PPP arrangement between ourselves and the federal government to deliver these three key road projects. It will receive some money from the federal government, some money from NSIA, and NSIA will raise capital from other parties to complete the projects. What’s NSIA approach to hedging itself against shocks and volatility? First of all, very rare do you have what we had in 2008 or 2001 when it was a synchronized melt down in the markets with every asset class rate on the decline. It was a global financial crisis. That happens once in a while and the board’s strategy is to ensure we are fully diversified as much as possible, and the major part of what we need to do is to ensure we are investing in the right assets. We need the right assets to get the right securities, the right instruments, so that has helped us. We have invested across 17 countries in our equity exposures. We cannot afford not to be diversified, it’s the number one hedge in a volatile market. The other strategy for us is to be as close to assets that we know as possible so we are not taking crazy, random risks of things we cannot explain. Where we see the most risks in our portfolio, to be honest with you are even some of our domestic investments, which at the same time make an impact and provide us growth opportunities in the future. And I say that because Nigeria is frontier market and frontier and emerging markets have been under pressure. Look at the Nigeria stock market, we have not invested in our stock exchange, but if we were, it would have been difficult, especially this year. Look at Nigeria in the context of the global market, so when I say a lot of risks are closer home, I’m actually referring to, for instance, if you look at the performance of the Nigeria stock exchange and that’s because in the wider context of what is affecting frontier and emerging markets, that asset class has particularly underperformed in the last 12 months because of all these trade wars issues that are happening globally.

Continues on page 22

Thursday 21 November 2019

BUSINESS DAY

Managing

GOVERNMENT

BUSINESS

Nigeria’s Sovereign Wealth Fund safe... Continued from page 21 So the way we hedge ourselves is through being diversified, picking the right securities and making sure that on a regular basis we are monitoring our portfolio and avoiding any major pitfall. The fact that we are not overly exposed to any one is a major protection for us. Imagine if we had put all our eggs in the US equity last year, it would have been a disaster but this year has been spectacular, so it’s not fair on the Nigerian people that I put you through that level of volatility. Bear with us, we are going to be diversified which means we might not be the best in terms of returns, but we are never going to be in a position where we lose money, it’s going to be a solid steady performance. I feel confident, unless we have a situation like in 2008 where there was no place to hide, then that is difficult but also we need to understand that this only happens once in a while and when it does, the world recovers a little bit quickly as well. Outside of those major crashes, for us, is by being well diversified in our portfolio and monitoring it daily to making sure we are picking the right managers and right advise. We changed our advisers last year from Cambridge associates to UBS, part of it was just because we have worked with Cambridge for five years, we needed to work with somebody else to see whether we can get a degree of edge in our returns. This is one of the dynamic decisions we make to ensure we are doing the right things and we do have a lot of advisers working with us. How are you able to gauge what to invest in and when? It starts by hiring the right people, and we have them. The other thing is that we have good advisers working for us and we are working very hard, our people are always on the road going to visit our investments, on the phone, video conferencing daily, checking on every portfolio. I get the report on every single position at least every week, that’s my main job. That way, we are able to pick out issues early enough and solve them. We have three ways of making an investment, first of all is the process, the people and the performance. It’s the three Ps that we use in managing. Performance is the first gauge, if performance is not so good, we ask ourselves have they changed their investment process and have they changed the people. Sometimes if somebody you know has been doing well in the past and something is wrong, you sit down and understand his logic, if you believe it, you stay with him, but if the process is changed and they are now doing things they don’t understand or there’s a new person who doesn’t know what he is doing, we sell that investment on the spot. So these are guiding principles surrounding how we select investments that we make, and this is on future generations and stabilization fund. For infrastructure fund, we define clearly where we want to invest, whether it is gas industrialization, agriculture, power, roads, healthcare, those are the areas we are investing at the moment. Anything outside of that, we don’t have capital, we don’t have the energy and we don’t have the expertise. Gas industrialization for us is very big area, the pipeline is growing and we are quite excited about the possibilities in that sector. What’s NSIA role in the agriculture sector? First of all, you have seen our role in fertilizer - the investments, it’s been very successful three years. NSIA and OCP of Morocco have formed a joint venture to produce one of the most important elements of fertilizer which is ammonia. OCP is the biggest buyers of ammonia in the world, so we are now creating a plant, we are going site it in River state – Bonny -to produce ammonia for off take for OCP, and we expect that the project will pay back in six years. It’s is a big project, it’s over $1billion investment, 50-50 jointly owned by NSIA. In the last three years of Presidential Fertilizer Initiative, PFI, 2017, 2018, 2019, we have blended almost a million metric tons which is 20 million bags of fertilizer, blended and sold, it’s never been done in the country. When we started there were hardly any blending plants operating in Nigeria, there were four that were okay, but were operating in less than 30 percent utilization. We are now have 24 blending plants across the country who have joined the program and now operating in 60, 70, 80 percent utilization. It’s creating tens of thousands of jobs. Just

the doctor started calling the manufacturer to see if they could get it but sadly she passed away. That’s another thing, in Nigeria, more than 80 percent of the patients are already terminal, so one of the big investments we need to make is in early detection of cancer. One of the investments that is worth making and I think state governments should consider is maybe mobile cancer diagnostic centers because early detection of cancer is something I think the country should focus on. One of my heart breaks in our cancer treatment center is how many people that turn up, I look at the data and many of them are already at the late stage. So early detection is important and pharmaceutical investment is important as a way to make sure we have a healthy society.

to give you an idea, every year, the truck movement alone for fertilizer is more than 70, 000 trucks, and that is just to get raw material up and down the country, not to talk about those that are buying finished fertilizer and distributing to different parts of the country. We have saved the country a lot of foreign exchange because before now the country used to buy fully blended fertilizer and import it, meanwhile we have limestone, and we have urea here. The only thing we don’t have is phosphate which we buy from morocco as part of the deal struck by the president and potash which we buy from international market. By the way there is potash in Yobe, but has not been developed although I saw in papers recently the presidential solid mineral development fund just signed a deal with OCP to develop phosphate in kaduna. On ammonia, we have identified the site, finished the early stage of feasibility, moving into concept stage, we are now talking about design and construction could start by late next year, and for finishing in 2023. That would be fantastic for the country, don’t forget that this gas that we are selling as LNG or just flaring could make us more money if we add value. PFI has been successful, fertilizer prices came down when PFI started, fertilizer prices was between N11,000 to N13,000 a bag, in the first year it was down to N5,000, and we are selling at N5,000, there has been challenges in some places within Kaduna, Kano, Abuja where we have blending plants, you can get for N5,000. But I want to admit that because of high cost of transportation from far places like Borno, Yobe, Zamfara, most people have not been able to buy it for N5,000 but a little bit ore, it’s still better than where it was before because of what just a threeman team in NSIA has done working with all the blending plants, logistics companies, importing and ship-loading, transporting to the blending plants, following through with them, auditing their books. It’s been fun. Also in agriculture, we created a $200 million fund, with UFF which is a company backed by Old Mutual South Africa, and they have acquired a farm in Nasarawa state called Panda farm. We are now at the early phases of investing in the farm, it’s going to be a big investment and from what I have seen, it’s going to be somewhere between $25 to $30 million to make the farm for soy and maize, irrigation and all kinds of things that we can grow all year round. We will expand it to 3,500 hectares and there is a feed mill there that is being refurbished. There is already a whole lot of farm designs and architecture going on and the partners are based in Holland. We are almost about to conclude our discussion on 2,000 hectares in Kaduna- Gurara, for avocado for export. We are almost about to conclude our signature with Edo state for cassava, and then we are also looking at indoor farming, I know this sounds crazy but this is probably one of the amazing things I have seen in a long time. There is a US partner we are working with on that to produce high quality vegetables for both local consumption and for export, there are a lot of things in the pipeline. What are your projections with these farms? The expectation is that, for example the farms will pay back in 3-5 years, if we invested about $25 million, we would have generated that in

cash in less than say 3-5 years, so we are very hopeful. We sponsored Fund for agriculture Finance in Nigeria, fafin, which is also currently investing in so many things. We also invested $5 million in banangona which is a scheme that aggregates small holder Farmers, it has about 40,000 farmers now, and it’s in Kano. But fafin has a lot of assets that we have invested in, and we have about 6 investments. Obviously we have been in discussions with commodity exchange for a long time, we have not reached a landing, though it’s been ongoing for a long time and we are working well with BPE on that. How about the health sector? For the health sector, we are happy it’s still early days. Our Luth Cancer center has stabilized, we are not yet fully wrapped, every time I go there, I still so many patients and it’s sad because it just tells you how many people are still sick in this country. It’s a world class cancer center, our people are still being trained, in the next couple of weeks we will have a new board in charge of that place and that will be announced once the NSIA board approves it. We’ve hired a few new oncologists, physicists, a team just joined from Egypt and we are going to have more people. We need many more people to make at least 2 shifts a day working 18 hours a day, then we will be in a position to actually not be overwhelmed, we get over 100 patients a day. Some of the equipment there are so new, our high energy equipment is second submission in Africa, so one of the challenge is actually getting people trained, it’s slow but we have to be careful when we dealing with people’s lives, it’s a long way to go, but it’s been active. Our diagnosis center in Kano should be up and running before the end of the year, like 95 percent completed, Umuahia is little bit farther behind, and I’m still hopeful we will finish before the end of this year or early next year. Unlike LUTH, we have hired 60 people already for both Kano and Umuahia, they have been fully trained and ready to start work. We have a pipeline of 13 projects we plan to do in healthcare next year, subject to capital availability. When it’s fully invested, LUTH will be over $10 million, Kano and Umuahia will be $5million each. Is the NSIA is positioning its healthcare investments to tackle huge brain drain challenge in the country? We are building a training center next to LUTH, and we are hoping that it becomes the finishing school for oncologists, therapists, physicists and those who actually work in cancer, so that people can stay back and practice after their studies. I think maybe it will finish by the end of this year. The other area we are looking at is pharmaceuticals, one of the things that has come out in our health care investments, especially our oncology center is that some of the medicines are not even available and they are expensive. We are in advanced discussions with the University College London, and I’m hoping that once we get the approval they will be helping us in consultation around how we make pharmaceutical products in Nigeria. So we are working hard to see how we can invest in pharmaceuticals for oncology medicine in the country. So let’s see how that goes, I think that will be very interesting. There was a sad case recently that got my attention, about a woman that got her prescription but could not find the medicine in the country,

Are you in talks with the state governors on this? We have our annual meetings with the governors once a year, hopefully I will raise it with them, but the ministry of health is there and is aware of all these issues. There are cancer treatment centers in the teaching hospitals that need refurbishment and equipment and all that, we are working closely with ministry of health. But I’m just saying that primary health care is a state and the local government problem and should not just be about malaria, cholera and typhoid. Health care issue is a problem, but for cancer which we have dipped our hands into, we need more centers, early detection systems, pharmaceuticals, they are expensive to bring them into the country, so there’s need to invest in them locally. Can you speak to NSIA’s involvement in the power sector? We have not really done much apart from the work we are doing on Mambilla right now and it’s ongoing, albeit, at an early stage. Mambilla as it is designed is over US$5 billion investment and a project of over 65 miles square, it’s a whole state. You are moving water to build a dam, to build four hydro dams, two power lines, and 700 kilometers of transmission cable. It’s a big project, you are going to build air strip, roads, before we get into it, and there is a lot of planning required. Mambilla has been in the works in this country for over 40 years. The president has put it under PIDF, and a lot of work is going on, but there’s a long way to go to actually get this done. It’s a big project and you don’t start it until you are sure of the money. The counterpart funding needed for this project alone is $850million, then the Chinese will bring their own over US$4 billion to finish the project and we’ve been in serious discussions with them. Hydro dams of that scale is not a joke, the cost of the project is over $5 billion. We also need to be careful and efficient and ensure this is really what we need, this is why we now bring in experts. After you build the dam and put power units, you now have to do 700 kilometers of transmission lines. We are working on solar plant panel in Kano with the federal government, it’s a PPP, 10 megawatts of solar, we are hoping that once we finish that we can do many more, there are many other things in our pipeline now on power. Clean energy for me is very important, there is a project we have been working on with two other parties to take one of the gas flare sites and recover the gas for cooking and then power. There are so many gas flare sites in Nigeria, we can turn the gas around for cooking and some for power plants, that way we address climate change, pollution and all those stuff. Can you speak to your investments under the PIDF? A lot has been going on, the Second Niger Bridge is something that by the end of this year you all be very proud of the work done by this administration. The first tranche of the PIDF fund has been deployed, the next tranche strand is commencing next year. The PIDF funding structure is $650 million from the government, plus N90 billion, plus $300 million from NSIA plus third party capital we are going to raise which will depend on the project we are talking to. This is across all five projects but now the projects that are ongoing are Lagos/Ibadan, Abuja/Kano and Second Niger Bridge. Mambilla will start soon, we are still in early discussion on the East West Road and it is a bit more complicated because it has four contractors. There is a lot going on the Lagos/Shagamu side, you will see a lot more progress between now and Christmas

Thursday 21 November 2019

BUSINESS DAY

BUSINESS TRAVEL NAHCO generates N7.38 bn revenue in Q3 2019 Stories by IFEOMA OKEKE

he Nigerian Aviat i o n Ha n d l i n g Company Plc (nahco aviance) has posted gross revenue of N7.38billion for the nine month period ended September 30, 2019. The Company subsequently posted a Profit Before Tax of 973.1 million for the Q3 ended September 30, 2019. The figure is 241.3million higher than the amount for the same period last year for Nigeria’s foremost ground handling company. This represents 32.96 percent increase over the same period last year. Profit After Tax which stood at N782 million for the nine-

month period compared favourably with the N601.31 million recorded for the same period in 2018. This translates to a positive 30 percent increase. The performance released by the Company to the Nigerian Stock Exchange (NSE) showed that the organization was already reaping from the gains of its transformation programme which commenced at the inception of the present management. Earnings per share stood at 48kobo as at the end of the third quarter of 2019 compared to 37kobo as earnings per share as at the end of the third quarter of 2018. The Board appointed a new management for the Company which early this year embarked on a five –

Dana Air airlifts 5.4m passengers in 11 years

ana Air has announced that it airlifted 5.4 million passengers in the last 11 years of its operations. According to a statement by Kingsley Ezenwa, the airline’s Media and Communications Manager, the airline hopes to double the figure by sustaining its operational efficiency, increasing its fleet size, maintaining its record on-time performance, and raising the bar of its excellent service delivery in the coming years. “Having completed a commercial analysis of our loads in the last 11 years and confirmed it to stand at 5.4 million, we have set the ball rolling for the next 9 years. We have commenced reviewing plans and we intend to raise the bar of our operational efficiency, increase our fleet, and improve on our excellent service delivery to remain on top and keep the commitment and loyalty of our staff and guests” With the addition of two of our recently acquired B737 aircraft, we are looking at creating more flights and providing massive capacity at underserved destinations within our route network this yuletide. This is to ensure seamless travel experience for our guests to avoid the uncer-

tainty of last year” “On our product and services delivery, we have the Dana miles club which offers benefits such as miles plus cash, miles in exchange for ticket, excess baggage allowance, discount at partner outlets and upgrade from economy to business class, all to the benefit of our loyal customers. Our Dana Miles guests should expect more in terms of innovation and rewards” Commenting further on the airline’s product and service, Ezenwa said “Our Business Class service is amazing and the service is second to none, tailored for customers who love to travel in style, luxury and comfort. We would like to keep the travel experience as topnotch as always. “We have dedicated each day to serving our customers even better and we have upped our enlightenment for passengers to use their correct details so we can interact with them directly via our multiple channels. Dana Air is one of Nigeria’s leading airlines with a fleet size of 9 aircraft, and daily flights to major destinations in Nigeria. The airline is reputed for its innovative online products and services, worldclass in-flight services and unrivaled on-time performance.

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year transformation plan. The Company is continuing the massive upgrade of its equipment, warehouses and other

facilities at the airports. Commenting on the results, Olatokunbo Fagbemi, the Group Managing Director

and CEO, said she was delighted that the Company was making progress on all fronts. “NAHCO is in a good place.

Apart from being the industry leader in ground handling in West Africa, we are also providing leadership in supporting our partners, the Cargo agents, in the important skills of packaging for export,” she said. In the period that the new management took over, the company had increased the capacity of its export warehouse and is currently renovating its import warehouse. NAHCO is also taking advantage of opportunities emanating from federal government’s closure of the land borders as it is partnering stakeholders on proper packaging for their products for exports. NAHCO recorded impressive revenue in excess of 9.8 billion for the 2018 financial year.

BA rewards travel agents with vouchers in its mega Christmas promo

ritish Airways, top international UK airline, recently showed appreciation to several of its Nigerian travel agents with Shoprite shopping vouchers in its mega Christmas promo. At the presentation of the vouchers which held at the Palms Shopping Mall, Lekki, Kola Olayinka, Regional Commercial Manager, West Africa, British Airways, remarked that the promo was initiated

to appreciate and reward the good work put in by the recipient travel agency partner staff during the duration of the promo. According to Olayinka, “The mega promo which ties into the festive “xmas season, was a good incentive to encourage our travel agents to take charge and earn more with each travel booking. The more tickets issued, the more shopping vouchers they got and hence more purchases

they are able to make for their household in preparation for the upcoming Christmas.” The promo allowed the travel agents access reward points on every flight they booked within the period for a chance to earn a shopping voucher worth up to 200 dollars and a grand prize of a business class ticket to London. Shopping vouchers worth over 4 million naira were up for grabs during the promo.

L-R: Bodunrin Olowolagba, sales manager, British Airways; Bolu Solanke, agency manager, St Claire Travels; Sunny imaikop, ticketing & reservation officer, Discovery Travels; Peju Diya, sales manager, British Airways and Ademola Sanya, trade manager West Africa, British Airways and Iberia Airlines at the Christmas mega promo prize presentation at Shoprite Lekki recently.

Expressing his gratitude, one of the winners, Imaikop Sunny, Ticketing and Reservation officer, Discovery travels & tours limited, remarked that the initiative served as an added encouragement for BA travel agencies to do more. He went on to say, “This was a very good initiative and a plus for British Airways. I’m happy to be among the winners of this promo and I urge them to keep up the good work.” Evelyn Nwakolo, another lucky winner, from Tour Brokers International TBI, was full of appreciation to BA management for such an incentive, according to her “this will be a Christmas with a difference with BA providing vouchers to shop for our homes this Xmas.” British Airways is a full service global airline, offering year-round great fares with an extensive global route network flying to and from centrally-located airports. It has its home base at London Heathrow, the world’s busiest international airport, and flies to more than 200 destinations in 80 countries across the globe. The Airline operates daily flights from Lagos and Abuja to London.

IATA seeks sustainable industry for all Europe’s citizens

he International Air Transport Association (IATA) has called on governments in Europe to seize the opportunity to create a sustainable aviation industry that protects the environment and increases connectivity opportunities for Europe’s citizens. The call came at the opening of Wings of Change Europe—a gathering of aviation stakeholders being

hosted in Berlin, Germany. Amid continuing celebrations of the 30th anniversary of the fall of the Berlin Wall, the role of aviation in the continent’s integration was top of mind. “Air transport has been at the heart of European integration. Europe is now connected by 23,400 daily flights, carrying one billion people a year. And the same spirit of optimism that forged the new

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Europe 30 years ago should be turned towards conquering the challenge of sustainability in a positive way. Solutions exist to sustainably connect this continent and keep it accessible to all its citizens,” Alexandre de Juniac, IATA’s Director General and CEO said. The growing concerns over climate change has rightly focused attention on the work aviation is doing to @Businessdayng

reduce emissions. Airlines have cut average emissions per passenger journey in half compared to 1990. More importantly, the industry is committed to reducing its environmental impact even further. Airlines continue to invest tens of billions of euros into more efficient aircraft, more efficient operations, and the development of sustainable aviation fuels

Thursday 21 November 2019

BUSINESS DAY

Markets + Finance

‘Providing proprietary research, commentary, analysis and financial news coverage unmatched in today’s market. Published weekly, Markets & Finance provides all the key intelligence you need.’

How FirstBank Fintech summit is contributing to bridge Nigeria’s financial inclusion BALA AUGIE

Adesola Adeduntan, CEO, First Bank of Nigeria Limited

financial needs. “Evidently, financial technology is causing positive disruption in the financial services industry. The impact of technology in lifestyle business and other areas of today’s customer is huge. We are therefore following global trends in collaborating with Fintechs and other big technology companies on several transformational initiatives to be able to satisfy our customers’ needs,” said Adeduntan. According to Adeduntan, the main purpose of the FirstBank Fintech summit is to converge thought leaders in the Fintech space to champion discourse around financial technology and proffer solutions that will shape the future of banking. He stated further that key areas of interest for the bank, is to champion the propositions around e-business and digital offering, agent banking, wholesale or transaction banking product suite, retail

and consumer lending and SME productivity. “I am optimistic that every organisation represented here will be empowered to provide services with greater speed and solve real societal problems to the advantage of the Nigerian populace through the insights that will be gained from this event. “At FirstBank, our promise is to always deliver the ultimate ‘gold standard’ of value and excellence. We will therefore stop at nothing to provide excellent and innovative financial services to our esteemed customers,” he concludes. Victor Asemota, keynote speaker at the summit said the essence of Fintech is the ability to deploy technology towards solving human problems with tools and processes. According to him, innovation simply means the ability to effectively combine and deploy tools, process and people together to achieve an aim.

Asemota opined that Fintech will help to end the deficit narrative associated with human centered innovation.

‘

According to Adeduntan, the main purpose of the FirstBank Fintech summit is to converge thought leaders in the Fintech space to champion discourse around financial technology and proffer solutions that will shape the future of banking

‘

s financial solution providers continue to face stiffer competition globally from Fintech startups and emerging technologies such as blockchain, crytocurrency and crowdfunding, and the increasing level of disruption in the traditional mode of payment and business models, technology holds the key to unlock the potentials in the financial service sector across Africa through Fintech. As the banking sector continue to find newer ways of engaging and providing customers’ centric services to bridge the current level of unbanked and under banked population to achieve Nigeria’s 2020 financial inclusion target. The fall out of the recently held First Bank Fintech Summit 3.0., is that technology is the growth to financial institution in Africa. “Customer experience and innovation are key in our approach to satisfying our customers. As a leading banking services solutions provider, FirstBank has continued to set the pace in the financial services industry, coming up with new initiatives to provide financial products and services with greater speed, accountability and efficiency,” said Adesola Adeduntan, the CEO, First Bank of Nigeria Limited at the recent First Bank Fintech Summit 3.0. Adeduntan opined that the third edition of the FirstBank Fintech Summit indicates that bank’s commitment to putting its customers first. According to him, FirstBank is keen at offering excellent financial services by devising new ways of effectively and efficiently meeting customers’

Hence, people plus innovation will result into solving real life problems, real time. Chuma Ezirim, the group executive, eBusiness and retail products, said Fintech is an enabler in solving real problems in the financial sector. However, building a strong digital franchise in the financial ecosystem will be driven by successful partnerships. In rolling out the figures, Ezirim said, “Over 18m customer accounts, over 10m cards issued (processes about 25% of card transactions in Nigeria). Highest number of Verve transacting cards; Visa debit multi-currency card. Over 8 million users (80% of customer base) with an average of 2.1 million transactions worth over N7 billion is processed daily. “Over 3.3 million customers; over 500,000 transactions worth N23billion are processed daily. Over 36,000 active agents in Nigeria with a dominant presence in the 754 local governments in the 36 states. Over 600,000 transactions worth over N9billion are processed daily,” said Ezirim. According to him, in developing digital innovation lab, the banking sector must create new digital experiences for customers by enhance existing channels and products. Therefore, banks and the financial sector should leverage Fintech and nonFintech ecosystem in Nigeria by promoting open innovation, collaboration and coinnovation in the Nigerian financial services sector. According to Ezirim, in offering banking as a service to its customers in leveraging its API infrastructure, FirstBank is today offering payments through accounts, wallets and cards. However, he is of the view that there are growth areas and opportunities in Fintech. According to him, Fintech allows banks to offer

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real time processing of transaction (instant payments and settlements). Mobile payments/acceptance channels through mobile Apps, USSD, QR Code, E-/M commerce, and others that are out-growing cards usage. Similarly, Fintech has contributed to the digitalization of person to person, person to business, business to person and business to business payment transactions. And, it allow for new approaches to assessing risk in underserved segments especially with consumer and SME Loans. Callistus Obetta, the group executive, technology services, First Bank said financial technology has made positive disruption in banking and other financial services; and financial institutions will do well to take advantage of Fintech. According to him, FirstBank is taking giant strides in the digital space. “In a short time, we have become the foremost financial inclusion solution provider with over 36,000 agents in all states of the federation. We have done over N2 trillion in transaction value from inception to date. “The FirstBank Agent Banking Network is currently doing over N8 Billion daily. This is helping us reduce poverty in the country. Our Firstmobile application has become the foremost mobile banking application in the country with over 3 million users doing over 14 million transactions monthly,” said Obetta stating that First Bank has been able to achieve this feat due to its ability to embrace technology. However, Obetta urged participants at the Fintech summit to leverage on the insights shared by speakers. “We will continue to adopt the best technology and collaborate with the best partners to deliver value to our customers,” Obetta stated.

Thursday 21 November 2019

BUSINESS DAY

LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

‘Law firm management is uniquely challenging’ - Joy Harrison-Abiola In this interview with BusinessDay, the Chairperson of the Association of Law Firm Administrators Nigeria (ALAN), JOY HARRISON-ABIOLA speaks about the future of legal work and the impact that technology, collaborative peer communities and how the delivery of cutting edge management contributes to the development of legal sercices in Nigeria.

ABOUT ALAN he Association of Law Firm Administrators Nigeria (ALAN) is a fully registered body made up of Business Support Professionals in various sized law firms in Nigeria. In the past twelve years we operated under the aegis of the Practice Administrators Forum (PAF). It was founded to provide support to professionals involved in the management of law firms, corporate legal departments, government legal agencies etc. We are affiliated with the Association of Legal Administrators (ALA) Illinois, USA.

etc. To confront these challenges awareness is key and ALAN is driving Business best practices awareness in the industry.

How do the association support the growth of the legal industry with its objectives? We are dedicated to promoting and enhancing the business competence and professionalism in the management of law firms. We bring to the fore the importance of Business Support Professionals (BSPs) to the legal industry. We provide professional development programs to law firm Administrators. We are at the forefront of promoting awareness of the importance of Business best practices in the legal industry. We do research on some strategic and operational challenges faced by law firms on Nigeria With the rapid changes in the legal services sector in Nigeria, there is need for law firms to come up with very strategic solutions to

How does collaboration drive the fundamental objectives of ALAN? Law firm management is uniquely challenging. ALAN offers the networking and resources to help achieve success as part of a law office management team. One of the major benefits of ALAN’s membership is access to a large group of experienced professionals- COOs, Practice Administrators, HR Managers, Accountants, Business Development Managers in various sized LAW firms. All our events provide opportunities to mix and mingle with peers. Also our Business Partners are often invited to our events and they provide immeasurable value.

How effective are some of the strategies aimed at achieving collaboration and knowledge sharing for the sustainable growth of all member law firms? The problems we face in the legal industry are common. ALAN provides collaborative peer communities, strategic operational solutions and business partner connections, empowering our members to add value to their organisations.

the current realities and challenges, what innovative solutions have ALAN come up with now to combat this challenge? A major breakthrough is our collaboration with the NBA via the Section on Business Law, some law firms and a few other professional bodies. One of the current realities is the future of work, the impact that technology and the millennials who will play in shaping that future.

ALAN has been a strong voice in advocating that law firms embrace technology and more progressive work life integration. We are championing policies that will make law firms in Nigeria more globally competitive. In recent times we have had seminars that dealt with counterproductive practices in law firms - financial management, HR issues - career progression, remuneration issues, talent retention,

Tell us about some partnerships that have yielded

good results not just for ALAN but member firms. First, our partnership with the Association of Legal Administrators Illinois USA, Our Association with the New York Chapter and recently with the Practice Administrators in ALA Boston Chapter. The partnership with NBA SBL, the Law Practice Management Committee of the NBA SBL, We have partnered and are partnering with some other professional Associations and Consulting Firms. What growth, networking and professional opportunities are available to legal administrators and managers across Nigeria? We believe the growth and networking potential available to legal Administrators in Nigeria are enormous. Presently we are still basically operating in the South but there is a huge request and potential to spread to other parts of the Nation. We are focused on growing our membership. Where do you see ALAN in another 10years? I see ALAN as the premier Professional Association for Law firm management. I see ALAN in 10 years as the undisputed leader for the business of law in Nigeria, focused on the delivery of cutting edge management, thoughtful discourse, great ideas, research, education and progressive development within the legal industry.

Experts suggest business strategies to grow law firms in Nigeria E xperts in various sectors of the economy have called on law firms to begin to look inward and develop business ideas and strategies that would enable them progress in the changing business world. Speaking during a workshop put together by Nigerian Bar Association Section on Business Law (NBASBL) Law Practice Management Committee (LPMC) in partnership with Association of Law Firm Administrator Nigeria, (ALAN), Anire Kanyi, chairman NBA-SBL LPMC said business strategy touches various aspects such as building businesses, turning around issues and trying to touch the very fundamental of any kind of business. Speaking on the theme, ‘Realigning Business Strategies for Law Firms,’ Kanyi said the “We realised that for us, law firms lack certain fundamentals to enable them progress in this changing business world. In order for them to compete with what is happening across the

Members of the NBA-SBL Law Practice Management Committee on a courtesy visit to AIG Imoukhuede

world, we need to begin to get the fundamental issues right. “You are seeing the kind of panel we have; people that understand the business and have turned their law firms around as a business. The basic thing is to understand what is expected from in-house counsel and also what is expected from the www.businessday.ng

lawyers themselves doing the work. What they need is that structure.” Toyosi Fatoki, 2nd Vice Chairman, NBA-SBL Law Practice Management Committee, (LPMC) said the committee is really focusing on how to get the law firms and law practice to where it should be and the committee knows that as far as https://www.facebook.com/businessdayng

the brains and intellectual capacity is concerned, Nigeria is covered but the law firms are not doing as well commercially as they are supposed to especially when compared to foreign law firms. Fatoki said this obvious gap is not because Nigeria doesn’t have the capacity but because it is not @Businessdayng

doing something right and that is one of the reasons why the NBASBL LPMC have chosen the theme that it has for the work shop, so that they can all brain storm and think about how to make law practices more commercially viable and can Continues on page 26

26 BD

Thursday 21 November 2019

BUSINESS DAY

LegalBusiness

Experts suggest business strategies to grow... Continued from page 25

become one of the wealthiest professions in Nigeria. “Participants here are taking home a lot of things. First, we need to know that there is more to the law practice than just the regular litigation and agreements. There are other aspects of law that we haven’t harnessed in Nigeria. There are training and consultancy services and other areas that we can delve into and develop so we can begin to generate proper revenues from these areas of law. “We should also take away the fact that succession is very important. We know a lot of law firms that have died because the

owners passed away. That shouldn’t be the case. There is no reason why we shouldn’t have 2000 years old law firms in Nigeria, if we have the right succession plan in play. It doesn’t have to be a family thing. You just identify the good people in the firm and train them to a certain level and when the older ones retire, the younger ones can take over,” she explained. Adeoye Adefulu, partner at the law firm, Odujinrin & Adefulu Barristers, Solicitors and Notaries Public who commended the LPMC for putting the event together said this is however, the first step in what should www.businessday.ng

be a series of discussion between lawyers within the law profession and outside the law profession as well. Adefulu hinted that one of the challenges lawyers have had is that lawyers have always talked to just themselves. “For instance, in the university you are taught by law lecturers who are lawyers. In the law school, you are taught by a lawyer and you are responding to a lawyer. When you get into practice, you are responding to your senior who is a lawyer and that senior who is a lawyer is responding to the general counsel in the organisation who is a lawyer. “So, we have this insular concept of our opinion being the end product. Your presentation and opinion in court is not the end product. There is a service you are delivering and you are delivering that service to someone who probably is not a lawyer and getting them engaged in that conversation is very key. “When we compare the city law firms here with those abroad, typically in UK, lawyers in lawyers in law firms are paid much better than in-house counsel. They are able to afford it because the law firms themselves are getting very well paid by the clients. But we have a situation where even among ourselves, there is an unhealthy competition, which the companies have taken advantage of and the value of our services are now being commoditised,” he said. He stressed on the need to get together and think about what value lawyers are providing, how they can provide that value and how they can work together to enhance

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the value. Moyosore Onigbanjo, Attorney General and Commissioner for Justice, Lagos State who was also present at the event said he was happy with what the NBA Section on Business Law was doing through its committee on legal practice. He said he would ensure that the ministry of justice worked collaboratively with the Section on Business Law to support its vision and its activities, adding that a contingency from the ministry would be heavily present at all NBA-SBL programmes, in other to take full advantage of the benefits offered by the various committees of the Section. Seni Adio, Chairman NBA-SBL said what the committee has done in the past and will continue to do is take their seminars across the country. “We try to take the programme to certain parts of the country that has the same affinity with the subject matter of our discussions. For example, if we are going to have a seminar on agriculture, it is likely to be somewhere in the North. We are going to be having one on mining and we are going to have it either in Jos or in Bauchi State, for oil and gas conference, we will have it in the Niger Delta region. “We have programmes being conducted in various parts of the country. We intend to compress the communiqué from this event and have it available on our website, disseminate it via social media and use it as a platform on which we can train in future,” Adio said.

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Thursday 21 November 2019

BUSINESS DAY

IndustryFile

LegalBusiness

Yemi Osinbajo calls on Nigerians to commit more to excellence in all their undertaking so as to bequeath to the present

ice President Yemi Osinbajo has urged Nigerians to commit more to excellence in all their undertaking so as to bequeath to the present and future generations a country that will be an exemplar in the comity of nations. Osinbajo, a professor of law and Senior Advocate of Nigeria (SAN), made this exhortation recently at the public presentation of ‘Sasegbon’s Judicial Dictionary of Nigerian (in 7 volumes) held at Muson Centre, Onikan, Lagos. The Vice President commended the utility value of the publication and described it as a must have for all desirous of improving the quality of legal practice and jurisprudence in Nigeria. He extolled the sterling qualities of the brain behind the publication Deji Sasegbon (SAN) and described as “unparalleled” his contribution to the legal profession through his over 78 volumes of law publications. In his remark, eminent lawyer and Chairman of the occasion Chief Wole Olanipekun (SAN) described the publica-

Vice President Yemi Osinbajo

tion of Sasegbon’s Judicial Dictionary of Nigeria as epochal. Similar views were expressed by the coterie of Judges, lawyers and other judicial officers

present at the event including Lawyer and Human Rights Activist Femi Falana (SAN) who described Sasegbon as a pacesetter and the publication

as an invaluable resource. The reviewer Professor Konyin Ajayi (SAN) described ‘Sasegbon’s Judicial Dictionary of Nigeria, as the definitive

encyclopedia of legal definitions of Nigerian law. To him, it is a complete statement of the entire body of Nigerian legal definitions as rendered in the language of the Courts, and based upon the authority of cases of Superior Courts. With its repertoire of over 150, 000 terms, it is perhaps the most authoritative, comprehensive law dictionary ever published in Nigeria. This latest publication, was not only conceived by Sasegbon, but was that to which he devoted his attention before his untimely death in 2016. The completion of his work was actualized by his widow, Oge Sasegbon, a seasoned lawyer, along with the Deputy Editor in Chief, Mr Ehi Esoimeme and a team of scholars and editors that Sasegbon had put together at DSC Publications before his demise. Sasegbon passed away on December 10, 2016. In his lifetime he published the Nigerian Supreme Court Cases (NSCC) in 38 volumes, Legal Desk Book, Nigerian Companies and Allied Matters Law and Practice in 6 volumes and Sasegbon’s Laws of Nigeria in 30 volumes.

Igbo lawyers honour supreme court Justices, Nwodo, Ngige, others

upreme Court justices, Justice Chima C. Nweze (PhD, FCIArb) were honoured by lawyers of Igbo extraction, under the aegis of Otu Oka Iwu on Wednesday, November 20, 2019 at an annual dinner & award night” which held at the Shell Hall of the MUSON Centre, Lagos. Others are, Justice Ugochukwu Ogakwu of the Court of Appeal, Justice Nelson Ogbuanya of the National Industrial Court, Justice Obiora Egwuatu of the Federal High Court and Justice Sunday Bassey Onu, who also of the Federal High Court also to receive the coveted awards of the law society. A statement by Chairman of the 2019 Dinner & Award Night Committee Zik Obi II indicated that other honorees include respected President-General of Ohanaeze Ndigbo

Justice Chima C. Nweze www.businessday.ng

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Worldwide, Dr. John Nnia Nwodo; Chairman of the Council of Legal Education (CLE), Chief Emeka Ngige SAN; former Otu Oka Iwu presidents, Chief Guy Ikokwu and Mr. Zik C. Obi II; former Lead Prosecution Counsel at the United Nations International Criminal Tribunal for Rwanda, Mrs. Ifeoma Ojemeni-Okali and immediate past Chairman of the Nigerian Bar Association (Lagos Branch), Mr. Chukwuka Ikwuazom. The event was chaired by revered legal luminary and former Chairman of the Body of Benchers of Nigeria, Chief George Uwechue (SAN, FNIALS) while the Chief Host is Otu Oka Iwu President, Chief Chuks Ikokwu. Otu Oka-Iwu is duly incorporated as an association of Igbo lawyers set up immediately after the NigeriaBiafra War to cater especially for the interest and welfare of Igbo lawyers. @Businessdayng

Thursday 21 November 2019

BUSINESS DAY

RIGHTSWATCH

LegalBusiness

Sowore: Archbishop of Canterbury replies SERAP

he Archbishop of Canterbury, Most Revd Justin Portal Welby has responded to an open letter by Socio-Economic Rights and Accountability Project, (SERAP) urging him to use his good offices and leadership and his “friendship with President Muhammadu Buhari to prevail on him to obey court orders most recently involving activists Omoyele Sowore and Olawale Bakare who remain in arbitrary detention despite a court order for their release.” This development was disclosed Monday November 18, 2019 by SERAP deputy director Kolawole Oluwadare. SERAP had in the letter to Archbishop Welby expressed “serious concerns about the disturbing trends by state governments and federal government to use the court as a tool to suppress citizens’ human rights.” Responding on behalf of the Archbishop through an email last night, Dominic Goodall, the Chief Correspondence Officer at the Lambeth Palace, said: “Thank you for your recent letter. Much as he would like to, the Archbishop is unable to respond personally in detail, so I have been asked to reply to you on his behalf.” Goodall’s email read in part: “Thank you for taking the time to share your comments and concerns on this matter, which have been noted. Please be assured that I will communicate your concerns to the Archbishop and his staff team, so that they are aware of your concerns. Thank you again for taking the time to write.” Kolawole Oluwadare said: “We are very delighted that our letter and the concerns that it

raises have caught the attention of the Archbishop. Given his public record for justice and human rights, we have absolutely no doubt that he will prevail on President Buhari to obey not just the court order for the release of Sowore and Bakare but all court orders.” “But it should never have

reached this level, as the government ought to have obeyed court orders as a matter of routine” Earlier, SERAP had letter dated 11 November 2019, said: “We believe you can use your leadership position and influence to persuade President Buhari to promote the rule of law in words and in action by

obeying all court orders including the order for the releasing of Mr Sowore and Mr Bakare from arbitrary detention.” SERAP also said, “As the senior bishop and principal leader of the Church of England, the symbolic head of the worldwide Anglican Communion, we believe you can reaffirm your belief in justice,

rule of law and the basic human rights of all people by speaking out with a strong voice against the repeated disobedience of court orders and the implicitly lack of respect by the government for the integrity and authority of the Nigerian judiciary.” The letter read in part: “Taking a stance on the issues of the rule of law and respect for court orders in Nigeria will also contribute to ensuring respect for human rights and the rule of law by the 36 state governments in Nigeria, as these governments seem to be taking their cue from the federal authorities regarding disobedience of court orders.” “Journalist and activist Omoyele Sowore and Olawale Bakare are facing trial on seven counts of treasonable felony, fraud, cyber-stalking and insulting President Muhammadu Buhari, simply for exercising their human rights. Mr Sowore, was arrested on August 3 by Nigeria’s State Security Service (SSS) for planning a protest.” “Justice Ijeoma Ojukwu granted Sowore and Bakare bail but the security agents have continued to refuse to release them despite being served with the court orders. This refusal implicitly violates the defendants’ constitutional rights to presumption of innocence.” “We therefore respectfully call on you to speak out on the repeated disobedience of court orders by the government of President Muhammadu Buhari and urge him to obey all court orders including the orders for the release of Mr Sowore and Mr Bakare from arbitrary detention.”

LEGAL INSIGHT

The deep offshore and Inland Basin production sharing contract (amendment) act: a review

T Proem

he Deep Offshore and Inland Basin Production Sharing Contract Act enacted as a decree in 1993 (‘the DOA’) provides the legal framework for deep water oil exploration and production; covering acreages greater than 200 meters in water depth. Prior to now, it embodies a gradation of fiscal incentives with a zero royalty and fifty percent (50%) tax liability on chargeable profit from oil exploration and production companies (Contractors) involved in exploration beyond 1000 meters water depth.

The legislation has been poised for amendment; either by a resolute commitment expressed by the Nigerian Federal Government (to maximize revenue) for the funding of its national budget or indeed, the Contractors, for what has been termed ‘unclear provisions’; in essence, a trigger of Section 16 of the Act which stipulates a periodic review (once the price of crude oil exceed US$20bbl) to guarantee increased economic benefits to the Federal Government. On November 4, 2019, Nigeria’s President Mohammadu Buhari GCFR, assented to the Bill amending the ‘DOA’ with the following key www.businessday.ng

changes; Replacement of the existing production-based royalty regime with a combination of production and price-based royalty regime: The introduction of a new provision (Section 17), which mandates the Minister of Petroleum Resources to cause the Nigerian National Petroleum Corporation (‘NNPC’) to call for a review of the PSCs every 8 years; Deletion of Section 16 of the DOA, which requires a review of the Act once the price of crude oil exceeds US$20 per barrel in real terms; and The introduction of offence and

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penalty for non-compliance with the provisions of the Act. Suffice to note that the original Act was promulgated in 1993 to encourage foreign investment in the Deep Offshore and Inland Basin areas by providing them with incentives such as lower royalty and tax rates. For instance, royalties for areas with depth of 201-500 meters was pegged at 12% while areas with depths in excess of 1000 metres was pegged at 0%. All of these at a time when the price of crude oil was below US$20 per barrel. Today, the realities are different and commendably so, Nigeria’s Federal Government has @Businessdayng

reacted to the need review its petroleum laws and boost investment (which loss has been put at about US$62billion) in its oil and gas sector. The Review Replacement of the existing production-based royalty regime with a combination of production and price-based royalty regime: The amendment introduces a consequential increase in government revenue by introducing Royalty by Price. In other words, the amendment provides for per centum payContinues on page 29

Thursday 21 November 2019

BUSINESS DAY

LEGALINSIGHT

LegalBusiness

Nigeria’s FIRS’ directive to the FMCG Industry: when and how Oliver should twist

n We d n e s d a y , August 14, 2019, Nigeria’s Federal Inland Revenue Service (“FIRS”) issued a Public Notice (“FIRS Notice”) directing principal companies, especially those in the fast-moving consumer goods (“FMCG”) industry, to ensure that “compensation due to their distributors and customers in the form of commission, rebates, etc. and by whatever means of payment, whether by cash, credit note or even goods-in-trade must be subjected to WHT/VAT at the appropriate rates as applicable and remit same to the FIRS …” In this piece, we take a look at the FIRS Notice and examine its policy thrust and legality. We conclude with relevant questions worth pondering on by both FMCG businesses and FIRS. On the nature of Commissions payable to Agents, Distributors, Customers et.al The FMCG business space is fiercely competitive with low margins on unit sales. Turnover or mass sale is often at the heart of the profitability of businesses in this space. A vast network of agents, distributors and customers are required to ensure such turnover. These agents or distributors are typically independent businesses, who may choose to either have an exclusive or non-exclusive relationship with an FMCG business. Whether exclusive or non-exclusive, the relationship between the FMCG business and its agents or distributors is largely denoted by the margins that the agents or distributors stand to gain from their distribution services. With low margins, save for large volume, there is just as much as FMCG businesses can pass on to their agents or distributors, given the volumes being moved by each distributor or agent. The global figures are those of the FMCG business.

It is within this context that the concepts of commissions, rebates, incentives, compensation, discounts et.al. arise. To the extent that they are measurable in monies worth, they typically are considerations given by FMCG businesses to their agents or distributors to reward the agents or distributors for their performance, likely based on pre-agreed metrics. The Laws of FIRS’ new squeeze: The Companies Income Tax (Rates, Etc. Deduction at Source (Withholding Tax) Regulations 1997 (the “Regulation”) is the legal basis of the FIRS Notice. The Regulation expressly mentions “Commissions” and does not for such other categories of rewards as rebates, incentives, compensation, discounts et.al. The FIRS Notice has interpreted “Commission” to also mean “rebates, etc. and by whatever means of payment, whether by cash, credit note or even goodsin-trade…”. In other words, FIRS will treat any reward that falls into the category of this clause as a “commission”. The tax treatment is a withholding tax (“WHT”) surcharge of 10% for every incorporated agent or distributor and 5% for the unincorporated ones. The former category is FIRS’ remit while the latter is typically for the Revenue Services of States (SIRS). SIRS typically follows FIRS’ lead in

tax administration in Nigeria. While the Regulation does not define or describe what will constitute “Commission” so as to expressly include ‘rebates’ or ‘incentives’ within its scope, Paragraph 3.9 of the FIRS Information Circular No. 2006/02 of February 2006 describes “commission” as “… The reward payable for services rendered by the agent is Commission…” This is similar to the Black’s Law Dictionary’s definition: “A fee paid to an agent or employee for a particular transaction, usually as a percentage of the money received from the transaction.” In these contexts, what underlies ‘Commission’ is the concept of a reward paid or given for performance by the payee; in which case, the nomenclature or characterization of the reward may not be as important as the substance of the transaction. In other words, the concepts of ‘commission’, ‘rebate’, ‘compensation’, ‘discount’, ‘incentives’ or related expressions may easily be construed as same where their substance is same. Thus, where in practice, the concepts of ‘rebate’, ‘incentives’, ‘compensation’, or ‘discounts’ refer to value, measurable in monies worth, given or paid to agents or distributors for their performance, such value may easily be referred to as ‘commission’. The FIRS Notice only conforms with the Regulation to the extent that it requires WHT to be de-

ducted from the commissions, rebates, discounts, incentives and other value of monies worth (now altogether “Commissions”) paid or given to agents or distributors. This is because such Commissions constitute taxable income in the hands of such agents or distributors. Accordingly, it is expected that the Commissions are properly accounted for by FMCG businesses such that the relevant agents or distributors that receive them are identifiable and the income tax withheld and remitted to the relevant tax authority (“RTA”) is easily credited to the agents or distributors. FMCG businesses are expected to correctly keep a Commissions account, sufficient enough to identify the beneficiaries of such Commissions and ensure that applicable WHT is deducted from such Commissions prior to the payment of the net-Commissions to the beneficiaries. The Value Added Tax Act, 1993 (as amended and currently compiled as Cap. V1, Laws of the Federation of Nigeria 2004) (“VATA”) currently places no obligation on FMCG businesses to deduct Value Added Tax (“VAT”) at source from payments due to their agents or distributors as the obligation to deduct VAT at source, also known as the Reverse Charge System, is currently limited to the following organizations or transactions: (i) Ministries, Departments and Agencies of Government; (ii) Companies operating in the Nigerian oil and gas sector; and (iii) Nigerian companies that undertake vatable transactions with non-resident companies within Nigeria. Section 7 of VATA however gives the FIRS Board, as established under Section 3 of the FIRS (Establishment) Act 2007 (“FIRS Act”) the power to “… do such things as it may deem necessary and expedient for the assessment and collection of the tax [VAT] …” Accordingly, the FIRS Board may require FMCG busi-

nesses to deduct VAT at source from payments due to their agents or distributors. The FIRS Notice is however not a directive of the FIRS Board but FIRS’ and will accordingly not suffice in law as legal authority for the FIRS’ current request to FMCG businesses. Accordingly, it is arguable that there is currently no valid obligation on FMCG businesses to Reverse Charge VAT on payments made to their agents or distributors, save in the case of vatable transactions with distributors and customers that are non-resident in Nigeria.

President) fails to trigger Section 17; whether the constitutional immunity provided by Section 302 of the Nigerian Constitution will act as a constitutional shield against criminal prosecution.

owns (an asset) or has incurred a qualifying capital expenditure for its own account. The amendment has therefore not provided the needed clarity as which party; a. Owns the assets which satisfies the ‘WEN’ test; and b. And which party enjoys the incentives provided by the law. It can only be imagined that, perhaps the above will be incorporated in the yet-to-be passed Petroleum Industry Fiscal Bill (PIFB). However, it is recommended that Federal Government must increase stakeholder’s participation to view this amendment (and pending Petroleum Bills) as a win-win situation. This engagement is necessary so that Nigeria does not, unconsciously make itself an unattractive market whilst making other African emerging oil market, an investment destination for investors.

Concluding Thoughts: Much as the pressure on FIRS in recent times has challenged it to increase its rate of tax collection, FIRS remains an administrator that is absolutely subject to the laws it was created to administer. FIRS cannot be lawless; it is a product of the law. It needs laws, both present and in the future, to do its job. Certainty of tax laws is one of the Smithsonian canons of taxation and unless tax laws are expressly and certainly laid, they will fail the scrutiny of litigation. The FIRS’ attempt to play around “Commissions” is not without questions, even in the face of these authors’ brief above. The subsisting +21years old Regulation could simply have been re-issued. The inapplicable VATA could have since been amended, particularly in light of its so many other inadequacies. The FIRS Notice will likely generate more controversies than taxes, while dancing to corporate Nigeria’s perennial message to the Nigerian Government – get your acts right. The twist is a dancemove that outdated Oliver.

Bidemi Olumide (bidemi. olumide@ao2law.com) and Kitan Kola-Adefemi (kitan. kola-adefemi@ao2law.com)

The deep offshore and Inland Basin production sharing... Continued from page 28

ment of royalty based on the price of crude per barrel; the more oil price increases, the more Nigeria’s Federal Government is set to enjoy increased revenue in royalties. In determining oil revenue, pricing plays a pivotal role as it is based on methodology to be agreed by the parties (where possible) and where not, by the Hon. Minister of Petroleum. Whilst a new royalty regime on pricing was introduced by the amendment, the original royalty regime on well-head basis was retained but with a different formula. Royalty for production in Inland basin was reduced from 10% to 7.5% while production in the Deep Offshore is now fixed at a percentage; being 10% royalty from a water depth of 200metres and above. The effect of this is that, an IOC producing in a water depth of 800 metres will pay the same rate as one producing in 200 metres depth. Given that produc-

tion is usually in deep offshore or deeper water depth, more revenue will accrue as royalty to the Nigerian Federal Government for production in deep water going forward. What remains unclear is whether these two royalty regimes will apply simultaneously to all PSCs or whether either may be applicable to particular PSCs by agreement. The introduction of a new provision (Section 17), which mandates the Minister of Petroleum Resources to cause the Nigerian National Petroleum Corporation (‘NNPC’) to call for a review of the PSCs every 8 years: The amendment to the Royalty regime in the original Act is intended replace the periodic necessity for review as envisaged by the now deleted Section 16 in the principal Act. Rather than a periodic review of the Act, a new Section 17 has been introduced which now requires the Hon’ble Minister of Petroleum to call for a review of the PSCs by the National Oil Corporation (‘NNPC’) every eight (8) years. As most of the existing PSCs will www.businessday.ng

now expire in about 2 (two) years, this provision (to the author’s mind) places a responsibility of periodic review of government oil receipts. Deletion of Section 16 of the DOA, which requires a review of the Act once the price of crude oil exceeds US$20 per barrel in real terms: As noted immediately above, the amendment has introduced a periodic review of the PSC once every 8 (eight) years. This is to bring current price realities in tandem with commercial expectation of both parties; that is the Government and the Contractors. The introduction of offence and penalty for non-compliance with the provisions of the Act: Section 18 of the amendment criminalizes failure or neglect by any person to comply with any obligation imposed by the Act. This in essence mandates the Hon’ble Minister of Petroleum to cause the periodic review otherwise, may face criminal sanctions. What is interesting is where (as is the present case), the Hon’ble Minister (who incidentally is also Nigeria’s

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Pitfalls Section 4 of the original Act: A major pitfall in the amendment is the retention of Section 4 of the Act. This relates to the question of who takes the benefit of tax incentives such as the Investment Tax Credit (ITC), Investment Tax Allowance (ITA) or indeed, Capital Allowance (CA). Put simply, this Section provides that where the NNPC and the International Oil Corporation (IOC) incurs any qualifying capital expenditure, wholly, exclusively and necessarily (satisfying the WEN test) for the purposes of petroleum operations, an ITA (for PSCs executed after July 1, 1998) or ITC (for PSCs executed before July 1, 1998) of 50% flat rate of the qualifying capital expenditure. Ordinarily, tax incentives are often enjoyed by the party who @Businessdayng

Please note that a more detailed review is in view and will be circulated once completed.

Thursday 21 November 2019

BUSINESS DAY

IndustryFile

LegalBusiness

Nigerian lawyers advocate supremacy of rule of law in resolution of civil disputes IFEOMA OKEKE

igerian lawyers have called for the application of the rule of law in resolving civil disputes in Nigeria. This call is coming at a time when law enforcement agents have resorted to arresting and detaining victims before they are investigated, thereby contravening the rule of law and undermining the legal profession. Speaking during the 12th Annual Business Luncheon organised by SPA Ajibade & Co, Olasupo Shasore, partner, ALP Legal who was also the keynote speaker at the event said it is time law enforcement agents adhere to the rule of law in order to keep the society in good order. Shasore said there is a strong connection between the adherence of rule of law and national productivity, adding that countries that don’t adhere to the rule of law are often ranked low in productivity. He commended the business luncheon which is themed: The Forum for the Resolution of Civil

Disputes: The Courts v Law Enforcement Agencies. “The theme of the event is apt and it is about preservation of our society, due process and the rule of law,” he added. He however noted that in the ideal society, this topic should not be considered because there is regard for the rule of law but it is the other way round in Nigeria.

Also speaking at the event, Biobele Georgewill, Justice of the court of Appeal, Nigeria said there is a need for the law enforcement agents to go back to the drawing board and stop criminalising civil issues. “In a civilised society, there should be investigation before arrest and detention is made, but in Nigeria the police arrest first

GLOBALREPORT China attacks Hong Kong mask ruling as fears of legal intervention grow

hina’s parliament has attacked a Hong Kong court ruling that overturned a controversial ban on wearing masks, fuelling fears that the region’s legal independence is under threat. It has been widely reported today that a spokesperson for the National People’s Congress (NPC) said members of its law and labour committee ‘expressed serious concern’ and ‘strong dissatisfaction’ over a High Court ruling that overturned a mask ban implemented in early October.

In a statement published by the official Xinhua news agency, the spokesman said the NPC was the only body with the authority to interpret Hong Kong law. He said: ‘No other organ has the right to make such a judgment or decision. Some NPC deputies expressed strong dissatisfaction. The legislative affairs commission of the Standing Committee of the National People’s Congress expresses deep concern.’ The mask ban was passed after Carrie Lam, Hong Kong’s chief executive, exercised emer-

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gency powers to bypass the region’s Legislative Council. It prohibited people wearing masks at public assemblies. However, a decision handed down by the High Court yesterday overturned the ban. Hundreds of protesters remain barricaded inside Hong Kong Polytechnic University today, as the pro-democracy protests continue to escalate. Last week a protester was shot at close range by a police officer, in the third shooting since demonstrations began this summer.

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before they carry out investigation. This undermines the rule of law. “The rule of law is the master of all. Without the rule of law, there is no democracy. Civil issues are being transformed into criminal matters just to punish innocent people,” Georgewill lamented. He stressed that obedience to the rule of law will lead to the development of the country.

Fatai Owoseni, former commissioner of police and Special Adviser to the Oyo State Governor on Security Matters during his presentation acknowledged the disregard of the rule of law by enforcement agencies. He said that in the course of his service as a commissioner of police, he observed that the rule of law is adhered to differently depending on which side of the divide people find themselves. “Justice is dispersed based on how much money you have. My loyalty is to the constitution of Nigeria. In retirement, I still fight that the rule of law be maintained,” Owoseni said. He however insisted that there is a thin line between criminal law and civil law, adding that the capacity of the police needs to be strengthened because they are often the most accessible people citizens run to for justice. “Our judicial system is slow. People run to the police because they are easily accessible. The judiciary needs to create an enforcement unit to address some of these issues,” he suggested.

£10m negligence claim against London law firm thrown out

£10m negligence claim against a London law firm and one of its partners has been thrown out by the High Court, which ruled that it had no jurisdiction to try the claim. Jury O’Shea LLP, and partner James Patrick O’Shea, were accused of being negligent in dealing with the financial affairs of Giacomino Maggistro-Contenta, a London-based businessman, after his death. According to the approved judgment, the businessman’s widow claimed that the family’s home in Harley Street, London – which fetched a price of £11.8m – was sold too cheaply by the defendants, and that the proceeds of the sale were sent to the wrong person. Maggistro-Contenta also objected to the terms of settlement agreed with a Brunei prince, with whom her late husband had had business dealings. Chief Master Marsh’s judgment concerned an application from Mrs MaggistroContenta seeking an order extending time for service of a claims document, which @Businessdayng

was delayed because her barrister had recently undergone ‘major gender surgery’ which caused ‘both physical and psychological trauma’. Marsh concluded that he should review the merits of the claim before deciding whether to grant such an extension. He said: ‘I am satisfied that the circumstances that arise on the claimant’s application are such that it is right to have regard to the merits of the claim as it is pleaded. The merits of the claim against Mr O’Shea, or rather the lack of merit, are clear without the need for a review of the documents’. Marsh went on to cite ‘wild allegations’ and evidence that ‘lacks a focus on the issues as they are pleaded and ignores facts that are inconvenient’. Earlier in his judgment, he criticised the claims form, stating it ‘contains everything but the kitchen sink and does so in a rather muddled and confusing way.’ Marsh dismissed the claimant’s application and granted a declaration that the court has no jurisdiction to try the claim.

Thursday 21 November 2019

Innovation

Apps

BUSINESS DAY

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

TECHTALK

Broadband Infrastructure

Bank IT Security

As NDPR audit kicks off, NITDA outlines companies exempted from data regulation ...agency plans country-wide awareness campaign in December, January Stories by FRANK ELEANYA

s companies across the financial, banking, insurance, oil and gas, ma nu f a c t u r i n g , F M C G and service sector move to comply with data audit notices, NITDA says businesses processing less than 2000 data subjects are exempted. However, where there is a case of a data breach by such entity, the availability of documented data management process ameliorates the possibilities of fines and other criminal charges. In January 2019, NITDA released the Nigeria Data Protection Regulation (NDPR), which is to a large extent a mirror of the European Commission’s General Data Protection Regulation (GDPR). The NDPR has been described by many stakeholders as the most comprehensive generally applicable legislation on data protection in Nigeria. It prescribes the minimum data protection requirements for the collection, storage, processing, management, management, operation and technical data in Nigeria. Olufemi Daniel, NDPR

desk officer who also helped craft the regulation, in an exclusive interview with BusinessDay explained that the NDPR audit is meant to assess the data management practices of organisations and for the government to provide necessary policies and directions to enhance compliance. So far, awareness for the data audit has mostly been focused on organisations within Lagos and Abuja. To reach other states, NITDA recently trained selected media executives on the

NDPR. The agency says another round of awareness is planned for the month of December, while NITDA would be coordinating, in partnership with the private sector, Nigeria’s biggest World Privacy Day celebration which would hold in January 2020 The audit includes a series of questions that are published in the draft NDPR Implementation framework. To carry out the audit, NITDA had licensed about eleven Data Protection

Compliance Organisations (DPCOs). The DPCOs look at the company’s personal data collection process to ensure they create processes that protect customer and employee data. Companies that default are exposed to a fine of N2 million or 2 percent of turnover for the last year (whichever is more). The deadline for the data audit was October 25, 2019. According to a source whose company is partnering with one of the DPCOs, a memo which originated

from NITDA to the DPCOs last week, requested for a list of companies that have audited or are in the process of auditing for data protection compliance. Zenith Bank is one of the Nigerian banks the source identified has commenced the audit process. Some organisations have already submitted their audits to NITDA. “The NDPR is not focused on imposing fines, however, where a data breach by a non-compliant entity is established, this makes the imposition of fine optimum,” Daniel told BusinessDay. “Non-filing of the data audit report is an indication of unwillingness to protect personal data.” One of the barriers to compliance is the cost of the audit. Daniel says that it depends on the number of data subjects. “The highest amount an entity pays is N20,000 for the filing,” he said. “DPCOs charge companies based on different factors and the complexity of requirements of the controller. We are, however, trying to cost to encourage companies. However, the cost cannot be compared to the cost of non-compliance which may include brand image damage, civil suit by data subjects, fines under NDPR

and criminal charge under the NITDA Act 2007.” Organisations can also negotiate with their DPCOs which could reduce the cost of the audit. However, the size of the company and the complexity of the data collection systems are very vital to costing. “We have a discounted programme for them as an organisation because we believe data protection is needed to build a solid system of trust for the proper scaling of businesses online,” Enyioma Madubuike, a lawyer and data protection expert told BusinessDay. According to Daniel, the audit is only the first step to data protection compliance for Nigeria. After the audit, a team of experts would be invited by the government to access the data management and security level of the country and advise the government and private sector on how to improve practices in order to make businesses more cyber-resilient and reduce incidents of a breach. Organisations will also be advised by the NITDA licensed data protection compliance organisations on remedial actions to be taken to improve on data and cybersecurity management.

is paying more attention to Videography than before. OPPO’s industry-leading Ultra Steady Video Mode technology ups the stability of videos, enabling users to capture steady videos while running, skiing, skateboarding, cycling, and more. It’s achieved through an IMU measuring device with a high sampling rate and a hull sensor, equipped with Electronic Image Stabilization and Optical Image Stabilization. These compensate for users’ shaky shots more accurately, and together with a 60fps frame rate, enhance image stabilization, fluency, and overall image quality. The OPPO Reno2 in

Ocean Blue with 8GB RAM and 256GB ROM will be available for sale on the 18th of November 2019 N179,000 only. The OPPO Reno2 F in Lake Green and Sky White with 8GB RAM and 128GB ROM will be available for sale on the 18th of November 2019 at N129,000 only. Both devices come with the standard 2-year warranty policy. You can think of the Oppo Reno 2 as a less powerful, more affordable variation on the Oppo Reno 10x Zoom – that’s the phone to get if you want the best that Oppo can offer right now, but if you want to save yourself some money, then this might suit you better.

OPPO Reno Series ticks nearly all boxes for Nigerian creatives

ntrepreneurship and creativity are two of the redeeming features of Nigeria’s young people which accounts for about 70 percent of the population, The features on the latest OPPO Reno Series appears tailored specifically for this demography. The series comes in two models, the Reno2 and Reno2 F. One of the things both models have in common is their enhanced photography and video features. For Nigerian creatives and potential entrepreneurs starting a career in photography, this could be the most affordable phone to go for. The quad-camera setup

includes 5x Hybrid Zoom allowing users to get far closer to a subject, ultraclear night shots even under near darkness condition on Ultra Dark Mode and super-stable video shooting on the go thanks to Ultra Steady Video. The zoom option performs best in the most necessary conditions ranging from busy cities to natural landscapes to broad daylight to dark nightlife, otherwise, you may need telephoto and digital cropping. Joseph Adeola, public relations manager of OPPO Nigeria said the models inherited the creative spirit of the Reno Series. “This latest iteration presents our users with

even more creative possibilities, empowering them to discover new perspectives,” he said. The Reno2 also comes with a 48MP primary equipped with Optical Image Stabilization, F 17 aperture and a half-inch sensor along with Quad Bayer technology which helps the phone achieve better performance in low light. The Oppo Reno 2 ships with a very comprehensive package that includes a high-quality case, a preapplied screen protector, as well as a headset in the box. Additionally, the phone ships with a VOOC 3.0 charger and accompanying USB-C cable, as well as the usual quick-start guides.

With a 48MP primary lens equipped with Optical Image Stabilization, F1.7 aperture, and a 1/2inch sensor along with Quad Bayer technology, Reno2 can achieve better performance in low light. The Reno2 Series’ Ultra Dark Mode covers an entire range of different night scenes via a powerful NPU, and OPPO fine-tuned algorithms. Even if light levels measure below 1 lux, it elevates your photos beyond the naked eye through hardware network-optimized AI noise reduction. But a single photo can’t tell a whole story, and with social media users increasingly shooting video, OPPO

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

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Thursday 21 November 2019

BUSINESS DAY

UNDERSTANDING NIGERIA’S

DAIRY VALUE CHAIN

Fast tracking dairy sector development in Nigeria through public-private sector extension services Joshua Uzu

ne of the most critical components of any sustainable agricultural development plan is the maintenance of an effective extension ser vices system – a branch of agriculture that ensures the systematic transfer of knowledge and technical advice to farmers in order to improve production and post-harvest practices, boost productivity and improve livelihoods. The focus of these extension services, in the context of dairy farming, would entail the provision of adequate information, technical and advisory support by extension agents to pastoralists, who lack immediate access to information and technology. According to the World Bank, the ideal ratio of extension officers to farmers for effective extension services is 1:800 - one extension worker to 800 farmer/farm families. In the Nigerian context, the 2013 National Agricultural Extension and Research Liaison Services (NAERLS) report, stated the officer to farmer ratio at 1:3,100, a ratio according to experts, that has taken a tumble for the worst since then. The implication of this low ratio is that many dairy farmers do not have access to essential extension services, negatively impacting their productivity and general livelihoods. In addition to inadequate number of extension agents, Nigeria’s extension services system is also bedeviled by poor logistics support for field staff, funding and the limited training for the personnel.

The public agencies engaged with extension support in Nigeria include the National Agricultural Extension and Research Liaison Services (NAERLS), Federal and State Ministries of Agriculture and the Agricultural Development Programmes. They depend primarily on the government to fund their extension activities and hence almost always must operate on a very limited budgets, which places a major constraint on their reach and effectiveness. These public agencies also receive occasional support from international organisations and NGOs, which provide a temporary boost to extension services. There are also - public-private

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partnerships and the private sector driven models emerging in Nigeria – which will reduce the financial burden on the government and ideally improve the reach and efficiency of the extension services rendered. For instance, the Nigerian Dairy Development Program (NDDP), implemented by Sahel Consulting engaged both government and private Extension Agents (EAs) to deliver practical training on improved dairy farming practices to smallholder dairy farmers in Kano and Oyo states. Leveraging a ratio of 1:160, the EAs were trained monthly on various topics, which they were expected to eventually cascade this new knowledge and

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insights to the dairy farmers. To ensure efficient training delivery by the EAs, they were provided with training equipment, including projectors, mobile phones and access to the internet and they received stipends to maintain their motivation. Sahel took into consideration the communities’ custom of not allowing male EAs to train female dairy farmers and thus prioritized the engagement of female EAs, which in turn facilitated widespread acceptance of the extension program. As a result, NDDP was able to train about 6,000 dairy farmers on 9 key topics and at the end of the project, over 70% of the dairy farmers adopted the improved farming practices, which led to an increase in the quality of milk produced by the dairy farmers. Taking a cue from the NDDP, dairy processors in Nigeria could partner with dairy farmers associations to identify local pastoralists and provide extension services such as technical training, advisory support and financial literacy trainings with the aim of improving the dairy farmers’ milk quality, efficiency and productivity. In return, the dairy farmers will provide regular supply of highquality milk to the processors. Not only will this arrangement contribute to local community development, it will also result in tangible economic benefits for the private processors. Additionally, these processors could also partner with development organisations, @Businessdayng

looking to contribute to the dairy sector development in Nigeria, to increase their capacity as well as the reach of their extension services programs. Additionally, the government can also contribute to the success of the models by providing social infrastructure such as good access roads to farms, solar-powered boreholes and ADP support for the farmers. Without a doubt, the provision of extension services is an integral component of any meaningful agricultural development strategy and the present government-led efforts for the provision of this critical service may be inadequate to drive the level of development required in the dairy sector. A private-public sector-driven approach to the provision of extension services for dairy farmers holds great promise for enhanced effectiveness and productivity.

Mr. Joshua Uzu juzu@sahelcp.com www.sahelconsult.com

Thursday 21 November 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

NLNG denies responsibility for soaring cooking gas price ... as marketers raise alarm Olusola Bello

he Nigeria Liquefied Natural Gas Limited (NLNG) says it is not responsible for the hike in the price of Liquefied Petroleum Gas or cooking gas, claiming that it delivered the product on time at the Lagos terminal to avert any supply gap. The price of cooking gas has moved from N3,200 for a 12.5kg cylinder to N4,600 while 1kg cylinder that sold for N900 is now N1000. Upon investigations by BusinessDay on why the increase in price, some of the stakeholders alleged that it was because of logistics problems being encountered by the NLNG vessel that normally bring cooking gas to Lagos terminal. The vessel, they claimed was diverted to a new terminal set for commissioning in Port Harcourt, Rivers State. They alleged that NLNG scheduled delivery for Lagos was disrupted by the inability of the Rivers State governor, Nyesom Ezenwo Wike, to commission the new jetty or terminal as earlier planned. He was alleged to have rescheduled

the ceremony and this necessitated the return of the vessel to the new jetty which affected Lagos operations. Hence the shortage in supply which has affected the price of the product. But Sophia Horsfall, manager, corporate communications and public affairs, NLNG, in response to BusinessDay enquiry described the allegations as untrue. She said: “These allegations are not true. We commenced delivery to this terminal (the Stockgap

Terminal) in October 2019. The 5th November 2019 scheduled delivery was only made commemorative, to mark the commencement of LPG deliveries by NLNG into Port Harcourt.” That delivery she stated was celebrated in an occasion attended by dignitaries, including the Governor of Rivers State, Nyesom Ezenwo Wike; Tony Attah; NLNG’s managing director and chief executive officer, Tony Attah; O.R. LongJohn; chairman, NLNG board of directors, Obiamarije Stan-

…as Chevron puts on offer assets valued $2bn in Nigeria

Olusola Bello, Team lead,

“While oil and gas majors increase their focus on core areas and divest mature assets and interests in geopolitically unstable regions, observers will be following closely to see how investors react and what other steps these energy giants will take to keep stakeholders interested amid rising climate concerns and geopolitical volatility,” Saxena added. Here are some highlights from Rystad Energy’s latest report: ExxonMobil plans to divest assets worth $15 billion by 2021 as it focuses on developing oilfields in Guyana and the US Permian Basin, as well as gas projects in Mozambique and the US Gulf of Mexico. Chevron needs to raise capital for projects such as Tengiz in Kazakhstan, Contract 3 in Thailand, and its US shale positions in the Permian Basin. In addition, the company is considering a sale of assets in Nigeria which could

Graphics: Joel Samson.

be valued at up to $2 billion. BP is looking to offload some of the US shale assets that lie outside of its core areas in order to help fund last year’s $10.5 billion purchase of BHP’s North America subsidiary. The British player put seven asset packages on the market, headlined by the gas-rich San Juan Basin acreage on the Colorado-New Mexico border. A sale could fetch between $1.6 billion and $2 billion for all the packages combined. Total plans to divest assets worth $5 billion by 2021. The company is seeking to sell one-third of its 16.8percent stake in the giant Kashagan field in the Kazakh sector of the Caspian Sea, thought likely to attract offers of between $3.2 billion and $4 billion. Shell plans to divest assets worth $10 billion by 2021 and is reportedly looking to exit the Abadi LNG project in Indonesia, which could raise between $1 billion and $1.6 billion for the supermajor.

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of the product by 75 percent in recent weeks. Bassey Essien, executive secretary of the association drew the attention of the public to what he described as the arbitrary increase in Lagos. According to him, the product’s price increased within a gap of five days, 20 metric tonnes of LPG which sold for N3.15 million, suddenly increased to N3.5 million and N3.9 million. “A few hours thereafter, the price moved to N4.2 million even though the same product has been in the storage of these terminals when the price was even N3.5 million, so why the sudden upsurge,” he said. He said the price hike would ultimately dovetail into high prices to the consumers who unfortunately are also caught up in the web of price hikes. “At this time of the year in the past, price hikes used to be attributable to the winter season, increased demand for heating energy and international price index. This we have consistently questioned why a product in abundance in our country should become such a victim of any slightest issue occurring internationally.

Seplat, stakeholders harp on critical success factors for Competition and Consumer Protection Act in oil and gas industry

Oil giants go on $27bn selling spree lobal giants of the oil and gas industr y are lo oking to sell assets that could fetch a total $27.5 billion, according to Rystad Energy’s latest assessment. These companies are actively shedding mature assets on a massive scale in a bid to finance higher-yielding investments elsewhere, with the added benefit of pleasing shareholders who are calling for stricter capital discipline. “The expected transactions mean some of the majors are poised to exit certain regions, giving regional players and independents a chance to buy into key fields and help keep them profitable through production-life extensions and new developments,” says Ranjan Saxena, an analyst on Rystad Energy’s upstream team. Rystad Energy has taken a closer look at some of the main assets currently up for sale.

ley, chairman of Stockgap Fuels Limited; Chinyere Stanley, manging director, Stockgap Fuels Limited; Eyono Fatayi-Williams ; general manager, eternal relations. Commenting on whether the company would acquire more vessel to avoid such disruption in future, she said: “In 2018, NLNG proactively commenced arrangements to charter a new DLPG vessel to boost volume and availability. The new vessel is being built by E.A Temile and Sons

Company Limited, a wholly Nigerian company, under a contract with Hyundai Mipo Dockyard, South Korea.” The National Bureau of Statistics, had recently said the average cost of refilling a five kilogramme cylinder for Liquefied Petroleum Gas (Cooking Gas) increased to N2,107 from N2,054 recorded in August. It said the price for refilling a five kg cylinder of cooking gas increased by 2.60 per cent month on month and 10.26 per cent year-on-year in the period under review. According to the bureau, states with the highest average price for refilling a five kg cylinder for cooking gas are Bauchi (N2,400.00), Borno (N2,440.00) and Gombe (N2,487.50). It said states with the lowest average price for refilling a five kg cylinder for cooking gas were Abuja and Ebonyi (N1,900.00), Enugu (N1,865.45) and Kaduna (N1,800.00). Meanwhile marketers of Liquefied Petroleum Gas (LPG), under the aegis of the Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM),have raised an alarm over the increased hike at the price

takeholders in the oil and gas industry have drawn attention to critical factors necessary for the successful implementation of the Federal Competition and Consumer Protection Act (FCCPA) in the oil and gas industry. The Act, which is a codified set of rules signed into law in January 2019 established the Federal Competition and Consumer Protection Commission and the Competition and Consumer Protection Tribunal. It was enacted for the promotion of competition in the Nigerian markets at all levels to eliminate monopolies, prohibit abuse of a dominant market position and to penalize other unethical restrictive trade and business practices. Delivering the opening address in a policy advocacy dialogue organised by Seplat, the company chief executive office, Austin Avuru, stressed Seplat’s strong regard for compliance and strict adherence to Corporate Governance ethos in the industry.

According to him, Seplat remains very concerned about its current and future business environment in Nigeria and will continue to collaborate with relevant stakeholders to advocate for good laws that will positively impact businesses, especially in the oil and gas industry. Avuru said: “As an organisation, Seplat is at the forefront of understanding, practicing and advocating proper compliance and corporate governance principles. In these areas, we lead from the front line. We have put together this event to draw attention to the gaps in this Act, with a view to getting stakeholders to accommodate the peculiarities of the oil and gas industry in future reviews of the Act.” Mirian Kachikwu,the General Counsel, at Seplat, expressed optimism that continuous engagement with relevant stakeholders will not only address grey areas in the FCCPA, but also inform possible amendments as may be relevant for businesses in Ni-

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geria, especially in the oil and gas space. Speaking on why the event was put together, Kachikwu said: “Seplat organised this policy dialogue to create ample awareness and enlighten key stakeholders in the oil and gas sector about the challenges that the new law could have on the smooth operation of the industry. The goal is to work with the regulator and government to shed light on grey areas. In his key note address, Babatunde Irukera, director general/chief executive Officer, Federal Competition and Consumer Protection Commission noted that: “The oil and gas industry in Nigeria is peculiar in many respects, both in terms of the legal and regulatory framework. The industry is particularly sensitive therefore if players in the industry notify of the need to make changes to a clause in the Federal Competition and Consumer Protection Act, it is the responsibility of all stakeholders to work together to effect the necessary change.”

Thursday 21 November 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

Consumer Spending

Consumer stocks go up in smoke amid disastrous earnings BALA AUGIE

disastrous earnings season has compounded the woes of consumer goods firms as their stocks continue go up flame, validating analysts view that the industry is the wiping child of a stuttering economy. The implosion in stock price and putrid valuation started in early 2018 when lack of transformation policy on the part of the present administration stoked massive sell-off of shares by investors. To exacerbate the already anaemic situation of consumer goods firms are decrepit infrastructure, multiple taxes, port congestion, and deteriorating consumer purchasing power that prevents them from breaking even. While they have been able to reduce debt through a rights issue, they are beset by a backlog of receivables, receding sales volumes, deteriorating cash margins, rising cost of production and weak return on capital

employ (ROCE). That means a dividend cut is in the horizon, but a lot companies have been maintaining a steady policy even amid the recession of 2016, and shareholders crave for companies that reward them out of distributable profit. The cumulative net profit of the 10 largest consumer goods firms that have released third quarter results showed net income fell by 28.92 percent to N54.96 billion, from N77.33 billion as at September 2018, according to data gathered by BusinessDay. That compares with a 2 0 . 1 7 p e rc e n t d ro p i n 2018/17 financial year, but the bottom line reached an all-time high of 189.12n percent in 201/2018, when a price hike across product brand help compensate for rising cost of production. Combined sales followed the same downward trajectory as it increased by 1.0 percent to N1.10 trillion as at September 2019, this compares to 7.51 percent drop in 2018/17, but it increased by 30.71 percent in 2017/2016 financial year. Over the last six months,

Nigeria’s real economic growth though remaining positive has decelerated for consecutive quarters, positing GDP of 2.10 percent in the first quarter (Q1) of 2019, a decline from 2.38 percent recorded in the fourth quarter 9Q4) 2018 and growth of

1.90 percent in the second quarter (Q2) 2019, which marked another decline from Q1 levels. “Most consumer goods companies are vulnerable to the vagaries of macroeconomic environment,” said Johnson Chukwu managing director/CEO of Cowry Asset Management Limited. The demand for goods is shrinking on the back of unemployment and weak output,” said Chukwu Data from the National Bureau of Statistics (NBS) revealed that Nigeria’s consumer inflation rose by 36bps to 11.61 percent in October, representing a 17-month high. Unemployment rate is at an all-time high of 23 perent

as over of a population of 200 million living on less than $1.98 a day. The country overtook India as the poverty capital of the world. The outlook for consumer goods industry is bleak as the proposed hike in Value added Tax (VAT) to 7.50 from 5 percent will squeeze consumer wallets. Experts have warned that an increase in excise duties on carbonated drinks will hurt companies’ margins as they will find it difficult to pass on the cost to a beleaguered consumer. The decision by Federal Government to close the borders (which is responsible for spiralling inflation) has hindered many companies from shipping their products in and out of the country. They export their products to the West African countries through land borders and prices are going up due to the closure,” said Chukwu. As a result of these challenges, valuations have been unattractively expensive, while stock prices have been beaten down, signalling investors’ apathy towards the industry. Unilever Nigeria Plc’s share price, which peaked at N62 in March 2018, has dropped more than half through the start of 2018 to N18.50; it shares are overvalued as it has price to earnings ratio of 40.22 times. Guinness Nigeria’s share price, which peaked at N159 in April 2015, has dropped more than four times to close at N31 as of 2:00 pm in Lagos.

It has a price to earnings ratio of 15.88. Pz Cussons’ share price, which peaked at N31 in June 2015, has dropped more than six times to close at N5.20 as of 2:00 pm Lagos. Its shares trade at 88.98 times earnings. Cadbury’s share price, which peaked at N42 on February 2015, has dropped more than four times to close at N9 as of 2:00 pm in Lagos. It has a price to earnings ratio of 13.10 times. Ni g e r i a n B re w e r i e s, which peaked at N181.02 on August 2017, hs dropped more than 3.69 times to close at N49 as of 2:00 pm in Lagos. It has a price to earnings ratio of 22.88 times. International Breweries Plc’s share price, which peaked at N38 on March 2018, has dropped by more than half to close at N49 as of 2:00 pm. It shares trades at 13.65 times earnings. “While a price increase is positive for Guinnees, but it is losing market share to the other players. So a price increase might be offset by a stepper volume decline,” said Yinka Ademuwagun, analyst at United Capital Limited. Analysts say government has to formulate policies that will help reinvigorate consumer spending and that removing infrastructure bottleneck will spur investment and create an enabling environment for businesses to thrive. Ademowagun said that people need to see a recovery in earnings that will make them confident about the sector.

Company

International Breweries is to resurrect from the dead BALA AUGIE

nternational Breweries Nigeria Plc is about to wake up from a slumber as parent company, Anheuser-Busch InBev (AB InBev), has committed to investing more than N123 billion in the Nigerian brewers’ operations. The world’s largest brewer is committed to injecting rights issue into its subsidiary. International Breweries has concluded plans to raise N164.39 billion through a

rights issue of N18.266 billion ordinary shares of 50 kobo each at N9 per share which will be pre-allotted on the basis of 17 new ordinary shares of 50 kobo each for every eight ordinary shares of 50 kobo each held as at the close of business on November 6, 2019. The capital injection will help lower debt in the balance sheet of the Nigerian brewer that has been recording recurring losses due to stiff competition and operating environment. For instance, total debts www.businessday.ng

(long and short term) stood at N243.82 billion as at September 2019, this represents a 12.27 percent increase from the previous year. International Breweries is highly leveraged, which means it finances nearly all of its operations with debt, exposing it to financial risk. The debt to equity (D/E) ratio stood at 13.01 percent as at September 2019, this compares with 6.11 percent as at September 2018. This means investors own N618 of every Naira of company assets while creditor

own N1,303. The debt to equity ratio shows the percentage of company financing that comes from creditors and investors. A higher debt to equity ratio indicates that more creditor financing (bank loans) is used than investor financing (shareholders) As a result of rising cost of production and spiralling interest expense, International Breweries recorded a loss of N16.45 billion as at September 2019. Brewers in Africa’s largest economy have been grappling

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with heavy taxes imposed by the Federal Government while high unemployment and poverty have put consumer spending check. A lot of Nigerians have downgraded to cheap brands and premium beers are inaccessible. AB InBev had in 2017 merged its three indirect Nigerian subsidiaries-International Breweries Plc, Intafact Beverages Limited and Pabod Breweries Limited. The merger was done through a scheme of merger with International Breweries subsisting as the @Businessdayng

post-merger company. The merger was seen as a major strategic move by AnheuserBusch InBev to upend competition and consolidate its Nigerian base for further expansion into the sub-Saharan Africa (SSA).

Disclaimer:

Last week we featured a story titled “At 75 percent, EKO Atlantic Mall has the highest vacancy rate” we, however, acknowledge our error in the headline as it was about Atlantic Mall Lekki. We hereby apologise for any damaged caused.

Thursday 21 November 2019

BUSINESS DAY

Retail &

consumer business

CONSUMER SPENDING

With inflation at 11.61%, consumers risk higher prices ahead of yuletide OLUWASEGUN OLAKOYENIKAN

onsumer items will probably come at higher prices during this year’s yuletide season compared with last year’s, as the effect of border closure reverberates across the country. But that’s if history is any guide. Nigeria’s inflation accelerated by 11.61 percent in October from a year earlier compared with 11.24 percent recorded in September, according to recent data from the National Bureau of Statistics (NBS). The latest inflation reading, which is the highest in 17 months, was triggered by escalating food prices amid harvest season as food inflation increased by 14.09 percent – the most in 18 months, no thanks to the recent border closure and

its spillover effects on food supply. Within the last 11 years, history has it that a faster

pace of increase in October inflation was followed by higher inflation figures in the last two months of the

year. For instance, in 2016 when the Nigerian economy was in recession, the head-

line inflation rose 18.33 percent on a year-on-year basis from 17.85 percent. Inflation in the succeeding months of the year printed 18.48 percent and 18.55 percent. While the increased consumer prices may not be unconnected to the nation’s economic downturn in the year, a similar trend was observed in 2012 when inflation rate quickened in October. Consumer prices rose accelerated by 11.7 percent in the month, while the index stood higher in November and December at 12.3 percent and 12.0 percent, respectively. The same situation was also witnessed in 2009 and 2008, further suggesting that Nigeria could be bracing up for another yuletide of higher prices this year as frontloaded festive demand may further bloat food prices and overall inflation reading in November and December, according

to Lagos-based investment house CardinalStone. “This is likely to translate to further erosion of consumers’ purchasing power, which had already been shaved by the combined impact of naira depreciation and weak wage growth in recent years,” analysts at CardinalStone said in a recent note to clients. Food items such as bread & cereals, fish, meat, potatoes, and yam tuber food classes among others recorded the highest price increases in October, according to NBS data. But CardinalStone believes this price pressure could extend to some non-food items as traders adjust to the reality of the rising cost of living. “We expect the recent uptick in inflation to subsist in the near term and forecast inflation at 11.82% YoY in November, contributing to an average inflation forecast of 11.40% in 2019,” the note read.

company

Malaysian KFC Operator’s owner considers selling it

SR Brands (M) Holdings owners are considering a sale of the fast-food operator, which runs KFC and Pizza Hut restaurants in Southeast Asia, after shelving an initial public offering earlier this year, people with knowledge of the matter said. The Malaysian company’s major shareholders, which include private equity firm CVC Capital Partners, are working with an adviser to gauge interest from potential buyers for a controlling stake in QSR, according to the people. A deal could value QSR at about 6 billion ringgit ($1.4 billion), the people said,

asking not to be identified because the information is private. QSR’s backers have asked for non-binding offers to be submitted by the end of November, the people said. Its investors also include state-owned Johor Corp. and pension fund Employees Provident Fund. The shareholders decided to pursue a stake sale, instead of reviving a potential listing as previously planned, after weak markets led to a dearth of initial public offerings in the country, the people said. Malaysian IPOs have raised just $452 million this year, with only one deal of more than $100 million, according to data compiled by Bloomberg.

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

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Malaysia’s benchmark gauge has fallen 5.7% this year, making it the worst performer among major Asian exchanges. Only two of the region’s frontier markets -- Laos and Mongolia -have posted worse returns. Representatives for QSR, CVC, EPF and Johor Corp didn’t immediately respond to requests for comment. QSR which started gauging investor interest in an IPO in March, shelved its IPO plan weeks later. The company operates more than 830 KFC restaurants in Malaysia, Singapore, Brunei, and Cambodia, as well as more than 470 Pizza Hut outlets in Malaysia and Singapore. It also breeds chickens and pro .

Thursday 21 November 2019

BUSINESS DAY

news

Senate settles for e-voting to cure electoral malpractices

Verve International partners TVIO on Jollofrewards.com

Stakeholders converge on Lagos to build capacity for basic education monitoring

... as bill to amend Electoral Act scales second reading

SEYI JOHN SALAU

Solomon Ayado, Abuja

enate on Wednesday resolved that a new law be enacted to mandate the Independent National Electoral Commission (INEC) to use new technologies in the accreditation and electronic voting by voters during elections. This was contained in a bill for an Act to amend the Electoral Act, 2010, and for other related matters 2019, which passed second reading in Senate. The bill is sponsored by the Deputy Senate President, Ovie Omo-Agege (Delta Central) and Abubakar Kyari (Borno North), chairman of Senate Committee on INEC. Leading the debate, OmoAgege explained that because the National Assembly had a constitutional gatekeeping role for democracy, it was all-important to protect constitutional order by ensuring elections were free, fair and credible. He said to achieve the mandate, the nation’s electoral laws must be sound and up to date in order to respond adequately to new challenges that come with changing times and human behaviours. According to Omo-Agege, the bill is a response in part to a plethora of Supreme Court decisions that directly called upon the National Assembly to act by enacting laws formalising INECs introduction of modern technologies into the electoral process, especially accreditation of voters. The Bill if finally passed into law, seeks to - ensure that “the Act clearly forbids members of political parties from taking up employment in INEC; mandate

INEC to publish the Voters Register for public scrutiny at every Registration Area and on its website at least seven days before a general election; “Mandate INEC to suspend an election in order to allow a political party that lost its candidate before or during an election to conduct a fresh primary to elect a replacement or new candidate; grant agents of political parties the right to inspect original electoral materials before the commencement of an election; “Grant political parties that nominated candidates for an election a right (exercisable within a specified timeframe) to inspect its identity/logo appearing on samples of relevant electoral materials proposed to avoid incessant cancellation of elections due to exclusion of parties from election due to printers errors or deliberate mischief of not including the logos of some parties on electoral materials; “Clearly mandate INEC to accommodate new technologies in the accreditation of voters during elections, as repeatedly called for the Supreme Court; define over votingto include situations where total votes cast also exceed total number of accredited voters; “Provide greater clarity and transparency in the process of reaching the final announcement of election results, starting with sorting of ballots, counting of votes, etc; mandate INEC to record and keep relevant detailed information of results sheets, ballot papers and other sensitive electoral materials used in an election, with clear consequences for violation;

erve International and Interswitch’s card business in Africa have signed a collaborative agreement with TVIO Solutions - a strategic marketing and sales promotion agency, which developed and manages Jollofrewards.com Jollofrewards.com is an online rewards platform that enables organizations to reward loyalty, acquire and retain customers. It has been creatively crafted to reward the insured based on the premium paid. The platform provides various travel, leisure and lifestyle incentives that includes free flights, free spa treatment, free hotel stay, free cinema tickets, free Airtime, free fuel vouchers amongst others. Verve international noted that the rewards initiative was in line with their organisational objective of rewarding Verve card holders. Through this partnership, Verve card holders will be entitled to free travel leisure and lifestyle incentives when they use their Verve card to buy or renew their insurance policies through partnering brokers. Speaking at the MoU signing event in Lagos, the CEO of Verve International, Mike Ogbalu III, commended the team at TVIO for such ingenuity. In his response, the CEO of TVIO Group, Dominic Essien, said they were excited about the opportunity to partner with a successful indigenous card scheme like Verve. Another partnering broker-

age firm Messer. J. Akin George & Co. Limited who was represented by their chief operating officer, Ayodeji Johnson considered the initiative a welcome one to deepen market penetration in the insurance industry. He considered the 1.9 million insurance policies in circulation out of 190m population in Nigeria as too low. “Initiatives such as this will definitely cause a push in insurance sales and deepen penetration”. A partnering brokerage MD Epicure Aigbogun commented, “Insurance sector is a fast growing industry in Nigeria; creating a rewarding distribution channel for the purchase of insurance such as the Jollofrewards platform further supports development of the market through enhanced access points for the average insured and makes insurance more worthwhile.” Dolapo Fadeyibi, ead of Partnerships and Alliances at TVIO Solutions expressed her excitement at the huge acceptability of the product by customers. According to her, “customers are free to choose any policy from any insurance company’s existing bouquet on offer through the Jollof platform.” Some of the notable brokerage firm in the consortium includes, J. Akin George & Limited, Stanbic Insurance Brokers, Epicure Insurance brokers amongst others.

takeholders in the educational sector on Tuesday converged on Lagos for a two-day capacity building training for School Based Management Committee (SBMC) members from selected local government education authorities in the state. This training can come at no better time than now when education, especially basic education is in dire need of the support of all stakeholders,” said Olufunso Owasanoye, executive director, Human Development Initiative (HDI), stating that every child in Lagos State must have access to quality basic education, with standard educational infrastructure for service delivery. According to Owasanoye, the engagement was meant to equip the stakeholders in supporting existing government-instituted measures in the management of public schools. “This training aims to strengthen your capacity in advocating for positive change in the management of our public schools,” Owasanoye stated. The HDI with support of the MacArthur Foundation embarked on projects monitoring to ascertain the utilisation of Universal Basic Education (UBE) funds in collaboration with other NGOs. Stella Olubunmi Francis,

the executive director, Glowing Splints Development Initiative and resource person at the two day SBMC workshop, said one of the major roles of setting up SBMC was to help reduce the number of out-of-school-children in the country. According to her, SBMC members are expected to monitor their communities and work closely with school administrators towards the upliftment of the school. “… the best interest of the child should be paramount in all that we do,” said Francis. In her presentation on “Conflict resolution in the governance of basic education and composition/membership of School Based Management Committees,” said poor communication is the major cause of conflict resolution. “As SBMC or PF members we must prevent conflict from becoming a barrier from moving forward, or achieving our common goals of improving our schools,” she stated. Francis posited that conflict resolution is finding peaceful solutions to disagreements, especially among SBMC members. “…process of limiting the negative aspects of conflict while increasing its positive aspects,” said Francis urging participants to engage in act that will enable them identify and handle conflicts sensibly, fairly and efficiently.

Special Foundation inspires students through career day programme

he Special Foundation Career Day 2019 held November 14 at the Lagos City Senior College, Sabo – Yaba, an initiative of The Foundation’s Mentorship programme, was aimed at professionals in different fields talking with school students about their careers. The professionals bring the realities of the jobs to the children together with life skills, secrets on how to make careers choices, tips on how to excel, personal success stories and career opportunities. One major setback with the current system of learning in Nigeria is the lack of practicality or semblance of reality outside the theoretical teachings in the classroom. This produces students who have an idea or notion of how things should be but who are ignorant of the reality. Students have different career aspirations for their future but have no idea what it entails to reach said career aspiration. Another problem is the notion of “professional courses”. Nigerians refer to some courses as more respectable and prestigious; therefore Parents force children to study these courses even when they have neither the interest nor capability to support such choices. The Special foundation believes that the dream of every child is valid and that every child is special.

The mentorship program was therefore founded to ensure that these dreams come true and that the children are linked with opportunities or platforms that will allow them best fulfil their potential. The aim of the Special Foundation Career day 2019 was to inspire the children to dream of a better future for themselves and to motivate them to make the right career decisions by hearing from the personal experiences of professionals in different fields from the community. The Career Day program impacted the lives of 270 students in SS 2. The children were inspired by professionals from different fields in topics including Career Choice: Your Interest & Your Subject Combinations, Career Choice: Hard work & Opportunities out there, Finding Self Confidence at a young age, Citizenship and patriotism and Menstrual health and hygiene. At the end of the different sessions, the children were more confident that their dreams are valid and they are focused on excelling and remaining in school to ensure they have a better future. They were gifted exercise books and snacks. The host school also received a Public Address System. www.businessday.ng

L-R: Funmi Cooker, area manager/deputy director, Industrial Training Fund (ITF), Abeokuta area office; Noimot Salako-Oyedele, Ogun State deputy governor, presentating the best contributing employer in resource development and revenue generation in 2018 to Anthony Sule, AGM, human asset management/administration, Dangote Cement Ibese Plant, and Joseph Alabi, head, external relations, Dangote Cement Ibese Plant, organised by ITF in Abeokuta.

House to pass Lagos 2020 budget December JOSHUA BASSEY

agosStateHouseofAssembly saysitisworkingtoensurethe 2020 budget presented to it by Governor Babajide Sanwo-Olu is passed into law in December. Governor Sanwo-Olu on Friday, November 8, 2019, presented a budget size of N1.168 trillion to the state of House of Assembly for consideration and approval. The Chief Whip of the House, Rotimi Abiru, stated this while fielding questions from journalists at the annual national delegates’ conference of the As-

sociation of Hansard/Verbatim Reporters of Nigeria held in Ikeja on Wednesday. According to Abiru, the appropriation bill has already gone through its second reading on Monday, meaning that all things being equal, the lawmakers will pass the budget before end of the year. “We’re looking forward to a hitch-free budget process and seek for the support of the executive to avail us with all necessary documents that would help in the passage of the budget. Once that is done, I am sure it is our

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desire to pass it before the end of the year,” Abiru said. Declaring the conference open, with the theme: ‘The challenges facing the production of Hansard and the way out,’ Abiru, who stood on for the speaker, Mudashiru Obasa, said Hansard was an important document in the parliament that contained everything said during proceedings. “Hansard is the official reporting of proceedings in the House of Assembly, it reminds us of things said at different times by members withoutdistortionanditisalsovery good for history. @Businessdayng

“There is utmost need to support and update this process of reportage so as to conform with modern day realities, we cannot leave out the use of technology in modern day Hansard preparation,” Abiru said. The clerk of the house, Azeez Sanni, represented by Taiwo Ottun, head, legislative directorate, informed the Hansard/Verbatim reporters that their “roles have been remarkably instrumental to the growth and development of our democracy and legislative institutions, most particularly when the need arises to refer to reportorial precedence as recorded in Hansard.”

Thursday 21 November 2019

BUSINESS DAY

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Thursday 21 November 2019

BUSINESS DAY

news FEC approves €500m facility for BOI to support... Continued from page 1

in Abuja. The loan with single-digit rates is to be guaranteed by the Federal Government of Nigeria and will be executed through the Ministry of Finance, Budget and National Planning. “The main objective of the loan is to support industry, revitalise agroindustrial processing zones and facilitate the creation of new jobs,” Agba said. “We do believe that about 1.2 million jobs will be created through this facility, increase the income of farming communities and promote the inclusion of SMEs and smallholder producers in the industrial value chain and the deployment of transportation infrastructure that connect farming communities to processors and market,” he said. Agba said the loan will be swapped to naira by the CBN to mitigate the foreign exchange risk and the fund would, therefore, be available to Nigerian enterprises at a more affordable rate and in local currency. The Ministry of Power also presented a memo seeking the ratification authorising the president to release $2 million. The fund is expected to be part of Nigeria’s contributions to the West African

Power Pool. FEC also approved a justice sector policy to reform the sector by simplifying access to justice. This was disclosed by Abubakar Malami, Attorney General of the Federation and Minister of Justice. Malami explained that the policy would ensure “speedy determination of justice”, “quality of justice” and “access to justice”. FEC also approved a memo seeking to repeal the Geneva Convention and re-enact it to “accord greater access to justice by prisoners of war”. Malami said Nigeria was behind the rest the world in terms of according prisoners of war certain rights and privileges. “The intention and design was to have a justice sector reform package that will turn things for the better as far as administration of justice is concerned. It will turn things around relating to the justice, turn things around in relation to speedy administration of justice, and turn things around for the purpose of ensuring at the end of the day, that we have a consensus approach to the administration of justice,” he said. He described the policy as one that is “all-encompassing as it relates to institutional accommodation”.

Senate committee accuses FAAN, FIRS, NDDC, ... Continued from page 2

but they have refused to do so,” Urhoghide said. “We are ready to bring anybody to public arena and there are no sacred cows. We are giving them only seven days to give us all the information we have demanded. We have written and even made calls to them but they refused to respond,” he said. He said the Senate Public Accounts Committee issued correspondences to relevant institutions of government seeking their responses to enable the committee carry out special oversight functions in line with Sections 85, 88 & 89 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended) and Order 97(5) of the Senate Standing

Orders 2015 as amended. As a result, he said, all the defaulting agencies have been given the last opportunity to make submissions. “Notice is hereby issued to defaulting MDAs and other organisations of government to, without further delay, make submissions within seven (7) days, that is, 20 to 27 of November, 2019 on their responses to the issues raised by the Committee and its various correspondences regarding their income and expenditure operations from 2017 to 2019,” Urhoghide said. According to him, the essence is to check corruption, ensure accountability and transparency in public spending and ensure that funds are being spent on the purposes they are meant.

P&ID $9.6bn judgment: FG opens case against... Continued from page 2

an undertaking to always be present in court with the defendant throughout the duration of the trial. The surety is to depose an affidavit of means with two passport photographs and undertake to pay the total bail sum should the defendant escape from the country before the conclusion of his trial. The court equally ordered

the defendant to surrender all his international passports, even as it mandated the Nigerian Immigration Service to confirm how many passports that were issued to him within the past 20 years. Prosecution counsel, Bala Sanga, had told the court that the defendant was arrested after an extensive covert manhunt that stretched for over two weeks. www.businessday.ng

L-R: Sharon Ikeazor, minister of state for environment; Suleiman Adamu, minister of water resources; Goddy Agba, minister of state for power; Uche Ogar, minister of state for solid mineral development; Sabo Nanono, minister of agriculture, and Festus Keyamo, minister of state for labour and employment, at the Federal Executive Council meeting at the Presidential Villa in Abuja, yesterday. NAN

Umahi, Ishaku, Okowa, others win BusinessDay States... Continued from page 1

Reinvestment, Defence of Women and Protection of Child Rights. Governor Darius Ishaku of Taraba State got award for the Most Improved State in Social Empowerment & Poverty Alleviation, while Governor Emeka Ihedioha of Imo State won the Fastest Growing State Economy award. The Most Improved State in Education Development/ Promotion of Made in Nigerian Goods went to Governor Okezie Victor Ikpeazu of Abia State, while Governor Abdullahi Sule of Nasarawa State took the Most Improved State in Industrialisation & Solid Minerals’ Development award. Also, the award for Most Improved State in Promoting Economic Emancipation and Poverty Alleviation was won by Governor Muhammad Inuwa Yahaya of Gombe State, while the Most Improved State in Security award was carted away by Governors Dapo Abiodun of Ogun State and Ifeanyi Ugwuanyi of Enugu State. O t h e r cat e g o r i e s o f awards won include the Most Improved State in Skills Development and Job Creation which went to Governor Godwin Obaseki of Edo State, and Most Improved State in Social Empowerment/Poverty Alleviation in Nigeria clinched by Governor Mai Mala Buni of Yobe State. The annual States Competitiveness and Good Governance Awards was introduced by BusinessDay, Nigeria’s foremost source of financial and business intelligence, to promote good governance, transparency and accountability in the use of the nation’s scare resources. The awards programme is meant to

provide an independent assessment of state governments’ activities in a fiscal year. In an address, Gowon said governance at all levels is a serious business and governors are in a serious business which requires extra efforts to better the lives of the governed. He described the States Competitiveness and Good Governance Awards by BusinessDay as a call to more service for the governors who won the awards and commended BusinessDay for setting in motion a programme to recognise conscientious efforts to stimulate the economy. The former head of state noted that for Nigeria to attain economic and political advancement, the country must take a cue from China, Singapore and Malaysia by putting in place strategic planning and implementation and infrastructure as well as ease of doing business to attract investors. Frank Aigbogun, publisher/CEO, BusinessDay Media, in his remarks called on states to do more for the people even with their limited resources, noting that the people appreciate little value added to their lives. He said if the governors focus on fostering rapid development, it would create wealth, reduce youth restiveness and enhance adequate security. According him, such works as done by the governors, apart from creating wealth, would further provide jobs and create the enabling environment where businesses would thrive. He noted that to improve the lives of the citizenry, the governors must take decisive actions to execute physical projects and to improve internally

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generated revenue, and move from recurrent expenditure to capital expenditure. This, he said, would foster health, educational and infrastructural development. “My message to governors is to do the least possible and it will amaze them how perception will be shaped so rapidly and development can be achieved in states that they have been given mandates to govern,” Aigbogun said. “I believe that the focus today is to not put too much on the Federal Government with the hope that they alone can develop the states. States governors and their local government chairmen should do the best they can do to make their states more developed, to make their hospitals safe, to make their schools as institutions where quality knowledge can be imparted. They should collaborate more to make their states better and in taking each other’s competitive advantage, leveraging and building on it, I believe our people will have cause to live happily,” he said. He reminded the governors that the states collect a larger chunk of the federation allocation which vests on them high responsibility of delivering more. Explaining the imperativeness of the awards, Aigbogun said the aim was to identify and reward governors who have worked tirelessly to fulfil the mandate bestowed on them by their people. “This is an event for which we commit our resources singularly aimed at identifying and rewarding governors of states who tirelessly work to fulfil the mandate given to them by their people. What we do every year is to travel across @Businessdayng

the length and breadth of the country to monitor closely the work that is being done by governors in the states,” Aigbogun said. “We believe in a country where the possibility of finding positive trends and development can emerge across the states, where actions, projects and catalysts by state governors who are doing their very best to improve internally generated revenue would move from preponderance of recurrent expenditure to growing capital expenditure, build infrastructure in the real sense, and commit to better education and healthcare service delivery among others,” he said. In their separate responses, the awardees assured that the recognition will spur them to do more for the betterment of their states as well as the country. The States Competitiveness and Good Governance Awards came into being to provide an independent feedback mechanism to states on the different policies, programmes and projects of state governments and the effects such actions have on the socioeconomic well-being of the residents of their states. Parameters employed include the kilometres of rural and urban roads constructed within a fiscal year; the number of hospitals and primary healthcare centres upgraded, renovated and newly built; enrolment rates into public primary and secondary schools; performance in national examinations such as the West African Examination Council (WAEC); improvement in internally generated revenue (IGR); capital importation and foreign direct investment (FDI); the number of classrooms built or renovated; supplies of educational materials, among others.

Thursday 21 November 2019

BUSINESS DAY

news

Why engaging design professionals is key for property outlook Buhari signs Executive Order 009 on open defecation Temitayo Ayetoto

rospects of a property leading demand in a market saturated with competition could be enhanced with the engagement of interior design professionals in the early life of a building project, designers under the umbrella of Interior Design Professionals of Nigeria (IDAN) have said. They said commercial projects particularly have a lot to gain by creating room for interior designers to infuse both aesthetic and functional value into property framework, speaking during the 5th edition of the association’s conference in Lagos, tagged ‘Guide: Freedom to Design’. Omon Mordi, IDAN president argued that there are many properties sitting on the market for years without being able to sell because property developers tend to ignore the part of consulting property designers in building. While some building structures have appealing sight, she explains that they may not necessarily be practicable in terms of functionality. However, the interior design industry in Nigeria is growing with designers increasingly taking on various projects varying from commercial to public

and residential spaces but the pedestal, they fear, will remain slow if poor professional engagement and lack of public education on the designing aspect continues. This among other reasons is why the association extended its conference focus on increasing the public’s understanding of who interior designers are and what they do. “So is there a need for interior designer in Nigeria? Absolutely. Is there a market for it? Definitely. Do people know that? Maybe not. That’s where IDAN comes in to let the public know that interior design as a profession is definitely something that should be valued,” she said. “We want people to know the level of expectations of professional standards they should hold designers to and why designers are needed on every design project.” Freda Anegbe, assistant secretary of IDAN canvassed tackling the challenge of education with making interior design courses available in universities across the country, through the ministry of education. The conference also gave focus to showcasing professional’s services, with a one on one con-

sultation and development of skillset, this year. In the past, the focus was placed on the product designers, manufacturers and suppliers, leaving out the professionals with the expertise of using these products creatively. On enhancing the delivery of designers, Tola Akerele, vice president IDAN said the association has realised the crucial need in terms of support on the management of staff, support on projects, having a bigger picture of what is available in the industry. “You don’t actually have to do everything yourself,” she said. On the one hand, the cost of having professional interior design services is considered as an unnecessary and extra burden by many Nigerians building houses, especially for residential purposes, findings show. Lack or poor options of finishing materials as well as low availability of skilled hands locally are constraining the budding area of design from growing at par with advanced trends in other climes. Apart from engaging essential services of surveyors, architects, structural engineers, builders and mechanical engineers, people tend to undermine the role of interior designers, undertaking the arrangement task themselves.

Tony Ailemen, Abuja

resident Muhammadu Buhari on Wednesday signed Executive Order 009 entitled, The Open Defecation-Free Nigeria by 2025 and Other Related Matters Order. The Order specifies Nigeria’s commitment to being open defecation free by 2025. It also states that the National Open Defecation Free (ODF) Roadmap developed by the Federal Ministry of Water Resources with support from other key sector players across Nigeria be put into effect. “There is established in the Federal Ministry of Water Resources a National Secretariat called “Clean Nigeria Campaign Secretariat. “The Secretariat is authorized on behalf of the President to implement this Order by ensuring that all public places including schools, hotels, fuel stations, places of worship, market places, hospitals and offices have accessible toilets and latrines within their premises. “The order directs that all

Ministries, Departments and Agencies (MDAs) of government shall cooperate with the Clean Nigeria Campaign Secretariat. “The National Assembly and the State Houses of Assembly shall enact legislation on the practice of open defecation with appropriate sanctions and penalties. “All development projects shall include construction of sanitation facilities as an integral part of the approval and implementation process. The order also indicates that the Secretariat shall terminate when Nigeria is declared Open Defecation Free. “All enforcement authorities are hereby directed to diligently collaborate with the Federal Ministry of Water Resources in implementing this Order. E x e c u t i v e O rd e r 0 0 9 came into being against the background that: Nigeria is ranked second amongst the nations in the world with the highest number of people practicing open defecation estimated at over 46 million people – a practice which has

had a negative effect on the populace, and has contributed to the country’s failure to meet the United Nations Millennium Development Goals (MDGs). President Buhari had described the statistics on open defecation and access to pipe borne water service and sanitation as disturbing, and had declared commitment to implement the National Water Supply, Sanitation and Hygiene (WASH) Action Plan. The President had declared a State of Emergency on Niger ia’s water supply, sanitation and hygiene sector, the action being imperative as it will reduce the high prevalence of water borne diseases in different parts of the country which have caused preventable deaths. Nig e r i a ha s c o m m i tted to end open defecation throughout the country by 2025 in consonance with her commitment to the United Nations Sustainable Development Goals (SDGs). This Executive Order takes effect from Wednesday, November 20, 2019.

Funding to combat HIV/AIDS shrinking - NACA DG

... as Buhari approves N2.5bn to expand HIV treatment Godsgift Onyedinefu, Abuja

irector-general, National Agency for the Control of Aids (NACA), Gambo Aliyu, has expressed concern that international and domestic funding to combat the HIV/AIDS scourge and achieve epidemic control in Nigeria is shrinking. The NACA DG says Nigeria’s domestic funding for HIV is estimated to be below 30 percent, even as the country accounts for more than half of new infections and deaths from AIDS-related illness, and only less than 40 percent of adolescents and youths have comprehensive knowledge about HIV. Aliyu, who said this while addressing a World Aids Day (WAD) press conference in Abuja on Wednesday, said Nigeria still had a lot to do in the face of shrinking funding. He however informed that President Muhammadu Buhari had approved N2.5 billion to increase the number of patients treated by the government from 50,000 to 100,000. The director-general, while noting that the theme of the 2019 WAD celebration is “Communities make the difference,” said communities were urgently needed to ensure that HIV remained on the political agenda and galvanise international and national funding for the disease. Aliyu said communities, which include network of people living with HIV, women and young people, peer educators, counsellors, community health workers, four-door service providers, civil society organisations, religious and traditional rulers, policy makers and activists play a significant role in the

national response to response to HIV. According to Aliyu, communities are vital to facilitating an enabling environment that promotes equal access to HIV prevention, treatment and care services for Nigerians. Also speaking at the conference, Araoye Segilola, national coordinator, National AIDS/ STI and Hepatitis, decried that Nigerian youths, adolescents were not accessing treatment services while people with disabilities were cut off. Segilola stressed that government interventions could only make meaningful progress if the communities were engaged actively and had access to treatment and care services. Chairman, Senate Committee on Primary Health Care and Communicable diseases, Chukwuka Utazi, also speaking, said the Nigerian government would be commemorating the WAD day with a renewed commitment towards Nigerians living with HIV, through the launch of a campaign tagged U=U (Undetectable and therefore Untransmitable) to increase the awareness and support for the target population. The chairman noted that the campaign was key to Nigeria’s effort achieve the UNAIDS ‘ 9090-90 target by 2020. He said the campaign would be geared towards supporting Nigerians living with HIV who are on Anti-Retroviral drugs for treatment to reach their goals of viral load suppression. “As we lunch this campaign next week in FCT, Nigerian communities will be charged with the responsibility of supporting their fellow Nigerians living with HIV to achieve undetectable viral load. www.businessday.ng

L-R: Obinna Anyanwu, MD/CEO, Capital Square Limited; Adenike Shobajo, vice president, Lagos Chamber of Commerce and Industry (LCCI); Francisco Carlos Soares Luz, consul general, Consulate General of Brazil, Lagos; Mojisola Bakare, general manager, corporate and investment banking, divisional head, corporate client coverage, Sterling Bank plc, and Michael Olawale-Cole, vice president, LCCI, at the LCCI Financial Services Group Symposium Pic by Olawale Amoo of Financing Agribusiness in Lagos, yesterday.

Prison reform: 3,768 inmates set free in 2 years - AGF Felix Omohomhion, Abuja

inister of Justice and Attorney General of the Federation, Abubakar Malami, said on Wednesday that 3,768 inmates had been freed across the country in the last two years in an effort to decongest Nigerian prisons. Malami, who was speaking in Abuja while addressing journalists on the proposed national workshop on the effective implementation of the provisions of the correctional service Act, 2019, said the Federal Government had achieved so much in the area of prison decongestion, adding that no fewer than 3,768 inmates in 34 prisons across 16 states of the federation has been set free. “The Attorney-General and

Minister of Justice in October 2017, constituted a Presidential Committee on Prisons Reform and Decongestion Chaired by the Honourable Chief Judge, High Court of the Federal Capital Territory, Honourable Justice I.U Bello to fast-track the Decongestion of prisons. “The Committee has since its inauguration visited and appraised about 34 prisons in 16 states. A total number of 3,768, have been so far released during these visits via payment of fines for convicts for minor offences with the option of fine who are unable to pay the fines, general review of peculiar cases and advocacy overtures to relevant authorities,” he said. The AGF in addition said the Committee also wrote letters of appeal to several state government executives to act on some special cases encoun-

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tered during the visits to various prisons in their states on the need to exercise their powers of clemency in deserving cases or commute to life sentence those condemned to death. He noted that in line with the vision of transforming the prisons into correctional centres, a standard Skill Acquisition Centre at Keffi Correctional Centre would be established in December, which will be replicated in Correctional Centres across the federation. “This will enhance the focus on corrections and promotion of reformation, rehabilitation and reintegration of offenders as provided by the Act. “It is on this note, that my office in collaboration with the Presidential Committee on Prisons Reform and Decongestion of Prisons and the Nigerian Correctional Service will be @Businessdayng

hosting a three-day Strategic Workshop in the Month of November, 2019, with the theme, “Towards Effective Implementation of the Correctional Service Act, 2019”. According to Malami, the purpose of the National Workshop is to sensitise stakeholders especially Justice Sector Institutions on the provisions of the Act particularly the provisions regarding non-custodial services which is newly introduced. He added that the workshop would provide a veritable platform for the overview and comparative analysis of Correctional Service Act, 2019. He said the signing into law of the Correctional Service Act, 2019 by President Muhammadu Buhari in August this year was a major turning point in Prisons Reform and Justice Sector delivery in the country.

Thursday 21 November 2019

BUSINESS DAY

POLITICS & POLICY

Ambode probe: Lawmakers say court can’t intervene Iniobong Iwok

Lagos High Court in Ikeja has fixed January 16, next year to commence full hearing in the suit filed by the immediate past governor of Lagos State, Akinwunmi Ambode against the state Assembly to contest the constitutionality of the probe of the buses which were procured based on budgetary approval as part of the Bus Reform Project. At the last adjourned date, the presiding judge, Yetunde

Adesanya had picked yesterday November 20, to allow the lawmakers to response appropriately why injunction order should not be issued against them in probing the former governor. Appearing before the court yesterday, the lawmakers told Adesanya that the suit filed against them by the former governor was incompetent. Addressing Court through their lawyer, Lawal Pedro, a senior advocate of Nigeria (SAN), said that the Ikeja High Court did not have jurisdiction to hear the suit, while they also opposed the injunction which

Bad traffic situation is temporary – Lagos State govt

he Lagos State Government has noted the discomfort commuters and motorists have been experiencing since the beginning of the massive road repairs under ‘Operation 116’ across the state. It said that there was no deliberate action to cause Lagosians any pain, and that the present situation is temporary. This was contained in a statement signed by Gbenga Omotoso, state commissioner for Information & Strategy, a copy of which was made available to BusinessDay. Omotoso said that the contractors were speeding up their jobs and that they were being encouraged to work at night where possible, even as motorists are being advised to use alternative routes. “The administration sympathises with residents on the inconvenience suffered daily but in fulfilment of its commitment to making the roads motorable immediately the rains subside, resources and equipment have been de-

ployed to fix degenerated roads. The discomfort will be short-lived,” he said. According to him, “The state government has directed the relevant agencies to review traffic control and regulation policies towards identifying a long-lasting remedy to the problem. “The daily influx of people from other parts of the country into Lagos has contributed to the big human and vehicular pressure on the roads. The government will surely surmount the challenges with technology and enforcement of traffic rules.” The commissioner further said that the government “appreciates the perseverance of Lagosians and pledges its commitment to pooling all its resources together to achieving a permanent solution to the problem posed by the rehabilitation of bad roads. The administration will ensure that majority of the roads become smooth and motorable before the Yuletide.”

restrained them from probing Ambode. Pedro told the Court that Ambode’s counsel, Tayo Oyetibo, SAN, had filed a written reply on points of law to their motion which challenged the injunction and a written address in opposition to the preliminary objection of his client. However, responding, Oyetibo confirmed receiving all the processes served on the claimant by the respondents. He said that the claimant has also responded to the processes. Following the submission of counsel, Adesanya adjourned the suit for hearing.

Akinwunmi Ambode

Ambode had instituted the civil suit against the State House of Assembly, its Speaker, Mudashiru Obasa and the House Clerk, Azeez Sanni. Other respondents to the suit are Fatai Mojeed, chairman of the Ad-hoc Committee set up by the House to probe the procurement of the buses and eight members of the Committee. The members of the Adhoc committee are Gbolahan Yishawu, A . Yusuf, Yinka Ogundimu, Mojisola Meranda, L. Makinde, Kehinde Joseph, Temitope Adewale and Olanrewaju Afinni.

Lawmakers express dismay over poor quality of roads in A/Ibom ANIEFIOK UDONQUAK, Uyo

awmakers in the Akwa Ibom State House of Assembly have expressed dismay over the poor quality of roads being executed by the state government. They also worry about the competency of contractors engaged by the state government. The lawmakers, who spoke when Ephraim Inyang Eyen, commissioner for works, appeared before the finance and appropriation committee to defend the 2020 budget of the ministry, frowned at the waste of government resources as a result of incompetent contractors. Mark Esset, PDP, who represents Nsit Atai state constituency, took a swipe at the Akwa Ibom State government over its award of the Nsit Atai-Okobo road project to four companies without success, asking that the current company handling the project be sent packing immediately if it is

incompetent. Esset expressed worries that government resources were being wasted on daily basis as a result of the failure of the current contractor handling the project. “The current handler of the project is the fourth ‘learning’ contractor that the road has been awarded to. If I’m not mistaken, I know that not less than a billion naira was paid, and nothing was done. “All the houses on that road have been condemned. Owners of houses on both sides of the road cannot have access to their houses because of the drainage that has been constructed six feet above the ground,” he said. Lawmakers who charged Ephraim Inyang-Eyen, on the issue of ensuring good roads in their respective constituencies and other areas of the state were Uduak Ududoh (Ikot Abasi/Eastern Obolo), Aniefiok Dennis (Etinan), Godwin Ekpo (Ibiono Ibom), Victor Ekwere (Mkpat Enin) and Emmanuel Ekpenyong (Ini).

All spoke separately when Inyang-Eyen, appeared before the Uduak Odudoh-led committee on Finance and Appropriation to defend the 2020 budget estimate of his ministry. In his remarks, Inyang Eyen said it was the close marking of his ministry that sent the erring contractors out of the Nsit Atai-Okobo road, noting that out of N1billion pay out for the contact, government recovered N700 million back to its purse. He assured that if the current company handling the road fails to meet the set requirements, they would be shown the way out, while government monies would be recovered. “Government will not lose money on the Nsit AtaiOkobo road, be rest assured. Every Kobo will be accounted for. “I can say that the governor is committed to dualising that road because we need it as a releasing point for the deep seaport’, he said. Giving a review of all on-

going projects being supervised by his ministry, Inyang-Eyen said the ministry of works is currently working on 57 major road contracts, 30 bridges and flyovers as well as 178 Intervention projects spread across the state. “Out of the 57 major road contracts, 11 have been completed and commissioned. “We are very hopeful that by the year 2020, in May when this administration would have been into the first year of the second term, we should be able to deliver at least another 18”. Inyang-Eyen said his ministry has so far accessed between 40 and 41 per cent cash releases in the current 2019 financial year. He said that N131 billion has been earmarked for his ministry for 2020 and that the focus would be the completion of all ongoing projects. He said resources are to be channeled to projects that are at about 50, 60, 70, and 80 percent completion so that they would have been put to us before May 2020.

Dickson inaugurates 41-member transition committee Samuel Ese, Yenagoa

overnor Henr y Seriake Dickson of Bayelsa State has inaugurated a 41-member transition committee in readiness for a smooth takeover of the incoming administration, saying it is in line with the 1999

Constitution of the Federal Republic of Nigeria. Secretary to the State Government, Kemela Okara is the chairman; Chief of Staff, Government House, Talford Ongolo is the deputy chairman, while Luka Obiri is the secretary. The committee, comprising all serving commissionwww.businessday.ng

ers, five permanent secretaries and political appointees, was inaugurated on Tuesday at the Governor’s Conference Room, Government House, Yenagoa. Dickson described the All Progressives Congress (APC) victory in the just concluded governorship election as a charade and explained that

irrespective of the outcome of the several initiatives being taken by the People’s Democratic Party (PDP), there was still need for a proper handover process to be initiated. His words: “Knowing that what transpired is not an election, we have to set up a transition committee. The first time in democratic rule and

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I thank God for the grace and enablement for making this possible for eight years and with a lot of achievements”. The governor charged the committee to articulate, record and document all the policies, programmes, projects and achievements of the ‘Restoration Administration’ in all sectors in almost eight @Businessdayng

years. He said the outcome of the committee’s work would be handed over in various forms to the in-coming government, stressing that the achievements of his government would be a testimony as Bayelsans were assured of continuing to enjoy the dividends of democracy.

Thursday 21 November 2019

BUSINESS DAY

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@Businessdayng

Thursday 21 November 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 20 Nov. 2019

Top Gainers/Losers as at Wednesday 20 November 2019 LOSERS

GAINERS Company NB

Opening

Closing

Change

N49

N52

Company

Opening

Closing

Change

MTNN

N121.9

N119.05

-2.85

N16.9

N18.5

1.6

DANGCEM

N144.9

N144

-0.9

UBA

N7.2

N7.75

0.55

NASCON

N14.85

N14

-0.85

FBNH

N6.75

N7.3

0.55

WAPCO

N14.65

N14.5

-0.15

ACCESS

N9.85

N10.2

0.35

OANDO

N3.6

N3.54

-0.06

CONOIL

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

26,776.15 4,074.00 267,314,230.00 3.053

Global market indicators FTSE 100 Index 7,265.39GBP -58.41-0.80%

Nikkei 225 23,148.57JPY -144.08-0.62%

Generic 1st ‘DM’ Future 27,832.00USD -63.00-0.23%

Deutsche Boerse AG German Stock Index DAX 13,171.89EUR -49.23-0.37%

S&P 500 Index 3,117.72USD -2.46-0.08%

Shanghai Stock Exchange Composite Index 2,911.05CNY -22.94-0.78%

12.923

PEARL Awards 24th year edition holds in Lagos

Stockbrokers set to discuss issues affecting their profession, market Stories by Iheanyi Nwachukwu

tockbrokers are warming up for ‘village meeting’ to discuss fundamental issues affecting their profession and how to take advantage of emerging opportunities in the financial market. The meeting scheduled for 3 pm on Thursday, November 21 in Lagos is an initiative built into this year’s Stockbrokers’ Conference which will commence in the morning of that day at the venue. Market watchers were quick to describe the proposed meeting as a value added to this year’s Conference. They observed that it would create a platform where some issues that would dominate discussion at the Conference shall be reviewed and where necessary, collective decision might be taken . They also explained that the Village Meeting would enhance coordinated approach at the Conference as all stockbrokers suffer from macroeconomic shocks that affect all sectors of the economy. The Institute’s First Vice President, Tunde Amolegbe who confirmed the Village Meeting explained that it had become necessary for

L-R: Tayo Orekoya, president/CEO, PEARL Awards Nigeria; Rabiu Abdullahi Umar, group chief commercial officer, Dangote Industries Ltd & Member, PEARL Awards Board of Governors; Faruk Umar, board chairman, and Nike Akande, past president, Lagos Chambers of Commerce and Industry and board member at the Induction of Rabiu Umar into the PEARL Awards Board of Governors.

stockbrokers to come together as a family to review the current trends in the economy, especially, the impacts on the businesses of securities dealers and the way forward. Meanwhile, barring unforeseen circumstances, the Executive Governor of Edo State, Godwin Obaseki and his Lagos State counterpart, Babajide Olusola SanwoOlu and other top-class dignitaries are among the participants expected at this year’s Stockbrokers’ Conference in Lagos. Their presence is expected to deepen discussion and bring the market closer to the govern-

ment at various tiers. Obaseki is a frontline chartered Stockbroker and a fellow of the Chartered Institute of Stockbrokers (CIS). Responding to media enquirers at the weekend, the Managing Director, Morgan Capital, Muyiwa Adeyemi explained that the Institute’s annual Conference was a platform designed to enable the capital market operators make inputs into the Federal Government’s economic policy in order to move the capital market forward The Chairman, Conference Planning Committee , Abiola Adekoya has earlier

addressed a Press Conference when she explained that the Confidence Theme: “ Boosting Capital Market Competitiveness in a Challenging Macro Environment “ was chosen to articulate policy measures that can reposition the capital market to play its pivotal role as a platform for mobilization of funds from surplus economic units to deficit one. Adekoya stated that issues such as innovation and growth, fintech, attracting talents to securities industry and nexus between agriculture and the capital market shall form the fulcrum of plenary sessions at the Con-

ference. “ With the integrated and digital-driven global economy of today, the barriers to competition are gradually coming down, making it necessary for stockbroking firms with exposure to the domestic market to innovate to retain and attract customers. Given the challenging domestic macroeconomic environment and liberal immigration policies in advanced economies with aging populations, retaining talent in the securities industry has been difficult, with negative implications for performance.”, Adekoya said. Corroborating her, the First Vice President, CIS, Tunde Amolegbe explained that the significance of discussing Fintech at the Conference should be appreciated against the background of the Institute’s efforts at ensuring the success of the government’s policy on financial inclusion. Amolegbe stressed that the Conference would bring about robust ideas on how to reposition the market in view of the unfolding developments in the global economy. Amolegbe also clarified the implication of Fintech on transaction cost by saying that it would rather make the cost cheaper and encourage more participation in the market across the board.

he stage is now set for the glamorous occasion where corporate titans are celebrated 2019 PEARL Awards Nite. The coveted Awards for the Nigerian Capital Market comes up on Sunday November 24, 2019 at the prestigious Eko Hotel & Suites Lagos, with this year’s theme tagged ‘Celebrating Sustainable Leadership and Resilience.’ According to the organizers, the annual PEARL Awards Nite is a national corporate showpiece event where quoted companies and key stakeholders in the capital and financial markets of the Nigerian economy are rewarded for their outstanding contributions to economic development. The PEARL Awards, instituted in 1995 is endorsed by the Securities and Exchange Commission (SEC), the apex Capital Market regulatory authority. Commenting on the event which is in its 24th edition, the President of PEARL Awards Nigeria, Tayo Orekoya remarked that this year’s Awards Nite promises to be novel yet glamorous. “The event is being remodeled from an operational stand point to be more appealing and engaging on a night of excellence and glamour”. Confirmed to grace this occasion are Olufemi Lijadu, Chairman, Board of Securities & Exchange Commission; Mary Uduk, Acting Director-General, Securities & Exchange Commission; Bashorun J.K. Randle, Past President, Institute of Chartered Accountants of Nigeria; Kayode Falowo, President, Nigerian-British Chamber of Commerce, among a host of other captains of commerce and industry.

CSCS introduces ‘Regconnect’ to improve interaction with Registrars’ community

entral Securities C lear ing System (CSCS) Plc has introduced to the Nigerian capital market Regconnect, a web-based application powered by CSCS to transform and improve the user experience of Registrars, by providing an easy to use platform to exchange information. The solution was formally launched on Tuesday November 19, 2019 at the company headquarters in Lagos. In a bid to conform with global best practices, the application was developed having

reviewed CSCS’ operations and methods of interaction with Registrars. Prior to the solution, Registrars could only connect with CSCS through a Data Exchange application that did not have the ability to process the data being submitted. The Data Exchange application and Regconnect solution are being run on a parallel deployment until December 2019, when total switch over to Regconnect will occur. However, Regconnect provides an efficiency lever for the capital market, as the apwww.businessday.ng

L-R: Edith Onwuchekwa, company secretary, SEPLAT, Ifueko Omoigui-Okauru, director SEPLAT, and Chioma Nwachuku, general manager, external affairs & communications, SEPLAT after a well received lecture by Omoigui-Okauru on “Sustaining Positive Transformation in Public Institutions: Beyond the Personality” at the NAPE conference in Lagos.

plication facilitates day to day processes regarding the maintenance of registers, with immediate validation of all data being submitted to ensure the accuracy of records, and in less time. According to the Managing Director/Chief Executive Officer of CSCS Plc, Haruna JaloWaziri, “As part of our strategic pillars to automate and improve operational efficiency in the Nigerian capital market, the application will automate our interactions and improve CSCS’ connection with the Registrars’ community. https://www.facebook.com/businessdayng

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Thursday 21 November 2019

BUSINESS DAY

Corporate Social Impact

iCreate Africa Thinks Grand Finale, Looks to Create 5m Jobs From Skills Stories by Onuwa Lucky JosepH

kills-based businesses are becoming really big business in Nigeria. They have always been so in other parts of the world. But there’s an incipient awakening to its potentials in Nigeria by players in the skills and crafts sector. One of them, the super-charged Bright Jaja, CEO of iCreate Africa Skills Festival, believes that if properly groomed and harnessed the industry has potential of delivering 5million jobs to the Nigerian job market in 5years. Sounds like an exaggeration until you do the math. According to the National Bureau of Statistics, NBS, as of Q3 2018, 55.4% of young people (15-34) were either underemployed or unemployed (doing nothing). And according to Worldometers, a site on that handles world statistics, Nigeria currently has 202,939,558 as of 18/11/19; the number of working age people (15 – 64) being 110,850,171 or 53.77%

Bright Jaja

Abubakar-Suleiman, CEO Sterling Bank

of the general population. It’s a big window for skills to fill in the gaps left by unemployment of the many able and capable young men and women. The iCreate Skills Festival, which had its debut last year is again gathering steam this year and heading towards the grand finale to hold in Lagos in December. At the press

conference where Jaja made what some would consider an audacious claim, and in company of his corporate sponsors – Sterling Bank, Bosch and other players in the sector, he pressed the point that “one of the problems we have in Nigeria is that a lot of young people are going for jobs that are not available. The system, the entire system, is focused

towards educating young people for jobs that are not available”. This was reinforced by Monalisa Onojo, a winner from the first edition of the skills festival who said “there are no jobs out there and that is when we realise that it’s time to pick up a skill, it is time to learn something, to be an employer of labour instead of being an employee”. While it might not transit as smoothly as she renders it, in the skills sector, generally categorized alongside the informal sector, capital requirement is nowhere near as high as what the formal sector setups require. It’s a sector that runs more on passion and guts and where bootstrapping tends to be the way to making it. The stories are many of those who started out with close to nothing. However, not many are then able to up their game and scale up such that they end up employing. The Skills Festival teaches participants how to employ the modern ways of doing business such that scale up is achievable. iCreate,

with its well adapted vocational education curriculum is seeing to it that participants get, if you like, executive vocational education that sets them up and ready for the marketplace. There were quite a number of eye opening revelations at the regional levels in Enugu and Kaduna, in skill areas such as Building & Construction, ICT, Creative Arts and Fashion, Culinary, Agriculture, Hospitality, Social Services, etc. The fireworks promises to be fully lit at the grand finale Morounfolu Fasinro, Chief Client Engagement Officer for Sterling Bank says his bank is “very happy to partner with iCreate Africa to produce this sort of opportunities and for people to create and change these industries for the future”. We believe, here at CSI, that this is the kind of project that needs buy in from more public and private institutions. Its success and those of others like it would help considerably to defuse the social tension that unemployment generates.

ProFuturo partners Matthew Kukah Centre to give education the digital edge

n 2016, Telefonica Foundation and “la Caixa” Foundation got together to launch ProFuturo, an education programme whose mission is to narrow the education gap in the world by providing quality digital education for children in vulnerable environments in Latin America, Sub-Saharan Africa and Asia. In line with Goal 4 of the United Nations’ 2030 sustainable development agenda on access to equitable and inclusive quality education for all, ProFuturo aspires to become a world reference for transformation and innovation in education, improving the education of millions of children through technology. ProFuturo, one of the largest digital education initiatives in the world, has as its hallmarks, quality, sustainability over time, and access to all corners of the world, whether in urban, rural or remote areas or conflict zones. To achieve this, its education solution is adaptable to any environment and context both with and without an Internet connection. The ultimate aim is to deliver the best education to 10 million children in vulnerable areas by 2020, and to 25 million by 2030. The practical execution of the lofty ideals of Profuturo was seen at Chanchaga Primary School, in Minna, Niger State, where the students had been gifted a big suitcase containing. • 48 tablets for pupils • A laptop that serves as the service provider • 1 wireless router

• 1 multiport USB charging station that charges the 48 tablets at once • 1 Projector and projector screen • 1 universal power supply Recovery kit Being a universal education programme that’s built on robust partnerships, ProFuturo seeks agreements with local agents to www.businessday.ng

implement the program in each country, as well as with international companies, institutions and agents who support the initiative on a grand scale. This is done in conjunction with The Kukah Centre (TKC), the local partner of Profuturo in Nigeria. So far, according to our sources, together, they are providing digital education in Northern Nigeria where they have given over 124,000 tablets to schools and their pupils, in 10 schools (7 public and 3 private) with Sokoto and Niger States being currently the only two pilot beneficiaries. We will serve a follow up to this story to intimate you about the plans of the Foundation and the Kukah Centre to take it beyond those states to others. Junior Achievement Nigeria Schools Win Awards for Innovation Junior Achievement Nigeria (JAN), for

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understandable reasons, likes to say that amongst its achievements in the past 20 years, it has reached over 970,000 students in over 20,000 classrooms in all the 36 states across the country and the FCT through over 4,000 volunteers. This puts the organization on track to reach one million students by the end of 2019. With a mission to inspire and educate young people to become conscientious business leaders, JAN achieves this by implementing economic education programs that develop attitudes and skills necessary for personal success and social responsibility. This mission came to life once again as two Junior Achievement Nigeria schools were recognized at the National NTA Expo in Abuja and Beyond School Community Challenge organized by the Mandela Washington Fellowship Alumni of Nigeria. The JA Explorers company founded by the Junior Achievement Nigeria students at Government Technical College, Uyo developed a water level indicator which automatically switches on the water pumping machine when water is low and switches it off when full. This innovative product made the JA Explorers win the National NTA Expo in Abuja. At another competition in Lagos State organized by the Mandela Washington Fellowship Alumni of Nigeria, the Green Tech Company founded by the Junior Achievement Nigeria students at the Topfield College, Ajegunle, Lagos won the Second Place Prize of 250,000 Naira for developing a Rechargeable Power Box. The invention which is an eco-friendly power box was designed to curtail the effects of power supply lapses in homes within the society. The impact JAN is making is made possible by the tremendous support it has enjoyed over the past 20 years and counting, from companies such as FirstBank, Citibank, Union Bank, African Capital Alliance, ACT Foundation, Google, Dangote Group, Stanbic IBTC, Deloitte, Schlumberger, Sigma Pensions, Facebook, Microsoft, IBM, Agile Communications, Channels Television and Verraki Partners amongst others. This support, which has enabled JAN impact lives and execute programs nationwide, is most commendable. We entreat more of that support for worthy organisations and causes in Nigeria. @Businessdayng

Thursday 21 November 2019

BUSINESS DAY

Corporate Social Impact

Onuwa Lucky Joseph (08023314782) Editor.

Access Bank, Nestle, Dangote and 46 others make finals of the 13th SERAS CSR Awards Stories by Onuwa Lucky JosepH

he organisers of the Sustainability, Enterprise, and Responsibility Awards, otherwise known as The SERAS CSR Awards Africa, have announced a list of finalists that have made it into the finals draws. The annual awards which has held for 13 consecutive years, and over time has evolved into the biggest awards of its kind, and the most important recognition in CSR and sustainability in Africa, holds the closing ceremony and gala night of the 2019 edition on November 23rd, at the Grand Ballroom of the Oriental Hotel, Victoria Island, at 6pm. A total number of 151 organisations applied for the honours. The applications came from large, medium scale, and non-governmental organisations operating around Africa. The 2019 edition also sets a record for the highest number of new participants as 29 organisation registered for the first time. After a rigorous investigation exercise and field visits as well as documented interviews with stakeholders, the judges committee presided over by Deborah Liepziger, who authored the UN Codebook on Social Responsibility has released the list of finalists that include - Lafarge, Flour Mills, Unilever, IHS Towers, Access Bank, Dangote Rice Limited, Dangote Cement, Nigeria LNG,

Union Bank, Nestle, Unilever, Hacey Health Initiatives, Reckitt Benckiser, Zenith Bank, CocaCola, Airtel, Nigeria Breweries, UBA Foundation, Chevron, Nigeria Bottling Company, 9mobile, ACT Foundation, Nigeria Stock Exchange, Oando Foundation, KCB Group (Kenya) amongst many others.

Also listed for individual honours are His Highness, Muhammad Sanusi II, the Emir of Kano – who was recently appointed by the United Nations as a special envoy for the Sustainable Development Goals. Based on his work in promoting the SDGs in Africa, he emerges as The SERAS 2019 Sustainability Champion of the

year. Chairperson of First Bank Nigeria PLC, Dr. (Mrs.) Ibukun Awosika, was selected to receive The SERAS gold standard award for her work in promotion of gender equality and empowerment of the girl-child in Nigeria. Other individual honorees include – Metropolitan Pastor Paul Adefarasin, Founder, House On The Rock/ Rock Foundation; Professor Ezekiel Nyamunga Okemwa, Founder, Climate Active National Organic Permaculture Solutions (CANOPS), Kenya; Fauziya Abdi (Kenya) and Masahiro Ishihara (Japan Bio-farm, Rwanda). A total of 25 all gold SERAS statuettes will go to deserving winners. According to Mary Ephraim, the executive director of TruCSR Consulting, and chairperson of the local organising committee, “we have come to the most epochal point of the process that began in March 2019, where the most responsible businesses in Africa are unveiled to the whole world.

As always, our goal is to deliver a world class awards ceremony that offers the best experience for all our guests, and one that shows the other organisations in Africa why business-for-good can only make the world a better place for all. Every preceding awards ceremony over the years has always been an upgrade of the former. This edition is not going to be any different.” The SERAS – CSR Awards which is an annual project aimed to promote as well as raise awareness about the role organizations play with emphasis on their responsibility towards stakeholders and the social development of Africa. The Awards is Nigeria and Africa’s first and premier Corporate Social Responsibility (CSR) and Sustainability Awards, is aimed at accentuating, recognizing and celebrating the efforts of socially responsible organisations who have imbibed the ethos of giving back to society through their various interventions in line with the UN’s sustainable development goals. Over the years, The SERAS CSR Awards international positioning as the biggest, the most credible and most glamorous on the continent has taken further leap with the participation of organisations from Angola, Uganda, South Africa, Kenya, Botswana, Tanzania and Ghana amongst others. Some of the past winners of the overall prize include- MTN, Access Bank, Nigerian Breweries, Lafarge, GTBank, Safaricom (Kenya) and, Investec Bank (South Africa)

The root cause of today’s obsession with corporate purpose (Part 1) Nell Derick Debevoise

urpose will undoubtedly go down in history as a notable theme of the early twentyfirst century. Between Millennials’ demands for purpose as employees and consumers, the August 2019 Business Roundtable statement redefining the Purpose of a Corporation, and the rise of purpose consultants as an industry, there’s clearly a collective interest in understanding the why behind the companies we work for and buy from. Peak ‘purpose,’ according to Google Trends, was the week of January 20-27, 2017. I’ll let you check your calendar for what public event might have provoked those searches. This focus on purpose is not a passing trend, but rather an issue that we need to resolve before evolving to the next stage of our society and economy. Our grappling to understand what role companies should play is an essential feature of what has been called the Fourth Industrial Revolution, driven largely by technology, including the ability to collect and analyze data, artificial intelligence, and connectivity. These technologies are drivers of much of

the change we’re seeing in today’s economy, but they aren’t driving the quest for purpose. We – across age groups, not just Millennials, according to research by Harvard, Edelman, and others – want to know what companies exist to do because of the integration of work and life. This concept of work-life integration has largely replaced the quest for work-life balance of the 80s and 90s. With the rise of Blackberries and other PDAs, the ship sailed on ‘balancing’ our time by putting firm boundaries between the work week and personal time on evenings and weekends. The www.businessday.ng

quest became to fit work around a satisfying personal life, even with conference calls on vacation and Sunday morning email sessions. With this integration of work activities into our ‘personal time’ (and the occasional midday workout or online shopping spree), we identify strongly with the work we do. Whereas in the industrial era of the twentieth century, you worked from your desk, likely in a cubicle, under neon lighting. You advanced your employer’s interests from Monday to Friday, 9 to 5, or even 8 to 8. But then you went home, or on vacation, and lived your life.

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After 30-40 years of service, you retired and collected that gold watch and hard-earned time with the grandchildren. That scenario allowed professionals to segregate their work from their personal identities. And so, if the work they were doing didn’t always align with their personal values, it didn’t create an existential crisis or even discomfort. But now, we’re on the phone with clients, solving operational failures on vacation, and mentoring direct reports as we cook our families’ dinner, in between reps at the gym, or from the hospital waiting room while visiting a loved one. And so that work we’re doing

has become part of your life. Our work is now visible to our friends, our families, and ourselves in our most intimate spaces. Work has become part of us as people. And it is this integration of our personal identities with the work we do that is driving the dramatic spike in demands from employees that companies operate according to publicly stated values and/or a purpose. Now that we’re doing business within the personal spaces of our lives, it no longer feels OK to upsell that client something you know they don’t need or can’t afford, or to allow a quick fix in the supply chain that increases the single-use plastic required.

Revenge of the flood after officials vote down climate change measures

he lovely floating city of Venice is becoming flooded. And the floods surged right into the city’s council chambers on the day when the council turned down policy amendments designed to tackle climate change. How do you describe that? May be it was just a wake-up call to those jaded @Businessdayng

council members who have lived with the waters of Venice all their lives and who couldn’t be bothered by all the ‘left wing mumbo jumbo’ about climate change. Let’s hope the message well delivered as it was will be well received and changes made in line with current climate realities.

Thursday 21 November 2019

BUSINESS DAY

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Thursday 21 November 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper Demetri Sevastopulo

ordon Sondland, the US ambassador to the EU, said he carried out a campaign to pressure Ukraine to open politically motivated investigations at the direction of Donald Trump, and that other senior US officials, including Mike Pompeo, secretary of state, were “in the loop”. Mr Sondland on Wednesday became the first member of the US president’s inner circle to say publicly that Ukraine was told it would have to announce investigations demanded by Mr Trump to secure a phone call and White House meeting for Ukraine’s president, Volodymyr Zelensky. “I know that members of this committee have frequently framed these complicated issues in the form of a simple question: Was there a ‘quid pro quo?’,” Mr Sondland said in his opening statement to a House impeachment hearing. “As I testified previously [in private], with regard to the requested White House call and White House meeting, the answer is yes.” Mr Sondland, the only confidante of Mr Trump who has agreed to testify before the impeachment inquiry, said the president ordered him to work with his personal lawyer, Rudy Giuliani, who was leading an effort to pressure Mr Zelensky to open investigations demanded by Mr Trump. “As a presidential appointee, I followed the directions of the president. We worked with Mr Giuliani because the president directed us to do so,” Mr Sondland said. “We had no desire to

Trump directed Ukraine pressure campaign, EU envoy says Gordon Sondland tells House impeachment hearing that ‘everyone was in the loop’

Alexander Vindman is publicly testifying after giving closed-door testimony about the July 25 phone call that has sparked an impeachment inquiry © Reuters

set any conditions on the Ukrainians. Indeed, my personal view — which I shared repeatedly with others — was that the White House meeting and security assistance should have proceeded without preconditions of any kind.” Mr Sondland said that Mr Pompeo and other senior officials were aware of an arrangement that critics have

Samir Assaf expected to move to a non-executive role

Speculators gained $507m in a single day after betting on weak shopping season

hort sellers increased their bets against some of the biggest names in US retail ahead of the holiday season — and their bearish bets already appeared to be paying off after some early earnings figures triggered a market sell-off. Short sellers, who profit when a stock drops in price, enjoyed a $507m paper profit on retail shares on Tuesday alone, according to S3, a financial analytics and technology firm. Sharp declines in the department store chains Macy’s and Kohl’s contributed significantly to the total. S3 said short sellers now have $7.8bn of outstanding bets against retailers, up $121m this month in the lead-up to the release of third-quarter earnings reports and the holiday shopping season that begins after Thanksgiving next week. The increase marks a reversal from the January-October period when speculative bets against the sector dropped by $998m in the face of rising share prices for some retailers that left many short sellers burnt. Kohl’s sent a shiver through the sector on Tuesday as its re-

covery from two successive quarters of comparable sales declines was weaker than hoped. Shares closed 19 per cent lower on the day, a boon for short sellers who had ramped up bets against the department store chain in the weeks ahead of its earnings. Ihor Dusaniwsky, managing director at S3, said short sellers also increased their bets against Macy’s, Target and Nordstrom ahead of retail earnings season. A $500m-plus paper profit for short sellers in a single day is “a huge move for a sector”, Mr Dusaniwsky said. “We are seeing pretty much top-to-bottom negative sentiment and associated long selling in the market,” he said. Short sellers are having to weigh up mixed data about the financial health of the US retail sector. Some companies are successfully adapting to the age of ecommerce while others are forced to close stores and cut jobs. Winners include Walmart, which last week lifted annual profit forecasts on the back of higher quarterly sales. Wall Street analysts have also pencilled in a 3.6 per cent rise in likefor-like sales at Target, which is due to report earnings on Wednesday. www.businessday.ng

John Bolton,” Mr Sondland told the House intelligence committee, which is leading the public phase of the impeachment hearings. “They knew what we were doing and why.” Mr Sondland, a hotelier who was rewarded with the ambassadorship after fundraising for Mr Trump, is a critical witness in the impeachment inquiry because he is one of the few

HSBC set to replace investment banking chief

Short sellers get early holiday gift from US retail sell-off Jennifer Ablan and Alistair Gray

called a “quid pro quo”. “We kept the leadership of the state department and the National Security Council informed of our activities,” Mr Sondland told Congress in his opening remarks for his highly anticipated public testimony on Wednesday. “That included communications with Secretary of State Pompeo . . . and communications with Ambassador

officials to have had conversations with the president about the events that have sparked the fourth impeachment inquiry into a US president. When Mr Sondland testified before the committee in private last month, he denied that there was any quid pro quo involved when the White House withheld $391m in military aid that Congress had designated for Ukraine to help the country defend itself from Russian aggression. Following the testimony of other officials, Mr Sondland amended his testimony to make clear that there had been a quid pro quo. In his statement, Mr Sondland included an email that he sent to Mr Pompeo and Mick Mulvaney, the White House chief of staff, and other top officials on July 19, one week before the controversial July 25 phone call between Mr Trump and Mr Zelensky that sparked the impeachment inquiry. A summary of the call released by the White House showed that Mr Trump sought investigations into the business dealings of Hunter Biden, the son of former vice-president and Democratic presidential candidate Joe Biden, as well as unfounded allegations of Ukrainian meddling in the 2016 election.

David Crow

SBC is planning to replace the long-serving head of its investment bank ahead of a big restructuring that will result in large-scale job losses at the unit he has led for almost a decade. Samir Assaf, head of global banking and markets, is expected to be moved to a nonexecutive role at the division as part of a series of changes to the group’s management team as interim chief executive Noel Quinn makes his mark on the bank, according to people briefed on the matter. HSBC declined to comment. The executive changes could be announced later this year or in early 2020, before Mr Quinn unveils a new strategic plan in February to try to revive the bank following years of disappointing returns. Mr Assaf, 59, was appointed in December 2010 and has become one of the longest-tenured heads of a global investment bank. In 2017, he described himself as “the last man standing” in the industry, following the departure of a string of his contemporaries, such as Anshu

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Jain at Deutsche Bank and Rich Ricci at Barclays. Since then, Mr Assaf, who was born in Lebanon and educated mostly in France, has also outlasted another crop of European investment banking chiefs, including Garth Ritchie at Deutsche Bank, Andrea Orcel at UBS and Tim Throsby at Barclays. He is known for his courteous, old-school style in an industry that has at times been dominated by hard-charging executives. Mr Assaf ’s move comes at a tumultuous time for HSBC, which in August ousted its chief executive John Flint after just 18 months in the job because he had lost the confidence of the board of directors, including chairman Mark Tucker. Last month, Mr Quinn announced his intention to “remodel and reshape” the lender after it revealed a 24 per cent decline in quarterly profits and abandoned its main profitability target. Earlier that month, the FT reported that the overhaul threatened 10,000 jobs. Mr Quinn, who became interim chief executive in August, is the only internal candidate for the permanent job, although the bank is also engaged in a search @Businessdayng

for external contenders. The executive shake-up presages a major overhaul of HSBC that is expected to result in thousands of job losses, many of them at Mr Assaf ’s division, as the Asia-focused bank seeks to slash costs and reduce its exposure to markets and businesses with low returns. A graphic with no description The scale of upheaval in investment banking in Europe is reflective of a torrid period for the industry, which has struggled to compete with US rivals like JPMorgan and Bank of America since the financial crisis. Some banks have decided to pull out of areas of investment banking that were once seen as essential, such as Deutsche Bank, which recently exited equities trading. “They’re definitely going to replace Samir and the successor is going to have to take an axe to the division,” said one adviser to HSBC. “Samir is near retirement age and this is a two-to-five year job.” Some of Mr Assaf’s colleagues had questioned whether he had the appetite to shrink the unit he spent nearly a decade building. However, by moving him to a non-executive role the bank hopes he can help his successor carry out the restructuring.

BUSINESS DAY

Thursday 21 November 2019

NATIONAL NEWS

‘Torture’ claim by ex-staff member of UK consulate in Hong Kong Simon Cheng says Chinese police detained and interrogated him demanding details of HK Kathrin Hille

former employee of the British consulate in Hong Kong has claimed Chinese police tortured him during a two-week detention in August to extract information about the territory’s protesters and UK diplomats. In a statement published on Facebook on Wednesday, Cheng Man Kit, also known as Simon Cheng, claimed he was strapped in a spreadeagled position for hours, beaten, deprived of sleep, blindfolded and hooded during lengthy interrogations in the southern Chinese city of Shenzhen after Chinese police detained him while he was attempting to return to Hong Kong. Mr Cheng also said he heard what he believed to be the interrogation of other participants in Hong Kong protests at the mainland Chinese detention centre where he was held. The detailed description is set to heighten tension between China and the UK over the case and fuel fears over the fate of those protesters who have been arrested. At the time of his detention, Mr Cheng was a local employee of Scottish Development International, Scotland’s inward investment agency, at the British consulate in Hong Kong. In his free time, he says he participated in peaceful demonstrations in Hong Kong. Chinese police detained him on the evening of August 8 at Hong Kong West Kowloon railway station when try-

ing to return home after a one-day business trip to Shenzhen. “I was asked three types of question: 1) The UK role in the Hong Kong ‘riots’; 2) my role in the ‘riots’; and 3) my relations with mainlanders who joined the ‘riots’,” Mr Cheng wrote in his statement. He said the Chinese interrogators “firmly believe the UK is one of the foreign powers to meddle with the Hong Kong protests; the protest itself is well organised and not truly leaderless; and I was suspected of being a mastermind and British proxy to incite and organise the protests in Hong Kong”. He added that they also suspected he was a core member of a “valour” group involved in violent protests and that he was trying to bring a “colour revolution” to mainland China. According to Mr Cheng’s account, Chinese secret police obtained details about the British consulate’s internal workings, instructions to staff about monitoring the Hong Kong protests, as well as information about Hong Kong and mainland Chinese participants in the protests from the email and social media accounts on his smartphone. Mr Cheng said he was ordered to write down the names of anyone he recognised in a pile of photographs and categorise them as peaceful or “valorous” protesters. He also identified British diplomats in a Telegram group whom he believed to have a military or security background.

Alibaba to raise up to $12.9bn in Hong Kong listing Shares in world’s biggest deal this year priced at slim discount to US ADRs Daniel Shane and Mercedes Ruehl

libaba is set to raise as much as $12.9bn in its secondary listing in Hong Kong, pricing its shares at a slight discount to those traded in New York in what will be the world’s biggest equity raising this year. The Chinese technology group has provided guidance to institutional investors that it will sell shares at HK$176 ($22.48) each, according to a company statement that confirmed an earlier Financial Times report. That represents a 2.9 per cent discount to the closing price of Alibaba’s New York-listed American depositary receipts on Tuesday. The shares will list in Hong Kong on November 26 under the ticker 9988 — numbers that are auspicious in Chinese culture. At that price, the deal would raise HK$88bn ($11.3bn). That amount could rise to $12.9bn if bankers exercise a “green shoe” option to sell an additional 15 per cent of shares to investors. Alibaba’s bankers indicated last week that they were looking to raise as much as $13.4bn. The share sale was multiple times oversubscribed by investors including sovereign wealth funds and Chinese institutions, according to a person familiar with the matter. The company also increased the allocation of shares to Hong Kongbased retail investors based on hefty demand.

Dickie Wong, head of research at stock broker Kingston Securities, said Alibaba shares were eligible to be included in Hong Kong’s Stock Connect programme, meaning they could then also be traded in China. “The important thing is that they can attract mainland investors,” he said. He added he did not expect a sharp rise in the stock on its trading debut, since it was priced at only a slim discount to Alibaba’s New York-listed shares. Alibaba has said its Hong Kong shares will be fully exchangeable with its US ADRs at a ratio of eight shares per ADR. Analysts have said Alibaba’s decision to proceed with the listing despite nearly six months of increasingly violent political unrest represents a message of support from Beijing for the city’s status as an international finance hub. The listing could also boost earnings for the Hong Kong stock exchange, whose profits recently fell at their fastest rate in three years as listings fees dwindled. Alibaba had said previously it planned to use the proceeds to fund the expansion of its online consumer services platforms including food delivery group Ele.me, online travel portal Fliggy and digital media platform Youku. It will also pour more money into machine learning and cloud computing technologies. In its most recent quarter, revenue rose 40 per cent and net profit tripled, blowing past analyst estimates. www.businessday.ng

Is the global economy about to rebound? Evidence suggests the downturn is ending but recovery is expected to be weak Valentina Romei and Chris Giles

inancial markets have been riding high this month, signalling rising optimism about the global economy only a few weeks after the IMF described it as “precarious”. With 2019 looking certain to post the worst global economic performance for a decade — reflecting rising US-China trade tensions and their dampening impact on exports and industrial production — investors see possible green shoots of recovery next year and do not want to miss out on potential gains. Some of this is not surprising. The IMF and other forecasters expect 2020 to be better than 2019, but the market moves in recent weeks raise the question now as to whether the outlook is much improved. Investors’ enthusiasm may be overblown. So far the evidence suggests the slide in the global economy is coming to an end, but the pace of recovery is still expected to be weak. Markets anticipate broad upturn Financial markets pride themselves on being forward-looking, catching on to trends before they are obvious in the economic data. Markets have certainly been pointing towards a broad recovery. With many equity markets close to all-time highs, investors believe the prospects for corporate profitability have improved sharply since the start of the fourth quarter. Government bond yields, a good indicator of economic optimism, have risen across advanced economies, suggesting central banks will not have to work hard to stimulate economic growth and inflation. A graphic with no description “As 2019 draws to a close, the market is pricing in economic recovery, with equities in the US hitting new highs and long yields well off the recent lows,” said Ric Deverell, economist at investment bank Macquarie. Global trade shows signs of stabilisation Much of the fear regarding the global economy in October stemmed from the real possibility that the global trade wars would

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intensify. In the past month, the news has been positive. The chance of a disruptive no-deal Brexit as the UK looks to leave the EU have dropped sharply after prime minister Boris Johnson withdrew objections to a customs border in the Irish Sea. Tensions also eased between the US and China, and Donald Trump did not impose tariffs on European cars by his mid-November deadline. Line chart of Purchasing manager index, composite new export sub-index, below 50= a majority of businesses reporting a contraction showing The deterioration in global new export orders has eased These trends have become visible in trade data, with global goods trade volumes growing in the most recent two months of data from July and August. This month, investment bank J.P. Morgan’s export order element — which tracks companies’ orders of foreign goods and services — of its global purchasing managers’ index for October improved by the largest amount in four years — albeit from a low base. GDP growth forecasts for 2020 stop falling While the improvement in the trade outlook has buoyed financial markets, it has not yet found its way into economic forecasts. The outlook for 2020 growth has stopped getting worse, but upticks in forecasts remain tiny according to data from Consensus Economics, which averages forecasts from major independent economists. After watching the “slide in the global economy” over the past 18 months, Peter Hooper, global head of Economic Research at Deutsche Bank, noted that in recent weeks there were “tentative signs of an easing” in the downward trends. Line chart of By date of forecast, annual % change showing GDP growth revision for 2020 Though the signs are still nascent, some are celebrating the end of ever more gloom in forecasts. “There are definite signs among global activity indicators that the worst of the slowdown is behind us,” said Innes McFee, managing director of macro and investor services at the consultancy Oxford Economics. Europe industrial output beats expectations Although many survey indica@Businessdayng

tors have continued to deteriorate, such as the regular forward-looking economic sentiment indicator from the European Commission, others are now showing more positive signs. The PMI indices for manufacturing in October, released this month, improved for the majority of the countries in the world, including big industrial powers such as Germany, the US and South Korea. In Europe, data on industrial production increased for the most recent two consecutive months, interrupting a period of steep contraction. Even Germany — which has suffered the most in the region from the industrial downturn — reported stronger than expected export growth and industrial orders in September. Line chart of Annual % change, excluding construction showing The contraction in the eurozone Industrial production has eased The improvement in the eurozone’s powerhouse is important. “German indicators are highly correlated with global trade dynamics,” said Katharina Utermöhl, senior economist at insurer Allianz. Despite these increases, however, the outlook is still muted. Eurozone industrial production is still contracting on an annual basis and German manufacturing output was down 5 per cent in September compared to the same month last year. But still no clarity for end of the year The modest uptick in data does not yet provide convincing evidence for a broad-based global recovery. Monthly data remain volatile and many of the more positive industrial indicators represent only small proportions of the world economy. When economists allowed a computer algorithm to evaluate the data, for instance, the outlook does not seem to have changed as much. According to analysis by Now-casting.com, a macroeconomic monitor, recent data releases from around the world have been mixed and do not point clearly to an improved outlook for the fourth quarter of this year. Improvements in the eurozone are offset by weaker data in the US, Canada and Japan.

Thursday 21 November 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

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Janus Henderson fined £1.9m for retail customer rip-off FCA says 4,700 people were charged active management fees for tracker-like Caroline Binham and Attracta

anus Henderson has been fined almost £1.9m by the UK’s financial regulator after the dual-listed asset manager admitted ripping off 4,700 of its retail customers. It marks the first time the Financial Conduct Authority has publicly named and fined an asset manager for being involved in the controversial practice of closet tracking, where fund managers charge for active stockpicking but instead closely mimic an index. Retail customers were essentially overcharged by almost £1.8m in fees by Henderson Investment Funds when it failed to inform them it was reducing the amount of active management of its Japanese and North American funds, the FCA said on Wednesday. The investment house, which has since merged with US asset manager Janus, took nearly five years to let customers know they were being charged management fees for what amounted to a tracker fund, the FCA said. By contrast, nearly all of Henderson’s institutional investors were informed of the strategy change and were offered management of the two funds without charge, according to the FCA’s findings. “The FCA requires firms to treat all its customers fairly, not just some customers. In this case, retail investors paid fees for active investment management they did not receive,” said Mark Steward, the FCA’s head of enforcement. “For retail clients, the Japan and North American funds were in effect operating as ‘closet trackers’ as the fees charged to them were inappropriate given the diminished level of active management.” Janus Henderson, which oversees £289bn in assets, said the investment house accepted the FCA’s findings. “Affected clients had already been separately contacted and fully compensated,” it said. “Since the incident, Janus Henderson Group has improved its systems and controls.” While small, the fine is significant as it highlights the FCA’s scrutiny of the sector — particularly the treatment of retail customers — in

the wake of the collapse this year of Neil Woodford’s equity fund. Andrew Bailey, FCA chief executive, said in an interview with The Times last month that there were dangers when retail customers and institutional investors invested alongside each other, and suggested the FCA may look to introduce separate investment classes in future. Regulators across Europe have opened investigations into closet tracking over the past five years on the back of concerns the practice is rife among active asset managers, which are under pressure from the rise of passive investing. Since the financial crisis, investors have flocked to passive funds that track common indices for a fraction of the cost of active funds. This has benefited industry groups such as BlackRock and Vanguard that dominate passive investing, but has heaped pressure on smaller and midsized fund groups that charge higher fees for their purported skill in stockpicking. The European Securities and Market Authority found in 2016 that up to a sixth of actively managed equity funds sold in Europe were potential closet trackers, while the UK regulator estimated in 2017 that there was £109bn in active funds that closely mirror their benchmark. Last year the FCA said it had identified 84 potential closet tracker funds and told the managers of 64 of the products to make it clearer to investors that they were “constrained” in some form. At the time, the watchdog refused to disclose the names of any of the managers or funds. Gina Miller, founding partner of SCM Direct, who has spoken out about closet tracking since 2013, said Wednesday’s fine was “too little, too late”. “It is scandalous that it has taken the FCA so long to address the closet index mis-selling scandal,” she added. The episode took place before Henderson’s 2017 merger with Janus to form the dual US-Australian listed fund group. Henderson cooperated with the FCA’s investigation and qualified for a 30 per cent discount on a fine that otherwise would have been £2.7m.

The European Investment Bank is not just shunning oil and coal, but gas too, since it expects all three to become so-called stranded assets © Reuters

Moral Money: A warning shot for investors on fossil fuels Your guide to the investment and business revolution you can’t afford to ignore

f you want more Moral Money content throughout the week, check our hub page regularly at ft.com/moral-money for breaking news, analysis and curated commentary on this bubbling revolution. Follow us on Twitter @ ftmoralmoney, forward this newsletter to colleagues who you think would find it valuable, and sign up here if you haven’t already. Is natural gas the next stranded asset? The European Investment Bank’s move to stop funding fossil fuel companies received a lot of play in the European media this week. However, most coverage missed a key point: this is a decision with big financial implications, as well as significant environmental impacts. The reason lies in the EIB’s justification for its move. Soon after the announcement, Andrew McDowell, the EIB’s vice-president for energy, told Bloomberg that “from both a policy and from a banking perspective, it makes no sense for us to continue to invest in 20-25-year assets that are going to be taken over by new technologies and do not deliver on the EU’s very ambitious climate and energy targets”. Put simply, this means the EIB is not just shunning oil and coal, but gas too, since it expects all three to become so-called stranded assets, or assets that it does not want on its balance sheet because they will lose value. “We see a future where renewables are going to start dominating the en-

ergy system,” Mr McDowell said. This matters. Until now most lenders viewed natural gas as a critical “bridge fuel” that could keep things running (and do less harm than coal) as the world transitions to clean energy. But if the EIB’s calculus is right — namely that gas will also be a stranded asset, along with coal — this might prompt activists to launch suits against other private-sector lenders. After all, if they lend to the gas sector this might be a possible breach of fiduciary duty, given the potential future losses that the EIB now sees. We have already seen this pattern play out in the coal sector — which, ironically, has already been disrupted by cheap natural gas. In a striking recent ruling, Enea, the state-owned Polish energy group, was barred from opening a new coal plant after a judge determined it was not economically viable in the face of rising carbon and falling renewables prices. And that example could inspire other campaigners too. “Private sector institutions have legal obligations to consider material risk — which would include stranded assets,” Peter Barnett, a lawyer for ClientEarth, the group that brought suit against Enea, told Moral Money. “If fiduciaries fail to inform themselves of these risks, it’s inevitable that litigation will follow.” (Billy Nauman) Companies face pressure to fight modern slavery Earlier this year the US State Department released a grim sta-

tistic: its annual report revealed that there were 24.9m victims of human trafficking, a figure equal to the size of Australia’s population. These are people forced into sex work, child soldiers and other victims of involuntary servitude. The UK has already made one attempt to deal with this horror: in March 2015 the British government passed a modern slavery law that required companies with a turnover of more than £36m operating in the country to issue a report on the steps they were taking to address the risk of modern slavery in their business. Now, CCLA, a £10bn asset manager for charities and religious organisations in the UK, has intensified the fight. In partnership with the UN Principles for Responsible Investment, the “Find It, Fix It, Prevent It” initiative aims to get companies to find and rehabilitate any victims of slavery within their supply chains. CCLA and partner investors will engage with companies in their portfolios to develop better ways to identify and address modern slavery. The effort is needed, CCLA said, because companies have made little progress in addressing the issue since the UK’s Modern Slavery Act came into force. The initiative comes as the Australian National University, the Business & Human Rights Resource Centre and other groups said in a report published today that there was a high risk of exploitation in the hotel sector.

Later in the US session, investors will weigh the release of the latest minutes from the Federal Reserve’s monetary policy committee. The minutes “will probably signal that policy is on hold for now, barring a material reassessment in the outlook, per Chair Powell’s recent rhetoric”, said Deutsche Bank’s strategists. “It’ll be interesting to see if the minutes shed any light on

what exactly would qualify as a ‘material reassessment’, as well as details on how deep the internal disagreement over the rate cut was.” In government bond markets, the benchmark US 10-year Treasury fell 3 basis points as investors moved into the debt. The pound slipped 0.2 per cent against the US dollar to hover around the $1.29 level, with little fallout from the UK’s first election TV debate.

European stocks slip on concern over US-China relations Federal Reserve minutes will be released later in the trading day Philip Georgiadis

uropean stocks fell to their lowest levels in more than two weeks on Wednesday as fresh concerns over relations between the US and China emerged. The US Senate has passed a bill that would force the Trump administration to annually reexamine Hong Kong’s special status on Tuesday, infuriating Beijing as protests roil the Asian

financial centre. The president also threatened to raise tariffs on Chinese goods if he is unable to strike a trade deal with Beijing. European markets slipped, as the composite Stoxx Europe 600 declined for a third straight session with a fall of 0.6 per cent. In London, the FTSE 100 slipped more than 1 per cent, leaving it on track for its worst day of the month. Investors worry the Senate’s www.businessday.ng

actions against China might prevent a trade deal, said UBS’s Paul Donovan. “However, risk market declines have been fairly limited, suggesting that investors’ base case is that a deal will still take place,” he said. In New York, futures trade pointed to moderate declines at the open, while in Asia there were falls for China’s CSI 300, Hong Kong’s Hang Seng and Japan’s Topix.

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Thursday 21 November 2019

BUSINESS DAY

ANALYSIS

Betrayed by the Big Four: whistleblowers speak out An FT investigation reveals a culture of fear at the world’s leading accounting firms Madison Marriage

ucy was trying to jump into a black cab to escape from an overly familiar boss. He got in too, followed her as she left the taxi and, eventually, physically shook her while she tearfully refused to go for a drink with him. Mary will only tell her story in a hushed voice from the bottom of the garden. She is worried about her children overhearing how a partner at her firm sexually assaulted her, kick-starting a process that led to her eventual redundancy. John recalls weeks sitting at home in his pyjamas, depressed and staring at a blank computer screen. He was told to stop coming into work shortly after reporting several incidents involving sexist and homophobic abuse to human resources. Julia felt ostracised by colleagues at the Tokyo branch of her firm because she was not ethni-

confidentiality agreements. Some don’t want their friends and families to know the full extent of their experiences. One harassment victim only spoke out because she worries about the scores of graduates that join the Big Four each year. “[The firms] are blooming good at PR, and there are an awful lot of young graduates leaving university and joining them, and the culture is not what they were expecting,” she says. Many of these whistleblowers — most of whom shared documents with the FT that supported their accounts — claim they were treated like pariahs by their employers at a time when they most expected to receive support. They found this particularly galling given the influential role the Big Four — who employ more than one million people between them and posted $154bn in collective revenues over the past 12 months— have in advising the

Brexit talks: the brutal reckoning that awaits the UK When and if Britain leaves the EU, an array of difficult questions about a future trade deal will spring up Jim Brunsden, Sam Fleming and Alan Beattie

cally Japanese, and says she was subjected to a form of bullying known as mushi in Japan, in which the victim is completely ignored by co-workers. These individuals worked for four of the most renowned names in the business world: EY, Deloitte, KPMG and PwC. They are among 20 former employees from the Big Four accounting firms who have spoken to the Financial Times about their experience of harassment, bullying and discrimination in the workplace over the course of a year’s investigation into how these firms treat whistleblowers within their ranks. The FT identified a disturbingly common pattern in terms of how complainants were treated: most initially felt ignored, then isolated and were eventually pushed out. Legal clauses aimed at silencing them swiftly followed; nine of those interviewed said they were pressured into signing restrictive non-disclosure agreements. Others were asked to sign but resisted. “Much worse than the incident itself is the fact that the company I thought was going to protect me then betrayed me and protected him and hung me out to dry,” says Mary. “That has been much more damaging to me in the long run.” Many were extremely concerned about speaking to the FT, asking to meet in inconspicuous coffee shops and scanning the door every time a new customer walked in. Several worry about employers viewing them as troublemakers, or about the impact of breaking

world’s most powerful institutions on best management practices. “Their clients are in every industry in the world, from universities to governments to businesses, and they are the ones setting the bar on ethics,” says Mary. “I have a really hard time accepting that the people who are writing the rules of the corporate world are the same people who, when the rubber hits the road, really have no ethics and will ruin someone’s life to protect their reputation.” Lucy can still remember her excitement the day she started as a trainee auditor at EY, one of the world’s largest accounting firms. She was wowed by the firm’s UK headquarters and the buzz she got after being given a company phone, a laptop and a corporate credit card. “It was super exciting. I felt like — this is it, I am proud of myself and I’ve made my parents proud.” She was asked to join the EY audit team at a major Asian client in London. But soon she became uneasy. A senior manager in the audit team — who was popular among partners and trainees — began paying her a lot of attention. When she went to pick up a dinner order for the team from Wagamama, he would insist on accompanying her. Although her team had a “hot desking” system, he often ended up sitting next to her. One evening before Christmas 2009, he left her a voicemail. He sounded drunk and made several sexually explicit references, including saying that he wanted to “f**k” her, and that he “needed and wanted” her. www.businessday.ng

s far as Boris Johnson is concerned, the hard part is already over. Britain’s prime minister told the CBI on Monday that victory in the December 12 general election will allow him to “get Brexit done” and then swiftly broker an agreement with the EU on the two sides’ future relationship. Noting that the UK would embark on trade talks from a place of “perfect alignment and harmony” after leaving the EU on January 31, he told business chiefs that he saw “absolutely no reason” why an agreement could not be reached by the end of next year. It is a line that the Conservatives will stick to in their campaigning ahead of polling day as they warn that victory for Jeremy Corbyn’s Labour party would mean more “dither and drift” on Brexit. Mr Corbyn claimed at the same conference that the Tories’ approach would “subject us to years of drawn out, bogged down negotiations” with Brussels on a future relationship deal. He said his approach of holding a second referendum would deliver clarity sooner. But as politicians spar over who is best placed to lead Britain out of its Brexit quagmire, top officials in Brussels believe the UK population faces a brutal reckoning for which it is ill-prepared. EU officials have been preparing for negotiations with the UK on the post-Brexit relationship for more than two years, and behind the scenes many member states are urging them to take a very hard line indeed. “What is going to come is going to be much more challenging and demanding than what we have seen up to now,” says one senior EU diplomat. “I would not wish negotiating a trade deal with the EU on anybody. It’s the worst thing that can happen to you, especially if your administration doesn’t have any experience negotiating trade issues.” When and if Brexit is finally delivered, a vast array of questions will immediately spring up. The two sides will need to do their best to safeguard a trading

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relationship worth £650bn in 2018, as well as define the terms of co-operation on everything from air transport to fighting terrorism. The talks will take place to the beat of a ticking clock. The UK’s post-Brexit transition period will expire at the end of 2020 unless Britain requests an extension by the middle of next year — something Mr Johnson is loath to do. Both Mr Johnson and Phil Hogan, the EU’s incoming trade commissioner, have emphasised that the two sides are not starting from scratch. Mr Hogan told Irish broadcaster RTE last week that Brussels would seek to kick off the negotiations swiftly, noting that the UK’s 46 years of EU membership created a unique context: one where Britain is integrated into the European market and in sync with its rules. “With a bit of goodwill on both sides we can do an agreement more quickly than we would do with any other negotiations around the world, which would take three or four years,” he said. Mr Johnson told the CBI that the two sides would begin talks “in a state of grace as far as our tariffs and our quotas are concerned”. “There is no other trade negotiation the EU has ever embarked upon with a third country where that has been the case,” he said. Another advantage is that Mr Johnson and the EU have already agreed on a 27-page political declaration setting out their shared vision of the future relationship. It forms part of the Brexit deal he struck with the bloc in October. At the heart of the future relationship would be a free trade deal ensuring zero tariffs and no quota limits on goods, and providing market access on services at least similar to that granted in the EU’s recent trade deals with Canada and Japan. The declaration also covers other key areas of co-operation such as nuclear energy and joint military operations. But EU diplomats warn that putting flesh on the bones of these plans will require a hardfought negotiation, and that the question of how far the UK is prepared to stick to EU rules will be one of several highly sensitive issues needing to be resolved. Michel Barnier, the EU’s chief @Businessdayng

Brexit negotiator, has already made clear that Brussels will be guided in the talks by a simple principle: the further the UK aims to diverge from EU rules in Mr Johnson’s avowed quest to boost the country’s economic competitiveness, the more restricted Britain’s access to the single market will be. The EU argues that it is being asked to grant Britain market access on goods going beyond any other trade deal the bloc has with a major economy, creating a clear risk of unfair competition for Europe’s companies. Such access will come at the price of sticking closely to EU law on workers rights, environmental standards, state aid and other rules. Britain, by contrast, argues that a free trade deal is a fundamentally looser economic relationship than membership of the EU’s single market and customs union, and that it would be hypocritical for Brussels to demand far more alignment than it has done in negotiations with other countries. Dominic Raab, the UK’s foreign secretary, said on Sunday that the country is “not going to align ourselves to EU rules”. Some of the countries that have been most adamant about the need for a regulatory level playing field are those, such as the Netherlands and Denmark, that are bastions of the cause of free trade and close allies of the UK. “Britain’s allies will themselves be subject to their own internal lobbies,” says Peter Guilford, a former EU trade official. “They will not be on Britain’s side.” EU diplomats underline that this is only part of the difficult terrain that the broader future relationship talks will need to navigate. Another is the neuralgic issue of fish. Across all 28 EU member states, the sector employs just 180,000 people according to Eurostat — a tiny fraction of the EU’s 230m strong workforce. Yet for France and half a dozen other EU nations, the industry is the lifeblood of coastal communities and they will insist on preserving their access to British waters. They could well block the broader trade talks if they do not get their way.

Thursday 21 November 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Wednesday 20 November 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. 362,561.30 10.20 3.55 421 63,527,783 UNITED BANK FOR AFRICA PLC 265,045.52 7.75 7.64 370 44,855,729 ZENITH BANK PLC 590,254.08 18.80 1.62 505 24,094,055 1,296 132,477,567 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 262,035.64 7.30 8.15 287 16,816,862 287 16,816,862 1,583 149,294,429 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,423,204.78 119.05 -2.34 78 2,879,413 78 2,879,413 78 2,879,413 BUILDING MATERIALS DANGOTE CEMENT PLC 2,453,833.07 144.00 -0.62 75 1,585,517 LAFARGE AFRICA PLC. 233,563.03 14.50 -1.02 121 8,589,284 196 10,174,801 196 10,174,801 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 323,467.98 549.70 - 14 31,269 14 31,269 14 31,269 1,871 162,379,912 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 1 15 UPDC REAL ESTATE INVESTMENT TRUST 11,873.80 4.45 - 1 2,000 2 2,015 2 2,015 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 2 2,015 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 47,695.50 50.00 - 10 15,015 OKOMU OIL PALM PLC. PRESCO PLC 34,600.00 34.60 - 5 600 15 15,615 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,590.00 0.53 6.00 15 432,436 15 432,436 30 448,051 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 1 52,292 JOHN HOLT PLC. 217.92 0.56 - 1 3,690 S C O A NIG. PLC. 1,903.99 2.93 - 2 22,183 42,273.91 1.04 0.97 50 6,364,843 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 20,457.21 7.10 0.71 135 6,775,898 189 13,218,906 189 13,218,906 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 8 11,662 ROADS NIG PLC. 165.00 6.60 - 0 0 8 11,662 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 3.09 11 404,900 11 404,900 19 416,562 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,986.09 1.02 - 7 80,200 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 2 70,359 GUINNESS NIG PLC 67,901.87 31.00 - 56 160,232 INTERNATIONAL BREWERIES PLC. 80,801.10 9.40 - 11 65,152 NIGERIAN BREW. PLC. 415,838.91 52.00 6.12 50 422,766 126 798,709 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 147,000.00 12.25 1.24 125 4,339,722 FLOUR MILLS NIG. PLC. 66,631.17 16.25 - 75 587,691 HONEYWELL FLOUR MILL PLC 8,088.80 1.02 -0.98 19 537,359 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 700 NASCON ALLIED INDUSTRIES PLC 37,092.14 14.00 -5.72 15 651,454 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 235 6,116,926 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 16,903.82 9.00 - 17 118,365 NESTLE NIGERIA PLC. 911,554.69 1,150.00 - 28 65,043 45 183,408 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,640.63 3.71 - 7 100,155 7 100,155 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 20,845.00 5.25 0.96 25 415,962 UNILEVER NIGERIA PLC. 106,282.60 18.50 - 34 132,129 59 548,091 472 7,747,289 BANKING ECOBANK TRANSNATIONAL INCORPORATED 126,611.90 6.90 - 112 1,564,127 FIDELITY BANK PLC 58,529.09 2.02 3.59 105 6,159,577 GUARANTY TRUST BANK PLC. 854,975.76 29.05 0.17 179 14,262,082 JAIZ BANK PLC 22,098.19 0.75 -1.32 30 3,363,821 STERLING BANK PLC. 61,035.69 2.12 - 13 262,000 UNION BANK NIG.PLC. 206,757.34 7.10 - 25 136,027 UNITY BANK PLC 8,182.54 0.70 -2.78 13 279,812 WEMA BANK PLC. 28,545.10 0.74 5.71 37 4,510,133 514 30,537,579 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 1 800 AIICO INSURANCE PLC. 4,920.45 0.71 -2.74 32 2,361,570 AXAMANSARD INSURANCE PLC 17,325.00 1.65 - 4 109,954 CONSOLIDATED HALLMARK INSURANCE PLC 3,008.10 0.37 - 2 44,000 CONTINENTAL REINSURANCE PLC 23,442.40 2.26 - 7 153,050 CORNERSTONE INSURANCE PLC 10,310.66 0.70 9.38 11 374,387 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 2 40,000 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,977.33 0.27 -3.57 22 2,898,235 LAW UNION AND ROCK INS. PLC. 2,405.95 0.56 - 8 208,400 LINKAGE ASSURANCE PLC 4,080.00 0.51 9.80 7 6,937,700 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 4 508,800 NEM INSURANCE PLC 11,089.06 2.10 5.00 22 1,192,916 NIGER INSURANCE PLC 1,547.90 0.20 - 3 3,946,052 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 4 750,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 1 60,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 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 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,550.13 0.34 -2.86 21 2,078,251 151 21,664,115

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,743.97 1.20 9.09 19 1,163,866 19 1,163,866 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,520.00 4.26 1.43 43 924,576 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 - 12 403,321 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 40,199.50 2.03 4.64 141 6,863,952 ROYAL EXCHANGE PLC. 1,029.07 0.20 - 0 0 STANBIC IBTC HOLDINGS PLC 408,464.63 39.00 - 23 328,474 UNITED CAPITAL PLC 13,200.00 2.20 0.92 103 5,975,532 322 14,495,855 1,006 67,861,415 HEALTHCARE PROVIDERS EKOCORP PLC. 2,029.31 4.07 - 5 117,643 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 0 0 5 117,643 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 1 4,426 1 4,426 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,302.26 3.50 - 0 0 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,534.02 6.30 - 41 1,108,770 MAY & BAKER NIGERIA PLC. 3,381.46 1.96 - 6 61,510 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 911.60 0.48 - 21 350,314 556.71 3.62 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. PHARMA-DEKO PLC. 325.23 1.50 - 0 0 68 1,520,594 74 1,642,663 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 888.00 0.25 -8.00 8 1,364,000 8 1,364,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 486.00 4.50 - 0 0 TRIPPLE GEE AND COMPANY PLC. 316.77 0.64 - 0 0 0 0 PROCESSING SYSTEMS CHAMS PLC 1,549.70 0.33 10.00 50 4,638,670 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 1 1 51 4,638,671 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,122,935.67 298.80 - 5 228 5 228 64 6,002,899 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 4 6,000 17,010.00 24.30 - 11 32,503 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 262,870.02 20.00 - 21 147,790 MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 36 186,293 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,589.14 1.47 8.09 16 556,905 16 556,905 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 3 3,826 GREIF NIGERIA PLC 388.02 9.10 - 0 0 3 3,826 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 55 747,024 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 1 4,536 1 4,536 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 1 2,218 1 2,218 2 6,754 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 5 467,018 5 467,018 INTEGRATED OIL AND GAS SERVICES OANDO PLC 44,007.20 3.54 -1.67 56 972,940 56 972,940 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 14 21,187 CONOIL PLC 12,838.11 18.50 9.47 41 238,068 ETERNA PLC. 3,651.61 2.80 - 13 179,970 FORTE OIL PLC. 21,621.19 16.60 - 60 205,407 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 5 11,426 TOTAL NIGERIA PLC. 37,652.97 110.90 - 16 10,792 149 666,850 210 2,106,808 ADVERTISING AFROMEDIA PLC 1,642.45 0.37 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 270.56 0.23 - 9 327,794 9 327,794 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 2 3,000 TRANS-NATIONWIDE EXPRESS PLC. 398.52 0.85 - 1 22,500 3 25,500 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,161.95 1.04 - 1 6,000 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 1 6,000 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 2 30,000 2 30,000 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 3 760,985 LEARN AFRICA PLC 979.74 1.27 9.48 11 364,000 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 616.92 1.43 - 5 38,789 19 1,163,774 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 679.66 0.41 - 2 43,000 2 43,000

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industry Insight

BUSINESS DAY Thursday 21 November 2019 www.businessday.ng

The many milestones of Indorama Group ODINAKA ANUDU

ing foreign exchange which is badly needed by the Nigerian economy. The fertilizer company is one of the biggest non-oil exporters in Nigeria, according to the export records of the Nigerian Export Promotion Council (NEPC). By the second quarter of 2017, a chemical product known as naphthalene was Nigeria’s biggest non-oil export product. It was exported by the Nigerian National Petroleum Corporation (NEPC). But the situation changed in the third quarter of that year, as urea replaced the chemical product as the biggest non-oil export product. Urea’s share of the total export within the quarter was 8.82 percent. Incidentally, it was exported by IndoramaEleme Fertilizer & Chemicals Limited. In fact, in the second half of 2017, the value of Nigeria’s non-oil exports to various parts of the world rose from $592.715 recorded in the first half (H1) of the year to $888.617 million in the H2 of 2017. Companies that were responsible for the dramatic rise in the numbers were the NNPC, Olam International, and Indorama Eleme Fertilizer & Chemical Company Limited. According to data prepared by the Central Bank of Nigeria, Indorama Eleme Fertilizer & Chemicals Ltd exported $69.815 million worth of granular urea in bulk to Uruguay, Brazil and Argentina in 2017. Due to management efficiency and capacity to provide solution to farm-

ers’ nagging fertilizer problem, Indorama Eleme Fertiliser & Chemicals Limited got $1 billion from the International Finance Corporation (IFC) in June 2018 for the construction of a new fertiliser plant in Nigeria. It is partnering the Federal Government in its Presidential Fertilizer Initiative (PFI), in which Indorama supplies urea

”

eated in the heart of Port Harcourt, Rivers State, is the Indorama Eleme Petrochemicals Limited (IEPL), which is responsible for the survival, growth and sustenance of many manufacturing companies in Nigeria today. A large number of plastic and allied firms depend on the Eleme-based company for petrochemical resins (or polymer resins) which serve as their raw materials. The petrochemical company is just one of the several subsidiaries of Indorama-Nigeria Group, which also comprises Indorama Eleme Fertilizer & Chemicals Limited (IEFCL), Indorama PET Nigeria Limited, and Indorama Port Operations. Since Indorama Corporation of Indonesia became core investor in the old Eleme Petrochemicals Company Limited (EPCL) in 2006 through privatisation programme of the Federal Government, the group has continued to grow and has become a major contributor to the Nigerian economy. The petrochemical company, in particular, has solved the major challenge facing a number of manufacturers— poor access to raw materials. Rather than scramble for foreign exchange to import inputs, the company ensures that manufacturers have access to their critical raw materials, enabling them to save costs and improve margins. The major resins used by plastic and allied companies are polyethylene and polypropylene. Indorama produces about 45 grades of these products for various industries. About 600 of such companies in Nigeria depend on IEPL for their survival. They are estimated to have over 90,000 workforce. Recently, IEPL completed its 4th Turn-Around Maintenance (TAM), which it completed in record 24 days. This is the 4th since 2006 when it took over EPCL. This is remarkable considering the fact that in Nigeria, TAM is regarded as ‘impossible’ in the refineries and other sectors. Another subsidiary, Indorama Eleme Fertilizer & Chemicals Limited (IEFCL), has a Train-1 world-class fertilizer plant in Port Harcourt, funded majorly by the International Finance Corporation (IFC). The plant produces 1.5 million metric tons of urea fertilizer, which has revolutionalised farming, boosted food production, helped to ensure food security and propriety for farmers. Indorama sells about half of the urea production to Nigerian farmers and exports the rest to South America, Brazil, West Africa, Central Africa and other parts of the world, thereby earn-

Indorama sells about half of the urea production to Nigerian farmers and exports the rest to South America, Brazil, West Africa, Central Africa and other parts of the world, thereby earning foreign exchange which is badly needed by the Nigerian economy

fertilizer to 13 fertilizer blending plants across the country for the production of NPK fertilizers at cheaper cost to farmers across the country. Nigeria used to import fertilizers worth over $7 billion per annum. Today, the FG has restricted the importation of urea into the country. Indorama has been a beneficiary of the policy. But rather than use it to exploit Nigerians, the company has made huge investments in fertilizer production and helped Nigeria in its import substitution policy by selling fertilizers at cheaper rates to farmers. Indorama’s Train-1 fertilizer plant is the world’s largest singletrain urea facility. It is building the Train-2 of its fertilizer plant, which is designed to replicate the Train-1 plant, and produce another 1.5 million metric tons per annum (MTPA). The plant is expected to be completed by 2021. When the plant is completed, Indorama’s total urea production will be 3 million MTPA. Two million MTPA is expected to be exported to earn foreign exchange, according to the company. For the records, in 2017, Indorama turned a wasteland at the Onne Port complex in Port Harcourt into a modern port facility, which now receives big vessels to carry the company’s bulk urea for export. This is a huge contribution to the nation’s maritime sector. To ensure steady flow of gas feedstock to its fertilizer plant,

Indorama also constructed an 83 kilometer gas pipeline running 30 communities across Imo and Rivers states. Through robust community relations engagement, the company is able to manage its pipelines without disruptions. Furthermore, Indorama PET is a specialised petrochemicals product, also needed in the plastics, beverage, and pharmaceuticals and bottling companies. This is the only PET plant in West Africa. Before the Indorama plant, Nigeria had been importing PETs from South Africa. This eroded the country’s foreign exchange, given the many uses of PET. But today, Indorama exports PETs to West Africa and other parts of the continent. Recently, managing director of Indorama-Nigeria, Manish Mundra, was quoted as saying that the group’s total Foreign Direct Investment (FDI) in Nigeria will reach $4.6 billion in 2025. Today, Indorama’s contribution to Nigeria’s GDP is estimated at $2.9 billion annually. That explains why the company is regarded as the best success story of privatization in Nigeria. It is also believed to have one of the best public-private- partnership (PPP) business models in the country, where its shares are owned by the core investor (Indorama), the Federal Government (through the Bureau of Public Enterprises – BPE), NNPC, the Rivers State Government, the host communities of Eleme, and the Nigerian employees. IEPL is perhaps the only company where community has 7.5 percent shares. Its contributions to Nigeria’s e c o n o my a re u n c o u n t a b l e. First, it creates huge employm e n t f o r Ni g e r i a n s. A b o u t 7,000 citizens are employed directly and indirectly by Indorama across the country. It also supplies highly needed raw materials for the plastics and allied sectors for polymer resins and PET. It likewise supplies urea and NPK fertilizers for farmers at cheaper cost, thereby sustaining their operations and boosting food production in the country. It generates huge revenue to the Federal Government and Rivers State governments in the form of taxes, including the Value Added Taxes (VAT), and dividends. It helps Nigeria to achieve its import substitution policy for fertilizers and petrochemicals, while putting the country on the export map of the world. Its corporate social responsibility (CSR) initiatives, especially in community development projects, keep every stakeholder happy. The Indorama-Nigeria Group c o m p a n i e s a re v e r y s t ro n g members of the Manufacturers Association of Nigeria (MAN).

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

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t ulatio a r g n on

Work, hard work and more work is what you are known for Your Excellency. The good work that you have been doing in our dear State-Taraba since 2015 will surely not go un-noticed. Today, we the people of Kurmi Local Government Area join millions of Tarabans and Nigerians to celebrate your award as the best Governor in Social Empowerment and Poverty Alleviation by the BusinessDay Newspaper. You won the Waterman, Electricity, Labour friendly and Vanguard Newspaper Governor of the Year awards in the past and this is a clear testimony of your relentless work in the State. For us the people of Kurmi, we can only pray for Godâ&#x20AC;&#x2122;s mercy upon you to serve us even better. Congratulations, Your Excellency.

Hon. Stephen Ibrahim Agya Caretaker Chairman, Kurmi LGA and ALGON Chairman Taraba State

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