BusinessDay 22 Jan 2020

Undercover Investigation (I)

Bed-space corruption, terrible food, well-fed rats… many things not right at ‘Yaba Left’ After altering his looks and taking psychiatric lessons every day for one week, investigative journalist ‘FISAYO SOYOMBO went undercover for three weeks in November, including 10 straight days on ward admission, as a patient of the Federal Neuropsychiatric Hospital, Yaba, Lagos, one of the nation’s most historic mental rehabilitation centres. His report unveils the decrepit state of hospital facilities, gross understaffing of critical staff despite a bloated workforce widely believed to be populated by ghost workers, low quality of service delivery, arbitrary charges on patients — all stemming from personal and institutional corruption and the hospital’s implicit stigmatising of its very own patients.

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e believed we had missed our way that sweltering afternoon of Tuesday November 12, 2019,

when we prematurely turned off Harvey Road into a building we were half sure was the Federal Neuropsychiatric Hospital, Yaba,

Lagos. But we were less than five seconds in when we knew we were indeed at ‘Yaba Left’, as the hospital is colloquially, and

more popularly, known.

“We’re going to the psychiatric hospital; are we in the right place, please?” I asked the

gatekeeper as politely as I could.

To my utter shock, he flared up. “You are at Yaba Left and Continues on page 37

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news you can trust I ** wednesDAY 22 january 2020 I vol. 19, no 482

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More than half of CEOs see global economic growth slowing in 2020 … as world gets wake up call for reform from elites gathering in Davos … focusing on creating a more inclusive world

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he proportion of chief executive officers (CEOs) expecting global growth to slow in the coming year has risen 10-fold since 2018, according to a survey conducted by PricewaterhouseCoopers (PwC).

That means that over half of the 1,581 CEOs questioned in 83 countries see the pace of expansion slowing, the most since PwC began asking the question in 2012. In every region, execu-

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Continues on page 38

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Here’re 5 wins for Nigeria from UK-Africa Summit t was a big win for Nigeria at the UK-Africa Investment Summit in London as the largest economy in Africa secured five partnerships with the British government aimed at delivering more investment, jobs and growth.

The deals bagged by Nigeria put the most populous nation in Africa ahead of South Africa, the most industrialised country in the continent, as it grabbed three partnerships with the British government.

“For my country, greater UK engagement in its economy would bring jobs to undertapped sectors, such as agricul-

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Continues on page 39

Inside L-R: Gabriel Idahosa, vice president, Lagos Chambers of Commerce and Industry (LCCI); Michael Olawale-Cole, deputy president; Toki Mabogunje, president/chairman of council, LCCI; Olumide Bolumole, head, listing business division, Nigerian Stock Exchange (NSE); Nike Akande, past president, LCCI, and Muda Yusuf, director-general, LCCI, during the close gong ceremony by the LCCI president at the Exchange in Lagos, yesterday. Pic by Olawale Amoo

NIMASA generates N16bn into consolidated account in 10 months of 2019 P. 22

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news IMO 2020: Low refining capacity steals shine from Nigeria’s sweet crude advantage …as marine fuel sulphur regulation takes effect STEPHEN ONYEKWELU

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member of the International Maritime Organisation (IMO), Nigeria has a chance to take advantage of higher oil prices in a case where the IMO’s 2020 regulation lowering maximum sulphur content in marine fuel leads a spike in spot prices.

The new sulphur regulation took effect on January 1, 2020. The regulation further lowered the maximum limit of sulphur oxide in marine fuels from 3.50 percent maximum fuel oil sulphur limit to 0.50 percent maximum fuel oil sulphur limit. Experts say this will reduce sulphur emissions by over 80 percent by switching to lower sulphur fuels.

Fuel oil, high in sulphur

content has traditionally been used by the shipping industry as bunker fuel, because they are usually cheaper. According to the Shipowners Association of Nigeria (SOAN); Nigerians own about 1,227 vessels and will be under pressure to comply.

Producers, refiners and consumers have different sides of the story to tell. For producers of low sulphur crude oil such as Nigeria’s sweet crude (Bonny Light contains 0.16% of sulphur), this is an opportunity to rake in some windfall.

The marine sector, which consumed 3.8 million barrels per day of fuel oil in 2017, according to a Wood Mackenzie report is responsible for half of global fuel oil demand. IMO sulphur regulations, therefore,

have the potential to be highly disruptive to the pricing and availability of compliant fuels.

This is also a boom for refiners as demand for low sulphur refined products soar but Nigeria’s four refineries have produced at below 30 percent of installed capacity. The four state-owned refineries ran at an operating deficit of N90.07 billion in the first seven months of 2019. Dangote Plc’s 650,000 barrels a day refinery comes on-stream next year, so Nigeria currently has extremely limited refining capacity to take advantage of this opportunity.

Nigeria’s oil and gas sector is unfortunately not wellpositioned to benefit from this windfall. The country’s production capacity has been capped at 1.7 million barrels of oil per day by the Organisa-

tion of Petroleum Exporting Countries (OPEC), 400,000 bpd below Nigeria’s budgeted 2.1 million bpd.

In addition offshore exploration and drilling activities have stalled with only one offshore rig operational in 2019, according to experts, and the Bonga South West Final Investment Decision (FID) suspended.

“Offshore drilling activities in Nigeria have stalled and the USA is putting pressure on Saudi Arabia to pump more oil so that oil prices come down,” said Adewale Ajayi, partner and head, energy and natural resources unit at KPMG. “So, Nigeria may not really benefit.

Many projects have been put on hold, which would have increased the volume of oil produced in Nigeria to drive foreign exchange earnings.”

Here’s why you may pay more for domestic air travel in 2020 IFEOMA OKEKE

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irfares may rise in 2020 as a result of declining number of airline operators, which has resulted to steady decrease in the number of aircraft operating in Nigeria.

BusinessDay’s checks show thatfiveyearsafterAirPeacecommenced scheduled operations in Nigeria, no other scheduled operator has been able to set up an airline or a leasing company, rather the number of operators has kept reducing steadily.

Between 2015 and now, about five airlines operating scheduled flights have closed shop. These include Discovery Air, First Nation Airways, and more recently Medview Airline, IRS Airlines and Associated Aviation.

BusinessDay’s checks show that Nigeria’s commercial airlines, which altogether had over 80 aircraft on their fleet in 2015, are currently struggling with about 47 aircraft, thereby causing passenger glut.

Air Peace currently operates 23 aircraft, Arik Air operates seven aircraft, Azman has five aircraft, Aero has four air-

craft, Max Air has two aircraft, Dana Air has four aircraft, and Overland has seven aircraft.

Experts in the aviation industry say the implication of this is that with fewer operation and fewer aircraft, the demand will be greater than supply, thereby resulting in an increase in airfares.

Ado Sanusi, CEO, Aero Contractors, who confirmed the development, says there are so many factors responsible for airlines not springing up in the country, and part of the reason is that investors are sceptical of investing in the aviation industry, given what happened to Arik Air, Aero Contractors, Afrijet, Discovery and First Nation.

“Investors usually gravitate to where their investment returns are high and not where they have seen that the industry has resulted in failures. They are sceptical about investing in the industry, but I think with the right business model, the right attitude and good corporate governance, aviation is one of the best investment frontiers in Nigeria and in West Africa,” Sanusi states.

•Continues online at www.businessday.ng

Flutterwave closes $35m Series B funding led by Greycroft and eVentures FRANK ELEANYA

F Supporters of newly established Operation Amotekun during a solidarity protest in favour of the security outfit, in Lagos.

Manufacturers slow down local input sourcing after FX market stability ODINAKA ANUDU

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igerian manufacturers are cutting back on local raw materials sourcing after it became easier to access foreign exchange to import inputs, BusinessDay learns.

Amid recession in the first half of 2017, many manufacturers sourced local alternatives to foreign inputs, pushing up percentage of local input preference to 60.72 percent, according to data from the Manufacturers Association of Nigeria (MAN).

But with several market interventions by the Central Bank of Nigeria (CBN), which resulted in foreign exchange stability, many manufacturers resumed chase for foreign inputs at the expense of local alternatives, pushing down local input preference to 57 percent.

“The relatively more available forex, resulting from the CBN intervention, may have

been rubbing off negatively on backward integration agenda as firms prefer to import raw-materials as against inward looking,” MAN states in its latest economic review obtained by BusinessDay. Oil price crashed to less than $40 per barrel in 2016, leading to low foreign exchange inflows into the mono-product Nigerian economy, which relies heavily on oil for much of its revenue and foreign exchange. This meant fewer dollars for manufacturers who had to import inputs, machineries and packaging materials. More than 54 manufacturing companies went south then, according to Frank Udemba Jacobs, then president of MAN. “The foreign exchange shortage has impacted our supply lines. We are spending much more time in order to secure the foreign exchange for certain raw materials and for some equipment we need for our plants,” Yaw Nsarkoh, www.businessday.ng

to find some inputs you want here at the right quantity and quality,” he says. then managing director of “Even when you can, it may Unilever Nigeria plc, said in be expensive. Secondly, it is March 2016. cheaper to import than invest The CBN first gave manu- billions in backward integrafacturers 40 percent prefer- tion programmes. This is why ence in the FX market, mean- there should be incentives to ing that they had exclusive embark upon those projects,” right to 40 percent of available he further notes.

FX in the market. The apex Manufacturers complain bank subsequently created that some raw materials are special windows for exporters not locally available at the and small businesses, leading required quantity or quality to some stability in the market. owing to infrastructure gaps.

“Local raw-materials utili- This, therefore, drives them sation in the manufacturing to seek foreign alternatives to sector has maintained down- keep their firms alive. ward trends since the first half “In the pharmaceutical inof 2017, when the CBN com- dustry, there are two inputs we menced policy intervention use, which are Active Pharmain the official forex market,” ceutical Ingredients (API) and MAN, led by Mansur Ahmed, excipients,” Okey Akpa, former said. chairman of Pharmaceutical According to Ike Ibeabu- Manufacturers Group of the chi, a manufacturer of chem- Manufacturers Association icals, it is easier to import of Nigeria (PMG-MAN), tells inputs than seek local alter- BusinessDay. natives.

•Continues online at “One, you may not be able

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lutterwave, a Nigerian-based payments technology company with operations in Africa, has closed a $35 million Series B funding from a consortium of strategic investors. The round was co-led by Greycroft & eVentures with additional participation from CRE Venture Capital, WorldPAY FIS, VISA, Green Visor and Endeavor.

Flutterwave connects the African continent to the world at large by providing the easiest and most reliable payment solutions for businesses around the globe. To date, Flutterwave has processed 100 million transactions valued at over $5.4 billion globally for clients including Uber and Booking.com.

“We’re helping businesses in Africa and globally accept payment and to scale by being the payment technology that connects Africa to the world,” says Flutterwave founder and CEO, Olugbenga “GB” Agboola. “We have built a technology infrastructure that is steadily being recognized as the bridge to connect the payment system. We are excited to be working with our newest commercial partners, Visa and FIS, and investors to build the dominant payments platform in Africa.”

With the latest round of funding, Flutterwave will continue to provide innovative solutions to businesses that @Businessdayng

want to facilitate payments seamlessly. The company’s core offering provides a frictionless payment solution for merchants, banks, and consumers and simplifies how payments are made and accepted.

The new funding will be used to support its expansion across the Francophone zone and North Africa as part of its mission to connect Africa to the world as well as drive efforts to boost market share in existing markets.

On the back of the latest round of funding, Flutterwave has signed commercial agreements with Visa and FIS. The agreement with FIS will allow the global financial technology provider to offer the Flutterwave solution as part of Worldpay from FIS payment solutions to its merchant clients in Africa. Flutterwave is a 2016 graduate of the FIS FinTech Accelerator program.

Additionally, the company’s new partnership with Visa aims to scale its consumer payments service, Barter, through Visa’s QR code payments, card issuance, and global payment processing channels - enabling efficient service delivery to over 85,000 businesses already using Flutterwave and rapidly growing Barter’s base users. The partnership increases access to digital commerce for African consumers and connects them to the rest of the world with Visa virtual card.

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news

UK to partner Nigerian, South African investment agencies with £25m funding EndURAncE oKAFoR, in London

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he UK has committed to deliver a new partnership with Investment Promotion Agencies in Nigeria and South Africa with funding worth £25 million. This is one of the many agreements that were established from the UK-Africa Investment Summit taking place in London.

The new partnership between the UK and African nations is based on trade, investment, shared values and mutual interest.

“The Summit demonstrated that the UK will go further to generate business to business links between the UK and Africa,” The UK Prime Minister, Boris Johnson, said while hosting the UK-Africa Investment Summit on Monday.

The Summit agreed new lasting partnerships between the UK and African countries to deliver more investment, jobs and growth. More than one thousand people attended the summit, including Heads of State and Ministers from African Governments, CEOs and senior representatives from African and British businesses, institutional investors, international organisations, financial institutions and civil society.

Billions of pounds of new commercial deals were announced, highlighting the strength of the UK’s offer and existing relationship with Africa. The UK also announced new initiatives and funding, which

will: strengthen the joint trading relationship, support African countries in their ambition to transform their economies, launch a major new partnership with the city of London, turbo-charge infrastructure financing, and enable Africa’s clean energy potential. Taken together, this will help to realise the UK’s ambition to be the investment partner of choice for Africa, create hundreds of thousands of jobs and ensure the mutual prosperity of all our nations.

On the side-lines of the Summit, Nigeria signed about four investment deals with some British companies; Tex ATC wants to install five airport control room towers worth £2 million in different parts of Nigeria, and Trilliant with a deal worth £5 million will install Smart Metering for Abuja DisCo. Also, Nigerian Low Energy Designs bagged an export contract to install street lighting in Oyo State, while another investment involving Savannah to invest £315 million in the acquisition and investment of in gas assets in Nigeria was signed.

Commenting on the number of investors that approached Nigeria for enquiries at the summit, Yewande Sadiku, executive secretary/ CEO of Nigeria’s foremost investment promotion council, said there was a lot.

“There are challenges in doing business in Nigeria, we know, but the opportunities exist because of the challenges,” Sadiku said.

US Embassy lauds SON impact in combating substandard goods hARRISon EdEh, Abuja

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tandards Organisation of Nigeria (SON) has been commended by the International Computer Hacking and Intellectual Property Unit of the Embassy of the United States of America (USA) in Nigeria, for its role in curbing the influx of substandard and counterfeit goods into the country.

This commendation was given by the head of the US Embassy delegation, Tanya Hill, during a courtesy visit to the director-general of S ON, Osita Aboloma, in Abuja, SON said in a statement on Tuesday.

Hi l l i n f o r m e d i n t h e statement that the aim of the visit was to intimate SON of the establishment of Federal Agencies Network Against Counterfeiting and Piracy (FANCAP); an initiative she said was borne out of a recent symposium on intellectual property rights.

This, according to her, is in

view of the crucial role SON plays in regulating substandard and counterfeit goods.

She said FANCAP was set up principally for the promotion, protection and enforcement of Intellectual Property Rights (IPR) through Inter- Agency collaborations and partnership.

Earlier in his welcome remarks, Osita Aboloma said SON was working in line with the standardisation policy of the Federal Government that placed high premium on getting rid of substandard and counterfeit products.

He stated that the organisation was not restricting itself to the enforcement of goods but also putting in place innovations that will ensure counterfeiting does not occur in the first place.

The SON chief executive pledged the organisation’s preparedness for greater collaboration w ith, and advised sister agencies for an expanded scope of operations. www.businessday.ng

Much of Africa using mobile money to grow economies, cut poverty but Nigeria is left behind WEF

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frica doubled its rate of financial inclusion over the last two years but while much of the continent is moving ambitiously to deploy mobile money to give hope and opportunity to millions, Nigeria, the continent’s most populous nation is being left behind, data show.

Financial inclusion in Africa has risen to 45% on the back of aggressive deployment of mobile money, and now Ethiopia is gearing up to grow its GDP by 10% by 2023

by a massive mobile money roll out, says Queen Maxima of the Netherlands and United Nations special advocate for inclusive finance.

She was speaking on a special panel on Africa at the World Economic Forum in Davos, which has as panellist President Mokgweesi Masisi of Botswana.

Worry is that Nigeria, which has won the dubious label of being the poverty capital of the world, is moving too slowly and with little inspiration in its adoption of mobile money.

Months ago, Nigeria is-

sue three mobile licences but analysts say the big hitters like Airtel and MTN with the size and inclination to make the massive impact that Nigeria needs have been ignored while less endowed players have been given mobile money licences. And even then, those that have been given licences cannot engage in lending.

Queen Maxima says what Africa needs is smarter financial regulation to open the space, the proliferation of broadband in a continent where only 7% of the people have access to 4G, more invest-

ment in women.

She adduces evidence to show that in Tanzania farmers were able to boost productivity by 16% via Agric insurance on the back of mobile money.

The Dutch Agric credit firm ROBO Bank has tapped MasterCard to impact 6 million farmers in Africa, the Dutch Queen states.

President Masisi says the continent needs to create the ecosystem that the recently agreed free trade project requires to thrive as well as the improvement in the way countries in Africa relate with one another.

L-R: Usman Adamu, camp head, Kutara Tatara IDP Camp in Nasarawa State; Salifat Sule, first lady of Nasarawa State; Peju Ibekwe, project manager, Giving.Ng, and Gaza Jonathan Gbefwi, member of the House of Representatives representing Karu/ Keffi/Kokona Federal Constituency, Nassarawa State, during the presentation of relief materials by Giving.Ng to internally displaced persons in the camp...yesterday.

Nigeria, other D-8 nations adopt social protection programme to boost healthcare, reduce poverty InnocEnt odoh, Abuja

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igeria and other member countries of Eight Developing nations, otherwise known as (D8), have adopted the Health and Social Protection Programme to assist member countries to reduce poverty and inequality as well as boost healthcare delivery within member countries.

This initiative was taken in Abuja on Tuesday, during the signing of the MoU on Headquarters Agreement of the D-8 Health and Social Protection (HSP) Programme.

Abuja has also been adopted as operating headquarters of the programme.

The D8 is an organisation of eight countries pursuing Economic Cooperation. The countries include Nigeria, Iran, Pakistan, Bangladesh, Malaysia, Turkey, Indonesia and Egypt.

Speaking during the event, minister of state for foreign affairs, Zubairu Dada, who signed on behalf of Nigeria, said Health and Social Protection Programme was an integral

tool in achieving the 2030 Sustainable Development Goals (SDGs), and called on member countries to brace the challenge and provide adequate measures to attain the goals.

He added that following the challenges of emerging trends such as climate change and other impediments to developmental goals, member countries must do more to ensure the wellbeing of their citizens “This has made member states to realize that more has to be done, and there are no shortcuts to the sustainable development without investing in people. The adoption of the Health and Social Protection Programme by the D8 countries is therefore timely in assisting member states to reduce poverty and inequality, as well as boost healthcare delivery.

“This will undeniably bring about the desired growth that will facilitate structural transformation of our economies. It is therefore important that we as member states continue to share our experiences towards making the programme a success,” the minister said.

He affirmed Nigeria’s com-

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mitment to ensuring the success of the initiative as well as the willingness to collaborate with other member states and other stakeholders in ensuring that all citizens receive access to affordable healthcare and robust social protection.

Also speaking, the Secretary General of the D-8, Dato Ku Ja’afar Ku Shaari, who signed on behalf of the D8, said the event marks the broadening of operational mandate into health and social protection.

He said the D8 journey that started over 20 years ago has led to modest achievements.

He added that economic cooperation between member countries across several sectors such as trade, aviation, infrastructure, tourism and culture transportation, agriculture, education, electronics and ICT has improved and yielded some good dividends to member countries.

“Our objective to be counted and seen visibly as a giant group in the international arena is gradually seeing the light of the day so also is our voice, which is now louder than before. But most importantly, the objective of uplifting the standards of our @Businessdayng

population needs to be worked on more vigorously in order to attain the right momentum for huge socio-economic growth to occur.

“In this regard the launch of the D8 Health and Social Protection (HSP) programme is designed to accelerate progress especially in the context of the SDGs 1, 2 and 3, which are critical indicators of living standards,” he said.

He noted that resources will be leveraged from within the group with the strong supporting the weak and thereby reducing reliance on donor aid.

Also speaking the minister of health, Osagie Ehanire in his remarks said the MoU signing signals the commitment of Nigeria to align with the good ideals of the D8 as well as look forward to harnessing its full potentials for the benefit of the people.

“The event today marks the dynamic economic promotion and sustainable development of its member states as well as being major actors in the global economic governance system and international economic cooperation,” the health minister said.

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Wednesday 22 January 2020

comment Poverty, unemployment and vanishing nationalism comment is free

Send 800word comments to comment@businessday.ng

Small Business handbook

Emeka Osuji

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am still of he conviction that our poverty reduction strategies will be better able to serve our needs and be more effective if we understand what is fuelling the scourge. There are certainly some institutions and phenomena, which we believe promote poverty and must change if we are to make progress with the fight against poverty. Our first culprit, identified elsewhere, is the form of government – the presidential system - run as a winner-takes-all enterprise in Nigeria. We note that the cost and unaccountable nature of that system sucks resources away from the people to a few mostly incompetent and unaccountable self-seeking persons. By the political system we include all arms of government and the presidential system itself.

With a judicial system that is anything but alert to protect the rights of citizens, and getting worse, the routing of the people by those who win political power is complete. This is more so in an environment where the Legislature is weakened and dogged by credibility gaps evidenced by shameful carpet crossings and phantom constituency projects, lack of transparency and evident selfinterest of members. The result is the perpetuation of inequity, inequality and intense pressure on the middle class, and the promulgation of more self-seeking laws. Prosperity cannot reign where injustice reigns.

The current political system, structure and process, which focus on the sharing of national wealth, without as much as an inkling of the idea of expanding the wealth, is a national disaster. A system that guarantees the security of criminals rather than that of its good citizens; a system that has taken over 40 years to contemplate economic diversification without as much as laying the first foundation stone for it; a system that awards national prestige to those who steal the most state resources and has no place for research, innovation and the intellect, is bound to produce the present chaos – tons of money in multiple currencies found in private homes and life goes on; failure of appointed and elected officials to deliver on the job but assured of the job security and re-election; fugitives running to the source of power as insurance against justice. Such a system will surely not reduce poverty.

The failure of the current system of governance, traceable to the presidential system of government and the power structure in the federation, has begun to tilt us towards the unthinkable, a feeling of safety only among our clan; a feeling of security only if the arm is with us. The freedom to loot and be honoured has led politicians to promise us hell if they are not elected or allowed to stay in office. The juice is so sweet that many are prepared to burn down their states if their sons and daughters are not allowed to continue from where they stopped in sucking the juice out of the people. As of now, only very few people endowed with the spirit of work still work in Nigeria.

Most public officials are looking for what to take, from anywhere, because justice is long dead and any bit of it alive has a price in the market. This is what happens when you give signal that justice is variable. Any system that cannot guarantee justice has

guaranteed poverty as the powerful exclude the weak; and soon that system implodes.

Today, the most important thing to some of us, especially the younger generation, is a share of political office. That shows the direction of our emphasis – access to the national till.

We are all aware, self-interest and pretences apart, that the problem with Nigeria is not the age of it leaders, granted that the younger the leaders, the more effective they are, but its political structure. The structure promotes incompetence and entitlement mentality rather than competition and innovation. It kills the spirit of patriotism and advances the tendency to tribe and clan. Surely, such a system could be hijacked by bigots. It may not be healed by the transfer of political power on the basis of age. Besides.

A nation whose young people, who ought to be busy churning out inventions in STEM, obsess themselves with the thought of how to get into the murky corruption brigade of stealing and deceit called Nigerian politics, has more coming. Whether the leader is young or old, Nigeria will not go far with its present expensive presidential governance system that has no place for merit but over rewards loyalty to individuals as against the nation. This system is not good for us.

Today, as we continue to name the agents of poverty in Nigeria, we identify unemployment, arising from the contracting economy and hence labour market, manifesting in high and rising levels of family distress, as another major contributor to the poverty in Nigeria and the hardship of its people. Although high unemployment is a derivative of the failure of leadership, we single it out for emphasis.

Unemployment is the absence of rewarding income earning engagement for labour. The nation is currently facing an unprecedented rise

‘

The failure of the current system of governance, traceable to the presidential system of government and the power structure in the federation, has begun to tilt us towards the unthinkable, a feeling of safety only among our clan; a feeling of security only if the arm is with us

Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii

The return of Frankenstein

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’m sure we’ll all agree that a useful definition of discipline is doing the right thing or what needs to be done at the right time rather than when it’s convenient. Cultivating good habits is also a sure reflection of a disciplined mind. Speaking to this, one thing I’ve always tried to drum into my children’s ears is a need to return things to where they took them from once they’re done with them. Don’t just dump things anywhere or leave them where you used them. I don’t know about you but if there’s one thing I hate in this life, it’s having to look for things. I hate it with a passion. When I need something, I like to know exactly where to go, pick it up, use it and move on to the next thing.

Apart from the fact that having to search for things, especially when you’re in a hurry to go somewhere or get something done, is one of easiest ways to add unnecessary stress to your life, you will most likely be doing the same to others who may need to use that item too; when it could easily have been avoided. One thing I know is that a habit of discipline is transferable.

What do I mean by that? An ability to be disciplined in one area of your life is likely to lead you to be disciplined in other areas of your life too. Total indiscipline in a critical area is likely to be replicated in other areas of your life as well.

Discipline can also be described as having the depth of character to remain faithful to your values, no matter the societal pressure to discard of them. Putting up with adversity because of your refusal to take the easier route of conforming to distorted social norms also requires discipline. Believing your way, which is the right way, will eventually prevail and positively change the system no matter how absurd that notion may currently look, takes disciplined thinking emanating from disciplined character.

Resisting the temptation to take shortcuts to

catch up with peers who have moved ahead and then digging deeper when the going gets tough instead of giving in - all require discipline.

Though it may be true that the average Nigerian has adjusted to the difficult environment and quite remarkably still manage to exhibit great hope that they will make it somehow, it’s almost always about them. Very few have developed the strength of character to believe they can do something to change the society as a whole. Neither have they come to accept the fact that the said change they desire to see in society is contingent on them recognizing their own character shortcomings and doing something about it. Until this yearning for people to do their own part for the whole is developed, true patriotism will remain a pipe dream. All the ideals which form MINDS as an acronym point to one thing, character. But today I’m focusing on one of these virtues, discipline.

Kindly humour me though and permit me to approach it from a slightly different angle; a nuance which not only speaks to placing emphasis on the goal of the whole over that of the part but on having the resolve to resist the temptation to do otherwise. Such requires discipline.

The nauseating term, “Marlians” won’t sound too alien to many of us by now. These are young men and women who probably best represent the growing crop of Nigerian youth who’ve lost all hope in this entity called Nigeria. Any residual love of country can best be described as visceral rather than one evoked by a deep appreciation of what the country has achieved or anything it has done for them.

This group of shallow young adults think it expedient to discard of long held social norms of decency, respect, thoughtful consideration of others, collectively accepted boundaries in human conduct and have instead adopted a

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less rigid approach to life; a rebellious attitude, irreverence and individualism, where you are your first and last consideration.

It’s fast becoming some sort of movement by our highly disillusioned youth who’ve decided to stick two fingers up to a society and a system which they believe, quite correctly, has let them down. They’ve now decided to live life their own way and by their own rules (which are really not many) without the shackles of long held social conventions and values. Many are products of folks who after struggling daily in this unforgivingly harsh environment to keep head above water are left with no time to instil critical virtues in their children. In direct response to our leaders in most sectors (politics, commerce, religion etc) whose example they’ve decided to emulate, they too have made their minds up to do only that which serves their interest and their ego. Scary thing is, our generation and those before us seem to have unwittingly created a Frankenstein who we don’t have a clue how to tame.

For long we’ve been bedevilled by leaders who see society and the people that make it up as something to subdue, rape and pillage at will, once it’s “their time”. Well, breaking news people. The Marlians no longer agree to be subdued. Unfortunately for them and the rest of us, the majority of these confused lot lack the educational backbone and the moral character to chart a better course and so they resort to the easiest picking of “anything goes”. Their only rule is that there are no rules. They want to be able to do this, travel there and have that but lack the discipline, patience and strength of character to work and earn it. In defiance, the Marlians point to “leaders” who can neither explain their source of wealth nor have ever been asked to do so, as justification for their own equally repugnant position. Perhaps unknown to them, they end

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in drug abuse and deviant behaviour among the youth. Some people think there is something innate in these young people pushing them into these negative activities. The blame has been going round from poor parenting, the favourite fall guy, to unpatriotic behaviour of traders, who sell illicit substances. The truth is that these are at best, accessories or contributors to the malaise. The real culprit is frustration, bred by idleness and a feeling of failure. We may be investing but it our investment is below the critical mass that would jolt the economy through massive job creation.

The key challenge in many families today is how to save their youngsters, who have worked hard to earn university degrees, from falling into depression. Some families have just created their first graduates. They sold land and other resources to pay the fees and now the state is not even doing anything.

Government intension may be good but failure to convert it to tangible preoccupation for the youth is failure.

Our inability to revive the middle class is hurting all classes. Despite this, small companies formed and run by the middle class have recently come under fire from the internal revenue agencies of both state and federal governments. Instead of finding creative win-win strategies to raise taxes, and get enhanced compliance (knowing what happens to tax revenue in countries with unaccountable leadership) governments are going about sealing every imaginable small company for tax default. This increases the pressure on the middle class while worsening the unemployment problem. We should do more to recreate the middle class so that it will play its role in our economic development.

Character Matters with Daps

Dapo Akande up being not that different to those they’ve come to see as their oppressors.

For any team (which is what a society should be) to have any chance of success, each team member must be utterly committed to the success of the team as a collective and this can only happen when all are driven by a sense of ownership. The Marlians, like most Nigerians have little sense of ownership in the Nigerian project. And like the Iranian people initially did, when their most influential military leader, General Soleimani was assassinated recently

by US forces, some sort of primordial national pride will cause most Nigerians to rise up too when faced with any external assault, whether it be physical or verbal. But at the drop of a hat, these same people would bail out of the country without looking back and given the slightest opportunity, would take action detrimental to the interest of their country, so long as it benefits them. Their “leaders” have taught them well, that it’s all about them.

Changing the nation...one mind at a time.

Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

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Wednesday 22 January 2020

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Human capital development as key to solving Nigeria’s economic challenges

Olanrewaju Rufai

N

o nation attains sustainable economic growth without developing the human resources necessary to drive such growth. In fact, the development and utilisation of human capital are pivotal to economic productivity and growth.

Given this background, one would expect that any nation with intentions to be in the upper echelons of development would prioritise human capital development. Unfortunately, this is not the case in Nigeria, a nation which has continually failed to invest in her most critical assets – her people.

Nigeria has continued to falter badly on the two key barometers used to measure the development of human capital – education and health.

A cursory examination of the Nigerian government’s budgets and expenditure over the past years reveals the nation’s misplaced priorities. The nation continues to fail to fund the both critical sectors, instead expending huge chunks on the remuneration of

public officials and subsidy of petroleum products.

The need for the development of any nation’s human capital cannot be overstated. Skilled and healthy human resources are imperative for the economic growth of any nation, and no nation has developed without the prioritisation of the development of its education and healthcare systems.

The challenge of educating Nigeria’s future is a daunting one. Currently, over 10 million Nigerian children are out of school. Furthermore, only 61 percent of 6-11-year-olds regularly attend primary school and only 35.6 percent of children aged 36-59 months receive early childhood education. In Northern Nigeria, the picture is even bleaker, with a net attendance rate of 53 percent. Therefore, getting out-of-school children back into education is the first challenge to surmount.

In addition, there is no gainsaying that the entire Nigerian education system is in dire need of a redesign. While the world continues to evolve, the Nigerian education system remains stuck in a dated past. Thus, not only is Nigeria failing to educate a significant portion of its future generation, those being educated are not being prepared for the globally competitive future. Therefore, there is a need to develop a forward-looking education system which caters to all social strata, with a focus on ensuring that future generations possess the necessary technical and soft skills to succeed in an evolving world.

The state of the nation’s healthcare system is not dissimilar to the nation’s

education system. While global health policies have undergone tremendous evolution in the past 60 years, the quality of the healthcare delivery system in Nigeria remains terrible and plagued by inadequate funding.

Consequently, majority of Nigerian citizens continue to grapple with basic health challenges.

The inefficiencies inherent in Nigeria’s healthcare system are reflected in nation’s health statistics: both maternal mortality and infant mortality in Nigeria are among the highest in the world, while the average life expectancy of Nigerians is estimated by the World Health Organization (WHO) to be 54.4. These dismal health indicators aptly illustrate the state of Nigeria’s healthcare system.

All of these illustrate the challenge with Nigeria’s human capital development. The two systems pivotal to the nation’s development – its education and healthcare systems are both in the doldrums. Therefore, if the nation is to attain sustainable development, there is an urgent need for the development of these critical sectors.

The complexity of the task of developing Nigeria’s human capital necessitates a collaborative approach.

Complementary investments and partnerships which leverage the strengths of both public institutions and private operators can help to develop scalable solutions to the nation’s education and healthcare challenges. Furthermore, there is a need for bolder leadership and strategic action within companies and across industries, including partnerships with public institutions and the pri-

‘

There is no gainsaying that the entire Nigerian education system is in dire need of a redesign.

While the world continues to evolve, the Nigerian education system remains stuck in a dated past

vate sector. These efforts will need to be complemented by policy reform on the part of governments.

In particular, there is a need to develop a forward-looking education system, with a focus on ensuring that future generations possess the necessary technical and soft skills to succeed in an evolving world. Therefore, the Nigerian education system must be redesigned to respond to these challenges and cater to the requirements of the modern world. In addition, the nation’s healthcare challenges must also be swiftly addressed.

A healthy and virile workforce are imperative for economic growth and development. Thus, all of these are factors which Nigerian policymakers must take into consideration in order to nation’s human capital and accelerate the nation’s development.

In light of the nation’s desire for accelerated economic growth, sustained investments in education and healthcare are necessities. A nation which fails to prioritize investments in these sectors is only setting itself up to fail. Massive investments in education and healthcare are necessary if Nigeria is to stand a chance at fulfilling its potential and compete in the upper echelons of nations.

If Nigeria fails to get its act in order and reset its priorities vis a vis human capital development, achieving sustained development will be impossible.

Rufai holds a first class degree in Management and Masters degrees in Management and Finance. He is a finance and strategy analyst and can be found on Twitter @LanreRufai_.

Investment implications of the supreme court judgement on the Imo state gubernatorial elections

O

n Monday, 13th January 2020 the Supreme Court of Nigeria delivered judgement on the appeal brought by Hope Uzodinma against Gov. Emeka Ihedioha on the Imo State Gubernatorial elections. While many Nigerians were shocked by the judgement and pondered the political implications of the judgement, what was not immediately apparent is the direct impact the judgement is going to have on all facets of business in Nigeria, including international trade, foreign direct investment, international contracts and the perception of Nigeria in the eyes of the international community.

Leaving politics aside, every Nigerian business person and every person or body anywhere on the surface of the earth interested in doing business either in Nigeria or with a Nigerian person or entity must be concerned about this judgement. And the reasons are legion. Two calls I received over the weekend, one from Finland and the other from California, US, highlight this concern.

The Finland caller, the head of a group seeking to invest in a state in Nigeria, said that their lawyers have raised urgent concerns about the safety of their investment. He dispensed with niceties. “We hear that once your government is interested in a court case it instructs the judges on what to do.” I tried to draw him out.

He mentioned the Atiku case and then, more emphatically, “We hear that an elected Governor was thrown out a few days ago and that your public documents can now be subverted by any other document brought by anybody.”

When I tried to assuage him, he asked, “What if they change the governor [of the state they are negotiating with] and the new governor declares our contract invalid? How would we prove our documents valid if the courts cannot even rely on your public documents? What if a new governor brings a forged document? Would

your courts be of help?”

The second caller, a man who has made several visits to Nigeria, after some preliminaries informed me that they are seriously considering the safety of their investments in Nigeria owing to concerns on the “growing official interventions in court cases and the uncertainty of your judges. Your judges appear cowed.”

How did we get to this point? Courts, especially the lower courts and up to the Court of Appeal, rely on precedents in making decisions.

In fact, the Court of Appeal and all lower courts are bound by the decisions of the Supreme Court. They cannot deviate from it; else it would be said to be wrong or to have been arrived at in ignorance of the law. This decision of the Supreme Court is taken as the latest declaration of the state of the law on the issues it decided, and the lower courts are not permitted to choose between an earlier decision of the Supreme Court and a latter one on similar issues. They are bound to follow the latter, except they can find a way to say that the issues are different or to distinguish it, In their latest decision on the Imo gubernatorial elections, the Supreme Court appears to have inadvertently made some bad decisions with far-reaching implications. Their lordships seem to have been pre-occupied with politics and maybe technical law, without adverting their minds to the wider implications.

For instance, in admitting and relying on uncertified 366 Nos. Form EC8A, a public document, the Supreme Court has by implication opened the door to lower quality of documentary evidence to be admissible in Nigerian courts. This seems to be not only contrary to the Nigerian Evidence Act and other laws but runs against the practice in all Commonwealth and other civilized countries. In practical terms, a Dangote may lose his real estate investment in a certain place because someone or group came

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up with an uncertified Certificate of Occupancy without any certification from the Lands Registry on it. This may happen even if Dangote holds the original document. If this can happen to a Nigerian, what would happen to a foreign investor? Better put, what would this judgement do to the confidence of an investor in Nigeria?

The law presumes regularity of acts of and documents from public offices and the onus is on who asserts the contrary to prove. A mere assertion and production of a document that does not satisfy the Evidence Act should not suffice to shift this onus.

Let us take it further. Commercial contracts.

What would be the effect of a mere assertion and production of a contrary document without proof in a dispute over a commercial contract?

Would the court rule in favour of the person who produces any kind of document even if he does not relate his assertions or claims to the document? What role should the court play in assessment of documentary evidence? If reliance on a document leads to absurd results would the courts still rely on it even if it falls short of evidential standards? This is what happened in the Uzodinma v. Ihedioha case.

The document which the Supreme Court relied on to cause this international furor had serious defects that made them unreliable, to say the least. Whereas about seventy parties contested the gubernatorial election, only four parties were mentioned and awarded votes in the 366 Form EC8A tendered by Uzodinma. The rule is that even if a party scored did not score any vote, zero should be entered for it because zero is a score. Apart from this obvious omission, in almost all the exhibits only the alleged score of APC (Uzodinma’s party) was visible.

Uzodinma himself and all his other witnesses including DCP Husseini could not read the scores of the other three parties when asked to do so on cross-examination. They all had one

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EMEKA U. OPARA standard answer when asked how they wanted the court to rely on the document: that since their own was not visible that they expected INEC to tender the original. Yet the parties had their copies of the real scores issued by INEC. I took notes during the tribunal sittings and observed the witnesses. When a few days ago I went through my notes I could see that a choreography has all the while been at play.

Should the court shift the onus when a party on whom the onus lies has failed to discharge it? I also have certified true copies of both the Tribunal and the Court of Appeal judgements.

I have read them over and over, including my handwritten notes which agree with the summation of the Tribunal. I am yet to fathom how the Supreme Court will rationalize its judgement.

Which brings me to another issue. The Supreme Court is yet to issue the reasons for its decision.

It just delivered a short judgement, the parties to await. It heard the appeal and delivered a short judgement the same day, on such a serious matter. It is within its power. Similar matters on the Sokoto and Kano gubernatorial elections were adjourned for one week after hearing, before judgement. However, these debates are happening all over on all media, national and international, and in writing its detailed judgement (whenever it will be) the Supreme Court now has the benefit of all these arguments pointing out the defects. I feel sour in my mouth.

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

Emeka U. Opara is a Lagos-based attorney and consultant.

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Akande author o journey de25@g

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Wednesday 22 January 2020

BUSINESS DAY

Editorial Publisher/Editor-in-chief

Frank Aigbogun editor Patrick Atuanya

DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo MANAGING DIRECTOR Dr. Ogho Okiti 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)

Bashir Ibrahim Hassan

Imo State Supreme Court verdict: Matters Arising

F

ive days after, the judgment of the Supreme Court on the March 9, 2019, gubernatorial contest in Imo State continued to reverberate with negative drumbeats. Partisans of the Peoples Democratic Party and ordinary citizens of Imo and other states took to the streets to protest the judgement with placards and other tools. It was a first for the country as it raises questions why the decision has been so controversial.

The Supreme Court ruled on January 14 that INEC should withdraw the certificate of return issued to Emeka Ihedioha of the People’s Democratic Party as the winner of the contest and thus Governor of Imo State and hand same over to Hope Uzodimma of the All Progressives Congress. It asserted that Uzodimma scored the highest votes and should immediately take the oath as governor.

Justice Kudirat KekereEkun read the lead judgement of the unanimous verdict of the court. The Supreme Court

based its ruling on the evidence brought by a police officer DCP Husseini that testified at the Appeal Court as PW-54. DCP Husseini brought election results from 388 polling units that the court said were excluded unlawfully from the overall collated results. Votes from the 388 polling units amounted to 213 295 and they all went to Mr Uzodimma.

INEC records show that Imo State had 3, 523 polling units. Its initial result credited Uzodimma with 96, 458 votes from 3, 135 polling units. Kekere-Ekun directed the addition of the 213, 295 votes from 388 polling units to the 96, 458 votes earlier accredited to Uzodimma. It then took Uzodimma’s tally to 309, 753.

The result posed a significant challenge, however. With the new calculation by the Supreme Court, Imo State then had the dubious distinction of an election result ordered by the Supreme Court where votes allotted exceeded the number of accredited voters. It remains a sore point and source of embarrassment regarding the Supreme Court’s decision.

We find other aspects of the judgement troubling. The Supreme Court gave probative value to the proof of evidence of PW-54, a police officer, thus relying on an uncertified public document Form EC8A. The electoral law recognises only INEC and its staff for certifying election results. The Supreme Court overruled INEC and the lower courts and admitted the document brought by a witness who ordinarily does not qualify to present election results.

There are many ramifications of the Supreme Court ruling. For one, it means that public documents do not need certification for acceptance in transactions, with the Supreme Court judgement as evidence. It means an investor may lose his real estate investment because someone or group came up with a Certificate of Occupancy without certification from the Lands Registry on it. Such a scenario could happen even if the investor holds the original document. Has the Supreme Court opened the door for lower quality of documentary evidence to be admissible in our courts? Or will they ring-

fence the Imo judgement so that no one can cite it?

Note that this judgement is against the backdrop of the reduced credibility of Nigerian documents in the international arena. It is more so for people dealing with investors from other countries. There are implications for business dealings, contracts and foreign investments. We hope that when the Court gives its reasons, it will clarify this matter.

INEC must sp eak to this judgement where an officer of the Nigeria Police Force brought documents INEC had rejected only for the Supreme Court to now accept it. What is the view of the election manager and regulator?

We also note that the Supreme Court handled the Imo electoral dispute before it in one day only. Such supersonic speed is unusual in handling a matter of such significance for citizens and the polity. The preceding and others are troubling matters arising from the Supreme Court on Imo State gubernatorial dispute. Citizens need an explanation.

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Wednesday 22 January 2020

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Border Closure: Any end in sight?

Franklin Ngwu

A

s we start the year 2020, one of the key concerns of most Nigerians is when the borders closed for about six months since August 2019 will be opened. The earlier thought that the borders will be opened on 31st January 2020 was dashed on 24th December 2019 when the Minister of State for Industry, Trade and Investment Mariam Katagum announced that the borders will be opened only when our neighbouring countries comply with the ECOWAS trade protocols. “We had a strategic meeting with the three countries, and what we agreed with our neighbours is to activate a joint border patrol, and the border patrol comprises the Customs, all the security agencies and ensure to try to follow the actual protocol laid by ECOWAS. The committee met on November 25, and it is only when that committee is certain that all countries are respecting the ECOWAS protocol that they will recommend a day for the opening of the border”, the Minister stated.

While the reasons for the border closure have been stated by the Federal Government, it seems that a more

strategic approach might be required to ensure that the benefits of the closure are sustainably realised. There is no doubt that other countries compliance with ECOWAS trade protocols is important, but it should not be the determinant factor for the reopening or continued closure of our borders.

Does it mean that the borders will continue to be closed if our neighbours are unable to comply with the ECOWAS trade protocols? If it is confirmed that our neighbours are complying with the trade protocols and the borders are reopened, what happens when one or all the neighbouring countries derail in their compliance?

Will be the borders be closed again?

During a critical review of the reasons for the closure by a select group of Economists, it was widely agreed that the border closure looks like a quasireintroduction of the Import Substitution Industrialisation (ISI) strategy used in the 1960/70s to jumpstart our industrialisation process.

At independence in 1960, Nigeria like other developing countries adopted ISI as it fitted well with our other socio-political mood and aspirations particularly for a firm control and ownership of the economy having secured political independence from United Kingdom. However, after about twenty years of using ISI, it was clear that it was an ineffective and unsustainable industrialisation strategy.

Firms were characterised by high inefficiency, high debt burden, lack of competitiveness, corruption, high government intervention and flawed ownership structures that inhibited effective governance and management.

With these failures and other factors

‘

While the border closure might be used as a short-term measure, the focus should be on how to create a competitive business environment that will enable Nigerian firms to profitably compete and outperform irrespective of whether our neighbours comply or circumvent the ECOWAS trade protocols

such as the influences of USA and UK and their controlled international institutions particularly IMF and World Bank, Nigeria like other countries was somewhat forced to transit from ISI to Export Oriented Industrialisation (EOI) through market liberalisation and privatisation policies. This was enhanced by the perceived success of some Asian countries such as South Korea, Singapore, Hong Kong thorough the adoption and implementation of EOI. As Nigeria seems unable to achieve reasonable industrialisation even after over fifty years of ISI, economic liberalisation and EOI, the question is if the magic will be achieved with the reintroduction of ISI evident in polices such as the exclusion of 41 items by the CBN and the border closure. Recalling that ISI is a model for the creation of a vibrant industrial base through government protection of new and small sized firms from foreign competition, its is difficult to understand how it will work in the present global economy. Moreover, its sudden and quasi-reintroduction after over forty years that it was adjudged as not successful and abandoned clearly shows the challenges and failures in our economic and industrialisation policies.

While the border closure might be used as a short-term measure, the focus should be on how to create a competitive business environment that will enable Nigerian firms to profitably compete and outperform irrespective of whether our neighbours comply or circumvent the ECOWAS trade protocols. Using cost benefit analysis, our neighbours will wait as long as re-

quired to continue to circumvent the trade protocols once they observe that Nigeria is not making a conscious and serious effort to make our products such as rice cheaper than the smuggled Thailand or Vietnamese ones.

As high cost of production remains a major reason why Nigerian products are more expensive than foreign ones, the first focus should be on how it can be reduced (cost of production) especially the ones related to infrastructure.

However, given the inability of the government to provide the infrastructure needed by every part of the country for their optimal productive outputs, a suggestion will be the need to create an effective, functional and subsidised special economic or production cluster in every geo-political zone of the country. Added with the appropriate incentives for private sector participation, the innovative capabilities of every region will be stimulated for rapid industrialisation of Nigeria. As one of the key reasons for the border closure is the continued smuggling of Nigeria petroleum products to neighbouring countries, the second key factor is the need to properly secure our borders and remove the fuel subsidy. While the removal of the fuel subsidy will not only increase the revenue of the government, it will also redirect the efforts of people making easy money from the subsidy to other productive ventures.

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.

E-mail- fngwu@lbs.edu.ng

Can Nigeria craft a fiscally-neutral infrastructure strategy?

A

ny realistic assessment of the total capital requirements for physical infrastructure roll-out and maintenance in Nigeria will reveal quickly the inadequacy of government resources to meet the challenge. Amidst multiple, urgent, growing and competing priorities of various kinds for public sector funding, it has now become simply irresponsible for any government or state-owned enterprise to rely solely on its annual budget for long-term infrastructure finance. Even more than budgetary resources, governments will also always be constrained in terms of actual human capacity (persons, time and expertise) to meet a significant proportion of the challenges entrusted to their care. It becomes prudent therefore for everyone in government or public office to think about the important question of how to craft a fiscally-neutral infrastructure strategy that can crowd-in development support.

Firstly, a definition. Put simply, a fiscallyneutral strategy for infrastructure is a procurement approach that seeks to deliver long-term, sustainable projects with as little recourse to the public purse as possible. In short, it is a strategy that will aim to create public infrastructure that pays for itself. This might sound like a radical or impossible idea, but it is in fact the simple basis for much infrastructure development planning and financing everywhere in the world (including in many African countries). Everything from ancient canals and turnpikes, to modern roads, bridges, air, sea and river ports, gas pipelines, and electricity supply infrastructure have been built with fiscal neutrality at the core of government thinking.

Secondly, it is important to define early

what a fiscally-neutral strategy does not mean.

The fundamental ideas behind this strategic approach are revenue generation from user charges, coupled with effective risk allocation (and not the award of private concessions, as often erroneously assumed). Indeed, concession agreements and so-called public private partnerships (while important and useful legal tools) are not the only means by which a fiscally-neutral infrastructure strategy can be delivered. Rather, the key concepts that matter are careful project planning, user identification and willingness to pay, construction and operational risk allocation, viability gap funding, and limited recourse financing.

Various legal and commercial mechanisms for giving effect to this same strategic objective have been deployed in multiple jurisdictions - including turnpike trusts, fuel taxes, road funds or boards, direct tolls, city charters and development levies; typically combined with risk allocation tools like Engineering, Procurement, Construction and Financing (EPC-F) contracts and Performance Agreements. Essentially, the goal is to ensure that infrastructure is built on time and budget, and revenues from user payments strongly support the debt service coverage and annual maintenance costs of the assets so constructed. Taken together, these frameworks are project finance tools which serve to expand the borrowing and delivery capacity of governments in the area of public infrastructure, while tapping into broader sources of credit and investment.

Specific to Nigeria, there have been recent calls for a massive “infrastructure bond” program to be issued by the government (and underwritten by long-term pension fund assets). My contribution to this debate would

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be as follows: by all means, yes! But on the condition that this must be a fiscally-neutral infrastructure bond issuance program. Now, what might the enabling legislation behind this initiative look like in practice? I will describe a few features of my ideal version of such a program. Firstly, a diversified scope of projects is important, to include commercial roads, rail lines, sea and river ports, gas pipelines, border posts, airports and industrial or agro-processing infrastructure. Next, qualifying projects must have secured at least a third of their financing from sources other than the government infrastructure bonds (ideally from local banks, development financiers, export credit agencies and InfraCredit-covered bonds).

For risk management purposes, EPC-F frameworks ought to be utilised, which allocate completion, financing and maintenance risks properly to credible contractors, backed by well-rated performance bonds. In relation to governance, a central body might be entrusted by government to oversee the dayto-day operations of the program (issuance, procurement, disbursement), superintended by an independent board of trustees with credible senior representatives from both within and outside public service. Viability gap contributions into projects would be sized based on competitive tenders, and duly included in the annual appropriations of the relevant procuring agency, government or enterprise. The overall mandate of the program will be to deliver a fiscally-neutral portfolio of projects, backed by the full faith and credit of the government as issuer of the bonds.

One central body already does an excellent job in relation to public debt oversight in Ni-

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Fola Fagbule

geria, and that is the Debt Management Office (DMO). According to them, the total stock of domestic and international public debt of the Federal and State governments in the country amounted to N26.21 trillion as at September 2019. That sum will increase by at least N1.59 trillion during 2020, based on Federal borrowing alone as outlined in the Appropriation Act for this year (with an estimated debt service cost of N2.75 trillion). This works out to an approximately $73 billion portfolio requiring $7.6 billion to sustain, a figure that is already daunting relative to the government’s very limited annual revenue. A well-structured program of fiscally-neutral infrastructure bonds would ensure that any and all additions to this debt portfolio are channelled into projects which generate revenue to pay their own way (and are economically impactful), freeing up budgetary resources for the myriad other financial commitments of governments across the country.

Fagbule, is Senior Vice President, Africa Finance Corporation. His Twitter handle is @folafagbule

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14

Wednesday 22 January 2020

BUSINESS DAY

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Nigerian consumers squeezed as price of garri rises 37% …Farmers were reluctant to plant cassava owing to glut Josephine Okojie

T

he price of garri, a staple food consumed mainly by low-income Nigerians, has gone up by 37percent in the last one month owing to farmers’ reluctance to cultivate cassava in large quantities due to glut, farmers told BusinessDay. BusinessDay survey at Mile 12 market shows that a 60kg of red garri currently sells for N8,000 as against N5850 sold a month ago.

Similarly, a 60kg of white garri goes for N6,500 as against N4,800 sold a month ago.

This shows a 37 percent increase in the price of red garri and a 34 percent increase in the price of white garri.

In many markets across Nigeria, a small bucket of garri, popularly known as ‘painter’, currently sells for N700 as against N450 sold a month ago.

In Shagamu, a bag of garri sells for N7,500 as

L-R: Jamie Rixton, lead consultant, Context; Toromade Francis, director general ,Premier Agribusiness Academy; Michael David,consultant, United State Soy ; Kellie Gypin , senior associate, Context and Mark Nelson, principal, Context at the ‘Creative Thinking and Problem-solving Skills for Decision making’ seminar organised by Premier Agribusiness Academy in Lagos recently.

against N5,350 sold a month ago.

Nigeria is the largest producer and consumer of cassava in the world with production capacity of 42 million metric tonnes per annum (mtpa), according to data from the Ministry of

Agriculture.

However, processors are currently finding it difficult to get enough cassava tubers for their factories.

This is attributed to farmers’ reluctance to plant cassava last year owing to a market glut, which brought

OCP Africa partners universities to deepen agric education HARRISON EDEH & Cynthia Egboboh, Abuja

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CP Africa in partnership with the ‘University Mo ha m m e d V I Polytechnic’ (UM6P) morocco has begun an effort to explore collaborative opportunities with Nigerian universities to broaden agricultural education and promote global best practice among farmers.

Ca l eb Us o h, Ni g e r i a country director, OCP Africa speaking at the interactive forum with representatives from University Mohammed VI Polytechnic (UM6P) as well as other Nigerian universities in Abuja on Tuesday said that the collaboration seeks to foster a network and relationship between the university in Morocco and the Nigeria universities around issues of technology, environment, agriculture, and innovation.

“This meeting is organised between OCP Africa, UM6P to interact with the Nigeria university community to foster networking and

collaboration between the university in Morocco and the Nigeria universities around issues of technology, environment, agriculture, and innovation,” Usoh said.

“The program is structured around the entire agricultural value chain, from the soil fertility, agricultural practices, and production. We collaborate with other companies to boost productivity by attending to the need of the farmers as it falls into the drive of OCP Africa to enhance productivity in agriculture within Africa,” he added.

He stressed the need for a review of the university curriculum to focus on the reality of the agricultural industrial need and the structure of the economy, w e need to change the curriculum and make it tally with the realities obtainable in the country.

Usoh said that efforts are on-going to partner with the Federal Government as well as blending plants across the country, to build farmers’ capacity, deepen access www.businessday.ng

to quality farm inputs and expand access to technology.

Ve r o n i c a O b a t o l u , executive director, Institute of Agriculture research and training, Obafemi Awolowo University in her remark commended the effort of the OCP Africa saying that the initiative is timely as it seeks to improve agricultural productivity by broadening t h e k n ow l e dg e o f b o t h students and farmers alike.

“This program is a welcome development as it focused on improving productivity in the value chains as well as improving livelihood by creating wealth through agriculture,” Obatolu said.

“When we talk about education and research, we talk about sharing ideas from one region to another; hence we appreciate this partnership as it aims to broaden our knowledge in agriculture. OCP Africa through the University Mohammed VI Polytechnic (UM6P) is reaching out to us through technology and innovations to better our knowledge on agricultural best practices.”

down the price of the product all through 2018 and 2019.

“Last year, a lot of farmers d i d n o t p l a nt ca ssava because there was gut, which impacted seriously on farmers, who could no longer plant the produce

in large quantity,” Ayowole Olayinka, chief executive officer, Viyola Foods told BusinessDay in a telephone interview.

“The situation is now affecting processors. We hardly get enough volume of cassava tubers for our factory currently,” Olayinka said.

“I had to visit several WhatsApp platforms to search for suppliers for our factory,” he explained.

He noted that there is also the scarcity of labourers owing to the border closure that has restricted Togolese and Beninoise into come the country, adding that they collect cheaper wages, u n l i k e t h e i r Ni g e r i a n counterparts.

“The cost of labour and inputs are higher now, such that small-holder farmers cannot afford to plant in large quantities,” he said.

Ademola Olaleye, a cassava farmer in Ogun State said that it was difficult for cassava farmers last year, as many of them could not recoup the investment they

invested on their farms owing to the glut.

“We were even begging processors to come and buy from us as there was oversupply of cassava in the market. This affected so many farmers and m a n y d i d n o t re p l a n t cassava but shifted to the cultivation of other crops,” Olaleye said.

“We want the government to find a lasting solution to this glut problem that cassava farmers suffer from periodically. All farmers need to be supported not just only rice farmers,” he added.

N i g e r i a’s i n f l a t i o n accelerated by 0.54percet in December 2019 to 11.98percent as against 11.44percent recorded in the same period in 2018, data from the National Bureau of Statistics states.

The inflation was mainly driven by the food price index which also accelerated by 0.19 percent to 14.67 percent in December 2019 compared with 14.48percent recorded in the preceding quarter.

Pangolin Conservation Guild Nigeria to host Pangolin conference to drive awareness …to mark World Pangolin Day 2020 Josephine Okojie

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n commemoration o f t h e 2 0 2 0 Wo r l d Pa ng o l i n Day , Th e Pangolin Conservation Working Group Nigeria (PCWGN) is collaborating with AFRINET Radio and TV Network, The African Pangolin Working Group South Africa and Uganda Wildlife Service to drive public awareness of the mammal.

Pangolin, which curls up into a ball when frightened, i s t h e w o r l d ’s m o s t trafficked wild mammal and despite the severity of it’s poaching in Nigeria, many Nigerians have never h e a rd o f p a n g o l i n s — including members of the law enforcement agencies.

“This collaboration will help generate the energy, expertise, and capacity to save the pangolins which is the most heavily trafficked mammal globally,” said O lajumoke Morenikeji, Chair PCWGN.

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“ The pangolin’s dire situation is further underscored by the recent inclusion of two Afr ican species on the IUCN Endangered list,” Morenikeji, who is also a Professor of Parasitology at the University of Ibadan, said.

Globally, there are eight species of pangolins; four in Asia, and another four in Africa. The giant pangolin - Ma n i s g iga ntea ; tre e pangolin - Manis tricuspis, and long-tailed pangolin Manis tetradactyla species are found in Nigeria.

The mammal is in high demand because it is believed to treat many ailments and diseases while serving as a delicacy in Africa and Asia, BusinessDay’s investigations found.

The insatiable appetite for pangolin meat and parts has led scientists to believe that a pangolin is being poached every five minutes, an entirely unsustainable speed, resulting in pangolin @Businessdayng

species being listed as vulnerable, endangered or critically-endangered on the IUCN Red List.

The conference will be taking place on February 14th at the University of Lagos and February 15th at the Olusegun Obasanjo Presidential Library (OOPL) Abeokuta, Ogun State.

The theme of the conference is ‘ Tackling Pangolin Trafficking in Nigeria’ and expected guest speakers will include Prof Ray Jansen (South Africa), Ms Nicci Wright from South Africa and Dr Zhou from China among others.

Conservationists, Zoologists, Wildlife experts, students, traditional rulers, traditional hunters, law e n f o rc e m e nt ag e n c i e s, relevant Government ministries, representatives of the Chinese community i n Nig e r i a, t h e Un i t e d States Embassy in Nigeria and other Embassies a re e x p e c t e d t o b e i n attendance.

Wednesday 22 January 2020

BUSINESS DAY

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AGRIBUSINESS ag@businessdayonline.com

‘Inadequate research funding, foreign preference limit local expertise in seed production’ FRANCIS ABAYOMI SOWEMIMO is a Professor in Plant Breeding and Seed Technology Department at the Federal University of Agriculture, Abeokuta, Ogun State. He has released several improved seed varieties of maize, sorghum, sunflower, and ofada rice. In this interview with TELIAT SULE and ADEMOLA ASUNLOYE, he dissects the recent developments in the nation’s rice industry. Details in BRIU Rice Industry Report 2020. Excerpts.

Kindly give us an overview of the rice seed industry in Nigeria? t is well known that rice is the most important staple food crop in Nigeria. It is a crop that everyone loves because of the easy nature of cooking, especially into several varieties of food. The seed system in Nigeria is developing and I can tell you that we will are gradually getting to an advanced stage of seed industry development.

Currently in Nigeria, we have more than 50 seed companies that are registered and are involved in rice production, grain, and seed sale. These companies are registered with the National Seed Council (NSC) and the Corporate Affairs Commission (CAC).

They have legal backing to go into seed production and also adopt new agricultural technologies to meet the need of the populace and possibly for export purposes.

However, their effort is really not enough because of the increasing number of people wanting to eat rice; it also depends on the kind of rice we are talking about. Most rice varieties in Nigeria are imported or improved. Their seeds are either produced here or imported particularly the exotic rice varieties.

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Can we know some of the companies (local) that originated from Nigeria?

I know of some prominent ones such as “Bora seed” “IITA GOSEED” which are based in Ibadan, “Premier s e e d” ( f o r m e r l y c a l l e d “Pioneer seed”), “Da-all Green” and” Gold Agric” are all based in Zaria. There are Dizengoff, Dupont Pioneer Seeds, Syngenta Nig. Ltd are foreign seed companies located in Lagos. There are 41 seed companies based in Kano state and Abuja each, 47 in Kaduna state, 11 seed companies based in Lagos, Plateau, Adamawa, Niger and Bauchi states. The reason they are concentrated in that part of the country is because of the weather system. Most of the seeds and crops that these companies are interested

in grow better in the North because of the dry season.

Like you know, there is need to dr y these seeds—the topography of the land, the soil type, and the texture all add up. So you find most of them concentrated there.

They also have some of their offices here in down South and in the Eastern part of the country. Although their major concentration is in the North, they are gradually shifting to other regions of Nigeria. The seed companies location, address, and profile can be found in www.seedportal. org.ng There is a major challenge we normally face in this part of the world: the development of local expertise. What can you say about the challenge of developing local expertise in the area of seed production?

Well, the first thing I will say is that Nigerians have a taste for foreign foods— that is one major challenge.

We discovered that when I came from the North, where I worked with the Institute of Agricultural Research, Ahmadu Bello University, Zaria, where we studied several varieties of crops like maize, cowpea, sunflower, sorghum, millet, and others.

When I came back to the South, many people are into foreign rice research (De Rica). I made consultation with the local people who said they would rather prefer Ofada or any local rice than to go for “De Rica” or foreign rice. But the means to achieve Ofada rice purification and improvement was limited.

Now the first challenge I have made mention is Nigerians’ preference for foreign taste and serving as status symbols. Most researchers who want to carry out research on the improvement of local rice have their attention diverted because of this preference.

Finance is another major issue. Most foreign rice has foreign backings by foreign research institutes; they are conscientious, vigorous, political power and have a lot of money for advocacy. www.businessday.ng

Francis Abayomi Sowemimo

Agricultural research institute such as African Rice Centre, International Rice Research Institute (IRRI) in Philippine, International Institute for Tropical Agriculture (IITA), among others: they have a big chunk of money with them. Therefore, the Nigerian government, universities and research institutes need a lot of sensitization and deliberate advocacy to showcase the nutritional advantages, resilience and medicinal attributes of local rice especially Ofada rice.

When it comes to Nigeria, the government, unfortunately, are unable to do so much that is necessary.

The government in itself encourages agriculture; unfortunately, the money that is pumped into agriculture is insignificant. Moreover, the very few people who are scientists in rice production, breeding, protection, sales, extension, and marketing still have to go back to school for a master’s degree or Ph.D. with their personal money, most often with very little or no aid from the government. The government needs to fund education in this specialized area of rice production and productivity. The government must also recognise farmers and place them in groups

and work with them directly.

There are groups now made out of farming but they need monitoring so that the money that is being released actually gets to them and used exactly for its purpose.

I consult for some seed and agric-tech companies and firms that are into production and processing. When they came for a field visit, some of the “Baales” said I must have been using something that prevented birds not to invade the farms unlike others— maybe I must have hidden “juju” in the soil or I have someone who comes at night to drive away birds. My reply was no, I use coordination of several methods. There are many types of coordination.

I will not go further on these coordinated methods because I am a consultant on seed and grain production and productivity.

Ap a r t f ro m f u n d i n g , the government must be ready to make available all the equipment (harvester, plough, and sprayer among others) that are needed for all planting operations (weeding, clearing, ridging, etc.). If all these are available, farmers will not suffer that much. Also, the government must also create a very good market environment and

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accessibility, especially good road network. I am surprised that Ogun state where I am has not taken over the sovereign suburb states: Lagos, Oyo, Ekiti, Ondo and Osun states on farming-related products.

Ogun should have been feeding these states with lots of produce from agriculture, and even beyond Nigeria to West African countries. I am also surprised that despite the vast fertile land, very good season, temperature, rainfall, humidity we still couldn’t do much as we ought to.

This is why I have problems with administrations and governors; when they come on board, they tend to do that which may not be of utmost benefit to the masses most times. I wish a government can come on board with one point agenda—“agriculture to feed the entirety of Nigeria”.

This is very possible! All he needs to do is to assemble people who are go-getters.

Who are not the normal administrative people that will just eat, drink and be under air conditioner whereas the farmers are out there suffering to produce crops of less comparative strength such as tomatoes and peppers. We need people who will hit the field in a hungry and angry manner to achieve results. If the people in the field are wellremunerated then everybody in the office will divert from office work to join the field chariot.

Such motivations will see many hitting the farms and making farm settlements and even backyard farms as part-time business. I visited Eweje farm settlement in Odeda local government area, I almost broke down because of its deplorable condition, I heard that some rehabilitation work is going on now. I hope the rehabilitation will be done to other farm settlements build by Chief Awolowo all around southwestern Nigeria. At the Eweje farm settlements, integrated or symbiotic farming of fish, s ma l l , la rg e r u m i na nt s and crop production can be done with ease. Crop @Businessdayng

production can go on in that place vis-a-vis all manners of poultry, animal husbandry and all manners of crop production, unfortunately, nothing is going on. I suggest the government lease out to willing agro-business enterprise for proper use of the space and to make returns, train would-be farmers and consultancy services.

We know that all regions in Nigeria produce rice; are there some rice variety that gives maximum yields for each of these regions?

There are! It also depends on the topography (the environment of the soil).

There are rice varieties that are low land: those with high soil moisture condition and that requires a little bit of dry season, such are adapted to the Southern part of Nigeria.

Those which are upland rice will do very well in the Northern part of the country.

It is not as if they won’t do well here in the down South but their yield may be low, however, they will do much better in the Northern part of the country due to the climatic condition. There is rice that has been bred for short duration; they are good for places like Sahel and Sudan agro-ecological zones of Nigeria. There are those that are of medium maturing or early maturing, they are good for middle belt or Guinea savannah areas like Kaduna, Benue, Kwara, Plateau, Nasarawa and Niger state. If you come down South, there are rice varieties that are already bred for these areas. Interestingly, you will find out that Ofada rice, igbimo rice, and Abakaliki rice are doing very well in the Southern part of the country.

Production is better in the North because they have the season—the long dry season for them, particularly upland rice varieties. I could give you specific names of rice varieties that are doing well in the down South compared to those that are doing very well there in the North but that may be mistaken for an advert.

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Wednesday 22 January 2020

BUSINESS DAY

cityfile Bayelsa records 80% drop in road crashes

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ayelsa command of the Federal Road Safety Corps (FRSC) says it recorded a drop of about 80 per cent in road accidents in the state in 2019 The sector commander, Ikechukwu Igwe, who disclosed this to newsmen in Yenagoa, said 59 accidents were recorded in 2018, while 16 were recorded in 2019 with eight fatalities.

“The total number of injured persons in 2019 was 49, which was far less than the 2018, when we have series of injuries in every month. In fact, we had about 25 injuries in one month, especially in June, 2018. So, there was a drastic reduction in road traffic crashes in the state in 2019.

He attributed the result to the corps’ aggressive public enlightenment and enforcement through its various programmes targeted at drivers and traffic rules.

“Our regular medical outreach for drivers in the state made great impact. During the year, we carried out an eye check up on drivers and we also checked them on high blood pressure as well as their sugar level to know their health status.

Igwe said that those found unhealthy were sent to specialist hospitals for further investigation and treatment.

Basscomm Nigeria visit to Lagos State Special Correction Centre For Boys, Oregun with food materials and toiletries in celebration of their CEO-Demola Onanuga’s 50th Birthday.

Ibadan: EFCC arrests 89 suspected ‘Yahoo-Boys’ in night club REMI FEYISIPO, Ibadan

Allottees to lose undeveloped plots in Abuja

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Man charged with videotaping traffic warden on duty

Abia, NDLEA join forces against illegal drugs

he Economic and Financial Crimes Commission (EFCC) has arrested 89 suspected internet fraudsters at the popular Club 360 in Ibadan.

The commission’s spokesman, Tony Orilade said in a statement issued to newsmen on Monday in Ibadan.

The Club 360 is located on Akala Expressway, Oluyole Extension in Ibadan.

Orilade said that the commission had carried out series of discreet surveillance on activities at the night club before the raid.

According to him, intelligence report indicated that the club was notorious for harbouring suspected internet fraudsters.

He said that the raid on the night club led to the confiscation of scores of vehicles, laptops, sophisticated phones and other items. The suspects are presently undergoing interrogation.

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srael Adejol, a resident of Lagos state, was on Monday docked in an Ebute Meta Magistrate Court, Lagos, for videotaping a traffic warden while at his duty.

Adejol, 27, appeared on a one-count charge of recording a police officer on duty. He, however, pleaded not guilty to the charge.

The prosecutor, Emmanuel Silas, told the court that the offence was committed on January 17, at 8.00 p.m., at Orile Bus Stop, Iganmu, Lagos.

Silas alleged that the defendant took video shots of Olukayode Abayomi, a traffic warden, while he was controlling traffic.

The offence he said, contravened Section 57(1)(c) of the Criminal Law of Lagos State, 2015, which prescribes a N90, 000 fine or six months imprisonment.

The magistrate, T. Agbona, granted bail to the defendant in the sum of N10, 000, with one surety in like sum and adjourned the case until February 11, for further hearing. NAN

uktar Galadima, Director, Federal Capital Territory (FCT) Department of Development Control, has warned allottees of undeveloped plots in service areas to develop them or risk revocation.

Galadima gave the warning when he led an enforcement team to remove shanties at Jabi District, in Abuja.

He said the department received complaints over occupation on allocated lands and after several meetings with the indigenous community revolved to clear all shanties in Jabi district He decried the rate at which shanties sprang up in the federal capital city, saying shanties had become a kind of haven for the people of the underworld which the department would no longer allow.

GODFREY OFURUM, Aba

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an Okoli, commissioner for Homeland Security, Abia State has pledged the support of Abia State government to the National Drug Law Enforcement Agency (NDLEA) in the fight against illegal drugs in the state.

Okoli, who made the pledge during his visit to the Abia command of NDLEA, on Monday, said that a synergy with the agency would strength the war against drug abuse in Abia.

He linked most violent crimes to hard drugs, noting that the agency’s operations were at the heart of reducing crimes in Abia, hence the need to support them to the fullest.

His words: “You find out that crimes are committed when the perpetrators are under the influence of hard drugs; so that is the root of crime and if you attack crime at its root, it will be easier to uproot and eradicate.

“That is why I am interested in the NDLEA and we are going to do things to the best of our ability to assist NDLEA to reduce drug abuse to www.businessday.ng

“We have two issues attached to that: one is the issue of shanties and then, secondly, we received a complaint over occupation on allocated lands.

“Toward the end of 2019 we carried out similar exercise at Gwarinpa and today we are in Jabi and we will continue like that from one district to another where we have high concentration and or presence of some of these shanties or illegal structures.’’

Galadima explained that as part of efforts to ensure smooth exercise, indigenous community would be resettled permanently to enable land allottees to develop them.

According to him, the Development Control will liaise with the Department of Resettlement and Compensation to come up with modalities on how to go about the resettlement of the indigenous community.

the barest minimum in Abia State. Supporting reduction of drug abuse in Abia will make it easier for other security agencies in the state to curb crime. We will also monitor other security agencies that we collaborate with, to reduce compromise, because where you put your resources, you also look in there”.

The commissioner also promised to join forces with the agency to fish out bad eggs among them, who frustrate their plans to weed out criminals from Abia.

He praised the NDLEA for the arrest of 26 drug suspects at the notorious “Milverton York” in Aba, stressing that he received information, detailing the evils going on there, which he passed on to the NDLEA, resulting in the timely arrest of the drug peddlers.

He also promised to work with security agencies to connect with lawmakers in the state and at federal level, to review punishment of drug offenders and other criminals, in order to deter them from continuing their practice.

Bamidele Akingbade, commander, Abia command of NDLEA, thanked the commis-

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“And then the allottees of those plots will be advised to move in and develop their land and failure to do that we will recommend revocation of those undeveloped lands.

The traditional ruler of Jabi, Yakubu Auta, appealed to the department to give them more time to relocate to their new area.

The monarch also called on the Federal Capital Territory Administration (FCTA) to ensure speedy conclusion of the resettlement exercise to enable them to resume their normal activities.

“We rely on these shanties to feed our families, pay our children school fees and provide them with basic necessities of life.

“All our lands have been taken over by the FCT administration and we are left with no piece of land to farm,” he said.

sioner for his visit to discuss issues that would enhance security in the state, from drug abuse and trafficking perspective.

Akingbade said that Abia has a high preponderance of hard drugs and NDLEA has been doing its best. He called for more support from the state government and residents, to overcome the agency’s handicaps, such as lack of vehicles.

He explained that the 26 suspects arrested by his agency, were part of the agency’s Christmas and New Year efforts to ensure that no drug dealer is allowed a field day in the state.

The commander also urged the state to support his agency’s drive to ensure that laws are reviewed and the legal bench is sensitised, to ensure adequate punishment for drug dealers, not minding the quantity they carry, for deterrence.

Some of the drugs recovered from the suspects, by NDLEA include, heroin, cocaine, marijuana, mixture of marijuana and hot drinks (Monkey tail), packets of tramadol and cocaine hidden and packaged in clothe buttons.

@Businessdayng

Wednesday 22 January 2020

BUSINESS DAY

COMPANIES & MARKETS

17

COMPANY NEWS ANALYSIS INSIGHT

Total sees first gain in over three months to join NSE’s top advancers SEGUN ADAMS

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otal nearly topped N S E ’s l e a d e r s’ chart on Monday after its shares gained almost 10 percent to advance for the first time in over 14 weeks.

Shares of the downstream Oil & Gas Company jumped 9.35 percent to N117 a unit.

This is a record gain for Total since its 10 percent surge on September 26, 2019- two trading sessions before the long drought which ended Monday.

Total has now gained 5.5 percent in 2020 while the market is up 10.69 percent.

As of Monday, it is unclear why the stock almost gained by nearly the most allowable in a day after prior underperformance.

“I would not be surprised if the bulk of what happened was a cross deal. The bulk of Monday’s volume might have been driven by a single investor,” a stockbroker told BusinessDay. “It is nothing special, Total’s financials have not been impressive.”

Total, the leader in the downstream sector of Nigeria’s Oil & Gas industry recorded an uncharacteristic loss in the first nine months of 2019.

The company reported a negative profit of N204.844m which saw earnings per share

plunge from N22.58 to a loss of 60 kobo.

This followed a 2 percent decline in Total’s revenue driven by underperformance of its main segment, Petroleum products, which was down 3.55 percent.

However, Total’s business

MARKETS

Foreign investors worry over political uncertainty amid fragile economy fears DAVID IBIDAPO

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re-election and election periods come with fears of political risk from foreign investors and expected to cool off once elections are over. However, this isn’t the case of the Nigerian political space given the recent ruling of the Nigeria supreme court on the appeal brought by Hope Uzodinma against Governor Emeka Ihedioha on the Imo State Gubernatorial elections.

This has only aroused worries from foreign investors on the continuity of government officers once elected.

This is another challenge for Nigeria, a country which has suffered a significant decline in its foreign direct investment statistics on the back of crawling economy, regulation inconsistency amongst other factors, attracting a meagre $222 million each quarter in 2019 – a low amount for a country estimated by global consulting firm, Mckinsey to need $31 billion in investment each year for ten years to bridge vast gaps in infra-

structure – according to data collated by the National Bureau of Statistics (NBS).

Analysts have noted while speaking with BusinessDay that the judgement is already creating a lot of bad image for Nigeria in a time the country badly needs foreign investment.

The figures of the NBS already shows Nigeria losing FDI battles when compare with frontier peers. The performance of the Nigerian stock market in 2018 and 2019 also reveals that investors confidence is at the nadir, with total market cap of the nation’s bourse shedding some 37 percent in two years.

The importance of foreign investment in the growth and development of an economy cannot be overemphasized. Emerging markets have developed through the investment of large and highly competitive companies.

FDI inflows complemented by infrastructure, increase productivity and generate jobs. Unfortunately, foreign investments have continued

to dwindle at an alarming rate following economic headwinds and now political uncertainties.

With approximately 200 million people and an unemployment rate of 23.1 percent, FDI in Nigeria is not encouraging. Analysis of FDI per Nigerians show that each citizen will get only $1.2 per quarter, which is below the World Bank’s international poverty line of $1.90 per day.

The Supreme court’s decisions in Imo state have raised a lot of dust, with some insinuating the influence of political superpowers, judging the credibility of the Nigerian judiciary system and the effectiveness of INEC in conducting a free and fair election.

“While will I go to the polls to vote when my vote won’t count and political candidates can easily go to the court and get the results changed to their own advantage. This will further discourage Nigerians from participating in electoral processes,” an analyst which pleaded anonymity told BusinessDay.

segment focused on ‘lubricants and others’ (18 percent of total revenue) rose by 4.17

percent in the period.

Analysts at Lagos-based United Capital in an industry report in September last year suggested an industry-wide difficulty confronting Total and its peers.

“Operating challenges faced by Total are not peculiar, as most downstream players seem to be plagued with a major problem; how to stay profitable with prices capped, and costs skyrocketing,” United Capitals said.

Analysts say government’s pegging Premium Motor Spirit (PMS) at N145 per litre is squeezing margin and affecting the performance of downstream oil firms which face a high cost from other aspects of their business.

The arrangement analysts say leaves little room for the players who face different kinds of cost (seen in highcost margins) in a business where revenue can only be

driven by volumes.

In terms of subsidy issues, this remains a challenge to Total’s profitability, as the company (as of H1 2019) is still owed about N19.4bn due from government entities. Moreover, the landing cost (N170 to N200 est.), said analysts at United Capital in the report.

In Monday’s trade, 254,530 unit of Total shares were exchanged, the most in 2020, although a similar volume was transacted on January 8 while 144,360 units were traded two weeks ago.

Law Union & Rock Insurance moved 10 percent to lead gainers while Total followed closely. Other top gainers were Cadbury (+8.5% to N10.85), Caverton (+6.87% to N2.8) and JaizBank (+6.15% to 69 kobo).

On the other hand, NCR led the laggards on Monday.

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Wednesday 22 January 2020

BUSINESS DAY

COMPANIES&MARKETS

Business Event

OIL&GAS

Schlumberger full year revenue remains flat amid job-cutting plans OLUFIKAYO OWOEYE

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il-giant, Schlumberger said it would embark on a c o s t- c u t t i n g measure for some of its operations as the oil company continues to battle with a sharp decline in U.S shale activity.

Schlumberger’s full-year revenue of $32.9 billion was flat year-on-year, with international revenue growth of 7 percent. Its Fourth-quarter revenue of $8.2 billion decreased 4 percent sequentially, with international revenue growth of 2percent.

Net income dropped 38percent to $333 million that is 24 cents per share, in the three months ended Dec. 31, from $538 million, or 39 cents per share, a year earlier.

Olivier Le Peuch, Chief Executive Officer, Schlumberger who took over just last year had promised to improve the company’s margins through job-cuts and asset sales. The company cut more than 1,400 jobs since the third quarter of 2019 and is exploring selling unprofitable businesses, Le Peuch said on a confer-

ence call. His plan calls for an asset-light strategy that emphasizes higher-margin software and technical services.

The company plans to pare its OneStim hydraulic fracturing business, which it expande d through a $430-million acquisition just two years ago. It is cutting the number of active fracking fleets, bringing the total reduction to 50 percent.

It however, forecast 2020 spending by oil and gas companies internationally to rise about 5percent, with revenue in its international division growing at the same pace or higher excluding asset sales.

L e P e u c h , h o w e v e r, warned OPEC-led output cuts would slow investments in Russia and the Middle East in coming months, and its business in Iraq would decline due to U.S.-Iran tensions. North American business will also drop in the first quarter in a low-single digit percentage.

With this result, Schlumberger has joined the list of oil companies feeling the heat as a result of shrinking revenue.

Recently, Exxon Mobil

announced a contraction in earnings amid a disappointing demand outlook; Royal Dutch oil giant, Shell announced that it plans to write down up to $2.3billion in the fourth quarter, an impairment of $500-600 million from deferred taxes and another $100-200 million from well decommissioning; Chevron announced on December 13 that it is writing down the value of its assets by more than $10 billion, a concession that in an age of abundant oil and gas some of its holdings won’t be profitable anytime soon.

US-based Institute for Energy Economics and Financial Analysis (IEEFA) said in a report that the write-down is also an indictment of shale gas drilling in Appalachia as low prices and a track record of not producing any profits have soured investors in the sector.

A recent analysis by IEEFA found that the seven largest Appalachian gas drillers burned through half a billion dollars in the third quarter.

“Despite booming gas output, Appalachian oil and gas companies consistently failed to produce positive cash flow over the past five quarters,” the authors of the IEEFA report said.

COMPANY RELEASE

Afreximbank signs term sheet for $190m facility to Made in Africa Inc

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frican Export-Import Bank (Afreximbank) has signed a term sheet with Made In Africa Inc. (MIA) to provide the company with a $190-million facility which would help finance the acquisition of a African Fabric Holdings BV, Netherlands, also known as Vlisco Group, a company involved in designing, producing and distributing African fashion fabrics.

Kanayo Awan, managing director of Afreximbank’s Intra-African Trade Initiative signed on behalf of the Bank while Kojo

Annan, Chairman and Founder of MIA, during a ceremony held on the sidelines of the Creative Africa Exchange Weekend (CAX WKND) taking place in Kigali.

The credit facility would be given to MIA in two tranches in which one of them would be used to provide working capital to the Vlisco group after the acquisition.

AfreximbanK is a panAfrican multilateral financial institution devoted to financing and promoting intra- and extra-African trade. The Bank was es-

L-R: Jennifer Yeates, assistant director, safety and flight operations, International Air Transport Association, IATA; Allen Onyema, chairman, Air Peace Limited; Samson Fatokun, head of account management, West and Central Africa, IATA, and Patrick Achurefe, quality manager, Air Peace Limited, at the presentation of third IATA Operational Safety Audit, IOSA, certificate to Air Peace.

L-R: Ibilowo Afolayan, vice president; David Majekodunmi, immediate past president; Ashiwaju Temitope, president, and Tunde Daramola, chairman, board of trustee, all of Fs Club, at the Swearing in ceremony of new executive officers of the Club In Lagos

tablished in October 1993

by African governments, African private and institutional investors, and non-African investors.

The Vlisco Group is known for designing, producing and distributing fashion fabrics, especially of the African wax print style, for the West and Central African market and African consumers in global metropolitan cities. Its fabrics have grown into an essential part of African culture, receiving widespread attention from the art, design and fashion worlds.

L-R: Aisha Yusuf Mohammad, representative of first lady of Borno State; Felicia Agubata, immediate past president of APWEN; Funmilola Ojelade, 16th president of Association of Professional Women Engineers of Nigeria; Babagana Mohammed, president Nigerian Society of Engineers (NSE), and Ebierin Otuaro, wife of the deputy governor of Delta State at the Investiture ceremony of Funmilola Ojelade as the 16th President of APWEN in Lagos

L-R: Alex Ogundipe, community manager, National Agency for the Control of AIDS (NACA); Dipo Odujimi, acting chairman of NACA Board; Gambo Aliyu, director-general of NACA, and Lanre Abas, executive secretary, Oyo State Agency for the Control of AIDS (OYSACA), at the closing of the National Agency for the Control of AIDS Empowerment programm for Indigent HIV Vuluerable Persons in Oyo State

Betsy Obaseki (m), group head, business development division, Bank of Industry, with Ubadigbo Okonkwo (4th l), former executive director, Bank of Industry, other BOI representatives along with the Best Performing Business Development Service Providers (BDSP), at the 2019 BOI-BDSP interactive session in Lagos

Wednesday 22 January 2020

BUSINESS DAY

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Wednesday 22 January 2020

BUSINESS DAY

Wednesday 22 January 2020

BUSINESS DAY

FINANCE ACT, 2020 Consumer Markets and Infrastructure Industry Impact Analysis

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CHAPTER 4

4.1 Consumer Markets

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he Consumer and Industrial Markets (CIM) industry comprises the manufacturing and trade sectors of the Nigerian economy, and accounts for about 23.97% of the country’s real GDP3. While this is significant, it is a far cry from the full potential of the industry, considering Nigeria’s large and youthful population and growing middle class. Unfortunately, the sector’s growth has been stifled over the years by the huge infrastructural gap in the country, particularly in relation to power and transportation.

These factors, combined with the tough macroeconomic environment, low access to credit, uncertainty in government policies, dependence on foreign inputs, etc., have limited the CIM industry’s ability to enable the realization of the Federal Government’s economic diversification agenda.

The Federal Government has made some efforts to address the above challenges in recent years. For instance, it introduced the Road Infrastructure Development and Refurbishment Investment Tax Credit Scheme in January 2019, in a bid to address road infrastructure deficit in key economic areas of Nigeria. Also, the recent directive of the Central Bank of Nigeria to Deposit Money Banks to increase their Loan-Deposit Ratio to 65%, with special consideration for operators in retail and consumer markets, is expected to increase lending to players in the CIM industry and possibly, reduce lending rates.

The Finance Act contains additional fiscal measures by which the Federal Government seeks to stimulate the CIM industry, some of which we have highlighted below: 4.1.1 Change to the condition for the tax-exemption of export profits The CITA exempts the profits derived by a Nigerian company from goods exported out of Nigeria, “provided that the proceeds of such exports are repatriated to Nigeria and are used exclusively for the purchase of raw materials, plant, equipment and spare parts”.

In practice, the requirement for repatriation imposes an unnecessary administrative burden on exporters.

The Finance Act intends to address this by simply requiring affected companies to demonstrate that the proceeds were used to procure raw materials, plant, equipment and spare parts, thereby eliminating the need to first repatriate the proceeds and the requirement to use the proceeds only for inventory and plant, equipment and spare parts. This is a welcome development.

However, the Act has yet to address the constraints on export-oriented businesses to declare dividends to its investors. Considering that the intent behind this incentive is to encourage local manufacturing and exportation out of Nigeria, it is important that the provision does not discourage investments by restricting the ability of such companies to distribute profits.

Requiring 100% of export proceeds to be reinvested and utilized as contained in the Finance Act removes the ability of investors in such business to reap the rewards of their labour and productivity by sharing or enjoying profits from such export proceeds.

goods, such as cigarettes, wines, spirit, beer, stout etc., manufactured in Nigeria.

However, such goods when imported into Nigeria does not currently attract ED. The Finance Act seeks to address this disparity by subjecting imported excisable products to ED. Therefore, importers of these products will be required to account for the duty to the Nigeria Customs Service , going forward as required under the Finance Act. The Act, however, exempts categories of imported goods which are not locally manufactured/available from being charged to excise duties.

4.1.4 Value Added Tax (VAT) compliance threshold In keeping with global best practice, the Act introduces a VAT compliance threshold of N25 million for taxable persons in Nigeria. By implication, Small enterprises with cumulative taxable supplies of less than N25 million in a calendar year will not be required to charge output VAT on their invoices or file VAT returns with the FIRS, thereby reducing the compliance burden on such companies.

While this is a welcome initiative, it will potentially affect the cash flow of small manufacturing or trading companies. This is because such companies would be constrained to treat their erstwhile allowable input VAT as an additional business cost, rather than recover it through the inputoutput mechanism.

Nevertheless, the potential impact of this should be moderated by the tax savings that affected small enterprises would enjoy by virtue of their exemption from CIT. 4.1.5 Expansion of the list of VATexempt goods and services The Finance Act expands the list of VATexempt goods in the First Schedule to include locally manufactured sanitary towels, pads and tampons, as well as the following broad categories of “Basic Food Items”: a) Brown and white bread; b) Cereals including maize, rice, wheat, millet, barley and sorghum; c) Fish of all kinds, other than ornamental; d) Flour and starch meals; e) Fruits, nuts, pulses and vegetables; f) Roots such as yam, cocoyam, sweet and

Irish potatoes; g) Meat and poultry products including eggs; h) Milk; i) Salt and herbs of various kinds; and j) Natural water and table water.

In addition, the Finance Act also expands the list of VATexempt services to include tuition relating to nursery, primary, secondary and tertiary education.

The above measures are aimed at alleviating the impact of the increase in VAT rate on the populace.

4.1.6 Tax Holiday for Agric Business The Finance Act amends Section 23(1) of the CITA to grant tax exemption to companies engaged in agricultural production from tax for a period of five year(s), which can be extended for another three years subject to the determination of satisfactory

4.2 Construction Industry The Finance Act introduces a cap on the withholding tax rate applicable to road, bridges, building and power construction contracts up to a maximum 2.5%. This amendment returns the WHT rate applicable to all aspects of building, construction and related activities (excluding survey, design and deliveries) from 5% to 2.5% following a reversal of the 2.5% rate in November 2016 by a Ministerial Order in the Federal Republic of Nigeria Official Gazette No. 168 issued pursuant to Section 81 of the CITA. This amendment contained in the Finance Act addresses the challenges of the recoverability of WHT deducted on payments to construction companies due to the thin margins (typically between 2% and 3%) earned by companies operating in this space.

4.3 Real Estate Investment Scheme The Securities and Exchange Commission (SEC) had in 2017 introduced Regulations for the operation of a Real Estate Investment Scheme (REIS) in Nigeria. According to the Regulations, a REIS may be setup as a Trust (Real Estate Investment Trust - “REIT”) or a Company (Real Estate Investment Company – “REICO”).

REISs are investment vehicles which pool funds from investors comprising individuals, companies, pension funds, institutional investors etc. for investments in real estates, such as airports, housing, shopping malls, etc. as an asset class.

REISs are usually established to acquire, develop and hold portfolios of real estate assets, and do not generally hold single assets. While some

4.1.2 Application of excise duties to excisable imported goods Prior to enactment of the Finance Act, excise duty (ED) was is applicable on excisable www.businessday.ng

performance of such business.

However, the Act does not stipulate a framework for granting this incentive, which is probably better placed in the Industrial Development (Income Tax Relief ) Act (IDITRA) as an incentive that can be granted by the President on the recommendation of the Nigerian Investment Promotion Council through the Minister for Industry, Trade and Investment.

While the decision to exempt agricultural businesses from tax is a welcome development, it is important that a clear framework for implementation is defined.

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REISs focus their investment according to geographic location, others are structured to invest in specific property types.

A REIT, being a pass-through entity, would appear to be the more suitable vehicle for operating a REIS from a tax perspective. However, despite the tax benefits of operating a REIT over a REICO, a trust has certain legal constraints that make it unsuitable for the largescale investments required for financing the development of infrastructure. Due to the variety, size and value of such properties, investors prefer to diversify their risk by acquiring securities or other interests in a REICO, despite the tax limitations of using a company.

The erstwhile tax framework for operating a REICO in Nigeria exposed investors to multiple layers of taxation, arising from receipt and subsequent redistribution of dividends and rent to investors, thereby making investment in a REICO potentially economically unviable.

The tax issues faced by a REICO and the revised provisions contained in the Finance Act are as follows:

4.4 Conclusion

4.3.1 Granting REICOs pass-through status Typically, rental, dividend or any other income received by a REICO on behalf of its investors (beneficiaries) must first suffer tax at 32% (CIT and Tertiary Education Tax) in the books of the REICO, before redistribution to its investors – as dividends. Upon distribution of dividends, a REICO would be statutorily required to deduct 10% WHT. To manage the double tax risk and ensure each investor is taxed in their various capacities under the relevant tax framework, the Finance Act provides for the treatment of a REICO as a passthrough vehicle. As a passthrough, the REICO would be exempted from paying tax on the income received on behalf of its beneficiaries, whereas the beneficiaries of the income would suffer tax under the relevant tax framework on the income received from the REICO. By so doing, the risk of double taxation is significantly minimised. For clarity, any incomes earned by a REICO other than those collected on behalf of investors would be subject to tax.

4.3.2 Exemption from Excess Dividend Tax

A REICO that earns dividend income that has been subject to WHT, which is considered franked investment income, was predisposed, by virtue of its portfolio structure, to suffer double tax on such dividends in the form of Excess Dividend Tax, upon further redistribution of these dividends to its beneficiaries. Such profits, which would otherwise not have been taxed, are exposed to further CIT at 30%. This means that the dividend income is essentially taxed twice.

This risk is especially material since REIS are mandated by SEC to distribute at least 75% of their income.

By amending the CITA provision on “Payment of Dividends by a Nigerian Company” and including an exemption for distributions made by a REICO, this risk, and the obvious disincentive to invest in REICOs, is managed.

A REIS provides a practical, effective and efficient avenue for investing in real estate through the transfer of legal interests and has an enormous impact on economic performance as a result of increased activities in both the capital markets and the real estate sector.

Based on a study conducted on the impact of REITs in the United States, it was estimated that the total economic contribution of the US REITs in 2017 was an estimated 2.3 million full time jobs and $140.4 billion of labour income. REITs directly employed 265,000 full time employees who earned $15.2 billion of labour income in the US. REITS also contributed approximately $19 billion in property taxes in 2017. Clearly, REITs are a significant contributor to the US economy in terms of jobs, economic activities and tax generation. The impact of REITs in other African economies, such as South Africa and India, is also worthy of note.

Nigeria is one of Africa’s largest economies and the prospects for REIS in Nigeria is perceived to be strong due to the high demand for, and undersupply of, real estate assets, and limited institutional investment.

However, the absence of an enabling tax framework had hindered investment in REITs and failed to unlock the potential benefits attributable to REIT activities. It is expected that with supporting tax legislation, a REIS can serve as a tax-efficient “pass through” vehicle for investment in real estate and stimulate growth of the capital markets, the real estate sector and the economy at large.

The amendments contained in the Finance Act should positively impact companies operating in the CIM industry and thus spur the growth of the industry. The taxexemption of small companies and the reduced CIT rate for medium-sized businesses, for instance, will increase their capacity to absorb the shocks in the Nigerian macroeconomic environment and improve their cash flow position. These changes, together with the removal of the restriction on carrying forward of losses and the revision of the “commencement rule”, will reduce SMEs’ risk of failure during the commencement period.

Considering that SMEs generally contribute about 45% of total employment and 33% of GDP in emerging economies4, the expectation is that the above incentives would enable Nigerian SMEs to create employment and wealth, thereby reducing the rates of unemployment and poverty in the country, which currently stand at 23.1%5 and 46%6, respectively.

The clarity provided by the Finance Act on the non-applicability of EDT to dividends

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declared from tax-exempt incomes is also a welcome development for companies whose dividend decisions have been adversely impacted by the literal interpretation of Section 19 of CITA. Also, the EDTexemption of dividend paid from retained earnings that have suffered tax may encourage some companies to increase the proportion of their current year earnings that is reinvested in the business, thereby reducing their borrowing cost and promoting economic growth and development.

The changes to the conditions for the tax-exemption of export profits may indirectly encourage backward integration and stimulate local demand and capacity building for the production of raw materials, plant, equipment and spare parts that would otherwise have been procured abroad. This may result in increased indigenous and foreign direct investment in the industrial markets sector.

The taxation of foreign service providers, the restriction of interest deductibility and

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the reduction of the WHT exemption on interest payable on foreign loans are primarily intended to mitigate the risk of base erosion and profit shifting by multinational enterprises operating in Nigeria.

However, they may result in a reduction in the volume of foreign services and loans, reduce the amount of foreign exchange required to service them and, ultimately, strengthen the Naira.

On the whole, the Finance Act should result in a significant increase in CIT (from foreign taxpayers), VAT and excise duties, and thus boost government’s non-oil revenue. This would, hopefully, reduce the need for increased borrowings to fund the 2020 Federal Government Budget, and change the narrative around Nigeria’s dismal taxto-GDP ratio.

Tayo Ogungbenro and Adetola Ehile Aibangbee, Partners Continues tomorrow

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Wednesday 22 January 2020

BUSINESS DAY

MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

NIMASA generates N16bn into consolidated account in 10 months of 2019 …Creates 7,414 jobs for seafarers amaka Anagor-Ewuzie

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he Nigerian Maritime Administration and Safety Agency (NIMASA), said it generated over N16 billion into the Consolidated Account of the Federal Government between the month of January and October, 2019.

It also increased the number of Nigerian seafarers employed onboard vessels involved in local seaborne trade by 3,179 in 2019 as part of its efforts to reduce the scourge of unemployment in the society.

Given the increase, the total number of Nigerian seafarers that gained employment onboard ships doing business on the nation’s territorial waters increased to 7,414 compared to 4,235 seafarers that were employed in 2018.

Briefing newsmen in Lagos recently, Dakuku Peterside, director general of

NIMASA, who gave insight into the agency’s activities as regards to maritime labour, attributed the rise in the number of employed seafarers to the suspension

of manning waiver formerly granted to shipping companies.

With the suspension, he stated, shipping companies submit a mandatory replace-

L-R: Dakuku Peterside, director general, Nigerian Maritime Administration & Safety Agency, NIMASA; his wife, Elima; Mohammed Danjuma Goje, chairman, Senate Committee on Marine Transport; Chibuike Rotimi Amaechi, minister of Transportation; Babajide Sanwo-Olu, Lagos State Governor; Boss Mustapha, secretary to the Government of the Federation, and his wife, Funmilayo during the NIMASA Corporate Dinner & Merit Awards held in Lagos recently.

NPA collects over 2.3mkg of waste from Nigerian ports in 11 months of 2019 amaka Anagor-Ewuzie

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etermined to ensure pollution-free marine environment for safe navigation of ships calling the nation’s seaports, the Nigerian Ports Authority (NPA), collected over 2.3 million kilogramme of garbage from Nigerian waters in the first 11 months of 2019 (January to November), says the 2019 Activity Report of the Marine Environment Management Department (MEMD).

Within same period, a total of 4,752 vessels called at Nigerian ports in Lagos, Warri, Port Harcourt, Onne and Calabar where the garbage and oily waste were collected.

According to MEMD report, a specialised unit of the Nigerian Maritime Administration and Safety Agency (NIMASA), the NPA also collected about 17,989.71 cubic meters of oily waste from Nigerian ports in Lagos, Warri, Port Harcourt, Onne and Calabar within the period under review.

A breakdown of this shows that from the ports in Lagos (Apapa and Tin-Can Island Ports), which had about 2,356 vessel calls, about 1,964,15.63

ment and training for seafarers that board their vessels.

According to him, NIMASA’s biggest achievement in the area of maritime labour in 2019 was the tripartite

kilogramme of garbage was collected while the volume of oily waste collected stood at 12,529 cubic meters.

Also, at Port Harcourt Port, which received 553 vessel calls, NPA collected about 56,571kg of garbage and 1,041.71 cubic meters of oily waste in the first 11 months of 2019.

The report further revealed that at Onne Port, which handled 905 vessels calls, the NPA collected a total of 168,953kg of garbage and 2,503 cubic meters of oily waste.

In Calabar Port, which recorded a total of 370 vessel calls, the NPA collected about 25,882kg of garbage and 124 cubic meters of oily waste within same period.

Meanwhile, in Warri Port that handled 568 vessels from January to November 2019, NPA collected a total of 49,611kg of garbage and 1,792 cubic meters of oily waste.

BusinessDay understands that the protection of the marine environment from pollution and any other waste are very critical to shipping, which is an international business that is globally regulated by the International Maritime Organisation (IMO), a United Nations organ. www.businessday.ng

Also, the NPA has a joint venture arrangement with African Circle Pollution Management Limited (ACPML), a private Nigerian company, licensed to operate port reception facilities for the collection, storage and processing of ship generated waste on behalf of the NPA. The MEMD report has it that the NPA has acquired reception facilities for MARPOL Annex IV for the three maritime zones of the country (Eastern and Central) Zones.

The reception facilities include Garbage compactor truck, Oil collection tanker, Storage tanks, Oil water separator, Sorting plant, Bailer, and Granulator Modular Laboratory in Lagos, Port Harcourt, Onne, Calabar and Warri Ports.

However, in line with the IMO circular on mandatory documents and certificates carried and used onboard vessels, the MEM Department received, processed and issued Marine Environment Management Mandatory Certificates and other documents to stakeholders.

Here, a total of 299 certificates and documents were processed and issued in 2019 as against 266 processed and issued in 2018.

agreement signed by stakeholders, which NIMASA facilitated.

NIMASA, he said, negotiated and ensured the collective bargaining agreement (CBA), which was concluded and endorsed by the tripartite parties under the National Joint Industrial Council for Seafarers and Dockworkers (NJIC).

“NIMASA, in conjunction with the tripartite stakeholders (Employers and Employees), successfully completed the International Labour Organisation (ILO) reports on Maritime Labour Conventions (MLC, 2006 and Dockwork Convention, 1973). Nigeria’s approach and model of reports has been commended by ILO and recommended for use by other member states of the ILO,” he said.

He stated that the development of Maritime Labour is critical to effective and efficient cargo handling onboard ships, seaports,

and terminal, as well as the maintenance of peace and harmony in the industry.

Meanwhile, at its third edition of the annual Corporate Dinner and Merit Awards held in Lagos at the weekend, NIMASA conferred awards to outstanding maritime industry players and staff.

Here, about 181 staff of the Agency bagged long service awards for 15-30 years of service, with Constance Omagbemi getting the coveted Employee of the Year.

GAC Shipping Company won the overall Shipping Company of the Year, among eight awardees of the Industry Stakeholders Merit Award. They were Total Exploration and Production Company, APM Terminal, and Tin-Can Island Container Terminal (TICT).

Others were West African Ventures, Awaritse Nigeria Limited, and Sea Navigation International Limited.

Customs abandons armoured vehicles as smugglers kill officers in Ogun, Lagos amaka Anagor-Ewuzie

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ollowing the failure of the Nigeria Customs Service (NCS) to put its Armoured Personnel Carriers (APCs) into use in the fight against smuggling, its officers were being killed by dare devil smugglers in Lagos and Ogun States.

Recall that Abdulahi Dikko, immediate past Comptroller General of Customs, had in 2014 procured the APCs for Customs officers in Lagos and Ogun to combat smuggling.

But, since 2015, the APCs have been abandoned while Customs officers are losing their lives.

For instance, in April 2018, a customs officer, Rasheed Abdulsalam, attached to the Federal Operations Unit (FOU), Zone A, Lagos was kidnapped after a fierce battle with smugglers.

Some of his colleagues also sustained various degrees of injuries in the bloody anti-smuggling op-

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eration that occurred at night around Gateway Hotel, Ota, Ogun State.

In January, 2019, smugglers killed another officer, Hamisu Sani and injured an inspector, Tijani Michael, during an ambush at Asero community in Abeokuta, Ogun State.

The operatives attached to the Ogun Area Command of the command were on a routine anti-smuggling patrol in an attempt to secure eight vehicles loaded with smuggled rice.

Another FOU operative, Yakubu Shuaibu, was also shot dead by suspected smugglers in Ogun State in April 2019.

The victim, an Assistant Superintendent of Customs, was killed at Akinrun village, Oja – Odan axis in Yewa North Local Government Area. The smugglers, who ambushed the operatives on patrol, also injured one of them, identified as Joseph.

However, stakeholders have raised alarm over number of Customs officers @Businessdayng

killed by smugglers in the last four years.

They however wondered why the service would allow anti-smuggling vehicles rot away while Customs officers lose their lives.

“Customs management should be held responsible for the death of officers. We should ask why the APCs are not working. Is it because they were bought by his predecessor? Or is it because they could not maintain them? We need answers,” said Sylvester Nnamdi, a clearing agent.

He stated that the death of officers recorded while facing smugglers would have been reduced if APC are put into effective use.

Joseph Attah, National Public Relations Officer of Customs, said Customs has armoured vehicles and they are being put to use.

He maintained that Customs have been going on patrol with Toyota Hilux buses across the country.

“To be Frank, we are making use of the armoured vehicles in our possession.”

Wednesday 22 January 2020

BUSINESS DAY

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MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

Roads to ports in Lagos have become the den of corruption, says Anakebe In 2019, the nation’s port industry witnessed ups and downs in the volume of business activities that took place. Earlier that year, business activities started slowly predominantly due to pre and post election activities but, it ended up with lots of volumes in the second half of the year. In this interview with AMAKA ANAGOR-EWUZIE, Tony Anakebe, managing director of Gold-Link Investment Ltd, a Lagos-based clearing and forwarding firm, shared his thoughts on port activities in 2019. He also listed among others, the major challenges that faced businesses in 2019.

Review of port business in 2019 he first quarter of 2019 witnessed a slow start in port business. This was apparently due to obvious factors such as the preparation for the 2019 general elections, late passage of 2019 budgets as well as lack of political will on the part of government to turn the nation’s economy around.

Despite the slow start, things started looking up in the second half of the year.

Precisely, at the beginning of the third quarter, there was an increase in the volume of business activities that took place at the nation’s ports.

This was largely due to the border closure as well as regular activities in the financial sector. This helped to move the maritime sector forward. With the closure of the land borders to trade, the goods going to ports in neigbouring countries before and subsequently smuggled into the country started coming through the seaports. This also increased the revenue generated by the Nigeria Customs Service (NCS) as the service reached over N1 trillion in the first nine months of 2019.

The problem which the nation’s port industry is having now and if not properly handled would escalate in 2020, was in managing the

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success of the border closure because several ships now anchor on Nigerian waters without berthing due to lack of space. Several terminals were filled to the brim as at the last few days of 2019, and demurrages were being paid by importers.

Alarmingly, the port witnessed congestion, and this was aside from trucks that queue for days on the roads to the ports in Lagos just to have access into the port to lift laden containers.

Given the situation of the roads, the cost of haulage escalated such that it was unbelievable that during the festive rush, 20-foot container was loaded with N1.2 million from Tin-Can Island Port to Ajao-Estate in Lagos while 40-foot container cost as much as N1.4 million.

Now, the question was how much is the freight charge from different parts of the world to Nigeria? This was due to the traffic congestion on the Apapa-Oshodi Expressway.

The management of traffic on the port roads has been zero to nothing especially from the last days of 2019 till date such that the road became the den of corruption. The problem became very bad because the security agencies that were feeding fat from it refused to allow the problem to abate.

The Federal Government would have to come in to

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eral Government should begin to inquire on why importers abandon their goods at the ports. In doing so, it would be discovered that some government policies do not encourage businesses at the port. The truth was that no importer would spend about N10 to N15 million to import a container only to abandon it at the ports.

In this case, shipping companies and government agencies had to forgo some charges to allow such goods to be moved out of the ports.

For instance, when a container stays up to one month in the port, it gets a demurrage of almost N1 million.

Tony Anakebe

handle the problem in Apapa in order to reduce the cost doing of business in the port in 2020. This was because the road situation has been pushing the cost of doing business in Nigerian ports very high. For instance, it took my company more than one week to be able to load a 40-foot container during the festive season.

Activities that stimulated growth in 2019 The policy of the Central Bank of Nigeria (CBN) which mandated banks to lend to businesses helped to open up the economy in the year under review.

It was also sad that the initiative of the Nigerian Ports Authority (NPA) to reduce demurrage and storage free days for importers, which also helped to boost the port business was discontinued.

We discovered that as volume grew in 2019, the service providers could no longer manage the policy.

During that time, the demurrage and storage charges payable by importers were reduced but now, the service providers have reverted to the status quo.

Port congestion For port business to move seamlessly in 2020, the Fed-

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Call-up system The call-up system was technically aborted due to the issue of corruption in the port.

And as far as the security men that manage traffic on the port roads continue to extort the truckers, it would be difficult to solve the gridlock problem in Apapa.

Truckers spend as much as N120,000 to N200,000 per trip to get to the port from Mile 2. During the rush period, several importers got their fingers burnt such that the transportation fare soared ridiculously as people paid as high as N1 million to load a 20-foot container because it was extremely difficult for trucks to have access into the ports.

It took some almost two

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weeks to load and one week to come out of the port.

Festive season There was an upbeat in the volume of importation during the festive season. There was also an increase in the units of cars imported into the country as vehicles that hitherto go to Cotonou port, now comes direct to Nigerian ports.

The volume of general goods imported within this period also increased and these contributed to the significant improvement recorded in the port sector within the last quarter of 2019.

Problems with SON Website The actual thing was that the Standards Organisation of Nigeria (SON) upgraded and changed its web portal. The new portal became very difficult for Customs Licensed Agents and their importers to access. And it ended up posing serious difficulties on agents and also contributed in slowing down clearing jobs that were SON regulated.

Early passage of 2020 budget It was only when the national budget is passed that individuals, companies and businesses would be able to set their own budgets. If the implementation of the budget begins as the President has assured, things would definitely take shape early enough in 2020.

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Wednesday 22 January 2020

BUSINESS DAY

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Wednesday 22 January 2020

BUSINESS DAY

PENSION today

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In Association With

More payout boost for Programmed Withdrawal retirees under CPS

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‘ The framework directs

PFAs to continue paying pensions to retirees that have fully exhausted their RSAs from their statutory reserve, pending implementation of Minimum Pension Guarantee

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etirees receiving their pension through Programmed Withdrawal will see another boost in the payout following a National Pension Commission (PenCom) directive Monday January 20, 2020, that Pension Fund Administrators (PFAs) should implement the second edition of pension enhancement exercise.

The pension enhancement is for Contributory Pension Scheme (CPS) retirees who have accumulated significant growth in their Retirement Savings Accounts (RSAs) and had retired between July 2007 and December 2017.

Accordingly to PenCom, the retirees referred to above are to contact their respective PFAs to confirm their eligibility and complete requisite documentations.

Making a second time of enhancement, PenCom had in December 2017 announced a maiden pension enhancement for this category of pensioners, with subsequent reviews that would be advised by PenCom from time to time.

That directive was contained in a framework on the issue, released by PenCom to PFAs and Pension Fund Custodians (PFCs).

The objective of the framework them was to provide uniform modalities for the implementation of periodic pension enhancement for the affected category of pensioners, using the surpluses generated from the return on investment, and the Retirement Savings Account (RSA) balance as at 31 December 2016 as the basis of the enhancement.

Section 115 of the Pension Reform Act 2014 (PRA 2014) confers on PenCom, powers to make regulations, rules or guidelines as it deems necessary or expedient for giving full effect to the provisions of the Act. Section 7 subsection 1 of the PRA 2014, provides that a contributor on retirement, is expected to withdraw a lump sum from the total amount in his/her RSA, and will use the balance for either a programmed monthly or quarterly withdrawals calculated on the basis of an expected life span or purchase a life annuity from a life insurance company licensed by the National Insurance Commission.

The fact is that the balance in the RSA for those who chose Programmed Withdrawal after the initial lump sum withdrawal remains the money of the account holder, so PFAs’ continue to render quarterly statements of accounts to the holders. Since the PFAs continue to invest the balances in the RSAs, thereby growing the balances in the RSAs, the balances are expected to meet the quarterly or

monthly payment of pensions to the holders on chosen life span as agreed by the managers.

One other issue addressed by PenCom in the framework is the issue of Minimum Guarantee Pension as provided for in Section 84 subsection 1 of PRA 2014. The section provides that all RSA holders who have

contributed to a licensed PFA for a number of years to be specified by the Commission shall be entitled to a guaranteed minimum pension as may be specified from time to time by the Commission.

The framework directs PFAs to continue paying pensions to retirees that have fully exhausted their RSAs from their statutory reserve, pending implementation of Minimum Pension Guarantee.

Section 81 of PRA 2014 creates a Statutory Reserve Fund to be maintained by every PFA as contingency fund to meet any claim for which the PFA may be liable as may be determined by the Commission. The Fund shall be credited annually with 12.5 percent of the net profit after tax or such percentage of the net profit as the Commission may, from time to time stipulate.

Section 82 of PRA 2014 on the other hand, creates a Pension Protection Fund, from where the minimum guarantee pension will be paid. The Pension Protection Fund shall consist of an annual subvention of 1percent of the total monthly wage bill payable to employees of Public Service of the Federation towards the funding of the minimum guarantee pension; annual pension protection levy paid by the Commission and all licensed pension operators at a rate to be determined by the Commission from time to time; and income from investment of the Pension Protection Fund.

It is now incumbent upon PenCom, to immediately put in place modalities

for the full implementation of Minimum Pension Guarantee because what has been introduced through the Pension Enhancement Framework is just a palliative measure.

Consequently, it is expected that the Pension Protection Fund from where the Minimum Guarantee Pension is to be funded, is being adequately funded in line with the provisions of Section 82 subsection 2 of the Act. This is expected so that the PFAs with regards to Minimum Pension Guarantee is limited to the levy prescribed in Section 82 subsection 2 paragraph b.

The above notwithstanding the PFAs are expected to implement the palliative measure, since PenCom’s regulations, guidelines and frameworks are always products of consultations between the Commission and operators in the industry.

The framework on pension enhancement for existing retirees on Programmed Withdrawal under the CPS will address key issues, including whether or not pensioners under the CPS can have increases in their pensions as provided for in the Constitution.

The second issue being that Programmed Withdrawal has no legal or administrative terminal date, so long as the PFA continue to invest the balance in the RSA of the retiree to generate additional fund.

Finally, in the event that the balance in the RSA of a retiree is exhausted, such a retiree will be paid minimum guarantee pension from the Pension Protection Fund.

The objectives of the Scheme are to ensure that every person who worked in either the Public Service or Private Sector receives his retirement benefits as at when due, assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age. The idea of depending on a company or government to take care of you at the end of your life or at retirement is an idea whose time has passed.

The Scheme is structured in such a way that from its commencement, no person shall be entitled to make any withdrawal from his retirement savings account before attaining the age of 50 years except where the employee retires on the advice of a suitably qualified physician or a properly constituted medical board certifying that the employee is no longer mentally or physically capable of carrying out the functions of his office or retires due to his total or permanent disability either of mind or body or retires before the age of 50 years in accordance with the terms and conditions of his employment.

IS NOW RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State.

Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@accesspfc.com Website: www.accesspfc.com

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This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme.

If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

26

Wednesday 22 January 2020

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Insurers seek NAICOM’s support for palliatives to bring down cost of recapitalisation Modestus Anaesoronye

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nsurance industry operators under the Nigerian Insurers Association (NIA) are appealing to the regulator, the National Insurance Commission (NAICOM) to assist the industry secure palliatives to bring down the cost of the recapitalisation exercise.

According to them, the appeal is based on the fact that the cost of the exercise will be too heavy and so need to be reduced to help increase shareholder value.

Yetunde Ilori, director general, NIA who made the remark said that the market expects more cheery news from NAICOM by way of palliatives and incentives especially those that are within the Commission’s control.

Ilori however commended NAICOM on its recent circular on extension of deadline for recapitalization of Insurance and Reinsurance Companies in Nigeria, describing it as a step in the right direction.

Ilori while commenting on recent developments on the insurance industry recapitalization, stated that the Commission had taken a bold step

Sunday Thomas, acting commissioner for Insurance/CEO, National Insurance Commission (NAICOM) and his wife middle, flanked by Insurance Industry Practitioners during the celebration of life of his father in-law, Adebisi Fadejimi Famoriyo, an Engineer who passed on at the age of 85 years, and was laid to rest weekend in Abuja

in the right direction. by acceding to the request of Insurance Companies for extension of deadline for the exercise.

“The Association appreciates the acting commissioner for Insurance, Olorundare Sunday Thomas and management of National Insurance Commission for acceding to our request” “This singular move has

no doubt portrayed the Commission as one with a listening ear. It has proven to be responsive to the yearnings and aspirations of the insurance operators and shown that the interest of the market is uppermost in its considerations”.

She enthused.

S h e n o t e d t h a t by the extension insurance companies now have ample time to comply with

Cornerstone Insurance shares grew 125% to emerge best performing stock in 2019 Modestus Anaesoronye

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ornerstone Insurance Plc shares grew by 125 percent in 2019 to emerge best performed stock on the Nigerian Stock Exchange, according to information from the insurance company.

Building on the impressive results of its 2018 financial year, the company it’s glad to inform its shareholders and the investing public about the achievement made on the company stocks in the 2019 financial year.

Ganiyu Musa, group managing director of the Company who led the top management to the Nigerian Stock Exchange to perform the closing gong ceremony on Wednesday, January 15, 2020, said the insurers we look forward to achieving greater heights this year 2020.

Cornerstone Insurance thinking consolidation in the ongoing recapitalisation exercise Cornerstone Insurance is looking at a bigger picture of a consolidated company post recapitalisation, where the brand is going to compete effectively with benefits of www.businessday.ng

stronger capacity, synergy, robust human capital and higher technical capacity.

This is as the company is already financially comfortable to meet the regulatory requirement for firms in its category in the ongoing recapitalisation exercise in the industry.

Musa had said during a press conference in Lagos that cornerstone Insurance came out from its loss position of N1.7billion in 2017 to N1.8billion profit in 2018, even as the 2019 profit outlook is showing sign of higher profit from that of the previous year, judging from its 2019 third quarter report.

the directive instead of having to go into the exercise without adequate preparation and diligent execution. This will also be in support of a seamless reinsurance arrangement which is an annual arrangement. It would have been absurd to conclude the recapitalization exercise by midyear as this might have caused a lot of disruptions.

“Now that the Commission has provided the needed impetus for members to go about the exercise, it is my appeal that member companies should give the exercise all the seriousness it deserves.

“We need to appreciate the Commission’s gesture by working hard to achieve the recapitalization threshold set for our various businesses. That

way, we will encourage the Commission to churn out more market friendly policies” she averred.

“For our members, the onus is on them to take advantage of the new date as some of the initial challenges thrown up by the first date have been addressed with the extension granted. It is our hope that whatever recapitalization option they have to take, the new timeline will give them ample opportunity to do so. The NIA wishes members success in their recapitalization plans and pray for a hitch free exercise”.

It will be recalled that in May last year, the Commission increased the capital levels for Insurance and reinsurance companies operating in the market as follows: Life Insurance business from N2billion to N8billion, General Insurance Business from N3 Billion to N10billion, Composite Insurance Business from N5 billion to N18Billion and Reinsurance companies from N10billion to N20billion with a deadline for the exercise set for June 2020.

With the latest development, Insurance companies now have December 2020 to comply.

Moroccan insurance industry expected to report sustainable growth in 2019

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he Moroccan insurance market saw sustained growth in 2019, estimated industry professionals based on increases observed over the previous two years.

Final figures for 2019 are pending from the Moroccan Federation of Insurance and Reinsurance Companies (FMSAR) and the Insurance and Social Insurance Supervisory Authority (ACAPS).

Estimates are that the life branch continued to outperform the market in 2019 with an increase of around 6 percent to 9 percent. Total life insurance turnover is estimated at around MAD 20.5bn ($2.1bn) in 2019, according to a report by La Vie Eco.

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Non-life insurance growth was more limited and is estimated to have seen premiums written increase by 4-7 percent.

Total non-life premiums are estimated at over MAD24.5bn in 2019.

According to the latest available official data, life insurance business expanded by 9.87 percent to MAD10.4 bn for the first six months of 2019.

In the non-life segm e n t , t h e p re m i u m s written stood at around MAD14.3bn in the first half of 2019, representing an increase of 7 percent.

Insurance industr y players believe that the market mainly benefits from increased awareness of insurance among the public and the im@Businessdayng

portance of preparing for retirement.

However, insurance business in the country is showing slight signs of slowing down. This is the case with motor business which saw premiums grow by 7.9 percent for the first six months of 2019 compared to double-digit growth rates achieved in previous years.

In addition, premium growth does not necessarily mean profitable operations. According to insurance executives, the rise in claims, particularly in the automobile industry, increase in management fees and the poor performance of investments weigh on the financial results of the insurance market.

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BUSINESS DAY

27

insurance today E-mail: insurancetoday@businessdayonline.com

On recapitalisation, we have firm assurances from our shareholders that they will bring the money – LASACO MD LASACO Assurance Plc recently turned 40 years, having weathered the storm of the harsh operating environment, different regulatory policies and also continually delivering value to its shareholders, while remaining a corporate institution that is contributing to economic growth. Segun Balogun, managing director/CEO of the Company in this interview with Modestus Anaesoronye shares his thought on where the coming is coming from, where it is now and what it plans to do in the future. Excerpt: LASACO is 40 years n ow, w h a t d o e s t h i s mean for the company and where are you going from here? t 4 0 , we a re happy that the company is growing and we have just elevated the company headquarters to a modern building that can compare to any modern office anywhere in the world.

Today, we have a new and rebranded LASACO. We have branches in South West, South, North and Abuja. We are not too present in the East but this is one of our next growth areas where we may begin to expand to soon.

The insurance industry is embarking on a recapitalization, what is LASACO doing about this?

NAICOM came up with a paid up capital requirement, which is higher than what the initial tier proposal was required of us. But for us at LASACO, what we have done is one, to reconstruct our shares.

We currently have over 7 billion units of shares that have been to issued over 37,000 Nigerians at 50 kobo. So we said, to achieve the recapitalisation plan, we will reconstruct the shares to the extent that the number of shares that have been issued becomes less. So instead of over 7 billion shares that has been issued, we want to have one third of that which is about 2 billion plus. SO, we still have almost 8 billion of shares unissued. In addition to reconstructing the shares, what that also means is that if you have one unit of shares of LASACO, instead of the one unit being valued at 30 kobo or 40 kobo, it means one unit of shares of LASACO will now be that amount multiplied by three. At the par value, 50kobo multiplied

A

by 3 is N1.50kobo for one unit of shares. At the price of 30 kobo which it is currently trading, the value of share of LASACO will now 90 kobo. What this means for investors is that instead of you getting dividend of 3 kobo like we paid in 2017, 4 kobo like we paid in 2018, it then means that what will be paid will be more significant. Instead of paying 3 kobo, it will be 9 kobo, instead of 4 kobo, it will be 12 kobo and this will be more meaningful.

Even at 3 kobo that was paid, if you look at all the quoted companies in Nigeria, you don’t have many companies paying as much as 10 percent of the value of shares as dividend. If the value of your share is 30 kobo and you pay 3 kobo, that is 10 per cent.

If the value of your share is 40 kobo and you pay 4 kobo, that is 12.5 percent. The big companies of Nigeria that their shares are priced at N30, N40, N120, N150, the kind of dividend they pay, by the time you put the dividend payment over the value of the shares, it is usually not as high as 10 percent or 12.5 percent.

Yes, you can say, this is in kobo, but in terms of the ratio of the dividend we are paying over the stock, its more meaningful. You are getting better returns on your investment than the bigger ones.

After the reconstruction, we decided to increase the number of units of shares that we have. Like I said, we have 7 billion shares which will reduce to a little over N2 billion. We also said we should increase the authorized share capital from 10 billion units to 20 billion units. Just today, we got approval from the Corporate Affairs Commission, saying that our authorised share capital has been increased from www.businessday.ng

Segun Balogun

authorized share capital to accommodate the increase we want to do. The issue is where the money will come from. So what we have done as a company because have about

10 billion units to 20 billion units.

What this means is that we have almost 18 billion units of shares to issue. The issue or challenge is not increasing the

‘ to offer We are going rights and also do private placement because there are individuals and companies that have shown interest to buy into LASACO ‘

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Wednesday 22 January 2020

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37,000 shareholders. Our top 50 shareholders control about 70 percent of the shareholding and we have top 10 controlling almost 60 percent. What we have done is to engage these top 10 shareholders that this is the plan. We are going to offer rights and also do private placement because there are individuals and companies that have shown interest to buy into LASACO. What we were waiting for is this document so that we can then go to the Securities and Exchange Commission seek for approval to come to the public to raise money. The top 10 shareholders have told us that they are with us all the way because we give them good dividend. They @Businessdayng

said they are just waiting for us to come to the public and say you are selling your shares and they will bring in the money. So we have very good assurances that the current major shareholders of LASACO will bring money to fulfill the recapitalization plan.

But for any good manager, we will always have contingency plan. We also have contingency plans that are very clear and possible, that in case of any failure which we don’t expect because we have firm assurances from the shareholders that they are bringing more money, so that we don’t have a situation that we are not fully recapitalized. There are also other plans on ground.

With respect to recapitalization, we have N4 billion and we are going to N18 billion because we are a composite company that operates both life and non life. So, we are looking for N13.4 billion and we have firm assurances that shareholders will bring in money.

Good enough, NAICOM extended the deadline to December 2020.

Our plans are to work as if the deadline is June 2020. So by April, 2020, we should be done with our recapitalization plan.

Post recapitalisation, what is the future plan of LASACO? The future plan of LASACO is to diversify. For insurance companies all over world that are making good returns, it is not just insurance operations alone. They diversify into other sector of the economy to augment the income that is made from insurance. Our future plan is to be a player in the hospitality and real estate industry. So in the next couple of years, you will see LASACO play in hospitality, real estate and the digital world.

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Wednesday 22 January 2020

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

The upside of being an underdog SAMIR NURMOHAMED

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hat happens when we think that others expect us to fail?

My research shows that these “underdog expectations” can actually motivate people to try to prove others, especially those they find less credible, wrong — leading them to perform better.

In one study, I surveyed 371 employees in a consumer packaged goods company in the U.S., asking about the extent to which they were seen as an underdog by others. Seven weeks later, their supervisors evaluated their performance. I found that experiencing underdog expectations was a significant predictor of performance, even after controlling for employees’ own expectations for success.

In other words, people who believed that others did not expect them to be successful were more likely to receive higher performance evaluations from their supervisors.

These results established a positive correlational link between underdog expectations and work performance in a corporation. To assess causality in a more controlled environment, I conducted a follow-up experiment with 330 online workers, asking them to do a computer task that involved clicking on rapidly moving circles. They were told that someone was observing their performance on the task. After participants completed a 15-second practice round, they received one of three messages — stating underdog expectations, high expectations or neutral expectations — from the observer; unbeknown to them, the expectations were randomly assigned to them. Participants then performed the task, which was five minutes long and required a combination of effort and focus to do effectively. I found that those who experienced underdog expectations performed the best — above and beyond those who received high or neutral expectations.

Why do underdog expectations lead individuals to perform better? There are of course countless stories about underdogs being successful. One recurrent theme among these stories is the desire to prove others wrong.

To understand whether this motivation explains why underdogs perform effectively,

I ran another lab experiment with 156 students in a business school, having them complete a negotiations simulation. Before they started negotiating, my team told them that researchers made predictions on their likelihood of negotiating effectively. Once again, we randomly assigned them either underdog, high or neutral expectations before they prepared and negotiated with their counterpart.

After the negotiation, we asked them questions about their desire to prove others wrong, their self-confidence and their assertiveness.

Again, I found that those who experienced underdog expectations performed better than those who experienced high or neutral expectations. In addition, I found that, as opposed to having greater self-confidence or being more assertive, the desire to prove others wrong was what explained why those experiencing underdog expectations performed better.

Of course, underdog expectations do not always translate to success. There are many more examples of people failing to overcome the low expectations others set for them. So when does being an underdog lead to success rather than failure?

I wondered whether it has to do with what we think about the people holding the expectations of us — whether we are driven to prove others wrong www.businessday.ng

only when we don’t trust their opinions in the first place.

I ran a final study with 589 online workers to find out whether someone’s credibility was shaped when their low expectations boosted someone else’s performance. In the study, I reran the computer task of clicking on a target, but with a twist: Before participants received randomly assigned underdog, high or neutral expectations, they were also randomly assigned information about the observer’s credibility.

Specifically, participants in the high-credibility condition read that the observer was a high performer in the same task and had an excellent track record of predicting others’ performance.

In the low-credibility condition, participants read that the observer was a poor performer and was often incorrect about others’ performance.

The results supported my predictions: Underdog expectations boosted performance only when the perceived credibility of observers was low. What was striking, however, was why this happened. Contrary to what I thought, underdog expectations from both less and more credible observers motivated workers to aim to prove others wrong. But this motivation only translated to better performance in the face of lesscredible observers, whereas it backfired when it came from more-credible observers.

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It appears that trying to prove highly credible people wrong may have fostered a sense of anxiety, which undermined subsequent performance. In contrast, people experiencing underdog expectations from less-credible observers were able to harness the desire to prove others wrong toward the task and perform successfully.

Do these results mean that leaders should set low expectations for their team to try to boost performance? Of course not. But they do suggest a few things to keep in mind when you’re trying to motivate yourself or your team.

First, build your own confidence by identifying the skills and qualities that can help you succeed. In all my studies, individuals had a requisite level of self-confidence and maintained this despite experiencing underdog expectations.

Employees should know that you believe in their potential for success, even if others do not.

One way to achieve this is by providing resources and training to build their confidence and promote their success.

Second, if you want to stay motivated in the face of underdog expectations, you need to think about why those expectations aren’t credible. Consider why observers who see you as an underdog might not have an accurate picture of how effective you are or why you can be successful. If you are the leader, @Businessdayng

you want to make sure your employees know that you think others’ low expectations are not credible. You can even undermine their credibility by pointing to ways in which they were wrong in the past.

Third, it’s important to recognize that trying to prove others wrong is a double-edged sword.

Leaders, if you want your underdogs to be successful when expectations are credible, you may need to ensure that proving others wrong does not cultivate anxiety or detract from the attention required to succeed at the task at hand. Prior research has shown that reappraising anxiety as excitement, preparing for potential setbacks or developing a preperformance ritual can help manage the anxiety that proving others wrong may sometimes create for employees.

Our world is full of feel-good stories of underdogs being successful. My work suggests that more people can achieve success when they think that others view them as underdogs — if they view others as less credible and channel their motivation to prove them wrong toward performing better.

Samir Nurmohamed is an assistant professor of management at the Wharton School at the University of Pennsylvania.

Wednesday 22 January 2020

BUSINESS DAY

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TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Dangote keeps ANAMMCO, auto industry alive on Shacman deals

JLR new seat optimises passengers comfort on long journeys

MIKE OCHONMA Transport Editor

MIKE OCHONMA

T

he assembly of Shacman vehicles by Transit Support Services {TSS} in partnership with A NA M M C O, w h i c h prompted the revival of the popular plant in Emene, Enugu, has once again, received a huge boost from the Dangote Group following the placement of a fresh order for Shacman heavy duty vehicles assembled at the plant.

Dangote group has since the plant re-opened five years ago after a period of skeletal operations, taken delivery of no fewer than 1,500 units of various models of the brand making the multinational the biggest and most consistent buyer of Shacman trucks, particularly the tractor units.

Shacman is widely regarded in China as the best in heavy duty vehicles, and the products are being assembled on contract basis by the Enugu plant for TSS (the brand’s representative in Nigeria).

In the latest purchase, the group placed an order for about 650 trucks; the production of which has raised the tempo of activities in ANAMMCO as plant workers and local input suppliers strive to meet deadlines.

Two years ago, the group placed an order for about 350 units of the heavy duty trucks assembled at the plant all of which were of the 8x4 tipper truck model said to be among the best from the brand’s product line-up, were delivered to the Dangote Oil Refinery in the Lekki Free Trade Zone (LFTZ).

TSS and ANAMMCO manage-

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Line-up of Shacman HDT assembled inside the ANAMMCO auto assembly plant in Emene, Enugu, South East Nigeria

ments believe that the current patronage will guarantee that the factory will continue to bustle with production which has been sustained since the assembly of Shacman commenced early in 2015 with an official roll-out ceremony at the plant.

At the event, and since then, auto industry analysts have been commending ANAMMCO/TSS partnership and the unprecedented private sector encouragement from Dangote as some of the gains of the federal government’s automotive policy that kicked-off in 2014.

Among other goals, the policy was designed to revive ailing assembly plants, attract fresh onshore/off-shore investments, encourage patronage from within and discourage importation of fully

built vehicles as well as stimulate development downstream.

Describing the Dangote support as very encouraging and exemplary, the managing director of TSS which is a division of ABC Transport plc, Frank Nneji, said that the impact of the patronage is being felt not only in ANAMMCO, but also in the related downstream where economic activities are being stimulated gradually.

Beyond the recall of the plant hands laid off while the near dormancy at the factory lasted where re-commencement of production has started, has also impacted on related ventures in the sector.

This has prompted industry watchers to consider the upsurge in production activities a boost to the policy also called the Nigerian

Automotive Industry Development Plan (NAIDP).

A source at ANAMMCO observed that the return of sustained production is having a multiplier effect on the country’s economy in general and that with purchases like Dangote’s, more income is generated and circulated with a lot of impact in the ancillary sectors of the industry.

To meet the Dangote orders and purchases from other trucks buyers that have followed the group’s lead, many heavy duty Shacman vehicles are assembled every week at the Emene plant.

A subsidiary of ABC Transport, Transit Support Services assembles a wide range of commercial vehicles like heavy and light duty trucks, fire engines and buses.

BMW, Mercedes, VW beat global sales slump MIKE OCHONMA

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erman car giants Volkswagen, BMW and Daimler have posted strong sales growth in the face of a contracting global market in 2019, shifting massive numbers of sport utility vehicles (SUVs) ahead of a pivotal year for electric mobility.

While ratings agency Fitch estimated global unit sales shrank four percent year-on-year, figures released in recent days showed BMW gaining two percent, Daimler’s Mercedes-Benz 1.3 percent, and the 12-brand VW group flagship brand 1.3.

But even with growing sales, carmakers plan over 40,000 jobs cuts in the coming years, with Opel the latest to announce 2,100 voluntary departures Tuesday.

In the fierce race to be worldwide number one in high-end cars, Daimler’s nose remained ahead for the fourth year in a row.

The Stuttgarters shipped 2.34 million Mercedes-Benz, while Munich sold 2.17 million BMWs

in all-time records postings for the automakers. Both premium manufacturers’ figures were massively boosted by China, with Mercedes sales there growing 6.2 percent and BMW 13.1 percent year-on-year.

“German manufacturers are well positioned with their premium brands,” said Ferdinand Dudenhoeffer, industry expert at the University of Duisburg-Essen.

But VW also highlighted strong performance in China “thanks to the strength of its brand. Electric cars have to hit the roads, otherwise www.businessday.ng

the fines will land and they will be painful. More keenly touched by the US-China trade conflict were American manufacturers like Ford and General Motors, Dudenhoeffer said.

For all the German carmakers, 2019 brought new strides for the dominance of SUVs in sales figures.

Sales of BMW’s “X” range grew 21 percent, now making up around half of total deliveries.

At Daimler, one in three Mercedes sold was an SUV at almost 784,000 units, while VW’s Seat and

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Porsche subsidiaries also shipped more of the models.

“It’s perfectly clear that SUVs drive sales and profits for the carmakers,” said Stefan Bratzel of the Center of Automotive Management.

But demand for the high-margin gas guzzlers will squeeze manufacturers as they scramble to reduce carbon dioxide (CO2) emissions in response to new EU rules.

From this year, automakers must reach average CO2 emissions across their new vehicle fleets of below 95 grammes per kilometre, on pain of harsh fines from 2021.

Looking to reduce their climate impact, manufacturers have dozens of electric and hybrid models lined up for release in the coming years.

In particular focus is Volkswagen’s “ID.3” compact car, presented to great fanfare at last September’s IAA trade show as the electric counterpart to the company’s stalwart Golf while BMW and Daimler are placing most of their chips on hybrids rather than all-electric power. @Businessdayng

aguar Land Rover is developing the seat of the future which is a pioneering shape-shifting system designed to improve customer wellbeing by tackling the health risks of sitting down for too long.

The ‘morphable’ seat, being trialled by Jaguar Land Rover’s Body Interiors Research division, uses a series of actuators in the seat foam to create constant microadjustments that make occupants brain think they are walking, and could be individually tailored to each driver and passenger.

More than a quarter of people worldwide or 1.4 billion are living increasingly sedentary lifestyles, which can shorten muscles in the legs, hips and gluteals causing back pain. The weakened muscles also mean you are more likely to injure yourself from falls or strains.

By simulating the rhythm of walking, a movement known as pelvic oscillation, the technology can help mitigate against the

health risks of sitting down for too long on extended journeys with some drivers doing hundreds of kilometres per week.

Steve Iley, Jaguar Land Rover chief medical officer, said: “The wellbeing of our customers and employees is at the heart of all our technological research projects.

We are using our engineering expertise to develop the seat of the future by using innovative technologies not seen before in the automotive industry to help tackle an issue that affects people across the globe.”

Jaguar and Land Rover vehicles already feature the latest in ergonomic seat design, with multidirectional adjustments, massage functions and climate control fitted across the range.

Iley has also issued advice on how the occupant can make seat adjustments to ensure the perfect driving position, from removing bulky items in your pocket, to shoulder positioning and from ensuring your spine and pelvis are straight to supporting your thighs to reduce pressure points. View the video here.

The research is part of automaker’s commitment to continually improving customer wellbeing through technological innovation.

Previous projects have included research to reduce the effects of motion sickness and the implementation of ultraviolet light technology to stop the spread of colds and flu.

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Wednesday 22 January 2020

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Mercedes makes incursion into MPV segment

Apapa station, NRC buildings demolished for rail project

MIKE OCHONMA Transport Editor

…CCECC delaying removal of Flour Mills plc

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he market is getting more exciting following the introduction of the V-Class which is the latest Mercedes model offering into the ranks of other existing MPVs in the local market.

Since its introduction, the Mercedes-Benz V-Class has gone on to revolutionize the multi-purpose vehicle (MPV) segment with its high-class appeal, comfort, efficient driving pleasure and safety.

Dealership sources say it caters to a growing customer group who are in need of a generous amount of space but never wanted to drive an MPV because style, a sense of well-being and ride comfort have been lacking.

The V-Class easily makes for a saloon for up to 8 people. The philosophy around the design is a combination of functionality, comfort, and style in a way no other vehicle in this segment can offer.

Its exterior is striking with an emotional and dynamic appearance, while the interior comes in a modern style and with high-class appeal, putting great emphasis on comfort. Other highlights in the V-Class include Mercedes-Benz intelligent drive, highly efficient engines and more personalized driving

MIKE OCHONMA

P

systems.

The exterior of the V-Class has a broader appearance and an even stronger visual presence thanks to its new front end. This comes courtesy of a new bumper design with striking cooling air inlets and a new diamond structure in the radiator grille.

The Mercedes star is positioned centrally in the radiator grille and framed by two slats in silver. The V-Class is the first vehicle in the segment which provides all light functions in LED technology as an optional feature. The all-LED headlamps with Intelligent Light System make for a visual highlight as it also enhances safety. The LED headlamps come with 34 LEDs in each headlamp that give the vehicle an un-

mistakable appearance, and compared with conventional systems, offer much improved vision in the dark.

We ststar Ass o ciate s Limited, Authorized General Distributor of MercedesBenz in Nigeria is offering the all-new facelift V-Class specially for the comfort of all travels.

Inside, the interior redefines the meaning of spaciousness in an MPV. Following the trend of modernity and clarity, the V-Class presents itself with new air vents in a sportier turbine look as well as new dials in the instrument cluster.

New upholster y and equipment colour tartufo nappa leather makes a modern and elegant statement with a total of six different upholsteries in light and

dark colors to choose from.

Modern and elegant can also be used to describe the new trim element in twin-stripe look which is used on the instrument panel and side paneling.

The trim elements in the piano lacquer, ebony wood, carbon fibre and brushed aluminium looks remain.

The seating in the rear allows numerous configurations to meet any requirements.

As standard, the MPV is equipped with four individual luxury seats with armrests in two seat rows.

Thanks to improved technology and operating logic, they can be folded forward intuitively to afford fast and easy access to the rear. An optional folding table can be installed between the individual seats in the first row.

SHACMAN Trucks Tian Chao in Nigeria on expansion visit MIKE OCHONMA

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ue to the expanding market of SHACMAN heavy and medium duty trucks and road tractors in Nigeria through its franchise company, Transit Support Services Ltd (TSS) and Tian Chao, general manager of Shaanxi Heavy Duty Automobile Import & Export Co. Ltd, China, manufacturers of SHACMAN is presently on a visit to its distributor, TSSL and other major customers in the coming week.

As part of his itinerary, Tian will meet with the dealers and customers of the SHACMAN brand as well as discuss plans to build a Complete-KnockDown (CKD) plant in collaboration with Transit Support Services Ltd (TSS) in Nigeria which will con-

General Manager, Shaanxi Heavy Duty Automobile Import & Export Co. Ltd, Mr. Tian Chao

tribute to the development of the country’s automobile sector and encourage technology transfer between China and Nigeria.

The truck’s held its maiden assembly line opening ceremony at the ANAMMCO assemwww.businessday.ng

bly plant in January 2015 with over 1,800 trucks produced from the factory.

This marks a significant breakthrough in the Nigeria localization project, since the brand’s entrance into the Nigerian market through Transit Support

Services Limited as SHACMAN Nigeria; till date over 3000 SHACMAN vehicles have been sold.

Tian’s visit will afford him an overview of the Nigeria truck market with a view to increasing investment in the country.

Shacman has since inception manufactured over 1,000,000 vehicles of different varieties including military trucks that have successively participated in the 35th, 50th, and 60th anniversary ceremonial military review on China national day.

It is one of the Chinese manufacturers to have advanced in the localization project since the vehicle assembly policy in Nigeria.

Shacman Nigeria operates through a network of dealers and showrooms in Lagos, Benin, Owerri and Abuja.

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roperties belonging to the Nigerian Railway Corporation (NRC) including the old railway yard inside the Apapa seaport complex and buildings located the rail compound near the Ebute Metta Junction (EBJ) occupying the identified right of way (RoW) has been pulled down by the federal government to pave the way for the standard gauge rail line being constructed by the China Civil Engineering Construction Corporation (CCECC).

Meanwhile, the pro-

management of CCECC. Recall that in July 2018, the federal government directed CCECC the contractor handling the project to extend its work from Ebute Meta to Apapa measuring about five kilometres as part of measures to facilitate the movement of goods from the Lagos seaports to other parts of the country by rail.

The decision to bring it forward was informed by the need to address the near stagnation of import and export business due to the gridlock on roads leading to Apapa and the Lagos seaports. Although the extension to Apapa seaport

Functional rail connectivity panacea to Apapa gridluck

posed demolition of some parts of Floor Mills which is located on the railway properties is yet to commence and as a result because of the slow pace of demolition exercise. The minister did not confirm the exact date the project will be completed.

As result of the snail speed, Amaechi said a joint stakeholders meeting between the Federal Ministry of Transportation, CCECC, the management of the Nigerian Ports Authority (NPA) and TEAM Nigeria which is the technical advisers of the Lagos-Ibadan standard gauge project is slated to take place this week to address some of the challenges inside the port complex.

Briefing newsmen at the end of the Monday inspection, he said that, the worst pace of work he encounted is between Ebutte-Metta to Apapa port complex where he regretted that the contractors has ben giving all sorts of excuses and that a result a meeting will take place between him and @Businessdayng

is in the second phase of the standard gauge railway project.

He said that the intended massive rail station to be built inside the Apapa port when completed would not basically focus on passengers but for freight purposes, where goods can be stored after clearance from the port. It will have a warehouse, hotel and a shopping mall to serve Apapa port and the seaport.

The minister said that the old facility is not the size of station that is ideal within the seaport going by the increasing number of economic and commercial actitvities at the port.’’What we are looking for is a bigger station and this is too small, since we have the whole property down to the road’’.

Two years ago, the minister had said, “We have come to inspect what the Apapa station looks like.

The station will be moved backward to the centre of the road since all the property around here belongs to the NRC”.

Wednesday 22 January 2020

BUSINESS DAY

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BANKING CeBIH and quest for epayment growth through Open Banking

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ore banking convenience is coming the way of bank customers. A new system is being introduced where bank customers with different bank accounts can now have opportunity to share their financial details.

This is contrary to the traditional system where many bank customers with multiple accounts are often faced with the challenge of having to visit the branches of each bank, or use their different mobile apps before they can access or use their money in any of the different bank accounts.

Open Banking addresses such challenge by creating an arrangement that gives a customer the opportunity to share his financial details in different financial institutions with approved third parties, hence making it possible to access and utilise those details via third party apps.

Under Open Banking, banks open up their application programming interfaces (APIs), to allow third parties to access financial information needed to develop new apps and services. This provides account holders greater financial transparency options.

APIs are a set of codes and protocols that decide how different software components should interact. They essentially allow different applications to communicate with one another.

According to PwC Nigeria, “Open banking means that no matter how many accounts and financial products a customer has, he/she can view and manage them from a centralised location. Open Banking lets customers have increased control over their data while supporting the innovation everyone yearns to see more of”.

As a result, the Committee of E-Business Heads, (CeBIH), has identified Open Banking as a critical factor in its quest to boost electronic payment growth through collaboration and

innovation.

“As industry practitioners, we have identified digital partnerships and open architecture as a major recipe for accelerating growth in payments”, said Stanley Jacob, CeBIH Chairman, at the annual retreat of the group held in Abeokuta, Ogun State.

CeBIH comprises of the upper echelon of electronic business industry practitioners in all banks, with the objective of promoting e-banking services in line with global best practices, whilst driving adoption through right policies, standards, technologies and public awareness.

CeBIH, Jacob stressed, believe that with Open Banking, the industry will “merge to surge”, there will be free flow of data following best practices and the cost-to-serve will be considerably lowered for the customer.

“We are working closely with the Trustees of Open Banking Nigeria, we are also advocating that the regulators continue to create an enabling environment for this to thrive, the overall objective is to create more value around the payment lifestyle of the customer and build an ecosystem driven by a healthy competition”, he added.

In line with this mission to drive Open Banking in Nigeria, the CeBIH annual retreat, with the theme, “Payment 2020plus: The Next Frontiers of Payments’, featured a session on Open Banking which discussed the prospects and requirements of Open Banking in Nigeria as well as benefits for customers and service providers in the electronic payment ecosystem.

Global Trends Open Banking started in United Kingdom in 2016 when the United Kingdom Competition and Markets Authority (CMA) directed the nine biggest UK banks to allow qualified thirdparty providers access to customer-permitted data.

The directive came into effect on January 13, 2018, with implementation based on the use of standards and systems created by Open www.businessday.ng

Stanley Jacob, chairman, CeBIH

Banking Limited, a nonprofit created especially for the task. Presently there are 202 regulated providers who are enrolled in Open Banking in the UK. Many of them provide financial apps that help manage finances and also consumer credit firms who use Open Banking to access account information for affordability checks and verification.

Following the example of the UK, about 47 countries have also launched Open Banking initiatives either through collaborative efforts or through legislation. These include Nigeria, where Open Banking Nigeria, a not-for-profit group was formed to drive the development and adoption of Open Banking standards in the country.

How Open Banking empowers the customer Driving the global trends towards Open Banking is the way it empowers bank customers to get better deals and the accompanied opportunities for collaboration and innovation among industry players.

Elaborating on this while speaking at the CeBIH retreat, Olayinka Oni, chief digital officer, Sterling Bank said, “Open Banking is a col-

laborative way in which you have to share your data. The sharing of the data is at the discretion of the customer not necessarily anybody else. So the customer is the one saying I want to share my data with this particular person and I am able to enjoy whatever service that person is offering.

“So whether I bank with

‘

The customer’s needs are diverse and often times as banks we cannot create all of these solutions as it were but though Open Banking I can definitely serve my customers a lot more

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‘

HOPE MOSES-ASHIKE

Bank A or Bank C, I want a situation where I am able to then say, all of my information that sits in these several banks, present it to me and even match that data into a single point. The customer is really in control and it is basically to ensure that the customers can control their destiny”, “Open Banking will drive new iteration of services as well as enable all kind of faster payment and easy payments. Customers will then be able to provide their accounts data and make it fluid and available as required. It means I can share my personal data and basically use it to drive authentication services.”

Speaking further, he said, with Open Banking customers will be able to communicate with the banks through Google, Alexa and other internet based cognitive services.

How Open Banking drive partnerships Open Banking, according to Ope Adeoye, a Trustee of Open Technology, will facilitate the partnership needed to drive innovation in the e-payment space, especially partnership between Fintechs and banks Speaking at the CeBIH retreat, he said: “In trying to do partnership with banks, it is so hard to execute a partnership with Bank A and think you can do the same with Bank B equally easily. You probably have to go through a painful process bank to bank. By the time you do that with 23 banks, it will probably take you four to five years to get your product or initiative to the market. The thinking then is that if such common standards existed, then innovation can move faster, and this pain is not just on the Fintech side, even the banks as well.

“As a bank you will like to partner with a vendor, and when you think of the fear of backing it internally, IT, operations, those things just slow you down as a bank.

“So my thinking is that if we have Open Banking in Nigeria as well, a lot of the innovations that we thought were not possible within the time that you have, you @Businessdayng

can now free your mind as an organisation to explore those things.”

Speaking on benefits of Open Banking and its impact on financial inclusion, Oni of Sterling Bank said, “The customer’s needs are diverse and often times as banks we cannot create all of these solutions as it were but though Open Banking I can definitely serve my customers a lot more.

“For example in UK where every bank is expected to sign on to open banking, no matter the need of the customer, there would be somebody solving that problem in the market and because maybe I am Barclays Bank, and I have joined Open Banking, then my customers will be a lot more potentially satisfied.

“With Open Banking, banks would then be able to explore market opportunities, which we may not have potentially exploited. This can truly help us extend ecosystem players potentially.

We would actually increase the pie.

“Right now we are all fishing within this old overbanked customers but I think if we really use this to drive our financial inclusion agenda, what will happen is that we would increase the pie as it were, and obviously all of us will be bigger. Ultimately it will drive revenue stream” Achieving Open Banking in Nigeria A major barrier to achieving Open Banking in Nigeria is misconception about its meaning, especially among banks. Speaking on how Open Banking Nigeria (OBN) is addressing this challenge, Ope Adeoye, said: “While there is a misconception that Open Banking equals PSD 2, it equally forces everyone to open up and partner with anyone who comes knocking down the door.

Also speaking in this regard, Oni said: “We have to do a lot of engagement. The OBN has been doing a lot of advocacy, with partnerships with several other quarters including deposit money banks, will then only form the efficiency around some of these things.”

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Wednesday 22 January 2020

BUSINESS DAY

Corporate governance

Boardroom diversity: Navigating the 21st century market “Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way: But it was filmless photography, so management’s reaction was, ‘that’s cute—but don’t tell anyone about it.’ Kodak management’s inability to see digital photography as a disruptive technology, represented the wake of its downfall.” … The New York Times (5/2/2008) ment of Mario Bizarri as a result of the incorporation of millennials into the decision-making process of the company.

Rather sadly, while board rejuvenation with fresh drive and attitude is constantly preached and applauded theoretically, being a proposition that looks good and resonates with most of the population; statistics on boards members’ ages has shown little progress. The general perception on board membership is a set of relatively old persons.

Olayimika Phillips

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s the 21st century market is diverse, so must the board of companies aiming to serve these markets.

This is particularly important when considered against the backdrop of the constant flow of innovations spurred by technological advancements. Rather sadly, most companies have, been slow to integrate change and diversity into their corporate structure, priding themselves in rote processes, and systems, justifying the resistance to change on slavish loyalty to the past. The truth however is that technology and innovation have come to stay not as visitors but permanent residents in the global economy and its steady march is now at the weakened doors of precedents – to fight is futile, to be flexible and tactical is wisdom.

Oftentimes, companies struggle with a weak response to changing market conditions amongst other organizational challenges, most of which have now necessitated the need to leverage on diverse insights and perspectives through multifaceted lenses including age, gender, background etc. The board is responsible for amongst other functions: formulating strategies to guide the activities and foster effective management of the company; monitoring the activities of the organisation to ensure they are in alignment with its underlying principles, objects and values. As a result of the everdynamic nature of businesses particularly in the 21st century, it is imperative for companies to maintain a flexible approach by constantly evaluating the constitution of its board, leadership structure and strategy.

This is particularly important as we live in a virtually borderless, post-industrial age, driven by technological innovation, where companies face the risk of organizational atrophy for continuously clutching to the straws of the past by adopting analogue solutions to digital problems.

In the maiden edition of this

series, I had emphasized the need for an experienced and techsavvy board. However, it is equally important to ensure a hybrid of experience and innovation in the selection of board members.

Recommended Approach Much importance is attached to the qualities of individuals who constitute the board of directors of companies. This is because, these individuals are pivotal to the success or otherwise of these companies. In selecting members of the board, a key consideration for most companies is the experiential value of the potential board member. The general trend in these parts is appointment by reference to age, with the belief that age is a true determinant of experience and technical expertise. Whilst this belief may be true in some industries in the past, the stark commercial realities of the 21st century market calls for a fundamental shift in this regard.

The business world has become unrelentingly disruptive, as established belief and practice are now struggling to catch up with never-ending innovations. The tides of civilization are sweeping in the direction of technology, and the population of most countries, especially develwww.businessday.ng

oping ones, is abundantly comprised of technocentric youths.

Presently, breakthroughs and the pace of development are set by young people, adding incredible value to the future of companies, through innovative and disruptive approaches.

This has necessitated the push for the inclusion of millennials on the boards of companies, since board appointments are usually made to afford the Company the expertise and business experience of the individual elects.

‘

As a result of the ever-dynamic nature of businesses particularly in the 21st century, it is imperative for companies to maintain a flexible approach by constantly evaluating the constitution of its board, leadership structure and strategy

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Unfortunately, the current global picture in this regard shows exactly what age diversity does not look like. The market is becoming increasingly diversified in product and people. As these markets expand, their potential customer base grows younger and younger—it is simply good business sense to have board members who can relate to this massive pool. It must be noted however that there is no merit in appointing a young person just to satisfy an “age quota”; a potential addition to the board must possess a demonstrable threshold of meaningful experience and quality of character expected of a director.

It is generally assumed that older and more established directors regularly come up with fresh ideas; however, a younger director, unhindered by age induced biases, may share fresh perspectives to issues that may not have hitherto been considered due to the generational gap. Furthermore, experience has evinced that new ideas from the younger generation incorporated in board discussions would surely be a company asset, as exemplified by the comprehensive transformation experienced by the Fashion mogul, Gucci under the manage@Businessdayng

Conclusion On a comparative note, incorporating diversity into positions of governance is a growing trend, even more notable within newly elected government administrations in Nigeria, evidenced by the appointment of commissioners within the age brackets of 25 and 28 years. This in itself represents a leaf to be borrowed by corporates in their governance structure.

Relatedly, the lessons from the Kodak story are quite instructive.

Although, companies more often than not are aware of the disruptive forces affecting their industry and divert sufficient resources towards expanding the frontiers in emerging markets, they nonetheless, sometimes fail to see the self-created enemy, not at the gate, but in the boardroom: lack of diversity.

Olayimika is a Partner in the law firm of Olaniwun Ajayi LP and has over 34 years of professional experience. She specializes in corporate governance, providing pragmatic solutions to the diverse challenges which confront corporates at different growth stages and serves on the board of several companies (listed and privately held).”

Wednesday 22 January 2020

BUSINESS DAY

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Wednesday 22 January 2020

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 21 January 2020

Top Gainers/Losers as at Tuesday 21 January 2020 LOSERS

GAINERS Company WAPCO NB

Opening

Closing

Change

Company

Opening

Closing

Change

N16.35

N17.35

1

DANGCEM

N175

N173

-2

N51.1

N52

0.9

GUARANTY

MTNN

N128.3

N128.5

0.2

ACCESS

OANDO

N3.52

N3.6

0.08

BUACEMENT

UPDCREIT

N3.45

N3.5

0.05

ZENITHBANK

ASI (Points)

29,462.76

DEALS (Numbers)

N34

N32.2

-1.8

N10.75

N10.05

-0.7

N37

N36.45

-0.55

VALUE (N billion)

N22.75

N22.35

-0.4

MARKET CAP (N Trn)

VOLUME (Numbers)

4,945.00 272,839,922.00 3.713 15.176,

Global market indicators FTSE 100 Index 7,607.48GBP -43.96-0.57%

Nikkei 225 23,864.56JPY -218.95-0.91%

S&P 500 Index 3,321.43USD -8.19-0.25%

Deutsche Boerse AG German Stock Index DAX 13,541.18EUR -7.76-0.06%

Generic 1st ‘DM’ Future 29,210.00USD -69.00-0.24%

Shanghai Stock Exchange Composite Index 3,052.14CNY -43.65-1.41%

Market routes downwards following profit taking in ‘big names’ … N150bn lost Stories by Iheanyi Nwachukwu

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he Nigerian stock market routed downwards on Tuesday January 21 as profit taking on major counters made the NSE All Share Index (ASI) trade under.

Dangote Cement, GTBank, BUA Cement, Access Bank, and Zenith Bank stocks recorded significant dip at the close of trading on the Nigerian Stock Exchange (NSE).

Investors sold these securities in order to lock in gains after they rose appreciably recently.

Meanwhile, Lafarge Africa, Nigerian Breweries, MTN N, Honeywell Flourmills and Oando stocks topped the advancers’ league.

Market watchers foresee

L – R: Olumide Bolumole, head, Listings Business Division, The Nigerian Stock Exchange (NSE) presenting a replica of the Closing Gong to Toki Mabogunje, president, Lagos Chamber of Commerce and Industry (LCCI) during the association’s courtesy visit to The Exchange in Lagos.

mixed trading this week as they anticipate further sell offs on some of the stocks that rallied recently and bargain hunting on others that are fundamentally sound but are yet to move as much.

The NSE ASI decreased by 0.83 percent, resulting to negative return of -0.53percent week-to-date (WtD).

The record year-to-date (YtD) positive return moderated to +9.76percent.

The NSE ASI closed lower at 29,418.70 points as against a preceding day high of 29,710.56 points. The value of listed stocks decreased from N15.303trillion to N15.153trillion, representing a decreased of about N150billion.

Dangote Cement stock price decreased from N175 to N173, losing N2 or 1.14percent, followed by GTBank Plc which rose from N34 to N32.2, down by N1.8 or 5.29percent.

BUA Cement Plc also dipped from N37 to N35.8, losing N1.2 or 3.24percent.

Access Bank Plc was also down, from N10.75 to N10.05, after losing 70kobo or 6.51percent, while Zenith Bank Plc decreased from N22.75 to N22.35, losing 40kobo or 1.76percent.

In 4,866 deals, equity traders exchanged 266,478,314 units valued at N3.615billion.

The share price of Lafarge Africa Plc increased most from a low of N16.35 to N17.35, adding N1 or 6.12percent. Nigerian Breweries Plc followed after moving from N51.1 to N52, adding 90kobo or 1.76percent.

MTN N rallied from N128.3 to N128.5, adding 20kobo or 16percent. Honeywell Flourmills gained 10kobo, from N1.03 to N1.13, adding 9.71percent, while Oando Plc moved up from N3.52 to N3.6, gaining 8kobo or 2.27percent.

likely to cascade to some redirection of liquidity to some of these names. Considering expected weighty maturities and the negative real yield environment in the money market (and some bond tenors), investors may seek out opportunities in alternative asset classes, including equities. This view is supported by the inability of the shallow treasury bills market (N2.7 trillion outstanding as at H1’19, according to Debt Management Office) to absorb the impending liquidity injections.

Indeed, the. We highlight that a conservative increase in allocation to equities of 100 150bps by PFAs could amount to circa N84.6 billion – N126.9 billion flows, which represents

a potential 2percent to 2.9percent of the free float market capitalization of stocks in the Pension Index (or circa 1.1percent to 1.7percent of the free float market capitalization of the entire market).

Although our assumed allocation increases constitute only small fractions of free float market capitalisation, a concentration of demand activities in a few counters may drive rallies in select names.

In line with the largely cautious stance of Nigeria’s PFAs, our recent engagements reveal that a few of them have been placing funds in money markets (that is fixed deposits) in the hope that the apex bank would reverse the OMO ban rather than go into equities.

CardinalStone Research:

Rising liquidity levels could drive more flows into equities

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quities market may be set for a first gain in three years in 2020 Monthly data spanning January 2014 to January 2020 suggests that Nigeria’s equity market had a 73.4percent correlation (R square of 53.9percent) with global crude oil price.

The market is also impacted by flow of capital, policy changes, corporate restructurings and the pace of liquidity build up, in our view.

Aided by improved oil price outlook, we believe changes in the last three drivers could lead the All Share Index (ASI) to a second positive return in six years in 2020.

Notably, the U.S. Energy Information Administration expects global Brent price to

slightly improve to $64.83 per barrel in 2020 (versus $64.36 in 2019) on expected increase in refinery runs and slight improvement in oil demand outlook.

The mild improvement in oil price expectation is, however, unlikely to persuade foreign providers of capital to significantly come into Nigerian equities in 2020; year-to-date (YTD) net foreign portfolio outflow stood at N84.5 billion as at November 2019).

H o w e v e r, d o m e s t i c investors are more likely to take advantage of equity opportunities due to the second order effect of the exclusion of domestic non-bank institutions and i n d i v i d u a l s f ro m O M O www.businessday.ng

activities. Specifically, the policy tweak could continue to result in the re-allocation of some maturing OMO bills to other investment options such as equities, as real yield on fixed income investments become increasingly negative. Thus, although the fundamentals may not be compelling enough to attract foreign portfolio investors (FPIs), a bourgeoning system liquidity could provide support for equities in the coming year.

There could be selected opportunities in some equity names We believe 2020 could be characterized by major transactions such as acquisitions, recapitalization, and potential listings. We also see legroom for significant

balance sheet optimisation and policy-induced uplifts from cost reflective tariff and stricter border enforcements.

On acquisitions, Seplat may have set the tone with the completion of the acquisition of Eland Oil & Gas Plc (Eland), via cash and new borrowings, in December 2019, with Transcorp also expected to finalise the acquisition of Afam in H1’20. In addition to these, 2020 is also likely to be characterised by business consolidation in the insurance industry as companies race to meet the December 31, 2020 recapitalisation deadline.

The new CBN polic y restricting domestic non-bank institutions and individuals from participating in OMO market activities is also

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BUSINESS DAY

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Wednesday 22 January 2020

BUSINESS DAY

news

Police foil pro Amotekun rally in Lagos … rally holds in Ibadan as Soyinka replies Balarabe Musa JOSHUA BASSEY, REMI FEYISIPO & INIOBONG IWOK

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igeria Police Force, Tuesday, foiled a pro ‘Amotekun’ rally organised by the Yoruba World Congress (YWC) in Lagos State.

The group had planned the protest to support the security outfit set up by the six Southwest states - Oyo, Ogun, Ondo, Ekiti, Osun and Lagos.

Governors of the South-West states backed by the entire Yoruba nation, on Thursday, January 9, 2020, launched Amotekun in Ibadan, the Oyo State capital, saying it was meant to secure the region against rising insecurity; killings, kidnappings, rape, among other violent crimes.

Abubakar Malami, minister of justice and attorney-general, subsequently dubbed the security outfit illegal and unconstitutional, adding also that his office was not consulted.

Meanwhile, Wole Soyinka, a professor of literature, has replied to Balarabe Musa’s allegation that the formation of Amotekun was prelude to Yoruba’s plan to secede from Nigeria.

“Balarabe is sadly, but I hope not tragically wrong. I invoke the tragic dimension here because the making of tragedy, especially for nations, often begins when fears are mistaken, or promoted as facts, and governments either by themselves, or together with interest groups, are enticed by fears into embarking on precipitate, irrational, and irreversible acts.

“Such acts turn out tin the end to be based on nothing but fears, sometimes generated by guilt over past injustices, such as inequitable dealing. That is the basis of tragedy, towards which nations are propelled by a partial or wrongful reading of sociopolitical realities and - history. I would like to see this nation avoid

such a blunder.”

Soyinka argued that raising the spectre of secession is a facile approach to the dangerous, selfevident lapses in governance which Balarabe himself acknowledges in his response to the Amotekun principle made flesh.

“The midwives of Amotekun have repeatedly acknowledged that theirs is only a contribution towards a crisis of escalating proportions. Other states should be encouraged to emulate, not misread such initiatives, then demonise them by false attributions. That is the certain recipe for tragedy,” he said.

The planned protest which was slated to hold at the Gani Fawehinmi Freedom Park at Ojota, failed to hold as armed policemen laid siege to the venue as early 5:00am and prevented people from entering the venue.

Speaking with newsmen, at the venue of the protest, Mathew Adeyemi Adeleye, director of Media and Communication, YWC, said the purpose of the protest was to show solidarity with the South-West governors in their effort to safeguard the people of the region.

He said the people and the governors would not be intimidated to abandon the security outfit.

According to him, “It’s sad that the police deny us entry despite an earlier order from the area commander. We express serious concern on what is going in Nigeria.

“The Yoruba leader, BanjI Akintoye will inform of the next line of action within the next 24 hours. There is a dilemma in Nigeria, if someone gives instruction and another one gives a counter instruction.

“Nigeria according, to her constitution is a democratically free society with the right to gather peacefully and that is why the rally was not done behind the police.

‘Fountain University to priorities skills, employability, content delivery’ SEYI JOHN SALAU

T

henewlyappointedchancellor of Fountain University and chairman, Jaiz Bank plc, Umaru Abdul Mutallab, has stated his desire of placing the university at the top of curriculum design and development to deliver holistic tertiary education that focuses on skills development, employability of students and content delivery.

“I intend to deploy my vast experience in the corporate world to make Fountain University the pride of the Nigerian University System. The vision is to transform the university into a centre of excellence whose curricular will be skill-driven and employment generatingincontentanddelivery, wellbeyondthestatutoryperiodof their validity,” said Mutallab.

Mutallab conferment as chancellor of Fountain University was made during the 9th convocation ceremony held at the school auditorium in Osogbo, Osun State. He also assured the university community of deploying his wealth of corporate experience and resourcestofostergrowthanddevelopment of the institution.

“Let me thank the proprietors

of this University, the Nasrul Lahi al-Fatihi Society, (NASFAT) for considering me worthy of appointment as the chancellor of this University. This is indeed the right moment for me to publicly acknowledgethehonouraccorded me. I consider this honour a privilege to serve my dear community and humanity.

“It comes to me after a modest five-decadecareerinthecorporate world, and at a time that a retiree of my age is willing to commit more of his energies to charity and every possible way of pleasing the Almighty.Iconsiderthisacalltoserve the young generation of youths to whom we all owe a duty of facilitatingabrighter,prosperousand rewarding future,” Mutallab stated.

University, Amidu Sanni, the Vice-Chancellor, Fountain University said he is optimistic that the appointmentofthenewchancellor will fast track several other developments to the university, which would enhance learning, research and community service.

Niyi Yusuff, the president of NASFAT worldwide, on his part said the institution is lucky to have such a prominent personality with wisdom, networks, and resources on the school’s board. www.businessday.ng

L-R: Dato’ku Jaffar Ku Shaari, secretary-general, Developing Eight Organisation for Economic Cooperation (D-8), with Zubair Dada, minister of state for foreign affairs, during the signing of the Headquarters Agreement of the D-8 Health and Social Protection Programme, between Nigeria and D-8, in Abuja, yesterday.

NAN

Heart attack: Who’s at risk?

ANTHONIA OBOKOH

A

cardiologist has said about 70 percent of heart attacks seen by cardiologists are preventable, yet it’s the number one health threat in the world, Nigeria inclusive.

Adeyemi Johnson, a cardiologist and vascular specialist, founder and managing director of First Cardiology Consultants, says even though the expertise and facilities are available, the most cost effective thing is to prevent the heart attack in the first place.

“This can be done by eating healthy, regular medical checks, controlling hypertension and diabetes, and we should also not underestimate the value of regular exercise; walking 30 minutes a day will go a long way to prevent heart disease,” he says.

Explaining what is heart attack, Johnson says it can be called myocardial infraction, or MI, is what happens when one of the arteries that supply blood to the heart gets blocked.

He explains that when this happens, the part of the heart that normally gets blood from the artery is damaged, noting that the longer the time the artery is blocked, the bigger the heart attack.

“The arteries that supply blood to the heart are called the

coronary arteries.”

Meanwhile, Coronary Heart Disease (CHD) or Ischaemic Heart Disease is a leading cause of heart attack.

According to the latest World Health Organisation (WHO) data published in 2017, coronary heart disease death in Nigeria reached 76,410, which is equivalent to 3.76 percent total death. The age adjusted death rate was 117.12 per 100,000 of population, which ranks Nigeria 90 in the World.

“Before now, people have had the mistaken belief that heart attacks only affect the rich and middleclass people. But that is not true, and now there is evidence that it affects all classes of people whether poor or rich,” says Johnson.

According to Johnson, the only difference is that the rich can pay for their treatment themselves while the poor who are struggling below poverty line cannot afford to pay for their treatment.

Signs to watch out for Heart attack is often not a sudden occurrence, though in many people, it strikes suddenly, but more often than not, people have warning signs and symptoms sometimes for hours, days or weeks in advance.

Experts say you or someone near you may be having a heart attack if they experience any of the following symptoms: tight-

ness or pain in the chest, neck, back or arms, as well as fatigue, light-headedness, sweating, an overwhelming feeling of anxiety, which may or may not include an unusual awareness of a racing heartbeat.

Women are more likely to have atypical symptoms than men.

Treatment of a heart attack will depend on how much blockage has occurred within the ‘coronary’ arteries supplying the heart and how much damage to the heart muscle has occurred as a result.

Treatment ranges from lifestyle changes and cardiac rehabilitation to medication, stents and bypass surgery.

However, bypass surgery through Interventional Cardiology can be used to treat heart attack, “This is a subspecialty of cardiology in which problems with the heart (like heart attack) are treated through a catheter (tube) that is placed in the arteries (blood vessels) of the leg or arm and advanced to the heart,” Johnson says.

He explains further that we can look at it as minimally invasive surgery, stating that basically, treatment of cardiovascular diseases includes: Interventional cardiology and open heart surgery (when the chest is cut open); both of these modalities are now available in Nigeria.

How to prevent heart at-

tack According to the World Health Organisation, the following are key ways to protect heart health and could help reduce your risk of having a heart attack or having another heart attack.

WHO warns about tobacco use, an unhealthy diet, and physical inactivity increase the risk of heart attacks and strokes.

Engaging in physical activity for at least 30 minutes every day of the week will help to prevent heart attacks.

Eating at least five servings of fruit and vegetables a day, and limiting your salt intake to less than one teaspoon a day, also help to prevent heart attack.

Having your blood pressure checked and knowing the number to avoid sudden attack. If it is high, you will need to change your lifestyle to incorporate a healthy diet with less salt intake, and may need medications to control your blood pressure.

Know your blood sugar; raised blood glucose (diabetes) increases the risk of heart attacks. If you have diabetes it is very important to control your blood pressure and blood sugar to minimise the risk.

However, experts say the longer the delay in starting treatment, the greater the likelihood of a poor outcome after a heart attack.

Foreign borrowings to help shore up external reserves in 2020 BALA AUGIE

T

he Federal Government’s plan to tap the international debt market this year will help shore up the foreign exchange reserves as the naira is set to continue its peg against the dollar with little movement.

Analysts however say the central bank has enough ammunition in form of sufficient dollars to support the naira.

“Raising Eurobond will give the reserves a one off boost,” said Wale Okunrinboye, investment analyst at Sigma Pensions Limited.

“In the 2020 budget, an al-

lowance of N850 billion has been made for external borrowing. Central bank says they are not going to devalue the currency.”

While Nigeria did not access the Eurobond market in 2019, there are concerns about the country’s current debt profile amid dwindling revenue to meet such obligations.

The Debt Management Office (DMO) overall target for foreign currency borrowing for 2020 is approximately $2.80 billion.

According to a recent report by the central bank, Nigeria spent $1.31 billion to service external debt obligations be-

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tween January and November last year.

This means external debt service payment alone rose by 245.90 percent between 2015 and 2019.

Analysts at Coronation Merchant Bank in a recent report say oil prices below $50 per barrel could be precarious for a country that is yet to recover from a recession in 2016 that paralysed business activities.

“Currently, Nigeria has a dual interest rate system, with the CBN open market operations (OMO) available to only banks’ proprietary books and to foreign portfolio invest@Businessdayng

ment,” note analysts at Coronation Merchant Bank.

“If the Apex bank cannot sell sufficient OMO bills to foreigners in 2020 then this could, in our view, present challenges to the current FX reserve management and disrupt the current currency structure,” they say.

The nation’s external reserve halted a six months downward trend, as it rose to $38.32 billion last week, the first week on week increase since July last year. The reserves first rose by $53 million to $38.34 billion on Wednesday, January 15, from $38.28 billion on Thursday, January 16 last week.

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you’re still asking again,”

he screamed. “Oga, you wan enter or you wan comot?”

In truth, we had expected this sort of aggressive behaviour. This, after all, was a hospital for treating the mentally ill.

We just didn’t expect it so soon.

In the beginning The history of mental rehabilitation in Nigeria is incomplete without the Neuropsychiatric Hospital, Yaba, Lagos.

Since beginning life as the Yaba Lunatic Asylum in October 1907, when its primary purpose was to serve as a holding place for keeping the mentally ill out of the way of ‘normal’ people in the society, the hospital has played a leading role in the evolution of mental care to treatment and healing, not just holding, of patients.

In the opening years of its founding, and until 1950, it was purely an asylum. The first batch of 48 inmates was admitted in a rundown Nigeria Railway Building in Yaba.

It was a time West Africa was generally witnessing the opening of asylums. Before this time, the mentally ill were kept in the custody of native doctors, who often contained but sometimes restrained them.

By 1951, qualified psychiatrists, nurses and pharmacists were starting to arrive. After it was managed by expatriates until the mid-1950s, the responsibility of management fell on Abraham Ordia, the first Nigerian psychiatric nurse. The next 20 years would witness the creation of an outpatient department and the commencement of occupational therapy.

From the Yaba Asylum, it became the Yaba Mental Hospital. These changes were accompanied by a rising patient population that wasn’t matched by increased staffing. One hundred patients in 1925 became 200 in 1944 and 448 in 1961, yet only one doctor manned the facility.

It wasn’t until 1961 that two more psychiatrists — Dr. A Boroffka, a German, and Dr. A Marinho, the first Nigerian psychiatrist to work at the hospital — were employed.

More recent decades have seen the staffing of nurses and pharmacists, a second name change to the Neuropsychiatric Hospital and the appointment of Nigeria’s first female psychiatrist as Chief Medical Director (CMD) of the hospital.

These strides notwithstanding,

Yaba Left was neck deep into violating is ‘guiding principles’, listed on its official website to include “patient-centred service delivery, patient and staff welfare, transparency and accountability”.

The delicate journey to Yaba Left After three unrelated complaints in two years about the standard of medical services on offer, I decided to experience the hospital myself as a patient rather than believe the complainants. To help devise a medically impregnable entry strategy, I enlisted the services of a US-based mental health expert. When we communicated for the first time in the first week of October, he explained I could only enter as a drug addict requiring rehabilitation after abusing marijuana and cocaine. If I faked the regular, mentally-ill patient, I would definitely be found out, he explained.

“That means I have to ingest cocaine just before I go in?” I asked. With the benefit of hindsight, I was only displaying the naivety that made me know I had to contract him in the first place.

“Not on your life!” he warned. “Close your eyes.

Imagine yourself having sex and you’re just about to climax.”

Silence.

“You see that feeling, cocaine will give you five times of it. Cocaine addiction, if it happens, is almost impossible to solve. You should never touch cocaine for any reason. Never.”

We agreed I would take no drug, not even marijuana.

However, I would be taught how to answer a doctor’s questions like a drug addict. He told me that on arrival at Yaba Left, I would be grilled by a doctor for roughly three hours. I had to answer the questions in such a manner to make my addiction serious enough for hospital admission, yet unserious enough for injection or drugs. Tough one. One mis-answered question could convince the doctor that I was unworthy of admission, which would spell the end of the story or, worse still, I could be admitted but placed on drugs/injection, which will subject me to some unpleasant side effects.

One more warning: no patient admitted at Yaba Left could refuse drugs or injections; any patient who tries it would be forcefully subdued by the Crisis Intervention Personnel, famed within and beyond the hospital for their

reputation to overpower the hardest of drug addicts and mentally-ill patients. My mental health expert and I knew the three-hour questioning was crucial; for this reason, we held six virtual meetings in late October — three for learning the answers to the questions and another three for re-enacting the sessions.

After making a few alterations to my looks, I presented myself to doctors at the Neuropsychiatric Hospital, Yaba, as a drug addict in need of rehabilitation, just like any other member of the society. My discoveries were disturbing.

Bed-space corruption Even though Dr. Akingbola, as I later found her name to be, was evidently in the third trimester of her pregnancy, she proved herself a class act, professionally. Dressed in a loose pair of black trousers and a flowing, silky robe, she stood up when she needed to, talked when she should, listened when she should, despite battling personal discomforts that manifested in the form of repeated sneezes and coughs. Dr. Akingbola did not speed up the questioning one notch; it lasted nearly the full three hours I’d anticipated.

Her overall professional conduct was impeccable.

A consultant whose name I later established to be Dr. Ogunlowo courteously interrupted us from time to time, interacting with the first doctor in a manner suggesting he was trying to help her settle. I easily concluded Dr. Akingbola was either newly employed or relieving another doctor at the hospital. A consummate professional, Dr. Ogunlowo’s face lit up with glee once Dr. Akingbola announced to him that I voluntarily walked in; medically, I was “motivated”.

Motivation, I’d been preinformed, is big deal to psychiatric doctors. Motivated drug patients stand a better stead of overcoming their psychiatric

disorders than those coerced or bundled into the facility.

Dr. Ogunlowo couldn’t hide his excitement. But there was a little problem.

“There’s no bed space,” he announced to me.

I couldn’t believe my ears.

This, coupled with its annex at Oshodi, is the only Federal Government-owned fullfledged psychiatric hospital serving the whole of Lagos — Nigeria’s ex-seat of federal power, most populated state, current economic capital — and only one of two available in the six states of the South West. It is also one of only eight public psychiatric hospitals serving an estimated 200 million Nigerians, one of every eight of whom were long proven by the World Health Organisation (WHO) to be suffering from one form of mental illness or the other. It’s a 535-bed facility; however, only two male wards comprising 60 bed spaces and a female ward of 30 bed spaces were wholly dedicated to drug patients.

“Don’t worry; come back next week. I’ll keep a space for you,” Dr. Ogunlowo’s words interjected my thoughts. “I don’t usually do this, but I see you’re motivated, and I don’t want you to go back to drugs.”

Going back to drugs was not the problem; it was that I’d already altered my looks; I couldn’t move about this way, yet I wasn’t prepared to be idle indoors. Having told them minutes earlier that I came in from Ibadan, I begged them not to allow me go. “Please help me,” I pleaded soberly.

“If I go back to Ibadan, I may not come back.”

Actually, this is the reality of real drug addicts; they hardly reach a point where they opt for admission, and if they ever do, only to get turned back, it’s bye to the hospital and back to

the lure of drugs. Days later, I would overhear a doctor lamenting to a colleague about a young female crack cocaine addict who found time out of her banking job to seek help at the hospital; unfortunately, it was one of those numerous no-bed-space days.

The doctor exchanged contacts with the lady, promising to alert her once a space opened up. Space opened up two weeks later but the banker never returned. It’s 18 months after but the doctor hasn’t quite managed to convince the lady to come back! If I was indeed a drug addict, the system had failed me.

Unlike the regular cocaine, crack is far more potent and addictive. Because it is smoked (rather than snorted through the nose), the drug reaches the brain more quickly, producing an intense and immediate ‘high’, which, it must also be said, is short-lived. Since the ‘high’ experienced by abusers is so pleasurable even if ephemeral, they constantly need more of the drug to maintain it. Eventually, an addiction is born, and the user needs the drug to simply feel normal. I begged doctors Ogunlowo and Akingbola profusely, but there was no reprieve. I could tell that the two doctors genuinely felt helpless.

One member of my team approached an official of the Crisis Intervention Personnel for help. I had been told that the ‘Crisis’, as they were simply called, sometimes pressured doctors into taking patients in. Olaniyi Olawale pressed for hours but didn’t succeed.

Before we left the hospital a

little past 9pm, we greased his hands with N5,000 — to say thanks for his effort. At that point, it was an honest gift from us; not a bribe. Soon, Olawale would prove himself a member of a syndicate at the hospital that specialised in arranging bed space for under-pressure patients in exchange for a token, often at the expense of more deserving patients.

Realising, shortly before leaving, that he hadn’t collected Olawale’s number, a member of my team approached a hospital orderly, Mrs. Adeniyi, for Olawale’s number. Mrs. Adeniyi declined to release it, instead insisting that we talk to her.

“Do you want to give him something?” she queried knowingly, furtively flickering her eyes over each one of us.

“What exactly do you want?

Talk to me.”

Mrs. Adeniyi assured us she could secure bed space for us, but she made it clear we would need to “settle”. To prove our seriousness, we handed her N2,000 and collected her number. To protect her own interest, Mrs. Adeniyi refused to release Olawale’s number even though she had it. Well, we found it through alternative means the following day, Wednesday, November 13, and contacted him.

N10,000 or N7,000, bed space at Yaba Left ‘doesn’t come free’ On Thursday, Olawale’s call was what roused me from sleep.

He had found a hospital staffer by the name Tosin Karunwi, who was willing to secure bed space for me, provided we understood that “nothing comes free”.We weren’t sure if Karunwi was a nurse, an orderly or a Crisis official, but we established that she indeed worked at the hospital.

Olawale announced that Tosin had demanded N10,000 to help lock down a bed space for me, but he successfully negotiated a N7,000 deal.

He asked us to forward the money to Account Name ‘Olaniyi Olawale Matthew’ with Access Bank — because Tosin didn’t want the money sent to her. He passed the money on to Tosin, after she agreed to return it if she didn’t secure a bed space.

To our utmost shock, once she took possession of the money, Tosin began to sell Oshodi to us. Actually, Os-

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hodi, the neuropsychiatric hospital’s annexe, was even worse managed than Yaba.

It was graveyard-like, largely abandoned. Oshodi was technically the hospital into which Yaba’s vomits were spilled. But Tosin argued otherwise.

“Wait a minute, why don’t you want Oshodi?” she’d asked on phone in the evening of Thursday, November 14. “Oshodi and Yaba are the same. Three bed spaces are vacant at Oshodi; I’d advise you to take one of them.”

On December 3, three full weeks after Tosin was paid for the bed space that never came, she was told to refund the payment, but she refused, and blatantly too. “You cannot get N7,000,” she snapped. “The [two] nurses I gave money to, do you expect me to pay back on their behalf? Maybe I can send N4,000 to you; it’s just maybe. Maybe. That’s even if I’m able to raise it. Do you expect me to hold the cash or keep it in the bank?”

Tosin claimed that no space had opened up at all, both at Yaba and Oshodi “since last week”. What she didn’t know was that I’d gone in (and come out) as a patient because a space indeed opened up for me, and that at least two more opened up during my stay. ‘ Ya b a L e f t a n n e xe doesn’t have a good drug rehabilitation programme’ Some days after I started discussing admission with Olawale without success, I returned to Yaba to try to force the issue. There, I met a doctor who surprisingly urged me not to waste my money on admission at Oshodi. Instead, this doctor advised me to consider the Federal Neuropsychiatric Hospital, Aro, Abeokuta.

“The issue is this: at Oshodi, you may not get the maximum benefit you need, to be sincere with you,” the doctor said. “I work here, and I know that after a while you may be frustrated, because what you will be doing there is not really rehabilitation. Many of the patients at Oshodi are psychotic; they have one form of behavioural disorder or the other.

The hospital’s programme for rehabilitation is not welldeveloped over there, so you may be there for days without seeing a psychologist.”

When I insisted I’d rather take Oshodi than wait endlessly for bed space to open up at Yaba, the doctor replied: “Probably, it’s because you don’t know how Oshodi is.”

This was the same Oshodi that Tosin was trying to trick me into accepting admission at.

The orderlies are corrupt — brazenly So For the fourth time in less than a week, I was back at the Neuropsychiatric Hospital, Yaba, on November 18 without any assurance of securing bed space. After more than six hours of laborious wait, intense lobbying to see doctors and queuing up to pay fees, my admission was finally confirmed.

“Bring N20,000,” Mrs. Ad-

eniyi, the orderly, ordered right inside the hospital reception.

She never told us what it was for, and we got no receipt after paying. We would later find out it was for a Ghana-MustGo bag I was to enter the ward with. The contents were a 400g sachet of powdered Dano milk, a 500g sachet of Milo chocolate and malt powder, two pairs of velvety pyjamas that threatened to tear up at the slightest pull, a medium-size towel, a small takeaway-style food plastic, a 140g package of CloseUp toothpaste, a stick of Oral tooth brush, a small-size cup, Two 65g bars of Premier Cool soap, two pairs of plastic spoon, two pairs of boxer briefs, one low-grade roundnecked vest and a sachet of little-known detergent. It wasn’t until I arrived at the ward that I discovered other patients had been similarly swindled. The contents of the bag shouldn’t even cost up to N15,000. Securing bed space at Yaba Left is so difficult that those who finally succeed are too physically and psychologically exhausted to ask too many probing questions before complying with payment instructions.

An introduction to the world of Yaba Left’s unbelievably big rats I arrived at Tolani Asuni, one of only two male drug wards at Yaba Left, in a hospital ambulance some minutes past 5pm. It was a block of five rooms comprising six beds each. Thirty patients in all. Op-

This small mass of crack cocaine -- worth between N5,000 and N10,000 depending on location of purchase -- will ruin your life. Flee from it!

posite it stood Adeoye Lambo, similar in number of rooms and bed space, but spotting a major difference that will be discussed later. The two wards are named after perhaps the two most influential Nigerian psychiatrists ever, both deceased. While Professor Thomas Adeoye Lambo, who died in 2004 aged 80, was Nigeria’s and Africa’s first-ever Western-trained psychiatrist and a former Vice DirectorGeneral at the World Health Organisation (WHO), Professor Tolani Asuni, aged 87 when he died in 2011, is remembered till date for his wide-ranging scholarly and leadership contributions to psychiatry in Africa.

It was Lambo, in fact, who, in 1956, convinced Asuni to take up psychiatric training.

Till date, Lambo is remembered as a world leader and one of the first to promote psychosocial rehabilitation for persons with mental illness and disability, and to develop primary care in the community for persons with mental www.businessday.ng

Inside this gate, at Oshodi, is the annexe of the Federal Neuropsychiatric Hospital, looking not one bit like a hospital.

illness in Africa. Fitting, therefore, that the wards named after both men at Yaba Left stood opposite each other.

Dinner, served every 6pm, was eba and egusi, but I waited until a little after 8pm before eating. It was the first time in decades I was seeing eba so full of lumps, and egusi so bland and watery. Even though I had not eaten all day, I lost my appetite instantly. I had ingested no more than three morsels when I spotted a strand of local sponge in the egusi. I showed my ‘neighbour’.

“Welcome to Yaba Left,” he exclaimed.

I tucked it away quietly under my bed, just beside one of the four iron poles anchoring the bedframe. The plan was to lodge a complaint with the nurses the following morning.

How wrong I was! By 7am the next day when I checked, the strand of sponge was gone.

“Anything you don’t want rats to touch, don’t put it on the floor,” a patient announced to me when I moaned aloud.

“Even your Ghana-Must-Go bag. Everything you have should be on your bed!”

IwouldlearnaboutYabaLeft rats in the evening of my second day at the ward. Well-fed and therefore robust, they roamed the greenery separating Tolani Asuni from Adeoye Lambo in theirdroveseverynight.Notthat I hadn’t seen rats before, I just didn’t know rats so big existed anywhere in the world.

“It’s been brought to the attention of the Chief Medical Director several times, but she said there’s nothing wrong with it,” one patient told me.

Actually, many things are wrong with the population of rats inside Yaba left. Lassa fever, a viral infection caused by the Lassa fever virus, is, for example, primarily transmitted to humans via contact with excreta from rats.

According to the Nigeria Centre for Disease Control (NCDC), Lassa fever is spread through “direct contact with urine, faeces, saliva or blood of infected rats; eating food or drinking water contaminated with urine, faeces, saliva or blood of infected rats; touching of floors, beddings and household materials contaminated with urine, faeces, saliva or blood of rats or an infected person; and person-to-person through contact with blood, urine, saliva, throat secretion or semen of an infected person”.

The Lassa fever virus is a familiar threat in Nigeria.

In the week November 25 to December 1, 2019, eight new confirmed cases were reported in Ondo (six) and Edo (two) states, with two new deaths from Ondo. From January 1 to December 1, 2019, a total of 4,771 suspected cases were reported in 23 states. Of these, 793 were confirmed positive, 162 of which resulted in deaths.

“The rats in the kitchen are even bigger,” another patient added. “The first day I entered the kitchen was the day Yaba Left’s food began to irritate me. See, we, the patients, and the rats are eating the kitchen’s food together!”

Mosquitoes and ex-patient’s bedsheets — welcome to Yaba Left This announcement hit me below the belt. It was my second day at Yaba Left and I hadn’t seen anything encouraging. The previous

Crack cocaine... Many Yaba Left patients genuinely want to quit but it looks beyond them. Best is never to try.

night, the nurse on duty had told me to “manage this bed sheet for today” after I was checked into my ward. The bedsheet was originally coloured white but had become browned ostensibly by several years of overuse. The bedsheet smelled stale, clear proof it hadn’t been washed for days or weeks in the lead-up to the last patient’s exit.

On my 10th day at the ward, I summoned the courage to ask a senior nurse if my sheets would ever be changed. Her response was shocking.

“We can give you another one if you promise to wash it from time to time,” she said.

“The problem is that when we send them to the laundry, white bed sheets suddenly become brownish.”

Yet all patients paid for laundry.

The bedsheet and rats weren’t the only oddities on my first night. The mosquitoes stung my legs mercilessly, no thanks to the overgrown lawn bordering the fence outside my ward and the Mrs.

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Adeniyi-purchased pyjamas that only stretched over a third of my legs. Consequently, my opening night was largely sleepless — and turbulent when I did manage to catch some sleep.

You can then imagine my consternation when I woke up inthemorningtoabreakfastthat was two slices of yam, tasteless stew and a piece of fish half the size of my index finger. Afternoon was mashy rice — close to the kind of rice I once tweeted about — and beans. Evening was again eba, this time with vegetable and egusi that was not only insipid but also watery. I ate halfandbinnedtherest.Trouble was already brewing but I didn’t know.

Trouble brewing… a civil, anti-food protest I was soaking in Karl Meier’s ‘This House Has Fallen’, my most frequently-read book, the following morning, my third day at the ward, when the doctor overseeing Tolani Asuni announced that all patients needed to gather for a meeting. That, a two-time patient told me, was unusual for that hour of the day.

As we would later discover, some patients had written a protest letter to the authorities on behalf of the group, listing a number of grievances. Majority were minor but two were major: exit date and food. I at once dismissed the clamour for exit on the simple basis that nobody likes to lose their freedom, even though it is evident, in this case, that it must happen if they must be weaned off drugs.

For drug patients, the psychiatric hospital is a glorified prison. They’re locked up in a ward. Whether they were brought in psychotic or conscious, they soon start feeling trapped in a matter of days.

Yet, they can’t leave of their own volition; only the doctors or their parents or guardians can set them free — unless they want to escape, which has happened before. But I was quite happy the bad food had been brought up. Like others, I keenly awaited answers.

Dr. Ojo requested to know exactly those who wrote the letters. One was the Captain of the ward, one of the longestserving patients. Soft-spoken and well-respected by the patients and even the nurses, he had been at the ward for close to three months and that was his second, possibly third, admission. The other, a lawyer, was a returnee-patient too. The lawyer was invited upfront to @Businessdayng

read the letter to the hearing of all. The session erupted in a cacophony of laughter when, while expressing displeasure with the food, he said: “The egusi soup is notoriously known to appear like a lagoon.”

There was hardly anyone who didn’t laugh but this was a very serious matter. For three reasons.

What’s the big deal about Yaba Left’s food?

Every drug patient pays a minimum of N120,000 for an initial two-month admission; N60,000 of that is for feeding.

Technically, this means feeding is half the service rendered

by Yaba Left. If it fails, therefore, the entire rehabilitation project is potentially as good as null. To put this in proper context, the next most expensive item after ‘feeding’ is ‘drugs’, at N20,000. And that’s one-third the cost of feeding!

Two, among the drugs taken by patients are Artane, which can cause dry mouth, and Thiamine, which can cause nausea. Therefore, patients on these drugs typically need their food tasty.

Three, drug patients are battling an addiction problem; if you take drugs away from their lips, you cannot afford to simultaneously take food away. Thiamine, for example, is a known appetite stimulant; you normally don’t give it to patients and starve them, which is technically what happens when they eat Yaba Left’s food.

And, finally, roughly a week beforeIwasadmitted,thehospitalbannedvisitorsfrombringing in food for patients. The ban was the consequence of an ex-patient’s bad behaviour. The patient, Ife, had tried to import marijuana into the ward, via a Dundu Nation employee who folded six wraps of the weed among fried yams delicately packaged in a paper and foil.

OnepatienttoldmeArizonahad been successfully imported and smoked at the ward a few times because of its discreet smell, but this time, the nurses intercepted themarijuanawrapsatthepoint ofentry,promptinguproarinthe hospital.

On learning of the development after a protocol breach that involved bypassing one or two doctors who could have smothered it, a thoroughly incensed Chief Medical Director, Dr. Oluyemisi Ogun, placed a ban on delivery of edible food to patients, save the ones brought by the two registered relatives who originally presented the patient for admission. Summary of the story, Yaba Left’s concoctions were the only edible food available to patients — and they were often terrible to behold, much less consume.

The protest letter of November 20 was laid to rest with a promise that things would improve, especially with regards to the food. They never did.

This is the first of a two-part series. Part II will be published on Friday.

This investigation was published with collaborative support from Cable Newspaper Journalism Foundation and BusinessDay.

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ture and manufacturing,”

President Muhammadu Buhari said in the UK. The UK government, which set out the ambition to increase trade and investment links with Africa, said the partnerships meant building a stronger, long-term relationship with African countries – based on trade, investment, shared values and mutual interest. The UK wants to be the investment partner of choice for Africa and will continue to support African countries in their ambition to transform their economies.

Hosted by the UK Prime Minister Boris Johnson, the UK-Africa Investment Summit, which was graced by over one thousand people, including Heads of State and Ministers from African the continent, CEOs and senior representatives from African and British businesses, institutional investors, international and organisations is offering Nigeria an opportunity to spur inclusive growth through the following measures: Economy With £750 million in aid already channelled in agriculture businesses investment programmes, the UK said it is committed to supporting African countries in transforming their economies particularly in growth sectors that can create quality jobs at scale.

Summit pre-events in agriculture and manufacturing, attended by senior UK and African business leaders, demonstrated the huge breadth of opportunities in these sectors and the growing need for investment, the UK stated.

The British government also noted that it sees huge opportunities: in the ‘fourth industrial revolution’ underway in Africa as new technologies like AI, 3D-printing and drones are deployed; in

Endurance Okafor

Africa’s rapidly growing cities; and through unleashing the potential of women and girls to drive economic transformation.

On that note, the UK entered a partnership with Kenya, Nigeria and South Africa (£45 million of funding) for a new Digital Access Programme aimed at increasing connectivity and digital skills of marginalised communities build cybersecurity capacity and establish Tech Hubs to grow the local digital economy, and empower startups with the skills needed to expand globally.

Infrastructure The summit launched a suite of initiatives to facilitate infrastructure financing in Africa and as expected, Nigeria with one of widest infrastructure gaps in the continent got the attention of the UK. It said that it launch new facility in Nigeria that will draw on UK expertise to help improve the provision and management of government infrastructure (funding of £80m).

Nigeria needs to spend $3 trillion and five percent of its GDP annually to bridge the infrastructure gap, according to the National Infrastructure Master Plan. From roads to bridges, down to power and railways, the country’s infrastructure has recorded significant depletion in the last 20 years, owing to poor maintenance culture, lack of sufficient funds and corruption.

More than half of CEOs see global...

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tives reported increased

pessimism, and confidence in their own company’s revenue growth prospects - both in the short and medium term - fell to the lowest since 2009.

The PwC survey, which was conducted from September to October 2019, was launched at the World Economic Forum (WEF) in Davos, Switzerland, Monday.

WEFPresidentBorgeBrende last week echoed its tone, warning in a press conference in London that “we are faced with a synchronised slowdown in the global economy. And we’re alsofacedwithasituationwhere the ammunition that we have to fight a potential global recession is more limited.”

Meanwhile, the president of the Swiss Federation and the founder of the WEF, Tuesday, sent out a wakeup call to leaders in private and public life to mount the urgent reform of the way they run the world to avert a catastrophe that stares all in the face.

Speaking at the formal

opening of the annual meetings of the forum in Davos, founder and executive chairman Klaus Schwab said we must refine the way businesses act to “make ESG a measurable part of annual audit.”

He said the world was in a state of emergency and that the window to act was fading.

According to Schwab, the world is “facing great challenges and we need platforms for global collaboration.

“Let’s make this a do shop and not talk shop so we can achieve something this week.”

He however outlined some of the initiatives of the forum to help, and they include a private public platform to provide skill to a billion people to make a living, grow and conserve one trillion trees by 2030 He said there was a general loss of trust and confidence of people around the world “we cannotbeparalysedbythis.Weas globalleadershavearesponsibility to help create a better world.”

•Continues online at www.businessday.ng www.businessday.ng

A modern filling station provided by Nigerian National Petroleum Corporation (NNPC) for the people of the riverine area about to be commission at Oporoma town in Bayelsa, yesterday.

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“What investors are talking about here at the UK-Africa summit is infrastructure challenges; energy, roads and less bureaucracy,” Ngozi OkonjoIweala, former minister of finance told BusinessDay. For a country like Nigeria to bridge its infrastructure deficit, some industry experts have said it requires borrowing to meet the desired revenue generation that can propel accelerated development.

Nigeria’s total public debt, comprising the debts of the federal government, 36 States and the Federal Capital Territory (FCT) as at September 2019 stood at N26.215 trillion.

The Debt Management Office (DMO) said recently that the country will borrow N1.549 trillion from domestic and international markets to fund its 2020 budget.

To manage its rising debt profile, economists have recommended that Africa’s largest economy should handle its huge infrastructure deficit through private and public sector investments.

Agencies Also at the Summit, the UK said it was committed to increase its work to support the growth of African nations. The UK said it will therefore deliver new partnerships with Investment Promotion Agencies in Nigeria and South Africa (funding of £25mn).

“There are challenges in doing business in Nigeria, we

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know, but the opportunities exist because of the challenges,” Yewande Sadiku, Executive Secretary/CEO of Nigeria’s foremost investment promotion, told BusinessDay on the side-lines of the Summit.

According to her, a number of investors approached Nigeria for enquiries at the summit.

Fintech With 112 African companies listed on the London Stock Exchange, with a combined worth of more than £125 billion, the UK said there are a growing number of opportunities for investors to participate in local currency issuances, which have the benefit of protecting borrowers from damaging exchange rate risk.

“At the same time, there is an emerging opportunity for African countries to benefit from the growing appetite of investors in the UK for investments that deliver a social or environmental return,” it said.

Research shows that a majority of people in the UK want to see their savings make a positive impact on people and planet alongside a financial return. The UK Government, together with businesses from around the world, used the summit to launch new initiatives and collaborations that will strengthen Africa’s partnership with the City of London and the wider UK financial sector.

The UK said it will be shar-

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ing its expertise through new regulatory partnerships, including to support Mauritius deliver the Africa Fintech Festival, the Bank of England to partner with Morocco’s Bank Al-Maghrib, and setting up a Nigeria Regulatory Sandbox to support Fintech firms to develop.

Clean energy As a result of the UK-Africa Investment Summit, the UK said it would support the Energy Commission of Nigeria to update its 2050 Calculator, an energy and emissions model that supports sustainable development planning (funding of £60,000).

Meanwhile, the UK and Nigeria investors have at the just concluded UK-Africa Summit signed commercial deals worth £324 million (over N153.4bn) and the new UK government assistance to grow the UK-Nigeria trade and investment partnership.

Nigeria and the UK will be partners in a range of initiatives announced during the Summit including: Significant UK commitments to support Nigeria develop an enabling environment to turbo-charge economic growth, including helping address land issues for investment; strengthening and improving the finance sector; helping entrepreneurs secure access to finance; preparing the ground for the launch in the UK of nairadenominated bonds – “Jollof Bonds”; and developing the

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tech sector.

Others are substantial initiatives to accelerate the clean energy transformation in Nigeria, through enhanced technical and financial support; and strong commitments to harness private-sector support for social development, particularly supporting women and young people in business.

British High Commissioner Catriona Laing, who attended the Summit, said: “Nigeria was out in force at the inaugural UK-Africa Investment Summit. President Buhari led the delegation and Nigerian businesses were well represented,rangingfromworld renowned figures, such as Tony Elumelu, through to female entrepreneursrunningstartups.

Nigeria has already secured billions of naira worth of deals from the Summit. With the launch of an exciting range of initiatives to help investors identify opportunities in Nigeria, I am confident much more will follow,” the High Commissioner said.

“I am proud the Summit had a strong focus on supporting female participation in the economy. In Africa, women are more likely to become entrepreneurs than men and, with a fast-growing population Nigeria needs to harness the dynamism of its women to ensure prosperity for all its people,” the British diplomat added.

•Continues online at www.businessday.ng

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Wednesday 22 January 2020

BUSINESS DAY

POLITICS & POLICY FG has failed in securing lives; Nigerians should be allowed to defend themselves - Atiku Solomon Ayado, Abuja

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former vice president and presidential candidate of the People’s Democratic Party (PDP), Atiku Abubakar has said the Federal Government was inefficient in securing lives and property of Nigerians and so the citizenry should be allowed to take to self-defence.

Atiku’s reaction is hinged on his clamour that regions and states in the country should be permitted to enforce community policing measures in order to properly protect their people.

The former vice president said in a statement on Tuesday that self-defence was

enshrined in International Human Rights, guaranteed

by Article 51 of the United Nations Charter.

“Nigeria has crossed the Rubicon and cannot go back.

There is too much insecurity in the land and too much inefficiency from the Federal Government, leading to wanton and unnecessary loss of lives.

“It is easy to think that all is well when you are in secure State Houses, but the reality is that the security situation is far from fine for the average Nigerian citizen.

“In such circumstances, people have an inalienable God-given right to self defence. This divine right, as long as it is limited to self defence, cannot be declared illegal by man. Not by any

stretch.

“What I counsel is that the Executive, Legislature and Judiciary must wake up and smell the coffee. When they do, they will realise that people who have volunteered to provide the internal security, that the government has not been able to provide, need encouragement, and more importantly, a legal framework and central support to make their dream of preserving the dignity of human life a reality,” he said.

According to Atiku, “Internal security is not a call for secession and we must abandon the paranoia that makes us see it as such. All calls for secession must be quashed by the might of the Nigerian state, no exceptions.”

He further said that the reality on ground in Nigeria today is that the armed and paramilitary forces are overstretched.

He noted that the police, armed forces and paramilitary bodies have shown great gallantry, patriotism and dedication to duty, hence the need he awarded scholarships and gave other support to the children of some the nation’s fallen heroes.

“Having said that, I must add that the reality on the ground in Nigeria today is that our armed and paramilitary forces are over-stretched. To deny this is to unpatriotically put their lives at risk. This we must not do. They deserve better from us.

“To say that we do not need

Imo: PDP protests Supreme Court judgment in Lagos ...Party seeks commission of enquiry into ruling

A former minister of integration and special duties, Abimbola Ogunkelu, said the judgment of the Supreme Court was questionable and should be reversed.

He said the only solution to electoral fraud in Nigeria was the signing of the amended electoral bill into law by the Federal Government.

“The Supreme Court judgment is unacceptable; it can be reversed and there have been instances where they reviewed and reversed previous judgments. They are human and they can make mistakes.

“The judiciary should act in accordance with the law, the people are losing confidence in them,” Ogunkelu said.

a t r i c k E h o l o r, president, One Love Foundation, Wednesday urged the leadership of the People’s Democratic Party (PDP) in Edo State to put its house in order to dislodge the All Progressives Congress (APC) from government in the forthcoming governorship elections in the state.

Eholor gave the advice during an interview with newsmen in Benin City.

According to him, if the People’s Democratic Party (PDP) presents a united front, the party will be able to dislodge the ruling All Progressives Congress (APC) and take over the government of the Edo State during the forthcoming governorship election.

The Edo born activist, however, noted that the party is at the verge of extinction in the state.

He noted that the party is currently on life machine in the state.

“The inability of the party’s aggrieved members to reconcile is a sign of imminent collapse of the party.

I think the whole PDP has

also collapsed because if PDP were on ground and know what they were doing, it would have been a sweep because we can see that the government of Obaseki has failed us,” he said.

He however, urged the electorate in the state to come out en masse and cast their votes for a governorship candidate of any political party that they believe its policies and programmes can move the state forward.

“It is for the electorate to learn that they have been used and deceived, so in the forthcoming election they should not sell their votes, they should do the needful, and cast their votes.

“The whole things must change and the fight between the leadership of APC in the state is happening at the right time so that people can really understudy them. Whether they are going to continue to sell their votes, continue to undermine themselves it is left for them. Now is the time for the youth to speak out to say enough is enough.

“Whatever they are doing today, it has thought us a lesson that we have been deceived and when we are going to cast our ballots, we should be very conscious and cast it very rightly”, he added.

munication, YWC, said the purpose of the protest was to show solidarity for the SouthWest Governors in their effort to safe guard the people of the zone.

He said the people and the governors would not be intimidated into abandoning the security outfit.

According to him, “I am sad that the police denied us entry despite an earlier order from the Area Commander, Bayode.

We express serious concern on what is going on in Nigeria.

“The Yoruba leader, Banji Akintoye will inform of the next line of action within the next 24 hours. There is a

dilemma in Nigeria, if someone gives instruction and another one gives a counter instruction.

“Nigeria, according, to her constitution is a democratically free society with the right of people to gather peacefully and that is why the rally was not done behind the police.”

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P indication that the judiciary had been hijacked by few individuals, adding that the trend portends serious danger for the nation’s democracy and a recipe for anarchy in the country.

He urged Nigerians at all levels to rise and defend democracy, stressing that the will of the people must prevail.

According to him, “The Supreme Court robbed Imo people, PDP and Nigerians of good governance. We know that Nigerians are watching.

We urged them, traditional leaders, religious rulers that Nigeria is under siege.

“Democracy is failing the people and when this happens anarchy would come.

Our forefather did not believe

that we would have a Supreme Court that would not follow the judgment of the lower courts,” Doherty said.

Speaking further, the state chairman, urged President Muhammadu Buhari to leave a legacy behind and sign the amended electoral bill into law.

He called for the setting of a commission of enquiry into the judgment of the apex court to ascertain how the apex court judges arrived at the votes awarded to Uzodinma.

“We urge the President to leave a legacy behind of ‘one man one vote’. The electorate is disenchanted with the state of affairs. The electorate is losing confident in the political system,” he said.

scattered across Nigeria, including in the North East and Zamfara, Jigawa and Taraba states, to mention a few. Not a few Nigerians are able to sleep with two eyes closed, because of the action of these bodies of dedicated and gallant country men,” he stated.

On the matter of internal security as a means of self defence, Atiku said the right to self-defence, including the right to combat terror, is guaranteed by international law.

He insisted that no human power has the authority to criminalise the protection of human life, and no human ambition is worth the failure to speak in support of the people in order to remain in favour with the oppressors of the people.

Edo 2020: PDP should put its house in order to defeat APC - Activist IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

Iniobong Iwok

he People’s Democratic Party (PDP) in Lagos State Tuesday staged a protest rally across the state against the Supreme Court Judgment that nullified the election of Emeka Ihedioha as governor of Imo State.

Recall that the Supreme Court last week nullified the election of Ihedioha and declared the candidate of the ruling All Progressives Congress (APC), Hope Uzodinma the winner of the March 2019 gubernatorial election.

The protest rally took members of the party across major streets in some parts of Lagos such as, Shogunle, Government Residential Area (GRA) in Ikeja and parts of Computer Village in Ikeja.

The protest rally, however, ended at the Federal High Court in Ikeja, while a protest letter was submitted to the Chief Judge of Lagos State by the state PDP Chairman, Deji Doherty.

Speaking with newsmen, Doherty condemned the Supreme Court judgment, saying that it was a rape on democracy and subversion of the will of Imolites.

He said the ruling was an

the services of those who are patriotic enough to voluntarily put their lives at risk to ensure the protection of the lives and property of Nigerians is to deny the obvious.

“I salute groups like the Civilian Joint Task Force in the North East, who provided and continue to provide an invaluable service to Nigeria and her peoples, at great cost to themselves, both in human lives and in productive hours, for which they are not well remunerated. Without their altruistic services, where would the war on terror be?” he said.

“I also acknowledge and appreciate the work that hunters and vigilantes have done and are still doing to help boost security in states

Police foil pro-‘Amotekun’ rally in Lagos Iniobong Iwok

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he Nigeria Police, Tu e s d a y , f o i l e d a pro-’Amotekun’ rally organised by the Yoruba World Congress (YWC) in Lagos State.

The group had planned the rally to support the security

outfit set up by Southwest governors last week as a solution to security challenge in the zone and to complement the effort of the police in curbing the spate of insecurity and kidnapping for ransom in Yoruba land.

However, the planned protest which was slated to hold www.businessday.ng

at the Gani Fawehinmi Park in Ojota failed to hold as officers of the Nigeria Police besieged the venue from 5am and prevented people from entering the venue.

Speaking with newsmen, at the venue of the protest, Matthew Adeyemi Adeleye, director of Media and Com-

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Wednesday 22 January 2020

BUSINESS DAY

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news

Lekoil reaches agreement with Optimum to defer OPL 310 obligations SEGUN ADAMS

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EKOIL, the oil and gas exploration and production company with a focus on Nigeria and West Africa, has announced that, further to its announcement on January 13, 2020, it has reached an agreement with Optimum Petroleum Development Company, the Operator of the OPL 310 Licence, on deferring the Company’s financial and operational obligations due in February 2020 pursuant to the Cost Recovery and Sharing Agreement executed between LEKOIL and Optimum in August 2019.

As previously announced, pursuant to the Cost Recovery and Sharing Agreement, LEKOIL was required to pay a portion of Optimum’s sunk costs and consent fees (previously estimated at $10m) as well as provide evidence of its ability to fund 42.86 percent of the costs and expenses for the drilling of the first appraisal well during February 2020 (estimated at a further $28m).

“We remain excited about the opportunities of OPL 310 and are focused on securing the necessary funding under the revised schedule. We are grateful for the support and commit-

ment shown by our partner Optimum, the Operator of the OPL 310 License. This alignment with our partner is crucial in unlocking significant value for all our investors and stakeholders,” Lekan Akinyanmi, LEKOIL’s CEO, said.

Optimum and LEKOIL have agreed the final payment of $9.6 million to Optimum, which covers sunk costs and consent fees as follows: The sum of $2 million to be paid on or before March 20, 2020, and the sum of $7.6 million to be paid on or before May 2, 2020.

Optimum and LEKOIL have also agreed that the obligation for LEKOIL to provide evidence of its ability to fund 42.86 percent of the costs and expenses for the drilling of the first appraisal well on OPL 310 be deferred until July 2020.

Speaking on behalf of Optimum, the company’s managing director, Yusuf K. N’jie, said: “We are pleased to continue to support LEKOIL by deferring their obligations which were due this quarter. We remain confident in LEKOIL’s ability to by July this year, raise the financing that is required for the commencement of the appraisal drilling programme for OPL 310, which we truly believe is a world class strategic asset.”

No ban yet on ‘Okada,’ ‘Keke’ on Lagos roads JOSHUA BASSEY

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agos State government says it has not taken a definite action on the operations of commercial motorcycles (Okada) and tricycles (Keke Marwa) on “some roads” across the state.

The government in a statement issued by Gbenga Omotosho, the commissioner for information and strategy, said that contrary to the news in circulation on the list of restricted areas, especially on the social media, purporting that the government had banned Okada and Keke Marwa on some routes, no such action had been taken.

“The list is false and unofficial; it should be disregarded,” the statement said.

According to the state government, a definite position on the issue would soon be made public through the official media channels of the government.

Recall that Omotoso last week told State House Correspondents after the a security council meeting held at the Lagos House, Ikeja on January 13, that the delay was informed by need for the Babajide SanwoOlu administration to achieve a generally accepted solution to what has been termed the Okada menace.

He said: “We have just con-

cluded our routine security meeting, during which the issue of Okada and tricycles was discussed exhaustively. For now, no major decision has been taken on the matter. There are several factors for this development, but the main reason was to reckon with various opinions expressed by stakeholders.

“So many people have made representations to the Government concerning commercial motorcycles and tricycles, including human rights groups, unionists and traders. They came up with many reasonable observations; all their views have been collated and are being considered.

“We feel it will not be good enough for the Government to take a final decision on the matter without considering the opinions of the stakeholders. That would be against the spirit of democracy for which the Sanwo-Olu administration stands,” he said.

Omotoso said whatever decision is eventually taken by the government, the security of lives of all Lagosians will remain paramount to the Sanwo-Olu administration.

The commissioner, however, stressed the government’s plan to step up the enforcement of the Lagos State Traffic Law as well as intensify its sensitisation of commercial motorcycles and tricycle riders on the need to obey the law. www.businessday.ng

UBA Connect set to deepen intra-African trade … as customers can now make cash withdrawals in local currencies SEGUN ADAMS

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nited Bank for Africa (UBA) plc has announced the official launch of a flagship product, UBA Connect, a service that enables customers conduct traditional banking transactions at any UBA branch in the 20 African countries where the bank operates.

The ser vice, which is available to both customers and non-customers alike, is expected to encourage intra-Africa trade, as cash

withdrawal can now be done in local currencies within the continent while deposits can also be made at any location regardless of where the account is domiciled.

CEO, UBA Africa, Oliver Alawuba, who spoke about the product, said, “Africa stands to benefit substantially from intra-Africa trade, which is facilitated by the easy flow of capital within the continent. As a bank committed to creating superior value for all its stakeholders, we are focused on ensuring that we continue to contribute

significantly to the development of Africa by improving accessibility and trade with UBA Connect, among other innovative services.”

He explained that the new offering allows easy transfers to UBA accounts across African countries as well as cash deposit into UBA accounts at any of the bank’s locations in Africa, adding that the cash will be dispensed to customers in local currencies at competitive exchange rates.

Group head, marketing, Dupe Olusola, said, “We’re thrilled to be able to offer our

customers the ease and convenience of UBA Connect.

This is in addition to an array of digital platforms which have made banking seamless for more than 12 million people who have trusted us with their money.”

To use the service at any UBA business location in Africa, a UBA Connect Send, Receive or Transfer form needs to be completed, with valid identification (International passport with valid visa or migration stamp, in the case of ECOWAS member countries).

L-R: Rauf Aregbeshola, minister of interior; Hadi Sirika, minister of aviation; Muhammad Dingyadi, minister of police affairs, and Muhammed Mahmud Abubakar, minister of environment, during the 2020 Seasonal Rainfall Prediction in Abuja, yesterday. NAN

Minimum wage: Planned showdown not intended to disrupt national economy - TUC JOSHUA BASEY

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he national economy may not be totally caught in the web of the planned showdown by organised labour to drive home their quest for implementation of the national minimum wage of N30,000 by state governments.

This followed a confirmation that the January 31, 2020, deadline issued by the Trade Union Congress of Nigeria (TUC) to state governments to implement the new minimum wage of N30,000, is with no intention to disrupt the national economy. Each defaulting state, according to the TUC, will be treated as an entity and made to bear the consequence of its own action.

While the Federal Government had since commenced payment of the minimum wage with its arrears backdated to May 2019, only six states were confirmed to have to commit to its implementation as at January 9, 2020. President Muhammadu Buharisignedtheminimumwage in April, 2019 MusaLawal,secretarygeneral of TUC, who spoke exclusively with BusinessDay on Tuesday, confirmed that mobilisation ahead the planned showdown with state governments was at advanced stage, and that affiliate state councils are only waiting for a directive from the national leadership of the TUC. According to Lawal, the congress is set to meet on January 28,

to review the level of compliance by the 36 states. The review, according to him, will guide the union’s action against each defaulting state.

“Our state councils are continuing mobilisation as earlier directed. The intent is not to shut down the economy, but to make sure that the state governments comply with the minimum wage law. We understand that since we issuedtheultimatum,twoorthree additional states have shown commitment to negotiate with their workers. But I can’t give you the exact number of states who have complied until we meet on January 28 to review the states,” said Lawal.

Issues bordering on minimum wage in Nigeria are in the exclusive legislative list; meaning that the Federal Government (withinputfromstates,labourand private sector representatives), decides what national minimum wage should be. Once endorsed by the National Assembly and signed by a sitting president, it becomes a law and binding on state governments. Minimum wage is the benchmark that employers of labour in the formal sector and government at all levels are required by law not to go below.

Stategovernmentshave,however, complained against this constitutional provision, arguing that matters on wage should be re-routed to the concurrent legislative list which allows both the federal and state governments to negotiate and legislate independently.

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Governors Fintiri, Ortom were duly elected – Supreme Court Felix Omohomhion, Abuja

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upreme Court on Tuesday held that the governor Ahmadu Fintiri of Adamawa, and Samuel Ortom of Benue were duly elected in the March 9 governorship election in their respective states.

The 7-man panel with Justice Sylvester Ngwuta as the presiding Justice, held that the two appeals against the governors’ election failedbecausetheappellantswere unable to prove their cases.

The Governorship Election Petition Tribunal sitting in Yola, Adamawa State capital had dismissed the case filed by the All ProgressivesCongress(APC)challenging the election of Fintiri of Peoples Democratic Party (PDP).

The Appeal Court had also dismissed the appeal by Jubrila Bindow, the APC candidate, against Orotm.

The tribunal declared that the petition was dismissed because it lacked merit.

The tribunal chairman said the petitioner also failed to prove the case beyond reasonable doubt.

The Court said the petitioner could not prove the case of overvoting and non-compliance with the Electoral Act as well as irregularities during the March 2019 rerun governorship election.

The judge averred that even the witnesses of the APC were inconsistent in their submissions, prompting him to discard their @Businessdayng

submissions.

In affirming Fentiri’s election, Justice Ahmed Dantijo, who read the judgment said that “the applicant cannot rely on smart card alone which the petition is founded.”

He said Bindow did not have enough facts to prove the allegation of over-voting and irregularities in his appeal against Fintiri.

He held the two lower courts were right to have said the petitioner was unable to make out his case. The panel therefore dismissed the appeal.

The Independent National Electoral Commission (INEC) had declared Fintiri winner of the re-runelectiononMarch28,2019.

INEC said Fintiri polled 376,552 votes to defeat the then incumbent governor, Bindow of the APC, who got 336,386 votes.

In dismissing the appeal of Emmanuel Jime, candidate of the APC against PDP candidate, Ortom, Justice Ngwuta, who read thejudgment,saidtheappealhad no weight to affect the findings of the panel of justices.

The apex court, in a unanimous judgement by the sevenman panel of justices led by Justice Olabode Rhodes-Vivour, dismissed the appeal, saying the panel found no reason to disturb the concurrent decisions of both the tribunal and the Court of Appeal that returned Ortom as the valid winner of the gubernatorial contest that held on March 9, 2019.

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Wednesday 22 January 2020

BUSINESS DAY

news

Nigeria, SA, Angola’s low performance obstacle to investment in Africa - World Bank Hope Moses-Ashike

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orld Bank president, D av i d Ma l pass, says three of Africa’s biggest economies - Nigeria, South Africa and Angola - have not performed well in recent times and that has been a key obstacle to foreign investment in Africa.

Malpass states this in his article titled ‘Africa needs to seize this golden chance,’ on Monday, in relation to UK-Africa Investment Summit.

The World Bank had said in its January 2020 Global Economic Prospects that Growth in Nigeria is expected to remain subdued. The macroeconomic framework—characterised by multiple exchange rates, foreign exchange restrictions, high persistent inflation, and a central bank targeting manifold objectives—does not provide a firm anchor for confidence.

Another challenge he identifies is that cross-border trade and investment,

which is vital for growth, isn’t making enough progress to lift Africa’s average growth rate, saying vested interests are at the core of both challenges.

Growth in sub-Saharan Africa moderated to a slower-than-expected 2.4 percent in 2019. Activity was dampened by softening external demand, heightened global policy uncertainty, and falling commodity prices.

He identifies four areas that need urgent attention of which first was, reforming state-owned enterprises and de-monopolising markets for greater competition. “For many nations, the government footprint remains excessive, crowding out private-sector activity in agriculture, transport, and energy”.

Secondly, he says Africa needs to reduce barriers to cross-border trade, saying, “Red tape and excessive regulation keep goods, services, ideas, and resources from flowing freely among countries. More intra-regional trade can generate the pressure and

www.businessday.ng

resources for improved infrastructure.”

Third, government debts and investments need to be more transparent. This will give people more voice in the contracts and commitments made by their governments, a critical basis for implementing the rule of law.

Fourth, the region must address “learning poverty”.

“Our recent study reported on children’s ability at the age of 10 to read a basic story. In some African countries, as many as 80 percent can’t do this. UK leaders, including the prime minister, have strongly supported programs to keep girls in school long enough to learn skills and break out of poverty.

“As donors and investors, we can all agree that the time for Africa is now.

We must not wait for every economic condition to be perfect. Let’s seize the moment and start delivering immediate wins that can rapidly transform economies and improve people’s lives,” Malpass states.

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@Businessdayng

Wednesday 22 January 2020

FT

BUSINESS DAY

43

FINANCIAL TIMES

World Business Newspaper

ANDREW EDGECLIFFE-JOHNSON

D

onald Trump has assailed environmental “alarmists” and economic “pessimists”, used his speech to the World Economic Forum in Davos to strike a defiant tone at an event dominated by concerns about climate change and economic slowdown.

Speaking just hours before his impeachment trial was due to begin, the US president claimed that he had turned a stagnant economy into “a roaring geyser of opportunity”. Mr Trump said he had created an inclusive and booming economy, in remarks seen in the room as an appeal to domestic voters in an election year.

Although he reiterated his criticism of the Federal Reserve, saying it had “raised rates too fast and lowered them too slowly”, Mr Trump said the US was “in the midst of an economic boom, the likes of which the world has never seen before”.

He also argued that Davos delegates should “reject the perennial prophets of doom and their predictions of apocalypse” — a thinlyveiled attack on environmental activists such as Greta Thunberg, who on Tuesday used the event to argue that governments and business leaders are doing too little to avoid irreversible climate change.

Speaking shortly after Mr Trump, Ms Thunberg told Davos attendees that her warning last year that “our house is on fire” had achieved nothing, as global emissions of carbon dioxide continue to rise.

She mocked the leaders of governments and businesses who tell

Trump urges Davos to reject environmental ‘alarmists’

activists “don’t be so pessimistic” while offering only “empty words and promises” rather than action.

“Unlike you, my generation will not give up without a fight,” the teenage climate activist told the audience. “We are telling you to act as if you loved your children above all else.”

But Mr Trump said: “This is not a time for pessimism, this is a time for optimism.”

US prosperity had come “thundering back at a record speed”

since his election, he argued, showcasing his agenda of corporate tax cuts and deregulation.

His remarks came hours before the US Senate opens his impeachment trial on charges of abuse of power and obstruction of Congress, but he made little reference to the proceedings.

Instead he hailed his recent trade agreements with China, Canada and Mexico and said his relationship with China’s Xi Jinping was “extraordinary”, saying: “He’s

for China, I’m for US but other than that we love each other.”

The US had pioneered “a new model of trade for the 21st century,” he argued. Phase two of its trade negotiations with China would begin “very shortly”, he said, and “our relationship with China right now has probably never been better.”

He also had warm words for Boris Johnson, saying the UK’s “wonderful new prime minister wants very much to make a deal,

as they say.”

Market concerns of a new trade battle with Europe eased on Monday, after French president Emmanuel Macron signalled a breakthrough in talks to resolve a tax clash with Washington which had risked new US tariffs on French goods and could have spilled over into a broader transatlantic trade war.

Mr Macron tweeted on Monday that he had a “great discussion” with Mr Trump on the taxation of digital groups such as Alphabet and Amazon and that they would “work together on a good agreement to avoid tariff escalation”.

But Steven Mnuchin, the US Treasury secretary, used an appearance in Davos on Tuesday to warn Italy and the UK that could still face tariffs if they pursued new digital taxes.

Mr Trump’s address came on the first full day of the forum’s 50th annual meeting, which has been dominated by concerns about environmental risks and threats to global cohesion.

The president’s speech followed a warning from Klaus Schwab, the World Economic Forum’s founder, of the risks of irreversible climate change and “continued political and economic disintegration” as global leaders and institutions suffer “a general loss of trust”.

Proposed rules for Trump impeachment trial outrage Democrats LAUREN FEDOR

M

itch McConnell sparked outrage among Democrats by laying out rules for Donald Trump’s impeachment trial that would raise the bar for introducing evidence and could lead to marathon late-night sessions that may limit the number of Americans able to watch the proceedings.

The resolution by the Senate Republican leader is expected to be approved on Tuesday, when Mr Trump’s trial is scheduled to begin. Mr McConnell said this month he “had the votes” to proceed in the Republicancontrolled Senate without the co-operation of Democrats.

The Senate last week received the articles of impeachment from the House of Representatives charging Mr Trump with abuse of power and obstruction of Congress. The president is accused of pressuring his Ukrainian counterpart to investigate Joe Biden, the former

vice-president and Mr Trump’s leading Democratic rival in the 2020 election.

Mr McConnell’s resolution grants House Democrats, who will act as prosecutors, and Mr Trump’s defence team 24 hours each to make their arguments.

But it will require them to use their time over a two-day period, with the first session starting at 1pm Wednesday — meaning the trial could extend into the dead of night.

Under this resolution, Senator McConnell is saying he doesn’t want to hear any of the existing evidence, and he doesn’t want to hear any new evidence Chuck Schumer, Senate Democratic leader Democrats have demanded the trial include the calling of witnesses and the admission of fresh evidence not included in the House impeachment probe.

But Mr McConnell’s resolution sets up a Senate vote, by simple majority, on whether to admit witnesses or evidence only after www.businessday.ng

the opening statements and a 16-hour period for senators to question the president’s counsel and House Democrats.

The resolution stipulates that if the Senate votes to hear witnesses, those testifying will first give closed-door depositions.

The Senate “shall decide after deposition which witnesses shall testify”.

Votes would also be required before consideration of any evidence collected by the House impeachment inquiry.

Chuck Schumer, the Senate minority leader, called Mr McConnell’s resolution “nothing short of a national disgrace”, saying the Republican was “hellbent on making it much more difficult to get witnesses and documents and intent on rushing the trial through”.

Mr Schumer has called for testimony from John Bolton, the former national security adviser, and acting White House chief of staff Mick Mulvaney, among others, after the Trump administra-

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tion told them not to co-operate with the House impeachment inquiry.

Mr Trump will be at the World Economic Forum in Davos when his trial begins, where he is due to give a speech and meet world leaders, including Barham Salih, president of Iraq, and Imran Khan, prime minister of Pakistan.

Earlier on Monday, Mr Trump’s lawyers laid out his defence in a 171-page legal brief arguing the president did nothing wrong and that allegations of abuse of power were a “novel theory” that did not support his removal from office.

A White House statement named eight Republican congressmen who would serve as part of Mr Trump’s team “to combat this hyper-partisan and baseless impeachment”.

One senior Republican leadership aide said Mr McConnell’s proposal for Senate votes on House evidence was “important” because the president had been “denied due process @Businessdayng

throughout the 12 weeks of partisan House proceedings”.

Mr Schumer vowed to offer amendments to the resolution when it is introduced. “Under this resolution, Senator McConnell is saying he doesn’t want to hear any of the existing evidence, and he doesn’t want to hear any new evidence,” he said. “A trial where no evidence — no existing record, no witnesses, no documents — isn’t a trial at all — it’s a cover up, and the American people will see it for exactly what it is.”

Mr Trump is expected to be acquitted in the Senate, as his removal from office would require 20 Republican senators to vote against him.

Last week, John Roberts, chief justice of the US Supreme Court who will preside over the impeachment trial, swore in 99 members of the upper chamber who will act as jurors. One senator, who was absent last week due to a medical emergency, will be sworn in on Tuesday.

Wednesday 22 January 2020

FT

BUSINESS DAY

44

ANALYSIS

US-China tech dispute: suspicion in Silicon Valley YUAN YANG

T

he first time that 35-year-old Zhang Lelin, a software engineer from China, felt uncomfortable in Silicon Valley was last year when he heard that a “huge team” of FBI agents had raided the home of one of his Chinese neighbours.

The target, Zhang Xiaolang, was charged with stealing trade secrets when he left Apple to join a Chinese electric car start-up and is now awaiting trial. Zhang Lelin, who works at Amazon, says the drama had been “like a movie” and wonders if it was engineered to “send out a message” to other Chinese tech workers.

His worries have been compounded not only by other high-profile cases of alleged Chinese IP theft, but by the increasingly antagonistic relationship between Washington and Beijing. The darkening climate has rattled Chinese companies, investors and — most of all — employees in Silicon Valley.

“For years, Silicon Valley ran on three main currencies: code, connections and cash. Chinese engineers churned out plenty of the first, and Chinese venture capitalists brought an infusion of the third, making the valley a relatively easy place for them to blend in,” says Matt Sheehan, author of The Transpacific Experiment, a book on Chinese and Californian collaboration.

Events of the past two years have changed the equation. “First, [the trade war] put a stop to venture capital flows, then it began complicating things for the big companies, and now it’s filtered all the way down to individual researchers,” says Mr Sheehan.

This is not the first time that the US government’s fears over technology have placed undue suspicion on immigrants with a Chinese connection. In 1999, Taiwanese-American scientist Wen Ho Lee, who worked in the Los Alamos nuclear bomb-design laboratory, was arrested on suspicion of spying for Beijing and placed in solitary confinement for nine months.

The charges could not be proven because they were largely based on his friendliness with Chinese scientists.

But the climate of suspicion has ramped up considerably in recent years, fuelled by trade war tensions between the US and China, the controversy over telecoms equipment supplier Huawei, and a string of cases involving Chinese nationals being accused in the US of stealing trade secrets.

One proposal from the commerce department is particularly chilling for Chinese nationals in the Valley, since many believe it could lay the legal basis for US tech companies to segregate them or even fire them.

The US commerce department has said it wants to expand existing export controls on so-called “dual-use technologies”, which have both civilian and military applications, to what it calls “emerging” and “foundational” technologies. The agency is now looking into categories such as artificial intelligence and microprocessor chips.

Since US rules consider even conversations about technology between Americans and foreign nationals as “deemed exports”, tech companies may have to

apply for licences for their foreign workers from countries outside of Nato. Chinese nationals are classed as the most sensitive, alongside Russians and Iranians.

In 2018, the commerce department more than halved the number of Chinese nationals it granted export licences to, awarding only 350 compared with 771 the previous year — the biggest proportional decrease of any country.

As a result, several Silicon Valley companies’ trade compliance and HR teams are already laying out plans for segregating their Chinese-national employees from the rest of their researchers, according to Dan Wang, analyst at Gavekal Dragonomics in Beijing.

Kevin Wolf, an export controls lawyer and the assistant commerce secretary during the Obama administration, however, thinks such concerns are premature, “because the new controls are likely to be narrowly tailored to address specific national security threats, as required by the export control statute”.

Libo Weng, an engineer at a semiconductor company in California, says it is already becoming more difficult for Chinese engineers to progress at work.

“From conversations with colleagues and friends, I think employers are more careful about letting Chinese engineers rise into positions where they can come into contact with core technologies — AI, chips — in which the US is more advanced than other countries. It was not as severe as this before Trump came into power,” says Mr Weng.

Chinese nationals and first-generation immigrant families make up a significant portion of Silicon Valley. According to US census data, 17 per cent of the population speaks a form of Chinese at home in the Silicon Valley counties of Santa Clara and San Mateo. The Valley’s longstanding ethnic diversity and the reliance of its tech companies on Chinese workers mean that the Valley is still welcoming to Chinese

talent.

But few Chinese engineers have made it to the very top of US tech companies, and the tensions between the US and China have prompted many to examine where they stand in their workplace. In particular, Chinese engineers complain that the precarious nature of their work visas means they feel the need to cling to their employers, regardless of unfair or poor treatment.

Under the H-1B visa programme for talented workers, which sustains most foreign nationals at tech companies, an employee is given just 60 days after being fired to find a new job, apply for and receive a new H1-B visa — after which they have to leave the country. Many feel the window is impossibly tight.

Employees at Amazon, Google and PayPal all cited heightened visa insecurity as the main pressure point facing Chinese staff. In 2018, the approval rates for H-1B visas started to fall, reaching 75.4 per cent in the last quarter of the year, compared with 94.5 per cent in the same quarter in 2015.

At the same time, processing time has taken longer as more applicants are sent through a second “request for evidence” stage. Five years ago, Zhang Lelin’s renewals took less than a month, but now they take two, he says, blaming the delay on his previous work on AI and computer chips.

He says one of his friends was stuck in China for seven months waiting for a visa renewal. “We all have the same background, so this kind of thing is random and could fall on your head any time,” he says.

These tensions have taken their toll. In September, a 38-year-old Chinese engineer for Facebook, Qin Chen, committed suicide by jumping from a building at Facebook’s Menlo Park headquarters. A week later, hundreds of engineers — mostly Chinese — from companies across the Valley gathered on the campus to chant: “Chinese lives matter, Zuckerberg!”

Some spoke of the need for a better work environment, and others highlighted the fragility of Qin’s immigration status.

Despite apparently living in the US for eight years, he did not have a green card and his entire family depended on his work visa.

Facebook said at the time that it was providing mental health and suicide prevention support to employees, and also added that bullying was not tolerated at the company.

Other Chinese engineers complain that Silicon Valley has an ethnic glass ceiling, and interviewees, many of whom are naturalised American citizens, compared their status with the relative success of Indians in large tech companies.

“In the US many Indian managers have become big company’s CEOs, but in many ways there’s still a bottleneck for Chinese people,” said Hans Tung, managing partner of GGV Capital, at a recent conference in Beijing. Turning to Eric Yuan, the founder of Zoom, he asked: “What do you think can be done?”

Mr Yuan is Silicon Valley’s most wellknown Chinese immigrant success story.

His video conference app Zoom, which listed earlier this year, is valued at just over $17.5bn. Mr Yuan responded that many Indian engineers were not only proficient at technical work, but also at understanding business models and management.

“It’s Chinese culture: it emphasises obedience and modesty, not confidence,” says Sophie Xu, a PayPal employee who left China for Canada and then the US 17 years ago. “There’s no wild ambition, we love book smarts.”

At an evening discussion organised by the Silicon Valley Innovation Entrepreneurship Forum, which hosts some of the biggest gatherings of Chinese tech talent in the area, a panel of high-fliers dispensed advice as to how to organise one’s time and succeed at work.

Continues on page 45

45

Wednesday 22 January 2020

BUSINESS DAY

FT

NATIONAL NEWS

US gas exporters fight to survive supply glut GREGORY MEYER

M

ultibillion dollar gas export projects that are central to the Trump administration’s push for “energy dominance” are locked in a battle for survival as prices fall and the market faces a supply glut.

Liquefied natural gas is a critical outlet for the US’s surfeit of cheap natural gas and the country is on track to pull ahead of Australia and become the world’s biggest exporter by 2024, the International Energy Agency has said.

Companies ranging from Royal Dutch Shell and Total to utilities and smaller independent groups are racing into the LNG export market, but planned capacity exceeds what is likely to be needed.

The consultancy McKinsey predicts that only one in 10 proposed export terminals will ever be built.

Last year, global importers received 346m tonnes of LNG — gas condensed to a liquid so it can be loaded on to tankers — according to S&P Global Platts. The volume will rise by 100m tonnes to 446m by 2025, it estimates.

Yet in the US alone, 14 unbuilt export terminals with government approval would add 160m tonnes a year of capacity, according to the Federal Energy Regulatory Commission. Another 90m tonnes’ worth of projects are still awaiting approval.

Last year, three US projects totalling 30m tonnes in annual capacity received final investment approval from their sponsors.

Plunging natural gas prices are also complicating the outlook for companies developing LNG export terminals, as the US benchmark price fell to its lowest level in four years on Monday. Cheaper US gas helps in the intensifying battle for market share, but also makes developers’ projects look less financially viable. Companies are already cutting processing fees, burning cash and letting construc-

The US is on track to pull ahead of Australia to become the world’s biggest exporter of liquefied natural gas by 2024 © Pascal Perich/FT

tion deadlines slip.

The global LNG glut has also pushed down prices outside the US as customers use their negotiating power with exporters. The JapanKorea Marker, a regional benchmark, has been trading at about $5 per million British thermal units, well below the level when most US export projects were conceived.

“There’s no question that the marketplace has become increasingly competitive,” said Jeff Martin, chief executive of Sempra Energy, a US company developing LNG terminals.

US projects face growing foreign competition from countries including Qatar, the largest and cheapest exporter, which recently confirmed plans to increase output from 77m tonnes to 126m by 2027. Mozambique is entering the market with a 13m tonnes per annum project and Nigeria said in late December that it would raise output from 22.5m tonnes to more than 30m by 2024.

There’s no such thing as economies of small. There’s only economies of scale Charif Souki, Tellurian China is set to overtake Japan as the world’s largest importer in 2024, the International Energy Agency predicts. But when the US trade war with China worsened last year, Beijing cut off purchases and added a 25 per cent tariff on US gas.

The trade deal announced last week included a commitment by

China to increase purchases of US energy — including LNG — by $52.4bn over the next two years, but the tariff remains. If nothing else, the agreement will increase China’s negotiating power with other exporters, said Ira Joseph, head of gas and power analytics at S&P Global Platts.

To attract financing, independent developers require contracts of 15 or 20 years. This includes a price for the gas and a fee for liquefaction — cooling the gas into a liquid. Liquefaction fees are also falling, another challenge to the economics of some projects.

Six years ago, another independent group Cheniere Energy was charging a fee of $3.50 per million Btu when it was lining up customers for its export terminals in Louisiana and Texas. It has since stopped disclosing fee terms. Other companies say they will liquefy gas for prices in the low $2 range.

One source of pricing pressure has come from Venture Global’s 10.8m-tonne project in Louisiana, which was among the three to receive the go-ahead last year. Still, a rival notes that Venture has only disclosed 1.5m tonnes of sales for a second, 20m-tonne export facility. Venture did not respond to requests for comment.

Several other projects are still trying to add customers. Tellurian wants to build a 27.6m-tonne terminal in Louisiana, while LNG Limited has been promoting the

8m-tonne Magnolia LNG project in the same state.

At the mouth of the Rio Grande river in Texas, three companies in November won federal permission to collectively export more than 37m tonnes a year.

As developers chase customers and financing, one of the largest construction contractors in the industry is under severe stress: McDermott International is in talks with lenders to avoid default.

LNG developers are working hard to attract and hold on to clients. At the Gastech trade fair in Houston, potential customers entering Tellurian’s two-storey booth were serenaded by a harpist and a string quartet beneath crystal chandeliers.

Tellurian said its $30bn Louisiana project would produce some of the lowest-cost LNG in the world, at a cost per tonne of $796. “There’s no such thing as economies of small.

There’s only economies of scale,” said Tellurian chairman Charif Souki in an interview.

However, Tellurian’s target for a final investment decision has slipped from 2019 to 2020. As of last September, it had $91m in cash on its balance sheet and outflows from operations and investing totalling $200m in the previous 12 months.

Meg Gentle, chief executive, said: “We are not going to run out of cash, this is not a concern.”

Mr Joseph predicts that only three US projects totalling 12.7m tonnes in capacity will receive a final investment decision this year.

Two would expand terminals at Freeport, Texas and at Cheniere’s Corpus Christi site in the same state.

A third is Sempra’s Mexico project, known as Energía Costa Azul.

Greg Vesey, chief executive of LNG Limited, said he travelled more than 200,000 miles last year drumming up business. So far the company has signed one nonbinding agreement to export 2m tonnes to Vietnam, a country he visited in November with US commerce secretary Wilbur Ross.

“I wouldn’t kid you, it’s a very tough market,” Mr Vesey said.

Investor concerns over US election surpass trade war fears ADAM SAMSON

I

nvestors have grown more concerned over the potential “tail risks” posed by this year’s US presidential election than the global trade war, underscoring the importance of America’s public policy with global markets sitting at record peaks.

A survey of fund managers by Bank of America, released on Tuesday, showed concerns over global trade have fallen to second-place on investors’ list of potential events that could unsettle markets. Trade fears had dominated for each month since mid-2018, barring one in which concerns of a China slowdown took hold.

The sharpening focus among the 202 asset managers with $630bn in funds under management on the US election comes as campaigning is entering a crucial phase, with polling day now less than 10 months away. Impeachment proceedings, triggered by Democrats in the House of Representatives, are also set to begin later on Tuesday in the Senate.

“While there are no obvious signs of election-related effects on economic activity so far in this election cycle, there is some concern that election-related uncertainty could have a more noticeable effect on sentiment and activity as the election approaches,” Jan Hatzius, Goldman Sachs chief US economist, said earlier this month.

Mr Hatzius’s analysis showed that while the direct economic effects on the US economy are generally muted, the uncertainty that takes hold during the campaign can have indirect effects.

“Increased uncertainty weighs on growth, suggesting that the upcoming election might pose modest downside risks for growth and investment,” said Mr Hatzius in a research note sent to the bank’s clients.

Typically election uncertainty spikes during January and March — the key nomination period — and then again as election approaches in September and October, Mr Hatzius said.

Investor concerns over US election surpass trade war fears Continued from page 44 “These are the rules of the game in the US,” says Zhang Yue, a Google engineer who also organises a Chinese new year’s gala and a local athletics club.

“Unlike a Chinese company, you don’t need to stay in the office until after your manager leaves — what matters is you get it done. And saying what you’ve done can be even more important than doing it,” says Mr Zhang.

Chinese companies and the government are keen to take advantage of the worsening climate to lure talent home.

“The long-term impact of the trade war will make it easier for

China to attract talent back,” says Tim Li, who has spent the past five years recruiting people from Silicon Valley to return to China, so-called “sea turtles”.

“There are also pull factors from China,” he adds, referring to China’s domestic tech boom.

Mr Li recently posted an advert for his services under a LinkedIn post by a Silicon Valley returnee to Beijing that had gone viral.

The post was titled, “To those Silicon Valley people who want to return [to China], but don’t dare”. It argued that working for a mature US firm meant a comfortable lifestyle with limited opportunities for advancement, while returning to China meant a more www.businessday.ng

cut-throat working environment, but one where people could have a greater impact.

“The US has displayed strong anxiety and discomfort over China’s rise . . . China’s internet industry will surpass the US’s on many fronts,” the post said. “If the long-term trend is like this, I think you should join the wave and take advantage of it.” The author, Wei Xu, recently left Facebook for a Beijing-based start-up.

Some, however, are more cautious. Zhang Lelin fears that Chinese engineers jumping from US to Chinese firms might trigger suspicions within their company or the FBI over IP theft. “That makes me hesitate when con-

https://www.facebook.com/businessdayng

sidering a Chinese firm,” he says.

China’s government-sponsored talent recruitment agencies have also spotted the repatriation opportunity. But they are also more cautious in operating in the US now because they fear increased scrutiny from the US government, according to one former recruiter.

Instead, adds Mr Li, China’s private sector is moving quickly.

“The semiconductor industry here is shrinking, whereas in China it’s expanding — there are lots of laid-off workers to be picked up,” he says.

Zhang Lelin says Chinese employees working at US tech companies are “cannon fodder”: @Businessdayng

“We get hurt by the US-China dispute, but we don’t decide the outcome.”

He reflects on how, during the second world war, the US government forcefully relocated more than 120,000 JapaneseAmericans to internment camps, a decision that had little to do with national security.

The first such camp was built in Manzanar, California, a few hundred miles from where most tech companies are now based.

For most workers in the Valley, that dark chapter of US history is in the past. But for some, it is not quite as far removed as it once seemed. “Look at history,” says Zhang Lelin.

Wednesday 22 January 2020

BUSINESS DAY

47

Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 21 January 2020

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) MORTGAGE CARRIERS, BROKERS AND SERVICES BANKING ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 0 0 ACCESS BANK PLC. 357,229.52 10.05 -6.51 537 33,001,195 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 290,695.08 8.50 -3.95 311 22,425,192 UNITED BANK FOR AFRICA PLC INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 ZENITH BANK PLC 701,711.64 22.35 -1.76 587 57,809,636 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 1,435 113,236,023 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 OTHER FINANCIAL INSTITUTIONS 0 0 FBN HOLDINGS PLC 269,214.70 7.50 -0.67 230 9,912,193 OTHER FINANCIAL INSTITUTIONS 230 9,912,193 AFRICA PRUDENTIAL PLC 9,200.00 4.60 -0.86 53 1,623,376 1,665 123,148,216 CUSTODIAN INVESTMENT PLC 34,997.09 5.95 - 20 310,026 TELECOMMUNICATIONS SERVICES DEAP CAPITAL MANAGEMENT & TRUST PLC 540.00 0.36 - 1 2,667 MTN NIGERIA COMMUNICATIONS PLC 2,615,554.93 128.50 0.16 148 2,749,116 FCMB GROUP PLC. 38,219.23 1.93 -4.46 142 16,242,102 148 2,749,116 ROYAL EXCHANGE PLC. 1,697.97 0.33 - 2 21,500 148 2,749,116 STANBIC IBTC HOLDINGS PLC 446,461.11 42.50 - 18 33,934 BUILDING MATERIALS UNITED CAPITAL PLC 16,500.00 2.75 1.85 77 3,850,689 DANGOTE CEMENT PLC 2,948,007.78 173.00 -1.14 276 2,392,021 313 22,084,294 LAFARGE AFRICA PLC. 279,470.25 17.35 6.12 387 10,179,529 1,033 68,522,768 663 12,571,550 HEALTHCARE PROVIDERS 663 12,571,550 EKOCORP PLC. 2,592.72 5.20 - 0 0 EXPLORATION AND PRODUCTION UNION DIAGNOSTIC & CLINICAL SERVICES PLC 746.16 0.21 - 2 76,000 SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 346,005.40 588.00 - 11 15,170 2 76,000 11 15,170 MEDICAL SUPPLIES 11 15,170 MORISON INDUSTRIES PLC. 494.58 0.50 - 1 1,500 2,487 138,484,052 1 1,500 REAL ESTATE INVESTMENT TRUSTS (REITS) PHARMACEUTICALS SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 EVANS MEDICAL PLC. 366.17 0.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 FIDSON HEALTHCARE PLC 5,320.22 2.55 - 12 98,174 UPDC REAL ESTATE INVESTMENT TRUST 9,338.94 3.50 1.45 16 907,819 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,175.26 6.00 - 12 283,901 16 907,819 MAY & BAKER NIGERIA PLC. 3,743.76 2.17 - 27 198,960 16 907,819 968.57 0.51 - 10 302,402 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC OTHER FINANCIAL INSTITUTIONS NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 1 12,600 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 62 896,037 0 0 65 973,537 0 0 COMPUTER BASED SYSTEMS 16 907,819 COURTEVILLE BUSINESS SOLUTIONS PLC 852.48 0.24 4.35 7 354,000 CROP PRODUCTION

7 354,000 FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 COMPUTERS AND PERIPHERALS 62,958.06 66.00 - 24 78,529 OKOMU OIL PALM PLC. OMATEK VENTURES PLC 1,206.13 0.41 - 0 0 PRESCO PLC 52,250.00 52.25 - 12 23,259 0 0 36 101,788 IT SERVICES FISHING/HUNTING/TRAPPING CWG PLC 6,413.06 2.54 - 0 0 ELLAH LAKES PLC. 8,500.00 4.25 - 0 0 NCR (NIGERIA) PLC. 394.20 3.65 - 3 10,416 0 0 TRIPPLE GEE AND COMPANY PLC. 287.07 0.58 - 4 10,000 LIVESTOCK/ANIMAL SPECIALTIES 7 20,416 LIVESTOCK FEEDS PLC. 1,710.00 0.57 3.64 11 478,435 PROCESSING SYSTEMS 11 478,435 CHAMS PLC 1,502.74 0.32 - 10 1,006,500 47 580,223 E-TRANZACT INTERNATIONAL PLC 10,962.00 2.61 - 0 0 DIVERSIFIED INDUSTRIES 10 1,006,500 JOHN HOLT PLC. 217.92 0.56 - 2 28,436 TELECOMMUNICATIONS SERVICES S C O A NIG. PLC. 1,903.99 2.93 - 1 1,120 AIRTEL AFRICA PLC 1,123,311.48 298.90 - 2 57 TRANSNATIONAL CORPORATION OF NIGERIA PLC 43,493.35 1.07 3.88 64 4,860,705 2 57 U A C N PLC. 30,397.68 10.55 -1.40 129 2,729,059 26 1,380,973 196 7,619,320 BUILDING MATERIALS 196 7,619,320 BERGER PAINTS PLC 1,956.31 6.75 - 3 18,959 BUILDING CONSTRUCTION BUA CEMENT PLC 1,234,355.71 36.45 -1.49 64 729,579 ARBICO PLC. 469.26 3.16 -9.97 1 106,000 CAP 17,500.00 25.00 - 27 92,229 PLC 1 106,000 MEYER PLC. 244.37 0.46 - 3 9,472 INFRASTRUCTURE/HEAVY CONSTRUCTION PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 JULIUS BERGER NIG. PLC. 28,314.00 21.45 - 48 397,660 1,156.20 9.40 - 0 0 PREMIER PAINTS PLC. ROADS NIG PLC. 165.00 6.60 - 0 0 97 850,239 48 397,660 ELECTRONIC AND ELECTRICAL PRODUCTS REAL ESTATE DEVELOPMENT AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 0.48 15 15,000,000 UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 - 3 3,900 CUTIX PLC. 2,395.40 1.36 - 16 421,743 3 3,900 52 507,560 31 15,421,743 PACKAGING/CONTAINERS

BETA GLASS PLC. 31,948.21 63.90 - 3 2,480 AUTOMOBILES/AUTO PARTS GREIF NIGERIA PLC 388.02 9.10 - 1 44,000 DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 4 46,480 0 0 AGRO-ALLIED & CHEMICALS BEVERAGES--BREWERS/DISTILLERS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 CHAMPION BREW. PLC. 7,124.84 0.91 -7.14 6 335,000 0 0 GOLDEN GUINEA BREW. PLC. 220.45 0.81 - 1 9,072 132 16,318,462 GUINNESS NIG PLC 66,149.56 30.20 - 34 80,580 CHEMICALS INTERNATIONAL BREWERIES PLC. 77,362.76 9.00 -6.11 30 2,508,405 B.O.C. GASES PLC. 2,060.41 4.95 - 4 7,970 NIGERIAN BREW. PLC. 415,838.91 52.00 1.76 61 778,051 4 7,970 132 3,711,108 METALS FOOD PRODUCTS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 DANGOTE SUGAR REFINERY PLC 175,800.00 14.65 - 79 1,409,488 0 0 FLOUR MILLS NIG. PLC. 96,358.92 23.50 - 53 1,128,611 MINING SERVICES HONEYWELL FLOUR MILL PLC 8,564.61 1.08 4.85 48 3,236,455 MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 15,000 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 2 15,000 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 2,998 PAPER/FOREST PRODUCTS NASCON ALLIED INDUSTRIES PLC 41,596.18 15.70 - 14 111,108 THOMAS WYATT NIG. PLC. 77.00 0.35 - 2 1,252 UNION DICON SALT PLC. 2,993.06 10.95 - 0 0 2 1,252 195 5,888,660 8 24,222 FOOD PRODUCTS--DIVERSIFIED ENERGY EQUIPMENT AND SERVICES CADBURY NIGERIA PLC. 20,378.49 10.85 - 29 188,308 JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 16 982,069 NESTLE NIGERIA PLC. 1,093,865.63 1,380.00 - 55 45,796 16 982,069 84 234,104 INTEGRATED OIL AND GAS SERVICES HOUSEHOLD DURABLES OANDO PLC 44,753.08 3.60 2.27 59 18,206,056 NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 59 18,206,056 VITAFOAM NIG PLC. 6,254.22 5.00 0.81 41 744,380 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 41 744,380 11 PLC 53,332.04 147.90 - 28 36,074 PERSONAL/HOUSEHOLD PRODUCTS CONOIL PLC 13,879.04 20.00 - 28 36,012 P Z CUSSONS NIGERIA PLC. 23,227.29 5.85 - 32 346,580 ETERNA PLC. 4,238.47 3.25 -9.72 14 826,820 UNILEVER NIGERIA PLC. 103,410.10 18.00 - 37 280,607 FORTE OIL PLC. 26,831.11 20.60 - 55 321,746 69 627,187 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 17 12,023 521 11,205,439 TOTAL NIGERIA PLC. 39,724.05 117.00 - 46 246,835 BANKING 188 1,479,510 ECOBANK TRANSNATIONAL INCORPORATED 141,291.54 7.70 - 81 2,386,776 263 20,667,635 FIDELITY BANK PLC 64,903.55 2.24 -0.45 101 11,285,804 ADVERTISING GUARANTY TRUST BANK PLC. 947,683.97 32.20 -5.29 233 9,361,871 AFROMEDIA PLC 1,509.28 0.34 - 0 0 JAIZ BANK PLC 19,446.40 0.66 -4.35 24 3,049,743 0 0 STERLING BANK PLC. 54,125.99 1.88 -1.05 47 2,012,199 AIRLINES UNION BANK NIG.PLC. 176,180.55 6.05 - 42 91,434 MEDVIEW AIRLINE PLC 15,796.05 1.62 - 0 0 UNITY BANK PLC 8,065.64 0.69 6.15 14 513,965 0 0 28,159.36 0.73 1.39 39 2,732,831 WEMA BANK PLC. AUTOMOBILE/AUTO PART RETAILERS 581 31,434,623 R T BRISCOE PLC. 235.27 0.20 - 2 7,019 INSURANCE CARRIERS, BROKERS AND SERVICES 2 7,019 AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 COURIER/FREIGHT/DELIVERY AIICO INSURANCE PLC. 5,613.47 0.81 1.23 29 3,052,275 RED STAR EXPRESS PLC 2,623.26 4.45 - 1 500 AXAMANSARD INSURANCE PLC 22,365.00 2.13 1.43 7 197,931 TRANS-NATIONWIDE EXPRESS PLC. 421.96 0.90 - 1 1,250 CONSOLIDATED HALLMARK INSURANCE PLC 2,926.80 0.36 - 0 0 2 1,750 CORNERSTONE INSURANCE PLC 8,395.82 0.57 - 27 1,057,917 HOSPITALITY GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 TANTALIZERS PLC 642.33 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 HOTELS/LODGING LASACO ASSURANCE PLC. 1,977.33 0.27 -7.41 16 2,081,416 CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 2,577.80 0.60 9.09 10 762,285 LAW UNION AND ROCK INS. PLC. IKEJA HOTEL PLC 2,328.25 1.12 - 4 6,240 LINKAGE ASSURANCE PLC 3,840.00 0.48 - 4 22,010 TOURIST COMPANY OF NIGERIA PLC. 7,076.28 3.15 - 0 0 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 2 355,401 33,821.80 4.45 - 1 1,000 TRANSCORP HOTELS PLC NEM INSURANCE PLC 10,561.01 2.00 - 9 94,550 5 7,240 NIGER INSURANCE PLC 1,547.90 0.20 - 2 6,577,616 MEDIA/ENTERTAINMENT PRESTIGE ASSURANCE PLC 2,906.58 0.54 - 0 0 DAAR COMMUNICATIONS PLC 4,320.00 0.36 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 165,000 0 0 SOVEREIGN TRUST INSURANCE PLC 2,272.89 0.20 - 5 97,000 PRINTING/PUBLISHING STACO INSURANCE PLC 4,483.72 0.48 - 0 0 ACADEMY PRESS PLC. 223.78 0.37 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 LEARN AFRICA PLC 933.45 1.21 - 1 1,200 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 2 18,100 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSITY PRESS PLC. 539.26 1.25 -3.85 12 1,494,171 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 15 1,513,471 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 ROAD TRANSPORTATION WAPIC INSURANCE PLC 4,951.61 0.37 - 19 49,194 ASSOCIATED BUS COMPANY PLC 745.97 0.45 - 0 0 131 14,512,595 0 0 MICRO-FINANCE BANKS SPECIALTY NPF MICROFINANCE BANK PLC 2,743.97 1.20 -2.44 8 491,256 INTERLINKED TECHNOLOGIES PLC 688.80 2.91 - 0 0 8 491,256 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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BUSINESS DAY Wednesday 22 January 2020 www.businessday.ng

Emerging market inflation hits near-six-year high Steve Johnson

S

urging food prices have pushed emerging marketwide inflation to a near six-year high, reversing a disinflationary trend that has held sway in the developing world since the immediate aftermath of the global financial crisis.

A gathering wave of fuel price inflation, largely driven by base effects, is also likely to strengthen in the coming months, helping to keep broad headline inflation levels elevated.

At this stage, analysts are not expecting a turn in the monetary policy cycle in most emerging markets, where inflation and benchmark interest rates have tumbled in unison in many countries in recent years.

However, the jump in inflation may limit scope for further monetary easing in the likes of Mexico, South Africa, India, Brazil and the Philippines, as well as adding a hawkish tint to policymaking in eastern Europe.

Emerging marketwide inflation jumped to 4.6 per cent, year on year, in December, up sharply from 3.4 per cent in September, according to an index based on 62 countries (admittedly excluding Argentina and Venezuela where inflation is through the roof ) maintained by Capital Economics.

This is the highest reading since 2014, when oil prices were $110 a barrel, as shown in the first chart, even as price pressures remain exceptionally weak in the developed world. “[There are] more upsides in headline inflation ahead,” in the developing world, said Kamakshya Trivedi, co-head of global foreign exchange, interest rates and emerging markets strategy research at Goldman Sachs.

“After a 2019 rich in downside inflation surprises across EM, in recent weeks innovations have been mainly on the opposite side, with some notable upside surprises in India, the Czech Republic, the Philippines, Poland and Turkey,” he added.

Goldman’s inflation acceleration metric, which aims to capture momentum and base effects in 16 EM countries, and which the bank describes as a “reasonably good predictor of future changes in year-on-year inflation”, has jumped markedly after languishing at lows in September, depicted in the second chart.

The rise has largely been driven by a surge in food price inflation, which has jumped to an eight-year high of 8.2 per cent, according to Capital Economics.

The largest driver of this has

Millions of pigs have been culled as African swine fever has cut through China and beyond, devastating global food chains and sending pork prices soaring © AFP/Getty Images

been African swine fever, which has cut China’s pig herd by more than a third, with the estimated loss of 100m pigs, and has spread to central Europe.

This has pushed pork prices in China to record highs and rippled out more widely as China’s meat imports jumped 63 per cent in the first 11 months of 2019 from the same period the previous year to $16.3bn, according to customs data.

Brazilian meat prices, predominantly beef, for example, rose by 25.7 per cent year on year in December, up from 7.8 per cent in November, off the back of rising Chinese demand.

“That alone added 0.5 percentage points to the annual rate of headline inflation between early November and early December,” said William Jackson, chief emerging markets economist at Capital Economics, accounting for a large slice of the 1.2-point rise in consumer price inflation to 3.9 per cent.

Overall, meat price inflation across 14 major emerging markets is running at 33.5 per cent, according to an index constructed by the consultancy, illustrated in the third chart.

This will have more impact on overall inflation than in developed countries because of the higher weighting that food tends to have in CPI baskets in the emerging world.

Food price inflation has also been pushed higher by a spike in the price of vegetables in India, after severe flooding damaged crops.

Edward Glossop, emerging markets economist at Capital

Economics, believed that EM food inflation was “probably close to a peak”, with Indian vegetable inflation likely to start to ease after the first quarter of the year and signs that the disruption related to Asian swine fever is fading.

Chinese pork prices fell month on month in December for the first time since early 2019, with the annual inflation rate slipping from 110 per cent to 97 per cent, Mr Glossop said, a trend coinciding with a rise in both Chinese and Polish pig stocks.

“That corroborates with comments from policymakers in China that they are getting to grips with ASF and stopping it spreading,” he added. “That suggests that the worst of the spread has probably happened. If pork prices are flat from here we should start to see a fall in yearon-year inflation quite sharply.”

One possible glitch could be the drought and bushfires in Australia, however, which have reduced cattle numbers.

Australia’s beef exports to China jumped 81 per cent in the first 11 months of 2019, according to Australia’s department of agriculture, although the country’s overall beef exports rose by just 7 per cent as its shipments were rerouted to China from other markets, such as Japan, Indonesia, Canada and the Philippines.

Capital Economics expects its headline measure of EM inflation to trend downwards from here. Nevertheless, Mr Glossop said inflation would actually rise further in most EM countries.

Firstly, higher oil prices are likely to push up inflation. As oil prices were generally lower in 2019 than in 2018, year-on-year fuel inflation was generally negative, dragging down headline inflation rates. However, yearon-year oil price differentials have recently turned positive, meaning they will push CPI inflation higher, not lower.

Mr Glossop estimated that EM-wide oil price inflation will rise from -4.5 per cent at present to +3 per cent, assuming that spot oil prices remain at current levels. This would be enough to push up overall inflation by half a percentage point.

Secondly, core inflation, which strips out food and fuel prices, may also rise in countries that have recently loosened monetary policy, such as India, where interest rates have been cut from 6.5 per cent to 5.25 per cent in the past year, while strong growth and labour shortages should keep inflation elevated in eastern Europe.

Given that much of the upward pressure is coming from noncore food and fuel prices, some central banks may choose not to react by tightening, or refraining from loosening, monetary policy.

As a generalisation, Mr Glossop said “more sophisticated” central banks in Asia, central and eastern Europe and Chile were more likely to look through such inflation.

However, some others, such as the banks of Colombia and Mexico, tend to be quite hawkish as elevated food and fuel prices have historically been more

likely to have secondary inflation effects and to push up inflation expectations.

As a result, Capital Economics believes monetary policy in Mexico, as well as South Africa, will be tighter than many observers expect this year.

Further rate cuts in India may also be off the near-term agenda after headline inflation jumped to 7.35 per cent in December, from 5.5 per cent a month earlier, well above the central bank’s 4 per cent target, the consultancy said. Likewise, the recent pick-up in Brazilian inflation may stymie further policy easing.

Goldman Sachs said a jump in inflation in the Philippines, from 1.3 per cent in November to 2.5 per cent in December, significantly above consensus expectations, meant risks to its forecast of a further 50-basis points of policy easing were now skewed in a “more hawkish direction”.

The biggest differences may come in eastern Europe, however. Given that inflation in the Czech Republic has risen to a seven-year high of 3.2 per cent, above the central bank’s target range of 1-3 per cent, Goldman said the risks were “skewed towards higher rates in the coming months”, despite markets pricing in cuts in the next two or three quarters.

Likewise in Poland, where inflation jumped from 2.6 per cent in November to a seven-year high of 3.4 per cent in December, Goldman said any discussion of 2020 rate cuts, which the market had been pricing in, was now “off the table”.

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