Businessday 23 apr 2018 by BusinessDay

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Stakeholders call for collaborative push to expand financial access ... NCC engaging CBN on partnership between banks, Telco’s - Danbatta ENDURANCE OKAFOR & DIPO OLADEHINDE

ollaboration between banks, Telcos, and FinTech operators, is the only way to effectively give more Nigerians access to financial serContinues on page 46

Nigerians wonder why Buhari is silent at home but vocal abroad

Egypt’s 14,400mw plants coming on stream highlight Nigeria’s power crises

Analysts blame FG’s failure to develop electricity market

ISAAC ANYAOGU

y the end of 2018, Egypt will have the capacity to export electricity once it completes construction of its 14,400MW power

plants making the country an electricity transfer and circulation regional hub. The country is breaking records with the speed with which it is able to add power to the national grid, an approach that is quite different from the ‘incremental method’ being

adopted by Nigeria. Meanwhile, Nigeria is still stuck with 12,000MW name plate capacity, but is only able to generate an average of 7,000MW and even distribute less. Many power plants lie idle six years after attempts to privatise them

BY OUR REPORTER

any Nigerians have been left wondering why President Muhammadu Buhari is vocal anytime he is out of the country but almost Continues on page 46

Inside Arsenal stock’s big move shows investors cheering Wenger exit P. 45 BusinessDay to unveil top 25 Nigerian CEOs 2017 power rankings P. 44

L-R: Kennedy Uzoka, GMD/CEO, UBA plc, and wife, Lotanna; Tony Elumelu, group chairman, UBA plc, and wife, Awele, at the 2018 UBA CEO awards, where deserving staff were honoured in a night of fun.

started. The country has only been able to add about 8,000MW of name plate capacity in about 19 years since 1999. However, actual generation has not changed much over period. In 2015, Egypt signed a memorandum of understanding with Siemens for a master plan to strengthen and develop the electricity grid until 2025. German Chancellor Angela Merkel, Egyptian President Abdel Fattah El-Sisi, Siemens CEO Joe Kaeser and other high-ranking representatives witnessed the symbolic inauguration of the first phase of Siemens’ megaproject in Egypt on March 2, 2017. Working together with local partners, Orascom Construction and Elsewedy Electric, Siemens has broken all records in modern power plant construction by connecting the first 4,800MW of new capacity to the Egyptian national grid in only 18 months after the signing of the contract for the company’s biggest single order ever. According to information on Siemen’s website ‘When completed 2018, each of the three Continues on page 4

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businessday market monitor Commodities Brent Oil

Biggest Gainer

$73.77

Seplat N737.1

Cocoa

US $2,729.00

Biggest Loser

1.41pc

Everdon Bureau De Change

Bitcoin

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40,814.89

-4.97pc

2,983,647.12

+2.65pc

BUY

SELL

$-N 360.00 363.00 £-N 506.00 516.00 €-N 437.00 447.00

FMDQ Close FOREIGN EXCHANGE Market

Spot $/N

I&E FX Window 360.31 CBN Official Rate 305.60

5 Years

10 Years

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-1.19 10.46

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-0.12% 12.94%

Ten states budget N2trn for capex in 2 years ... Delta, Kano, Kaduna lead BUNMI BAILEY

en states’ had budgeted capital expenditure (capex) for 2017 and 2018 hitting a combined N2trn. The States include Kwara, Ondo, Plateau, Edo, Kastina, Yobe, Delta, Kogi, Kaduna and Kano states, data from BudgIT which was analysed by BusinessDay shows. According to the report by BudgIT, a civil organization that deals in budget transparency and accountability in Nigeria, the ten states as at April 18th, 2018 have their budget in public domain. The budgeted capital expenditure for Delta state rose by 18.4 per cent to N161.6 billion in 2018 from N 136.5 billion in 2017, Kano state spiked by 9.7 per cent to N151.9 billion in 2018 from N138.5 per cent in 2017. Kaduna state’s capital outlay declined marginally by 0.15 per cent to N131.2 billion in 2018 relative to N131.4 billion spent in the preceding year. Analysts have attributed this

trend of a surge in infrastructural spending as an essential factor to drive inclusive economic growth. “One of the things that I see common among these states is the investments in infrastructure and in my opinion it is just in line with the ruling All Progressive Congress’ manifesto to invest more in infrastructure that would foster economic growth and development ,” Ayodele Shittu, a Lecturer in the Department of Economics, University of Lagos said on phone. Based on the states’ 2017 and 2018 budget documents, Delta state combined capital expenses for the two years period is N298.1 billion, Kano’s outlay amounts to N290.4 billion and Kaduna had N262.6 billion. Others are Katsina state (N257.8 billion), Kogi state (N204.9 billion), Kwara state (N191.0 billion). Edo state total capital expenses so far is N144.3 billion while Plateau, Ondo and Yobe states respectively has budgeted N140.6 billion, N140.1 billion and N72.1 billion as capital expenses for the two years period.

There are views that the state government investments are being channelled towards railway projects in Kano and Kaduna states to open up major farms which are located in that region. “I suspect that rail is part of Kano and Kaduna major infrastructural investments. It will ease transportation among food producers in the hinterland of the two states which will in turn have a knock on effect on food production and improve food availability in those regions and in the long run lead to stable food prices” Ibrahim Tajudeen, Head of Research, Chapel Hill Denham told BusinessDay on phone. The total budget of the ten states for the two year period is put at N3.6 trillion in which capital expenditure is N2 trillion which is higher than recurrent expenditure which is N1.5 trillion. This is a good sign as against the normal trend where a large chunk of state governments’ budget is spent on paying salaries and other recurrent expenses, leaving a paltry amount for capital expenditure.

FGN BONDS

TREASURY BILLS

“If we have a situation where a number of states have capital expenditure budget than the recurrent expenditure that for me is indicative of progress in addressing the infrastructural deficit we have in the country,” Johnson Chukwu, Chief Executive Officer of Lagos-based financial advisory firm, Cowry Assets Management Limited, said. “A lot of times the revenue of the states is barely enough to cover recurrent expenditure so the capital expenditure are always projected on the fact that the government will have some kind of windfall,” Chukwu added. The onus therefore rests on the various state governments that are yet to release their documents to the public to do that since it is a public document. Doing that will improve the country’s transparency rank from the 80th position out of 115 countries notching 17 points out of a possible 100, according to transparency index by International Budget Partnership (IBP) 2017. “States that do not have their documents known should emulate these states so that we can improve our level of transparency in this country”, Chukwu concluded.

MTN picks Chapel Hill, RenCap, Vetiva, Rand Merchant as advisers to N144bn IPO ... meets with analysts IHEANYI NWACHUKWU

TN Group has shown commitment to move ahead with plans to list its Nigerian unit, the latest being the recent appointment of Chapel Hill Denham as lead manager for the initial public offering (IPO) in the Lagos bourse later this year. Other appointed advisers are South Africa’s Rand Merchant Bank, Renaissance Capital and Vetiva Capital. MTN aims to list its Nigerian unit worth $5.23 billion by July and raise funds to cut debt. It plans to raise at least $400million from the IPO to pay preference shareholders and go on a road show between May and June. MTN Group plans to list on the Premium Board of the NiContinues on page 46

Egypt’s 14,400mw plants coming on stream... Continued from page 1

power plants, located at Beni Suef, New Capital and Burullus, is set to become the biggest gas-fired combined-cycle power station in the world. Altogether, the three power plants will have a combined capacity of 14,400 MW. “Critical success factors for the project is in the planning, the structuring of the deal and the availability of a functional market,” says Chuks Nwani, energy lawyer and vice president PowerHouse International. “This is what has been lacking in Nigeria’s quest to build power plants, you need a market.” The Federal Government opened itself for such accusation by its decision to interfere with electricity pricing rather than allow market forces determine pricing. Even when gas prices, inflation and exchange rate, key determinants of tariff have changed, the federal government prevented the Nigerian Electricity Regulatory Commission (NERC), which acts more like an appendage, from allowing electricity distribution companies (DisCos) to review tariffs. Meanwhile, in Egypt, the citizens had to swallow a bitter pill. Currency devaluation, deregulation and other tough economic prescriptions have been applied to create a more market friendly environment. In the country’s 2018 budget, its finance minister has already proposed slashing electricity subsidy by 48 percent and fuel subsidy by 19 percent. An enabling market environment is why Egypt could attract a financing package for the Siemens’ part of the €6bn contracts, which was structured by Siemens Financial Services (SFS) and includes a tailored guarantee concept.

The plan includes providing solutions along the electricity value chain taking into cognisance the country’s capacity to generate power from coal, nuclear, and renewables and the market. This will boost electricity generation in Egypt by 50 percent. Nigeria’s programme to privatise 10 National Integrated Power Plants (NIPPs) initiated during the administration of former president Olusegun Obasanjo began two years earlier than Egypt’s power project but it is yet to see much progress. The financial offers for the NIPPs were made in 2013 and since then, the plants have suffered depreciation. The preferred bidders want the sale mechanism to factor this depreciation, loss of value and time-frame for repairing them in purchase negotiations, but cash-strapped Federal Government wants to get its hands on the money as quickly as possible. Consequently, the preferred bidders and the Niger Delta Power Holding Company (NDPHC), managing the plants have structured the terms so that the bidders pay 30 percent of the bid prices upfront while deferring the balance (over a 15 year period) until the market attains financial stability. The bidders say this will mitigate risks of stranded investments or government default. Nigeria is yet to give the green light. But even this proposal comes with its own problems. Wolemi Esan, partner at the law firm of Olaniwon Ajayi LP had earlier told BusinessDay that such renegotiation may prompt the reserve bidders and even the other unsuccessful bidders for the NIPP assets to consider this change in payment terms as an attempt by government to relax the rules in

L-R: Mansur Ahmed, group executive director, corporate communications and stakeholder management, Dangote Group; Zouera Youssoufou, managing director, Aliko Dangote Foundation; Aliko Dangote, chairman, Aliko Dangote Foundation; Rasheed Yussuf, chairman general, Lagos Zone, Nawair-UD-Deen Society of Nigeria (NUDS); Tajudeen Olusi, chairman, board of trustee, Zummuratu Islamiyah Society of Nigeria, and Rasaki Oladejo, national president, NUDS, at the formal commissioning and handing over Nawair-UD-Comprehensive College School Complex to the NUDS, Idi-Oro, Mushin Lagos, donated by Aliko Dangote Foundation, at the weekend. Pic by Olawale Amoo

the middle of the process. “Such unsuccessful bidders may legitimately challenge the renegotiation on the ground that they would have bid differently if they were aware that NDPHC was going to grant a significant concession on the payment terms,” Esan said. Thisdisagreement,alongwithlack of firm gas supply, inadequate transmission evacuation infrastructure, and in some cases, non-completion of the NIPPs has stalled the project. Some progress has been seen in the construction of Gbarain, Egbema, Alaoji and Omoku but they still fall short. In February 2015, former president Goodluck Jonathan while com-

missioning the 750MW, four-gas unit of Olorunsogo II power plant in Ogun state, said Nigerian had spent $8.26 billion on the NIPPs. “In the next two years, electricity will be taken for granted in Nigeria, as in other countries,” Jonathan said. However, three years later, electricity is still a fundamental issue in Nigeria. Manufacturers say 40 percent of their production cost goes to power. Shortfalls in the electricity market is over N1trillion, DisCos still bill customers upon a brutal exercise of discretion and power generation companies (GenCos) are locked in a legal battle with the Nigerian Bulk Electricity Trading Company over settlement of their

market invoice. But in Egypt Siemens will also deliver up to 12 wind farms in the Gulf of Suez and west Nile areas, comprising around 600 wind turbines and an installed capacity of 2GW. The deal is being done with cooperation of local partners Orascom and Elsewedy Electric and will serve a market of over 45million people. Nigeria has a population of 198 million people with GDP of $405 billion. Egypt is Africa’s third largest economy with GDP of $336 billion and a total population of 98 million people, less than half of Nigeria’s population. •Continues online at www.businessdayonline.com

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Severe head injuries (trust, deception and good neighbours)

BASHORUN J.K RANDLE Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

rom “The Nigeria Voice” and “Sun” newspaper dated 23rd March, 2018, we have a front page report with the headline: “Nigeria’s stolen crude traced to Philadelphia, USA” “Human rights lawyer and Senior Advocate of Nigeria (SAN), Femi Falana, Thursday revealed one of the destinations where stolen crude oil from Nigeria was taken to without the knowledge of the Federal Government. Through the efforts of a group of lawyers of like mind, Falana said that some ships that carried stolen crude from Nigerian seaport were traced to a port in Philadelphia in the United States of America (USA) where the product was discharged. Upon investigation here in Nigeria, he stated that there was no record of the shipment of the crude, whereas, at the destination port, a record showed that the crude was from Nigeria. “We got information at the loading port, of a ship carrying crude and when we traced it, it was a port in Philadelphia that 6.2 million barrels of oil was recorded from Nigeria, the ship could not escape because of taxation put at $12.7 million. This revelation is just one out of many ports in the US, not to talk of Britain, India or China where stolen crude from Nigeria were taken to,” he lamented.

Falana made this revelation at a training on anti-corruption monitoring and reporting, organised by the Anti-corruption Situation Room of the Human and Environmental Development Agenda. According to him, it would be difficult to give an accurate figure of barrels of crude oil that leave the country’s shores everyday, since there was no meter at the loading point. He expressed doubt whether the Nigerian Extractive Industries Transparency Initiative (NEITI) could sanitise the oil and gas sector, now that the government has no respect for figures and data from agencies like NEITI. Falana also announced that his group has secured the nod of the Attorney General of the Federation to file charges against all foreign banks that warehoused monies looted from Nigerian treasuries by the late Sani Abacha and former governor of Delta State, James Ibori.” It was the Norwegian Ambassador to Nigeria, Jens-PetterKjemprud who in an interview with VictoriaOjeme which was splashed on the front page of “Vanguard” newspaper of 25th March, 2018 dropped a bombshell: “Norway produces 36,000 megawatts of electricity from hydro power for five million people while Nigeria produces on a good day 3,600 megawatts for two hundred million people, which means that Nigeria has to produce its power from generators and from the use of diesel which is expensive and does not benefit manufacturing in the country.” He also added for good measure: “First of all, I would like to say that the people and the human capacity here in Nigeria are enormous. As an example, Nigerians graduating from US educational institutions have the best results and it is the same thing

Norway produces 36,000 megawatts of electricity from hydro power for five million people while Nigeria produces on a good day 3,600 megawatts for two hundred million people, which means that Nigeria has to produce its power from generators and from the use of diesel which is expensive and does not benefit manufacturing in the country

with Nigerians in Norway. The human capital of this country is enormous. I think Nigerians are performing below what they can do and if you manage to get all of the creativity, human capital and innovation together, Nigeria should take its normal place which is among the top countries of the world. So why are things like this? I don’t know. I used to say it is 20 per cent about politics and 80 per cent about organization. So maybe the society needs to be organised somewhat different. Nigeria is underperforming and something needs to be done to change that. And in whatever way the international community, of which Norway is a part, could help in reorganizing and getting all these potentials out to benefit the people of Nigeria, I am sure that all my colleagues and the entire international community will be happy to cooperate with Nigeria on that. We hosted the Nigerian-Lake Chad Humanitarian Conference in February last year, which came out with almost $700million in commitments; Norway made a commitment over a three year

period of approximately 100million Norwegian Krone which is in the range of $20million a year over a three year period but depending on the needs we are adding to that. As you probably know, we are also the biggest per capita donor to the general funds of organisations like UNICEF, UNHCR and UNDP. So we have direct assistance through programmes worked out here and indirectly through the organizations. So we are scaling up and we are in dialogue now with the government and the UN about what can be done to attract more commitments to the situation as the situation is today in the North-East but also to move from humanitarian assistance to development activities.” We have every reason to draw encouragement from the late Joseph F. Kennedy former Ambassador of the United States of America to Britain and father of President John F. Kennedy who insisted that: “A nation that is afraid to let its people judge its truth and falsehoods in an open market is afraid of its people.” We also have the front page of “Nigerian Tribune”newspaper of March 29, 2018. Headline: “How We Recovered N2.4billion; U.S. $115,000 from ex-Air Chief, Amosu – EFCC An operative of the Economic and Financial Crimes Commission (EFCC) Tosin Owobo, on Tuesday, revealed how the commission recovered N2.4 billion and $115,000 from former Chief of Air Staff, Air Marshal Adesola Amosu. Owobo who said this before Justice Mohammed Idris of a Federal High Court in Lagos revealed further that Amosu returned N2.4b through bank drafts at the agency’s Lagos and Abuja offices. Owobo said his team also recovered $115,000 in one of Amosu’s residences. Amosu is standing trial alongside

former Nigeria Air Force (NAF) Chief of Accounts and Budgeting, Air Vice Marshal Jacob Adigun and a former Director of Finance and Budget, Air Commodore OlugbengaGbadebo. They were accused of diverting about N21 billion NAF funds, charges which they pleaded not guilty to. Nigerian Tribune recalls that an initial plea bargain talks with the EFCC and the defendants broke down after the defendants reportedly refunded some money to the Federal Government. However, at Tuesday’s proceedings, the Prosecution Counsel Mr RotimiOyedepo during the examination in chief enquired whether the EFCC had recovered anything from the N21 billion allegedly stolen by the defendants. Owobo, therefore, answered in the affirmative. He told the court that money, cars and landed property were seized from the defendants. “About N100m was recovered from the third defendant Air Commodore Gbadebo. “About N383 million was recovered through the first defendant’s wife. The first defendant (Amosu) also refunded two bank drafts of N2.4 billion in our Lagos and Abuja offices. We recovered $115,000 in one of the first defendant’s residences,” he said. Owobo listed the recovered vehicles to include a bulletproof Lexus LX 570, a bulletproof Landcruiser Sports Utility Vehicle and a Toyota Avalon. “Various landed property and buildings were recovered from the second defendant.” Justice Idris thereafter adjourned the matter till April 18, 2018for continuation of the trial.”

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State capture as poisoned chalice

TAJUDEEEN AHMED Tajudeen Ahmed, a strategy expert, with several years of senior management experience in consulting, commercial banking, and FMCG, is the General Manager/Group Head Business Development at BUA Group

onsidering diverse definitions of “state capture”, a term introduced into the political economy lexicon by the World Bank in 2000, I take liberty to give my personal definition of that term as:a form of systemic corruption involving the manipulation, by the ruling elite and/or businessmen/private interests, of government/public policy, laws, and regulations to their own exclusive advantages, usually to the detriment of the general public and/or competing businesses. Perhaps, the most popularcase of state captureon the African continent, recently,could not have been less than the scandal involving the government of the erstwhile President of South Africa, Jacob Zuma, and the Gupta family. Incidentally, one of the principal reasons that ‘consumed’ Zuma, having been forced to resign, at the risk of being assailed with an historic vote-of-noconfidence by Parliament, was the state capture imbroglio with the influential Gupta family. His nine-year Presidency

collapsed on the backdrop of this; and allegedly related corruption scandals. It is worthy to give a brief background to the scandal. The Gupta family’s patriarch, Shiv Kumar Gupta, noted for his artistry in trade, especially for businesses in fertilizer, chemicals, soapstone powders and spices; originated from Saharanpur, an industrial town in Uttar Pradesh, north of Delhi, in India. As is common with most entrepreneurial Indian families, whether aristocratic or not, he sent his three sons off to explore other parts of the world; hence Ajay (born in 1966), Atul (born in 1968), and Rajesh (born in 1972), left India for Russia, South Africa, and China respectively. As it turned out, Atul, the middle son, literally ‘hit gold’ in South Africa, on the backdrop of a craftily intricate infiltration of the officialdom of the ruling Africa National Congress (ANC) and a lax regulatory environment, following the fall of apartheid rule. Eventually, the family practically “captured” Zuma, who they had known and influenced since his time as a security chief of ANC, several years before he was elected President. With all the trappings of state capture, the emergence of Zuma as President showed the influence of the sly Gupta family on public policy in South Africa on a very large scale. Such was that influence that they orchestrated the sack of the Finance Minister, Nhlanhla Nene, in December 2015, because he was an impediment to some suspicious multi-million rand transaction aptly named as “Nenegate”. Two Finance Ministers, after Nene’s sack, were also eventually fired on the alleged instigation of the power-

ful family! In fact, Nene’s successor as Finance Minister, Des van Rooyen, lasted a miserly three days and was replaced by Pravin Gordhan, who was ‘grudgingly’ allowed to last for fifteen months before he was also fired for resisting some dodgy nuclear deal between his country and Russia, in which the Gupta family had an inordinate interest! However, it was the extravagant, devilmay-care opulence shown during the use of the exclusive high-security Waterkloof Air Base, normally reserved for military flights and heads of states,by an Indian commercial airline that ferried guests and family members of the Guptas into Pretoria, South Africa, and subsequent wedding extravaganza of the family in Sun City, allegedly funded via public funds, that served as the death-knell of the Zuma presidency. There was also the award of a dubious 340 million rand (20 million euros) contract by the Free State government for the running of a dairy farm in Vrede, the agricultural-hub town in the Free State province, without any tender, to a company, Estina, whose sole director was an Information Technology (IT) salesman with zilch farming experience! Having collected an advance fee of 6.7 million euros, the company wired the funds to the Guptas in an intricate manner via the United Arab Emirates. Among many other state capture scandals, Themba Maseko, who was directly spoken to via telephone by President Zuma, saying: ”there are these Gupta guys who need to meet with you and who need your help; please help them,” was fired a few months after Ajay Gupta claimed that “I will sort him out; he has proved difficult”. The notorious Gupta family had so

much influence on the government that they could summon the heads of big state-owned enterprises (SOEs) that awarded contracts, regulators that set and enforced rules, and Ministers of government anytime they wished! The African bent to this discourse notwithstanding, it would amount to intellectual tomfoolery to assume that state capture is an exclusive preserve of the blessed continent. There are examples of state capture cases in Europe, Asia, South America, and other parts of the world. Joel Hellman, World Bank’s Europe and Central Asia Vice Presidency’s Governance Specialist, cited outcomes of a joint World Bank/EBRD survey of over 3,600 firms in transition countries as being that the degree of state capture varies tremendously across Eastern Europe and Central Asia, from a low in countries like Hungary and Estonia to a high in Russia and Azerbaijan. In fact, the report suggested that for multinational companies operating in countries bedeviled with the malaise, the USA’s much-touted Foreign Corrupt Practices Act or OECD’s Convention, have little impact on state capture. Far from the predictive expositions in textbooks, what is the content of the armory with which the wealthy assail governments and related authorities across countries? There are a few of them. One, a pervasive culture of lack of implication or repercussion for bad behavior, malfeasance, etc encourages the purveyors of state capture- that is, both the state and non-state actors. Countries that are suffused with this malaise offer clearer examples of the culture. Two, poor quality of public services and public policy creates the room for

capturing the levers of state administration by culprits. Three, a lack of, or a blurred presence of, administrative independence from political pressure may make it easy for business operators to capture government bureaucracy. The last group of causes can be gleaned from the comments of Elena Panfilova, head of Transparency International in Russia, who noted that the slow pace of reforms, an inefficient public service, the relative absence of small and medium sized businesses, and the too-speedy privatizations are contributory factors to a belligerent situation of state capture in that country. State capture is deeper than corruption; it is the systemic annihilation of public institutions, so much that Lawson Naidoo, Executive Secretary of the Council for the Advancement of the South African Constitution said it amounts to “institutional vandalism on a massive scale”. Considering that state capture distorts competition, encourages “crony capitalism”, creates “corporate bullies”, and eventually affects the future economies of countries negatively, governments, public institutions, not-for-profit agencies in the public sector space, and other stakeholders should continue to have healthy conversations aimed at seeking to control, and ultimately stop state capture. This, they could do, by way of strengthening governance across all public institutions, with special focus on those responsible for granting licenses, waivers,approvals, etc.

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The import of retrospective voting in 2019

MARTIN IHEMBE Ihembe is a Political Scientist with research interest in political development. He can be reached via 08023688848

If elections are the essential ingredient in representative democracy, then presumably there should be some apparent connection between the will of the people as expressed through elections and the policies they receive from subsequently invested government (Downs, 2011) hile the ban on electioneering campaign has not been lifted by the Independent National Electoral Commission (INEC), the political atmosphere is already charged. With party primaries slated for August and general elections coming up early next year (ceteris paribus), political actors are already strategizing ahead of 2019. The big one came last week Monday when the President Muhammadu Buhari (PMB) officially declared his intention to seek re-election. While mixed reactions have trailed the president’s declaration, the quality of conversation among the electorate is rather appalling. Therefore, the task here is to examine PMB’sfidelity to his campaign promisesin 2015 which endeared him to most Nigerians, and the import of retrospective voting in the 2019 general elections following his re-election bid. Bearing in mind the critical areas the Goodluck government failed woefully, candidate Buhari and his party the All Progressives Congress (APC) exploited the grievance of the electorate by giving top billing to security, corruption, and the economy. In addition, there was also

a bonus to the economy which was to equate N1.00 to $1.00. Without asking questions onconcerning the how, these promises resonated with an obviously livid electorate who were already in the mood of change; hence the resultant surrendering of their willto another agent of the state – PMB. This actionis consistentwiththeviewexpressedinthe first prefatory note above. However, can we say with certitude that the policies Nigerians received from the government they invested in 2015 correspond with their expectation thus far? A careful appraisal of the key issues candidate Buhari promised to tackle will answer this question. Security While the movement of the Military Command to Maiduguri was a laudable effort which yielded commendable result, the very reason why it was moved appears to be defeated. If what we are seeingisanythingtogoby,theHaramists have been emboldened as evident in series of attacks they have launched since this year began. As if that is not enough, the murderous activities of the herdsmen is ever increasing with no respite in sight. Those who trooped out large number in 2015 to vote for this government to provide them with security in order to pursue happiness are now rewarded with a Hobbesian hypothetical state of nature. That the activities of the Haramists and murderous herdsmen persist only reminds us of what General Abacha once said about the persistence of such murderous acts. According to him, “if insurgency lasts more than 24 hours, the government has a hand in it”. Again, to think that voting billions of dollars into fighting insurgency would yield the desired result without addressing the root cause – poverty in absolute terms – to me is delusional. Were it to be so, the West would have won the war on terror long ago, having expended billions of dollars coupled with its military sophistication. Failure to address the economicdimensioninaregionthathas the highest rate of poverty in Nigeria is what the Haramists are feeding on. This government has done little or nothing in this regard.

Since PMB has engaged in what political scientists call “moral hazard”, by which is meant reneging on the campaign promises that got him elected, there is a need for Nigerians to adopt the retrospective voting model in 2019, now that he is seeking re-election Corruption Nothing endeared the electorate in the 2015to Buhari like his “supposed” anti-corruptioncredential.Toparaphrase a market woman in Venezuela who saw the country’s liberation from the oligarchy in Hugo Chavez, most Buharists (this author inclusive) felt that democracy and governance were deeply infected, and Buhari was the only antibiotic that could heal them. Three years down the line, can those Buharists confidently voice those saint like platitudes about Buhari? While the Buhari led government deserves some credit on the TSA and someothergainsrecordedsofarinitsfight against corruption, it goes without saying that its double standards on this issue has rubbishedthisfeat.Uptillnow,noonehas explainedtoNigerianshowAbdulrasheed Maina was smuggled back the federal civil service when it was public knowledge that he had serious corruption issue to answer. Other cases which involved Usman Yusuf of the National Health Insurance Scheme (NHIS), Mai KantiBaru of the NNPC, Ahmed Abubakar of the NIA, and the Buratai property scandal in Dubai are serious issues that cannot be dismissed for a government that claims to be fighting corruption.In recent times, the PMB government also made a volte face on its tough talk on corruption by absolving those who renounce the People’s Democratic Party (PDP) and joined the APC.What the foregoing clearly says

about this government is that we live in an Orwellian Animal Farm where some animals – Nigerians – are more equal than others (implicitly, others even have the license to kill). This readily brings to question the anti-corruption credential of the PMB government. Thequestion now is: how different is this government from the one it replaced? As someone once said, it is clearly a case of “meet the new boss, same as the old one”. Economy Not long after the PMB government assumedoffice,recessionsetin.Thiswas blamed on the profligacy and financial recklessness of the GEJ administration and rightly so. Among the enlightened segment of the electorate, it was quite understandable that the rot inherited by the PMB’s government would make it difficult to get the economy back on track as he promised before the election. However, it was not expected that the economy would be detained in that condition as we have it today. The economic policy pursued by this government has no growth ingredient(s), or what the economists refer to as demand side policies. Economic policy disarticulation seems to be the hallmark of this administrationas seen in the abysmal performance of the 2016-2018 Medium Term Expenditure Framework (MTEF) that was approved upon its assumption of office. This has impacted negatively on the lives of Nigerians, most of whom cannot afford the “necessaries and conveniences” of life arising from economic hardship which has given rise to crime rate. While looted funds have been recovered in billions, with increased revenue accruing to federal coffers as a result of TSA implementation, revenue from FIRS and other non-revenue generating institutionslikeImmigrationServiceand FRSC in trillions, the country still suffers huge infrastructural deficit which has hadconsequencesoneconomicgrowth. Instead of delivering the N1.00 to $1.00 exchange rate promised during election, a dollar now exchanges for N360.00 with serious negativemultiplier effect on the economy, coupled with its bad forex policy in 2016 which served as a recipe

for corruption, and consequently saw the naira crashing. Is this the change we voted for? Retrospective voting in 2019 From the foregoing appraisal of Buhari’s presidency, we cannot say with certainty that there is correlation between the campaign promises in 2015 and the policy outcome in the past three years. This is consistent with the second prefatory note above. The way President Buhari has administered this country so far, it is obvious that he and the APC adopted those populist policies they sold to the electorate in 2015 to win election; not the other way round. Since PMB has engaged in what political scientists call “moral hazard”, by which is meant reneging on the campaign promises that got him elected, there is a need for Nigerians to adopt the retrospective voting model in 2019, now that he is seeking re-election. The model thrives on reward and punishment after a careful assessment of the performance of incumbents who seek re-election. Having been deceived in 2015, applying the retrospective voting model on Buhari by subjecting his stewardship to further scrutiny is a task that we must do in order to make the right choice in 2019. Speaking of the right choice, do we really have other options that we can choice from? Sowore, Durotoye, and Moghalu are young Nigerians – not of the establishment order – who have indicated their interest to put their names on the ballot. In order to avoid the “smoking mirrors” most Nigerians fell for in 2015 in the name of “change”, we have to start asking these aspirants serious questions concerning how they intend to accomplish their beautiful promises, plus, their public policy choices on sensitive national issues like economy, education, healthcare, justice system, youth empowerment, national integration, especially now that the country is so polarized and a lot more. Redirecting our campaigns on issues, as against frivolities will certainly do our ailing democracy a lot of good.

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Dealing with conflicts of interest in the boardroom

BISI ADEYEMI Bisi Adeyemi is the Managing Director of DCSL Corporate Services Limited. For comments and reactions, kindly contact badeyemi@dcsl.com.ng.

conflict of interest occurs when an individual is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other. It is inevitable that Directors will face situations of potential conflict of interest with the companies they serve. The “Agency Theory” postulates that Shareholders are principals and Management their agents. The agents therefore need to be monitored in order to ensure that they protect their principals’ interest effectively. Corporate Governance principles aim to curtail the agent’s “propensity for self-interest” and misconduct by having an independent board which should ensure that Manage-

ment delivers value to the owners and all stakeholders. Accordingly, the Director as a member of an “independent board” is expected to subject his interest to that of the company. The interest of the Company shall at all times be the dominant interest. The Companies and Allied Matters Act places the Director in a fiduciary relationship towards the company and requires him/her to ensure that his/her personal interests do not conflict with his/her duties as a Director. He/she must act with utmost good faith, in the company’s best interests and cannot fetter his discretion nor make secret profits. The SEC Code of Corporate Governance provides that companies should “adopt a policy to guide the Board and individual directors on conflict of interest situations”. A Director is required to disclose any conflict of interest that he/she may have and abstain from discussions on such matters. Where he/she is not certain whether he/she is conflicted, it is best to seek guidance from the Chairman or the Company Secretary. Similarly, Directors who are aware of

a conflict of interest on the part of a fellow Director, have a responsibility to raise the issue. Disclosure by a Director of a conflict, or a decision by the Board as to whether a conflict of interest exists should be recorded in the minutes of the meeting at which the notice of interest was made. The NAICOM Code of Corporate Governance extends disclosure requirements to employees, whilst the CBN Code of Corporate Governance obliges Directors to disclose the fact where they or entities related to them provide services to the respective bank on whose Board they serve. Directors do not live within the prism of their Board membership but have a range of other personal and professional interests. It is no surprise, then, that they will come across real, potential or perceived conflicts of interest. Indeed, the interests of a Director’s or his/her nominator to the Board may sometimes conflict with the overall interest of the Company. A typical example is where the Board is considering a proposal to commit substantial funds to developing a new product weighted against a proposal to recommend a dividend. Depending on which hat they choose to wear,

Directors may find themselves struggling with meeting the interests of return-seeking shareholders (including themselves) or looking at the long-term benefits which could be in the overall interest of all stakeholders. Hence the need to have more independent Directors who would typically bring a balanced perspective as well as some neutrality and objectivity to decision-making. Having disclosed interest in a proposal the Board is considering, the Director is to recuse himself/ herself from discussions on the matter. Some Boards have adopted a policy that sees the conflicted Director exit the Boardroom on the premise that it allows the Board to have a “more candid” conversation. However, this could also suggest that there isn’t sufficient candor on the Board as the presence of the conflicted Director should not impact discussions. Be that as it may, if the Director insists on sitting-in, he/she cannot be compelled to leave. A Director has an unassailable right of attendance at Board meetings and this right can only be waived by the Director. In the absence of such a waiver (by will-

ingly leaving the boardroom), the only recourse available to the Board if to bring the meeting to a close at that point if it cannot proceed with the Director in the room. It is important to note that disclosure and abstinence from deliberations will not always cure conflict of interest. There will be situations where the presence of the conflicted Director on the Board will be enough reason to say no to a proposal. There will also be situations where it may be in the overall interest of the enterprise to have the conflicted Director leave the Board. It is better to avoid conflict of interest situations, rather than have to deal with the often far reaching consequences. The Board should strive to ensure that the interests of Directors are aligned with and indeed subject to those of the Company at all times. Bisi Adeyemi is the Managing Director of DCSL Corporate Services Limited. Kindly forward comment(s) and reaction(s) to badeyemi@dcsl. com.ng

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Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi HEAD OF SALES, CONFERENCES Rerhe Idonije SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Monday 23 April 2018

Unending Benue massacre

igeria continues to hover daily on the edges of precipice as one group of insurgents after another continue to challenge its legitimacy and above all its monopoly over the legitimate use of violence within its jurisdiction. If we accept Max Weber’s definition of the state, as political scientists have done, the successful claim to absolute monopoly of the legitimate use of physical force within a given territory is the key feature and distinguishing characteristic of a state. In that case, Nigeria’s claim to statehood is tenuous, except in the juridical sense where the international community continues to afford it legitimacy regardless of its ability to project its powers within its territorial boundary. Today, it is obvious that the so-called Fulani herdsmen have replaced the Boko Haram terrorists as the greatest security threat in the country and are threat-

ening the peace and even the survival of the country as one undivided entity. These marauding killers who posed as herdsmen have been on a killing spree for the past three years, terrorizing communities all over the country but most especially in the North central states of Benue, Plateau, Kogi, Taraba, Adamawa, Nassarawa and have engaged in wholesale massacres of communities – including helpless women, children, the elderly and infirm – without the government being able to defend the victims, bring the perpetrators to justice or even stop further attacks. For instance, Benue state has been turned into a river of blood since January 1 this year as the so-called herdsmen have engaged non-stop in the killings and sacking of communities all across the state. Over two months after the Nigerian army began exercise ‘Ayem Akpatuma’ or ‘cat race’ to arrest the rising cases of herdsmen killings in Benue state and to allow the over 175, 070 internally displaced persons currently taking refuge

in ramshackle camps across the state to return to their homes, the army has been unable to stop the killings in the state and the militias responsible for the killings have only grown bolder, extending their areas of attacks from the towns bordering Nasarawa state to hinterland communities in the state. In a way, this speaks volume about the state of law and order in the countr y and citizens’ respect for the rule of law. The government must realise that its first and primary duty is to provide security and protect lives and property and its failure to do so renders it illegitimate and ineligible to demand obedience from citizens. The Nigerian government has consistently failed to protect its citizens. In a way, its inability to protect lives and property is tacitly encouraging citizens to resort to self-help. Of course we know that even in the state of nature, survival is the first law. The current emotions in Benue state are those of grief, anger, and most importantly, determination to resort to

self-help. The frustrations with the inability of the federal government and security agencies to deal with the situation is leading to calls and plans to re-arm the people or form militias to defend themselves against future attacks. We do not need to remind the government of the consequences of communities resorting to self-help. The government must act now to prevent the arming and militarisation of the Nigerian society. It is far better to strengthen its security apparatuses to protect and defend citizens than allow citizens be forced into performing this function themselves. To allow armed citizens in a country as fractious and ridden with ethnic, communal, religious, and political conflicts as Nigeria’s is a recipe for disaster. That is why the government must do all within its powers to strengthen its capacity for policing the entire Nigerian society, ensure that justice is done to all wronged parties promptly to strengthen their belief and faith in the rule of law and the process. The time to act is now!

HEAD, HUMAN RESOURCES Adeola Obisesan

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Monday 23 April 2018

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BUSINESS DAY

Monday 23 April 2018

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In Association With

Tweet like a jailbird

Tweeting the dollar down

How African governments try to control what is said online Some governments are muzzling social media—except when it supports them

N THE West, when celebrities post revealing videos on Instagram, they may find themselves mocked by tabloids and gossip websites. In Tanzania they can be arrested. On April 16th Diamond Platnumz, a Swahili rapper (pictured), known for such ditties as “Bum Bum”, was arrested after posting a clip of himself kissing a woman. According to Tanzania’s information minister, Harrison Mwakyembe, Mr Platnumz’s “indecency” fell foul of a new law intended to regulate social media. It is part of a growing trend of African governments trying to control what is said online. Tanzania’s vaguely worded law, which came into effect last month, seems to require almost anyone who publishes content online in the country to buy a licence for 2.1m Tanzanian shillings (around $900). The government says its aim is to fight “immorality” and hate speech. No one imagines that political speech will be spared. Any content “that causes annoyance, threatens harm or evil, encourages or incites crime, or leads to public disorder” can lead to a writer’s licence being revoked or a 5m shilling fine. A similar law, introduced in 2015 and ostensibly aimed at cyber-criminals, has ensnared people for insulting the president in WhatsApp groups. Other east African states are tightening up, too. Uganda’s government has

America’s Treasury refrains from naming any currency manipulators Donald Trump is less circumspect

OST governments are happy when foreigners want their bonds, especially when those foreigners are long-term holders, like central banks. But America is different. It worries that some foreign governments buy its debt to keep the dollar pricey and their own currencies cheap. This “currency manipulation” gives other countries a competitive edge, raising their own trade surpluses and America’s deficit. Brad Setser of the Council on Foreign Relations, a think-tank, sees an “arc of intervention” across Thailand, Singapore, Taiwan and South Korea that has slowed the dollar’s

proposed a daily charge for social-media use on mobile phones of 200 Ugandan shillings ($0.05), to reduce what President Yoweri Museveni (a prolific tweeter himself ) calls excessive “gossiping”. In 2016 Rwanda made it illegal to cause “annoyance, inconvenience, or needless anxiety” with a digital device, but journalists were already cowed. One was arrested for complaining on Facebook about police harassment. Even in Kenya, where there is more freedom of speech, restrictions were mooted ahead of last year’s election. In January, a prominent Kenyan blogger, Cyprian Nyakundi, was arrested for allegedly defaming the interior minister. Internet penetration in much of Africa is still low,

but it is growing quickly. In Tanzania, roughly 23m people (out of a population of 55m) used the internet last year, according to the government. That was up 16% on 2016. As more people get access, the elite are being challenged like never before, says Nanjira Sambuli, a Kenyan activist. Will the new laws silence digital dissidents? Uganda’s charge can probably be collected directly by mobilephone operators—but it is unlikely to stop people from gossiping. The effect of Tanzania’s law will depend on how the government enforces it. In a country with an annual GDP per head of just $900, few bloggers will pay the fee. But, as Mr Platnumz has found, the law can be used to arrest people

for posting nearly anything online. To improve enforcement, the government has proposed installing CCTV cameras in internet cafés. Some of Africa’s savvier leaders have made the internet work for them. Uhuru Kenyatta, Kenya’s president, hired Cambridge Analytica to help him get re-elected last year. The British firm is under fire for obtaining data on millions of Facebook users in dubious ways. One of its executives boasted of writing “all the speeches” for Mr Kenyatta and having “staged the whole thing”. Facebook and Twitter messages, not necessarily associated with the campaign, promoted fake stories and targeted Mr Kenyatta’s challenger. All over Africa, anyone is free to slime the opposition.

decline over the past nine months. America has reportedly persuaded South Korea to forswear currency manipulation in a “side-agreement” to their revised trade deal. And on April 16th President Donald Trump tweeted that “Russia and China are playing the Currency Devaluation game...Not acceptable!” Mr Trump’s tweet was at odds with his Treasury Department’s assessment. Every six months it must tell Congress if any big trading partner is manipulating its currency. (Offending governments are scolded, followed by other chastisements if they do not mend their ways.) But its latest report, published on April 13th, refrained from branding anyone a manipulator. The report did admonish China for its persistently large trade surplus in goods with America. But Russia was barely mentioned. The recent decline in its currency was, after all, prompted by the Treasury’s decision to strengthen sanctions. Instead the report paid uncustomary attention to India, pointing out that it has a large trade surplus in goods with America and that its central bank has intervened heavily Continues on page 15

Monday 23 April 2018

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BUSINESS DAY

Monday 23 April 2018

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BUSINESS DAY

In Association With

The Trump presidency

The Republican Party is organised around one man

That is dangerous

LL presidents, Republican and Democrat, seek to remake their party in their own image. Donald Trump has been more successful than most. From the start, the voters he mesmerised in the campaign embraced him more fervently than congressional Republicans were ready to admit. After 15 months in power, as our briefing explains, he has taken ownership of their party. It is an extraordinary achievement from a man who had never lived in Washington, DC, who never held public office, who boasted of groping women and who, as recently as 2014, was a donor to the hated Democrats. The organising principle of Mr Trump’s Republican Party is loyalty. Not, as with the best presidents, loyalty to an ideal, a vision or a legislative programme, but to just one man—Donald J. Trump—and to the prejudice and rage which consume the voter base that, on occasion, even he struggles to control. In America that is unprecedented and it is dangerous. Already, some of our Republican readers will be rolling their eyes. They will say that our criticism reveals more about us and our supposed elitism than it does about Mr Trump. But we are not talking here about the policies of Mr Trump’s administration, a few of which we support, many of which we do not and all of which should be debated on their merits. The bigger, more urgent concern is Mr Trump’s temperament and style of government. Submissive loyalty to one man and the rage he both feeds off and incites is a threat to the shining democracy that the world has often taken as its example. Not what, but how Mr Trump’s takeover has its roots in the take-no-prisoners tribalism that gripped American politics long before he became president. And in the past the Oval Office has occasionally belonged to narcissists some of whom lied, seduced, bullied or undermined presidential norms. But none

has behaved quite as blatantly as Mr Trump. At the heart of his system of power is his contempt for the truth. In a memoir published this week (see Lexington) James Comey, whom Mr Trump fired as director of the FBI, laments “the lying about all things, large and small, in service to some code of loyalty that put the organisation above morality and above the truth”. Mr Trump does not— perhaps cannot—distinguish between facts and falsehoods. As a businessman and on the campaign he behaved as if the truth was whatever he could get away with. And, as president, Mr Trump surely believes that his power means he can get away with a great deal. When power dominates truth, criticism becomes betrayal. Critics cannot appeal to neutral facts and remain loyal, because facts are not neutral. As Hannah Arendt wrote of the 1920s and 1930s, any statement of fact becomes a question of motive. Thus, when H.R. McMaster, a former national security adviser, said (uncontroversially) that Russia had interfered in the election campaign, Mr Trump heard his words as unforgivably hostile. Soon after, he was sacked. The cult of loyalty to Mr Trump and his base affects government in three ways. First, policymaking suffers as, instead of a coherent pro-

gramme, America undergoes government by impulse—anger, nativism, mercantilism— beyond the reach of empirical argument. Mr Trump’s first year has included accomplishments: the passage of a big tax cut, a regulatory rollback and the appointment of conservative judges. But most of his policymaking is marked by chaos rather than purpose. He was against the Trans-Pacific trade deal, then for it, then against it again; for gun control, then for arming teachers instead. Second, the conventions that buttress the constitution’s limits on the president have fallen victim to Mr Trump’s careless selfishness. David Frum, once a speechwriter for George W. Bush, lists some he has broken (and how long they have been observed): a refusal to disclose his tax return (since Gerald Ford), ignoring conflict-of-interest rules (Richard Nixon), running a business for profit (Lyndon Johnson), appointing relatives to senior posts in the administration (John F. Kennedy) and family enrichment by patronage (Ulysses S. Grant). And third, Mr Trump paints those who stand in his way not as opponents, but as wicked or corrupt or traitors. Mr Trump and his base divide Republicans into good people who support him and bad people who do not—one reason why a record 40 congressional Republicans, including the

House Speaker, Paul Ryan, will not seek re-election. The media that are for him are zealous loyalists; those that are not are branded enemies of the people. He has cast judicial investigations by Robert Mueller into his commercial and political links with Russia as a “deep-state” conspiracy. Mr Trump is reportedly toying with firing Mr Mueller or his boss in the Department of Justice. Yet, if a president cannot be investigated without it being counted as treason then, like a king, he is above the law. The best rebuke to Mr Trump’s solipsism would be Republican defeat at the ballot box, starting with November’s mid-term elections. That may yet come to pass. But Mr Trump’s Republican base, stirred up by his loyal media, shows no sign of going soft. Polls suggest that its members overwhelmingly believe the president over Mr Comey. For them, criticism from the establishment is proof he must be doing something right. Look up, look forwards and look in But responsibility also falls to Republicans who know that Mr Trump is bad for America and the world. They feel pinned down, because they cannot win elections without Mr Trump’s base but, equally, they cannot begin to attempt to prise Mr Trump and his base apart without being branded traitors. Such Republicans need to reflect on how speaking up will bear on their legacy. Mindful of their party’s future, they should remember that America’s growing racial diversity means that nativism will eventually lead to the electoral wilderness. And, for the sake of their country, they need to bring in a bill to protect Mr Mueller’s investigation from sabotage. If loyalty to Mr Trump grants him impunity, who knows where he will venture? Speaking to the Constitutional Convention in 1787 George Mason put it best: “Shall that man be above [justice], who can commit the most extensive injustice?”

America’s Treasury refrains from naming any currency... Continued from page 14

in currency markets, with net foreignexchange purchases worth 2.2% of its GDP. It was added to a “monitoring list” of countries warranting closer scrutiny. The list itself does not bear much scrutiny, however. As well as India, it comprises China, Germany, Japan, South Korea and Switzerland. But India has no overall trade surplus and Germany has no currency of its own to manipulate. The list also ignores Thailand and Singapore, which have intervened over the past year to curb the rise in their currencies, according to Mr Setser. These oddities are not entirely the Treasury’s fault. It is required to assess a country against three criteria: its trade surplus with America, its current-account surplus with the world and its intervention in currency markets. The first measure makes little sense, point out Fred Bergsten and Joseph Gagnon of the Peterson Institute for International Economics. In today’s global supply chains, countries like Singapore can sell materials to China that end up in products bought by America. Their direct exports to America may seem modest. But their indirect exports, embedded in goods sold by China, may be large. The Treasury is also required to consider only America’s “major” trading partners. It thus limits its analysis to the largest dozen (plus Switzerland, the 15th-largest). That gives small, interventionist economies a free pass, notes Stephanie Segal of the Centre for Strategic and International Studies, another think-tank. Within these broad limits the report’s authors enjoy substantial discretion. And the Treasury is considering broadening the definition of a “major” trading partner. It thus had leeway to prepare a more rigorous report if it had wished to do so. Instead, says Mr Setser, it wrote this report to be ignored. Perhaps Treasury officials do not want to be drawn into Mr Trump’s tariff tit-for-tat, suggests Mr Gagnon. The report waves the flag (invoking “fair and reciprocal” trade) but fires no bullets. It may be hard to cheapen the dollar, but it is easy to depreciate a report.

BUSINESS DAY

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Monday 23 April 2018 In Association With

Border bandits

The Colombian guerrillas who won’t give up their guns A few former FARC fighters are still kidnapping and smuggling drugs

“

T SOUNDS like an outrageous act of provocation. In a referendum on April 15th, Guatemalan voters chose to file a claim at the International Court of Justice (ICJ) demanding sovereignty over 53% of Belize, their eastern neighbour. The Belizean government, however, responded with congratulations, saying the result “contributes further to the strengthening of democracy, peace and security”. It had reason to be sanguine: the most likely outcome is that nothing will happen. Guatemala’s demand for a bigger chunk of Central America’s Caribbean coast is far older than Belize itself. In the 1700s Spain agreed to let Britain cut timber in the northern half of modern Belize. Britons searching for mahogany crept southwards. After Spain retreated from Latin America in the 1800s, Britain formally took over the entire territory, naming it British Honduras. The new state of Guatemala said it had “inherited” the region from Spain. Guatemala gave up its claim in 1859, in exchange for Britain building a road from Guatemala City to the Caribbean. But the road never materialised, and Guatemala declared the treaty void.

The dispute remained an irritant for most of the 20th century. Both Britain and Guatemala intermittently deployed troops to the region, and the threat of invasion by Guatemala’s military dictators contributed to the relatively late decolonisation of Belize; it did not gain independence until 1981. Although Guate-

mala recognised Belize in 1991, it reasserted its territorial claim eight years later. The two countries have set up an “adjacency zone” 2km wide to separate them. Tensions occasionally flare over shootings of people crossing the border. Only in 2008 did their leaders bury the hatchet. After years of

stalled talks, they agreed to resolve the dispute at the ICJ—if and only if both countries’ voters approved via referendum. That is the latest sign that old grudges are fading. Guatemala long ago dropped its demand from its constitution, and no longer reserves three empty seats in congress marked “Belize” and draped in

its national colours. With the country’s political agenda dominated by corruption and crime, a decade passed before it held its referendum. Although 89% of people who voted chose to file at the ICJ, turnout was just 26%. “Most people consider it irrelevant,” says Fernando Carrera, a former foreign minister. Now it is Belize’s turn. The government says its electoral roll will not be ready until 2019. Perhaps surprisingly, some Belizeans support a “yes” vote. Winning at the ICJ would not only lift an age-old cloud over the country, but also bring international law to Belize’s side when policing illegal fishing and logging by Guatemalans. A defeat, however, would be catastrophic. Guatemala’s demand covers a large hunk of the mainland, several islands and a wide swathe of sea territory. In total, the court would rule on an area containing 43% of Belize’s people, 50% of its exports and 38% of its GDP. “If Belize wins, we win nothing,” says Osmond Martinez, a professor at Galen University in Belmopan, who expects Belizeans to vote no. “If we lose, we lose 12,000 [square] km of our country.”

A burning issue in Africa

Africa’s big carbon emitters admit they have a problem Can they continue developing and still uphold the Paris climate agreement?

N HOUR east of Johannesburg, on the rolling highveld plains, six massive cooling towers sit around two belching smokestacks. The Kendal power station (pictured) is among the world’s largest, producing 4.1 gigawatts (GW) from burning coal. A few kilometres down the road there is another coal-fired plant, Duvha, which is only slightly smaller. An even bigger one, Kusile, is under construction next door. When sub-Saharan Africa comes up in discussions of climate change, it is almost invariably in the context of adapting to the consequences, such as worsening droughts. That makes sense. The region is responsible for just 7.1% of the world’s greenhouse-gas emissions, despite being home to 14% of its people. Most African countries do not emit much carbon dioxide. Yet there are some notable exceptions. Start with coal-rich South Africa, which belches out more carbon dioxide than Britain, despite having 10m fewer people and an economy one-eighth the size. Like nearly all of its power plants, many of its vehicles depend on coal, which is used to make the country’s petrol (a technique that helped the old apartheid regime cope with sanctions). A petrochemical complex in the town of Secunda owned by

Sasol, a big energy and chemicals firm, is one of the world’s largest localised sources of greenhouse gases. Zambia is another exception. It burns so much vegetation that its land-use-related emissions surpass those of Brazil, a notorious— and much larger—deforester. On a recent descent into Lusaka, four fires were visible from the aeroplane. “If you had come 30 days later, it would have been worse,” says Davison Gumbo of the Centre for International Forestry Research, a non-profit. Most burning happens during the dry season, which starts next month. South Africa and Zambia may be extreme examples, but they are not the region’s only big emitters (see chart). Nigerian households and businesses rely on dirty diesel generators for 14GW of power, more than the country’s installed

capacity of 10GW. Subsistence farmers from Angola to Kenya use slash-and-burn techniques to fertilise fields with ash and to make charcoal, which nearly 1bn Africans use to cook. This, plus the breakneck growth of extractive industries, explains why African forests are disappearing at a rate of 0.5% a year, faster than in South America. Because trees sequester carbon, cutting them counts as emissions in climate accounting. Other countries are following South Africa’s lead and embracing coal, the filthiest fuel. A dozen of them are building or planning new coal-fired power plants totalling 40GW, according to Coalswarm, a watchdog. A big one planned for the old port town of Lamu in Kenya is one of many Chinese-backed coal projects in Africa. Policymakers at the latest African climate summit, which con-

cluded in Nairobi on April 13th, acknowledged the continent’s carbon problem. But they worried that development might slow if Africa meets its commitment under the Paris climate agreement, which aims to limit global warming. The two imperatives often pull in opposite directions. Africa’s sunny skies and long, blustery coastlines offer near-limitless solar- and wind-energy potential. But what African economies need now are “spinning reserves”, which can respond quickly to volatile demand, says Josh Agenbroad of the Rocky Mountain Institute, a think-tank in Colorado. Fossil fuels deliver this; renewables do not. Foreign aid, on which many African countries depend, often leads to more emissions. To ensure that their money is used efficiently, and not stolen, Western development agencies favour large tried-and-tested projects, such as fossil-fuel plants. So do the Chinese, who want to keep their engineers busy now that they have stopped building coal-fired power plants at home. Yet it is not all gloom. The UN’s newer green-finance initiatives are proving more generous to Africa than its old Clean Development Mechanism, which has channelled just 2.5% of its resources to the continent since 2001. Many of Africa’s proposed coal plants, including the

one planned for Lamu, may never get built. Several countries are intrigued by hybrid plants where most electricity is generated by solar panels, but diesel provides the spinning reserves, says Mr Agenbroad. Adaptation will remain Africa’s chief climate concern for the foreseeable future. But it is no longer the only one.

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BUSINESS

COMPANIES & MARKETS

DAY

Coralpay to power Alipay in Africa as Asian giant expands footprint

Pg. 30

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

N50.85bn income from treasury bills underpins Zenith Bank’s earnings BALA AUGIE

enith Bank Nigeria Plc, the second largest lender by market value, started the year with a double digit growth in earnings, thanks to interest income from short-term government securities For the first three months through March 2018, Zenith Bank’s net income spiked by 25.52 percent to N47.07 billion from N37.50 billion the previous year. The growth in profit was largely driven by increase in interest income in the period under review.

Interest and similar income grew by 20.70 percent to N142.61 billion in March 2017 as against N118.09 billion the previous year; largely driven by a N50.85 billion income from treasury bills (T-bills). In short there was an 88.88 percent surge in interest income from T-bills compared to the corresponding period. However, interest income from loans and advances dipped by 2.19 percent to N77.08 billion in March 2018, which means Zenith is less aggressive about lending. Nigerian banks have turned off the tap on lending as they swooped on short term government securities when yields were around 18

percent and 22 percent for between April and September last year. Guaranty Trust Bank Plc, the largest lender by Market value, made N22.06 billion from interest income for Tbills in the first quarter of the year albeit netted off by a N22.49 billion available for sale figure for 2017. It recorded a 3.95 percent drop in interest income to N80.77 billion in the period under review from N84.10 billion the previous year. Figures coming in from Tier lenders that have released first quarter results show their loan books are shrinking. Zenith Bank’s loans and advances to customers dipped

25.53 percent to N1.75 trillion in March 2018 from N2.35 trillion the previous year. Similarly, GTBank’s loans and advances to customers fell by 6.25 percent to N1.35 trillion in March 2018 2017 from N1.44 trillio as at March 2017. Analysts say a drop in those yields from record highs in August means that 2018 will be more challenging for lenders, despite the positive macro backdrop. “We can see that the banks are not lending as much as they used to do and that explains the shrinking interest income on loans and advances,” said Ayodeji Ebo managing director and

CEO of Afrinvest Securities Limited “Interest income from government securities will also moderate as a result of reduction in yields and we expect that to continue to the next quarter. In summary, it is the combination of declining income from lending and reducing investment securities,” said Ebo. Yields on net Treasury Bills (NTB) is around 11 and 12 percent in 2018 as Fitch, a global ratings agency cavert that this year could be challenging for lender as government slowed down issuances and opted for foreign borrowing through

Eurobond issuances. “We expect falling T-bill yields and lower issuance to put pressure on Nigerian banks’ profitability in 2018. The CBN’s latest issuance schedule shows N1.1 trillion (USD3.6 billion) of rollovers in the first quarter of 2018 against N1.3 trillion of maturing bills.” “We may have to work hard to grow volumes,” said Segun Agbaje the Managing Director of Guaranty Trust Bank plc during the bank’s full year financial statement presentation. Zenith Bank’s shares have gained 5.72 percent, underperforming the NSE ASI of 6.72 percent.

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INTERVIEW

BUSINESS DAY

Interview with Private Sector Leaders

‘We have strong balance sheet and cash to invest’ Recently, the Nigerian Stock Exchange migrated four companies to its premium board, among them is Seplat Petroleum Development Company Plc. Shortly after joining the elite group of issuers, the ever busy chairman of Seplat, ABC ORJIAKO and the company’s Chief Executive Officer, AUSTIN AVURU were followed to their Ikoyi-Lagos Corporate Headquarters where they later spoke to select journalists including IHEANYI NWACHUKWU. Here are excerpts of their responses.

hat does the Premium Board listing mean to Seplat and its investors? It is a very important milestone in taking a very long term view in our strategic vision. From the get go we knew that Seplat was going to aim very high and we are very clear in our mind that corporate governance is the base. So we continuously make sure that best practices are core in our business. We are very happy that having gone through that scrutiny when we did our listing on the London Stock Exchange ( LSE) and NSE we were sure that corporate governance, very high level best practices scrutiny was important and that is what today’s (last Monday) elevation has indeed eloquently testified. I think the message obviously for all the investors is that it is a clear message that they are with the right company. The next point is that it is going to create the ability for many of our investors to see more liquidity happening in their securities. It is also going to mean that the securities they hold have value at the highest echelon or segment of the capital market. That is something to be very proud of. Corporate Governance is very important in this level of Premium Board listing, how are you prepared as a company to ensure this is sustained going forward? Like I said before corporate governance for us is a given. We go beyond corporate governance and compliance. What I said on the floor of the NSE is that for us corporate governance is a given. We take best practices as the core of our business. But going forward , having migrated to the Premium Board index , it means that a lot more is required of us to make sure we maintain that leadership position with respect to making sure that corporate governance paradigms are well maintained in our organisation. You succeeded in doubling the value of this company within four years as a listed company from N200billion to over N400billion market capitalisation. Going forward, what do we expect in that direction? As a matter of fact when we listed on the Exchange, our market capitalisation was relatively high. Obviously because of the Foreign Exchange (forex) adjustment we

would have more than that. But going forward, what we would like to do is to create very robust fundamentals for our securities so that regardless of what happens in the environment we stand out. We would make sure that our company is well governed; making sure that the effectiveness of a strong management team is maintained. We will also make sure that every message we will give to the market and investors that we do, we will not only perform but exceed their expectation. We promised the market when we came that we would be adding value growth in terms of capital growth and that we have delivered and that is what the elevation to Premium Board has shown. We promised them we would be a profitable company and we have maintained that over the years. We also promised that we are going to be a company that is well run; that we have delivered. We said we are going to grow the company organically, we promised we are going to be a profitable and dividend paying company; that we have delivered. We will acquire asset, we would grow our production, and all these we have done phenomenally. We said we would commercialise and monetized gas and we are doing that. Obviously, if you are following the trend of our performance you will see that the gas revenue is growing Year on Year (YoY).

performance or result in the future. What is the company’s financial projection for 2018? As an oil and gas production company we guide for production and we don’t guide for profit, unlike banks and so on. By the time we publish our first quarter (Q1), we will guide for the rest of 2018 in terms of production and so on. How has the nation’s macroeconomic challenges impacted your business and how have you been able to hedge against it to add to shareholders’ value? The biggest challenge to our operations is whatever impact the Niger Delta crisis could have on our production and evacuation of our products. You saw within 16 months of minimal production when the Trans-Forcados was down and how it impacted on us. That is our highest risk. We are hedging against that by having multiple avenues or routes for evacuation of our products. We are working with neighbours and other stakeholders to put the Escravos pipeline in place, to complete and commission it and we still have option in Warri refinery if we are pushed to the wall. Here we consciously established three options of evacuating our production. In the East of the country we are trying to develop our OM 53 from the scratch. We would develop this along with two other options of evacuation.

How do you feel heading the Board of a successful company? Obviously, we are happy to be at the helm of affairs. But beyond that is the fact that, to whom much is given, much is expected as well. One of the things we pride ourselves about the company is the level of experience we have in the Board; the diversity we have and obviously the strong experience we have in the management team. We even make sure that even through our succession programme, every of those elements count. Three factors qualified Seplat to be listed on the Premium Board. These are liquidity around the stock, market capitalisation and corporate governance. How will your company sustain these factors? Starting with liquidity you have to have free float of shares of over 20percent, but for us as a company our free float is closer to 50percent than 20percent already and with a company like this free float of shares can only increase, so you either tap from the market or whatever you can do in the future to dilute the shareholding of the existing shareholders and increase the free float. So, we are consciously working on that to increase the liquidity on the stock. For market capitalisation other than liquidity two critical elements are size and governance and size is about market capitalisation. So if we continue to do the right things and for us internally, we believe that if you consciously and as a matter of culture continue to do the right things, even without prompting ultimately you will see the benefit and the benefit will come in value creation and this will translate to increase in the value of the company. So all things being equal, except for things outside our control, we expect our market capitalisation to also continuously increase and not lower than where we are now. When we applied for listing on the Premium Board, our market capitalisation was just over N200billion, so you just saw during the introduction of our company on the floor of the

The stockbrokers said that they look unto the seven companies that are listed on the Premium Board to lift up the market. What that means is that if these companies cough, it will affect the market. So can you let the market know the existing long term strategy you are adopting that can impact on the market as well as shareholders?

Exchange that our market capitalisation was N396billion, and as at the end of trading on that day of our listing it went up to N404billion and so it doubles the minimum requirement for qualifying to be listed on the Premium Board. For us, the most critical is governance, we have spent seven and half years building a company we believe in. If you make the best practice of corporate governance as a culture you will ultimately see the result; that is what you are seeing. We are only four years old on the Exchange and we are already in the Pre-

We said we are going to grow the company organically, we promised we are going to be a profitable and dividend paying company; that we have delivered. We will acquire asset, grow our production, and all these we have done phenomenally. We said we would commercialise and monetized gas and we are doing that

mium Board. In fact, we are seven and half years as a company in operations and eight years as a registered company. We started as the company August 1, 2010. We are less than eight years old and we have come this far; this is not by chance, it has been a deliberate effort by the Board and Management team and how to create this governance culture. So what you saw today (during listing) is an attestation of the result of what we have been doing in the past seven and half years. How did Seplat grow in its performance indicators given the short period of its existence? You know our history; we started originally as a growth company. We took over asset and we consciously worked the asset and more than tripled production in about four years, from 18,000 barrels per day (bpd) to 60,000 bpd. Prices were good then until between mid-2015 and 2017. Two things happened to us simultaneously; prices dropped and production crashed because of crisis outside our control and Trans-Escravos that led to dip in our production performance, revenue generation, productivity and profitability. In fact, in 2016 full year, we had a loss of about N166 billion. We only worked out through 2017 to turnaround the position to profitability. Let us return to corporate governance again, it is through this same corporate governance practice upon which we operate that we were able to navigate

the company from this two years of treacherous condition outside our control. I hope you are aware that we raised $350million bond just last month and $300million revolver credit. So, our overall average cost of debt has gone down to by 300percent from our creditors. Our balance sheet is completely restructured. Every time I talk about governance as a matter of a culture being imperative for us to deliver long-term and sustainable good performance. We really do believe in it. It is not about priding ourselves as been in Premium Board, so when we say we are proud of ourselves because of what we really believe in which is to deliver the long-term benefit to our stakeholders. How do you hope to sustain and even surpass this performance to be able to attract more investors? Our intention is to sustain and even surpass our present performance. It takes a lot of discipline and effort to be where we are to be in the Premium Board. People talk about reporting, transparency, and discipline; it looks that simple, you have to do the right things to be proud to discharge what you are doing. If you are cutting corners even before disclosure you won’t get there. When we say we are proud of what has happened; this is an attestation of what we really believe in, that we needed to belong to this class of companies. For us, doing the right things as consistently as we can has taken us thus far. We have put the building blocks in place to be able to deliver sustainable

Our strategy emphasizes on sustainable growth and delivery on our promises on sustainable basis. When we release our Q1 result and Year-on-Year (YoY) we would like to meet the promises we made to our investors and deliver value in a sustainable manner. We have a strong strategic department and when you do all these; that will reflect on your share price and market capitalisation. We have seen the growth of our market capitalisation in boosting the market. You have just raised some money from bond, what are you using the proceeds for and what is your production level and the target you have put in place? We would give you the guide for our production in 2018 soon when our Q1 is released. In terms of the bond, we have two tranches of debts; $700 million from Nigerian banks and $300 million from foreign banks and both debts worth $1 billion. At the end of 2017, we have paid off about $400 million in capital repayment and not just interest. So both debts combined are down to $650 million, but we also have cash in hand. Our gross debt consists of $350 million of bond and $200 million that we withdrew out of the $300 million revolver. We also have cash in hand of about $350 million. So really our net debt is down to under $200 /$250 million. All of that translate to the fact that our balance sheet has been restructured from a very difficult situation. So two things will happen or two things can be enabled. We can invest more money in the business since

in two years. Between 2015 and 2017 we have not drill anywhere. So we are going back to drilling and invest more on our gas business. We have cash to invest and that is one key result of this exercise of borrowing. Secondly, we will be in a good position if we see opportunity for any acquisition; we will be in a good position to participate. Where we are today is a far cry from where we were two years ago. We were first struggling to survive following the crisis in Niger Delta. Now we have a strong balance sheet. What should investors expect now that you have bounced back to profitability? What we said to investors when we were doing our road show for the bond is to reinstate dividend. Our intention is to reinstate dividend as a matter of policy. We suspended dividend in 2016 because of crises beyond our control. But in a normal course of business we will normally be able to pay a certain level of dividend. Analysts have set price target of circa 40percent increase in your share price. Are there things that you are doing regarding your future performance which other people are not seeing? I think they are seeing what you are seeing in our company. They have seen how past performance and how we have navigated the most difficult situation in Niger Delta crisis. Many of our competitors of our size are not listed. The reason why you cannot measure how well we did in navigating ourselves from that terrible situation is because our competitors of the same size are not listed to be able to compare us. If they were listed you can be able to compare apple for apple since it is not

easy to turn around within 12 months with the kind of situation we were. I think when they see our past performance like that and project that there might be no back breaking situation like we had in 2016; in future they will expect consistent growth and if you plot on any growth trajectory from where we are both in production and even if you held the price constant at $60 per barrel you will see substantial cash flow and profitability. But for us we focus on delivery on objectivity and let the market determine what our value is. Currently where do you sell your crude? In Nigeria once your crude gets to the terminal it is sold already. We already have five years long term marketing agreement with international traders, selling the crude has never been an issue. No producer that will tell you he has not sold his crude. The marketers can play all the games and keep the ship somewhere hoping to get extra 20 cents or so. These are the marketers game, every producer sell its crude right there at the terminal from the day of bill of lading to when it is sold. While other of your colleagues in the Premium Board said they will be turning in their sustainability report from time to time, but you said you have already been doing it. So how often will you let the public see this report? As a matter of fact, now that the Exchange requires the sustainability report on annual basis we will regularly make it available to the market. So as we submit our annual report regularly we would also submit the sustainability report along with our annual report.

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Access Bank Rateswatch Market Analysis and Outlook: April 20 - April 27, 2018

KEY MACROECONOMIC INDICATORS Indicators

Current Figures

Comments

GDP Growth (%)

1.92

Q4 2017 — higher by 0.52% compared to 1.40% in Q3 2017

Broad Money Supply (M2) (N’ trillion) Credit to Private Sector (N’ trillion)

24.02 22.62

Increased by 0.79% in Feb’ 2018 from N23.83 trillion in Jan 2018 Increased by 2.88% in Feb’ 2018 from N21.99 trillion in Jan 2018

Currency in Circulation (N’ trillion) Inflation rate (%) (y-o-y) Monetary Policy Rate (%)

1.94 13.34 14

Decreased by 0.42% in Feb’ 2018 from N1.95 trillion in Jan 2018 Declined to 13.34% in Mar’ 2018 from 14.33% in Feb’2018 Raised to 14% in July ’2016 from 12%

Interest Rate (Asymmetrical Corridor) External Reserves (US$ million) Oil Price (US$/Barrel)

14 (+2/-5) 47.01 75.95

Lending rate changed to 16% & Deposit rate 9% April 16, 2018 figure — an increase of 1.08% from April start April 20, 2018 figure - an increase of 11.46% from the prior week

Oil Production mbpd (OPEC)

1.81

Mar’ 2018 figure — an increase of 1.12% from Feb’2018 figure

COMMODITIES MARKET

STOCK MARKET Indicators

NSE ASI Market Cap(N’tr) Volume (bn) Value (N’bn)

Friday

Change(%)

20/4/18 40,814.89

13/4/18 40,928.70

(0.28)

14.74

14.78

(0.28)

0.24 3.03

0.17 2.04

44.97 48.39

MONEY MARKET NIBOR Tenor

Friday Rate

Change (Basis Point)

(%)

20/4/18

13/4/18

3.0000

2.3300

O/N CALL 30 Days

3.7500 3.3750 11.3107

90 Days

12.5718

OBB

Friday

Indicators

20/04/18

1-week Change

YTD Change

(%)

75.95 2.69

11.46 (0.37)

17.83 (11.98)

2774.00 43.29 116.75 84.34 11.81 484.25

8.57 (2.71) 1.07 (3.20) (1.48)

(10.33) 8.83 (22.96) 11.71

1336.74 17.13 315.60

(0.05) 3.63 3.29

1.46 (0.35) (3.72)

Energy Crude Oil $/bbl) Natural Gas ($/MMBtu) Agriculture Cocoa ($/MT) Coffee ($/lb.) Cotton ($/lb.) Sugar ($/lb.) Wheat ($/bu.) Metals Gold ($/t oz.) Silver ($/t oz.) Copper ($/lb.)

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

2.9200 3.0000 13.4297

83 38 (212)

Tenor

14.1665

(159)

Friday

1 Month

FOREIGN EXCHANGE MARKET Market

(N/$)

Rate (N/$)

20/4/18

13/4/18

20/03/18

Official (N) Inter-Bank (N)

305.60 337.93

305.55 337.37

305.70 335.86

BDC (N) Parallel (N)

360.00 363.00

360.50 362.00

Friday

Change

(%)

(Basis Point)

20/4/18

13/4/18

3-Year 5-Year

0.00 12.09

0.00 13.33

0 (124)

7-Year 10-Year 20-Year

12.45 12.75 12.99

12.95 13.35 13.42

(50) (59) (43)

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation.

Change

(%)

(Basis Point)

13/4/18

9.59 10.36

12.91 13.12

(332) (275)

6 Mnths 9 Mnths 12 Mnths

11.31 12.36 12.73

13.76 14.32 14.86

(245) (196) (214)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

Friday

Change

(%)

(Basis Point)

20/4/18

13/4/18

2,690.91

2,644.27

1.76

Mkt Cap Gross (N'tr) Mkt Cap Net (N'tr) YTD return (%)

9.04 5.95 9.55

8.88 5.81 7.65

1.80 2.44 1.90

YTD return (%)(US $)

-45.58

-47.46

1.88

Index

TREASURY BILLS (MATURITIES) Tenor

Amount (N' million)

Rate (%)

Date

91 Day 182 Day 364 Day

5,849.03 64,993.79 51,995.03

10.9 12 12.078

18-Apr-2018 18-Apr-2018 18-Apr-2018

Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Friday

(%) 20/4/18

AVERAGE YIELDS Friday

Friday

1 Mnth 3 Mnths

BOND MARKET Tenor

Global Economy In the US, consumer prices rose 2.4% in March from a year earlier - the largest annual gain in a year and following February's 2.2% increase - a Labour Department report showed. Excluding the volatile food and energy categories, core prices ticked up 2.1% from a year ago, after increasing 1.8% in February. The core CPI was lifted by rising rents and healthcare costs. Healthy increases were also reported in personal care and motor vehicle insurance. Year over year, the food index grew 1.3%. In China, the Gross domestic product (GDP) advanced 6.8% year-on-year in the first quarter of 2018, the same pace of growth seen in the fourth quarter of 2017, data from the National Bureau of Statistics showed. With this outturn, the GDP growth rate has remained within the range of 6.7% to 6.9% for 11 quarters. Growth in the first quarter was supported by a pickup in construction and manufacturing. According to official data, the construction and manufacturing sector grew 6.3% from a year earlier, accelerating from a 5.7% pace in the fourth quarter. In the United Kingdom, retail sales plunged in March as unusually cold and snowy weather kept consumers indoors and disrupted deliveries of stock. Data from the Office for National Statistics (ONS) showed that retail sales volumes dropped by 1.2% in March. Retail sales had registered a gain of 0.8% in the prior month. For the whole of the first quarter, sales dropped by 0.5% compared with the final three months of 2017 - the biggest fall since Q1 2017. The biggest declines were recorded in sales of clothing (0.7%), household goods (0.2%), supermarkets (0.6%) and sales of auto fuel (7.4%). Local Economy The International Monetary Fund (IMF) has stressed the importance for fiscal adjustment in Nigeria as the Fund urged the Federal Government (FGN) to ensure it disburses borrowed funds on high return investments and infrastructure. The Assistant Director, Fiscal Affairs Department, IMF, stated this during the launch of the Fiscal Monitor report, at the ongoing IMF/World Bank meetings in Washington DC. The Fund also pointed out that rising debt levels in Nigeria currently exposes the country to interest rate and market risks. It, therefore, emphasised the need to create fiscal buffers in the nation. Nigeria’s external debt stood $18.91 billion (N5.787 trillion) at the end of December 2017, while domestic debt rose to N15.937 trillion, bringing the total debt stock of the country to N21.725 trillion ($70.92 billion), according to the latest data released by the Debt Management Office (DMO). The Assistant Director also noted that rising debt then create vulnerabilities that will squeeze out spending priorities. In a separate development, the global rating agency Fitch, in a recent report warned that the increased use of international capital markets in sub-Saharan Africa may increase refinancing risk as the amount of international debt rises. It stated in its report that maturities appear manageable in the near term but public financial management (PFM) in the region remains weak. Sub-Saharan Africa sovereign are making greater use of the international debt market financing such as Kenya (USD$2 billion), Cote d’Ivoire (EUR1.7 billion) and Nigeria (USD$2.5 billion) and Ghana’s parliament last month approved plans for a Eurobond issue. In its report it observed that tapping into international capital markets can be an important financing option where liquidity in local funding markets is low. However, the rise in debt since 2011, growing use of commercial funding, and in some cases currency depreciation have increased debt servicing costs in some countries. Seven of the 18 Fitch-rated SSA sovereigns had general government interest payments/revenues above 15 percent yearly, the highest since at least year 2000,” the agency explained.It also pointed out that borrowing in foreign currency in international market exposes the countries to forex refinancing risk and possible higher debt service/GDP burden in the event of local currency depreciation. It will seem cheaper if domestic interest rate are high like in Nigeria, which used the proceeds of its Eurobond issue to refinance more expensive

naira-denominated debt. According to Fitch, it generally involves a net increase in risk. Stock Market The Nigerian stock exchange market closed on a negative note last week as the major market indicators trended downwards. The All Share Index (ASI) declined by 113.81 points to close at 40,814.89 points from 40,928.70 points the previous week, representing a 0.28% decrease. Similarly, market capitalization shed 0.28% to close at N14.74 trillion from N14.78 trillion the previous week. Last week’s market downturn was triggered by profit taking activities by investors. This week, we expect that the direction of the market’s trend will, in the near term be dictated by the news and earnings scorecard that filters into the market. Money Market Money market rates ascended last week as Open Market Operation (OMO) sales exceeded maturing T-bills by about N10 billion. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates further rose to 3.00% and 3.75% from 2.33% and 2.92% respectively the previous week. Longer dated placements however trended downwards. The 30-day and 90-day NIBOR closed lower at 11.31% and 12.57% from 13.43% and 14.17% the prior week. This week, rates may remain around prevailing levels due to reduced OMO activity. Foreign Exchange Market The naira-dollar exchange rate at the interbank window depreciated marginally by 56 kobo to close at N337.93/$ from N337.37/$ the previous week. At the parallel market, the local currency closed at N363/$, unchanged from the previous week’s rate. Similarly, the local unit was stable at the official market at N305.6 same as the previous week. The relative stability of the local currency continues to be supported by the intervention of the apex Bank. This week, we expect the naira to remain stable, boosted by the Central Bank’s ability to intervene on the currency market amid rising foreign exchange reserves and higher crude prices. Bond Market Bond yields trended downwards for the third consecutive week due to increased demand fueled by lower Primary Market Auction (PMA) and OMO rates. Yields on the five-, seven-, ten- and twentyyear debt papers settled at 12.09%, 12.45%, 12.75% and 12.99% from 13.33%, 12.95%, 13.35% and 13.42% respectively the previous week. The Access Bank Bond index rose by 46.44 points or 1.76% to close at 2,690.91points from 2,644.27 points the previous week. This week, the direction of yields would likely be determined by the new bond auction calendar. Commodities Market Oil prices rose to the highest levels in over three years, last week, following data showing a drop in U.S. stockpiles and ongoing risk of supply disruptions. U.S. crude inventories fell by 1 million barrels last week, to 428 million barrels, according to a weekly report by the American Petroleum Institute. Bonny light, Nigeria’s benchmark crude, closed up 11.46%, at $75.95 per barrel. In contrast, precious metals prices dipped last week as generally positive economic data from the US and China undermined the appeal of safe-haven metals and non-interest-bearing assets. Gold lost 0.05% to settle at $1,336.74 per ounce. Silver however gained 60cents, or 3.6%, to end at $17.13 per ounce due to higher demand for the precious metal. This week, we see oil prices remaining supported by news suggesting OPEC and its nonOPEC partners are considering yet another extension that would push the production cuts. MONTHLY MACRO ECONOMIC FORECASTS Variables

Apr’18

May’18

Jun’18

Exchange Rate (Official) (N/$)

337.93

338.00

338.10

Inflation Rate (%)

12.73

11.99

11.18

Crude Oil Price (US$/Barrel)

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

BUSINESS DAY

C002D5556

Monday 23 April 2018

COMPANIES & MARKETS Coralpay to power Alipay in Africa as Asian giant expands footprint

oralpay is partnering Alipay, the world’s largest online and offline payment platform operated by Ant Financial Services Group, to ease transactions on echannels in Africa. The partnership further expands Alipay footprints in Africa and opens the door for its more than 600 million active users in China to make purchases in the continent using the CoralPay platform. By the ground-breaking agreement, millions of Alipay users can now conduct seamless transactions in Africa at CoralPay affiliated merchant locations, beginning with the Nigerian market. Alipay, regarded by many as Asia’s PayPal, is supported in 24 countries and regions and works with over 250 overseas financial institutions and payment solution providers

to enable cross-border payments for Chinese travelling overseas and overseas customers who purchase products from Chinese ecommerce sites. In signing this agreement, CoralPay, a payment solution and transaction processing company, has broken new grounds as this is the first such contract and partnership in Africa and plans to work with African banks to enable seamless e-payments for which Alipay is renowned. The partnership is coming at a time when Africa has emerged as a preferred destination for Asian investments with continent enjoying high influx of tourists and business travellers. CoralPay has sealed partnership deals with leading banks and Payment Terminal Service Provider (PTSPs) as well as aggregators to serve their customers. With the

CoralPay and Alipay partnership, customers can easily make payments for visa applications, pay for air tickets and other transportation services as well as used for payment at services at hotels, restaurants and supermarkets. The partnership therefore offers Alipay users seamless access to a proven epayment solution powered by CoralPay without the need to open a bank account when they take up residency in Africa or whether they are visiting. Speaking at the agreement signing ceremony, which was held in HongKong, Chief Executive Officer (CEO), CoralPay, Chioma Nkechika, assured Alipay users of his company’s ability and capacity to deliver on the African franchise, leveraging on their business network and partnership. He also stated that Coral-

R-L: Abdulaziz Dankano, for Nigerian High Commissioner to Hong Kong; Libang Deng, senior executive, Alipay International Acquiring; Chioma G Nkechika, CEO, CoralPay Tech Limited and Zhuo Jie, project lead/consultant Coshine Software Co. Ltd. at the signing of the partnership agreement between Alipay and CoralPay

Pay was well-placed to deliver seamless transactions and thereby help to achieve the expansion required especially as its technical partners is already partnering with Alipay

to process transactions in Asia. On his part, Alipay Head of International Acquiring, Oliver Tang, said he was excited at the partnership, which

he said has opened a new frontier for Alipay customers to seamlessly transact with their Alipay wallets while travelling across Nigeria and Africa.

UACN profit drops 83% despite earnings hitting 4-year high MICHEAL ANI

nited Africa Company of Nigeria (UAC), a leading diversified conglomerate operating in the food and beverage space has recorded an 83 percent drop in profit, despite putting some N89.2 billion as revenue in full year 2017. Data compiled by BusinessDAY and sourced from company’s financials on the Nigerian stock exchange, shows that its 2017 earnings was the highest in four years (since 2014), when the NSE started compiling data. While UACN revenue surged 8 percent from N82.6 billion that it recorded in 2016 to N89.18 billion in 2017, this could not be said about its profit for the year, rather its profit shrunk 83 percent from N5.67 billion in 2016 to N962.8 million in 2016. A stockbroker that is familiar with issues hovering around the company discloses that the major challenge facing the company is UAC Property Development Company (UPDC). “The main problem with

UACN is UAC properties, the stockbroker said. Stressing that UAC property as a subsidiary is not doing well at all”. “Also, most of what companies in the consumer goods space recorded as turnover were as a result of increase in the prices of goods and nothing else, as many of them last year had to review their prices north,” he added. In a bid to position the group solely as a Fast and Moving Consumer Goods (FMCG) company, the management of last year disclosed that they are working on the deconsolidation of UAC Property development company (UPDC) from the group. The management also revealed that UPDC was unable to recover construction costs for some of its completed properties Analyst at Lagos-based cardinal stone, an equity research institute said they view the move as a positive development as it eliminates the risk of earnings volatility from UPDC’s operations on the group; as earnings have been stifled, largely due to the consolidation of operating losses from its

property segment. “Whilst UPDC’s revenue appears to have rebounded, we believe the outlook for the real estate sector (particularly the luxury end) remains soft. Also with seemingly bright prospects for the other segments (especially food and beverage), we expect the group to remain profitable into the future with the exclusion of UPDC,” Analyst at Cardinal Stone said in a note. UAC is one of Nigeria’s biggest players in the consumer goods space, with a market cap of 48.69 billion. The company has remained a foremost and active participant in Nigeria’s economic landscape since 1879, following the merger of four trading companies namely, Alexander Miller Brother & Company, Central African Trading Company Limited, West African Company Limited and James Pinnock. In 2015, its revenue declined 13.9 percent to N73.77 billion from N85.65 billion. This figure increased to N82.57 billion and N89.17 billion in 2016 and 2017 respectively.

SEC moves to tackle de-listing on NSE

orried by increased de-listing on the Nigerian Stock Exchange (NSE), the Securities and Exchange Commission (SEC) on Friday expressed commitment to tackling the issue and ensuring listing of multinationals.

Mary Uduk, the SEC Acting Director-General, gave the assurance at the first 2018 postCapital Market Committee news conference in Lagos. Uduk said that de-listing by quoted companies posed a threat to the growth of the capital market. “Increase in de-listing by

public companies pose a threat to the market in view of the fact that quite a number of them are highly capitalised,” she said. The acting director-general said that the commission mandated the committee to come up with strategies aimed at tackling de-listing and boosting listing of more multinationals.

L-R: Alero Onosode, general manager human resources, SEPLAT; Jay Smulders, technical director, SEPLAT; Mirian Kachikwu, general counsel, SEPLAT; ABC Orjiako, chairman, SEPLAT; Oscar Onyema, CEO, NSE; Austin Avuru, CEO, SEPLAT; Effiong Okon, operations director, SEPLAT, and Chioma Nwachuku, general manager, external affairs & communications, SEPLAT, during the presentation of a certificate to Seplat Petroleum Development Company PLC on their migration to the NSE Premium Board at the Exchange in Lagos.

JC International receives ISO 9001:2015 certification

n a bid to continually meet national and international standards, JC International, a leading inspection, rope access and training company, has upgraded its Quality Management System (QMS) from ISO 9001:2008 to ISO 2001:2015. The certificate, presented to the company in Lagos recently, is the latest version of international standard by Bureau Veritas (BV), UK. The certification further affirms JC International’s quality management system ability to consistently provide Training, Rope Access, Non-Destructive Testing (NDT), Inspection and Certification of Lifting Equipment, Bottom Hole Assembly, Drill Pipes and Water Jetting services to Oil and Gas, Construction and Marine industries. The new ISO 9001:2015 certification adopted a risk-based thinking, whereby risks and opportunities are identified and used to improve the business

processes; while the previous version, 9001:2008 centred more on using corrective and preventive techniques at meeting customer’s requirements. Speaking on the achievement, Austin Joseph, managing director, JC International, said the upgrade from 9001:2008 to 9001:2015 was in line with the company’s commitment to meeting and exceeding the expectations of its stakeholders. Joseph said, “This has further shown how strongly committed we are as a company to continually improve our overall business processes.” According to Joseph, implementing ISO 9001:2015 standards is not only critical to meeting customer’s needs, but also to ensuring a workforce of highly trained and competent personnel as well as mitigating workplace hazards and many other benefits. Also, Theo Aren, manager, Quality Assurance and Quality

Control (QAQC), JC International, explained that the recertification would further reaffirm customer’s confidence in the company. Aren said, “Meeting client’s expectations is a core part of our business drive. Our Quality Management System is able to consistently meet the requirements of our interested parties such as employees, customers, government, regulatory bodies and including host communities.” Meanwhile, Bureau Veritas Systems Certification manager, Adenike Akinbote, commended JC International for its consistent commitment towards maintaining international standard of operations. She said after months of rigorous assessment, Bureau Veritas found JC International to conform to the requirements of international standard, therefore, worthy of the ISO 9001:2015 certificate.

Monday 23 April 2018

COMPANIES & MARKETS Business Event

Ismaila Zakari, president, Institute of Chartered Accountant of Nigeria (ICAN) (sitting left); Aderemi Atayero, vice chancellor, Covenant University, (sitting right), signing MoU between ICAN and the University, while John Evbodaghe, ICAN registrar, (standing left), and Olumuyiwa Adedayo, registrar, Covenant University, watch with admiration.

L-R: Emeka Okoye, managing director, Virony Nigeria Limited; Vicky Cao, president, Virony; Mercy Johnson- Okojie, Virony brand ambassador , and John Jiang, marketing director, Virony , during the unveiling of Mercy as Virony brand ambassador in Lagos. Pic by Pius Okeosisi

L-R: Emmanuel Daniel, chairman, The Asian Banker; Tunde Kuponiyi, head, consumer distribution, Ecobank Nigeria, with the Best Transaction Bank in Nigeria, West Africa Award and David Gyori, chief executive officer, Banking Reports, London, at the The Asian Banker â&#x20AC;&#x201C; West Africa Awards 2018 in Lagos.

Felix Ofulue, head corporate communications Ikeja Electric (l) presenting Edutainment Power Play Board Game to Blessing Anyikwa, the studentsâ&#x20AC;&#x2122; Hall Mistress, Faculty of Education University of Lagos (r), and Ademola Adeleke, Dean Student Affairs, University of Lagos (m)

BUSINESS

DAY

BUSINESS DAY

Monday 23 April 2018

This is M NEY A daily guide to your Personal Finance

• Savings • Travel • Debt & Borrowing • Utilities • Managing your Tax

If it sounds too good to be true, it probably is

benga Thomas recently got a well-deserved promotion in a leading manufacturing company. He earned a decent income with good perks and had plans to move his family to a new apartment in a nicer neighbourhood. He had managed to save N3,500,000 for 2 years’ rent and placed it in a fixed deposit for 90 days, earning 14% per annum. One Friday evening at the club, his old friend Shayo Segun was full of excitement and convinced him to break the investment as he could help him to make three times that amount in the same period. He could then use the proceeds to invest in property and still have enough to take his family on holiday. Shayo regaled him about how much he had made himself. Gbenga had known Shayo since they were boys and decided to break part of his investment to follow Shayo’s advice. He didn’t discuss it with Bimpe, his wife, as he knew she would never let him risk their rent based on what Shayo said. When the first credit came, he couldn’t believe it; he felt much more confident and put some more in. Again, another credit. He was minting money. He then broke the entire investment and “invested” it along with the profit and the children’s school fees. That was the last he saw of

his money. Gbenga had never had issues with his blood pressure. This was the beginning of health challenges. Last week, it was reported the EFCC arrested 3 people in relation to duping people of their “investments” made in Swiss Golden. Reports say that over 3 billion naira has been invested in the scheme and the EFCC was only able to recover a little over 200 million naira. It is very disturbing that just over a year when Nigerians lost billions of naira to the MMM scandal, thousands of Nigerians have again lost their life savings. One would have thought that people had learnt a bitter lesson, so what is the

reason why people will put their hard earned life’s savings in a “phantom investment”, a Ponzi Scheme. A Ponzi scheme is a fraudulent investing scam promising abnormally high rates of return with little risk to investors. The Ponzi scheme generates returns for older investors by acquiring new investors. Perpetuation of the high returns requires an everincreasing flow of money from new investors to keep the scheme going. This is similar to a pyramid scheme in that both are based on using new investors’ funds to pay the earlier backers as opposed to any from profit earned from an underlying asset. When new entrants slow down or dry up it will eventually and inevitably collapse. Why do people keep falling for these scams? To my mind, there are at least 3 reasons: greed, poverty and ignorance. Greed can be defined as “an excessive desire to acquire or possess more”, especially more material wealth; greed is about excessive want. Greedy investors tend to be impatient and unrealistic. They throw caution to the wind and ”invest” based on vague, subjective information, tips, hype, and rumor with the hope of a quick windfall rather than with informed due diligence in pursuing a

carefully crafted plan. The investor often doesn’t understand the nature of the investment and assumes only the best, completely ignoring the worst. We love easy money and often forget that it isn’t that easy to make money. In a very ostentatious materialistic society it is easier to fall prey to the scams where there is much energy spent in trying to outdo one another with all the lifestyle trappings. The internet makes everyone and everything look so wonderfully happy, beautiful and rich! When it comes to investing, far too many people tend to follow the crowd and invest in the latest fad; this can prove to be disastrous, as such investments usually carry an extremely high degree of risk and are unsuitable for most of us. Adverts and rhetoric will show people making huge amounts of money to entice the “greedy” onlooker who then jumps on the band wagon and loses his or her shirt. Poverty drives people to desperation; and nobody enjoys the endless struggle to end poverty; the lure of instant gratification becomes attractive. With clever marketing, it is easy to be enticed by one scheme or the other to make some money particularly if you are uninformed. Unfortunately financial

knowledge is not taught in schools and we grow up with very little knowledge about how money works or how it can work for us. It is important that you develop your knowledge of financial matters through reading, seminars and so much information online. This will give you at least a better chance and understanding of the available options for your money. Without being informed, it is easy to be enticed by supernatural profit. We all have different money personalities. How much risk are you prepared to take? Are you risk-averse, somewhat conservative, moderate, or are you a fearless risk taker that would you risk the family home for a hunch? Sadly as regards the Ponzi Schemes, most of those that dive in, actually don’t even realize that they are taking risk. Of course, every day there are people who do suddenly get rich by winning the lottery, hitting the jackpot on a gambling machine, or betting on a rare stock that skyrocketed overnight. These things can happen; it’s usually because they were lucky; we cannot live life based on luck as luck goes both ways; it can run out. Having observed successful investors for many years, it is clear that there is no magic formula for investing. Successful investing requires a wellthought-out plan usually tied to short, medium and long term goals. It also comes from focus, patience, discipline and consistency; it doesn’t just happen overnight. Successful investors aren’t looking for a miracle; they are more realistic and seek steady ways to improve their performance over time in a rational manner rather than latching onto the next getrich-quick opportunity of which they have little information. They seek professional advice and apply their own knowledge and experience in coming to their investment decisions. “Don’t put all your eggs in one basket” is a well-

known adage that we must all try to embrace in our investing lives. An important ingredient of successful investing is to build a diversified portfolio so you don’t risk everything in one investment. Successful investors do lose in some investments but make up in several others. Unfortunately thousands of Nigerians will continue getting scammed. It is tempting to try to get rich quickly, but the process of getting rich slowly and steadily via saving and long-term investing in a diversified portfolio is tested and more reliable. Don’t let wishful thinking cloud your better judgment; if something sounds too good to be true, it probably is too good to be true! Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. For more personal finance tips, contact Nimi: Email: info@moneymatterswithnimi Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

Monday 23 April 2018

C002D5556

BUSINESS DAY

Live @ The Stock Exchange Top Gainers/Losers as at Friday 20 April 2018 GAINERS Company

LOSERS Opening

Closing

Change

N702

N737.1

35.1

MOBIL

N44

N44.85

0.85

DANGCEM

FBNH

N12.25

N12.85

0.6

GLAXOSMITH

N125.8

N126.1

0.3

PRESCO

N13.4

N13.6

0.2

UNILEVER

SEPLAT GUARANTY

DANGFLOUR

Market Statistics as at Friday20 April 2018

Company

Opening

Closing

Change

N181

N172

-9

N252.5

N249.5

-3

N33.2

N30.3

-2.9

N68.65

N66

-2.65

N55

N53

-2

Nigerian stock market sheds N41bn …NSEASI down by 0.28%

Stories by Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) AllShare Index depreciated by 0.28percent to close the week ended April 20, 2018 at 40,814.89 points from week open level of 40,928.70 points. The value of listed equitied decreased to N14.743 trillion from a high of N14.784 trillion on April 13, 2018, indicating a decrease of about N41billion. Thirty-six (36) equities gained in the review week, lower than 37 in the preceding week; while 33 equities depreciated in price, lower than 38 equities in the preceding week, while 100 equities remained unchanged

higher than 94 equities recorded in the preceding week. All other indices finished lower with the exception of NSE CG, NSE Premium, NSE-Main Board, NSE 30, NSE Banking, NSE Oil/Gas, and NSE Pension indices, which appreciated by 1.08percent, 1.38percent, 0.54percent, 0.13percent, 2.34percent, 0.73percent and 1.42percent respectively. In the trading week under review, the stock market recorded total turnover of 3.008 billion shares worth N30.296 billion in 24,036 deals in contrast to a total of 1.415 billion shares valued at N19.644 billion that exchanged hands the preceding week in 20,659 deals. The Financial Services Industry (measured by vol-

ume) led the activity chart with 2.539 billion shares valued at N23.510 billion traded in 13,179 deals; thus contributing 84.43percent and 77.60percent to the total equity turnover volume and value respectively. The Oil and Gas Industry followed with 273.443 million shares worth N2.358 billion in 3,735 deals. The third place was occupied by Consumer Goods Industry with a turnover of 60.840 million shares worth N2.654 billion in 3,141 deals. Trading in the top three equities– FCMB Group Plc, United Bank for Africa Plc and Oando Plc (measured by volume) accounted for 1.816 billion shares worth N9.599 billion in 3,851 deals, contributing 60.37percent and 31.69percent to the total equity turnover volume and value respectively.

ASI (Points)

40,814.89

DEALS (Numbers)

5,746.00

VOLUME (Numbers)

242,291,871.00

VALUE (N billion)

3.026

MARKET CAP (N Trn

14.742

Stanbic IBTC engages clients on dynamics of custody market

tanbic IBTC Nominees Limited, a subsidiary of Stanbic IBTC Bank Plc, recently organized an investor services forum to interact with and update its existing and potential customers on developments in the market. The aim of the forum was to unlock new market opportunities and enhance participation of local investors in custody services. A custodial service refers to when a corporate entity or individual (custodian) holds a property or asset on behalf of a client. Specifically, a custodian is a financial institution that holds clients’ securities for safekeeping in order to minimise the risk of theft or loss. Securities such as share certificates, bonds, stocks and treasury bills are some of the assets a custodian holds for clients. Custody services are available to a wide portfolio of clients, including unit trust schemes, pension funds, corporate clients, high networth individuals, financial institutions, foreign, local and individual investors, insurance funds, fund managers, brokers, and dealers. The session, which held in Lagos recently, had the theme “Future of Custody in Nigeria – Meeting Global Standards,” providing a peep at global technological changes and the future of

custody. In attendance at the event, which also featured a panel discussion, were local investors, fund managers, asset managers, pension fund managers, insurance companies, capital market players, regulators, policymakers, bankers and other stakeholders from the private and public sectors. Akeem Oyewale, Chief Executive of Stanbic IBTC Nominees Limited said change is inevitable in life and in business, which makes it imperative to keep track of developments in the market. Such new insights, he added, provide that vaunted springboard to opportunities that maximise business and investment success. “In the area of business we operate, change is a constant thing and as such it is critical to intimate our clients on what is changing in our market and in the industry. Changes can be regulatory, industry or competition driven, or it could be set off by enhanced risk awareness, as well as environmental and technological changes,” Oyewale stated. Technological changes, for instance, have engendered big data analytics, which avail real-time information as well as generate actionable insights that help managers enhance business performance, increase efficiency and lower structural costs and risks. He also noted that blockchain

technology, as disruptive as it may seem, offers numerous benefits such as proficient systems and processes leading to cost efficiencies and valueadded solutions. New opportunities for growth, triggered by a variety of factors, are consistently emerging in the wealth creation and management space and tapping into such opportunities requires having the right information that aids successful planning and implementation, Oyewale stated. This realization underlines Stanbic IBTC’s determination to arm its clients with requisite information and tools to stay ahead of the curve. Custodianship is a pivotal component in the capital market value chain ,Oyewale stated, adding that as the level of awareness on how to harness the benefits of custodianship is still low in Nigeria, all hands should be on deck to bring everyone on board for mutual benefit. Oyewale said advances in technology have enabled custodians to expand product solutions well beyond their traditional roles of settlement and safekeeping to reporting on and monitoring fund investment portfolios, which is consistent with increasing demands on corporate governance, as well as the increased accountability expected of fund managers and/or trustees.

possible and eliminates counterfeit of products in circulation. You do not need internet or data connection to verify a document. Verifyon-the Go, anytime and anywhere. It is good for identifying original Fast Moving Consumer Goods (FMCG) products. It is a must have for organisation who wants brand protection and anti-counterfeiting. We highly recommend it to tertiary institutions. Human Resources Managers, government agencies and private organizations,” Giwa said.

Tripple Gee is a Central Bank of Nigeria (CBN) accredited Security Printer with over 38years experience in providing ul-

timate protection against documents alterations and anti-counterfeiting, and has the state-of-art technology.

Tripple Gee set to launch tru-Data

ripple Gee & Co Plc is set to launch an app that adequately and securely protects true IDentity of sensititive documents and takes care of counterfeiting. This app is called tru-Data, and it will be officially unveiled at the 4th ID4Africa Exhibition holding in Abuja from April 24-26. Speaking on the new application, the Vice Chairman of Tripple Gee, Chief Gbade Giwa said “This revolutionary product is what is needed to fight IDentity theft and counterfeiting of sensiti-

tive documents in the country. This way fraudulent attacks can be easily detected when the encryption of the critical data of the document is decrypted using our app, which is freely available on the Google Play store, to confirm the authenticity of the document. What is more, the picture of the original owner of the document can also be encrypted making ID theft absolutely impossible. The encryption could be on documents such as certificates from tertiary

institutions, birth certificates, Corporate Affairs Commission (CAC) Certificate, Certificate of Occupancy (C of O), ID cards among others”. Tripple Gee explained that said that the app, which is powered by HD Barcode Technology, is the first of series of products Tripple Gee plans to launch into the Nigerian marketplace. “Tru-Data has many benefits as it can capture images and longer texts (172 times more than normal QR code), and ZIP files. It makes quick verification of documents

BUSINESS DAY

Monday 23 April 2018

CITYFile 5,000 women acquire vocational skills in Lagos JOSHUA BASSEY

Women artistes perform during the opening of the third edition of African Drums Festival at Abeokuta, in Ogun. NAN

Eleyele Dam: Oyo moves to end deadly flooding in Ibadan AKINREMI FEYSIPO, Ibadan

he rehabilitation of the Eleyele Dam, in Ibadan, Oyo State capital, will substantially enhance residents’ access to potable water and save the city from recurring deadly flooding, the state government has said. Governor Abiola Ajimobi, stated this on Friday, at the flag off of the rehabilitation of the dam, located in Eleyele, Ido local government area of the state. Represented by Isaac Isola, the commissioner for environment and water resources, Ajimobi said that the project was one of the legacies he wished to be remembered for. According to him, the contractor handling the overhaul of the dam, Messrs CGC-CHWE Joint Venture, and other partners, had been given a maximum of 24 months to complete the project. The governor explained that the devastating effect of August 26, 2011 flooding spurred the government to embark on a

comprehensive flood control measures across the city, including dredging of river channels and construction of bridges. He said: “One of the major challenges that first confronted this administration upon our assumption of office in 2011 was the devastating flood of August 26, 2011; an unfortunate incident that ravaged many parts of Ibadan. “This Eleyele Dam, which was approaching its 70th anniversary then, was badly hit, leading to an overflow of the dam and degradation of the appurtenant structures. “The implication of this was that one of the two fictional values of the Eleyele Dam, which was to help flood control during high flow periods through its reservoir holding capacity, had been compromised! “Unlike the piecemeal and largely reactive responses of past administrations in the state, we decided to take the bull by the horns in our determined efforts to change the narratives of perennial flooding in Ibadan. The ceremony we are holding today is one of such efforts.

“On completion, the dam will have improved capacity to contain flooding in and around Ibadan. Yet another derivable benefit is that the capacity of the dam to supply treated water to the city of Ibadan and would be greatly boosted.” Also speaking, Abimbola Adekanmbi, the commissioner for finance, planning and budget, said the contractor and supervising consultants for the project were selected through World Bank-standard competitive bidding process. The project scope, according to Adekanmbi, include raising of the dam embankment crest from its existing height of 183.6m to 185.4m ask, erection of 1.0m high concrete parapet wall and increase on the discharge capacity of the spillway from 368.9m3/s to 1269m3/s. He said there would also be an increase in the width of the spillway channel to enhance its discharge capacity, rehabilitation of the intake tower in order to fully restore its capacity to supply raw water from the reservoir to the treatment plant, among others.

Ogun to build 20,000-capacity theatre for drum festival

overnor Ibikunle Amosun of Ogun says the state is building a 20,000-capacity amphitheater for hosting the annual drum

festival. Amosun disclosed this at this year’s edition of the African Drum Festival conference, workshop and exhibition held at the Olumo Rock Tourist Centre in Abeokuta.

The theme of the exhibition is “drumming for advancement, drumming for socio economic development.’’ The governor said that the amphitheater would be ready by December this year and would host the 2019 edition. He also stated that the three-day festival would be extended in the next edition, noting that the time allocated to the participants to perform was

short. Amosun further disclosed that the benefits from the previous editions of the festival had led to the introduction of an intellectual training programme that would serve unborn generations. He added that the government was using the festival to create wealth for the youths as well as to promote social and economic development.

bout 5,159 women including widows have trained on vocational skills aimed at making them economically self-reliant. The beneficiaries were trained at different vocational centres across Lagos in the last one year. Lola Akande, Lagos State commissioner for women affairs and poverty alleviation, said the training was also to reduce unemployment among women in the state. Among the beneficiaries, according to Akande, were widows, young, vulnerable and disabled women. She said to allow more women benefit from the training, government was upgrading and expanding the existing skills centres. Akande said in the period under review, 300 women were also exposed to digital entrepreneurial training to sharpen their marketing skills so as to compete with their contemporaries in the business world. “To support the vision and invest in the future of girls and young women, the ministry participated in the 2018 Olave BadenPowell Society conference held at in Japan. This served as a forum to explore changes that assist young women to interact and develop their potentials as a responsible world citizen who will lead their communities, countries and raise their voice on issues that concern them”, she said. The commissioner said her ministry handled 1,313 domestic violence matters, out of which 1,055 were amicably resolved while other cases were disengaged from the ministry due to family interventions.

Oyo to prosecute owners of illegal structures AKINREMI FEYISIPO, Ibadan

yo State says no form of illegal structure will henceforth be allowed while the violation of its environmental laws will attract instant prosecution. Waheed Gbadamosi, the director general of Bureau of Physical Planning and Development Control, made the declaration when he led a task force team on illegal structures/filling stations on enforcement mission to Oyo and Ogbomoso. Gbadamosi decried the violation of the physical planning laws of the state, especially outside Ibadan, the state capital. “The illegal structures portend great danger for the people. Some people built under the power lines while some have constructed their filling and gas stations in densely populated residential environment without any space. This is not good for the state and as government, we are working round the clock to militate against natural disasters. We want people to support this cause by adhering to the state planning laws,” he said. He reiterated the provisions of the 1978 Land Use Act which states that all lands within the territory of each state solely belong to the state government, saying that any physical development to be embarked on in the state must be granted approval by the government. He urged the residents within and outside the state capital to approach the state town planning offices to seek approval for their building plans, warning that the government would not hesitate to pull down structures not approved by the law.

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Monday 23 April 2018

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Chipmakers hit by fears of smartphones slowdown

Key ratios to know when buying insurance Page 36

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ECONOMY

8 consumer goods firms’ gross margin beats industry average BALA AUGIE

nly 8 out of the 13 largest consumer goods firms in Africa’s largest economy recorded gross profit margins that beat industry average, according to data compiled by Markets Intelligence. The 2017 audited financial statement of these firms show none of them recorded an expansion in year on year gross margins despite increased revenue. The index comprises the most capitalized and liquid companies in food, beverage and tobacco. The firms are Unilever Nigeria Plc, Cadbury Nigeria Plc, Vitafoam Nigeria Plc, Nestle Nigeria Plc, Flour Mills Nigeria Plc, Nigerian Breweries Plc, Guinness Nigeria Plc, International Breweries Plc, Honeywell Nigeria Plc, PZ Cussons Plc, Dangote Sugar Nigeria Plc, Dangote Flour Plc, and Nascon Allied Nigeria Plc. Gross profit margin, also known as gross margin, is calculated by dividing gross profit by revenues. A higher ratio means a firm has enough money left to cover operating expenses and exceptional items. Nestle, Nigeria Breweries, Guinness Nigeria, International Breweries, Nascon Allied Nigeria, Unilever, PZ Cussions, and Vitaform recorded gross margins of 41.66 percent, 41.66 percent, 38.37 percent, 37.51 percent, 36.92 percent, 28.82 percent, and 28.76 percent, beating the industry average of 28.0 percent, according to data compiled by Markets Intelligence. However, Dangote Flour, Danogte Sugar, Honeywell, Flour Mills, and Cadbury recorded gross margin of

SHORT TAKES 25 kobo Nigerian Aviation Handling proposes final dividend of 25 kobo per ordinary share for period ended December 31, 2017.

34 percent Nigeria’s state oil company NNPC’s engineering subsidiary on Friday reported a 34 percent fall in 2017 profit before tax to N3.26 billion ($10.4 million) compared with the previous year. Foreign exchange gains of 56 percent before tax in 2016 fell to 4.8 percent in 2017, NNPC spokesman Ndu Ughamadu said in a statement.

23.46 percent, 24.94 percent, 23.12 percent, 13.10 percent, and 22.47 percent fell below the industry average. None of the companies recorded and expansion in margins. Nascon’s gross margins declined to 36.92 percent in December 2017 from 54.63 percent the previous year. Unilever’s gross margins fell to 31.88 percent in December 2017 from 41.47 percent as at December 2016. An increase in selling prices across key products and the improving economic environ-

ment has helped underpin the revenue of consumer goods firms as most recorded double digit growth in at the top lines. The introduction of a new foreign exchange policy by the Central Bank of Nigeria (CBN) eased the pains of consumer goods firms as dollar became available to them to import raw materials and equipment. The gross domestic product of Africa’s largest oil producer expanded for three straight quarters last year after a 1.6 percent contraction in 2016, with year-on-year

growth reaching 1.9 percent in the final three months of 2017. The Manufacturing Purchasing Managers’ Index (PMI) closed March at 56.7 index points as business activities in the country continued to grow, according to the a recent report by Central Bank of Nigeria (CBN). The cumulative sales of 13 firms under our coverage grew by 17.75 percent to N1.80 trillion in December 2017 as against N1.52 billion the previous year. Combined profit surged by 100 percent to N155.29

billion in December 2017 from N77.65 billion the previous year. “It’s the combination of the two things; improved liquidity and increases in key product price. It’s more of increases in the price of product to make up for slow sales volume as most of their products are inelastic,” said Ayodeji Ebo, managing director and CEO of Afrinvest Securities Limited. “The stability in foreign exchange in 2017 prevented most of these firms from booking foreign exchange losses,” said Ebo.

N237.8 MILLION Guinea Insurance posts rise in full year December 2017 profit before taxation of N237.8 million versus N176.2 million a year ago. It recorded full year net premium income of N747 million naira versus N649.5 million a year ago

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: DIPO OLADEHINDE, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: DAVID OGAR )

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Email the BMI team patrick.atuanya@businessdayonline.com

BUSINESS DAY

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Monday 23 April 2018

Markets Intelligence

ECONOMY

Key ratios to know when buying insurance Markets Intelligence explains key ratios you need to understand before buying an insurance policy firms that have shown increase in solvency ratio in the last two years. Combined Ratio …. Consolidated Hallmark, Prestige and NEM are winners This ratio is a measure of efficiency for an insurance firm and it can be likened to the gross profit margin for manufacturing, construction and tech firms. The Combined ratio or CR indicates a general insurance company’s total outflow in terms of operating expenses; commissions paid, and incurred claims and losses on its net earned premium. A ratio below 100 percent indicates that the company is making underwriting profit, while a ratio above 100 percent means that it is paying out more money in claims that it is receiving from premiums. Consolidated Hall Mark Insurance has a CR of 38.60 percent as at December 2017, the lowest among the 10 firms under our coverage. Prestige Insurance Plc and N.EM Insurance Plc have efficient underwriting capacity as their CR stood at 45.27 percent and 60.67 percent in the period under review. Aiico Insurance CR of 136.15 percent is the highest among the 10 firms under our coverage. However, do note that the higher combined ratio does not mean the company is running at a loss as the ratio does not include earnings from investments or investment income, say experts. BALA AUGIE Solvency ratio ….Prestige, Wapic, Law Union and Lasaco emerge leaders Solvency ratio helps identify whether a company has the buffer to settle all claims in extreme situations. It is a good indicator of an insurance company’s capability in meeting short term and long term liabilities. A high ratio means a firm has enough

assets to cover claims. On the other hand a low ratio means a firm’s ability to meet its obligations are in doubt. In India, all companies are required to maintain a solvency ratio of 150 percent to minimize bankruptcy risk. For the purposes of these analyses, we have decided to use the India benchmark to score Nigerian insurers. According to latest data from the 2017 financial statement, Prestige Nigeria Insurance Plc’s solvency ratio of 384.55 percent

is the highest among the 10 firms under coverage. Wapic Insurance Plc , Law Union Rock Insurance Plc and Lasaco Nigeria Insurance Plc have solvency ratios of 283.15 percent, 225.53 percent and 204.29 percent respectively, which means they have the financial muscles to meet obligations as at when due. On the other hand, Aiico Insurance’s solvency ratio of 53.11 percent is the lowest among these firms. Investors are advised to buy policy of

Claims Ratio The claims ratio or loss ratio is the ratio of losses to gains such as the ratio of paid insurance claims, including adjustment expenses, to premiums earned. Among life insurers, Aiico has the highest claims ratio of 118.78 percent as the insurer is aggressive about settlement to policy holders. Some investors prefer firms with high loss ratios because it shows they prompt settlement.

Chipmakers hit by fears of smartphones slowdown Sell-off after Taiwan Semiconductor reports weak demand ALIYA RAM AND ADAM SAMSON

hipmakers faced a widespread selloff on Friday after an update from one of Apple’s biggest suppliers, Taiwan Semiconductor, raised expectations of a sharper slowdown in smartphone sales this year. It said in an earnings update that second-quarter revenues would be hit by “weak demand from the mobile sector”, unnerving investors who fear that smartphone sales have entered a structural slowdown after a decade of rapid growth. International chipmakers including Analogue Devices, Cirrus Logic, Dialog Semiconductor, Qualcomm and Qorvo fell between 3 per cent and 6 per cent during Friday trading. Taiwan Semiconductor ended the trading day down 6 per cent at NT$229. Chipmakers made the biggest falls on European bourses on Friday. ASM International’s stock fell more than 8 per cent. BE Semiconductor lost 3.6 per cent and Austria Microsystem was down 2.4 per cent.

In Europe, the MSCI semiconductor index was down 3.5 per cent on Thursday. Apple’s shares fell 3 per cent on Thursday, while the PHLX Semiconductor Sector index, which has been on a tear over the past year, fell 4.3 per cent in its worst day in more than two months. Chipmakers and smartphone suppliers have attempted to drum up more demand from manufacturers of “internet of things” devices and automated cars to offset the slowdown, but phones still account for a large proportion of revenues. Companies including Intel and UK-based Dialog and Imagination Technologies have also been punished over the past year by an overreliance on Apple as a customer. Smartphone sales in China, the world’s biggest market, fell last year for the first time since 2009 while global sales fell in the fourth quarter for the first time since 2004. “Product mix always go with the customers’ demand,” said Li Mei He Ho, chief financial officer for Taiwan Semiconductor in an earnings call. “So while we have seen some weakness in the first half for the

mobile [customers] . . . maybe not so full for the whole year and that will be one factor to our overall structural profitability.” Technology stocks, which were a key driver in last year’s sharp rally in global equities, have wobbled over the past month. MSCI’s broad measure tracking the share price of tech companies around the world has slumped 5.2 per cent from the all-time peak recorded on March 12, according to FactSet data. The index remains up 4.7 per cent so far this year. The recent fall captures declines in the share price of some of the largest companies in the industry. Apple has pulled back 4.9 per cent from record levels struck in March, while Google parent Alphabet is off 8.3 per cent from the high it hit in January. Facebook, the world’s biggest social network, has had a particularly rough time, falling 12.9 per cent from its February high. The Silicon Valley group has faced intense pressure over the leakage of data on up to 87m users to Cambridge Analytica, a group that performed political work for the Trump campaign.

Apple, which has emphasised its focus on privacy, was relatively insulated from a sell-off in tech stocks after the scandal. Overall, market volatility has done little to dissuade investors from pumping money into the sector. The industry has garnered $27.4bn in net inflows globally this year, stronger than any of the other major sectors, according to EPFR data compiled by Jefferies, the investment bank. Jonathan Golub, chief US equity strategist at Credit Suisse, said this week the Swiss bank remains bullish on the US tech industry and favours it over other major sectors. “Despite recent concerns around tech, the group is the most compelling, with strong fundamentals, above market revenue and organic earnings growth (adjusted for tax change), and attractive free cash flow valuations,” he said. The S&P 500 index of large US tech stocks was expected to post sales growth for the first quarter of 14.2 per cent, roughly double the rate of the broad index, FactSet data showed.

BUSINESS DAY

Monday 23 April 2018

Start-Up Digest

In association with

How we support, equip Nigerian SMEs—FIIRO DG Stories by ODINAKA ANUDU

loria Elemo, directorgeneral and chief executive officer of the Federal Institute of Industrial Research Oshodi (FIIRO), says the institute does not frustrate the micro, small and medium scale enterprises (MSMEs) in Nigeria, but rather support, promote and equip them with 21st century research and machines needed for industrial revolution in the country. Elemo is reacting to a BusinessDay story published on Monday, April 9, 2018, entitled, ‘How FIIRO directors frustrate Nigerian SMEs’. The report centred on how Jon Kachikwu, chief executive of Jon Tudy Interbiz, a small-scale export

firm, allegedly paid for groundnut roasting and dehuller machines in 2015 at FIIRO but could not get them about three years after. Kachikwu had raised an alarm over how he paid N950, 000 into the institute’s account for the fabrication of the two machines but received them in bad condition. In other words, the machines were supplied but were faulty, prompting him to return them to the institute. Kachikwu had said that since that the repair was not done timely, the only rational thing the institute should do was to refund him. But speaking to BusinessDay, Elemo said Kachikwu’s application for the said machines did not come to her table and did not go through the normal process. “He was brought to look at a host of equipment and he decided to go for the groundnut roaster and the dehuller. It is a whole series of equipment, and it is only those two that had problems. We didn’t have his papers and the application did not come to my table, yet when he ran into that problem, I was notified and I quickly zeroed in. I know the engineer he was working with as a staff member, and we didn’t want unnecessary issues. “So, when the machines had issues, they were taken straight to the fabrication laboratory and we discovered that it was not a FIIRO design. It was fabricated outside, and not in FIIRO. Yet I took it as a

personal project and it was installed for him. I think he had a small problem and he wanted a refund, which I told him that he could get. But as at the time he was putting pressure on us for the refund, we were not

ready and did not have the necessary funds.” Elemo said that things should always be done properly and people should route their requests through the director-general.

“We wanted to assist him because we wanted to encourage industrialisation in Nigeria. “What is paramount now is that we should be able to give him functional machines, which we have tried to do. Nevertheless, we will still discuss these things. We told him, these are not contracts. If they are paper works, he will sign an agreement. All those things were not spelt out. For the DG herself to be on the fabrication floor to ensure that those pieces of equipment were properly fabricated, I think he should be more grateful,” Elemo explained. According to her, FIIRO has supported so many industries and SMEs that are running today across the country. “As far as FIIRO is concerned, and as far as industrialisation is concerned, we have done a lot to catalyse it in Nigeria. “This error by commission or omission on Kachikwu’s part should not be used to bring down the efforts of the federal government in making sure that that industrialisation takes root. The machines have been ready. We have the engineers that installed them. I think he is no more interested in that process any more, but we cannot force him. So he can get his money back, though the money was not totally put into the institute. People should learn to route their requests through office of the DG,” she added.

Our entrepreneurship journey, by Vanpeux co-founder

L-R: Joyce Akpata, director-general, Nigerian-American Chamber of Commerce (NACC); Hassan Bello, CEO, Nigerian Shippers’ Council; Otunba O. Akomolafe, deputy president, NACC at the April breakfast meeting held last Thursday in Lagos

Nigerian-American Chamber, Fosad train entrepreneurs on customer management

he Nigerian-American Chamber of Commerce in association with Fosad Consulting trained entrepreneurs on customer relationship management. The one day training, which held at the Chamber’s Secretariat on the 27th March, 2018, witnessed the attendance of business executives and customer service professionals across industries. Participants were encouraged to develop passion not just to lead their customers but to develop, guide and nurture their minds. “Customers are like plants, they need to be nurtured. Service professionals and business executives must

be prepared to impact, inspire and help their customers discover their natural habitat. Then they must bear in mind always that ‘cash is not king, rather customer is king,” the entrepreneurs learnt. The training, which was facilitated using real life experiences, games, discussions and presentations for knowledge sharing, focused on achieving client service excellence, building and retaining client relationships, creating an exceptional internal customer experience, understanding the impact of bad customer service, benefits of excellent customer service, developing soft skills and understanding the importance of customer to business growth.

n 2011, the two former bankers— Ovoke Ekrebe and Peter Ejimudo—set up Vanpeux Global Synergy at Kalejaiye Street, Shomolu in Lagos, as a general technology outfit. One and a half later, these entrepreneurs lost every penny they invested in the business. This was a painful experience but part of the learning curve. “We were like living beings that died and resurrected. We lost all we had and started afresh,” Ovoke

Ekrebe, co-founder of Vanpeux, tells Start-Up Digest. “It is true when they say that small businesses fail in the first one or two years. We have done our failing and have resurrected, never to fail again,” Ovoke says confidently. Four to five years after, this firm is now providing renewable energy services to a number of establishments in the country. Apart from serving numerous customers, Vanpeux has become one of the 45 renewable energy firms certified

to do solar business in Nigeria by the United States Agency for International Development (USAID) and The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), American and German development agencies respectively. The firm is powering more than 1,500 homes and 45 businesses through solar energy. “We are among the 45 recommended to undertake renewable energy all over the world. That means we have passed capacity tests and have the ability to take up renewable energy projects from start to finish. Our customers should be very proud to know that reputable international organisations have recognised our work. They can have confidence that we are providing reliable renewable energy solutions,” Ovoke says. “It is a fantastic seal of performance. There are so many businesses in Lagos. There are over 1,500 renewable energy firms in Lagos alone that claims to proffer renewable energy solutions. There was a project that USAID ran which was a renewable energy efficiency programme that supported private companies. At the end of their programme, they did some form of audit in Nigeria and found 45 worthy,” he adds.

BUSINESS DAY

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Monday 23 April 2018

Start-Up Digest

‘Your business must satisfy a particular need’ Tobiloba Arewa Adesanya is the executive director of Àdìré World, a tie and dye textile designing company. Tobiloba holds Bachelor of Science (Bsc) degree in Social Studies from Tai Solarin University of Education, Ogun State, Nigeria. In this interview with BUNMI BAILEY, the young entrepreneur shares the secret behind her business, challenges and how government can help young entrepreneurs grow. Tell me about your business.

dìré World is a tie and dye textile designing company that believes in connecting people‘s personality with what they wear. We tell stories and put people in charge of their style through patterns. Some of our products are Àdìré t-shirts, shirts, neck ties, bags, notepads, and scarfs, among others. We work with event planners for decoration, photographers for backdrops, fashion designers, and corporate organisations interior designers, among others. Also, Àdìré World has an academy for people who inspire to be textile designers. This is a textile designing school with a flexible time table that works with every age group. I started tie and dye business in 2016 when I was at 300 level. I had already started learning tie and dye from 100 level in school. My school had a law that mandated every student to choose one vocational study apart from the initial course you came to study in school. The vocational course was compulsory and failing it may lead to an extra year. When I was sure this was what I wanted to do for the rest of my life, I registered my business in 2017 in my finals at the age of 21. I finished from Tai Solarin University of Education where I graduated with second class upper division in Social Studies. What inspired you to set up the business? My business was inspired by the need to redefine Nigeria’s textile industry. Being someone who loves arts and has strength in fashion, I combined both together and went into the textile industry. So with this, designing Àdìré to me is like designing ‘a wearable art

Tobiloba Arewa Adesanya

piece’. I am very intentional about my designs. Every pattern has a meaning, every colour application and combination is intentional and goes with the brand. I also believe that what you wear says a lot about you. What you wear speaks before people talk to you. So with this, I design outfit that suits my customer’s personality. This happens after a series of questions and answers, listening to what they want people to think when they see them, while building their brand through the outfit.

Furthermore, my business is inspired by the need to use textile as a tool for story-telling. Every pattern has a story behind it, and it pattern is intentional. You have over a year experience in entrepreneurship training. Why do you think most startups fail after five years of being birthed? The first reason why start-ups fail in the first five years is irrelevance. This means there is no demand or need for the product or service

you’re providing. If this is the case, then your start-up will not be around for long. The economic conditions in Nigeria understandably force a lot of people to start businesses with the focus of making money alone, but this mind-set is not sustainable for running a successful business. It is absolutely essential that your business is centred on satisfying a particular need in the society that people have, in order to ensure that what you are providing has an existent market. If you have already started a business and realise that your product/service has no market demand, then you will need to pivot a little. Nigeria currently presents quite a few problems for its citizens. Take a step back and ask yourself, ‘Which of these problems can I solve with the resources within my reach?’. Answer this question and start your product or services from that angle. Next is mismanagement of funds. As a young business owner, raising sufficient capital to start and run a business is often a challenge. So, proper management of business funds has never been more important. Mismanagement of money in Nigerian businesses typically takes the form of mixing personal and business funds or giving too much credit to customers based on sentiments. This then results in the business being owed a lot of money, and the more debt a business has, the higher the risk of it being unsuccessful. Another one is little or no focus. This is often a difficult task for start-up entrepreneurs because they usually include constant changes in priorities in a bid to find the right business model. They consistently switch from one business to the other. Nevertheless, once you have nailed down a particular business model that works, it is important to be patient, stick to it and build on it.

What was your initial start-up capital? I started with N2000, which I used in getting dye and chemicals in school. How would you say your business has grown since starting? Since I started a year ago, I would say my business has grown in some many ways. I started the business with little or no experience, but along the line, I submitted myself to be mentored by people who have done it before. I learnt from them. I learnt from their failures. I take counsel. So with this, my business is growing based on principles from people who have been there and through the direction of God. What are the challenges confronting your business? One of the main challenges I face in my industry is inflation of the materials. Most of the fabrics we use are imported and the prices are irregular owing to the exchange rate. Made-in-Nigeria products are now beginning to get more appreciated unlike before. Entrepreneurs in Nigeria can now measure up to global standards in terms of quality. How can the government address some of those challenges? The government can help us set up a 100 percent cotton factory in Nigeria. This way, we will not have to rely so much on the imported Guinea or t-shirts. That way, we can make our own local fabrics and won’t have to worry about inflation. What would you tell your younger self? To my younger self, I would say; Define every relationship in your life.

How to establish a commercial pig farm OLUMAKINDE ONI

s Nigeria makes efforts to diversify its revenue base away from oil, experts are making case for diverse opportunities in the agricultural sector. One of such opportunities is pig farming. According to experts believe Nigerians are not tapping into the opportunity in this area because of ignorance and poor perception about pigs. Apart from a breeding ground, which should be large enough, it is easy to start a piggery with N500, 000 to N1 million. To start a piggery, you need healthy piglets, standard pens, quality feed and three to six workers, depending on the number of piglets available.

The biggest thing about pigs is that they reproduce in large numbers. Pigs can go between N15, 000 and N40, 000 depending on their size and weight, and one pig can easily reproduce up to 15 to 20 piglets. This is its biggest advantage. Secondly, pigs can survive in any environment. Pigs are in high demand in China, Japan, India, Mexico, Canada and many parts of Asia. In 2015, United States exported porks (pig meat) worth U$4 billion; Germany, $4 billion; Spain: $3 billion, among others. Live stock production grew by 2.52 percent in Q3 2017 from 2.28 percent in Q2 2017 and 0.76 in Q3 2016, National Bureau of Statistics (NBS) states in its Gross Domestic Q3 report. The pig carcass yields a higher percentage of dressed meat and a

higher proportion of edible parts. Pork is higher in energy then other meat. It is nutritious and tasty, as slaughter animals are comparably young. Pork is palatable and attractive, as it is tenderer than beef. A slaughtered pig can be more easily utilized; it does not require ageing or tenderizing. The product can be smoke, salted, processed and stored otherwise, a smaller quantity becomes available at any time and causes less of a storage and keeping problem. The Pig “Carcass yields a high dressing percentage, more edible meat of greater nutritious value. The salvage value of the breeding stock is very high. This means that pigs which have been used to produce several can still be sold at a relatively high price whenever they are to be sold out.

Pigs can be bred at any time of the year and goat that have to be bred at a particular time of the year. Pigs are efficient converter of industrial by-products and Agricultural wastes (including kitchen wastes) into pork. Social and economic benefits derivable from the project are improvement of the economic well being of the sponsor, generation of employment opportunities, and increase in the level of protein consumption thereby improving the level of our health care delivery system. Technical Aspect The project involves design and construction of pig pens and acquisition of foundation stock of pigs (breeders). The stock female pigs are to undergo intensive feeding and breed-

ing for the purpose of child bearing. The young ones are to be raised at the fattening house to market sizes where they will be sold to prospective buyers. Financial Information To establish a 50 sow unit commercial pig farm, the breakdown of the costs are given as follows: Pre-Investments : N200,000 Housing : N3,000,000 Breeders (55 at N30,000) : N1,650,000 Feeding : N2,000,000 Utilities/Others : N500,000 Total N7,350,000 Note: The scale could be lower or higher depending on the financial strength of prospective investor Tel: 080-23058045, 08152596985, 080-33660177 E-mail: olumakindeoni2@yahoo.com.

BUSINESS DAY

Monday 23 April 2018

Start-Up Digest

Tomilola and Remilekun: Entrepreneurs shaking Nigeria’s skincare industry Josephine Okojie

igeria’s middle-class and urban population have continued to desire better quality beauty and personal care products as they constantly attempt to boost their personal image and confidence. This has translated into the impressive growth recorded in the country’s beauty and personal skin care market. To tap into this opportunity, young entrepreneurs are now specialising in products that nourish the skin and bring great returns. Here are two entrepreneurs in this business.

Tomilola Awanebi Tomilola Awanebi is the founder of Sheabuttersheen Nigeria Enterprises, a startup that produces a range of organic skincare products. Tomilola was inspired to start this business when her baby had issues with skin-related allergies that failed to respond to doctors’ prescriptions. According to Tomilola, the situation prompted her to carry out extensive research on alternatives to address these skin-related issues. The entrepreneur found shea butter, tried it on her baby and it yielded much result. “I discovered a major challenge through personal experience. My first child had issues with allergies that lasted for years, despite doctors’ prescriptions and use of steroids,” she says. “This challenge gave birth to years of research on alternative and organic cure to minor skin-related issues. It also raised my interest in organic therapy. As at then, the use of organic products was not pronounced, but funny enough, it was the answer to my child’s years of skin allergy because my research gave me positive results,” the entrepreneur adds. To change this for others with skin-related issues, the Economics graduate established Sheabuttersheen Nigeria Enterprises in 2012. For her, the challenge was a business opportunity which should not be ignored. Tomilola tells Start-UpDigest that she started her business with only N11,

Tomilola Awanebi

000, an amount she spent on buying raw materials for processing. She started this business in her residential apartment and now has two major factories in Lokoja and Akure with over 20 employees. More so, product penetration is reaching over 18 states with two major export countries of focus. “My initial start-up capital was N11, 000. Of course, I started with a manual process, but now, we are into mechanised way of production and have a machine with a two-tonne processing capacity of shea nuts. “The business has grown from producing just shea butter for local consumption to the production of five other by-products of shea butter and also from local suppliers to exportation and getting NAFDAC licence,” she further says. Tomilola sources her raw materials from local suppliers and from villages where shea nuts are grown. She also gets her packaging materials from Lagos. Speaking on some of the challenges facing the business, the young entrepreneur says that irregular supply of shea nuts is the major challenge. She discloses that because shea trees are grown in wild areas, it is difficult to have them on any plantation. She also identifies high rate of deforestation as another major challenge that is not just facing her business but the entire shea industry in the country. “Shea trees in most states are cut

Remilekun Lawal

down as firewood and for charcoals. “We also have external traders from neighbouring countries dictating our prices, making it difficult for local producers to afford it and still be profitable,” Tomilola notes. She believes that lack of vital infrastructures such as stable power supply, good road network and storage facility, among others, has continued to impact on her business negatively. Tomilola urges the government to address the issues around infrastructure, stating that it is the basis of industrialisation and growth of the nation, calling on them to ensure policy consistency and to stop the illegal felling of trees across the country. The Madonna University, Okija, Anambra State graduate says that youths can only find agriculture attractive when there is innovation in the sector. “Agriculture is viewed as a very stressful venture because it is labour intensive, but with mechanisation,

youths would find agriculture attractive.” On her advice to other entrepreneurs, she says, “Entrepreneurs should have vision, goals and mission clearly written and must stay focused to that vision and ensure each day that passes, they have achieved or worked towards achieving a goal. “Entrepreneurs should be willing to start and grow a business out of nothing or with little. It is your success in ‘the little’ that will make ‘the big’ a reality. Endurance in an economy like ours is a virtue for all entrepreneurs and lastly financial discipline is vital to the growth of an enterprise,” she adds. Remilekun Lawal Remilekun Lawal is the founder of Brown Skin Girl (BSG) Limited, an organic and natural skin care products firm. Lawal went into the business because she wanted to have a safe skin care alternative for people whose skins are damaged by chemical products.

As at then, the use of organic products was not pronounced, but funny enough, it was the answer to my child’s years of skin allergy because my research gave me positive results

With just N10,000, Lawal started the business last year, mixing shea butter and coconut oil with her body cream. After mixing them together, a friend would always pick it up from her, a situation that went on and on. After a while, she saw a business potential in it and subsequently went for an online training to learn how to combine essential oils together with herbs for lotion. Lawal currently has four people work for her and conducts trainings for others. “I also import some raw materials. Most of the essential oils I use are not grown in Nigeria, like olive, rose flower oil, sweet almond oil, eucalyptus oil and the like. For fruits extracts, I get some here and still have to import others because they have to be grown organically. I also get my milk locally from a dairy farm. I shop online for some of my products. I source things that can be got locally like shea butter, coconut oil and black soap,” she states. She says dollar crunch in Nigeria in 2016 impacted her firm negatively. In terms of challenges, Lawal explains that packaging is a big challenge in the cosmetics industry. “I hardly find g o o d packaging materials that are up to standards for my products. In developed countries, there are specifications for beauty care packaging materials, but you do not find these in Nigeria. The manufacturers

do not follow specification for cosmetics packaging but produce same packaging for all products,” she says. “Another major problem is the huge desire for bleaching products among Nigerians. Everybody wants a product that will just bleach them quickly without considering the adverse effect of it. So it is quite difficult to convince people about organic and natural skin care products because it takes time before you see the effects on your skin, but people always want it very fast,” she adds. She says poor power supply is also a major challenge, which has also contributed to surging production cost, adding that lack of access to funds must be tackled. She recognises the role of the social media, disclosing that it has a positive impact on her business. “I started out by creating a BBM channel where I posted all my products and skin care routines on the channel and people started requesting my products through the channel. Despite that, it was expensive then because of foreign exchange volatility, yet people were still buying my products. My business has grown and it is still growing,” she says. “Now I take some of my products to exhibitions and people still buy. I have customers that have been with me since starting till now,” she reveals. Like other entrepreneurs, Lawal says government must create an enabling environment for start-ups to survive. “We need key infrastructure such as power to survive. Finance is also very key. Start-ups need a lot of incentives and finance at a single-digit interest rate. The government should adjust some of its importation policy to allow importers bring in products that cannot be produced in the country. The government must also ensure that standard products are imported into the country and not substandard. The government also has to look at some of the oils that are used by cosmetics industry to be grown in the country,” she says, while calling for tax holidays for start-ups .

BUSINESS DAY Harvard Business Review

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Monday 23 April 2018

In association with

What I learned about working parenthood after my kids grew up AVIVAH WITTENBERG-COX

et me just, for a moment, shine a light on the pleasures that await you once your kids have grown up and left home. It comes faster than you think. What few parents will admit to is the thrill of post-hands-on parenting. The ability to refocus on professional priorities and dreams is an unexpected gift, and one we rarely plan for. In my thirties, I assumed I’d be retiring in my sixties. But today, at 56, I’m beginning to think I’ve only just begun. Another surprising discovery: Your children

often become very interesting — even inspiring

— people. And the more professional they get, the

more relevant they discover you become. Not only do your business networks come in handy, but so does just about everything you’ve ever learned about stuff, from accounting to leadership. It is a very particular pleasure to remain relevant as your children age. To realize that they don’t grow up and leave — they grow up and call. A lot. As lives lengthen, the post-kid decades are stretching out healthier and wealthier than ever before. People are “unretiring,” returning back to work after an attempt at conforming to old ideas of age. They rediscover purpose and pleasure at

work, when it isn’t driven by the crushing pressure of full-time schedules or revenue maximization. Looking back at my years of peak working parenthood, there are four things I wish had been easier to remember when I was in the thick of things: — DON’T SWEAT THE SMALL STUFF. One bad week doesn’t make you a bad parent. — DON’T BURN OUT BEING A PERFECTIONIST PARENT. Instead, invest sustainably and regularly in yourself and your kids. — LOVE THEM A LOT, BUT KEEP YOUR AMBITION FOCUSED ON

YOUR OWN CAREER. — IF YOU ARE MARRIED, LOVE YOUR SPOUSE, and don’t demote your relationship to the bottom of the priority pile. No one will thank you. Your kids are learning relationship skills from you. Inspire them. We all want to be wise elders to our children. Who knew, though, that doing so could take dedication to something other than them? Being a working parent can be hard. But as you get older, like many other things, it gets better and better. (Avivah Wittenberg-Cox is CEO of 20-first.)

Why great networkers are sometimes bad for creative projects ANDREW SHIPILOV, CHARLES GALUNIC AND JULIEN CLEMENT

magine you are putting together a team for an important project. You have two candidates for the last slot. Tess has not only a lot of relevant experience but also a wide network in the industry. She seems to know all about the emerging trends; her colleagues marvel at her creativity. Then there’s Cyril, who is competent and has deep skills and knowledge, but does not have Tess’s broad network. Decades of research have explained why people like Tess can come up with creative insights: Their connections expose them to different ideas from groups of people who normally don’t talk

with each other. These “hubs” absorb information from different professional communities and recombine them in creative ways. They certainly benefit from having connections. But is it a twoway street? Do the people who work with hubs like Tess get as much out of the collaboration? To answer that question, we studied factors that determined the success (viewership) of game shows. Game show teams are almost always led by two people with very distinct roles: a creative director and a producer. We studied whether hiring hubs (like Tess) to work on TV shows made the shows successful, and specifically, what impact hubs had on executives’ ability to do their work well.

nities, and they have less fear of damaging their reputation. Even more interesting, creative directors benefited when they worked with people who worked with hubs. It seems that hubs’ ideas got transmitted through the network of their contacts to reach creative directors even without their direct interaction. By contrast, producers suffered when they worked with people who worked with hubs on their own projects. The results were striking. Creative directors benefit from their proximity to hubs; working with hubs gave them access to new ideas and tools to put together innovative game shows. But a very different picture emerged

from producers: They actually suffered from it. The shows of producers who were in contact with hubs performed less well, and there was even evidence of delays in their production. In other words, if you are a producer, you are bet-

ter off avoiding Tess and choosing Cyril. Why is that? As it turns out, hubs are great repositories of ideas, but they can be poor collaboration partners. Their attention is stretched across projects in different commu-

(Andrew Shipilov is a professor of strategy and an Akzo Nobel Fellow at INSEAD in Fontainebleau, France. Charles Galun is the Aviva Chaired Professor of Leadership and Responsibility at INSEAD. Julien Clement is a Ph.D. candidate at INSEAD.)

REAL SECTOR WATCH

Monday 23 April 2018

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BUSINESS DAY

How Akwa Ibom attracted 4 manufacturing companies in 3 years …as state woos investors, partners professionals

ages its airports independent of the support of the Federal Government.” He stated that the meeting was meant to rub minds with Concerned Akwa Ibom Professionals based in Lagos and enable them understand the investment potential back home. “Government is focused on attracting investors to come into the state and invest. We need to talk to every concerned party and showcase opportunities so that they can take advantage of them. These are part of the initiatives by Akwa Ibom State to woo investors to showcase the prospects and potential in Akwa Ibom State,” the commissioner added. The meeting provided an op-

portunity for the state government to sell its economic policies to the professionals, including the Ibom Deep Seaport (IDSP). Speaking with journalists, Augustine Edet, managing partnet at Savvi and consultant to the Central Bank of Nigeria (CBN), said he and other participants at the meeting were enthusiastic about the potential in the state and would galvanise their resources to invest in Akwa Ibom. “We had a delegation from the government of Akwa Ibom speak to us about investments and opportunities in the state. We had the technical committee for the deep sea port and the commissioners in the state. The chairman of the investment committee was also there. We are leaving with one mind and we will see how we can bring together our resources and leverage our contacts for the state,” Edet said. One major challenge faced by investors is the doing business environment. According to Edet, Akwa Ibom professionals raised concerns in this direction and the state government officials gave them assurances. “Some of us expressed frustrations where in the past we had facilitated investments but there was really no framework to guide that process. But right now, there is a one-stop shop. The technical committee has been equipped to serve as a one-stop shop and facilitate investments into the state,” he stated. According to Barth Ebong, former general managing director of Union Bank Plc, who is also an Akwa Ibom citizen, professionals got clarifications on areas that were available for investments and government programmes on capacity development.

super stars of Nigerian Breweries who constituted an important segment in the route to the market, while saluting them for their excellent contribution to the company’s success. In his remarks, Jordi Borrut Bel, managing director, NB, lauded the partners for the long years of support and affirmed that the

company looked forward to a more rewarding relationship with them in the years ahead. “As partners for progress, we need you now more than ever before to win. The environment is more intense and the competitive landscape continues to change. These are challenging times in the market,” Borrut Bel said.

ODINAKA ANUDU

hree years after coming to power, the Akwa Ibom State government has attracted four largescale manufacturing companies to the state. The state has the largest syringe factory today, which has the capacity to produce 400 million to one billion syringes annually. Jubilee Syringe Manufacturing Company Limited (JSM), a foreign direct investment into Akwa Ibom, is the largest in Africa, bigger than a syringe plant in South Africa, which has the capacity to produce just 95 million syringes per annum. Apart from the syringe factory, the state plays host to a digital metering factory, a pencil manufacturing company and a toothpick firm. “Today in Akwa Ibom, we can boast of Africa’s largest syringe factory. In just three years, we have four companies thriving in Akwa Ibom. We have the digital metering company that produces prepaid meters. Added to it are the pencil and toothpick factories. Recall that pencils and toothpicks are consumed by every household in Nigeria. Akwa Ibom State has taken the lead to play a pivotal role to produce these things locally,” Charles Udoh, Akwa Ibom State information commissioner, told BusinessDay after a meeting with Concerned Akwa Ibom Professionals based in Lagos, last Thursday. Udoh said apart from these four factories, a set of four other large-scale manufacturing concerns was on the verge of establishing in the state. Despite being attracted by the

state, the industries are not run as government entities. “They are run and benchmarked as private entities. They are 100 percent private entities. Government of Akwa Ibom has equity participation, in most cases, just the land. For us, we realised that industrialisation in Nigeria in the past failed because most industries were run as extended parastatals of government. So, today the government of Akwa Ibom is insisting that industries are set up and run as private entities while government only creates the enabling environment,” he explained. According to the commissioner, Akwa Ibom State was an attractive investment destination,

a fact attested by the National Bureau of Statistics (NBS). “In the last two years, the National Bureau of Statistics has listed Akwa Ibom as the second largest destination of Foreign Direct Investment (FDI) in Nigeria, only second to Lagos. That shows that the government of Akwa Ibom is doing something right,” he stated. He explained that Akwa Ibom had constructed more roads than any other state in Nigeria, stressing that the state was among the safest in the country. “Cumulatively, it has constructed 1,700 kilometres of roads, spanning the length and breadth of the state. Today, Akwa Ibom is the only state that man-

Nigerian Breweries celebrates trade partners JOSEPHINE OKOJIE

igerian Breweries has celebrated its distributors and trade partners who excelled in the course of their business partnerships with the company in the last year.

The celebration was done recently at an award ceremony in Lagos. The brewer also promised more exciting years ahead for its customers across the country. Uche Unigwe, sales director, NB, explained that the theme of this year’s award ‘Winning More Together’ was conceived to

recognise and reward excellent performances of the company’s distributors and transporters for the year 2017. Unigwe added that despite the challenges in the operating environment, the company did well and achieved many milestones that called for celebration. He described the partners as

BUSINESS DAY

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REAL SECTOR WATCH Nigeria to generate N96bn from cassava inclusion in wheat—FIIRO

there was a close connection between the institute and the industry as its output was currently redefining the industrial landscape of the country. “The Federal Government of Nigeria has shown great interest in the implementation of a National School Feeding Programme. In tandem with this objective, FIIRO, a research institute with a core mandate in research and development into good and agro-allied processing technologies has carefully developed a High Nutrient Density Biscuit from appropriate combina-

tions of locally grown food crops. This product has been fully commercialised by Nasco Group, an indigenous company with track record in biscuit production and marketing and it will be marketed under the trade name ‘Champ’,” she revealed. “The biscuit was officially presented to President at the Federal Executive Council Meeting in February, 2018, by the Minister of Science and Technology, Ogbonnaya Onu,” she said. According to her, the biscuit had the nutritional composition to meet onethirds of recommended dietary allowance (RDA) for both micro and macro nutrients for school age children (5-13 years). She added that the biscuit contained 15-17 gram of protein per 100g with at least one-thirds of the recommended dietary allowance of specific nutrients such as iron, calcium, iodine, selenium, zinc, magnesium, vitamin A, floic acid, Vitamin c, while providing 450 kilocalories of energy per 100g of biscuit. I b r a h i m D a n ’A z u m i Gwarzo, chairman of the board, expressed surprise at the achievements of the institute and pledged the support of the board towards ensuring that FIIRO achieved more feats.

plaints handling, market survey and stakeholders engagement, adding that it was strengthening its internal mechanisms to combat substandard products head on while urging all Nigerians to join hands with SON in order to create greater opportunities for genuine and certified locally manufactured products to thrive. The DG pledged the agency’s total commitment to protecting the lives and property of Nigerians as well its economy using the instruments of standardisation and quality assurance. Some of the participants commended the SON management under the leadership of Aboloma for the step to train staff, adding that it was in the right step in the right direction. According to the participants, the training would go a long way in fast-tracking ease of doing businesses in

the country while also settling disputes without litigations.’ Meanwhile, the agency also inaugurated a committee on impartiality, to enhance the performance of its recently created National Registry for Consultants and Firms (NRCF) engaged in management systems practice in Nigeria. Inaugurating the committee in Abuja, Aboloma stated the benefits for setting up the unit as including to fulfil the mandate of the organization in ensuring quality service delivery in management systems implementation in Nigeria as provided in the SON Act No. 14 of 2015. According to him, the unit had the responsibility to assess and register competent management systems practitioners in Nigeria, including auditors, training institutions, certification bodies and consulting firms.

Stories by ODINAKA ANUDU

loria Elemo, directorgeneral and chief executive officer of the Federal Institute of Industrial Research Oshodi (FIIRO), says an inclusion of High Quality Cassava Flour (HQCF) into wheat has the capacity to generate N96 billion revenue for farmers and players in the value chain, based on 1.2 million metric tonnes per annum demand estimate by flour millers. Elemo, who disclosed this last Tuesday during a courtesy visit of board members of FIIRO to the institute, stated that the HQCF industry alone could generate three million jobs for over 5,000 small and medium cassava processing plants required to produce the 1.2 million tonnes of cassava. According to her, FIIRO pioneered research on the mechanisation of the production of garri, disclosing that the first of such plant designed by the institute was manufactured in the UK by an engineering firm known as Newell Dunford and sold around the world for which the Federal Government earned royalties. “The proliferation of bottled palm wine compa-

L:R: Patrick Ajah, managing director, Twinnings; Ngozi Ushedo, corporate affairs manager, Pfizer; , Ashiru Olaseni, government affairs and policy director, West Africa, Johnson & Johnson; Margaret Olele, CEO/ executive secretary, American Business Council when US Consulate hosted new members of American Business Council in Lagos recently

nies in Nigeria is as a result of the pioneering activities of the institute in palm wine bottling and preservation. Today, there are over 1,000 MSMEs producing bottled palm wine for both local and export markets, generating over 20,000 direct and indirect jobs as well as earning foreign exchange through export,” Elemo, who is a professor and scientist, said. She said the institute’s research and development in sorghum malt production led to the ban on barley malt importation in 1986. Ever since then, sorghum,

which is locally available, has replaced barley in the brewery industry, thereby stopping the country from heavy importation and saving huge foreign exchange, she stated. “Proliferation of Instant Pounded Yam Flour (IPYF) production companies in Nigeria today is through the pioneering activities of the institute. “Based on our current sur vey of over 45 IP YF companies in Nigeria, over 2,500 jobs were created directly by the IPTF companies and it is estimated that over 12,000 jobs were

created indirectly. Foreign exchange is earned through export of IPYF.” She explained that FIIRO was currently developing food products for people with special needs, including children suffering from acute malnutrition, diabetes, HIV/AIDS, and sickle cell, among others. Elemo further stated that pioneering activities of the institute in fruit juice production led to the proliferation of fruit juice manufacturers across the country, creating an estimated 40,000 jobs. She pointed out that

SON equips staff with ADR techniques to cut costs

n a bid to enhance service delivery and quicken stakeholders’ adoption and compliance to stipulated standards, the Standards Organisation of Nigeria (SON) has equipped its staff with Alternative Dispute Resolution (ADR) techniques. Osita Aboloma, director general, SON, said the move was aimed at saving costs while also mitigating the suspension of economic activities that might arise from enforcing its statutory regulatory functions on importers of substandard goods to the country. Aboloma said ADR had been used as an instrument of standardisation and quality assurance in developing most economies across the world hence, adding that Nigeria needed follow the trend in its quest to achieve economic growth and development.

The SON boss, during the flag off of the ADR training of SON state coordinators in the Northern, Zone, in Abuja recently, stated that the ADR became necessary to complement the Federal government’s ease of doing business policy, pointing out that the agency was equipping its state heads across the federation with techniques across global trend on dispute resolution. According to him, SON had so far trained about 40 of its staff from different departments on ADR and plans to train many more. Aboloma stated that ADR provides greater choices for settlement of disputes and misunderstandings in the workplace, businesses and private interactions under a win situation. Although the general provisions in the new SON Act has empowered the agency

Osita Aboloma

to prosecute perpetrators of substandard products manufacture, importation and distribution while also providing stiffer penalties for convictions including jail terms, the agency is exploring measures

at resolving conflicts without wasting resources or stalling economic activities. Aboloma said the agency had been empowering its staff with skills to handle conflicts that might arise from com-

Monday 23 April 2018

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43 NEWS

BUSINESS DAY

ARC appoints Chinedu Moghalu communications specialist

hinedu Moghalu, a Nigerian, has been appointed the senior communications specialist/head, communications and advocacy for the Africa Risk Capacity/United Nations World Food Programme, based in Johannesburg, South Africa. The African Risk Capacity - http://www.africanriskcapacity.org/ - is a Specialised Agency of the African Union that provides African sovereigns with capacity building services for early warning, contingency planning and risk finance towards protecting the livelihoods of their vulnerable citizens against the impact of natural disasters through home-grown, innovative, cost-effective, timely and sustainable solutions. In this position, Moghalu will be leading efforts to ensure that the work of ARC in responding to the challenges of climate change and natural disaster risk management is strategically communicated to the Member States and the international community in a way that secures commitment and boosts resource mobilisation. Prior to this position, Moghalu, at various times, served as the regional head of

Nigerian Export-Import Bank (NEXIM) for the Southeast and Delta State in Nigeria, as well the head of the corporate communication division at its headquarters in Abuja. Before joining NEXIM Bank, he had more than 10 years career with various United Nations agencies, including the ILO and the Global Fund for AIDS, Tuberculosis and Malaria. Chinedu Moghalu holds a M.Sc. degree in communications for development, and other degrees in political science and law from University of Nigeria, Nsukka, and University of Lagos, in Nigeria. Moghalu is a member of the Nigerian Bar Association, International Bar Association, International Public Relations Association (IPRA), and sits on the Board of the Chigari Foundation.

… says warrants are issued in accordance with appropriation

Despite concerns, Adeosun insists debt levels sustainable ONYINYE NWACHUKWU, Washington DC

Finance ministry refutes N10bn contractors’ payment sharing he Ministry of Finance has refuted theclaimbyanonline medium of “illegally sharing of N10 billion from the national treasury.” In a press statement from the ministry at the weekend, signed by OluyinkaAkintunde,specialadviser, media and communications to the minister of finance, Kemi Adeosun, itread,“TheattentionoftheMinister ofFinance,Mrs.KemiAdeosun,has been drawn to a smear campaign by an online medium, …, of “illegally sharing of N10 billion from the nationaltreasury. According to the statement, the ministerwishestodebunktheentire mischievousandmade-upreportof the online medium, which negates

L-R: Jordi Borrut Bel, MD/CEO; Kola Jamodu, chairman, and Uaboi Agbebaku, company secretary, all of Nigeria Breweries Plc, during the 72nd annual general meeting of the company in Lagos, at the weekend. Pic by Pius Okeosisi

the ethics and professionalism of journalism. The article displays a worrying lack of understanding of Appropriation, Payments and Control, and therefore be disregarded by the public,itsaid. “The minister further wishes to state that warrants are issued in accordance with Appropriation and after due approval by the Cash Plan Committeechairedbytheminister. “Attemptstolinkhertothisfactuallydefectiveandincorrectreportare highlyregrettable.Thereisabsolutely notruthinthereportoftheHonourable Minister being involved in any fraudulent scandal as alleged by the mischievous online medium,” it statedfurther.

igeria’s minister of finance, Kemi Adeosun, said at the weekend that Nigeria’s debt level was sustainable, a statement she made in obvious response to the concerns by both the World Bank and International Monetary Fund on rising debt levels in majority of low income and developing economies. About 40 percent of lowincome countries in subSaharan Africa (SSA) region are already in debt distress or in high risk of debt crisis, according to the IMF. By end of 2018, Nigeria would have borrowed some N5.839.27 trillion just in three years to fund the budget deficits, and Debt-to-GDP Ratio currently stands at about 18.20, though lower than standard peer group threshold of 56 percent. But serious concerns are being raised at the 2018 IMF/ World Bank spring meetings

FG to facilitate $25bn FDI for critical infrastructure OLUSOLA BELLO

heFederalGovernmentmay have guarantee of about $25 billion foreign direct investment (FDI) for critical infrastructure in the country. This is part of the Economic Recovery Growth Plan (ERGP) package by the government aimed at stimulating the economy. This was said to have been disclosed to participants of the just concluded six-week Focus lab for members of the ERGP group. Some members of the group that spoke with BusinessDay said themoneywasgoingtobeinvested in critical infrastructure such as power, manufacturing, transportation, health, education, works and others. They said government had asked them to bring forward projectsthatcouldbesupportedforthe purpose of ease of doing business in their sectors, so that it could

facilitate their execution. “After the stakeholders were brought to participate in the Focus Lab, the government at the end of the exercise disclosed to us that there is $25 billion ready to be invested on critical infrastructure in various sectors of the economy,” one of the participants said. According to another official of a multinational company operating in Nigeria, the plan now is that the government wants to fast track development in all the sectors of the economy, that is why it has asked that critical projects be identified so that they can be followed through. He said what the government was planning to do was possible if the necessary guarantee and enabling condition were put in place, saying, “With this money, you may be seeing some expansionsinsomeareasandtheinterest on the money would not be more than 6 percent.” What the government want to

do is not new as such a thing has been done in one of the South East Asian countries, he said. The ERGP is a Medium Term Plan for 2017 – 2020, developed by the administration of President Muhammadu Buhari for the purposeofrestoringeconomicgrowth while leveraging the ingenuity and resilience of the Nigerian people – the nation’s most priceless assets. The ERGP builds on existing sectoral strategies and plans such as the National Industrial Revolution Plan, and the Nigeria Integrated Infrastructure Master Plan. The ERGP will strengthen thesuccessfulcomponentsofthese previousstrategiesandplanswhile addressingchallengesobservedin their implementation. The ERGP is also consistent with the United Nations’ Sustainable Development Goals (SDGs), as it addresses SDGs three dimensions of economic, social and environmental sustainability issues.

in Washington DC around the debt service, particularly as the country struggles with low revenues from tax. But Adeosun, speaking with journalists on the sideline of the meetings, said Nigeria had nothing to worry about, saying, “It is correct that debt levels in low-income countries is a threat but Nigeria is better described as a middle income country. “The concern that has been expressed and it’s a legitimate one is that debt levels in those countries are at 55 percent of GDP, which is very high but Nigeria’s is at less than 20. “So, we are not one of the countries they have expressed concerns about. However we will continue to manage our debt very responsibly. “We are at 20 per cent of

GDP and we do not intend to grow it aggressively. We are doing well at the moment as debt rate to revenue is going down gradually as we replace debt with revenue and refinancing our debt.” She said the government would keep monitoring and analysing its debt levels at every stage so that they do not fall into the trap that most African states had fallen into. Defending her stance, she said economic recession and near collapse of major sources of income, which she said was inherited, from the President Jonathan’s administration, the government was compelled to borrow in order to save the country. Her words, “I don’t like to look back but if you look at the situation we inherited in 2015,

it was a collapse in our major source of income, growth had curved, reserves were not there and debts were rising. “There were two options; one was cut back, lay people off and wait for oil prices to recover or be more aggressive, expand your budget, take on more debts and invest in infrastructure in hope that you will get growth going to develop more revenue. “Now, step one and two and three of that have been done. We’ve expanded our budget, we pumped money into the economy, and we made sure recession was not prolonged. We are now back into growth, we need to accelerate that growth and focus on revenue mobilisation, which in turn will reduce our debt pressures.

44 BUSINESS DAY NEWS Bureaucracy undermining investment inflows to Nigeria - Emir Sanusi ONYINYE NWACHUKWU, Washington Dc

mir of Kano, Mohammed Sanusi Lamido, has warned government authorities to reduce unnecessary bureaucracies and lackadaisical attitude to enable the country attract the much needed foreign investments. Sanusi gave the advice on Saturday in Washington DC at the US-Nigeria Investment summit, held at the Embassy of Nigeria. Most of the Nigerian authorities scheduled to attend the event failed to show up, and according to him, “this does not show seriousness on the part of those running the economy in dire need of investments.” The 2018 US-Nigeria investment summit tagged “Nigeria is Open for Business” was to showcase some of the economically viable investment opportunities in Nigeria. The objective was on getting the much needed private capital to achieve the investment projects listed in the Economic Recovery and Growth Plan. Some of the minsters billed to take part in the forum are the Ministers of Trade and Investment, Finance, Transportation, Agriculture, Science and Technology and also the Minister of state for Petroleum, among others. Only the minister of trans-

portation, Rotimi Amaechi, attended the meeting. Frowning at the poor attendance of the authorities and late start of the meeting, Sanusi said Nigeria had a strong economy and market, which ordinarily should position it as an investment hub in Africa, yet many investors shy away from the country due to the attitude of government officials. “Nigeria maybe the biggest economy, but an investor may decide that rather than go through the hassle of investing say $500 million in Nigeria, he may decide to invest $100 million each in Ghana, Cote Ivoire, South Africa, and Rwanda. “I’ll give you a simple example, we had a meeting today with investors. We were supposed to start at 10am. So, I came in early, and I was taken to the Nigerian ambassador’s office to sit down, while investors were waiting for me outside. That is not how you attract investors. “Also, we had a list of top Nigerians that were to attend the meeting, like the Vice President and some ministers. Some of these ministers were in town but they did not come. “You (Nigeria) invite US Commerce Secretary, some top investors and your ministers are in Washington and they do not come to talk to the investors about Nigeria. That is not done. “I bet you that if the Rwandan embassy had this kind of forum, President Kagame him-

self will be there telling people to come to his country,” he said. The Emir maintained that the way the country is being packaged and marketed would, obviously, determine how seriously investors take the government. “There is absolutely no reason why the Nigerian embassy in the US will organise ‘Nigeria is open for business’ forum, with Nigerian ministers and some governors in town and not is here to meet these investors. “And there is no reason to start one hour late or that our public address systems should not be working. This is the first point of entry for these investors. They haven’t even come to Nigeria and this is their experience already. “He may say that if I’m having this experience in DC, what will happen when I go to Abuja or Kano? How do I get to see the governor? Will I wait 10 hours? “And for these kind of people (investors) in DC, they had other heads of states to meet, World Bank to meet and an hour is a lot of time for them to wait for you. “So I think we need to look at those kind of things that investors look at and have a very honest conversation, sector by sector, region by region, state by state, what do we need to do to make those areas attractive, “ he said.

Emefiele signals possible monetary policy easing soon … targets single-digit inflation in 2018 ONYINYE NWACHUKWU, Washington Dc

igeria’s Central Bank governor, G odwin Emefiele, on Sunday signalled the possibility that the apex bank could begin to ease monetary policy soon, even though inflation pressures still remained a concern. According to Emefiele, he expects inflation easing to single digits in 2018 and at worst, lower double digits. Nigeria’s inflation eased to 13.34 percent in March 2018 - the fourteenth consecutive deceleration since January 2017, raising the hope that the numbers closely watched by the apex bank could ease within the 6-9 percent target range by year-end. Briefing Nigerian media on the outcomes of week-long spring meetings of the International Monetary Fund (IMF)

and World Bank in Washington DC, Emefiele said inflation concerns were gradually ebbing due to the apex bank’s monetary policy stance. “At this time, yes, we are still in the mode of tightening, and indeed even the IMF reported that our position to tighten was the right one at this time when we are working very hard to rein in on inflation. “But I can assure all of us, like I said before and let it be on record, if you wish, that we will not tighten in perpetually, that at some point, we will begin to loosen and I believe that those financial accommodation period are coming on very, very soon,” Emefiele stated. The IMF had commended what it called the CBN’s tightening bias” in 2017, and expects such stance to be sustained until inflation abates to the single digit target range. The CBN left benchmark rates unchanged for the ninth straight time, citing

inflation concerns. “We are hoping that in 2018, we should achieve very low double digit and if we are lucky, high single digit for 2018,” Emefiele, who co-briefed the press with the finance minister, Kemi Adeosun stressed. “We would love as much as possible to have our inflation as low as possible, last month inflation was at 13.3 percent,” he added. The IMF sees inflation levels for Nigeria and Angola, Africa’s two key large economies remain in double digits, even though commodity prices in the region could ebb slightly in 2018 through 2019. According to the fund, the uptick in inflation expectations for the two countries would reflect the pass-through effects of currency depreciation for Angola and supply factors, and assumed monetary policy accommodation to support fiscal policy for Nigeria.

Senate invasion, a question on Nigeria’s security integrity - Oye EMMANUEL NDUKUBA, Awka

he All Progressives Grand Alliance (APGA) has described the invasion of the Senate by suspected hoodlums and carting away of the mace as a slap on Nigeria’s security system. Victor Oye, national chairman of APGA, gave the condemnation in an interview with newsmen in Awka, the Anambra State capital, on Friday. Oye said the invasion, which had attracted global condemnations, should not have been allowed to happen in the first place, and called on the Federal Government to un-

ravel the mystery behind the act. He expressed worry about the security of life and property of Nigerians, if a place like the National Assembly could be so invaded without hindrance. “The thing drew global condemnation, and APGA is not reacting differently, we condemn it. Such a situation should not have occurred in the first place, in a nation where we have a clear cut democratic practice. I felt disappointed that the security apparatus in the National Assembly could not withstand the incident. “It was a slap on democracy, a big slap on Nigeria security system and it calls to question the integrity of the Nigerian

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security system. “If that highbrow area could be invaded by hoodlums, then where else is safe in Nigeria. This is a situation the Federal Government should view with all seriousness and deal with the perpetrators of this dastardly and ignoble act. “It casts a slur on the nation’s integrity, it is a terrible thing, it could only have happened in a fairyland and not a place populated with people with common sense and gumption, it was a very sad day for Nigeria,” he said. The APGA chairman said the hoodlums must have acted on high-powered approval for them to be so brazen in their act.

BusinessDay to unveil top 25 Nigerian CEOs 2017 power rankings … CEOs added N2.6 trillion to market value MICHEAL ANI

eading a company and creating value depends on many skills that are hard to measure—strategic vision, authenticity, long-term planning. Investors aren’t the only stakeholders that need tending to; the best-run companies connect effectively with customers, employees, and the communities where they operate. All that stops at the feet of CEOs, who must be everything their company’s stakeholders want of them. BusinessDay, will on April 26, 2018 at the Intercontinental Hotels Lagos, honour the Top 25 CEOs who delivered the most value to stakeholders and contributed to the stellar performance recorded by the Nigerian capital market in 2017. Last year, listed stocks gained N4.36 trillion in market capitalisation, a development that made the Nigerian capital market one of the best in the world. Interestingly, the 25 CEOs that will be celebrated accounted for over 60 percent of the success recorded on the NSE. That means they added

some N2.6 trillion to market value in 2017. The Top 25 CEOs of quoted companies on the NSE Awards was introduced to celebrate the CEOs who contributed to the success of the Nigerian capital market by adding significant value to shareholders’ investment. Parameters used in the selection of the winners include share price appreciation and sustainable growth in each company’s Profit after Tax (PAT). The current governor of the Central Bank of Nigeria (CBN), Godwin Emefiele was one of the past winners when he was the GMD/CEO of Zenith Bank. Since its introduction, the annual awards have become the capital market bellwether used in identifying the topperforming Chief Executive Officers and stocks on the Nigerian Stock Exchange (NSE). It is to this end that we celebrate these men and women who have contributed to the success recorded by their companies and the Nigerian economy in general. Dignitaries expected at this year’s event include the CEO of the Nigerian Stock Exchange, Oscar Onyema, as well as the Executive Gov-

ernor of Ogun State, Senator Ibikunle Amosun. Below is a tip of the ice berg of some of the CEOs’s that will be unveiled at the event. David Ifezulike, is the CEO of Nestle Nigeria, one of Nigeria’s biggest player in the fast moving consumer goods space, with a market cap of N1.13 trillion. Despite the challenge of foreign exchange stability that was faced in the sector since most the players largely import the raw materials they used in production, the firm recorded a 326 percent increase in profit from N7.92 billion in 2016 to N33.72 in 2017. Andrew Odibi has been the Managing Director/CEO of C & I Leasing Plc since January 28, 2016, one of the country’s foremost brand for leases, and other ancillary services in Nigeria. The company with a market cap of N2.52 billion had its Profit after Tax (PAT) increase by 13.9 percent in full year 2017. Nnamdi Okafor is the MD/CEO of May&Baker Nigeria PLc, one of the biggest players in the Nigerian Drug market, with a market cap of N2.744 billion.

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Centre for Social Justice wants FG to tie future bailouts to achievements … says only Yobe achieved full IPSAS compliance entreforSocialJustice(CSJ) is currently advocating that futurebailoutprogrammes of the Federal Government to states be tied to achievements ‎of such concerned states, as this will facilitate promotion of proper fiscal responsibility in Nigeria. The Centre is also making further case for the Federal Government to ensure a benchmarking exercise that validates the progress made by participating states before they will be due for a financial drawdown. Eze Onyekpere, the lead partner of CSJ, gave the charge last week in Abuja, at the unveiling of the ‘Implementation of the Subnational Fiscal Sustainability Plan’ with the evaluation of Cross River, Ebonyi, Ekiti, Kebbi, Niger and Yobe, representing each state fromdifferentgeo-politicalregions

of the country. According to Onyekpere, the Subnational Fiscal Sustainability Plan seeks to ensure a more sustainable fiscal management of their resources and to introduce greater transparency and accountability in the fiscal process. He informed further that the plan was developed against the background of the bailout funds given to states by the Federal Government. He remarked that the performance of the states in accountability and transparency needed to be improved, while pointing out that only Yobe State among the states in focus achieved full International Public Sector Accounting Standard (IPSAS). He also called for the review of relevant and obsolete revenue laws and policies, which he said were ongoing in five of the six statesinfocus,addingthatitwould help in ensuring proper fiscal

Buildings under high-tension cables to give way in Edo

Youths besiege INEC offices demanding voters card

do State governor, Godwin Obaseki, has warned against erecting structures under high-tension cables in the state, urging those still dwelling or doing business in such locations to vacate the buildings to avoid environmental and health hazards. The governor, in a statement, said it was regrettable that some residents in the state ignored several warnings issued in the media and relayed during town hall meetings that they should vacate such dwellings in different parts of the state. According to Obaseki, “We are constrained to make this appeal again after initial attempts to dissuade the people from living or doing business under high tension cables were not heeded. It is a source of worry for us as a government because we are aware of the risks involved and are determined to prevent any unfortunate incidents. “Much as we have the option to forcefully evacuate these persons from such places, we would want to first tread on the path of caution and treat them as reasonable, responsible fellow humans who will heed advise.” He cautioned those who live in such locations to work with relevant government agencies to ensure the safe evacuation of their belongings and businesses. The governor explained that the warnings were imperative because of the unfortunate past incidents such as the death of 30 persons at viewing centre in Calabar after a high-tension cable fell on the facility among other similar incidents.

DAVID IBEMERE

HARRISON EDEH, Abuja

governance in the sub-national government. In his earlier submission, Charles Abana, a representative of the Fiscal Responsibility Commission, at the event urged the Federal Government to evolve mechanismofincentivisingstates that were engendering fiscal discipline in their respective states. ‎He encouraged states to adopt a fiscal responsibility laws that would ensure efficiency in financial transactions and fiscal discipline in the states. He added further that the enactment of the laws would ensure fiscal independence of the states shielded from any political or administration inconsistency. Industry watchers are of the view that states enact fiscal responsibility laws will improve fiscal prudence in public expenditure, while assisting in monitoring how government budgets is approved and released.

45 NEWS

BUSINESS DAY

Int’l Day for Monuments and Sites: Edo assures on reclamation, preservation of Benin Moat, others … urges partnership to harness gains of heritage objects

overnorofEdoState,Godwin Obaseki, has assured of his administration’s resolve to reclaim, remodel and preservetheBeninMoataspartof thenewtourismsuper-structures that will pull tourist traffic to the state. Obaseki gave the assurance in commemoration of the International Day for Monuments and Sites, marked on April 18, each year. “The Benin Moat is a priceless asset and part of our heritage objects with global appeal. We have commenced the reclamation of the Benin Moat and our grand plan is to make it one of the superstructures in our tourism master plan. “We are very proud to have inherited this massive earth work which is considered the largest

man-madestructureintheworld and we are determined to unlock itsculturalandtourismpotential,” the governor said. He added that similar attention would be accorded other cultural assets across the state to boost social-economic activities in the culture and tourism sector. He called on culture enthusiasts, tourism promoters, art collectors and other stakeholders tokeyintothecultureandtourism valuechaintomaximisethegains thesectorholdsfordevelopment. He stressed: “Culture is our strongest asset as a state and we must make the best of this prized inheritance. Part of our plan for our heritage objects is to partner with the Oba of Benin, Oba Ewuare II, to build a world-class Royal Museum to hold stolen artefacts being recovered by the

Benin Kingdom.” He explained, “The museum will put an end to the argument by holders of these stolen works, thatwelackworldclassfacilitiesfor preserving our art works.” According to the United Nations Educational, Scientific and CulturalOrganisation(UNESCO), the International Day for Monuments and Sites (World Heritage Day) is an international observance held on April 18, each year around the world with different types of activities, including visits tomonumentsandheritagesites, conferences, round tables and newspaper articles. The day was proposed by the International Council on Monuments and Sites (ICOMOS) on 18April1982andapprovedbythe General Assembly of UNESCO in 1983.

igerians, especially the youths besiege the offices of Independent National Electoral Commission (INEC), in various local government areas across Lagos State demanding their voters card, in what look like a reaction to the statement attributed to President Muhammadu Buhari that “Nigerian youths are lazy.” The local governments visited by BusinessDay on Friday, which include Apapa, Surulere, Ajeromi Ifelodun, and Mushin recorded long queues as Nigerians defied the early morning rain to go look for their voter’s card. Kunle Ajayi, a 400-level student of Department of Mass Communication, University of Lagos, told BusinessDay at Ajeromi that for a long time since he registered he had not bothered to get his PVC, but “after yesterday, I realised the importance.” “The statement from our President shows what most politicians think of us. It is better spending 24 hours on queue to get my PVC, I have never felt the importance more than on Wednesday reading the comments,” John Obi, a trader who was seen struggling to get his card. Another, Jerry Ahon, told BusinessDay he had been unemployed for over a year after leaving school and had to learn a vocational skill to survive. “I graduated in 2014 and did completed my National Youth Service last year. Till today, I have tried getting a job, none, I had to learn how to make shows to survive. I felt hurt reading the statement from the President,” he said.

L-R: Tony Fadaka, registrar/chief executive, Nigerian Institute of Management (Chartered); Olukunle Iyanda, president and chairman of Council, NIM; Peter Dauke, deputy commandant, National Defence College, Abuja, Nigeria, and Jude Iheanacho, director of capacity building, NIM, at NIM membership induction ceremony for graduating officers of the National Defence College, in Abuja.

Arsenal stock’s big move shows investors cheering Wenger exit LOLADE AKINMURELE

hareholders are more optimistic of a future without manager Arsene Wenger, than one with the French-

man. Arsenal’s unchanged share price on Friday after Wenger said he was pulling the plug on a 22-year career as club manager at the end of the season could pass for a lukewarm reaction, but year to date trend shows investors had long cheered the news which became official on Friday. This was amid a 2017/2018 campaign that has looked like the club’s second season running without partaking in the lucrative UEFA Champions league. Arsenal’s share price has rallied since the turn of 2018 amid intensifying calls for the French manager to step aside. The club’s share price was up some 102.7 percent to 3.7 million pounds as of April 18 compared to the same period last year, according to data obtained from the Financial Times market

portal. The club’s thinly traded stock set a record for highest volumes since 2013, when 42 units were traded on January 28, 2018, to lift the share price by 0.5 percent to 2.8 million pounds from 2.786 million pounds the day before. For context, only a daily average of two units has been traded in the period between 2015 to date, excluding January 28. “The trend offers clues that investors are cheering Wenger’s exit from the club,” an analyst told BusinessDay. “Wenger’s decision to quit was not an overnight decision, and investors who have money at stake had already priced in the event of his exit as early as the start of the year. So even if the stock is stagnant today, you know that the market has prematurely reacted to his exit.” It is unclear if Wenger’s exit strengthens the resolution of Aliko Dangote, Africa’s richest man, to snap up commanding shares at the club, after publicly stating in 2017 that he would sack Wenger if he had the chance.

“The first thing I would change is the coach. He has done a good job, but someone else should also try his luck,” Dangote said at the time. “If they get the right offer, I’m sure they would walk away,” he said, referring to the club’s shareholders. “When we finish the refinery, I think we will be in a position to do that. Dangote’s refinery is edging towards a 2019 completion date. In a shock move on Friday, April 19, Arsene Wenger announced he will leave Arsenal football club at the end of this season, “After careful consideration and following discussions with the club,” the 68-year old said. Fan patience had been wearing thin for Wenger, who failed to win the English Premier League title in the 14 years since he last won it in 2004. The club’s shareholders were not as disappointed with the Frenchman, under whom the club achieved record revenues and profit by selling players bought for a paltry sum to wealthy football clubs across

Europe. The club’s net profit rose 502 percent to 35 million pounds in 2017 compared to 5.8 million pounds in 2013, while earnings jumped 51 percent to 424 million pounds in the period under review. The team currently sits sixth in the Premier League, which would see them miss out on the lucrative UEFA Champions League next year, unless they win the Europa League tournament. They face Spain’s Atletico Madrid in the semi-final next week. No replacement has been announced but Chief executive Ivan Gazidis revealed Arsenal will be “open-minded, brave and bold” in their search to replace Wenger as manager. Celtic manager Brendan Rodgers and former captain Patrick Vieira, current head coach of New York City FC, are among bookmakers’ favorites to replace Wenger, according to SkyBet. Asides winning three premier league titles, Wenger won a record 7 FA cups.

46 BUSINESS DAY NEWS MTN picks Chapel Hill, RenCap, Vetiva, Rand... Continued from page 4

gerian Stock Exchange (NSE) which has the likes of Dangote Cement Plc, Zenith Bank Plc and FBN Holdings Plc. MTN Nigeria has around 402 million shares in issue, the same amount in preference shares, which it sold at $0.99 in 2007. As part of the IPO it would split one share into 50 units, to create 20 billion shares, which would be listed on the bourse and set the IPO price via book building. The company would use the proceeds of the share sale to redeem preference shares issued to existing investors who bought the shares 11-years ago and also cut its dollar exposure. MTN wants to achieve a “retail friendly” offer price for the IPO, it said in a pre-IPO docu-

ment, of around N80 per share, the average price for shares listed on Nigeria’s bourse, Reuters reported in February. And it would split its nominal value to 2 kobo from one naira. South Africa’s MTN owns more than 70 percent of MTN Nigeria, which has about 300 existing shareholders. The company met with local and foreign analysts in Lagos last Friday to help them understand its business and operations, ahead of the forthcoming listing. The Group Chief Executive Rob Shuter said last week that IPO plans were well advanced and the company would provide exact terms in the next few months. The telecoms firm is working with Stanbic IBTC Capital, Standard Bank of South Africa, Standard Advisory London and

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Citigroup Global Markets, as joint advisors and global coordinators, with Stanbic acting as lead issuer. MTN Group hopes to get all necessary approvals for the listing including that of the Securities and Exchange Commission (SEC) and Nigerian Stock Exchange (NSE). MTN Group agreed to list the Nigerian unit as part of a June 2016 agreement to pay a $1.7 billion fine for missing a deadline to disconnect unregistered subscribers amid a security crackdown. Gbenga Oyebode, a renowned lawyer and boardroom guru was recently appointed chairman of the board committee on MTN floatation. The Nigerian stock market rose by 42 percent last year. MTN is Nigeria’s biggest mobile-phone company with just over 50 million subscribers as at the end of December.

L-R: Henry Rowlands, acting executive commissioner, corporate service, Securities and Exchange Commission (SEC); Mary Uduk, acting director-general; Isyaku Tilde, acting executive commissioner, operations, and Toyin Sanni, chairperson, Financial Literacy Committee, at the first post Capital Market Committee meeting/press briefing in Lagos, at the weekend. Pic by Olawale Amoo

Nigerians wonder why Buhari is silent at... Continued from page 1

taciturn when he is back home. The latest series of controversial interviews to the media in UK and even participation in the Commonwealth Business Forum as a panellist have left Nigerians raising questions about the president’s apparent preference for foreign media exposure at the expense of communicating with the Nigerian public through the local media. Since becoming president in May 2015, President Buhari has only participated on one media chat which took place on December 30, 2015. The presidential chat was a tradition which was used by past presidents to inform Nigerians directly on their thinking on national issues. It was started by former president Olusegun Obasanjo and was continued by late President Yar Adua and former president Goodluck Jonathan.

However, since president Buhari had his maiden media chat, he has not bothered to have any other one, leaving Nigerians largely in the dark on his thinking on major national issues. Buhari has also not granted interview to any major media organisation in the country, not even the government owned and controlled National Television Authority (NTA). But while Buhari has ignored the local media, he is quick to grant interviews to the foreign media whenever he is out of the country, in the process making controversial statements that often have negative connotations on the country’s already battered image. “Buhari has been good at doing more damage to the country’s global reputation with his comments that doing good. And that is really sad because he is supposed to be the chief marketing officer

for the country,” said a brand communications officer of one of the country’s leading banks. He cited the example of banks where the CEO is usually regarded as the Chief Marketing Officer and does everything to ensure the banks reputation is protected. Buhari’s trail of foreign media interviews has been one of communication blunders. In UK, Buhari granted a controversial interview to the Telegraph UK, which was published on the February 5, 2016 edition of the paper in which he was quoted by the Telegraph to have said that Nigerians ‘reputation for criminality has made it hard for them to be “accepted” abroad.’ Also, while on a visit to Germany in October 2016, while standing next to Chancellor Angela Merkel, one of the world’s most powerful politicians, Buhari told the world media that his own wife belongs in the kitchen. This was after Aisha Buhari,

Monday 23 April 2018

Stakeholders call for collaborative push to... Continued from page 1

vices stakeholders have noted. This will be achievable by the various sectors complementing each other in the value chain, and not as competition or threat, as this will spur financial inclusion and further lead to rapid economic growth for the benefit of all. Ayodeji Ebo, managing director of Lagos-based financial advisory, Afrinvest Limited said the CBN needs to manage the level of risks in financial inclusion and also licence the Telco’s to come up with more financial products that will widen the gap of financial inclusion, which they don’t currently have. Bismarck Rewane, managing director of Financial Derivates limited said there are many constraints to financial inclusion and it’s not going to happen overnight. “It’s not that Nigeria is performing badly, we are not just improving as faster as others,” Rewane added. Data compiled from the Latest World Bank’s Global Findex Database showed Nigerian adults who are 25 years and above with bank accounts declined by 5 basis points from 49 percent in 2014 to 44 percent in 2017. This was not different from account holders over 15 years, as their numbers fell 4 percentage points from 44 percent in 2014 to 40 percent in 2017. The data revealed that 51 percent of Nigerian males had a bank account in 2017 compared to the 27 percent recorded for females; this brings the gap between the male and female to 24 percentage points. This is however larger than the 20 percentage points gap that was recordedin2014whenthetotalnumber of males with an account was at 54 percent with females at 34 percent. Rewane added, “There should be levelplayingfieldsbetweentheTelco’s and banking system that will enable the customers have options of either using the telephone wallet or cash wallet rather than choosing for them.” “It’s not about who is doing better or doing worse, it’s about making the customer the king and judge of its decision; however I think the Telco’s should be given more freedom,” Rewane said. Tobi Osanyingbemi, deputy manager at Tier one lender Guar-

anty Bank said financial inclusion will automatic fall in place when the economic atmosphere is balanced. “If we take a look at majority of the countries performing better than Nigeria in financial inclusion, we would discover that they all have better structured economies,” Osanyingbemi told BusinessDay. According to the World Bank report, mobile money drove financial inclusion in Sub-Saharan Africa, as only eight countries in Africa which included Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe recorded 20 percent or more adult using only a mobile money account. Although the World Bank also noted there are immense opportunities in the region as about 95 million unbanked adults receive cash payments for agricultural products, and roughly 65 million save using semiformal methods. “The banks are always looking at the best opportunities to make money; the reason the banks are not doing so much now is the fear of losing customers savings,” Osanyingbemi said. Also, young adults within the age of 15 and 24 with an account in 2011 stood at 21 percent while 2014 and 2017 recorded 36 percent and 33 percent respectively, according to the World Bank data. Furthermore the report revealed that just 12 percent of Nigerians who are 15 and above received wages through mobile phone, while just 11 percent received wages into their account. In 2017,as high 70 percent of those who are 15 and above still paid utilities using cash only although slightly lesser than the 80 percent recorded in 2014. Nigeria with a 41.6 percent financial exclusion rate is faced with various challenges to achieving the set 80 percent financial inclusion target by the Central Bank of Nigeria (CBN) by 2020. Umar Danbatta, executive vice chairman of the Nigeria communications commission (NCC) told BusinessDay last week that the NCC has engaged with the CBN towards making Telco’s drive the Mobile money model in Nigeria. •Continues online at www.businessdayonline.com

the president’s wife granted a controversial interview to BBC in which she said she might not back her husband re-election bid in 2019, ‘unless he got a grip of his government.’ Also in May 2016, Buhari backed the statement of former British Prime Minister David Cameron, who described Nigerians as fantastically corrupt. When the UK media confronted him with the statement asking if he needed an apology from the prime minister for making such a derogatory statement about the country, Buhari admitted ‘Nigerians are fantastically corrupt’ although he said that instead of an apology, he wanted UK to return all stolen funds in their possession. Buhari admitted to the fantastically corrupt statement after two other Nigerian senators had told the UK media that the statement from the British prime minister was demeaning and demanded an apology.

Buhari’s latest statement is the calling of Nigerian youths as being lazy with a sense of entitlement. This has attracted a lot of outrage from youths in the country who have been left wondering how the president formed such an impression of youths in the country and what has he done to correct it. The fact that the statement was made at an international business forum has been seen as quite damaging to the country’s reputation as a potential investment destination. Sources in media industry say that Buhari’s negative statements would have been better managed if they were made in the local media since the local media would understand local sensibilities. “Making those statements abroad leaves the president totally exposed as the foreign media feeds on the blunder which massages their already negative perception of the country,” said a source in a top media agency in the country.

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BUSINESS DAY

ABUJACITYBUSINESS COMPREHENSIVE COVERAGE OF NATION’S CAPITAL

Nigeria’s foreign reserves rose to $46.55bn in April 2018 CYNTHIA EGBOBOH, Abuja

he Nigeria’s Foreign reser ves over the past 19 months, recorded a major leap, rising from $23.81 billion to $46.55 billion in April, 2018. Udoma Udo Udoma, Minister of Budget and National Planning disclosed this in Abuja recently, expressed delight over the successes recorded in the growth in the nation’s economy under the present administration. He said: “Confidence is returning, capital inflows

are increasing, inflation rate has declined from 18.72% in January 2017 to 13.34% by March 2018; Foreign Reserves have grown from $23.81 billion in September 2016 to $46.55 billion by April 4, 2018 and the country’s Ease of Doing Business ranking has improved and is up by 24 places from 169 in 2016 to 145 in 2017.” Udoma, speaking at the plenary session of the UKNigeria Trade and Investment Forum in London said that Nigeria’s outlook for 2018, and over the medium term, is very positive as the country had since exited re-

cession and the economy is steadily growing again adding that Nigeria is a country with enormous potentials with vast opportunities for investment given its rich natural resources including oil wealth, solid minerals and fertile land. “Nigeria is one of Africa’s largest economies with large market for any prospective business. It is well located to provide gateway for trade expansion across the rest of Africa and the World. It has a strong political leadership and is an active member of the Commonwealth with strong

trade and economic links with the United Kingdom and other Commonwealth countries,” he said. He explained further that as part of government effort to transform the economy and deliver sustained, diversified and inclusive growth, the Economic Recovery and Growth Plan (ERGP) was put together and several initiatives in the Plan are being implemented to remove constraints to investments. Some of the initiatives include the Presidential Enabling Business Environment Council (PEBEC) and the Focus Labs.

Nigeria Immigration Service generated N35.7bn local revenue in 2017

JAMES KWEN

enue State Internal Revenue Service (BIRS) has sealed some commercial banks, government agencies and business organizations for their failure to remit the assessed taxes and liabilities also known as Pay As You Earn ( PAYE)totheStateGovernment amounting to N7.7 billion. Three banks have been sealed for owing various amounts of money for the period between 2009 and 2014 which accumulated to N 4.9 billion, while other organisations owed a cumulative sum of N2. 7 billion within the period under review. Mimi Orubi-Azape, BIRS Chairman who led the tax enforcement team to lock up the tax evading firms said, dialogue between BIRS and

the affected institutions had failed hence the need for the enforcement exercise. Orubibi-Azape stressed that BIRS has obtained a court order from the High Court, Makurdi based on section 104, and BIRS tax law 2011, to carry out the tax enforcement exercise. She stated that the affected banks, government agencies and business organizations are free to challenge BIRS in any competent court of jurisdiction. “The sealed properties will be auctioned after 14 days and the money raised from the auction will be remitted into the treasury of the Benue state government while the balance will be given to the affected banks and organizations. They can pay in not more than three instalments,” Orubi-Azakpe maintained.

NIS lauds CONTEC over deployment of cutting-tech for CERPAC cards production OYIN AMINU, Abuja

CYNTHIA EGBOBOH, Abuja

he Nigeria Immigration Service (NIS) in 2017 generated N35,724,482,338.26 in 2017 as against N36,175,778,205.77 local revenue generated in 2016. According to the report by the National Bureau of Statistics, the immigration statistics shows that this revenue dropped from N13, 361,621,621.77 in 2016 to N13, 173,254,969.00 in 2017. While the number of Applicant during the period also dropped from 3,684,288 in 2016 t0 720,958 representing 80.43% drop. The report shows that 127,882 of the total figure are minor which represents 79.98% drop from 638,858 recorded in 2016, number of adults were 544,473 representing 80.76% drop from 2,829,964 recorded in 2016 and the remaining 48,603 are senior citizen which also dropped from 215,466 recorded in 2016. A further breakdown shows that states that issued the highest number of passport were Lagos (254,897), Abuja (94,568) and Oyo (49,453). While the states with the lowest were Yobe (2629) followed by Nassarawa (2828). A total of 152,163 passports were issued at the foreign missions in 2017 as against 172,824 issued in 2016 while the number of visa issuance at the foreign missions was put at 115,150 representing 11.95% negative growth and the number of lost and stolen passports re-issued in 2017 was put at 13,450.

PAYE: Benue Internal Revenue Service clamps down on Banks, businesses

L-R: Smail Alhilali, industrial development officer, UNIDO; Julia Rohe, quality monitoring offcier, UNIDO; Edet Akpan, permanent secretary, Ministry of Industry, Trade and Investment (MITI), and Jean Bakole, regional director, UNIDO, during the Federal Government and UNIDO New Programme 2018-2022 validation workshop on Inclusive and Sustainable Industrial Development in Nigeria, held in Abuja. Pic by Tunde Adeniyi

FCT-IRS targets N146bn revenue in 2018, rakes in N19.1bn in 3 months LAIDE AKINBOADE-ORIERE

uthorities of Federal Capital Territory Internal Revenue Service (FCT-IRS) at the weekend rolled out strategies toward boosting the revenue base by N146 billion in the year 2018. Abdullahi Attah, FCTIRS Executive Chairman, disclosed this while briefing journalists in Abuja, said the agency was able to generate over N19.1 billion on Internally Generated Revenue (IGR), from January to March 2018. According to Attah, “Though we are new, just about four months old but for revenue generation we are targeting N146 billion for 2018. And we have al-

ready generated N19.1 billion from January to March, 2018. “N12.1 billion was collected in our portal only. N7.5 billion that went to Federal Inland Revenue Service (FIRS), erroneously. Thus total collection for the period is now N19.6 billion. “Section 7(g) of the FCTIRS Act requires the service to issue tax identification numbers to every taxable person in the FCT. The service, has upon assumption of operations in the last three months, worked in concert with various data management agencies and developed a robust taxpayer database based on which, unique taxpayer identification numbers were assigned

to every identified tax payer in the FCT. “So far, we have generated over a million Unique Taxpayer identification Numbers (TINs), for individuals and currently in the process of registering other taxpayers and agents.” Attah said in the next few days the agency would be sending bulk text messages and emails to confirm the validation of tax payers’ registration details and informing the registered taxpayers of their unique taxpayer identification number. He noted that FCT-IRS is committed to serving the taxpayers in a most conducive manner and would continue to improve tax payers’ satisfaction and confidence.

bdulrasaq Dangiri, Assistant Comptroller General (ACG) in charge of Combined Expatriate Resident Permit and Aliens Cards (CERPAC) of the Nigeria Immigration Service (NIS), has commended management and staff of Continental Transfer Technique Limited (CONTEC Global) for deploying state of the art and cutting edge technology in the production of CERPAC cards. Dangiri, made the disclosure after inspecting the facilities at the Abuja CERPAC production centre over the weekend and expressed happiness at the cordial relation-

ship that exist between the privately led technologically based security organization and NIS over the years. “It is my pleasure to admire andtoappreciatethegoodwork ofCONTECGlobalintheprovisionandproductionofCERPAC cardstodeservingNigeriansand ExpatriatescomingtoNigeriato do business. “I’m indeed happy to be here today and have observed the very robust working relation since the collaboration started. We will continue to do all the administrative work looking at what is happening here from the other end, and then ensuring that both the administrative and documentation work is done and then give the go ahead for the production of the biometric card.

FG tasks Research Institutes on local production of Sporting kits OYIN AMINU, Abuja

he Federal Government has challenged Research institutes under the purview of the Ministry of Science and Technology in the production of affordable sporting equipment in order to enable Nigeria excel in international competitions. Ogbonnaya Onu, Minister of Science and Technology gave the charge at the presentation of hosting rights for 2019 by the Research Institute Games Association of Nigeria (RIGAN) to Nigerian Building and Road Research Development Institute (NBBRI), in Abuja. Hedisclosedthattwoagencies in the Ministry - National Institute of Leather Science

and Technology (NILST) and National Research for Chemical Technology (NARICT) had produced high quality football of international standard to promote sporting activities as well as create jobs and reduce poverty. “We have encouraged that because we want sport not just for entertainment but also as an industry: one that is capable of offering employment to our people and also capable of helping us to create wealth and defeat extreme poverty. “It will also help Nigerians to employ many of our young people, not just those who are directly involved in sporting activities. It will also play a major role in the production and marketing of sporting equipment as a way of growing our economy,” he added.

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Retail investors bought N5bn FG Sukuk bond, SEC says P

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Dangote to sponsor 250 students in newly completed school in Lagos ODINAKA ANUDU

… extends forbearance window to September 2018 ONYINYE NWACHUKWU

etail players in the domestic capital market invested some N5 billion in the N100 billion Sukuk (ethical) bond issued by the Federal Government last year, the Securities and Exchange Commission (SEC) said on Sunday, as it also announced an extension of the forbearance window for investors with multiple accounts and subscriptions to September 2018. The invested amount represents 5 percent of the N100 billion bond with a sevenyear tenor, for fixing 25 key economic road projects across the six geo-political zones, with N16.67 billion earmarked for road projects in each geo-political zone. Newly appointed acting director-general of SEC, Mary Uduk, said this at the first 2018 post-Capital Market Committee (CMC) press briefing in Lagos, a statement from the commission

stated. Uduak said its Technical Committee on Non-Interest capital market reported that the sovereign sukuk issued in 2017 attracted about 1,600 retail investors. Following from that success, she assured that “the next level of engagements is to work with supra-national entities (such as IFC, AfDB), state governments, institutions (such as Federal Mortgage Bank, NMRC) to include sukuk options in their capital investment plans.” The forbearance is to enable those who bought shares in multiple names consolidate shareholder’s identities with the registrars and Central Securities Clearing System (CSCS) into one that bears their official names. During the market boom, some investors bought shares with different names, which they had forgotten and could no longer access the benefits of such investments. The acting director-gen-

eral therefore called on the affected investors to take advantage of the forbearance window to ratify their accounts. She also expressed commitment to ensure listing of multinationals, adding that de-listing by quoted companies posed a threat to the growth of the capital market. “Increase in de-listing by public companies pose a threat to the market in view of the fact that quite a number of them are highly capitalised,” she said. The acting director-general said that the commission mandated the committee to come up with strategies aimed at tackling de-listing and boosting listing of more multinationals. She said that some highly capitalised companies had delisted, thereby, affecting the growth of the market. The committee will meet with stakeholders to find out reasons behind their delisting and also discuss with eligible ones why they are yet to list on the exchange.

resident of Dangote Group, Aliko Dangote, will sponsor 250 students from indigent families in Mushin area of Lagos to his newly completed school – Nawair-Ud Deen Comprehensive College. Dangote said this during the handing over of the school, built and funded by his Foundation, to NawairUd Deen Society of Nigeria at Idi-Oro area of Mushin Local Government Area, on Saturday. Dangote will be providing a 3.5KVA generator, furniture and fully equipped library to the school, with a view to reducing the level of illiteracy and improving human capital development in the country. Nigeria has 8.6 million out-of school children, according to recent data from the Ministry of Education. Dangote said his mission was to reduce this to the barest minimum. “Our mission is targeted at reducing the number of out-of-school children,” he said. The philanthropist, who is the president of Dangote Foundation, said he had spent about N4 billion in equipping classrooms and

building infrastructure in universities, adding that the Dangote Business School at Bayero University was the only such school providing a doctorate degree in Business Administration. He pledged that his Foundation would be replicating the business school model at the University of Ibadan, stating that his efforts were targeted at investing in Nigeria’s young people. “We are giving back to the Almighty God, who has actually blessed us. The only way we thank him is by doing good deeds. We have done more by sponsoring children whom their parents are not able to pay. We are going to sponsor them, give them library, the furniture both the students and teachers,” he said. “We are going to look at training of artisans and many others. So there are many interventions that we will continue to make as a foundation,” he disclosed, stressing that he would continue to assist the government in supporting education of the Nigerian people. “We will continue to intervene. The first primary issue is to take care of malnutrition in Nigeria, where you know that if you do not take care of a child in the first

1,000 days, there is nothing you can teach this child that he can learn. That is why recently Bill Gates gave $50 million. We also have agreed to give our $50 million to help reduce malnutrition issues in Nigeria. But as a whole, we need to do more. I am not saying we are not doing enough, but we also need to do more to help the government.” Zouera Youssoufou, CEO of Dangote Foundation, said the Foundation often supported all kinds of education projects, saying, “You can see that the children that are going to school here do not have any school to go to. “The Foundation will provide the generator, we are going to upgrade the furniture and we will give them the library. So, this comes like a reference school in this neighbourhood.” She added that the foundation often undertook one project at a time. Also speaking, Ola Yussuff, chairman general of Nawair-Ud Deen Society of Nigeria, said the school sparked a notable stride in the area of primary and secondary education, while calling on other well-to-do citizens to support human capital development in the country.

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CBN injects $396.18m for agriculture, airlines, petroleum, others HOPE MOSES-ASHIKE

entral Bank of Nigeria (CBN) has intervened in the Retail Secondary Market Intervention Sales (SMIS) segment of the market to the tune of $396.18 million, as part of its move to guarantee liquidity in the foreign exchange market. According to figures obtained from the CBN on Friday, the released sum is meant to meet obligations in the agricultural, airlines, petroleum products and raw materials and machinery sectors. Confirming the figures, Isaac Okorafor, the bank’s acting director, corporate communications department, said interventions by the CBN in both the retail and wholesale sectors of the forex market were targeted primarily at ensuring liquidity in the market as well as encouraging production and trade, particularly now that the focus was on the promotion of local content. Okorafor said with the country’s reserves nearing $50 billion, the bank was

more determined to sustain the gains recorded through the various policy options it took in the course of stemming the depletion of the external reserves and steering Nigeria out of recession. Beyond ensuring liquidity in the inter-bank sector of the market, he said the bank was committed to supporting efforts aimed growing the economy and further diversifying it away from oil. Despite rates closing at N362/$1 on Friday, he insisted that the market would remain stable and that the bank would ensure it maintained the country’s external reserves in order to safeguard the international value of the naira. The CBN in its last SMIS on March 23, 2018, intervened with the sum of $339.89, while also intervening in the inter-bank foreign exchange market to the tune of $210 million, comprising of $100million for the wholesale segment and $55 million for both the Small and Medium Enterprises (SMEs) and invisibles segment on Wednesday, April 18, 2018.

Open Vector partners Open Banking Nigeria

s part of a global alliance, Open Banking Nigeria has entered a strategic alliance with Open Vector to jointly develop the Open Banking Nigeria API standards. Open Vector is a strategic change advisory firm specialising in providing Open Banking consulting and implementation services to senior and Clevel banking executives world-wide. Adedeji Olowe, a trustee of Open Banking Nigeria, commented, “The payments revolution in Nigeria continues at a very exciting pace but we believe that a common Open Banking API standard will provide a significant boost to payments and financial inclusion. We are excited to collaborate with Open Vector to be able to deliver a world-class implementation of Open Banking to the Nigerian financial industry.” Carlos Figueredo, CEO of Open Vector UK, said, “We are excited to be embarking on this strategic alliance with Open Banking Nigeria which is spearheading the opportunities

afforded by open banking both nationality and regionally. We firmly believe that this can generate significant socio-economic benefits to Nigeria as well as the broader African region including the opportunity for greater financial inclusion.” Open Vector is led by Carlos Figueredo, CEO who, together with his team of directors, have conducted senior advisory roles to the Competition & Market Authority (CMA), the United Kingdom regulatory authority behind the Open Banking UK regulation and implementation. Open Banking Nigeria, formed by a group of fintech and banking industry veterans, is a not-for-profit organisation that drives the Open Banking initiatives in Nigeria to extend non-partisan and nonfinancial API standards for financial services in the country. Open Vector joins an array of technology companies that are partnering with Open Banking Nigeria to drive the adoption of Open Banking in Nigeria.

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Corporate’s performance hinges on directors’ sound decision making SEYI JOHN SALAU

or corporate organisations to perform optimally towards meeting its organisational goals as an entity, directors in such organisation must ensure good health and healthy lifestyle for sound decision making to put their organisation at per with other corporate entities. Hence, the Institute of Directors (IoD) Nigeria, the body that brings together directors at various levels of the nation’s corporate establishment both at the private and public sector level through advocacy approach the quarterly ‘walk for life’ to help directors’ stay active and healthy. According to Ahmed Rufai Mohammed, president/ chairman of Council, IoD, the institute hopes to change directors’ daily routine of work-car-home-work to make them walk. Being healthy makes an individual happy, he said, saying, “If you are not healthy you cannot be happy, and directors need both physical and mental alertness to perform optimally.” The Walk4Life, according to the IoD president, is part of efforts put in place by the council to assist members improve their health status and keep fit, and as a way of networking for members of the institute.

Speaking further on the health benefits, he said, “Walking helps people burn out excess calories and sugar stored in the body.” Femi Ekundayo, former president of the IoD and the CIBN, said the walk for life was desirable for members to help keep them sound and active, away from the busy work schedule they engage in their day-to-day activities. “It is best for us to make ‘walk for life’ a culture so that we can observe it regularly because health is wealth. But beyond that, it brings the IoD families together. Through it, we are able to build our corporate bodies to see the values in ourselves,” Ekundayo said. Ebun Sonaiya, chairman, IoD Health Committee, said the initiative was introduced to help directors live healthy lifestyle and keep fit, saying, “The initiative is getting bigger and better with supports from various corporate organisations through sponsorship, and we are keeping to our goal of making it a quarterly event.” The Walk4Life take-off point was at the IoD secretariat at 28 Cameron Road, Ikoyi, covering about 11.963 kilometres, and was flag off by Bobby Bryan, commercial director, East, West Central and Lusophone Africa, Delta Air Lines, main sponsor for the first quarter ‘Walk for Life’ of the IoD for April.

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Sahara Group urges immediate action INEC debunks reports of reintroduction towards Africa’s industrialisation of 30,000 new polling units

ahara Group cofounder and executive director, Tonye Cole, will join high-level African policy-makers, industry leaders and global businesses operating on the continent at the Business Council for Africa (BCA) Annual Debate this Tuesday. Cole will contribute to a discussion on the prospects for the industrialisation of Africa. Can Africa ride the wave of the fourth industrial revolution or will its systems and institutions betray it and scupper its chances, as has occurred in the past? Prior to 2015, when the continental economy benefited immensely from high commodity prices and a commensurate access to fast money, the importance of industrialisation in Africa was downgraded when in fact efforts to transform the continent through industrialisation and digitisation should have been doubled down as a result of unprecedented levels of financial buoyancy at the time. According to Cole, “Unlike countries such as the UK, which experienced a downturn in its manufacturing sector after WW2, African nations are de-in-

dustrialising while still poor. We are missing opportunities to create employment and generate wealth by providing blue collar jobs in factories.” A number of thought leaders and think tanks agree that closer integration across the whole of Africa is needed to aggressively drive diversification through industrialisation so that a continent with the fastest growing youth population in the world does not find itself vulnerable to the vicissitudes of systemic boom and bust cycles. He said, “We must convert our rich commodity base into processed, refined and manufactured goods which create industrial value chains and allow us to become a part of the greater global value chain.” Among the more startling facts about the poor state of industrialisation in Africa is that manufacturing provides a paltry 6 percent of all jobs on the continent. This figure remained unchanged in almost 30 years leading up to 2008. Comparatively, manufacturing jobs grew from 11 percent to 16 percent over the same period in South East Asia.

INNOCENT ODOH, Abuja

ndependent National Electoral Commission (INEC) has refuted newspaper reports alleging that the Commission had perfected plans to re-introduce 30,000 new polling units in order to compromise the 2019 general elections. A statement issued in Abuja by the chief press secretary to INEC chairman, Rotimi Lawrence Oyekanmi, at the weekend, said the fact was that in response to 3,789 requests so far received nationwide for the creation of new polling units, the Commission directed its Resident Electoral Commissioners (RECs) to thoroughly assess and provide it with information. The information needed by the INEC from the states include: New settlements that are not served or inadequately served by existing polling units; Areas with natural barriers that hinder access to existing polling units; Areas that are distant from

existing polling units; and Areas affected by communal and other conflicts that make voting in existing polling units unsafe for voters, the statement said. “These reports are still being awaited from the States. It is these reports and the information they contain that will be collated and carefully examined by the Commission in order to determine what changes may be necessary in the current polling units profile of the country. “Therefore, the insinuation that the Commission intends to create 30,000 new polling units to compromise the 2019 General Elections is false, misleading, unfounded and should be disregarded. “We assure the public that our decisions and actions shall always be guided by the provisions of the extant laws and our determination to respond to requests by Nigerians to serve them better. Even so, this will be done only after full consultation with all stakeholders,” the statement said.

Monday 23 April 2018

Red Card Movement launches in Abuja with #OfficeOfTheCitizen campaign

ith a view to promoting democratic rights and enhancing electoral due process, The Red Card Movement (RCM) has officially launched in Abuja. The movement als o kicked off its phase one programmes: #OfficeOfTheCitizen, #MyPVCMyRedCard and #RedCardToAPCAndPDP campaign, which holds three distinct objectives. The objectives include: To educate and sensitise citizens on their power, as citizens and the fact that the most powerful office is the office they occupy; to mobilise up to 30 million Nigerians to register to vote, about 2 million citizens with uncollected PVCs to collect them and for all citizens with PVCs to come out to vote and protect their votes. Also, to publish empirical data from both local and foreign organisations that reflect evidential failure of governance and corrupt leadership in the last two decades, third party evidence on the streets from citizens that show governance failure from huge infrastructural gap.

Speaking at the event, the convener of the group, Oby Ezekwesili, said the movement was established to “remove our nation from the hands of bad governance and corrupt leadership.” She reiterated that the idea was to remove the decadent class and to place a quality set of leadership at all levels nationwide - people who have character, were competent and capable. According to a co-convener and co-chair of the movement, Tony Akabuno, the purpose of democracy is defeated if only a few people who are eligible to vote actually exercise their right to do so. “Voting gives the right to take part in public affairs, so it is often described as the heart of democracy. It is absolutely necessary to build the critical mass of people who are eligible and willing to take part by exercising their constitutional rights to vote,” he said. Present at the launch were Ibilola Amah, coconvener, Red Card Movement, Nasir Kabir, Maureen Karbirk, Adejoke Adekoya, Aisha Yesufu, and Chijioke Mbaeyi.

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UK financial watchdogs fail to bite in Barclays case

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Korean leaders establish phone hotline ahead of summit

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World Business Newspaper

GE aircraft business helps lift earnings gloom Industrial giant beat expectations despite new $1.5bn charge over subprime lending possible penalties. ED CROOKS GE’s shares have dropped by 53 strong performance per cent over the past 12 months, from General Electric’s but were up 4 per cent at $14.54 in operations making early trading on Friday after the aero engines and other earnings beat. aircraft parts lifted the Earnings per share excluding industrial group’s performance one-off items and pensions costs for the first quarter, helping it were 16 cents for the quarter, down post earnings well above analysts’ from 18 cents in the equivalent expectations. period of 2017 but well above anaThe aviation division reported lysts’ forecasts. Revenues were in operating profits of $1.6bn, up 26 line with expectations at $27.4bn. per cent on the equivalent period Cash flows, which have become of 2017, as GE both increased the a focus of attention for GE invesprices for its engines and parts for tors, showed that capital spending commercial aircraft, and improved exceeded adjusted cash from opproductivity. erations by $1.68bn in the quarter, The strong performance in avia- although that was an improvement tion was the highlight of a mixed on the $2.75bn outflow in the first performance from GE’s industrial quarter of 2017. operations. Healthcare and transJohn Flannery, the chief execuport equipment also reported tive who took over in August, said increased profits, but its power in a statement that the quarter was equipment division continued to “a step forward in executing on our decline. Baker Hughes, the oilfield 2018 plan”, and said the company services group in which GE has a was “seeing signs of progress in our 62.5 per cent stake, swung into loss performance”. after restructuring charges. He added that GE had cut However, the company also structural costs in its industrial took another charge for legacy businesses by $805m, and was on problems in now-defunct finan- track to exceed its cost reduction cial services operations. It booked goal of $2bn in 2018. a provision of $1.5bn relating to The charge for WMC is the WMC Mortgage, a subprime lend- second charge for a former finaner that GE bought in 2004 and shut cial services business that GE has down as the housing crisis blew up reported this year. In January the just three years later. WMC is the company revealed that it needed to subject of an investigation by the pay $15bn to cover legacy liabilities US Department of Justice, which from its insurance business, which GE thinks could result in it facing it sold in 2006.

German police open up to applicants from Poland Lack of local trainees in Brandenburg reflects national skills shortage GUY CHAZAN

hen the Brandenburg police received orders to beef up their ranks after years of austerity and staff cuts, they took a decidedly unconventional approach. They looked east. Faced with a dearth of local interest, the force began recruiting Poles. Starting in 2016, officers attended job fairs across Poland and created a Polish website with details on how to apply for training. “Thanks to Europe without borders . . . your citizenship doesn’t matter,” it says. The Polish reaction was ambivalent, to say the least. “Some said, we’ve seen all that before, Germans marching in here and taking away our young people,” said Rainer Grieger, head of the Brandenburg police academy. “There were some pretty caustic comments on social media.” The decision to recruit outside Germany was born of necessity. With Germans increasingly wor-

ried about law and order and the threat of terrorism, Angela Merkel’s government has announced plans to hire 15,000 more police officers over the next four years. But uncertainty surrounds where they will come from. “Police work is so unattractive these days that high-school graduates prefer to go to Siemens or BMW,” said Wilko Möller, a police officer from the Brandenburg town of Frankfurt-an-der-Oder and activist for the rightwing populist Alternative for Germany. “Hiring Poles doesn’t really solve the problem.” The scarcity of police is part of a broader issue affecting German industry and public services. The economic boom has created a significant skills shortage, which companies in surveys regularly cite as their biggest headache and a constraint to growth. Unfilled vacancies reached 778,000 in the labour market in March, up 2.2 per Continues on page A14

John Flannery

Rudy Giuliani joins Trump team in Russia probe Former New York mayor says he hopes to ‘negotiate an end’ to Mueller investigation KADHIM SHUBBER

resident Donald Trump has brought in Rudy Giuliani, the former mayor of New York, to bolster his personal legal team in the Russia investigation. The appointment follows the departure last month of John Dowd, the US president’s former lead attorney dealing with the special counsel’s probe. It comes as Mr Trump’s longtime personal lawyer, Michael Cohen, faces a criminal investigation by the US attorney’s office in the southern district of New York. Mr Giuliani, himself a former US attorney of that district, will join Mr Trump’s team at a tense moment in Robert Mueller’s probe into alleged Russian election meddling. The question of whether the president will sit down for an interview with Mr Mueller has not yet been decided. Meanwhile, Mr Trump’s sup-

porters have in recent weeks called for him to fire both the special counsel and Rod Rosenstein, the deputy attorney-general who oversees the investigation. “Rudy is great,” Mr Trump said in a statement. “He has been my friend for a long time and wants to get this matter quickly resolved for the good of the country.” Mr Giuliani told The Washington Post: “I’m doing it because I hope we can negotiate an end to this for the good of the country and because I have high regard for the president and for Bob Mueller.” Greenberg Traurig, Mr Giuliani’s law firm, said he was taking a leave of absence “to handle matters unrelated to the law firm or its clients”. Jay Sekulow, Mr Trump’s personal attorney in the Russia investigation, said in a statement: “I have had the privilege of working with Mayor Giuliani for many years, and we welcome his expertise.”

Jane Serene Raskin and Martin Raskin, former federal prosecutors who currently practise in Florida, will also join Mr Trump’s personal legal team, said Mr Sekulow. They declined a request for comment. Mr Giuliani was mayor of New York City from 1994 to 2001 and led it at the time of the September 11 terrorist attacks. He served as the US attorney for the southern district of New York in the 1980s, where he gained a reputation for winning convictions of Mafia leaders and also for self-promotion. “Rudy’s demeanour left a trail of resentment among the dozens of federal judges in Manhattan,” James Comey, the former FBI director, who also served in New York’s southern district, wrote in his recent memoir. “They thought he made the office about one person, himself, and used publicity about his cases as a way to foster his political ambitions rather than doing justice.”

US considers emergency curbs on Chinese tech investment Trump administration eyes special powers to escalate trade pressure on Beijing SHAWN DONNAN

he Trump administration is considering declaring a national economic emergency to impose new restrictions on Chinese investment as part of a trade crackdown on Beijing, a senior US Treasury official confirmed. Heath Tarbert, assistant Treasury secretary for international markets and investment policy, told a Washington conference on Thursday that the administration was looking at invoking the International Emergency Economic Powers Act (IEEPA) as part of an investment crackdown ordered by President Donald Trump last month, according to media reports. The law is usually used to administer sanctions against rogue regimes and terrorist groups. It would give the president broad powers to restrict Chinese investment in sensitive sectors such as semiconductors and robotics that the administration is concerned Beijing is targeting as part of a strategic push to acquire US technology. The move comes amid signs that

increased scrutiny of Chinese inbound investments into the US has already put a damper on capital flows. Foreign direct investment between the world’s two largest economies has already been hit by rising trade tension and increased scrutiny from the Committee on Foreign Investment in the US (Cfius) — which reviews transactions for potential national security threats — for Chinese transactions. Last year, Chinese FDI into the US fell to $29bn from a record $46bn in 2016, according to the Rhodium Group, a consultancy that tracks investment flows between the world’s two largest economies. IEEPA’s potential use has been reported previously, but Mr Tarbert is thought to be the first US official to acknowledge publicly that the administration was considering the move. The potential move is part of the US’s “Section 301” investigation into the alleged Chinese theft of US intellectual property and practice of forcing technology transfers from foreign investors. That probe has already resulted in

threats by Mr Trump to impose tariffs on up to $150bn in imports from China that have provoked vows to retaliate from Beijing and fears of a potential trade war. The Treasury department is drafting a plan for new investment restrictions that would go beyond the national security limitations administered by Cfius. Congress is also considering legislation that would expand Cfius’ remit to cover outbound investments in joint ventures in China and other countries. “We have separate offices in Treasury which are considering those two issues distinctly,” Mr Tarbert told an Institute of International Finance conference on the sidelines of this week’s World Bank and International Monetary Fund spring meetings. The Treasury has until late May to send its plan for new investment restrictions to Mr Trump. But the legislation to reform Cfius has also run into opposition from major business groups, including IBM and GE, which are concerned that the proposed measures on outbound investment are too broad.

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Apple hit by fears of smartphones slowdown Sell-off among chip makers after Taiwan Semiconductor reports weak demand ALIYA RAM AND ADAM SAMSON

hipmakers faced a widespread sell-off on Friday after an update from one of Apple’s biggest suppliers, Taiwan Semiconductor, raised expectations of a sharper slowdown in smartphone sales this year. It said in an earnings update that second-quarter revenues would be hit by “weak demand from the

mobile sector”, unnerving investors who fear that smartphone sales have entered a structural slowdown after a decade of rapid growth. International chipmakers including Analogue Devices, Cirrus Logic, Dialog Semiconductor, Qualcomm and Qorvo fell between 3 per cent and 6 per cent during Friday trading. Taiwan Semiconductor ended the trading day down 6 per cent at

NT$229. Chipmakers made the biggest falls on European bourses on Friday. ASM International’s stock fell more than 8 per cent. BE Semiconductor lost 3.6 per cent and Austria Microsystem was down 2.4 per cent. In Europe, the MSCI semiconductor index was down 3.5 per cent on Thursday. Apple’s shares fell 3 per cent on

Thursday, while the PHLX Semiconductor Sector index, which has been on a tear over the past year, fell 4.3 per cent in its worst day in more than two months. Chipmakers and smartphone suppliers have attempted to drum up more demand from manufacturers of “internet of things” devices and automated cars to offset the slowdown, but phones still account for a

Comey memo claims Trump told him of Putin conversation

German police open up to applicants from Poland... Continued from page A13 cent on December. Police are at the sharp end. Mr Grieger is competing not only with the private sector but with other regional police forces on equally aggressive recruitment drives. “We’re in a fierce battle for people,” he said. “We fight for every trainee.” It is a fight Brandenburg will always be in danger of losing, said Mr Möller: “People prefer to go to rich states like Bavaria or Hamburg because the police here are so badly paid.” For the Brandenburg police, a lack of homegrown recruits is not the only factor. The state, which borders Poland and has had a rise in cross-border traffic over the past decade, needs more Polishspeaking officers. Polish and German officers already carry out joint patrols and are allowed to pursue criminals on each other’s territory. The campaign has elicited a strong response. Since it began, more than 100 Poles have applied for training places: nine are enrolled at Mr Grieger’s academy in Oranienburg, with 46 more going through the selection process. Simona Marek, a 28-year-old industrial engineer from Zabrze near Katowice, began training last September. If all goes well she will graduate in 2020 and hopes to become a traffic officer, fulfilling a longstanding dream of living and working in Germany. “There are a lot more opportunities here than back home,” she said. Ms Marek said she loved the course but acknowledged tension with some German trainees — the legacy of the wars and occupations of the past century. “They don’t want to have anything to do with me,” she said. “It’s not like everyone is ‘Wow, you’re from Poland, I really want to talk to you’.” Paradoxically, Brandenburg is expanding police numbers when crime rates are declining. The state recorded 175,000 offences last year, a 5.8 per cent drop from 2016. “But that hasn’t really entered people’s consciousness yet,” said Thorsten Herbst, a police spokesman. “Communities are demanding more security.” Such demands have intensified since Germany opened its borders to more than 1m refugees in 201516, mostly from the Middle East. Most are law-abiding, but locals do not always see it that way. “Even if there are only one or two cases [of crimes by foreigners], people feel less safe,” said Mr Herbst. “They say: this only started happening after the refugees came.”

large proportion of revenues. Companies including Intel and UK-based Dialog and Imagination Technologies have also been punished over the past year by an over-reliance on Apple as a customer. Smartphone sales in China, the world’s biggest market, fell last year for the first time since 2009 while global sales fell in the fourth quarter for the first time since 2004.

Russian leader said country has ‘most beautiful hookers’, according to document

KADHIM SHUBBER

Barclays CEO fined in whistleblowing probes Jes Staley to keep job after seeking to uncover source of allegations against colleague CAROLINE BINHAM, MARTIN ARNOLD AND KATIE MARTIN

K regulators say they will fine Barclays chief executive Jes Staley after a probe into his efforts to uncover a whistleblower in 2016, but said he would not be banned over the affair. In the landmark decision, Barclays will avoid any sanctions by the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority for sloppy whistleblowing systems after the bank moved to tighten up processes. Mr Staley apologised last year for his “mistake” in ordering the bank’s security team to try to identify a whistleblower who had made allegations about a recently recruited colleague. The board gave Mr Staley a formal reprimand and promised to cut his pay by a “very significant” amount. On Friday, the PRA and FCA said they had wrapped up their probes into the matter. Each levied an unspecified fine on Mr Staley

for failing to act with due skill, care and diligence in a confidential draft warning notice, but said he did not lack the fitness and propriety to continue in his role. “We have issued draft warning notices in respect to the CEO and will announce the outcome once this issue has reached a conclusion,” they said, adding that Mr Staley will receive a discount on his penalty if he settles early. “The Barclays board continues to have unanimous confidence in Mr Staley and continues to recommend his re-election as a director at the Barclays annual general meeting on 1 May 2018,” the bank said. It added that it “will determine what adjustment to Mr Staley’s compensation is appropriate once the FCA and PRA processes have concluded,” it added. The regulators have also requested that the bank reports on “certain aspects” of its whistleblowing programmes. Mr Staley tried to find out who had written allegations to the board accusing him of covering up the

personal problems of a friend, Tim Main, when they worked together at JPMorgan Chase, and again when his former colleague was hired by Barclays. The bank’s head of whistleblowing in 2016, Jonathan Cox, has left the bank. He withdrew an employment tribunal claim amid a confidential settlement with Barclays. The decision by the FCA and PRA is the first public move they have made under a tough regime that holds senior managers to account for failings on their watch, which was introduced as a way of cleaning up the City of London after a string of scandals. Penalties under the regime include bans from holding regulated positions for particularly egregious flouting of the rules. That would have meant Mr Staley would no longer be able to serve as chief executive. The New York Department of Financial Services, known for its heavy fines on banks, is still investigating the episode and Barclays said it was co-operating with the US probe.

Trump accuses Opec of driving up oil prices ‘artificially’ US president hits out after Saudi energy minister says world has ‘capacity’ to absorb higher prices DAVID SHEPPARD AND AHMED AL OMRAN

onald Trump has launched a broadside against Opec for pushing oil markets to the highest level since 2014, saying that crude prices have been driven up “artificially” by the cartel. The US president’s statement, made in one of his customary early morning tweets, followed comments by Saudi Arabia’s energy minister on Friday that the world economy could cope with higher oil prices as crude approached $75 a barrel. “Looks like OPEC is at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!” Mr Trump tweeted.

Mr Trump’s comments will be seen as a warning in Saudi Arabia not to allow oil prices to run too high, at a time when Riyadh is pushing the US to back them in confronting Iran. Brent crude oil fell by roughly a dollar following Mr Trump’s tweet, having hit a near four-year high of $74.75 a barrel on Thursday. The kingdom, which together with Russia has led big oil producers in cutting oil output since early 2017, wants a closer alliance with the Trump administration than it enjoyed with his predecessor, Barack Obama. Mr Trump’s intervention poses a dilemma for Saudi Arabia’s powerful Crown Prince Mohammed bin Salman, who needs a higher oil price to help his efforts to modernise the kingdom’s economy. But he has also spearheaded attempts to bolster the country’s alliance with the US.

Prince Mohammed toured the US for three weeks this month where he met Mr Trump and courted business executives to invest in his plans to modernise Saudi Arabia. Opec continues to cut daily oil output Amy Myers Jaffe, a senior fellow at the Council on Foreign Relations, said Mr Trump was sending a message that, while the shale boom has made the US one of the world’s largest oil producers, it still cared about the effect of rising prices. “This tweet is a direct signal to Saudi Arabia that they are making the president’s job harder, not easier,” said Ms Jaffe, who has advised previous presidents on energy. “The president is tweeting now because sharply rising oil prices make US strategic decision-making and diplomacy more difficult, as well has having a direct impact on his political base if gasoline prices go up in the summer.”

onald Trump claimed Vladimir Putin told him that Russia had “some of the most beautiful hookers in the world”, according to a memo written by former FBI director James Comey. The memo, published by Associated Press, followed a meeting Mr Comey had with the US president in the White House in February 2017, a few weeks after Mr Trump’s inauguration. “He did not say where Putin had told him this,” Mr Comey wrote in the memo, parts of which are redacted. The release of the memo, and several others, comes after the Department of Justice provided copies to Congress following demands by Republican lawmakers. Mr Trump has repeatedly called the former FBI boss a liar and disputed the contents of the memos, which Mr Comey has said he wrote immediately after encounters with the president. Earlier this week, Mr Trump tweeted that the memos were “self serving and FAKE”. On Thursday evening, Mr Trump tweeted that the memos “show clearly that there was NO COLLUSION and NO OBSTRUCTION”. He added: “Also, he leaked classified information. WOW! Will the Witch Hunt continue?” The documents deal with the events Mr Comey has detailed in his testimony to Congress and recently published memoir, A Higher Loyalty. They are key pieces of evidence in the investigation into whether Mr Trump’s dealings with his former top law enforcement official amounted to an attempt to obstruct justice. In particular, Mr Comey has claimed that the president asked him to go easy on Michael Flynn, Mr Trump’s former national security adviser. Mr Flynn later pleaded guilty to lying to the FBI about his contacts with the Russian ambassador. The memos appear to corroborate Mr Comey’s later testimony on the matter. The memos include previously unreported claims, including the allegation about Mr Trump’s conversation with the Russian leader. They also state that the president said Mr Flynn had “serious judgment issues”. A memo from March 2017 states that Mr Trump told Mr Comey he had “a letter from the largest law firm in DC saying he has gotten no income from Russia”. Mr Comey recorded that in the same conversation, Mr Trump said he was going to bring a lawsuit against Christopher Steele, the former British spy who wrote a dossier that alleged collusion between the Trump campaign and the Russian government. The dossier included the allegation that Mr Trump had watched sex workers urinate on a bed in a Russian hotel, a claim without evidence that the president has strongly denied.

Monday 23 April 2018

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BUSINESS DAY

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

UK financial watchdogs fail to bite in Barclays case Many are asking how committed the UK is to addressing light-touch regulation pany conduct.” CAROLINE BINHAM AND It is also at odds with earlier ofMARTIN ARNOLD ficial decisions: Bob Diamond, the es Staley, the chief executive bank’s chief executive in 2012, was of Barclays, was not the only ousted by the BoE over the Liborone being judged over his re- rigging affair, even though no regucent whistleblowing controversy. latory findings were levied against So, too, were the UK’s financial him personally. His predecessor, John Varley, is awaiting a jury trial watchdogs. They have been found wanting over criminal charges in a separate by many in the industry over the case stemming from an emergency test case, which has ended in a de- cash call involving Qatari investors cision not to ban Mr Staley for twice during the financial crisis. The head of the European operatrying to uncover the identity of a whistleblower. He will instead re- tions of a rival bank said: “Next time ceive a fine and will have his bonus the FCA comes to me and says you docked, with the expectation that did this thing wrong, I will just ask how that ranks on the scale comthis will total no more than £2m. It is the first public test of new pared to what Jes did . . . they have powers the regulators inherited made a pragmatic decision, not a after a string of scandals that taint- principled one.” There are also wider questions ed the reputation of the City of London, from benchmark-rigging about whether whistleblowers will to the mis-selling of payment now be deterred from stepping protection insurance. Designed to forward. “It’s the first time that a senior improve the tone from the top, the Senior Managers Regime gives the individual has been picked up over Financial Conduct Authority and the treatment of whistleblowers, the Bank of England the power to and we see that as a positive,” said fine and even ban senior manage- Francesca West, chief executive of Public Concern at Work, a charity. ment for failures on their watch. A ban would have meant the “However, the reality is that the end of Mr Staley’s City career, and fragile confidence built up recently Barclays would have been left look- has been undermined, and there ing for its fourth chief executive in is a big risk that now serious issues five years. But the decision to spare will not be raised.” There has already been a marked him — on the basis that the regulators had no evidence of a lack of in- drop in the past two years of people tegrity — has left some questioning sharing that confidence. In 2016how committed the UK is to leaving 2017 the FCA dealt with 900 whistleblowing cases, down from 1,340 two light-touch regulation in the past. “This decision is disturbing years earlier. The Barclays case was on the and conflicts with UK regulators’ face of it clear-cut: Mr Staley had stated desire to better protect whistleblowers,” said Erika Kelton, already issued a mea culpa last year a lawyer at Phillips & Cohen who for twice trying to unveil the idenspecialises in whistleblower cases. tity of a whistleblower in 2016 who “Simply put, it’s a victory for execu- wrote anonymously to the bank’s tives who brook no challenges to board detailing allegations against corporate behaviour and a loss for Tim Main, Mr Staley’s recent recruit employees who do nothing more and former colleague at JPMorgan than express concern over com- Chase.

German wholesaler Metro cites Russia as it warns on profit JONATHAN ELEY

Crash and carry. etro, the German-based wholesaler, has warned on profits. Earnings before interest, tax, depreciation and amortisation are now expected to rise “slightly” in the current financial year, excluding exceptionals and currency movements. Previously, it had expected growth of 10 per cent. Sales are expected to grow 0.5 per cent at constant currency, half the rate previously forecast. Russia is the main culprit, according to the company’s statement: “Metro had expected a significant improvement of the sales development in Russia for the second half-year. Instead, the management board now — also because of the further deteriorating geopolitical situation — expects sales in the

second half-year to stay behind expectations. Furthermore the repositioning of the business will incur higher additional cost in the second half-year than previously expected. It also said negotiations with unions at Real, its German hypermarket operation, have ended without agreement, and that an interim solution will impact earnings. Bruno Monteyne, European food retail analyst at Bernstein, said the company’s management was losing credibility. “Until a few weeks ago, they felt very comfortable that they budgeted enough investment in Russia to kick start growth again,” he said in a note to clients. He added it was unlikely the wage talks affected earnings much, given that they had been dragging on for months. Metro shares closed down almost 11 per cent in Frankfurt. The company reports half-year results on May 15.

Slide for US tech stocks weighs on Wall Street Apple extends fall after TSMC comments, Trump rattles oil markets DAVE SHELLOCK

hat you need to know • S&P 500 down 0.9%, Nasdaq Composite 1.2%,lower • Government bond sell-off loses steam • Chipmakers down as Apple supplier TSMC forecasts weak smartphone demand • Oil retreats after Trump tweets that prices are “artificially very high” • Euro under pressure ahead of ECB meeting as dollar firms • Sterling retreats after Bank of England governor casts doubt on May rate rise Overview US stocks ended the week on a downbeat note, as the technology and energy sectors came under pressure from concerns about demand for smartphones and as oil prices continued to retreat from 40-month highs. This week’s sell-off in US and German government bonds showed signs of running out of steam, but not before the yield on the 10-year Treasury

hit a fresh one-month intraday high of 2.943 per cent. Gilt yields fell sharply — along with sterling — reflecting a further reassessment of the UK rate outlook. In New York, the tech-heavy Nasdaq Composite index was down more than 1 per cent, with Apple extending the previous day’s 2.8 per cent drop by a further 3.5 per cent by midday. Taiwan Semiconductor Manufacturing, one of the iPhone maker’s biggest suppliers, warned on Thursday of “weak demand” from the mobile phone sector, heightening concerns about a slowdown in smartphone sales. “Potentially, the TSMC guidance is the first warning shot that the global economy is slowing down faster than expected,” said Peter Garnry, head of equity strategy at Saxo Bank. “The main question is then whether this is the beginning of a secular trend or is it just short-term cyclical effects.” Meanwhile, President Donald Trump pulled the rug from under the oil markets as he criticised Opec for

driving prices “artificially high” — a day after Brent crude touched $74.75 a barrel, the most expensive since late 2014. “It won’t have escaped Mr Trump’s attention that rising gasoline prices can quickly eclipse any financial benefits to rust-belt America from his tax cuts,” noted Jasper Lawler, head of research at London Capital Group. Elsewhere, participants kept a wary eye on government bond markets following a 10 basis point rise in the 10-year Treasury yield over the course of the week, with the German Bund yield up 8bp over the same period. The US yield curve continued to steepen — albeit modestly — following a lengthy period of flattening that the saw the gap between two- and 10year yields hit the lowest for a decade. “The probability, according to Bloomberg, of four Federal Reserve rate hikes in 2018 is now at the highest of the year, at around 33 per cent from 18 per cent at the start of last week,” noted Jim Reid, strategist at Deutsche Bank.

UK regulators criticised for fine on Barclays chief Chief executive Jes Staley escapes ban for attempting to unmask whistleblower CAROLINE BINHAM, MARTIN ARNOLD, KATIE MARTIN AND PATRICK JENKINS

K regulators have been criticised for being too soft on Barclays chief executive Jes Staley after they decided to fine him for trying to unmask a whistleblower but concluded he will not be banned over the affair. In the landmark decision, Barclays will avoid any sanctions by the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority for sloppy whistleblowing systems after the bank moved to tighten up processes. The regulators’ decision is a relief for Mr Staley, who is not expected to be sanctioned more than £2m, including a board decision to dock his pay, according to people familiar with the investigation. But the move raises questions about whether the regulators have been too soft, particularly when they are trying to bed down new whistleblowing rules to give more protection to those who come forward to call out bad behaviour. The case was also the

first big test of the UK’s new regime to hold senior financial managers to account. “This is not just some technical flouting of the rules,” said Mary Inman, a lawyer at Constantine Cannon who represents whistleblowers. “Jes Staley has flouted two of the key stop-guard measures regulators put in place to prevent a repeat of the financial crisis. The response to not take action against the bank and to fine Jes Staley an unspecified amount feels very weak. I’m very disappointed.” The decision by the regulators removes a large cloud hanging over both the bank and Mr Staley, whose fate was in the balance. The watchdogs could have decided that he should be blackballed from financial services for a lack of integrity for twice trying to uncover the identity of an anonymous whistleblower who had written to the bank’s board to make allegations about a recently recruited colleague. “It does look as though they have gone soft in that they could have been more severe,” said Dino Bossi, former head of investigations and whistleblowing oversight and policy at Barclays who now advises companies

on whistleblowing. “This could be an example of where the regulator has bitten but it has only got gums.” Mr Staley will become the only sitting chief executive of a large UK financial institution to have received a fine from the regulators. Yet rival bankers said the regulator should have been tougher. “If I had done this, I’d be out on my ass and anyone who worked for me who did this would have to go, I don’t care what their explanation is,” said the European head of a global bank. “This undermines the FCA’s moral authority.” It is not the end of the matter: the New York State Department of Financial Services, known for its tough stance on banks, is also investigating and is yet to make any determination. Barclays said it was co-operating with the US watchdog. Shares in Barclays rose 1.3p to 215.5p on Friday. A top 10 shareholder in Barclays said: “This was a close call. I think it is a reflection of how difficult a position the regulators were in, but also how difficult it would be if Barclays was to lose its fifth chief executive in seven years.”

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BUSINESS DAY

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Monday 23 April 2018

ANALYSIS

Warren Buffett heads for board exit at pivotal moment for Kraft Heinz Company has had a miserable year since its thwarted $143bn bid for Unilever

SCHEHERAZADE DANESHKHU, ERIC PLATT AND SUJEET INDAP

Moon Jae-in, left, and Kim Jong Un are due to discuss denuclearisation when they meet next week

Korean leaders establish phone hotline ahead of summit Direct link comes a week before talks to discuss de-nuclearisation and peace treaty SONG JUNG-A

orth and South Korea have set up the first telephone hotline between their leaders a week before Kim Jong Un and Moon Jae-in are due to meet at a rare summit to discuss de-nuclearisation and a peace treaty. Seoul said on Friday that a fourminute test call was made on the hotline between the presidential Blue House and North Korea’s powerful state affairs commission headed by Mr Kim, Pyongyang’s supreme leader. The two leaders will have their first phone conversation ahead of their face-to-face meeting next Friday in the demilitarised zone dividing the two countries. Mr Kim is set to attend a separate summit with US President Donald Trump in May or June. “The connection was smooth and the voice quality was very good. It was like calling next door,” said Youn Kun-young, Seoul’s presidential official.

The decision to install the hotline was made when President Moon’s special envoys met Mr Kim in Pyongyang last month to pave the way for next week’s summit at the truce village of Panmunjom. At the meeting, Mr Kim mentioned that a single phone call with Mr Moon could resolve any sticking points when working-level talks fail to make progress. Their historic summit, only the third between the rivals since the end of the 1950-53 Korean war, will be televised live as the North Korean leader visits the southern side of the demilitarised zone for the first time. The two previous summits were held in Pyongyang in 2000 and 2007 between Mr Kim’s late father Kim Jong-il and South Korea’s former presidents Kim Dae-jung and Roh Moo-hyun. Mr Moon surprised North Korea watchers on Thursday by saying that Pyongyang no longer insisted on the removal of US troops from South Korea in return for “complete denuclearisation” — remarks aimed

at easing concerns that North Korea may demand excessive concessions from South Korea and the US in its upcoming summits. Mr Moon also hinted at the possibility of reaching broad agreements with Mr Kim on de-nuclearisation and signing of a peace treaty on the peninsula in return for normalised ties with Washington and economic aid for Pyongyang. Pyongyang has yet to confirm Mr Moon’s comments. North Korea held a plenary meeting of the Communist party on Friday to decide “policy issues of a new stage” to meet the demands of the current “important historic period”, its official KCNA news agency said. But no details were available on Friday about what was discussed at the meeting. Cheong Seong-chang, researcher at the Seoul-based Sejong Institute, said Mr Kim must have felt the need to explain the background for his sudden diplomatic outreach to Seoul and Washington after last year’s heightened military tension on the peninsula.

Arsène Wenger bids adieu after transforming English football Frenchman quits after 22-year reign as Arsenal manager ROGER BLITZ AND MARK ODELL

rsène Wenger, whose cerebral approach transformed British football, has announced his departure from Arsenal football club, bringing to a close a 22-year reign as manager. The 68-year-old Frenchman’s decision to quit — though not unexpected in light of the team’s decline in recent seasons — shocked many in the game. Wenger is known for his stubbornness and has always insisted he would see out his contract. The club’s majority owner, US billionaire Stan Kroenke, had only last summer given Wenger a new two-year deal and consistently placed huge faith in the manager, even when it was clear the club was struggling to compete at the top level. Arsenal’s board had previously shown no interest in planning Wenger’s succession. But as the club’s form worsened this season, it was widely reported that Kroenke had asked his son Josh, already a non-executive director at Arsenal, for a review. “After careful consideration and following discussions with the club,

I feel it is the right time for me to step down at the end of the season,” Wenger said in a statement posted on the club’s website. His longevity, along with that of Alex Ferguson — the former Manchester United manager who served for a quarter of a century — was a rare example of stability in a profession where managers are appointed and sacked with unseemly haste. His durability owed much to the near-instant success he achieved at Arsenal, one of European football’s most storied clubs that in the 1980s and early 1990s had developed a reputation for functional but boring football. His appointment as manager in September 1996 was greeted with surprise and bemusement in the English game, where the first wave of foreign managers were struggling to make an impact. Few had heard of the bespectacled outsider, who made little impact as a player and managed inconspicuous teams in France and Japan. But in his first full season, he guided Arsenal to the “double”, winning the FA Cup and the Premier League — a rare feat in the game. He achieved it

through the combination of scouting relatively unknown players from France and elsewhere and importing them at bargain prices, while revolutionising the club’s training methods and style of play. Even the refreshing way he spoke about the game contrasted with the cliché-ridden patter of British managers and players at the time. After the club won another “double” in 2002, the peak of his reign came two years later, when Arsenal went the entire 2003-04 Premier League season without losing a game — a feat unsurpassed in the modern game in England. Only Preston North End had previously managed it, in the 1888/89 inaugural season of league football. Arsenal’s achievement led the media to dub Wenger’s team the “Invincibles”. This feat brought Wenger his third and last Premier League title, and gave him another record — including games played at the end of the previous season and at the start of the following one, Arsenal went 49 games unbeaten, the longest sequence achieved in the history of top-flight English football.

arren Buffett on Monday will step down from the board of Kraft Heinz after five years, leaving the food group in which his Berkshire Hathaway investment company has a 27 per cent stake with an uncertain future. The 87-year-old made the announcement in February — almost exactly a year after Kraft Heinz’s failed $143bn bid for Unilever — giving his reason as a wish to travel less. His departure comes at a pivotal time for Kraft Heinz and has raised questions about his relationship with 3G Capital, the New York-based private equity group founded by Jorge Paulo Lemann that is the other major shareholder. Mr Buffett told the FT: “My stepping down from the board represents no change of any kind in my or Berkshire’s relationship with 3G. I am on no public boards (except Berkshire) and expect to be on none in the future.” Kraft Heinz has had a miserable year since the thwarted Unilever bid — its most recent quarterly earnings disappointed and its shares have slid by 30 per cent year-on-year. “There is no question that our financial results in 2017 did not meet our potential,” acknowledged Bernardo Hees, chief executive in February. Though Mr Hees talked about a step-up in investment and the potential for organic growth, some analysts appear unconvinced. They believe that another M&A deal might be getting closer, while fearing for the consequences if Kraft Heinz fails a second time. “Organic growth is not Kraft Heinz’ expertise”, said analysts at Credit Suisse in a recent note. “We harbour serious doubts about the management team’s ability to generate sufficient product innovation to grow its collection of retro brands in highly-commoditised categories.” Mr Lemann, Brazil’s richest man, has been a friend of Mr Buffett since the two met on the board of Gillette 20 years ago. Mr Lemann and Marcel Telles, another of the three Brazilian men who founded 3G, are also on the Kraft Heinz board. In many ways, Mr Buffett and Mr Lemann are one of the corporate world’s more unlikely pairings. The Sage of Omaha cultivates a cosy, avuncular image as a friendly investor who cherishes incumbent management. But 3G Capital, set up by Mr Lemann after making a fortune at Anheuser-Busch InBev, has a reputation for buying businesses, throwing out managers — 11 of the top 12 Heinz executives left on one day — and ruthlessly slashing costs. In other ways, they are well-suited: to start with, folksy elder statesman Mr Buffett gave the Brazilian group instant credibility in the US. Moreover, Mr Buffett’s hunt for “elephant” deals was well-matched by 3G’s formidable ambition. Mr Buffett wrote in his 2015 letter to Berkshire shareholders: “I knew immediately that this partnership [with 3G] would work well from both a personal and financial standpoint.” However, Mr Buffett did not come cheap for 3G. The $8bn of preferred stock Berkshire Hathaway invested

originally in Heinz earned a whopping 9 per cent dividend. (Berkshire separately invested a total of nearly $10bn in Kraft Heinz common equity.) The $3bn Berkshire provided to fund 3G’s purchase of coffee and doughnut chain Tim Hortons also paid 9 per cent. Mr Buffett and 3G teamed up in 2013 to buy Heinz and then took it public again when they merged it with Kraft in 2015. But it was third time unlucky when it came to Unilever in 2017. Mr Buffett admitted pulling the plug on that acquisition in the face of fierce resistance from Unilever, which went against his mantra of friendly deals. “It became very apparent that Unilever did not want the offer. I got calls that it was unwelcome, and I said: if it’s unwelcome, there’s no offer,” Mr Buffett told CNBC, soon afterwards. Adding that English was the second language of Alex Behring, Kraft Heinz’s Brazilian chairman and 3G chief executive, Mr Buffett said: “I’ve seen misunderstandings before — that’s one reason why I like to do it the way I do it. I say: I’ll make you an offer if you want one.” More recently, Mr Buffett and Kraft Heinz appear to hold different views about the investment climate. Mr Buffett said in this February’s shareholder letter that valuations “proved a barrier to virtually all the deals we reviewed in 2017 as prices for decent, but far from spectacular businesses, hit an all-time high”. Only a few weeks earlier, Mr Hees told analysts that: “valuations today are more attractive than they were even two months ago. And the chapter of Kraft Heinz integration is behind us.” Given that both are keen dealmakers, these differing views on valuations, as well as Mr Buffett’s opposition to more hostile deals, could be blocking 3G’s M&A ambitions for Kraft Heinz. Alexia Howard, analyst at Bernstein said: “Some investors have interpreted Buffett stepping down from the Kraft Heinz board as that Kraft Heinz could be inclined to go after a hostile deal. I don’t know what their intentions are but at the margin, it seems as though it may be more possible than it was with Buffett on the board.” The pair’s dealmaking ambitions may have also been upended by their own success. Most of the large packaged consumer food companies, such as General Mills and Kellogg, have defensively initiated their own heavy cost-cutting programs to try to preempt shareholder activism or an unsolicited knock on the door. Nevertheless, Mondelez is often cited by analysts as the best substitute for Unilever. Like the AngloDutch company, a large proportion of its sales are to emerging markets and it has well-known brands, including Oreo biscuits and Cadbury chocolate. One person familiar with the situation said that 3G had teed up a deal, only to have it upended by the election of Donald Trump. Mr Trump’s protectionist rhetoric and willingness to target specific companies would have made cost cuts and plant closures tricky.

BUSINESS DAY

C002D5556

NEWS YOU CAN TRUST I MONDAY 23 APRIL 2018

Opinion

for your new week

Buhari has lost credibility on national security

n S eptember 2015, as President Buhari marked his first 100 days in office, I wrote a piece titled “Buhari plays to his strengths, but the economy is his Achilles heel”. I argued that, overall,he had started well in the areas of his perceived strengths –tackling insecurity and fighting corruption – but badly in his area of historic weakness: economic management. With an academic hat on, I awarded him a Third for his cluelessness and atavism on the economy, a 2:1 for his early anti-graft initiatives, and a First for his initial approach to tackling insecurity. Earlier, in July of that year, a TIME magazine journalist emailed me, asking:“What’s next for Nigeria’s fight against Boko Haram, following Buhari’s firing of his senior military commanders?” I replied that, so far, Buhari was doing everything right to defeat the Boko Haram insurgency. He had appointed new service chiefs widely believed to be“first-class officers”; was building a strong regional alliance against Boko Haram; and was reaching out to the international community for help. Buhari emanated credibility, and few around the world doubted that he would deliver on his promise to make Nigeria safer. But we were wrong. I was wrong. Yes, I was wrong in thinking that he would play to his fabled strength and tackle insecurity in Nigeria. Instead, insecurity has worsened, turning Nigeria into a fragile if not a failed state.As I said, I awarded Buhari a First for his initial approach to tackling insecurity in Nigeria.But, three years in office, truth be told, he now deserves a Third or even a Fail on national security! In Lagos recently, Buhari repeated the platitude about his government’s “commitment” to “improved national security”. Indeed, he wants to take $1.3 billion from the Excess Crude Account to “fight the rising spate on insecurity across the country”. As former Senator Naj’atu Muhammed said recently, “terrorism has become a multi-billion-naira industry in Nigeria”. Yet, Nigeria is the 5th most dangerous (i.e. least safe) country in the world, according to the 2018 Legatum Prosperity Index for Safety and Security. This is a fundamental failure of governance. The first duty of any government is to protect and safeguard the lives of its citizens. Great philosophers such as Thomas Hobbes and John Locke have long espoused the idea that governments have their roots in an implied social contract. Under this social contract, according to Hobbes, government exists to insulate us from the arbitrary violence of nature and protect us from each other. For Locke, citizens agree to surrender absolute freedom in return for the state safeguardingtheirlives, liberty

fivethings

and property. But Buhari has violated this social contract, this fundament purpose of government. His government has not only failed to generate economic prosperity,it has also failed to protect the lives and properties of ordinary Nigerians. The government’s inability and/ or unwillingness to stop the atrocities of Boko Haram and the criminal herders has allowed these dastardly groups to continue to traumatize local communities in Nigeria. Of course, Buhari inherited the Boko Haram problem and, in fairness, the situation is slightly betterunder him than it was under Goodluck Jonathan, when, particularly in 2014/15, Boko Haram attacks paralysed most of the north-east. But it’s also true that the Boko Haram Buhari inherited was decimated after the overwhelming, if belated, military offensive launched by the Jonathan administration, with international support, during the 2015 general election campaign. Surely, Buhari was expected to do better, to finish off the insurgents or at least render them incapable of causing more havocs. But, alas, three years into the four-year term of this administration, that has not happened. Boko Haram remains a very potent and dangerous terrorist group, and over 100 of the 276 Chibok girls they abducted on 15 April 2014 are still being held by them. 57 of the girls escaped, and, OK, to its credit, the Buhari government negotiated the release of 107. But 113 girls are still with the terrorists! Two weeks ago, on the 4th anniversary of the Chibok girls’ abduction, President Buhari’s spokesman, Garba Shehu, issued a perfunctory statement, saying the government “is doing its very best to free the girls from their captors”. He blamed friction among the Boko Haram members for the failure of the government’s negotiation to secure the girls’ release. But what this shows is that the government is at the mercy of the insurgents. Boko Haram is very much in charge, dictating the agenda, despite repeated official claim that it has been “technically” defeated! Indeed, the folly of this “Mission Accomplished” rhetoric was laid bare on 19th February this year, when, just two weeks after the government said that Boko Haram was on its death throes, the insurgents struck! They attacked a school in Dapchi, Yobo state, and abducted 105 schoolgirls. It was Chibok all over again! The government secured the release of the Dapchi girls 30 days later after a negotiation that looked dubious and inscrutable in many ways. Any negotiation with a terrorist group will inevitably provoke questions such as: on what terms? At what cost? For instance, how could a government that wants to promote religious harmony negoti-

ate away the freedom of the Christian girl, Leah Sharibu, who rejected the terrorists’ demand to convert to Islam? We must also ask: did the negotiation involve payment of a ransom? But any concession to Boko Haram, whether in form of the so-called amnesty or ransom-payment, would be unacceptable. The terrorists’ heinous crime should not be rewarded. Furthermore, giving concessions to Boko Haram, which is supposed to have been “technically” defeated, would suggest the government is misleading Nigerians. And no government can successfully fight insurgency without public confidence. Now, what about the atrocities of the criminal herdsmen? There is no space to explore the herder-farmer conflict here. But it must be said that the herders’ unabated and uncontrolled killings and violence are a stain on the conscience of this nation and a blow to the moral standing and credibility of the Buhari government. The herders’ criminal rampage led to the death of 2,500 in 2016, according to the International Crisis Group, and several hundreds more since then. This is not mentioning the humanitarian calamity, with over 170,000 internally displaced people in the north-central. Of course, no country is immune from organised crime and violence, but the attitude and response of the government matter a lot. In Nigeria, conflicts escalate and spread for three state-induced reasons. First, government incompetence and army failure; second, government and army complicity and duplicity; and third, the government’s failure to give justice to the victims of these atrocities. Take the competence point first. Well, it is universally recognised that the Nigerian army lacks the offensive and defensive capabilities to defeat Boko Haram. They are ill-equipped and ill-trained for the counterinsurgency strategy needed to beat the terrorist group. When soldiers start running from insurgents, as Nigerian soldiers often did, you know something is amiss. But what about the government’s own incompetence? Two weeks ago, President Buhari told the Archbishop of Canterbury, Justin Welby, in London that Muammar Gaddafi was responsible for the herder-farmer clashes. Why? Because when he was killed in 2011, his gunmen moved to Nigeria. So, Nigeria is such a failed state that it couldn’t protect its borders and deal with invading foreign gunmen. Buhari also said that herdsmen used to carry sticks, but “now they carry sophisticated weapons”. But why are the herders allowed to carry such weapons? Is the government so impotent that it can’t disarm them? Listening to Buhari, one often thinks he is a helpless and hapless bystander rather than Nigeria’s president! Then, what about complicity and duplicity? First, take

that of the army. Recently, General T Y Danjuma, former chief of army staff and minister of defence, controversially urged Nigerian to defend themselves because, as he put it, “the armed forces are not neutral”, adding: “They collude with the armed bandits that kill the people; they facilitate their movement”. What Danjuma was really saying was that the social contract has broken down; the government can’t contain the Hobbesian savagery of the herders and protect innocent Nigerians against their bestiality. And, of course, once the social contract breaks down, what you have, according to Hobbes, is anarchy! Sadly, the Buhari government itself is not neutral. It is more sympathetic to the herders than the farmers.Buhari, himself a Fulani and cattleowner, has always identified with the cause of the Fulani herdsmen. He said in 2016, for instance, that “It would be foolhardy for someone to just say he would chase us away. So, where do we go? The “us” and “we” in that statement referred to the Fulani herdsmen. So, you have a president and a government that are clearly not an impartial arbiter in the herder-farmer conflict. Which brings me to the third point: lack of justice for the victims of the atrocities. Humanitarian intervention has always been recognised in international law, and, in 2005, the UN General Assembly recognised the “Responsibility to Protect” in case of genocide, ethnic cleansing and massive violence. So, why has the Buhari government not intervened to prevent what is certainly massive violence, if not ethnic cleansing, by the Fulani herdsmen? Secondly, where is justice? Aprominent British writer once said that“Any violent death is a rip in the fabric of society and must be respected, investigated and punished”. So, why has there been no arrest, prosecution and punishment of the criminal herders? Professor Wole Soyinka was right when he said that the victims of the atrocities of Boko Haram and the herders do not need sympathy: they need justice! They need the perpetrators to be brought to book! So, three years in office, Buhari has failed to make Nigeria safer, despite his promise.The deaths of ordinary Nigerians are treated as a trifle. Worsening insecurity is traumatizing local communities, harming farmers who ensure food security and discouraging foreign investors. Buhari has failed in the first duty of government: to protect the lives and properties of citizens. His fabled reputation on national security is in tatters! Sad!

Olu Fasan, a Londonbased lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

Fascinating business facts $1.66

The introduction of a national minimum wage of $1.66 an hour in South Africa is be delayed by up to two months as parliament is yet to approve necessary draft legislation, a spokesman for the labour ministry said on Friday. The minimum wage - a policy championed by President Cyril Ramaphosa as an important step to tackle labour instability and wage inequality was approved by the cabinet in November and meant to be introduced on May 1.

$80 With oil racing towards $80 a barrel on the back of a market rebalancing, Schlumberger, the world’s largest listed oilfield services group, now says the oil market will face growing supply challenges over the coming year, following the steep drop in investment in recent years. Paal Kibsgaard, Schlumberger’s chief executive, said as the company reported first quarter earnings that three consecutive years of “dramatic underinvestment” in oil exploration and production worldwide had resulted in declining production in countries including Angola, Norway, Mexico, Malaysia, China, and Indonesia.

71%

The UK government has appointed a former Credit Suisse banker to manage its stake in Royal Bank of Scotland as it prepares to return the bailed-out lender to the private sector. Charles Donald, currently vice-chairman of UK advisory and corporate broking at the Swiss investment bank, will take over as head of UK Government Investments’ Financial Institutions Group next month. He will work with fellow Credit Suisse alumnus James Leigh-Pemberton, FIG chairman, with a view to starting the process of selling down the government’s remaining 71 per cent stake in RBS later this year.

$1.5bn US industrial group General Electric has shown that it is still bearing the scars of its financial services ventures, taking a charge of $1.5bn relating to a subprime lender that it shut down in 2007. Despite the additional damage from crisis-era subprime bets, GE shares rose more than 4 per cent in early New York trading after its first-quarter earnings issued on Friday morning beat analyst estimates. But the charge relating to WMC Mortgage is the latest sign of how GE’s financial services operations, which once contributed half the group’s profits but have now mostly been sold, are still leaving a mark.

4.5%

Chipmakers faced a widespread sell-off on Friday after an update from one of Apple’s biggest suppliers, Taiwan Semiconductor, raised expectations of a sharper slowdown in smartphone sales this year. It said in an earnings update that second-quarter revenues would be hit by “weak demand from the mobile sector”, unnerving investors who fear that smartphone sales have entered a structural slowdown after a decade of rapid growth. International chipmakers including Analogue Devices, Cirrus Logic, Dialog Semiconductor, Qualcomm and Qorvo fell between 3 per cent and 6 per cent during Friday trading. Taiwan Semiconductor ended the trading day down 6 per cent at NT$229. Global smartphone sales dropped 4.5 per cent in the last quarter of 2017.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08022238495 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

BUSINESS DAY

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

2017 POWER RANKING ...the CEOs that added N2.6 trillion in market value...

TELIAT SULE

eading a company and creating value depends on many skills that are hard to measureâ&#x20AC;&#x201D;strategic vision, authenticity, long-term planning. Investors aren't the only stakeholders that need tending to; the best-run companies connect effectively with customers, employees, and the communities where they operate. All that stops at the feet of CEOs, who must be everything their company's stakeholders want of them. On April 26, at our Annual Awards & Dinner, BusinessDay will honour the Top 25 CEOs who delivered the most value to stakeholders and contributed to the stellar performance recorded by the Nigerian capital market in 2017. Last year, listed stocks gained N4.36 trillion in market capitalisation, a development that made the Nigerian capital market one of the best in the world. Interestingly, the 25 CEOs that will be celebrated accounted for over 45 percent of the success recorded on the NSE. That means they added some N2.6 trillion to market value in 2017.

The Top 25 CEOs of quoted companies on the NSE Awards was introduced to celebrate the CEOs who contributed to the success of the Nigerian capital market by adding significant value to shareholders' investment. Parameters used in the selection of the winners include share price appreciation and sustainable growth in each company's Profit after Tax (PAT). Since its introduction, the annual awards have become the capital market bellwether used in identifying the top-performing Chief Executive Officers and stocks on the Nigerian Stock Exchange (NSE). It is to this end that we celebrate the individuals who have contributed to the success recorded by their companies and the Nigerian economy in general. Dignitaries expected at this year's event include Chief Executive Officer of the Nigerian Stock Exchange, Oscar Onyema, as well as the Executive Governor of Ogun State, Senator Ibikunle Amosun.

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Access Bank

Zenith Bank

Share Price Appreciation in 2017:

78%

73.8%

Amount added to market capitalisation:

N112.24bn

N239.56bn

Herbert Wigwe GMD/CEO

Peter Amangbo GMD/CEO

Herbert Wigwe was appointed as the Group Managing Director/CEO effective January 1, 2014.He left Guaranty Trust as an Executive Director to co-lead the transformation of Access Bank Plc in March 2002 as Deputy Managing Director. Wigwe started his professional career with Coopers and Lybrand Associates, an international firm of Chartered Accountants. He spent over 10 years at Guaranty Trust Bank where he managed several portfolios including financial institutions, corporate and Multinationals. He holds a B.Sc. degree in Accounting from the University of Nigeria, Nsukka; a master's degree in Banking and International Finance from the University College of North Wales and another master's degree in Financial Economics from the University of London. Wigwe is an alumnus of Harvard Business School Executive Management Programme and a Fellow of the Institute of Chartered Accountants of Nigeria (ICAN).

Peter Amangbo is the Group Managing Director/CEO of Zenith Bank Plc. Prior to his appointment, Amangbo has been an Executive Director of the bank since 2005 and has over twenty four (24) years cognate banking experience all of which has been with Zenith Bank. He worked previously with PriceWaterHouse (now PriceWaterHouseCoopers) as a Senior Consultant in the Financial Services Group.He holds a B.Eng. Degree (Electrical and Electronics Engineering) from University of Benin and an MBA from the University of Warwick, Coventry in the United Kingdom. He is a Fellow of the Institute of Chartered Accountants of Nigeria (FCA). He has attended the Advanced Management Programme at INSEAD, France and Wharton Graduate School of Business, USA.

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United Bank for Africa (UBA)

Diamond Bank

Share Price Appreciation in 2017:

128.9% Amount added to market capitalisation:

70.5%

N142.94bn

Amount added to market capitalisation:

N14.36bn Uzoma Dozie GMD/CEO

Uzoma Dozie was unanimously appointed by the Board as the Group Managing Director/Chief Executive Officer of Diamond Bank Plc effective from November 1, 2014. His appointment was approved by the Central Bank of Nigeria in December 2014.Dozie started his banking career

Kennedy Uzoka

in the commercial banking unit at Guaranty Trust Bank

GMD/CEO

Plc where he worked for some years and later moved to Citizens International Bank Limited where he worked

Kennedy Uzoka is the General Managing Director/ CEO of UBA. He has had a lengthy career at the bank, which over the course of two decades has seen him at the helm of a number of critical departments. Prior to his appointment as GMD/CEO he was the Deputy Managing Director and CEO of UBA Africa. A keen adaptor of technology and modernity, Uzoka has supervised two strategic support functions in the bank: Information Technology and E-Banking. Most recently, he spearheaded the Customer Focused revolution in the bank which has created a fully digital, 24/7 user friendly experience that aims to anticipate and fulfil our customerâ&#x20AC;&#x2122;s expectations. Uzoka is the holder of a BSc in Mechanical Engineering from the University of Benin an MBA from the University of Lagos and an AMP from Harvard Business School.

in the Oil and Gas Division. He joined Diamond Bank Limited as a Manager and the head of the bank's oil and gas unit. He was at a time head, financial control, then retail banking where he spear-headed the introduction of lifestyle-changing retail products. Dozie was the Executive Director in charge of Lagos businesses between 2011 and 2013 until his appointment as a Deputy Managing Director in April 2013. Uzoma Dozie graduated in 1991 with a Bachelor of Science degree in Chemistry from the University of Reading, Berkshire, England. He obtained a Master of Science degree in Chemical Research from University College, University of London in 1992 and an MBA with specialisation in finance, from Imperial College Management School, London in 1998. He also attended the Program for Management Development at the Harvard Business School, Boston, Massachusetts, USA.

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Guaranty Trust Bank Plc

Nestle Nigeria Plc

Share Price Appreciation in 2017:

65%

92.1%

Amount added to market capitalisation:

N492.68bn

N293.4bn

Segun Agbaje GMD/CEO

Mauricio ALARCÓN MD/CEO

Segun Agbaje was as the Managing Director/Chief Executive Officer GT Bank on June 22, 2011. With over (25) twenty-five years investment and international banking experience, Agbaje is involved in the general manage-

Mauricio ALARCÓN is the Managing Director and Chief

ment of the Bank’s day-to-day operations and has earned

Executive of Nestlé Nigeria Plc. He joined Nestlé Mexico

a reputation as a truly accomplished and highly respected

in 1999 where he held various roles in sales and market-

professional within the West Africa sub-region, given

ing before his transfer to the Strategic Business Unit in

his diverse experience in the financial services industry.

Switzerland as Marketing Advisor. In 2004, he became the

Agbaje possesses a deep understanding of the Nigerian

Marketing Lead for Nestlé’s Movenpick Ice Cream brand,

business environment having initiated and led the execu-

and in 2007, the Managing Director of the Ice Cream

tion of large, innovative and complex transactions in fi-

Business unit in Australia. In 2010 he moved to Egypt as

nancial advisory, structured and project finance, balance

Business Executive Manager for Nestlé’s Ice Cream Busi-

sheet restructuring and debt and equity capital raising in

ness in North Africa.

several sectors of the Nigerian economy notably oil and

Before his recent role, ALARCÓN was the Managing

gas, energy, telecommunications, financial services and

Director of Nestlé Cote d’Ivoire from 2014, and in 2016

manufacturing industries.

became the Managing Director of the Atlantic Cluster

He is an alumnus of the Harvard Business School and

comprising Côte d’Ivoire, Sénégal, Guinea, Guinea Bis-

holds a Bachelor of Science in Accounting and a Masters

sau, Gambia, Mauritania and Cape Verde. An engineer by

in Business Administration from the University of San

profession, ALARCÓN started his career in an industrial

Francisco, USA.

group and then worked in the banking sector in Mexico before joining Nestlé.

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Stanbic IBTC Holdings

Flour Mills of Nigeria

Share Price Appreciation in 2017:

176.7%

56.8%

Amount added to market capitalisation:

N233bn

N10.34bn

Paul Gbededo GMD/CEO

Yinka Sanni

Paul Gbededo, a Fellow of the Polymer Institute of Nigeria

Chief Executive

and Managing Director of FMN’s Agro-Allied Business, was appointed the Group Managing Director / Chief Executive Officer of Flour Mills on 1st April, 2013. Paul has

Yinka Sanni serves as Chief Executive of Stanbic IBTC Holdings and previously served as the Chief Executive at Stanbic IBTC Bank and IBTC Pension Managers Limited (IBTC Pensions). He has extensive experience in credit and marketing, corporate finance, asset management and stockbroking and has been involved in a number of landmark capital market transactions. He is also a Fellow of the Chartered Institute of Stockbrokers of Nigeria. Yinka has a B.Agric. (Hons.), Agricultural Economics from the University of Nigeria, Nsukka, an MBA from the Obafemi Awolowo University and has gone through the Harvard Business School's Advanced Management Programme.

over 30 years career with FMN Group started at Nigerian Bag Manufacturing Company Plc (1982 – 1998), where he acquired extensive experience serving in various managerial positions as process control manager, production manager, general Manager Production and became the first Nigerian Production Director in 1993. Paul, best known for his pioneering role in fertilizer, pasta and rice, joined Flour Mills in 1998 as General Manager/Director in charge of fertilizer operations, pioneering development of the product, “Golden Fertilizer” the first choice of Nigerian farmers. Paul was educated at the Polytechnic of North London UK where he obtained Graduateship of Plastic and Rubber Institute and Associateship of National College of Rubber Technology in 1980, and holds MSc. Degree in Polymer Technology (1981) of Loughborough University of Technology, UK.

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FBN Holding Share Price Appreciation in 2017:

Ecobank Transnational Incorporated (ETI)

162.7%

Share Price Appreciation in 2017:

65.4%

Amount added to market capitalisation:

N62.82bn

Amount added to market capitalisation:

N27.54bn

Urum Kalu (UK) Eke GMD/CEO

Ade Ayeyemi Group Chief Executive Officer

UK Eke assumed office as Group Managing Director, FBN

Ade Ayeyemi was appointed Group Chief Executive Of-

Holdings Plc on January 1, 2016. He joined the board of

ficer of Ecobank in June 2015 and assumed office on Sep-

First Bank of Nigeria Limited in 2011 as executive director,

tember 1, 2015. He is an experienced banker, who before

public sector South until his appointment as GMD of FBN

joining Ecobank, had a long and successful career with

Holdings. UK Eke is a seasoned banker with deep finan-

Citigroup, where he was CEO of Citigroupâ&#x20AC;&#x2122;s sub-Saharan

cial services experience spanning diverse areas including

Africa division based in Johannesburg. Ade is an ac-

risk management, consulting, taxation, process engineer-

counting graduate of the University of Ife, now Obafemi

ing, capital market operations and business assurance. He

Awolowo University, Ile-Ife, Nigeria, where he earned a

holds a first degree in Political Science from the University

Bachelor of Science degree with First Class Honours. He

of Lagos and an MBA in Project Management Technology

also studied at the University of London and is an alum-

from the Federal University of Technology, Owerri.

nus of the Harvard Business Schoolâ&#x20AC;&#x2122;s Advanced Management Programme. A Chartered Accountant, he is also a trained UNIX Administrator and Network Operating Systems Manager. His many interests include business strategy, economics, process engineering and technology.

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Fidelity Bank

African Prudential Registrars

Share Price Appreciation in 2017:

192.9%

38.4%

Amount added to market capitalisation:

N46.94n

N2.62bn

Nnamdi J. Okonkwo MD/CEO

Nnamdi Okonkwo joined Fidelity Bank in 2012 as Executive Director in charge of the bank’s businesses in Southern Nigeria, a position he held until January 1,

Peter O. Ashade MD/CEO

2014 when he was appointed Managing Director/CEO of Fidelity Bank. Before he joined Fidelity Bank, he worked in other financial institutions including the United Bank for Africa (UBA) Plc where he held various managerial and leadership positions including regional bank head in Lagos, Regional Director, Federal Capital Territory Abuja; project director, and head of corporate banking and multinational corporate division. The high point of his career in UBA came when he was appointed Managing Director/CEO of UBA Ghana and later elevated to Regional CEO of the bank’s West Africa Monetary Zone covering Ghana, Liberia and Sierra Leone. Nnamdi obtained a first degree in Agricultural Economics from the University of Benin. He holds an MBA in Banking and Finance from Enugu State University of Technology, Nigeria. In addition, he is also a graduate of the Advanced Management Programme of INSEAD Business School, Fontainebleau, France.

Peter O. Ashade is an astute investment banker with close to 3 decades’ cognate experience in Nigeria’s money and capital market. He joined UBA Registrars Ltd (now Africa Prudential Plc) in 2006 as Managing Director/CEO and led the transformation of the business from a subsidiary of UBA Plc to the only listed Registrars’ company on the Nigerian Stock Exchange achieving over 8000% growth in profitability within 8 years. He championed disruptive innovation in the registrars’ business in Nigeria pioneering many e-products and successfully implemented a major diversification strategy for the business.

BUSINESS DAY

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A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

C & I Leasing

NASCON Allied Industries Plc

Share Price Appreciation in 2017:

158%

117.7%

Amount added to market capitalisation:

N10.76bn

N2.12bn Andrew Otike-Odibi MD/CEO

Andrew Ifuneyachukwu Otike-Odibi is a double Alumnus of the University of Benin, with an MBA and a Bachelorâ&#x20AC;&#x2122;s Degree in Accounting. He commenced his career in 1991 with the Chartered Accounting Firm; Godfrey Ikomi then moved to the international Consulting practice of Ernst and Young in 1992. In 1993 He switched to a banking opportunity with Diamond Bank and in only 2 years his outstanding performance isolated him as the best option for the position of

Paul Farrer

Port Harcourt Branch manager.

Managing Director

In 1999 Andrew resumed with C & I Leasing PLC - the foremost brand for Consumer Leasing and Business support services- as the Port Harcourt Branch Manager and the same outstanding qualities distinguished him on

Paul joined NASCON as Managing Director in 2015,

every task assigned.

having previously been the Chief Operating Officer and

Today he is the Managing Director of C & I Leasing PLC; a

Group Executive Director of Food Concepts Plc. His

business which is heavily relied upon by several multina-

experience in the foods business spans 20 years in the

tional and indigenous corporate organizations in various

South and West African markets; in international com-

sectors of the Nigerian economy including Oil and Gas,

panies such as TGI Fridays (Americana Group), Steers

Banking, FMCG and Telecommunications. C & I Leasing

Holdings â&#x20AC;&#x201C; Debonairs Pizza, Famous Brands and Innscor

PLC supports all these organizations offering services

International. He is an alumnus of East London Technical

in Manpower Outsourcing, Fleet Management, Marine

College, South Africa.

Operations and Telematics. He is a Fellow of the Chartered Institute of Accountants of Nigeria, a sports aficionado and a volunteer with several Christian and charity organizations. He is happily married with 3 Children.

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Berger Paints

Cement Company of Northern Nigeria (CCNN)

Share Price Appreciation in 2017:

32.7%

Share Price Appreciation in 2017:

Amount added to market capitalisation:

N605.73m

90% Amount added to market capitalisation:

N1.14bn Ibrahim Aminu MD/CEO

Ibrahim Aminun joined Cement Company of Northern Nigeria (CCNN) Plc, Sokoto, in January, 2010 as an As-

Peter Bababunmi Folikwe MD/CEO

sistant Directorâ&#x20AC;&#x201C;Finance and later promoted to Finance Director. He was appointed into the Board as Executive Director â&#x20AC;&#x201C; Finance, in May 2013. He became the MD/ CEO of Cement Company of Northern Nigeria PLC on June 1, 2016. He started his working career at First Bank

Folikwe was appointed as the MD/CEO on the 10th of

Nigeria Regional Office in Ibadan where he served un-

March 2015. He has over 24 years of experience in Mar-

der the NYSC scheme. He has over two and half decades

keting, Sales/Distribution and General Management;

working experience in various organisations including;

having worked in a number of top-rated companies in

Federal Civil Service Commission, Lagos; Nigeria Univer-

Nigeria across a number of sectors in varied capacities.

sal Bank, Kaduna; Nigerian Security Printing and Minting

He brings with him, a great depth of knowledge and

Company Ltd, Lagos/ Abuja; Nigerian Telecommunica-

experience in manufacturing, telecommunications and

tions Ltd, Abuja; Suburban Telecoms, Abuja: BUA Flour

FMCG environments.

Mills, Lagos.

He holds a Bachelor of Science (Hons) degree in Market-

Born on 14th July, 1968, he obtained his B.Sc. degree

ing from the University of Nigeria, Nsukka, and Masters

in Accounting from Ahmadu Bello University, Zaria, in

in Business Administration (MBA) from the University of

1990. He is also a member of the Institute of Chartered

Benin. A Fellow of the Institute of Direct Marketing, Foli-

Accountants of Nigeria (ICAN) and a fellow of Association

kwe is alos a Member of the Nigeria Institute of Market-

of Chartered Certified Accountants (ACCA, UK). Aminu

ing, an alumnus of Lagos Business School and Cranfield

also holds an MBA from Usmanu Danfodiyo University,

University Bedford, UK.

Sokoto.

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Dangote Sugar

Dangote Flour Mills Plc Share Price Appreciation in 2017:

Share Price Appreciation in 2017:

185.9%

227.3%

Amount added to market capitalisation:

N9.50bn

N84.60bn

Abdullahi A. Sule

Thabo Mabe GROUP CEO

Ag. Group Managing Director Thabo Mabe who is the current Group Chief Executive Officer of DFM Plc was born 27th August 1963 in South Abdullahi Sule is the acting Group Managing Director of

Africa. He holds a BSC in Chemistry from Fort Hare Uni-

Dangote Sugar Refinery Plc. He has over 30 years experi-

versity in South Africa. He started his working career in

ence in the oil & gas sector in the USA and Nigeria, steel

Unilever Plc where he served in various capacities with

production, machine shop operations and the sugar in-

practical involvement in manufacturing production, sales

dustry both in Nigeria and the United States of America.

and other spheres of work in the Company. He held vari-

Before he joined Dangote Sugar, he was the MD/CEO of

ous leadership positions until he rose to become the CEO

African Petroleum (AP) Plc, and Sadiq Petroleum Nigeria

of Unilever Nigeria Plc.

Limited.

He headed the multinational company for over 4 years

He holds a BSc. in Mechanical Engineering and a Mas-

leading to its tremendous transformation which has been

terâ&#x20AC;&#x2122;s degree in Industrial Technology from Indiana State

sustained till date.

University, United States.

He joined the services of Dangote Flour Mills Plc on 1st July, 2014 as the Group Chief Executive Officer and a director on the Board of the Company with his vast experience which spans over years.

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A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

May & Baker

Eterna Oil and Gas Share Price Appreciation in 2017:

Share Price Appreciation in 2017:

31%

176%

Amount added to market capitalisation:

N1.03bn

N1.42bn

Nnamdi Okafor

Mahmud Tukur MD/CEO

MD/CEO Nnamdi Okafor joined May & Baker in 1985. He was appointed as the Managing Director /CEO on February 1, 2011. Before then he was the Executive Director/General Manager, Foods Division, Ota, with responsibility for the operations of the food processing division of the company. Okafor holds a Bachelor of Pharmacy (Honours) degree from the University of Ife, Ile-Ife (now Obafemi Awolowo University, Ife) as well as Master of Business Administration (MBA) in Marketing from ESUT Business School, Lagos. He is a Fellow of the Pharmaceutical Society of Nigeria, Member of the Nigerian Institute of Management and an alumnus of the Lagos Business School.

Mahmud Tukur is the managing director and chief executive officer of Eterna Oil and Gas. Before his appointment, he served as MD/CEO of Daddo Maritime Services Limited, a foremost indigenous maritime services company. He is the Vice Chairman of Eco-Marine Group, a shipping line and Terminal Operator with operations throughout West Africa and an Executive Director of Independent Energy Limited (IEL), an indigenous Oil Exploration and Production Company. IEL is the operator of the Ofa marginal field. Tukur is a joint honours graduate of Accounting & Management from the Business School of the University of Wales College, Cardiff. He has a solid track record of business success, well-developed organisational skills and has garnered a wealth of skills and experience over the past 20 years in the Oil & Gas and Maritime sectors.

BUSINESS DAY

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Monday 05 March 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

NEM Insurance

Fidson Healthcare Share Price Appreciation in 2017:

Share Price Appreciation in 2017:

189.1%

58.1%

Amount added to market capitalisation:

N1.61bn

N739.27m

Tope Smart GMD/CEO

Fidelis Ayebae CEO

Tope Smart is the group managing director and chief executive officer of NEM Insurance Plc. A seasoned un-

Fidelis Ayebae is the Founder and Pioneer Chief Execu-

derwriter and marketer, he started his insurance career

tive Officer at Fidson Healthcare Limited. He started the

with the firm of Everyman Insurance Brokers, Abuja in

company in 1995 after working in various capacities in a

1987. The management of the company later discovered

number of organizations, including Citibank Limited. He

the abundance of talent in him and was recommended to

transformation agenda over the years has succeeded in

head the Abuja branch of the firm but he left for Nigerian-

placing Fidson on the global stage.

French Insurance Company Limited in 1989 in order to

Ayebae graduated from the Mainland Institute of Tech-

widen his experience. He became the Managing Director/

nology in 1976 with a Diploma in Civil Engineering. He

Chief Executive Officer of the new NEM Insurance Plc

obtained Advanced Diploma in Business Administration

after the recapitalisation exercise in 2007. Tope Smart,

from the University of Lagos in 1999. He is an Associate of

an insurance graduate and an award winner from the

the Chartered Institute of Administration and also a mem-

University of Lagos (1987), is also an Associate of the

ber of the Nigeria Institute of Management. He is also the

Chartered Insurance Institute, London (ACII) 1990 and

Chairman and Director of many other companies. He has

the Chartered Insurance Institute of Nigeria (ACIIN) 1991.

attended many courses, both locally and internationally

He holds a Masters Degree in Business Administration

including banking operation, organisation development

from the University of Nigeria, Nsukka 2000.

skills, and selling skills, among others.

BUSINESS DAY

C002D5556

Monday 05 March 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Honeywell Flour Mills Plc

Okomu Oil Plc Share Price Appreciation in 2017:

Share Price Appreciation in 2017:

68.5%

61.5%

Amount added to market capitalisation:

N29.77bn

N1.98bn

Olanrewaju Jaiyeola MD/CEO Olanrewaju Jaiyeola was appointed to the board of direc-

G.D Hefer, PhD MD/CEO

tors as the Managing Director designate on October 2nd 2013. Few months later, he was later appointed as the Managing Director/CEO of Honeywell Flour Mills Plc

Graham Hefer is the Managing Director of Okomu Oil Plc.

on April 1st 2014. Before his latest assignment and ow-

Before joining Okomu Oil Palm as managing director, he

ing to his versatility after holding various accounting and

worked for 15 years in the cotton industry in Southern and

finance positions, Jaiyeola was deployed to head the sales

Central Africa where he was a shareholder in a number

function in 2004. Following excellent results delivered by

of cotton ginneries. He once worked as a lecturer and

him since joining the sale functions, he was promoted

research fellow at the University of Natal then moved

to the position of the Director, Sale Operations in Au-

on to work as an agricultural director at Tongaat Cotton

gust 2007. He had his professional accountancy training

Limited. Hefer was an executive director at Noordelike

with the international firm of Messrs. Akintola Williams

Sentrale katoen (PTY) South Africa. He is one of the rare

& Co and became a chartered accountant in 1990. He

CEOs that have transited from the academic world into

acquired relevant accounting experience in reputable or-

the business world. He has a Masters of Science degree

ganisations before joining the Honeywell Group in 1993.

and Doctor of Philosophy (PhD) in Agriculture.

Jaiyeola obtained a Bachelorâ&#x20AC;&#x2122;s degree in Mathematics and Statistics from Obafemi Awolowo University, Ile-Ife, Nigeria in 1986.

BUSINESS DAY

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Monday 05 March 2018

A Special Report on the Top 25 Best Performing CEOs on the Nigerian Stock Exchange

Linkage Assurance Plc

Pius Apere is the MD/CEO of Linkage Assurance Plc. In 2011 he assumed the position of Managing Director of

Share Price Appreciation in 2017:

Achor Actuarial Services Limited in London before join-

32%

ing Linkage Assurance Plc as Deputy Managing Director.

Amount added to market capitalisation:

N1.28bn

Earlier, he had worked as an actuarial analyst for Lloyds Banking Group (HBOs), in Bristol, United Kingdom from 2008-2010 and with Ernst & Young in London from 20102011. He was the Life Manager at Unity Life & Insurance Company in Nigeria from 1989-1991. He was Consulting Partner at Chike Oyeka & Co (Actuarial Consultants) Nigeria from 1991-1992 and worked as the Head of Life Insurance Department at Cornerstone Insurance Company in Nigeria in 1992. Apere holds a B.Sc from the University of Lagos, M.Sc and PhD in Actuarial Science from CASS Business School, City University in London. He is a Fellow of Institute of Insurance, London. He worked at Ajibola Ogunshola & Co (Actuarial & Financial Consultants) in Nigeria from

Pius Apere, PhD

1986-1989.

MD/CEO

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