BusinessDay 23 Jul 2018 by BusinessDay

Truck drivers defy Osinbajo, continue siege on Apapa Emeka Ucheaga, Oluwatosin Dokunmu & Abimbola Hassan ver recalcitrant truck drivers are maintaining their siege on the port city of Apapa 72 hours

after a directive by Vice President Yemi Osinbajo that the trucks be removed and order restored to the roads and bridges. Armed policemen and soldiers accompanied by men of the state traffic management

news you can trust I **MONDAY 23 JULY 2018 I vol. 15, no 101 I N300

unit LASTMA moved into Apapa on Saturday to enforce the Vice

President’s order, but their hapless efforts have been met with

Tomorrow: Columnist and former chairman of the NESG, Sam Ohuabunwa writes on Lagos Ports gridlock: the folly of a nation

resistance by the truck drivers. On Sunday, the trucks kept their siege in the bridges into Apapa with commuters managing to crawl through a narrow Continues on page 46

Hospital Firms bypass banks, raise Eko in need of a N226bn CPs at lower rates miracle INSIGHT

Emeka Ucheaga, Sobechukwu Eze, Abdullateef Eniola-Giwa & Abimbola Hassan

to impact lenders’ loan growth

ompanies have been raising debt through the FMDQ OTC platform at a record pace as N226 billion worth of commercial papers (CPs) have been issued since November alone. Analysts tell BusinessDay that Commercial papers are bank loans going directly to the market. This trend is expected to continue as more commercial papers are expected from Dangote Cement and Nigerian Breweries later this year. Commercial Papers are shortterm debt financing securities (no longer than 270 days in tenor) consisting of unsecured and discounted promissory notes, which can be readily traded. Due to their relatively short maturity period, commercial

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Cross section of attendees and award recipients at the BusinessDay’s States Competitiveness and Good Governance award in Abuja. Pic by Tunde Adeniyi

Shell’s onshore divestments gather pace with planned $2bn asset sale ISAAC ANYAOGU

hell Nigeria’s ambition to fully divest from onshore fields in Nigeria is nearing a critical stage as it is making significant progress to sell all its mining leases in the

contentious Ogoni community. Drilling for crude oil in onshore fields in Nigeria’s Niger Delta is fraught with challenges as oil assets are easily targeted by disgruntled elements. Analysts say the company’s plan to fully exit onshore fields in

Nigeria by divesting these assets to Nigerians is a good strategy. “The risk of militancy and sabotage of oil assets is making Shell wary of investing in onshore fields in the Niger Delta, it makes better economic sense for them to divest these assets to

Nigerian firms who have proven better adept at managing local crises than the IOCs,” said Chuks Nwani, an energy lawyer. Nwani said that the IOCs are restricted by mandatory disclosures

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DIPO OLADEHINDE

ore than three decades after opening its doors to save lives, Shareholders in Eko Hospital one of Lagos’ most popular health facilities will be hoping the only hospital business quoted on the Nigerian Stock Exchange (NSE) under the auspices of Ekocorp Plc will be able to get it acts rights and make profits in 2018. The company financial performance has been unsteady over the last three years following a decadelong battle between the founders of EKO hospital and Geoffrey Ohen (a major shareholder and an oil and gas magnate). While most firms listed on the NSE have already released their q1 2018 and preparing to release there q2 2018 report, the reverse is the case for Eko Hospital as the company is yet to release its q1 2018 having just recently released its full 2017 report. Although its revenue have be-

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See commodities on page 2

Inside

New bill seeks to gag the media P. A1 - NPO

businessday market monitor Commodities

NSE

Bitcoin

Brent Oil

Biggest Gainer

$73.04

DANGCEM N234.70

Cocoa

US $2,322.00

2.04pc

Biggest Loser NESTLE N1430.00

36,603.44

-0.85pc

₦2,580,715.30

Everdon Bureau De Change -0.39pc

Buy

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$-N 357.00 360.00 £-N 474.00 482.00 €-N 412.00 420.00

2 BUSINESS DAY NEWS

FMDQ Close Foreign Exchange

Treasury Bills

Spot $/N 3M Market I&E FX Window 361.60 -0.26 CBN Official Rate 305.85 11.04

6M 0.02 12.30

fgn bonds 5 Years

10 Years

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0.00% 13.74%

0.13% 14.18%

0.00% 14.16%

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Unilever PAT up 60% on higher finance income Abimbola Hassan & Sobechukwu Eze

nilever plc released its Half Year (H1), 2018 financial statement on Friday which shows it recorded a 13 percent increase in revenues for the period. This stellar performance however saw cost of goods sold rise by 12 percent compared to the first half for 2017. Operating profit for Unilever plc improved slightly by 2 percent compared to H1 2017, however the firm recorded a whopping 325 percent increase in finance income to N1.5 billion compared to N354 million in the prior period, which was due to the increase in interest on call

deposits and bank accounts. The company witnessed a 90 percent contraction in its finance costs as the company had less obligations to meet which were only basically their obligation to third party bank loans and interest cost on defined benefit plans. Unilever saw its profit after tax for the period jump by 60 percent to N5.59 billion, from N3.5 billion in the earlier period, which shows strong profit margins by the company halfway into the year. The asset of Unilever plc increased so did it liabilities by 8 percent and 13 percent respectively. Unilever stock traded at N52 following the earnings release, and is up 27 percent year to date.

Ex-police officers not replaced with expatriate staff - Mobil DIPO OLADEHINDE

anagement of multinational oil and gas firm Mobil Producing Nigeria, a subsidiary of ExxonMobil, says none of the sacked Supernumerary (SPY) police officers are being replaced with expatriate staff as the company is already making plans to assist them with police employment opportunities. “In addition to receiving a separation package that includes compensation based on years of service and position; the affected personnel will be offered assistance from a Human Resources consultant to help find employment opportunities with a third-party security services provider,” ExxonMobil said in a statement sent to BusinessDay. ExxonMobil added that the activities undertaken by ExxonMobil to provide compensation packages to the individuals affected by the April 2018 Supreme Court judgment is consistent with the Court’s ruling and prior company practices. “This is a limited program that will impact only individuals within the scope of the Supreme Court judgment,” ExxonMobil said. Staff of ExxonMobil last week closed down the Lagos headquar-

ters of the company over the alleged sacking of 860 spy police without entitlements. The company’s workers’ union protested the sacking of these workers, who were mostly Nigerians saying, they were sacked by ExxonMobil in breach of labour laws despite putting in over 22 years of service accusing the management of refusing to comply with Supreme Court Judgement. Recall on April 20, 2018, the Nigerian Supreme Court ruled that all SPY police personnel were employees of ExxonMobil and were thus entitled to all remunerations, benefits, terms and conditions as employees of ExxonMobil as approximately 925 personnel are affected by the ruling. As a result, ExxonMobil implemented a non-voluntary separation program in July 2018 for police officers as approximately 500 affected personnel were still in active service. ExxonMobil spokesperson, Ogechukwu Udeagha said the company complied with the Supreme Court ruling by acknowledging the spy police as employees however given the business model calculating their emoluments and benefits was a challenge as the highest certificate most of them have was a School Certificate. Continues on wwwbusinessday online.com

L-R: Patience Oniha, director-general, Debt Management Office (DMO); Oscar Onyema, chief executive officer, Nigerian Stock Exchange, and Ibrahim Usman Jibril, minister of state for environment, during the official listing ceremony of the 13.48%, 5-year, N10.69bn, FGN Green Bonds in Lagos, at the weekend.

MARKETS

Firms effectively utilising assets to generate sales BALA AUGIE

Continues on wwwbusinessday online.com

Truck drivers defy Osinbajo, continue siege... Continued from page 1 corridor between the trucks. Each time any of the trucks moved, the corridor was blocked with policemen apparently unable to offer any help to commuters. Months ago, Osinbajo visited Apapa by helicopter but his orders then was ignored by the truck drivers and their sponsors, compelling him to make another visit on Friday. As at this morning, Apapa trucks still remain camped on the roads and bridges, making Apapa inaccessible to motorists. This is yet again in direct defiance to

the Executive Order by the Vice President. The Federal Government earns close to N1 trillion annually in revenues from Apapa, while the state government pulls in billions in fees paid for every container coming out of the two ports in Apapa – Tin Can Island Port and Apapa Wharf, but both governments have persistently gained to rein in the unruly truck drivers. Many now believe that the truck drivers have strong backers in Abuja. As the siege continues, Apapa, a once boisterous commercial centre, has been left to degenerate. Property values have fallen

The Sterling Bank tweet that broke internet on July 21, 2018 (#Bankwars)

usinessDay analysis shows that consumer goods firms have a higher fixed asset turnover ratio compared to other sectors. Investors and analysts use the fixed asset turnover to gauge how firms have effectively utilized assets in generating higher sales. Put in another way, the ratio indicates how much a business is generating in revenues for every Naira invested in fixed assets; the higher the ratio the more efficient a firm. However, it is a generally accepted finance principle that firms that do not invest enough in assets will lose sales, and that will hurt profitability, free cash flow, return on assets and eventually stock price. Nascon Allied Nigeria Plc has employed its property plant and equipment in making money as its fixed asset turnover of 1.19 times, beats in the average industry benchmark of 1.10 times This also means Nascon’s operations generate N1.19 in revenues for every N1 it has in net fixed assets. Its share price has gained 137.87 percent in the past year. The company’s return on assets (ROA), increased to 19.43 percent in December 2017 from 13.29 percent the previous year.

drastically, up to half the houses and offices in Apapa have been abandoned by their owners while crime rate has risen sharply and all this has meant doom for the small businesses in the area. School population has dropped in Apapa, even at the highbrow Corona Schools located on Park Lane, while some schools have closed as the chaos by trucks persists. This may be directly connected to people deserting their Apapa homes. “Rental values in Apapa have fallen by around 30 percent in the past two years. This trend is likely to continue due to the traffic issues in Apapa,” according to a real estate agent who operates in Apapa.

Economic activities in the estimated N7.3 trillion Apapa economy have slowed as truck drivers’ road blockade has prevented customers from reaching the markets and employees from having access to their offices. The gridlock has even stretched to the surrounding environment. For the whole of last week, trailers have lined up from Mile 2 towards Oshodi on the ApapaOshodi Expressway, and also towards Festac Town First Gate on Lagos-Badagry Expressway. The ripple effects of this siege are on everybody and everywhere. “The Apapa economy is estimated to generate over N20 billion per day. To allow this kind of situation to be impacting on the economy means a lot of money is

being lost on daily basis, not only by the businesses, but also by the country,” Paul Gbadedo, group managing director, Flour Mills of Nigeria, said. According to Gbadedo, “Apapa handles about 75 percent of shipping activities in Nigeria, so both the government and businesses cannot afford to close their eyes on the scale of deterioration of the road infrastructure without doing something.” Imohimi Edgal, Lagos State commissioner of police, told the press that the ‘Operation Restore Sanity On Lagos Roads’ in Apapa was to begin during the early hours on Friday last week. Three days later, many of the trucks still remain on the roads and bridges in and around Apapa.

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Monday 23 July 2018

NEWS

Varied policy frameworks seen constraining Africa’s energy development potential MIKE OCHONMA

olicy and regulatory frameworks across Afr ica remain varied and largely constrain the development potential of the continent, international law fir m, Pinsent Masons Africa partner Rob Morson, says. Speaking at the Powe r G e n c o n f e re n c e i n Sandton, last week, Morson says the current policy and regulatory environment is not conducive to enabling Africa to leapfrog the development of its energy sector. Morson highlights that more and more Afr ican countr ies are developing regulatory frameworks around localisation and local content, and while this is a positive development, he believes these frameworks should be developed on a regional or continental basis. While the disruptive

nature of the energy industry remains positive in a sense, he explains that there are still constraints around the regulation of policy that is not allowing the continent to grow. “Policy and regulatory framework is potentially disruptive in a negative sense, but I like to think of it as a positive disruption in the sense that policy and regulatory certainty will act as an enabler and not a constraint,” he states. In his contribution, Loda Dedekind Aurecon, technical director, Engineering Company, highlighs that legislative and regulatory framework certainty will enable even micro grids to contribute to a disruptive energy network. Moreover, US-based investor-owned electric companies association Edison Electric Institute international programmes vice president, Lawrence Jones, adds that if the energy util-

ity sector is allowed to work, without intervention, because of a framework that is consistent and stable, investors will be more willing to invest in the African energy sector. He further suggests that, when integrated resource plans (IRPs) are discussed, other sectors need to also be involved in those discussions. “ W h e re w e l o o k at energy, we need to open our eyes and disrupt the process. The best person that we may need to talk to for an energy future is not necessarily the energy expert. Maybe it’s the guy who’s involved in education, or who’s involved with water,” he points out. Dedekind agrees, noting that it is the isolation of the development of IRPs that places a restriction on the industry, as well as the development of potential projects in the energy sector.

Apapa gridlock: Commuters blame security officials for worsening situation AMAKA ANAGOR-EWUZIE

part from the poor road conditions and lack of truck holdingbay for the ports, port users have blamed the disreputable activities of some security officials drafted to control traffic on major roads in Apapa, for the resurgence of gridlock in the area. They allege that only truck drivers that part with a minimum of N10,000 per truck are allowed access into the port by the security operatives, while others are detained on the already choked road. The gridlock assumed a worrisome dimension on Wednesday morning as traffic on major routes in and out of the port city came to a standstill. The stretch of traffic extended from the Tin Can Island Port end to Mile 2 with all the lanes on the ever-busy Apapa-Oshodi Expressway blocked by trucks and tankers. The Ijora Wharf end did not fare any better as trucks and tankers occupied a major chunk of the road, with the queue stretching to as far as Obanikoro on Ikorodu Road. Many motorists had to abandon their vehicles to trek long distances to get to their destinations. Further findings reveal that the resurgence of the gridlock is not far-fetched as

only those who pay certain amount of money are given the right of passage to the port. A port security officer attached to one of the terminals at the Lagos Port Complex (LPC) Apapa accused security operatives responsible for directing traffic in Apapa of turning the gridlock situation to “big business.” He said on Tuesday night for instance, only trucks belonging to Flour Mills Nigeria were allowed into the port from midnight until 5am “for reasons best known to them.” The port security officer, who spoke on condition of anonymity, said, “Apart from the bad stretch from the back of Leventis through under Marine Bridge to Ijora ascent that requires urgent palliatives, Police and Naval officials aid certain categories of people to disrupt the flow of outbound traffic. “On Tuesday night, all outbound traffic was stopped from about 23:59pm hours till 05:15am hours for Flour Mills trucks to drive one-way to their facility. “The window was used by Flour Mills to exit and take in trucks. Having being kept on hold for more than five hours, the outbound traffic had accumulated and disorganised, with all manners of queues and lanes formed, this coupled with

the bad stretch is the immediate cause of the outbound gridlock we have been witnessing.” Several road users, who expressed frustration at the gridlock, also blamed the traffic control officials for allowing the situation degenerate to the present level. Oyinlola Bakare, a staff of a shipping agency, said, “I have been here at Ijora for more than three hours. I left my house in Surulere since 6am, just to get to work before 7am. But here I am still stuck between trucks with no hope of any movement. “The Army, Police and Navy who are working on this road are not helping matters. All they do is collect money from trucks and stop those that cannot pay on the road. That is why everywhere is blocked. Government should help us. This suffering is too much.” Charles Omokaro, another road user, who also works in Apapa, said the immediate remedy to the gridlock was to stop the use of one-way by some truck drivers as it not only confered undue advantage on some truckers, but was also against the traffic law. “In addition to this, the authorities must call the security officials to order. They should stop collecting money and stop preferential treatment of trucks on the road,” he said.

Monday 23 July 2018

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COMMENT

Monday 23 July 2018

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90 [ninety] candles for Dr. J.K. Randle BASHORUN J.K RANDLE Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

• Continued from last week n the midst of our grief (but not woes) it was Archbishop Angaelos of London (The Coptic Orthodox Church UK) who admonished us and insisted that the counterforce to terrorism is love not hatred nor poison: “You are loved. The violent and deadly crimes you perpetrate are abhorrent and detestable, but YOU are loved. You are loved by God, your Creator, for He created you in His Image and according to His Likeness, and placed you on this earth for much greater things, according to His plan for all humankind. You are loved by me and millions like me, not because of what you do, but what you are capable of as that wonderful creation of God, Who has created us with a shared humanity. You are loved by me and millions like me because I, and we, believe in transformation.” At the wedding of Prince Harry to Meghan Markle on 19th May 2018 at Windsor Castle, the American preacherThe Most Rev. Bishop Michael Curry delivered a memorable sermon which has gone viral. He was followed by the Archbishop of Canter-

bury, The Rt. Rev Justin Welby. Then came the dynamite from Archbishop Angaelos: “The theme of inclusion and love didn’t end there: one of those reading the prayers was Archbishop Angaelos of the Coptic Church, invited by Prince Charles, who has been vocal in his concerns about the frequent, deadly attacks on Copts and their churches in Egypt, as well as attacks on other Christians around the world because of their faith. The musical choices, selected by the couple and Prince Charles, echoed the choices of the a s modern American classics such as “Stand by Me” and “This little light of mine” by Etta James. Ev e n the musicians had a connection: The cellist, ShekuKanneh-Mason, who’d won the BBC Young Musicians of the Year award in 2016. He received a personal invitation to play after catching Prince Harry’s attention at a charity event. Then there are the 53 floral emblems of the Commonwealth nations embroidered into Meghan’s veil—a tribute to an organization that means so much for the royal family. As the official press release stated, “The Commonwealth family of nations—of which Her Majesty the Queen is head—will be a central part of Prince Harry’s and Ms.Markle’s official work following H i s Royal Highness’s appointment as Commonwealth Youth Ambassador. Ms.Markle wanted to e x press her gratitude for the opportunity to support the work of the Commonwealth by incorporating references to its members into the

The process will involve turning ‘bad’ genes into healthy ones, eliminating dead cells from the body, repairing damaged cells, treatments with stem cells and ‘printing’ vital organs in 3D design of her wedding dress.” (For the record, Canada’s contribution was the bunchberry, Cornuscanadensis.) Afterward, everyone got what they wanted: a kiss. They stopped briefly, just outside the flower-bedecked doors to St. George’s Chapel, then it was time for the rest of Windsor to see the bride and groom. Thousands lined the carriage route around the small town as well as the grand processional Long Walk to the castle. One of those in the crowds was Marlene Koenig, an expert on British and European royalty from the Washington, D.C., area. She camped out overnight in a sleeping bag to claim a prime spot on the Long Walk. Her reward: a perfect front row photo of the happy couple as they went by. It may not be the grandest of royal weddings but it’s the one that Meghan and Harry wanted.” By a cruel iron and twist of fate, it appears our ancestors lived before their

time and died before physics and science could intercede: Headline: Death will be optional by the year 2045! “Dying will be optional within just 27 years and the ageing process will be ‘reversible’, according to two genetic engineers during the presentation of their new book in Barcelona. José Luis Cordeiro, born in Venezuela to Spanish parents, and Cambridge (UK) mathematician David Wood, founders of the operating system ‘Symbian’, have just published The Death of Death and say immortality is a real and scientific possibility that could come much earlier than originally thought. Humans will only die in accidents, never of natural causes or illness, by around the year 2045, say Cordeiro and Wood, who say it is ‘crucial’ that old age starts to be classified as an ‘illness’ so that publicly-funded research into its ‘cure’ can extend. Nanotechnology is key, among other new genetic manipulation techniques, the engineers said during the presentation at Barcelona’s Equestrian Circle. The process will involve turning ‘bad’ genes into healthy ones, eliminating dead cells from the body, repairing damaged cells, treatments with stem cells and ‘printing’ vital organs in 3D. Cordeiro, who is based at the Massachusetts Institute of Technology (MIT) in the USA, says he has ‘chosen not to die’ and that in 30 years’ time, he will be ‘younger than he is today’. Ageing is the result of DNA ‘tails’, known as ‘telomeres’, in chromosomes – of which every cell except

red blood and sex cells has 23 pairs – becoming shorter, and reversing ageing involves lengthening the telomeres. Telomeres become damaged and shortened with the passage of time, a process that speeds up in the event of toxins entering the body – smoking, alcohol and air pollution are among elements that reduce the length of telomeres, thus accelerating ageing. Cordeiro and Wood believe that within 10 years, illnesses such as cancer will be curable, and that major international corporations such as Google will be ‘entering the field of medicine’ because they are ‘beginning to realise that curing ageing is possible’. Microsoft has reportedly already announced the setting up of a cryopreservation centre in which a scientist is researching the possibility of cancer being completely curable within a decade. The engineers explain that, although ‘people generally do not know about it’, it was discovered in 1951 how cancer cells are immortal: when Henrietta Lacks died from cervical cancer, surgeons removed the tumour and kept it – and it is still ‘alive’ today. Immortality will not necessarily mean the planet becomes overcrowded, the scientists say: there is still plenty of room for more people on Earth, and these days, people do not have anywhere near as many children as they did in past decades and centuries; plus, ‘it will be possible to live in space by then’.

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“A director shall not fetter his discretion to vote in a particular way” – section 279(6) of CAMA

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

ccording to Section 279 of the Companies and Allied Matters Act (CAMA), as fiduciaries, Directors are expected to act in good faith at all times – a duty primarily owed to all stakeholders in the Company; exercise power only for proper purpose - if not, they may be liable to the Company for losses incurred; exercise care and skill – what a prudent Director would do in comparable circumstances; protect corporate property, opportunity or information; not to allow personal interests to conflict with their duties and responsibilities as Directors and not to fetter their discretion. These are statutory duties and are enforceable against the Director by the Company. Indeed to underscore the sacrosanct nature of these responsibilities, subsection 8 of Section 279 provides that “No provision, whether contained in the articles or resolutions of a company, or in any contract shall relieve any director from the duty to act in accordance with this section or relieve him from any liability

incurred as a result of any breach of the duties conferred upon him under this section”. A Director’s fiduciary duty is owed to the Company and not to the shareholders. As such, to the extent that the best interests of the Company may diverge from what is in the best interests of the shareholders, the Director must act in the best interests of the Company. A Director may not fetter his/her discretion by contracting with other Directors or with third parties to act in a certain way in the future. The duty not to fetter his/ her discretion applies regardless of whether the Director is nominated or appointed by a particular shareholder, and whether the Company is private or public. The interests of shareholders are often aligned with the interests of the Company, however, where such interests are in conflict, the Director’s duty is to the Company which has other stakeholders, including employees, creditors, regulators, etc,all of whose interests should be considered. An example of a divergence of interests is where the Board is faced with a decision to either pay dividend after five consecutive years of losses or embark on a significant upward review of employee remuneration that has been kept constant during the “trying period”. The shareholders would typically vote in favour of a dividend pay-out, whereas it could be in the best interest of the Company at the time to approve an upward review of compensation to employees who have made it pos-

sible for the Company to come out of the woods. After all, according to Richard Branson “if you can, put staff first, your customers second and shareholders third, effectively, in the end, the shareholders do well, the customers do better, and yourself are happy”. The obligation not to fetter their discretion precludes Directors from agreeing to pre-agree, the manner in which they exercise their discretion. In other words, a Director’s obligation to act in accordance with his fiduciary duties would usually take precedence over any course of conduct he/she may have previously agreed with co-directors or third parties. The ability to make independent judgement is core to the performance of the Director’s fiduciary duties. If he/she has agreed ahead of a Board meeting to vote in a particular way, it goes without saying that the Director will not be willing to consider superior argument, a contrary position or indeed fresh facts that should make the position he/she had taken ahead of the meeting not in the best interest of the Company. Shareholders on the other hand are free pursuant to a Shareholders Agreement to fetter their discretion and agree to vote in a particular way. Such a position can however only be given effect to at a shareholders’ meeting and not in the Boardroom. A nominee Director representing a Private Equity firmfor example on the Board of a portfolio company cannot fetter his/her discretion to vote in a particular way as this will not bein the best interest of the Company – even though it may serve the narrow interest of the PE firm. The Directors of

a Company incorporated under the Companies and Allied Matters Act are subject to statutory and common law fiduciary duties that transcend the duties owed by the Director to a nominator. The mere appointment as a nominee does not imply a duty to act in favour of the nominator. This comes to play in the group structure, where Directors sitting on the boards of subsidiary entities are expected to align with the position of the Group – even when such alignment may not always be in the interest of the subsidiary entity. In Hawkes v Cuddy (2009) EWCA Civ 291, Stanley Burton LJ stated that:”In my judgement, the fact that a director of a company has been nominated to that office by a shareholder does not, of itself, impose any duty on the director owed to his nominator. The director may owe duties to his nominator if he is an employee or officer of the nominator, or by reason of a formal or informal agreement with his nominator, but such duties do not arise out of his nomination, but out of a separate agreement or office. Such duties cannot however, detract from his duty to the company of which he is a director when he is acting as such … an appointed director, without being in breach of his duties to the company, may take the interests of his nominator into account, provided that his decisions as a director are in what he genuinely considers to be the best interests of the company; but that is a very different thing from his being under a duty to his nominator by reason of his appointment by it.”

Ultimately good governance hinges amongst other things on the honest communication (by way of appropriate disclosures) between Management and the Board so that everyone knows everything they need to know as well as having Directors with sound judgment and independent character able to set the appropriate tone at the top, and enforce it. Hence the increasing clamour for more Independent Directors on Boards. The independent director (who passes the true test of independence) should be able to steer the Board towards achieving some balance where there are divergent but equally legitimate interests on the Board. On Thursday, July 26th, 2018, we will be hosting a Corporate Governance Masterclass, themed “The Role of the Board in Business Sustainability” at the Fraser Suites, Abuja. Please contact ntaiwo@dcsl.com.ng or 08037699347 for further details. Confirmed Speakers at the Masterclass include: • Dr. Shamsuddeen Usman, CON, OFR • Mr. Tope Aladenusi, Partner, Cyber Risk Services, Deloitte Nigeria • Ms. Bisi Adeyemi, Managing Director, DCSL Corporate Services Limited • Mrs. Rita Obu, Managing Partner Rita Obu& Co.

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Monday 23 July 2018

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COMMENT

BUSINESS DAY

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The Apapa challenge and cosmetic solutions

ANTHONY OSAE-BROWN Osae-Brown is the editor of BusinessDay @osaeB

papa is in the news again. The tankers are all over the place. Going in and coming out of Apapa has become a daily nightmare and the spill over traffic is becoming the nightmare for everyone that makes a living in Lagos, the country’s commercial capital. The uproar over the traffic has created the usual emergency response to a perennial issue. The Police announced on Friday that it is launching “Operation Restore Sanity” to Apapa, a good ‘catch phrase’ with little meaning and relevance. The degeneration in Apapa has been with us ‘forever.’ It was a major campaign issue by the current Minister of Power, Works and Housing, Babatunde Fashola against the then Goodluck Jonathan led Peoples Democratic Party government when he was the governor of Lagos

state. Three years down the line, Fashola is now in the Presidency, Jonathan is retired to Otuoke and Apapa remains a mess. Several ‘cosmetic’ attempts have been made to clear the Apapa traffic but as soon as the media attention dies down, the gridlock creeps back. It is estimated that we lose about N20 billion daily due to the Apapa gridlock, which is the country’s premier port. Most companies inventory planning is in a mess because of the situation in Apapa. They now have to stockpile inventories or risk running out of stocks as they wait for their goods to be cleared from the Apapa ports. It now takes upward of three weeks for container trucks to get into and out of Apapa. The Apapa gridlock has also had negative impact on the Apapa business district which used to be one of the most sort after places to live and work in Lagos. Now most properties are empty and the area has largely become a ghost town. A good reflection of the situation in Apapa is seen in the Apapa Mall which is now 50 percent empty. Internationally, Nigeria is no longer a desired shipping destination because of the longer turnaround time for ships coming to the country. A 2018 Overseas Cargo and Freight Costs template showing the cost of shipping cargo from The United States to other destinations published by moverdb.com shows that cargo and freight costs from the United States (New York) to Nigeria

A 2018 Overseas Cargo and Freight Costs template showing the cost of shipping cargo from The United States to other destinations published by moverdb.com shows that cargo and freight costs from the United States (New York) to Nigeria are about the highest globally are about the highest globally. The cargo and freight costs of a 20 feet container from New York to Apapa Port is $4,982 almost twice the cost of the same 20 feet container to South Africa which will cost just US$2,542. For a 40 feet container, the cost is US$7,436, which is almost twice the cost to ship a similar container to South Africa. The higher cost to Lagos is despite the fact that New York to Lagos is just 6,516 nautical miles and will take approximately 27 days for a ship to sail the distance. The distance between New York and South Africa (Cape Town) is 9,097 nautical miles and takes a ship approximately 38 days to sail the distance. Therefore, the only plausible explanation for why it cost more to ship goods to Nigeria than to South Africa is the inefficiency that reigns at the country’s main sea port

of Apapa. Average turnaround time for ships at Apapa is now estimated in excess of 30 days, far above the average of one to two days for the most efficient ports. The face of the of the country’s inefficient port system is seen in the gridlock caused by tankers seeking to get into the ports to load their containers or the number vessels waiting on the high seas for days just to be able to unload their containers. But these are just the symptoms. Speaking with players at the ports and looking at the data shows that the issue with the ports go deeper. Over the years, the Nigerian economy has grown and expanded but access to the ports has actually shrunk. Figures from the Nigeria Ports Authority (NPA) shows that container traffic statistics at the country’s sea ports have more doubled since 2007. Container traffic coming into the nation’s ports increased from 356,551 T.E.U in 2007 to 935,309 T.E.U in 2014 before dropping slightly to 771,130 T.E.U in 2015. Within the same period, average outbound container traffic at the nation’s ports have also more than doubled from 75,399 T.E.U to 168,249 T.E.U. This ordinary should be good news as it is an indication that the economy is expanding. However, in the case of Nigeria, this has become a challenge because the infrastructure to support this growth in cargo has actually deteriorated. The major means of evacuat-

ing goods from the country’s ports are the roads, and this is mainly the Tin Can to Oshodi expressway and the Ijora to Apapa express way. Interestingly, the Tin Can to Oshodi expressway has become impassable for almost 10 years now. This has forced most trucks to start taking the Ijora to Apapa expressway where the roads are also very bad which is not surprising considering the pressure that the roads have come under. The challenge for traffic into and out of Apapa has also become worse because there is also some form of remedial repairs being carried on the only access route. But the truth is that, even if both the Ijora-Apapa and Tin Can Oshodi were in perfect condition, the growth in cargo and container traffic would have been difficult to manage. With a single road access, it is obvious that we will have the mess that Apapa has become currently. It is therefore obvious that the ‘operation restore sanity’ is not a solution to Apapa’s woes. It is an attempt to cure the symptom and leave untreated the cause of the illness. A more permanent solution would be to look for innovative ways to get the containers coming into Apapa ports out as fast as possible, the same way any efficient port will run globally.

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On the need to elect the right people for the right political offices

MOHAMMED DAHIRU AMINU Mohammed Dahiru Aminu, wrote from Cranfield, England. mohd.aminu@gmail. com

lectioneering campaigns play a central role in all multiparty democracies. Campaigns are important in bringing out the ideological positions of politicians running for different offices in the land. In the 1976 Carter-Ford televised debates in the United States, for instance, it was found that debates produced an increased political awareness in the minds of the electorate before the elections were conducted. Such debates allow citizens to have a better understanding of both the personalities and the issues involved. On the personality level, the electorate can judge candidate performance, competence and attributes; while on the level of issues, the electorate can assess how well aspiring leaders understand contemporary issues and policies bordering on present-day

challenges. Although political debates could have existed for a very long time, nonetheless, the first televised pre-election debate was instituted by the Nixon-Kennedy campaigns of 1960 in the United States, and this was since adopted by almost all Western democracies. One thing is certain—the presence of the mass media in the political system makes it the most reliable method by which verbal behaviour of candidates are documented so that their deeds in office can be used to easily hold them to account. Since the “mandate theory” of multiparty democracies hinges on the idea that the electorate choose political parties based on alternatives, the demand on if promises are fulfilled by politicians is key in evaluating the value of the democratic process. This calls for the need to elect the right people for the right public offices, all the time. There are several reasons for which a candidate can be elected to political office,and since leadership requires making the most difficult decisions, it cannot be denied that modern democracies can only function effectively if personsmanaging the highest offices in the land have the capacity for critical thought to enable them to take the most difficult decisions on governance. In correlating the capacity for effective leadership vis-à-vis the ability to make difficult decisions, German general, Kurt von Ham-

merstein-Equord, was attributed with the following words: “I divide my officers into four groups. There are clever, diligent, stupid, and lazy officers. Usually two characteristics are combined. Some are clever and diligent—their place is the General Staff. The next lot are stupid and lazy—they make up 90 percent of every army and are suited to routine duties. Anyone who is both clever and lazy is qualified for the highest leadership duties, because he possesses the intellectual clarity and the composure necessary for difficult decisions. One must beware of anyone who is stupid and diligent—he must not be entrusted with any responsibility because he will always cause only mischief.” Nigeria could be a perfect example that explains the inability of a people to forge ahead due to the absence of clever leadership enduring for several decades. In a recently televised press briefing, Nigerian politician, Datti BabaAhmed, described Nigeria’s President Muhammadu Buhari’s popularity as a political acceptance that was built and sustained not based on meaningful ideas but on “stark illiteracy” and “outright madness.” While Baba-Ahmed’s words may not be politically right as it could be too difficult to endure for those who care to be apprehended by it, perhaps due to narrow local concerns; his words, nonetheless, relates perfectly to the more general and wider issues defining the situation Nigeria is currently facing. The main message of Baba-

Ahmed’s thesis is on the eeriness of voting a person into the highest office in the land not based on his competence driven by excellent intellectual clarity, but on a supposed personal integrity. Even though the personal integrity of a leader is important, allocating absolute power to a person based on that attribute alone is problematic, and it could only be essential if that integrity is complemented by a thorough and methodical understanding of the teething troubles within the Nigerian distinct polity. For Nigeria to work for all Nigerians, it is important to construct mechanisms to check the intelligence of our leaders in the sense of how well they understand the current developments and the present and future challenges, before we give them our votes. In any event, it should be stressed that the personal integrity of a leader should only be significant as a complementary item for the leader’s ability to cause the desired outcome through productive use of resources. It should be stated that even in foremost democracies such as the United States, the extent of ideological awareness is debated to establish if the “ideology glass” (to lend the coinage of Columbia University professor of political science, Kathleen Knight) is half full or half empty. Having studied the 1980 presidential votes in the United States within what she termed the “levels of conceptual-

ization”, Knight concluded that a substantial impact on a candidate choice is created when ideological sentiment is supported by a sophistication enough to merit categorization as an “ideologue.” This doctrinaire support of a political ideology for nation building in the contemporary world is missing in the Nigerian polity. The missing ideology has led to the ignoring of the normative foundations of democratic mandates; thus, the demand that candidates for political offices are competent or not does not even arise in major party-political discourses. Since there are no set criteria (such as the official completion of a course or the conferring of a title by known practitioners as we have it in our different fields of specialization) as requirements to be met for holding political offices, the Nigerian voters seem to be very comfortable with people of least competence amongst them to emerge as their leaders. But in a democratic setting, the criteria for office is not made definite so that the voters can think; so that they can realize that they are not limited by a predetermined boundary for a reason to allow them to elect the best amongst themselves; to have leaders who can formulate the best answers to their problems. The current reality of the Nigerian polity prevents any attempt to attain a fairer, more egalitarian society.

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Monday 23 July 2018

How Nigeria can ensure financial inclusion for all

he Central Bank of Nig eria this month announced it is not on track to reach its target of increasing financial inclusion in Nigeria to 80 percent by 2020. In fact, financial inclusion in Nigeria has gone backwards. Between 2014 and 2017, the percentage of banked adults dropped nearly 4 percentage points to 39 percent, while the sub-Saharan African average increased more than 8 percentage points to 43 percent. The reason for this is clear and we have been saying it since 2014: the decision of the CBN to block telecom network operators from applying for mobilemoney licenses, rather preferring the service to be offered by banks is the main reason for the failure to drive financial inclusion in Nigeria. This went against the current trend in much of Africa that led to the inclusion of the very poor who hitherto cannot afford

to open bank accounts. Even the success of M-Pesa, a mobile payments app in Kenya with over 17 million active users and conducting more than $50 billion in cashless transactions yearly, did not convince the CBN to take the telco-led approach. The apex bank’s argument was that telcos are not licensed financial institutions and it was better for the specialists in banking to provide the services so people do not lose their money. Meanwhile, the telecom companies will provide most, if not all, the infrastructure for the scheme. With the decision to go with the banks, the telcos simply stood by and watched as banks floundered, unable to drive the take-off of digital financial services despite the presence of over 21 licensed mobile money operators in the market. Current figures show that less than 6 percent of Nigerians use their handsets for mobile money transaction, compared with 73 percent of Kenyans, where more than two-thirds of adults have a

bank account, according to the World Bank. This need not be so as Nigeria, with more than two phones for every bank account and with a teledensity of over 108% is a potential global market leader for digital financial services. It is well that the CBN is now reviewing the path it took in 2012 with a “refreshed strategy” and has also signed a cooperation agreement with the Nigerian Communications Commission to improve the penetration of financial services using mobile phones. It must however go beyond that by licensing mobile telecommunications operators to champion the drive. This way, they won’t just be providing platform for others to use but will champion it, invest in, effectively market the product and ensure their customers subscribe to it like in other climes. The anxiety over the propriety of telcos performing banking services need not arise. There are precedents Nigeria can learn from. M-PE-

SA in Kenya actually started as a product from a MicroFinance bank, which was looking for a cheap platform to reach out to its customers spread all over the country. It eventually struck a partnership with Safaricom and that led to the birth of M-PESA which is now widely used across Kenya by both the financially included and excluded. In Ghana also, the Bank of Ghana allowed the telecom companies to set up subsidiaries with own boards separate from their parent companies to provide mobile banking services. This has led to the relative success of digital financial services in Ghana. Ability to scale is crucial to the success of mobile moneyand clearly the banks cannot achieve this. Therefore, central to CBN’s new strategy should be a central role for the telcos. This is the only way to drive digital financial s er vices and ensure millions of financially excluded Nigerians are financially included.

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Monday 23 July 2018

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Monday 23 July 2018

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In Association With

World trade

Transgender rights

How to rescue the WTO The American-led trade order is in danger. But it may yet be saved

HE headquarters of the World Trade Organisation (WTO), on the banks of Lake Geneva, once belonged to the League of Nations. That ill-fated body was crippled by American isolationism. The building’s occupant today is also at the mercy of decisions taken in Washington. President Donald Trump has circumvented the WTO to impose tariffs on steel and aluminium imports, including those from America’s allies. Complaining of unfair treatment, the administration is blocking nominations to seats on the WTO’s appellate body, which could leave it unable to hear cases after 2019. Most ominously, America is embroiled in a trade war with China. Both sides have imposed tariffs on goods worth tens of billions of dollars and are threatening worse. The WTO was supposed to contain trade disputes and prevent retaliatory pile-ups. Today it appears to be a horrified bystander as the system it oversees crumbles. Free-traders are right to be deeply worried, but not yet right to despair. For the outlines of a plan to save the system are discernible. It’s the end of the WTO as we know it That might seem fanciful, given Mr Trump’s belligerence, but for two things. The first is that the president is not the only person forging American trade policy. The European Union and Japan have been talking to Robert Lighthizer, his low-profile chief trade negotiator, about WTO reform. Mr Trump’s tirades make headlines, but Mr Lighthizer wants to remake the WTO, not abandon it entirely. He could use the president’s threats as leverage to make deals. Think of it as a good cop/bad cop routine, albeit one in which the bad cop has only a faint grasp that he has been allotted the role. The second thing to understand is that the focus of much of America’s ire, China, arouses

deep suspicion elsewhere, too (see Briefing). Since joining the WTO in 2001, China has not turned towards markets, as the West expected. Instead, it has distorted trade on a scale that is far bigger than the dumping and other causes of disputes between market economies that the WTO was designed to handle. The EU and Japan share America’s desire to constrain Chinese mercantilism. China’s state-owned firms and its vast and opaque subsidies have distorted markets and caused gluts in supply for commodities such as steel. Foreign firms operating in China struggle against heavy-handed regulation, and are required to hand over their intellectual property as a condition of market access. But holding China to account is hard with the existing rule book. The reforms being talked about by the EU, Japan and America could plug many of the gaps. They would set out how to judge the scale of government distortions to the market, make it easier to gather information on wrongdoing and set the boundaries for proportionate retaliation. They would also define what exactly counts as an arm of the government, and broaden the scope of banned subsidies. And they would lower the burden of proof for complainants, which, given the opacity of the Chinese system, is too high. Even the sunniest optimist will

be able to identify the obstacles to this plan. Most obviously, why would China ever accept a reform that jeopardises its state-run economic model? Put plainly, because America could wreak havoc otherwise. It is in China’s interests to preserve the global trading order because, if China is isolated, the Communist Party cannot achieve the prosperity that cements its legitimacy. The benefits to China of its WTO membership have come not from lower tariffs in America—they were already low—but from the certainty of stable trading relationships. Its “Made in China 2025” plan to boost vital industries sounds threatening, but if China were obliged to produce everything at home, its time frame would be delayed by decades. Sure enough, China and the EU agreed on July 16th to co-operate on WTO reform (see article). Reaching a global agreement that covered every one of the WTO’s 164 members would also be extremely difficult. The last big round of global trade talks stalled over demands by developing economies such as India for more leeway to protect farmers. New negotiations may be held hostage to these old disputes. Luckily, negotiators can skip around them if necessary, by securing a “plurilateral” agreement between a group of big economies. The WTO would still enforce the terms, though

they would not apply to its other members. Last comes the greatest block to a grand bargain, Mr Trump himself. The president is a fierce critic of the WTO and a believer that bilateral deals suit American interests better. This week he called the EU a “foe” on trade. If he thinks Mr Lighthizer is manipulating him, he will strike back. And I feel slightly more upbeat than you might expect A better idea than the Trump administration’s wrecking strategy would have been to unite most of the world around a set of rules in America’s interest, forming blocs so large that China would have had to choose between compliance and isolation. That was the idea behind both the Trans-Pacific Partnership (TPP), a pact from which Mr Trump withdrew within days of taking office, and also a stalled trade deal with Europe. Wrecking strategies do not always fail, however. Sometimes they pay off handsomely. A WTO fit to handle complaints about unfair competition would be a gift to the world. The genius of the rules-based system is that it has torn down barriers by persuading producers that the prize of access to foreign markets is worth the accompanying global competition. When that competition is deemed lawless, political support for free trade withers. A world in which China is pursued by its critics through the WTO, and faces proportionate retaliation when necessary, is far preferable to one in which a tit-for-tat trade war can escalate without limit. Mr Trump is hard to predict. He may yet abandon the WTO. If he does, other powers will probably go on building links and writing rules—witness the trade deal that the EU and Japan signed this week. But if Mr Lighthizer is able to present Mr Trump with an agreement that the president likes, the world trading system may yet be saved. It might even be improved.

A culture war comes to Westminster Both the Conservatives and Labour agree on trans rights. Now they just have to convince the voters

ITH a wince, Theresa May said she was sorry. Asked about her record on gay rights, the prime minister apologised for refusing to support the repeal in 2003 of a law which banned teaching children “the acceptability of homosexuality as a pretended family relationship”. A year earlier she had voted against adoption by gay couples. Yet today, “I want to be seen as an ally of the LGBT community,” said the prime minister. “We want a country where people are able to be open about who they are, who they love and how they identify.” The Conservative

Party, once a generator of anti-LGBT laws, has belatedly wrapped itself in the rainbow flag. Mrs May was speaking at the launch of a consultation on reforming the Gender Recognition Act, which dictates how people can change their legal gender. Supporters of reform argue that the current system is slow and demeaning. To obtain a Gender Recognition Certificate, a person must have spent two years in their new gender. They need a doctor’s diagnosis of gender dysphoria, must submit medical reports, sign a legal undertaking and pay £140 ($185). Only 4,910 people have bothered since 2004, when the law came into force. The government wants the process to be “streamlined and de-medicalised”. Beyond that, details are thin. But the destination is clear: a looser regime. “Trans women are women; trans men are men,” Penny Mordaunt, the minister in charge, told Parliament. Labour supports the plan to liberalise the law, criticising only the government’s sluggishness. Normally, unanimity in the House of Commons is reserved for unconContinues on page 15

Monday 23 July 2018

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In Association With

A culture war comes to...

Transatlantic rift

The Western alliance is in trouble

Continued from page 14

That should worry Europe, America and the world

MERICA did as much as any country to create postwar Europe. In the late 1940s and the 1950s it was midwife to the treaty that became the European Union and to NATO, the military alliance that won the cold war. The United States acted partly out of charity, but chiefly out of selfinterest. Having been dragged into two world wars, it wanted to banish Franco-German rivalry and build a rampart against the Soviet threat. After the Soviet collapse in 1991, the alliance anchored democracy in the newly liberated states of eastern Europe. Today, however, America and Europe are separated by a growing rift. The mood before the NATO summit in Brussels on July 11th and 12th is poisonous. As President Donald Trump accuses the Europeans of bad faith and of failing to pull their weight, they accuse him of crass vandalism. A second summit, between Vladimir Putin and Mr Trump in Helsinki on July 16th, could produce the once-unthinkable spectacle of an American president treating his Russian opponent better than he has just treated his allies. Even if the two summits pass off without controversy—as they might, given how Mr Trump delights in confounding his critics— the differing priorities, divergent beliefs and clashing political cultures will remain. The Western alliance is in trouble, and that should worry Europe, America and the world. Every alliance has its tensions, but the Western one is strained on a bewildering number of fronts (see article). Mr Trump, and his generals, are exasperated by the feeble efforts of many NATO members to honour their promise to raise defence spending towards 2% of GDP by 2024. The American right tends to condemn European support for the Iranian nuclear deal (which Mr Trump quit), and what it sees as a bias against Israel. And policymakers from both parties think that, as the world’s attention shifts to Asia, whining, sanctimonious Europeans deserve less of their time. As if that were not enough, Mr Trump fatuously accuses the EU

of being “set up to take advantage of the United States” and chastises it for unfair trade. Meanwhile, Europe is divided. Italy has a new populist coalition that is proPutin. So, increasingly, is Turkey, a member of NATO (but not the EU) which is hostile to the liberal democratic values that bind the alliance. Worse could be in store. A Labour government in Britain under Jeremy Corbyn, who has a long history of opposing the use of arms by the West, would treat America with deep suspicion; he could even try to leave NATO. SACEUR punch This newspaper believes that the Western alliance is worth saving. In a dangerous and increasingly authoritarian world, it can act as a vital source of security and a bastion of democracy. But the alliance does not have a Godgiven right to survive. It must continually earn its place. The question is: how? The first step is not to make the job harder. Europe should do everything it can to resist Mr Trump’s instinct to lump trade with security. Wrapping them up together will only make the West less secure as well as poorer. Next, supporters of the alliance need to be practical. That means paying up. Mr Trump is right to complain about countries like Germany and Italy, which spent just 1.22% and 1.13% of GDP on defence in 2017. Indeed, he could go further. Too little of defence spending is useful—over a third of Belgium’s is eaten up by pensions. More should go on

R&D and equipment. For America’s allies, being practical also means keeping up. Collaboration in areas like cybersecurity will make the alliance more valuable to America. More urgently NATO must continue to sharpen its response to the tactics of misinformation and infiltration that Russia used in Crimea and eastern Ukraine. Politics waxes and wanes. Lost military understanding is hard to rebuild. Exercises that cement NATO’s remarkably close working military relations are more vital than ever. And being practical means sticking together. Negotiating over Brexit, the EU is minded to shut Britain out of the union’s security structures because it will no longer be a member. Given Britain’s military experience, its arms industry and its intelligence agencies, that is self-defeating. Instead, the EU’s members should seek to bind Britain in by, for example, promoting the European Intervention Initiative, proposed by France, which aims to create a force that can act in crises. Once America would have seen such a plan as a threat to NATO. Today it would stand both as insurance and as a sign that Europe is willing to take on more responsibility. Fighting for the mind Last is the battle of ideas. If NATO and the EU did not already exist, they would not be created. Since the Soviet collapse, the sense of threat has receded and the barriers to working together have risen. Yet that does not make

the transatlantic alliance “obsolete”, as Mr Trump once claimed. America’s alliances are an asset that are the envy of Russia and China. NATO is an inheritance that is all the more precious for being irreplaceable. The need for security remains. Russia is not the Soviet Union but, as a declining power, it feels threatened. It has modernised its forces and is prepared to deploy them. The need to anchor European democracy remains, too. As authoritarianism creeps up on Poland and Hungary, the EU and NATO can once again help limit its advance. And there is the extra benefit of how Europe helps America project power, by providing bases, troops and, usually, diplomatic support. NATO is more fragile than Mr Trump thinks. At its core is the pledge to treat an attack on one member in the North Atlantic region as an attack on them all. His vacillation and his hostility to Europe weakens that promise, if only because it reveals his scorn for the idea that small countries have the same rights as big ones. Asia is watching, as is Mr Putin. The more Mr Trump bullies his allies, the more the world will doubt America’s security guarantees. Because great powers compete in a grey zone between peace and war, that risks miscalculation. Mr Trump believes he is a master negotiator in pursuit of a stronger America. With Europe, as with so much else, he gravely undervalues what he is giving up.

troversial topics. This time, Labour and the Tories have ended up on the same side of a brewing culture war. The consultation exercise has provoked complaints that women-only spaces, from toilets to domestic-abuse shelters, could become vulnerable to sexual predators if rules are loosened too much. Supporters of reform argue that single-sex spaces are protected by the Equality Act, and that trans people could still be excluded if necessary. The consultation will examine whether changing rules on gender recognition would affect these protections. The row is bitter. Insults fly online. One offline debate ended in assault. Women wearing fake beards invaded the men’s bathing pond at Hampstead Heath, to protest against trans women’s use of the ladies’ pond. Arguments have erupted over changing rooms, all-women MP shortlists and even the cabin arrangements of the Caledonian Sleeper train. The viciousness stems partly from a difference between trans rights and other social-justice movements. Most of the opposition to changing the law has not come from the authorities, as in the gay-rights movement. Instead, the main struggle is with women, who argue that their own interests are jeopardised by the reforms. That the government has waded into such a controversial area has left some MPs perplexed. For most voters, trans rights fall low on the agenda. Data are poor, but by the government’s rough estimate 200,000-500,000 trans people live in Britain. “Most people now know a gay person,” says Benjamin Cohen, chief executive of Pink News, a website. “But almost no one knows any trans people.” The Tories, however, are keen to atone for their past mistakes on LGBT rights, and to shake off an illiberal reputation. At last year’s election the party lost support in metropolitan areas, undoing a decade of patient work by David Cameron to woo socially liberal voters. Enacting gay marriage was one of the main achievements of his six years in office. Some Conservative MPs suggest that improving the lot of trans people would win back lost votes.

BUSINESS DAY

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Monday 23 July 2018 In Association With

Françafrobeat

Emmanuel Macron pays tribute to Fela Kuti, a Nigerian musician But it wasn’t all singing and dancing

HE old Afrika Shrine, a music venue in Lagos, the commercial capital of Nigeria, was burned down by soldiers in 1977. Its founder, the late Fela Kuti, a musical megastar, had called them “zombies” in a song. The soldiers beat Kuti badly and threw his mother from a first-floor window. But Kuti’s children, Yeni and Femi, rebuilt a nearby venue in 2000. Ever since, the New Afrika Shrine has attracted hip Nigerians and expats, including a young Emmanuel Macron, who once worked as an intern in the French embassy in Abuja. Mr Macron, now president of France, seems to have developed an attachment. When visiting Nigeria on July 3rd he went out of his way to visit the nightclub, known for its gyrating dancers and counterculture vibe. “What happens in the Shrine remains in the Shrine,” Mr Macron told the unusual crowd. Musicians,

artists and stars from the Nollywood film industry drank champagne with government dignitaries, few of whom had ever visited the club. (The day before Mr Macron’s visit, the potholed road to the Shrine was blocked by steam rollers pressing hot new tarmac.) Fela Kuti is best known in

the West as the king of Afrobeat, which mixes African music with jazz, soul and funk. But across Africa many people also remember him as the self-styled “Black President”, an anti-establishment musician who wrote protest songs and was a thorn in the side of Nigerian military regimes until his

death in 1997. Nigeria’s current president, Muhammadu Buhari, was head of a military government that threw Kuti in jail in the 1980s. At the time, Amnesty International listed him as a prisoner of conscience and campaigned for his release. For Mr Macron, it may have been astute politics to honour a musician who had slammed former colonial powers with lyrics such as: “Colomentality…De ting wey black no good” (roughly: “Colonial mentality says anything black is no good”). A year ago he was criticised for saying that Africa’s problems were “civilisational”. This visit was not all fun. Whereas France previously focused mainly on relations with French-speaking Africa, Mr Macron is trying to strengthen ties with Anglophone countries. Before visiting the Shrine, he met Mr Buhari and promised

to help him fight Boko Haram, a jihadist group that uses children as suicide bombers. France has about 4,500 troops conducting counter-terrorism operations in Africa, mostly in French-speaking countries in the Sahel. Mr Macron warned of growing ties between jihadist groups in the Sahel and Boko Haram. “The challenge for us is to manage the conflicts…and stop them joining together.” As the dignitaries left in their big cars in the early hours, the Shrine’s young regulars—fat joints in hand and demanding entry after being locked out of the party—forced their way through the turnstiles. Many may well have had some of Kuti’s lyrics on their mind. Of the colonial elites, he sang: “Dem go turn air condition/ And close dem country away” (“They will turn on the air conditioning/ And suck the life out of the country”).

The coming storm

A court with a solid conservative majority could reshape American life Here’s how

HEN Anthony Kennedy announced his retirement from the Supreme Court on June 27th, Democrats rushed to the barricades. “This is the fight of our lives,” announced Senator Elizabeth Warren of Massachusetts. Senator Kamala Harris proposed delaying confirmation hearings for Mr Kennedy’s successor until after the next election, which falls in November 2018, just as Mitch McConnell, the Senate majority leader, did with Barack Obama’s nominee in 2016. In practice, Democrats cannot stop Mr Trump from placing his second justice on the country’s highest court. Mr McConnell is serenely untroubled by the precedent he set, and President Donald Trump plans to announce his nominee on July 9th. When the nominee is confirmed in the autumn, he or she should cement a reliable conservative majority that could, among other things, make abortion less accessible and federal agencies less powerful, though not quite in the way that many seem to expect. The next justice will almost certainly be young (Mr Trump talked of wanting his nominee to serve for 45 years) and farther to the right than Mr Kennedy, a libertarian conservative whose moderate social views made him the court’s swing vote. Predicting a jurist’s voting patterns used to be harder. David Souter, appointed by a Republican (George H.W. Bush), became a reliably liberal jurist. Hugo Black, a former Klansman from Alabama, ruled school segregation unconstitutional. Today’s Republican appointees, though,

grounds could find their actions protected, for example. What was once the law of the land could end up applying only in some places. A Kennedy-less court would probably be less hospitable to all sorts of regulation. The Affordable Care Act looks secure for now, because the block that upheld it (Mr Roberts and the court’s four liberals) remains intact. But conservative jurists are sceptical of the doctrine known as Chevron deference, which tells courts to defer to government agencies in their interpretations of ambiguous statutes, as long as they are reasonable. Conservatives complain that, in effect, this lets agencies make laws as well as enforce them, usurping power that properly belongs to Congress.

come up through a conservative legal pipeline that was in its infancy a few decades ago. They have reliable paper trails and are thoroughly vetted. Republicans have learned the “no more Souters” lesson. To shore up his standing with white evangelicals, the president released lists of potential nominees during the campaign, and has met at least seven people on those lists, though Mr Trump, an inveterate showman, may choose someone else entirely. The president has stoked Republican hopes by musing about the Supreme Court overturning Roe v Wade, which found that a constitutional right to privacy protects a woman’s decision to terminate her pregnancy. That seems unlikely. It would be political self-harm, galvanising the left

while removing a longtime inspiration for religious conservatives. Justices also tend to dislike simply overturning past rulings (though the court’s five conservatives, including Mr Kennedy, displayed no such squeamishness in a recent case that overturned decades of precedent to weaken public-sector unions). Nothing seems to fit The court need not explicitly overturn Roe to functionally outlaw abortion, though. It could simply approve onerous state-level restrictions. In 2016 Mr Kennedy voted with the Court’s four liberals to strike down, as an undue burden on a constitutional right, a Texas law requiring that abortion providers have the right to send their patients to nearby hospitals

and that abortion clinics have similar facilities to surgical centres. Several similar cases are wending their way through the federal-court system. Under a more conservative justice, abortion may not become explicitly illegal, just inaccessible in many states. A similar pattern may hold for gay rights, a cause that Mr Kennedy helped not just with his rulings on gay marriage, but going back to 1986, when he struck down a Colorado law that would have exempted gay people from anti-discrimination protections. Here, too, the risk is less that his successor renders gay marriage illegal than that the court permits various religiously inspired opt-outs. State clerks who refuse to sign marriage certificates for same-sex couples on religious

Monday 23 July 2018

C002D5556

BUSINESS DAY

Monday 23 July 2018

CityFile

Flood: 60 houses still in ruins in Niger

brahim Inga, the director general of Niger State Emergency Management Agency (NSEMA) says over 60 houses are yet to be reoccupied after the July 2 heavy rainfall which wreaked havoc at Rafin-Gora and Anguwan Gangare Saji in Kontagora local government area of the state. Ten persons had reportedly lost their lives in the flood and over 60 houses destroyed. Inga said that the agency had carried out an assessment of the affected persons and a comprehensive report had been submitted to the state governor for relief materials. He said the state government had donated N5 million during a joint condolence visit by members of the state executive council and the legislature to victims. According to Inga, the donation would cushion the effects of the disaster, pending when relief materials would come from the government. The director general noted that government was concerned about the welfare of the people, especially those affected by disasters, adding that relief materials would soon be provided for the victims.

Why frequent accidents occur on Badagry-Seme road

he Badagry unit of Federal Road Safety Corps (FRSC) has identified driving against traffic and overloading as some of the major reasons for the spate of accidents being recorded on the Badagry-Seme expressway. Fatai Bakare, the unit commander said in Badagry that the drivers on the route were often apprehended for was reckless driving. “Badagry is a border area, so there is high vehicular movement in that axis. Many of them tend to drive recklessly and this causes accidents in the area. “Overloading is another frequent traffic offence, but the command carries out various enlightenment programmes to advise the public on the need to desist from such practices. “Our officials are always located at strategic places to check and correct traffic offenders so as to limit all forms of traffic violations,’’ he said. Bakare said that the corps has provided the necessary tools for its officers to perform their duties effectively.

A flooded section of Lafia-Akwanga highway in Nasarawa State on Friday. NAN

Bayelsa communities lament blockage of waterway by exhumed oil pipeline SAMUEL ESE with agency reports

esidents of Amazor and Aghoro communities in Ekeremor local government area of Bayelsa affected by oil spillage have lamented blockage of their waterway by exhumed pipeline. An oil leakage occurred on May 17 at an oilfield operated by Shell Petroleum Development Company (SPDC). The residents told reporters in Yenagoa that the waterway was blocked by the Trans-Ramos oil pipeline following the on-going Joint Investigation Visit (JIV) by the giant oil firm. Itoko Edwin, a traditional ruler in Amazor, said the spill which was still gushing out in some points has also affected Amazor community where more fishing settlements and sources of water have been damaged. Edwin, also chairman, Community Development Committee (CDC), said

the waterway blocked by the exhumed pipeline was hampering economic activities of the people as they can no longer transport their goods and wares. “The Joint investigation Visit (JIV) by the SPDC on the spillage has commenced, but some exhumed pipeline have blocked the surface of our water which is the only route to our market and farmlands. “It is very difficult now because we cannot have access to the farms. The sources of water have also been destroyed; we urged Shell to expedite action in dealing with the oil spill in the area and bring relief to the victims,” Edwin said. Bamidele Odugbesan, the media relations manager of SPDC, had recently said that a JIV to the affected communities were underway to investigate the cause of an oil leak. According to Odugbesan, the oil firm has convened a joint investigation team to visit the area. He, however, expressed regret that the rains and swampy nature

of the area were hampering the spill response operations. Meanwhile, the Oil and Gas Producing Areas Enlightenment and Empowerment Initiative (OGPAEEI), a civil society organisation, has urged SPDC to extend the investigation to some newly affected communities. Jackson Collins, president of the organisation, listed the new affected communities as Amazor, Wisdom City Zion and Donseimor Ama. “While the affected creeks are Fonkoro, Zeinkiki and Ekpanagbai, among others; some of the fish settlements include Tutu gene, Selekeye gene and Tebeyai, among others. “Shell need to be proactive in the ongoing investigation and try to reach out to the affected areas that have not been reached; they are suffering, no sources of water, farmland destroyed and waterway has also been blocked,“ he said. Preliminary findings had linked the oil leaks to corroded pipelines.

Court restrains trade group from 34,000 Cameroonian refugees in C’River, says SEMA forcing traders to join BOLADALE BAMIGBOLA, Osogbo

he Federal High Court in Osogbo, Osun State has restrained the West Agro Input Dealers Association (WAIDA) from forcing members of Artisans, Peasants and Traders Association of Nigeria (APTAN) or any other persons to join WAIDA against their will. It also ordered WAIDA to pay a sum of N200,000 for the expired agro chemical products confiscated from one Abdul Ganiy Adebayo, in addition to awarding a sum of N500,000 as damages. In a 12-page judgment, Justice M. A. Onyetenu ruled that WAIDA and its members violated the rights of one AbdulGaniy Adebayo, an APTAN member, for confiscating his wares after refusing to join WAIDA. Onyetenu ordered the association,

represented by its leaders, Kolade (aka Baba Kolade and Rafiu Olaniyi, to release to the 3rd applicant, Abdul Adebayo, his confiscated products. She also ordered the respondents to pay the market value of any of applicant’s goods which expired in their possession within seven days. “The respondents are hereby ordered to pay the sum of N500,000 jointly and severally to the applicants as damages to the breach of the applicants’ rights. “The respondents, their agents, servants, privies or any persons claiming from them or through their groups of persons or association are hereby restrained from further harassing, intimidate, threatening, and disturbing the applicants or any member of the applicants’ association from selling agro chemical products or any other lawful trade in Osun State of Nigeria”, the judge said.

ross River State Emergency Management Agency (SEMA) on says over 34,000 Cameroonians are currently taking refuge in six local government areas of the state. John Inaku, the director general of SEMA, disclosed this in Calabar, the state capital, at the weekend. Inaku said that the inflow was as the result of the crisis in Cameroon over the demand for Ambazonia Republic by the Southern Cameroonians. According to Inaku, the asylum seekers are currently taking refuge in Obudu, Boki, Ikom, Etung, Akamkpa and Obanliku local government areas of the state. “So far, we have 34,000 Cameroonian asylum seekers spread across six local

government areas in Cross River. About 21,000 of them have been documented by the United Nations High Commission on Refugees and the National Commission for Refugees. “As an agency, we go into the interior areas that have not been accessed by these organisations and holistically, we have 34,000 of them already on ground,’’ he said. The director general said the state government was doing its best to provide succour to the refugees, adding that the increasing number was too heavy for the state government alone to handle. He appealed to the National Emergency Management Agency (NEMA), corporate organisations and other humanitarian agencies to offer their support to the refugees.

Monday 23 July 2018

C002D5556

BUSINESS DAY

Live @ The Stock Exchange DMO lists N10.69bn FGN Sovereign Green Bond on NSE Nigerian Stock Exchange tion’s funding options to said Oscar Onyema, chief the NDCs targets in sight lifts suspension in shares of Stories by catalyse the rebound of the executive officer, Nigerian and lays the foundation for Iheanyi Nwachukwu the expansion of the Fedeconomy and offer the vast Stock Exchange. majority of Nigerians, a new Oniha in her statement eral Government’s Green Royal Exchange

he Debt Management Office (DMO) last Friday July 20, 2018 listed the N10.69billion, 5-year, Federal Government Sovereign Green Bond at coupon rate of 13.48percent on the Nigerian Stock Exchange (NSE). On the same day, the NSE also held a pre-listing conference for market participants, themed, ‘Exploring the Green Financing Opportunity: Green Bonds and Enabling Frameworks’ to highlight the opportunities available within the Green Bond market in Nigeria. The event had in attendance about 200 market operators, government officials, clevel executives, as well as top officials from the academic and sustainability sector. The event was headlined by Pat Oniha, Director General, DMO, Ibrahim Usman Jibril, Minister of State for Environment, and Amina J. Mohammed, United Nations Deputy Secretary General, represented by Edward Kallon, UN Resident/Humanitarian Coordinator and UNDP Resident Representative. The Sovereign Green Bond is part of a strategic process by the Federal Government to add to the na-

alternative. The listing of this Sovereign Green Bond, which is the country’s first ever certified green bond and the first in an emerging market, is a testament to NSE’s continued vision of pushing green finance and more broadly, the sustainable development agenda in Nigeria. Parties to the transaction include the Ministry of Environment, the Debt Management Office and Chapel Hill Denham as the financial advisers to the transaction. “Admitting the first ever sovereign green bond in an emerging market is yet another milestone for the Exchange and is a further affirmation of our unique platform to support both the Federal Government and businesses to access capital for sustainable initiatives. The listing of the FGN Green Bond represents a new stage in the development of Nigerian capital markets and opens the way for further corporate issuance and international investments. As a member of the UN Sustainable Stock Exchange Initiative, we are committed to developing this enormous opportunity for Nigeria,”

during the listing ceremony stated that, “The Green Bond Listing is an opportunity to enable Nigeria tap into the growing global market for green bonds, which as of end of 2016 comprised of $576billion of unlabeled climate aligned bonds and $118billion of labeled green bonds according to Climate Bonds Initiative in London. The DMO is proud to list the N10.69 billion FGN Green Bond 2022 on the NSE and expects that trading this instrument will not only bring about Climate Change Awareness but will also diversify the Nigerian Capital Market and attract more investors”. Also, in his speech, the Minister of State for Environment said, “The Sovereign Green Bond further reinforces Nigeria’s reemergence as a major player in the international climate regime, and President Muhammadu Buhari’s strides in moving Nigeria towards being a lowcarbon economy. The issuance of a Green Bond by Nigeria delivers on program 47 of its Economic Recovery and Growth Plan (ERGP), in addition to meeting the expectations set out in Article 2 of the Paris Agreement. This places progress on

Portland Paints optimistic of maintaining positive trends

ortland Paints and Products Nigeria Plc, a subsidiary of UAC of Nigeria Plc has assured its shareholders that its 2018 focus will be to consolidate and build on the gains achieved in 2017, especially in the execution of “our route to market strategy as well as new business development initiatives”. Larry Ettah, chairman, Portland Paints and Products Nigeria Plc who said this at the company’s Annual General Meeting (AGM) in Lagos said “we will also expand our footprint in the marine and protective coating space in the Nigerian oil and gas sector.” At the meeting, the shareholders received and approved the report of the directors, the audited financial statements of the company together with the reports of the auditors and the audit committee for the year ended December 31, 2017. Although, Nigeria’s operating environment may remain challenging in 2018, Portland Paints and Products Nigeria Plc is determined to ensure it optimises the opportunities therefrom to achieve its set business objectives. “I am happy to report

that our business repositioning drive has led to improved performance of your company in the year 2017. Your company recorded a revenue of N2.32 billion, which represents 26percent growth over the N1.971 billion recorded in the previous year. The company’s Profit After Tax (PAT) was N58.17 million, which is a major improvement on the N8.6 million recorded in 2016. We are optimistic of maintaining this trend in 2018, which will further consolidate our company’s resilient position,” Ettah said. He spoke of the impact of the rights issue undertaken by the Company, saying: “we successfully accomplished the company’s rights Issue with 65.6percent subscription. This capital injection enabled the business to liquidate its major interest bearing loans as well as improve its working capital’’. On the outlook for 2018, the Chairman emphasized that the Company will consolidate on the gains achieved so far and focus on the execution of its route to market strategy as well as new business development initiatives. According to

him, the Company will also expand its marine and protective coatings space in the Nigerian Oil and Gas Sector. He also highlighted the moves by the Company to reverse the trend in the business, stressing: “The year 2017 started with a challenging operating environment. In the first half of the year, the economy witnessed scarcity and high cost of forex which culminated into shortage and high cost of raw materials input, leading to inability of businesses to meet their customers’ commitments. Despite these challenges, your company made some bold moves in expanding its customer base, engaged and improved the relationship with industry professionals, as well as worked to get specified on new projects.” The Chairman also announced changes on the Board of the Company with the resignation of Bayo Osibo with effect from 4th October 2017 and the appointment of Adedamola Olusunmade as the new Managing Director/ CEO. Olusunmade succeeds Mukhtar Yakasai, who has taken another appointment within the UACN group, while he remains as a nonExecutive Director on the Board of Company.

Bond Issuance Program on a recurring basis.” The Green Bond issuance and listing follows Nigeria’s endorsement of the Paris Agreement on Climate Change on September 21, 2016. The Paris Agreement aims to strengthen the global response to the threat of Climate Change. Since the signing of the Agreement, various countries that are parties to the Agreement have initiated several steps aimed at making the environment better. It will be recalled that, NSE, in collaboration with Federal Ministry Environment, Federal Ministry of Finance and Debt Management Office hosted a high profile conference themed “Green Bonds: Investing in Nigeria’s Sustainable Development” in 2016 that provided an opportunity for the government to engage the capital market stakeholders. The conference was a major step towards the issuance of Nigeria’s first sovereign green bond.

he Nigerian Stock Exchange (NSE) has notified investing public of lifting of suspension earlier placed in the shares of Royal Exchange Plc. In a market bulletin dated July 20, 2018 signed by Godstime Iwenekhai, head, listings regulation department, the Nigerian Stock Exchange referred to its market bulletin dated July 5, 2018 where it notified the public of the suspension of eight (8) listed companies for noncompliance with Rule 3.1, Rules for Filing of Accounts and Treatment of Default Filing, Rulebook of The Exchange (Issuers’ Rules) (“Default Filing Rules”). The Rule provides that; “If an Issuer fails to file the relevant accounts by the expiration of the Cure Period, The Exchange

will: send to the Issuer a “Second Filing Deficiency Notification” within two (2) business days after the end of the Cure Period; suspend trading in the Issuer’s securities; and notify the Securities and Exchange Commission (SEC) and the market within twenty- four (24) hours of the suspension.” The NSE further noted in its bulletin that Royal Exchange Plc which was one of the companies suspended has submitted its audited financial statement for the year ended December 31, 2017. In view of the submission of its accounts and pursuant to Rule 3.3 of the Default Filing Rules the general public was notified that the suspension earlier placed in the trading of the Company’s shares has been lifted effective Friday.

BUSINESS DAY

C002D5556

Monday 23 July 2018

BUSINESS

COMPANIES & MARKETS

DAY

Great Nigeria Insurance sets October timeline to delist from NSE

Pg. 22

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

Revenue of US firms in Nigeria hits N2.6trn as FDI reaches $1.3bn ….pay N111bn in taxes ODINAKA ANUDU

he United States companies in Nigeria, ranging from GE to PwC, made N2.6 trillion in 2017 as against N1 trillion reported in 2016, according to a report conducted by the American Business Council (ABC), sponsored by Dow Chemical. The report says that Foreign Direct Investment (FDI) inflows from the US into Nigeria were $1.3bn in 2017. The survey, carried out on 74 American firms, discloses that US firms in the country paid a total of N111 billion in taxes in 2017 as against N34 billion in 2016. However, the 2016 report dealt with only 48 firms, while 2017 was based on the survey of 74 companies. Another interesting aspect of the report is the total spend on training. The US firms invested over N1.6 billion in training in 2017 as against N340 million in 2016. More so, they pumped N1.5 billion into Corporate Social Responsibility (CSR) last year as against N217 million the previous year. The report discloses that the CSR programmes em-

barked upon by US firms in 2017 were in key sectors such as health (provision of medical equipment for primary health centres; medical missions); education (scholarships for university undergraduates); infrastructure ( building of classrooms as well as youth and sports centres), and social intervention (monetary donations to charities, NGOs, community development trust funds). The US companies created over 9,000 direct jobs and 11,000 indirect jobs in 2017, says the report, adding that 52 percent of the firms identified Nigeria as a regional hub for their operations in West Africa. Also, 64 percent of the firms have a local content target, which is reflected on areas such as products, people and supply chain, the report states. “We share in the aspirations of Nigeria,” said Lazarus Angbazo, president of ABC and chief executive of GE Nigeria, at a press conference in Lagos. “We take a long-term bet on Nigeria. Virtually all the companies in ABC have been here for decades and share in the basis consensus of development of Nigeria,” Angbazo said. He stated that American companies in Nigeria were not

afraid of the upcoming elections as they shared in Nigeria’s dream regardless of who was president. He further stated that US firms in Nigeria had shown that they were good corporate citizens, based on their level of commitment and expenditure on CSR, adding that GE col-

rowth and Development Asset Management Limited (GDL) has signed the Initial Public Offering (IPO) of N1 billion units of N10 each at par in the GDL Money Market Fund. The fund is an open-ended fund constituted under a Trust Deed and will invest in money market instruments such as treasury bills, bank placement and commercial papers. The fund seeks to maximise return on invested capital in a coordinated and risk averse manner consistent with the preservation of capital and the maintenance of liquidity by investing exclusively in investment grade money market instruments introduced and duly approved by the Central Bank of Nigeria (CBN). Speaking to journalists after the signing ceremony, Kola Ayeye, managing director/CEO, GDL said the money market fund is approved by the Securities and Exchange

Commission (SEC) and it is beneficial for retail investors, individuals and High net worth individual (HNIs) as it affords them the opportunity to diversify. “So you have the opportunity of funds which are under professional management, diversification and the professionals managing the fund have an eye on where the interest rates are going, so they make informed choices. Hopefully, the returns should be slightly better than if the owners of the fund are managing it themselves”, Ayeye said. Furthermore, he said “the approved outlets are treasury bills eligible bank placement and triple in commercial papers. The money is very safe. Investors in this fund can go and sleep. This is not a risk fund. This fund does not take risk. The benefit it gives investors is diversification. This fund helps you to achieve safety and diversification and a strong yield”. He explained that the other segments of the market is going

(poor preparations of school leavers for the labour market), specific industry regulations, local content, as well as crime and security. “US companies are optimistic and bullish in doing business in Nigeria,” McGraw said, adding that there had not been a better time to do busi-

ness in Nigeria. Margaret Olele, CEO/ executive secretary of ABC, stated that most US firms saw CSR as a strategic plan. Raph Ozoude of UPS stressed the need to train Nigerian graduates in a way that they could be ready for the demands of the labour market.

L-R: Ibeawu Chamberlain, managing partner, ZDesign and Development Consulting Limited; Simon Bromfield , territory manager, AUTODESK Incorporated; Vijay Rains , senior technical sales specialist, and Louis Iwegbuna, business development manager, at Autodesk Futures’ Forum in Lagos. Pic by Pius Okeosisi

GDL offers N1bn money market fund to investors HOPE MOSES-ASHIKE

laborated with UNICEF in 2017 on the rehabilitation of internally displaced persons (IDPs) in the north-eastern Nigeria. According to Darrell McGraw, vice president of ABC, the major challenges faced by US companies in Nigeria in 2017 were labour issues

south and if the riskier segment of the market for example, equities are going south and people are leaving equities, they can’t leave their money under their mattresses. “I will think that when the equities market is down, the money market becomes more compelling. I think that makes the timing most appropriate”. By pooling of funds together, the fund presents the advantage of enhanced bargaining powers in the financial market such as minimised transaction costs. Unit holdings in the fund may be used as collateral for obtaining credit facilities from various financial institutions. As an open-ended fund, it will be opened to investors for subscription through the fund manager after the full subscription of the initial 100,000,000 units issued. As a result, the fund manager will issue additional units when required, with the consent of the Trustees, subject to the registration and approval of the units to be offered by the SEC.

Financial transactions by internet, mobile phones to hit $3b by 2020

inancial transactions across made via the internet or a mobile phone are expected to grow from $200 million at the moment to an eye watering $3 billion by 2020 Close to $100 million of fundraising has been injected already in 2018 into Africa’s bourgeoning fintech and mobile payments sector, with a significant amount of capital still to be deployed this year, and prospects for the sector looking bullish, according to telecom, media and tech news and events company, TMT Finance. Joseph d’Arrast, EMEA Editor at TMT Finance said: “The increasing demand for payment transaction and lending services are attracting investment from mobile operators, banks and international funds, all jostling to position themselves across the continent. These new initiatives also achieve inclusive goals set by international development

finance institutions, which have been joining multiple fundraisings over the last twelve months.” Demand for services are also tipped to see a large uptick: financial transactions made via the internet or a mobile phone are expected to grow from $200 million at the moment to an eye watering $3 billion by 2020, according to a recent report by pan-african banking group Ecobank. Regulation, access to re-

liable and affordable internet and the development of blockchain are also all key topics affecting Africa’s Fintech sector, according to d’Arrast. “We expect B2B lending platforms and antifraud startups to attract most interest from investors. Venture capital funds are playing an important role – both local firms and international investors often originating from Europe or the USA” he said.

BUSINESS DAY

C002D5556

Monday 23 July 2018

COMPANIES & MARKETS

he Board of Great Nigeria Insurance Plc (GNI) has set a timeline of approximately three months for the company’s voluntary delisting from the Nigerian Stock Exchange (NSE). At its forthcoming ExtraOrdinary General Meeting (EGM) on Wednesday July 25, 2018, GNI Plc shareholders will be able to elect to accept the exit consideration from July 25, 2018 to October 23, 2018. Specifically, GNI Plc anticipates that the delisting will take effect from October 23, 2018, according to a notice issued at the Nigerian Bourse. Great Nigeria Insurance Plc has continued to struggle over

Great Nigeria Insurance sets October timeline to delist from NSE …Board moves to shield Company from regulatory sanction Iheanyi Nwachukwu

the past years to meet up with NSE post-listing requirements which include not submitting its financial reports as required and inability to meet the free float requirement. Over the last five years, there is little or no trading

activity on the shares of the company held by the minority shareholders. There has also been a considerable fall in trading volumes over the last twelve 12 months with an average daily volume of circa 1,200 units during the period March 2017 to March 2018. Through a voluntary delisting, the Board of GNI Plc proposes to delist all the ordinary issued shares of GNI Plc of

L-R: Kola Ayeye, director, The Fund Manager; Nadu Denloye, chairperson, The Fund Manager, and Chinedu Dike, representative Issuing House, during the signing ceremony of The GDL Money Market Fund in Lagos.

3,827,485,380 units from the Daily Official List and from trading on the Main Board of the Nigerian Stock Exchange. Part of the listing rules of the NSE is that listed Companies must have at least 20percent of its listed shares held by the investing public. GNI Plc is in violation of this Listing Rule and thus liable to be mandatorily delisted by The Nigerian Stock Exchange. Through the Voluntary Delisting of GNI Plc, the Directors of the Company believe they will be shielding the Company from any enforcement action or sanction that the Nigerian Stock Exchange may impose, for example by way of a mandatory Regulatory Delisting and potential reputational damage to the Company. Also, they noted that the delisting will afford the company to carry an imminent Corporate Restructuring exercise to take advantage of emerging opportunities and may consider re-listing the company in the future if the market conditions are favourable. The decision by the board to embark in voluntary delisting relates to their feelings that the shareholders of the company are not benefiting from the continued listing “as shareholders are not getting any exit opportunity and their invest-

ments have been locked up and they find it difficult to dispose of their shareholding. Neither the company has benefitted as the company’s shares continue to trade at a significant discount to the intrinsic value.” Also, GNI’s Free Float currently stands at 16.03percent, significantly below the NSE’s minimum Free Float of 20percent. With this Free Float deficiency, the NSE could take enforcement action even though The Quotations Committee of the National Council of The Exchange (QCN) has extended the curing period to May 2020. The NSE regulatory requirements of companies listed on the main board of the Exchange is to have a minimum of 20 percent of their shares in the hand of retail minority shareholders, under a listing requirement known as free float. GNI, which is listed on the main board, only has a free float of 16 percent. The company was recently given an extended deadline of May 18, 2020, to dilute its bloc shareholdings and free more shares for minority shares. “We do not expect that this deficiency will be cured during that period and we expect the NSE to initiate a Regulatory Delisting,” shareholders were told. Through the Voluntary Delisting of GNI, the Directors of

the Company will be exercising a regulatory provision that will shield the Company from any enforcement action that the Exchange may effect, which may arise as a result of the outstanding Free Float deficiency. Furthermore, through the Voluntary Delisting process, the Company will be providing an Exit Consideration to minority shareholders who do not wish to remain in an unlisted company. In 2016, the company sold a 75 percent majority equity stake to a consortium of investors known as Insurance Resourcery and Consultancy Services Limited (IRCSL). The deal was valued at N3.24billion. A total of 2.87 billion ordinary shares of 50 kobo each of GNI were crossed in a single deal to Insurance Resourcery at N1.13 per share through the negotiated cross deal window of the NSE. Great Nigeria Insurance Plc commenced business in 1960 and following Central Bank of Nigeria (CBN)’s directive that required banks to either divest from non-core banking subsidiaries or form holding company to hold those subsidiaries; Wema Bank divested transferring its 75percent equity stake in GNI Plc to Insurance Resourcery and Consultancy Services Limited.

Investors seen taking-up Dangote Cement shares …as Africa’s leading cement producer reports N185.5bn pre-tax profit in H1 Iheanyi Nwachukwu

angote Cement Plc, Africa’s leading cement producer recorded N185.5billion pre-tax profit in the first-half (H1) of 2018, a remarkable advance from N155.5billion PBT achieved in H1’2017. Dangote Cement Plc interim financial statements for the three months and six months ended June 30, 2018 were released Friday at the Nigerian Stock Exchange (NSE). Dangote Cement share price increase most on Friday at the Lagos Bourse, from N230 to N234.7, which implies N4.7 or 2.04percent gain. Afrinvest analysts in their July 16 stock recommendation had retained Dangote Cement Plc in their watch-list for the month of July. With year-to-date (Ytd) gain of 2percent, Dangote Cement shares have outperformed the NSE ASI with negative returns in excess of 4percent.

In the H1 of 2018, its earnings per share (EPS) increased by 3percent to N6.60. Dangote Cement Plc strong cash generation supports net debt of N232.8billion after N178.9billion dividend payout. Its financial highlights s h ow g ro u p re v e nu e i n creased by 16.9percent to N482.4billion compared to N412.676billion in the firsthalf of 2017. The group’s gross profit increased t o N 2 8 4 . 8 4 4 b i l l i o n f ro m N235.127billion in H1’2017. Its after-tax profit for the first-half period printed at N113.164billion well ahead of N109.71billion in the corresponding period H1 of 2017. The group’s earnings before interest, tax, depreciation and amortization (EBITDA) which measure its operating performance went up by 20.8percent to N246billion, 51percent margin; Nigeria EBITDA increase by 19.3percent to N226.9billion, 65.9percent margin; while PanAfrican EBITDA was up 31.9 per-

cent to N25.9billion, 18.7percent margin. In the first-half of 2018, Dangote Cement Plc successfully issued N50billion Commercial Paper (CP) under its N150billion Programme; largest-ever issuance by a Nigerian company. The Commercial Paper listing on FMDQ OTC Plc last Thursday July 19, 2018 was seen as great news for the Nigerian debt markets. The Group’s operating highlights shows Total Nigeria sales volumes increased by 13.9percent to 7.8 million tonnes; Nigeria domestic sales volumes of 7.3 million tonnes, at nearly 66percent market share; while PanAfrican volumes went down by 3.9percent to nearly 4.6million tonnes mainly due to production slowdown in Tanzania. “Our first-half performance was very strong and driven by an excellent recovery in Nigeria, where our sales volumes increased by nearly 14percent and revenues rose by more than 18percent. Pan-African opera-

tions saw a slight fall in volumes but both revenues and EBITDA increased because of better pricing and currency conversion effects”, said Joe Makoju, Group Chief Executive Officer, Dangote Cement Plc. “In addition, we achieved the largest-ever issuance of Commercial Paper by a Nigerian company when we issued N50billion Series 1 and 2 Notes at the end of June, with a discount rate that reflected the strength of our Company and its excellent credit ratings”, he added. Looking further into the group’s scorecards revealed that in the first-half of 2018, the group’s cement sales volume increased to 12.362million tonnes from 11.509million tonnes in the corresponding first-half period of 2017. Out of total revenue of N482.439billion in the firsthalf of 2018, N344.104billion came from Nigerian market while N138.685billion was earned from Pan African market. While the group revenue

from the sale of cement increased to N482.284billion in the first-half of 2018 as against N412.557billion in H1’17 revenue from the sale of ‘other products’ rose to N155million against N119million in first-half of 2017. Profit from operating activities in Nigerian market was N203.511billion while profit from Pan African market was N2.858billion. Dangote Cement is Africa’s leading cement producer with nearly 46million tonnes per annum (Mta) capacity across Africa. A fully integrated quarryto-customer producer, Dangote Cement has a production capacity of 29.25Mta in its home market, Nigeria. Its Obajana plant in Kogi state, Nigeria, is the largest in Africa with 13.25Mta of capacity across four lines; its Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta and its Gboko plant in Benue State has 4Mta. Through recent investments, Dangote Cement has

eliminated Nigeria’s dependence on imported cement and has transformed the nation into a net exporter of cement serving neighbouring countries. In addition, Dangote Cement has invested almost $3billion to build manufacturing plants and import/grinding terminals across Africa. Dangote Cement operations are in Cameroon (1.5Mta clinker grinding), Congo (1.5Mta), Ghana (1.5Mta import), Ethiopia (2.5Mta), Senegal (1.5Mta), Sierra Leone (0.7Mta import), South Africa (2.8Mta), Tanzania (3.0Mta), Zambia (1.5Mta). The principal activity of the Company and subsidiaries (together referred to as “the Group”) is to operate plants for the preparation, manufacture, and distribution of cement and related products. The Company’s production activities are currently undertaken at Obajana town in Kogi State, Gboko in Benue State and Ibese in Ogun State; all in Nigeria.

Monday 23 July 2018

BUSINESS

DAY

Business Event

L-R: Adedamola Olusunmade, managing director/ chief executive officer, Portland Paints & Products Nigeria Plc; Larry Ettah, chairman, and Bolanle Maryanne Oyekan, secretary, at the annual general meeting of Portland Paints & Products Plc in Lagos.

L-R: Oyindamola Odewuyi, representative Sterling Bank; Gbenga Sanusi, vice president media & publicity, Change Africa Foundation; Olamide Olabisi, president/founder, Change Africa Foundation; Posi Lawore, vice president, intellectual property and partnerships, Change Africa Foundation; Babatunde Awodiji, head of logistics , Change Africa Foundation, and Omosolape Akinpelu, head of brand management , Meristem Securities, at the press conference announcing the kick off of KONAMII AFRICA (Lagos Edition) Interorphanage homes/annual charity soccer fiesta in Lagos.

L-R: Femi Asenuga, director; Segun Omosehin, managing director/ CEO; Akin Ogunbiyi, chairman and Subomi Adebero, company secretary, all of Mutual Benefits Assurance Plc at its 22nd Annual General Meeting (AGM) in Ibadan recently.

L-R: Onwe Emeka Ogah, chief medical director FETHA (FWACP); Dennis Okoro, director, MTN Foundation; Umezurike Daniel, commissioner, Ebonyi State Ministry of Health; (FWACS) and Abasi-Ekong Udobang, senior manager, MTN Foundation, recently at the handover ceremony of the emergency ward project in Ebonyi State.

BUSINESS DAY

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Monday 23 July 2018

C002D5556

Photo Splash

BUSINESS DAY

Photo Splash

At BusinessDay’s States Competitiveness and Good Governance Award in Abuja

L-R: King Dandison Douglas, Jaja of Opobo; Mohammed Abdullahi, governor, Bauchi State, and Frank Aigbogun, publisher/CEO, BusinessDay Media Limited.

L-R: King Dandison Douglas, Jaja of Opobo; Yakubu Lamai, representative of Nasarawa State governor, and Frank Aigbogun.

L-R: King Dandison Douglas, Jaja of Opobo; Ibrahim Hassan, deputy governor, Jigawa State, and Frank Aigbogun.

L-R: King Dandison Douglas, Jaja of Opobo; Muhammed Abubakar, governork, Bauchi State, and Frank Aigbogun.

Cross Section of Emir from Bauchi State.

L-R: Nasim Babangida, commissioner of cooperative, Bauchi State, with Halliradaum Jika, a honourable.

L-R: Nkechi Iwegbu with Tope Badru, both of Lagos Business School.

L-R: Olutayo Idemia, regional sales manager, Identity and Security, France, with Kudu Ibrahim, head, communication and public affairs, NDIC.

L-R: Frank Aigbogun, with Ishiak Abubakar, representative of Kwara State governor.

L-R:Yusuf Ibrahim, liaison officer, Kwara State Liaison Office, Abuja, with Ishiak Abubakar, representative of Kwara State governor.

L-R: Laoye Tomori, deputy governor, Osun State; Oba Adeyeye Enitan Ogunwusi, Oni of Ife, and Frank Aigbogun. Frank Aigbogun, publisher/CEO, BusinessDay Media Limited.

L-R: Ibrahin Hassan Dankwambo, governor, Gombe State; Oba Adeyeye Enitan Ogunwusi, Ooni of Ife and Frank Aigbogun.

L-R: Mattew Kolawole, speaker, Kogi State House of Assembly; Ahmed Suleman, Emir of Misau, and Frank Aigbogun.

Cross section of dignitaries from Rivers State.

L-R: Kenneth Kobani, representative of the Rivers State governor; Oba Adeyeye Enitan Ogunwusi, Ooni of Ife, and Frank Aigbogun.

L-R: Ibrahim Dankwambo, governor, Gombe State; Umar Faruk, Emir of Katagum, and Frank Aigbogun.

Cross Section of the Awardees.

L-R: Anthony Osae Brown, editor BusinessDay Media Limited, with Frank Aigbogun.

L-R: Muhammed Abubakar, governor, Bauchi State, with Oba Adeyeye Enitan Ogunwusi, Ooni of Ife.

L-R: Kenneth Kobani, representative of the Rivers State governor; Oba Adeyeye Enitan Ogunwusi, Oni of Ife; Ibrahin Hassan Dankwambo, governor, Gombe State; Mohammed Abdullahi, governor, Bauchi State, and Ibrahim Hassan, deputy governor, Jigawa State.

King Dandison Douglas, Jaja of Opobo, Chuka Utazi, representative Enugu State Governor and Frank Aigbogun, publisher/ CEO BusinessDAY Media Limited.

Oba Adeyeye Enitan Ogunwusi, Oni of Ife, with Ibrahin Hassan Dankwambo, governor, Gombe State. Pictures by Tunde Adeniyi

BUSINESS DAY

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COMPANIES & MARKETS Royal Exchange records N12.8b gross written premium MODESTUS ANESORONYE

oyal Exchange Plc, Nigeria’s premier insurance and financial services group, has announced its results for the 2017 financial year, recording gross written premium of N12.8billion from its business activities as at ended December 31, 2017, representing an increase in revenue when compared to the figure of 2016, which stood at N12.5billion. Auwalu Muktari, group managing director, Royal Exchange Plc made the remark following the release of the company’s financial results for the years ended 31 December 2017 on the floor of the Nigerian Stock Exchange (NSE), recently. Net Premium Income for the period amounted to N7.1billion, while underwriting profit amounted to N7.6 billion in the financial year under review. A further analysis of the operating results showed that the Total Assets of the group witnessed a marginal growth of 5 percent, from N31.7billion

in 2016 to N33.3billion as at December 31, 2017. Net claims paid for the period under review amounted to N3.4billion, a reduction of 4 percent from 2016, which stood at N3.6billon. Net Income before management expenses totaled N2.4 billion, showing a slight dip from the N2.7 billion that was generated in 2016. Muktari stated that despite the very harsh operating environment, the group was able to grow its figures by participating in large-ticket financial transactions, as well as playing in the retail insurance market, which shall be a key growth driver in the years ahead. According to Muktari, “Royal Exchange Plc envisions a situation where the retail insurance market should be able to contribute between 50-60 percent of our revenues in the future, as the retail market is the future of insurance in Nigeria, considering the population of the country. The GMD further added that with the recent approval from the National Insurance Commission to undertake agricultural insurance, the company has entered into

strategic alliances with various stakeholders in the agricultural space to drive insurance within that sector of the economy and in the couple of months, revenues will start coming in from there. Speaking further, he noted that “Royal Exchange Plc, will in the years to come, continue to be an aggressive player in the retail market in Nigeria and will be looking at different strategies to increase its product offering and visibility in the marketplace, while not losing track of the corporate market, where the returns and margins, are getting thinner, yearly”. The GMD noted that the bottom-line result of the group did not turn out as projected, due to increase in cost of doing business in the country, especially in the area of power generation and the general lull in the economic activities within the corporate markets. To stem this tide, Muktari said that “the company has implemented various cost optimization strategies and business process reengineering measures, which shall guarantee profitability in both the current financial year and the years ahead.

Monday 23 July 2018

C002D5556

BUSINESS DAY

This is M NEY A daily guide to your Personal Finance

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

Habits that could be stopping you from selling effectively Iyore Ogbuigwe

t a time when there is low consumer demand and low spending going on, evidence still shows that huge deals are closed even in such times. Even in economic recessions, great salespeople still successfully activate buying desire in even the most prudent prospects and close deals consistently. How do they achieve this feat and maintain their profit margin even in tough times? They stop doing the following: 1. The Wrong Mindset This is the root cause of poor performance by a lot of people. This must be addressed first, if not, there will be no progress. I hear people say things like, “the market is dry”, or “I’m not a natural salesperson,” this is equal to saying, “Making money is not natural to me.” The road to consistent peak performance is using your mind right, using the tool of your imagination to influence the sales process. Your life is already being influenced and controlled directly by your thoughts so this isn’t anything new. The only issue is, you need to take back control of your life by intentionally taking control of your thought life. 2. Poor Choice Of Words Watch your words. Your words have greater impact on you than your circumstance. What you goggle into your brain is the search result it will produce. If you say negative things, you will attract negative results but if you form a habit of speaking positive words into your sales process, money will find you. Before you head out every morning, say things like, “there’s a lot of money out there and I’m going to find it,” instead of negative comments like “there is no money in this

country. Nobody wants to buy my product.” 3. Poor Work Ethic In other words laziness. When you assume a new sales or business role the first thing is to use the law of 100 which involves contacting 100 people within the next week to talk to them about your product. This will help you breakthrough any initial fears of rejection and get the awareness of your product into the market. Another aspect of poor work ethic is broken focus. When you’re following up, be following up; when you’re prospecting, be prospecting, not doing these and calling friends or hanging out on Social Media. 4. Inability To Negotiate Based On Value A lot of people think their products or services don’t sell because of price. Price is never a major factor unless the prospect is not in your income target market. What is price? Price is simply a perception of value and everything counts in creating perception. No one knows what creates the perception of a prospect because no two prospects are alike. Therefore pay attention to every detail of your business. Your appearance, business cards, brochures and other instruments of your business must always look neat and clean. 5. Losing Existing Business It is easier to get repeat business from existing clients than to acquire new ones so this is not the time to lose clients to your competition. Invest in your

current clients by calling them and letting them know that you are standing with them as a trusted advisor even in tough times. This is called building Relational Capital. 6. Failure to Get referrals A lead is different from a referral. If a person gives you a contact to call, it’s a lead because you have to reach out to the person, build trust and close a sale but a referral is a lead plus a guarantee of satisfaction from a client. This means the client will contact the person in advance to let them know that they’ve enjoyed your product or services and would want to recommend it to them. So you can get leads from anywhere but get referrals effectively from only satisfied clients. Never be shy

The highest earning in your industry or market are not necessarily the best people but those who think they are the best. So tell me, are you the best

to ask for a referral from your clients! 7. Fear of Failure In harsh economic times there is a tendency to hear a lot of comments about the economy, especially when you want to elicit a buying desire from a prospect. The discomfort of hearing a NO is something a lot of people run away from. For this reason alone, a lot of people hide in their shell, look for time wasting activities and avoid doing the important things to make money. This is because they’ve associated NO to mean failure, rejection or inadequacy. Why? Negative emotions are often stirred in people when they hear NO because of their childhood. Whenever our parents said NO to us as children, it usually meant we were doing something wrong so we had to stop it or we were being refused something we wanted. Hence, at a subconscious level most people have associated NO to mean something negative. On the contrary, NO is a good word. As a sales person (which everybody is) you will need to change these associations of failure,

rejection or inadequacy linked to the word NO. NO is your greatest opportunity. Get used to the word, NO. In the alphabet, N appears ten letters before Y, so don’t be bothered if you hear more than ten NOs before you hear a YES. Just keep at it, the YES will show up. You may not qualify to hear a YES until you’ve heard your fair share of NOs. So, hurry! Find your NOs Mary Kay Ash, the business woman behind Mary Kay products, said when she opened her first store in a mall, she practiced what she called the 2-feet approach: she spoke to anyone who came 2-feet close to her about her cosmetic products. Let this be your attitude when looking for clients this week; even in the face of seeming rejections talk to as many prospects as you can about your product then you will make more money. 8. Doubting Yourself Do you doubt yourself? Never do, rather, sell your abilities to yourself daily by speaking to yourself. This releases your true potential at every point in time. In addition to selling your

abilities to yourself, brag about what you can do at every point. Chances are you will deliver. Believe in your abilities and talk about it. Never shy away from telling people about your products/services and your ability to deliver. I am the best at what I do! Are you the best at what you do? You better say you are, not necessarily on a roof top but to yourself. If you don’t think you’re the best, the world will never see that you are. The highest earning in your industry or market are not necessarily the best people but those who think they are the best. So tell me, are you the best? Iyore Ogbuigwe is a highly sought after sales and persuasion expert for local, international and multinational corporations. Iyore is the CEO of Ultravantage& Founder of the IyoreOgbuigwe Sales Academy (IOSA). He holds sales seminars in Nigeria, Ghana and the USA and has written 5 books on selling. Connect with Iyore: Website: www.iyoreogbuigwe.com Email: admin@iyoreogbuigwe.com Instagram & Twitter: @ iyoreogbuigwe

BUSINESS DAY

Monday 23 July 2018

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

KEY MACROECONOMIC INDICATORS Indicators

Current Figures

Comments

GDP Growth (%)

1.95

Q1 2018 — lower by 0.16% compared to 2.11% in Q4 2017

Broad Money Supply (M2) (N’ trillion)

25.17

Increased by 2.64% in May 2018 from N24.52 trillion in Apr’ 2018

Credit to Private Sector (N’ trillion) Currency in Circulation (N’ trillion)

22.21 1.93

Decreased by 0.21% in May 2018 from N22.25 trillion in Apr’ 2018 Decreased by 1.36% in May 2018 from N1.96 trillion in Apr’ 2018

Inflation rate (%) (y-o-y) Monetary Policy Rate (%)

11.61 14

Declined to 11.61% in May’ 2018 from 12.48% in Apr’ 2018 Raised to 14% in July ’2016 from 12%

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

14 (+2/-5) 47.45 71.25

Lending rate changed to 16% & Deposit rate 9% July 18, 2018 figure — a decrease of 0.73% from July start July 20, 2018 figure— a decrease of 7.49% from the previous week

Oil Production mbpd (OPEC)

1.66

June 2018 figure — an increase of 1.84% from May 2018 figure

COMMODITIES MARKET

STOCK MARKET Indicators

Friday 20/07/18

NSE ASI

Friday

Change(%)

37,392.77

(2.11)

Market Cap(N’tr) Volume (bn)

13.26 0.68

13.55 0.21

(2.11) 219.40

Value (N’bn)

3.90

3.24

20.63

MONEY MARKET NIBOR Friday Rate

20/07/18

1-week Change

13/07/18

36,603.44

Tenor

Indicators

Friday Rate

Change

(%)

(Basis Point)

20/07/18

13/07/18 608 625

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.)

YTD Change

(%)

71.25 2.77

(7.49) (1.07)

10.53 (9.36)

2319.00 108.90 87.49 11.08 507.75

(6.45) (1.80) 0.02 0.82 3.62

19.78 (16.36) 12.89 (27.72) 17.13

1224.94 15.38 274.60

(1.32) (2.72) (0.65)

(7.03) (10.53) (16.23)

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

OBB O/N

15.0000 15.6700

8.9200 9.4200

CALL 30 Days

8.1500 12.7020

9.9500 12.8406

(180) (14)

20/07/18

13/07/18

90 Days

13.3316

13.3944

(6)

1 Mnth 3 Mnths

10.67 11.27

11.50 11.75

(83) (48)

Friday

1 Month

(N/$)

Rate (N/$)

6 Mnths 9 Mnths 12 Mnths

12.33 12.85 13.47

12.64 12.79 12.95

(32) 6 52

20/07/18

13/07/18

20/06/18

FOREIGN EXCHANGE MARKET Market

Friday

Official (N) Inter-Bank (N)

305.85 348.12

305.80 346.82

305.85 343.75

BDC (N) Parallel (N)

361.00 360.00

361.00 361.00

359.81 362.00

Tenor

Indicators

Friday

Change

(%)

(Basis Point)

20/07/18

13/07/18

3-Year 5-Year

0.00 13.68

0.00 13.64

0 4

7-Year 10-Year 20-Year

13.99 13.78 14.14

13.94 13.85 14.10

5 (6) 4

Change

(%)

(Basis Point)

20/07/18

13/07/18

2,670.31

2,666.49

0.14

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

8.50 5.50 8.71

8.49 5.50 8.55

0.16 0.00 0.16

YTD return (%)(US $)

-46.55

-46.68

0.13

Index

TREASURY BILLS (MATURITIES)

Disclaimer

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

(Basis Point)

Friday

Tenor 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.

Change

(%)

Friday

AVERAGE YIELDS Friday

Friday

(%)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

BOND MARKET Tenor

Friday

91 Day 182 Day 364 Day

Amount (N' million) 5,849.034 26,600

Rate (%)

Date

Global The International Monetary Fund (IMF) has warned that rising trade tensions between the United States and the rest of the world could cost the global economy $430 billion if all the tariff threats are carried out. Recall that the US earlier this month imposed steep tariffs duties on $34 billion in imports from China, with another $200 billion slated for September, on top of duties on steel and aluminium from around the world including key allies. Beyond the immediate threat from weaker levels of international trade, the IMF said greater use of protectionist measures could hinder business investment, disrupt global supply chains, slow the spread of productivityboosting technologies and raise the price of consumer goods. Despite highlighting greater risks for the world economy, the Fund left its global growth forecast of 3.9% for both this year and next unchanged.In a separate development, in the UK, the Office for National Statistics (ONS) reported that the annual rate of inflation rose by 2.4% in June, matching May's figure. Meanwhile, the core inflation gauge (excluding volatile food and energy items) printed at 1.9% year-on-year (y-o-y), down from 2.1% recorded in May. The ONS said that while rising energy and transport prices exerted notable upward pressure on the rate of inflation last month, this was countered by falling prices for clothing, games, children's toys and hobbies items. Elsewhere, in Japan, the consumer confidence index weakened marginally in June, survey data from the Cabinet Office showed. According to the data, consumer confidence index dropped to 43.7 in June from 43.8 in May. The index measures consumers’ expectations for the next six months on a scale of 0–100. The slight deterioration in June came on the back of declines across all sub-indices, except employment. Domestic The International Monetary Fund (IMF) has raised its forecast for Nigeria’s growth rate in 2019 to 2.3% from its earlier projection of 1.9%. In its latest World Economic Outlook (WEO) Update, July 2018 titled, ‘Less Even Expansion, and Rising Trade Tensions’, the Fund said that the upgraded forecast, “reflects improved prospects for Nigeria’s economy” and an increase in commodity prices. The multilateral institution also retained the 2.1% growth projection for the country this year from 0.8% in 2017. However, it raised a few concerns about Nigeria’s policy environment and the sub-optimal performance of its non-oil and non-agricultural sectors. According to the IMF, Nigeria’s revenue remains stifled by net losses from its retail fuel sales and sub-optimal performance of its non-oil sectors. In a separate development, the Bankers’ Committee of the Central Bank of Nigeria has launched a new initiative designed to give Small and Medium Enterprises (SMEs) access to loans, funds and grants to expand their business. Christened “Funding Nigeria Small and MediumScale Enterprises”, the initiative is part of the government`s economic diversification effort towards increased SMEs’ easy access to intervention funds, and aims at growing small and medium-scale businesses for effective contribution to the Nigerian economy. A spokesman for the Committee stated that oneday public enlightenment workshops would be organized across three states of the federation on how SMEs can access funds, loans and grants available in the Funding Nigeria SMEs’ initiative to create the necessary awareness. The workshops would be facilitated by experts from Deposit Money Banks, the CBN, the Ease of Doing Business group,Bank of Agriculture,Bank of IndustrySmall and Medium Enterprises Development Agency of Nigeria.

36,603.44 from 37,392.77 the previous week, representing a 2.11% decline. Similarly, market capitalization shed 2.11% to close at N13.26 trillion from N13.55 trillion the previous week. The downward trend in performance gauges comes amidst ongoing sell pressure in high-value stocks. This week, we expect that the direction of the market’s trend will be dictated by the news and earnings scorecards that filter into the market. Money Market The overnight lending rate surged last week as outflows for OMO and bond auctions, as well as FX sales totaling about N729 billion, outweighed inflows from matured OMO bills worth around 232 billion. Consequently, short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates rose to 15% and 15.67% from 8.92% and 9.42% respectively the previous week. In contrast, longer dated placements trended downwards. The 30-day and 90-day NIBOR closed lower at 12.70% and 13.33% from 12.84% and 13.39% respectively the previous week. This week, cost of funds in the interbank money market is expected to tick up in response to expected OMO auction by the CBN. Foreign Exchange Market The local currency posted differing directional performances in various segments of the foreign exchange market last week. At the interbank window, it depreciated slightly to N348.12/$ from N346.82/$ representing a drop of 1.30 Kobo. Similarly, the official rate weakened marginally by 5 kobo to settle at N305.85/$ from N305.8/$ the previous week. Conversely, at the parallel market, the local unit gained one naira to exchange at N360/$, stronger than N361 postedweek before. This week, we envisage the naira remaining close to prevailing levels as the CBN continues to intervene in the market to improve liquidity. Bond Market Bond yields ticked higher owing to weak demand and sell-offs across all curves from counterparties. The sell-offs was spurred by investors drifting towards OMO instruments for higher returns. Yields on the five-, seven-,tenand twenty-year debt papers finished at 13.68%, 13.99%, 13.78%, and 14.14% from 13.64%, 13.94%, 13.85%, and 14.10% respectively last week. The Access Bank Bond index rose by 3.83 points or 0.14% to close at 2,670.31 points from 2,666.49 points the previous week. The direction of bond yields would likely hinge on the outcome of the CBN Monetary Policy Committee meeting holding this week. Commodities Oil prices fell last week after data showed an unexpected rise in US crude oil production. The Energy Information Administration reported thatproduction hit 11 million barrels per day (bpd) for the first time in the nation’s history, as the ongoing boom in shale production continues to drive output. Nigeria’s crude oil benchmark, Bonny light, was down $5.77 or 7.5% at $71.25 per barrel from the previous week’s close. In a similar vein, precious metals prices slipped last week weighed down by strength in the dollar and an escalation U.S.-China trade dispute. Gold$16.40, or 1.32%, to settle at $1224.94 an ounce, while silver fell 2.7% to $15.38 an. This week, concerns about mounting supply is likely to depress crude oil prices further. For precious metals, we see a continuation of price weakness driven by expectations of a hike in interest rates by the US Fed later this month. MONTHLY MACRO ECONOMIC FORECASTS Variables

10 10.5

145,962.899 11.49

18-July-2018 18-July-2018 18-July-2018

Stock Market The Nigerian stock exchange market closed on a bearish note last week as major market indicators trended downwards. The All Share Index (ASI) lost 789.33 points to close at

Jul’18

Aug’18

Exchange Rate (Official) (N/$)

346.90

347.02

348

Inflation Rate (%)

9.34

9.00

Crude Oil Price (US$/Barrel)

76.75

76.00

77.00

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

Sept’18

REAL SECTOR WATCH C002D5556

Monday 23 July 2018

BUSINESS DAY

BUA: The making of a cement giant Stories by ODINAKA ANUDU

UA Group has taken a number of steps to tap into growing opportunities in the Nigerian economy. BUA’s main escapades are in the manufacturing sector, particularly in the cement industry, where it is consolidating its place as Nigeria’s second largest cement maker. L a s t Tu e s d a y , v i c e president, Yemi Osinbajo, commissioned BUA’s 1.5 million metric tonnes Kalambaina cement plant in Sokoto State, which gulped $350 million to build. The ultramodern cement plant has a 32 megawatts multi-fuel captive power plant and a coal mill, blessed with huge limestone deposits. One significant thing about the plant is that it increases cement production in Nigeria and BUA’s capacity in particular. For starters, BUA is building a $1 billion Obu Cement Complex in Okpella, Edo State. The plant, commissioned in August 2017, will be completed by

L:R:Brent Omdahl, U.S. commercial counsellor; Darrell McGraw, partner, PWC; Lazarus Angbazo, president, American Business Council (ABC); Margaret Olele, CEO/executive secretary, ABC, at the launch of Economic Survey Report by the American Business Council in Lagos last Wednesday

end of this year. By the time the Okpella plant is completed by end of the year, BUA’s total production capacity will hit eight million MT and would give 35 percent of the entire volumes produced in Nigeria. Another critical aspect of this plant is proximity to Niger Republic, which enhances its export potential. The cement plant started three years ago when BUA engaged Sinoma at the

height of foreign exchange crisis and began production in March this year. Speaking at the commissioning of the plant, Osinbajo said the cement factory is a demonstration that Nigeria has vast potential, which investors should explore. According to him, the National Infrastructure Master Plan recommends that Nigeria needs to spend $3 trillion to bridge the infrastructure gap as well as five percent

of GDP annually. “Nigeria now produces over 40 million MT of cement, more cement than any other country in Africa. Nigeria’s huge market size, low per capita cement consumption of 125kg and estimated housing deficit of 17 million are key drivers,” Osinbajo said. He appealed to cement makers to cut prices while also considering producing more of concretes for road construction, stating that

now is time for Africa’s most populous country to commence building roads with concretes. “We can revolutionalise road construction by simply deciding that we can build roads with concretes. I have no doubt that this will boost employment generation and boost economic growth,” he stated, adding that a road has been completed in Ogun with concretes, while the Apapa road is being reha-

bilitated with concretes. Abdul Samad Rabiu, chairman and CEO of BUA Group, said the new plant will be generating more power than is currently generated by the entire Sokoto State. According to Rabiu, the plant will run on coal, heavy oils or a mixture of both, and the use of coal is expected to save over 70 percent of energy costs compared with 15 million litres of fuel oil per month or 40 tonnes or even 20 trucks of fuel that could have been used per day. He said at least 2,000 direct and 10,000 indirect jobs are required to get the plant running, adding that the $1 billion Obu Cement Complex in Okpella, Edo State, commissioned in August 2017, will be completed by end of this year. BUA is not only playing in the cement industry, but also in rice, edible oils, sugar, and real estate, among others. It operates rice milling factories with a capacity of 200,000 tonnes per annum as well as 1,000 tonnes of edible oils per day. It is planning to begin production of 2.5 million metric tonnes of steel annually.

How Beta Glass performed in 2017 …16.2% turnover, rise in profit ODINAKA ANUDU

igeria’s foremost glass maker Beta Glass Plc recorded 16.2 per cent turnover in the financial year ended December 31, 2017, as sales surged from N19.091 billion to N22.186 billion. Profit and dividend also followed in the positive trajectory as profit before tax (PBT) rose from N5.215 billion in 2016 to N5.854 billion in 2017. Similarly, profit after tax (PAT) increased from N3.799 billion in 2016 to N4.115 billion in 2017. At the Annual General Meeting (AGM) held in Lagos, Abimbola Ogunbanjo, chairman of Beta Glass Plc, disclosed that the board recommended a gross dividend of N1.07 per share, subject to the deduction of withholding tax. This, according to him, represented

a 9 per cent increase in value from last year’s dividend and was consistent with the company’s dividend policy to pay out 13 per cent of net profit after tax. Ogunbanjo, who is also the president of the Council of the Nigerian Stock Exchange (NSE), stated that shareholders’ equity improved by N3.7 billion when compared with the previous year, arising from strong profit and adjusted for the dividend distributed during the year. “The company’s cashflow was managed efficiently given the difficult conditions and capex spends, which were significantly higher compared to prior year, due to the impending furnace cold repair,” Ogunbanjo said. He said it was comforting to have seen Nigeria’s economy recover from recession and added that with stable oil production due to rela-

tive peace in the Niger Delta region, oil exports would rise, with attendant positive impact on the economy. Ogunbanjo pointed out that with the opening of the Importers and Exporters (I&E) foreign exchange window in the second quarter

of 2017, the Nigerian equities market appeared to have regained confidence of foreign portfolio investors, who actively supported the resurgence of the market. He, however, stated that the socio-economic impact of the forthcoming

2019 election cannot be overlooked, especially as it comes with great uncertainty. “It is hoped that the elections would be handled with great care in order that its impact does not affect the recovery of the economy,”

L-R Akin Akinfemiwa, chairman, MOMAN; Tinuade Olawore and her husband Thomas Obafemi Olawore , former executive secretary and Clement Isong, new executive secretary, all of MOMAN at the send-off dinner for Olawore in Lagos recently.

he cautioned. The company had a stellar performance and exciting year, characterised by a solid financial performance, which has recently seen Beta Glass emerge in the NSE 30 Index, the influential index that tracks the 30 most capitalised companies at the Stock Exchange. Beta Glass is a subsidiary of Frigoglass Industries (Nigeria) Limited, which also exports glass packaging materials to three countries. The company has manufacturing plants in Ughelli, Delta State, and Agbara, Ogun State, with three furnaces that produce in excess of 600 tons of glass containers per day. Breweries account for 42 per cent of its total glass unit sales while soft drinks occupy 24 per cent. Wine and spirits make up 18 per cent just as pharmaceuticals and cosmetics’ patronage is estimated at 16 per cent.

BUSINESS DAY

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REAL SECTOR WATCH

Monday 23 July 2018

Investigation

Return of the metals

The once moribund Delta Steel is now alive and kicking, having been rehabilitated by Premium Mines and Steel. The steel plant holds enormous economic benefits for Nigeria, writes ODINAKA ANUDU.

wo big signposts welcome visitors to Aladja. They both contain five words: Welcome to Premium Steel City. An eagle-eyed visitor will easily notice, at the entrance of Aladja, that the company’s name is written in bolder letters than the town’s. This is, perhaps, a signal that the community is as significant as the steel plant. It is a humongous plant that sits on 172 hectares of land, traversing Ovwian and Aladja, two communities in Udu Local Government Area of Delta State. It is a well-guarded plant, with heavy presence of police officers and soldiers. At the gate of the steel plant, uniformed security guards hand in registers to incoming visitors and even staff members to sign their names. Like in the good old days, the plant is located in a place that can best be described as a typical Nigerian village. Commuters often have to stand in front of the steel plant for a number of minutes before getting commercial vehicles and tricycles. The roads can also be lonely at times owing to low economic activities going on around the complex. The people of Ovwian and Aladja are very careful and sometimes suspicious. They understand when someone is trying to force words out of their mouths. It is 10.25 am and two villagers have already walked out on this correspondent for being asked to talk about the steel complex. It is said

Inside the rolling mill

Steel melting shop section

that the Aladja people are warriors and, so, think intelligently. Perhaps, their war heroics make them suspect every move. Date is Friday, June 22, 2018. The administrative block houses staff members who provide management and marketing services. No bank is in the complex for now, but a small-scale company known as Steadfast Investment Limited provides money transfer services to interested staff. The complex is like one big village and can be very difficult to cover barefooted. This correspondent, therefore, is driven to the heavy duty section, where production takes place, by someone heading in the direction.

Moving from one department to another can be really tasking. A staff member who needs to visit the production section from the administrative block will have to drive or wait till someone else, moving in that direction, drives towards the segment. The production segment consists of several departments, including the rolling mill, which currently rolls steel into iron rods. The sizes of the iron rods range from 12 millimetres (mm), 16mm, 20mm, to 25mm and 32mm. The rolling mill is where ore goes into the blast furnace. Production of iron rods is a very complex industrial process, which also involves blowing the hot air through

nozzles. The rolling mill is, as usual, very hot. Cold water can become hot for a tea meal in 15 minutes within the mill. Human rights lawyers fighting for noise control can be deaf in the steel mill in 20 minutes. Noise emitted by compressor casing, gear box, discharge and suction ducting, intercooler, moisture separator and lubrication system can cause a health havoc. But this is how it is in China, India, the United States and other steel manufacturing countries. Here, Indians and Nigerians work together. Indians provide a direction and Nigerians do the execution. However, one significant thing about Premium Steel is that Indians themselves are actively part of the whole industrial process, which gives room for technology transfer. There is a quality control department within the rolling mill. This department ensures that iron rods produced meet certain acceptable standards. One source in the company says that the production segment employs roughly 160 workers. More workers will join once other departments kick off, the source says. The company is producing iron rods, but it is already confronted by the realities of the Nigerian market, populated by cheap Chinese steel.

Low manganese Chinese iron rods are 20 percent cheaper than locally produced ones and Nigerian manufacturers are devising ways to beat them. Premium Steel, consequently, reduces the manganese content of its iron rods to between 50 and 72 percent, from 90 to 120 percent quality of the 1990s, insiders say. Apart from competition with China, another reason given by someone familiar with the situation is that the price of manganese, which determines the strength of iron rods, is very high and it is nearly impossible to survive with 1990s standards in today’s market. This situation is also affecting aluminium makers in the country who now consistently reduce the millimetres of roofing sheets to compete favourably in the market. “But it also has a negative implication for the quality of infrastructure and housing projects we do in Nigeria today,” says one respondent. For a company that reopened in March, producing iron rods three months after is not a small feat. Beside the rolling mill is the steel melting shop, which is where the hot metal turns into steel by a combined blowing process. This segment is, however, not working at the moment.

Another section involves pelletising and beneficiating plants, where pellets are moulded and raw materials converted into semi-finished steel. These are not working, independent findings show. Others are direct reduction plant (made up of two modules), continuous casting shop, air separation plant and the foundry, which are likewise not working at the moment. Company’s target Insiders say the steel company is targeting one million metric tonnes (MT) of liquid steel, 950,000 MT of billets and over 300,000 MT of rolled products when all the segments in the complex kick-start again. This was the capacity of the plant in 1980s and the firm is planning to reinstate it. The company is also looking at producing automobile spare parts in the future, an insider says. This may not be far from the truth given that it was Delta Steel Company that supplied spare parts to Peugeot Automobile in Kaduna in the 1980s and 1990s. These targets may, however, be far-flung, owing to the fact that the Nigerian economy of the 1980s and 1990s were not as dependent on importation as that of today. History The once Delta Steel Complex was set up in 1982 to produce steel and supply raw materials to rolling mills at Jos, Katsina, Ajaokuta and others. However, poor management and corruption dealt a big blow on the company, resulting in low capacity utilisation and losses. The company shut down in 1995, owing banks and backlog of salaries to workers, amounting to over N10 billion. Many of the workers incidentally died without getting rewards for their hard work, findings show. It was later sold to Global Steel Holdings, also known as Global Infrastructure, the firm currently managing Itakpe Iron Ore, for $30 million, after a bidding process. The company was severally accused by villagers of asset stripping and bad management. The company

BUSINESS DAY

Monday 23 July 2018

REAL SECTOR WATCH was said to have borrowed over N25 billion from various banks. “Global just went ahead borrowing money from banks and stripping the assets of the company, which was quite unfortunate,” someone familiar with the sale of the company says. In 2008, President Musa Yar’Adua (now late) revoked the sale of the assets to Global Infrastructure. After the establishment of the Asset Management Company of Nigeria (AMCON) in 2010, the bad bank took over the debts and repaid them. AMCON sold it to Premium Steel, after resolving issues of debts, salaries and dissent from Ovwian and Aladja people. Communities, staff complaining BusinessDay interestingly finds that many villagers are not happy with Premium Mines and Steel. One reason is that they believe that the sale of the complex to Premium Mines and Steel was faulty and compromised. They claim that while the company bought the old Delta Steel at N28 billion from AMCON in 2014, China Polaris had bidden N33 billion and should have won the bid. H o w e v e r, Mu s t a p h a Chike-Obi, former chief executive of AMCON, had earlier debunked this allegation, saying that Premium Steel was the highest bidder. “We are also not happy that AMCON did not give us our 10 percent share before selling it to Premium Steel,” one villager, Samuel Emuhu, says. It is understood that Global Infrastructure gave the communities 10 percent share in the company, but experts wonder if this was

Premium Mines and Steel premises

one of the reasons the company struggled. More so, many staff members working for Premium Steel say they have not been given letters of appointment, meaning that their jobs are not secure. Another staff member says that Premium Steel employs people from different parts of Nigeria and India, but does not consider the people in whose towns the complex is located. What N600bn can do Premium Steel is currently investing N600 billion to make the humongous firm work again. By reviving the steel complex again, experts say the federal government needs to hand over moribund firms to serious and experienced investors. “This model must extend to onc e pub l icly owned but now moribund and badly managed facilities such as Ajaokuta Steel Complex, Aluminium Smelter Company, Nigeria Paper Mill, Nigerian National Paper Manufacturing Company, Federal Superphosphate Fertilizer Company and National Steel Raw Materials Exploration Agency, among many others,” Ike Ibeabuchi, managing director of a chemical manufacturing outfit, MD Limited, says. Company’s commitment The steel company is planning big and wants to capture the Nigerian market. Prasnata Mishra, managing director of Premium Steel, says the company’s one million metric tonnes liquid steel capacity plant was once responsible for reinforcing Nigeria with steel and allied products. “We are targeting at least

The rolling mill segment

5,000 jobs directly and indirectly. We shall touch the lives of over 30,000 Nigerians in the first instance before we start calculating the secondary opportunities it creates,” Mishra says. “This was left in terrible state as the plant was in a total shambles and deplorable shape when Premium Steel acquired it. We, therefore, retooled it with state-of-the-art equipment for competitive production,” he adds. Opportunities beckon Nigeria is a land of opportunities. Someone refers to the country as an untapped goldmine. For a steel company like Premium Steel, Nigeria’s demographic strength is an opportunity. Apart from its 198 million people, housing deficit is estimated at 17 million. More so, the National Infrastructure Master Plan recommends that Nigeria must spend $3 trillion to bridge its infrastructure gap.

The country also needs to spend five percent of its gross domestic product (GDP) to ensure that homes, roads, bridges and dams are built for a population growing at 2.6 percent annually, according to World Bank estimates. “This is an opportunity for companies in Nigeria,” says Yemi Osinbajo, Nigeria’s vice president. Hurdles to cross Like many manufacturers, Premium Steel has to contend with policy somersaults. During the last administration of Goodluck Jonathan, certain steel makers were given import waivers to bring in cold rolled mills on the understanding that they produce and then sell these coils directly to manufacturers in the downstream subsector, who then use them for further production of other metal products. As abused as the policy was perceived to be, manufacturers expected a more tactical approach as investors had already pumped in billions following the backing of the previous government. But the Muhammadu Buhari administration reversed the policy, jeopardising some investments, steel makers say. Kamoru Ibitoye Yusuf, CEO of Kam Industries, which operates a large cold roll mill in Ilorin, Kwara State, says the country needs a consistent policy on duty rates so as to attract more investments to the cold rolling mills in Nigeria. “Iron rods have been protected by 50 percent duty, but cold rolled coils have not

been protected. That is the reason investors are running away from that end of the business. One cold rolling mill can sustain 50 to 100 local industries, which will create jobs,” he adds. Frank Udemba Jacobs, president of Manufacturers Association of Nigeria (MAN), laments that policy inconsistency in the manufacturing sector in general and steel sub-sector in particular is hurting investments. Another challenge facing the steel sector is low patronage. Steel manufacturers further complain that government agencies and departments owe them huge sums of money when they make supplies. More so, cheap Chinese steel, mostly substandard, is dominating the Nigerian market. Experts worry that these steel products are not only bad for construction but can also cause cracks and holes in infrastructure. Ajaokuta Steel impact Despite gulping almost $10 billion of public funds, the Ajaokuta Steel Complex has not produced a single sheet of steel, according to experts. In a move that shocked economists and finance experts, the federal government budgeted N3.9 billion in 2016 and N4.27 billion in 2017 for the resuscitation of the moribund Ajaokuta Steel Company, despite an earlier business case in the last administration showing that the complex could only work if properly privatised. Government is still pumping money into the ‘behemoth’. Lack of privatisation of

Ajaokuta Steel is dragging the manufacturing sector back, Jacobs says. According to him, 80 to 85 percent of manufacturing equipment and spare parts should have been coming from Ajaokuta Steel had it been working. This was one of the original reasons for setting up the complex. Experts say that steel is the backbone of every economy because the majority of things on earth are made with tools or machinery. Also, steel is used in building bridges, roads, houses, trains, trucks and ships as well as in mining and oil drilling. It is interesting to note that Ajaokuta and Delta Steel were incorporated the same year—1979, but the latter has now dwarfed it. Official data show that the country imports steel valued at $3.3 billion every year. An average of steel products such as standard plates, hot-rolled coil, cold-rolled coil and rebar is estimated at $464.7 using Chinese prices, which means that Nigeria imports roughly 7.1 million metric tonnes of steel annually. Eighteen of the 30 functional steel firms in Nigeria produce about 2.2 million tonnes a year, with scraps and billets imported mainly from China. The steel sector is driven by the private sector, which is filling the gap left by Ajaokuta Steel Complex, a ‘behemoth’ expected to have added at least one million tonnes to the national production. Way Out Raj Gupta, chairman of African Industries, with 12 manufacturing plants across Nigeria, six of which are steel companies, believes that Nigeria should checkmate cheap Chinese steel. Gupta says that actions have been taken across the world to check cheap Chinese steel products, urging Nigeria to toe the same line. Aliko Dangote, president of Dangote Group, believes that the manufacturing sector requires a consistent policy to thrive and compete effectively Oluyinka Kufile, chairman of Basic Metal, Iron and Steel and Fabricated Metal Products Group of the Manufacturers Association of Nigeria, says the local steel sector needs government patronage. In his last words, Ibeabuchi, earlier cited, says, “Privatise Ajaokuta Steel immediately. This is long overdue.”

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CEO INTERVIEW

Monday 23 July 2018

Interview with Private Sector Leaders

‘My vision of NLNG in another 30 years Tony Attah is the Managing Director/Chief Executive Officer of Nigeria LNG and the Vice President of Bonny Gas Transport. In an interview with FRANK UZUEGBUNAM, editor, West Africa Energy Intelligence, on the sidelines of World Gas Conference in Washington D.C, he talks about his optimism for natural gas and his vision for NLNG amongst other issues. Excerpts:

any traditional LNG buyers are joining commodity trading entities in entering the LNG spot trading arena. What is NLNG plan for the spot market in the medium to long term? Essentially, you may already know that we are sold out. I have committed contracts – short, medium, long terms. At this moment, spot trading does not mean much to us at NLNG even though we are already in the market for Trains 1, 2, and 3 re-marketing which are actually due by end of 2021. What we are seeing is in response to long term in the whole definition of term from 20 – 25 years. The new long term is 10 – 15 years but I think the advantage we have is that we are not green, we already have off-takers who have tasted us and know what we can do so in terms of risks. We are not as exposed to the new fundamentals in the market around short or long term but I think the flexibility aspect of our positioning is what would be crucial. We are quite flexible to leverage the situation. In the end, it will come down to our own agility and how competitive we can be but whether it is long or short term really should not matter. It is about value and it is how you can create a better value today. We are not very active in the spot market because we are completely committed but we do occasionally have one or two spots in case any off-taker is not ready to take but spots are not very popular with NLNG. Looking at the market fundamentals at present, is it still a good business decision to go on with NLNG Train 7? Absolutely. Ten years ago, it was fantastic business so I can just imagine 10 years later it has to be even better business. The glut anticipated is relative. If you think about 2016; the perception was that the whole world will be drowning in LNG and then 2017 will be the worst year for LNG market because there will be LNG all over the place. If you follow the trends and the reality that happened; the whole of last year, there was only one FID. Those predictions did not happen. Again, you hear there will be more glut because many projects are coming. The reality is; how many will truly come? For us, it is not about what will happen elsewhere

but what we really want to do, so we stay with the fundamentals of our strategy to stay competitive, stay credible with our off-takers/ buyers and look for additional value for our molecules in the marketplace. Today, we have sitting buyers and when you talk to most of my customers, they describe us as responsible, reliable and trusted. Those 3 key attributes that define NLNG must count for something. There will be more volumes in the window as we expect Train 7 to come in, I think there will also be some volume coming in from other places. Some prediction is that global capacity will move from the over 285 million tonnes (MT) per annum capacity to about 400MT in 2025 but a lot of that is projections. Some of that is forecast but what I want to know is that the additional 8MT capacity that I want to bring to market is coming in a very competitive manner. As long as I am competitive, I do not worry too much about the market. I see a lot of excitement on your face whenever you mention Train 7. Is that excitement real? I am holding it down. I could almost fly on that excitement. The reality is that you have to be excited for Train 7 because as you recall, we have had this dream since 2007. Between 1999 and 2006, we were deemed the fastest LNG plant and LNG country in the world because every 18 months, we were adding a new train but since 2007 to date, we have not added any new capacity. So to see this dream coming to reality, that has to elicit excitement. Definitely, I believe it will happen. We have actually put pen to paper on FEED so for me there is no reason to wane in terms of excitement. If anything, the excitement is growing even more because it is visible that Train 7 will be real. In fact, it is real. At one of the sessions here at the World Gas Conference, Maikanti Baru, NNPC GMD said Nigeria is targeting 10 percent of global LNG market. Do you feel the burden of the expectation? Not necessarily because a few years ago we were actually 10 percent of the global LNG market but we lost our position. Between 2007 and 2018 when we did not add an extra capacity, we lost our edge a little bit. When we were number 3, we were firmly 10 percent of the

global LNG market but because we have stayed static for so long and the market has moved on, we have dropped somewhere below 7 percent. So, I think it is a conversation around what my 30MT will amount to in 2023/24 when I bring Train 7 online relative to the projection that the market should be about 350MT. There is a good chance that at 30MT, if the market does not move heavily, we easily could still be at 10 percent but perhaps it is a premonition that my additional 8MT per annum is not enough and I feel so. We talk about Qatar. Qatar was just about 24 months ahead of us. Today Qatar is at 77MT and they want to hit 100MT by 2023 so no one is static. Essentially, Train 7 is not the destination. There has to be Trains 8,9,10. I tell my colleagues at NLNG that my vision of the company in another 30 years is actually 15 trains. Some will say where will it be? You assume that because it is NLNG, it has to be on one loca-

tion? Not necessarily. We have seen that in other climes. That vision has to be held positive that we have to continue to grow starting with Train 7 so 30MT per annum is exciting but it should not be the cap and I believe that is what the GMD was referring to. But the future is great! Is NLNG prepared to take a dive into the domestic LNG market? Domestic LNG for us is quite a big market and that is the reality of what it means. Next year, would be 20 years of operations for NLNG as a company in terms of bringing volumes to the market which I believe is the purpose the company was set up. Essentially, I can continue to take my volumes external to Nigeria but when we look at NLNG’s vision of being a global player that helps to build a better Nigeria, that right-hand side of our vision is a bigger driver of why we want to play in the domestic space. It is not so much about the competitiveness or so much a good market.

If you look at the country today; power is a big challenge, manufacturing not growing, industrialization almost tending to de-industrialization because of lack of energy source. That is what is really driving us. Of course you do not want to go in there at a loss but we will find a way to make it competitive. I would not see it as long term. It is a bridge. Between when the upstream development will happen and the pipeline networks will interconnect and scale up domestic gas to take off in Nigeria, we can help by bringing some volumes into the country. Of course, the challenge would be that accessibility would be the coastal states or cities but we are also aware that some other players are already looking at deepening domestic LNG into the transport sector. We are looking more at bringing LNG into the country for power and manufacturing just to help build a better country and bridge the space until the domestic gas infrastructure takes off in the future. We have seen many milestones by NLNG with regards to liquefied petroleum gas (LPG) market.What

Monday 23 July 2018

C002D5556

BUSINESS DAY

Tony Attah

MD/CEO,Nigeria LNG/VP, Bonny Gas Transport

is actually 15 trains’ next? I think it is about scale when you look at LPG. Let me take you back a little. You may recall that before NLNG got involved in LPG, the entire country was at 50,000 tonnes per annum. Between 2007 when we got involved and now, the entire country has moved 10 times. We are now at 500,000 tonnes per annum and NLNG is contributing more than half of that. Last year, we did about 265,000 tonnes. The capacity we have committed to bring to the country is about 350,000 tonnnes. The next thing is about scale. This is not scale for NLNG, this is scale for Nigeria. We are today working with the office of the Vice President, to see how we can get LPG to take the centrestage as catalyst for development and industrialization in Nigeria. The work we have done with KPMG shows a forecast of today’s true potential of at least a million tonnes per annum opportunity for LPG in Nigeria and 3 million tonnes in the next 5 years if everything we are working comes together. I remember the president of Nigerian Gas Association referencing per capita consumption of LPG in Nigeria to be 2 percent when our neighbours, Ghana, is 5 percent; Senegal, Morocco are talking 16, 66 percent. There is big scope for us in terms of LPG so it is about scale. Recently one of the opportunities we have done is to work with Nigerian Content Development and Monitoring Board (NCDMB) to get the first Nigerian-owned LPG vessel to start. That is a start and its part of how we are helping local capacity to develop with eye on the future to LPG scaling. How achievable is zero gas flare considering the investment hurdles around capturing and utilisation of flared gas? It is something that has to be done. First of all, a country like Nigeria, blessed with so much gas cannot be flaring. That is a fact. There are so many reasons it should not be that way. Environmentally, flaring should not be acceptable. Also, gas is money; if you are burning it away, you are loosing money so it also does not make economic sense. From sustainability point of view, we really must end flaring. If you look at our company, the way we are set up, we are the main reason why Nigeria has achieved the success it has recorded today. Because of NLNG, gas flaring in Nigeria has reduced by more than 60 percent. If you look at today’s environmental reality and economic side, it just makes business sense not to flare. That is part of why we exist. What you have to do in the upstream is to gather these gas and we will buy it off you so there is no need to flare. We are ready to offer ourselves as a receptacle to take it. That is why I firmly believe that whatever target is set, if the political and economic will align, gas flaring will be a thing of the past. Unlike in the past

when people will say if I gather the gas, where does it go? Today, NLNG is available. I think gas flare out can be a reality for Nigeria and really it has to be. In the 2018 budget, the national assembly slashed the budget for Bonny-Bodo road which is one of the big NLNG’s CSR project. Is it something you are worried about? Ordinarily, it should be. For a project to start and finish, you need consistent flow of funds. We have the cash layout. It is something my colleagues are looking at. I think originally, about N10 billion was voted by the Ministry of Works, Housing and Power. To be fair, I think our cut is about 10 percent but if you look at it with a different lens, you know how appropriations and actual allocations work in government parlance. We are not underwriting the project in the sense of underwriting everything. We are contributing 50 percent of it, we are the stabilization force to ensure that work goes on while we manage some of the interplay between government and how the budgets become appropriation and actual funding. Ten percent reduction is not something I will ordinarily be happy about but in the end it is about work completion. We have seen it in past where this same project has been attempted and abandoned. As NLNG, we guaranteed the project will not abandoned because we take care of those vacuums that may be created. If the contractor do more than has been voted, we have to bridge that and hope that government knowing exactly how much they need to contribute would have to make up for it. You are never happy when your budget is cut but is it a source of concern to the extent that you worry too much for 10 percent cut at this time of the year, I am not too worried really. What do you expect from the government and legislature to sustain the NLNG success story? For everything NLNG does for this country, you have to expect support. In other countries, NLNG would actually be preserved and protected deliberately by government. As a minimum today, we expect national assembly to support us, defend us and even protect us because of the value we bring to the country. If you look at our books, since inception, this company has delivered more than $15 billion in dividends to FG and since we became taxpayer in 2009, we have delivered $6 billion in taxes. We continue to guarantee that and it is almost taken for granted that

something will come from NLNG. I still remember talking to somebody in the budget office and he said we have a line for NLNG $1 billion we are expecting. That is almost an assured fund that will come in. If you have an entity, one company like NLNG delivering more than one percent of the GDP, the least you would expect is support but we also expect government to appreciate us enough to want to protect us and defend us to continue to deliver more value. But I must say that we see some support especially for Train 7 because in my mind, this is the first time we have a government that is 100 percent behind the project. This government has its eye firmly

on Train 7 but we need quite a lot of additional support in terms fiscals, legislation. That is the way you treat the goose that lays golden egg. That is the minimum - you would protect that entity. In some of your public presentations, you keep saying; “It’s time for gas”. Is it just a mere mantra? It is time for gas! But it has to be time. If you look at energy transition, the serious global call for de-carbonisation and you look at Nigeria which is almost a mono-economy in terms of forex earning, you will say oil and gas economy is less than 30 percent of the GDP but the foreign exchange earnings is still more than 95 percent from that sector. I think in the

Profile: ony Attah has over two decades experience in the oil and gas industry. Prior to his current role at Nigeria LNG Lim ited, he was the Managing Director and Board Chairman of Shell Nigeria E & P Company SNEPCo, Vice President HSE and Corporate Affairs, Vice President Human Resources (HR) as well as other technical & non-technical roles in Operations and major projects including being the head of Head of Joint Venture Economics in the commercial function. He holds a Bachelor degree in Mechanical Engineering from the University of Ibadan and a Master of Business Administration from the University of Benin. He is a member of Council for the Regulation of Engineering in Nigeria (COREN), Society of Petroleum Engineers (SPE) and a fellow of the Nigerian Society of Engineers (NSE). He is married with children and his hobbies are watching soccer, playing golf and listening to music.

end, it is about looking deeper into the future of energy and asking yourself where is this going? Recently, I sat in a session at World Gas Conference in Washington D.C where the debate was about where the energy mix will be. There were a few permutations, but in the end, you have to agree that gas will still be at the centrestage because gas is cleaner, affordable and available globally. When I look at Nigeria and I listen to people describe Nigeria today as that gas nation with some oil, you have to take a different lens to say what can we do with this gas? Every time we talk about almost 200TCF, 192TCF of proven reserve that we know about but there is also 600TCF scope for recovery. What are you going to do with that and when? I say it’s time for gas because I believe it’s not a mantra and it’s quite credible. If you look at countries like Qatar, Trinidad & Tobago even Russia; they under-pined their whole economy on gas. We have talked about oil for over 50 years and with the decarbonisation drive in the energy transition that is coming, gas is positioning as the centerstage going forward. The future of Nigeria has to be gas that is why I say it’s time for gas but perhaps the way to say it is; if not now, then when?

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These tables validate BPE DG’s assertion that Discos are technically insolvent BALA AUGIE

ast week’s declaration by the director general of the bureau of public enterprises (BPE), Alex Okoh, that distribution companies (Disco) are technically insolvent sent a predawn chill down the spine of investors, policy makers and the general public. BusinessDay had reported in January that the six largest distribution firms are grappling with rising operating costs, poor working capital conditions, insufficient cash flows, ballooning debt, and weak revenue. To say that Discos are a liability to regulators is an understatement, they have become a cancer to the system. And if some urgent and responsible isn’t done, the operators may seize to exist in the foreseeable future. For instance, the cumulative loss after tax of 6 Discos that have released 2016 results was N196.52 billon, from a loss of N108.57 billion recorded in 2015. The firms are Ibadan Distribution Company Plc, Abuja Electrical Distribution Company Plc, Ikeja Electricity Company Plc, Kaduna Electricity Distribution Company Plc, Benin Electricity Distribution Company Plc, and Eko Distribution Company Plc. The combined operating cost of N344.64 billion incurred by these firms exceeded cumulative sales of N336.72 billion as at December 2016, leaving

Nigerian Discos 2016 financial summary Ikeja

Ibadan

Benin

Sales (N'm)

64,4975

61,314

50,371

Operating Cost (N'm)

76,104

56,562

41,551

Loss Before Tax (N'm)

- 90,296

- 35,859

11,518

Loss After Tax (N'm)

- 65,636

- 24,984

11,625

4,775

584

Accumulated Losses (N'm) - 175,433 Shareholders' Fund (N'm) Total Assets (N'm)

360.97

38,977

47,800

184,191

Trade and other Payable Negative Working Cap (N'm)

139,826

88,937

102,543

64,606

65,709

81,648

75,220

23,228

Kaduna

Eko

Abuja

Sales (N'm)

42,851

56,536

61,147

OperaBng Cost (N'm)

50,903

53,036

66,489

Loss Before Tax (N'm)

-‐ 30,514

-‐ 28,468

-‐ 47,298

Loss ANer Tax (N'm)

-‐ 17,904

-‐ 28,662

-‐ 47,447

Accumulated Losses (N'm)

-‐ 28,601

24,980

-‐ 29,602

Shareholders' Fund (N'm)

18,641

24,985

-‐ 11,019

Total Assets (N'm)

90,282

87,615

117,207

Trade and other Payable

71,048

46,697

121,700

NegaBve Working Cap (N'm)

19,234

40,918

-‐4,493

Source: Company Financials

them with an inevitable gross loss. There are indications that these firms could find it practically difficult to meet obligation to creditors, suppliers and financial institutions as they continue to grapple with poor liquidity. For instance, cumulative total current assets of N182.56 billion are less than N494.41 billion current liabilities as at December 2016, which resulted in a combined negative working capital of N312.20 billion. Perhaps more worri-

some is mounting trade and other payable, and rising gearing or leverage ratio that expose Discos to financial risk. Drilling down the figures shows Abuja Disco is technically insolvent is technically insolvent as its total liabilities of N128.22 billion as at December 2016, exceeded total assets of N117.20 billion. This resulted in a negative shareholders’ fund of N11.09 billion in the period under review. Negative shareholder equity on a company’s balance sheet is a red flag that investors

should steer The Federal Capital based power firm is ensnarled in debt, and its trade and other payables surged by 81.37 percent N121.70 billion to in December 2016 from N67.10 billion as at December 2016. The company’s finance cost surged by 334.01 percent to N12.24 billion in December 2016 from N2.82 billion the previous year. It should be noted that Abuja Disco does not have earnings to pay up rising interest expenses. Next on the roll call is Benin Disco. The company is also technically

insolvent as its total assets of N88.93 billion as at December 2016 are less than total liabilities of N89.52 billion, which resulted in a negative shareholders’ fund of N584.52 million. The firm’s finance costs surged by 328.44 percent to N4.67 billion in December 2016 from N1.09 billion the previous year. Experts are of the view that this will be challenging for operators in the sector. “The current liquidity crisis in the power sector is likely to be heightened in 2018, not least because the front runner IPP (Azura) will become operational in the course of the year, and the Nigeria Bulk Electricity Trader’s limited receipts from the distribution companies would have to be shared with even more generation companies,” said Woleme Esan, energy and infrastructure lawyer and partner at Olaniwun Ajaiye. Analysts at CSL Securities say the suspension of tariff increases is a major threat to the sector which is currently facing significant cost pressures. “While increasing tariffs could be a good starting point for improving liquidity whilst attracting investments into the power sector, we believe NERC will come under strong resistance if this is done. We recall that, in 2016, NERC tried to implement costreflective tariffs proposing a 45% hike, following which labour unions took it to court. Consequently, the plan was put on hold,” said analysts at CSL Securities.

P.E

SHORT TAKES $210mn Nigeria’s central bank said on Wednesday 20th June that it had injected $210 million into the interbank foreign exchange market, extending efforts to boost liquidity and alleviate dollar shortages. The bank said in a statement it had released $100 million earmarked for the wholesale market, $55 million for small businesses and individuals, and $55 million for certain dollar expenses such as school fees and medical bills.

IV funds A breakdown of the new fee structure showed it was divided into IV t fund segments. Fund one is an optional fund, which means interested contributors, must write to take part in it. Fund two and three are the default fund for contributors aged 49 & below, and aged 50 & above respectively. The fund four is for retirees, as stated by PENCOM

2018-2020 The fee structure for Nigeria pension industry was revised by the National Pension Commission (PENCOM), and it is valid for the period between 2018-2020, as compiled from the commission’s statement,released last week Thursday, 21 June 2018. The revised fee structure which will be effective from 1st of July, 2018 cover charges by the commission, Pension Fund Administrators (PFAs), Pension Fund Custodian (PFCs) and the commission itself

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

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Markets Intelligence Economy

Negative equity risk premium hold back stock price appreciation Emeka Ucheaga & Abdullateef Eniola-Giwa

ince 2011, e quity r isk premium in Nigeria has remained in negative territory, causing investors’ appetite to switch to riskfree government bonds. The last time equity risk premium was positive in Nigeria was far back in 2010 when investors enjoyed a tiny 61 basis points spread between the 10 year federal government bond and equity earnings yield. That year, stocks outperformed government securities, in the years that followed, not so much. Equity risk premium refers to the excess return that investors demand for investing in the risky stock market rather than safely investing the risk free securities of the federal government. The premium compensates investors for assuming the risk that equity returns will outperform bonds. If the risk premium is negative, it is usually a signal that equities prices are elevated and earnings per share must either increase significantly or share prices must fall to restore the risk premium to a positive state where it becomes attractive to

invest in equities. As a rule of thumb, equities ought to provide a risk premium around 5.6 percent above Treasury bill rates and 3.8 percent premium above 10 year government bond. However, the risk premium varies depending on how risky the market considers the stock to be. Between 2011 and 2017, stock returns in Nigeria averaged 10 percent per annum versus 15 percent returns in the 1 year treasury bills and 14 percent returns in 10 year government bonds according to

data compiled from Bloomberg. Throughout this period, equity risk premium remained negative while the earnings yield averaged just 7 percent which helps to explain the poor stock performance. W h i l e ov e ra l l ma rke t e a r n ings yield remained at single digit throughout the period under review, BusinessDay found that individual equities which had a positive equity risk premium far outperformed the risk-free securities during this period, giving more validation to our argument.

Equities such as Fidson Healthcare and Okomu Oil which had earnings yield as high as 39 percent and 28 percent respectively in 2011 thereby providing equity risk premium of around 24 percent and 13 percent respectively as at that time have delivered stellar returns for buy and hold investors since then. Fidson shares have compounded by an average of 70.3 percent per annum since 2011 while Okomu Oil shares have averaged 108.6 percent returns per annum since 2011. Other large and midcap stocks which had a positive equity risk premium as at 2011, also outperformed the NSE index (10%), 10 year bond returns (14%) and treasury yields (15%) during this period include: Cement Company Northern Nigeria (26.8%), NEM Insurance (66.5%), Presco (138.9%) and Ecobank Transanational Inc (19.6%). Although certain stocks which have persistently low earnings yield may still deliver solid returns overtime, it’s unlikely that the equity market will suddenly become attractive to risk conscious investors who like to get a premium for taking a risky bet on equities over safe haven assets.

UBA steady dividend growth makes it an aristocrat among Premium peers Abdullateef Eniola-Giwa

n the last 5 years the Pan African financial services group, United Bank of Africa has checked the relevant boxes for investors as capital has appreciated 5x and its annual dividend growth outranks its peers on the premium board. The elite group of appropriately governed companies with market capitalization of over 200 billion have all had positive returns from 2012 to 2017 and UBA has been of the highest order assuming an aristocratic status. BusinessDay analysis observed the 5 year growth in capital investment and compounded annual growth of the dividends in the Premium board of the Nigerian Stock Exchange since 2012. The top performer with 575 percent change in its share price and 25 percent annual growth was UBA, Zenith Bank followed with 290 percent growth and 11 percent annual growth in dividends.

Dangote Cement had grown its dividends by 23 percent but there was only 177 percent increase in stock prices making it the third of the seven premium board members. Access Bank and First Bank Holdings had a negative growth in dividends since 2012 but both stocks had grown by 309 percent and 50 percent. WAPCO had the lowest capital appreciation of the seven companies in that time range with

only 42 percent while Seplat who was listed in 2014 had grown by 9 percent but was excluded given the time difference our calculations. To be accepted into the premium board ranks, companies must meet the minimum market capitalization requirement of N200 billion on the date The Exchange receives its application, the company must be evaluated under the NSE’s Corporate Gover-

nance Rating System (CGRS) and achieve a minimum rating score of 70 percent, a minimum free float requirement of 20% of its issued share capital or the value of its free float shares is equal to or above NGN40 billion on the date the Exchange receives its application to list. WAPCO has been down 27.6 percent year to date and analyst surveyed by BusinessDay expressed the concerns because if its downward trend continues and share price falls by another 30 percent the market cap will be on the border of the N200 billion threshold from its current value of N294 billion and may see the company lose its premium status. The Premium board index collated by BusinessDay outperformed the Nigerian Stock Exchange All Share Index as its year to date return was 3.46 as opposed -4.29. Financial service sector continues to dominate the premium board with four banks and two industrial goods sectors and Seplat as the only Oil and Gas company on the Board.

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How Fisayo makes money on YouTube Fisayo Fosudo is someone that can be described as a ‘Tech YouTuber’. Fisayo is also a video producer and is known in the tech space for creating unique technology videos for the African market. He is a graduate of Economics from the University of Lagos. In this interview with BUNMI BAILEY, he talks about his business and how he creates tech videos that stand out from the rest.

Who is Fisayo Fosudo? am a visual storyteller and technology video producer with a background in economic analysis, brand communication and technology. I specialise in smartphones, gadgets, applications, and my goal is to build one of the most engaged tech communities in the space. I currently have a total social following of over 40,000, with millions of impressions and over half a million video views from making unique weekly technology videos for the African space and globally on my YouTube channel – YouTube.com/FisayoFosudo. Tell me your entrepreneurship story: How you started and the journey so far. I developed interest for the technology of video when I was 17, but I didn’t have the resources to record or edit. I always resorted to reading a lot of Wired Magazines and exploring cutting edge technology in related magazines, self-help books and I also learned graphic designs. It was through the resources I got from graphic design that I was able to get some equipment I started with. It has been interesting so far. What really inspired you to set up this business? I was inspired by Africa itself and the potential for creating something unique for us as well as tell the story globally. I am only a little over a year into the specificity of mobile phone video reviews and I only look to take it a notch higher.

HP, 9Mobile, MallForAfrica, Jumia, PayDay Investor by ARM Pensions and many others. The digital space seems to be getting saturated, owing to the number of young people moving into it. What future do you see for this space in the ten years? It’s really going to be interesting to see what the next ten years will bring forth. I can’t entirely say what will come of it, but what I can somewhat predict happening is the decentralisation of a lot of analogue or even currently technological systems like banking, which the blockchain technology seems to be threatening. Also, I expect trade in many aspects to have a lower barrier to entry and it is already evident now. There are numerous businesses currently on social media alone and many more users and creators that are being introduced every day.

Fisayo Fosudo

How much did you start with and how big have you become since starting? As I mentioned, all my resources from years of graphic design work, which accrued to a savings of about $6,000, went into getting gear and furniture for video production. This was done before I started making videos. I didn’t have any immediate results in the beginning, but I quickly learned a lot moving forward and I was able to make my first mobile phone

video review in April of 2017. It has been a little over a year and three months, and we have been able to gain over 40,000 combined following, 13,000 YouTube subscribers, over half a million views and millions of impressions across the Internet. You market phones, wristwatches and other tech products via digital online platforms. How lucrative has the business so far been?

It has been okay so far and there is still a lot of ground to cover as far as making a career out of online technology video production. How do you make your money? From YouTubers: People who upload videos on YouTube consistently. I make money via pre-roll adverts, that is, adverts before the video itself is played, and then collaborating with a brand. I have been able to and still currently work with many brands such as

What challenges do you face? The major challenge I currently face is power supply or the lack thereof. Editing videos takes time, resources and a lot of power (light/ energy), and not having something dependable is a major downside. Fortunately, there is always a generator to resort to, but it is just weird that we still have problems like this. To digress, it is also why we cannot have many more manufacturers come in due to heavy operations cost stemming from lack of dependable power alone. What would you tell your younger self? I would tell him to work smarter.

How Poise Nigeria celebrated World Youth Skills Day ODINAKA ANUDU

n November 2014, the United Nations instituted the World Youth Skills Day aimed at creating more awareness of and dialogue on the importance of technical, vocational education and training and the development of other skills ideal to both local and global markets. The intent is to reduce unemployment and underemployment among the youth in all ends of the world and throw light on youth skills development as well as underline the vital need for marketable skills. In celebration of World Youth Skills Day, Poise Nigeria organised and held an event on Monday, June 16, 2018, to raise awareness on the importance of youths developing skills for jobs. The event themed, ‘Improving the Image of Technical and Vocational Education and

Training’, had in attendance Fred Nduka, general manager, human resources, Challarams; Asher Adeniyi, managing director – PoiseGFA; Mobolaji Akinkugbe, national coordinator, Next Economy Pro-

gramme, SOS Children’s Villages; Nonye Cally-Bechi, deputy managing director, Poise Nigeria, and Femi Obidare, managing director at Gidijobs Nigeria. These resource persons enlightened the partici-

R-L: Fred Nduka, general manager, human resources, Challarams; Nonye CallyBechi, deputy managing director, Poise Nigeria; Asher Adeniyi, managing director, PoiseGFA; Mobolaji Akinkugbe, national coordinator, Next Economy Programme, SOS Children’s Villages; , and Femi Obidare, managing director at Gidijobs Nigeria at a World Youth Skills Day’s celebration by Poise Nigeria in Lagos last Monday

pants on various topics centered around the theme. In attendance were beneficiaries of the Skills Development Programme run by Poise Nigeria with the support of Oxfam Nigeria. These programmes are the Career Kickstart Employability training and Ekobits ICT Academy, where graduates are polished for the marketplace and under -privileged teenagers/youths from vulnerable communities receive ICT training and education respectively. With Poise Nigeria’s renowned contribution in the area of employability, learning and skills development, the beneficiaries were full of thanks as they learnt from the wealth of knowledge and experience of the guest speakers on practical steps to take to advance their career and life. Light was also shed on the kind of skills youth require to operate in future economies and to become drivers

of an ecologically friendly future. Participants said the event was timely in aiding their personal and career choices, stressing that they were better equipped to acquire more skills as well as make use of already acquired ones in improving themselves.

Start-Up Digest Team ODINAKA ANUDU Editor

odinaka.anudu@businessdayonline.com 08067478413

Reporters Josephine Okojie Angel James Joel Samson Graphics

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Deeper Life: Building a new generation of high-skilled entrepreneurs ODINAKA ANUDU

section of the Nigerian public believes that churches are not doing enough to solve some of the daunting challenges ravaging the society. This group criticises churches for failing to liberate men from poverty, want, diseases and life’s problems. But this is only a half-truth, as many Christian denominations are beginning to initiate programmes that meet the needs of the 21st century’s man. One of the churches that have keyed into solving the ever-growing problems of the 21st century’s man is the Deeper Christian Life Ministry, overseen by the holiness preacher, William Folorunso Kumuyi. Today, Deeper Life, known worldwide as a holiness church, has seen the need to build the total man through empowering him with the 21st century entrepreneurship skills. The church recently initiated the Young Professionals Forum to equip young members of the church with modern-day skills and meet their specific needs as a group. The church organised a skills acquisition programme, where 255 of them were trained in Digital Marketing, Web Design, Mobile Applications Photography and Video Editing, Event Planning and Interior Design, Hydroponic Farming, Pastry and Mixology. An award ceremony took place in the church’s headquarters at

L-R Jerry Asemota, Deeper Life Bible Church secretary, representing William Kumuyi, general superintendent ; Maureen Onyia, permanent secretary, Enugu State Liaison office, Lagos ; Oyinkansola Oyeyilola-Urias, best student in Event Planning; Bayo Oyeyemi, moderator, Lagos, and Fashina Abayomi, president , Young Professional Forum, during the graduation and award ceremony for the beneficiaries of the ministry’s skills acquisition programme at Deeper Life Bible Church headquarters in Lagos. Pic by Pius Okeosisi

Gbagada, Lagos, on July 8. “It remains our abiding desire to have them subsequently transformed from being employees to self-employed personalities and from employers to becoming entrepreneurs,” Kumuyi said, at the event. According to him, many young people hardly come to terms with their purposes in life, a yawning gap the church is determined to fill. He said massive unemployment, underemployment, loss of jobs, frustrations, delinquency, drug abuse and other delinquencies that have captivated the attention of young people present

a grim picture to every discerning and concerned mind. He said the church is wholly committed to the edification and elevation of the human essence and faculties into maximal productive use. “There are plans to train additional participants to acquire entrepreneurial skills in the next two months. We expect and pray that the graduands and beneficiaries of the first batch of the skills acquisition programme will face the future with courage and hope,” he stated. Observers believe that this step taken by Deeper Christian Life

Ministry could redefine the Nigerian religious ecosystem. Adebayo Fasina, president, YPF, in a statement, said YPF was born to help youths discover their purposes in life through diligence, hard work, honesty and integrity, which would prepare them for excellence in their chosen fields of endeavour. According to Fasina, YPF currently has over 1,500 members in Lagos and has the intention of expanding to other states of the nation. “YPF is designed for young graduates, career professionals, and young entrepreneurs in Nigeria geared towards making

them job givers,” he said. Speaking with reporters, one of the graduands, Adeyemi Jeremiah, who was trained in Digital Marketing, said the programme has impacted positively in his life. “Less than one month after the programme, I got a contract with EduBridge Consult in partnership with Google, as a digital trainer. Also, I have been to two states within two weeks. I was in Anambra and Kwara States to conduct some training and, in the two states, I have trained over 700 students,” Adeyemi said. “I have two Google certifications as a Digital trainer and Adword specialist. Currently, I manage two social pages for small and medium enterprises (SMEs),” he added. Ben-Eze Chidiebere, who was trained in Graphic Design and Branding, was full of gratitude to the church for the opportunity. “Before the training, I had issues with fonts and colours in my designs, but after the programme, I got a perfect understanding of the basis of design. So, since I got my foundation right, my designs have changed. Now I have a lot of contracts and jobs to do just because I got the training right and understand it well. I now also own D’Ebere Art and it has been doing fine ever since,” said Ben-Eze. On where he hopes to see himself in the next five or six years, he said: “Going forward, I would like to see myself doing marvellously well in the design work and reduce unemployment rate in the country, which is the ultimate goal of the training.”

FG urged to reorganise non-informal training schemes AKINREMI FEYISIPO, Ibadan

he federal government has been urged to reorganise the traditional apprenticeship and non-formal training schemes as well as incorporate standardised certification procedures as a way of increasing capacities and capabilities to generate employment in the informal sector. In a communiqué issued at the end of a two-day dialogue on job creation in Nigeria by Ibadan School of Government and Public Policy (ISGPP), United Nations Economic Commission for Africa (UN-ECA) and Office of the Vice President of Nigeria, it was noted that successive governments in the country failed to give balanced attention to the basic avenues of skills acquisition, as they repeatedly concentrated resources and expertise on the formal tech-

nical and vocational educational training (TVET), to the detriment of traditional apprenticeship and non-formal training. According to the communique, investments in a highly productive and skilled workforce would lead to the expansion of growth potential and employment opportunities as well as strategic and meaningful contributions to overall national development. Public and private sector players, the academia, policy and economic experts and Poise Nigeria, among others, who participated in the dialogue, noted that barriers to job creation can be identified and resourcefully tackled by the combination of technology, policy, innovation and institutional support. “Creation of jobs should involve the public and private sectors to overcome the challenges of unemployment and job creation in the country,” the communiqué said. It was agreed that there is an

urgent and strategic need for the re-assessment of Nigeria’s economic growth to ensure that growth addresses the challenges of unemployment and job creation

in the country. “The problem of youth unemployment in the country cannot be divorced from weak policy conceptualisation, management

L-R: Joyce Akpata, director general, Nigerian-American Chamber of Commerce (NACC); Emmanuel Odemayowa, CEO, Global Property Partners; Akin Opatola, COO, Brokerfield Real Estate | AOC Subsidiary; Oluwatoyin Akomolafe, national president, NACC; Demola Adetola, CEO, Demola Adetola & Co; Tola Akinhanmi, acting head, real estate finance (West Africa), Stanbic IBTC Plc, at the NACC July Breakfast Meeting, held in Lagos on July 19

and evaluation.” The communiqué, however, stated that a significant proportion of the nation’s workforce is negatively affected by varying degrees of unemployability to the absence of necessary skills and skills mismatch. It recommended a holistic economic diversification that will add value to ever y stakeholder and a rethink of the agricultural policy of the government to include land reforms that give titles of lands to farmers, empower them as economic beneficiaries, adding that the job creation challenge in the country can be effectively addressed through a comprehensive diversification of the nation’s economic structure. Participants, therefore, stated that there is a place and need for the institutionalisation of good governance as well as policy continuity as fundamentals for job creation.

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The Key to Preventing Generational Tension Is Remembering That Everyone Wants to Feel Valued Liane Davey

remember the first time I felt old as a manager, more than 10 years ago now. It was at a lunch with my new team when I mentioned the first “45” I bought with my own money as a kid. One of my direct reports, who was 10 years younger than me, looked at me blank-faced and asked, “What is a 45?” She had never seen the singlesong vinyl record format. We came from different worlds. Over the next couple of years I had what I perceived as serious “generational issues” on my team. I learned a few lessons about managing across the generational divide. The most important lesson is to see past the stereotypes. Generational differences are real, but we tend to make too much of

them. The individual differences within a generation are much greater than the differences across the generations. Don’t make

the mistake of pigeonholing someone because of the year they were born. If you feel resistance, instead of getting frustrated,

try empathizing. If you’re managing someone much older than you, they might have legitimate concerns about your leadership be-

cause your style is countercultural or just different from how things used to be done. If you’re managing someone much younger than you, maybe they experience your management style as slow and cautious, or even rigid. Regardless of the direction of the generation gap, ask thoughtful questions and listen carefully to learn from the answers. Judgment is a two-way street. Just as your employees are judging you, you are likely judging them. It’s critical to confront your own stereotypes. One thing you can count on is that regardless of age, everyone wants to be valued. If the way you are managing the older or younger members of your team is overtly or subliminally signaling that you don’t value them, you will see the symptoms of hurt feelings: resistance, disengagement, anger, or

insubordination. Start by engaging each person in a conversation that demonstrates that you’re interested in their thoughts. The point of these open conversations is not to suggest that your organization’s way of doing things is optional; it’s not. Instead, the point is to understand the potential resistance you might face and to tap into any source of strength and support that you can get. It’s time to stop thinking about problems as “generational issues.” If you have a problem with an entire generation, that’s your problem, and your prejudice. If you have a problem with one employee who happens to be of a different generation, then you have a problem with one employee, period.

(Liane Davey is the cofounder of 3COze Inc.)

How to Use Mindfulness to Increase Your Team’s Creativity Ellen Keithline Byrne & Tojo Thatchenkery

hen they don’t have the time or space to incubate novel and clever ideas, employees may miss out on opportunities to reframe a problem and see new possibilities for potential solutions. How do you help your team develop their creativity? Research has found that a short period of mindfulness training can have a positive impact on creative output. When we create group dynamics that are in flow, where one person’s idea spurs another person’s, the idea develops to a point that it wouldn’t have on its own. Research suggests that peo-

fresh eyes. PROVIDE THE RESOURCES. Offer employees resources for developing their creativity and mindfulness practice.

ple who practice mindfulness have more cognitive flexibility, are able to see beyond what they’ve already done and are better at solving problems requiring insight. It indicates that people are open to more-original ideas after just a brief meditation practice. And when we apply this to a team of people, we begin to magnify this effect. What else can companies do to develop mindful teams and cultures? Here are some steps they can take: CONNECT MINDFULNESS TO CORPORATE VALUES. Demonstrate a deliberate intention to develop a mindful culture by linking the mindfulness benefits to the organization’s stated values.

Organizations have an opportunity here. Simple mindfulness practices can begin to shift their teams’ levels of creativity and can be a necessary tool for addressing the complexities of today’s workplaces.

CREATE CORPORATEBASED MINDFULNESS PROGRAMS. Train employees in mindfulness practices and in how to apply the benefits to daily life.

SUPPLEMENT LEADERSHIP DEVELOPMENT PROGRAMS .Offer a condensed version of the corporate-based mindfulness program during rou-

tine leadership training sessions. ALLOW FOR MINDFUL MOMENTS. Offer opportunities for employees to slow down, to incubate, and to see with

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Monday 23 July 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES Rolls-Royce threatens to end ‘mini-nuke’ project for lack of support

Lobbyist quashes speculation over death of HNA co-founder Page 42

Page 43

World Business Newspaper

Trump lashes out over former lawyer’s secret tapes President fumes about recording of conversation over payments to former Playboy model Demetri Sevastopulo

onald Trump has lashed out at his former lawyer Michael Cohen following reports he had secretly recorded a conversation about payments to a former Playboy model who said she had an affair with the then-New York property mogul. Mr Trump tweeted on Saturday morning that it was “perhaps illegal” for a lawyer to record a conversation with a client without consent. The New York Times on Friday reported that two months before the 2016 presidential election, Mr Cohen had taped a conversation about payments to Karen McDougal, a former Playboy playmate who had sold her story about an alleged affair to The National Enquirer. “Inconceivable that the government would break into a lawyer’s office (early in the morning) — almost unheard of. Even more inconceivable that a lawyer would tape a client — totally unheard of & perhaps illegal,” Mr Trump tweeted. “The good news is that your favorite President did nothing wrong!” The Federal Bureau of Investigation obtained the recording during an April raid on the offices of Mr Cohen, who was then personal attorney to Mr Trump. The New York Times said Rudy Giuliani, the former New York mayor who is now representing the president, said Mr Trump had discussed making a payment to Ms McDougal, before saying that the conversation was about buying the rights to the story from the American Media group. American Media Inc, the publisher of The National Enquirer whose chairman is a friend of Mr Trump, owned the rights to the story in a “catch and kill” deal with Ms McDougal – an arrangement

where the story is not published and the seller of the rights is prohibited from discussing the story. Ms McDougal, a former Playboy Playmate of the Year, claimed that the affair with Mr Trump had begun shortly after the birth of Barron, the president’s son with Melania, his third and current wife. The allegations are only one of a set of claims about extra-marital relationships involving Mr Trump. Mr Cohen paid $130,000 to Stormy Daniels, the adult entertainer who has also claimed to have had an affair with Mr Trump, although the president denies that such a relationship ever took place. Mr Cohen is being investigated by the Southern District of New York, as part of an inquiry into whether there were campaign finance violations during the 2016 presidential election. One of the longest serving members of the Trump Organisation, Mr Cohen previously said he would “take a bullet” for Mr Trump. Following the FBI raid, however, he has made comments that cast doubt on whether he would remain loyal, leading to speculation that he might cooperate with investigators. “My wife, my daughter and my son have my first loyalty and always will,” Mr Cohen told ABC television earlier this month. “I put family and country first.” In response to the president, Lanny Davis, a lawyer representing Mr Cohen, tweeted on Saturday: “The strategy of @realdonaldtrump @potus @RudyGiuliani is flawed; just as is #Trump’s false #Twitter statement made against @michaelcohen212 this morning”. Mr Davis added: “Rudy claims the tape is “exculpatory”. Why so angry?” Mr Giuliani said that the recording would prove that Mr Trump had done nothing wrong.

Theresa May to send ministers across EU to sell Brexit plan Lobbying to be stepped up despite Davis warning that proposal will have to be abandoned George Parker & Chris Giles

K prime minister Theresa May will this week send cabinet ministers across the EU to sell her Chequers Brexit compromise plan, despite warnings from her former Brexit secretary that she will have to rip it up and start again. Mrs May will convene her last cabinet before the summer break in Gateshead on Monday, where she will instruct her senior team

to step up lobbying in European capitals. But David Davis, who quit as Brexit secretary earlier this month in protest of the compromise, said at the weekend that he feared the plan would not fly in Brussels and Mrs May would have to drop the scheme in favour of a “Canada plus, plus, plus” free trade agreement. “I think when we get to the autumn, if we are in the situation where we don’t have any degree Continues on page 42

US regional bankers warn on rising trade tensions Protectionism threatens demand for loans particularly in export-dependent sector

S bankers from Texas to Wisconsin have warned that world trade jitters are starting to undermine the confidence of their corporate clients, in the latest sign of a business backlash against protectionism. While downplaying the impact on lending volumes so far, regional and community lenders across the country said anxiety about tit-for-tat tariffs threatened investment activity unless the tensions cooled. “They’re concerned,” said Bruce Van Saun, chairman and chief executive of the $155bnin-assets Citizens Financial Group, of the Rhode Islandbased bank’s business clients. Managers were trying to establish whether the Trump administration was merely “posturing” to secure better trade deals or if there was a “dark side of these negotiations, which could get ugly”. Some companies were al-

ready trying to adjust their supply chains in response, he added. “If there’s a lull in activity because of uncertainty, or because supply lines have to be rejiggered, that can just harm economic activity.” Asked during M&T’s earnings presentation whether trade friction and geopolitical tensions were hurting sentiment among commercial clients, Darren King, chief financial officer of the S&P 500-listed lender, said: “The short answer is yes.” “It just causes a little bit of inactivity and paralysis. But it’s not widespread. It’s depending on who really is impacted by those changes.” Lenders concentrated on export-dependent regions or sectors are particularly cautious. Curtis Farmer, president of Comerica, a $16bn-market-cap lender based in Dallas, told analysts that trade concerns were “probably the greatest source of caution” for its corporate cus-

tomers. The bank has a chunky exposure to the car industry, and a sizeable presence in Michigan and California as well as Texas. In eastern Massachusetts, Rob Cozzone, chief financial officer at Rockland Trust bank, said trade concerns were even spreading to the commercial property market. Developers concerned about the rising costs of materials and goods were changing contracts, to lock them in. “They are either fixing with their suppliers or passing it on to the buyers,” he said. “That is a new dynamic.” In rural Ohio, Paul Siebenmorgen, chief executive of Farmers & Merchants Bancorp, said a tariffinduced slump in soyabean pricing had caused customers “to delay equipment and land purchases”. However, he added that financial results from the bank’s agricultural customers remained strong and there had been no “material decline” in soured loan rates.

Putin-Trump idea for bilateral business forum hits early trouble Deep scepticism in Russia that plan hatched at Helsinki summit can get off the ground Kathrin Hille & Henry Foy

n idea Vladimir Putin and Donald Trump hatched at their summit a week ago for a new dialogue forum for Russian and American business leaders already appears to be dead in the water, highlighting the difficulty of making even small steps forward in the deadlocked relationship between Moscow and Washington. After a two-hour tête-à-tête with the US president in Helsinki last Monday, Mr Putin said that they had agreed to create a working group of senior Russian and American business captains to develop trade and investment between the two countries. “Business people

better understand how to go about mutually beneficial cooperation. Let them consider what can be done and make recommendations,” Mr Putin said. But Russian government officials and business people are deeply sceptical that the initiative can get off the ground, as anti-Russian sanctions and Trump administration policies make even meeting and speaking to Russian business leaders risky for their American peers. “If we succeed in convincing our American partners to set up such a commission, such a structure on economic issues, that would be awesome,” Anatoly Antonov, Russia’s ambassador to the US, said in Moscow on Friday. “But with all these restrictions in place, it is not

working.” Mr Antonov said work was under way on the proposed bilateral grouping. Another person briefed on the bilateral talks said discussions were under way for organisations representing US and Russian businesses in Moscow to meet this week. However, Mr Antonov said the Countering America’s Adversaries Through Sanctions Act (Caatsa), a US law passed a year ago that codifies sanctions against Russia and makes it almost impossible to lift them, was a huge impediment, as was the so-called “Kremlin list” of more than 200 Russian billionaires and senior officials that Washington called out as potential future sanctions targets in January.

BUSINESS DAY

C002D5556

NATIONAL NEWS

FT Theresa May to send ministers across...

Farc members take seats in Colombia’s congress for first time

Continued from page 41 of agreement, we’re going to have to start again,” Mr Davis said in an interview with the Sunday Express. He said that the government should start working up an alternative plan based on the “best bits” of trade deals the EU has already struck with Canada, South Korea, South Africa, Switzerland and New Zealand. “Today, I wouldn’t expect the government to be particularly welcoming of Canada plus, plus, plus,” he said. “But I think, come the autumn, we’ll be in a different position.” Mrs May’s Chequers plan goes well beyond a traditional free trade agreement, proposing that the UK stay close to the customs union and aligned with EU rules on goods. She has argued that a Canada-style deal would necessitate a hard border in Ireland. But Michel Barnier, the EU’s chief Brexit negotiator, last week challenged the Chequers plan in a series of “major” questions, asking if it would lead to more bureaucracy and breach the indivisibility of the EU’s “four freedoms” of movement for goods, capital, services and people. Mrs May hopes the 27 remaining EU member states will take a less doctrinaire approach, and is sending senior ministers to European capitals “to step up the pace” of negotiations. David Lidington, her de facto deputy, will travel to France, foreign secretary Jeremy Hunt will go to Germany, home secretary Sajid Javid will visit Spain and business secretary Greg Clark will head to Italy. Mrs May will meet the leaders of Austria, the Czech Republic and Estonia, while chancellor Philip Hammond will sit down with other EU finance ministers at a G20 meeting in Buenos Aires. But at home, Dominic Raab, the new Brexit secretary, admitted on Sunday that he was still working to convince some cabinet ministers that the Chequers plan was right for the country, while Eurosceptic Tory MPs have vowed to oppose it. Mr Raab told the BBC’s Andrew Marr programme that the Bank of England had produced analysis showing that in “material ways” a no deal exit would be worse for the EU than it would be for Britain, but the BoE said that this referred only narrowly to questions of financial stability. Meanwhile, John Major, the former Conservative prime minister, said it was possible that 30 to 40 “irreconcilable” pro-Brexit Tory MPs would block any deal in the autumn, pushing the country towards a “catastrophic” exit from the EU without a withdrawal deal. “The people who have the least will be hurt most,” he told the BBC, adding: “The majority of the House of Commons should not let the irreconcilable minority in the Conservative party determine what happens in these negotiations.” Sir John also said that in the event of a parliamentary impasse, it would be “morally justifiable” to hold a second EU referendum on the terms secured by Mrs May in Brussels.

Monday 23 July 2018

Senior figures from once-feared guerrilla group sworn in as part of peace deal Gideon Long

Lobbyist quashes speculation over death of HNA co-founder Pharma go-between Daniel Vial says Wang planned holiday in Provence Harriet Agnew & Lucy Hornby

hinese aviation executive Wang Jian was planning a week of luxury tourism when he died unexpectedly in the south of France, according to a lobbyist with deep business and political connections in China who has rejected the speculation surrounding the death that has gripped China. Wang, co-chairman of sprawling Chinese conglomerate HNA Group, spent his final evening dining with pharmaceutical insider Daniel Vial at a boutique hotel in southern France. The following day, he slipped while trying to take pictures on a wall by an ancient church, and plunged to his death. The unusual accident has given rise to a flurry of speculation and conspiracy theories in China, where HNA is under financial pressure following a global acquisition spree. Chinese reporters have rushed to Bonnieux, the pictur-

esque village where he died, and surprised the local gendarmerie with the volume of their queries. Chinese authorities appear to be eager to rule out any alternative explanation. Diplomats arrived immediately on the scene in Provence. An autopsy was conducted, as is routine when a foreigner dies accidentally in France. The French inquest is due to be closed once the results of a DNA test are received. “I am certain it was neither a murder nor a suicide,” Mr Vial said in an interview at his spacious Paris apartment overlooking Les Invalides. “At dinner the night before he died we were talking about all of his plans for the week ahead to enjoy the region’s culture.” Wang travelled to the Luberon region of Provence with four colleagues after attending an annual golf tournament in Paris sponsored by HNA. Mr Vial joined the group for champagne and dinner at the Bastide de Capelongue, a luxury hotel a short walk away from his restored 11th-century

priory. A year earlier, Wang had been outbid on a nearby chateau. Wang had already purchased tickets to see the Richard Strauss opera Ariane À Naxos, and The Magic Flute, Mozart’s final masterpiece, at the international music festival in nearby Aix-enProvence, Mr Vial said. He also told his friend he was looking forward to attending the annual summer photography festival in Arles and walking in the region’s lavender fields. But on Tuesday July 3, Wang fell 10 metres after attempting to climb a wall at the Haute Eglise in Bonnieux, which he was touring with four companions and a FrancoChinese guide. He was conscious for a few minutes, but died before paramedics could arrive. “We are certain it was accidental,” said Hubert Mériaux, a lieutenant-colonel in the gendarmerie of the southern Vaucluse region. A person who had no connection to Wang had also witnessed his fall. “That’s why I have no doubt.”

CSR: Huawei calls for entry for “seeds for the future” program for Nigerian university students

uawei Nigeria, recently announced the call for entry from Nigerian university students to participate in this year’s ‘seeds for the future’ programme, a Corporate Social Responsibility (CSR) initiative that was initiated in 2008, and seeks to develop local ICT talent, enhance knowledge transfer, promote a greater understanding of and interest in the ICT sector, improve and encourage regional building and participation in the digital community. The Seeds for the Future Program was created by Huawei Technologies to proactively support the development of future leaders and innovators across the world. Huawei is committed to promoting ICT industry development in the countries it operates, and aims to drive long-term economic, social, and environmental sustainability. Li Frank, managing director in a statement said, talent is crucial for the growth and development of any industry, the rapidly growing ICT industry has greatly changed business models.

“As a result, across the ICT ecosystem there is an urgent need for large numbers of technical staff who can address the challenges posed by this transformation. For true and lasting development in Nigeria, we must look in the area of human capital development with a huge focus on youths. “Over the years, Huawei has been investing in ICT skills and knowledge in Nigeria in an effort to boost employment, foster the development of knowledge-intensive products and services, and enhance the ICT skills of the future generations. Huawei has done this successfully by implementing and supporting a number of schemes such as the Growing Girls and Women in Nigeria (G-Win), 1000 Girls in Training, scholarships for The African University of Science and Technology (AUST), engineers training programs,” said Frank. This marks the third consecutive year, where smart lucky Nigerian students are picked through a detailed and objective selection process to partake in Huawei’s global CSR program. The ten (10)

successful candidates from this year’s Seeds for the Future program will proceed to Beijing and Shenzhen, China for the all-expense paid training in September. Victoria Aduwo, one of the successful participants from last year’s trip to China, in her testimonial said, “We learnt so much about ICT and got first-hand experience in a global ICT firm from leading ICT facilitators. I got hands-on with state of the art technologies. I learnt about Smart Cities, Smart Agriculture, and Telemedicine”. This year, the entry process will be open to all legitimate Nigerian students currently studying a technological, computing or engineering based course in a legally registered university or higher institution of learning. Students are thereby encourage to look forward for more details as Huawei Nigeria will be advertising the qualification process and terms through newspaper adverts, online news blogs and social media channels, with steps and links on how to apply.

alf a century after their Marxist comrades took up arms in the Colombian mountains and vowed to overthrow the state, members of the country’s once-feared guerrilla group, the Farc, have taken seats in the democratically elected congress for the first time. A handful of senior figures from the Farc, now a political party, walked into the parliament building in central Bogotá on Friday to be sworn into office in a ceremony rich in symbolism. Among them was Pablo Catatumbo, a 65-year-old veteran who fought with the Farc for more than 40 years before helping negotiate their 2016 peace deal with the government. He and his colleagues, who carried red roses — the Farc’s symbol — into parliament, took their seats opposite staunch conservatives who have spent their lives trying to destroy the guerrilla group. “Today we are witnesses of a true milestone in our history,” President Juan Manuel Santos said in his last speech to congress before stepping down after eight years in power. The Farc members did not win their 10 seats — five in the senate and five in the lower house; they were given to them under the terms of the peace deal. They will hold them for eight years but after that they will have to win seats on merit. The decision to give them a platform in congress was one of the most controversial parts of the peace deal, with some conservatives saying it was tantamount to rewarding terrorists. Mr Santos’s successor, president-elect Iván Duque, has described the decision as “a joke” but has stopped short of saying he will try to strip the guerrillasturned-politicians of their seats. For all the controversy, the Farc will have little clout. In March’s congressional elections it took just 0.3 per cent of the national vote. Instead, the new congress will be dominated by parties from the right and centre-right, spearheaded by Alvaro Uribe, who waged a fierce war against the Farc as president from 20022010, led opposition to the peace deal, and threw his weight behind Mr Duque’s presidential bid. As Mr Duque prepares to take office on August 7, the peace deal he inherits is under severe strain. The Farc says the government has broken its promises and one of its senior leaders, Iván Márquez, refused to take up his seat in the Senate, arguing in a recent letter that “Colombia’s peace is trapped in nets of treason”. Another Farc leader, Jesús Santrich, could not enter Congress because he is in jail, awaiting extradition to the US on drug-trafficking charges.

Monday 23 July 2018

C002D5556

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Rolls-Royce threatens to end ‘mini-nuke’ project for lack of support

Aero-engine maker wants long-term government commitment, including financial support Peggy Hollinger & Sylvia Pfeifer

olls-Royce is preparing to shut down its project to develop small nuclear reactors if the government does not make a long-term commitment to the technology, including financial support, in the coming months. The UK aero-engine maker has scaled back investment significantly, from several millions to simply paying for “a handful of salaries”, said Warren East, RollsRoyce chief executive, in an interview with the Financial Times. “Obviously, we would love to keep the project alive so we will do it as cleanly as we possibly can . . . shutting down as much of the activity as we can shut down without killing the capability,” he said. However, David Orr, executive vice-president of RollsRoyce’s small modular reactors programme, said that without comfort from the government on two fronts the project “will not fly. We are coming to crunch time.” Rolls-Royce wants its technology to be chosen as the first to apply for a licence when a slot is made available later this year. It also wants the government to provide financial support, initially of about £20m, to take the technology through the early stages of the licensing process. This would be match-funded by the consortium, which includes companies such as Laing O’Rouke and Arup. Rolls-Royce is one of several consortia to have bid in a gov-

ernment-sponsored competition launched in 2015 to find the most viable technology for a new generation of small nuclear power plants. However, when a nuclear sector deal was finally unveiled last month, the government allocated funding only for more advanced modular reactors (AMRs). SMR’s, which typically use water-cooled reactors similar to existing nuclear power stations, were omitted from specific funding even though they are closer to becoming commercial. This has frustrated those putting forward SMR bids. RollsRoyce has argued that developing its technology should be regarded as a “national endeavour” to develop nuclear skills that can be used to create an export led industry. Senior executives have argued the government could make a commitment along the lines of that made last week on Britain’s combat air capability, where it agreed an investment timetable with industry and set out its long-term ambitions for the sector. Tom Mundy, chief commercial officer of NuScale Power, said the US company was looking for “a suite of initiatives” from government that would “help SMRs become commercial”. “The future for SMRs in the UK is not just about vendors like NuScale, it’s about the totality of the SMR vision. It’s ultimately about the customer base — the power companies that want to buy and deploy the technology,” he said.

Fiat Chrysler chairman tells staff Marchionne will not return John Elkann urges employees of Italian carmaker to brace for worst on former boss Rachel Sanderson & Peter Campbell

ohn Elkann, Fiat Chrysler chairman, has told the carmaker’s employees to prepare for the worst as they absorb the shock news that Sergio Marchionne, the veteran chief executive, was unlikely to recover from complications during surgery. Mr Elkann, scion of the Agnelli industrial dynasty that owns a third of Fiat Chrysler Automotive shares, told the company’s nearly 236,000 employees on Sunday of his “profound sadness” that Mr Marchionne’s health had “worsened in the last hours”. Mr Elkann said the 66-year-old auto industry veteran “would not be returning to FCA”. Fiat Chrysler, its holding company Exor and subsidiary Ferrari held three board meetings on Saturday to rapidly appoint a replacement for Mr Marchionne as his medical prognosis dimmed. He named Mike Manley, the British head of Fiat Chrysler’s best-selling Jeep brand, as the

company’s new CEO. In Turin, the historic headquarters of Fiat, long-time employees spoke of disbelief as it became clear that Canadian-Italian Mr Marchionne was in a critical condition at a Swiss hospital. “It is ridiculous. He was larger than life,” said one person choking back sobs. “I cannot believe it is happening,” said another long-serving employee. Mr Marchionne has dominated Fiat Chrysler since creating the automaker by rescuing Italy’s Fiat from bankruptcy and later merging it with Chrysler of the US. In the process, he has emerged as one of his generation’s boldest business leaders known for his nonstop work ethic and razor sharp intellect. Filling his shoes had been seen as a near impossible task. Mr Marchionne had been set to retire next April but the traumatic and premature nature of succession leaves numerous hurdles for the company, said analysts and fellow executives.

US tariffs set to dominate automakers’ earnings Higher commodity costs and trade fears expected to hit profits Patti Waldmeir

he “big three” US automakers will this week report second-quarter earnings buoyed by unexpectedly strong sales of high-margin pick-up trucks and sport utility vehicles, which have defied higher petrol prices and interest rates. But with the automakers caught in a Trump-triggered trade war, all eyes will be on what Ford, General Motors and Fiat Chrysler say about the future impact of tariffs, and whether trade concerns will force a cut in full-year earnings forecasts. Representatives of America’s auto industry told a US commerce department hearing on Thursday last week that “Section 232” tariffs of up to 25 per cent on imported cars and parts would raise the cost of an imported car by $6,000 and a US-built car by $2,000. But those are not the only duties targeting the industry, which has been hit by tit-for-tat tariffs between China and the US, US steel and aluminium duties and the threat of an EU-US tariff war. Even before trade worries surfaced, the industry was warning that input costs would hit profits. Ford predicted in January that this year’s earnings per share

would fall because of higher commodity costs and in April said first-quarter profits were hit by steel prices boosted by “just the threat” of 232 steel tariffs. Wall Street analysts are forecasting General Motors adjusted earnings per share of $1.78 for the quarter ended June 30, compared with $1.89 for the previous year. Ford’s second-quarter adjusted earnings are forecast at 32 cents a share, down almost 43 per cent on the previous year’s figure of 56 cents. GM blamed higher materials costs, along with product launch costs, for depressing first-quarter adjusted earnings before interest and taxation in North America. Steel and aluminium tariffs were not implemented until after the end of the first quarter, but materials prices had already begun rising at the end of last year. Analysts expect Fiat Chrysler — which this weekend suffered the sudden exit of chief executive Sergio Marchionne due to ill health — to report adjusted second-quarter earnings of €0.84 compared with €0.69 a year ago. While Wall Street analysts said second-quarter earnings would not reveal much direct impact from tariffs, automakers are likely to come under pressure to quantify the impact on

second-half costs on car prices and, potentially, on the level of US sales. David Whiston, at Morningstar, said: “The problem with all the tariff talk is that we don’t know what’s going to happen and in what form, and even if it does happen, how long it will last. Everyone right now is planning on it not being a long-term problem.” Brian Johnson, at Barclays, said: “Auto stocks have been getting whipsawed by macro volatility around trade tensions . . . but we would point out that trade with China is almost negligible . . . due to ‘source in region, build in region, sell in region’ strategies. And while tariffs on European vehicles and on Nafta flows would sting, we see potential political solutions on both fronts.” “I think there will be a resolution in six or nine months and it’s not worth disrupting the supply chain for Europe or China,” said Efraim Levy of CFRA Research. “But Nafta is a bigger issue.” “Some automakers are hedged several years into the future on commodity prices and others are very good at forcing this stuff on to suppliers,” said one auto analyst, who added that most automakers would in any case be reluctant to blame any profits impact on presidential tariffs.

UK must not sacrifice the City’s openness in tit-for-tat with the EU Brexit will bring new barriers, as UK becomes subject to European ‘third country’ regimes Jonathan Ford

hroughout the negotiations over Britain’s departure from the EU, there has been plenty of talk about hard and soft borders. Mostly this has centred on the frontier between Northern Ireland and the Irish Republic. But there is another soft border that has attracted rather less attention; and that’s the one which surrounds Britain’s financial system itself. The UK is unusual in the way it opens its markets to all comers. Take, for instance, the so-called “overseas persons exclusion”. Since the 1980s

this rule has permitted foreign firms to trade freely in UK-based wholesale markets, without needing to register locally, or even to come from a home country with equivalent regulations. The one requirement is that those who do so cannot physically operate on UK soil. This liberal regime has worked well for the City of London, drawing liquidity to its markets and helping to cement it as a global financial centre. It is one reason why the UK plays host to so many components of the plumbing that connects modern finance. But a mixture of Brexit and modern technology are causing some to

ponder whether a more obtrusive perimeter might be needed. While the UK hopes to minimise the friction that will follow from Brexit, that process will inevitably lead to some new barriers, as it becomes subject to European “third country” regimes. To hedge against the risk of being unable to serve customers, financiers are looking at moving some activities on to EU territory. Some European countries have openly used the uncertainty to dangle incentives to shift business to their own financial centres. Brussels has looked at rule changes that would force more business onshore.

44 BUSINESS DAY NEWS

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Monday 23 July 2018

EFCC urged to investigate N12.4bn non-competitive contracts in Discos … Discos dismiss report as handiwork of evil people TONY AILEMEN, ABUJA

n Ad hoc Committee of the National Council on Privatisation (NCP), which recently investigated the Nigeria power privatisation, has called on the Economic andFinancialCrimesCommission (EFCC) to investigate suspicious cases of “Corporate larceny” in the Discos as part of measures to ensurethattheyremainfinancially healthy. The committee, headed by Bashir Gwnadu, also had in its memberships top government officials drawn from the Presidency, the Federal Ministry of Finance as well as the Bureau for Public Enterprises (BPE) that midwived the privatisation process.

Five PDP chieftains nabbed for killing chairman

ive chieftains of the opposition People’s Democratic Party (PDP) have been arrested in Lagos for alleged killing. Lagos State Police Command, on Sunday said the suspects had been taken in for interrogation over the killing of one Borishade Adeniyi, chairman, PDP Apapa chapter. The arrest was confirmed by the command’s spokesman, Chike Oti, in a statement, saying what was supposed to be a peaceful political meeting of PDP members ended in unnecessary bloodletting. “In a swift reaction, the Commissioner of Police, Lagos State, CP Imohimi Edgal, directed the Area Commander in-charge of Area ‘J’ Elemoro, to ensure the arrests of all those involved in the crime. “Pursuant to the directive, five of the principal suspects were arrested; viz: Kehinde Fasasi, chapter chairman, EtiOsa LG; Rotimi Kujore, PDP chapter chairman, Lagos Island LG; Fatai Adele, PDP chapter chairman, Mushin LG; Mr Ismail Abiola, PDP chapter chairman, Amuwo Odofin LG, and Amos Alabi Fawole, PDP chapter chairman, Surulere LG,” he said. Oti said that the five suspects have been transferred to SCIID, Panti, for further investigation. He stated that the incident took place on Saturday, at about 6 p.m. during Lagos State PDP Visitation meeting at Igbosuku Village, Eti-Osa LGA, attended by Lagos State and Local Government PDP chairmen. The image maker noted, however, that towards the end of the meeting, fracas broke out between contending factions of the party; one faction for the state chairman, Moshood Sabadon and the other for the Eti-Osa LG chapter chairman, Kehinde Fasasi.

Others include Itua Ighodalo, Akinbolahan Adeniran and Paul Ogbu as members, while Jide Adesanya, consultant/technical assistant to DG, BPE, and OluwaseunUmarofanti-corruptionunit, BPE, served as Secretary 1 and 2, respectively. But in a swift reaction, the Discos have dismissed the report as “a non issue,” saying they have done nothing wrong. A top player in the industry, who does not want his name in print, dismissed the report as “handiwork of evil and envious peoplewhodonotliketheprogress of other people.” The top industry player dared EFCC to do its investigation on the issue as they had done nothing against the laws of the land. The report had noted that the

distribution segment of the Nigerian electricity market had cases of suspicious transactions involving purchases from, or payments to, orawardofcontractstocompanies co-owned by the owners and promotersoftheseDiscosinbreachof procurement procedures. The report also alleged that there was collusion with the purchasers of the Discos, i.e., the 60 percent equity holders in making those payments or award of contracts. “The Open Book Report of the Nigeria Electricity RegulatoryCommission(NERC)suggests massive cases of corporate larceny whereby purchases are made by the managers of the Disco without competition or simply in suspicious manner to aid transfer of funds out of the companies with-

outrequisiteapprovalsoftheBPE.” The report noted that 60 percent shareholders would not have to totally rely on dividends for their investment return, a situation that might not only affect their operations, but likely to create inefficiency. “In essence, those in control of the companies are reported to be involved in practices akin to transferpricingormis-invoicingfor lack of a better word, whereby the Discosarenotnecessarilydodging taxes but simply over-paying contracts so as to take money out as a wayofrecoupingtheirinvestments well before any profits are made.” The NCP Ad hoc Committee’s report shows many examples of such “shady and non-competitive dealingstotallingoverN12.4billion insuspicioustransactionsengaged

upon by 10 Discos.” The Ikeja Disco was not includedaccordingtothereportseen byBusinessDay,evenasthereport notedthepossiblythatmoremight have escaped scrutiny. According to the report, “All this is done at the expense of the BPE, the 40% equity holder in the Discos.Wedonothaveanydatafor Ikeja Disco, which is easily among the top three or four in the league. The BPE needs to call their equity partners to account, as this is partly public money going into private pockets.Itshouldalsobeofinterest to the EFCC.” A further analysis of the payments shows that Benin Disco madepaymentofN590,538,038.75 to Global Utilities Management Company Limited and Messrs VIPL Global Services Limited,

while Enugu Disco made what it saw as “unclear transactions” worth over N208 million. N4,141,106,555.62 for unclear contracts,aswellasN86,966,674.00 donations to groups related to chairman. Kano Disco on the other hand also made payment of N670,000,000.00 to Northwest Power from the Disco’s Central Collection Account with Fidelity Bank on February 5, 2014; noncompetitive procurement transactions worth over N778 million, paymentstoKCETASAfricaPower Limited worth over N453 million, N161,338,750.00 in favour of Jewel Global Services Limited and N281,842,105.29 in favour of Motion Dynamic Concepts Limited for Technical Service Agreement (TSA).

Monday 23 July 2018

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kaduna

BUSINESS DAY

Let’s Make Kaduna Great Again

Implementing Pension Reforms in Kaduna State:

Pension Bureau ends physical verification, introduces biometrics Peter Ibrahim

aduna State Government commenced the implementation of the new contributory pension scheme in 2016 to address the hardship faced by pensioners. The new pension scheme, which replaced the Old Defined Benefit Scheme, remedies the problems and failures arising from the implementation of the 2007 pension law and saddled the state with more arrears of pension and gratuity. Dan Ndackson, the Executive Secretary of the Kaduna Pension Bureau explained that the new pension arrangements protect the earned pension rights of workers and end the problems that unfunded pension schemes have always created for pensioners and government alike. In this interview, Ndackson, spoke on the Pension Reform in Kaduna State, and the recently introduced biometric “I am alive verification” system that has replaced the periodic physical verification exercises that were nightmares for pensioners. Question: What necessitate the reform of the pension system in Kaduna State? Ndakson: If you found yourself in Ikoyi, Lagos before 2004, one sight that would have greeted you was the number of retired military officers with their mats, camped and waiting for their pension. The situation was very similar in Abuja at the office of Head of Service. I must commend the wisdom of the Obasanjo administration and the present Governor of Kaduna State, Mal. Nasir El-Rufai who pioneered the Pension Reforms at the national level when he was the DG of Bureau for Public Enterprises (BPE). The Kaduna State public sector employees were suffering the same fate as those of the federal before the pension reform in the State. Therefore, it was commendable that the Governor Makarfi administration in Kaduna State embarked on the pension reform in Kaduna State with the enactment of the Kaduna State Pension Reform Law, 2007, about three years after the commencement of the pension reform at the federal level. Question: Was Kaduna having problem with pension payment? Ndacson: Kaduna, like other States had similar challenges to those faced by the Federal Government. This explains why the State introduced the pension reform in 2007, soon after the Federal government. Though contributions under the contributory pension scheme in Kaduna State commenced in March 2008 under the Makarfi Administration, the implementation was epileptic. The provisions of the law were not fully respected. These and many other shortcomings in the implementation of the 2007 law made the Mal. Nasir El-Rufai administration to repeal the law in 2016 and enacted the Kaduna State Pension Reform Law 2016. The 2016 law created the State Pension Bureau as the regulator and supervisor of both State and Local Governments pension in the State. The Governor also approached the National Pension Commission to release one of its staff

Dan Ndacskon, Executive Secretary, Kaduna State Pension Bureau

to help set up the Bureau. Question: What are the highlights of the new law enacted under the Nasir El-Rufai administration? Ndacson: The 2007 law did not vest the implementation of the law on any specific agency and where it did, the agencies only focused on some aspects of the law. It created the Kaduna State Pension Bureau, an amalgam of the defunct Bureau of State Pension and Bureau of Local Government Pension. So, there is now an agency of government whose primary responsibility is supervising and regulating pension administration in Kaduna State whether under the defined benefits scheme or under the contributory pension scheme. Apart from that, the contribution rates under the 2007 law were 10 percent by the employer and 5 percent by the employee, but in the 2016 law, the contribution rates were raised to 13 percent by the employer, and 7 percent by the employee, giving a total of 20 percent contribution, the highest by any State in Nigeria. Under the Federal Law, the contribution is a total of 18 percent. The 2016 law also provided a window to accommodate the contributions of people who are yet to open their RSAs with the requirement for the creation of a Transitional Contributions Fund (TCF) by the employer with one of the PFAs. The pension contributions of such employees who are yet to open their RSAs are remitted to the appointed PFA for management by the employer pending when the employee opens his RSA with the PFA of the employee’s choice after which the contributions are remitted to his/ or RSA with his chosen PFA. Furthermore, the 2016 Law provides that employees are at liberty to open their RSAs with any licensed PFAs of their choice. This has been implemented as any employee who did not have an RSA prior to August 2016 was at liberty to open his/her RSA with

any PFA of his/her choice, thereby opening the pension business in Kaduna State public sector to all PFAs licensed by PenCom. The 2016 Law also made a provision for Actuarial Valuation, a necessary pre-condition for the transition from Defined Benefits Scheme to the Contributory Pension Scheme for the determination of the benefits of workers under the Defined Benefits Scheme prior to transition. Question: Has the Kaduna State Government been faithful to the law about its contribution to the pension scheme? Ndacson: The Kaduna State pension reform law 2016 makes it mandatory for government to remit pension contributions for the State employees to the Pension Fund Administrators within 7 days of paying salaries. It further provides that in case of any failure to do so by those responsible in the State, the Bureau is mandated to notify the Governor that the contributions had not been made, and the Governor is mandated by law to ensure that state machinery that is responsible for making the payment, makes good the payment. The government also pays huge amounts as premium to insurance companies as premium for the Group Life Insurance. And as for the payment of monthly pension under the old pension scheme (Defined Benefits Scheme), the government has not defaulted in payment of monthly pension in the last 24 months that I have been at the Bureau as the Executive Secretary. The Nasir El-Rufai administration has done tremendously well in this regard. The figures are there to be verified by whoever is wishing to do so. Question: What is the pension bill of Kaduna State like? Ndacson: The defined benefits pension bill for the state and local governments revolves between eight hundred million naira and one billion naira every month and government has been paying this regularly.

Hmmm! The government gets about N3.5 Billion from the Federation Account, about N2 billion from I.G.R which brings its income to about N5.5 billion and then its spend about N2.2 billion on wages and then N1 Billion on old pension scheme So, that leaves little or nothing for development.... Question: Recently, the National Pension Commission did an evaluation of the level of implementation of the pension reform in Kaduna State and scored Kaduna State 75.7%. Why didn’t you score a 100%? Ndacson: I am sure if the National Pension Commission had carried out this assessment in 2014 or even 2015, Kaduna State wouldn’t have scored that high but if you look at what the state government has done within the last two years of implementing the pension reform, you will appreciate the achievements of the State. A lot of the structures that are required for effective pension administration have been put in place. For instance, there is an agency of government whose primary responsibility is to oversee the implementation of the State pension law. The agency also follows up with government to remind it of its obligations as provided in the Kaduna State pension reform law (2016). To a very large extent the sincerity and commitment of government is not in doubt. I must commend the Governor for his sincerity of purpose. The Governor could get the World Bank to support the automation of the Kaduna State Pension Bureau. Almost 90% of our operations have been automated. We started capturing the biometric credentials of our retirees since November 2016 before they are included in the pension payroll. This invariably reduces the stress that pensioners are subjected to at the Bureau when they have challenges and need the assistance of the Bureau. Furthermore, it makes it difficult for anybody to fake the identity of a pensioner, which also reduces pension fraud. We have a Data Centre that is designed to link up with employers’ data bases, especially to their payroll units which helps the Bureau to monitor compliance with the provisions of the contributory pension scheme remotely from our Office. Pensioners can attest to the improvements that have taken place at the Bureau in the last two years in terms of payment and documentation. Question: Let’s talk about your apex initiative, the biometric “I am Alive Verification” system, which your Bureau has introduced in place of physical verification that subjects the old or senior citizens to all manners of indignities and all that. Explain what the “I am Alive Verification” System is all about? Ndacson: The biometric “I am Alive Verification” initiative is the high point of the pension reform in Kaduna State. Both the government and the Bureau saw the need to do something about the problems that retirees usually encounter, especially those in their 80s, 90s; those in rural areas; etc. All categories of pensioners were required to appear for physical verification once every two or three years for government to confirm that they are alive to be paid. The reason is obvious, government

loses large sums of money to families of dead pensioners because it has no way of knowing that a pensioner is dead unless the death is reported to the Bureau. So, the periodic physical verifications were to help Government to remove deceased but unreported pensioners from the pension payroll. By 2016, the Kaduna State Government had taken a decision that no retiree would be paid his/her monthly pension except through a commercial bank. It went further to direct pensioners to forward their NUBAN account numbers and BVN to the Bureau, without which the pensioner would be suspended from the pension payroll. By complying with these directives of the State Government, invariably every pensioner on the pension payroll of the State has his/her biometric data with the banking system in Nigeria. Given that the Nigeria Interbank Settlement System has custody of all the bank verification numbers and biometric data of all commercial bank customers in Nigeria, the Bureau decided to leverage on the existing technology in the banking system to offer convenience to our pensioners while mitigating one type of pension fraud (payment of monthly pension to deceased pensioners). The Bureau therefore decided to partner with the Nigeria Interbank Settlement System and some willing banks to periodically confirm that our pensioners are still alive before we continue paying them their monthly pension. The biometric I’m Alive Verification system simply requires a pensioner to walk into the branch of any of the participating banks with his BVN and gives his/her thumbprint. Once the pensioner thumbprints, it will register with NIBSS and NIBSS would communicate this electronically to the Bureau’s Pension Management Information System (PMIS) to confirm that the pensioner is still alive and the Bureau would pay him/her pension for the next three months before he/she thumb-prints again. Currently, we are partnering with UBA Plc., Keystone Bank Plc., and Zenith Bank Plc on the initiative. Kaduna State pensioners anywhere in the country can walk into any branch of these banks nationwide to give their thumb prints once every 90 days. Failure to do this within 90 days from the date of last thumb printing by a pensioner will result in automatic suspension from the monthly pension payroll until the pensioner thumb prints again. The initiative is for pensioners under the old pension system (Defined Benefits Scheme) who are paid pension by the State or Local Governments. The verification system covers all those who retired from Kaduna State public sector before or on 31stDecember, 2016 and are already on the pension payroll. For those who retired under the old pension scheme but are yet to be put on the pension payroll, they should wait until they are enrolled before they can start thumb printing every ninety days. The scheme has gone a long way in minimizing the hardship that pensioners use to encounter. The initiative is people cantered because it is set to address a major challenge of the senior citizens in the state.

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Firms bypass banks, raise N226bn CPs at lower... Continued from page 1

papers are referred to as low-risk investments, offering competitive returns to investors in compensation for the issuer’s credit risk. Companies have opted to go direct to debt investors rather than through banks as borrowing costs for bank loans start around 17 percent and above for prime borrowers compared to the lower cost of borrowing in commercial papers where yields currently average 15.6 percent. Commercial paper yields are accessible at a cheaper rate despite the fact that firms are borrowing through commercial papers without collateral. Already, some impact can be seen on the asset creation ability of the banks since this trend began last year. Tier 1 banks which account for around 50 percent of total industry loans have seen the pace of growth for their loan books shrink from 24.2 percent as at the first quarter (Q1) of 2017 to just 1.4 percent in Q1, 2018. Although Tier 1 bank deposits have increased by around N1.69 trillion in the past year, the growth rate in new deposits have also slowed. Deposit growth rate fell from 18.6 percent in Q1, 2017 to

12.28 percent in Q1, 2018. “Customers are becoming increasingly aware of higher investment opportunities in money market instruments like commercial papers and treasury bills,” said a top bank manager of one of the Tier 1 banks who craved anonymity. “It is becoming more difficult for banks to keep deposits or find new ones as customers are now opting to invest long term deposits in high yielding money market instruments.”

“Banks that have continually seen a reduction in deposits are now trying to collaborate with fintechs to improve deposits by the use of USSD and direct deposits through Fintech operator accounts.” Fintech companies have become major players in the savings market. Companies like ALAT, Cowrywise, Piggybank and Paylater are disrupting the savings market, raising billions in savings at higher interest rate than traditional banks are providing. Some of the Fintech companies are now even creating loans for customers, becoming more and more in direct competition with the traditional banks. “If banks are finding it difficult to grow their loan book and

their deposit base, it could affect their profitability,” said Vivian Alozie, research analyst at Capital Bancorp. “With treasury yields dropping, banks may have to rely on new loans to drive earnings growth this year. “We are not too worried about bank profitability per se; rather we fear that earnings growth may slow down if this trend continues. Lower deposits will affect their ability to create credit which could translate to lower earnings from bank interest income.” In June, Dangote Cement and Coronation Merchant Bank issued a combined N65 billion in fresh commercial papers. Dangote Cement Plc’s N50 billion commercial papers is the biggest CP programme so far on the Nigeria debt capital market. The CP is a dual tenure issuance under the company’s N150 billion CP programme established in November, 2017. The CP comprises of N12.04 billion and N37.96 billion issu-

ances and is series 1 & 2 under the N150 billion CP programme. The series 1 and 2 notes is priced at spreads of 25 and 50 basis points over the chosen primary market sovereign benchmark rate, to achieve discount rates of 12.40 per cent and 12.65 per cent, respectively.

Continues on wwwbusinessday online.com

Trailer and tanker drivers defy Federal Government directives; still lay siege on bridges in Lagos, as of yesterday.

Continued from page 1

ing hovering at N1.3 billion from 2014 to 2017, it however increased slightly to N1.4 billion in 2017 while it recorded a loss before tax of N970 million in 2017, compared to a profit of N96 million in 2016. “Communication gap exists between the revenue and finance departments, whereby revised invoices raised as a result of disputes in tariffs and inadequate approvals from Health Management Organisations are not communicated by the revenue department to the finance department,” Eko Hospital explained in its 2017 report. Eko Hospital recorded a loss after tax of N1.2 billion in 2017 compared to a profit after tax of N79.6 million in 2016; The firm also had a negative retained earnings of N889 million which implies that until the firm generates enough profits to have positive retained earnings it may not be able to dividends . The firm’s Return on Equity (ROE) which illustrates how effective the company is at turning the cash put into the business into greater gains and growth for the company and investors was negative at 0.34percent in 2017 compared to 4.50 percent in 2016, while in 2015 it stood at 7.22 percent. Return on Assets (ROA), an indicator of how profitable a company is relative to its total assets dropped to 2.13 percent in 2016 from 4.12 percent in 2015 while in 2017 it had a negative ROA of 0.34 percent. “Unidentified receipts from customers are not adequately

investigated; rather they are recognised as other income instead of being credited to the respective customers’ accounts,” Eko Hospital said. The loss recorded last year was largely due to the company’s decision to write off bad debts and unsubstantiated balances of N983.9 million. A breakdown of the writeoff shows that Trade Receivables which represent money due from customers for services rendered comprised a large portion of the write-offs at N929 million. “A provision for impairment of trade and other receivables is established when there is objective evidence that the Company will not be able to collect all the amounts due according to the original terms of the receivables,”Eko Hospital said. A l s o, d e b t o w e d b y s t a f f amounting to N19 million were also written off which implies that the company does not see any possibility of recovering them. “Accounts receivable balances were not tested for impairment by management, hence doubtful and irrecoverable balances were reported as good and recoverable,” Eko Hospital said in its 2017 financials. The hospital also wrote off what it described as unsubstantiated bank balances of N30.1 million. This implies that these are bank balances that are carried in the company’s books but not found in any bank accounts as the hospital also noted that it had written off its investments in Hope Valley Clinic as it no longer exists. Continues on wwwbusinessday online.com

…through spot and short tenor forwards Hope Moses-Ashike & Bunmi Barley

Shell’s onshore divestment’s gather pace... and have a difficult task explaining strange expenses from Nigeria when host communities begin to make incredulous demands. Shell in April this year ramped up efforts and succeeded in renewing 17 of its oil leases due for renewal in 2019. The 17 acreages are: OMLs 11, 17, 20, 21, 22, 23, 25, 27, 28 31, 32, 33, 35, 36, 43, 45 and 46. The properties were due to expire in 2019. Recall that in April, the Ministry of Petroleum approved the recommendation by the Department of Petroleum Resources (DPR), to revoke three Oil Mining Leases (OMLs) 31, 33 and 36, operated by Shell Petroleum Development Company, a local arm of Shell, the Anglo Dutch major. While licences for 13 of the remaining 14 leases were renewed, the DPR proposed that OML 11 be split into three because it is too large at 2,800sq km. Those renewed have a new lease of life for another 20 years and analysts say the com-

Eko Hospital in need of a miracle

CBN’s $2.4bn Chinese currency swap takes off as regulator sells Yuan

Pic by Olawale Amwo

Continued from page 1

Monday 23 July 2018

pany will push for more divestments in in the coming months as it seeks to consolidate its operations. Top on the asset disposal list are oil mining licenses 11 and 17 which Shell is considering selling for up to $2 billion, according to reports. Exiting the two blocks would cut Shell’s exposure in a crises prone region rife with controversy. “There is also the issue of uncertainties in the sector, so the best course of action is to hedge your risk,” Nwani said. Meanwhile oil headed for a third weekly loss amid concern escalating trade rows would undercut energy demand, undermining reassurances from Saudi Arabia that it won’t flood global crude markets. Futures pared gains in New York on Friday as President Donald Trump said that he’s “ready to go” with tariffs on $500 billion of Chinese goods. Crude has retreated about 6 percent this month as the escalating trade war between the U.S. and China rattled global financial markets. Brent for September settle-

ment rose 22 cents to $72.80 on the London-based ICE Futures Europe exchange. The contract fell 3.4 percent last week. Since 2010, Shell has divested at least 12 oil assets in onshore Nigeria following intractable differences with host communities which often leads to destruction of the company’s assets. In 2010, the company sold its interest in OML 4, 38 and 41. It soon followed with divestments of OML 26 and 42 which sold on Nov. 30, 2011; OML 40 on Aug. 31, 2012; OML 34 on Sept. 5, 2012 and OML 30 on Nov. 9, 2012, respectively. The OMLs divested in the Eastern Niger Delta region are 26, 30, 34, 40, 42, 4, 41and 38. In June 2013, Shell also announced a strategic review of its operations in the Eastern Niger Delta and this culminated in the divestment of OMLs 18, 24, 25, 29 and the Nembe Creek Trunk Line. Nigeria is yet to pass a petroleum industry bill since a decade which is a chief course of uncertainty in the sector. Operators are also call-

ing for concrete policy on fiscal terms for the sector.

igerian banks on Friday complied by debiting the accounts of customers who participated in the first foreign exchange auction conducted by the Central Bank of Nigeria (CBN) on Friday. The CBN on Friday, July 20, 2018, flagged off its intervention in the sale of foreign exchange in Chinese Yuan (CNY), signalling the consummation of the Bilateral Currency Swap Agreement (BCSA) signed with the People’s Bank of China (PBoC) on April 27, 2018. BusinessDay also gathered that the CBN has debited the current accounts of the dealer banks and would announce the result of the auction this week. Isaac Okorafor, CBN’s acting director, corporate communications department disclosed that the sales shall be through a combination of spot and short tenored forwards. He added that the exercise, which shall be Special Secondary Market Intervention Sales (SMIS) retail, would be dedicated to the payment of Renminbi denominated Letters of Credit for raw materials and machinery and agriculture. He explained that the bids were on Spot FX basis as the Authorised Dealers’ accounts with the CBN would be debited in full for the Naira equivalent of the USD bid amount, he advised customers that were not willing to accept the settlement terms not to participate in this Special SMIS - Retail. Analysts see this as welcome

development saying the yuan auction will help to ease pressure on the dollar. “This is a positive move towards reducing pressure on the greenback. Though, we don’t anticipate any major appreciation of the dollar in the near term, we expect this new policy to reduce operational bottlenecks as well as lower transaction cost for imports,” Ayodeji Ebo, MD, Afrinvest Securities Limited told BusinessDay on phone. “If the CBN sustains the Yuan auction, we expect to see a reduction in the demand for the greenback in the medium to long term amidst capital inflow reversals from FPIs leading to further stability of the dollar. This may increase the level of transaction with China in the long run but we do not foresee moderation in price of goods and services from China in the near term,” Ebo said. China is Nigeria’s biggest trading partner after the U.S., with volumes between the two totalling $9.2 billion in 2017, according to Bloomberg data. Nigeria runs a deficit, importing $7.6 billion of goods including textiles and machinery from China and exporting just $1.6 billion, mainly oil and gas. “It is a positive development in our exchange rate because the pressure on the Dollar should reduce based on the volume of the yuan. The volume of yuan that can be met via that auction will not be demanded again at the dollar window,” Ibrahim Tajudeem, Head of Research, Chapel Hill Denham said.

Continues on wwwbusinessday online.com

Politics & Policy Monday 23 July 2018

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BUSINESS DAY

Dangling juicy carrots won’t help you, R-APC mocks Buhari, APC INNOCENT ODOH, Abuja

eaders of the Reformed All Progressives Congress (R-APC), a breakaway faction of the ruling All Progressives Congress (APC), have mocked the attempt by President Muhammadu Buhari and the APC to woo members of the R-APC back by dangling some juicy carrots before them, stressing that it won’t help. A statement issued by the National Publicity Secretary of the R-APC, Kassim Afegbua, made available to BusinessDay on Sunday, noted that despite the boasts of the APC, the party is apprehensive of what will befall it that is why it has decided to turn to carrots to woo the R- APC. It added that the APC is full of double standard and cannot be trusted with anything. “We members of the R-APC find it very amusing that those who boasted that they won’t lose sleep over our altruistic action, have been hopping from door to door pleading with our members not to leave by dangling juicy carrots and promising them heaven and earth. Such level of double standard is the reason why the R-APC was birthed in the first place because the leadership is not one that keeps promises and it’s the reason why no one should take the APC serious. “It is interesting to suddenly see Mr. President holding meetings with the Senate President, Dr. Bukola Saraki, reportedly promising mouth-watering offers; the same leader who was ridiculed, scandalized, demonized, criminalized and called all sorts of names by agents of the presidency just to give the Senate President a bad name in order to hang him. “As soon as the Supreme Court gave a resounding verdict on the trumped up and frivolous charges

against the Senate President, Mr. President suddenly felt a need to praise the judiciary for standing on its own. Hmm, power as they truly say, must be a crazy aphrodisiac,” the statement said. The R-APC lamented that never a time has the number 3 (three) citizen of Nigeria been so dehumanized, criminalised and disgraced in such whimsical manner while all the present reconciliators kept conspiratorial silence, waiting for the sledge hammer to fall on the Senate President. “They tried all tricks, mounted all manner of pressures, raised all dubious allegations, just to nail the Senate President. They were short of calling him a promoter of armed robbery; they linked his name to the Offa Robbery and improvised all biles to rubbish the institution of the Legislature. They striped him naked in the market place and now desperately trying to bath him with ornaments in the inner fortress of Aso Rock. “The Chairman of the Code of Conduct displayed magisterial arrogance in prosecuting the Senate President, but all that fell by the way side as the Supreme Court gave one of its landmark judgments in recent time by giving him a clean bill of health,” the statement said. The R-APC stressed that it is pathetic that all the political conspirators in the APC swooped into dubious reconciliation assignment, hopping from door to door at the thick of the night to strike deals of reconciliation saying “those who said they won’t lose sleep over the R-APC, have become sleepless in the last two weeks. “Does anyone need to be reminded that caveat emptor should be the operative words? Those who pleaded in the past, short of kneeling before their subordinates, ended up in the political belly of their benefactors when the re-election

SIKIRAT SHEHU, Ilorin

ahmood Muhibudeen Aliyu, a professor of Business Education and retired lecturer in the Department of Business Education at the Ahmadu Bello University, Zaria has declared his intention to contest the presidential seat in the forthcoming 2019 general election under the People’s Redemption Party, (PRP). Although, Aliyu is a kwara-born politician, he pledged to resuscitate radicalism of the late Aminu Kano as a sure way of redeeming failed promises of All Progressives Congress (APC), explaining that there must be equitable political, social and economic opportunities for all and sundry if Nigeria must get it right. Aliu, who declared his intention

Atiku visits Katsina, says Kaita, Coomassie will not be forgotten in a hurry

F Former Vice President of Nigeria, Atiku Abubakar, director general of Atiku Presidential Campaign Organsation, Gbenga Daniel and eldest sons of late former Insoector General of Police, Ibrahim Coomassie during Atiku’s visit to the family of the late boss police boss in Katsina on Sunday, 22 July 2018.

was concluded. It is an albatross that some people are still carrying till date. Examples abound in this our democracy and it is ringing bell in our consciousness every now and then. “This government is never a promise keeper and some of the promises contained in the manifestos of the APC have been jettisoned. The president who has held himself in the inner sanctuary of the Presidential Villa is all of a sudden, opening his doors to one meeting or the other all in the name of re-election,” the statement added. The R-APC said that it is too late for the Buhari government because the train has left the station, adding that leopards cannot change their spots no matter how much one tries to tame them. The R-APC, which recently formed the Coalition of United Political Parties (CUPP) with about 40 opposition parties, urged all their members to remain

Aliyu, Ahmadu Bello Varsity don, declares presidential ambition, pledges to right alleged APC’s wrongs to run for presidency in Ilorin, Kwara state capital on Sunday, said, “We believe in the forging of Nigerian national unity on the basis of justice and equitable political, social and economic opportunities for all citizens, within a genuinely federal system of government on which our diversity is recognised and cherished. ”With this come 2019, the era of some animals being more equal than others will be over. All Nigerians will be treated on equal ground as Nigerians on their individual merit.” “PRP government in the centre under our supervision, willwork towards cutting down the high cost of governance that we are now battling with.” He said rather than fighting curruption, the PRP government will tackle the elements that breed curruption through that following; stopage or abolishion of of discriminate salary

and wages system, mornitoring of individual investments, among other things. “I wish to declare my aspirations to contest for the presidency, if given the opportunity, an executive order will be signed declaring a two years “state of emergency” on education to perform surgical operation systems, during the period, 30% of the country’s annual budget will be allocated to education which will br properly utilised, mornitored and accounted for. “Similarly, 15% of the budget will be allocated to the health sector. “It was once said that “ the beautiful ones are not yet born “ I can assure you that beautiful ones have been born, nurtured , developed and are of ag. “Nigeria is set for a new dawn, let us rise and take this country to the promised land and realised the dreams of our life time.”

steadfast and resolute in defending their rights and taking the appropriate action in defence of democracy. “This democracy must survive on ethical grounds and not on lawlessness and exclusion. It must provide a level playing grounds for all participants. Those who prevented some persons from visiting their states in the name of politics, have suddenly realized that they need the services and support of those persons. They are now pleading, ready to submit to all demands. Who does not know that won’t work because examples have shown that political agreements are often observed in the breach? “This is to inform our members nation-wide that we are still maintaining our stand against the APC and no amount of carrots, intimidation and harassment can dissuade us in our shared commitment to rescue this democracy,” the statement said.

ormer Vice President of Nigeria and frontline aspirant for the presidential ticket of the Peoples Democratic Party Atiku Abubakar on Sunday, visited the families of the late former Inspector General of Police, Alhaji Ibrahim Coomassie and the late former Governor of old Kaduna State, Alhaji Lawal Kaita to pay his condolences to the two families. The presidential aspirant who paid the visit a day after he formally declared his bid for the 2019 presidential contest remarked that he enjoyed the wise counsel from both Coomassie and Kaita and that they can never be forgotten in a hurry. “I have decided to pay this visit today because of the special bond that I shared with these departed souls. Beyond being associates, I tapped tremendously from their tap of wisdom and my prayer is that the Almighty Allah accepts their good deeds and forgives their shortcomings. “I also pray that the bereaved families continue to have the comfort and strength to bear the loss,” Atiku said. Atiku similarly led a delegation of associates including the Director General of his campaign organization and former Governor of Ogun State, Otunba Gbenga Daniel to the palace of Emir of Katsina, Alhaji Abdulmumini Kabir Usman to condole with him over the loss of his illustrious subjects.

APC blasts PDP, says the opposition looking for life after death JAMES KWEN, Abuja

he ruling All Progressives Congress (APC) has mocked its main opponent, the People’s Democratic Party (PDP), saying that it is looking for “life after death”. APC argued that, “after three years in the wilderness, the Peoples Democratic Party (PDP) is understandably excited with possibility of hiding its irredeemably bad image under the heap of a new coalition”. Bolaji Abdullahi, APC National Publicity Secretary in statement issued Sunday night stressed that, “like the vulture, PDP sees every altercation as a potential opportunity for a feast”. Abudllahi observed that, “ if PDP is not alleging wild conspiracies, they are threatening to boy-

cott elections or announcing fake defections”. According to the APC Spokesperson, “what is clear with all these is that no matter how long a leopard lives, it cannot change its spots. “What President Muhammadu Buhari and Comrade Adams Oshiomhole, the National Chairman of our Party are doing, persuading every aggrieved member not to leave the Party, is what responsible and sensible party leaders would do. “Party politics is a game of number. And that game is addition. If the PDP had the same presence of mind in 2015, perhaps the calamity that befell them would have been averted. “We challenge the PDP to face Nigerians on their own merit in 2019 and stop shopping around for supporters”, he stated.

A1 BUSINESS DAY NEWS

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Monday 23 July 2018

Ambode commends ‘Home & You’ on ultra-modern furniture factory

Feyisola Abiru (m), CEO/founder of “The Home and You,” flanked by her mother-in-law, Risikat Abiru; Tokunbo Abiru, GMD/CEO, Skye Bank, and Olusegun Osunkeye. (Behind): L-R: Rotimi Ogunleye, commissioner for physical planning and urban development; Oba Rilwan Akiolu of Lagos State, and far right, Abdul-Kabir Adewale Shotobi, Oba of Ikorodu, flanked by Olayinka Oladunjoye, commissioner for commerce and industry, Lagos State, during the ‘Home & You’ on Ultra-modern Furniture Factory in Ikorodu, Lagos State.

New bill seeks to gag the media - NPO

he Nigerian Press Organisation (NPO), comprising the Newspaper Proprietors’ Association of Nigeria (NPAN), Nigeria Guild of Editors and the Nigerian Union of Journalists (NUJ), as well as other media stakeholders have raised concerns about the proposed “The Nigerian Press Council Bill 2018,” saying that it has the potential to gag the media. They reached the conclusion at a meeting held July 19. The meeting painstakingly studied the provisions of the proposed bill in the context of its implication for free speech, press freedom, media independence, safety of journalists and the right to operate as a business in accordance with the laws of the Federal Republic of Nigeria. The meeting also took notice of the fact that a lawsuit instituted by the NPO on the same subject matters of the bill is pending at the Supreme Court. Consequent upon the meeting observed that the proposed bill is unconstitutional as it runs against the principles and tenets of the rule of law and is actually

subjudice given that a case on the subject matter is still pending in the highest court of the land – the Supreme Court - in view of which the bill should not have been drafted in the first instance. The NPO also noted that the bill is, for all intents and purposes, draconian and anti-press freedom being an amalgamation of the obnoxious Public Officers Protection Against False accusation Decree No. 4 of 1984 and the Newspapers Registration Decree 43 of 1993, both vestiges of the dark days of military rule and therefore incurably and irreparably bad, being also inconsistent with values of our democratic society. Other conclusions from the meeting are that the proposed bill; ‘seeks to criminalize journalism practise despite the fact the laws of the country already have enough provisions and avenues for seeking legal redress.’ ‘Smacks of an attempt at undue interference in the operations of the media in Nigeria as businesses registered under the relevant laws of the federation.’ ‘Seeks for a The Nigeria Press Council to usurp the powers of

the courts by assuming extrajudicial powers.’ ‘Seeks to incapacitate the media in the exercise of the duties and obligations imposed on it by section 22 of the constitution to monitor governance and hold government accountable to the people. The section states as follows: “The press, radio, television and other agencies of the mass media shall at all times be free to uphold the fundamental objectives contained in this Chapter and uphold the responsibility and accountability of the Government to the people.” ‘That the bill violates the provisions of section 39 of the 1999 constitution (as amended) sections 1 and 2 of which state as follows: “Every person shall be entitled to freedom of expression, including freedom to hold opinions and to receive and impart ideas and information without interference.’ ‘Without prejudice to the generality of subsection (1) of this section, every person shall be entitled to own, establish and operate any medium for the dissemination of information, ideas

and opinions” The bill also violates Article 9 of the African Charter on Human and Peoples’ Rights (Ratification and Enforcement Act) No. 2 of 1983 to which Nigeria is a signatory and which is now part of the country’s laws. And the bill through some of its other obnoxious provisions seeks to indoctrinate Nigerians, THROUGH THE USE AND MISUSE of curricula in training of journalists and usurp the powers of the regulatory bodies in the educational sector affecting media training especially the National Universities Commission and the National Board for Technical Education. The bill also seeks to create the impression that the Nigerian media community does not take the issues of ethics and self regulation seriously whereas it is a well known fact that the mechanisms actually exist including the Code of Conduct of Journalists in Nigeria, the Ethics Committees of the NUJ and NGE and the recently launched Nigerian Media Code of Election Coverage endorsed by media stakeholders.

NEXM Bank pushes for enhanced credit access to SMEs ONYINYE NWACHUKWU, Abuja

n a proposed bill before the National Assembly, Nigeria’s Export-Import Bank (NEXIM) is pushing vigorously for a platform that allows increased access to finance to small businesses (SMEs) and as well help Nigeria play more in both intra-Africa and international trade arena. The new law, Factoring (Assignment and Receivables) bill, 2017, seeks to provide and promote a non-bank financing involving the purchase of receivables, which essentially converts conversion credit sales to cash at a discount. Abba Bello, NEXIM Bank managing director, said as an Export Credit Agency and a trade facilitating institution, the Nigerian Export-Import Bank was concerned that the poor access to financewashinderingbusinesses, meaning that a larger proportion of trade in the non-oil exports sector took place in the informal sector and were therefore not captured in government statistics. Thebankisfurtherconcerned about the high level of such informal trade in Nigeria and Africa, with informal non-oil exports re-

cently estimated at a minimum of $12 billion annually in the country asagainstrecordednon-oilexport trade averaging about $3 billion annually in recent times. While this challenge is a reflection of the large informal economy, estimated at 41.43 percent of Nigeria’s GDP in 2015 bytheNigerianBureauofStatistics (NBS), it is also symptomatic of the dearth/poor access to export credit, particularly among SMEs, who are the principal players in cross-border trade, he said. Empirical data released by the Central Bank of Nigeria indicate that less than 1% of the total loans and advances disbursed annually are allocated to the non-oil export sector over the years. Against this background, NEXIM, according to Bello, saw the need to partner trade facilitating institutions like Afreximbank and FCI, and other stakeholders, under the auspices of the CBN Financial System Strategy 2020, to develop and promote Factoring as an alternative trade finance instrument and a SME financial inclusion strategy. Factoring therefore is a form of structured trade finance, whereby a trader sells its accounts receiv-

able (i.e. invoices) to a third party (called a Factor) at a discount, in exchange for immediate cash with, which to finance continued operations would help resolve most of the poor financing issues. “This will be one of the financing options that will mitigate the tradition challenges of SMEs in meeting the eligibility criteria for accessing credit from the traditional banking institutions,” the managing director said, speaking at the Nigerian Factoring Roundtable held in Abuja. The Factoring Bill is being championed by chairmen of Senate Committee and the House of Representatives Committee on Banking,RafiuIbrahim,andJones Onyereri, respectively. The draft bill was first produced by the Nigerian Factoring working Group since October 2016, and has already passed through the first and second readings at the National Assembly and indeed the public hearing, which was held two days ago. As contained in a National Assembly document cited by BusinessDay, Factoring involves thepurchasebyafinancialinstitution, called a Factor of receivables, that are invoices, due to suppliersexporters by customers, with

the factor providing their client with fast access to at an agreed percentage of the face value of the receivablesandtheassumptionof fullcreditandfactoreddebtcollection responsibilities. JosephNnanna,deputygovernor, CBN, who also doubles as the NEXIM Bank chairman, said the Bill was a significant collaborative effort that started over three years ago between NEXIM and some key players in the public/private sector, under the auspices of the CBN Financial System Strategy 2020,whosawtheneedtodevelop an alternative trade financing instrument to promote financial inclusion and boost access to funding by the SMEs. He said the bill if passed, wouldnotonlypromoteasuitable regulatory/legal environment to support the rapid development of Factoring services, but would also contribute towards integrating Nigeria into the global Factoring market. This, according to him, will position the Nigerian economy to benefit from the global Factoring volume, which reached €2.6 trillion in 2017, according to the data released by FCI, with Africa contributing less than 1%.

overnor Akinwunmi Ambode of Lagos State has commended Feyisola Abiru, CEO/founder of ‘The Home and You’ for establishing its ultra-modern furniture factory, as he urged Nigerians to continue to patronise made in Nigeria products. Speaking at the commissioning in Ikorodu, Lagos, the governor said the factory would produce industrial made-in-Nigeria furniture that can compete globally for both corporate and home use within and outside Nigeria, noting, “It is only through this means that the local economy could be developed.” Ambode, represented by Rotimi Ogunleye, and Olayinka Oladunayo, both commissioners for physical planning and commerce and industry, described the sitting of the factory at Ibeshe, a suburb of Ikorodu, as a key driver for the economy of the state and the country at large. “This is the first furniture company of its kind in the Ikorodu axis and a clear indication that the efforts of Lagos Sate government to provide security and infrastructure is beginning to yield positive fruits,” he said. Abiru, while responding to questions fielded in by the media on what spurred her to achieve this feat, identified, “passion and an undying crave for success had been the reason I was able to whether the storms in the early days of the 21-year-old business.” She particularly noted the exemplary role and support of Bank of Industry (BoI), in the realisation of the noble dream

which today has become one of the major economic drivers in Lagos state and Nigeria as a whole. “But for the support from BOI, we won’t be here today. They gave us the first facility in 2006 to get us running. We acquired world class machines from Italy, when we needed to improve on our quality and expand the capacity of the business, we approached them again for another facility, which was granted in 2017,” she said. On his part, Olusegun Osunkeye, pioneer chairman of the company, described the ‘Home and You’ as a great edifice, noting Nigeria would benefit from the establishment of the ultra-modern furniture factory as it would create employment and boost the local content policy of the government. “They will use local wood to produce first class furniture, so it will create employment and because it is profitable, government will get its taxes, and impact skills on the surrounding. So, it is a factory that will bring many benefits to its immediate surroundings, Lagos state and ultimately to the country at large,” he said. At the current rate of population growth, more than 500 million Africans are projected to live in cities by 2030. This growth as well as favourable government policies in some African countries is believed to favour the furniture business as this is anticipated to increase the demand for real estate; residential accommodation, office space, hotels and schools.

SPE Nigeria calls on FG to leverage natural gas for economic diversification FRANK UZUEGBUNAM

ociety of Petroleum Engineers (SPE), Nigerian council, has called on the Federal Government to leverage the country’s vast natural gas potential to drive economic diversification, urging the government to also implement the National Gas Policy as a matter of urgency. “Gas can open up the economy for diversification. With proven gas reserves of about 182TCF and a prospective 600TCF, Nigeria should treat natural gas as an enabler, not a commodity,” Chikezie Nwosu, chairman, Nigerian Council of SPE, said at a press briefing to announce the forth-coming Nigeria Annual International Conference and Exhibition (NAICE 2018) holding between August 6 and 8, in Lagos, with the theme, ‘Diversification of the Nigerian Economy – the oil and gas industry as an enabler.’ The conference is expected to attract dignitaries like Ibe Kachikwu, minister of state for petroleum; Maikanti Baru, group managing director, Nigerian National Petroleum Corporation (NNPC); Odien Ajumogobia, former minister of state for petroleum resources, among others. Nwosu urged government and players in the sector to promote cost competitive-

ness. “The cost of production of a barrel of crude oil at a point in Nigeria went up to $45. We need to drive down the cost from around $23 at present to $15”, he said adding that collaboration between service companies, indigenous oil companies and international oil companies could be vital for cost competitiveness. On the Petroleum Industry Bill (PIB), he said the bill should progress to an act as quickly as possible so as to help douse the uncertainty in the sector bring investment back to the sector. A key component of the bill according to him is the Host Community Bill. “Security should be proactive not reactive. Once host communities effectively see themselves as partners, you will see that the cost of security will come down to almost nothing,” he said. The SPE chairman also called for more investment in renewable energy as it has become clear that with anticipated growth in energy demand, the world is rapidly moving towards an age of cleaner sources of energy where renewables will play a part in the energy mix adding that the SPE will continue to engage the national assembly and key stakeholders on renewable energy.

Monday 23 July 2018 A2 BUSINESS DAY NEWS FG urged to adopt PPP to boost domestic tourism Nova Merchant Bank transmits into intellect banking platform C002D5556

SEYI JOHN SALAU

takeholders in the tourism and hospitality industry in Nigeria have urged the Federal Government to adopt a sustainable Public-Private Partnership (PPP) initiative to attract the needed investments forthedevelopmentofdomestic tourism in Nigeria. This position was reached at the Institute of Directors (IoD) NigeriaTourismandHospitality forum held recently in Lagos, withthetheme,‘DomesticTourismasaCatalysttotheGrowthof Nigerian Economy.’ Ben Murray-Bruce, founder of Silverbird Group, in a keynote address, urged the government toconsiderworkingwithprivate interest to bridge funding and infrastructure gap in Nigeria. “Unless the government fixed the infrastructure problems in the country, tourist investors were wasting their money and time,” he said.

According to Murray-Bruce, the key infrastructure challenged faced by the sector include good hotels and securing a Visa to Nigeria. “Destination is nottheproblem,wehavetourist site like Ogudu Cattle Ranch, Yankari Game Village, but how do you get to the place without security, public toilet and good hotels. “It is hard to get visa into the country, you have to pay manyagenciesandtheMuritala Muhammed Airport is in bad shape. It will cost the government nothing much to fix these challengesforexamplestellyour immigration officers to fix visas on time,” Murray-Bruce said. Murray-Bruce, a serving senator representing Bayelsa East Senatorial district, however urged the government to educate immigration and customs officers on the need to relate friendly with tourists, especially in public places and sites across the country.

“Educate Customs officers to be nice to tourists, allow tourists to take picture of interesting places, taxi drivers should be nice and hotel operators too, thenbuildpublictoiletsonroads leadingtotouristsites,”hestated. Biodun Jaji, chairman, IoD Tourism and Hospitality Committee, in a statement said, “Tourism holds the key to Nigeria’s economic sustenance away from oil. “Tourism’s economic activities effectively improve the livelihoods of the people through income generation, employment creation, improved infrastructure and increased government revenue.” According to Jaji, the theme of this year forum is apt as he hopes that papers, discussions, networking and communiqué from the forum will make some contribution to influence the growth of domestic tourism in Nigeria.

Minister chides ANED, gives NERC, Discos directive to improve service in power sector HARRISON EDEH, Abuja

inister of power, works and housing, Babatunde Fashola, has chided the Association of Electricity Distributors of Nigeria (ANED) led by Sunday Oduntan, its executive director, regarding his response to directive he issued to the Nigeria Electricity Regulatory Commission (NERC) to ensure Distribution companies raise their services to electricity consumers. ANED’s executive director has in response to the minister’s directive to the Bureau of Public Enterprises (BPE), Nigeria Bulk Electricity Trading (NBET) and the NERC, said the minister’s response won’t save the power sector from collapse. But, Fashola in swift response, said, “My directives on improved service delivery in power sector went to Legal entities, not an interloper.” Going further, Fashola said, “The BPE, NBET and NERC, to whom my directives were made, contracted individually with Discos not as an association.”

According to Fashola, “Throughout my press statement, which contained the directives, I referred copiously to the provisions of the Electric Power Sector Reform Act (EPSRA), which is the law that regulates the power sector. I referred to Discos in their capacities as licensees. “Oduntan should tell members of the public if ANED is a licensee. He should tell the public whether he is an investor in a Disco and in which Disco he has invested and what he invested,” Fashola queried Oduntan in a statement he issued at the weekend. Fashola insisted, pointing our further that, “I do not recognise him because the law that guides my functions does not recognise him.” While the Discos reserve the right to choose to affiliate with that view or disown it, I am optimistic that the power sector will prosper in spite of Oduntan-minded personalities, the minister said. “Electricity consumers ‘which include Fashola’ want better service. NBET wants its money; about N800 billion, so

she can pay Gencos,” he said. According to Fashola,”If DisCos can prove that FGN owes more than what we admit, they should deduct (N72 billion) from N800 billion and pay the remaining N728 billion which they owe NBET” He pointedly to” Respond to the query from the Ministry of Power, Works and Housing as to why 408 feeders, which have a capacity to deliver 5,756MW of power to consumers only carry 444MW because of faulty lines, bad equipment and load shedding? Oduntan should interpret this and tell the public whether it is the Ministry who should fix these lines and whether the unused energy will not reach the consumers if the feeders are put to use, he noted. These are part of the subject of my directives to NERC to address deliberate load shedding. Oduntan should advise his clients to spend the money used in publishing media responses to fix these problems to restore bad lines, and provide transformers and meters to their consumers, he said further.

NSE tasks Nigerians on Green Bond to tackle $3trn infrastructure deficit

igerian Stock Exchange (NSE) said on Friday that the $3 trillion required to provide infrastructure for the next 25 years could be addressed with Green Bond issuance. Oscar Onyema, NSE CEO, stated this at the Federal Government GreenBond pre-listingconferenceorganisedbytheexchange in Lagos. Onyema said Green Bonds present a unique opportunity for financing the country’s climate change objectives, delivering on critical infrastructure gaps to unlock economic growth potential.

He described green bonds as a turning point and a new paradigm for Nigeria and urged listed companies and other corporate organisations in Nigeria to use globally recognised platforms at the NSE to raise green capital. “Green bonds also provide a way for issuers to diversify their capital structures and attract a wider base of investors from both domestic and international markets. “As you are all aware, Nigeria – as a party to the Paris Climate Agreement – has committed to achieving specific climate change

objectives embedded in her Nationally Determined Contributions. “These objectives require huge capital investments, and particularly so for Nigeria – given the huge infrastructural deficit which is estimated at $3 trillion over the next 25 years,” he said. He commended the Debt Management Office, the Ministry of Environment, the Securities and Exchange Commission and all the members of the Green BondAdvisoryWorkingGroupfor the actualisation of the initiative.

HOPE MOSES-ASHIKE

s part of its determination to enhance customer experience, Nova Merchant Bank Limited has transmitted to first of its kind system called ‘intellect banking’ platform from IBS core banking system. The intellect platform is built around the customer experience; it is flexible, scalable, and agile and allows clients to be able to leach on different solutions like FinTechs. Chinedu Ikwudinma, managing director/CEO of the bank, said this at the weekend in an interview with journalists. The aim of the bank in coming up with this platform is to identify a solution provider that is geared to the future. “We are the first bank in this country to use the intellect banking platform. We

went through a very rigorous exercise of selection or consideration going over several months from last year and speaking to different providers of core banking solutions,” Ikwudinma said. Continuing, he said, “We are very key as a new bank to identify a provider, who is already align with that objective from their own services. So, this is a 25-year-old company with operation in 40 countries serving more than 240 clients including entities like JP Morgan, Citibank, Reserve Bank of India. It is actually their system that is use by Reserve Bank of India for most of their treasury activities and payments across India. “We are pleased to say as at today we have gone live on that system. We are adopting the system for our entire suit of banking application, the core banking platform, the channels in terms of where

customers will engage with treasury activities and trade.” According to him, “Our aim is digital solution for our customers end to end and try to use both the platform and our capacities for things like data analytics, machine learning and co to be able to give insight to our customers. “By choosing a banking platform that no other bank is using is already a journey. It allows us to create bespoke solution for customer that matches their business.” Ikwudinma noted that the bank is doing well since it commenced operation in February 1, 2017. “The bank is profitable, we have maintained that track record our indices in terms of ratios, liquidity capital adequacy ratios or the key ratios are excellent. We are ahead of the industry standards and regulatory requirements. Our customer base is growing and we are happy say this.”

Monday 23 July 2018

BUSINESS DAY

Monday 23 July 2018

BUSINESS DAY

Monday 23 July 2018

FOCUS

Governor Wike’s Third Year Anniversary: Golden Era For Rivers State Government Girls Secondary School, Rumuokwuta, Nyemoni Grammar School, Abonnema and Birabi Memorial Grammar School, Bori highlighted the success of the education policies of Governor Wike. At Onne, the Rivers State Government rolled out Government Secondary School, Onne, while Model Primary School, Mgbuosimini was commissioned. The Faculty of Science and Technical Education Building at the Rivers State University came on stream while Governor Wike flagged off the construction of the Student Union Government Secretariat at the Rivers State University. Educational advancement constitutes a major plank of the New Rivers Vision. Governor Wike sees education as a fundament route towards the empowerment of the next generation.

SIMEON NWAKAUDU

or over six weeks, Rivers State held the entire country spell-bound. The Third Year Anniversary Celebration of the Wike administration brought to the fore, the fundamentals of good governance in the face of governance failure in majority of the states of the Federation. The superlative performance of Governor Wike brought into focus the extreme and disheartening failure of the APC Federal Government. Therefore, everyone, including wellmeaning leaders of all persuasions gravitated towards Rivers State to identify with a people’s leader. A compassionate governor. In the course of the third year anniversary of Governor Wike, which was marked by the commissioning of key projects and the flagging off of new ones, several leaders described him in different glowing terms. But one strand of description stood out as it featured at different commissioning ceremonies in the health sector. It came from the leader of the medical professionals who could not hide their joy. This beneficiary-assessment was not induced. It came from a pure heart. Rivers State Chairman of the Nigerian Medical Association, Dr Datonye Alasia in a burst of inspiration declared that under Governor Wike, Rivers State has enterred a golden era in healthcare delivery. Though, Dr Alasia viewed his assessment purely from the lenses of the profits that accrued to his profession, his assessment applied to the entire state and other key sectors. From road infrastructure to education to judiciary through to empowerment and workers welfare, Governor Wike reached out to the people of Rivers State in the course of the first three years of his first term. He proved the relevance of having a prepared leader in Government House. ROAD INFRASTRUCTURE All through the three years of Governor Wike’s administration, all the three senatorial districts have benefited from key road projects. Several of these roads have helped to connect agricultural centres to Port Harcourt and other parts of the country. In the course of the third year anniversary, another set of roads were completed, while others were flagged off. These roads provided the right linkages and helped to boost the economy of the state. The Garrison-Trans-AmadiSlaughter-Woji-Elelenwo Road is one of the major highlights of the anniversary. Abandoned at about 30percent by the immediate past

Gov. Nyesom Wike

failed Amaechi administration, Governor Wike completed this road through diligent supervision and funding. Another road thrown up during the third year anniversary of Governor Wike is the Woji-Elelenwo Dual Carriageway and Bridge. The failed Amaechi administration ran away from this road because of the sheer funding requirement. Governor Wike dutifully funded and supervised this road for two years and delivered it to the people of Rivers State. The road has cut travel time between Eleme and Port Harcourt. The 22.3 kilometer Airport–IpoOmademe -Ozuoha Road in Ikwerre Local Government Area was an economic gift to the people of the area who are predominantly farmers. This road was commissioned during the governor’s third year anniversary. Governor Wike rolled out about 100 neighbourhood roads across the state to boost the living standard of the people. In Elele-Alimini, the Rivers State Governor constructed and commissioned 19 roads to lift the area. For the people of Ogba/Egbema/Ndoni (ONELGA), the Wike administration completed 11 beautiful roads. In Okrika Local Government Area, 15 roads were constructed for the good people of Okochiri Kingdom . In Port Harcourt Township, Governor Wike used the Third Year Anniversary Celebration to bless the communities with key roads. They include: Bishop Johnson Street, Creek Road, Bishop Fubara Street, Captain Amangala Street, Tourist Beach Street and Abacha Road.

The icing on the cake for road infrastructure was the completion and commissioning of the Obiri-Ikwerre Airport Road. This road is a beauty to behold and a wonderful example of good governance. The Third Year Anniversary Celebration of the Wike administration also witnessed the flag off of the construction of Bolo Internal Roads and Eteo-Sire-Bariyira-Nonwa-Kira Road. The implication is that the delivery of projects will continue unabated. HEALTH SECTOR DEVELOPMENT The health sector featured prominently during the third anniversary of Governor Wike’s administration. The quality of projects commissioned showed clearly that health-

In the course of the third year anniversary of Governor Wike, which was marked by the commissioning of key projects and the flagging off of new ones, several leaders described him in different glowing terms

care delivery will improve in the state. The Deima Denni-Fiberesima Doctors’ Quarters at the Braithwaite Memorial Specialist Hospital was flagged off by Vice President Yemi Osinbajo and delivered by the administration of Governor Wike in record time. This residential facility will serve as morale booster to doctors as it will encourage them to serve the people faithfully. As part of the third anniversary, Governor Wike completed and delivered the Mgbuosimini Health Centre and the Primary Health Building in Port Harcourt. These two projects are targeted at developing the Primary Healthcare of the people. The Training of qualified medical doctors and other health professionals to promote quality healthcare received attention as the Wike administration completed and commissioned the Medical College at the Rivers State University. The growth of this sector is guaranteed as Governor Wike is still developing key projects across the state. GREAT EDUCATIONAL PROJECTS This is one sector that proved to the world that Governor Wike believes in the future of Rivers State. Project after project came to the fore as Rivers people celebrated the beauty of performance. These were projects that defined the very essence of visionary leadership. Three pilot projects for the introduction of Boarding Education were unveiled.

ADMINISTRATION OF JUSTICE Through consistent investments, Governor Wike has elevated Rivers State into the Judicial Hub of the South-South. From a state with a negative image that the Former Rivers State Governor, Rotimi Amaechi closed the courts for two years, Governor Wike has improved access to justice. In the course of the Third Year Anniversary Celebration of the Wike administration, the National Industrial Court flagged off by the President of the National Industrial, Justice Adejumo was commissioned by the Chief Justice Of Nigeria, Justice Onoghen. The construction of the National Industrial Court has addressed the challenges of litigants going to Bayelsa, Imo and Enugu for their labour matters. The Court of Appeal, Port Harcourt Division was in a mess. It was on this premise that Governor Wike offered to intervene. Today, that intervention, the first of its kind has led to the delivery of a brand new Court of Appeal with enhanced facilities. CIVIL SERVANTS WELFARE The welfare of Rivers workers has always been prioritised by Governor Wike. The love for workers was exhibited during the third anniversary of Governor Wike. The administration unveiled a 24-number 3-Bedroom Flats for Civil Servants in Port Harcourt. To ensure the sustenance of this project, the Rivers State Governor organised a facility manager for the civil servants residential quarters. As part of the Third Year Anniversary Celebration of the Wike administration, the National President of NLC, Comrade Ayuba Wabba was invited by the Rivers State Governor Continues on page A7

Monday 23 July 2018

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Absa’s Maria Ramos: On winning a favourable deal

“I am quite competitive . . . I don’t like losing. So I can drive people quite crazy” - Maria Ramos

Ms Ramos, 59, was born in Portugal before moving to South Africa with her mother and bricklayer father. “I am quite competitive,” she says. “I don’t like losing. So I can drive people quite crazy.” That relentless will helped Ms Ramos to negotiate a separation deal with her former colleagues at Barclays that ended up costing the British bank $1bn in compensation, as well as contributing a 1.5 per cent stake in the African lender to fund black economic empowerment causes. She credits Cyril Ramaphosa, the current South African president, with teaching her negotiating tactics. She had worked for him as chairman of the body charged with drawing up a new constitution for the country after apartheid ended in the early 1990s. “You need to have data. You need to know what you want to achieve, what the numbers look like, have a good team around you,” she says. “So, that negotiation [with Barclays] got pretty heated at times, but we got a deal.” A further complication of the Absa deal was that she was going up against her former colleagues at Barclays, including group chief executive Jes Staley and finance director Tushar Morzaria, who had decided to cut ties with the company she was running and reduce the UK group’s stake to just under 15 per cent. “It’s also about respect,” she says. “You’re sitting across the table from somebody like Tushar, or Jes, or the rest of the board, and these are people you’ve worked with. You know them, you respect them. You know

Governor Wike’s Third Year Anniversary: Golden Era For Rivers State Continued from page A6

to lay the foundation for the construction of the Rivers State NLC Secretariat.

MARTIN ARNOLD, FT

Maria Ramos

where they’re coming from. Hopefully they respect you.” Yet the challenge of spinning off Absa as an independent bank with more than 40,000 employees in 12 countries is still only partly met. Much of the technical and legal work of breaking away still needs to be completed by June 2020 and it only officially dropped the Barclays name two weeks ago. Meanwhile, the distraction of negotiating the split has allowed rivals to poach key clients and staff, eating into its market share. Such adversity is nothing new for Ms Ramos. She has had to fight for most things since arriving in South Africa, when her family were too poor to send her to university. To earn money she got a job as a “waste clerk”, picking up payment slips and cheques from behind the tellers and processing them at a branch of Barclays in Vereeniging, an industrial town south of Johannesburg. After finding out about a male-only scholarship, she shamed the bank into opening it to women and accepting her. “I just carried on fighting about it, and eventually . . .”, she says, with a grin. Joining the anti-apartheid movement while studying commerce in Johannesburg made a lasting impact, and after Mandela’s election as president in 1994 Ms Ramos joined the treasury. There she met Trevor Manuel, thenfinance minister and senior member of the African National Congress. Together, they formed one of South Africa’s best-known “power couples”. Ms Ramos was blindsided by Mr Staley’s move to sell most of its majority stake in Barclay’s African business, which came soon after he took charge in 2015. “We heard like everybody else, the day before the announcement, the night before, really,” she says. “Yes, it was a shock, to colleagues, to customers, frankly a shock to regulators as well.” She called in her senior managers, before addressing about 1,500 employees in the Johannesburg head

$1bn

The compensation amount for Barclays bank in the separation deal

FOCUS

Leading People

aria Ramos is on the verge of tears as she recalls the leader who inspired her to handle the biggest challenge of her career: the sale of Absa, the South African bank, in 2017 by its former parent, Barclays. The move marked the end of the British bank’s centuries-long presence in Africa. “I learnt a long time ago, from none other than Nelson Mandela, that this is about inspiring people, and if you respect people enough, and you understand dignity, that you can lead with purpose, and with focus,” she says. “He was never pushed around. He was always very clear about what he wanted to achieve.” It is a rare quiet moment from this irrepressible woman who started as a bank clerk and has risen through the South African establishment to lead one of the country’s biggest companies.

BUSINESS DAY

office. With speculation swirling about potential bidders for the bank, Ms Ramos told staff that, while she did not have all the answers, this was a unique opportunity to build an independent pan-African business. Meetings with all 12 of the bank’s national regulators as well as major clients followed. The bank’s strategy was shaped by a year of consultations with staff across the group. “They’ve been through an intensely dramatic time, and so it really is a time for us to stop and ask people,” she says. She shows me a video on her mobile of staff in a regional office dancing and singing after one such strategy meeting. “This is Africa,” she says. “It is what we do — we dance.” She has a reputation as a ruthless boss, earned by firing most of the senior managers in her last job running state transport group Transnet. Yet Ms Ramos believes she has been too slow to get rid of underperformers in the bank. “When I think about the mistakes I make most often as a leader, they tend to be around how quickly I act, particularly, on people,” she says, blaming “hesitation” driven by fear of “upsetting the apple cart with this person, or with this regulator, or with this process”. One issue that really riles Ms Ramos is sexism. “Going to a meeting, you have to say the same thing three times before you get heard,” she complains. “Some guy says the same thing, doesn’t articulate it as well, he’s heard the first time around.” Recalling how an analyst once attributed the bank’s underperformance to her gender, she says he “didn’t say it to my face because he would have been boxed”. “What should it matter that I pitch up to do results wearing the same jacket this year that I wore last year?” she asks. “No one knows whether a guy’s pitched up wearing the same flipping tie or the same bloody suit? Right?” For once, Ms Ramos sounds weary. “I don’t know how much longer I will do [this]. The board has to, obviously, deal with succession,” she says, adding that she has committed to see through the two-year separation from Barclays. What would she do if she retired? She professes to having always wanted to write a novel. She may write a book about sexism in business instead.

SPECIAL PROJECTS Certain critical projects that touch the lives of the people were inaugurated by the Wike administration as part of the third anniversary. These projects are vital to the development of the economy of the state. They include: The Emmanuel Aguma House formerly known as Produce House, which was allocated to agencies of the United Nations and other international organisations. This structure was remodelled by the Wike administration. This building was revived from the dead. The Rex Lawson Cultural Centre was inherited by Governor Wike at 30 percent completion. In 120 days, Governor Wike financed and supervised it to completion. The Rivers State Traditional Rulers Secretariat was flagged off and completed during the Wike administration. Sultan of Sokoto, Alhaji Sa-ad Abubakar performed these two major functions. This is the best Traditional Rulers Secretariat in the country, with special facilities. It was in the course of the Third Year Anniversary Celebration of the Wike administration that the construction of the Real Madrid Football Academy was flagged off by the President of Confederation of African Football, Ahmad Ahmad. This event attracted the global sporting press and football family. It was a defining moment for football as a business. NATIONAL INTEGRATION/POLITICS WITHOUT BITTERNESS Beyond the practical gains of showcasing Nigeria’s best performing governor for close to two months, the Third Year Anniversary Celebration of the Wike administration was used to foster national integration and national unity. As a statesman, Governor Wike carefully selected leaders from all divides and international community to commission projects executed for the good of Rivers people. There were the ingredients of peer review, friendship, international cooperation and regional integration. Every community was given a sense of belonging. The European Union Ambassador to Nigeria, Mr Ketil Karlson commissioned the Emmanuel Aguma House formerly known as Produce House, the British High Commissioner to Nigeria, Paul Awkright commissioned the Government Girls Secondary School, Rumuokwuta, the Chief Justice of Nigeria, Justice Walter Onoghen commissioned National Industrial Court and Appeal Court Complex,

General Abdulsalami Abubakar commissioned the GarrisonTrans-Amadi- Slaughter-WojiElelenwo road while Former Vice President Atiku Abubakar commissioned the Isiokpo Internal Roads. Delta State Governor, Senator Ifeanyi Okowa commissioned Mgbuosimini Health Centre/Primary School, Former President Goodluck Jonathan commissioned the Ozuoha-Ipo-Omademe Road , Former PDP Acting National Chairman, Senator Ahmed Makarfi commissioned Nyemoni Grammar School, Abonnema while Senate Minority Leader, Senator Godswill Akpabio commissioned Omoku Internal Roads. Ekiti State Governor, Ayo Fayose commissioned Elele-Alimini Internal Roads, PDP National Chairman, Prince Uche Secondus commissioned Creek Road and 24-number 3bedroom Flats for Civil Servants was commissioned by Former Plateau State Governor , Senator Jonah David Jang. Sultan of Sokoto, Alhaji Sa-ad Abubakar commissioned the Traditional Rulers Secretariat, Ooni of Ife, Oba Adeyeye Enitan Ogunwusi commissioned the Rex Lawson Cultural Centre while the Obi of Onitsha , Igwe Nnaemeka Achebe commissioned Abacha Road . Politically, Governor Wike used the third anniversary to emphasise the relevance of politics without bitterness. Political leaders may be from different political parties, but there must be meeting points to foster development. On that note, Senate President Bukola Saraki commissioned the Obiri-Ikwerre Airport Road, Speaker of the House of Representatives, Rt Hon Yakubu Dogara commissioned the Woji-Elelenwo Dual Carriageway and Bridge while Sokoto State Governor, Aminu Tambuwal commissioned the MedicalCollege at the Rivers State University and the Birabi Memorial Grammar School, Bori. These three leaders are members of the APC. BLESSED BY GOD It was a celebration that started and ended with God. A dedication and Thanksgiving Service was held at Winners Chapel D/ Line. All through the programmes, there was no casualty or untoward story, despite visitors coming from across the globe. At the end, another Thanksgiving Service was held at Cathedral Anglican Church of Saint Paul in Port Harcourt. The Blessing of God placed Rivers State on top and made it an international reference point. While others struggled to survive, Rivers State under the leadership of Governor Wike has become Nigeria’s centre of development and international recognition. For three years, Governor Wike has deepened the process of propeople governance.

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MPC set to retain rates at 14% HOPE MOSES-ASHIKE

head of the Monetary Policy Committee (MPC) meeting beginning today to tomorrow in Abuja, analysts have unanimously predicted a hold in the monetary policy stance, although there are justifications to ease. The inflation rate has maintained a consistent downward trend since January 2018. FSDH Research’s forecast shows that it may drop to single digits in 2018 provided there is no food crisis that can lead to escalating food prices. There has been relative stability in the foreign exchange rate due to favourable crude oil production and price, and foreign capital inflows. However, the view of the MPC members that fiscal injections and rising rates in the developed markets would have adverse impacts on price stability in Nigeria may not allow the MPC to ease policy. Weak economic and credit growth in Nigeria do not justify rates hike, FSDH Research, a subsidiary of FSDH Merchant Bank started in a report.

At its meeting in May 2018, the MPC maintained the Monetary Policy Rate (MPR) at 14 percent, with the asymmetric corridor at +200 and -500 basis points around the MPR; it retained the Cash Reserve Ratio (CRR) and Liquidity Ratio (LR) at 22.50 percent and 30 percent respectively. “We expect the MPC to maintain the benchmark interest rate at the current level due to the anticipated expansionary impact of fiscal spending following the signing of the 2018 budget,” the Economic Intelligence Unit of Access Bank Plc said in a report. The total foreign exchange (FX) inflows through the Investors’ and Exporters’ FX Window between January and 19 July 2018 stood at $18.54 billion. The total inflows for the month of July as at 19 July 2018 stood at $1.17 billion. Given the run rate, July may record the lowest inflows since January 2018. Rising rates and yields in advanced countries, coupled with low yields in Nigeria and weak economic recovery may encourage FX outflows. However, FSDH Research expects that the favourable crude oil production in Nigeria and

price in the international market should continue to lead to accretion to the external reserves. This should maintain stability in the foreign exchange rate in the short- to-medium term. Nigeria’s external reserves have been dropping consistently since 06 July 2018. The 30-day moving average external reserves decreased by 0.34%, down from $47.61bn at end-May to $47.45bn at 18 July 2018. The naira depreciated slightly in the Investors & Exporters (I&E) and Nigeria Inter-Bank Foreign Exchange (NIFEX) windows to N361.59/$ and N346.25/$ respectively on July 9, relative to N361.25/$ and N340.25/$, in that order, on May 23, when the MPC last convened. The depreciation pressures witnessed in these market segments stemmed from stronger demand for the dollar, chiefly due to the repatriation of funds by the Foreign Portfolio Investors (FPIs). Meanwhile, the local currency appreciated against the US dollar at the parallel market by 1.37% to close at N361/$ on July 9th, from N366/$ in May, on sustained liquidity injections across market segments by the CBN.

VFD Group restates commitment to talent development

n line with its dedication to talent development and human capacity building, VFD Group has announced the opening of its 2018 Graduate Trainee Programme. The Graduate Trainee Programme is a 12-week intensive training plan. The curriculum comprises of rotational attachments across the subsidiary companies of the group, case studies, series of business trainings and specialised IT boot camps.

At the end of the training period, successful participants are integrated into the company’s workforce on a fast track to mid-level management. VFD Group is the holding company for its subsidiaries like VFD Microfinance Bank, Everdon Bureau de Change, Anchoria Asset Management, VFD Bridge, Germaine Auto Centre and Dynasty Real Estate. The company is calling for entries from smart

graduates below the age of 27 who have minimum of a second-class upper degree from a reputable university or upper credit for polytechnic graduates, and a valid NYSC certificate. Interested and qualified candidates can apply on the company’s website www. vfdgroup.com/careers/ before the application window closes, as application opens from July 23 to 29.

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Oando, JV partners bridge clean water shortage gap in Agbere community

ll thanks to Oando plc and its Joint Venture (JV) Partners, NNPC and NAOC, as the over 5,000 residents of Agbere Community, Bayelsa State were overjoyed at no longer being another statistic. They were finally taken off the appallingly high statistics of 69 million Nigerians without access to clean potable water, following the commissioning of a 20,000-gallon water scheme in the community. According to the Oando representative at the commissioning, “The initiative is grounded in the fact that water is a fundamental human need. Each person requires at least 20 to 50 litres of clean, safe water, daily, for drinking, cooking, and simply keeping themselves clean. Sadly, today in Nigeria there is an alarming dearth of access to

clean water, and at Oando, we want to bridge this gap especially in our host communities.” The laudable water scheme will drastically reduce deadly water-borne diseases in the community such as typhoid fever, cholera, diarrhoea, dysentery, hepatitis A to name a few. The scheme will also reduce the amount of time spent looking for water especially in rural areas, as noted by UNICEF - 19 million Nigerians walk long distances to collect unsafe water from lakes, streams and rivers. One could rightfully say that Oando and its JV partners heeded the words of UNICEF communications specialist, Eva Hinds, who said: “Improving water and sanitation services as well as basic hygiene practices in Nigeria, calls for strong commitment

from all partners-the Government, civil society, the private sector and communities.” He said: “For Nigeria to achieve the global goal of providing access to safe water for every citizen by 2030, it needs to make water, together with sanitation and hygiene, a national priority. This goal is closely linked with three key results for the countrygood health, environmental sustainability and economic prosperity.” The water scheme, in line with goal six of the United Nations Sustainable Development Goals, ‘Ensure Access to Water and Sanitation for all”, will also reduce infant mortality rates in the Agbere community as diarrhoea a water borne disease remains the leading cause of death amongst children under ﬁve years of age in Nigeria.

Trace Live hosts Falz, surpasses fans’ expectation

iding on the success of its previous editions, Trace thrilled the Nigerian audience at the fourth edition of the Trace Live Series with Falz The Bahd Guy. The well-attended event, held recently at the Terra Kulture Arena in Victoria Island Lagos, was greeted with an overwhelming enthusiasm by numerous fans, industry heads, and media personalities, among others. Trace Live Series has in

the past hosted the likes of Omawunmi, Flavour and Adekunle Gold whose phenomenal performances left the crowd wanting more. With such high standard, Falz’s performance definitely lived up to expectation as his mind blowing performances brought the audience up to their feet to boogie down and sing along to hit songs like - Karishika, Soft work, Soldier, Weh done sir. Other highlights of the

evening were the announcement of the release date for his forthcoming album, Falz The Experience 2, on December 30, 2018, as well as, the unveiling of his first artiste, Sir Dauda under his label ‘’Bahd Guy Records.’’ Falz closed the show with his controversial hit song – This is Nigeria, but it was obvious the crowd was not in any way ready to call it a night. However, the show was an enthralling experience for all in attendance.

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Lack of collaboration responsible for current HIFL holds team draws, jerseys reveal ahead maiden edition controversies in power sector - operators D OLUSOLA BELLO

takeholders in the electricity industry say unless the various operators piloting the sector put their differences aside and collaborate among themselves the sector will remain beleaguer and without much progress. They say this against the background of the recent development in the industry in which the minister of power, works and housing, Babatunde Fashola, came hard on the distribution companies accusing them of being responsible for inefficient services delivery to consumers. According to them, a situation in which the Nigeria Electricity Regulatory Commission (NERC), Nigerian Bulk Electricity Trading Company (NBET), generation companies, distribution companies and Transmission Company of Nigeria (TCN) are all working on their own without synergy on how to tackle the issues in the industry will not allow for achieving a common purpose. Joy Ogoji, executive secretary of generation companies, said recently at BusinessDay ‘Future of Energy Series’ that most of the issues plaguing the industry could be resolved if all the actors resolve to collaborate and iron out things rather than seeing themselves as antagonists. Ogoji said the time had come for operators of generating plants, Discos, NBET, NERC, TCN, and

the Ministry of Power to sit down and discuss on areas of common challenges with the aim of providing efficient services to consumers. In the same vein, Kola Adesina, chairman of Egbin Power plc, said if there was no collaboration among the various stakeholders it would be difficult to have a seamless and efficient service delivery from the industry. According to Adesina, slamming policies at will without first discussing with those that are to implement such policies will not encourage investors to come into the sector. Another industry stakeholder, Dan Kunle, an energy expert, said all the problems plaguing the industry would have been avoided if the current government had looked into what was left to be completed by the Olusegun Obasanjop and Jonathan administration as far as the power reform was concerned. He said the current government choose to ignore some of the inherent problems in distribution, and also gas production and distribution. The various government agencies are handicapped because they are working in tandem with other stakeholders in the industry at cross-purposes. According to Fashola last week, the person to turn to when consumers have no meter, no supply of power, or your transformer is bad, is the Discos, who

are your service providers. “They are the ones who bill you and collect money from you,” he said. He however pointed out that, from time to time, there were failures in the system, such as gas supply shortage or transmission failures. This, he said, is not the fault of the Discos, “but any fairminded observer will admit that this does not happen every day and this has nothing to do with supply of meters or the proliferation of estimated bills.” He blamed the Discos for not doing enough to improve service delivery while at the same time resisting the various policy initiative put in place to improve power supply. But the Association of Electricity Distributor, the umbrella body of the Discos, said, “The companies cannot meet their obligations specified in their performance agreement if they are not allowed to recover the cost of the product that they sell, no different from economies of any commodity for sale.” The association said as result of the politicisation of the tariff, the Discos were currently operating in an environment of an average retail tariff of N32/ kilowatt hour versus an actual cost of energy that exceeded N65/kilowatt hour, and a growing market shortfall estimated to be in excess of N1.3 trillion with a monthly accumulation of N27 billion of the market shortfall.

raws for the 2018 edition of the Higher Institutions Football League have been revealed as part of preparations toward the successful hosting of Nigeria’s first and only collegiate football league. On Friday, football experts, stakeholders and administrators alongside several brands and business leaders, gathered at the external ball room of the Federal Palace Hotel, Lagos, to witness the draws for the participating 16 schools in the 2018 edition of the collegiate football league in Nigeria starting from July 28 to November 3. Speaking after the draws, Stephen Hamafyelto, president, Nigerian University Games Association (NUGA), said, “Football lovers across the country can look forward to a very interesting competition. “The successful draws will not only put to rest the question of who plays who, but also set the tone for everyone to be geared up for the exciting days ahead. The managers, the players and even the organisers are now better placed to align themselves with the HiFL’s brilliant execution format. “We are confident that the HiFL will complement the efforts of NUGA to bring back the good old days of competitive inter-school games with all the excitement therein.” Other activities that took place at the event included

the reveal of unique jerseys and logos for the participating schools. In a bid to grow collegiate sports in Nigeria, HiFL was launched this year by PACE Sports and Entertainment Marketing, for football teams in higher institutions in Nigeria as the first organised collegiate football league in the country. According to Sola Fijabi, director, PACE Sports and Entertainment Marketing, the draws for the participating schools is a major part of the competition “as the draws have proven, PACE is very ready to deliver the league in line with global best practices. “This is a major part of the competition, and in the coming weeks, we hope to provide the biggest youth engagement platform in the country in terms of reach and visibility. “The reveal of the seeded teams in line with global standards is a demonstration of our commitment to deliver the league under the highest quality and condition.” The league will commence with 16 universities, zoned into the Coastal Conference (South) and the Sahel Conference (North) for reasons of proximity and effective administration. During the draws, the eight universities from each conference were further categorised into two groups for the reasons of proximity and safety. School teams were picked

randomly from 4 transparent bowls which represented the 4 groups namely; Sahel A, Sahel B, Coastal A and Coastal B. Exinternational football players/ sponsors who managed the process of the draws ensured that the placement of schools was done in line with global standards. After the draws, the official fixtures for the HiFL 2018 season were also revealed. Some of the exciting matches to anticipate include the battle of the coasts, Unilag Marines vs Uniben Royals, and the titanic battle of the north between BUK Stallions and Udusok Sultans. Pioneer sponsors of the league Stanbic IBTC and Indomie Instant Noodles, expressed their delight at the opportunity to be part of the HiFL story as it aligns with their desire to positively impact the youth, while moving them forward to greater heights. Supersport, brilla Fm and complete sports were also announced as official media partners of the league. Ahmed Shuaibu Gara Gombe, technical consultant, HiSL, and CEO, Green-WhiteGreen Sports Centre Limited, described the draws as the platform that essentially sets the ball rolling for the competition. As we proceed, we are on the lookout for exceptional talents and we are committed to providing them the needed support to help them grow in their career.”

Monday 23 July 2018

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Monday 23 July 2018

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Monday 23 July 2018

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Monday 23 July 2018

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Monday 23 July 2018

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fivethings

Opinion

for your new week

Beware! Politicians are ganging up again. Just for power GLOBAL PERSPECTIVES

OLU FASAN Dr. Fasan, a London-based 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

ord Palmerston, the 19th century British foreign secretary and later prime minister, famously said, “Nations have no permanent friends or enemies, they only have permanent interests”. Of course, he was only talking in the context of international relations. But Nigerian politicians are now using the phrase shamelessly as a fig leaf for their valuefree, self-interested politics. As a result, party loyalty is so fickle and fluid in Nigeria, with the prevalence of political turncoatism. What’s more, there is a new phenomenon: the ganging up by strange political bedfellows during general elections just to capture power. We saw it in 2015. We are seeing it – again – now, ahead of next year’s elections! In an electoral democracy, based on the party system, political parties can only survive when they believe in, and stand for, something, and have loyal, rather than fair-weather, adherents. In Europe and much of Africa, political parties have longevity and stability because of their values and the loyalty of their members and leaders. Nelson Mandela, despite being disappointed with the actions of his successors as leaders of the African National Congress (ANC), once said: “I will join the nearest branch of the ANC in heaven!” Margaret Thatcher, despite her misgivings about the leadership of the Tory party after she left office as prime minister, died as a card-carrying member of the party. But, in Nigeria, Olusegun Obasanjo publicly tore his membership card of the People’s Democratic Party (PDP), under which he was Nigeria’s president for eight years, and did everything to destroy the party and scupper its electoral chances simply because he couldn’t control it! But you won’t have principled, value-based, honest, responsive and accountable politics and governance when parties are mere vehicles for acquiring power for personal gains. And one way to know that politics in any country is serving the interests of politicians rather than the people is when parties are formed by strange political bedfellows or when politicians and parties gang up opportunistically at elections in pursuit of a shared self-interested objective of just capturing power. This, sadly, is now the

trend in the electoral politics of Nigeria. Four years ago, ahead of the 2015 general elections, several politicians and political parties ganged up to defeat the then governing party, PDP, under the presidency of Goodluck Jonathan. It was a potpourri of unlikely political allies, united by a common, but unprincipled, goal of seizing power from the incumbent. Thus, by a strange political alchemy, the All Progressives Congress (APC) emerged from the merger of the Action Congress of Nigeria (ACN), led by Bola Tinubu; the Congress for Progressive Change (CPC); led by Muhammadu Buhari; the All Nigeria People’s Party (ANPP) of John Odigie-Oyegun; a faction of the All Progressives Grand Alliance (APGA), led by Rochas Okorocha, and a break-away faction of the PDP, known as nPDP, consisting of five governors, three former chairmen, several legislators and prominent former PDP politicians across the country, including Bukola Saraki and former vice president Atiku Abubakar, not to mention Obasanjo, who did not hide his support for the new party. Well, w ith enor mous electoral firepower, the APC pulled off a great feat, unprecedented in Nigeria: it defeated the incumbent president. “Hurray! Nigeria’s democracy is now working”, most Nigerians exulted. But, as President Obama said recently at the centenary an-

political dynamics in the party’s fragmented power bases, not to mention the overbearing influence of the shadowy cabals around the president, have prevented Buhari from reshuffling his largely mediocre and lacklustre cabinet. Now, the APC itself has splintered, with the emergence of the so-called Reformed APC (rAPC). G i v e n a l l t h e a b ov e, you will understand why I scoffed at the front-page story in a recent edition of BusinessDay, captioned: “Battle for 2019 set as PDP merges with 39 parties”. The new “party” would be known as “Coalition of United Political Parties (CUPP)” and would present just one presidential candidate to dislodge Buhari from Aso Rock. But who are cupped in CUPP? Well, they include the PDP; the rAPC, formerly known as nPDP; the Social Democratic Party (SDP), previously purist, but recently infiltrated by disgruntled PDP members; the National Conscience Party, the party formed by the late civil rights activist, GaniFawehinmi (he will be rolling is his grave!); the Labour Party, now fronted by former Ondo State governor, Olusegun Mimiko, who recently defected from the PDP; and, wait for it, Obasanjo’s African Democratic Congress (ADC). Lord Palmerston would be turning in his grave at the way Nigerian politicians have bastardised his

Lord Palmerston would be turning in his grave at the way Nigerian politicians have bastardised his “no permanent friends or enemies, but permanent interests” dictum. Surely, the only “permanent interests” galvanising these previous political foes are shared animus towards Buhari and the determination to seize power from him niversary of Nelson Mandela, democracy is not just about elections, it is also about the strength and stability of democratic institutions. Unfortunately, barely two months after gaining power, the APC was in disarray. Its leadership was paralysed by oligarchic rivalries, and party discipline was thrown to wind in the National Assembly and across the country. Of course, when a governing party becomes dysfunctional, the government it leads would malfunction. The Buhari government has failed, in part because of the president’s weak leadership but also because of APC’s deep crisis. The executivelegislature gridlock, which has hampered government effectiveness, is linked to the party’s crisis. Furthermore,

“no permanent friends or enemies, but permanent interests” dictum. Surely, the only “permanent interests” galvanising these previous political foes are shared animus towards Buhari and the determination to seize power from him. Atiku, who is corralling the coalition, and perhaps bankrolling it, is doing so in pursuit of his long-standing presidential ambition. As for Obasanjo, he is motivated by a personal goal to deny Buhari a second term even if it means supporting Atiku, who he’s been telling Nigerians for years “is corrupt”. For Obasanjo, it’s “Anyone but Buhari”, just as he said in 2015: “Anyone but Jonathan”! Indeed, Obasanjo recently met with Afenifere leaders, his long-standing political enemies, to solicit

their support in “rescuing” Nigeria by denying Buhari a second term. Never mind that he is viscerally opposed to political restructuring, an article of faith for Afenifere! Of course, Obasanjo is not the only one playing this “no permanent enemies, but permanent interests” game. Atiku, a serial defector, has long been doing it. As has the APC! In 2014, Tinubu led leaders of the newly formed APC to Obasanjo in Ota. “We are resolved and determined to rescue Nigeria”, he told Obasanjo, adding: “We want you to lead the mission, we want you as navigator”. But, recently, the same Tinubu mocked Obasanjo for saying Buhari shouldn’t seek a second term. Hear him: “I remember one Uncle backdoor, who has been General himself and who has been elected President. I call him election rigger!”. Hilarious! Obasanjo was once Tinubu’s political enemy, then he became his political friend, and now he is his political enemy again! Depending on the next political interests, Obasanjo might be Tinubu’s political friend and ally again, and vice versa. Lord Palmerston, where are you?! But how can Nigeria’s party system and democracy develop with this chameleonic, end-justifies-means behaviour? I mean, where is the difference between the coalition against Jonathan in 2015 and the new coalition against Buhari? None. It’s the same politicians again. The rAPC is the nPDP of old. Obasanjo has simply switched alliance – again! Atiku, of course, is a recurring feature in all this. It’s a revolving door politics! To be clear, I am not against coalitions if they are driven by noble goals rather than selfish ambitions. For instance, I wrote recently that the next general elections must be about restructuring Nigeria and that there must be a Government of National Unity after the elections to deliver it. That requires crossparty collaboration. But the CUPP is not about restructuring. The Coalition promised in its MOU to “present an executive bill on restructuring and devolution of powers to the National Assembly”. That’s disingenuous. Which restructuring plan would they implement, the one based on the report of the Jonathan government’s National Conference or the APC’s restructuring report? There is no consensus yet. That’s why the restructuring and political settlement that Nigeria needs cannot be done by one party simply submitting an executive bill to the National Assembly. It requires elite consensus, it requires a Government of National Unity. If the Coalition is committed to a comprehensive restructuring agenda and to a unity government to deliver it, then it would be in the national interest. Otherwise, it’s another self-interested ganging up for power; in which case, I simply say: Beware!

Fascinating business facts

$98bn

hina’s mobile payments revolution is happening with breathtaking speed and scale. In five years it has transformed daily life in Chinese cities, laying the foundations for the country’s mammoth financial tech industry with gross revenues reaching $98bn in 2017 according to iResearch. Last year, the value of mobile payments in China overtook the worldwide totals of both Visa and Mastercard and almost half the world’s digital payments in 2017 were made in China according to Pwc. In particular, Alipay and Tencent have now also outstripped PayPal, the US’s biggest online payments operator with each handling more payments in one month this year than Paypal’s $451bn for the whole of 2017.

$20bn

hese are not happy days for Netflix, the US based company that is using technology to disrupt the movie industry by replacing linear television entertainment with an internet model. The latest miss on subscribers is its biggest disappointment in two years, and it sent its stock tumbling by as much as 14 per cent in after-hours trading on Monday wiping away more than $20bn from its valuation in a matter of minutes. Netflix is predicting 135.1m members at the end of September. Its forecast of 5m global net subscriber additions this quarter was below the 5.3m it added in the same quarter a year ago.

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rivate equity firms are raising money at the fastest rate in more than a decade and buyout executives are rushing to tap investor demand even as fears grow of a market correction. The average time PE funds, including those investing in infrastructure and real estate, are taking to raise money has fallen to 12 months — from almost two years in 2010 — the quickest pace since at least 2006, according to an analysis by Pitchbook, a data provider. The figures also show there are now fewer funds raising cash from investors in the US — from 328 in 2014 to 271 last year and 111 by the end of June this year.

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nheritance is more enticing than income when it comes to Germans and marriage. Money that could pass down the family is what matters to Germans looking for a spouse, according to a paper published by the Bundesbank. In it, economist Junyi Zhu and Etienne Pasteau from the Paris School of Economics write that inheritance is about two and a half times more important than income in explaining marriage choices in Europe’s largest economy.

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enya’s Safaricom is in “advanced talks” with the Ethiopian government to introduce its popular M-Pesa mobile money service to neighbouring Ethiopia, a market of 100 million people, two sources said on Tuesday. Britain’s Vodafone, Safaricom’s parent company, will license the use of the M-Pesa trade name to an Ethiopia-based bank while Safaricom will host the servers in Nairobi, one telecoms industry source told Reuters. Ethiopia’s state telecoms monopoly, Ethio telecom, will carry the service, the source added. Started in 2007, M-Pesa has nearly 30 million users in Kenya.

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.