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Shiite protest: Buhari orders

IGP to secure Abuja, Nigerians L-R: Mobolaji Balogun, chairman, Lafarge Africa plc; Adewunmi Alode, company secretary, and Michel Puchercos, GMD/CEO, at the company’s 60th annual general meeting in Lagos, yesterday. Pic by Olawale Amoo

…DCP killed, 3 others injured ...Police arrest 54 suspects, decry death of DCP

Greenville’s $500m plant boosts P Nigerian industries with LNG

INNOCENT ODOH & TONY AILEMEN, Abuja

resident Muhammadu Buhari on Monday ordered the Inspector General of Police (IGP), Mohammed Adamu, to secure Abuja at all cost and provide security for

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Inside

to supply LNG to Kaduna Power Plant ODINAKA ANUDU

new dawn has come for Nigerian industries as Greenville Liquefied Natural Gas (LNG) Limited takes LNG to manufacturers to cut their production costs and improve

efficiency. A number of industries in Sagamu, Lagos and northern Nigeria are already connected to Greenville’s environmentally-friendly, clean and clear energy, with Dufil Prima Foods, makers of Indomie noodles, being the latest beneficiary.

“What we need in Nigeria is more industrialisation, more jobs and more skills, and now power will not be an issue when it comes to starting any company,” Ritu Sahajwalla, managing director, Greenville, said weekend at the commissioning of Greenville customer location at Dufil Prima

Foods in Port Harcourt. Greenville’s $500 million plant at Rumuji, Rivers State, has the capacity to produce 2,250 tonnes every day and 750 million tonnes annually. The oil and gas firm has an arrangement with the Fed-

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Focus shifts to pricing as Interswitch hires advisers for Lagos, London IPO P. 2 Steer clear of Edo Assembly or see war, Edo youths warn P. 39 House of Reps

Tuesday 23 July 2019

BUSINESS DAY

news Presidency gives detail of how it spent $1bn Excess Crude Account fund TONY AILEMEN, Abuja

n f u l f i l m e nt o f i t s promise to give account of how the $1 b i l l i o n w i t h d r aw n from the Excess Crude Account (ECA) for security was spent, the Presidency has come up with more details of the fund’s application. The Senior Special Assistant to the President on Media and Publicity, Garba Shehu, on Monday explained that N876.9 million has already spent from the money domiciled at the Central Bank of Nigeria while a balance of $123,111,571.29 has remained unspent at the CBN. Providing the detail, Shehu said the withdrawal of the money was authorised by the National Economic Council. The breakdown shows that Buhari administration paid $496,374,470 for a dozen Super Tucano fighter aircraft for the Air Force in a direct, governmentto-government (no Contractors or Commission Agents) transaction with the government of the United States of America. They are due for delivery in 2020. “Various other military procurements for criti-

cal equipment have been made. These are for the Nigerian Army and the Nigerian Navy, amounting to $380,513,958,71,” Shehu said. “These procurements include money for the purchase of Navy Lynx helicopters. Total amount spent so far: $876,888,428.71. The equipment paid for have due dates of delivery of between six months to two years. Balance of the money that is unspent as at today is $123,111,571.29,” he said. Shehu said the entire expenditure involved in these exercises is on the basis of government-togovernment procurement. “In cases where the Nigerian government dealt with equipment manufacturers, their home governments have in all cases given guarantees to the federal government,” he said. “Again, it is important to stress that no contractors or commission agents have been involved in the procurements under discussion,” he further said. Shehu added that “all USD 1,000 million was domiciled in the Central Bank of Nigeria and to date, not a single dollar of it has been transferred to the

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Focus shifts to pricing as Interswitch hires advisers for Lagos, London IPO Iheanyi Nwachukwu & David Ibidapo

he price at which Interswitch brings its shares for sale in the public is now the focus of many prospective investors who are eagerly awaiting the Initial Public Offering (IPO). This comes as news broke that Interswitch, the Nigeriabased payments firm, has hired advisers including, JPMorgan Chase, Citigroup, and Standard Bank Group as advisors for the IPO in London and Lagos later this year. “We should see an uptick in the stock performance of Interswitch upon listing on the back of a good pricing which investors perceive as a fair value for the stock,” Gbolahan Ologunro, research analyst at CSL stockbroker told BusinessDay. “However, if priced at a discount to what investor’s fair value is then the reverse may be the case.” The company had pulled earlier plans to list in 2016 after the price of crude oil fell dramatically, causing dollar shortage and a contraction in Nigeria’s economy. Analysts see uptick in

economic growth accelerating payments between companies and thus revenues at payment services providers, but the Lagos stock market has not been impressive lately as investors shy away from stocks. “A look into sub-Saharan Africa, the industry is more or less in its growth stage, hence increased investors’ excitement on the news of the intention of Interswitch to list,” Ologunro said. Interswitch tried a dual IPO two years ago and this second attempt that is now underway comes at a time when the Nigerian stock market has lost over 11percent of its value since the beginning of this year. The initial public offering may value the financial technology company at $1.3billion to $1.5billion, analysts said. The potential listing would follow those of two other major African and Middle Eastern tech company share sales this year. Jumia Technologies, dubbed the Amazon of Africa, listed in New York earlier this year, while Dubai-based payments firm Network International Holdings went public in London. www.businessday.ng

L-R: Mohammad Shah Ekramul Hoque, Third Secretary/Head of Chancery, Bangladesh High Commission; Shameem Ahsan, High Commissioner, Bangladesh High Commission; Babatunde Ruwase, president, Lagos Chamber of Commerce and Insdustry (LCCI); Temitope Akintunde, assistant director, international and public sector relations, LCCI, and Muda Yusuf, director general, LCCI, during a courtesy visit of the high commission of Bangladesh to LCCI in Lagos.

Nigeria seeks to double power output on Siemens’ deal

…to cost $3bn secured through FG’s sovereign guarantee …aims to replicate Egypt’s success ISAAC ANYAOGU & TONY AILEMEN

he power agreement signed between the Nig er ian g overnment and Siemens, a leading German electric company, on Monday will see the German company upgrade transmission and distribution networks which could double Nigeria’s electricity generation and raise distribution capacity three-fold to 11,000 MW by 2023. BusinessDay gathered

that Siemens will try to resolve gas constraints to power plants by seeking to tap into the AKK pipeline for fuel supply so abandoned turbines can be restarted. Half of Nigeria’s 13,000MW generation is constrained due to lack of gas. President Muhammadu Buhari said he directed Siemens to fix the power distribution and transmission aspect of the electricity challenge in a roadmap brokered by German Chancellor Angela Merkel when

she visited Nigeria in 2018. The pair agreed to work on an electrification roadmap for Nigeria with greater focus on resolving power distribution challenges in its initial phase. According to the presentation Siemens made to the Nigerian government, seen by BusinessDay, the company’s intention is to deliver results similar to those in Egypt that are tailored to the specific needs of Nigeria. Siemens built three combined-cycle power plants and wind

farms adding over 14GW to Egypt’s capacity at the cost of £8 billion. A source with knowledge about the deal says the company will spend as much as $3 billion over the next five years to improve Nigeria’s power sector. DisCos will be tasked to improve collections aided by smart metering, costreflective tariffs and technical support. The Nigerian government through the Ministry of Finance will

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Lessons for Nigeria from Gambia on ways to build cheaply, profitably CHUKA UROKO

ouse prices in Nigeria are among the global highest and this is as a result of construction and other extraneous costs which developers factor into the price tags they put on their houses. This is unlike what obtains in other African countries, including Gambia, which holds out a few lessons for Nigeria, the continent’s largest economy, on how to build cheaply and profitably. Among the smaller African countries, especially those within the West African subregion, Gambia, a country of about 2 million people, is quite aspirational. Besides being a tourism hub, the country aspires to be the Dubai or Singapore of the sub-region. Despite its small-size population and economy, the country is bullish in housing and other real estate developments and those who are involved do so cheaply and profitably.

“We need to readjust our designs to incorporate efficiency, affordability and functionality,” advised Mustapha Njie, CEO, Taf Africa Global. Taf Africa Global is a real estate investment and development firm with very strong footprints in Gambia and Nigeria where it has invested about $100 million and delivered close to 10,000 housing units. The company which, at the moment, is developing 375 housing units for low midincome earners in Gambia, says it is de-emphasising social status, advising that people should do so in making demands for their housing needs. “Developers need to deemphasise going horizontal which consumes a lot of land. There is need to go vertical and there is no other choice. In Lagos, for instance, people are already going up and that is the new way to go,” Njie noted. Nigeria lags many of its global and continental peers in easy of doing business gen-

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erally and registering property in particular. In the Gambia, it takes one month to perfect all land documentations and Njie says that is the worst case scenario. “It can be less; for us, because we have been doing it over time, it takes us about two weeks to get all our papers; all we need is just stamping,” he said. This is a big lesson for Nigeria where it takes much longer time to register property, piling pressure on property developers, especially from their lenders, and also delaying project delivery timeline and frustrating investment interests. Getting land documentation or titling in the country is a rigorous process, given the bureaucracy, corruption and the high cost of acquiring the title. In its recent report, PWC estimates that 95 percent of households in Nigeria have no title, pointing out that it takes an average of 12 procedures and 105 days or as long as two years to register a property. @Businessdayng

The cost of getting this done, according to PWC, is about 11.1 percent of the property value. “This process is made difficult due to the low quality of land administration in a city like Lagos. This does not encourage formal declaration of assets and discourages people from registering their properties,” the professional services firm noted. Nigeria ranks 149 on the ease of obtaining Construction Permit and requires 17 procedures, 118 days, and 27.5 percent of property value, a factor that encourages more informal construction of properties and increases risks in the real estate sector. In Lagos which Nigeria’s economic heart beat, it is estimated that 97 percent of lands in the city is unregistered, making it difficult for banks to validate claims to land or for land occupants to use their land to create wealth. This, more than anything else, accounts for Nigeria’s over 17 million housing units deficit.

Wednesday 24 July 2019

BUSINESS DAY

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Tuesday 23 July 2019

BUSINESS DAY

NEWS

FG takes MSME Clinics to Lagos as branding summit holds Ifeoma Okeke

s thousands of attendees from different industries both locally and globally converge for the second edition of Glocalisation and Branding Summit, which holds in Lagos, the Federal Government has disclosed plan to address key challenges affecting micro, small and medium scale businesses through its MSME Clinics. Being one of the strategies for improving local manufacturing, the MSME Clinics was introduced by the government to bring together key frontline government agencies and stakeholders to interact with a view of removing impending bottlenecks. Kemi Areola, CEO, Vivacity PR, organiser of the summit, who disclosed this, noted that the MSME Clinics would be available to deliver on the spot services, especially in the areas

of company registration, Tax and more According to Areola, Glocalisation and Branding Summit will enable companies showcase their products and services and foster synergy that would address challenges confronting brands across the nation and the world at large. She said the summit would also enable businesses network and develop strategies that would enhance the visibility of products and services. “The event will play host to over 1000 attendees from different industries both locally and globally. We are inviting Nigerian business to get involved and leverage the immense opportunities available to and through our rapidly developing MSME Sector. There will be lots of opportunities for SMEs to meet with brand influencers and entrepreneurs to share experiences needed to survive this dynamic ever evolving market,” she said.

OutsideInHR partners Israeli edutech firm on gamification certifications David Ibemere & Jonathan Aderoju

n a bid to make innovative skill development methodologies and modern cloud-based learning systems more accessible to professionals in every field, OutsideInHR in partnership with Accelium and Simplyun4gettable islaunchingtheAcceliumGrowth Centres across Nigeria starting with Lagos State. Speaking at the launch event themed “The Gamification Revolution” in Lagos at the weekend, Benedicta Busari, a consultant with OutsideInHR, said the growthcentreswouldhelpprofessionals,entrepreneursorbusiness ownerslookingforanopportunity for skill development programme chart a new path on leadership and human development in the country. The certification programme, the organisers said, will introduce participants to problem solving skills, critical thinking and help in decision making. “AcceliumisanIsraeliEdutech firm with a scientifically validated methodology and have been adopted in over 15 countries by more than 4,000,000 learners across various spheres including corporations, governments, educational institutions and the

military that uses a game-based suite of training and assessment solutions which combine personal coaching, team workshops, and mobile learning to develop strategic thinking and resilience,” Busari said. The tools have been designed in such a way that will exposed entrepreneurs, individuals, business people among others to critical thinking, decision making, problem solving skills, and also serve as an experiential taster where participantsenjoy practical exposure to robust, game-based tool built on scientifically tested methodologies, she explained. “First certification classes in Nigeria starting this 31st July 2019, for professionals, entrepreneurs andinterestedindividuals.Theorganisation will introduced learners to the powerful tools used by chess masters and game theory experts for analysis, flexible thinking,problemsolving,anddecision making, helping them become more effective, methodical and resilient,” she said. AccordingtoNgoziAdebiyi,an OutsideInHR’s lead consultant at the launch, the Growth Centre is offeringa10%and5%discountfor persons who sign up on or before July 25 – 28, 2019, respectively.

7 deepwater FPSO projects risk stalling if talks between government, IOCs fail OLUSOLA BELLO

he multi-billion-dollar Bonga South-West and six other Floating Production Storage and Offloading (FPSO) projects lined up to be developed in-country risk being frozen for some time if discussions over royalty on deepwater ventures involving the Federal Government, National Assembly and international oil companies go the wrong way, BusinessDay investigation has revealed. The fiscal condition for the Bonga South-West project and other projects is significant for their success, industry sources say. Some of the prospective deepwater projects whose development has either been sanctioned already or about to be sanctioned are Total’s Ikike, Owowo, Bonga South-West, and Preowei projects. The final investment decisions (FIDs) of these projects are expected to be made by 2020, with the first oil from Preowei scheduled for 2022. There is, of course, the Zabazaba and the Etan fields which Eni/Agip is working on. A bill is at the National Assembly on adjustment of the Production Sharing Contract (PSC) in terms of royalty. Deliberations are ongoing between stakeholders and lawmakers, with the outcome expected to make or mar the projects. The international oil companies (IOCs) have been resisting the Federal Government’s move to increase royalty for deepwater projects to 50 percent and the companies are saying that doing business in Nigeria under such a fiscal regime would be difficult because aside from the 50 percent royalty, the companies also pay other taxes to the government. Throwing more light on this development, Bayo Ojulari, managing director, Shell Nigeria Exploration and Production Company (SNEPCO), said projects should be competitive, warning that if they are

expensive due to different local conditions, it will be difficult to attract investments in Nigeria. He said the projects should be done in the country such that they would be costfriendly and competitive. According to him, having a competitive project will

give room for others to thrive instead of being stagnant. The SNEPCO boss made it clear that a new tender for the Bonga South-West project had gone out since 2017 while Shell commenced negotiation of PSC terms after almost 10 years of stagnation.

500 volunteers boost ‘Clean up Edo Project’

do State government’s initiative to improve environmental sanitation, with project ‘Clean Up Edo,’ has gained a boost with the induction of 500 volunteers from the Conference of NonGovernmental Organisations (CONGOs) to support the Edo State Waste Management Board in ensuring cleanliness in the state. Speaking at the inauguration of the volunteers in Benin City, commissioner for environment and sustainability, Omoua Oni-Okpaku, said the aim of the collaboration with the group was to discourage indiscriminate dumping of waste into drains and roadsides, and promote healthy lifestyle among residents.

She said, “The initiative was birthed to address the challenge of flooding caused by indiscriminate dumping of waste into drains. We decided to work with CONGOs who volunteered to support the government in carrying out sensitisation and sanitation with the relevant government agencies. “’We want the volunteers to go into flood-prone areas to sensitise residents and work with community heads in desilting drains to address flooding so as to enable people move around freely during the raining season.” The commissioner urged the volunteers to be civil while discharging their duties, adding that the initiative was an opportunity for them to serve humanity. www.businessday.ng

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“But early 2019, the company signed some agreements with the Nigerian National Petroleum Corporation (NNPC) which was done together with other International Oil Companies (IOCs) that have an interest in the project,” Ojulari said.

Tuesday 23 July 2019

BUSINESS DAY

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Tuesday 23 July 2019

BUSINESS DAY

NEWS

Poor economic viability stalls NPA’s planned dredging of Calabar channel

… Authority urges shipping lines to use flat-bottom vessels AMAKA ANAGOR-EWUZIE

he rekindled effort of the Nigerian Ports Authority (NPA) to address the shortcomings of the Calabar port by dredging its water channel to enable bigger vessels with large volume of business access into the port is being stalled by lack of financial viability and poor economic reward. The windy nature of the Calabar port channel, which is above 80km in length, requires the NPA to invest over N40 billion to dredge the channel, according to a recent cost-benefit analysis carried out by the authority. Hadiza Bala-Usman, managing director, NPA, said in an interview in Lagos that it does not make economic sense to invest such a huge sum in the dredging of the channel. “Our recent Cost Benefit Analysis on the dredging of Calabar channel shows that it is not financially viable for the NPA to embark on Calabar

dredging project that requires over N40 billion,” she said. Geographically, Calabar port is closer to the North-East and the North-Central parts of the country and was built to service businesses located in these parts of the country. But business activities at the Calabar port have been at their lowest for many years due to the shallow draught of the water channel that restricts bigger vessels access into the port, BusinessDay findings show. The situation pushed the immediate past management of the NPA into a failed joint venture agreement with the Calabar Channel Management Company Limited (CCMCL), aimed at carrying out capital and maintenance dredging on the 6-metre channel in order to expand it to 10 metres draught. The NPA boss said larger vessels require a draught of 1718 metres, and it is not possible for the NPA to dredge a channel that is 5-17 metres. “Even if we dredge the Cala-

bar port to 10 metres, that is not the industry practice for now. In view of the change in the dynamics of shipping, larger vessels are now calling at seaports,” Usman said. Therefore, she said, the NPA needs shipping companies to use flat-bottom vessels that require less level of draught to bring in cargoes to Calabar port, adding that Nigeria needs to prioritise and fast-track the development of deep seaports that will have the required draught for larger vessels. Omar Suleiman, former managing director of the NPA, said Calabar port has a big problem, which has to do with the location of the port in a place that does not have the natural attributes of a seaport. “The port has 120 kilometres of high sea meandering channel. If the NPA dredges the channel this month with $100 million, in six months, it will need to dredge it again,” Suleiman said in an interview with Ships & Ports.

L-R: Noel Akpata, co-founder, Horasis-in-Nigeria/CEO, Stratex; Shamsudeen Usman, chairman, Horasis-in-Nigeria/former minister of national planning; Vice President Yemi Osinbajo; Meka Olowola, managing partner, Zenera Consulting, and Aliu Akoshile, managing director, Daily Times, during the Horasis-In- Nigeria business meeting with Osinbajo at the Presidential Villa in Abuja.

FG, Sterling Bank, others boost 340,000 SMEs via renewable energy HOPE MOSES-ASHIKE & ISAAC ANYAOGU

ederal Government of Nigeria, Sterling Bank plc and Virtus Energy Solutions Limited are collaborating to enhancepowerproductionforsmall businesses in Nigeria. The project will provide electricity access to over 80,000 shops across 16 economic clusters, empower over 340,000 micro, small and medium size enterprises, and create over 2,500 jobs while serving over 18 million Nigerians. “This is a significant milestone in the financing of the Energising Economies Initiative (EEI). Since the deployment of off-grid electricity solutions at various markets across the country, we are already witnessing positive environmental and economic impacts. This is the sort of intervention we look forward to scaling across Nigeria with support from financial institutions,” Damilola Ogunbiyi, managing director/ CEO, Rural Electrification Agency (REA), states.

Ogunbiyi says the Federal Government through the REA is implementing the EEI, which supports the rapid deployment of off-grid electricity solutions to provide clean, safe, affordable and reliable electricity to economic clusters (e.g., market places, shopping centres, industrial facilities) throughprivatesectordevelopers. The REA worked in partnership with the USAID sponsored programme, Power Africa. Power Africa provides technical advisory support to this initiative, which is already transforming businesses in Sabon Gari Market, Ariara Market, Sura Shopping Complex and other economic clusters with sustainable, clean and affordable power supply by increasing economic activities, spurring business growth, fostering job creation and enhancing the business experience. “Technical advisory is a key pillar of assistance Power Africa provides to Nigeria’s power sector. We are focused on ensuring initiatives like the Energizing Economies are designed and www.businessday.ng

implemented with regulatory, legal, financial, transactional and project management support,” says the USAID/Nigeria Mission director, Stephen Haykin. The Central Bank of Nigeria (CBN)aspartofitswidermandate towards ensuring economic development, productivity, macroeconomic stability and economic diversification has shown commitment towards ensuring the successful implementation of the EEI. Unwavering support has been secured at the Bankers’ Committee level to support the proliferation of decentralised energy solutions. On its part, Sterling Bank has been an industry leader in financing off-grid energy solutions through its multi-pronged approach aimed at ensuring the delivery of projects that provide electricity to communities and businesses and has extended a five year facility worth N446 million to Virtus for the deployment of distributed energy solutions across selected economic clusters in Nigeria. https://www.facebook.com/businessdayng

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Tuesday 23 July 2019

BUSINESS DAY

news

Over 500 investors to visit Nigeria for inaugural Horasis-in-Nigeria business meeting … as FG gives seal of approval SEGUN ADAMS

n array of international top investors, heads of government, bankers and hedge funds managers numbering over 500, are set to attend the inaugural Horasis-in-Nigeria Global Business Meeting. The two-day business conference also recently secured the endorsement of the Federal Government of Nigeria with collaboration of partner to host the event. Vice President Yemi Osinbajo, while receiving a delegation from Horasis in Abuja, ratified and pledgedthesupportoftheFederal Government for the conference while at the same time alluding to the annual Horasis Business Meetings securing a permanent home in Nigeria. Vice President Osinbajo subsequently received a partnership plague from the Horasis International representatives as a symbolic seal of the Federal Government’s endorsement of the conference in Nigeria. The event, scheduled to hold later in the year, seeks to address universally relevant business issuesanddevelopinterdisciplinary solutions across sectors. Horasis Global Meeting is competitivelycomparedbyglobal media firm, Bloomberg, to the WorldEconomicForuminDavos, which annually gathers over 500 chairmen/CEOs of tier-1 companies of the world alongside Heads of Governments (Presidents, Prime Ministers) to discuss and find practicable solutions to problems confronting our world. Horasis-in-Nigeria chairman, and former minister of national

planning, Shamsudeen Usman, and co-founder/regional coordinator, Horasis-in-Nigeria, Noel Akpata, expressed satisfaction with the Federal Government’s endorsement and long-term support. Commenting on the potential of the Horasis-in-Nigeria conference to enhance the economic outlook of the country, Akpata remarked: “We fervently believe that against all odds, Nigeria’s myriad of problems should be visualised as opportunities needing a different level of innovation and creative problem-solving driven by nation-building mindsets to resolve.” Meka Olowola, managing partner of Zenera Consulting, the official strategy and marketing consultants of the conference, observed: ‘’Over the years, corporate Nigeria has deepened its robustness in terms of governance, ethics,technicalcompetence,and other global best practices, therefore priming themselves in position to forge strong international partnerships on a scale that will inevitably generate tremendous value for the sub-region. “This inaugural meeting is geared towards congregating the world’s most sophisticated businessmen to reinvigorate the Nigerian economy for the short and long term.” As a nation, this global meeting will position Nigeria as a veritable investment hub to the world, improve foreign relations, bilateral agreement and expose homemade Nigerian brands to a wideraudience.Horasisisaglobal visions community dedicated to inspiring the future.

DPR, experts seek safety, sustainable growth in oil, gas industry Modestus Anaesoronye

xperts in the oil and gas industry in Nigeria have stressed the need to promotesafety,andtoalsotackleillegal operators in the industry. The experts, who spoke at a workshop organised by Navgas, with the Directorate of Petroleum Resources (DPR) and others big players in Lagos, said this had become necessary to ensure sustainability and growth of the industry,evenasthereexistedahuge untapped potential. Monday Adeoye, terminal manager, Navgas, said there was the need to focus on the effective handling of Liquefied Petroleum Gas(LPG),enjoiningindustryplayerstocollaborateinboostingsafety. The DPR director, represented byAkinMusa,anassistantdirector, said standards and procedures in the sector were being reviewed to meet up with the ever-changing trends in the sector. According to him, there would be more surveillance by the directorate to tackle errant firms, and as new plants emerge, so DPR would increase its monitoring, and defaulters would be punished. MusapraisedNavgasforsponsoring the event, and urged other operators to emulate its good gesture. Oluwole Akinyosoye, DPR Lagoszonaldirectorwhospokeon the issue of the regulatory compliance, said though gas consumption had grown astronomically in

the 10 last years compared with kerosene, we were merely scratching the surface. Comparing the consumption of domestic gas in Senegal and other countries, he submitted that the rate of the product’s consumption in the country was small. However,hewasoptimisticthatthe marketwoulddeepeninthefuture. Akinyosoye outlined few benefits of gas over kerosene as its cheapness, and easy availability and that more Nigerians were taking to gas for their domestic use. He warned that gas was more volatile, calling on stakeholders to makesafetytheirwatchword.DPR, he said, would always be strict on safety and that operators should self-regulate their operations. He told them that there were a lot of leakages in the system, a factor that led to incidents in the past. There were reports that product was being distributed to illegal operators, he said, warning that DPR would sanction anyone caught doing so. Programmemanager,National LPG Expansion Plan, Office of the Vice President, Dayo Adesina, also harped on safety. Noting that the sector had a lot of stakeholders, he called on relevant stakeholders to interact on how to boost safety and production. Hesaidthegovernmentwould assist them through awareness creation, among others, to move the industry to the next level in the next10years.LPG,henoted,would be a game changer. www.businessday.ng

L-R: Faith Oghwude, CEO, Almond Productions Limited; Rashidat Adebisi, divisional director, retail solutions, AXA Mansard Insurance plc; Wura Omoyajowo, account officer, Farm Crowdy Limited; Folashade Agbejule, insurance manager, EFInA, and Kola Oni, chief strategy and marketing officer, AXA Mansard, at the AXA Mansard Emerging Customer Discovery Day in Lagos.

Lagos to tap from Diaspora Nigerians to further grow economy JOSHUA BASSEY & Seyi John Salau

agos State is to leverage inputs from Nigerians in Diaspora to further strengthen and grow its economy. WithaGrossDomesticProduct (GDP) of about $136 billion, and an average monthly Internally Generated Revenue (IGR) of N34 billion, Lagos is not just the biggest sub-nationaleconomyinNigeria,it isalsotheonlystatethatcansurvive without the monthly handouts from the Federation Account. In the last one decade, the state had relied over 75 percent on IGR to fund its annual budgets. The governor, Babajide San-

wo-Olu, says his administration looks to making the economy bigger and better by tapping the brains of Nigerian professionals outside the country. Sanwo-Olu spoke on Monday while declaring open a two-day trainingprogrammeforteachersin Surulere,organisedbytheAssociation of Nigerian Academics in UK. Represented by Jermaine Sanwo-Olu, his senior special assistant on Diaspora affairs, the governor indicated that the involvement of the Diaspora Nigerians would be in the area of capacity building, development of the workforce and youth empowerment. According to Sanwo-Olu, the

Sankore Investment launches Sankore Real Wealth, Sankore Agriculture for investors Lucky Nwanekwu

ankoreInvestments,awealth management firm with over 150,000 clients in Nigeria, added two new products to their existing products list expected to return 15 percent and 17 percent, respectively, per annum. Speaking with clients recently, founder/CEO of Sankore Investment, Titi Odunfa, said the new products came after much thoughts by the team to find other ways to invest the funds of their clients other than the equities market and treasury bills. “I believe that investments can grow our country and we can put money into areas that can solve problems in the country, like agriculture and housing. “Sankore Investment provides advisory,brokerage,fundmanagement and other investment services to a range of clients including individuals and corporations. Our mission was to help our clients build, manage and preserve their wealth and we do this primarily by providingabouquetofinvestment services tailored to the individual needs of each client and if you don’t know, the name Sankore is earned from an old educational Institution in Mali. So we are keen with education and doing a lot of research before we invest for our clients,” Odunfa said. Odunfa, who founded the firm,cutherteethworkingwithUS

investment firm, Goldman Sachs. Country manager of AFEX Commodities, Ayodeji Balogun, who was also present at the event spoke about the Sankore Agriculture Fund. A bulk of the investments will be done by AFEX, an organisation, which provides innovative solutions for the Agricultural sector in Nigeria. According to Ayodeji, the two asset classes that have real value in Nigeriaarehousingandfood,thisis because Nigeria’s growing populationwillneedwheretosleepandeat. Sankore Agriculture Fund and Real Wealth Fund The Sankore Agriculture Fund is a commodity investment, which pools funds for the primary purpose of investing in income- generating agricultural practices, to increase crop yields or assist in building storage and processing capacity to broaden local value addition. The Fund will have a principal protected return of 17 percent annually and the minimum investment is N5,000,000, while the Real wealth fund is an alternative investment, which pools funds for the primary purpose of investing in income- generating real estate, such as residential homes, student housing, and affordable housing units, while taking advantage of tax exemptions, it will have an expected return of 17 percent annually.

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state will rely on the knowledge, intellect, exposure and experiences of Nigerians around the world. “I believe that the Diaspora will hasten the development of Lagos; so in moving forward we are going to be bringing in doctors, nurses, teachers and others from around the world to impact the state voluntarily. “This is the season of change, we are bringing the world to Lagos so that we can have world best practices,” he said. He expressed the belief that the Diaspora was the wheel of progress for Nigeria as a whole, adding, “Nations like Israel, India and China utilise the power of the Diaspora to bring about changes

in their respective nations. “So, we see this UK group coming to impart knowledge and build capacity of the teachers who are custodians of knowledge and trainers of the future leaders.” AccordingtoSanwo-Olu,education and technology is at the heart of the governor’s ‘THEME’ programme, adding, “You can’t haveeducationwithoutbeingdigitalisedintechnologyinformation. “You need to digitalise, leverage on the power of technology to make your work better, more efficient, be IT and computer savvy, use the newest technology so that you can appeal to the various learning styles of young people,” he said.

Ineffective rail transport impeding port operations in Nigeria – Usman AMAKA ANAGOR-EWUZIE

anaging director, Nigerian Ports Authority (NPA), Hadiza Bala Usman, has identified ineffective railway infrastructure as an impediment to effective port operations in Nigeria. Speaking in Lagos on Monday at the opening of the West Africa Rail Revolution Conference in Lagos with the theme, “Defining the Future of the Transport Infrastructure, Maintenance and Expansion in West Africa,” Usman said rail transportation would continue to play a crucial role to port operations. According to her, no country should contemplate establishing port without adequate rail transport system to complement the port. “If anyone had any doubts as to the clog that poor railway infrastructure could be in the wheels of effective port operations, let he or she borrow a leaf from the challenges that we are currently facing with the Lagos Port Complex (LPC) and the Tin-Can Island (TCIP). This challenge would instruct you on why no country would contemplate establishing port without the complement of adequate rail transportation,” she said. She blamed the substantial @Businessdayng

part of the challenges, which port users face in the optimisation of the ports in Lagos area, which had even extended to distort normal activities of Lagos to the failure to provide adequate rail infrastructure in the ports. She said the failure had eventually resulted to the dilapidation of the structure that was available at the beginning. She however stressed the need for operators of the ports across the African continent to embrace the economic benefit of the sector as a key player in the growth and development of their country’s economies within the sub-Saharan Africa. This would take place only through the collaboration in the sharing of experience and resolving complex issues, she said. Stating that the Federal Government is presently working towards a more efficient port terrain through the deployment of modern rail infrastructure, the NPA boss urged all the delegates to embrace the new agenda and explore all possibilities towards taking it to the next level. Chidi Izuwah, director-general/CEO of the Infrastructure Concession Regulatory Commission (ICRC), reiterated the need for African countries to ensure adequate provision was made in the area of port infrastructure.

Tuesday 23 July 2019

BUSINESS DAY

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Tuesday 23 July 2019

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Tuesday 23 July 2019

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The foundation of sea power (1) STRATEGY & POLICY

MA JOHNSON

he ability of any maritime nation, including Nigeria, to use the seas for transport and other civilian purposes such as fishing and more recently, exploitation of resources above or below the seabed has generated significant debate among naval thinkers. When one comes in contact with the word “sea power” for the first time, it may connote military strength at sea. This is not completely true because sea power has both a naval component and an economic aspect. It is an aggregate of the nation’s naval force and maritime industry. It was Alfred Thayer Mahan who first coined the term “sea power,” after analysing a number of naval battles while at the US Naval War College. Mahan, an Admiral, naval strategist, and author of The Influence of Sea Power upon History argues that national prosperity and power depends on the control of the world’s sea-lanes. According to Mahan, whoever rules the waves rules the world; sea power is necessary to facilitate trade and peaceful commerce. In support of his views, he propounded six conditions that affect sea power namely: “An advantageous geographical position; serviceable coastlines, and abundant natural resources including a favourable climate; size of the territory; large population size to defend

its territory; a society with an aptitude for the sea and commercial enterprise; and a government with the influence to dominate the sea.” Towards the later part of the 19th century, after the appearance of Mahan’s greatest book, the New York Times had this to say: “It has been said that naval strength has become at this day the right arm of diplomacy, and the most important element in large and critical foreign relations. A navy is necessary to a commercial power, and it is at once a promoter of and conservator of commerce. Without its support, foreign trade would languish, if not perish utterly. This truth is taught by all lessons of history, and its observance today becomes a prudent and wise nation.” The above quote gives a sense to governments, and seafarers at least, that navies are uniquely established to defend trade. That is why when one looks deep into the sea power phenomenon, it does not only include a navy that rules the sea but also the peaceful commerce and shipping from which a naval fleet naturally and healthfully springs, and on which it securely rests. From history, most developed nations were founded on sea power. The growth of American overseas possessions, the rise of the US Navy and the adoption of strategic principles upon which it operates are all influenced significantly by sea power. The British Empire was also won through sea power and the territory cannot be retained without it. But sea power as a dominant strategic identity and culture continues to be challenged by academics and naval scholars. One of them, Paul Kennedy, argues that Britain’s loss of naval mastery was not due to its relative economic weakness compared to Americas but also to a relative de-

cline in the potency of sea power itself in the new technological environment. Although, Kennedy touched on American nerve almost 30 years ago in his book The Rise and Fall of Great Powers, when he theorised that for a great power to remain truly great, it must perform a task which is simple to understand but difficult to execute. The task is that great powers must be able to balance wealth and their economic base with their military power and strategic commitments. Kennedy further reasoned that once a great power does not get the balance correctly, it becomes vulnerable to any country like China whose economy is fast expanding. But was Paul Kennedy right with the state of America’s economic status after 30 years of his thesis? Whichever way one sees Kennedy’s thesis, an important thing to note is that despite analytical rebuttals from critics, Mahan’s strategic theories have equally continue to influence newly emerging economies like India and China in their quest for sea power in the 21st century. Today, sea power includes many aspects of a naval strength that did not exist in the last century – maritime industry and marine sciences. These industries now add to a maritime nation’s economy. A well-established theory for the economic advantage of a nation is to produce goods and services, and exchange them with other nations. Throughout history, nations that have traded this way and conducted a strong foreign trade have prospered and grown in economic and political strength. Those that have failed in commerce have failed as world powers. If one recalls from the ancient times of Persia to the Japan of World War II, the loss of sea power has resulted in the failure of many nations. They failed because their

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Mahan propounded six theories: An advantageous geographical position; serviceable coastlines, and abundant natural resources including a favourable climate; size of the territory; large population size to defend its territory; a society with an aptitude for the sea and commercial enterprise; and a government with the influence to dominate the sea

sea power was not founded on trade. The foundation of sea power is trade. When a nation is not seriously committed to trade within its continent and other parts of the world, sea power will be a weak component of its economic development. African countries like most other developing countries have raw materials, but are not seriously engaged in trade with each other. Perhaps, that is the reason why Africa with a population of over one billion people and France with a population of about 65 million have “about” the same GDP. To service its intercontinental trade, Africa has to rely heavily on ships and ports. But, Africa’s ships and ports do not always match global trends and standard. Africa’s minimal integration in world trade within the context of sea power is as a result of inadequacies in its maritime sector, particularly in areas such as shipbuilding, human capacity, merchant and fishing fleet, and port facilities amongst others. Although, Africa is a resource-rich continent, its growth in recent times has been recorded in commodities, services, and manufacturing. African nations want to engage each other and the world in trade. But some African nations are unable to reap immense political and economic benefits of being littoral states due to the fact that most of their exports are shipped. The case of Nigeria is very instructive. In the past three years (2015- 2018), Nigerian ship-owners have lost over US$ 25.3 billion paid to foreign ship-owners by importers and exporters as freight charges on goods, according to newspaper reports. (To continued) Johnson is an author and a retired naval engineer who has passion for African development and good governance

Kidnapping: An injury to all

idnapping is an evil that is not unique in our lifetime. There is clear evidence in the Bible book of Deuteronomy (chapter 24, verse 7) where it is recorded that “if a man is found kidnapping any of his brethren of the children of Israel and mistreats him or sells him, that kidnapper shall die and you shall put away the evil from among you.” Given that the book of Deuteronomy was written through the inspiration of God by the Hebrew Prophet, Moses (circa 1405 BC), it means, therefore, that kidnapping is a global enterprise that is as old as man. It is lucrative and has blossomed in scores of countries including Mexico, Colombia, Brazil, Philippines, Russia, Great Britain, Thailand, Guatemala, Italy, Somalia and now Nigeria. In Nigeria, kidnapping is less than two decades old, yet its dehumanizing effects are alarming. In terms of security, Nigeria has not been like a lamb without blemish and without spot, but then, there was relative peace and people could travel without much apprehension. Now, the iniquity of kidnapping is in her and has changed everything to one of strife and contention to the injury of all. It is unfortunate that kidnapping in Nigeria is not status sensitive as everyone is a fair game for the kidnappers. They kidnap any and everything that has breath. Animals, especially cattle and sheep are also endangered. The kidnappers rustle cattle in the fashion of criminals who were reported to have kidnapped six-ton working elephant in Thailand

some years ago. The kidnappers ought to concentrate on the unholy privileged oppressors who have been unethically and illegally favoured politically and economically and have sown poverty bountifully in the country. Through their collective degraded morals, hate speech, oppression, despair, hunger, frustration, unemployment and injustice have been nurtured to maturity and one of the unfortunate outcomes is kidnapping. They should also reap kidnapping bountifully. But this is not the case. The kidnappers are not able or willing to establish a link between the reasons they are in the kidnapping business and the status of their victims. Now, kidnapping in Nigeria is tending toward a crescendo following a video that went viral not long ago. It was observed in the video that kidnapping business is now also becoming attractive to some men in uniform who have found it alluring to be in cahoots with notorious kidnappers. This is a trend that must be watched before it gets too complex. In the Philippines official figures showed that over 52 percent of the kidnappings were carried out by police or military men. Can we afford that luxury in Nigeria where corruption has become a dominant culture, thus making fighting crimes dangerous and unsuccessful? If we do, in no time, we shall have a situation where kidnappers could just snatch people off busy streets, markets or hospital beds without a qualm. After all, some children and teachers have experienced www.businessday.ng

kidnapping right in their schools! It would be good that we cease being frightened by kidnapers; but is there a solution? I read and hear that the Police is making some good efforts to ensure that no vestige of the evil of kidnapping remains in Nigeria. While not doubting the authenticity of the claim, my curiosity is, however, aroused especially that Nigeria cannot be said to be one of the countries in the world where credible information could be available on any subject. In many countries where kidnapping thrives, records are available to show the number of kidnappings per 100,000 population per year. Are we able to do that too? There is no incentive to hide the number of cases but the information is not just publicly available and many of the incidents may not have been reported. No one knows, in the absence of credible information, how long kidnapping will remain in Nigeria. I suspect that its end is not in sight and we must all, therefore, seek ways and take necessary steps to minimize it. One of the first steps is to erase from our perception that all kidnappers are Fulani herdsmen. Such an impulse toward self-serving bias does not have strong utility value. To think that all kidnappers are of the Fulani stock is an indirect but potent way of masking the true identity of the miscreants. However, the tendency for people to reach self-serving conclusions whenever a cloud surrounds a piece of evidence cannot be avoided. A number of persons have been arrested

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Francis Iyoha

by the Police and other security agencies. Even though criminals could take on several identities, but one would expect the police to have detailed information on those that have been arrested; make such information available and save us the devious innuendo about kidnappers being solely Fulani herdsmen. Is that a herculean task? The answer is no! The second step is to have a database of the incidents and the ‘colour’ of kidnapping operations to guide decisions. Besides, there is also the need to teach kidnapping preventions at all levels, publish regular reports on kidnapping incidents, counsel victims who must have become psychologically, emotionally and financially drained and exhausted. Who should do all of these and who is currently doing them? Prof Iyoha is of the Department of Accounting, Covenant University Email: iyoha.francis@covenantuniversity.edu.ng

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Tuesday 23 July 2019

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Mobile phones, internet and jobs in Africa (1)

Rafiq Raji

y column this week is the first part of my recent paper for the NTU-SBF Centre for African Studies at Nanyang Business School, Singapore, where I am a research fellow. References are in the original article. The nexus between internet adoption and infrastructure, foreign direct investment, financial development, economic growth and job creation in African countries and elsewhere is well established. The internet is a net job creator. For every one job lost to the internet, about three new jobs are created. The internet is creating new jobs, transforming existing jobs, or enabling outsourcing of jobs to cheaper but more productive locations. It is also making some jobs redundant. Access to the internet via mobile phones is having a huge economic impact around the world. Because of the ubiquity of mobile phones and their relative affordability, more and more citizens of poor countries are using the internet to avail themselves of the myriad opportunities on the global communication platform. Human capital development, ease of access to finance, robust infrastructure, and a conducive business environment underpin the job creation thesis of the internet, however. Small and medium-sized enterprises

(SMEs) record increases in productivity of at least 10 percent from using the internet. Research also finds that SMEs that are aggressively using web technologies grow and export twice as much as their counterparts which do not. It has also been found that 75 percent of the internet’s impact is in traditional industries. Apart from boosting legacy industries, fast internet infrastructure is also creating new ones. Social media platforms like YouTube and Instagram are creating millionaires and billion dollar businesses. New industries are being created, business models are being disrupted and labour markets are being reconfigured. Digital payments are already huge in many African countries. M-Pesa, a Kenyan mobile money service, is a prominent example. Africans also already trade and make purchases with crypto-currencies like Bitcoin. Facebook is about to disrupt even this laudable progress in digital payments with its soon-to-be-launched digital currency called Libra. The internet is creating new ecosystems. New employment forms, like in the “gig economy”, are also emerging. Unsurprisingly, African governments are beginning to realise the potential of internet technology and its associated ecosystems for boosting economic growth, creating jobs and thus alleviating poverty. Interestingly, even for supposedly advanced spheres of information technology like artificial intelligence, Africa is increasingly seen as the new frontier. Subsequent sections of the paper highlight the internet-driven opportunities, the factors driving them, and the challenges and constraints that weigh on them. The paper then concludes with recommendations on how Africans, their governments and key local and global stakeholders, can manage

all these variables effectively and sustainably for economic growth and job creation. Cheaper internet & smartphones underpin new job opportunities According to the International Telecommunication Union (ITU), only about a quarter of Africans currently use the internet. While relatively low, it is twice the number of African internet users five years ago. With 76 percent of Africans currently having a mobile cellular phone subscription, the likelihood of greater internet use of about the same rate in the not too distant future seems feasible. It makes sense then that mobile phones are increasingly used as a means to deliver services. Mobile data remains relatively expensive, though (see table 1). Africans can now do most of their non-physical banking transactions online via their mobile phones. They are able to stream videos on Netflix, a streaming service. Online shopping is certainly now no longer a novelty in many African countries. African firms are also increasingly using the internet to improve their productivity. Adoption varies by country. Kenya is ahead of most in the use of the internet for managing inventory, online sales and purchases and marketing. Ghana and Zambia come second and third respectively. And this applies to both manufacturing and service firms. Table 1: Average cost of 1GB of mobile data (2019) India $0.26 $0.91 Russia Nigeria $2.22 United Kingdom $6.66 Canada $12.02 United States $12.37 Switzerland $20.22 Source: Forbes

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Still, while cheaper smartphones and increasingly less expensive internet access for social networking offer new and constantly evolving opportunities for Africans, a digital divide with developed countries clearly remains. For massive economic and jobs impact, more Africans have to use the internet

Mobile telephony is engendering the formalisation of the informal economy in many African countries. Informal economic agents need to get documented and acquire some formal identification to secure mobile phone lines. With a mobile phone line, they are able to use mobile money for business transactions and remittances; thus increasing financial inclusion. Kenya and Uganda are prominent examples. Africans are increasingly able to do so because the cost of acquiring a smartphone and using the internet, though still expensive, is declining. In 2012-17, the average selling price of smartphones in Kenya, Nigeria and Tanzania declined by 44%, 35%, and 52% to US$118, US$121, and US$117 respectively. Smartphone adoption in sub-Saharan Africa, which was 39 percent in 2018, is expected to reach 66 percent by 2025. Still, while cheaper smartphones and increasingly less expensive internet access for social networking offer new and constantly evolving opportunities for Africans, a digital divide with developed countries clearly remains. For massive economic and jobs impact, more Africans have to use the internet. And if that is to be the case, smartphones and mobile data have to become much cheaper. There are already several cheap smartphone initiatives in a number of African countries. In June 2019, Google announced it was building a subsea cable connecting Africa to Europe. Subsea cables carry 99 percent of the world’s internet data traffic. Facebook, another global tech firm, is working on a low-cost to free African internet access initiative of its own. So, in a couple of years, African internet data rates could become much cheaper as well. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Nigeria’s transportation sector: As good as the competence of its human resources

ransportation is one of the key indices for measuring the development of a nation. Nigeria’s rural transport infrastructure has been identified as a crucial component for the economic development of the country because it links the rural societies to the urban areas. A good transportation network expands economic activities by improving access and facilitates movement of goods and services such as agricultural commodities in all the nooks and crannies within the nation. In order to maximize the efficiency of transportation there is need for continuous training and retraining of the human resource planning within the sector for it to be effectively equipped with the latest skills, technique and modern ways of carrying out its operations. Human resource planning is a basic resource and an indispensable means of converting other resources to mankind’s use and benefits. It is a process of increasing the knowledge, skills and ability of the people of any society. It is the most fundamental means of enabling a society to acquire the capacities to bring about its desired future state of affairs. In addition, a nation’s long term survival and development depends ultimately upon the quality and creative energy of the people. In line with Nigeria’s national focus and strategies in conformity with its objectives, we must ensure our human resource planning is geared towards higher quality to maximize efficiency in our nation’s transportation sector.

The transportation sector plays a fundamental and strategic role in the growth of any society globally and its major role is in the area of social and economic development of the nation, whether developed, developing or underdeveloped. Data on the contribution of transportation to the economy shows the importance. And why the movement of goods, persons and services across our nation must be improved through the use of modern technology and people with the right knowledge and expertise to achieve greater efficiency. The strategic importance of the transportation sector cannot be over emphasised as all nations recognise the pivotal role which transportation plays and will continue to play in fostering socio-economic growth and development in societies. The increase in the movement of people, goods and services is a direct manifestation of the various activities which take place in any society and all depend on transportation. In Nigeria, the challenge of human resource planning has remained prevalent because of lack of attention, awareness and maybe because of the growing cost in the training and development of personnel among organisations. The management of both public and private establishments need to make adequate provision for training and development programmes for the ultimate performance of its work force which is very strategic for its operational efficiency. For the Nigerian society to achieve im-

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provement of transportation services, it is also very important that government regulators set up viable machinery to train and develop its human resources. Achieving this will help in the creation of an enabling condition that can harness human resources for optimal productivity. Human resource planning is very vital and this is why government authorities in transportation must dedicate more resources and time to improve it. The cause of the continuous degeneration and setback in the transport sector is the poor human resource development. Programmes and human resources competency levels need urgent upgrades to meet up with global standards. Investments in transportation infrastructure, operations and management will be subsequently properly utilised and ensure a positive impact on the growth and development of the sector, as well as a direct impact on the economy. Inefficient human resource planning development programmes and applications are also responsible for the slow growth in our transport sector. Human Resource Planning programmes are a continuous and ongoing exercise that build, streamline and position the sector for the different changes that can occur within the system. It also helps organisations in the recruitment of new employees, optimizing its human resources and planning for workers’ retirement and compensation. It has been discovered that most organisations with high productivity levels had

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Festus Okotie previously made human resource planning development an integral part of their business culture. There is very important need to recognise the significant role of human resource planning as a continuous, ongoing process and exercise which will help the transport regulators to properly plan for change management within the system as well as enhancing performance. Hence the call for the houses of assembly at the national and state levels to set up committees on transportation. These will brain organise storming session with different experts in the transportation sector to create a blueprint for improving the policies within the transport sector. The objectives would be efficiency and the smooth running of the transportation system in our nation. It will generate more opportunities and value to our economy. Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Tuesday 23 July 2019

BUSINESS DAY

EDITORIAL The rise and rise of the creative sector Publisher/CEO

Frank Aigbogun editor Patrick Atuanya

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

he Lion King movie premiered globally on Friday, July 19 with the music of six Nigerian stars on the soundtrack. Our cultural sector counts as one of the few bright spots of these times. French media giant Canal+ has invested in the four-yearold Iroko Studios to produce more films for the African and global market. Nigerians have gained nominations into the US-based The Academy of Motion Picture Arts and Sciences for their roles in film production. Nigerian stars whose music is part of the Disney movie include Tekno, Yemi Alade, Mr Eazi, Burna Boy, Tiwa Savage, and Wizkid. Their inclusion adds fillip to the status of our music as among the world’s best. They are among the stars of this generation and feature alongside American superstar Beyonce Knowles. In May, Warner Music Group (WMG) announced a partnership with Audu Mai-

kori’s Chocolate City label. “The deal will expand the global reach of Chocolate City’s roster of artists, including Femi Kuti, M.I. Abaga, Dice Ailes and more”, according to industry voice Billboard. Under the new deal, announced Thursday, May 28, artists on Chocolate City would join the repertoire of WMG. And will see WMG invest in Chocolate City to sign and develop promising local talent. A study by PricewaterCoopers (PwC) showed that the sector keeps fulfilling its precious promise. The music segment has grown at an annualised 13.4%, with forecasts of revenues of $73m or N26.28b in 2021. Revenues in the broader entertainment industry would hit $6.4b in 2026, double the figure of $3.6b in 2012. Nollywood played a pivotal role in drawing global attention to the possibilities of the Nigerian creative and entertainment sector. It has gone through four epochs, including changing from a video-based, straight-tohome approach to reverting to standard film format and mar-

keting first through cinemas. The New Nollywood continues to attract global interest, study, and investments. In an essay “Cracking Frontier Markets,” Harvard University scholars Clayton M. Christensen, Efosa Ojomo, and Karen Dillon identify Nollywood as an example of market-creating innovation. Come September, the School of Media and Communication of the Pan-Atlantic University will commence a Master’s degree in Film Production in furtherance of skill development in film, cinema and broadcasting. The trajectory of ROK studio, the brainchild of Mary and Jason Njoku, exemplifies the growth story of Nollywood. ROK is a film studio and international TV network has the most extensive catalog of Nollywood movies for online distribution. It has 15 million subscribers and three channels on the DsTV. It has produced over 540 movies and 25 original TV series. It’s notable that the sector has succeeded because government has wisely allowed it the

freedom to grow. Entrepreneurs have led the way with the government following to establish structures for quality control, such as the National Film and Video Censors Board. We commend the effort of the Central Bank of Nigeria and the Bankers’ Committee to enhance the enabling environment for the sector with the Creative Industry Financing Initiative (CIFI) which will provide loans at 9% to entrepreneurs in Fashion, Information Technology, Movie Production, Movie Distribution, Music, and Software Engineering. A fund for the creative sector is a welcome encouragement to an industry that is already doing so much and represents Nigerian enterprise in a good light. The creative industry will continue to deliver excellent results and returns to the country. The creative industry can contribute more to the economy and society through jobs, entertainment (and relief of tension in these hard times). Nigeria needs to tap into the considerable potential of the sector.

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Tuesday 23 July 2019

BUSINESS DAY

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Civil servants or evil servants: Myth versus reality The Reformer

JOE ABAH

henever things go wrong in the Nigerian government, the civil servant always seems to get the blame. Therefore, such terms as useless, incompetent, corrupt, indisciplined, clueless, bloated, idle and overstaffed are freely used. From the media, to academics, to politicians, it is a free-for-all and the civil service is a pliable punching bag. Even the most corrupt and incompetent legislator, hungry civil society journeyman or dodgy private sector crook will take delight in pouring scorn on the civil servant. “Sack them all”, they’ll scream sanctimoniously… once they are sure that they don’t have a pending file before the civil servant. Some civil servants too will often join others in running down their colleagues, in the hope that they can somehow appear to be better than their peers. Ironically though, I find that it is often the most corrupt and incompetent civil servants that will tell everyone who cares to listen how corrupt and incompetent civil servants are! Of course, many honest and competent civil servants sometimes denigrate their colleagues in the service, often out of frustration with “the system.” But Stockholm Syndrome is real. Are civil servants incompetent? Before you answer this question, consider another question: why do the same civil servants serve with merit on building committees in their private lives and build churches, mosques

and community centres, to time, cost and quality? There is often never any budget variations or overruns and nobody embezzles money. Why do they distinguish themselves on Parent/ Teacher Associations? Why are they pillars of their communities? Why do they serve with great credit on ad-hoc committees? What happens to those same civil servants when they walk into the Ministry on Monday morning? Why do they suddenly become incompetent, useless and in need of constant ‘capacity building’? Ever thought about that? Why is it that most voluntary self-help community projects are completed but a World Bank review of 2009 shows that only 29% of government projects are ever completed and 26% usually get cancelled. Why is this the case? Professor Peter Ekeh wrote a brilliant article in 1974 titled “Colonialism and the Two Publics”. If you haven’t read it, you should, as it provides helpful insights. He explained that in the mind of most post-colonials, there are two ‘publics’: the primordial public at the village level for which you should sacrifice and give your all and not embezzle from, and the civic public (essentially the Western system of government created by the colonialists) that you have a “duty” to steal from to feed the primordial public at your village and clan level. This goes some way to explain why people in public office are expected to steal to come and build a mansion in the village and for many to ask: “Na your papa money?” I am not condoning incompetence in public service. I just want you to understand how it happens. You go to the Federal Secretariat everyday and see various people hanging around doing nothing. Are these people all civil servants? Well that is another matter entirely! When KI was in government, there was a group a 6 or 7 young men that greeted me excessively every morning and consistently offer to carry my bag upstairs, even though

I refused every single day. They sat behind the reception counter downstairs had laptops in front of them most times. They once came to see me as a group to see if I could help with an Immigration recruitment vacancy because they were all unemployed and had applied for the vacancies. Apparently, they were originally engaged as casual staff to input some data on Pensions and that work had come to an end. Since then, they had been coming to ‘work’ every morning, with absolutely nothing to do. They depend on handouts from their effusive greetings and one of them confided in my staff that before I gave them a small amount of money collectively for Easter, they only had N70 between the 7 of them that day. There are many people like these that hang around the Secretariat and various office complexes. There are also some retired servicemen in brown uniform, men of the Nigeria Legion, who provide some security, help to switch off the lights in the offices, manage access for the cleaning companies, switch on generators and so on. They tend to sit around for most of the day as their main duties are after the close of work. Most offices engage them and give them a stipend as a way of keeping them active and engaged. They are not civil servants. That is not to say that there aren’t civil servants that are underutilised. However, in some countries, it is seen as mental torture to be employed and not be given work. The law may even see it as ‘constructive dismissal’ for which you can claim compensation from your employer at an industrial tribunal. There are myriad reasons why many people are underutilised. One is corruption. Many chief executives simply select a small group of people with whom they ‘do business.’ Everybody else outside this small group does no work, sees no ‘benefits of office’ and doesn’t even know what their own organisation is doing. Nobody cares or even notices whether or not anybody outside the

‘

My experience has been though that it is not worse than the corruption in the private sector, some religious organisations or even in the lives of many individual Nigerians that I know

select group comes to work, never mind loitering around with nothing to do. Those that come to work do so in the hope that some crumbs may fall off the table of the inner circle. After a fruitless wait, they will start to devise new ways to obstruct the business of the public so that they can extract tolls to get their own ‘share.’ I have seen instances where this included writing letters to people falsely claiming that they have been “directed” to ask them to do things that will require their parting with money before they can get services that they are otherwise entitled to. Of course, this behaviour is inexcusable and condemnable. I am not condoning or excusing it. I just want you to understand how it happens. Another reason, of course, is a lack of leadership that is committed to the cause of the Nigerian people. Coming into government, I was struck by how insular the public service is. The last person anybody thinks about is the man, woman or child on the street. The focus is always of the public servant is often on “our pay”, “our welfare”, “our training”… seldom on the welfare of the public. Therefore, there is often no attempt to utilize people to deliver better services, reduce waiting times, respond more quickly to letters and complaints or go out of our way to assist the elderly and vulnerable. In a culture of “I am directed”, nothing happens unless the leader “directs.” The leader often doesn’t direct in the interest of the public. In some cases, some leaders do not direct at all and for months or even years, people come to work with nothing to do. After a while, they stop coming at all. I am not excusing or condoning it. I just want you to understand how it happens.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Dr Abah is a development practitioner and the immediate past Director-General of the Bureau of Public Service Reforms.

There’s need for more disruption in Africa’s tech scene

or most people living outside Africa, they imagine the continent as the home of poverty, corruption, internet fraud, infrastructure deficit, and everything that describes under-development, marginalization, oppression, bad leadership, insecurity, diseases, and many more. Although the continent is truly beset with some perennial development issues, some of these notions are preposterous and not entirely peculiar to Africa. No doubt, for a continent that is richly blessed with numerous natural resources, the economies of the countries within it should be enviable and have the capacity to truly compete with the First World countries. Home to 54 countries, with Nigeria and South Africa having the biggest economies, the continent has a population of 1.2 billion people, projected to rise to 2.5 billion by 2050. It is the second most populated after Asia and second growing economy in the world after East Asia, with a 3.5% annual growth rate. Average age is about 20 years, and 30% of its population make up the middle class which is expected to grow by 80% between 2020 & 2030. An estimated 473 million people are connected to the internet in Africa, which represents 36% of its population, while 1 billion people who have access to mobile phones, represents 80% of its population. There are a number of laudable achievements the continent has earned for itself. These achievements, although rarely spoken of, have positioned the continent on a global map, earned it positive recognition from First World countries, changed its narrative to something better and

more appealing, and made it a sought-after destination for business investment, leisure and entertainment. This article will dwell on the business investment opportunities that have changed the fortunes of the continent, and how these businesses are impacting and transforming the quality of lives in Africa. E-commerce is one of the business sectors powering the engines of commerce and trade in the continent. It has brought many untold opportunities for both the consumers and the micro, small, medium enterprises. In Nigeria for instance, Jumia paved the way for e-commerce in 2012, provided consumers access to hundreds of thousands of products, and expanded access for discerning entrepreneurs who quickly took advantage of the many unique opportunities presented by these platforms, to reach more consumers and sell more products. The convenience of e-commerce made a compelling case for early adoption of online shopping by customers who until then only shopped from brick and mortar stores. The bold move by Jumia and other ecommerce players paved the way for many e-commerce startups in the country today. Although many of these platforms have been phased out due to a number of challenges, the truth still remains that the story of how Jumia led the way for e-commerce in the country continues to reverberate the entire sector, and has today, yielded many positive results. It was not too long after Jumia launched in Nigeria that it expanded its operations to 14 other African countries, in which it has operations today, covering 75% of

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the entire continent’s GDP, and about 75% of internet users. The Case of e-commerce and Jumia Yet, the continent is still perceived to be growing slowly compared to other developed continents such as Europe, Asia, South & North America when it comes to online commerce. For instance, online retail penetration accounts for less than 1% of all the transactions in Africa, compared to 12% in the US and 20% in China. There is a ratio of 1 shop to 67,000 Africans versus 1 shop to 1,000 Americans. The shift from physical stores to online stores is happening gradually as a result of ecommerce platforms becoming increasingly relevant to both the consumers and sellers in Africa. Let’s use Jumia, a Pan African e-commerce platform as a yardstick to illustrate this gradual but steady growth. On the Jumia platform as at March 31st 2019, there were over 81,000 active sellers across Africa selling over 30 million products to about 4.3 million active customers, according to the company’s prospectus on the New York Stock Exchange. Who are these sellers, and where did the consumers come from? Sellers who until 2012 were primarily selling offline and reaching very few consumers within their geographical proximity. Same consumers who grew up going to physical stores to make a purchase, wasting time and effort, and in some cases money. These same traditional offline shoppers and sellers embraced a convenient method of shopping, started to spend money and time saved from walking a distance to physical shops on other priorities, whereas the sellers started reaching

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Olukayode Kolawole more buyers, even those outside of their geographical reach. Where are the products they sell sourced from? The sellers and consumers are not the only beneficiaries of e-commerce. The economy of the various countries with ecommerce presence benefits the most through the promotion of locally made products i.e. Made in Nigeria. Majority of the sellers on the Jumia marketplace sell locally made products, especially fashion items. These local producers enjoy unprecedented exposure and access to millions of customers across Africa. This therefore makes for a strong case because 75% of most African economies derive their revenue from micro, small and medium enterprises. It thus means that the more exposure these local businesses enjoy on the Jumia platform, the more revenue will be generated for the countries.

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

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Manageme He can be c

Tuesday 23 July 2019

BUSINESS DAY

Media business Huge business spin-off expected as Coscharis, Renault partnership re-awakens auto assembly industry Stories by Daniel Obi Media Business Editor

he latest partnership between Nigeria’s Coscharis Group and French Groupe Renault SKD to begin vehicle assembly in Nigeria is expected to create business spin-offs, employment and place Nigeria as car manufacturer on global map. Between 1950s and early 80s, the automotive industry, dominated by foreign brands blossomed and employed thousands of Nigerians. But by early 90s, their operation was negatively affected by importation of used cars, downturn in the economy, government’s inconsistency and higher cost of locally manufactured cars compared to imported counterparts. Nevertheless, Nigerian government through the automotive plan which contains a number of policy measures is trying to revitalise the auto industry for job creation and local value addition. With the understanding that the automobile industry assists to catalyse the economy, Coscharis partnership with Renault which keys into the government’s auto policy will hopefully bring back old days on government’s policy consistency. Coscharis said it invested about N1.7 billion on new its assembly plant situated at Awoyaya, Lagos. According to Cosmas Maduka, President of Coscharis Group his

company made the move by making huge financial investments to acquire the plant, adding that the decision was a demonstration of the company’s strong believe and faith in Nigeria’s automotive industry. Speaking at the unveiling of the plant and launch of his partnership with Renault recently, he said the huge investment in both financial and human resources was a great sacrifice that would ultimately help create the much desired job opportunities for Nigerians as well as help in growing the economy. Worried about growing unem-

ployment in the face of growing youth population, Maduka said jobs can only be created if government provides enabling environment and support the local manufacturers by patronising the industry and make a policy to buy only made in Nigerian cars that are well tested and built for Nigerian roads. Also speaking, the Group Managing Director of Coscharis, Josiah Samuel believed that assembly plants that produce volumes will attract component manufacturers that will further create jobs for Nigerian youth. Chairman, Groupe Renault

SEYI JOHN SALAU

spiring women entrepreneur with interest in the makeup and beauty industry have been advised to leverage House of Tara franchise model for self- empowerment to build business that creates customers’ experience and consistently delivers friendliness, tailored makeup and retail sales. Mitchell Okojie, the franchise manager at House of Tara while speaking at the 2019 franchise workshop held recently in Lagos, said the company is poised to build a world class institution that empowers, engages and creates an exciting experience for its franchisees. “Each franchise agreement covers a period of 3 years and the franchise cost has two components that cover the actual franchise and support fees. However, the franchisee will be responsible for the products replenishment cost,” said Mitchell. Under the agreement, the three main streams of the House of Tara business model covers the Make-up Studio, Makeup Academy and the TARA product line comprising beauty products and professional make-up kits. However, courses for the makeup school are divided into basic, professional and advance classes with a duration of two weeks, one L-R: Leke Kupoluyi, chairman, Specialised Exhibition Conference, L agos Chamber of Commerce & Industry (LCCI); Oluwakoyejo and two months, and a class size Oluwatosin, chief Software Architect, Chronicles SDC Limited, receiving an award of recognition and Gabriel Idahosa, vice of eight students to a tutor for the president, LCCI, during the Campaign Launch of “SuccessTAB: One Tablet for Every Child” held at the 5th edition of the ICTEL practical classes. EXPO 2019, at Landmark event center, Lagos.

Ikpoki, Thorpe, Olubodun task experiential marketers to engage CEOs, SMEs he experiential marketing practitioners in Nigeria under the aegis of Experiential Marketers Association of Nigeria- EXMAN, have been tasked to take their expertise beyond marketing directors to CEOs and SMEs in order to widen the value proposition of their trade. Michael Ikpoki, former CEO, MTN Nigeria & Ghana and now CEO of Africa Context; George Thorpe, Chairman Market Space and Feyi Olubodun, former CEO, Insight Communication and now CEO Open Squares, who spoke at the EXMAN 6th Annual General Meeting business seminar in Lagos recently, were unanimous in their submissions that experiential marketers need to move a notch higher by engaging the CEOs and extending their services to millions of SMEs in the country. Olubodun who spoke on “Understanding the African Consumer” said, “The way brands are consumed is determined largely by the cultural frame. Speaking on how experiential marketing industry can adopt cultural nuances to better their trade,

Fabrice Cambolive promised that Renault will offer the Nigerian clients a unique, original range that is perfectly adapted to the conditions of the country. “Renault has an offer that meets the expectations of the new African middle class in terms of attractiveness, durability and equipment such as connectivity” He said Nigeria with a population of about 200 million, is a strategic African country where Groupe Renault will extend its footprint and Coscharis Group, big player in car assembly and distribution has been recognized as partner.

Aspiring ‘womenpreneur’ advised to leverage House of Tara franchise model

the ex-CEO of Insight Communications said, “I think exman is so critical because they are the last mile, they are the ones that actually engage directly with the consumers. They can use some of these in designing the kind of consumer engagements that they proposed to their clients and they execute.” Ik-

poki, who dwelt on the need for the practitioners to move beyond chief marketing officers to chief executive officers, believed that most CEOs do not understand the working and operation of experiential marketers. The Africa Context CEO said, “Experiential marketing industry should find a way to engage the CEOs.

L-R: John Obas Ebohon, professor of Sustainability and Environmental Law; Ifeoma Idigbe, founder of Boys to Men Foundation and Yemi Osilaja, chairman of Light Level Limited, at GreenHubAfrica meeting recently in Lagos. Pic by Richard Ojo www.businessday.ng

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NewBrandsXPO gains momentum as more brands key into its concept

he just concluded NewBrandsXPO in Lagos, an exhibition for promotion of new businesses as well as established brands with new products and services, witnessed the participation of local, multinational and international brands that used the opportunity to interface directly with consumers for feedback and product promotion. The two- day exhibition held at Muson Center saw global auto giant, Kia; multinational transportation network company, Uber; leading wealth advisory firm, Afrinvest; and renowned business conglomerate, Tolaram Group, giant beverage maker, 7-up, Dana Air, South African Airlines and many local firms showcasing their products and services to visitors. The exhibition which held between July 19th and 20th July 2019 also featured free business workshops for SMEs on themes ranging from branding, sales and marketing to finance. “The workshop followed a request by SMEs who wanted us to give them much more information and exposure with critical insight. We brought experts in different fields @Businessdayng

from branding , financing and marketing to lecture them”, Tony Usidamen, Lead Consultant of Uburu and co-promoter of the NewBrandsXPO said. According to Usidamen, “It is no surprise that this year’s edition has attracted several recognizable brands and many new ones. Indeed, NewBrandsXPO is an ideal platform for brands to authentically engage with consumers, and to nurture the trust and confidence necessary for the realization of business goals.” Being the second edition, the turnout has been very impressive. Also the number and quality of exhibitors has improved which is testament to the power of the platform to promote new product and emerging services in Nigeria. Usidamen said the vision for the expo goes beyond Nigeria as “we will go into W/African market. Lagos is the starting point as we have the plans to move to other cities in Nigeria and West Africa” The exhibition venue was set up in a family-friendly space with lots of games and fun activities for everyone.

Tuesday 23 July 2019

BUSINESS DAY

ADVERTISING Availability of data, product alternatives are making consumer more relevant today – says Kantar director Globally, traditional market research is evolving and catching up with the pace of technology, but this is not the case in Sub Saharan Africa due to low technology adoption, poor infrastructure and regulation gap. But in this interview, Fikayo Aremu, who leads the financial services, technology, telecoms, digital and research for Kantar Nigeria believes that Africa is getting there and will hopefully catch up soon. He informed his opinion on the current focus on the development of the continent. He said Kantar is leveraging its global network and expertise to be ahead of the curve. Fikayo who also leads the customer experience domain for Kantar in Nigeria spoke on other issues. Excerpts Marketing research is taking centre stage in the contemporary businesses, what is informing this trend? hy many businesses fail is because there is limited understanding about the terrain they play in; the consumer and their needs and how to meet those needs. Most importantly is how to ensure that those needs are promoted all the time. In Kantar, we believe every businesse needs to understand its consumer before they plunge in to market with their products. This is what some organizations don’t realize. But now, however those organizations that care are taking much interest in the main stream market research before any decision is made. Without insight, organizations are groping in the dark. The customer appears to be gaining more confidence and relevance in the marketing space, what is your view? Without the customer, there is no business and that is why we say the customer is the king. Some factors account for it. They include; availability of data , availability of alternatives availability of multiple channel and increased voices and empowerment, which is linked to social media and access to mobile phones. Today over 5 billion people are connected to mobile phones globally. By 2025, it is expected that mobile phone connection will hit 6 billion out of 7 billion people living in the world. Somehow, all brands are linked towards the same customer at the same time. What are the advantages and disadvantages of all this for businesses and customers? I see more of advantages. The other side is that if organisations don’t

Fikayo Aremu

take the advantages, it will turn to disadvantage. For example, let’s look at access to unlimited data. As the customer is accessing data, so also the brands should be having access to data. But the question is what brands do with the data. Secondly, how do brands position themselves in the place of alternatives as first or second choice? Thirdly, how are the brands’ voices heard and what channel are they employing to reach the customers. If you don’t leverage these four points, it becomes disadvantage. Kantar, in the recent time has emphasised the journey of the consumer, tell more about this journey? A customer journey does not start with marketing the brand. It starts from understanding the needs of

the customer. Most organisations, especially in the Sub-Saharan African believe that spending much on advertising drives value for brands, but we fail to start from identifying the need of the customer. At Kantar, because we understand this full process we don’t advise you to start from the point of advertising and awareness, but understanding the customer needs, creating products and services, creating awareness, sustaining the customer relationship to become an advocate of the brand. We found out from one of our global studies that 75 % of the millennials “spend money on experience than material things”. They prefer experience and value to just products that does not drive value for them. Brands therefore need to understand

whole spectrum of the customer journey in the market space. Experience is combination of moments. For instance, a customer that wants to watch a video on demand or from a pay TV, there are moments that are involved such an experience. It involves the customer bank, telecom provider, card switching company, content provider etc. The customer do not care about all these touch points but he/she wants to subscribe and get access to video content. If one of these touch points fails, the whole experience is crumbled. If all the brands understand where they play in that customer journey, they will put more efforts to drive experience in the moments that matter. How should business owners be supporting their brands to remain relevant and for growth ? Brands need technology as an enabler to drive customer experience. We summed this up in one of our Thought Leadership publication; “Momentum for Growth” for businesses in three points below- Experience, Exposure and Activation. In brand building, brand owners erroneously put the message first, but the Experience must be created first to delight your existing customers and then create the message from the experience to brand promise to both existing and future customers. Then activate what you have said to remain salient to the customers. This is what has made the successful organisations what they are. You said technology is enabler to grow customer experience and in terms of technology, we are not there yet, is that why Nigerian brands are not creating the necessary experience? It is a challenge but there is always a way around that. However, tech-

nology is growing and what matters is is identifying the importance of technology to your business. Fintech came to Nigeria about 5 years and they have grown because they understand how they can leverage technology to grow their business. FMCG can also leverage technology to create experience and grow its business. They should first understand what drives experience for their customers, then what are the technology driven tools to drive the experience. As I said, A typical FMCG thinks that their journey starts from awareness, but it starts from needs. If they understand the customer journey, they will know where the issues are at every point in time. Technology is an enabler. In Kantar, how much of technology tools do you employ? We advise and make use of those tools internally. We have created most of our solutions to be mobile compliant. We have moved from paper surveys to tablets and mobile and online. We now have online communities and panels. We have also created WhatsApp interviews. We have also moved to chatbot surveys. We also leverage AI and analytics to drive research insights beyond the data we collect from the customer, we now aggregate data from everywhere for decision making. All this is to give clients value. What Kantar does is to first understand client business issue, who are your customers and where they are located. This determines our approach to market research for the business category. We have not totally jettisoned traditional research, as we use it where there is low mobile usage penetration, but technology reduces cost, achieves speed and delivery where applicable.

Digibrands unveils Africa’s Environmental Sustainability Media Platform, GreenHubAfrica

2019 EXMAN Award: Keskese emerges Agency of the Year

…Wins Grand Prix, 6 other Awards

igiBrands, a reputable Marketing Communications and Advisory firm based in Lagos has launched Africa’s first environmental sustainability media platform called Green Hub Africa. The launch of the platform is to reflect the organization’s passion and investment in social advocacy and sustainability. To kick-start the project across the continent, GreenHubAfrica hosted an inaugural meeting which was attended by members of its advisory board. The event which held in Lagos celebrated the smart minds that have been appointed to follow the project through the completion of

each initiative. The smart minds include Ifeoma Idigbe, Yemi Osilaja, Ikechi Odigbo, Akinwole Omoboriwo, who are the platform’s advisory board members while John Obas Ebohon serves as the Chairman of the board. Also present on the team to discuss goals and intentions for future of the GreenHubAfrica initiative were Olu Amoda, Doyinsola Ogunye and Peter Okwor. In his remarks, the Chief Executive Officer of Digibrands, Henry Bassey expressed his enthusiasm for the new direction saying, “At DigiBrands, we hope to change mind-sets to take active steps towards building a legacy for future generations by amplifying, www.businessday.ng

celebrating and rewarding individuals and businesses who engage in “Green Practices.” He added, “GreenHubAfrica is the continent’s first environmental sustainability media platform that will create awareness across private and public sectors to develop, measure and reward environmentally friendly initiatives with a periodic tracking of sustainable practices. Our goal is to be the largest community of over 10 million earth enthusiasts by partnering with reputable sustainability stakeholders for a credible and measurable social impact. We look forward to this journey and we hope you are as excited as we are.” he said .

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eskese Nigeria Limited, one of Nigeria’s foremost experiential marketing agencies, has once again emerged the experiential marketing agency of the year at the 2019 Experiential Marketers’ Association of Nigeria (EXMAN) Awards held recently in Lagos.. Keskese won a total of 7 Awards including the Grand Prix, 2 Gold, 2 Silver and 2 Bronze at the award ceremony. At the event, Keskese emerged the only agency out of the 49 EXMAN certified experiential marketing member agencies to win the highest award of the Grand Prix via @Businessdayng

the seamless and perfect execution of MTN mPulse Campaign, said a statement. The list of the campaigns that won laurels for the agency includes MTN mPulse, MTN Pulse (Campus Invasion), MTN and Arsenal Partnership and MTN Lumos. The MTN M Pulse campaign was recognized by winning 2 Gold in two different categories that include Best Activation in Consumer Experience and Use of Digital in an Event while the same campaign was awarded silver and bronze medals in the Best Activation on Consumer Experience and Best Event on Business to Consumer categories respectively.

Tuesday 23 July 2019

BUSINESS DAY

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Tuesday 23 July 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Financial Services

Africa Prudential’s mid-year profit hits N1bn mark, sees turnaround in digital technology unit … stock sinks to 22-month low ISRAEL ODUBOLA

alf-year profit of Africa Prudential Plc, a Lagos-based re g i s t ra t i o n service provider, grew to N1.03 billion in 2019, its highest in the last seven years, thanks to transformation in the company’s digital technology unit and tangible decline in borrowing cost. Proceeds from the digital technology business spiked to N73.7 million in the first six months of 2019, compared to N457, 000 in the preceding comparable period, and helped contract income surge 47 percent. “This quarter is one of a promise delivered. In our digital technology strategic business unit, we are strategically positioning ourselves to deliver best-in-class experience to our clients through our array of innovative business offering” Obong Idiong, Managing Director of the firm said in a note to investors. Idiong added that the initiative is trickling down into the company’s number as 16, 035 percent growth was recorded in income from digital technology business, positing that company would unveil two new innovative prod-

ucts in subsequent quarters to deliver value to clients in and out of the capital market space. Despite receipts from contracts with clients nearly doubled to N870 million in the review period; gross earnings of the firm declined 7 percent as interest income, which accounted for 57 percent of earnings, dipped 28 percent to N1.14 billion. Breakdown of interest income showed that interest earned on three of four investment securities fell. While cash earned on loans & advances, treasury bills and bonds dipped 7 percent, 60 percent and 64 percent respectively, interest on short-term deposits nearly doubled. Between April and June 2019, the firm’s interest income tanked 35 percent to N544 million, while contract income soared 61 percent, to weaken total earnings by 6 percent. This is a recurrence of its first-quarter performance when interest income, which constituted almost 70 percent of its earnings, declined 18 percent, pushed by a 51 percent and 64 percent cut in cash earned on treasury bills and bonds, which the company’s chief attributed to

Source: Company financials, NSE declining yield environment last quarter. Meanwhile, the rout on the Nigerian Stock Exchange (NSE) has pushed a number of stocks to fresh lows, and Africa Prudential is no exception, as its shares are trading at their lowest price of N3.40 since September 2017. Year-long, its shares have lost 12 percent, slightly underperforming the equity index that is down 11 percent.

Operating profit of the service provider shed 17 percent to N1.3 billion as indirect expenses jumped and other income tanked. However, pre and posttax profit managed to up 6 percent and 5 percent respectively, partly attributable to finance cost which dipped 76 percent to The company’s total assets appreciated marginally by 0.92 percent or N7 million

to N21.9 billion compared to N21.7 billion as at December 31, 2018. Going forward, the Obong stated the company would continue to explore the numerous opportunities in the digital technology space while deepening its position in registrar business. He reaffirmed that the company is committed to creating optimal value to clients and stakeholders amid

fragile economic growth which has slowed business activities and global headwinds such as trade tensions. Africa Prudential’s business model involves creating client-company registers of shareholders, maintaining the register, dividend and interest payment, issuing shares and debentures certificates, attending to shareholders enquiries and handling of scrip and right issues.

Insurance

Custodian rides on dividend surge, sustained profitability to join NSE 30 firms OLUWASEGUN OLAKOYENIKAN

he quest of Custodian Investment Plc, Nigeria’s most profitable publiclyowned insurance company, to maximise its shareholders’ wealth has earned it a spot among NSE 30 companies. NSE 30 is the price index that tracks the top 30 companies in terms of market capitalisation and liquidity. The Nigerian Stock Exchange (NSE) had in its biannual review of the index earlier this month announced the replacement of Dangote Flour Mills Plc with Custodian Investment Plc. This implies Custodian Investment Plc is the only insurance firm among the

30 biggest companies on the local bourse despite Nigeria’s uninspiring insurance culture which hampers insurance firms from expanding business compared to peers in Africa. Checks by BusinessDay revealed that the inclusion of the firm in NSE 30 Index largely came on the back of improved market value of Custodian Investment Plc. The share price of the company’s stock had remained below N4.50 per share, but kicked off a bullish trend in end-March 2017 to hit its highest level of N6.80 since 2012 when BusinessDay started collating its data. Also, the company consistently paid cash dividends to its shareholders since 2014,

making it one of the best companies in the insurance sector that has been faithful in rewarding their owners using a portion of their net profits. But beyond maintaining an impressive record of dividend pay-outs in the last five years, Custodian rewarded its owners with 32 kobo final dividend for the 2017 financial year, this represents an increase of more than threequarters of 18 kobo paid a year earlier. That was the game changer for the firm, even as major metrics used in measuring the firm’s financial performance improved. Profit margin stood at 16.98 percent as against 13.83 percent in the previous year.

Return on Asset, a profitability ratio that provides how much profit a company is able to generate from its assets, hit 9.04 percent in 2017 from 7.83 percent. A l s o, t h e c o m p a n y showed improved efficiency in turning the cash put into the business into greater gains and growth as its return on equity rose to 19.92 percent in the year as against 17.71 percent recorded in 2016. Custodian’s share price appreciated in value on the NSE by more than 20 percent to N4.96 per share a week from when it disclosed a final dividend payment of 32 kobo per share was proposed for its shareholders. Consequently, the surge

in dividend payment attracted investors to take strategic positions in the company, making it mark its best trading week in more than three years after the announcement. The stock gained as much as 15.35 percent during that week. Custodian’s declared dividend for 2017 followed a 37.1 percent surge in its net income for the year to N7.31 billion as against a N5.33 billion achieved in the previous year, thanks to increases in its investment income and gross premium income on non-life insurance that made that happen. Investment income comprises of dividend income, interest income as well as discounts on Treasury Bills and

Bonds, according to the firm. In spite of the dividend payment, the company was able to add over N5.43 billion to its retained earnings compared with N4.27 billion increment recorded in 2016, causing it to sustain its profitability in 2018 even though it fell 2.7 percent to N7.11 billion. As a result, it paid 35 kobo in 2018, representing a 9 percent increase and a slower pace of dividend growth from 2017. The company’s shares shed 1.61 percent to close at N6.1 on Friday, bringing its return since the start of the year to 8 percent and outperforming the NSE broad index which has lost 11 percent this year.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

Tuesday 23 July 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

Financial Services

United Capital half-year profit pares despite second quarter pick up SEGUN ADAMS

n spite of a strong performance in the second quarter, United Capital Plc, a Lagos-based investment bank, saw a decline in its half-year profit on the heels of a drag in revenue. The investment bank posted a profit of N1.67 billion for the half-year period to June 30, 2019. Compared to the same period last year, it made some 17 percent less profit. Earnings scorecard of the investment bank shows it made N644 million as profit in first quarter and N1.02 billion in second quarter, with the latter performance representing a 58 percent growth over its first three month. Year-onYear in second quarter, United Capital has grown its profit by 27 percent.

“We did deliver on our promise to improve performance in Q2 2019 and as can be gleaned from our numbers we had a good outing in the quarter under review”,Peter Ashade, Group CEO, United Capital said in a note to investors. Ashade said the inauguration of cabinets across states of the federation would see the pace of bond and commercial paper issuance pick up, increasing the investment bank’s advisory fee, while the group would adopt initiatives to improve top lines and profitability. “We would be going into the second half of the year 2019 stronger” he added. United Capital made 16.53 percent less revenue as figures fell to N3.24 billion in the period compared to N3.88 billion last year. In the second quarter revenue fell by 1.16 percent.

Operating income declined by 8.95 percent year-on-year, to N2.82 billion in the half-year period in 2019. This was due to a 4.81 percent decline in Investment income while Fees and Commission income fell 16.99 percent. The investment bank’s net trading income plunged 57 percent while net interest margin rose 12.94 percent. Dividend income rose 16.36 percent to N366.92 million while income from other sources fell 88 percent, weighing on United Capital’s other income which declined 44.64 percent to N419.89 million in the period. United Capital saw its total expenses by 15.81 percent to N1.25 billion on account of a write back of N180 million compared to impairment allowance of N73.62 million last year.

L-R: Adesiji Oyebolu, director, national convention, Junior Chamber International (JCI) Nigeria; Adeyemo Adeonipekun, executive secretary, JCI Nigeria; Adetola Juyitan, president, JCI Nigeria, and Oluwatoyin Atanda, executive assistant, JCI Nigeria, at the media parley organised to give account of the stewardship of JCI Nigeria in the last eight months in Lagos.

Deals

PepsiCo eyes African growth with $1.7bn offer to acquire Pioneer Foods ISRAEL ODUBOLA

epsiCo, an American multinational food and beverage company, has entered into agreement to acquire one of South Africa’s largest makers of branded food and beverage products, Pioneer Foods Group Limited, for $1.7 billion as it seeks to widen presence in Africa. Given the agreement, the New-York headquartered company would purchase the entire 222 million shares outstanding of Pioneer Foods for 110 rand per share of the South African-based food maker. Ramon Lagurta, Chairman and Chief Executive Officer of PepsiCo, said the deal is part of the food and beverag giant’s

goal to accelerate growth in key markets globally and make the company a “Global” leader in convenient foods and beverage. “Pioneer Foods represents a differentiated opportunities for PepsiCo and allows us to scale our business in Africa. This forms an important strategy not only to expand in South Africa, but further into Sub-Saharan Africa as well” Lagurta said. The deal would enable PepsiCo expands its Sustainable Farming Programme in Africa and partner farmers in Pioneer Foods communities including woman and rural smallholders to boost yield and improve livelihood. Tertius Carstens, Chief Executive Officer of Pioneer

Foods, stated that the acquisition marks a milestone for his company, highlighting things achieved by the South Africanbased food maker. “As part of PepsiCo, we will have greater scale to expand our leading brands, brings greater capital to invest in local agriculture, and a partner committed to taking our company to greater heights” said Carstens. Aspartofthistransactionand PepsiCo’s ambition to expand and prioritize local markets, the company would establish an operating sector for the SubSaharan African region to be headed by Eugene Willemsen, a former Executive Vice-President of Global Categories and Franchise Management of the group.

L-R: Mitchell Elegbe, GMD/founder, Interswitch; Samuel Chukwuyem Okojere, director of payment system, CBN, and Kenneth Olisa, chairman, Interswitch, when CBN was named ‘The Industry Enabler of the year’ as part of the recently concluded Interswitch Connect Sales Award.

Company Release

Cars45 enhances access to vehicle ownership, rolls out 2 more franchise lots in Lagos

n a bid to take its products and quality of service closer to the consumers, Nigeria’s leading automotive trading platform, Cars45 has unveiled two more Carsbazr franchise lots located in the Egbeda and Shogunle areas of Lagos in partnership with Auction.com Ltd. Speaking at the launch of the franchise outlet, CFO, Cars45, Jide Adamokelun noted that “for us at Cars45 and Carsbazr, we are always seeking out opportunities to fulfil our brand promise to consumers, which is, providing end-users with a rich variety of verified cars at affordable prices.” “The roll out of these new franchise locations also ties in strongly with our vision to enhance accessibility of the consumers to affordable car sales channels, transform

Nigeria’s automotive industry and deepen the values of transparency and integrity that we have brought to that space,” Adamolekun said. It will be recalled that Cars45 provides a detailed 200-point inspection report as well as a grade ranking on all vehicles bought or sold in a manner that reveals the true condition of the cars and empowers the consumer to make a well-informed buying decision. CEO Auction.com, the latest franchise beneficiary, Oludare Adewale said,” considering the brand’s preeminent status, we are very happy to partner with Nigeria’s number one automotive trading platform to enable the public have more convenient options when it comes to buying cars. In the few years that we have done business together, we have seen the value

L-R: Tony Fadaka, registrar/chief executive, Nigerian Institute of Management (NIM) Chartered; Pat Anabor, deputy president, NIM; Akin Ogunbiyi, group managing director, Mutual Benefit Assurance plc/guest speaker, and Abdullahi Muraina, national treasurer, NIM, at the 2019 Distinguished Management Lecture of the Institute in Lagos.

they provide to dealers like us in terms of value, volumes and profit margins. It’s a win-win for everyone and we will work hard to ensure that the current target of 50 franchise locations before the end of year is surpassed.” Speaking on the driving force behind the franchise rollouts, Head Operations, Carsbazr, John Egwu said, “what we are bringing to the market with our franchise rollouts is transparency to the car selling process, driving affordability in a way that says that there is a car for every wallet size and lastly delivering great consumer experiences that is consistent with what you’ll get at any of our Carsbazr retail lots across the country. We’ll like to encourage other dealerships to take up our franchises even as we create L-R:Onome Odili, head of marketing; Gabriel Modigie, sales operation, and Kelechi Chiboka, marketing value and enrich the lives of coordinator, all of Zola Electric Nigeria, at the Zola Flex viewing centre 2019 Africa Cup of Nations activation Nigerians with quality services.” in Lagos.

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Tuesday 23 July 2019

BUSINESS DAY

COMPANIES&MARKETS

INTERVIEW

Big data analytics tools can be used to identify and combat cybersecurity threatâ&#x20AC;&#x2122; DEBO FAGBAMI is the Chairman, Society of Petroleum Engineers (SPE), Nigeria Council. In an interview with FRANK UZUEGBUNAM, Fagbami talks about Big Data, Artificial Intelligence and Mobile Technology in oil and gas industry, which is the theme of the forth-coming Nigeria Annual International Conference (SPENAICE2019) from August 5 â&#x20AC;&#x201C; 7, 2019. Excerpts:

hat do you see as some of the primary challenges and opportunities this wave of data will create? The challenges associated with the wave created by big data in our industry would stem from the fact that big data in itself is a complex terrain. Obvious challenges would come during its integration with existing business processes and methodologies as well as the uncertainties created by management of large and complex data by an industry only beginning to adopt it. Added to this would be the in-house talent gap as well as the complexities associated with migrating existing data into a big data structure suitable for use in the artificial intelligence(AI) terrain. Synchronizing data across multiple data sources and user groups or function also create a challenge and added to this would be costs associated with migration and providing solutions for specific scenarios and enduser applications. Having said this, big data and AI in our industry would open doors for new talent as well as cross-training and skills conversion which is not unfamiliar territory for petroleum engineers to explore and exploit. As more organizations recognize the importance of big data as a means of realizing and entrenching competitive advantage, it would be used as an in-road to gain insight and make more informed decisions. To what extent will big data be responsible for combating new security problems and challenges? I will throw a curve ball to this question as big data in itself presents a powerful means of storing large amounts of data that can help analyze, examine, observe trends and irregularities

means of improving their business process.

Debo Fagbami

within a system or network. Big data analytics tools can be used to identify and combat a cybersecurity threat which remains a concern for most organizations today. Having an in-house structure and talent pool that is adequately equipped to utilize the concept of bid data for business process enhancement as well as to protect the system is a fantastic bargain for any serious organization. Cyber threats remain a clear and present danger and oil and gas companies generate and store large volumes of data on a daily basis in support of the energy value chain from exploration to production and a threat to any remains a threat to all, hence the responsibility lies with all industry players to ensure that standards are set to utilize robust analytical tools to combat the threats imposed by cyber-crime. Can you expand on the need for procurement and sourcing of AI, big data and mobile technology in the Nigerian energy industry? For as long as there is need to utilize and manage www.businessday.ng

large volumes of data, there would always be the requirement to employ analytical tools to make sense from the complex wave and volumes of data available. This will certainly bring about the need to resort to external sources and commercial data sources to provide bespoke and mined datasets to facilitate the effectiveness of business processes. How has the skills transfer and foreign investment changed over time within the industry? In recent years, skills transfer has become more of a necessity than ever before. As the world tends towards the concept of a global village or global market place, talent has to remain competitive with global standards. The Petroleum Industry & Governance Bill (PIGB) remains an enabler and provides a platform to create investor confidence to encourage foreign direct investment. It is long overdue for this to be signed into law. What will be the culture of the future for the

upstream industry? The culture in the industry would transform from one that sees data as a burden to one that sees data as an asset. The more organizations tend to find themselves immersed in data, the more the need to have ways to analyze, validate and authenticate such data and information. What is the best time for the adoption of a significant new technology paradigm and how associated organizational challenges can be counteracted? Like the Chinese say, the best time to plant a tree is a hundred years ago, while the next best time is now. Adoption of new technology and the required paradigm shift to a big data mindset to deal with organizational changes is now and this cannot be over-emphasized. The oil and gas industry is possibly a late comer into the realms of the big data revolution, but quite a number of organizations like Shell and BHGE are at the fore-front of embracing big data as a

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Will further regulation be required to rebuild investment trust and confidence in the upstreamsegment of the industry in the absence of PIGB? The oil and gas industry in Nigeria is already largely at par with global standards as far as practice goes. The regulatory bodies in country have done a fantastic job at regulating the various activities in the industry particularly as regards standards of practice and compliance. In the upstream space, activities are further governed by subsisting laws including the Petroleum Act amongst others and these create a baseline level playing field for all industry players in the sector. In our industry, additional regulation is not and should not be on the front burner at this time. The clamor for the PIGB is essentially borne out of the need to create an enabling environment to shore up investor confidence and stimulate activity in the industry to drive commerce and enhance the socio-economic landscape. The vibrancy of the upstream sector remains a key enabler to the economic development of our country. How has SPE-NAICE event grown since its first entry? The SPE Nigeria Annual International Conference has certainly grown since inception 43 years ago. On a personal note, my first attendance at NAICE was in 1997 in Port Harcourt and since then I have witnessed NAICE hosted in various Nigerian cities including Lagos, Abuja, Calabar and more recently settled in Lagos having found a venue large enough to accommodate the spread of programs and attendees that NAICE commands. The exhibition component has seen a quadruple increase @Businessdayng

in participation from organizations in the last ten years alone, our panel session style discussion forums have grown from 3 to 6 in recent years not to mention the quantity and quality of peer reviewed technical papers that have been presented at various NAICE events. NAICE continues to be the leading technical conference in subSaharan Africa and it remains a pacesetter that has opened up the technical space in our industry. In the coming years, I envisage NAICE to expand beyond the shores of Nigeria beginning first with hosting it outside Lagos to other oil and gas enclaves in country like Port Harcourt, Bayelsa etc. and ultimately staging it outside Nigeria which is a prospect I sincerely look forward to witnessing. How will the structure of the NAICE2019 program support or encourage the participation of mid and downstream sector of the petroleum industry? NAICE has always supported and continues to support participation from the midstream and downstream sectors and at some point, in the past, the NAICE theme has actually focused on natural gas being a key enabler to the economic development of Nigeria. For a gas focused conference at the time, there is no way discussions would not center around processing, transportation and distribution via pipeline infrastructure, and these are areas that are well covered by the aforementioned sectors. Similarly, other sectors like Banking and other financial services have been fully integrated into our NAICE program of activities. This year, we would be having quite a number of power packed panel discussants trashing out issues in the area of AI and big data and quite a few of these discussants would be coming from the financial services sector.

Tuesday 23 July 2019

BUSINESS DAY

Tuesday 23 July 2019

BUSINESS DAY

GODWIN EHIGIAMUSOE

CEOINTERVIEW

Managing director/CEO, LAPO Microfinance Bank

Interview with Private Sector Leaders

“The core tool we use to tackle poverty is credit”

LAPO Microfinance Bank has continued to maintain its premium status in the microfinance sector, having over 484 branches across the country and disburses N14.1 billion loans monthly, yet it is not considering converting to a commercial bank. Godwin Ehigiamusoe, Managing director/CEO, speaks on developments in microfinance sector and other issues in this interview with HOPE MOSES-ASHIKE. Excerpts:

an you look at the current level of poverty in the country and the inroad LAPO hopes to make given its priority in terms of addressing these challenges? We have made our contribution to addressing the challenge of poverty for over thirty years in the areas of access to finance, health and social empowerment especially in rural communities. Lift Above Poverty Organisation -LAPO- the precursor of LAPO Microfinance Bank, was initiated to address the increasing level of poverty. Remember the then government of General Babaginda adopted a set of economic programme called Structural Adjustment Programme (SAP) in in 1986, which had the following as its central components: devaluation of the naira; rationalization of staff in the public sector, and liberalization of export and dismantling of commodity boards. A major instant fallout of SAP was an increase in the level in poverty in spread and severity. Lift Above Poverty Organization was a non-governmental community-based response in OgwashiUku, now in Delta State. LAPO is essentially a development organization with a focus on poverty alleviation. In the founding of the organization I conceptualized poverty as I still do, as an octopus with the tentacles of material deprivation; poor health and social exclusion. Microcredit as microfinance was then called was to address material deprivation with our health and social development programmes promote quality health and social empowerment. LAPO NGO will in the next few months commission its ultra-modern health facility with medical and diagnostic services in Benin City On credit, our ambition from day one was to create an institution which ordinary people would go to on a sustainable basis to access institutional credit. Mind you, this was a tall ambition at the time when the ordinary people particularly women were excluded from institutional credit. The only options were obviously expensive money lending channels and loosely organized informal credit groups. Today, LAPO’s presence in communities across Nigeria and contribution to agric lending is widely acknowledged. We are equally happy over our contribution

LAPO does that is, applying LAPO approach, will be credit-led. Owners of micro and small businesses demand for loans more than deposits they make. This explain why true microfinance banks seek for loans from local and international sources to bridge the gap between the loan assets and deposits on their balance sheet

to the development of poverty lending practice not just microfinance in Nigeria and beyond Looking back to when you started, how many clients have you serviced and lifted out of poverty? For over thirty years, first as a nonprofit, we have operated, million of Nigerians have accessed our loans and many have moved on. Our current loan and savings clients exceed four million. In 2013, we celebrated naira equivalent of $1 billion given as volume of loan. That was roughly N157 billion. Since 2014, we have disbursed N686.3 billion in loans to micro and small businesses in agriculture, commerce, clean energy, affordable housing and education amongst others. Given the huge gap between demand for financial services at the bottom end of the society and the very limited access, there is still much to do. LAPO has played the role of a pathfinder in the sector. In 2013, we pioneered Affordable housing in partnership with Lafarge the French cement solutions firm and support the French Agency for Development. We are glad to see the initiative being hugely embraced by the microfinance sector to the benefit of the ordinary Nigerians. Is there any number you can put to the people you have lifted out of poverty? As I have earlier noted, we have reached millions of Nigerians with a range of financial services and many have moved on. We current provide loans and savings opportunities to over four million. There is also an unintended impact or benefit, that is, impact on youth unemployment, because at the beginning it was not on our list of objectives. But today we have 7, 012 largely young people on our full-time staff list, and over 8,000 in the LAPO System. With the challenges associated with giving loans in Nigeria especially defaults, how were you able to pull this number of people? Delinquency is a fact of lending, even micro-lending. Therefore the major task of a lending institution is portfolio quality management. At LAPO, we have had our fair share of pervasive delinquency challenge in our operating environment,

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Sometime in 2015, LAPO launched Social Impact Deposit product. Is it still in existence? Yes, it is still there. As you know it is to provide opportunity for high net worth individuals to make deposits with LAPO MfB and reap the double benefits of competitive interest rates and the more fulfilling sense of making contribution to a pool from where loans are made to very low-income people who own micro businesses. The response has been good and we expect more people to identify with this product.

especially when we were operating as a non-profit. The problem actually led to the decimation of the vibrant non-profit microcredit sector in Nigeria in 1990s. We have been able to overcome the problem through a combination of staff training, client engagement and support, and effective risk management. You have a very large customer base. How do you ensure you hear directly from the people whose lives you hope to impact are not their representatives LAPO has unique structures and processes particularly at the field level which ensure adequate engagement with our clients. Most of our clients are organised into credit groups with elected leaders and secretaries. These meet periodically and our staff are in attendance. Leaders of a

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number of these credit groups, say 60 or more supervised by a LAPO Branch constitute what we call Branch Council which has an elected Council Leader. The Branch council has as Secretary our Branch Manager. The council meets quarterly. This structure provides us with the opportunity to engage our clients. Top management staff periodically embark on ‘In Touch’ visits which require each top manager to work out of a selected branch for a week. He or she is to accompany the branch staff to meetings of client groups. I and members of the Management team are required to use clients’ telephone numbers generated by our Client Relationship and Support Unit to make calls at random to our clients. Internally, we call it call logs. Of course, it is often fulfilling for me to visit our clients across the country and I do so often. We analyse information and insights from these interface sessions with clients.

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How do you also ensure that group leaders are not excessive in the discharge of their duties? How do you ensure their actions conform to LAPO’s ethics and standards? Many of our union leaders are altruistic in the leadership they provide to their members. However, there are few that take undue advantage of members of their groups, because their behaviour is giving us a lot of concerns and creating unpleasant reputation which is discounting the huge positive impact of LAPO across the country. If in a month LAPO is disbursing N14.1 billion, how much are you mobilising in Deposit? We are a licensed deposit institution and mobilise deposits. However, any microfinance bank or institution which does business as

What is LAPO MfB doing in the environment or sustainability? In 2012, we launched what we called ESG Initiative hat is, Environment, Social and Governance initiative whose market place dimension is to enable LAPO to support our clients who by nature of their livelihood are active agents on the environment, to become agent of environmental preservation. In collaboration with other organizations we provide loans to our clients to own clean cooking gas cylinders and solar lamps. In the work place dimension, we have succeeded in ensuring that all key meetings that is, board committee and full meetings; management meetings and review meetings are paperless. In addition to the environmental implication of this initiative, we also indeed tracking the financial gains of not using papers, and the savings are in millions of naira. LAPO is an active member of the Global Alliance for Banking on Values (GABV) and promoting sustainable finance in Africa.

gap at the bottom end of the economy is still huge and any initiative that will support bridging the gap is welcome. Also, the ensuing competition will be of benefit to the microfinance sector and the services users. For us at LAPO the initiative is welcome as long as the microfinance banks will be run on sustainable basis for the benefits of ordinary Nigerians. You earlier mentioned that aside supporting the poor with need for credit you have also supported other MFBs, in what ways? LAPO has always believed that a virile microfinance sector is a good for us. Even as a non-profit, we provided training and funding supports for fledgling institutions. Some have blossomed to our joy and many failed. We have opened our well -resourced Institute in Benin City to other microfinance banks and annually organized international workshops for microfinance banks in Africa. Personally I continue to play an active role in the development of the sector and I am indeed happy that in spite of the challenges in the sector, we have made huge leap from where we were in 2005. What your plans in the next five years? Nigeria with a large number of exceptionally enterprising people, is a fertile

ground for microfinance. In the next five years, we will continue to deepen our operations and come up with more innovative products and services Do you have grants that support start-ups? We are looking forward to developing youth loan products which will incorporate features responsive to start-up financing. Has LAPO been recognized? Yes. We have had tons of awards and recognitions. Some for what we do in microfinance and others for our broader contributions to human development. As one of the key pioneer players in the global microfinance community , we have been acknowledged . In 2006, LAPO won the Grameen Foundation’s award for Excellence in Microfinance which came with a cash prize of $10,000 which we used to set up a scholarship for children of our clients. Annually LAPO makes contributions to the fund and over 3,000 children of our clients have benefitted for secondary and university education. At home, the University of Benin in 2016 honoured me with an honorary degree of Doctor of Science and the Lagos Business School Alumni Association’ award of distinguished alumni came in 2014. Of course, the FATE Foundation’s Model Entrepreneur Award came in 2008

What is the future of Microfinance in Nigeria, particularly the MFBs with National licence considering that the CBN and Bankers Committee are setting up NIRSAL Microfinance banks across 744 local governments? The market reality is that the supply www.businessday.ng

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Tuesday 23 July 2019

BUSINESS DAY

EDUCATION Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Why non-implementation of holistic education policy stifles sector growth KELECHI EWUZIE

lobal research findings have consistently shown that no other activity guarantees individuals the opportunities for social and economic mobility like education. The importance of education as the most important vehicle for the transformation of individuals and societies cannot be overemphasised. It is equally not too hard to decipher that one key index to measure the growth or supposed development of any nation is the amount of attention, the leadership of such a country pays to her education sector. Education over the years has played a vital role in the socio-economic development of any nation. It is against this backdrop that professionals in the field of education have identified the non-implementation of national policy on education as the reason behind the stunted growth of this all-important sector. Isaac Adeyemi, former vice-chancellor Bells university of Science and Technology, Otta, Ogun State observes that the growth potential of education in Nigeria is stifled by the inability on the part of government across all levels and their agencies to faithfully implement national policy provisions, a situation that has led to poor quality of preparation of teachers. Adeyemi pointed out that the inability of successive governments at different levels to implement the education policy has led to high illiteracy rates, a large number of out-of-school children, inadequacies in number and quality of teachers and poor quality of products from the school system. According to him, “The interesting point to note is that all national reports on education over the last 20 or more years have documented the scenario described above, yet our pace of improvement has been snail slow. Indeed, quality is worsening on all fronts. To ensure

Tonye Cole, former Group Executive Director of Sahara Group and energy in a group photograph with covenant University team, winners of the Enactus Nigeria 2019 National Competition held in Lagos

that we hike performance of education, greater attention should turn to improve the delivery of education at all levels.” Implementing a workable education policy is not all about throwing more money into the system; rather it is about all stakeholders - parents, students, teachers, school managers, religious leaders, examination bodies and the general public contributing in some form to improving efficiency, effectiveness, relevance and quality at all levels, Ibidapo Obe, former vice-chancellor University of Lagos says. “I will say that the necessary policy and practice environment should be provided for the delivery of quality education at all levels. I am not talking about the federal government alone. State and local governments have their roles to play. We must invest more in education”, he said. On his part, Peter Okebukola, former executive secretary National Universities Commission

(NUC) observes that Nigeria’s National Policy Education is one of the finest documents on education in Africa. He opines that it virtually covers all angles in the delivery of education, adding that it is not working as envisioned in some areas because many are satisfied with flouting its provisions since the penalty for transgression is weak. Wale Afebioye, an executive director and business development executive of Premier College Ijebu- Ode, Ogun State said basically the problem with the education sector is the fact that schools are not centers for creative expression and most time people go to school basically to have a certificate to present in order to have a job. Analysts observe that increasingly, there are too much love for foreign education instead of developing our education system to compete globally, this development is bleeding the economy, as huge capital flight are experi-

enced on an annual basis owing to the increase in foreign exchange loss to foreign universities said a source. The unsteady academic calendar, lack of infrastructure among other things and the constant strikes by lecturers according to analysts are responsible for this drive towards foreign education by Nigerians. Maurice Onyiriuka, a university don suggested that the only way out of this quagmire is for government to support the entrenchment of adequate and quality education in all level of education in the nation especially the tertiary institutions, this he believes will nip in the bud the mass exodus of students to foreign land and save the economy of the huge foreign exchange loss. He, therefore, urged the government to come out with a clear policy statement on the fundamental question of effective funding and other basic requirements need to save the nation this huge loss of foreign exchange.

ICPC to crack down on VCs over fake NYSC mobilisation Kaduna Government expends N142.9bn Felix Omohomhion, Abuja

he chairman of the Independent Corrupt Practices and Other Related Offences Commission (ICPC), Bolaji Owasanoye, has sounded a note of warning to Vice Chancellors, who are involved in sending unqualified candidates for the compulsory one-year National Youth Service Corps (NYSC) programme. Owasanoye, in response to a request from the Director-General of NYSC, Shuaibu Ibrahim, on the menace of fake NYSC members, during a courtesy visit to the commission in Abuja, said that ICPC will act promptly, once a report of illegal mobilisation of unqualified candidates for the programme by a Vice-Chancellor was received. He said: “We are ready to prosecute any university Vice-Chancellor who mobilises those that should not go for the scheme if you send them to us.” The chairman, while lamenting the menace of corruption, urged NYSC to enhance the skill acquisition training being offered to corps members by advocating a skills-based tertiary education curriculum that would prepare youths to become employers of labour instead of depending on the government to create jobs. He also said that NYSC stood a better chance in helping the youth in the fight against cor-

ruption because the scheme provided the first point of contact with real-life situations for corps members after school. According to him, “We can kill patterns that lead to corruption where necessary. Many young people think there is a short cut to success, that once you are out there, you just hit millions. That is not the case, there should be a gestation period. NYSC should create a platform to provoke positive consciousness, the activism to challenge things when they go wrong.” The ICPC boss urged NYSC to create awareness on anti-corruption by enlisting the corps members into the social media platforms of ICPC, adding that it would help them to become anti-corruption stakeholders in their local communities. The Director General, earlier in his address, noted that collaboration with ICPC which began in 2003, through the ICPC/NYSC Anti-Corruption Vanguard had yielded fruitful results. Brigadier General Ibrahim said he was confident that the commission would help deal with the challenges of mobilizing unqualified candidates for NYSC by Vice Chancellors. He requested for the re-inauguration of the Anti-Corruption and Transparency Unit (ACTU) in NYSC, saying that old members had either retired or been promoted above the schedule. ICPC chairman welcomed his request saying that ACTU would be inaugurated as soon as all the formalities were done with.

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on basic education in 4 years

Abdulwaheed Olayinka Adubi

he immediate past commissioner, Ministry of Education, Ja’afaru Sani has disclosed how the sum of N142.9 billion was expended on basic education between 2015 and 2018. Ja’afaru who made this known in a paper titled: “Management and funding of Basic Education with the theme: “ The State of Basic Education in Kaduna State; Prospect and Challenges, said basic education is being funded through counterpart funds.

Reuben Osahon, ECOBA National President presenting the best SS3 Mathematics Award to Efosa Illoware Eghenayamose.

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While speaking at a 2-Day policy retreat recently, he explained that Universal Basic Education Commission, (UBEC), the 23 local government council’s, and other grants from international agencies were used for the funding of basic education in the state. According to him, “Out of the N142.9 billion, N3.8 billion was counterpart fund from the state, LGAs and UBEC accessed between 2015 and 2016, while counterpart fund for 2017 and 2018 amounting to N5.5 billion would be accessed in June. He further explained that the sum of N64.9 billion was spent on primary school teachers and 28 billion naira on education personnel. He said within 2016, N9.4 billion was also spent on the school feeding programme, while N22.5 billion was spent on the on-going National Home-Grown School Feeding Programme from 2017 to date. To him, “N8.3 billion external aid was expended on basic education, 21.6 million U.S dollars; equivalent to N6.6 billion came from World Bank under the Global Partnership for Education and Nigerian partnership for Education project”. “3.6 million pounds, equivalent to N1.4 billion came from the United Kingdom Department for International Development, Teacher Development Programme, and according to him, N254.2 million came from UNICEF”, he said.

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Tuesday 23 July 2019

BUSINESS DAY

EDUCATION How much do you respect children?

OYIN EGBEYEMI

ommunication, emotional intelligence and child psycholo g y a re v e r y popular topics these days. People are becoming more aware of the importance of the careful nurture of children especially in today’s age where they have easy access to information and are not as

sheltered as they used to be just a few decades ago. In the modern school environment, educators are also beginning to imbibe more inclusive measures and are taking more individualised approaches towards childcare. I think this is an absolutely wonderful concept because I would have found it so useful during my childhood. Some people may get the impression that paying such close attention to children is equivalent to spoiling them. Admittedly, the line between a spoilt child and a child who gets individualised attention may sometimes seem a little unclear. We have to learn to understand when this is a false assumption because in today’s world, children have a whole lot more concepts to understand and they need to be bolder and more confident in order to stand out from their peers and live well.

So it is important that we give them all they need to be effective, and if this is in the form of communicating with them more thoroughly, then we are respecting them as individuals and giving them access to their rights to express themselves. With this in mind, it is also very important to know that academic excellence is not enough and complacency with situations that are wrong and inappropriate is unacceptable. Children need to be carried along in some of the decisions that adults make. This helps build their self-awareness, socialawareness, maturity and confidence. Below are a few tips on how to give respect to children: Speak and Explain: One thing that my parents always did and still do is that they

explain a lot to me. I had a very strict curfew before I turned 16, but they explained their reasoning being the risks of exposure to certain people and situations that occur at certain times of the day at certain places. It was not always a situation of “I’m telling you to do this, with no explanation and you must do it because I am an adult and you are a child and I said so.” It is important to break things down to the level that children understand in order to increase their awareness and acceptance of the concept or situation. Keep your Promises: Children have very loving and vulnerable hearts. They do not pretend to have a tough exterior like most adults do. In most cases, they also have not formed the thick skin that most adults have. Hence they are very sensi-

Slum2School Africa, Anthony Joshua partner to tackle out-of-school children challenge KELECHI EWUZIE

etermined to address the growing challenge of out- of- school children in Nigeria, Slum2School Africa has partnered with Anthony Joshua, former World heavyweight boxer to visit Adekunle Primary school, Makoko, Lagos. The visit by Anthony Joshua was part of activities put together by Slum2School Africa aimed at seeking out ways to contribute to the reduction of out of school children in the country as well as improve the country’s educational sector.

Currently, Nigeria has an estimated 10.5 million of the country’s children aged 5-14 years, not in school; an issue this widespread is one that deserves all the attention needed. Ruth Diyan Ebe, Head of Operations Slum2school Africa, while speaking at the event said the need to empower underprivileged children could not be overemphasised as they later become part of the larger society. According to her, “We recognise that there are severe shortcomings in the educational sector in Africa and in this area, we seek to improve the lives of Africa’s

most precious resource - her children”. Ebe opines that Slum2School’s successes could be attributed to a number of collaborations which include the government, private sector, individuals and other developmental agencies adding that the British government also partners with them. “We are having delegates from the British High Commission, British Council and Anthony Joshua to see what Slum2School does, what Makoko community is all about and how we can work together to help the children have access to quality education,” She said.

Slum2School Africa is a volunteer-driven organisation whose mission is to transform the society by empowering disadvantaged children to realise their full potential. Founded in 2012, Slum2School Africa provides educational scholarships, create learning spaces and provide other psychosocial support for disadvantaged and vulnerable children in slums and indigent communities. Also present at the event was Tonye Cole, former Group Executive Director of Sahara Group and energy, ace comedian Ali Baba, Timi Dakolo amongst others.

Wasiu Adumadeyin, President, National Association Of Private Schools (Napps), Lagos State Chapter; Ronke Soyombo, Director general, Lagos State Ministry of Education; Vani Malik, general manager, Kellogg-Tolaram Nigeria Limited; Isreal Sobowale, a Kellogg’s superstar scholarship awardee; Tolu Akande-Sadipe, House of Assembly member, Oluyole Federal Constituency; Darlington Igabali, marketing manager, Kellogg’s, during the Official Presentation of award scholarship to Kellogg’s Superstars essay competition winners in Lagos www.businessday.ng

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tive and take every word for what it is. Plain and simple. So when you go back on your word, it hurts their feelings and that makes them feel disrespected. Listen Attentively: When children have something to say, we should be patient and give them enough time to express themselves. Cutting children short is disrespectful and could even take away from their confidence. Children may also not be able to express themselves fully verbally sometimes. So listening goes beyond hearing; body language and general demeanour should be taken into consideration. Apply some emotional intelligence: Different children have different personalities, so it is important that we adjust the way to interact with them to suit their ways. Some children respond bet-

ter through physical gestures while others respond through words and other means of expression. As much as freedom of expression is a means of demonstrating respect to children, we must also remember that lines must be drawn when we find them in situations that are not constructive. We must make them aware of what is right and wrong. But again, the way we do so and convey discipline and restrictions is very important. Applying these tips above should provide some headway in getting across to children and help drive a respectful relationship with them. Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Edo College alumni present awards to deserving students

he Lagos branch of Edo College old boys Association, ECOBA has presented nineteen prizes and awards to deserving students and teachers of Edo College, Benin City at the 2019 graduation and prize-giving ceremony of the institution. Speaking at the graduation ceremony for one hundred and forty-three students, Isaac Ehiozuwa, Edo state Head of Service, chairman of the occasion lauded the staff of the school for maintaining the excellent standard of the school. According to the Ehiozuwa, who was represented by Edwin Oaikhena Edionweme, a director of administration and supplies, a lot has been done by the school authorities, but a lot still needs to be done. He advised the staff to continue to ensure that the right discipline is inculcated in the students which would bring joy to every parent. “We are all aware of the steps the Edo state governor, Godwin Obaseki has been taking in the education sector. It is therefore good to key into the mission and vision of this administra@Businessdayng

tion,” he added. Reuben Osahon, National President of ECOBA, who thanked the old boys of the school for their numerous contributions to the development of their Alma-Mata, enjoined the new graduands to find the nearest branch wherever they find themselves and join the association. “The law states that after two years of graduation from the school without being expelled you are qualified. If you have benefited from the institution, it is your responsibility to contribute your quota to the development of the school that is 82 years old,” he noted. Osahon further said the laudable contributions of ECOBA to the overall development of Edo College cannot be over-emphasised, adding that the old boys have played key roles in activating the core values of the college. “Its physical environment inclusive, management is extremely grateful to the class set of 92 that built and commissioned a basketball court. By so doing, they have revived the spirit of sportsmanship amongst students,” he added.

Tuesday 23 July 2019

BUSINESS DAY

This is change management — without all the risk and upheaval

Much can be learnt about your organisation from the restrooms Why do we care so much about the most private room in the office? Pilita Clark

or the past two months I have stopped doing s o m e t h i n g at w o rk that I thought I would do for ever. I no longer flush the loo. Nor does anyone else in the swanky refurbished L ondon office building the Financial Times moved into in May. We can’t — there is no button to push. There isn’t even one of those sensors you can activate with the wave of a hand. Instead there is another type of detector device that craftily calculates when a flush is needed and delivers it with no apparent human intervention. This is just one newfangled feature in an office full of sitstand desks and kitchen taps that produce sparkling, still or boiled water. We also have those fancy Toto toilets with heated seats and water jets: we are owned by Japan’s Nikkei media company. But none of this has provoked as much discussion as the selfflushing nature of the loos. “They’ve got a mind of their own,” spluttered one colleague the other day, voicing a common concern about the difficulty of knowing exactly when the automatic sensor will kick in, and the lurking fear it might not. The hunt for the non-existent flush button has proved especially troublesome: one colleague pulled on a promising looking red cord and was appalled to discover it set off an alarm and flashing lights. Another pushed what she thought might be the right button and got a faceful of jet-

sprayed water. These are the sorts of things that only happen once and, as office dilemmas go, they are small. So why do we care so much? How can a simple bit of automation cause so much restroom unrest? I have always thought the office toilet was more important than one might think and last week I found some research that backs up my hunch. Some years ago, researchers at the University of California, Berkeley and Portland State University looked at what workers in 192 US offices said when they were asked to offer a general comment about their personal work area or building. As expected, basic creature comforts ranked highly. People frette d about unpredictable air-conditioning temperatures, boring cafeteria food, poor light, too few places to buy coffee, irksome noise and slow lifts. But the top issue mentioned was none of these. It was restrooms, specifically ones that were dirty, smelly, too far from desks, had low water flow or what the study called “issues with paper products”, such as overstuffed towel dispensers. The researchers admitted these comments might seem irrelevant or trivial. “But a restroom is a basic comfort and typically the most private place at work,” they said. “It appears to be both a magnet for complaints as well as a nexus for judging the thoughtfulness of architects and designers, maintenance personnel and the organisations that employ them.” T h i s ma k e s s e n s e t o m e, and perhaps to Donald Trump www.businessday.ng

as well. After the US president moved into the White House, the New York Times reported he loved to give tours of the building to visitors and had “an odd affinity for showing off bathrooms, including one he renovated near the Oval Office”. Our instinctive interest in such matters supports another theory I have that much can be learnt about an organisation from its restrooms. The loos in the swish building that green billionaire, Michael Bloomberg, built for his e p o ny m ou s m e d i a g rou p i n London use a vacuum system like those in an aircraft. Waste is whooshed away with air and far less water than a typical toilet requires. Down the road at Westminster, loos are w idely shared d e m o c ra t i c a l l y by M Ps a n d staffers alike, though a report last week on bullying in the House of Lords cited claims of a “feudal” culture where some lavatories were designated for peers’ use alone. The opulence of some restrooms can also prove tricky. As my colleague, Patrick Jenkins, reported last month, when the new chairman of Barclays bank, Nigel Higgins, formally took up his new role, he lost little time shrinking the grand corner office of his predecessor, John McFarlane. A meeting room was carved out of part of it and the future of its private bathroom looked grim until it emerged that the renovation could be “self-defeatingly costly”. All of which goes to show that when it comes to this most private of rooms, you can never lose sight of the bottom line.

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any leaders who sit at the top of large departments and organisations are hungry for innovation. But they are often uncertain where to start and it can be tempting to avoid the risk associated with change by finding all the reasons why it cannot happen. But Oliver Burrows, chief data officer at the Bank of England, is not one of those executives. He knew, as many leaders do, that the workload of his department would increase, but resources would not. As the post-2008 financial crisis regulatory environment demanded more data collection, greater detail and more analysis, his team of 150 risked being swamped. Just making people work harder was not a sustainable strategy so he needed to develop ways to cope with the increased demand. Like many large, traditional organisations, his department was hierarchical and complex. The easy assumption would have been that significant change would be difficult, political and perhaps more trouble than it was worth. But Mr Burrows was determined to try. “When I dug into the governance, I discovered that, at my level, we have quite a lot of freedom to decide how to achieve our objectives,” he says. “But it can be a social norm not to use it.” What Mr Burrows did not do was to map out a new department structure or summon his leadership team to a lavish off-site. Instead, he was excited by the idea of loosening the hierarchical culture of his department and developing small experiments that the whole team could try in order to create smarter ways of working. Mr Burrows put a call out to his team. This was an experiment in itself — and one that revealed far more appetite for innovation than he had expected. People were excited by inventing change, rather than having it thrust upon them. Together, the volunteers mapped out 12 experiments, some of which worked and some of which, Mr Burrows shrugs, did not. “I made the decision to open up

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They just tried them and they worked,” he says. “I’m really proud of that. Everyone was.” But the “big win” was sourcing strategy ideas from the bottom up @Businessdayng

our senior management meetings to anyone who wanted to sit in,” he says. “At first, lots turned up but over time they drifted off. Turns out, it wasn’t all that exciting.” Other experiments were more successful. “We also made the annual appraisal process a lot more participatory,” says Mr Burrows, “that worked really well.” Then there were “some technical coding projects” that Mr Burrows says no one in the management team would have thought of, or been brave enough to try. “They just tried them and they worked,” he says. “I’m really proud of that. Everyone was.” But the “big win” was sourcing strategy ideas from the bottom up. “In the past, people thought strategy was the preserve of management types — which meant not them. But there were just so many good ideas out there.” Without a massive, expensive, bold departmental redesign, Mr Burrows had liberated significant creativity among his team. He had found new ideas and new sources for ideas, producing change while conducting business as usual. Yet when I suggested a similar process to an executive vice-president at a FTSE 100 company, he looked at me aghast. Experiments? Asking people for help? In his eyes, that would be an expression of weakness, admitting that he did not have all the answers. But of course, he did not have all the answers and the hierarchy in his head stopped him from reaching into his organisation to find them. For years, management theorists and consultants have created such sturm und drang around change that some managers have become averse to the risk it involves. But “experiments” sound less risky. They can be low-cost and quick, and even those that do not deliver magnificent breakthroughs reveal aspects of the organisation that may have been previously misunderstood. Even more important, experiments signal an openness to change which may release fresher thinking. It is easy to fall back on the excuse that nothing can be done. In a separate instance, a friend came to me for advice about a colleague whose behaviour routinely breached ethical guidelines. Over time, this disturbed her and she considered leaving the company. So I challenged her: what had she done to improve the situation? She was a leader, surely she could try one experiment. When next I saw her, she had considered the possibilities and tried one. The result? She was promoted to chief operating officer. It struck me then, and it still strikes me now, how all leaders have power but very few know how to use it. People with ideas but no power lurk restless throughout organisations, but people with power and no ideas frequently sit atop of them. Nothing meaningful happens until the two dare to collaborate. Whoever takes the first step is the real leader.

Tuesday 23 July 2019

BUSINESS DAY

An executive education start up is aiming for unicorn status India-based Eruditus partners with leading business schools to offer online courses

ome of the best-known “unicorns” — privately held companies with a valuation of $1bn or more — to go public have been based in the US (including Slack and Uber) or China (such as Meituan). India may be next. Mumbai is home to Eruditus, a start-up that its co-founder hopes will earn unicorn status. Venture capitalist Sequoia India and Bertelsmann India Investments have invested in the company, which is shaking up executive education by delivering courses across the world in partnership with leading business schools. “The executive education market in regions outside the US and Europe have traditionally been underserved by elite US and European business schools,” says co-founder and director Ashwin Damera, who earned an MBA from Harvard Business School in 2005. He estimates that the online professional education market is worth $280bn globally, of which 15 per cent is for high-level executive education. Mr Damera believes there is potential in markets such as India, the Middle East, Africa, China and Latin America which have large populations of ambitious working professionals and fast-growing employers that can afford to help them develop. In 2018, Eruditus enrolled 10,000 students and wants to triple that figure this year. While many unicorns are “disrupters”, Eruditus says it is collaborative. It partners with schools, including Harvard, MIT Sloan, Columbia and Berkeley Haas, to deliver small private online courses (Spocs). This is in contrast to other start-ups, such as Coursera and edX, which offer free or low-cost massive open online courses (Moocs). The reputation of Moocs has been dented by low completion rates — one study found that these courses have a dropout rate of about 96 per cent. Eruditus claims an 80% completion rate, however, partly because enrolling on one of its programmes requires significant commitment. For example, the 15-week online certificate in leadership effectiveness, run with Insead, costs about $3,500.

Ashwin Damera, co-founder of Edtech startup Eruditus, sees huge potential for growth in the executive education markets of India, the Middle East, Africa, China and Latin America

T h e e i g h t- m o n t h e x e c u tive course in management, offered with Columbia, costs $33,000, and the application fees alone are as much as $1,800. Mr Damera believes the partnerships between start-ups and schools are symbiotic. While universities “are fantastic at research and teaching”, he says, “Edtech providers provide complementar y capabilities such as marketing and enrolment, global delivery models and technology investments.” But Mr Damera also cautions business schools against complacency. They must develop their own online capabilities, he adds, to serve other niche audiences outside of executive education. Eruditus is not alone in collaborating with schools to design programmes for senior executives. GetSmarter, which claims completion rates of 90 per cent, has partnered with Oxford university’s Saïd Business School to launch short programmes in fintech, blockchain, digital marketing, artificial intelligence (AI) and algorithmic trading. www.businessday.ng

It also partners with the Graduate School of Business at the University of Cape Town on a values-based leadership programme. “The opportunity is vast and is only going to get bigger, as we find more people seeking to re-

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We have a slightly different pedagogical model, but with the same demands in terms of quality and excellen

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train or reskill as they go through their careers,” says Andrew Crisp, co-founder of education marketing specialists Carrington Crisp. But, he warns, edtech startups pose a risk to schools as they can deliver courses across the world, without incurring costs such as buildings and faculty salaries. “Business schools still have an advantage in terms of talent, knowledge creation and pedagogy,” he says. But a lot of professors will freelance for other organisations, he adds, so the “people advantage” is smaller than it appears. The executive education market is particularly attractive to start-ups with backgrounds in delivering technology prog ra m m e s : o f f e r i n g c o u r s e s around digital disruption and transformation is a stepping stone to more general business, management and human skills. The origins of French start-up OpenClassrooms, for example, is in Le site du Zéro, a website that taught young people programming languages and coding. It now offers master’s level programmes in entrepreneurship, strategy, product management @Businessdayng

and digital marketing. OpenClassrooms partners with schools, such as HEC and Paris Business School, as well as employers. This summer it is working with Microsoft on an AI master’s level certificate that will train 1,000 students for AI-related jobs in the UK, US and France. “Our programmes are online but all geared around developing actual competence,” explains cofounder and chief executive Pierre Dubuc. The company uses projectbased learning and each student is supported by a mentor who is “a practising expert”. Mr Dubuc even goes so far as to describe OpenClassrooms as a higher education institution. “We have a slightly different pedagogical model, but with the same demands in terms of quality and excellence.” This reflects broader moves towards corporate learning in the executive education market. London-based Fuse Universal works with companies, such as EY, Spotify and Vodafone. It is taking a slightly different tack, delivering bite-sized training to employees on their smartphones and tablets. Mooc providers, such as Coursera, Udacity and edX, are also evolving their business models to focus more on corporate learning, while LinkedIn announced that content from other platforms, including Harvard Business Publishing, will be available on the social network’s learning platform. Tanya Staples, vice-president of learning content at LinkedIn says the social network’s platform “complements higher education with a diverse range of courses to help people throughout their career journey”. Neil Bearden, an associate professor at Insead, was an early investor in Eruditus. He says edtech can help schools and others access people who otherwise would be hard to reach. He also thinks there is “tremendous opportunity” for one-on-one coaching. “There are a lot of executives . . . who need more than the latest framework or a refresher on some topic matter,” says Prof Bearden. “They need specific help with their idea or business model. Someone will find a way to deliver coaching in a way that scales well, and make a lot of money.”

Tuesday 23 July 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

POLICY

Nigeria’s plan to sell flared gas gathers steam ISAAC ANYAOGU & STEPHEN ONYEKWELU

igeria’s gas flare commercialisation programme is steadily progressing towards completion as two hundred and five applications have been deemed qualified to participate in the next stage of the programme where they would submit proposals. Folasade Yemi-Esan, permanent secretary, Ministry of Petroleum Resources, conveyed the Ministry’s approval in her supervisory capacity over the affairs of the Ministry following the successful completion of the evaluation exercise which was carried out from 17th - 25th June, 2019 in Lagos by the NGFCP Proposal Evaluation Committee (PEC). This means that the applicants have only two more hurdles to surmount - send in proposals and satisfy an evaluation committee of the viability of their projects before

Justice O. Derefaka, Program Manager, Nigerian Gas Flare Commercialization Programme (NGFCP), Ministry of Petroleum Resources (MPR).

selection as preferred bidders- before being awarded the right to sell

gas, oil companies routinely flare in the Niger Delta. Justice Derefaka, Nigerian Gas Flare Commercialization Programme (NGFCP, earlier said the Federal Government has approved the reconstitution of the ministerial steering committee (SteerCo) of the Nigerian Gas Flare Commercialization Programme (NGFCP) in the Ministry of Petroleum Resources (MPR). The SteerCo was expanded to accommodate other agencies of Government as well as MPR as the NGFCP moves into the implementation phase. The new agencies are - The Ministry of Finance, Ministry of Environment and the Petroleum Technology Development Fund

(PTDF). Premised on that, the committee has now changed from Ministerial to Inter-Ministerial Steering Committee. Over 850 interested parties registered their interest in the NGFCP while 238 Applicants submitted Statement of Qualification (SOQs) in response to the Request for Qualification (RfQ) published by the Department of Petroleum Resources (DPR). A total of 238 SOQ documents were evaluated in accordance with the provisions of applicable Regulations, Guidelines, Standard DPR Practices for bid evaluation, and were adjudged either a ‘Pass’ or ‘Fail’ status. Following a rigorous exercise conducted in line with established protocol and using the Electronic Evaluation Tool (EET), 205 Applicants emerged successful (attaining a ‘pass status’) while the remaining 33 Applicants did not meet the minimum requirements and thus attained ‘fail status One hundred and seventy eight sites across the Niger Delta currently flare about 888 million cubic feet per day of gas, a volume that could generate 5,000 megawatts of electricity, doubling Nigeria’s power supply and at $3 per million British thermal units, generating revenues of $800 million annually. The Nigerian Gas Flare Commercialisation Programme (NGFCP) is organising the exercise, conducted under the auspices of the Ministry of Petroleum Resources, and is seeking to inspire 80 separate projects to tap the 888 million cubic feet a day of gas currently wasted. Approved in 2016 by the Fed-

eral Government, the NGFCP seeks to achieve the government’s target of eliminating gas flaring in the Niger Delta by 2020. The Petroleum Act of 1969 and the Flare Gas (Prevention of Waste and Pollution) Regulations 2018, signed in July 2018, provide the basis for the NGFCP. The Petroleum Act empowers the Federal Government to take gas at the flare-free of cost. According to the NGFCP, Nigeria loses approximately $1 billion of revenue through gas flaring due to its inability to capture and sell flared gas in the country. So, the programme seeks to stop this waste while creating value to the local economy by creating new 300,000 jobs, producing 600,000 MT of liquefied petroleum gas (LPG) per year and generating 2.5GW of power from new and existing Independent Power Plants (IPPs). But Nigeria will need $3.5 billion worth of inward investments into gas capture technologies to achieve its flare gas commercialisation targets by 2020. Under the programme, investors reach an agreement with the producer of the field, build a one-meter flare connector which traps the gas and is used for various purposes either as a fertiliser plant or to generate power for the community. AN NGCFP Qualified Applicants’ Workshop has been scheduled for 19 August to impart awareness of the regulatory frameworks, incentives and best practices demanded by the government and to test “the appetites” of qualified applicants, according to Andrew Agi, NGFCP director in a letter to a successful applicant.

INVESTMENT

Singaporean company seals Nigeria FPSO deal worth $902m on Anyala, Madu oil fields DIPO OLADEHINDE

eppel Offshore & Marine, A Singaporean shipping company has secured a contract to handle the progress amendment and upgrading of a Floating Production Storage and Offloading (FPSO) vessel bound for work at Anyala and Madu discoveries in Oil Mining Leases (OML) 83 and 85. According to information published on Keppel Offshore & Marine website, under a deal with Malaysia based Yinson, Keppel will work to upgrade and modify the Allan FPSO, which will be deployed in the Anyala and Madu fields, offshore Nigeria for Lagos-based independent oil firm First Exploration and Petroleum Development Co Ltd. The bareboat charter deal is also accompanied by operations and maintenance (O&M) deal, with the total value of both deals up to

$901.79 million. The plan for Yinson is scheduled to commence in 3Q 2019 with delivery expected in 1Q 2020. Upon completion, the FPSO will have a storage capacity of 700,000 barrels of oil and a processing capacity of 60,000 barrels of oil per day. It will be deployed in the Anyala and Madu fields, offshore Nigeria for First E&P. CEO of Keppel O&M, Chris Ong said the Singapore based firm is pleased to secure these contracts from repeat customers as it reflects the market’s confidence in Keppel O&M’s customised solutions for newbuild vessels and FPSO conversions. “This is the third newbuild dredger for Van Oord and the third FPSO project for Yinson. We are able to leverage the experience of working closely with our customers as well as our engineering and construction expertise to further improve productivity on their prowww.businessday.ng

jects,” CEO of Keppel O&M said on the company website. Eirik Barclay, CEO of Yinson Offshore Production, said, “We have chosen to partner with Keppel Shipyard for this fast-track upgrade project just as the market is showing a positive trend with an increasing number of both project awards

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and tenders. We very much look forward to working with Keppel on this project and are confident that they, once again, can provide a highquality, safe and on-time delivery to Yinson.” Keppel’s scope of work includes refurbishment and life extension works, fabrication and installation @Businessdayng

of a new riser balcony, spread mooring system and helideck, as well as modification of the vessel’s topsides and marine systems. “The above contracts are not expected to have a material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year,” Keppel said. First E&P, established in 2011, owns 40 percent of the rights to Anyala and Madu fields with the remaining 60 percent being help by Nigeria National Petroleum Corporation (NNPC) which were acquired from Chevron Nigeria Limited (CNL). OML 83 covers and aerial extent of 125 sq. km, with Anyala field as the only discovery within the acreage while Madu field which is the main discovery within OML 85, has an aerial extent of 521sq.km. Anyala field is located at a water depth of 55m, about 45km off the coast of Bayelsa State.

Tuesday 23 July 2019

BUSINESS DAY

ENERGY INTELLIGENCE FINANCING

Gasco Marine to raise N40 billion financing for expansion ISAAC ANYAOGU

asco Marine will soon open talks with lenders to secure N40billion through an infrastructure bond to expand into gas transportation and the development of a mini liquefied natural gas plant, the company’s managing director has said. The company which recently launched a N2 billion Compressed Natural Gas (CNG) plant in OkeSokori, Abeokuta, Ogun State to meet the demand of consumers in Ogun, Lagos, Oyo, and other southwest states, is deepening investments in the gas space after successfully delivering the plant 15 months from the date it started construction. “There are so many opportunities in the gas space and our target is to raise N50billion through the infrastructure bond. The first drawdown was N10 billion and it used to build our CNG plant in Abeokuta and to expand our facilities here in Marina,” Bukola Badejo-Okusanya, the company’s managing director said

Bukola Badejo-Okusanya in an interview with BusinessDay. Okusanya said the company’s next phase of growth is expanding its CNG business, running a gas transportation business to take gas to industries outside the South West region. It is also planning the

construction of a mini LNG plant. Gasco Marine said it will fund some of its future projects the same it funded its previous project. It raised an infrastructure bond from pension funds after securing a sovereign guarantee from Infra Credit.

STRATEGY

pipeline. It is targeting manufacturing companies within the Lagos metropolis and free trade zones on the outskirts of Ogun State. Okusanya said that while Gasco Marine is not just solely a CNG company, it will expand its ability its virtual pipeline capacity to take gas outside the southwest region. “We truck the gas from our station through our compression plants to these locations to provide power for their operations or use for feedstock for their heat manufacturing process, ceramics, confectionary and fast food goods or as fuel but we are planning to do much more than that soon.” Gas companies are finding opportunities in Nigeria’s epileptic power supply to provide a more efficient and cost-effective power to industries. According to the National Bureau of Statistics (NBS), the NNPC spent N3.8 trillion or $12.4 billion importing petroleum products in 2018 and gas companies want a cut in the pie by displacing diesel with gas as the predominant plant feedstock.

MARKET

Value appreciation for shareholders key to LEKOIL’s 2019 strategy - CEO

Trexm flaunts flare management tool at Nigeria Oil and Gas conference 2019 IFEOMA OKEKE

ISAAC ANYAOGU

frica focused oil and gas exploration and production company, LEKOIL has indicated that value appreciation for shareholders is central to its 2019 strategy. “The priority for 2019 is to grow production volumes at Otakikpo through Phase Two development (subject to funding) to reach gross volumes of 15,000 to 20,000 bopd. The first step has already occurred, with 3D seismic data acquisition and interpretation now completed,” Olalekan Akinyanmi, LEKOIL chief executive said in a note that accompanied its 2018 financial report. “The next year [2019] should therefore provide key catalysts for value appreciation for shareholders as we move forward in building a leading Africa-focused exploration and production business,” the CEO said in the note. LEKOIL was founded in 2010 by a group of leading professionals with extensive experience in the international upstream oil and gas industry as well as in global fund management and investment banking. Working with partners, government and regulatory agencies, the company has sustained production

“We think that if we are able to meet our targets and deliver on the numbers we promise them we think that that second phase will be much easier for them to invest in our business,” said Okusanya. The company plans to kick start these projects in the next three to five years but banks on its efficient project management system to deliver these projects ahead of schedule. Gasco Marine secures its feedstock from the Nigerian Gas Marketing Company helped by its strategic location. “We get gas directly from the Nigerian Gas Marketing company. We are located about 300meters from the Abeokuta City Gates. It is the main receiving facility in Ogun state. It is the location of NGC station that sends gas into Lagos, Agbara and some other areas. The advantage this has is that, we are the last to feel low pressure,” Okusanya said. The company hopes to outdo smaller companies who lack the required gas infrastructure to take the feedstock directly from the gas

Olalekan Akinyanmi, LEKOIL chief executive

levels and continues an aggressive investment campaign which is projected to result in increased production and profitability in the short to medium term. “We also continue to advance toward the start of the appraisal drilling programme on Ogo in OPL 310. We will work with our joint venture partner, Optimum to negotiate agreements that will allow us to make progress on the block, after securing all relevant regulatory extensions and approvals,’ Akinyanmi said. Apart from its interests in OML www.businessday.ng

310, the company and its partners finalized Technical Evaluation on OPL 325 in January 2018. Its consultants, Lumina, identified and reported on 11 prospects and leads which were estimated to contain potential gross aggregate Oil-in-Place volumes of over 5,700 mmbbls (unrisked, Best Estimate case). After finalising terms for a Production Sharing Contract on the block, LEKOIL intends to farmdown a portion of its 62 per cent working interest following a detailed prospect/lead risking study.

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REXM Oil & Gas Services Nigeria Limited, an oil services company says its Flare Care Programme, an initiative launched in partnership with Baker Hughes General Electric (BHGE) will help customers control flare efficiency using an advanced process control algorithm. The company exhibited the tool at the 18th edition of the Nigeria Oil & Gas Conference and Exhibition, which held at the International Conference Centre, Abuja, Nigeria from July 1st to 4th, 2018. Commenting on the exhibition, Bolutife Odusanya, CEO TREXM Oil and Gas Services Limited, reiterated that TREXM remains committed to delivering innovative, sustainable and cost-effective solutions to the satisfaction of their client’s in the Oil & Gas, Manufacturing, Telecommunications and Power industries. He said, “We are proud to be a part of this admirable initiative targeted at prompting the growth of the Nigerian Oil and Gas Industry. This is our first time exhibiting at the Nigeria Oil and Gas Conference and Exhibition and we are delighted to partner with the organisers of the conference and exhibitions to showcase our products and services to conference attendees and visitors.” “It is noteworthy that TREXM has remained consistent in providing exceptional services, using creative solution driven by professionalism, @Businessdayng

safety, ethical standards and integrity. With our team of highly trained professional and robust offerings it is our vision to be a world class energy service company and our clients client’s global and locally trusted partner,” he added. TREXM joined over 250 other exhibitors from the Oil & Gas, Manufacturing and Energy sector to showcase its vast service offering and products to the over 6500 visitors who attended the conference and exhibition themed: Driving Nigeria’s Oil & Gas Industry Towards Sustained Economic Development and Growth. In a bid to offer the best products and services to clients, TREXM has over the years, entered into strategic partnerships with several world class service delivery companies and original equipment makers (OEMs) most recently partnering up with Baker Hughes General Electric (BHGE), which saw the launch of the innovative Flare Care Programme in 2018. TREXM commenced operations in the last decade, setting up its operations in Nigeria and USA and has continued providing leading professional services in Electrical & Control and Instrumentation Services, Metering & Measurement Solutions, Systems Integration & Automation, Wellhead Solutions, Power Engineering Systems, Cathodic Protection, Inspection & Testing Services, Specialty Engineering Product Units, Quality Assurance Services and Operations & Maintenance Services.

Tuesday 23 July 2019

BUSINESS DAY

OFFGRID BUSINESS MARKET

Renewable energy growth in Nigeria is creating jobs DIPO OLADEHINDE

eyond pursuing climate goals, many governments are prioritizing renewable energy as a driver of economic growth through creation of job opportunities a scenario that holds much lesson for Nigeria currently struggling with a rising unemployment rate. In highly populated countries like China, Brazil, United States and India the rise of decentralized renewable energy as a solution to electrification problem is also bringing with it a solution to high unemployment. As the global energy transformation continues to gain momentum, this employment dimension ensures socio-economic sustainability and provides yet another reason for countries to commit to renewables a situation Africa’s largest economy has being struggling with rising unemployment in the past four years can learn from. CHINA According to a 2019 report by International Renewable Energy Agency (IRENA) China remains the clear leader in renewable energy employment as 39 percent of renewable energy jobs around the world are in china with a total of 4.1 million jobs created as at first Quarter 2019. China’s 2018 wind employment is estimated at 510 000 jobs, roughly the level of the

previous year while solar Photovoltaic (PV) generated 2.2 million jobs. BRAZIL In Brazil, the biofuels sector remains the most important renewable energy employer generating over 832,000 jobs. IRENA’s employment factor calculations suggest that Brazil presently has close to 15,600 jobs in solar PV, mostly in construction and

installation while wind energy has generated 34,000 jobs. United States In the United States, the liquid biofuels, solar, and wind industries are the largestemployersintherenewableenergy field. IRENA’s 2019 report reveals biofuels has generated 311,000 jobs while solar and wind energy has generated 242,000 and 114,000 jobs respectively.

India India’s employment in grid-connected solar PV, as estimated by IRENA using employment factors, increased to 115 000 jobs in 2018, a gain of more than 20 000 while total jobs created by renewable energy stood at 119,000 jobs. “Jobs in off-grid solar applications cannot be calculated with precision but may well double total solar employ-

ment,” IRENA’s report said about India. Globally, IRENA said renewable energy sector employed 11 million people in 2018 compared with 10.3 million in 2017 although employment remains concentrated in a handful of countries, with China, Brazil, the United States, India and members of the European Union in the lead while Asian countries’ share remained at 60percent of the global total. “Several factors including national deployment and industrial policies, changes in the geographic footprint of supply chains and in trade patterns, and industry consolidation trends — shape how and where jobs are created,” IRENA’s 2019 report noted. Nonetheless, IRENA’s report noted that increasingly diverse geographic footprint of energy-generation capacities and, to a lesser degree, assembly and manufacturing plants, has created jobs in a rising number of countries. Also, IRENA’s report acknowledged that rising off-grid solar sales are translating into growing numbers of jobs in the context of expanding energy access and spurring economic activities in previously isolated communities. With Nigeria currently struggling with over 20.9 million unemployed people, stakeholders says with due attention and commitment by all concerned in Nigeria energy sector, renewable energy will be creating over a million jobs in no distance future.

Kenya’s $775m wind project is Africa’s largest, teaches Nigeria how to be ambitious STEPHEN ONYEKWELU

enya, East Africa largest economy has launched Africa’s biggest wind power plant, a project aimed at reducing electricity costs and dependence on fossil fuels, nudging the nation to meet an ambitious goal of 100 percent green energy next year. The sprawling wind farm of 365 turbines on the shores of Lake Turkana in northern Kenya was designed to boost electricity supply by 13 percent, giving more Kenyans access at a lower cost, President Uhuru Kenyatta said at its launch last Friday, according to an Aljazeera report. In Nigeria however, Research and Development (R & D) tailored towards Wind Energy Technology (WET) have been few, slow and not encouraging. The available data have not also been adequately employed to develop physical models that would translate the huge resources of wind to power. Until recently, what was available was small data system pointing to the availability of wind as a source of potential electricity production within the nation. Basic researches into the act of tapping wind for electricity have been non-existent

within the country. This is because, such practices involve funding and such funds have not been available anywhere for access by wind energy researchers. More so, research tailored towards development of low cost materials for wind turbines and other renewable energy technology applications should begin. This will invariably eliminate the huge initial

capital involved in starting Wind energy business and also further reduce the operating and management cost of the technology. But East Africa’s most industrialised country has made great strides in renewable energy in recent years and is considered one of the few African nations making progress toward clean power.

ANALYSTS: Isaac Anyaogu (Team Lead), Stephen Onyekwelu, Dipo Oladehinde

About 70 percent of the nation’s electricity comes from renewable sources such as hydropower and geothermal - more than three times the global average. “Today, we again raised the bar for the continent as we unveil Africa’s single largest wind farm,” Kenyatta said. But one in four Kenyans - mostly

in rural areas - does not have access to electricity. Those with power face high costs and frequent blackouts due to unreliable supply. Nigeria’s electricity access story is not better than Kenya’s. About 80 million Nigerians living in 8000 villages across the country lack access to electricity, a World Bank report had stated. Mac Cosgrove-Davies, the World Bank Global Lead, Energy Access, had said this during the opening ceremony of the “Fourth Mini Grid Action Learning Event: titled, ‘Up scaling Mini Grids for Low-Cost and Timely Access to Electricity in Abuja last month. “Kenya is without doubt on course to be a global leader in renewable energy.” Kenyatta, who has announced plans to move the country to 100 percent green energy by 2020, said power from the $775 million wind farm would help the government reach its goals of ensuring housing, healthcare, jobs and food security to all citizens. “Today marks an important milestone in the country’s steady march towards achieving self-sufficiency in power production,” said Mugo Kibati, chairman of the Lake Turkana Wind Power, a private consortium that runs the plant at the launch.

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Tuesday 23 July 2019

BUSINESS DAY

BDTECH

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Africa’s youth population to drive strong mobile subscriber numbers ...Sub-Saharan Africa’s mobile economy valued at over $150 billion in 2018 Stories by Jumoke Akiyode Lawanson

ub-Saharan Africa will remain the world’s fastestgrowing mobile region over the coming years as millions of young African consumers become mobile users for the first time, according to a new GSMA study. It reveals that more than 160 million new unique mobile subscribers will be added across the region by 2025, bringing the total to 623 million, representing around half of the region’s population, up from 456 million (44 per cent) in 2018. Subscriber additions will be concentrated in high-growth markets such as Nigeria and Ethiopia, the report says. “A new generation of youthful ‘digital natives’ across Sub-Saharan Africa are set to fuel customer growth and drive adoption of new

mobile services that are empowering lives and transforming businesses,” said Akinwale Goodluck, Head of Sub-Saharan Africa, GSMA. “With mobile technology at the heart of

Sub-Saharan Africa’s digital journey, it is essential for policymakers in the region to implement policies and best practices that ensure sustainable growth in the mobile industry,

and enable the transition to nextgeneration mobile networks.” The study calculates that the mobile ecosystem across Sub-Saharan Africa generated almost $150 billion in economic value last year – equivalent to 8.6 per cent of the region’s GDP. It is forecast to generate almost $185 billion (9.1 per cent of GDP) by 2023. The 2019 Sub-Saharan Africa edition of the GSMA’s Mobile Economy report series is being published at the ‘Mobile 360 – Africa’ event being held this week in Kigali, Rwanda. The new report also reveals that: • Around 239 million people, equivalent to 23 per cent of the region’s population, use the mobile internet on a regular basis. • Smartphones accounted for 39 per cent of mobile connections in Sub-Saharan Africa in 2018, forecast to increase to two thirds of connections by 2025. • 3G will overtake 2G to become

the leading mobile technology in Sub-Saharan Africa this year. • 4G will account for almost one in four connections by 2025. However, 4G uptake is being dampened in some markets by the high cost of 4G devices and delays in assigning 4G spectrum. • The region’s mobile operators are increasing investment in their networks and are expected to spend $60 billion (capex) on network infrastructure and services between 2018 and 2025 – almost a fifth of this total being invested in new 5G networks. • Sub-Saharan Africa’s mobile ecosystem supports around 3.5 million jobs, directly and indirectly, and last year contributed almost $15.6 billion to the funding of the public sector through consumer and operator taxes. The new report ‘The Mobile Economy, Sub-Saharan Africa 2019’ is authored by GSMA Intelligence, the research arm of the GSMA.

in what the customers’ needs are. “Cowrywise was developed to help build savings to achieve specific goals. Savings plans have been streamlined based on data sites into education, emergency etc. we have realised that people actually want to save for the future, but they don’t have a plan to guide them.” Laurin Hainy, CEO and cofounder, Fairmoney, who spoke during the panel session, said; “Fintechs like Fairmoney were created to bridge the gap in financial service provision and give customers value for money.” On what banks are doing to encourage financial health, Olusegun Adeniyi, head of Africa Fintech Foundry, Access Bank Plc, said banks are definitely not laggard in that space. “There is a growth curve that needs to happen in the banking

mindset with regards to things like mortgage. From a technology mindset, we need to start asking whether there will be need for mortgages in the next 10- 20 years with the way the technology industry has expanded. We should focus more on innovation that will accelerate living beyond the challenges of not being able to buy a house. As banks, we don’t want to be playing catch up at that time, so we are positioning ourselves to be providers of customers’ future needs,” Adeniyi said. Flourish is a venture firm that is focused on backing entrepreneurs whose innovations are helping people across the globe to capture economic opportunity and achieve financial health. It has invested in over 40 countries across the globe, including the popular Pagatech and Flutterwave, a merchant acceptance payment processor.

Fintech players discuss need to focus on financial health

igeria’s biggest Financial Technology players say that there need to move from financial inclusion to focusing more of financial health for economic growth. Discussions at a Fintech gathering hosted by Flourish Ventures, the financial inclusion investment arm of Omidyar Network, bordered on the disruptions caused by fintech start-ups and move by fintechs to re-bundle to enhance commercial viability. Speaking at the event, Arjuna Costa, managing partner at Flourish said that new trends are being developed and the motive of financial services have changed from just being able to drive financial inclusion and that the idea that Big Tech is moving into financial services is already here and not in the future. “One of the trends we are no-

ticing around the world is that finance is becoming invisible and embedded into or day to day life and activities. One of the most powerful illustration of this trend is chat applications powering payment. The biggest payment company in the world is ‘WeChat’, a chat application which has more than 900 million monthly active users,” he said. According to him, existing social media platforms have been digitised to include financial service provision. “WhatsApp has launched a payment application in China and India. A research was carried out in Kenya last year, to find that people were using the WhatsApp application before and after making an Mpesa payment, so it makes sense. “This idea of finance becoming invisible is not just limited to pay-

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ments. Metromile which is an auto insurance company in the US leverages drivers existing engagement with an Uber app to provide them real-time value driven auto insurance. It figures out, through the Uber app, when the drivers are not covered by commercial insurance i.e, when they don’t have a passenger and automatically switches on the driver’s app and this happens seamlessly,” Costa said. It is evident that adding financial services supports the core business of social media, e-commerce and other platforms. Facebook launched Libra and it makes it easier for them to start as commerce on the Facebook platform; amazon has $3billion in credit to its small merchants across the globe. Also speaking, Razaq Ahmed, CEO and co-founder of Cowrywise said financial health is really rooted

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Tuesday 23 July 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

SAS announces $1 billion investment in Artificial Intelligence

…educational programs, R&D innovation to help boost Nigerian businesses Stories by JUMOKE AKIYODE-LAWANSON

AS, driving the future of analytics, is investing $1 billion in Artificial Intelligence (AI) over the next three years through software innovation, education, expert services and more. The commitment builds on SAS’ already strong foundation in AI which includes advanced analytics, machine learning, deep learning, natural language processing (NLP) and computer vision. Educational programs and expert services will equip business leaders and data scientists for the future of AI, with the technology, skills and support they need to transform their organisations. “At SAS, we remain dedicated to our customers and their success, and this investment is another example of that commitment,” said Francis Makai, general manager of SAS in Nigeria. “With our innovative capabilities in AI, SAS helps businesses deter damaging fraud, fight deadly disease, better manage risk, provide exemplary service to cus-

tomers and citizens, and much more.” The $1 billion investment in AI will focus on three main areas: Research and Development (R&D) innovation where SAS continues to build on the success of its global AI efforts; education initiatives addressing customer needs to better understand and benefit from AI; and expert services to optimise cus-

tomer return on AI projects. R&D Innovation SAS is investing in R&D innovation in all core areas of AI, with a special focus on making it easy for users with different skill levels to benefit – from business experts to data engineers to data scientists. SAS is embedding AI capabilities into the SAS Platform and solutions for

data management, customer intelligence, fraud & security intelligence and risk management, as well as applications for industries including financial services, government, health care, manufacturing and retail. SAS continues to partner with innovative companies and leading technology providers like Accenture, Cisco, Deloitte,

L-R: Jungjune Yoon; general manager, air conditioning & energy solution, Sunghak Chung; assistant product manager, air conditioning & energy solution, Saheed Adeyemi; sales manager, air conditioning & energy solution and Vijay Bakshi; air conditioning & energy solution, all of LG Electronics West African operations at the ELANEXPO held at Landmark event centre, Lagos, recently.

LG showcases latest commercial air conditioning products at Clima HVAC expo 2019

G Electronics (LG) showcased its wide range of heating, ventilation and air conditioning systems at the Mega Clima HVAC Exhibition in Lagos recently. The expo which is designed to bring together leading brands in the technology industry as well as developers, engineers, architects, contractors, financial institutions and other key stakeholders to showcase their latest products, had LG demonstrating its inverter technology driven and energy saving products which address the unique power challenges in Nigeria. This year’s international air conditioning, refrigeration exhibition which held from 11th to 13th of July 2019, marks the 3rd one and has offered an unrivalled opportunity for companies to further make

public statements in terms of their positioning in the industry and the new offering they will be bringing to the table which LG has leveraged on the platform to connect with new suppliers, customers, business partners. Since the introduction of its first-generation Multi V plus to its fifth generation Multi V 5 with maximum capacity 26HP, LG has always been ahead of its competitors with its cutting-edge innovation. The flagship product in LG’s state-of-the-art air-source VRF systems, the Multi V 5, represents the next generation in the popular LG Multi V family. Speaking at the exhibition, Jungjune Yoon, general manager- air solutions division, LG Electronics West Africa operations said “LG’s commercial, light commercial and residential systems are making www.businessday.ng

major inroads in Nigeria and many countries across the Middle East and Africa, where demand continues to grow for high-performance HVAC technology. LG is dedicated to creating sustainable innovations and is proud to lead the way with our industryleading VRF technology. “LG Electronics Air Solution Business Unit is a provider of total HVAC and energy solution offering a broad portfolio of air conditioner products that are compatible with any building anywhere, including compact residences, towering skyscrapers, massive factories and giant concert halls. LG also supplies even the largest buildings and industrial facilities with central air conditioning systems such as VRF and efficient control solutions”, Yoon averred. Saheed Adeyemi, sales

manager for air conditioning, LG Electronics West Africa said LG as an innovation first company is solving Nigeria’s problems with its latest innovative products. “The dual cool air conditioner can work with a generator as low as 0.9kva. I think that is a very good one from LG considering Nigeria’s non-stable power issues.” One of its latest addition, LG Multi V S has received a number of noteworthy industry accolades, most recently being named “Green Innovation of the Year” by Green Builder as well as a TecHome Brilliance Award honoree. LG Multi V S is a compact, 5-ton heat recovery unit that operates single-phase power, designed to provide excellent energy efficiency and the versatility of simultaneous heating and cooling.

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Intel and NVIDIA. This work brings the latest advances and practices in AI and machine learning to customers, and ensures SAS AI technologies perform optimally in customers’ hardware and cloud environments. SciSports, an innovative Dutch sports-analytics startup, is applying computer vision from SAS to data streaming from soccer, or football, matches. SAS AI technology running on NVIDIA GPUs delivers ingame insights to coaches and managers. By capturing and analyzing this and other data, football clubs can improve many aspects of “the beautiful game,” including in-game strategy, player recruitment and the fan experience. “The reason SAS tops the revenue list for advanced analytics for the last five years is that SAS solutions are built on a foundation of machine learning and deep knowledge of analytics. These are part of SAS’ DNA,” said Dave Schubmehl, research director for Artificial Intelligence at IDC. “Combining SAS’ knowledge and technology with its continued push to

innovate in computer vison, NLP and deep learning will drive further adoption of AI across multiple industries. And it will help companies interested in AI – whether early in their AI and analytics life cycle or more mature.” Customer Education and Development Initiatives Customer education and development initiatives such as the new SAS AI Accelerator Program will focus on helping organizations and professionals get AI-ready at any level. Resources and talent are also part of the investment. SAS will augment its AI expertise through additional resources in professional services, centers of excellence, education and R&D. AI and Analytics in action As the latest addition to the SAS smart campus project, SAS’ newest headquarters building, a 420,000 sq. ft. tower which hosts the new global education center, uses the latest innovations in AI and machine learning to connect performance with business results.

Inlaks to launch “thehatch” Innovation Lab with a Hackathon

n a bid to bring innovative solutions to the Fintech industry and pave the way for young technology entrepreneurs, leading system integrator in Sub-Saharan Africa, Inlaks is set to birth an innovation lab called thehatch. The launch of thehatch supports the vision of Inlaks to expand into a new phase termed “Inlaks 2.0”. Inlaks says that the innovation lab is set to build, scale and provide a nurturing environment for Fintech Start-ups by ensuring a level playing field for domestic technological ideas. This laudable establishment will guarantee an easy penetration into the Fintech market with ample resources, training, finances and collaborative spheres to provide best in class Fintech solutions. The launch of thehatch innovative lab will begin @Businessdayng

with a Hackathon challenge themed, “Shaping the future of Insurance”, geared towards the development of technologically enabled solutions that solve major problems in the insurance sector. The event is expected to gather 100 participants consisting of 20 teams of innovators to develop business and technical innovative solutions for the Insurance industry. Femi Adeoti, managing director, Africa operations, Inlaks, Femi expatiated on the event noting that “Most tech-startups do not have the experience to reach the customers that would buy into their solutions. It is therefore our goal to hand-hold these startups and take them to greater heights while interfacing with some of our global clients and partners, and thereby take advantage of the opportunities that are possible.”

Tuesday 23 July 2019

BUSINESS DAY

property&lifestyle

How use of blockchain for land registry can unlock $900bn dead capital in real estate Endurance Okafor

esides finance, property registration is a major challenge for real estate investors in Nigeria. Getting land documentation or titling in the country is very difficult, given the rigorous process, bureaucracy, corruption and the high cost of acquiring the title. As a result, PwC recommends that Nigeria can use block-based land titling initiative to unlock the estimated $900 billion worth of dead capital in residential real estate and agricultural land. Dead capital is described as assets that cannot be converted to economic capital. “Approximately 95 percent of household dwellings in Nigeria have no title or a contestable title,” PWC said in its recently released report, adding that in Lagos, for example, it takes an average of 12 procedures and 105 days to register a property or as long as two years. This triggers the costing up to 11.1 percent of the property value. “This process is made difficult due to the low quality of land administration in a city like Lagos. This does not en-

courage formal declaration of assets and discourages people from registering their properties,” the professional services firm noted. According to the Londonbased firm, Nigeria ranks 149 on the Ease of obtaining Construction Permit and requires 17 procedures, 118 days, and 27.5 percent of property value, a factor that encourages more informal construction of properties and increases risks in the real estate sector. About 97 percent of lands in Lagos are unregistered. This makes it difficult for banks to validate claims to land or for land occupants to use their land to create wealth. This is one of the reasons the country with the highest population in Africa has more than 17 million units housing deficit. “The cost of building a house is the same, whether you are building in V.I or Ikoyi, but it is the land value that drives the cost of properties high,” Adekunle Abdul, Managing Director, Metro & Castles Homes, a real estate development company told BusinessDay in recent interview. A further probe into the report revealed that through the use of the Block chain-based titling initiative, the distributed public ledger database

Israel Odubola

system can bring tremendous potential applications to property rights and recording of property titles for those who operate in the informal sector. This new technology will also give communities the opportunity to bypass many other private services which assist parties in the West to sell and track titles and deeds. These include solicitors and notaries, appraisers, insurance firms, mortgage brokers and banks, custodians of documents, etc. These new ways of trustworthy registration and authentication would help the communities to secure and manage their capital when selling and renting, their as-

sets. It will also list every single transaction and other people in the system would be able to instantaneously verify these transactions, protecting people or community’s privacy but at the same time giving enough transparency to allow for oversight from anyone. The block chain-based land titling concept captures and permanently records each transaction throughout the sale of a property. This means a buyer achieves near real-time traceability and transparency into the state of the property as BusinessDay survey shows. For example, envision two citizens in the ancient city of Benin- a buyer and seller -who have negotiated the sale of a

house and wish to register their sale deed with the local authorities. They would proceed to the government services offices as they normally would to register the sale deed, which they have in their possession. The government office will then enter the sale deed into their system, one that is now powered by the blockchain technology. This blockchainenhanced system then takes over and registers the sale deed in the presence of the buyer and seller. It will also process the sign-offs by both the buyer and seller and push the transaction to the approval stage. After the transaction is made, an automatic transfer of ownership is completed.

Opportunity opens for home buyers to own luxury apartments, experience waterfront living CHUKA UROKO

p p o r tu n i t y ha s opened for home seeking Nigerians to own serviced luxury apartments at The Seattle Residences which, by virtue of its exclusive location, offers refreshing waterfront living experience. The Seattle Residences is one of the latest iconic products in the Nigerian property market today. It is not lost on its developers and promoters that the market into which they have introduced their product is not only crowded and com-

…as $32m residential property on exclusive Diplomats Row beckons petitive, but also slow-moving, hence the need offer the best. In a crowded and slowmoving market where everybody seems to be doing virtually the same thing, what keep both the market and product suppliers going are product differentiation and efficiency of service delivery. That exactly defines the upscale and exclusive luxury The Seattle offers. A project funded by Triton Universal Global Concepts Limited, a private real estate investment company, The Seattle Residences comes as upscale

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Town planners seek collaboration with science & tech, urban devt ministries

luxury serviced apartments offering luxury waterfront living experience with panoramic views of the Lagoon. It is often said that, in real estate, location is everything. But for The Seattle Residences and its developers, a piece of luxury such as this looks beyond this cliché, which is why today, every new capital in the market for investment or residential purposes seeks a space or slice of its breathtaking offerings. Located in the heart of Lagos, in the serene enclave

of Walter Carrington Street, Victoria Island, The Seattle Residences offers fully furnished 3 and 4-bedroom apartments that are a perfect blend of modern architecture, indulgent home comfort, state-of-the-art appliances and breath-taking vistas. Comfort and convenience are major considerations for a luxury-loving home buyer. But a savvy investor takes it further. He considers return on his investment too. On this score, The Seattle Residences does not disappoint such investor. “The project aims to achieve a yield of 12 percent, some 200 basis points above the average prime mixed-use development yield as at Q4 2018. In deciding the appropriate mix for the project, the developers balanced the risk between long term and shortterm tenancy, and the expectation on its total return is commensurate with the property’s current risk profile,” Bidemi Fadayomi, Head of Asset Development at Triton Universal Global Concepts, said. To achieve these ambitious targets, he explained, the development had to differentiate itself in the ‘luxury’ property market. “Location was critical. But it was not enough to be situated in the high-end loca-

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tions of Ikoyi or Victoria Island. Security and serenity of the immediate vicinity could not be compromised,” he noted, pointing out that Walter Carrington Crescent, otherwise known as Diplomats Row, home to various consulates and High Commissions, was an inspired choice. “This is, easily, the most secure street in Lagos, if not the country”, he noted. The location of the waterfront plot itself means that The Seattle Residences enjoys an uninterrupted vista of the Lagos Lagoon on one side and the leafy, well appointed diplomatic buildings on the street facing side. Besides the usual facilities and services such as power, water, lift etc which are given in other locations, The Seattle Residences boasts a concierge, spa, bistro and houseboat service. For people who love exercises, the small but perfectly formed gym with views of the water traffic of the Lagos Lagoon is inspiration to both body and mind. There is also a boxing gym and yoga classes on offer. The Seattle Residences offers two main apartments configuration that include 3-bedroom and 4-bedroom plus a serviced 3-bedroom hotel apartment for short-stay services. @Businessdayng

own planners, under the aegis of Nigerian Institute of Town Planning (NITP), Lagos State Chapter, have called for stronger collaboration between the state ministries of urban development & physical planning and science and technology, saying that without synergy government might not realize set objectives. The call came during a recent courtesy visit the chapter paid Segun Adeniji, permanent secretary of the Lagos State Ministry of Science & Technology at Alausa. The town planners maintained that rapid development seen in urban cities across the globe is driven by information technology, and expressed their willingness to support the ministry in this regard. This collaboration, they said, should entail creating ICT units within various units and agencies affiliated to the ministry to resolve technical issues confronting urban planning. Bisi Adedire, President of the Chapter, lamented the strenuous procedures for obtaining physical planning permit for any development in Lagos State, saying it did not befit a metropolitan city like Lagos. Adedire noted that only three districts in Lagos has e-planning operating system, but it is nothing in a denselypopulated city like Lagos, fueling the institute’s readiness to provide technical support for full implementation of e-permit in the state. The town planners posited that technologically advanced countries have adopted Fibre Optics to Homes (FTTH) to replace Cell Tower, otherwise known as telecommunication masts. “Some telecommunication providers have embraced this trend by installing underground fibre optic cables in some parts of Lagos,” Adedire said, urging service providers to toe this path. “We would suggest that you create a synergy with the Lagos State Infrastructure Maintenance Regulatory Agency (LASMIRA) to ensure that the use of Fibre Optics cable becomes a major criterion for the issuance of permits to telecoms service providers in Lagos State”, he added. In managing a mega city such as Lagos, they remarked that geo-spatial data information is pertinent as it provides information about the current state of development and the nature of land use changes that have occurred over a period of time.

Tuesday 23 July 2019

BUSINESS DAY

property&lifestyle A peep into living conditions in low-income, over-crowded suburbs Israel Odubola

t a time when infrastructure decay has become a major feature of Nigerian cities and house prices and rents are aiming for the roof-tops, living in the lowincome and semi-urban areas in a crowded city like Lagos could be a huge challenge. Each of the three big cities in Nigeria, Abuja, Lagos and Port Harcourt, has a fair share of squalid areas, but as a commercial and industrial city with a large concentration of people estimated at 20 million, Lagos is ahead with nine identified urban slums defined by squatter settlements. These settlements are predominantly lacking in basic facilities. The importance of social amenities to mankind cannot be overemphasized as life can be frustrating without facilities needed to ease living conditions, but what obtains in Lagos today makes both life and living very difficult. Almost everyone considers the availability and functionality of social facilities such as power, good road network, security and water supply, etc, before deciding on where to live, and this is because a strong nexus exists between the quality of public amenities and people’s wellbeing. To really underscore the poor state of living conditions in Nigeria, the country was ranked 108 out of 111 nations surveyed by The Economist, in their quality of life index basing the ranking on material wellbeing, security, health, social and community activities. Nigeria’s low rating implies citizens hardly enjoy those facilities meant to make life stress-free, and this is the plight of residents in the low-income

Need for legislation and regulation in FM industry

and semi-urban areas of Lagos, according to BusinessDay findings. Bamidele Oseni, a civil servant who resides in Agege, noted that while power supply has improved considerably in his environs, the major challenge is security concerns. “Security is zero. We had to improvise with gates mounted everywhere with vigilantes who collect monthly payment of N1, 000 per room,” said Oseni. “The roads are still the same as they were when I was growing up. The difference is in the little poor patching which does not last after spending huge money on the project,” Oseni noted, adding that the paucity of public water supply has prompted landlords to dig boreholes. Similarly, Daniel Ogunsanya, a private school teacher residing in Ifako Ijaye, told our reporter that power supply has also improved in his area, but security remains a huge challenge.

“Well, our roads are relatively fair. Power is stable up to 20 hours uninterrupted daily supply, but security is poor as there are several cases of hoodlums attack in the neighbourhood,” Ogunsanya said, adding that water was generally supplied by private individuals. A resident of Abule-Egba, another Lagos suburb, Juliana Adebiyi, posited that power supply has improved in her environs in recent times on the back of favourable weather conditions and strategy deployed by electricity officials to justify the crazy bill charged on customers. “The power situation has improved but the roads are nothing to write home about. The roads are not passable whenever there is rainfall,” Adebiyi said, adding that her environment was fairly peaceful. Taofek Kareem, a merchant residing in Akesan, decried the ineptitude of government towards providing necessary facilities in his area, thus mak-

ing life very difficult for Lagosians living in that part of town. “I cope by providing the needed amenities personally. The roads are bad especially from Mile 2 to Badagry which I ply daily,” Kareem said. This has significant impact on my income because I spend more on transport fare than other household and personal demands Speaking further, “There is no government water in my area. Electricity too is terrible. The community is secured but that’s not the effort of any government” A resident in the Mile 2 area, who identified herself simply as Adeyinka, stated that the Lagos-Badagry Expressway which she plies on daily basis is nothing to write home about. “I spend two to three hours in traffic on the road. It’s even worse when there is downpour,” she said, adding that while security is somehow fair in her area, power supply was yet to see any big improvement.

Developer explains why construction cost, selling price of properties differ by over 35% ENDURANCE OKAFOR

igeria is one of the most expensive property markets in the world. It is the second most expensive in Africa after Angola and the reasons for this go beyond just the construction cost which is also a factor. Other factors some of which are extraneous include high cost of funds, government agency charges, and market uncertainty or the shelf life of the property which means the time the property has to stay in the market before it is sold. Adekunle Adbul, managing director of Metro & Castle Homes, told BusinessDay in an interview that these factors are the main reasons house prices, for instance, are always high, differing from construction cost by almost 40 percent. “Finance is the reason it is difficult for a developer to construct a property that

Infrastructure Maintenance With Tunde Obileye

can be sold for less than N10 million,” he said, explaining, “finance is the key strategy for everything; the reason property prices are high is because funding comes at a huge cost; if you are going to the market to look for $2million to fund a project, it will come at a great cost and all the cost is buried into cost of construction.” According to him, the actual cost of developing a house may be less than N25 million but that same property can be sold at N40 million, and this is as a result of factors like interest rate, which can cost as much as N5 million coupled with other government agency cost. “So I think if we have a guaranteed market and the bank is ready to finance, it will be a different ball game. Even if I make N3million margin from one house, I won’t mind as long as it is bought as I construct; but in a situation where you don’t know when the house will leave the market and the cost www.businessday.ng

of finance is high, we have to make provision,” Adbul explained. He cited an example of an Air Condition producer who manufactures 100 products in a day, and is sure of selling up to 95 of such products. “I can tell you that if I were such a producer, my margin will drop drastically, but if I don’t know when I will sell it, I will have to factor in time, and then interest rate. So, that is what increases price.” For over a decade, Nigeria has endured more than 17 million housing units deficit in a country whose annual population growth rate has been more than economic growth pace since 2015. According to the Association of Housing Corporation of Nigeria (AHCN), underdevelopment of Nigeria’s mortgage industry in driving home ownership is worrisome as more than 90 percent of new homes utilise funds from personal savings for incremental construction.

Developers in Nigeria are continuously in search of viable alternative sources to funding real estate projects in a country where cost of funds has made bank credit inaccessible, unaffordable and unattractive to the sector. Commercial banks are not ideal or suitable medium for financing real estate projects because whereas commercial bank deposits are short-term in nature, real estate is for long term which is usually vulnerable to the vagaries in the economy such as changes in interest rates, exchange rates, and the rate of inflation. “If the banks can finance, we can be making N2million on each property and we wouldn’t mind, as long as people are taking it off the market, and I am able to move to the next project but as they say, the unknown will give you doubt to want to increase your price so that it covers the unknown,” Adbul said.

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his is not the first time this call is being made and I am aware there are other like-minded colleagues advocating the same. With the growing sophistication of end users and the complexity of modern infrastructure there’s an increasing demand for facility management to adopt global best practices in Nigeria. From a practitioner’s understanding, facility management has to do with people, process and environment. It integrates all these to make a built environment enjoy the benefits of longevity and value appreciation. Also, it should give end users peace of mind and comfort. Every building is designed for a particular purpose and this determines the kind of maintenance required to keep the building in excellent condition despite natural wear and tear. For instance, a hotel is a place people come to stay or perform one function or another. It must, therefore, be in a condition that those making use of it can enjoy the facilities provided. It will be unacceptable if there is no regular electricity, the AC system is faulty, the toilets have no water supply and the environment is generally untidy. To a c h i e v e s t r o n g growth and best practice, there is a need to have a formally established professional body that will regulate the activities of facility managers like what obtains in other professions such as the Nigeria Bar Association (NBA) regulating activities of lawyers and law practice in the country. The accountants, engineers, medical doctors and many other professions also have bodies that regulate them but facility management as a profession is yet to formally have one. At the moment only a few legislations exist such as the Factories Act and Environment Impact Assessment (EIA) Act. However, there is a need for legislation to deal with the practice of facility management and specific issues related to it. What obtains @Businessdayng

now is that most FM practitioners carry on, believing that they understand what they do. Legislation and regulation will make it mandatory for existing and would be practitioners to acquire the necessary training and skills. Currently, a good number of people still don’t have the competence and skill set to practice in this industry. As a result, we find so called experts ending up creating more problems for clients when called to perform FM tasks. Only a few academic institutions offer courses in facility management. Ethical values will also be given the necessary attention so that professional misconduct can be handled according to laid down rules and guidelines Best practice in Nigeria’s FM landscape is still a major problem. Individuals do what they think is the best practice for them. There is no set standard. My position is that we have to evaluate what we do, determine if it meets global best practice and gives customer satisfaction. For us to achieve best practice, we need to look outside our local environment and adopt what countries that have done so well in this industry do. The ISO 410001-2018 will also be very useful. The growth of the industr y would require collective effort from all stakeholders including government, private sector operators and the industry practitioners. It is going to require educating people to know about the FM industry to be able to understand what it entails. There is need also for conferences, seminars and training sessions to share knowledge and experiences from time to time. The industry is so loose and I think it is time we started defining the criteria for anyone who wants to pursue a career in facilities management. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

Tuesday 23 July 2019

BUSINESS DAY

Markets + Finance

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

Rights and protection of Nigerian consumers: who takes responsibilities? Bala Augie and Seyi John Salau

vailable data indicate that consumer protection in Nigeria, like other developing countries had remained at the lowest ebb in spite of the prevalence of unwholesome business practices. Although several consumers’ protection act in developing economies recognised the rights of consumers, it does not specifically provide how these rights should be enforced, when infringed upon. Consumers’ awareness of their rights and protection laws is low, which results in the absence of litigations whenever the rights are infringed against. Over the years, industry players have argued the fact that regulatory authorities need to be more proactive in safeguarding the rights and welfare of consumers in Nigeria. Hence, they have called for intensified consumer education, awareness initiatives that focus on consumers in order to increase their knowledge base as well as push for the amendment, which has resulted into the newly signed Federal Competition and Consumer Protection (FCCP) Act. Convergence of Fintech and consumer protection Consumers as a class have also gone through phenomenal changes. The changing needs of children, millennial and young adults have been some of the most potent forces shaping the market. However, many consumers today still lack the quantitative and literacy skills necessary to cope with more complex, information-intense marketplaces. Similarly, new technologies introduce new technical and legal issues that represent new level of challenges for consumers especially in technology enabled spaces such as e-commerce, financial services industry and telecom-

munication. These and other changes in socio-economic conditions have had implications for consumers, resulting in emergence of diverse issues for regulators and other stakeholders with the mandate of protecting consumers. The financial services and technology (Fintech) space of the Nigerian ecosystem in the past few years no doubts has poised some challenges for the traditional financial service providers, which to a large extent presented some issues of consumers’ protection. The innovation of Fintech on the one hand created a huge value to consumers while reducing the financial exclusion rate which in return leads to economic growth and development through the various economic activities engineered by leveraging technology. However, the big issue around protecting the rights and privileges of consumers with technology adoption in the financial service sector is the convergence between Fintech and consumers’ protection. The Fintech Association of Nigeria (FintechNGR), established in 2017 as the voice of Fintech in Nigeria that is working to create inclusive national association for Fintech ecosystem in Nigeria. The association which is set to be a self-regulatory institution for the sector focuses on three core area to accelerate, advocate and connect players in the sector, and also ensure principles of consumer protection and rights are enshrined in Nigeria Fintech ecosystem. The CAFEi intervention The Consumer Awareness and Financial Enlightenment Initiative (CAFEi) was recently launched in Lagos to address consumers’ complaint especially in the financial sector and ensure that response time are drastically reduced in order to rendered satisfactory services to the banking public. This was in response to increasing complaint by the various users of financial services in Nigeria especially on

Debola Osibogun, founder, CAFEI

the social media space due to the slow response time of the deposit money banks. The initiative that has been endorsed by the Central Bank of Nigeria (CBN) and the Chartered Institute of Bankers (CIBN) will expectedly drive consumer awareness of financial institutions offerings in the market and boost service delivery across the industry value-chain. Debola Osibogun, the President of CAFEi, a nongovernmental organisation (NGO) initiative created to serve the financial sector said the initiative is aimed at driving financial literacy and consumer engagement in Nigeria, noting that the initiative would elevate consumer literacy in the country. “Our mandate is to drive consumer education in furtherance of the society here accountability is embed in our DNA and a country where contracts, written or implied, are enforced for the benefits of ensuring shared responsibility as well as prosperity,” said Osibogun. According to Osibogun, her engagement with stake-

holders in the financial sector shows that individuals, organisations and regulators are genuinely concerned about forging inclusive progress and sustainably shared prosperity, hence the initiative would work in collaboration with industry experts to improve the delivery of goods and services across the country especially in the financial sector through its annual symposium. Osibogun opined that CAFEi have been at the forefront of driving the conversation at the national level for increased consumer education and awareness. “We’ve had series of publications in the newspapers to mark World Savings Day, International Women’s Day and the Global Money Week,” said Osibogun stating that CAFEi have been on media tours to numerous radio stations in its campaign to ensure consumers in Nigeria are aware of their rights in relationships with providers of products and services. “As elites, we carry a huge moral burden to ensure that we safe guide the interest of every Nigerian and remain

strong advocates for a society where the rights of consumers of services and products are protected. The mutual trust between providers and consumers of goods and services is an important ingredient in the functioning of any society and we all share in the obligation to uphold this relationship. “As a nation, we have survived failure of several sectors in the past; however, we stand no chance of any meaningful progress in a failed system where this relationship is not respected. Therefore, it behooves on us to ensure the providers of these services continue to enjoy the trust of consumers and vice versa. Finding the right balance between the increasing expectations of consumers and the interests of the service providers remains paramount as we continue to strive for a society that is worth bequeathing onto the next generation of Nigerians. “The solutions we are looking for will lie both in empowering consumers to make more informed decisions, and in strengthening the market conduct practices of institutions through effective regulation and enforcement. I am positive that you will all agree with me that one without the other is wholly inadequate,” Osibogun concludes. Uche Messiah Olowu, President of the CIBN, while speaking on the initiative expressed the desire of the institute to collaborate with CAFEi and the deposit money banks to improve and deepen consumers’ engagement across the value-chain of the industry. The CIBN president said the institute has a remedial department which is the ethics and sub-committee that takes care of unresolved complaints of consumers in addition to what the CBN is doing in the consumer protection department. “For us, we are pushing that we are not yet there, but we will get there because we have various Non-Govern-

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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mental Organisations (NGOs) working with the CIBN focused on policy advocacy; you will begin to see a lot of improvements. I think we need to give it more bite in terms of awareness to the public because we have resolved a lot of issues in billions of Naira where consumers’ complaints have been resolved,” Olowu stated. The Federal Competition and Consumer Protection (FCCP) Act The Federal Competition and Consumer Protection (FCCP) Act, which was recently signed into law by President Muhammadu Buhari aims at promoting a competitive market and protecting consumer rights in Nigeria. Prior to the enactment of the act, there was no single piece of legislation regulating competition in Nigeria. Thus provisions of laws regulating competition were found in various legislation such as the ISA; the Nigerian Communications Act 2003; the Electric Power Sector Reform Act 2005 amongst other laws. However, the new act applies to all businesses in Nigeria and supersedes all laws on competition and consumer protection. The FCCP act prohibits unfair business practices or abuse of dominant market position by any company, as well as any agreement to restrain competition such as agreements for price fixing, price rigging, collusive tendering and others. To regulate and facilitate competition, the President may from time to time, by order published in the Federal Gazette, declare that prices for goods and services specified in the order shall be controlled in accordance with the provisions of the act. In addition, the act mandates the commission to administer the provisions of the act as well as set up the Competition and Consumer Protection Tribunal to adjudicate over conducts prohibited by the act and exercise jurisdiction in accordance with the act.

Tuesday 23 July 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 22 July 2019

Top Gainers/Losers as at Monday 22 July 2019 LOSERS

GAINERS Company

Company

Opening

Closing

Change

N1250

N1260

UBA

N5.5

N5.95

0.45

AFRIPRUD

N3.4

N3.7

0.3

NASCON

N5.8

0.2

CILEASING

UACN

N5.4

N5.6

0.2

FLOURMILL

NESTLE

NB MTNN

Opening

Closing

Change

N59

N56.1

-2.9

ASI (Points) DEALS (Numbers)

N128

N126

-2

N15

N13.5

-1.5

VOLUME (Numbers)

N4.95

N4.55

-0.4

VALUE (N billion)

N14.4

N14

-0.4

MARKET CAP (N Trn)

27,808.69 3,887.00 285,762,525.00 2.244

Global market indicators FTSE 100 Index 7,514.93GBP +6.23+0.08%

Nikkei 225 21,416.79JPY -50.20-0.23%

S&P 500 Index 2,983.86USD +7.25+0.24%

Deutsche Boerse AG German Stock Index DAX 12,289.40EUR +29.33+0.24%

Generic 1st ‘DM’ Future 27,138.00USD +8.00+0.03%

Shanghai Stock Exchange Composite Index 2,886.97CNY -37.23-1.27%

13.552

Poor H1 scorecards fail to spur investors interest in stocks …market records additional N55bn loss Stories by Iheanyi Nwachukwu

he influx of nottoo-impressive first-half (H1) financial results of some listed companies further affects the performance of the Lagos Bourse. After recording over N300billion in the trading week ended July 19, the stock market opened this week’s trading with additional loss of about N55billion. At the sound of stock trade closing gong on Monday July 22, the market furthered into the red zone with a Nigerian Stock Exchange (NSE) All Share Index (ASI) recording a decrease of 0.40percent. Year-to-date (ytd), the stock market is in negative return of 11.52percent. This week, the outcome of the two-day Monetary Policy Committee (MPC) meeting will dominate the headlines and determine further direction of finan-

L-R: Olutola Mobolurin, chairman; Bola Ajomale, MD/CEO; Ariyo Olushekun, director; Oladipo Aina, director; and Aigbovbioise Aig-Imoukhuede, director, all of NASD Plc at its 6th AGM held in Lagos recently.

cial and capital markets activities. The negative seen on Monday is in line with most market watchers expectation that the bearish performance will be sustained despite attractive prices in fundamentally sound

stocks. The NSE All Share Index and market capitalisation declined from 27,919.50 points and N13.607 trillion recorded as at Friday July 19 to 27,808.69 points and N13.552 trillion on Monday July 22.

“Looking ahead, we expect the tepid performance to continue in the market in the absence of catalyst that could spur positive sentiment”, said United Capital Plc analysts in their investment view for July 22-26 period.

However, they did not rule out the possibility of intermittent gain “owing to investors positioning for interim dividend-paying stocks”. In 3,887 deals, stock traders exchanged 285,762,525 units valued at

N2.244billion. Only 14 companies gained as against 18 losers. Nigerian Breweries Plc recorded the highest value loss, after its share price decreased from N59 to N56.1, losing N2.9 or 4.92percent; followed by MTN Nigeria Plc which decreased from a preceding day high of N128 to N126, after losing N2 or 1.56percent. On the gainers table, Nestle Nigeria Plc topped other stocks after its share price increased from N1250 to N1260, adding N10 or 0.80percent; followed by UBA Plc which rallied from N5.5 to N5.95, adding 45kobo or 8.18percent. Also, Lagos-based analysts at Vetiva said: “The NSE ASI traded below its opening level for most of the session before experiencing some volatility towards the close of trading courtesy of Dangote Cement Plc”. As such, despite the attractive entry points across the board, they foresee another session of declines on Tuesday July 23.

NSE, GRI host roundtable on sustainable development goals

LCFE partners CIS to build capacity for commodities trading

-Academy, a knowledge platform of the Nigerian Stock Exchange (NSE) partnered with the Global Reporting Initiative (GRI) to host a roundtable on Sustainable Development Goals (SDGs). The workshop held in Lagos on Thursday, July 18, 2019 was driven by the need to raise awareness on the inherent economic opportunities and social impact businesses can achieve by aligning their operations towards the achievement of the SDGs was sponsored by IHS Towers Nigeria. It was also organized to help organizations develop more innovative approaches in the communication of their sustainability initiatives and their contribution to the SDGs. The forum is in line with NSE’s ongoing partnership

pparently warning up to commence operation, following the approval of its licence by the Securities and Exchange Commission (SEC), Lagos Commodities and Futures Exchange (LCFE) and Chartered Institute of Stockbrokers (CIS), have Jointly exposed stockbrokers and other securities dealers to the fundamentals of commodities trading. The two-day intensive training, perhaps, first in the series, was tagged “Understanding Commodities Market and Trading” for stockbrokers and other stakeholders in the securities market. Declaring the workshop open at the weekend in Lagos, the Managing Director and Chief Executive Officer of LCFE, Akin Akeredolu-Ale underscored the substance

with GRI to advance sustainability reporting among listed companies in Nigeria. It offered a peer-to-peer knowledge-sharing platform for sustainability thought leaders and practitioners to exchange best practice approaches which they have successfully applied in aligning their business operations and reporting the progress achieved in the actualization of the Sustainable Development Goals. Speaking on the event, Bola Adeeko, Head, Shared Services Division, said, “corporate ambition around SDGs is on the increase as businesses recognize the need to operate within stable economies. Conversely, poverty, gender inequality, climate and water issues pose serious threats to almost any business model. While various businesses www.businessday.ng

are investing independently in capacity building in sustainability, it is important to create a platform where key actors can share knowledge and learn from each other with the aim of achieving sustained impact”. “The NSE understands its unique role as an engine for economic growth and earlier this year hosted a sustainability reporting implementation workshop where it unveiled its Sustainability Disclosure Guidelines for listed companies with support from GRI. We will continue to strengthen our partnerships with various local and international organizations to provide the requisite knowledge for market participants to improve their Environment, Social and Governance (SDG) reporting practices”, added Adeeko.

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and essence of strategic capacity building in certification of personnel, trading practices , standardization and products development as essential ingredients for the smooth take-off of the new Exchange. Akeredolu-Ale who expressed optimism that the training would be sustainable noted that the partnership between LCFE and CIS was informed by the statutory position of the Institute as the only body recongnised by law in Nigeria to train and certify dealers for commodities trading. “From the inception, the strategic documents of the Commodities Exchange laid down two things: The issue of capacity building in personnel and the issue of certification and standardization. We have gone past registration by the regulators. We are mov@Businessdayng

ing into products development. And for us to generate the products and the contract that are going to be tradable on the floor of the Commodities Exchange, we have started building capacity. “There has to be certification by a credible institution, recongnised by law to train and certify operators in the Capital Market. So, we decided to partner the Chartered Institute of Stockbrokers to activate the capacity of stockbrokers in products development, understanding the commodities market and how to trade in the commodities market. He explained that the training would expose participants to tradable products on the Commodities and Futures exchange and the four asset classes scheduled for commencement of trading.

Tuesday 23 July 2019

BUSINESS DAY

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Tuesday 23 July 2019

BUSINESS DAY

FEATURE

BSOEC: Unearthing decades-long IOCs’ intransigence against host communities Samuel Ese, Yenagoa

he Bayelsa State Oil and Environmental Commission (BSOEC) is the first effort by any state government to investigate the intransigence of international oil companies (IOCs) in their relationship with their host communities, and so far, the commission has been doing a tremendous job. Governor Henry Seriake Dickson has grossly been misunderstood by some groups and individuals since setting up the commission, but going by the facts that are being unearthed by the commission headed by the Archbishop of York, John Sentamu, it would not be out of place if other oil producing states towed this line in addressing grievances that are at the core of crises in oil producing areas. From accepting memoranda and oral presentations from communities, individuals and groups, the commission has undertaken visits to oil communities in all the eight local government areas of the state and last of all organised a stakeholders forum in all councils. A close look at how international oil companies operate in Nigeria, clearly shows that there are marked differences between their mode of operations in Nigeria and internationally accepted standards as practiced in other nations like the US, Britain, Canada, Saudi Arabia etc. To say that oil bearing communities in the Niger Delta region are paying a high price for their natural resources, crude oil and gas, is no longer new; it has been the norm since the beginning of exploration and exploitation activities about six decades ago. IOCs have not only be over bearing in their dealings with the people, they have also been indifferent to their plight by the continuous dumping of toxic wastes on their lands, rivers and streams. Over the decades, IOCs have refused to change their equipment such as pipelines, blame oil spills on sabotage to escape remediation of affected lands, rivers and streams and denied the people compensation and employment opportunities. Whenever they condescended to payment of compensation for damages due to exploitation or oil spills, it was always at their valuation thereby denying the people their due rights while employing divide and rule methods to cause crises in their host communities. No true environmental assessments are carried out before embarking on their projects in the region, which have resulted in severe environmental degradation in the form of erosion and destruction of the ecosystem with great consequences for the peoples lives and livelihood. Joint investigation visit reports are always dictated and forced on the communities while any protests

Henry Seriake Dickson

by aggrieved people are met with force by armed soldiers or policemen while dropping pecks as reliefs in the form of scholarships and projects as contained in their agreements. Perhaps, one of the most challenging consequences of the operations of IOCs in Bayelsa State and the rest of the Niger Delta region is gas flaring with the resultant acid rain that is affecting roofs and the soot contaminating sources of drinking water such as streams, ponds and rivers. This also has serious consequence for public health in the region as many ailments suffered by mostly the rural populace are traceable to the continuous and unmitigated gas flaring, which has defied any solutions as even the Federal Government looks resigned to it. It is against this backdrop of such unquantified pain and misery being suffered by host communities that Shell Petroleum Development Company of Nigeria Limited (SPDC) said it has spent over N23 billion in the development of its host communities in Bayelsa State in the past 13 years. SPDC General Manager External Relations, Igo Weli represented by External Relations Manager, Corporate Lands Management, Trevor Akpomughe stated this at the media launch of the 2019 edition of the Shell in Nigeria Briefing Notes, an annual publication detailing the activities of the business interests of the energy firm in Nigeria He stated that the N23 billion was spent since it adopted the Global Memorandum of Understanding (GMoU) template, a template that host communities say is poorly implemented and is usually forced on them. A clear understanding of the antics of IOCs in their dealings with their host communities is crucial to understanding why oil communities are always at loggerheads with IOCs over the years. Recall that several years ago, SPDC presented its EIA report in Yenagoa www.businessday.ng

with respect to the gas gathering plant at Gbarantoru, and during the presentation announced the name of one Tari Dadiowei as signatory to the document, but unfortunately for them, the man in question was present in the hall and denied involvement in writing the report. Another example of IOCs’ highhandedness was the blatant refusal to compensate coastal communities in Southern Ijaw and Ekeremor local government areas over the explosion that rocked Chevron’s Apoi North platform off the coast of Koluama in 2012. While most of the blame has been on IOCs, the truth remains that the regulatory agencies have, often, gone to sleep over serious issues of human health and development, which have been at the heart of agitations in the Niger Delta region since the famous 12 Day Revolution by late Isaac Boro. The sorry state of affairs in Ogoniland in Rivers State, the unwarranted attacks on some oil communities on the excuse of militancy, militarisation of the Niger Delta region as well as skewed legislation, which places oil and gas matters under the purview of an unconcerned Federal Government are major causes of crises. Activities of the military have actually added to the burden of pollution of lands, streams and rivers in their attempts to destroy illegal refining sites and the implements used by the perpetrators of illegal refining. So, backed by the knowledge garnered in the cause of their visits to oil spill sites and engagements with oil bearing communities, groups and individuals, the Bayelsa State Oil and Environmental Commission (BSOEC) is properly placed and sufficiently informed to make a formal report on the travails of oil communities in the state. As BSOEC started winding up investigations with the Local Government Stakeholders Forum last

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Saturday, Kathryn Nwajiaku-Dahou, chair, Expert Working Group of the commission, who represented the chairman, John Sentamu at the forum lamented that the oil and gas industry has been hazardous to health. Nwajiaku-Dahou told journalists in Yenagoa that the industry has also had effect on “farmlands, on their livelihoods and their lives. They are longer farming in the way they used to, they are no longer catching fish in the way they used to and they are crying out.” Earlier, at Sagbama, headquarters of Sagbama Local Government Area, she told journalists that the forum there had revealed other issues that they had not learnt before particularly the issue of land acquisition by SPDC at Ofoni community and the denial of benefits to Asamabiri community by Agip for their refusal to accept an EIA report. “The next step for the commission is to look through all the information we have heard, bring it all together and quickly look towards recommending a way forward for this government and also for the communities”, she stated. Promising to bring an international dimension into the issue, Nwajiaku-Dahou said “We are now moving towards making our recommendations and engaging our political friends internationally to see how we can make sure that the voices that we had listened to are heard on the international stage. I don’t want to preempt what these recommendations will be, but they’ll certainly have some international dimension.” Michael Watts, a member of the commission, said in Yenagoa that “We have visited all of the local government areas of Bayelsa within the last week. In addition, we have been talking to regulators, we have been talking to business people, the Nigerian oil companies in particular.” Watts disclosed that “The big message that came through in going around to all of the LGAs is that there is a very common pattern of bruises that the oil and gas industry has had devastating consequences on livelihoods, on fishing, on farming that traditional fishing grounds have been eviscerated. “They have been destroyed by oil spills in particular. We have heard a great deal about gas flaring and the consequences on human health, on lung infections and so on. So, we have heard a very common pattern in terms of the causes and consequences on people, and on the environment, on the marine world. It’s been tremendously consistent. “I think there are many things that can and should be done. Firstly, there is the issue of safety. Much of the oil infrastructure is very old. Not old, but some of the major spills are due to corrosion and poor equipment. This means that the oil companies and the government must need to ensure that new equipment replaces the old equipment. That is one issue. @Businessdayng

“A second thing that needs to be done is remediation. That means that areas that have already suffered from spills need to be remediated. That is actually a quite long and complicated and quite costly process. It means that the land needs to be improved and rested. It means that forests have to recover, that is quite complicated. “And last, but not least, this would also require a change in the behaviour of the companies, but also of the government. We heard a lot from communities about the GMoU, the global memorandum of understanding, with oil host communities and how they have often failed. “We have heard a great deal about the joint investigation process by which oil spills are accessed. And these are clearly inadequate. And on this issue, it’s clear that the government needs to improve its performance. There must be tighter and strict regulation in order for the companies to be held to account and to improve their performance. “The whole process of compensation is central to many of the grievances in all of the communities that we have visited. They all have complaints about the JIV process, for example. They did not understand, first of all, the way in which compensation was calculated. “Secondly, they often disagreed over the cause of the oil spills. Sometimes, the JIV said the cause was in fact sabotage and yet the communities often argued strongly that it was operational failure, corrosion of the equipment. “So, the whole question of compensation is a very important one that needs immediate action because in some cases there are oil spills that occurred many years ago from which there have been absolutely no compensation or whatsoever. “And when the compensation has been given, the means by which those compensations are calculated are very unclear and they are often made by the companies without participation and input by the communities. So, this is an area that requires a great deal of work moving forward.” Another member of the commission, Enegbo Emesoh said going forward: “I don’t know of an easy step I can tell you now. We are still very much in the fact finding and evidence gathering stage. Now, we’ve got a whole lot of information. We have to go back and work with that information. “We have to think through it carefully on how we may make recommendations on these issues. They are complex issues and we’ll look at the different aspects of the issues that we’ve seen, some may be to the companies, some may be to the government. We don’t know yet, but we’ll certainly go about it carefully. “But one thing is for sure. Whatever recommendations that we’ll make will be aimed at addressing the impact that the oil pollution is having on the people of the Niger Delta.”

Tuesday 23 July 2019

BUSINESS DAY

INTERVIEW

‘Single digit interest rate will improve mortgage segment of real estate in Nigeria’ In this interview, Oluwatobi Osunuba, managing director of Chateau Royal Real Estate Limited tells BusinessDay’s Frank Eleanya, how the company is addressing the housing deficit in Nigeria and what the country and private players need to do to make housing more affordable for low and middle income earners. From the name ‘Chateau Royal Real Estate Limited’, it appears you only target high-end consumers, is that correct? t Chateau Royal Real Estate Limited, we give preference to all class in need of housing by providing affordable options, flexible payment plans with great value for investment. We are a solution providing real estate firm giving consideration to all levels from the low, mid and high-income earners.

a negative notion in the mind-set of investors.

What gap is Chateau Royal Real Estate hoping to fill in the real estate sector in Nigeria? With our years of experience in real estate development, we came into developing to bridge the gap between consumers’ wants and affordability. We do not intend to impose design but give the system and support for investors to build to taste in a well infrastructure and maintained estate. How are you addressing the challenge of limited consumer income which affects real estate businesses? Based on collective data on field, we realized that large scales of interested investors are young chaps who understand the necessity of housing. But we also realized that these investors have limited income so we devised a strategy of a flexible payment plan that helps and enables them purchase at a very pocket friendly rate. We are committed to advancing lives by providing best real estate solutions that exceed the expectations of our stakeholders. How do you deal with affordability? My thought on affordable housing is simple. Low- and middle-class earners should be able to have where they can call their own without breaking the bank. Housing is very crucial given the radical increase in our population. For everyone to have access to housing, it must be affordable even the high earners delight in a good housing and it must be affordable with flexible payment plans options and investment instruments to help cushion the impact. We believe strongly in this and the government has a huge role to play in its actualization. As a necessity, the purchasing cost should be considerable and not over valued to allow middle-class Nigerians to benefits.

Oluwatobi Osunuba

That is why at Chateau-Royal Real Estate Limited, we are committed to giving young minds investment opportunities to own a piece of affordable luxury, be a part of investors and smile in the nearest future by boasting “I have got a shrewd investment”. We currently have 2 fast selling projects Maplewoods Ibeju-Lekki with initial deposit of N100,000/plot and a promo of Buy 5 Get 1 free with a 12 months flexible payment plans. There is also Peach Palms Abijo GRA. Do you have any products for millennial? Yes, definitely we do, we are generational. Our major achievements are the rate our estates are fast selling within and in Diasporas. Our projects at Maplewoods Ibeju and Peach Palms are definitely suitable for them. What do you find as the biggest challenge in real estate and how are you addressing it? One major challenge we face in the industry is the distance between the government and our sector. We also face the challenge of non-encouraging government policies and limited access to housing funds. As a real estate firm, one major strategy we have deployed to address these challenges is to make available affordable estates with flexible payment plans options. We also encourage discussions with the government every time the opportunity presents itself for furtherance of the sector. www.businessday.ng

What are the trends you are seeing in the market and where do you see the market going to? In the last few years, the sector has experienced a positive turn and has contributed immensely great quota to the growth and development of the Nigeria economy. I can assure you the future is bright if the government can consciously encourage private players within the sector with flexible and robust policies. This can help deflate the housing deficit reasonably. Moreso we are going to patent future revolutionary trends in the sector that is going to have skeptics and admirers talking for a long time; we are currently investing in technology and innovations not currently seen in the sector. How can developers solve these reoccurring situations of substandard building in the country, what can be done to improve this? This is one major challenge the industry has been facing over the years. A lot affect the standard of housing like drastically unstable cost of various building materials. This is a two-way challenge. I want to use this medium to encourage my fellow players in the industry not to take decisions in greed and for investors to be true in valuing what is being invested in. This would go a long way in reducing the event of substandard deliveries in the industry. Also, players in the industry should try to keep to their words in terms of time; design; layout; and facility delivery so as not to create

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What is your innovation strategy and what makes you unique from the others? The Nigerian market is very attractive and we are bringing investors from diaspora and within the shores to help us actualize both our long term and short-term goals. Also, we are partnering with some financial institutions to help access the best of mortgage facilities possible to our subscribers. There are also lots of other freebies targeted at the family and individual constituents of families as give away when you begin to subscribe with us. Innovations in the sector can be witnessed mainly in structure and facility delivery. As a key player in the industry, we want to play our part in improving good service delivery e.g. estate time-line delivery, eco-friendly environment and also focus on affordable luxury which is the reason for the birth of Maplewoods Ibeju Lekki and Peach Palms Abijo GRA. We are very intentional in making sure that we deliver on all our promises to all subscribers. Access to mortgage has remained a huge problem in Nigeria and an almost impossible task to achieve. What solutions are you proposing? Do you work with mortgage institutions in your projects? What can you recommend to the government with your experience in the real estate? As regards access to mortgage, I would recommend a single digit interest rate. Currently we have several mortgage facilities partners with us on our projects. I also recommend a more flexible policy from financial institutions and government to help cushion the housing deficit in the country to also encourage sector players and investors with friendly policies. Players in the real estate sector have been blamed for not meeting the needs of the changing time? How true is this? To some degree true and some larger degree, not true. However an ever focused team driven by innovation, latest building technology, and trends around the world in the sector has been engaged by us giving birth to some innovations milestones. I will also say that the sector is one of the fastest growing sectors of this economy given its immense contribution to the growth and @Businessdayng

development. Though this sector is highly competitive and this is due to the different efforts and innovations various developers bring into play. Lack of accurate data has remained a major issue for players in the industry. How does it affect your company and what do you think can be done to resolve this? Data research and collection is crucial and highly needed for proper planning. Inadequate statistics does not only affect the real estate sector only but it affects all other sector of the economy. Accurate data collection helps the sector in determining what exactly is needed in terms of structures as well as facilities by the investors in the sector. Although I commend the efforts of the Nigerian Bureau of Statistics, a simple way of doing this is to be present effectively at all level of government. This would help in accuracy and consistency of data collection that would aid private players within the sector and the federal government in planning. What do you find as the biggest challenge in real estate and how are you addressing it? One major challenge we face in the industry is the distance between the government and our sector. We also face the challenge of non-encouraging government policies and limited access to housing funds. As a real estate firm, one major strategy we have deployed to address these challenges is to make available affordable estates with flexible payment plans options. We also encourage discussions with the government every time the opportunity presents itself for furtherance of the sector. What new trends are you seeing in the real estate sector and where do you think we will be in the next 5 to 10 year. In the last few years, the sector has experienced a positive turn and has contributed immensely great quota to the growth and development of the Nigeria economy. I can assure you the future is bright if the government can consciously encourage private players within the sector with flexible and robust policies. This can help deflate the housing deficit reasonably. Moreso we are going to patent future revolutionary trends in the sector that is going to have skeptics and admirers talking for a long time; we are currently investing into technology and innovations not currently seen in the sector.

Tuesday 23 July 2019

BUSINESS DAY

news Shiite protest: Buhari orders IGP to secure ... Continued from page 1

every Nigerian. The order followed yet another violent clash in Abuja, Nigeria’s Federal capital, on Monday between members of the Islamic Movement in Nigeria (IMN) and the men of the Nigeria Police and the military, in which a deputy commissioner of police (DCP) in charge of Operation at FCT was reportedly shot and killed while two other police officers and one journalist were seriously injured. The IMN members, otherwise called Shiites, are protesting the continued detention of their leader, Ibrahim El-Zakzaky, who has been held in detention by the Buhari government since 2015. The IGP, who spoke to State House correspondents after briefing President Buhari on the protests, vowed that he would enforce the orders. “The President asked us to make sure we provide security for every citizen of this country and not to leave any space that some group of people will create breakdown of law and order,” Adamu said. He said he was at the Presidential Villa to brief Mr. President on the security situation in the country, especially the activities of the IMN, and to provide “an update of what is happening in the country vis-a-vis their activities”. “Specifically, we briefed him of the incessant act coming out of this group of people, protesting here and there. We briefed him on the fact that we have been able to curtail their excesses and to let him understand that everything is under control,” he said. The Shiites’ Monday’s clash with the security forces was one in a succession of recent clashes, preceded by the attempt by the sect members to invade the National Assembly two weeks ago, where they allegedly shot and inflicted injuries on some security agents. Yesterday’s clash led to the death of DCP Umar who

was killed by the protesters while trying to prevent the violent action of destruction of property when the sect besieged the busy Federal Secretariat and Three Arms Zone in Abuja. Confirming the clash in a statement on Monday, Frank Mba, Force Public Relations Officer, said members of the El-Zazakky group involving over 3,000 trooped to the Central Business District of Abuja at about 12:30, adding that the heavily armed protesters defied all sense of decency as they violently attacked innocent citizens and police personnel on duty. “In the process, the Deputy Commissioner of Police in charge of Operations, FCT Command, DCP Usman A.K Umar, was shot and fatally injured by the protesters. The officer who was immediately rushed to the hospital died moments later while receiving treatment. Also, two (2) Assistant Superintendents of Police and a Staff of Channels Television sustained serious injuries and are currently receiving treatment. The violent protesters also razed down a National Emergency Management Agency (NEMA) Response Post close to the Federal Secretariat, Abuja and two (2) vehicles,” the statement said. The police also noted that they have arrested 54 suspects in connection with the incident, stressing that the suspects are undergoing interrogation and will be arraigned in court as soon as possible. Decrying the killing of DCP Umar while commiserating with the family of the deceased, IGP Adamu said, “Enough is enough as the Force and the nation at large will not continue to suffer losses on account of reckless and lawless persons and groups in the society.” IGP Adamu had issued an order restricting all forms of protests to the popular Unity Fountain, but it appeared the sect had defied that order by extending their protests to other parts of the capital city.

Presidency gives detail of how it spent ... Continued from page 2

Ministry of Defence or any other ministry, agency of government, individuals or political party office as was the norm under the PDP administration”. “We note that the PDP made so much of a report claiming that the National Security Adviser (NSA) had declared the entire amount of USD 1,000 million as

missing. The NSA will not have said this,” he said. He also disclosed that no arms can enter Nigeria lawfully without the approval of end-user certification as issued by his office. “In these days of fake news, citizens including political parties pretending to the role opposition parties must be careful about the reports they work with,” he said. www.businessday.ng

Greenville’s $500m plant boosts Nigerian... Continued from page 1

eral Government since 2014 to supply LNG to Kaduna Power Plant. “We have 2,250 tonnes of LNG and we will expand more to supply LNG to 250 megawatts (MW)-capacity Kaduna Power Plant in the north,” Sahajwalla, said. “We have almost concluded. Kick-off depends on the completion of the power plant. We have everything needed to start. Nigeria can have 250MW in six months,” she said, adding that Dufil is getting 5 megawatts from the company to power its factory. Forty percent of Nigerian manufacturers’ expenditure goes into alternative energy sources. A number of them

use Low-Pour Fuel Oil (LPFO), which is much expensive and environmentally-unfriendly. According to a survey conducted by the Manufacturers Association of Nigeria (MAN), expenditure on alternative energy sources totalled N93.1 billion in 2018, eating deep into the margins of the producers. Sahajwalla said LNG is cost-effective and environmentally-friendly, adding that it is the catalyst to Nigeria’s industrialisation and growth. “One truck can produce 5 megawatts. That is why I said from now Nigeria can have more pipelines and more stable power plants. This project comes very handy in terms of new industries and the strength of industries. From now to the next four or five

years, industries are developing and the pipeline will be coming,” she added. Industries are seeking ways of cutting production costs as they battle with multiple taxation, low consumer purchasing power and poor access to funding. Nigeria has retained its double-digit monetary policy rate at 13.5 percent from a previous 14 percent, while commercial lenders give out loans at 20 to 35 percent interest rates with a 12 months tenor. Virender Pathania, head of operations, Dufil Prima Foods, explained that the LNG is clean energy and will emit less carbon. “If you look at this, it is clean energy. Carbon emission will be less and at the same time it

is cost-effective. It is also easy to store and transport,” he said. He said Dufil is maintaining CNG but will keep it as a stand-by while gradually switching to LNG. “We still have commitments in CNG, but if supply is regular and efficient, we will switch to LNG,” he said, adding that Greenville bore the cost of the project, except the civil structure. Oyadolu Joseph, one of the directors of Greenville, said the company is undergoing a silent revolution because LNG reduces cost of running and maintaining businesses or homes. “Your overhead costs and cost of sales will be reduced, which will increase your profit,” he said. He further explained that the company has a plant for LPG (cooking gas) and will supply once there is demand.

Greenville LNG customer site at Dufil Prima Foods, Port Harcourt

Nigeria seeks to double power output.. Continued from page 2

provide Sovereign Guarantee. Siemens will carry out a comprehensive upgrade of Nigeria’s weak electricity grid capable of wheeling less than 5,000MW and reduce technical and non-technical losses. It will aggregate all DisCos’ investments in their network including cables, switches, transformers and substations to raise distribution above the current 4,000MW. President Buhari, speaking while signing the roadmap, said his government was clear that fixing the power sector was a key priority for the administration and lamented the failed past attempts. “These various interventions to solving the electricity problem have yielded an imbalance between the amount of power generated

and the amount available for consumers. Despite over 13,000 megawatts of power generation capacity, only an average of 4,000 megawatts reliably reaches consumers,” Buhari said. He said this was why he directed his team to ask Siemens and the Nigerian stakeholders to first focus on fixing the transmission and distribution infrastructure – especially around economic centres where jobs are created. “Whilst it was evident that more needed to be done to upgrade the subtransmission and distribution system, our government was initially reluctant to intervene as the distribution sector is already privatised. I am therefore very pleased with the positive feedback from private sector owners of the distribution companies, who have all endorsed government’s

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intervention to engage Siemens on this end-to-end plan to modernise the electricity grid,” he said. Buhari disclosed that government’s aim is to deliver electricity to Nigerian businesses and homes. “My challenge to Siemens, our partner investors in the distribution companies, the Transmission Company of Nigeria and the electricity regulator is to work hard to achieve 7,000 megawatts of reliable power supply by 2021 and 11,000 megawatts by 2023 – in phases 1 and 2 respectively,” he said. “After these transmission and distribution system bottlenecks have been fixed, we will seek – in the third and final phase – to drive generation capacity and overall grid capacity to 25,000 megawatts,” he said. Buhari said the strong commitment to the devel@Businessdayng

opment of Mambilla Hydroelectric and the various solar projects under development across the country, the long-term power generation capacity will ensure adequate energy mix and sustainability in the appropriate balance between urban and rural electrification. “Our intention is to ensure that our cooperation is structured under a Government-to-Government framework. No middlemen will be involved, so that we can achieve value for money for Nigerians. We also insist that all products be manufactured to high quality German and European standards and competitively priced,” he said. “This project will not be the solution to all our problems in the power sector. However, I am confident that it has the potential to address a significant amount of the challenges we have faced for decades,” he added.

Tuesday 23 July 2019

BUSINESS DAY

news

Nasarawa partners CBN to implement agric value chain programmes Solomon Attah, Lafia

asarawaStategovernment has finalised plan to partner the Central Bank of Nigeria (CBN) and international donors to fund the implementation and development of an agricultural value chain programmes in the state. GovernorAbdulahiSulemade this known at the flag-off of fertilizer sales for the 2019 farming season in Lafia, the state capital, on Monday, stating that the programmewas expected to increase the output of farm produce. “I have already given the approval for the state government to partner the Federal Government of Nigeria and international organisations for the fund of agricultural development to implement

the value chain development programme (VCDP). “This is expected to increase the income of every household that engages in the production and marketing of rice, cassava in Nasarawa State,” the governor said. He reiterated that the state government had signed a memorandum of understanding with the Federal Government, adding that the state had released N88 millionasitscounterpartpayment for the take-off of the programme. Meanwhile, the state government has launched the sale of fertilizer directly to farmers at the rate of N3,500 per bag, and urged the committee to strictly comply with government’s directive as its administration would not tolerate anyformofdiversionoftheproduct.

LG autonomy: Only four LG can pay staff salaries in Nasarawa Solomon Attah, Lafia

nly four out of the 13 local government areas in Nasarawa State can conveniently pay staff salaries in full. The said local government of Awe, Keffi, Keana and Wamba are the four council areas that, by the allocation coming to them as result of the financial autonomy to localgovernmentcancomfortably pay their June salaries 100 percent. Ibrahim Balarabe Abdullahi, speaker of Nasarawa State House of Assembly made this known on Monday after the chairman of LG Committee, Mohammed Alkali (APC-Lafia North) presented an interim report of the committee during the House proceedings in Lafia. The Nasarawa Assembly has set up a six-man committee to investigate why local workers are yet to receive June salary and other deductions of Local Government funds, where they discovered series of abnormalities in the local government system in the state. Abdullahi said, “It was also found out that by the allocation of June 2019, only four local government in the state can comfortably pay their salary 100 percent. “These are Awe, Keffi, Keana and Wamba and the other nine localgovernmentscannotpaydue to paucity of funds compared to their wage bills.”

The speaker however approved additional three weeks for thecommitteetodoathoroughjob on the issue in order to bring total sanity to local government system in the state once and for all. The issue is affecting the entire state, he said, and directed the chairmen of the 13 local governments in the state to pay salaries this week unfailingly as promised. “This report revealed 13 areas of concern and anomalies such as indiscriminate promotions and implementations of promotions, duplication of names in the pay vouchers. “Names of retired and deceased staff continue to exist in the payment voucher of local governments and same in development areas. Balarabe-Abdullahi urged the committeetofindalastingsolution to the problems of local government system in the state in the interestofpeaceanddevelopment. Earlier, Alkali, while presenting the interim reports sought for additionaltimetoenablethecommittee complete its assignment. “We are yet to meet the management of the state Primary HealthCareDevelopmentAgency andthePensionBoardonthematter due to time factor. “There are a lot of discoveries made by the committee while discharging our assignment,” he said.

Obaseki congratulates Sterling Bank chairman, Asue Ighodalo on 60th birthday overnor Godwin Obase- lent health.” ki of Edo State has conThe governor said: “As a state gratulated Sterling Bank we are proud of the legacy you chairman, Asue Ighodalo, on are bequeathing corporate Nigehis 60th birthday, describing ria and your support for charity. him as a respected Edo son who “With the culture of hard has contributed immensely to work you have built over the corporate Nigeria. years, you are indeed a role Obaseki, in a statement, model for millions of Edo said: “As you turn 60 today, I youths and I pray for God’s send you warmest wishes and continued guidance in your pray that God grants you excel- new age and beyond.”

Malta Guinness takes CSR to Abuja, Kaduna, Kano, Bauchi

alta Guinness Nigeria has taken its Corporate Social Responsibility (CSR) to the cities of Abuja, Kaduna, Kano, and Bauchi to share the goodness and vitality of the non-alcoholic Malt drink, as part of its mission to fuel the greatness of every Nigerian, irrespective of location and occupation. The Malta Guinness team visited three mosques in Abuja, Kaduna and Bauchi. In Abuja, the visits held in National Mosque, Shehu Shagari Mosque, and

Kubwa Village Central Mosque. This was followed by visits to Al Manar Mosque Ungwa Rimi, Nawair- Ud-Deen Mosque, and Sabo Central Mosque, Kaduna. The team also visited Alfurqan Mosque, Alibaba Mosque, and Fegge Central Mosque, in Kano. Speaking at the event, Ife Odedere, assistant brand manager, Malta Guinness said, “by visiting Muslim faithful across the country, Malta Guinness is reaffirming its position as the premium nonalcoholic Malt drink. www.businessday.ng

L-R: Adedotun Sulaiman, board chairman, Financial Reporting Council (FRC) of Nigeria, presenting copies of Nigerian Code of Corporate Governance (NCCG) 2018 and 2019 International Financial Reporting Standards (IFRS) to Abdullahi Umar Ganduje, governor of Kano State, during a courtesy visit to the Governor by Board Members of the FRC in Kano.

Steer clear of Edo Assembly or see war, Edo youths warn House of Reps

group, under the auspices of the Edo Youth Vanguard, has sounded a warning to the House of Representatives and the leadership of the All Progressives Congress (APC) to either be impartial in its intervention in the contrived impasse in the state House of Assembly or incur the wrath of the youth. In a statement issued in Benin City by its president, Nosakhare Oseghale, the group questioned, especially the lower legislative arm’s ill-conceived directive, days back, that the governor, Godwin Obaseki, should issue a new proclamation to the Assembly for proper constitution while directing the Inspector General of Police and the director-general of the Department of State Service (DSS), to shut the Assembly and provide adequate security to allay further fears of intimidation and threat as alleged by some members-elect. The decision was reportedly taken when the House

adopted the recommendations of its Committee set up to investigate the crisis in the state Assembly. He said: “We are surprised and shocked that the House of Representatives seems to have abdicated its primary responsibility to represent the common and collective interests of the citizens through the enactment of laws for the peace, order and good governance of the Federation among other equally important legislative duties. “In a democracy, as practised in Nigeria, the legislature exists as an independent institution which deepens democracy and ultimately strengthens the polity. Shirking or abdicating these allimportant responsibilities on the altar of parochial and partisan and political interests imperils democracy and that comes with devastating consequences. “This is why the stance of the House of Representatives on the Edo State House of Assembly issue raises not only eyebrows, it calls for deeper

scrutiny into what inspired the misguided decision. Who are their sponsors? Are they acting in our interest or the interest of their paymasters,” the group queried. The EYV averred that Edo youths are not docile, adding that “We have just decided to maintain the peace and order in the state as encouraged and entrenched by Governor Obaseki but we are privy to the shenanigans of selfish and mindless Abuja political merchants and we shall not allow them to dictate to us who the leaders of our House of Assembly should be. “Since when did the national party start interfering in the composition of the leadership of a state House of Assembly if not that there is a particular interest that needs to be served?” The youth group claims that it was ironic that the House of Representatives acted in the manner it did, given that constitutionally, to make such order or any whatsoever on a state House of Assembly, there should be a joint resolu-

tion with the Senate and until then, any such directive is an exercise in illegality. The group also pointed out that apart from the illegality, what the House of Representatives has done is sub-judice given that the parties involved in the crisis are aware that there are three legal suits on the matter while there’s a Federal High Court injunction in respect of one of the issues raised. Indeed, according to the Solicitor-General of Edo State, Oluwole Iyamu, the Clerk of the House of Assembly instituted a case before the Federal High Court which has as defendants the National Working Committee of the APC, the Inspector General of Police and the Department of State Service, DSS. An injunction restraining the defendants were granted but which the HoR failed to appeal before issuing its directive. “Why didn’t the House of Reps committee take steps to vacate the Order before unilaterally issuing a directive,” the group asked.

Alleged N7.6bn fraud: Ex-Abia governor, Kalu, opens defence Innocent Odoh, Abuja

ormer Governor of Abia State, Orji Uzor Kalu, on Monday, July 22, 2019, opened his defence in an alleged N7.6 billion fraud trial involving him and two others before Justice Mohammed Idris of the Federal High Court sitting in Ikoyi, Lagos. A statement issued on Monday by the acting head of media and publicity of the Economic and Financial Crimes Commission (EFCC), Tony Orilade, said Kalu was standing trial alongside his former commissioner for finance, Ude Udeogu, and a company, Slok Nigeria Limited, on an amended 39-count charge bordering on money laundering to the tune of N7.6 billion. Kalu, who is also the senator representing Abia North Senatorial District, allegedly committed the offence between August 2001 and October 2005. The EFCC had on May 11,

2018, through its counsel, Rotimi Jacobs, closed its cases after calling 19 witnesses. Rather than open his defence, Kalu filed a no-case submission, which was afterwards dismissed by the trial court on July 31, 2018. Dissatisfied with the decision, Kalu approached the Court of Appeal, to upturn the ruling of Justice Idris. However, on April 24, 2019 the Appellate Court in a lead judgement by Justice M.L. Garba, upheld the decision of the lower court. The Court of Appeal also dismissed appeals filed by Kalu’s co-defendants challenging the jurisdiction of the court to further hear the case, following the elevation of Justice Idris to the Court of Appeal, the statement said. The President of the Court of Appeal, Justice Zainab Bulkachuwa, thereafter, issued a fresh fiat to Justice Idris to conclude the case.

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At Monday’’s sitting, Jacobs stated that the day’s proceeding was for the defence to open its case. Responding, Kalu’s lawyer, Awa Kalu, informed the court that he received a letter from the prosecution informing him of the resumption of the case. The defence counsel also added that he had informed the prosecution before the resumed sitting that he would not be available in court due to his involvement in some election petition matters. He further stated that he had to appear in court out of the respect he had for the court so as to explain his predicament in person. “The election petition matters are constrained by time as stipulated in the Constitution and the time for concluding election matters cannot be extended by any court,” Awa Kalu said. He also told the court that the @Businessdayng

second and third defendants, Udeogo and Slok Nigeria Limited were not represented in court for today’s proceedings. The defence counsel also told the court that he had to rush down to Lagos from Abuja yesterday without the case file due to the fact that his Secretary, whom he said was bereaved, could not prepare the case file. Kalu’s lawyer, therefore, asked the court for a short adjournment for the defence to open its case. While acknowledging the receipt of the letter written by Kalu’s counsel, Jacobs argued that the defence could still open its case. Justice Idris noted that there had been a prior notice to all the parties in the matter, stating that the hearing of the case should resume. The Judge also held that the absence of counsels to the second and third defendants could not be justified, and therefore, ordered Kalu to open his defence.

Tuesday 23 July 2019

BUSINESS DAY

POLITICS & POLICY

Benue governor swears in 15 commissioners, assigns portfolios BENJAMIN AGESAN, Makurdi

enue State Governor, Samuel Ortom on Monday swore in 15 commissioners to help stir the affairs of his administration especially as members of the State Executive Council. He stated that the appointments were made without interference from any quarters, stressing that those appointed should know that their godfather is God and then the Benue people. The governor noted that the new appointees were coming into governance when challenges are enormous and should deploy their experiences to bear on the collective determination of his administration to

respond to the challenges confronting it. He urged the newly sworn in commissioners to quickly settle down and acquaint themselves with the policy document of his administration, ‘Our Collective Vision for a New Benue,’ which birthed five main pillars of good governance and revenue security, agriculturedriven industrialisation, STEAM-based education and health services as well as investment in critical infrastructure and promotion of gender, empowerment of women, youth, sports and persons with disability. Governor Ortom noted that as part of efforts by his administration to deliver its promises to Benue people, reorganisation of government machinery was being done in some sectors, point-

Samuel Ortom

ing out that those who fail to measure up would have to give way for others to come in. The governor, while

Insecurity: We must come together to find lasting solution - NASS YOMI AYELESO, Akure

he National Assembly has said the current insecurity in the country has reached a level where all stakeholders must come to together to find lasting solutions to it. The legislative arm revealed that kidnappings, killings and banditry is war that has no frontiers. The Deputy Senate Leader, Ajayi Boroffice stated this on Sunday when he led a 14-man delegation of the National Assembly members to Akure, the Ondo state capital in a condolence visit to Afenifere leader, Pa Reuben Fasoranti following the killing of his daughter, Funke Olakunri. He said the Senate and the House of Representatives would collaborate with the executive arm towards providing way forward, saying, “The killings must not continue.” He said: “The National Assembly was concerned about what happened and there was a motion and resolution was taken. Senate condemned what happened and also commiserate with Fasoranti. National

Assembly will work hand in hand with the executive to find lasting solutions to insecurity. “Something has to be done very urgently. We have a role to play because we are part of the government. The killings cannot continue. “ We a r e c o n c e r n e d about what is happening. We believe that action has to be taken to stop the nefarious activities of these people. We are fighting a wall that has no frontiers, we are fighting those we don’t know their location. But, with our conscious efforts we will find solutions to it.” On the calls for the relocation of Fulani from the South by the Northern Elders Forum, Boroffice, who represents Ondo North said the statement might be as a result of anger. “We are a nation where the constitution guarantees free of speech. I don’t think the Senate can legislate on it. I believe people speak with emotion or out of anger or sentiment. I don’t think that is enough for us. This shows concerns of Nigerians and this will actually activate the solutions the country wants to put forward to solve it,” he said. www.businessday.ng

Also speaking, Senator Amosun noted that the current insecurity is alien in the country, added that all hands must be on deck to end it. The former Ogun State governor said: “Security is collective responsibility of everybody and we have been talking about state police, community police, getting our people employed, fighting insecurity in the hard way “I think all of us must come together to find a lasting solution to all these incident that has more or less affected our country but we need to still give kudos to our security and i am sure they will not rest until we are all secured in Nigeria.” On his part, the House of Representatives member representing Surulere/ Ogo Oluwa constituency of Oyo State, Hon. Segun Odebunmi said the killing of Olakunri is a national embarrassment. Odebunmi added that local security arrangements should be deployed to complement the efforts of the nation’s security outfits, noting it would help in no small measure to curb the increasing insecurity across the nation.

congratulating the commissioners for their appointments, also charged Permanent Secretaries and senior government offi-

cials in their ministries to cooperate with them for optimal performance, even as he appealed to their family members, friends and political associates to shun the temptation of mounting undue financial pressure on them. Attorney-General and Commissioner for Justice, Michael Gusa while responding on behalf of his colleagues, expressed appreciation to the governor for finding them worthy to serve in the cabinet, assuring that they would give him the desired support to succeed. Dennis Ityavyar, Bernard Unenge, David Olofu and M-Erga Kachina retained their portfolios of Education, Lands, Survey and Solid Minerals as well as Finance and Industry, Trade

and Investment, respectively. Ngunan Adingi is to oversee Information, Culture and Tourism, Ladi Ajene Isegbe was assigned to Youths and Sports with Alexander Shaapera taking charge of Works while Dondo Ahire was assigned to Water Resources and Environment with Timothy Ijir, Victor Dzungwe Ukaha and Igirgi Nyiazungwe taking charge of Agriculture and Natural Resources, Rural Development and Cooperatives as well as Women Affairs, respectively. Oyiwona Godwin is to oversee Energy, Science and Technology; Ekpe Ogbu is to take charge of Housing and Urban Development, while Ongbabo Sunday was assigned to Health and Human Services.

S’Court declines to reverse self on Zamfara APC Felix Omohomhion, Abuja

he Supreme Court, Monday, declined to review its decision on disqualification of the All Progressives Congress (APC) in Zamfara from participating in the governorship, national and state House of Assembly elections in the state. In a ruling, the apex court refused to review its judgment which nullified the 2018 APC primary elections in the state. In an application filed by the APC by its counsel, Robert Clarke (SAN), the APC asked the court to reverse and set aside the consequential order in its judgment delivered on May 24, 2019. The appellant also wanted the court to order fresh election by INEC as against its consequential order which directed other party than APC with the highest vote to various offices that was contested for in Zamfara be sworn in. Senator Kabiru Marafa had dragged the APC in the state before a high court in the state, praying it to nullify the primaries of the party carried out by a faction loyal to the ex-governor, Abdulaziz Yari. The trial court had dismissed Marafa’s suit, which prompted an appeal to Appeal Court of Sokoto Division. The five-panel of Justices, led by Justice Bode RohdesViviour, on Monday, held that the consequential order arose from the substantive

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suit which is within the prescribed the 60 days for preelection matters, therefore the appeal to set it aside was incompetent and the court lacks jurisdiction to review it. The Supreme Court had earlier invalidated the participation of the APC in the last governorship, National Assembly and State Assembly elections in Zamfara on the ground that the APC and all its candidates that participated in the elections for failure to conduct lawful primaries. The apex court had in a unanimous judgment on May 24, 2019, by a five-man panel of Justices led by the acting Chief Justice of Nigeria (CJN), Justice Tanko Muhammad, held that the APC did not conduct valid primary elections to nominate candidates for any elective position in the state and as such did not have any valid candidate in all the elections that held in Zamfara State. The Justices maintained that the Sokoto Division of the Court of Appeal was right when it held that the APC did not file any eligible candidate in the 2019 general elections in Zamfara State. The verdict was prepared and delivered by Justice Paul Galinje, who also awarded a cost of N10m against the APC. “I find that the lower court was right in holding that there were no primary elections in Zamfara State. The appeal had no merit and it should be dismissed. It is accordingly dismissed. “The party that has no can@Businessdayng

didate cannot be declared a winner of the election. Therefore, all votes that are credited to such party are deemed as wasted votes. Candidates of parties with the highest number of valid votes cast with the required spread stand elected in Zamfara”, the Supreme Court held. The implication of the verdict was that all candidates of the APC that won elections in Zamfara State, including its governor-elect, Mukhtar Idris, national assembly members elect and state House of Assembly members were in the face of the law deemed not duly elected. In complying with the verdict of the court, the Independent National Electoral Commission (INEC), announced the People’s Democratic Party (PDP) as winner of the governorship election, all the National Assembly seats and all but one state Assembly seats. After explaining the rationale behind the commission’s decision, INEC boss, Mahmood Yakubu, said: “I wish to seize this opportunity to draw the attention of all stakeholders, but particularly the political parties, to the implications of the Supreme Court judgment on the Zamfara matter. “It is clear that properly conducted party primaries are cardinal to the proper internal functioning of political parties, the electoral process and our democratic system at large.”

Tuesday 23 July 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

ALEX BARKER IN BRUSSELS AND JAMES POLITI IN WASHINGTON

rance is exploring ways to scrap an age limit for candidates to head the IMF, a reform that could clear the path for the World Bank’s Kristalina Georgieva to emerge as a compromise choice for the job. Bruno Le Maire, France’s finance minister, informally raised Ms Georgieva’s name at a meeting of G7 finance ministers in Chantilly last week, according to three European officials, only for the age restriction on IMF management to be highlighted as a legal impediment. The IMF’s bylaws state that managing directors must be under 65 years of age when appointed and cannot serve “beyond [their] 70th birthday”.The rule disqualifies Ms Georgieva, the 65-year-old Bulgarian chief executive of the World Bank, as well as Mario Draghi, the 71-year-old outgoing president of the European Central Bank. Without committing themselves to Ms Georgieva, French officials in Washington have suggested changing the internal rules. Should the idea gather support, it could be put to an IMF board vote as soon as this week. “They see her as a possible compromise and they want the age limit changed,” said one senior EU diplomat. Ms Georgieva’s name has emerged after Christine Lagarde’s appointment as ECB president after eight years at the helm of the IMF. Ms Lagarde announced last

France urges IMF age-cap rethink in hunt for Lagarde successor World Bank’s Kristalina Georgieva stands to benefit if limit were removed

Christine Lagarde with Kristalina Georgieva, left, who has experience in international politics and development economics through working at the World Bank and as a European commissioner © Bloomberg

week that her resignation would take effect on September 12, leaving relatively little time for the IMF to find a replacement. Mr Le Maire has been asked to lead deliberations between Euro-

pean capitals on the IMF role and is keen to keep all viable options open. Failure to find a common position could badly hurt Europe’s claim to the job. “The most stupid thing we could do is not agree on

one candidate,” said one senior European government figure. A French official said Mr Le Maire “does not have a preferred candidate” and would play an “impartial” co-ordination role.

Jeroen Dijsselbloem, the Dutch former chair of the eurogroup of eurozone finance ministers, emerged as an early front-runner but faces resistance from Rome and other southern European capitals. Mark Carney, the Canada-born Bank of England governor, has struggled to convince European capitals that he can be “a European candidate”, in spite of holding UK and Irish passports. “He is out,” said one senior eurozone finance ministry official. Northern member states are meanwhile complaining of France and southern Europe being overrepresented at the ECB and in EU economic policymaking. One EU diplomat said: “With Europe’s financial architecture de facto being managed by the Mediterranean union it is time for the north to reassert itself.” Ms Georgieva is one of a batch of names expected to be tested in coming weeks. She would bring experience in international politics and development economics to the IMF, following the World Bank and a six-year stint as a European commissioner in Brussels.

The day Deutsche Bank’s boss decided Equifax to pay up to $700m in US on a radical solution settlement over data breach When police raided the Frankfurt HQ, Christian Sewing knew he was running out of time OLAF STORBECK IN FRANKFURT, STEPHEN MORRIS IN LONDON AND LAURA NOONAN IN NEW YORK

hen a dozen police vans pulled up in front of Deutsche Bank’s twin towers on a grey and chilly Frankfurt morning last November, Christian Sewing knew he was running out of time. As camera crews broadcast the spectacular raid by more than 100 officers, the chief executive kept up appearances, lunching with the Federal Reserve’s top banking supervisor, Randal Quarles, in an exclusive corporate dining area at Deutsche’s headquarters. Elsewhere in the bank’s premises, armed police, prosecutors and tax inspectors scoured filing cabinets and computers — including those in the CEO’s office — looking for evidence of alleged money laundering. The traumatic day symbolised the end of an era for Deutsche, once the world’s biggest bank by assets. By then, Mr Sewing already knew he was heading

towards another dire set of quarterly earnings. Added to the raid, this emboldened him to call time on a two-decade attempt to conquer Wall Street. Shares in Germany’s largest lender were trading near 149-year lows, down almost 90 per cent from their 2007 peak. Funding costs were soaring, its credit rating had deteriorated to near-junk levels and revenues were in freefall. A senior manager remembers December and January as “months of horror”. The bank’s strategy, described as “wait and hope” by one strategic adviser, relied heavily on the ever-more-remote prospects of interest rate rises and a return of market volatility. Mr Sewing swiftly realised that something much more radical was needed — and sooner than he had initially planned. “The raids and the downward spiral Deutsche found itself in afterwards were the real catalyst,” said one member of the supervisory board. Another director said: “It wasn’t just a minor heart attack.” www.businessday.ng

FTC says credit reporter ‘failed to take basic steps’ to prevent hack that hit 147m MARTIN COULTER IN LONDON AND KADHIM SHUBBER IN WASHINGTON

quifax will pay up to $700m as part of a settlement with US authorities after a 2017 hack that exposed the personal data of close to 150m people whose most sensitive financial information is tracked by the credit reporting company. The resolution with the Federal Trade Commission, Consumer Financial Protection Bureau and 50 state attorneys-general draws a line under the hack, the largestever breach of consumer data. The company has also settled with claimants in a class-action lawsuit. “Equifax failed to take basic steps that may have prevented the breach that affected approximately 147m consumers,” said Joe Simons, FTC chairman, in a statement on Monday morning. “This settlement requires that the company take steps to improve its data security going forward, and will ensure that consumers harmed by this

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breach can receive help protecting themselves from identity theft and fraud,” he added. Mark Begor, Equifax chief executive, said: “This comprehensive settlement is a positive step for US consumers and Equifax as we move forward from the 2017 cyber security incident.” The settlement comes two years after the breach in July 2017, when hackers were able to steal data including social security numbers after Equifax had failed to patch its systems, the FTC said. The company had been warned of a security vulnerability in March that year but failed to take action until the hack. “Hackers were able to access a staggering amount of data because Equifax failed to implement basic security measures,” the FTC said on Monday. The names and dates of birth of a least 147m Equifax customers were stolen in the hack, as well as 145.5m social security numbers and 209,000 payment card numbers and expiration dates. Equifax was forced to scrap @Businessdayng

executive bonuses and suspend share buybacks last year, in anticipation of fines and lawsuits resulting from the hack. The settlement with US authorities follows action by UK regulators last September. Equifax was fined £500,000, the maximum penalty allowed by law at the time of the hack, after it was revealed hundreds of thousands of British customers had also been affected. The UK Information Commissioner’s Office said Equifax had collected British customer data and stored it in the US. Equifax will pay $300m into a compensation fund for affected consumers as part of the settlement with the FTC, CFPB and state AGs, with the potential to add up to $125m more. It will also pay $175m to the state AGs and $100m to the CFPB in civil penalties. In addition to the cash payments, Equifax will also provide all US consumers with six free credit reports every year for seven years. As part of the class-action settlement, affected consumers will receive 10 years of free credit monitoring.

Tuesday 23 July 2019

BUSINESS DAY

NATIONAL NEWS

Iran says it disrupted US spy ring operating inside country Donald Trump calls claims false and hits out at ‘badly failing’ regime NAJMEH BOZORGMEHR IN TEHRAN

ran said it had demolished a spy ring of 17 Iranian nationals who were trained by American intelligence agents, but US President Donald Trump dismissed the claim as “totally false”. Tehran and Washington traded fresh accusations on Monday as Iran remained locked in a separate showdown with the UK over Tehran’s seizure of a British-flagged tanker last Friday. An Iranian intelligence ministry official told foreign reporters in Tehran that the alleged CIA spies worked in military and nuclear facilities and added that the US had expanded its espionage operations inside Iran under Mr Trump. He said some of the 17 people had been sentenced to death while others were co-operating with Iran’s intelligence services. But the US president tweeted: “The Report of Iran capturing CIA spies is totally false. Zero truth. Just more lies and propaganda (like their shot down drone) put out by a Religious Regime that is Badly Failing and has no idea what to do. Their Economy is dead, and will get much worse. Iran is a total mess!” Mike Pompeo, US secretary of state, told Fox News: “It’s part of their nature to lie to the world. I would take with a significant grain of salt any Iranian assertion about actions they’ve taken.” Iran revealed the counterespionage operation in the midst of a crisis sparked by its seizure of the Stena Impero, the UK-flagged tanker, an act of retaliation for Britain’s capture of an Iranian vessel earlier this month. Iran insists that the UK seized the vessel off the coast of Gibraltar this month at the behest of the US and rejects British allegations that it was shipping oil to Syria in violation of European sanctions. British prime minister Theresa May, who is scheduled to step down on Wednesday, was due to address the tanker seizure on Monday morning in a meeting of the UK government’s Cobra emergency response committee. The Iranian intelligence official said the alleged spies were experts and technicians in “sensitive places” from which the US would like to collect information, including military and nuclear sites. But he said the spies had failed to do any major sabotage. A reformist former government official said Iran’s spy-busting announcement appeared more aimed at a domestic audience than the US. “Iran’s intelligence services are reminding people that they have full control and authority over the state of affairs,” said the former official. “The intelligence ministry wants to say that despite political infighting, the intelligence services of various organisations are united in fighting espionage and will find out about any co-oper-

ation with foreign intelligence services.” The intelligence ministry official said the spying operation was run exclusively by the US, although some foreign intelligence services had been aware of meetings the Iranian spies had in their countries. The Iranian anti-espionage operation started last year and it is ongoing, the official said. The intelligence ministry released video footage on Monday showing CIA agents meeting Iranian spies they recruited in shops and restaurants in countries including Austria, Sweden, the United Arab Emirates, Thailand and Afghanistan. “We have been present . . . in the Iran desks of their [intelligence services],” Mahmoud Alavi, Iran’s intelligence minister, said in a video. “When they work on some forces . . . to hire them as spies, our forces can track them immediately.” The intelligence ministry official told reporters that none of financial promises CIA agents had made to Iranian nationals had come true. Timeline: Showdown in the Gulf 8 April US president Donald Trump announces that the US will add Iran’s elite Revolutionary Guard Corps to the list of foreign terrorist organisations, allowing the US to impose further sanctions on Iranian businesses. May 6 John Bolton, US national security adviser, announces that the Trump administration is deploying an aircraft carrier strike group and bombers to the Middle East in response to troubling “indications and warnings” from Iran. May 12 Four tankers, including two Saudi vessels, are hit by “sabotage” attacks in the Gulf of Oman, off the coast of Fujairah. US officials said they suspected Iran. Tehran denied any involvement. June 13 Two oil tankers, the Norwegianowned Front Altair and the Japanese-owned Kokuka Courageous, are attacked in the Gulf of Oman. US secretary of state Mike Pompeo points the finger at Tehran. Iran denies the accusations. The US military releases a video that it says shows Iran’s involvement. June 17 Iran announces that it will breach its uranium enrichment limits within 10 days, threatening the total collapse of the 2015 nuclear deal. Hours later, Mr Trump said an additional 1000 American troops would be deployed to the Middle East June 20-21 After Iran shoots down a US drone it claims strayed into it’s airspace over the Straits of Hormuz — a claim the US disputes — President Donald Trump confirmed that he called off retaliatory strikes on Iran at the last minute. www.businessday.ng

Boris Johnson is widely expected to become the UK’s next prime minister but won’t have much time to play with when he enters No 10

Boris Johnson’s allies line up for key cabinet roles Speculation grows over who will be appointed to incoming PM’s top team SEBASTIAN PAYNE AND GEORGE PARKER IN LONDON

arring a big upset Boris Johnson will enter Downing Street as Britain’s new prime minister on Wednesday and begin forming his first government, finally fulfilling his lifelong ambition. But after a drawn out and at times fractious Tory leadership contest, Mr Johnson and his team of supporters will not have much time to play with when the former London mayor crosses the threshold of No 10. For the past few months, while the majority of the Johnson campaign team has been focused on guiding him to victory over the foreign secretary Jeremy Hunt, a smaller coterie of advisers has been preparing a plan for power, lining up senior cabinet appointments and key policy announcements. While some of his allies have described the team as a “presidential-style transition operation”, others say it has been “very chaotic” adding that the warring factions of Johnson supporters vying for jobs is making it difficult

to form a cohesive operation. “No 10 will be like Game of Thrones but without Jon Snow at the helm,” said one Tory MP. A united and clear transition plan is all the more important for Mr Johnson who has vowed to deliver Brexit “do or die” by October 31, the UK’s scheduled departure date from the EU. One of Mr Johnson’s first acts after taking over from Theresa May will be to appoint the three core cabinet jobs: chancellor, foreign secretary and home secretary. Despite reports that some big hitters such as Sajid Javid and Liz Truss have been lined up for senior positions, the Johnson team insists no decisions have been taken. What is certain is that Mr Johnson is eager to make a clean break from the era of Mrs May. Chancellor Philip Hammond, justice secretary David Gauke and international development secretary Rory Stewart, along with allies of Mrs May are all expected to be pushed out — if they don’t quit first. Last week nearly 40 Conservatives, including Mr Hammond, voted for or abstained from a

vote for a parliamentary amendment that will make it harder for a Johnson government to take the UK out of the EU without a deal. Some Conservatives are bracing themselves for a bloody reshuffle, similar to Harold Macmillan’s “Night of the Long Knives”, when seven ministers were dismissed in one night in 1962 in an attempt to rejuvenate his government. Others, however, think Mr Johnson might act more cautiously. “I suspect Boris will only replace the people in the cabinet who have talked themselves out of a job,” said one Johnsonsupporting MP. “Yes, it’s going to be a big change, but it might not be as vast as some people are predicting. Only he really knows the plan.” Mr Johnson’s transition team is headed by Edward Lister who served as Mr Johnson’s chief of staff in London City Hall. The 71-year-old is likely to take up the same role in Downing Street, at least for a short period. Supporters of Mr Johnson say “he knows the mind of Boris and can translate his broad ideas into specific policies”.

Powell seeks a cure for the disease of low inflation The Fed chair is expected to preside over the first US rate cut since the financial crisis JAMES POLITI IN WASHINGTON

ay Powell this month stressed the Fed’s determination to fight the sluggish inflation numbers dogging the US economy, warning Congress that downbeat prices could lead to an “unhealthy dynamic” of lower interest rates and less room to act in a downturn. “We’ve seen it in Japan. We’re now seeing it in Europe,” Mr Powell said in his testimony. “And that’s why we think it’s so important that

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we defend our 2 per cent inflation goal here in the United States and we’re committed to doing that”. The 66-year-old former investment banker and private equity executive who took the helm of the Fed last year, is poised — as early as next week — to steer the US central bank towards its first interest rate cut since the financial crisis. Mr Powell and other Fed officials have justified the need for looser monetary policy by citing “uncertainties” in the outlook due to trade tensions and a @Businessdayng

weaker global economy. But the persistence of low inflation in the US economy despite high growth and plentiful jobs, is a dominating factor behind the probable decision to cut rates by 25 basis points. The Fed’s preferred measure of inflation — the core PCE price index, which excludes food and energy — is running at 1.7 per cent year-on-year compared with the central bank’s target of 2 per cent — and inflation expectations have also weakened.

Tuesday 23 July 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Trump says lawmakers not ‘capable’ of loving America President intensifies race row by stepping up attacks on four female Democratic Congresswomen AIME WILLIAMS IN WASHINGTON

o n a l d T r u m p, U S president, continued to stoke an intensifying race row on Sunday, tweeting that he did not believe that four US congresswomen were “capable of loving” America. Although Mr Trump did not name the lawmakers, he has previously attacked four ethnic minority freshman Democrats — Alexandria Ocasio-Cortez, Rashida Tlaib, Ilhan Omar and Ayanna Pressley. Last week, Mr Trump tweeted that they should “go back and help fix the totally broken and crime-infested places from which they came”. On Sunday, Mr Trump tweeted: “They should apologise to America (and Israel) for the horrible (hateful) things they have said. They are destroying the Democrat Party, but are weak & insecure people who can never destroy our great Nation!” His fresh remarks show he is not backing down from his attacks on the four women despite criticism from Democrats. On Sunday morning, two senior Democrat lawmakers, Elijah Cummings and Cory Booker, said the president was racist. Mr Cummings said Mr Trump’s comments reminded him of his

experiences in Baltimore in the 1960s. “I heard the same kind of chant. Go home, you don’t belong here,” Mr Cummings told ABC’s This Week. “When Trump does these things, when the president does these things, it brings up the same feelings that I had over 50 some years ago and it’s very, very painful,” he said. Mr Cummings said all four of the lawmakers were “merely trying to bring excellence to government”, adding: “These are folks and women who love their country, and they work very hard and they want to move us towards that more perfect union that our founding fathers talked about.” Senator Cory Booker, a Democratic presidential candidate, criticised Mr Trump as being “worse than a racist”. “He is actually using racist tropes and racial language for political gain. He is trying to use this as a weapon to divide our nation against itself,” Mr Booker said on CNN. Bernie Sanders, another 2020 Democratic candidate, tweeted: “I wish we didn’t have to say this, but it is the damn truth and we have to say it: We have a president who is a racist and a xenophobe. His goal is to turn us against one another.”

Bridgewater fund caught off-guard by market bounce Pure Alpha suffers 4.9% fall in year to June as equities and bonds rise ORTENCA ALIAJ AND ROBIN WIGGLESWORTH IN NEW YORK

ridgewater’s flagship fund suffered one of its worst first-half performances in two decades this year after being wrong-footed by rebounding markets. The $150bn hedge fund group founded by Ray Dalio saw its Pure Alpha fund, which tries to surf macroeconomic trends, lose 4.9 per cent in the six months to June as global equity and bond markets bounced on hopes of looser monetary policy. The FTSE All-World equity index was up 15 per cent by the end of June, while the broadest global bond market gauge was up 6 per cent. The average “macro” hedge fund gained 5.2 per cent in the period, according to data provider HFR. The drop came after a strong year in 2018, when Pure Alpha delivered 14.6 per cent returns net of fees, while other managers struggled with market volatility. One person close to Bridgewater said the fund had now pared some of its earlier losses, and is now down 1.45 per cent in the year to mid-July.

Bridgewater declined to comment on why its performance has fizzled this year, but the particularly poor performance in January — when Pure Alpha declined by 4.5 per cent — suggests that it went into the new year expecting further turbulence and instead suffered as the market recovered. Bridgewater’s passively managed All-Weather fund, which in contrast to Pure Alpha aims to be largely immune from macroeconomic shifts, rose 13 per cent through June. Mr Dalio wrote last week about a “paradigm shift” in the global economy that Pure Alpha tries to navigate, characterised by tax increases, rock-bottom interest rates, central banks increasingly financing government deficits through money creation and subsequent devaluations — increasing the lustre of gold. “History has shown us and logic tells us that there is no limit to the ability of central banks to hold nominal and real interest rates down via their purchases by flooding the world with more money, and that it is the creditor who suffers from the low return,” the investor said in a LinkedIn post on Wednesday. www.businessday.ng

Elijah Cummings: ‘I heard the same kind of chant. Go home, you don’t belong here,’

Hong Kong police under fire after ‘triads’ beat protesters Force says it was too stretched to quell attack by alleged gang members in metro PRIMROSE RIORDAN AND NICOLLE LIU IN HONG KONG

he Hong Kong government has come under pressure from lawmakers to guarantee public security after thugs, accused of being triad criminal gang members, beat up pro-democracy protesters in a deepening of a political crisis in the Asian financial hub. Pro-democracy politicians on Monday criticised police for arriving too late to stop at least 45 people being injured late on Sunday night in violence at a metro station in the outlying district of Yuen Long, near the border with mainland China. The scuffles erupted when the men used sticks to beat protesters returning home from central Hong Kong where they had participated in a demonstration, part of a running series of week-

end protests against a proposed extradition bill that have ended in fierce confrontations with police. The beatings shocked a city in which such violence is rare. “I am furious towards the police for not sending anyone to control the situation,” said Democratic party lawmaker Lam Cheuk-ting, who was also injured in the violent scuffles. He alleged the men were members of Hong Kong’s triads — organised crime gangs that operate in the territory. “Hong Kong is now allowing the triads to do what they want, to beat people on the street.” Hong Kong is facing its worst political crisis since its handover from Britain to China 22 years ago following the protests against the extradition bill, which would allow criminal suspects to be sent to China for trial. The territory’s leader, Carrie Lam, has suspended the bill but the protests have continued,

leading to calls for its complete withdrawal, including from the city’s business community. The Hong Kong General Chamber of Commerce, a major business association in the territory, in an unusually strongly worded statement on Monday, condemned the violence on Sunday but called on the government to formally withdraw the bill “to show good faith”. It also demanded the government enlarge public consultation on issues, make officials accountable for the “poor” handling of the bill and establish a commission of inquiry into the tensions. The mass protests also took a new twist at the weekend when demonstrators defaced Beijing’s Liaison Office in the territory — the first time they have targeted a building associated with the Chinese government during the anti-extradition protests.

China stocks: Star market to burst The real test for the exchange will be whether it can drag some top tech names on board

o, you want to quadruple your money in a day? Investors in Anji Microelectronics got just that. The semiconductor parts maker was part of the first batch of stocks to list on Shanghai’s Star Market, an Asian version of Nasdaq. Investors cheered China’s most notable attempt to promote direct financing and deregulate markets since launching ChiNext, a similar attempt, a decade ago. Funds poured into Star Market. But history suggests these spectacular gains were overdone. There is no doubt that the timing is right. Tensions with the US mean Chinese unicorns are turning away from New York as a listings venue. The Star Market should also help to soak up funds flooding into China. Some $70bn

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of inflows are expected following the MSCI and FTSE A-shares quarterly rebalancing in August. The runaway gains on some Star Market names reflect the decision of exchange authorities to place no daily limit on price moves during the first five trading days. But much of these gains are at the expense of other indices. On the same day, all other Chinese markets, including the Hang Seng, Shanghai Composite and ChiNext fell more than 1 per cent. Trading volumes declined, pointing to the same investor pool shuffling funds onto the hot new board. The Star Market limits trading to investors with two years of trading experience with at least $74,000 in funds. The intention was to discourage some of the @Businessdayng

flighty retail investors who make up more than 80 per cent of the local market, limiting volatility. Yet, with the still-low entry bar, the investor profile is little changed. A wild first day of trading shows bars to entry were still too low. Furthermore, most foreign investors are kept out of the new trading venue, which lacks a link with Hong Kong. The ability for investors to short-sell stocks for the first time in mainland China will add to volatility when the going gets rough. The rally is eerily similar to the ChiNext’s launch. Trading volume and prices spiked when that launched. It is now more than 60 per cent below its peak. Most Star Market stocks have already come down from intraday highs.

Tuesday 23 July 2019

BUSINESS DAY

ANALYSIS

‘Eye for eye’ ideology behind Iran’s seizure of UK tanker

Seizure of Stena Impero demonstrates Tehran’s desire not to be seen as weak NAJMEH BOZORGMEHR IN TEHRAN

Revolutionary Guard member shouted “Allahu akbar”, the euphoric religious slogan, as gunboats buzzed a British-flagged tanker and a naval helicopter dropped troops on to the vessel, replicating how the UK impounded an Iranian oil tanker earlier this month. Iran’s release of footage of the operation to commandeer the Stena Impero on Friday in the Strait of Hormuz demonstrated that it had made good on its threat to retaliate for the Royal Navy’s seizure of the Grace 1 supertanker off the coast of Gibraltar. “Eye for eye and hand for hand is our Islamic ideology. An American eye or a European hand are not more valuable than an Iranian eye or hand,” said Mohammad-Sadegh Javadi-Hesar, a reformist politician. “Iran will not let the balance of power be disrupted in the region, which would equal our death. If we let Britain treat us unjustly now, others will follow suit.” Iranian leaders say they are committed to diplomatic solutions and seek neither escalation of tensions nor war with the US or other western states. But while they say

they will not initiate any attack, they insist that any act of aggression will be reciprocated, even if it risks wider conflagration. The Islamic Republic claims Britain seized the Grace 1 at the behest of the US in response to the Revolutionary Guard’s shooting down of an American drone, which the US said had put the country some minutes away from a military confrontation with its arch enemy. The UK denies the claim, warning that the seizure of the Stena Impero was hostile, put Iran on a “dangerous path” and that its response would be “considered and robust”.The UK has advised British shipping to stay out of the area for now. Iran rejects British allegations that the Grace 1 was shipping oil to Syria in violation of EU sanctions. “That was a big lie by Britain. Was this the first tanker suspected of carrying oil in about one decade of war in Syria?” said Saeed Laylaz, a reformist analyst of Iran’s political economy. While Iran is open to acknowledging it acted in retaliation, it claims the Stena Impero violated international maritime regulations by causing pollution in the vital waterway, switching off tracking devices to avoid Iranian forces and colliding with a fishing boat.

Shares on China tech exchange surge up to 520% in trading debut Star Market billed as Shanghai’s answer to Nasdaq as Beijing grapples with trade war HUDSON LOCKETT IN HONG KONG

hares rocketed by as much as 520 per cent on the first day of trading for Shanghai’s new science and technology-focused equities market in what the Chinese government will hope is a further sign of its resilience in the face of its trade war with the US. The Star Market was announced by president Xi Jinping less than a year ago and has been billed as China’s answer to Nasdaq, the tech-dominant stock market in the US. Beijing hopes the new board will encourage investment in domestic tech companies and also lead to more Chinese businesses listing at home rather than overseas. China is trying to counter pressure on its technology industry from Washington, which earlier this year blacklisted the country’s sector champion, telecoms equipment maker Huawei. More than 140 technology and science companies have signed up to list their stocks on the new facility run by the Shanghai Stock Exchange, aiming to raise a total of Rmb128.8bn ($18.7bn). The first 25 companies to list on the exchange on Monday had raised Rmb37bn collectively through the issuance of new shares that closed their first

trading day on Star between 84 per cent and 400 per cent higher from where they had priced. The average gain was 140 per cent. Among the companies to list on day one were chipmakers Anji and Montage Technology, which rose as much as 520 per cent and 285 per cent, respectively. Four of the 25 stocks were up more than 200 per cent at the close, with 16 stocks up more than 100 per cent. The sharp rises are unusual in China, where stock movements are normally capped within a range defined by authorities. The Shanghai and Shenzhen exchanges permit main board stock prices to move 44 per cent on their first day of trading, after which they are limited to moves of up to 10 per cent. By contrast, the Star Market has no limits on share price movements during a stock’s first five days. The Star Market’s first day gains come despite rules intended to limit the influence of China’s retail investors, who account for about 80 per cent of turnover on the Shanghai Stock Exchange and are often more heavily influenced by momentum trading than institutional investors. Star allows investors to trade who have an account balance of at least Rmb500,000 ($73,000), and who have two years of trading history. www.businessday.ng

Naspers: ‘Africa’s SoftBank’ looks beyond its Tencent stake By floating some of its online assets it will create Europe’s biggest consumer internet company. But will that lift its share price? JOSEPH COTTERILL IN JOHANNESBURG

t is Africa’s SoftBank: the continent’s most valuable company by virtue of owning a significant piece of one of Asia’s tech giants. Naspers — a publisher once condemned as a mouthpiece of the apartheid regime in South Africa — has quietly become one of the world’s biggest internet investors thanks to a stake in China’s Tencent that it originally paid $32m for in 2001. Its near 30 per cent stake in the Hong Konglisted gaming and WeChat giant, is now worth $133bn. Few other bets come close in the investing hall of fame. The one it most resembles is the initial $20m gamble Masayoshi Son, the SoftBank founder, took on Alibaba, the Chinese ecommerce group, in 2000. That stake is now worth close to $132bn and has turned SoftBank into one of the most powerful tech investors in the world. Yet Naspers is worth just $100bn — enough to make it the largest company in Africa by market capitalisation but more than $30bn short of the value of its Tencent stake. It is a valuation gap driven largely by the overwhelming dominance of the Chinese group. It has overshadowed fast-growing food delivery apps in Latin America, Indian online payment groups, Russian social networking outfits and even South Africa’s answer to Amazon — all part of Naspers’ internet empire. A former chairman of the group described Tencent as “the big, winged stallion in Naspers’ stable”. It is similar to the role played by Naspers in South Africa’s stock market over the past decade, propping it up as Jacob Zuma’s presidency trashed the economy and corruption scandals scared off foreign investors. Naspers is now on the brink of another corporate transformation. It has effectively become too big for Johannesburg’s bourse, where it represents just under a quarter of a share-weighted index

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of the biggest 40 companies. In September it plans to list about a quarter of both its Tencent stake and its global internet assets on the Amsterdam bourse, rolling them into a separate company known as Prosus, forward in Latin. It will overnight become Europe’s biggest consumer internet company ahead of groups such as Spotify. “We have been historically low profile, especially in Europe, and that is going to change,” says Bob van Dijk, who succeeded Koos Bekker, the person behind the original Tencent deal, as chief executive in 2014. “We’ve really been surprised at the interest.” Prosus is a bid to fix Naspers’ huge share price discount, which the company believes is largely structural. As it became an ever bigger part of the local market, South African investors had to offload its shares to keep portfolios diversified. But the company also hopes European institutional investors, starved of technology stocks, will be attracted to Prosus — automatically in the case of index trackers — and that this will help narrow the discount and create a new market for the shares. Others argue, however, that the discount reflects fundamental concerns that will not be resolved when Prosus lists. “South African investors had concentration reasons to sell down Naspers as it dominated the JSE,” says Ken Rumph, a Jefferies analyst. “That didn’t explain why the rest of the world refused to buy [the shares] at 60 cents on the dollar.” This argument is not about size. It is about influence. The concern, hinted at by Mr Rumph, surrounds who ultimately controls the fate of Naspers, where an elite class of supervoting shareholders has reigned since the company listed in 1994. These shares have 1,000 votes each — 100 times more power than the ones Mark Zuckerberg uses to control Facebook. Prosus will replicate this arrangement if Naspers’ stake ever falls below 50 per cent. @Businessdayng

The fear, Mr Rumph says, is that this “anti-activist control structure” ultimately prevents shareholders applying the brakes if Naspers makes poor investment choices with its cash-pile. Naspers insists that the structure is used only to guarantee to regulators that it will not succumb to a hostile takeover. “We believe that this assurance of independence and continuity is critical for our entry into, and operation in, many markets,” it says. In practice, say people familiar with the structure, it is about reassuring Beijing that one-third of Tencent will stay in safe hands. Some South African investors had urged Naspers to sell its Tencent stake as long ago as 2004, when the Chinese company first listed and the South African group had already doubled its money. It didn’t and Naspers has subsequently made billions out of the stake. Many investors might view control issues as an acceptable trade-off for exposure to further Tencent gains. But some don’t, instead arguing that keeping the Tencent stake as it is restricts more radical options. “Their strategy is flawed,” says Albert Saporta, a Geneva-based investor who has urged a separation of the Tencent stake. “The Dutch company will be at a discount and is going to suffer from the same issues as the South African one.” Naspers is unlikely to parcel out the Tencent stake to shareholders because of the sensitivities surrounding control of such a large stake. There might also be expensive tax bills from a separation. Yet Mr van Dijk has ruffled feathers. In 2018 he sold Tencent shares for the first time, raising $10bn from a 2 per cent stake. This year Naspers has spun off MultiChoice, an African pay-TV business which began life in 1985 as the group’s original pivot from newspapers. The discount in Naspers’ share price has subsequently narrowed from 50 per cent to about 35 per cent.

Tuesday 23 July 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 22 July 2019

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 231,043.97 6.50 1.56 197 9,444,163 UNITED BANK FOR AFRICA PLC 203,486.56 5.95 8.18 364 33,840,181 ZENITH BANK PLC 577,695.49 18.40 -0.54 374 16,014,062 935 59,298,406 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 204,603.17 5.65 -0.88 196 3,978,265 196 3,978,265 1,131 63,276,671 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,580,952.25 126.00 -1.56 93 1,448,359 93 1,448,359 93 1,448,359 BUILDING MATERIALS DANGOTE CEMENT PLC 2,896,886.26 170.00 2.94 88 2,169,466 LAFARGE AFRICA PLC. 211,012.12 13.10 1.16 121 3,724,038 209 5,893,504 209 5,893,504 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 282,453.39 480.00 - 9 1,648 9 1,648 9 1,648 1,442 70,620,182 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 1 10 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 1 10 1 10 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 10 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 53,228.18 55.80 - 8 44,270 PRESCO PLC 44,800.00 44.80 - 7 17,500 15 61,770 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,440.00 0.48 - 9 166,327 9 166,327 24 228,097 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 847.13 0.32 - 1 38,784 JOHN HOLT PLC. 179.01 0.46 - 3 4,223 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 38,615.59 0.95 -6.86 197 31,131,621 U A C N PLC. 16,135.26 5.60 3.70 45 595,029 246 31,769,657 246 31,769,657 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 1 100 1 100 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 23,760.00 18.00 - 10 43,200 ROADS NIG PLC. 165.00 6.60 - 0 0 10 43,200 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,092.09 1.19 - 5 110,212 5 110,212 16 153,512 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 13,231.85 1.69 - 2 60,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 100,757.61 46.00 - 10 10,023 INTERNATIONAL BREWERIES PLC. 131,516.69 15.30 - 3 5,200 NIGERIAN BREW. PLC. 471,817.22 56.10 -4.92 63 518,500 78 593,723 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 89,250.00 17.85 0.56 181 1,951,030 DANGOTE SUGAR REFINERY PLC 135,000.00 11.25 - 40 178,315 FLOUR MILLS NIG. PLC. 57,405.31 14.00 -2.78 116 2,573,403 HONEYWELL FLOUR MILL PLC 7,612.99 0.96 -4.95 14 751,822 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 20 NASCON ALLIED INDUSTRIES PLC 36,032.36 13.50 -10.00 30 852,503 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 382 6,307,093 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,284.58 10.80 - 34 122,258 NESTLE NIGERIA PLC. 998,746.88 1,260.00 0.80 62 182,970 96 305,228 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,628.12 3.70 - 14 106,371 14 106,371 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 23,028.77 6.00 3.45 22 394,746 UNILEVER NIGERIA PLC. 183,840.17 32.00 - 17 26,217 39 420,963 609 7,733,378 BANKING ECOBANK TRANSNATIONAL INCORPORATED 165,145.96 9.00 - 26 46,802 FIDELITY BANK PLC 44,621.19 1.54 -2.53 72 5,568,945 GUARANTY TRUST BANK PLC. 854,975.76 29.05 -0.51 197 13,456,464 JAIZ BANK PLC 12,964.27 0.44 - 5 229,818 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 66,217.96 2.34 2.63 97 46,020,563 UNION BANK NIG.PLC. 187,828.86 6.45 -1.53 82 4,971,206 UNITY BANK PLC 7,481.18 0.64 - 5 61,217 WEMA BANK PLC. 23,144.68 0.60 3.45 22 1,086,092 506 71,441,107 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,296.73 0.62 -3.12 22 982,334 AXAMANSARD INSURANCE PLC 17,325.00 1.65 - 6 72,370 CONSOLIDATED HALLMARK INSURANCE PLC 2,276.40 0.28 -9.68 15 1,387,800 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 3,240.49 0.22 - 2 1,500 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,489.97 0.34 3.03 21 2,843,475 LAW UNION AND ROCK INS. PLC. 2,019.28 0.47 - 1 2,071 LINKAGE ASSURANCE PLC 4,640.00 0.58 -9.37 5 131,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 11 1,977,295 NEM INSURANCE PLC 10,983.45 2.08 - 17 252,656 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,583.62 0.48 4.17 7 737,908 REGENCY ASSURANCE PLC 1,333.75 0.20 - 3 38,750 SOVEREIGN TRUST INSURANCE PLC 1,834.98 0.22 4.76 14 951,610 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 150 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 1 100 WAPIC INSURANCE PLC 4,817.79 0.36 -5.26 42 3,151,393 168 12,530,412

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 2,583.90 1.13 - 0 0 0 0 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,158.00 0.99 - 1 200 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 200 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,400.00 3.70 8.82 55 933,176 CUSTODIAN INVESTMENT PLC 35,879.37 6.10 - 9 33,053 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 31,684.34 1.60 -3.12 49 2,815,669 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 0 0 STANBIC IBTC HOLDINGS PLC 389,141.01 38.00 - 23 815,290 UNITED CAPITAL PLC 12,900.00 2.10 -3.67 99 12,247,912 235 16,845,100 910 100,816,819 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 781.69 0.22 - 0 0 0 0 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,554.08 4.10 - 2 600 GLAXO SMITHKLINE CONSUMER NIG. PLC. 9,925.77 8.30 - 12 68,160 4,140.56 2.40 - 11 22,310 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 949.58 0.50 - 5 464,000 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 30 555,070 30 555,070 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 5.00 53 49,787,070 53 49,787,070 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 TRIPPLE GEE AND COMPANY PLC. 346.47 0.70 - 6 36,573 6 36,573 PROCESSING SYSTEMS CHAMS PLC 1,267.94 0.27 - 13 1,113,800 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 13 1,113,800 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,215,762.01 323.50 - 10 902 10 902 82 50,938,345 BUILDING MATERIALS BERGER PAINTS PLC 1,825.89 6.30 - 12 122,256 CAP PLC 17,325.00 24.75 - 18 20,324 CEMENT CO. OF NORTH.NIG. PLC 157,722.01 12.00 - 65 772,683 FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 95 915,263 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,624.37 1.49 - 13 232,784 13 232,784 PACKAGING/CONTAINERS BETA GLASS PLC. 33,173.14 66.35 - 1 1,000 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 1,000 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 109 1,149,047 CHEMICALS B.O.C. GASES PLC. 1,918.89 4.61 1.54 10 479,576 10 479,576 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 92.40 0.42 - 1 5,857 1 5,857 11 485,433 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,315.17 0.21 -4.55 45 11,522,687 45 11,522,687 INTEGRATED OIL AND GAS SERVICES OANDO PLC 49,725.65 4.00 -1.23 57 4,646,532 57 4,646,532 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 56,974.05 158.00 - 9 12,446 CONOIL PLC 14,052.53 20.25 - 67 364,250 ETERNA PLC. 4,368.88 3.35 - 13 132,088 FORTE OIL PLC. 26,244.99 20.15 - 43 253,713 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 1 296 TOTAL NIGERIA PLC. 44,103.89 129.90 - 33 24,859 166 787,652 268 16,956,871 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 1 100 1 100 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,112.54 5.28 - 12 47,963 TRANS-NATIONWIDE EXPRESS PLC. 328.19 0.70 - 1 2,750 13 50,713 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 250 1 250 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 3,035.04 1.46 6.57 14 327,375 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 14 327,375 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 241.92 0.40 - 7 8,725 LEARN AFRICA PLC 1,080.03 1.40 - 7 9,243 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 6 900

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Emmanuel Ijewere: An ‘accidental farmer’ redefining Agribusiness in Nigeria CALEB OJEWALE

griculture in Nigeria was traditionally considered an exclusive reserve of rural dwellers, who more often than not had little to no formal education. Therefore, when after 38 years of being an accountant and leading some of the most prestigious organisations in Nigeria, Emmanuel Ijewere decided to venture into agriculture, it came as a rude shock to many. Ijewere serves as Managing Partner of Emmanuel Ijewere and Co., a firm of Chartered Accountants. He is also an Independent Director of NOVA Merchant Bank Ltd. He started his accounting career in 1965 with Coopers & Lybrand and set up his own firm of Chartered Accountants, Emmanuel Ijewere & Co in 1979. He has served as President to a number of notable organizations such as, the Institute of Chartered Accountants of Nigeria (ICAN), Nigerian Red Cross Society, Institute of Directors (IoD), among others. He has had extensive business and corporate management responsibilities, stemming from his Chairmanship role in several companies, including Learn Africa Plc, Best Foods Global (Nigeria) Limited, Longman Nigeria Plc, Petra Micronance Bank, Salus Health Trust Management, CSN Investment Concepts Limited, Drum Resources Nigeria Limited, among others. He is a member of the National Economic Forum, the International Investment Council and the Technical Committee on the Privatization of Federal Government Companies and Parastatals. He is the Chairman of FARCOM. He serves as a Director of Gemini Pharmaceuticals Nigeria Limited. He served as a Non Executive Director of CWG Plc since April 17, 2014 until October 14, 2016. He is a fellow of the Institute of Chartered Accountants of Nigeria (ICAN). Ibrahim Babangida, as military head of state, appointed Emmanuel Ijewere to chair the committee that established Value Added Tax (VAT) in Nigeria. Ijewere also worked closely with Akinwumi Adesina, while serving as Nigeria’s Minister of Agriculture and Rural Development, in finalising the Agricultural Transformation policy. He also served as a member of the Agricultural Transformation council headed by former President Goodluck Jonathan. Today, Emmanuel Ijewere, serves as Group CEO of four agribusiness companies: Best Foods Livestock and Poultry limited; Best Foods Fresh Farms Limited; Best Foods Multiconcept Limited and; Naija Pride Agribusiness Limited. Each one is a distinct organisation but operating complementarily with others, in areas such as poultry, abattoir and meat processing, crop production, as well as aggregating and off taking of agricultural commodities, mostly between Northern and Southern Nigeria. “I came into agriculture by accident,” Ijewere told BusinessDay. Narrating how it happened, he said at the time he was planning to retire from accounting practice after 38 years, when just by accident on the road, he saw people selling and transporting meat on motorcycles, with it resting on their body. He said to himself “This is

Emmanuel Ijewere

shameful and unhealthy, with exposure to flies etc and carried on their bodies with equally dirty clothes.” This would usually be around 6pm in the evening and they must killed the cow in the morning without any preservation. “That anger got me into it, so I got a few friends together and decided to do something about it,” he said. With this newfound passion, his retirement period dovetailed into a new adventure in agribusiness, and now spanning close to twenty years. Best foods livestock was the first agribusiness company he started, and to get it running, he invited partners with whom he worked to set up a poultry farm for broilers, also setting up a piggery on land acquired in a place called Abijo in Epe Local Government Area of Lagos state. The company was also fattening cattle for about 2 weeks before slaughter. One of the directors in the company at the time was a veterinarian who was helpful in ensuring international best practices were adhered to. Then, the only abattoir operational in Lagos was the one in Oko-Oba which he says “was an eyesore, although there was a modern one that was never used at that time.” Best Foods built one of the first modern and clean abattoirs in the state, and even though it was not fully au-

tomated, operated according to European standards. Part of this included not selling meat within 24 hours after slaughter. The abattoir adopted a system which meant that every time cattle was slaughtered, it was put inside chillers at 4 degrees, before it was de-boned and ready to sell. “It is never from the abattoir to the pot,” he said. With this came the additional cost of providing electricity for refrigeration. At that time, Ijewere said a litre of diesel was sold for N8.25k, the same diesel is about N240 today, and meanwhile the price of meat has not gone up by that margin, he says. This has been one of the encumbrances in running the livestock processing business, which encompasses beef, pork and chicken, which have to be in cold rooms for 24 hours every day. Apart from livestock, the crop production arm of Ijewere’s business has thrived through challenging and equally rewarding times. About 19 years ago, Ijewere set up a pineapple farm on 22 hectares of land in Ubiaja, Edo state. From this farm, he was exporting pineapples to the Covent Garden market in the United Kingdom. Every Sunday the flight took off from the Lagos airport at 12 mid day. He took the pineapples from Edo state to Lagos in trailers, and was meeting the

stipulated specifications, but somewhere along the line problems cropped up because first, it took the trailer a very long time to travel because of the bad roads, checkpoints etc. Sometimes the trucks missed the plane, and this meant he was stuck with those cartons of pineapples, and either had to sell them off or they just rot away. Also, because of the difficult nature of the roads, when some of them got to the market in the UK, they come up with complaints that some had already started losing water. That meant they either condemn them or reduce the price drastically, so he discovered that the business was making huge losses on account of this. Never one to give up without a fight, Ijewere went on to start a pineapple juice company called Sunshine juice. This coincidentally was at a time some big hotel brands were just coming to Nigeria, and they became his biggest buyers. As time went on again, pineapple production, power, machinery, and bottles for packaging required a lot of money and banks, he said, were not interested in financing agriculture. All his investments were coming from his own equity and selling properties to keep them afloat. “At a point, I had 850,000 heads of pineapple on my farm in Ubiaja, Edo state, so I sold everything and got out of the business,” he said. However, his crop production business did not end there. About five years ago, he started a tomato farm at a place called Igbodu in Epe, bringing his experience from the pineapple production. He has installed 20 greenhouses on the land, for the production of tomatoes, which even though has not fully met his expectations, has become another learning curve in guiding his future investments. He remains a major supplier to some of the biggest retail chains in Nigeria, relied upon to deliver high quality agricultural commodities. One striking thing about Emmanuel Ijewere during interactions with this reporter is his thirst for knowledge and creating partnerships to make up for any areas he lacked expertise. This appears to have been the secret to his dogged journey in Agriculture for almost 20 years, after an earlier 38 years in Accounting. When he was made pioneer chairman of the Agriculture and Food Security Commission of the Nigeria Economic Summit Group (NESG), he was still new into the sector but his radical approach to making a success of things made him stand out. “In the country of the blind, one eyed man is king, so I became king,” said Ijewere, “but at the same time, I tried looking for the second eye. That was how I trained myself, educated myself, went for trainings, seminars, lectures etc to make up for the knowledge gap.” It may in fact, not be entirely wrong to describe Emmanuel Ijewere as a serial entrepreneur in agriculture, considering how many ventures he has started within the period of time, some of which he has either sold, wound up, or transformed into new businesses. He is currently Vice President of the Nigeria Agribusiness Group (NABG), a mentor to many established and aspiring agropreneurs, ensuring that like him, none gives up on their dreams to make agriculture prosperous in Nigeria.

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