Businessday 23 may 2018 by BusinessDay

Teleology’s Nigerian shareholders in search of funds to close 9mobile deal ... appoints UBS to help raise $300m equity Jumoke Akiyode-Lawanson

eleology’s Nigerian shareholders Omar Farouk Edewor and Mohammed Edewor who are also the directors of

the company are in talks with financial advisers to source equity in-order to pay up the balance of its $301 million financial bid to take over ownership of 9mobile, BusinessDay can exclusively report.

BusinessDay findings reveal that the holding company registered as Teleology Nigeria Limited under the corporate affairs commission (CAC) with

news you can trust I **wednesDAY 23 may 2018 I vol. 15, no 60 I N300

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Emeka Emuwa, chief executive officer, Union Bank (fourth r), and executives of the bank, at the official launch of Union Bank’s Robotic Process Automation (RPA) initiative in Lagos, recently, making the bank the first in the banking industry to introduce the technology.

Past administrations lacked imagination on economic management – Buhari Does not care about people’s opinion about Abacha Challenges ex-president to show proof of $15bn investment in power As CAN asks President to resign over killings

Tony Ailemen, James Kwen, Stella Enenche & Laide Akinbode-Oriere, Abuja

resident Muhammadu Buhari Tuesday accused previous administrations of lacking imagination in the management of the economy. ‘‘Sometimes, I wonder about those who can afford to send their children abroad for studies and yet continue to sabotage the economy, I wonder what kind of Nigeria they want their children to return to and work. There is a lot of lack of imagination.” ‘‘If you are working for the

… acting MD/CEO appointed FRANK ELEANYA

Niyi Toluwalope, Acting MD/Ceo.

alentine Obi, the Managing Director of premier e-payments solution provider eTranzact International Continues on page 4

CBN considers liquidity risks to keep MPR at 14% ... to release framework for Yuan currency swap next week HOPE MOSES-ASHIKE, BUNMI BAILEY, MICHEAL ANI, ENDURANCE OKAFOR, Lagos & Onyinye Nwachukwu, Abuja

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Sanusi at AfDB makes case for hard-nosed P. 2 reforms

Valentine Obi resigned voluntarily, says eTranzact

L-R: Gbenga Oyebode, non-executive director; Mauricio Alarcon, MD/CEO; David Ifezulike, chairman; Bode Ayeku, company secretary; Ndidi Nwuneli, non-executive director, and Ricardo Chevez, non-executive director, all of Nestle Nigeria plc, during the 49th AGM of the company in Lagos, yesterday. Pic by Pius Okeosisi

he Central Bank of Nigeria (CBN) kept its monetary policy rate (MPR) at 14 Continues on page 4

BUSINESS DAY

Wednesday 23 May 2018

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ISO Certifications Sanusi at AfDB makes case for hard-nosed reforms NDIC’s to deepen service Iheanyi Nwachukwu

frica’s development agenda must focus on the socio-cultural and commercial interests of Africans and the upliftment of Africa’s trade and economic ecosystem, said Muhammadu Sanusi II, the Emir of Kano and a former Governor of Nigeria’s Central Bank, during his address at the ongoing 2018 Annual Meetings of the African Development Bank Group in Busan, Korea. “Africa’s economic transformation will be best achieved through fast-tracking regional cooperation and the execution of hard-nosed structural reforms that focus on

the development of the continent’s human capital and material resources,” said Emir Sanusi II. The Emir shared insight about revamping African regional integration, trade and economic relations with Executive Directors and Governors of the Bank, comprising Finance, Budget and Economic Planning Ministers from member nations. An economist and financial risk expert, the monarch traced Africa’s post-colonial economic woes to the continent’s fiscal indiscipline and endemic disregard for its competitive advantages. For these reasons, he asserted, Africa’s development was stunted and its global trade ties lopsided in

favour of offshore trading partners. “Nine out of every 10 countries in Africa have huge trade deficits with China, but Asia developed mostly on domestic investments and resources,” he noted, underscoring the need for African Governments to invest in and promote creativity and indigenous enterprise. The Emir advocated a series of structural reforms, including strategic investments in key sectors including agriculture, infrastructure, education, and small and medium enterprises. He called for deliberate industrial diversification noting that China has begun to move its mega-sized manufacturing capabilities out of low-cost industries. African Governments also need

to eradicate constitutional provisions and structures that increase the cost of governance at national and sub-national levels, manage demographic growth, and revamp and harmonize moribund and ineffective customs and excise duties that promote cross-border smuggling and revenue losses to governments, he said. Africa’s debt burden continues to inhibit capital investment in industrialization, he observed, lamenting the misallocation of resources: “We need to begin to ask ourselves, ‘what do we do with the available funds in our coffers?’” “Perceptions matter. So there is an urgent need for improved trans-

delivery to stakeholders

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HOPE MOSES-ASHIKE & ENDURANCE OKAFOR

he Nigeria Deposit Insurance Corporation (NDIC) has become the first public sector organization in Nigeria to be awarded three International Standards Organization (ISO) certifications by the British Standards Institute (BSI) simultaneously. At an elaborate ceremony in Abuja, the Corporation was presented with the three certificates by the British High Commissioner to Nigeria who was represented by the Lead Trade Adviser for Educa-

Past administrations lacked imagination on... Continued from page 1

country, then you should not be misappropriating and misapplying public funds the way people did,’’ the President said. President Buhari specifically expressed his anger at the mismanagement of Nigeria’s economy, through alleged fraudulent electricity projects and misuse of revenue earned from oil. The President while receiving members of the Buhari Support Organisations (BSO) led by the Comptroller-General of Customs Hameed Ali, at the Presidential Villa, described previous administrations as people who had “no love for the country.” The President queried the huge funds previous regimes said they committed to the power sector, and challenged the leaders to “ show proof” of where the funds were deployed. President Buhari urged Nigerians to remain vigilant and ensure that only ‘‘people of conscience are in-charge of governance at all levels’’, as the nation prepares for general elections in 2019. ‘‘I challenge anybody to check from Europe, America and Asia; between 1999-2014, Nigeria was producing 2.1 million barrels of crude oil per day at an average cost of US$100 per barrel and it went up to US$143.” ‘‘When we came it collapsed to US$37 – US$38 and later was oscillating between US$40 and US$50.” ‘‘I went to the CBN Governor, with my cap in my hand, and asked if we had savings. He told me we had only debts, no savings. Some of the roads were not repaired since the Petroleum Trust Fund (PTF) days. ‘‘I do not care the opinion you have about Abacha but I agreed to work with him and we constructed roads from Abuja to Port Harcourt, Benin to Onitsha and so on. We also touched education and health institutions.” ‘‘One of the former Heads of State was bragging that he spent more than US$ 15 billion on power in Nigeria. Where is the power?’’ the President said. The President noted that under his watch, the 2016 and 2017 budgets recorded the highest appropriation and releases in capital

projects, with over N2.8 trillion disbursements in two years. He urged Nigerians to reject those bent on dividing the country along religious and ethnic lines, warning that they do not mean well for the country. ‘‘I have said severally that we do not have any other country than Nigeria and we will remain here and salvage it together.” ‘‘We have nothing to regret. Absolutely nothing. God has given Nigeria everything. We are rich in human and material resources. Let us keep on praying to God to put people of conscience in-charge at all levels,’’ he said. In his remarks, Ali said the group and majority of Nigerians are passionate about a secondterm for President Buhari because of his integrity, honesty, love and patriotism. He noted that President Buhari has entrenched fiscal discipline and prudent management of resources, improved the nation’s security and delivered on his promise to revamp agriculture, as a major revenue earner for the country. But as Buhari railed against previous administrations, the Christian Association of Nigeria, CAN, has asked President Muhammadu Buhari to resign if he cannot end the continued killings in the country. Supo Ayonkunle, CAN President said this yesterday at the National Christian (Ecumenical ) Centre, Abuja during the mass preceding the peaceful protest by Catholic Archdiocese of Abuja over the killings in Nigeria, particularly the recent killing of two priests and some lay faithful in Benue State. Ayokunle noted that the security of lives and property was the primary responsibility of government and if any government failed in this regard as noticeable in Nigeria, it is left with no option but resignation. Ayokunle who was represented by Steven Adekete noted that the church in Nigeria has been in perpetual mourning for a long time and condemned the spate of killings across the country. “The President has said to us he will continue to protect the territorial integrity of Nigeria and her citizens but this has not been done. The question we are asking is that if they

L-R: Udoma Udo Udoma, minister of budget and national planing; Yewande Sadiku, executive secretary/CEO, Nigerian Investment Promotion Commission (NIPC); Okechukwu Enelamah, minister of Industry, Trade and Investment; Babatunde Fashola, minister of power, works and housing, and Sirika Hadi, minister of state for Aviation, during the 2018 Nigeria Direct Investors’ Summit held in Abuja, yesterday. Pic by Tunde Adeniyi

don’t know those who have been killing us, then they should resign. “The people who have being killing us are not invincible. They are human beings. They move about. They are known. Enough is enough. The killing of ministers in the house of God cannot be acceptable by God and the Church in Nigeria. We will continue to demand for justice,” the Christian leader stressed. Similarly, Archbishop Nicholas Okoh, Primate of Anglican Communion in Nigeria asked the Federal government to be sincere and rise up to its constitutional duty and protect Nigerians from senseless killings by herdsmen. Okoh said forming of committees is meaningless at this time as the Nigerian military is capable of quelling the humanitarian crises if given right orders and reminded the government that it has a contract with the people which must be fulfilled by both parties. “We have the Nigerian Army, Air force and Navy if given the right order, they can go to the bushes to fish out these people and disarmed them. If they do not take away arms from these people, we are not safe. The idea of forming one committee here and there is useless,” Okoh maintained.

Also, Catholic faithful joined by other Christian denominations dressed in black attire across Nigeria Yesterday converged at designated places for peaceful protest over incessant killings in the country. This was as the pope representative to Nigeria (Papal Nuncio), Archbishop Antonio Guido led about 50 Bishops to Benue State for the mass burial of 2 priests and 17 parishioners killed by armed Fulani militia last month at St. Ignatius Mission, Mbalom in Gwer East Local Government. All Catholic Dioceses across the country held masses and peaceful protests in solidarity with the Makurdi Diocese. In Abuja, the faithful defied the morning rain and trooped to the National Christian (Ecumenical) Centre for the mass and prayer for peace in Nigeria which was followed by a peaceful protest. John Onaiyekan, Catholic Archbishop of Abuja represented by the Auxiliary Bishop, Anslem Umoren in a homily reminded President Buhari of his inaugural covenant with Nigerian:” I belong to Nobody and I belong to everybody, “ hence the need to give protection to all countrymen. The Bishop Umoren, however,

warned Christians that the current tribulations should not dampen their spirit but they should be rather strengthened as those who died for Christ do not die in vain but for a divine purpose. The Auxiliary Bishop on behalf of the Archbishop who was in Makurdi for the mass burial led the protest from the National Ecumenical Centre to Our Lady Queen of All Nations Pro- Cathedral, Abuja. Speaking with journalists during the protest, Mike Omeri, former Director General National orientation Agency said the protest was solidarity against violence and not against one religion or the other but to ensure that Nigerian citizens, irrespective of their status are given protection by the government. “These protests across the country means that government should listen. The day government stops to listen, then they are inviting other things and I don’t know what that could be but government should listen to the people. “This violence is beyond religion because we have had series of demonstration across the land. Something is happening, government should listen and they should stop insulting Nigerians when they respond to issues of crisis like this,” Omeri stated.

Wednesday 23 May 2018

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Sanusi at AfDB...

NDIC’s ISO Certifications to deepen service... Teleology’s Nigerian shareholders in search...

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parency, as this is clearly linked to good governance,” he said. “We need to accept that we have a perception problem that we must address. We need to tackle corruption, block leakages and create opportunities for new jobs.” “Private sector capital is crucial for sustained economic growth but so is government’s intervention in guaranteeing business externalities like power, water and waste management, roads, housing and the legal and regulatory environment for innovation, commerce and industry.” On trade, the Emir called for a regional and pan-African approach to trade negotiations, a tactical model which should be led by the Bank. “The African Development Bank has the intellectual resources and clearly is better positioned to negotiate with China on behalf of Africa as a bloc of nations,” he said. “Europe approached global trade as a bloc so why can’t African nations do the same? This is clearly another area in urgent need of the Bank’s intervention.” AfDb President Adesina recalled the Emir’s progressive posture during his time in public service. “As Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi was pro-development. He channeled significant investments into agriculture, infrastructure and SMEs.

tion Sector Opportunities, Natasha Anjekwu. The three certifications achieved by NDIC are on Information Security Management System ISO/IEC 27001:2013, IT Service Management System ISO/IEC 200001:2011 and Business Continuity Management System ISO22301:2012. Expressing her delight at the development, the National Coordinator/CEO SERVICOM Office in the Presidency Nnenna Akajameli. The SERVICOM boss, who was present at the event, lauded the NDIC for the feat. She urged the Corporation to view the certifications as its most valuableassetswhichshouldspuritto greater performance. She concluded by stating that the SERVICOM Office intended to project the NDIC as a model to other public institutions in its efforts to optimise service delivery among public institutions in Nigeria. Earlier, in her own remarks, Natasha Anjekwu described the feat as a great achievement. She said NDIC’s fulfilment of the requirement for the certification bore eloquent testimony to its adherence to international best practice in its operations. Also speaking at the event, the Director of Home Finance in the Federal Ministry of Finance, Olubunmi Siyanbola, who represented the Minister, also lauded the Corporation and urged it to view the development as a spur towards achieving greater heights. Responding, the Managing Director/Chief Executive of the NDIC

Umaru Ibrahim reiterated the commitment of the Corporation to lead in addressing the challenges of the financial services industry in Nigeria with a view to engendering professionalism and accountability. While expressing his delight at the emergence of the Corporation as the first public institution in the country to be certified with the three standards at once, the NDIC Boss added that the feat was consistent with the implementation of its renewable 5-year strategic plan, and its desire to be the best deposit insurer in the world by 2020. He promised that the Corporation would not rest on its oars in maintaining the standard it has set for itself. The Nigeria Deposit Insurance Corporation successfully obtained the three ISO Certifications from the British Standards Institution (BSI) in 2017 after a rigorous process of satisfying the conditions precedent to accreditation. The British Standards Institute UK thoroughly engaged and audited the Corporation operational processes between April and July of the year to determine the conformity of the Corporation to the standards. By these achievements, the Corporation is poised to enhance the level of its operational readiness to deliver on its core mandate while continuously improving on the service delivery to meet the expectations of its stakeholders through sound information security, efficient IT management system and a robust business continuity system.

L-R: Jackson Iwuanorue, chief of staff to Adamu Garba 11; Adamu Garba 11, presidential aspirant, and Ayodele Adio, director, strategic communications, Adamu Garba Campaign Organisation, during their visit to BusinessDay corporate head office ‘The Brook’ in Apapa, Lagos, yesterday. Pic by Pius Okeosisi

Plc, resigned voluntarily, the company said yesterday. eTranzact, on Monday May 21, 2018, announced that it will be making significant changes to the Company’s management team. Obi, Managing Director of the Company will be stepping down and Niyi Toluwalope will be taking over as the Managing Director in acting capacity. Until his appointment, Toluwalope was the Chief Financial Officer, a position he has held since 2011. Other executive positions affected by the management changes are: Executive Directors -Sullivan Akala and Ike Eze; Chief Technology Officer - Richard Omoniyi and Head of Operations - Kehinde Segun. The eTranzact executives resigned honorably because they have the responsibility for governance in the company. “eTranzact is aware of recent

the address of 155, Broad Street Marina Lagos, and share capital of N100 million, in December 2017 mainly for the acquisition of 9mobile, Nigeria’s fourth largest telecommunication operator. Informed sources say that “although Adrian Wood is the promoter of Teleology and part of the management, he is not actively involved in raising equity but the listed company directors as well as some other partners are still sourcing funds to close the deal.” “It is also possible that the Omar Farouk Edewor and Mohammed Edewor are nominee shareholders and the company might decide to do a transfer of shares after the ongoing transaction is closed but right now, all hands are on deck to make sure that the needed money is raised,” Our source said. Although earlier reports suggest that Teleology is made up of 12 international and eight Nigerian shareholders, the company’s CAC document lists only two shareholders. Olusola Teniola, President, Association of Telecommunications Companies of Nigeria (ATCON) told BusinessDay that teleology holdings limited which operates as a private equity has hired UBS to help it raise a $300 million bridge loan from local banks and investors. “The high risk involved in business operations in Nigeria is making it difficult for Teleology to raise the money but they are actively

working to make sure that they pay up the balance and close the deal. They still have on till the end of June to pay up so and they should be applauded for all efforts made because raising $251 million is not easy at all, especially in Nigeria,” Teniola said. Teleology is said to have submitted a financial bid of $301 million dollars which saw it emerge as the preferred bidder in 9mobile’s sale process, living smile which bided a lower sum of $150 million cash as the reserved bidder. The SPV succeeded in raising the $50 million non-refundable deposit before the March 22, 2018 deadline set for it to pay up and show commitment of interest to take over 9mobile, However, recent developments such as the addition of new criteria by the NCC chairman, the senate interruption and court order to stop the process as a result of complaints by minority shareholders of the former Etisalat (now 9mobile) is not an encouraging sign for investors trying to do Business in Nigeria, analysts say. Teleology has also detailed a 10 point plan to turn over the telco, confident that it will successfully raise and pay its bid balance to own 9mobile. Adrian Wood, promoter of Teleology and pioneer CEO of MTN Nigeria, revealed the company’s plan to rivatlise the debt ridden 9mobile .

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Etranzact makes significant management... Continued from page 1

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Business Day publications about these management changes and wishes to announce that the changes are strictly eTranzact Board’s decision, and would like to advise all its stakeholders that it is working closely with the regulators, and all other relevant Stakeholders to resolve any issue related to or arising from the management changes. In addition, we want to categorically state that there was no fraud in eTranzact International Plc, however a merchant used the company’s interface with a bank to perpetrate fraud. Also, there is no truth about PricewaterhouseCoopers (PwC) or Ernst & Young reviewing the Accounts of the Company. eTranzact retains PwC from time to time for various technology related assignments and none has to do with reviewing the Company’s Accounts. The ISO certifcations are a testament to eTranzact’s focus in adopting and implementing global

and best practices to ensure effectiveness, efficiency, confidentiality and integrity in its day to day operations. This marks the beginning of a new journey for the company.” eTranzact is Africa’s leading provider of mobile banking and payment services. It is the first fully operational multi-application and multi-channel electronic transaction switching and payment processing company that is publicly quoted on the Nigeria Stock Exchange. Since 2003, eTranzact has been at the fore front of delivering cutting edge electronic and mobile payment products and services to customers that cut across virtually all works of life. “As a regulated entity operating in the sensitive space of electronic payments, eTranzact is re-tooling its systems and revamping its management to prevent a reoccurrence of this sort of incidence. eTranzact is also working closely with its regulator and relevant stakeholders to ensure the issue is resolved very quickly,” the Company said.

percent for the 9th consecutive period, amid slowing inflation. The CBN on Tuesday after the two day Monetary Policy Committee (MPC) meeting in Abuja applied a wait and see approach on liquidity risks expected to emanate from rising FAAC allocations, the threat of higher 2018 budget spending, the risk of a supplementary budget allowing for a rise in the minimum wage, and other elements of pre-election spending. Also, the Apex bank kept unchanged the liquidity ratio at 30 percent, Cash Reserve Ratio at 22.5 percent and +200/-500 basis point asymmetric corridor around the MPR, hinting that it would not consider easing until inflation fell to single digits. “The objective of the policy stance will be to accelerate the reduction in the rate of inflation to single digits, promote economic stability, boost investor confidence and promote foreign capital flows,” Godwin Emefiele, governor of CBN said. The MPC’s decision has prompted some economists to question whether rate cuts will ever materialise in the wake of slowing inflation rates. “We interpret the decision to keep all rates unchanged as suggesting that FX stability – even with oil back at USD 80/bbl – remains paramount, and the CBN will not do anything to risk this. Not even easing, when the opportunity presents itself,” Razia Khan, Africa Chief Economist at Standard Chartered Bank, London, said in emailed response to BusinessDay. Khan added, “inflation is on a downtrend courtesy of recent FX stability. It will likely decelerate further. The economy is weak. Out-

side of lending to the government, money supply is contracting. In our view, it would have made more sense for the CBN to front-load its easing, reversing course later on if it became clear that pre-election spending – in its multiple forms – was likely to be a problem.” The CBN governor noted that members were faced with the choices of maintaining status quo, tightening, or easing monetary policy. “it is surprising to me because what the CBN is saying is that we should let the economy lift itself first before we take steps to stimulate it into a path of sustainable development and expansionary growth,” Bismarck Rewane Managing Director and CEO at Lagos-Based Financial Derivative company said. “Look at Ghana that has brought down rate five times in the last 12 months, we have seen growth at 8.5 percent alongside inflation dropping from 22- 17 percent. So I do not understand what the logic is on why one has to wait for inflation to get to single digit in anticipation of a supplementary budget.” “This is an output issue and not because of excess demand, it is because output is not enough so we need to do things that will increase credit and stimulate activities which will invariable lead to a decline in inflation,” Rewane added. On the domestic front, the Committee noted the continued drop in headline inflation rate in April at 12.5 percent , rebounding crude oil prices and stable production, FX stability amid strong external reserves, and sustained GDP growth.

•Continues online at www.businessdayonline.com

Wednesday 23 May 2018

BUSINESS DAY

Wednesday 23 May 2018

BUSINESS DAY

8 BUSINESS DAY NEWS FG saves N228bn from ghost workers, TSA KEHINDE AKINTOLA, Abuja

resident Muhammadu Buhari on Tuesday disclosed that his administration had so far saved over N120 billion from the elimination of ghost workers from the public service, and another N108 billion from bank charges during the implementation of Treasury Single Account (TSA) policy. Buhari disclosed this in Abuja, during the conferment of the National Productivity Order of Merit Award on 15 Nigerians and five companies. The President said programmes put in place by the current government had begin to yield fruits as shown in the decline of the rate of inflation to 12.5 percent as of May 14, 2018. He explained that the recession witnessed by Nigeria in 2016 was as a result of the over dependence on a single commodity by Nigeria and the unprecedented looting of the nation’s treasury, adding that the current challenge before the government was how to sustain the recovery and ensure growth. “As you are already aware, our country, recently witnessed a tough economic period of recession attributed

mainly to over dependence on a single export commodity as well as the unprecedented looting of the treasury. With our determined efforts, we were able to exit recession. “The challenge before us now is how to sustain the recovery and ensure growth. The Economic Recovery and Growth plan (ERGP) of this administration targets a 7% growth rate by 2020, driven by strong none oil sector growth in agriculture, solid minerals, manufacturing, information technology and services. “Our aim is to change our narratives from an import dependent, consumption driven and undiversified economy to a producing nation where we grow what we eat and consume what we make. Our effort in this regard is beginning to pay off as most indices by which an economy could be measured are looking bright. “Our foreign reserve has risen to $47 billion as at April 9th 2018 as against $29.6 billion in May 2015. The inflation rate had dropped to 12.5% as at 14th May 2018, making it the 15th consecutive month of fall. The implementation of the Treasury Single Account (ISA) has stopped the pilfering of the Treasury.

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Reps back N500bn recapitalisation of FMBN Edo targets World Bank’s special support ... propose N100 levy on 50kg bag of cement window as country director visits KEHINDE AKINTOLA, Abuja

ig e r i a’s Hou s e o f Representatives on Tuesday harped on the need to recapitalise Federal Mortgage Bank of Nigeria (FMBN) to the tune of N500 billion. Meanwhile, the House proposed N2,000 per ton locally produced and N100 per bag of 50kg on imported cement, as sustainable development levy, in the new legislative framework for National Housing Fund (NHF). The resolution was passed sequel to the adoption of the report of the Committee on Housing, which centred on the need to ensure full compliance with the National Housing Fund (NHF) Act for effective delivery in Nigeria. The House during the consideration the report during the Committees of the Whole, frowned at the failure of Central Bank of Nigeria (CBN), Commercial banks and insurance companies to comply with relevant sections of the NHF Act to remit their statutory funds. “Central Bank of Nigeria, commercial banks and insurance companies should be compelled to perform their statutory duties as provided

in the Act. “Federal Government should re-capitalize the Federal Mortgage Bank of Nigeria to the tune of N500 billion to make it bore vibrant and responsive to its functions, for effective housing delivery in Nigeria,” the report read. Meanwhile, the House condemned the promotion of the parallel organisations, noting that such initiative was against the interest of the Federal Republic of Nigeria. Hence, the lawmakers resolved to further investigate and sanction on those behind the illicit practice. Similarly, the Hous e stressed the need for the review if the provisions of the FMBN Act to make it more enforceable. The Parliament also underscored the need for government and relevant stakeholders to provide necessary support for existing public institutions rather than create new ones to avoid duplication of functions. In a related development, the House adopted the bill which seeks to repeal the FMBN Act, 2004 and make comprehensive provisions for the establishment IG FMBN SBD its board of directors and for other related matters.

ollowing the visit to Edo State of eleven World Bank executive directors to inspect major World Bank projects in the state, country director of the Bretton Woods Institution, Rachid Benmassoud, will arrive the state on a two-day follow-up visit, this week. Senior specialists in various sector areas, such as institutional reforms, public works, gender, agriculture, water, and sanitation, will accompany him. Benmassoud’s visit is predicated on Edo State government’s impressive deployment of funding, technical and other assistance of the World Bank, which was attested to, less than two weeks ago, by executive directors of the World Bank, who were in the state for on-the-spot assessment of the bank-sponsored developmental projects. Specifically, the bank’s country director will meet with heads of ministries, departments and agencies of the state government to clear the way and prepare the state for a Special Funding Window from the bank to the state. According to Governor Godwin Obaseki, “The visit

of the World Bank country director lends credence to our commitment to bringing development to our people in the state, with the support of our partners.” He maintained that Edo State under his watch placed high premium on the sanctity and the integrity of partnerships, contracts as well as an open and transparent process. “Development partners like the World Bank, operate in an environment where stakeholders abide by rules governing the partnerships, and in which input, output and outcomes are measured from time to time. The World Bank will not take you seriously if all you do is to award ‘political contracts,’” he said. The governor disclosed that during the World Bank country director’s visit, he would also tour the banksponsored projects such as erosion control projects under the Nigeria Erosion and Watershed Project (NEWMAP), Edo State Employment and Expenditure for Result (SEEFOR), covering road projects; agriculture (FADAMMA); water, sanitation and review policy reforms in the civil service, and other sectors.

Wednesday 23 May 2018

BUSINESS DAY

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Diversifying the Economy: Time to include the MSMEs Fact: MSMEs contributed 49% of GDP and employed over 60m people in 2013 (NBS)

EMEKA OSUJI Dr Emeka Osuji School of Management and Social Sciences Pan Atlantic University Lagos. eosuji@pau.edu.ng @Emyosuji

would like to know if anybody has discovered the true reasons why the diversification of our economy has remained an academic exercise. Some people will say it is because in Nigeria we don’t solve problems; we only kick the can down the corridor until our term of office is over; then we pass it on to the new man and begin to heckle him to resolve what we left in the can we kicked for years. Others may say rightly that we are more interested in the spoils of office than the colour of the ink used to write our names when we are gone. Much as these are classic views, there are a few others. Nigeria is once again motioning to the world that it has decided to diversify its economy away from oil but the world is laughing derisively because we are saying this for the umpteenth time. Some even say we do not mean it when we say diversify the economy. The Nigerian economy is about to, once again, return to the path of growth. At least, everybody who should know seems to agree on that, including the International Monetary Fund (IMF) and the World Bank. They all projected positive growth figures for Nigeria in 2018. The IMF is expecting substantial growth in the global economy, the GDP of which it has set at 3.9 per cent for this year, with Nigeria and other emerging econo-

mies leading the growth at a growth rate of 4.9 per cent. In particular, the Nigerian economy, which has been generally upbeat since turning the recession corner, is forecast to grow more in 2018. Although Nigeria’s projected growth rate at 2.1 per cent is lower than that of Sub-Saharan Africa put at 3.4 per cent, it is however better than South Africa’s 1.5 per cent, even though Nigeria’s growth outcome is expected to slip back to 1.9 per cent in 2019. The World Economic Outlook, which made this prediction, was short on the reasons for the expected slip back in 2019. However, it does appear that they considered it an obvious fact. We know Nigeria is facing an election year and what is likely one of the most contested elections in her history. The usual trepidation among investors is fast coming to play. Politics has taken the front burners as governance and economics recessed. This is so all over the world. The only difference is that Nigeria’s federal government has much of the national purse. It also does much of the significant spending in the economy. Therefore, any slow down on its spending reflects in a general economic lull - a lull that has been amplified by the feud between the Executive and Legislature. Somehow, the gods have been smiling at this government of late. Brent crude price is close to $80 and is forecast at well over $100 by close of year. Inflation has come down to 12.48 per cent and heading towards Central Bank’s target of 6 to 9 per cent, due, among others, to the stability in the supply of foreign currency. The drop in inflation may be sustained if the new guys at the Monetary Policy Committee (MPC)

...this economy cannot be diversified without a policy on local content and the patronage of domestic producers. That is how to invigorate the SME sector. It is ironical that this government does not see anything wrong in the use of expensive foreign SUVs as official cars. Peugeot may be importing CKD while Innoson may lack mass output capacity, the fact remains that they add value and create jobs continue to see the value of positive interest rates, and not be scared of investment flow reversal feared in some quarters to attend the gradual interest rate hike plan of Jerome Powell, the new US Fed Chief. Some tenuous management is needed here. Already, the markets are showing signs of instability and reacting quickly. The stock market is trending upwards, after a yoyo period, perhaps on the effect of decisions being made by portfolio managers and their investors. Investors are calling funds from TBs and moving into bonds. We expect more market reaction. But it is hard to say how the numbers will stand at the end of the year. We have just brought to a close one of the longest budget stand-offs, which produced a budget that is significantly different from what the executive transmitted to the parlia-

ment. It does appear that the executive may have to carry on without further battles with the legislature. Time is of the essence and it is not on the side of the executive. After all the positive points about our growth possibilities, we need to face our economic reality. The more important issue truly is not whether growth is sustained or diminished in 2019. Those are relevant but it has become more important to focus on the sources and impact of growth than its quantum and direction. Nigeria is still the most dangerous place to have a baby. It is competing with Sierra Leone, Central African Republic and Chad, for the trophy of where mothers die the most in child birth. Nigeria has the worst maternal mortality rate, ahead only of these very poor countries. How do we explain the fact that Nigeria is competing with war ravaged countries in human development? The answer is simple: the people do not benefit from their economic growth. Growth impacts only a small portion of the population. Income is distributed according to access to patronage and not productivity. We kick the can of every challenge. Today, we are pursuing the diversification of the economy but you can bet it’s all a kicking of cans. The economy is SME-driven. I am yet to see any clear plan to empower the SME sector, which is the bulk of the economy. There is no deliberate channelling of productive forces to the sector. It is not even being prepared for increased productivity. Granted that much has been done to provide them with finance, we now know that finance is not their major problem. The rate of drawdown of the available facilities is an indication that the problem is beyond finance. Capital follows profitability. Finance may even become

dangerous if too much of it is made available to businesses that have limited investment opportunities. It may even lead to debt overload. What business opportunity have we created for small businesses? Is there any industry feeding the SMEs with job orders and taking supplies from them? There is no effective economic linkage. We cannot diversify without a solid attempt to direct business activity to the MSMEs and link them to big business. Truly, this economy cannot be diversified without a policy on local content and the patronage of domestic producers. That is how to invigorate the SME sector. It is ironical that this government does not see anything wrong in the use of expensive foreign SUVs as official cars. Peugeot may be importing CKD while Innoson may lack mass output capacity, the fact remains that they add value and create jobs. They rev up the SME sector through orders for tyres and tubes, bolts and nuts. As Coordinator of the federal government delegation to South East Asia in 1990, I have elsewhere told the story of our study of the Malaysian industrialization strategy, which led us to establish the National Land Development Authority. The Proton Saga had achieved about 55% local content at the time of our visit. It has long since become fully Malaysian car. The Proton Exora won the Future Car Challenge organized by the Royal Automobile Club in the UK. But here, we are either busy starving Peugeot of orders and buying Range Rovers or striking Innoson down for very strange reasons.

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OGP Week: A thought for a day

TIJAH BOLTON-AKPAN Bolton-Akpan is Executive Director, Policy Alert & Co-Convener, NigerDelta Open Government Observatory (NOGO). He wrote via: tijah.bolton@ policyalert.org

rom 7th to 11th of May, 2018, Nigeria joined the rest of the world to mark the global Open Government Partnership (OGP) Week. They were five days of reflection on how far Nigeria has come on the open government journey and plenty of inspiration for the distance ahead. I summarized my current thoughts on the OGP into these five ideas, one for each day of the OGP week: 1. With more states joining the OGP, we are set to witness a new and increasingly robust wave of government-civil society partnerships across the country. The multi-stakeholder partnership model of the OGP guarantees process equality between the government and citizens’ representatives in the OGP and this remains one of its unique and

most lauded features. The insistence on equal number of representatives from both sectors on the Steering Committee, Co-Chairs from both sectors and co-creation and ownership of ideas and action plans imposes a burden on governments and civil society actors to rethink how they engage. In co-creation lies a big potential for change but also a big risk if not well managed. This is very important at the state level where, more often than not, the might of the governor is law, and civil society is perceived more or less as a dispensable irritant or at best a negligible afterthought in government-driven processes. The impact of the OGP on government-civil society relations at the subnational level will, without a doubt, become an important research area for students of governance in the near future. Already, success stories are emerging from Kaduna, Kano, Anambra, Enugu and Ebonyi (Nigerian states that have signed on to the OGP) on how old assumptions, animosities and contempt are giving way to new relationship modes across the divide. There is no gainsaying that this will have a transformative impact on demandside organizing generally and, more specifically, on the capacity of citi-

zens to hold governments to account at the subnational level. Unfortunately, the Niger Delta, in spite of its peculiar narrative, has been missing so far on the queue of states that have indicated interest in the OGP. 2. Nigeria’s OGP leadership faces the huge task of marketing existing statelevel reform programmes as well as the“elite club” carrot as an incentive for state governors and other subnational leaders, especially as the 2019 elections approach. It is not enough to dangle the prospect of having more subnational commitments in the country’s next NAP cycle as an incentive for states to come on board. Whether we agree or not, very few leaders at the state level are driven by such high or nationalist values. What really ticks them are fiscal incentives (based on the power to collect more money) and political prestige (based on the power of belonging). For a time, the Federal Ministry of Finance wielded the big stick of the Fiscal Sustainability Plan (FSP) at states but it seems the initial enthusiasm has waned and states are now accessing federal bailouts and budget support without meeting the FSP conditions. I understand that the World Bank is tying states’ qualification to access certain new Bank financing on OGP-compliance. Conditionalities can be tricky but they are very welcome

in this context. Our organization, Policy Alert, has tabled the need to join OGP Nigeria’s subnational programme with very highly placed officials in a few states and repeatedly we got either a direct or thinly veiled message that anything OGP had to wait until after the 2019 elections. Note that by that time Nigeria would be entering its second National Action Plan (NAP) cycle. What this means is that the push to localize OGP may take a beating in the struggle between policy imperatives and political expediency at the state level. This may also have implications for the inclusion of subnational commitments in the next NAP. I think a carrot and stick approach will do the trick. 3. Legislative openness and role of parliaments in the OGP. The legislature is an important domain for open government reforms but it does seem that Nigeria’s National Assembly (NASS) and State Assemblies have yet to embrace the OGP in a manner sufficient for gaining needed traction. I have followed the OGP process in Nigeria and I think the legislators at all levels are still spectators. Beyond the need to be involved as active participants, legislators also have a duty to open up their own work while making laws and performing oversight to support the opening of other facets of

government. Citizens need access to information and opportunities to influence laws and other deliberations before the legislature. Technology avails legislatures of new tools for opening up their data and processes to citizen scrutiny and engagement. Thinking about just how long it has taken NASS to even begin to respond to the #OpenNASS campaign, there is much justification to begin considering legislative openness commitments for the next NAP. I also note the game changing potential of some of Nigeria’s OGP commitments that may remain at the level of mere potential without the right legal framework in place and the backing of the legislature. One of them is the uncovering of anonymous ownership of companies playing in the extractive sectors through the establishment of a public registry of beneficial owners of such companies. This depends on the review of the Companies and Allied Matters Act (CAMA) 1990 as amended.

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Wednesday 23 May 2018

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The impact of herdsmen attacks on federal government’s food security policy: the case of Benue

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

e realized, rather belatedly that we ought to have been investing in agriculture. We are now aiming at food security because of our large population… Agriculture is providing jobs for millions of our citizens and we are doing well towards the attainment of food security and jobs. President Muhammadu Buhari in United States That Nigeria is currently witnessing an ocean of gruesome killings perpetrated by people still identified as “suspected Fulani herdsmen” with only occasional islands of peace is no news. What is news is the implication of the activities of this murderous group on food security which the government is not mindful of, as it made steering the economy to the path of growth by investing in agriculture in order to attain food

RASAK MUSBAU Musbau is of the Features Unit, Lagos State Ministry of Information & strategy, Alausa, Ikeja

lthough living in Lagos State is challenging for a lot of people because of the comparative high cost of housing, transportation and other living expenses, it remains where every Nigerians want to reside due to abundance of opportunities and pace of development in the State. It is where many see hope in the midst of deep rooted unemployment situations in the country. Lagos is exceptional in its provision of the legal and much of the physical and social infrastructures on which private production and commerce thrive. Of course the current administration of Governor Akinwunmi Ambode had from the onset “focus like a laser beam” on improving the state economy and establishing his administration’s capacity to work and end with AA+ grade. Rather than lamenting and giving excuses, Ambode challenged failure to a duel by given top priority to wealth creation and poverty eradication. No doubt, the influx of people from other States into Lagos impacted on unemployment rate in the State. For this reason, one of the very first tasks performed by Governor Ambode upon his inauguration was the creation of a Ministry of Wealth Creation and Employment with the sole aim of solving the unemployment quandary in the state. Three years down the line, the soundness of the creation is unquestionable going by account of the achievements of the Ministry has reeled out by the Commissioner for Wealth Creation and Employment, Pharm. (Mrs) Uzamat

security and reduce importation (see Buhari’s 2018 budget speech). Again, the president reiterated this commitment in a parley at Blair House, in Washington D.C., with some American CEOs in the agric. sector and their Nigerian counterparts. While making his speech at the White House when he met President Trump, he repeated the same food security lines. What should concern Nigerians is how possible is this given our present condition of violent attacks on crops and farmers by the herdsmen. Realizing the important need to redirect its focus to non-oil sector – agriculture, which had long been abandoned as a result of wealth from oil is commendable; especially when the economic growth the country recorded in the second quarter of 2017 which saw it exit recession is attributed to agriculture. However, the food security currently promoted appears to be the usual government verbiage we have heard before which lacks action at the implementation level. If not, how can one reconcile implementing the much talked about food security policy within a political society where some elements main target – as they have exhibited – is to destroy crops in the name of pasturing their cattle and brutally kill farmers whose role in attaining food security is indispensable? The forgoing aptly explains the

...we are not weak if we make a proper use of those means which the God of nature hath placed in our power. The millions of people, armed in the holy cause of liberty, and in such a country as that which we possess, are invincible by any force which our enemy can stand against us present situation in Benue state, the food basket of the nation, and other states in the north-central, north-east and north-west. Sadly, state response from the federal government (FG) which controls the coercive apparatus of the state is everything but effective and assuring; at least from what we have seen so far. Therefore, it is safe to conclude that the FG has remained passive in the face of what appears to be an act of genocide on its citizens – majority of whom are farmers – it swore to protect. If you are still wondering how this affect food security with respect to Benue, and perhaps Nigeria as a whole, a careful examination of the state’s economy will provided deeper insight even though this has been stated briefly above.

Essentially, Benue’s economy is an agrarian one which houses a vast majority of the state’s population. What this means is that any threat or attack to the sector will definitely have serious ramifications on the lives of the people who depend on it for their livelihood, and by extension the nation economy which relies on proceeds from this sector which Benue state plays a prominent role as the food basket to boost its economic growth. While natural disasters such as flood and drought can also affect such an economy, which is perfectly understood because they are beyond human control; avoidable ones like herdsmen onslaught on farmers’ lives and crops, and cattle destruction of crops have badly affected the peasant economy in Benue. Aside the burning of crops and brutal murder of farmers by the herdsmen, farmers who survived the senseless killings have been detained in Internally Displaced Persons (IDPs) camps under horrific condition since they fled their ancestral homes on account of insecurity. They cannot return to take advantage of the raining season for agricultural purposes which guarantees food security. Coupled with non-payment of salary (this tends to stimulate the peasant economy) by the inept Ortom government which is unarguably the worst in the state’s history, hunger and poverty have worn a human face in Benue state. Need I state

that this has eroded any effort – if at all there was – at addressing goals number one and two of the Sustainable Development Goals (SDGs)! The president was right by saying “agriculture is providing jobs for millions of our citizens….” In fact, our youths took seriously the idea of returning to the farm when the nation’s economy was in recession. As a result, Benue state witnessed bumper harvest last farming season in spite of the floods which badly affected rice fields, fish ponds and other crops; all of which were a consequence of corruption in the management of ecological fund by the previous administrations, especially Suswam’s. However, the onslaught of the herdsmen which has become an abhorrent norm in the life of Benue farmers has taken away those jobs. This author is also affected. So, for the president to say that “we are doing well towards the attainment of food security and jobs” suggests that he is governing a sovereign territory from Mars, which why he is not aware of the impact of the havoc the herdsmen have wrecked on food security and human lives. After all, he is never aware of anything.

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Appraising Lagos wealth creation strides Akinbile-Yusuf on May 10, 2018. Arrowheads of the job creation initiatives of the Ambode administration undoubtedly is the Lagos State Employment Trust Fund (“LSETF” or “the Fund”), established by The Lagos State Employment Trust Fund Law 2016 to provide financial support to residents of Lagos State, for job, wealth creation and to tackle unemployment. LSETF serves as an instrument to inspire the creative and innovative energies of all Lagos residents and reduce unemployment across the State. The Fund has the mandate to directly invest N25Billion in helping Lagos residents grow and scale their Micro Small and Medium Enterprises (“MSMEs”) or acquire skills to get better jobs. The Fund has now disbursed N5.22 billion loan to 6, 462 beneficiaries of its entrepreneurial scheme in fulfillment of one of the pivotal promises of Governor Akinwunmi Ambode to promote and sustain entrepreneurship and employment. Through the loan programmes, additional 8,797 new taxpayers have been added to the Lagos State tax register. . In addition to the loan scheme, LSETF’s Employability Programme is currently equipping thousands of unemployed youths with the skills that would makes them globally competitive and employable. The target is to train 10,000 unemployed youths through vocational trainings that would prepare them for employments in the construction, manufacturing, healthcare, entertainment, and hospitality and tourism industries. The Fund will thereafter help the trainees to secure job placements opportunities within the identified industries. The United Nations Development Fund (UNDP) has thrown its weight behind this

programme through the Lagos State Employability Support Project, which plans to increase the pool of skilled manpower to alleviate the acute shortages of employable labour in Lagos State. An important segment of the job and wealth creation programmes is the planned Mindset Re-orientation programme for 2,000 unemployed youths in the State. The training will include, Employability skills Training, Career counseling, effective CV writing, developing effective interview skills and Job Hunting Strategy for the invited interns and job fair. This will go a long way in making mass of unemployable youth to be employable and secure job. Besides the graduates, the government also recognizes the potential role of the artisans in wealth creation. Under the Tradesmen and Artisans Capacity Building Scheme of the administration, 1000 Artisans were retrained last year (2017) in collaboration with the Lagos State Technical and Vocational Education Board (LASTVEB). The Capacity Building Scheme was to equip the participants with technical and entrepreneurial skills with a view to enhancing their efficiency, competitiveness and productivity. It was held for eight weekends across the State in 5 centres, Ado-soba, Agidingbi, Epe, Ikotun and Ikorodu. In addition, 40 members of Lagos State House Painter Association were trained and engaged by KANSAIPLASCON Nigeria a paint manufacturer. The government also recognizes that the emergence of new technologies has created an opportunity to address the needs of society to attain sustainable growth and development. For this, the government, through the collaboration of Ministry of Wealth Creation and Employment, other MDAs, IBILE Holdings and other rel-

evant Stakeholders would be establishing an ICT hub in Yaba. In same vein, the administration collaborated with Johns Hopkins University School of Advanced International Studies (JHU-SAIS) to explore opportunities in the area of youth entrepreneurship and technological innovation in Lagos State. The partnership focused on convening a forum to give Techpreneurs opportunity to pitch to an audience that would include but not limited to venture capitalists, industry experts, US based Techpreneurs and academia. The collaboration was aimed at leveraging on work JHUSAIS is doing as regards Sub Saharan Africa in the area of youth entrepreneurship and technology and bridge the divide across tech ecosystem. Riding on a series of engagements with JHU-SAIS, Microsoft, General Electric, Covington and Radius Network among others, an ICT summit was held from 23rd to 26th April, 2018 in Washington DC. Lagos State Government sponsored the participation of 15 (fifteen) Lagos based Techpreneurs and Start-ups at the event. The Graduate Internship programme of the State is designed to expose interns to particular jobs, profession or industry. It is an avenue for creating a network contact between the Off-takers and the interns in order to improve and enhance their formal education, acquired knowledge and skills with first-hand workplace skills and experience (teamwork, initiative, analytical thinking and communication). In Y2017,One Thousand Eight Hundred (1800) candidates were screened. A total number of(910) were deployed to various private organizations and (460) interns were confirmed and accepted for the GIP. Out of those confirmed,(36) Thirty-six were given (3) months extension for

possible employment based on their performance during these period. Cars45 retained (4) interns on full time. Illumina Heritage also employed one of the Interns and ChiscoTransportextended internship of one (1) for possible employment. Mainone extended the internship period of (4) interns to (12) months. The administration launched Innovation-Driven Enterprise Program tagged “Lagos Innovates” in December 2017. Lagos Innovates is a series of programs designed for the benefit of technology - and innovation-driven startups in Lagos State. By providing access to high quality infrastructure, learning, capital and networks, Lagos Innovates will cement Lagos’ position as the leading destination for startups in Africa. So far, government has awarded first set of workspace vouchers to 23 beneficiaries, and first hub loan of N40million to Leadspace, a shared infrastructure solution company that provides office amenities to entrepreneurs, founders, freelancers, startups, SMEs and content creators in Yaba and Ojodu. Leadpace will use the funds to open an additional workspace facility in Tejuosho, Yaba with a capacity of 474 work desks and 26 outdoor seats. It is expected that with improved security, regular power supply as well as availability of other necessary infrastructure, the full economic potential of Lagos would be unleashed to the benefit of not only Nigeria but the African continent. Businesses and industries would flourish even more because the wealth creation programmes of Lagos State are trainee-centred, service-oriented and results-based.

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Wednesday 23 May 2018

EDITORIAL PUBLISHER/CEO

Frank Aigbogun

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

Caution as the herdsmen killings take a religious dimension

wo recent developments have added a critical and unfortunate dimension to the crisis caused by the killings in the Middle Belt of Nigeria and the handling of those developments by the Federal Government. They move the country into uncharted territory of matters seen from the prism of religion. Experience elsewhere instructs on the need to tread cautiously and handle the unfolding developments with circumspection. The religious angle to the killings was the dominant theme when President Muhammadu Buhari met with United States President Donald Trump in Washington on April 30. Trump bluntly stated, “We have had very serious problems with Christians who are being murdered in Nigeria. We are going to work on that problem very, very hard because we cannot allow that to happen.” Members of one of the largest Christian denominations in Nigeria stepped out Tuesday, May 22, in nationwide protest marches against the cold-blooded murder of two priests in a church in Benue State. The protests by Catholics add a new and dangerous dimension to the unfolding sad chapter of killings by terrorists in the guise of herdsmenin the Middle Belt. Benue State has been at the epicentre of these

gruesome killings. There are now no fewer than 170, 000 displaced persons from various communities in the state residing in Internally Displaced Persons camps. The murder of Fr Joseph Gor and Felix Tyolaha was particularly provocative. Armed Fulani herdsmen attacked the reverend fathers inside the church as they conducted morning mass on April 24, in AyarMbalom community within the Gwer East Local Government Area of Benue State. They also killed 19 parishioners and burnt houses in the community. Among the dead were two head teachers and the principal of a secondary school in Ayar. In other words, the killers went for the jugular of matters such as education and religion that held the community together. The attack on the church came some four days after herdsmen similarly murdered ten persons in the Guma LGA, and destroyed houses in Naka, Gwer LGA. There were also attacks by persons dressed in military uniforms who claimed to be searching for those who killed a soldier. More than any other incident, the direct attack on the church, its leaders and parishioners gave a religious twist to the killings. President Buhari seemed to grasp the implication of the incident as he quickly reacted with a statement condemning the action. Buhari said, “This latest assault on innocent persons is particularly despi-

cable. Violating a place of worship, killing priests and worshippers is not only vile, evil and satanic, it is clearly calculated to stoke up religious conflict and plunge our communities into endless bloodletting.” Buhari then pledged the resolve of the Federal Government to arrest and prosecute the perpetrators. Nothing has happened since then. The Federal Government has made no recourse to the incident since that instantaneous reaction by the President. The inaction is compounded by statements that do not bring any comfort to the affected as well as other citizens. President Buhari and officials of the Federal Government have had no fewer than three different rationalisations for the killings in Benue State and other parts of the Middle Belt. While meeting with Trump, Buhari canvassed what Nigerians now call the Gaddafi theory for the mindless terrorist killings. “The problem of herders in Nigeria is a very long historical thing,” he said. “The Nigerian herders don’t carry anything more than a stick and occasionally a machete to cut down foliage and give it to their animals. These ones are carrying AK-47s. “People should not underrate what happened in Libya. Fortythree years of Gaddafi; people were recruited from the Sahel and trained to shoot and kill. With the demise of Gaddafi, they moved to other countries and regions and

carried the experience with them.” While meeting with leaders from Benue State, however, President Buhari sued for integration and cooperation between the farming communities and the herdsmen. He asked the grieving visitors to be more accommodating and see the herdsmen as fellow citizens of Nigeria. Then the Inspector General of Police and the Chief of Army Staff blamed the killings on the passage by the Benue State House of Assembly of a law that made open grazing an offence in the state. Some of the explanations are insensitive while others such as that of “ex-Gaddafi soldiers” insult the nation. The Gaddafi theory is beneath contempt: it implies a breach of the internal security of Nigeria by foreign forces and directly questions the competence of all our security forces. No one should be repeating that jaded explanation. BusinessDay calls on the Federal Government to provide leadership in the core area of security of lives and property of citizens in one of the federating units of the country. Citizens of Benue State and all Nigerians want to see positive action to arrest the persons visiting terror on Benue State, whether they are herdsmen or former Gaddafi soldiers. Nigeria must avoid adding the tinderbox of religion to the conflict between pastoralists and farmers. Stop the killings now.

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Wednesday 23 May 2018

BUSINESS

COMPANIES & MARKETS

DAY

Africa’s first treasury bills investment App built in Lagos

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

WAICA Re moves beyond Africa for increased market share …to continue capital raising for big ticket risks MODESTUS ANAESORONYE

AICA Reinsurance Corporation Plc (WAICA Re) says it has expanded its reach beyond Africa, providing reinsurance services up to Asia and Middle East. Abiola Ekundayo, managing director/CEO of the Company said reinsurance business is an international business and does not limit it to only Africa, stating that it is building capacity to enable it accommodate more risks both within and outside Africa. According to Ekundayo who spoke at the sideline of the recent African Insurance Organisation Conference in Accra Ghana said its continuing its capital raise until paidup capital reached 100 million dollars. According to him the Company currently has a paid up capital of about 65 million dollars, having progressed steadily from 12.5 million dollars to 30 million dollars and presently 65 million dollars. He said the company share price currently is over 1.8 to a dollar, adding that by the time the additional share capital is

raised the value will be significant. On performance of the business, he said they have gone beyond Africa progressively, while noting that the company has been able to approach the business of reinsurance globally. He added that the company has done very well in English West Africa speaking countries, and needed to go beyond Africa for new businesses. On its subsidiary in Kenya, he said the general business office has gotten approval in principle and will soon get its license from the regulator. Kofi Duffor, chairman WAICA Re said in the year 2016, the company successfully achieved its strategic objective of growing its business beyond the Anglophone West Africa region, pointing out that it attained a notable growth level of 250 percent in Francophone Africa region in 2016 while maintaining 80 percent growth in other overseas countries within the period. The company’s chairman, who disclosed this said the capitalisation process was started by the company in 2016, through a Rights Issue, which involved the issue of

14,472,816 ordinary shares at $1.52 per share at a ratio of 0.5669 new share for every one existing share held. He said that the offer was to raise additional share capital of $21,998,680 to support the Corporation’s strategic drive and business expansion. “At the end of the off e r, 1 3 , 0 3 1 , 1 9 0 s h a re s were subscribed valued at $19,807,408.80, representing

a success rate of 90 per cent”, said Duffor. WAICA Reinsurance Corporation Plc is a public limited liability company incorporated under the laws of Sierra Leone (Companies Act 2009) on 7th March 2011. In the years following the creation of West African Insurance Companies Association (WAICA) in 1973, the founding fathers had the desire to estab-

lish a reinsurance organisation to help mitigate the effects of the lack of reinsurance capacity within the West African insurance industry. To fulfill this ambition, the founding fathers considered it prudent to start off by creating a reinsurance pool which hopefully will someday metamorphose into a fully fledged reinsurance corporation. Today, the WAICA Reinsurance

L-R: Lola Amos-oluwole, executive council member, Alliance Manchester Business School, Nigeria Alumni Association, Ayo Adegboye, Linda Uneze, and Charles Nwoko, all members of the Board of Trustees of the association at a press conference to announce it’s forthcoming cocktail themed: Dynamics of online retailing in the 21st century scheduled to hold in Lagos. Pic by Pius Okeosisi

Pool has turned into WAICA Reinsurance Corporation Plc, a dream come true. There is no gain in saying that there is lack of reinsurance capacity in the West African sub region, which situation is compelling insurance companies to seek reinsurance protection in other parts of the world where the treaties offered are not exactly competitive and/ or affordable and the service sometimes almost non-existent. The current WAICA Executive Council in order to give impetus to the development and realization of the idea of establishing a fully fledged reinsurance institution then embarked on revitalizing and implementing the idea of establishing the WAICA Reinsurance Corporation (WAICA Re). To that end, the Executive Committee reconfirmed and endorsed the age old decision to locate the headquarters of WAICA Reinsurance Corporation (WAICA Re) in Freetown, Sierra Leone and to have major operating centres in Accra, Ghana and Lagos, Nigeria. Apart from the provision of reinsurance capacity, the establishment of WAICA Re is a good example of regional socio-economic integration.

WaterAid insists fight against Ebola unsustainable without WASH practices …says 50% of schools, 42% of healthcare facilities without access to water CHUKA UROKO

aterAid, an international charity organisation working in 34 countries across the world, has said that WASH practices are crucial for a successful fight against Ebola, insisting that efforts at fighting the scourge cannot be sustained unless the world’s poorest are given the tools they need to fight the disease. WASH is an acronym for clean water, decent sanitation and good hygiene. The implication of this recommendation is that in homes, offices and other commercial areas including market places, water should be of top priority and should be available in sufficient quantity.

Unfortunately, clean water is a scarce commodity in most parts of Africa and access to it is extremely hard. A World Health Organisation (WHO) report notes that about 50 percent of schools and 42 percent of healthcare facilities in subSaharan Africa are without access to water. In Nigeria, almost a third (29 percent) of hospitals and clinics in the country do not have access to clean water, the same percentage do not have safe toilets and one-in-six (16 percent) do not have anywhere to wash hands with soap. This puts patients and healthcare workers at unacceptable risk of infection, including some of the most vulnerable members of society – new mothers and their newborns. Therefore, it behoves governments at all levels to start

prioritizing water in their considerations for critical infrastructure provision. The practice at the moment, especially in the cities where pipes from public mains are permanently dry, is for individuals to sink private boreholes for their water needs. This explains why, according to WaterAid, one-in-five deaths of newborn babies in the developing world are caused by infections with a strong link to dirty water, poor sanitation and unhygienic condition, and that Nigeria has one of the largest numbers of neo-natal deaths worldwide. “Good hygiene and, in particular, hand-washing with soap, have significant impact on the health and wellbeing of the global population. It was one of the ways in which

Nigeria fought and won the fight against the deadly Ebola virus in 2014. “We cannot be lax in our attitude and neglect to consistently practice good hygiene. Ebola is back on the continent and it is frightening to think that we could all be at risk if we don’t take the necessary precautions and early enough”, said ChiChi Aniagolu-Okoye, WaterAid Nigeria’s Country Director, in a statement obtained by BusinessDay. Ebola, a deadly disease which derived its name from a river in DRC when it was discovered there in the 1970s has been recorded nine times in that central African nation. The disease killed eight people in the country last year. WHO says a total of 42 Ebola virus disease cases has been reported in the country includ-

ing 19 deaths. In Nigeria, especially in Lagos, though the disease which is believed to be caused

chiefly by rats had its victims, was given a good fight, containing and checking its spread to other parts of the country.

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COMPANIES & MARKETS Africa’s first treasury bills investment App built in Lagos HOPE MOSES-ASHIKE

new frontier has opened for investors in the African finance sector with the launch of I-invest, a mobile application that allows users purchase Treasury Bills (T-Bills) directly from their smart phones. Developed by Parthian Partners, a pan African inter-brokerage services firm in partnership with Nigeria’s leading commercial bank, Sterling Bank Plc, I-invest enables both new and experienced investors match their investment maturities to their needs. The first-of-its-kind investment app levels the playing ground for new investors providing them with equal opportunities available to experienced and institutional investors to save money and improve their money market portfolios through Treasury Bills. It eliminates entry barriers such as lack of education and information to make smart investment decisions and the ability to get a broker and/or time

required to visit banks to fill forms for treasury bills. Commenting on the app, Oluseye Olusoga, CEO, Parthian Partners said, “I-invest extends the use of mobile technology beyond money transfers, utility bill payments and airtime purchases. It broadens the choice of money market products available to new and experienced retail investors in the Nigerian money market to include Treasury Bills. Potential investors require only a smartphone with a functional mobile phone line and data subscription to use I-invest.” Olusoga added that IInvest will appeal to the typical Nigerian who is looking to grow their savings through a diversified money market portfolio but has hitherto encountered numerous challenges while attempting to do so. Now they can invest in Treasury Bills irrespective of their location in Nigeria. Additionally, Ibidapo Martins, Chief Marketing Officer, Sterling Bank Plc said, “I-invest is a secure and convenient mobile app that deflates the elitist and upmarket status associated

with investing in treasury bills. A first-time investor can download the app from the android app store, follow the step by step instructions to register and start investing within five minutes.” He disclosed that the Bank chose to partner with Parthian Partners on I-invest because it was a long overdue financial solution that will benefit many Nigerians. “It was only right we collaborate with Parthian Partners on this innovative mobile solution that will save our customers the commute time required to get to a banking hall while also encouraging Nigerians at large to imbibe an investment culture”. To start investing, users can select from the list of available securities, with a minimum amount of 100, 000 Naira and confirm transaction. Interest accrues daily, while the investment amount and interest will be credited to the customer’s account on maturity. The user-friendly interface of the application allows account holders to fund their account with a debit card or pay at any bank

Six more fertilizer blending plants approved for 2018 PFI programme Daniel Obi

he Federal Government has given approval to six additional blending plants for the production of fertilizer in Nigeria under the Presidential Fertilizer Initiative. While three of the plants have received full approval and are already receiving raw material for blending of the multi-nutrient NPK fertilizers, the other three are awaiting final approval, having already been given provisional approvals by the office of the National Security Adviser, a statement has said. “When these six new plants all come on stream, it would bring the total number of fertilizer blending plants operating in the country to 17, up from 5 as at 2016. The three blending plants will also add a total of 1,800,000 metric tonnes in terms of capacity to the country’s growing fertilizer blending industry”. The plants that have been given final approval to join the existing 11 plants include: Waccot Fertilizer and Chemicals Ltd

in Auchi, Edo State; Sora Ltd in Makurdi, Benue State, Citizen Fertilizer and Chemcals Lyd in Kano State, while those given provisional approval are Green Technologies, Abak, Akwa Ibom State while two others whose names were not provided are in Zamfara and Gombe States, the statement clarified. Speaking on the sidelines of a meeting of the members of the Fertilizer Producers and Suppliers Association of Nigeria (FEPSAN) in Abuja recently, Executive Secretary of FEPSAN, Rabiu Kwa, said in the statement that the addition of three new blending plants is indicative of the preparedness of the Federal Government to sustain the gains already made in the Presidential Fertilizer Initiative, which, according to him, has lifted the country from an importdependent nation to one that produces high quality fertilizer. He said FEPSAN members are fully in league with the Federal Government’s drive to provide the inputs needed by farmers to enhance agricultural productivity, expressing the optimism that the sincerity of purpose with which the government had implemented the PFI programme, the country

was already on the right path towards food security. “You can see the impact we made on the productivity of farmers last year. It is this impact that has been attracting new investors in fertilizer blending and we welcome more investors because the appetite for fertilizer will continue to increase as more and more people embrace farming as their businesses while existing farmers seek to expand their operations,” he stated. He expressed the hope that with new blending plants joining the PFI programme, FEPSAN will very likely double the volume of fertilizer produced, a development he expects will transform to savings for the government as well as provide export opportunities, especially to other West and East African Countries. Managing Director of Bejafta Group Limited, operators of a blending plant in Jos, Plateau State Nigeria, Jacob Gimba also said in the statement that the approval of new participants will help the industry grow further, bring in new ideas that will help the industry and also place the country in pole position to support farmers in boosting crop yield.

L-R: Olasupo Kola, treasurer, Photojournalists Association of Nigeria (PJAN), Lagos Branch; Demola Akinlabi, chairman, PJAN; Qasim Akinreti, chairman, Nigeria Union of Journalists (NUJ), Lagos Chapter; Odion Aleobua, CEO, Modion Communications, and Tunji Amokade, head of commercial retail, Leadway Assurance, during the presentation of personal accident insurance cover by Modion Communications in partnership with Leadway Assurance for 100 PJAN members at Modion Communications Office in Maryland, Lagos.

branch of their convenience for the account to be funded real time. Users can top up directly from their mobile banking platform. Similarly, customers who choose to withdraw need to

provide their bank details, enter amount to be withdrawn and provide answers to their secret question while ensuring their KYC details are up to date. In the case of theft or loss

of the users’ mobile device, the investment is not affected however customers are advised to install the application on another device, login and change their password settings.

Stakeholders target sustainable frameworks for food sufficiency CALEB OJEWALE

takeholders in Nigeria’s seed industry are to conduct an evaluation of the sector as they aim to develop a sustainable framework to foster growth and competitiveness, as the country strives to improve sufficiency in food production. The country for years had a reputation of being one of the places where farm yields are lowest in the world, a situation which appears to motivate efforts to undertake relevant evaluations, in developing strategies that will see productivity improve. The National Agricultural Seeds Council (NASC), the government regulatory agency that coordinates and regulates

seed activities across the country, says it is organizing a 2 day SEEDCONNECT Conference and Expo with the theme “The Nigerian Seed Industry: Evaluating the Seed Sector and Developing a Sustainable Framework to Bolster the Growth of the Seed Industry” from June 5th –June 6th 2018 in Abuja. At the conference, it is expected that seed companies, researchers, and other stakeholders will converge to proffer solutions to some of the industry’s pressing concerns. According to Olusegun Ojo, director general, NASC, the convergence will provide an opportunity for stakeholders to review the Nigerian seed Sector with a focus on past innovations, success, failure and challenges; identify critical priority actions to be undertaken by stakehold-

ers to leverage each other’s strengths, scope, scale and operation efficiencies of the sector, and; identify critical gaps and develop a strategic framework for scaling up delivery of high quality seed to farmers. A statement by NASC, also reads that; the conference is a rebrand of the usual annual national seed planning event organized by NASC that brings key stakeholders to review activities of previous year and draw plans for the current year. The gathering is expected to aid in the development of a holistic, pragmatic and sustainable road map capable of strengthening the Nigerian Seed Industry and making seeds of the highest quality available to Nigerian farmers and farmers in neighboring countries.

Medview Airline denies law suit over cancellation of flight IFEOMA OKEKE

edview Airline has said it is not aware of any law suit by passengers over cancellation of a flight on August 13, 2017. This is coming on heel of reports in the press that some passengers have gone to court over the said flight. In a statement, the airline said it is yet to be served any court papers

from any quarters, adding: “We have not received any prelitigation letters as the practice, much less of properly served court papers”. “Sensationalization of impeding litigation in the press without recourse to us is tantamount to trial in the media, which is a grandiose to whip up public sentiments”, the statement said. As a responsible organization, the airline welcomes genuine complaints from pas-

sengers, and such complaints regarding flight cancellation, delays, missing baggage and refunds are handled in line with civil aviation laid down procedures as contained in Part 19 of Civil Aviation Act 2013. Medview Airline is committed to its corporate value, which is the ability to succeed in providing the desired service for customers’ satisfaction and respect for individual clients, the statement further said.

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COMPANIES & MARKETS

L-R: Yemi Ademiluyi, Cyber Security manager, Inlaks; Tanwa Ashiru, CEO, Bulwark Intelligence, and Remi Afon, president, CSEAN, at the Cyber Secure Nigeria conference 2018 held in Lagos recently

L-R: Seye Awojobi, registrar/CE, CIBN; Pius Olanrewaju, national treasurer, CIBN; Bayo Olugbemi, 1st vice president, CIBN; Uche Olowu, president/chairman of council, CIBN; Olowu and Ken Opara, 2nd vice president, CIBN, at the Investiture of Dr Uche Olowu as 20th President of CIBN and other Office Holders at Federal Palace Hotel

Lifemate Furniture projects zero importation in the long term OLALEKAN IPELE

ifemate Furniture, Nigeria’s leading furniture manufacturing company have projected long term plans to stop the importation of hardware and accessories, targeting to focus majorly on locally sourced materials. Asked if Life mate manufacture here in Nigeria, the managing director of the company, Derrick Dai said, “we don’t just assemble here in Nigeria, all of our production is done here in the country. “We only import from America, Italy and Japan some accessories and hardware we can’t find in the Nigerian market. But I hope that eventually we can get everything from the Nigerian market. We don’t want to import anything to facilitate our operations in Nigeria” Derrick told BusinessDay that already, asides those inputs that can’t be readily gotten in the Nigerian market, all of its raw materials are sourced in the country. Speaking at the lunch of what he described as the largest furniture show room in Lagos, the Dai said “the company currently employs more than a thousand Nigerians, pay taxes to the Nigerian Government and has invested massively in the country. “We Chinese may be the owners and investors in Lifemate but we are registered here in Nigeria. Lifemate is indeed a Nigerian brand. Our product is designed to suit the needs

of their numerous customers across all works of life” We are teaching our Nigerian employees how to produce many of our products and how to operate machineries. The company is also looking to set up a technical school to train the Nigerians in the line of the furniture making For more than fifteen years, the company has been meeting the needs of Nigerians with quality product that suits their different needs at the most affordable prices. The company is also looking to expand operations into construction and decoration as the MD sited the new edifice housing the largest furniture show room in Lagos which he said was completed by the company in eleven months. The Nigerian market is quite big and no one individual company can hold and sufficiently meet the need of the people. Hence, the company is looking to collaborate with other furniture company whether indigenously owned or multinational to ensure increased availability and affordability of furniture to all households. On his part, the company’s head of advertising described the company as a leader in Nigerian furniture market as it offers the latest and in demand products. “Among our latest collection is the massaging chair, first in the Nigerian market, it offers the same world renowned Chinese massaging. You can now in the comfort of your home get the best of relaxation at very affordable prices”

L-R: Fagboyo Sunday, business development manager; Balogun Olaniyi, Modern Trade Manager; A K Mirchandani, chairman, Sona Group of Industries; Ashok Manghnani, COO; Adeolu Adelakun, sales executive Euro Global, and John Ogunleke, laboratory technician, all of Sona Group at the Food West Africa 2018

Bukola Smith, Executive Director, Business Development, First City Monument Bank (FCMB), presenting the star prize of N2million to Team LSFlow, winners of the FCMB sponsored “Secure Lagos” Hackathon in partnership with the Lagos State Employment Trust Fund (LSETF), during the final day of the contest in Lagos. With them from left are Babajide Asegbeloyin, team lead, Techspace Ecosystem Business of the Bank; Rolayo Akhigbe, divisional head, transaction banking, and George Ogbonnaya, group head, business banking.

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Wednesday 23 May 2018

MARITIME e-COMMERCE

New study says APM Terminals contributes N186bn annually to Nigeria’s economy Stories by UZOAMAKA ANAGOR-EWUZIE

PM Terminals, one of the leading global port operators in Nigeria, created a total turnover of about $610 million (N186.05 billion) per year to the Nigerian economy from 2013 to 2016, an impact assessment study conducted by Quantifying Business Impacts on Society (QBIS), a Denmarkbased consulting firm, has revealed. The study titled “Nigerian Trade Stimulator – How APM Terminals in Nigeria have Impacted Trade, Creating Jobs and Ensuring a Sustainable Business Environment,” was conducted by Mette Dalgliesh Olsen and Thomas Westergaard-Kabelmann. According to Olisen and Westergaard-Kabelmann, the objective of the study was

to assess the socio-economic impact and value-addition of APM Terminals’ operations in Africa’s largest economy. The study focused on APM Terminals’ investments in Nigeria from 2010 to 2016. “The direct turnover cre-

ated by APM Terminals from 2013 to 2016 has created close to $44 million (N13.42 billion) of annual turnover to companies supplying goods and services to APM Terminals and another $352 million (N107.36 billion) of

annual turnover to those supplying consumption goods to the employees of APM Terminals and its suppliers,” the authors said. This, according to the study, means that APM Terminals’ business activities

Global West Vessel Specialist owners in legal battle over company shares

he family of late Romeo Itima, pioneer managing director of Global West Vessel Specialist Limited (GWVSL), a maritime security company has dragged Winfred Itima, the current managing director, to court over allegations of financial mismanagement and unprofessional conducts. The late Romeo died on August 7th, 2012 in Escravos, Delta State, where he was reported to have fallen off a boat and drowned. Winfred, who is the closest family member to the late Romeo, allegedly took control of his companies shortly after his death. As a result, the deceased family led by Helen Itima, wife of late Romeo and two of her children, sued Winfred alongside other directors, Oluwagbenga Leke Oyewole, former senior special assistant to ex-president Goodluck Jonathan on Maritime Matters and Olabisi Idowu Afolabi, The suit designated: FHC/ CS/1123/2017 was filed before Justice Babs Kuemi of the Federal High Court, Lagos. The preliminary hearing took place on Wednesday May 16,2018 after which the case was adjourned to June 26, 2018. In the suit, the plaintiffs claimed that late Romeo es-

tablished the company in Nigeria in 2009 to combat piracy and associated crimes plaguing Nigeria’s territorial waters. To them, the company was his way of contributing to salvaging Nigeria’s maritime security domain by using his wealth of experience as a master mariner from the United States of America to develop Nigeria. According to the deceased family’s statement of claim, Winfred, their father’s sibling, allegedly took-over the management of GWVSL and Molecular Power Systems Limited, and has refused to give account of the finances of the two companies to the family till date. They also claimed that the actions of their uncle were clear breach of filial affection, trust, care and confidence their late father reposed in him, after the late Romeo allegedly sponsored Winifred training in the US before returning to Nigeria to join GWVSL. The plaintiff also alleged that Winfred, who was not a director at the time late Romeo died, made himself the managing director of GWVSL without due consultation and approvals. The further alleged that

Winfred unlawfully allotted to himself 6,000,000 ordinary shares of Molecular Power Systems Limited without recourse to the pioneer shareholders including the deceased wife, who is an administrator of the late husband’s estate. They accused Winfred reducing the late Romeo’s shares of 2,000,000 to 300,000 while he became the highest shareholder in the company. The employment of Zion Itima, the eldest son of late Romeo at GWVSL, was also terminated. The family further claimed that the accused took away loads of documents that were in possession of the deceased Romeo immediately after his death and prevented the family from having access to them. Late Romeo, they said, through GWVSL executed many contracts running into several millions of naira for the Nigeria Maritime and Safety Administration Agency (NIMASA), most of which were not paid for before his demise and has remained unaccounted for till date. In the suit, the deceased family asked the court to compel Winfred, the accused, to produce all contracts entered

have created a total turnover of about $610 million ((N186.05 billion) per year to the Nigerian economy in the period from 2013 to 2016.” The study also stated that APM Terminals has enabled about 35,000 direct, indirect and induced jobs per year in Nigeria from 2013 to 2016. “From 2013 to 2016, APM Terminals employed an average of 1,196 FTEs (full time employees) per year. It further supported close to 4,800 jobs per year in the companies supplying goods and services to APM Terminals and 29,000 jobs per year when the people hired by APM Terminals or its suppliers spend their salaries on private consumption,” the study further stated. It also stated that the operations of APM Terminals has impacted positively on trade in Nigeria, leading to an increase in manufactured export by up to 15 percent

corresponding to about $0.5 billion (N152.5 billion) from 2006 to 2009. The study indicates increasing Foreign Direct Investment in the country and increased non-oil exports, in line with the ambition of the Federal Government. “With increases in production, jobs and salaries which in turn increases households’ income and led to increased private consumption. This led to increase in demand from the sectors delivering goods and services for private consumption, which in turn increased employment and salaries, resulting to induced effects,” the study stated. Following the Nigerian port reforms, APM Terminals initially invested $220 million in a comprehensive terminal upgrade in Apapa, but has since 2011, put in additional $135 million to increase the capacity of its terminal in Apapa.

Regional maritime security paramount to Nigeria’s economic devt – Peterside

by late Romeo with NIMASA before he died and payments made by NIMASA till date, including the list of vessels the company acquired, which now form part of the fleet owned by the company. They also pleaded with the court to order a general meeting of all pioneer stakeholders to re-allot shares and appoint legitimate directors as well as declare unlawful the restructuring and allotting of shares to late Romeo after his death, void. According to them, the court should direct a complete audit of GWVSL by reputable independent auditors from 7th August 2012 till date including its dealings with Molecular Power Systems Ltd. They further begged the court to compel Winfred to give a detailed account of all the assets including vessels purchased under the Private Public Partnership (PPP) Agreement between Late Romeo and NIMASA as well as sale of vessels and other properties. They also asked the court to order the removal of Winfred from the GWVSL Board of Directors, and immediate forfeiture of the shares he and his ally, Olabisi Afolabi unlawfully acquired as directors.

akuku Peterside, the director general of the Niger i a n Ma r i t i m e Administration and Safety Agency (NIMASA), has said that the agency is taking the lead in tackling issues around maritime security in West and Central African subregion, due to its negative impact on Nigerian economy. Peterside, who described security in the Nigerian Maritime domain as work in progress, called all stakeholders to ensure optimum safety of all investments in the sector. Speaking in Lagos at the weekend, Peterside stated that a lot of factors especially safe shipping, contributes to the cost of products coming into the country through the seas, thus the need to tackle insecurity in the waterways. “We must ensure the security of the Gulf of Guinea because Nigeria is not isolated from whatever happens in the region which may lead to negative economic impact, or increase in the cost of insurance premium and ultimately lead to high cost of goods and services for consumers,” he said. Stating that 65 percent of cargo heading to the region ends up in Nigeria, Peterside, said that NIMASA is

Dakuku Peterside

implementing international regulatory instruments in collaboration with various countries in the region to checkmate criminal activities. “No maritime crime occurs within a jurisdiction. Often, maritime crime starts from one jurisdiction and ends in another. The only way we can tackle maritime crime is for all of us to work together. We have several regional initiatives for tackling maritime crime including ECOWAS Integrated Maritime Strategy; Africa Integrated Maritime Strategy; Gulf of Guinea Commission,” he added. He further said that NIMASA has been collaborating with other agencies leading to the renewal of the Memorandum of Understanding between NIMASA and the Nigerian Navy and other parastals.

Politics & Policy

2019: APC in danger of losing South East again as Imo crisis deepens 19

Wednesday 23 May 2018

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You are already rejected, be ready to accept defeat, PDP tells Buhari INNOCENT ODOH, Abuja

ain opposition party the People’s Democratic Party (PDP) has advised President Muhammadu Buhari to be prepared to accept defeat in the 2019 general election, given that all indices, including those released by his Presidency, show that Nigerians across board have overtly rejected him for another four years in office. The PDP declared this in a statement issued on Monday by its National Publicity Secretary Kola Ologbondiyan, saying “indeed, with the degenerated economic, security and social situations in our nation under his incompetent and anti-people administration, in addition to the spate and weight of direct disapprovals from Nigerians and international bodies, President Buhari knows that he is now swimming against the tide.” The PDP added that apart from the acute poverty, hunger and starvation Buhari allegedly brought, Nigerians have reached a consensus that the President has betrayed the trust of the or-

Buhari

dinary people, particularly in the north, especially with scandalous revelations that he is not indeed pro-poor and uncorrupt as they were made to believe in 2015. “This is in addition to his disconcerting aloofness to the plight

Timi Frank not an APC chieftain, says Bolaji Abdullahi INNOCENT ODOH, Abuja

he All Progressives Congress (APC) has denied the erstwhile Deputy National Publicity Secretary of the party, Timi Frank, stressing that he is not a chieftain of the party as being reported in some media platforms. A statement issued by the APC National Publicity Secretary, Bolaji Abdullahi, made available to our correspondent in Abuja, said “our attention has been drawn to a report on the online newspaper, in which one Timi Frank was addressed as a ‘Chieftain’ of the All Progressives Congress (APC). “We wish to correct the wrong designation and remind the newspaper and indeed the general public that Timi Frank has since November 2016 been suspended as a member of the APC following a recommendation of an APC disciplinary committee and subsequent ratification by the Party’s South South Zonal Executive Committee. “Hence, whatever position Timi Frank holds or canvasses is done in his personal capacity and has no bearing on the APC.”

Timi Frank has consistently criticized the policies of the President Muhammadu Buhari led APC Federal Government for the poor handling of the economy as well as the insecurity ravaging parts of the country. On Sunday, Frank issued a letter to President Muhammadu Buhari detailing the alleged failures of the party under his leadership. In the letter, Frank accused the President of instigating a reign of terror and indiscriminate arrest of people on trump up charges especially critics of the president. He also accused the Buhari government of perpetrating more corruption than he claims to fight , adding that corruption in the current government is on the upswing according available statistics. Frank told Buhari that “under your tenure the rule of law has been replaced with the rule of force. You have injected fear into the society. People who voted for you to save them from corruption and ineptitude have been barred from speaking up against the myriads of evil and wicked acts being perpetrated by officials in your government.”

of citizens, his failure to initiate and implement any development project in any party of the country and the refusal to fulfill the littlest of his 2015 campaign promises. “Today, the electorate has come to terms with the fact that the

promises by President Buhari and his APC are all a big scam. “In fact, our investigations have revealed that President Buhari never intended to fulfill any of his promises. This is because, three years down the line, our President cannot even boast of any clear-cut implementation blueprint on his promises. “Instead, our dear President and his cronies acquired a life of opulence, going on foreign tastes and swimming in ocean of corruption, while millions of Nigerians who voted him into power are abandoned to languished in poverty and bloodletting occasioned by the APC misrule,” the PDP said. Ologbondiyan noted that President Buhari’s handlers, in their shouting match, should know that Nigerians are only clamouring for his expulsion from Aso Rock come 2019 because Nigeria does not have provisions for mid-term elections, stressing that had such been in Nigeria’s statutes book, Nigerians would have since chased Buhar’s incompetent, insensitive and tactless government away from office. “It is a notorious fact that our

dear nation and our citizens have not had it this bad since our independence in 1960, leading to the general indignation against the Buhari Presidency. “Even President Buhari’s aide, Mallam Shehu Garba, has acknowledged that Nigerians across board, including parliamentarians, policemen, custom officials, immigration officials, civil servants and the business community are all clamouring for an end to the Buhari Presidency, come 2019. “Now that the multitude of artisans, market women, transporters, labourers, small scale entrepreneurs and professionals, whose businesses have collapsed are teamed with the army of unemployed youths, deprived widows and victims of bloodlettings across our country, in clamouring against President Buhari, who then is left to vote for him in 2019. “The Presidency should therefore not be surprised that our citizens are now rallying on the platform of the repositioned PDP, a party known for all-inclusiveness and people-oriented policies, to rescue the nation from grips of the Buhari-led APC administration,” the PDP said.

Fresh crisis hits A’Ibom APC as consensus agreement is rejected ANIEFIOK UDONQUAK, Uyo

resh crisis has hit the Akwa Ibom State chapter of the All Progressives Congress (APC) as the consensus agreement reached by the stakeholders ahead of the party’s congress has been rejected. Under the consensus agreement, Ini Okopido was selected as the state chairman of the party but this was swiftly rejected by the members saying there was no room for a consensus arrangement in the party’s constitution. Among those claiming to occupy the party’s top position in the state are Anny Asikpo, a member of the defunct Action Congress of Nigeria (ACN) and Udoma Bob Ekarika, a medical doctor and former member of the state executive council during the tenure of former governor Victor Attah and the current chairman of the party, Amadu Attai After series of meetings and horse-trading, chieftains of the party had agreed on a consensus arrangement to achieve peace and unity. Those who signed the accord include the former Minister of State for the Federal Capital Ter-

ritory (FCT), John Udoedehe; the Managing Director MD of the Niger Delta Development Commission (NDDC), Nsima Ekere; the Senior Special Assistant to President Muhammadu Buhari on National Assembly Matters (Senate), Ita Enang; the former Minister of Petroleum, Don Etiebet; the Managing Director of the Oil and Gas Free Zone Authority (OGFZA), Umana Okon Umana. Others include former Senator Aloysius Etok, who defected to the PDP in 2014, and cross the carpet to the APC; incumbent Senator Nelson Effiong, representing Akwa Ibom South at the Senate, who also quit the PDP for the APC and other party loyalists. Enang who spoke to reporters said “the reconciliation became necessary in order to persuade aggrieved members and stakeholders to bury their personal interest for the greater interest of the APC winning governorship in 2019.’’ He explained that “in arriving at the consensus arrangement, we had to accommodate the interests of all the members parties that came to form the alliance for APC to emerge to contest and won the 2015 elections”. But as the final meeting held at

Enang’s residence in Uyo, the state capital as a prelude to announcing the new executive members, aggrieved APC chairmanship aspirants, held a parallel congress at Sheergrace event centre in Uyo where the new state executive of the party was also announced. Anny Asikpo, declared himself as the new chairman of the party after a parallel congress. Asikpo explained that the new consensus chairman of the party, Ini Okopido, from Ika Local Government, has no grounds to occupy the office. “I came from the ACN platform, apart from John Udoedehe, I am the next most senior person in the party”, he stressed and questioned the rationale behind handpicking new comers into the fold. Also Ekarika, former Commissioner for Works, who was interested in becoming the chairman of the party said “the right thing that should have been would be to imbibe the party principle adopted by the APC at the national level. In a statement in Uyo, members of the executive committee of the party said they rejected the consensus arrangement describing it as unpopular and an unacceptable decision “purportedly taken by few elders of the party.’’

BUSINESS DAY

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Wednesday 23 May 2018

Politics & Policy

Parallel congresses: APC swimming against the tide

he ruling All Progressives Congress (APC) is now confirmed to be suffering from immense internal paralysis arising from its failure to resolve its contradictions. The party is in desperate search of measures to redeem itself and reassure Nigerians that it is still the party to beat in 2019 election. The APC has hardly grappled with the fallouts of its shambolic and violent ward congresses on Saturday May 6, and barely two weeks after, it organized another spiteful state congresses in some of the states, which have probably set the party on highway to political Golgotha. Apart from few instances of peaceful and harmonious congresses in Edo, Enugu, Katsina and Borno states, the news across the states depicts a picture of a proliferation of parallel state congresses that produced parallel executives in about 10 states, deepening the confusion in the party. In Ondo State, the battle of wits between the State Governor, Rotimi Akeredolu and his detractors set perhaps the most visible theater of the absurd. The Ondo State debacle was shaped by the division between Governor Rotimi Akeredolu and some National Assembly members and other stakeholders, which escalated to violence that led to the beating of as several journalists, politicians and observers by thugs. A member of the House of Representatives, Bamidele Baderinwa, was allegedly stripped naked and attacked with machetes by the thugs at a rival congress. Even Osun State Commissioner for Regional Integration, Bola Ilori, who

Oyegun

is from the state, was not spared as the thugs inflicted injuries on him. The Lagos chapter of the congress attended by Vice President Yemi Osinbajo, National Leader of the party, Asiwaju Bola Ahmed Tinubu, Governor Akinwunmi Ambode and all National Assembly and state legislators elected a new state executive with Alhaji Babatunde Balogun emerging as Chairman. However, aggrieved members of the party have allegedly rejected the outcome. The absurdity then eclipsed Imo as Governor Rochas Okorocha, the acclaimed kingpin of the APC in the South East, got battered by his opponents, who allegedly trounced him totally. The anti-

Okorocha group led by his deputy Uche Madumere, had ignored a last-minute court order to elect a new executive for the state chapter of the party. A furious Okorocha is reportedly confused and is said to be running from pillar to post to seek salvation for his political fortunes in the state while in neighboring Ebonyi, parallel congresses were held with loyalists of the Minister of Science and Technology, Ogbonnaya Onu, and those of Senator Julius Ucha meeting in two different locations. The Delta and Rivers states episodes were full of intrigues as the Olorogun Otega Emerhor led group in Delta was defeated

after his one-time ally, Jones Erue, was returned as Chairman in a congress organized by the Great Ogboru/Ovie Omo-Agege group despite announcements that the congress had been postponed. The drama extended to Oyo state where the bickering between state governor Abiola Ajimobi and Minister of Communications, Adebayo produced yet another parallel congresses. Governor Ajimobi led his loyalist to state congress at the Lekan Salami Stadium , Adamasingba, Ibadan, where he was joined by supporters from the national secretariat, were former Governor Adebayo Alao-Akala, former Senate leader, Senator Teslim Folarin, Senator Fatai Buhar, Chief Adeniyi Akintola(SAN), Prince Akeem Adeyemi reportedly held a parallel congress. Shittu, on the other hand took his loyalists to the popular Liberty Stadium, where he was joined by Senator Monsurat Sunmonu, Busari Adebisi, Adeolu Akande, and Ismail Adebayo Adewusi, among others. In Kwara another parallel congress also emerged just as Adamawa state witnessed its own confusion as elements loyal to Governor Mohammed Jibrilla and his predecessor, Murtala Nyakom held parallel congresses. The National leadership of the party had come up with a veiled threat saying that it will not accept the results of those it did not commissioned to carry out the exercise. But analysts believe that this development will disorganize the party and may lead to implosion and massive exodus from the party. Speaking to BusinessDay, on why the APC is fracturing over some discrepancies, a director of

Organisation and Operation at the Nigeria Intervention Movement (NIM), Khairat Animasheun, said “what made APC become APC was the merger and in the merger all the parties submitted their individual certificates and lost their identities. “But before doing that the APC did not sit down to agree on who does what and the terms of execution of their manifesto. So they have been strange bedfellows in the same cocoon and that is the reason they have not been able to work together and that has affected the governance in Nigeria.” The Director of the Centre for China Studies, Charles Onunaiju, who is also, a political affairs analyst, said “What is happening in APC today is not surprising, judging by its formation. What crystalized the party is not common ideology but the enthusiasm to capture power and appropriate national resources. Some of them have felt left out and that is why the grievances and desperation are manifesting in different ways.” A chieftain of the party who does not want his name on print blamed President Muhammadu Buhari for allegedly creating disaffection in the party with the way he runs party and national affairs. He said “if only President Buhari had not shown overt favoritism and clannishness, the party might have been saved from these multiple crises.” So this was the level into which the party had degenerated and signs are that the party’s national convention scheduled for June is already primed to fail because the party from inception had no sound ideology and philosophical framework upon which it united for purposeful leadership.

How Edo APC elected, replaced ex -woman leader facing EFCC trial as organizing secretary IDRIS UMAR MOMOH, Benin

gainst the backdrop of President Muhammadu Buhari anti-corruption war, the outgone Edo State woman leader of the All Progressives Congress (APC), Aisosa Amadasun, who is currently being tried by the Economic and Financial Crime Commission (EFCÇ) for fraud, on Saturday emerged the State Organizing Secretary of the party. Amadasun was however, replaced by Betty Okoebor as woman leader from Esan North-East local government area by the leadership of the party in the state in a congress that was conducted based on consensus and hamonization. Recall that the traditional ruler of Uromi, Anselm Edenojie, was suspended and deposed as traditional ruler by the immediate

past governor of the state, Adams Oshiomhole over alleged altercation with the new state woman leader of the party. The embattled immediate past state woman leader was on October 5, 2017 arraigned and remanded in prison custody by Justice Ohimai Ovbiagele of the Criminal division of Edo State High Court over alleged N1.5billion Edo State Universal Basic Education Board (SUBEB) contract scam. She is being tried along former chairman of the board, Stephen Alao, the immediate past acting Secretary Suleiman Ali, Adams Osabuohien and Momodu Dove. She was alleged to have received the sum of N2.5million from one Chinedu Abiazia, N4.5million from Goldust Complex limited, N2 million from Odam Global Integrated Services among others from different contractors as bulk sale of shares of contracts awarded

to them. A total of 36 persons were elected, but some of the elected officers swapped positions in order to give way for others while some others were asked to step down based on the consensus agreement adopted just as new blood were injected into the system. At the end of the congress, Anselm Ojezua, was re-elected as the state chairman of the party, while Lawrence Okah, State Secretary, Ohioma George, State legal adviser, Saliu Momoh, state treasurer, Valentine Aisuen, youth leader among others retained their positions. Those coming on board for the first time are Kenneth Asekahme as deputy state chairman; Anthony Ikuenobe, Assistant Secretary, Betty Okoebor, Women leader, Ovenseri Peter Iduozee, Physically challenged, Maimuna Momodu, assistant woman leader among

others. Speaking on behalf of other elected officers of the party, Aselm Ojezua said the party was more united compared to when he was first elected as the chairman of the party four years ago. Ojezua said the peaceful congress conducted in the state has proven that the party can achieve a lot if all members join hands together and work for the progress of the party. “Some time about four years ago, when we assumed this office for the first time, things were so bad for APC. You remember after the ward congresses, how people left APC? You remember after the LGA congresses, the party was torn apart? That was what we inherited when the first excos was formed four years ago but today, we are indeed united party. “Today, I feel very pained that comrade Adams Oshiomhole is

not here today to witness the result of the hard work, diligence and industry that he put into this party. “What we see today, is because of the industry of Adams Oshiomhole. Today, Edo State is the example for Nigeria. We have shown the world that peaceful transition is indeed possible, that by consensus, you can make your choice and yet it will be inclusive. Today, we have proven that in Nigeria, things can work if we have the right attitude and so I will give thanks to all of you who have given us support all this time”, he said. Earlier, Oke Onyejekwe, chairman of the state congress committee, who addressed delegates from the eighteen local government areas, said though they have been mandated to supervise the exercise, the manner and behaviour of delegates was an affirmation that they have all agreed to consensus arrangement.

Wednesday 23 May 2018

C002D5556

BUSINESS DAY

Politics & Policy

2019: APC in danger of losing South East again as Imo crisis deepens JAMES KWEN, Abuja

s the 2019 general elections draw closer, fresh u n h e a l t hy d e ve l o p ments have continued to emerge with indications that the ruling All Progressives Congress, APC, will again loss the South East geopolitical zone. APC had lost almost completely the entire South East comprising the five Igbo speaking states of Abia, Anambara, Ebonyi, Enugu and Imo in the 2015 general elections. Only Imo State that the Governor, Rochas Okorocha got re-elected under the APC in 2015. With the re-election of Okorocha who doubles as the Chairman of APC Governors Forum, election of over 20 members of Imo State of House of Assembly and Senator Ben Uwajimogu on the platform of APC as well as the emergence of Senator Ostia Izunaso as the party’s National Organising Secretary made Imo the stronghold of APC in the entire South East. After the 2015 general elections, the appointment of a Minister from each South East state based on constitutional stipulation and other appointments as well as defections such as that of the former President of the Senate, Ken Nnamani and Senator Hope Uzodinma(Imo) with many others started making APC to be on ground ahead of the 2019 general elections. However, as Chinua Achebe said; “Things Fall Apart, The Centre Could Not Hold”. Thus, Imo as the centre of APC in the South East could not hold, therefore things are falling apart with monumental negative consequences for the ruling party in this zone. Fingers are being pointed at Governor Okorocha, the arrowhead of APC in Igboland and singers of the discordant tunes have been explicit that the Governor’s antics are capable of incurring loss for the party not just in Imo but the whole South East. Not too long ago, the forum of Imo APC Stakeholders stormed the National Secretariat of APC and lamented that if not checked, Okorocha’s draconian acts such as the plot to impose his son in-law as the party’s Governorship candidate will spell doom for APC. Aggregating the misgivings of the forum, Ben Uwajumugu, Senator representing Imo North called on APC National Leadership to intervene urgently before Okorocha completely jeopardized the efforts of selling the party in the South East to avoid the repeat of what happened in 2015 in 2019. “Today, all is not well in Imo State. If you don’t do something to rescue the situation it will be a miracle for APC to win Imo State in the forthcoming elections.

Okorocha

“It will not only be Imo State but the damage that has occurred in Imo State will affect the other states in the South East. As we tell you today if you conduct a poll on all the APC members in the South East less than 10% will support the continuation of what Rochas has imposed on Imo State and in the South East and there is no way one can incarcerate and deprive every members of this party their hope ad and aspiration in 2019. “The Governor appropriated the powers of NWC, the power of the zonal and state EXCO of APC and dished out certificates and recognized people in what he called mock election. “ You have to make a statement now let Igbo people know that there is an NWC that is ready to come to justice and deliver us from the wicked hands of Rochas Okorocha who makes Imo people keep crying about APC so that the people will know that that is not the life style of APC”, the Senator insisted. Similarly, Okey Ikoro, Chairman Imo APC Stakeholders Forum presented a vote of no confidence on Governor Okorocha at a recent meeting of over 100 stakeholders including, Deputy Governor, Eze Madumere, Osita Izunaso, APC National Organising Secretary,16 out of the 21 APC local government chairmen and some serving and past members of the state executive council. Ikoro called on the party’s National Leadership to urgently address the disputation to avoid jeopardising the party’s electoral chances in the state and indeed the South East region ahead of the 2019 general elections.

Barely two weeks after the pilgrimage of Imo APC stakeholders to Abuja, the party’s ward and local government congresses triggered another war in the ranks of APC with a sharp battle divide between Okorocha command and Izunaso & Co command. It became obvious that the Izunaso command was winning the war and Okorocha command was resisting, therefore, throwing Imo into a state of political Armageddon with pockets of violence. During the ward congresses for instance, Okorocha could not withstand the political heat exuded by the ‘Abuja commandants’ as he ran to Daura, President Muhammadu Buhari’s village, may be to tell him to intervene. The situation with the local government congress was the same. Apparently left with no option, Okorocha sponsored a delegation of three Imo APC House of Representatives members loyal to him and 24 members of the Imo State House of Assembly who were al-

Okorocha also lost at this stage as the NWC did not act in line with the pleas or threats of his forerunners but rather uphold the contested results with favour the Izunaso camp

legedly given N5 million each on a protest visit to the APC National Secretariat to demand cancelation of the results of the ward and local government congresses as according to them, congresses did not take place. Achor Ihim, Speaker of the Imo state House of the Assembly who led the Okorocha delegation told journalists after a closed door meeting with the APC National Working, NWC that, they came to reconfirm the fact that there was no election(congresses) held in all the wards and local governments in Imo state. “There was no congress in Imo state and we are here to reaffirm, to send and demand that an announcement be made for a new date for the ward congresses, Local congresses and we can now talk about the state congresses. “ We have affirmed our stand with our governor, we are still standing with our governor. He is the face of the APC in the South East. Of course the young man has done so well that without him, there would have been no APC in the South East in the first place. Imo state in particular is the fulcrum of APC and it cannot be toyed with. “As such we demand that they issue statement and announcement be made about the congresses that did not hold. The new date should be announced and the whole things should be ratified so that there will be peace in the state. The shenanigans that we saw can never be taken for congresses. Okorocha also lost at this stage as the NWC did not act in line with the pleas or threats of his

forerunners but rather uphold the contested results with favour the Izunaso camp. In a swift reaction, the Imo APC Stakeholders Forum in counter notice copied to the APC National Leadership, the President, APC Governors and Security Agencies signed by Senators Ben Uwajimogu, Hope Uzodinma, Ifeanyi Araraume, Osita Izunaso among others recounted that Okorocha was the reason APC performed abysmally in the last general elections and if urgent steps are not taken the same thing would repeat in the next rounds of election. “You will recall that this State was the first State that the President visited as President elect to campaign to assure and salvage the almost lost chance of our APC State on account of the total rejection of this governor by the people of Imo State and the entire South East, which was clear in the results of the presidential and national assembly elections wherein the party won only 5% of votes in the Presidential and only 2 of the 41 South east seats in Federal House and none at all in the Senate. “That result was a consequence of the action of a governor who being the only in the party in the South East had by unbridled theft, ruined the economy of Imo State where for the 43 months to 2015 and the 36 months in this second tenure had sequestered all the allocation to the 27 Local Government of the State for the use of himself and his family The group noted that the ward and local government congresses were conducted credibly except that Okorocha with his cohorts who felt rejected by the delegates resorted to perpetration of violence plunging the state into anarchy which calls for a state of emergency. “This attempt to drag the state into further violence in the face of a nonexistent state assembly only, points to the complete breakdown of an already nonexistent governance for which the state of emergency envisaged in the Section 305 of our Constitution is to be declared. “As our Party Chairman, kindly bring to the notice of our dear President that should the governor in his megalomania fueled by a debased mental state procures further violence in his child like tantrums, a state of emergency in Imo State would be a natural consequence. Dramatically, while the anti Okorocha group was already bathing in the euphoria of victory preparatory to the state congress, the pro Okorocha group was also not resting on its oars as it procured an interim injunction from a Federal High Court, Owerri stopping the state congress few hours to its conduct.

BUSINESS DAY

C002D5556

Wednesday 23 May 2018

C002D5556

BDINVESTIGATION

BUSINESS DAY

Echoes of despair, frustration as Boko Haram holds economy hostage (1) Nigeria’s war against Boko Haram in some parts of the Northeast has raged on for some years, with no known end in sight. A visit to Borno and Yobe, revealed businesses and individuals, most of which were agro-based, have for seven years been struggling to survive. Some individuals shared their experiences with Caleb Ojewale during his recent trip to the region. Abubakar Agwai, Yobe state secretary of the Amalgamated Cattle Dealers Association of Nigeria. t the beginning of our interview in Potiskum, first Agwai said, “This market where you’re standing right now is the largest cattle market in West Africa.” Then he proceeds to answer some questions on how the market has survived through insurgency.

Fannami Girema, a farmer in Buni Yadi, Gujba LGA, Yobe state, said he “used to get between 100 and 150 bags of beans, guinea corn and maize. Before the crisis, we cultivated many crops like groundnut, beans, guinea corn, maize and even rice, although the places where we plant rice before are not accessible now.” Last year I got 22 bags or sorghum unlike before when I would get 70-80 bags, and this decline is due to many reasons like lack of machineries, late planting and others.

State of the market before insurgency, and its subsequent impact Before insurgency, this was the only market in Nigeria where we spend not less than N950 million every week during the market days of Tuesday, Wednesday, and Thursday. This amount is spent just to buy cows and take them to the southern parts of the country. But it is very unfortunate that this insurgency has severely impacted us, and reduced our capacity to do business like before. The insurgency has affected this market in many ways. Cows coming to the market have been drastically reduced, likewise the number of customers coming to trade. It was in this market that unknown gunmen shot over 150 people to death. Till date there has been no show of support or concern from any agency of government. In the process of fleeing (after their localities may have been attacked by Boko Haram insurgents), some people lost their capital, some had their cows burnt to death. The market has been devastated to a level where the goods coming have been drastically reduced. People in the market have reduced because there is no capital to trade like before.

How they felt when leaving their farms behind We felt very sad and frightened when leaving. When leaving, we were thinking about our lives not farms or crops or food. Some were killed as they fled therefore it was a victory for those who were able to escape; not what you had with you or what you left behind. This is a pain that we still feel, are just coping with it. It is only time that will reduce the way we continue to feel about the whole experience.

How people are coping Many people are unable to cope and recover from the losses. This is because, someone who in the past was buying 15 cows to send to the southern part of the country, is now unable to buy anything. Most of them are now labourers in the market. It is strangers who are now coming to buy cows and take to those places where victims of insurgency previously traded. Imagine someone that bought cows and transported to places like Warri, Lagos, Enugu and other places (in the south), is now the one working for those coming to buy, so they can give him some change to live on. Now, someone is buying and you are loading, and this is because of insurgency. If not for insurgency, our market would have grown more than this. Those that had capital, no longer do. Cows are not coming, people are not coming. Nothing is coming to the market. People have become charity cases, whereas they were the one who gave others in the past Muhammad Lawan, a farmer in Buni Yadi, Gujba LGA, Yobe state. He spoke in hausa

L-R: Fannami Girema, Ali Modu, Saidu Bala Musa, and Muhammad Lawan, farmers in Buni Yadi, Gujba LGA, Yobe

We previously had about 50 villages ahead of us but which no longer exist. The residents in those villages were all farmers, but they are no longer there because of insecurity. language, explaining that on account of the insurgency; agricultural activities have deteriorated very much. Because a farmer who has the capacity to cultivate 50-100 bags before can now only get 10-20 bags at most. How they felt when leaving their farms behind We felt very sad because you planted your crops, they have grown, and you have estimated your yield. Some had even stared harvest but we left all these behind to flee for our lives, and on returning, one did not meet a single thing. It is very disheartening because where you fled to, there was nothing there, and as a farmer your farm is your investment this accounts for the major reason why we were all incapacitated (when we left). How long were you away? We spent at least two good years before we came back. Some even spent three years but those who farmed last year spent two years

Level of confidence to resume farming We previously had about 50 villages ahead of us but which no longer exist. The residents in those villages were all farmers, but they are no longer there because of insecurity. But here, we have confidence in going to our farms and no threat whatsoever. Steps to be taken for agricultural activities to resume like before The first and foremost thing is provision of tractors. Lack of tractors has made our farming to be very difficult, manual farming is very hard here. The yield is widely different between the tractor farming and the manual farming. We also need provision of capital for paying for the tractors, seeds, labourers, and even food to eat. Saidu Bala Musa, a farmer in Buni Yadi, Gujba LGA, Yobe state, used to plant various crops like guinea corn, beans, and sesame. What is the current status in output? What we get now is not up to what we were getting before. Last year I got 20 bags of sesame and 30 bags of rice, unlike before, when I get 40-50 bags of sesame and 40-50 bags of rice, we are just trying to recover little by little How they felt when leaving their farms behind When we left here, we were about to harvest our crops. I had four farms then, which were all ready to be harvested and all necessary plans and work had been done. But that was how I left everything behind; we did not even reap our crops much less using them, and when we came there was nothing. How long were you away? We spent two years before returning. When

There were farmers who previously got even up to 1000 bags of produce here, but presently cannot even produce 50 bags Abubakar Agwai, Yobe state secretary, Amalgamated Cattle Dealers Association of Nigeria

we came back our houses had been destroyed either partially or totally and some houses had grown bushes. We all came back and met our houses in inhabitable conditions. Level of confidence to resume farming We don’t have any problem with security issues, in this area there is peace of mind on our farms. Our only problem is just the expanse of land that we cannot totally cultivate. And the major crops we can plant at the moment and which we concentrate on are sorghum and beans, others are insignificant. Steps to be taken for agricultural activities to resume like before The first step to take is to provide us seeds and fertilizers. We also need provision of capital to employ labourers, purchase insecticides, pesticides and other farm chemicals. We usually suppled surrounding areas with 20-30 trailers of agricultural produce every week before insurgency, but this is no more. Ali Modu, a farmer in Buni Yadi, Gujba LGA, Yobe state, said “before the crisis, a bachelor could harvest about 50 bags of guinea corn while married men get up to 100 bags and above. We also cultivated groundnut and bambara nut.” What is the current status in output? I will make an instance with myself because since we came back, it was last year I started to farm due to fear. And like I said the other time, I used to get 50-100 bags of produce before the crisis, last year; I only got 10 bags in all. Before we fled, some had harvested their produce and some had not but it did not make any difference because we all returned to find nothing.

Ibrahim Garba, Sarkin Yaki, Gujba Emirates Council, in Buni Yadi, Yobe state, sat with two other palace chiefs outside the destroyed, abandoned Emir’s palace. According to him “there is no fear or threat within here presently, and we feel very safe at the moment. The threat or fear prevails in the neighbouring villages around here.” Productivity before insurgency We planted sorghum, maize, maiwa (late millet/ unopened millet – another breed of millet), sesame, beans and rice. We used to have plenty harvest in the crops we planted. At the moment, we expect our harvest to improve because the lands have been abandoned for some time and with this, become more fertile. For instance, before if you got 50 bags, this year, you will look forward to getting 60 – 65 bags. Present status in return to proper farming Farming activities have not fully resumed but plans are going on to start this planting season. Farms are being cleared, and we are waiting for the rainy season to set in. I even planted maize today as I am talking to you

It will take 6-7 years before farming activities will become normal, and this is according to our expectation if farming starts this planting season

because we had a good rain last night. How long before farming returns to normal It will take 6-7 years before farming activities will become normal, and this is according to our expectation if farming starts this planting season. What needs to be done to achieve this? Among the things that can be done to encourage the return of people who are far away and have not returned, is to build their destroyed or dilapidated houses first. As you can see, work is going on even here where the Red-Cross is building houses for people without houses and repairing those that are damaged. Lawan Ibrahim, the Zannah Sulhuma Gujba, on his part, said “There is a high threat and fear in our place. Only a very few have returned and they cannot even farm because it is not safe at all. Many have not returned and some do not even intend to return at all. Even I sitting here, it is due to my position in the Emirate council, but things are not safe around us. Jauro Yaya, Bulaman Jana of the Gujba Emirates Council, however, also said; there is no fear or threat here, we feel very safe, we sleep soundly, and we fear nothing. We have our local hunters here, and our soldiers are here as well. It is due to their presence that we were able to return up to our present population. We have spent two years now, but for farming, we don’t have the capacity to resume completely, due to lack of money, seeds, machineries and others, because in the beginning, we fled at the harvesting season, only a few of us had harvested our crops, many of us left them unharvested. Even those who harvested theirs couldn’t take anything out. When we came back, we met nothing, and that is why we are very incapacitated are we are just starting from scratch now. At the moment, we struggle for what to eat and not what to plant. NGOs bring food for us here that is, the World Food Programme. They bring the food we eat on a monthly basis, and even with that, it does not suffice for us. Sabo Usman, transport officer, Gujba LGA, and also a vendor with the World Food Programme (WFP) How would you describe the impact of insurgency here? The insurgency’s impact on our agricultural activities is much, there were farmers who previously got even up to 1000 bags of produce here, but presently cannot even produce 50 bags because of financial problems; lack of machinery,

fertiliser, and improved seeds. Some farmers don’t even have money to pay labourers that will work on the farm for them. The Boko Haram boys have destroyed everything; they burnt our houses and farms and took away harvested crops. When are things likely to become normal? Farming activities may resume to normal in like five or more years to come, but not less than five years. This is because farmers who started last year are expecting more productivity this year, if this progress continues like this, we would resume to our normal productivity within the time mentioned earlier. Current level of farming I have been a farmer and even up till now, I plant sorghum, sesame, beans, maize. My farm is 600800 acres big. There is no change in the expense of land I cultivated before and now. Presently, there are workers on the farm clearing the land in preparation for planting. Level of confidence to work on the farm There is no fear or threat in going to farm. Last year, we worked on the farm, and we did not hear of anybody that was attacked when working on the farm. The Emir’s representatives are here, if there was any case, it would come to their knowledge. Therefore, there is full confidence in going to our farms. This is one of the major reasons that encouraged us to continue this year again. How did it feel losing people to the insurgency? Many people that died include my neighbours, friends, relatives. I cannot describe (or qualify) the grief I felt, but you have to be patient in times like this. We felt very sorrowful indeed, and we still feel the pain. Presently, there are many widows here whose husbands have been shot,

When leaving, we were thinking about our lives not farms or crops or food. Some were killed as they fled therefore it was a victory for those who were able to escape

How long were you away? Those that fled earlier spent three years, those who went out in the later time spent two years. Some spent two years and some months and so on. Level of confidence to resume farming There is peace of mind here but surrounding villages have fear in farming especially eastwards, there are places where farming cannot even be practiced. Steps to be taken for agricultural activities to return to normal Provision of fertilizers, cattle used for ploughing , machines or vehicles for transporting of goods and farmers, tractors and seeds

Sabo Usman, transport officer, Gubja LGA, and vendor with the World Food Programme

L-R: Jauro Yaya, the bulaman jana; Lawan Ibrahim, the zannah sulhuma; and Ibrahim Garba, the sarkin yaki, all of the Gujba Emirates Council.

slaughtered, burnt, handicapped, or even taken away by them (i.e. the terrorists). They don’t have anybody to cater for them. They rely on cards given for food collection by organizations like WFP and so on. They are very many with their

children, living in uncomfortable conditions. If you will assemble them here, the palace front may not occupy them, you will be very surprised. Badamasi Umar, a farmer in Buni Gari, few kilometres from Buni Yadi, said “Before the insurgency, in a single farm, you can plant up to three crops and get; sorghum (20 bags), sesame (5 bags), beans (4 bags), from a small farm. In a big farm, you can get sorghum (100 - 200 bags), sesame (50 bags or more), and beans (30 bags). But presently, what you can get combined in a farm is 20-30 bags if you use tractor, and 5-10 if you don’t use tractor. The low productivity is also because we can’t farm the lands that are Eastwards as they are not safe, and also we use only local manure. How did it feel leaving your home, farms and running away? We spent three years while we were away, and left our farms sadly. We were very unhappy while leaving all our harvest behind, as we fled for our lives leaving our crops behind. When we wanted food, we had to buy or be given while ours was here but we can’t access it, and that year, we had a very high yield. Those who harvested could not take it away with them, and before we came back; it had gotten spoilt. Then that year, there were heavy winds which blew down many houses. Present status in regaining productivity Presently, no farmer gets more than half of what he cultivated before, and this is due to the insecurity on the other lands. You have to share the land amongst yourselves now no matter how small it is to be able to engage everybody. We can’t cultivate the expanse of land we did before, because all the farms that are Eastwards have not been regained and are inaccessible for security reasons. Ironically, they are the most productive lands and are bigger than the ones we cultivate now. The lands we cultivate presently are a little safe, and there is little confidence farming there, only that every farmer’s dream is to farm the banned farms. We are just managing these ones. What can be done to return agricultural productivity to normal? Empower people with money to eat first; many of us don’t have food to eat, not to talk of crops to plant. A farmer that can employ up to four to five labourers before does not even have food to eat now. We also can be empowered through; provision of tractors, seeds to plant, and fertilisers. With the exception of Abubakar Agwai, these interviews were conducted in Hausa language, and translated by Bashir Yusuf.

BUSINESS DAY

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Wednesday 23 May 2018

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A new league of proxy farmers in Nigeria Stories by JOSEPHINE OKOJIE

uwon Gbolade a 45 years old farmer in Lagos, Nigeria’s commercial nerve centre, grows rice, soybeans and maize on 20 hectares of land yet he has never been to a farm. Gb olade has no practical knowledge about farming and does not understand the fundamentals of agriculture yet he harvest tons of crops yearly and makes over N500, 000 from farming each year. This is as a result of the investments Gbolade made in the agricultural sector through a digital platform which connects farm sponsors with real farmers. “I am a farmer but have never visited any farmland and lack the practical knowledge,” Gbolade said with excitement in his voice. “I make returns between 6 to 25 percent and within a 3-9 months period, depending on what farm type I choose,” he added with a big smile on his face. Not only is the business very profitable but also helping Nigeria meets its funding needs to boost food production and ensure food security. Ahmed Yakubu, an engineer with a top engineering firm in the country is also a farmer by proxy. “I have been into farming since 2016 and the journey has been exciting and rewarding. I have a 10 tons rice farm in Kebbi and I have never been to Kebbi state before,” Yakubu told BusinessDay. “I could have these farms through my investments in Thrive Agric- a company that connects sponsors

Sabitu Muhammadu Yahaya, managing director, Jifatu Food Processing Company Nigeria Limited (L) introducing his company’s products to President Muhammadu Buhari (R), and Muhammad Badaru Abubakar, Governor Jigawa State (M) during the Mini-Trade Fair organised by the Jigawa State Government during Buhari `s working visit to the state.

to farmers. The returns have been excellent,” he added. Just like Gbolade and Yakubu are leveraging on the farming opportunities the likes of Growsel, Thrive Agric, and Farmcrowdy are providing to create wealth and improve their income. The likes of Farmcrowdy, Thrive Agric and Growsel are organisations behind the initiative which is reshaping the way people participate in farming and food

production using their online platform to invest. The organisations function through their various platforms and trains farmers in smart farming techniques as well as supplying them with inputs and technical support to boost their output. The opportunity has allowed many Nigerians who do not want to be involved in the drudgery of farming own a farm and venture into agribusiness.

“Farmcrowdy has recorded close to 1,000 unique farm sponsors, aggregated a combined 4,000 acres of farmland in Nigeria for farming purpose and grown over 150,000 organic chickens to date,” Onyeka Akumah, co-founder and CEO, Farmcrowdy said recently during the firm’s first annual anniversary in Lagos. How finance can help smallholder farmers improve yield Over the years, lack of finance

has remained one of the major factors bedeviling the country’s a g r i c u l t u ra l s e c t o r a n d t h i s impediment has continued to prevent farmers from investing in basic inputs, such as quality seeds, fertilizers and small-scale irrigation facilities among others needed to raise productivity and generate sustainable income. But all that is fast changing owing to the new league of proxy farmers in the country. “Despite contributing about 30percent to Nigeria’s GDP and 70percent to the country’s labour force, most farmers in Nigeria are still entangle in poverty, a problem that basically stems from a lack of funds to access modern farm inputs, which in turn drastically reduces their output,” Jerry Oche, CEO, Growsel said in a statement. “To change this for farmers and ensure they have the required finance to expand their production areas and boost productivity, we create a meeting point for farmers and farm sponsors who are willing to invest,” Oche said. According to experts, such financing models to far mers w ill increas e pr ivate capital i nv e s t m e nt i n t h e c o u nt r y ’s primary agriculture and integrate poorer sections of the population into a sustainable process of economic growth and development. In turn, this will reduce poverty by providing jobs directly and indirectly that will serve as a stimulus to the Nigerian economy and agricultural sector.

Fish, shrimps production receives boost as ASL unveils new trawlers

igeria’s quest to boost fish and shrimps production has received a boost a Atlantic Shrimpers Limited (ASL) has unveiled two newly acquired trawlers-Seven Stars 1 and 2 as part of its fleet expansion and increase investment in the country’s seafood subsector. The investment in the newly acquired trawlers is the largest made in the West African fishing industry in the last 28 years. The investment also reflects ASL confidence and commitment to the Nigerian fishing industry, which is internationally recognised as one of the best managed and sustainable fishing industry in the world. “We are adding to a new series of more efficient to our fleets. Our goal is to align with Nigeria’s transformation agenda through agriculture to ensure food security and generate export proceed while generating employment,” Kamlesh Kabra, managing director, ASL said during unveiling of the vessels in Apapa port recently

“We believe in Nigeria and we would continue to invest in its fishing sector,” Kabra said. According to him, the addition of the two ultramodern trawlers is a proof of the company’s continued dedication to invest more in Nigeria fish industry. ASL which have been active in the Nigeria’s shrimp trawling business since the 90s, started with just 15 trawlers has grown its number of trawlers in its fleets to 72 and also invested in its own Dry Dock to facilitate in-house maintenance of fleets. The company has also developed a value added processing factory, inhouse lab, workshops and modern cold storage facilities. In his keynote address, Heineken Lokpobiri, Minister of State for Agriculture and Rural Development congratulated ASL on the remarkable feat and investment in Nigeria. The minister stated that the investment in the new vessels will not only support existing jobs but

replace old vessels and processing technology that will usher new opportunities. “It is a privilege to commission these magnificent new trawlers t h a t A S L h a s a c q u i re d . A S L has consistently displayed an unwavering commitment to

delivering the absolute best to the Nigerian market and beyond, while being environmentally responsible in the process,” Lokpobiri said. “Our ultimate goal is to attain self-sufficiency in fish production and the ministry is striving to create an enabling environment for the

L-R: Kamlesh Kabra, managing director, Atlantic Shrimpers Limited (ASL); Heineken Lokpobiri, Minister of State for Agriculture and Rural Development; Stewart Harper, chairman-board of directors, ASL and Olusegun Awolowo, chief executive officer, Nigerian Export Promotion Council (NEPC), at the official commissioning of newly acquired fishing trawlers by ASL in Lagos recently.

private sector to thrive and fill the missing gap as the ministry has placed fisheries and aquaculture top among its value chains development programme,” he added. Stewart Harper, chairman board of directors, ASL said that the two new vessels has a 40 ton capacity each for shrimps and fish, adding that the country is leading in the designs of the newly acquired trawlers. Harper commended the Nigerian government for its continued support to the organisation in boosting the country’s shrimps and fish production. Also speaking also during the unveiling, Olusegun Awolowo, chief executive officer, Nigerian Export Promotion Council stated that the commissioning falls in line with the country’s national plan for a zero oil economy. “I believe this will go a long way generating more revenue for the company and also the country while creating more jobs for our population,” Awolowo said.

Wednesday 23 May 2018

C002D5556

BUSINESS DAY

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Food security: Lagos spends N1.05bn on Lake Rice subsidy ... set to create 274,000 jobs via mill expansion JOSEPHINE OKOJIE

he Lagos State Government has subsidised lake rice to the tune of N1.05 billion from December 2016 till date, as part of its efforts aimed at ensuring food security and rice sufficiency in the state. Suarau O luwatoyin Isiaka, commissioner for Agriculture Lagos State, disclosed this recently at a Ministerial press briefing to mark Governor Akinwunmi Ambode third year in office. The commissioner noted that the subsidy include cost of transportation, bagging and difference in cost of production, stating that the subsidy has helped in preventing prices of rice in the state from skyrocketing Suarau stated that the state government has also embarked on the establishment of 32 tonnes per hour rice mill at Imota, which will create over 274,000 jobs across the entire rice value chain in the state.

He said in implementation of the State Government’s Development Po l i c y , t h e st ate Mi n i st r y o f Agriculture is mandated to facilitate

sustainable food production, create jobs and poverty reduction through several agricultural projects and programmes.

According to him, in an effort to ensure continuous supply of lake rice, the state has completed arrangement to establish a 32TPH

rice mill at Imota, which will require the cultivation of 32,000 hectares of land for paddy supply, adding that the State signed an agreement with Bugler AG for acquisition of the equipment. He hinted that the rice mill will require the cultivation of 32,000 hectares of land for paddy supply, which will provide a platform for the State to partner with other South West States in rice cultivation besides existing collaboration with Kebbi State. On the agricultural value chain empowerment, he said farmers, fishermen, fish farmers, butchers and processors were provided necessary agric inputs, productive assets and capacity building that will ensure steady food production and supply to the citizens. “A t o t a l o f 1 , 5 0 0 f a r m e r s and marketers across the five Administration Divisions of the State benefited from the last edition of the programme with multiplier effect on job creation, livelihood sustenance and increased food productivity,” Suarau said

Expert calls for the review of FG’s Anchor Borrowers Programme ADEOLA AJAKAIYE, Kano

FG to establish training centres for farm managers

he Federal Government of Nigeria is to establish Farm Management Training Centers across the geopolitical zones of the country. The Audu Ogbeh, Minister of Agriculture and Rural Development, (OFR) made this disclosure at the unveiling of the John Deere SMART model farm in Abuja recently. Ogbeh further stated that John Deere Tractor Manufacturers would be engaged to offer capacity building to interested persons to realize optimum yields and increased productivity in their farm operations. The minister noted that the triangle of cooperation between John Deere, Nigerian Agricultural Mechanization and Equipment Leasing Company is the way to go for mechanized farming to encourage youths to embrace agriculture. “The old have to give way to the

youths, as they need to farm to feed themselves,’’ he said Earlier, Ahmed Adekunle, Special Assistant to the Minister on Mechanization, noted that the partnership between the Federal Ministry of Agriculture and Rural Development (FMARD) with John Deere through the NAMEL is an initiative of the Honourable Minister that has come to reality to deliver on the farm mechanization programme of the Federal Government, while explaining that this initiative is aimed at increasing production per hectare and attracting financing provided by John Deere to the Ministry. The managing director of John Deere Sub-Sahara Africa noted that the John Deere SMART model being introduced into the country is an eco-system approach that focuses on improving yields of the smallholder farmers.

n expert in Nigeria’s agricultural sector has called on President Muhammadu Buhari to urgently review the implementation of the Central Bank of Nigeria’s (CBN) Anchor-Borrower Programme (ABP), as findings has shown that the implementation of the scheme so far, is falling short of national quest of making the sector driving force of the nation economy. The call was made on the side -lines of President Buhari`s working visit to Jigawa state by Sabitu Muhammad Yahaya, managing director, Jifatu Food Processing Company Nigeria Limited. “My submission on the Anchor Bor rower Programme of the Federal Government is based on my experience as a participant. I am one the participants, who responded to the call made by President Buhari to businessmen in the north to assist his regime in making a success of

his agriculture programme,” Yahaya said. As a way of addressing this development, the expert suggested that the implementation of the scheme be reviewed with the aim of bringing into the driving seat of the programme, persons with passion for agriculture. Sp e a k i n g t o B u s i n e s s D ay after the President inspected his company exhibition stand at a mini-trade fair organized as part of the visit; Yahaya said the review of the scheme would go a long way in ensuring the success of the programme. Yahaya who is also the chief executive officer, Jifatu General Enterprises Nigeria Limited, owner of Jifatu stores, urge the government to re-constitute membership of the ABP implementation committee, and remove members that are not interested in the development of the sector. He also urged President Buhari to ensure the removal of commercial

banks in the implementation committee of the scheme, on the ground that their involvement is one of the factors hampering the seamless implementation of the scheme. “Because of my love for the country, and the president, I floated Jifatu Food Processing Company. My vision is to ensure that the company is operational in the 19 Northern States. So far, we have commenced operation in Kaduna, Niger, Katsina, Kebbi, Kano, and here in Dutse, Jigawa state. “The company is conceived to be an off-taker for the over 6000 farmers that are participating in our outgrowers programme. We resolved to conceive the out-grower programme when we discovered that most of the farmers we supported were finding it difficult to get an off-taker for their produces” he explained. Commenting on the nature of the company `s out-grower programme, he revealed that the programme entails provision of soft loan to cover Land preparation, purchase of farm inputs, purchase irrigation facilities, harvesting, as well as serving as offtaker for the crop cultivated. He disclosed that his company has invested close to N1 billion in the out-grower programme, pointing out that farmers participating in the scheme had grown from 1000 to 6000, since the company came on seam two year ago.

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Wednesday 23 May 2018

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What to know before making agribusiness investment in Edo CALEB OJEWALE Twiiter: @calebtinolu

nformation on how to penetrate different states to take advantage of their agricultural potentials is often either lacking, or hard to obtain. However, for Edo, Godwin Obaseki, the state’s governor, explained in an exclusive interview we had, that there are ways to come into the state as an investor. As Obaseki explained during our interview, “in the area of agriculture, we have three teams working from different areas. First there is the special adviser on agriculture, Joe Okojie, who is a former commissioner for agriculture. Then there is the ministry of agriculture, with a commissioner and his team, and there is the Public Private Partnership office. “We also have a business bureau so there are several points of entry where you can engage with us on the type of opportunities available.” The governor assured that through either of these avenues, potential investors can get information on whatever area of agriculture they want to invest. And in making this even better, he explained that the state is being mapped out to determine what commodities do well in

Edo state. “Fortunately we have enough information and data, soil analysis, rainfall pattern, agronomic reports to help would-be investors have enough information to make enlightened decisions on what to do,” said Obaseki. Specific crops where the state has comparative advantage are being identified and potential i nv e s t o r s c a n re q u e s t information on how their intended businesses can benefit from the masterplan of sort being designed. Obaseki explained that the state is “currently finalizing the master plan on agriculture with specific reference to oil palm. We have an institution from Indonesia that is working with us on this. Once it is completed, we would have

identified the areas where we want to allocate land for oil palm. We would have finalized communication action programme with the communities involved those areas. “We would have infrastr ucture plan s o that when we publish for expressions of interest, people would apply and then we work with them on how to make investments. We want to use that as a model to help investors reduce the risk, rather than just give them land. “What we’d rather do is that once we’ve mapped out an area, the soil is good, and we have decided on what can be done, we will then construct the road into that area. We would have spoken with the community on the business for cooperation,

and then you can go in there and do your business,” he said. Obaseki also noted that the state will be focusing on high value crops like oil palm, rubber, and cocoa to an extent, then Cassava in terms of tubers, for grains; soybeans, then fruits, and legumes. “ Yo u k n o w , E d o pineapples are the sweetest in this countr y. If you haven’t tasted it yet, try Edo rose pineapple and you won’t eat any other,” said the governor with a sense of pride. However, while waiting to get a taste of the Edo pineapple, potential agric investors can attempt interfacing with the identified units, and we would like feedback on just how seamless the process of investing in Edo is.

Agritech & Innovations

New maize hybrid to improve yield by 100 percent CALEB OJEWALE

igeria’s abysmal yield in maize, presently around an average of 1.5 metric tonnes per hectare, is to be doubled by a new maize hybrid which is being developed by Flour Mills of Nigeria PLC and Corteva Agriscience, Agriculture Division of DowDuPont. Th e p a r t n e r s h i p by both companies for maize hybrid seed development in Nigeria, also seeks to work with relevant Nigerian agencies to strengthen the legal framework for Plant Variety Protection (PVP) in intellectual property laws which will not only guarantee that the country gets access to the best technology solutions but also protect the rights of smallholder farmers. Both companies said in a joint statement provided to BusinessDay, that the collaboration will see FMN and Corteva Agriscience working together on key aspects of

the maize value chain in Nigeria, with a focus on promoting modern farming techniques and practices, capacity development and knowledge transfer for the local production and use of improved and quality inputs, including seeds and crop protection. “We are excited at the prospects of this partnership, and what we can achieve,” said John Coumantaros, chairman, FMN. “Corteva Agriscience is a globally renowned company with a wealth of experience in crop protection and biotechnology solutions, and will introduce new and exciting seed production techniques that will help develop the maize hybrid seed market in Nigeria. Over the years, FMN has invested heavily in the primary processing, aggregation and distribution of locally grown grains such as maize, soybean, rice, sorghum and wheat, and are passionate about strengthening the capabilities of small-scale

farmers, even as we continue to seek out newer ways of deepening our supply chain,” said Coumantaros. Maize yield in Nigeria, at 1.5 tonnes per hectare is significantly below the average 2 tonnes in Africa and 10 tonnes per hectare in the U.S. Early projections indicate that the adoption of hybrid seed and use of improved farming inputs and techniques will increase maize yields by about 100% in the next five years. On his part, Paul Gbededo, group managing director, FMN, said “We are currently in the sustainability testing phase for the most viable varieties suitable for this environment and envisage that the next step will be to establish in Nigeria, a world-class hybrid maize production plant. “Our business is ultimately about providing for the livelihood of millions of Nigerian families, by ensuring that they have access to great food, and as such, we are focused on building a business that caters for not just

their nutritional needs but enriches their lives,” added Gbededo. “This partnership endorses our commitment to collaboration across the food chain to transform the role of agriculture in society and enhance the livelihood of farmers in Nigeria,” said Prabdeep Bajwa, commercial unit director, Africa Middle East, Corteva Agriscience, Agriculture Division of DowDuPont. “Our company is investing in innovation, drawing on our knowledge of genetics, chemistry and digital to give farmers in Africa more and better products and ensuring their success.” It was also noted that FMN and Corteva Agriscience have already started work on demonstration farm plots in Nigeria to showcase highperforming hybrid maize varieties with additional test sites expected to commence soon in Kwara, Niger, Kaduna, Kano, Oyo, Nassarawa, Bauchi, Plateau States and the Federal Capital Territory.

Closing Nigeria’s protein gap requires innovation OLUSOJI APAMPA

ccording to the UN Food and Agriculture Organisation, Nigerian adults each get about 8.6g per day of crude animal protein as opposed to the minimum recommended 35g. The simple reason for this protein gap is that animal protein is still expensive for most Nigerians and this is because, the cost of raising the animal is high for small holder farmers who are the main producers. From catfish to chickens to small ruminants and cattle, smallholders are reporting that well over 70% of their costs go into feeding the animal. The only way to solve this problem is by finding more affordable, but equally nutritious feed. Innovation is needed in this area. In feeding cattle, the Business Innovation Facility (BIF), a DFID UK programme, has shown that Napier grass (a hybrid of elephant grass) can increase milk yields from 1litre to 3 litres per day, single milking. Others have used it to fatten their cattle and small ruminants. It can be grown by smallholder farmers, buying seedlings for about N30 each, and it can spark off a revolution in feeding that class of livestock. A large dairy farm that has incorporated it in its feed regimen reports a 30 percent saving in costs. Cattle need to eat about 4-5% of their body weight in dry matter daily. 1 Hectare of ordinary grass provides 8-10tonne of this dry matter per year with capacity to support 4 animals at 2-2.5t/ year/animal while Napier grass averages about 30t per year thus supporting about 15 animals for the year. So, a smallholder with 2Ha of land cultivated with Napier grass can support 30 animals rather than the 8 he used to support on ordinary grass. As competition for land continues between farmers and herdsmen, Napier grass will allow more efficient use of what land is available, allowing little space to be used with high yield/sqm. It will also be more effective as averagely, cattle need about 120g of protein per day from their feed and ordinary grass gives them 60g, but Napier provides 140g. Cost of establishing 1Ha of Napier amortized over its lifespan of 5years before it needs to be re-established

comes to about N340/day. It allows the cattle produce 3L of milk in single milking and at N150/L this translates to N450/day or N1350/day in cottage yoghurt. The “free grass” some would argue costs nothing, but the cows produce only 0.8-1L of milk per day N150 or N450/day in cottage yoghurt produced by the women. The pastoralists typically survive on the milk economy. In raising catfish, hydroponically grown grain shoots infused with nutrients are proving to be a good alternative to conventional feed for raising 2-month old fingerlings to table size, potentially crashing cost of feed by 40-60 percent. Trials are currently going on to see if these plant proteins on their own, added to polyculture involving tilapia or clupeids can be efficient ways to grow catfish to table size and make it a more affordable source of protein. The cost of feeding chickens could be phenomenal as well. The Business Innovation Facility working with its partner, Synergos, has been researching cassava grits made from cassava peels. From research and analysis done by ILRI, a research institute under IITA, the nutritional value of the grits has been determined and preliminary feed formulations show that about 10% of the maize content can be replaced with such cassava grits to bring down the costs. So, what was previously a waste product is now being used as replacement for an expensive ingredient, maize. Each of these innovations presents new business opportunities adding value in new ways. In the case of cassava grits, an investment in equipment of about N1.5m enables the women who process Gari, to start processing cassava peels into grits. Each processed batch costing about N1.25m can be delivered with an 11% profit margin, per delivery. As a new product, it is an open field that the poultry association and the aquaculture industry should consider very carefully both for the trade and savings potentials.

Olusoji Apampa, Country Director, The Business Innovation Facility (BIF). Twitter: @sojapa E-mail: soji.apampa@cbinigeria. com

Wednesday 23 May 2018

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Pension Today

BUSINESS DAY

In Association with

Micro pension plan brings flexibility to enable large informal sector participation

he draft guidelines for the extension of pension coverage in accordance with section 2(3) of the PRA 2014 (Micro Pension Plan) 2018, requires that stakeholders and concerned publics make their inputs to enable PenCom come up with the final guidelines for the scheme. According to the document, persons not below 18 years of age with legitimate source of income shall be eligible for participation in the Micro Pension Plan under Section 2 (3) of the PRA 2014: Such persons must be self-employed that belongs to a Trade, Profession or Business Association; selfemployed persons with a business registration as a company, partnership or enterprise; employees operating in the informal sector who work with or without formal written employment contract; as well as other self-employed individuals. According to the guidelines, notwithstanding the above, persons from 15 years and below 18 years may also participate subject to the approval/consent of their guardians. A unique feature of these guidelines is the flexibility it offers, as every contribution is splited into two, to comprise 25 percent for contingent withdrawals and 75 percent for retirement benefits. Contributions under the micro pension plan shall be managed as two separate funds namely: Micro Pension Contingent Fund (MPCF) for the 25 percent contingent contributions and Micro Pension Retirement Benefits Fund

(MPRBF) for the 75 percent retirement benefits contributions. The participation of the informal sector in the Contributory Pension Scheme as provided by Section 2(3) of the PRA 2014 is primarily to provide for retirement benefits. Withdrawals/accessing benefits shall be two types reflecting the flexibility incorporated in the treatment of the contributions. The micro pension contributor shall be eligible to access the portion of his/ her contribution available for withdrawal one month after making the initial contribution. Subsequently, the micro pension contributor shall be eligible to make contingent withdrawals at any time; may withdraw the total balance of the contingent portion of his/her RSA including all accrued investment income thereto. While the timeframe for processing and payment of contingent withdrawals shall not exceed two working days, the law will require that payment shall be made

Aisha Dahir-Umar, acting DG, PenCom

only to the micro pension contributor’s designated bank account. While the PFA shall process all requests for contingent withdrawals, it shall notify the Commission of all payments made weekly,

Section 2(3) of the Pension Reform Act, 2014 (PRA 2014) provides that employees of organizations with less than three employees as well as the self-employed persons shall be entitled to participate in the Contributory Pension Scheme in accordance with Guidelines issued by the Commission

RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State. Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@diamondpfc.com Website: www.diamondpfc.com

while the micro pension contributor has the option of transferring part of his outstanding balance on the contingent portion to his retirement benefits portion. The contingent withdrawals however shall be subject to applicable tax laws. Another beautiful side of these guidelines is the flexibility in mode of payment of contributions. According to the draft, micro pension contributors may make contributions daily, weekly, monthly or as may be convenient to them. And contributions shall be made by cash deposit, electronically or any payment instrument/platform approved by the Central Bank of Nigeria. On retirement benefit withdrawal, the micro pension contributor shall be eligible to access pensions upon attaining the age of 50

years or on health grounds in accordance with the regulation for the Administration of Retirement and Terminal Benefits. Where a micro pension contributor secures employment with organisation having more than three employees, the Micro Pension Contributor shall be eligible to participate under Section 2(1) of the Pension Reform Act, 2014. In this situation, the micro pension contributor shall formally request for conversion, attaching all necessary documents specified in the guidelines. Section 2(3) of the Pension Reform Act, 2014 (PRA 2014) provides that employees of organizations with less than three employees as well as the self-employed persons shall be entitled to participate in the Contributory Pension Scheme in

accordance with Guidelines issued by the Commission. These categories of persons mainly in the informal sector constitute the vast majority of the working population in Nigeria and are not covered by any retirement benefit scheme. Accordingly, the Commission considers it necessary to develop the Guidelines for the implementation of the provisions of section 2(3) through a “Micro Pension Plan”. The Micro Pension Plan refers to an arrangement for the provision of pension to the self-employed and persons operating in the informal sector. For the purposes of these guidelines, the informal sector refers to employees in companies that are not mandated to implement the contributory pension scheme, while a self-employed individual is someone who earns his income through conducting legitimate trade or business for him or herself. The objectives of the pension Scheme, as provided in the Pension Reform Act 2014 are to ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory or Private Sector receives his retirement benefits as and when due; It is also assist improvident individuals by ensuring that they save in order to cater for their livelihood during old age; while also establishing a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the Public Service of the Federation, Federal Capital Territory and the Private Sector”.

This section is created to increase awarness and deepen knowledge about the contributory pension scheme. If you have enquiries or contributions, send to this e-mail: diamondpfcbusday@yahoo.com

BUSINESS DAY

Wednesday 23 May 2018

C002D5556

E-mail: insurancetoday@businessdayonline.com

Adenrele Kehinde, chairman, holding the award plaque (4th from Left), flanked from left by Ekpe Ukpabio, executive director; Aderemi Ogunmefun, director; Theuns Botha, director; Val Ojumah, managing director/ CEO; Margaret Dawes, director; Oyewale Ariyibi, director and Caleb Yaro, director, all of FBNInsurance at the official presentation of the AIO Insurance Company of the Year award to the Board of Directors of FBNInsurance in Lagos.

Funmi Babington-Ashaye, president, chairman of Council, Chartered Insurance Institute of Nigeria (CIIN), joined by other Council Members of the Institute, and also Ajibola Ogunshola, chairman, Continental Re during the CIIN 2018 Fitness Walk held recently in Lagos

African Oil, Energy, Aviation Pools face increased volatility, pressure on premium Stories by Modestus Anaesoronye

nsurance is a business of large numbers, and when this does not happen, a lot of pressure is seen on available premiums. This is what African Oil and Energy and Aviation Pools, owned by some members of the African Insurance Organisation (AIO) continues to suffer. The level of patronage is not sufficient to make the pool sustainable and profitable as anticipated, underscoring while the pools are suffering huge volatility in its chosen area of the business. Oil and energy risks as well as aviation are volatile risks that require a lot of technical capacity to underwrite because of its characteristics of high claims profile,

which Africa Re no doubt have to drive operations of the two African pools. Members of the pools, therefore must cede businesses to the pool if it must deliver value to members, and also gain capacity to play actively in and around the Continent. Results for the 2017 operations of the pool released during the African Insurance Organisation Conference and General Assembly held in Accra, Ghana show that African Oil and Energy Insurance Pool paid out claims amounting to $20.44 million as against $4.66 million in 2016. During the period under review, gross written premium was $27 million from $16.05 million in 2016, while gross premium earned also rose to $20.62 million from $17.27 million.

Profit for the year under review stood at $722, 183 in 2017 as against $47,882 in the previous year. On the part of African Aviation Insurance Pool, gross written premium at the end of 2017 financial year was $943,996, as against $741,172, while gross premium earned in the review period closed at $883,149. Further analysis of the result shows that the Pool paid claims amounting to $730,648 as against $1.48 million in 2916. Profitability however dropped to $95, 247 in 2017 as against $2.05 million in the previous year. The African Oil and Energy Insurance Pool were incorporated on 20th June 1986 during the 13th General Assembly of the AIO held in Bujumbura, Burundi, for the purpose of sharing Pool business

and risks. It was an amorphous organization created to render the following specialized services to the members: “Create capacity within Africa for oil, gas, petrochemical and energy related insurance risks emanating from Africa with a view to reducing foreign exchange outgo.” “Provide adequate insurance cover to match the rapid technological advancement of individual African countries and to further ensure that oil companies operating in Africa are charged competitive premium rates in order to enhance profitability and stabilise the African oil insurance market.” “Give technical support and advice to insurance companies operating in Africa on matters relating to risk management and insurance of oil and energy related

risks.” African Reinsurance Corporation manages the pool and is remunerated by way of commission based on the gross premium. While The African Aviation Pool also established the same time was to create capacity within Africa for Aviation insurance risks emanating from Africa, thus minimizing the foreign exchange outgo on aviation reinsurance of African airlines. “Provide the African Aviation Insurance/ reinsurance marketer with underwriting, training and manpower development facilities to enable them have technically competent underwriters.” It is also provide technical/professional services to the members of the pool on matters relating to aviation insurance/ reinsurance.

Africa Re records growth in Q1 NAICOM’s director supervision, Barineka despite market challenges Thompson qualifies in US based ACAMS audit

n the first quarter of 2018, the gross written premium of African Reinsurance Corporation grew by 26.31 percent, from $ 167.13 million in March 2017 to $ 211.10 million. The performance reflects the successful 1st January renewals in all its markets combined with the slight hardening in the South African reinsurance market. Despite the growth in premium, adverse claims experience with several large and catastrophe losses, led to an almost break-even underwriting result. Trade tariff disputes between China and the United States coupled with a hike in the U.S Federal

Reserve interest rates, brought about more volatility in the international financial markets in the first quarter of 2018. Most of the financial markets underwent a correction during the period under review. Hence, Africa Re’s investment income dropped to $ 3.34million from $ 13.97 million realized in the first quarter of 2017. Commenting on the performance, Corneille Karekezi, Africa Re’s GMD/CEO stated that: “The Corporation continues to show resilience even after the major losses recorded in 2017 and impacting 2018. The performance is in line with our forecast of a positive underwriting result at year end”.

he Director Supervision, National insurance Commission (NAICOM), Barineka Thompson, has acquired the United States based certification in Anti-Money Laundering Specialists (ACAMS) Audit, becoming the only resident Nigerian with the qualification.ACAMS is the largest international membership organization dedicated to advancing the professional knowledge, skills and experience of those dedicated to the detection and prevention of money laundering around the world, and to promote the development and implementation of sound anti-money laundering policies and procedures. This is the highest professional qualification in AML/CFT and other financial crimes prevention and investigation across the world. Barineka who holds an MBA and

Fellow of the Institute of Chartered Accountants of Nigeria and Associate of the Chartered Institute of Taxation of Nigeria, has successfully superintended AML/CFT implementation in the insurance sector. He is also member on PToFATF (now IMC), and has attended sev-

Barineka Thompson

eral GIABA and FATF Plenary and trainings abroad. Barineka, from available record is the only resident Nigerian with this ACAMS-Audit presently. Three others are dual Nigerian citizens in the UK and USA. Several Nigerians have the standard CAMS. ACAMS achieves its mission through promoting international standards for the detection and prevention of money laundering and terrorist financing, educating professionals in private and government organizations about these standards and the strategies and practices required to meet them. The body further certifies the achievements of its members; and provides networking platforms through which AML/CFT professionals can collaborate with their peers throughout the world.

Wednesday 23 May 2018

C002D5556

BUSINESS DAY

E-mail: insurancetoday@businessdayonline.com

Members of the Professional Insurance Ladies Association (PILA) during the recently concluded African Insurance Organisation Conference held in Accra, Ghana.

L-R: Mensah Simon Peter, head strategy; Fumilayo Idodo, technical division and Jude Modilim, executive director, Technical Operations, all of Sovereign Trust Insurance Plc during the recently concluded African Insurance Organisation Conference held in Accra Ghana,

Experts review impact of protectionism in diversification of risks, investments in emerging markets Stories by Modestus Anaesoronye

rotectionism in the global insurance and reinsurance industry is often described as a hindrance to both emerging and mature market development, and despite the EU/U.S. covered agreement and other positive regulatory changes across the world, protectionism remains a challenge for industry players. Protectionism Protectionist measures in the insurance and reinsurance industry were recently highlighted by international law firm Hogan Lovells in its 2018 Insurance Horizons report, which explores protectionism in emerging markets, the UK’s impending departure from the EU, and

the EU/U.S. covered agreement, among other trends. Earlier this year, Lloyd’s of London Chairman Bruce Carnegie-Brown described protectionism as the “one barrier that could stop this future in its tracks,” warning that protectionist measures in the Latin America marketplace could threaten the growth prospects of insurers and reinsurers. The threat protectionism brings to insurers and reinsurers around the world was also highlighted by Lloyd’s Chief Executive Officer (CEO) Inga Beale, who said in an interview with Reinsurance News that certain protectionist measure threaten reinsurers’ diversification needs, calling on the market to work against the rising tide. Concerns were also raised by global insurer Markel’s

Asia unit, which warned in early 2017 that growing protectionist measures and regulatory changes that support protectionism, could hinder the reinsurance industry’s ability to transfer and diversify risk. While protectionist measures in the insurance and reinsurance industry aim to limit the amount of premiums that exit a jurisdiction’s market, essentially keeping the risk in the country, this naturally increases the volume of risk concentration within the jurisdiction’s economy, as opposed to spreading the risk throughout the global re/insurance markets. This was something underlined by Insurance Europe last year, which noted such measures in African, Asian, and South American markets, and which

highlighted the benefits of opening up markets in order to improve their domestic markets, and ultimately the economy. Hogan Lovells notes certain protectionist measures in the re/insurance industry in emerging markets, citing regulations such as rights of first refusal and the imposition of withholding taxes from on internationally ceded premiums and collateral requirements. “Rules requiring the cession of risks to local insurers and reinsurers apply in China, India, Indonesia, many African countries and in Brazil, Ecuador and Argentina. Between 2013 and 2015, London’s premiums from emerging markets fell from $10.5bn to $9.3bn, against strong growth in those markets,” says Hogan Lovells.

FBNInsurance gets recognition for record growth in three years

ast growing Life Insurer, FBNInsurance, has been named the Insurance Company of the Year at the recently concluded 45thAfricaRe/ African Insurance Organisation (AIO) conference in Accra, Ghana. Established in 1972, AIO seeks to promote interAfrican co-operation in insurance and to develop a healthy insurance and reinsurance industry in Africa. Their annual awards recognize outstanding firms and individuals who have made remarkable contribution to the African insurance industry. While acknowledging the company’s rapid

growth, the organisers referenced the average growth of 57.36 percent in premium income over the last three years, 58.6 percent of net profit and 43 percent of shareholders’ funds. Figures from the company’s recently released audited statement revealed the company recorded a 98 percent growth on her yearon-year premium and a 37 percent increase in her profit before tax over the full financial year. Commenting on the latest award, Managing Director/Chief Executive Officer, FBNInsurance, Val Ojumah, thanked the organisers for maintaining its status as a

credible organisation over the years and dedicated the award to the owners, FBNHoldings and Sanlam SA, the Board, Management and Staff of his company. “The AIO Awards remains one of the most sought after on the African continent for many reasons. We are honoured to win the prestigious Insurance Company of the Year award as this strengthens our position as the fastest growing insurance company in Nigeria and a thriving business on the continent. It is also another confirmation that our corporate strategy works.” Incorporated eight years

ago, FBNInsurance has defied the odds to become one of the leading life insurers in Nigeria’s sceptical market. With a robust agency structure boasting over 2000 sales agents, the company has consistently delivered on its strategic objectives by offering responsive insurance products to the Nigerian market. The AfricaRe/AIO Insurance Company of the Year 2018 is the company’s third major award in the past one year. Recall that the company had earlier this year won the Sanlam Emerging Market (SEM) Cup of Nations and the 2017 World Finance Best Life Insurance Company Award.

Duru gets NAICOM approval as ED, Technical Old Mutual General Insurance

he National Insurance Commission (NAICOM) has approved the appointment of Japhet Duru as new executive director, Technical at Old Mutual General Insurance Company Nigeria. Duru will oversee the operations department of the organization with a view to bolster its underwriting operations and maintain its prompt claims settlement. Duru, an Economics graduate of the Imo State University started his career at Valid Insurance Limited. Prior to joining Old Mutual General Insurance, he served as the General Manager/ Chief Operating Officer at HIERS Insurance Brokers Limited. Duru has also held vari-

ous senior management positions such as Head of Underwriting at KBL Insurance Ltd, Group Head Technical at International Energy Insurance Ltd and Head of Operations at Stanbic IBTC Insurance Brokers Limited. Japhet Duru also holds a Master’s degree in Finance from Lagos State University and is a Fellow of the Chartered Insurance Institute of Nigeria (CIIN).

NAICOM confirms Abraham Olalekan ED, Operations Veritas Kapital Assurance

nsurance industry regulator, the National Insurance Commission (NAICOM) has confirmed Abraham Olalekan, as the executive director, Operations, Veritas Kapital Assurance Plc. Olalekan is an experienced underwriting leader, reinsurance and risk management professional who has developed various new products and implemented new processes in the Nigerian insurance industry. With over twenty years cognate experience in various insurance roles including Chief Underwriter, Reinsurance Manager, etc; Olalekan specializes in direct and treaty Reinsurance underwriting, commercial claims handling, extensive client and broker relations, and solving complex situations and problems. He is a graduate of the University of Lagos. He is also an Associate of the

Chartered Insurance Institute of Nigeria (ACIIN); the Corporation of Registered Insurance Brokers (ACIB); and a Member of the Chartered Insurance Institute, London (CII). He is an alumnus of the prestigious Lagos Business School. Olalekan is a strategic executive who has substantially improved overall claim processes, and reduced company’s reinsurance cost. He has worked in various senior management capacities at leading insurance companies such as Sovereign Trust Insurance Plc and AXA Mansard Insurance Plc.

BUSINESS DAY

Wednesday 23 May 2018

In Association with

Customers’ transactions safe as CBN, CIBN move to fight banking fraud Stories by HOPE MOSES-ASHIKE

ustomers can now carry out their banking transactions without fear of losing money as the Central Bank of Nigeria (CBN) collaborates with the Chartered Institute of Bankers of Nigeria (CIBN) to fight against internet fraud and other crimes in the banking sector. “This is the time banks and the economy is facing cyber insecurity. The CBN will partner with CIBN to ensure that financial transactions are secured,” said Joseph Nnanna, Deputy Governor, Financial System Stability, CBN. In the first half of 2017, there were 16,762 reported cases of fraud and forgeries (attempted and successful), involving N5.52 billion and US$ 0.124 million in the first half of 2017, compared with 9,164 cases involving N4.36 billion in the corresponding period of 2016, the CBN’s half year 2017 economic report revealed. This indicated respective increase of 82.9 and 19.3 per cent above the number and

value of cases (attempted and successful) in the first half of 2016. The actual loss by banks, however, decreased by 43.5 per cent to N0.78 billion and US$0.03 million, below the N1.38 billion incurred in the first half of 2016. The marked decline in the actual losses to the banking industry indicated the effect of stronger internal control measures adopted by the banks, improved use of technology and more thorough approach in hiring employees for sensitive areas of operation. Similar to the preceding half-year, fraud and forgeries reported in the review period were perpetrated, mainly, by outsiders (non-bank staff ), although there were instances involving banks’ employees. The fraud cases included pilfering of cash, suppression and conversion of customer’s deposits, stealing, illegal funds transfer, defalcation and fraudulent ATM withdrawals. Nnanna, who delivered a goodwill message at the investiture of the 20th President/Chairman of Council of the CIBN, Uche Messiah Olowu, challenged the insti-

Uche Olowu president/chairman in council, CIBN

tute on bridging the knowledge gap among deposit money banks and other financial institutions including Microfinance banks and primary mortgage banks. Olowu sees his inaugura-

tion as a new dawn for the institute. “I’m elated today that I’m the 20th President and Chairman of Council. It is a new dawn because we want to enthrone professionalism. We’re moving to

the next level – a level that is cerebral, driven by values. We’re going to try to adjust to emerging trends; we want to remain at the head of the learning curve,’ he said. Accepting to lead the institute for the next two years he said his administration will focus on key five strategic areas, which are rules and standards, skills and competences, research and advocacy, technology and resources, brand and visibility. “Having enumerated our five strategic initiatives that will be our primary focus for the next two years, let me reiterate that we shall continue to work to strengthen existing programmes which have been captured in the road map to management”, Olowu said. In conjunction with the National Universities Commission (NUC), National Board for Technical Education (NBTE), and other relevant stakeholders, he said the Institute will champion the review of banking and finance curriculum to bridge the gap between the classroom and the requirement of the market place. Olowu pledged to instill

good corporate governance ethics into the banking system, using the institute’s capacity programmes, and to practice inclusive management system in his administration. On enterprise risk management, Olowu said “We want to mobilise competent persons that have adequate knowledge for risk management, and that knowledge will spread across the industry. We have our research unit: Center for Financial Studies, all interventions in our institute will follow that body. It’s going to be peopled by competent industry experts. So it’s a new dawn for banking in Nigeria because we’re playing at the global stage as the chairman of the Global Banking Education Standard Board. Segun Ajibola, immediate past president of CIBN, encouraged his successor to uphold the values of the institute, remain focused, tenacious and to collaborate with his colleagues at the institute. He told Olowu to work with banks to ensure Enterprise Risk Management ( E R M ) f ra m e w o rk wa s adopted to fight risks in the industry.

Union Bank introduces Robotics to deepen customer service delivery

n an avant-garde move which sets it apart from its counterparts in the Nigerian banking industry, Union Bank has deployed innovative Robotic Process Automation (RPA) technology in its operations; a first in the Nigerian Banking industry. The new technology was officially launched at an interactive session which took place at the Bank’s Stallion Plaza Head office in Lagos with technology experts, pressmen, customers and the Bank’s Management and employees in attendance. RPA technology makes

use of robots which are software tools developed to simplify business process delivery. The software robots offer improved business efficiency and data security by automating repetitive tasks across multiple business applications without altering existing infrastructure and systems. Announcing the deployment of the new technology, the Chief Executive Officer of Union Bank, Emeka Emuwa said: “We are quite pleased to be the first in the banking industry in Nigeria to introduce robotics into our processes. The provision of simpler,

smarter banking services to our valued customers is at the core of our business and Robotics Process Automation helps us achieve this objective by leveraging cutting edge technology and innovative partnerships. I commend the hard work and dedication of our Union Bank team for the effective execution of this project.” The Bank’s adoption of RPA technology is expected to enhance staff productivity, reduce process turnaround time and improve accuracy and compliance. With the new technology in place, employees are better able to

focus on other value adding and customer related functions, significantly improving the overall quality of customer experience. In the first phase of the Bank ’s RPA implemen tation, reconciliation of Automated Teller Machine (ATM) transactions are now fully automated, cutting down processing time by over 60 percent and ensuring that refunds on ATM fund dispense errors are promptly and efficiently carried out. Union Bank’s marked technological advancement in recent times is a major

element of its transformation programme and has included the redefinition of the Bank’s business model, reengineering of its work force and rebuilding of its physical infrastructure. In 2017, the Bank introduced a wide bouquet of digital banking platforms including an upgraded version of its mobile banking app - UnionMobile and *826#, the unique USSD code which allows customers perform banking transactions through short code messaging on their mobile phones. Several innovative features on the UnionMobile

App have since received wide acclaim including the industry first ‘Agent Locator’ feature. Others are ‘Locate an ATM with Cash’, ‘Cardless withdrawals’ and the mCash easy payment feature. Last year, Union Bank celebrated a century of providing reliable banking services to generations of Nigerian families and businesses. With its ongoing transformation and marked upgrade of its infrastructure including the new RPA technology, Union Bank is poised to deliver on its promise of being a truly simpler and smarter bank for the next one hundred years.

BUSINESS DAY

Wednesday 23 May 2018

C002D5556

Essential tips for the modern traveler

FlixBus moves to grow global mobility

Insecurity, restiveness puts ItakpeWarri rail delivery in doubt

Page 30

Kojo Motors launches most advanced Yutong buses in Nigeria …Calls for patronage from government Stories by MIKE OCHONMA

ojo Motors Limited, one of the leading automobile dealerships in the country is setting an ambitious goal that will see the wholly Nigerian-owned company assemble different range of Yutong buses locally. With technical support extended by Zhengzhou Yutong Bus Co. of China, Kojo Motors Limited while throwing its weight behind the National Automotive Industrial Development Plan (NAIDP) of the federal government targets to produce over 1800 units of the buses in the country within the next 3 years, with a robust masterplan to grow the number. As at the time of filling this report, Kojo Motors presented three out of the array of unique models at the just concluded Lagos Motor fair. These include the ZK6729D, ZK6858H9 and ZK6122H9 described as outstanding range of model that guarantees return on investment for buyers. For in instance, the ZK6729D model is most suited for commute within the city in the league of shuttle buses like the Toyota Coaster. There’s also the ZK6729DG model with a City bus interior. Ideal for BRT or mass transit operations like the Lagos State Bus Reform Initiative and other State Mass Transit Projects . Muyi Line and some private companies are already using these for airport shuttle, staff bus and so on. The next is the ZK6858H9 model described by Kojo Motors as an ideal coach. It is comfortable, spacious luggage compartment and the new standard for intercity travel in Nigeria. This coach is well suited for long journeys and performs excellently well for a journey of up to 600 kilometres from Lagos to Accra or Lagos to the any part of the country. Some operators like GUO Transport, EFEX Executive and De Modern Bus are already doing this route with the ZK6858H9 model. Next on the line is the ZK6122H9

model. It is the long distance coach model designed for travel upto 1,000km. The current model comes with toilet, offering a new level of convenience for passengers. African Eagle, E. Ekeson Bros Transport, GUO Transport, Eddyson Transport, LandStar are some operators doing Lagos to far North and East with this model. The move according to Chinedu Oguegbu, executive director, Kojo Motors Limited while speaking exclusively to BusinessDay motoring will address the growing transport needs of the country. Presently operated as a semiknocked-down (SKD) assembly plant, Kojo Motors Limited plans to migrate to full completelyknocked-down (CKD) regime in the next three to five years under a good economic condition. With the expansion of the local domestic market needs as priority in the short to medium plan, the Yutong Bus assembler hopes to extend its frontiers to other regional markets outside Nigeria eventually, which will position the country as an export hub. In terms of pricing compared to other competing commercial bus

brands, it will offer better value, price and specification compared to European models. Kojo Motors also offers financing in addition to service and spare parts. Offices and service stations in Lagos, Abuja, Port Harcourt, Benin City and Awka are well equipped and staffed to provide efficient after-sales support of the Yutong buses. As the world’s major bus and coach supplier, Yutong is a largescale enterprise mainly specialized in bus business and also covers areas of construction machinery, special vehicles, auto parts and components, real estate and other investment business. As the No.1 bus brand in China, Yutong boasts powerful R&D capability and has the largest bus production base in the world and enjoying huge popularity both at home and abroad. In 2016, it sold 70,988 units buses, ranking the first place in China for fourteen consecutive years. In addition, it has been the sales champion in the global bus market for several years. In recent years, new energy buses have shown huge market potentials. Yutong has also made impressive

achievements in this promising field. In 2016, its sales volume of new energy buses exceeded 26,000 units, up by over 30% year on year. Ranking the first place in the global new energy bus market, Yutong new energy buses took nearly 40% of the global new energy bus market. In terms of drivetrain and technological advancement, years of accumulation on technological research and development has laid a solid foundation for the commercial operation of Yutong’s fuel cell buses. In September 2017, Yutong hydrogen fuel cell buses won the bid in the 3rd phase of a UN project which will carry out trial operation in Zhengzhou. Yutong once again won the bid for 25 fuel cell buses to be operated in Zhangjiakou, marking that the commercialization pace of its fuel cell buses is gaining ground. Company sources said that in the future, under the support of the fuel cell and hydrogen energy engineering technology research center, the technological level of China’s fuel cell buses, new breakthroughs in market-oriented operations with Yutong as a representative will reach a new level.

Get good tyres as rain is here, says FRSC

ith the heavy and incessant downpour of rain witnessed in most parts of the country, along with the general drizzling effects of the rainy season and the need for cautions to be observed to avoid the accompanying hazards, there Federal Road Safety Corps has advised drivers to adopt the common sense speed limits. Bisi Kazeem FRSC’s Corps Public Education Officer said that with the visibility is always

low, while there is accompanied foggy weather during this period. He said the Corps Marshal, Boboye Oyeyemi, has expressed worry at the rate at which people neglect the basic ethnics of driving during the rainy season, which results in avoidable crashes, death and fatal injuries in some cases. He stated that the Corps Marshal advised all motorists to make sure their vehicles are in order, stating that it is im-

portant for all motorists to ensure their braking systems, wipers and headlamps are in good shape. The Corp CPEO added that the tyres are important to all vehicles; hence it is equally essential that motorists get new tyres with firm grip and tractions in order to avoid crashes during this season. He warned against disobedience of traffic rules and regulations during this period, stressing that special squads of the FRSC have been deployed across the country to monitor compliance and bring violators to book.

Is your car’s air conditioning a health hazard?

otorists are being urged to clean the air conditioning units in their cars after researchers found potentially dangerous bacteria living and breeding in systems. With the weather warming up in the northern hemisphere, the study shows drivers may be putting their health at risk when they reach for the cool switch. Bacteria associated with meningitis, urinary tract infections and septic arthritis were among the many types discovered in air conditioning filters. Recently, swabs of 15 air conditioning filters were taken from cars across the UK and sent for laboratory analysis. Micro-organisms were detected in all of the filters tested at London Metropolitan University. The most common was Bacillus licheniformis, a bacteria most commonly associated with birds and soil. Eight out of 15 of the filters tested positive for this micro-organism, which is among a type of bacteria known to cause food poisoning. Bacillus subtillis and Bacillus were the second most common micro-organisms found. Bactillus subtillis are normally found in the gastrointestinal tract of humans and some mammals. They generally do not cause disease but have been known to cause septicaemia in a patient with leukaemia. Bacillus is more dangerous and has links with a wide range of infections including meningitis, abscesses and septicaemia.

A car’s air con works by mixing fresh air from outside with a refrigerant and the mixture turns into liquid as it is cooled. It is then turned into vapour as it travels through evaporation coils and blown into the cabin as cool air. It is the evaporator in the system that provides perfect conditions for bacteria, mould and fungi to build up and thrive. Although the car filter will prevent many pollutants entering the passenger compartment, it will not stop all micro-organisms. The research was commissioned by Kwik Fit, which urged drivers to clean their cars’ air conditioning systems at least once every two years. On average, the test found 1.6 different strains of mico-organisms within the filters.

30 BUSINESS DAY

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MTRAVEL

Wednesday 23 May 2018

odern

FlixBus moves to grow global mobility

Insecurity, restiveness puts Itakpe-Warri rail delivery in doubt

Stories by MIKE OCHONMA

…Tech-startup, e-commerce, traditional transport in one

fter revolutionizing long-distance travel in Europe, FlixBus, the company behind the bright green buses, is bringing its one-of-a-kind business model to the United States. Five years after its first European routes, FlixBus will hit the roads between US cities like LA, San Diego, Las Vegas, Phoenix and Tucson on May 31. Europe’s fastest-growing mobility provider announced that from its new US headquarters in Los Angeles, it is aiming to have over 1,000 daily connections in the US by the end of 2018. FlixMobility, with its brands FlixBus and FlixTrain, is the brainchild of three young entrepreneurs, Jochen Engert, Daniel Krauss and André Schwämmlein, who wanted to develop a completely new means of travel that was a blend of tech-startup, e-commerce and traditional transportation. Based on this concept, FlixBus was launched in Germany in 2013 with a unique business model in which it manages the technology, ticketing, customer service, network planning, marketing and sales, while its local SME partners are responsible for the daily operation of buses. “Our business model has revolutionized the way people view and utilize buses in Europe, and we are excited to offer this fresh take on bus travel to people in the United States,” said André Schwämmlein, Founder and CEO of FlixMobility while speaking in Hollywood, Los Angeles. Travel according to André Schwämmlein said, can and should be simple and accessible to everyone. We harness technology to create a better experience for travelers, with the goal of providing smart and green mobility to experience the world.” FlixTrain routes which help

connect the dots on the FlixBus route map can also be booked with the InterFlix ticket. “In every country that we operate – whether it’s a new or established FlixMobility market – our goal is to provide smart and green mobility for every citizen to experience the world,” said Schwämmlein. The service currently has 300 bus partners throughout Europe, many of which are small, familyrun businesses. In the 28 markets in which it operates, FlixBus has created more than 7,000 jobs for bus drivers. For Phase 1 of the US launch, 180 initial FlixBus connections will be operated by six regional bus partners and provides companies such as TCS a new business opportunity, even as both are looking forward to growing together through this partnership. It’s a smart way to operate which ultimately benefits the customer,” said Terry Fischer, President of Transportation Charter Services (TCS), one of the first US FlixBus partners based in Orange, CA. In addition to the US launch, FlixMobility plans to extend its European portfolio by 30% in 2018 to 350,000 connections per day.

Besides expanding its domestic networks in emerging markets such as Croatia, Poland and Czech Republic, the green company will focus on cross-border services between major touristic destinations in Western and Eastern Europe in line with increased travel for the summer season. Travelers will benefit from higher frequencies between Europe’s capitals (e.g. Paris, London, Paris, Rome, Warsaw, Berlin, Paris, Copenhagen), from extra capacities during peak travel times and more summer destinations such as new day and nightlines to the Croatian coast, Italy, Southern France and Northern Germany. In mature markets of Germany and France, the green provider extends its multi-stop strategy (e.g. Berlin, Paris) and airport shuttles (e.g. Benelux Airports in Germany and France). With 350,000 daily connections in 27 European countries, FlixBus users in Europe will have plenty of options to explore. For only €99, the popular InterFlix pass allows passengers to choose five preferred routes out of our extensive network, regardless of the distance between destinations.

Essential tips for the modern traveler

hen it comes to modern travel, the rules, guidelines, policies and procedures are absolutely overwhelming, and the evolution of travel by air has gone backwards. Do you need help figuring out the organized chaos of traveling today? Here are a few up-to-date travel tips Does your credit card offer travel benefits? Before you buy an airline ticket or pay for a trip, check with your credit card company regarding important points such as: If you have to cancel, does the credit card company offer a cancelation policy or insurance? If not, it might be to your advantage to purchase via your travel agent. Travel Boarding Pass. Check in earlier than you think. When booking an airline ticket, ask your travel agent what time you should check in at the gate counter. Rules have changed so much as most airlines now require two hours and

reserve the right to cancel your ticket. Baggage Also, does your credit card allow you to check luggage for free or at a reduced rate? Many do. For example, Gold, Platinum and Reserve Delta SkyMiles Credit Card Members may enjoy perks such as priority boarding and the option to check your first bag free on every

Delta flight. That’s a savings of up to $200 per round-trip for a family of four. Car rental sign. Does your car insurance cover car rentals. Find out if your car insurance covers car rental while you are on vacation, then you will know if you should purchase the rental car company’s insurance.

nless the federal government adopts a number of precautionary measures, there is the possibility that the revised completion date of August 2018 by the Federal Government on the 323km Itakpe to Warri rail project may not be realistic after all. This is because the ItakpeWarri rail project divided into two segments of Itakpe to Ajaokuta measuring 52 kilometers and Ajaokuta to Warri with a distance of 271 kilometers may witness a delay as a result of insecurity and restiveness on the side of the host communities’ resident where the rail corridor is domiciled. Among the blind spots that constitute threat to security is the Ajaokuta end described as very dangerous due to incidences of kidnappings, killings and threats to life that has

Recall that in August 2017, the federal government mandated the contractors to complete Itakpe-Ajaokuta-Warri rail line and commence commercial operations in June, 2018 and also ensure commencement of commercial operations immediately. Chibuike Rotimi Amaechi, the minister of transportation, disclosed this while briefing newsmen in Abraka, Delta State location of the rail line at the end of an inspection tour embarked upon to ascertain the level of work done by the Contractors handling various works on the rail line. Amaechi said “we have a directive from the Federal Government that we must complete the Itakpe-Ajaokuta-Warri rail line and it was put in this year (2017) budget”.

become a recurring decimal around that corridor. Worried by the security situation, the Chinese Civil Engineering and Construction Company (CCECC) had to hand over the job to Tinabell Nigeria Ltd; a local contract to build stations 9 (Okpara) and 10 (Ujewu) to avert any danger. On the other hand, the issue of restiveness from the communities located around Abraka and Warri had forced the contractors to stop working over a number of compensation issues including the regular illegal request for all sorts of levies and compensations, he added. The contractor is also grappling with the deployment of equipment, tools and manpower. Also, the sites are remotely located, thus making it difficult for members of staff to work during odd hours. Similarly, the weather factor may contribute to delay in achieving the date for completion of the rail project with the onset of the rainy season especially with the coastal nature of the region.

In December 2016, Julius Berger and other Contractors handling the rehabilitation works on the Rail line were mobilized to site to commence work. The first phase was awarded in 1987. “if this contract was completed between the time it was awarded Nigeria would have been the first country in Africa to have a standard gauge. This contract depends on who you are talking to, some would say 30 years while others would say 34 years but whatever year it is, we need to get this place functioning and the directive of the Federal Government is that we should start and our target is that by June 2018, commercial activities would resume”. The rail line which is otherwise known as the central line and being the economic belt of the country will traverse Kogi State, part of Edo and Delta States. It will be extended from Itakpe to Abuja depending on availability of funds in order to do freight and passenger services when finally completed.

BUSINESS DAY

Wednesday 23 May 2018

CityFile Group tells FG to end killings of citizens

Transnational traders dealing in food stuff and other commodities await security check at Muna check point in Maiduguri, on their way to Niger, Chad and Cameroon on Monday. NAN

100 Edo students trafficked to Libya in 4 months – Obaseki’s aide

o fewer than 100 students of Idogbo Secondary School, Benin, have been trafficked to Libya in the last four months, Solomon Okoduwa, senior special assistant to Governor Godwin Obaseki of Edo State, on human trafficking and illegal migration, has said. Okoduwa said this was disclosed to him by some teachers in the school, concerned about how the institution has become the harvesting ground for traffickers. He said government would not allow the ‘evil’ to continue to thrive in the state. “Government is stepping up campaign against trafficking. The state task force against human trafficking is on the trail

of the human traffickers,” Okoduwa said, warning students to be wary of the antics of the traffickers who deceived them into embarking on the dangerous journey. The special assistant, who addressed the students on Monday, said: “Henceforth, report anyone who tells you to travel to Europe. They are simply taking you through Sahara Desert and the Mediterranean Sea and you may eventually end up in Libya. “The number of students that have been trafficked from your school in this short period is overwhelming. The truth is that many of them might have been imprisoned there or facing one challenge or the other. “Taking the route of Sahara Desert

and other illegal routes is hellish. Many have died of hunger; many have drowned in the Mediterranean Sea in search of greener pastures. “Worst still, the families of those people that died on their journey were made to pay for the travel expenses, when unknown to them their loved ones have gone to the great beyond. If anyone tells you to travel abroad through Libya, tell him or her capital ‘NO’. If you must travel for any reason, travel the right way.” Edo State is said to have the highest number of persons trafficked to Libya from Nigeria. The state government had received no fewer than 3,400 Libya returnees within the last six months.

What traditional rulers can do to maintain peace, says Ambode JOSHUA BASSEY

overnor Akinwunmi Ambode has taken traditional rulers in Lagos State to task, saying their involvement in maintaining the peace in various localities must be prioritised. Ambode spoke at the inauguration of Council of Lagos State Obas and Chiefs, Monday, at the State House, Ikeja. The council comprises all rated traditional rulers and chiefs, with the Oba of Lagos, Rilwan Akiolu as permanent chairman. The governor said the traditional rulers must work towards ensuring peace and security and as well be at the forefront of correcting anti-social behaviours in their communities, as a peaceful atmosphere remained the necessary ingredient for development. According to Ambode, the traditional institutions also have a key role to play in the promotion of tourism in Lagos, being the custodians of culture and tradition of the people.

“Our government has immense regard for the traditional rulers and would always welcome advice from you in order to maintain social harmony and ensure peaceful coexistence in Lagos. “The most important ingredient for development in the state is peace and security and you all have an important role to play in this. I call on you our royal fathers and the new leadership of the council to continue to address anti-social behaviour in their communities. “As custodians of the culture and tradition of our people, you should be at the forefront of the state’s tourism campaign. A significant aspect of tourism is our culture and historical sites which fall under your jurisdiction,” Ambode said. He added that the tourism potentials of Lagos and the resources being channeled by the state government to environmental regeneration and creation of tourist hubs must be showcased to the world, adding that such required the support and coop-

eration of royal fathers. Muslim Folami, the commissioner for local government and community affairs, which also oversees issues relating to the traditional institution, said the re-constitution of the council became imperative following the expiration of the tenure of the former council after serving for five years in line with the law. The new council is made up of Oba Rilwan Akiolu as permanent chairman, three vice chairmen, one acting vice chairman and 77 members totaling 82 members. The composition of the membership reflects the 20 local government areas and 37 local council development areas, thereby allotting 15 members each to four divisions of the state and 21 members to Lagos Division due to its peculiarity. The vice chairmen are Akran of Badagry, De Wheno Aholu Menu-Toyi I; Ayangburen of Ikorodu, Kabir Shotobi; Alara of Ilara, A.O Adesanya; and Onigando of Igando, Lasisi Gbadamosi.

ivil Society Joint Nigeria Crisis Action Committee (JN-CAC) has called on the Federal Government to be proactive in stopping incessant killings in Zamfara, Benue, Kaduna and other parts of the country. The convener of JN-CAC, Chidi Odinkalu made the call at a news conference to announce national day of mourning and remembrance for all victims of violent killings in Abuja. Odinkalu, who is the former chairman, National Human Rights Commission, said the frequency of killings in recent times was a source of grave concern to citizens and all people who wish Nigeria well. According to him, from Abia to Zamfara, Nigerians wakeup daily to fresh news of mass atrocities, which are barely acknowledged by the government and a vast majority of fellow citizens. “In the first 70 days of 2018, over 1,400 persons were killed violently across the country, an average of nearly 40 per state and the Federal Capital Territory (FCT). “In part of the North-West, including Southern Kaduna, Birnin-Gwari and much of Zamfara State, vast swathes of ungoverned territory have been takeover by rustlers, bandits and vigilantes whose preferred currency is blood. “The southern states of the country have not been spared as at least 34 out of 36 states have experience at least one episode of violent killings within the first quarter of 2018. “As a result of all these, the number of out-of-school children has grown in the past decade from by nearly one-third from about 10 million to over 13 million now. “As citizens and advocates, we demand that this dehumanisation of Nigerian lives must stop,” Odinkalu said.

Flood: NIHSA to install warning devices nationwide

igeria Hydrological Services Agency (NIHSA) says it will soon install the “flood warning alert’’ device on major rivers so as to check flooding across the country. Olayinka Ogunwale, acting directorgeneral of NIHSA, who mentioned this in Abuja, said the device would facilitate efforts to send flood alerts to the people living in flood-prone areas so as to save the people’s lives and property. Ogunwale said that NIHSA had started the installation of the network device system on River Niger at Lokoja, while others would be installed on River Benue and other major rivers across the country. According to Ogunwale, the installation of the network device systems will particularly boost efforts to detect and check flood incidents in flood-prone areas of the country. “Just recently, we started with the idea of installing flood alerts and we started with just only one in Lokoja. “We want to actually start with that project, watch it and see how effective it is going to be; then, we can continue from there. “We want to actually install the warning device systems on almost all the major rivers, especially those rivers in the flood-prone areas,’’ he said. Ogunwale said that a flood warning device system was a means of detecting threatening flood events in advance, so as to enable the agency to warn the public for quick response to avert flooding or minimise its adverse effects. The acting director-general said that the rationale behind the acquisition and installation of the device was to reduce the people’s exposure to coastal flooding in particular.

32 BUSINESS DAY Financial Inclusion

& INNOVATION

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Supported by:

The 3 Ps of Financial Inclusion - People, Products and Partnerships IBUKUN TAIWO & OLAYINKA DAVID-WEST

ith more than 60 million Nigerian adults living without bank accounts, financial inclusion looks like a gargantuan task ahead of industry stakeholders. And it is. So it is encouraging to note that several countries, notably India and Indonesia recorded significant financial inclusion growth between 2014 and 2017. Amidst the multi dimensional challenges and the many moving parts within and outside the ecosystem, it can be truly overwhelming to begin to contemplate how to approach the problem. So we decided to draft something to help with this. In the quest to improve financial access, 3 pillars, what we call the 3Ps of financial inclusion, form the basis of every successful financial inclusion drive. They are people, products and partnerships. People Financial inclusion is about improving people’s lives and helping them on the journey out of poverty. Achieving this involves, among a host of things, moving them away from cash transactions to digital money. This is a tough and often long term task but it is achievable. We do this by influencing people’s behaviour and affinity for cash and getting them interested and even comfortable with digital alternatives. So far, Nigerians have been slow to adopt mobile

money - 2017 penetration rates are still below 1 percent of the adult population. According to EFInA’s Access to Financial Services in Nigeria 2016 survey, the key obstacles limiting mobile money uptake have been access, low awareness and trust. In order to overcome the access hurdle, we have to build out an agent network across the country (including rural areas) in a sustainable manner (experts estimate this number at 180,000 agents to adequately serve the adult population). This agent network will complement the other financial service points (FSPs) such as ATMs, POS terminals and bank branches which are currently insufficient to serve the country’s almost 100 million adult population. When it comes to trust, as discussed in last week’s

article, it needs to be managed carefully within the ecosystem. In order to bolster customer confidence levels in financial services, appropriate preventive mechanisms as well as advanced complaints resolution systems are necessary to ensure customer’s funds are safe and secure. Finally, if people are not informed/educated about the options available to them (awareness), they will not change their behavior. Right now, 80.7 percent of the adult population is yet to even hear about mobile money, according to EFInA. Therefore, awareness and sensitisation campaigns on the use and benefits of mobile money would go a long way in increasing adoption of mobile money. These should also be complemented with financial literacy programs which would encourage usage

even after the account has been opened. Products When it comes to financial services, there’s no “one size fits all”. People need financial services, yes, but these services have to meet their specific needs. In some instances, customs and traditions means that financial service needs vary across cultures and regions. In fact, financial service needs vary across gender and other demographic characteristics as well. This is even more pertinent as the World Bank Findex revealed the urgent need for intervention in financial inclusion for women. Furthermore, our targ e t audie nce, the u nbanked and underserved, face unique obstacles and therefore, unique financial needs. Financial service providers would do well to

adopt human centred design that builds out financial products based on a proper understanding of the customer - their needs, challenges, habits and lifestyle. This way, product-market fit would be easily achieved, financial products would be an easier sell for providers and adoption would increase. Lastly, it’s good to keep in mind that serving unbanked or underserved populations involves the creation of low-cost, financial products since by default, these are mostly low-income citizens.

more than anyone. Partnerships enable actors to progress faster as they leverage each other’s strengths and expertise. These partnerships are established in order to improve product appropriateness, lower costs and reach more unbanked citizens - goals with special relevance to financial inclusion. Partnerships do not have to be exclusively banks joining forces with fintechs, even though that’s an important part of the mix. Like we explored in a previous article, partnerships can be cross sectional: publicprivate sector partnerships, government-bank partnerships, financial institution - non financial institution partnerships and so on. These 3 Ps are handy and constitute the foundation of any successful financial inclusion campaign. If we can understand the unbanked and underbanked (people), if we can figure out what type of financial services would meet their needs and fit with their lifestyle and habits (product), and if we can forge strategic partnerships which will deliver these products to our target market, financial inclusion would be a reality and we would be closer to achieving our 2020 goals. Do you have any thoughts on these 3 pillars? In what other ways can financial inclusion be improved? Send your contributions to sustainabledfs@ lbs.edu.ng or Twitter: @ SustainableDFS

Partnerships With more than 60 million financially excluded Nigerians, financial inclusion cannot happen at the scale we want without strategic partnerships. Stakeholders in other markets where financial inclusion have been successful understand this

Olayinka David-West and Ibukun Taiwo are members of the Sustainable and Inclusive Digital Financial Services initiative of the Lagos Business School

Benin City; Ahmadu Bello University, Zaria; Obafemi Awolowo University, IleIfe; University of Nigeria, Nsukka; Moshood Abiola Polytechnic, Abeokuta; University of Abuja and University of Uyo, Akwa Ibom, among others. Other banks like Access Bank, Zenith bank, Diamond Bank and the likes have also initiated the instant online opening accounts packages which is seen as a way to get more Nigerians to open bank account at their own convenience.

Meanwhile the Central Bank of Nigeria (CBN) has set a target to financially include 80 percent of Nigerians by the year 2020. Experts are however sceptical about the actualisation of this target judging that Nigeria operates a core banking system, which has not help in including more Nigerians into the financial circle. This is following the World Bank’s Findex Database which revealed that Nigerians with bank account has declined between 2014 and 2017.

Ecobank drives financial inclusion among youth HOPE MOSES ASHIKE

cobank Niger ia has commenced a youth engagement program in tertiary institutions across Nigeria as part of efforts to deepen financial inclusion by banking the youth. The initiative, themed ‘Ecobank Xpress Campus Storm’ will avail students of tertiary institutions the opportunity to open the Ecobank Xpress account, a digital account that requires no documentation, mini-

mum balance or paperwork, simply by downloading the Ecobank Mobile app. With the Ecobank Xpress account, students will be able to access financial services such as airtime top up, funds transfer and bill payment from their mobile devices. Parents and Guardians will also be able to transfer money to their children or wards‘ Xpress accounts which they can withdraw without a card at any Ecobank ATM or Xpress Point. The first phase of this initiative will cover 24 universities, polytechnics and

colleagues of education across the country. Flagging off the program, Carol Oyedeji, Executive Director Consumer Banking, Ecobank Nigeria, said the activation is to empower young people by offering them convenient, affordable and accessible financial services anytime, anywhere from their mobile. She reiterated that it was in line with the bank’s strategy to make banking available to the hitherto unbanked and underbanked in support of the Central Bank of Nigeria’s financial inclusive drive.

According to Oyedeji, “This initiative is one of the ways we are connecting with the youth segment. We will set up free WiFi centres tagged the ‘Xpress Corner’ across these campuses and there are opportunities for the students to win exciting prizes during the activation. We will also hold concerts with major artistes as a means of infusing fun into the program” Institutions listed for the campus storm include University of Lagos, Akoka; Yaba College of Technology, Yaba; University of Benin,

33 BUSINESS DAY

Wednesday 23 May 2018

Leadership SHAPING PEOPLE INTO A TEAM

Managers can’t be great coaches all by themselves

he best ones are connectors. In a utopian corporate world, managers lavish a constant stream of feedback on their direct reports. This is necessary, the thinking goes, because organizations and responsibilities are changing rapidly, requiring employees to constantly upgrade their skills. Indeed, the desire for frequent discussions about development is one reason many companies are moving away from annual performance reviews: A yearly conversation isn’t enough. In the real world, though, constant coaching is rare. Managers face too many demands and too much time pressure, and working with subordinates to develop skills tends to slip to the bottom of the to-do list. One survey of human resources leaders found that they expect managers to spend 36% of their time developing subordinates, but a survey of managers showed that the actual amount averages just 9% — and even that may sound unrealistically high to many direct reports. It turns out that 9% shouldn’t be alarming, however, because when it comes to coaching, more isn’t necessarily better. To understand how managers can do a better job of providing the coaching and development up-and-coming talent needs, researchers at Gartner surveyed 7,300 employees and managers across a variety of industries; they followed up by interviewing more than 100 HR executives and surveying another 225. Their focus: What are the best managers doing to develop employees in today’s busy work environment? After coding 90 variables, the researchers identified four distinct coaching profiles: TEACHER MANAGERS coach employees on the basis of their own knowledge and experience, providing advice-oriented feedback and personally directing development. Many have expertise in technical fields and spent years as individual contributors before working their way into managerial roles.

ALWAYS-ON MANAGERS provide continual coaching, stay on top of employees’ development and give feedback across a range of skills. Their behaviors closely align with what HR professionals typically idealize. These managers may appear to be the most dedicated of the four types to upgrading their employees’ skills — they treat it as a daily part of their job. CONNECTOR MANAGERS give targeted feedback in their areas of expertise; otherwise, they connect employees with others on the team or elsewhere in the organization who are better suited to the task. They spend more time than the other three types assessing the skills, needs and interests of their employees, and they recognize that many skills are best taught by people other than themselves. CHEERLEADER MANAGERS take a hands-off approach, delivering positive feedback and putting employees in charge of their own development. They are available and supportive, but they aren’t as proactive as the other types of managers when it comes to developing employees’ skills. The four types are more or less evenly distributed within organizations, regardless of industry. The most common type, Cheerleaders, accounts for 29% of managers, while the least common, Teachers, accounts for 22%.

The revelations in the research relate not to the prevalence of the various styles but to the impact each has on employee performance. The first surprise: Whether a manager spends 36% or 9% of her time on employee development doesn’t seem to matter. “There is very little correlation between time spent coaching and employee performance,” says Jaime Roca, one of Gartner’s practice leaders for human resources. “It’s less about the quantity and more about the quality.” The second surprise: Those hypervigilant Always-on Managers are doing more harm than good. “We thought that category would perform the best, so this really surprised us,” Roca says. In fact, employees coached by Always-on Managers performed worse than those coached by the other types — and were the only category whose performance diminished as a result of coaching. The researchers identified three main reasons for Always-on Managers’ negative effect on performance. First, although these managers believe that more coaching is better, the continual stream of feedback they offer can be overwhelming and detrimental. (The Gartner team compares them to so-called helicopter parents, whose close oversight hampers children’s

ability to develop independence.) Second, because they spend less time assessing what skills employees need to upgrade, they tend to coach on topics that are less relevant to employees’ real needs. Third, they are so focused on personally coaching their employees that they often fail to recognize the limits of their own expertise, so they may try to teach skills they haven’t sufficiently mastered themselves. “That last one is a killer — the manager doesn’t actually know the solution to whatever the problem is, and he’s essentially winging it and providing misguided information,” Roca says. When the researchers dove deep into the connection between coaching style and employee performance, they found a clear winner: Connectors. The employees of these managers are three times as likely as subordinates of the other types to be high performers. To understand how Connectors work, consider this analogy from the world of sports: A professional tennis player’s coach may be the most important voice guiding the player’s development, but she may bring in other experts — for strength training, nutrition, and specialized skills such as serves, lobs and backhands — instead of trying to teach everything herself. Despite this outsourcing, the coach remains deeply involved,

c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

identifying expertise, facilitating introductions and monitoring progress. Encouraging managers to adopt Connector behaviors may require a shift in mindset. “Historically, being a manager is about being directive and telling people what to do,” Roca says. “Being a Connector is more about asking the right questions, providing tailored feedback and helping employees make a connection to a colleague who can help them.” The most difficult part is often self-knowledge and candor: Being a Connector requires a manager to recognize that he’s not qualified to teach a certain skill and to admit that deficiency to a subordinate. “That isn’t something that comes naturally,” Roca says. To get started, the researchers say, managers should focus less on the frequency of their developmental conversations with employees and more on depth and quality. Do you really understand your employees’ aspirations and the skills needed to develop in that direction? Next, instead of talking about development only one-on-one, open the conversations up to the team. Encourage colleagues to coach one another, and point out people who have specific skills that others could benefit from learning. Then broaden the scope, encouraging subordinates to connect with colleagues across the organization who might help them gain skills they can’t learn from teammates. For employees, one message from this research is that you’re better off working for a Connector than for one of the other types. So how can you recognize whether someone is in that category — ideally before accepting a position? Roca suggests asking your prospective boss about his coaching style and discreetly talking with his current direct reports about how he works to upgrade subordinates’ skills. For managers and subordinates, the research should redirect attention from the frequency of developmental conversations to the quality of interactions and the route taken to help employees gain skills. Says Roca: “The big takeaway is that when it comes to coaching employees, being a Connector is how you win.”

34 BUSINESS DAY

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Tuesday 23 May 2018

News Feature Need for Buhari to address investors concerns, fundamental issues in power sector The coming on stream of Azura power plant is a welcome relief to electricity consumers, given Nigerians yearning to have steady power supply. OLUSOLA BELLO, Energy Editor, examines obstacles to a steady supply of electricity in Nigeria and what players in the industry want the government to do ahead the commissioning of the plant.

s President Muhammadu Buhari gets set to commission the Azura power plant, industry operators want him to address electricity fundamentals in the industry to make it more attractive for other investors to drive foreign direct investment (FDIs) into the power sector in Nigeria. Tucked in the midst of what can be described as a semi forest with some sparsely wild palm plantations, the 450mw Azura power plant which went full cycle early April is set for commissioning any moment from now by President Muhammadu Buhari. This is the first phase of the project which is expected to be scaled up to about a1000 megawatts by the time it is fully completed. The plant is straddled by three communities namely Orior-Osemwende, Ihovbor and Idunmwowina NurhoNisen which are already feeling the impact of the project as it brought about some level of economic activities to the communities, hence the good relationship that is existing between communities and the company. Industry analysts are saying that it behoves on him to let investors know his strategy that would ensure effective and functional transmission lines across the country, and which would address other fundamentals that would guaranty that power supply to end users would no longer be an issue. Some of these fundamental issues are that electricity market is basically flawed, and the market is completely viewed as not functioning. The market is operating under inappropriate tariff which has almost crippled the sector, the transmission and distribution networks are too inefficient to wheel the power to the end users, the sector also experience acute gas shortage that prevents from functioning maximally. Because of these issues the

power sector lost an estimated N1,853,000,000 in one single day on May 16, 2018 1. The dominant constraint for having good volume of power generated remained unavailability of gas as this situation is causing the nation a loss 2,751MW every day. The Azura power plant which has come to be a game changer in the power industry dynamics in Nigeria has the potential to increase job creation. Its addition to the national grid could revive some companies that have gone distressed because of lack of electricity. Above all, it is expected to boost the economy as small scale entrepreneurs and the informal sector of the economy are expected to witness improved activities. Azura helped improve supply in April during Easter period as the government encouraged the management to augment the load on the national grid, hence the relative supply of power enjoyed that time. With a national generation capacity of 4,000megawatts, Azura contributes about 10 per cent presently. The pro-

ject is purely on a commercial arrangement that is private sector driven hence there is no delay in completing the plants before the scheduled date. One thing should however be of interest to the president when he gets to Azura to commission the power plant; government owned NIPP in Ihovbor which shares the same fence with Azura is barely functional because of lack of gas. Industry analysts however say this should be a major cause of concern for the president. According to Edu Okeke, deputy managing director of Azura Power said the reason why gas supply to Azura is steady is that the company relationship with the gas seller is purely on commercial bases. “We had a gas purchase agreement with Seplat Petroleum Development Company which is to supply gas to the company for the next 20 years. If it defaults we would not pay”. This is not the same situation with the NIPPs which depend on the government for gas supply. “The beauty of this arrangement for the company is that for us to be able to negotiate

the price with Seplat, means that the quantity we are taking is quite high. We are taking about 100 million scf per day which is a lot of gas. With this Seplat is assured that for the next 20 years it is going to supply this quantity of gas and would get paid; so with this you are in stronger position to negotiate a better rate than a company that is just taking 500,000 scf per day which you are sure whether it is going to pay or not”. The first plant deploy power to the national grid in November 2017 and by April, all the three turbines where hooked to the national grid. Okeke said Siemens and the other contractors have been very fantastic in keeping to the agreed date of delivery in completing the project before the dead line. The contractual timeline with Siemens and Julius Berger was 30 months with 10 days. Azura also beats it contractual agreement- with Nigeria authority which was36 months. This plant was completed without a single loss time incident. So to spend almost five million man hours on this pro-

ject and nobody was injured was tremendous achievement. Some industry watchers urged President Buhari to ensure that electricity supply industry fundamentals are fixed, so that other investors can find proper footing in the industry. John Uwajumogu, partner, Transaction Advisory Services of Ernst and Young Nigeria, said if Nigeria electricity supply industry fundamentals can be fixed, then other investors would want to replicate Azura in the country. He said that the Nigerian Electricity Regulatory Commission (NERC) has taken some step towards this direction with its eligible customers policy as that is expected to make the electricity value chain valuable. For instance Egbin power plants can generate 1320 but only 500mw could be evacuated, also the Jebba and Kainji power plants could only send about 300 megawatts to the national grid because of transmission and distribution problems. This is same with other generating power plants. They are informed in advance the volume of megawatts they are expected to make available for the grid. Analysts have attributed this fundamental problem as the reason why the country is not having another Azura type of project. The inability to evacuation the power generated from the plants to end users remains a challenge that the administration must address to improve power supply in the country. Azura unlike other generating companies has nothing to lose if it generate and the power generated can be evacuated, it must be paid for. This is because the government is bound to pay for whatever has been generated whether evacuated or not. The pull call option agreement PCOA which is the anchor of contract gives sovereign guaranty on the project.

Wednesday 23 May 2018

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BUSINESS DAY

FINANCIAL TIMES

Zimbabwe applies to rejoin Commonwealth 15 years after it left

Swiss franc strength returns as eurozone political risk heats up

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World Business Newspaper

China cuts import duty on cars in concession to US Washington and Beijing near deal to save ZTE in tit-for-tat moves to ease trade tensions TOM MITCHELL, LUCY HORNBY AND EMILY FENG

hina said it would cut the import duty on passenger cars just as Washington and Beijing neared a deal to save Chinese telecoms group ZTE from US sanctions, as the rival superpowers traded concessions to avoid a trade war. China’s State Council said on Tuesday that the tariffs on cars would be cut from 25 per cent to 15 per cent on July 1, according to the official Xinhua news service. The duty is still high by international standards. US negotiators had been seeking a reduction to the US level of 2.5 per cent. A person briefed on the potential deal over ZTE said the US Department of Commerce would allow the Chinese equipment maker to resume sourcing of American components in return for wholesale senior management changes and payment of another large fine. The White House’s attempt to rescue ZTE, just weeks after US sanctions nearly destroyed the company, comes as part of a broader move by the Trump administration to de-escalate trade tensions with Beijing after threatening tariffs on $150bn in Chinese imports. But the abrupt move towards detente has angered hardliners in the US, with Republican senator Marco Rubio tweeting on Tuesday: “If this is true, then administration has surrendered to #China on #ZTE Making changes to their board & a fine won’t stop them from spying & stealing from us. But this is too important to be over. We will begin working on vetoproof congressional action.” Even within the Trump administration, several officials have assailed moderates for seeking a quick deal to cut the US trade deficit at the expense of yielding too much ground to Beijing over intellectual property and strategic technology. Last year, the Chinese telecoms group agreed to pay $1.2bn to settle

US charges related to its business operations in Iran and North Korea, a case brought by the Obama administration. It was later accused of violating the terms of the deal by the Trump administration, which imposed sanctions that crippled the company. ZTE did not immediately respond to a request for comment. Chinese trade experts see the aboutface as a reflection of the importance of ZTE as a key customer for Qualcomm, the US chip manufacturer. China recently approved a Qualcomm joint venture with state-owned Datang Telecom, as part of commitments to open market access since the Trump administration hardened its trade rhetoric. Overall, China spends an estimated $150bn a year on tech-related parts and goods from US companies, said Edison Lee, analyst at Jefferies. The potential settlement is the latest in a series of corporate developments for ZTE, which declared on May 10 that it would have to go out of business following a suspension of share trading the month before, when Washington imposed a seven-year moratorium on it sourcing US components. The White House made a U-turn soon after, with Mr Trump tweeting on May 14 that he would work with Chinese President Xi Jinping to grant the company a reprieve. Chinese officials and analysts do not accept the Trump administration’s argument that the sourcing ban, imposed in April by Wilbur Ross, the US commerce secretary, was a “legal enforcement matter” unrelated to the trade negotiations. “ZTE did not deserve the death penalty for its mistakes,” said Lu Xiang at the Chinese Academy of Social Sciences. “It was used as a tool in the trade dispute.” Yesterday, US Treasury secretary Steven Mnuchin told CNBC that Mr Xi had requested that Mr Trump support ZTE — a request he said was no different than an American president lobbying on behalf of US companies. ZTE’s largest shareholder is a state-owned group linked to a contractor to China’s space and missile programmes.

Barclays clears another legal hurdle on road to recovery Victory in SFO case relating to 2008 fundraising caps a good quarter for chief Staley MARTIN ARNOLD, JANE CROFT AND CAROLINE BINHAM

ust a year ago, the problems were coming thick and fast for Jes Staley. The Barclays chief executive had just apologised to investors for trying to unmask a whistleblower, fallen for a prank email and been forced to defend the disappointing performance of its investment bank. Roll forward 12 months and Mr Staley has sailed through relatively unscathed. He can now even claim to be making progress in a central goal of clearing up the big legal issues that have been hanging over the bank for

many years. A further victory was secured on Monday after a UK judge rejected criminal charges against the bank and its main operating company over its emergency fundraising in 2008. The decision by the Crown Court to dismiss charges brought by the Serious Fraud Office over cash injections Barclays arranged from Qatari investors to survive the financial crisis is the first sign that the longrunning legal battle may be going in the bank’s favour. In the worst-case scenario, the bank’s UK licence may have been Continues on page 36

US Treasury secretary Steven Mnuchin said Chinese President Xi Jinping had requested that US President Trump support ZTE © Reuters

La Liga chief hits out over Fifa plans for $25bn football shake-up Tebas says proposals would decimate leagues and bring ‘food now and hunger tomorrow’ MURAD AHMED

he head of La Liga, Spain’s professional football leagues, has attacked a plan for new global tournaments as “totally irresponsible”, saying it would decimate the football industry in countries around the world. Fifa, international football’s governing body, is in talks with a consortium of international investors, including Japan’s SoftBank, which has promised $25bn to expand the Club World Cup, an annual competition played by seven of the globe’s top teams, into a 24-strong tournament held every four years, as well as a new league contest for national teams. Javier Tebas, president of Liga Nacional de Fútbol Profesional, which runs Spain’s two top professional divisions, called on Fifa to scrap the proposals despite the two biggest clubs in the country, Real Madrid and Barcelona, publicly supporting the plan.

“My obligation is to protect the football industry in Spain and these tournaments [would] really damage the football league and the football industry here,” said Mr Tebas. “I’ve already said to Real Madrid and Barcelona in regard to this: there will be food now and hunger tomorrow.” He said an enlarged Club World Cup would lead to the further concentration of wealth in Europe’s heavyweight teams. That would damage the competitiveness of national leagues, making them less appealing to broadcasters and sponsors over the long term. According to a presentation for the expanded Club World Cup, Fifa plans to include at least 12 European sides. Four Spanish teams — Real Madrid, Barcelona, Atletico Madrid and Sevilla — would qualify for the event, where they would compete for almost $2bn in prize money. “This will cause a deconstructing of the national league,” said Mr Tebas. “We already have this problem

in Europe. We have to face it and find a solution because the Club World Cup will make it even worse.” He said the new tournaments would mean more matches are played each season, which would force national leagues such as his own to trim the number of clubs in the top division from 20 to 18 to cope with the additional fixtures. This would result in La Liga losing hundreds of millions of euros in broadcasting and sponsorship rights, he added. It would also prompt a “cascading effect” down the football pyramid in many countries, with pay cuts for players and job losses at clubs. Fifa insists the proposed tournaments would reduce the number of matches each year. The Club World Cup would take place in June, when the quadrennial Confederations Cup, which would be abolished, is held. Nations League matches would take place on dates allocated for national “friendly” matches, which they would replace.

Oil price has sector’s investors eyeing a windfall Industry pushing to improve returns as it rebounds from a long downturn ANDREW WARD AND ATTRACTA MOONEY

nvestors in the world’s largest oil and gas companies are eyeing a windfall from rising crude prices as the sector heads towards its strongest financial performance in a decade, while keeping a tight rein on spending. Companies including Total and BP have already launched share buyback programmes, and Royal Dutch Shell is preparing to follow suit in a sign of the industry pushing to improve investor returns as it bounces back from a long downturn. “The oil market is tightening and we now see it as appropriate to factor in at least some of the windfall profitability that higher prices are generating,” said Lydia Rainforth, analyst at Barclays, in a report that said Europe’s integrated oil and gas groups were on course to deliver excess free cash flow for the first time since 2008. US groups, such as ExxonMobil

and Chevron, are also benefiting from this year’s faster-than-expected upturn in oil prices because of rising global demand, supply disruptions in Venezuela and political tensions in the Middle East. Brent crude, the international benchmark, hit $80 per barrel last week for the first time since 2014. Many oil producers are generating more free cash at current prices than they did at $100 per barrel before the market crashed four years ago. This is because of deep cost cuts during the downturn, with average operating expenses per barrel down a third and development costs halved by the same measure since 2014. Most oil majors can now cover dividends and capital expenditure at prices around $50 per barrel, meaning that, at $80, they make a healthy surplus. Having spent the downturn battling to balance the books, oil executives are adjusting to a new environment in which they face choices over how to

use spare cash. The message from most has been consistent: there will be no return to the runaway spending of the $100 oil era. Instead, companies are focusing on debt reduction and shareholder returns. Debts rose sharply during the downturn as companies borrowed to avoid cutting dividends and leverage remains high. Shell, for example, has trimmed net debt by $10bn in the past year but still owes $66bn, a debt-tocapital ratio of 25 per cent. Jessica Uhl, Shell chief financial officer, indicated last month that she wanted gearing closer to 20 per cent before launching a promised $25bn share buy-back programme. The recent surge in oil prices has increased investor expectations that this will happen in the second half of this year. BP said this month that it, too, was prioritising debt reduction after announcing a 71 per cent increase in first-quarter earnings.

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NATIONAL

Rancour and division in Ireland as abortion vote nears people to speak out, but when we Debate on whether to repeal ban has become increasingly contentious ARTHUR BEESLEY

aye Edwards is one of the many Irish women who once took a difficult journey: out of the country to end a pregnancy when she knew her baby could not survive outside the womb due to foetal abnormalities.

She is campaigning ahead of a referendum on Friday to repeal Ireland’s constitutional ban on abortion and is shocked by the level of vitriol she has encountered. “People have been rude, by all means,” said Ms Edwards, telling of a nasty encounter in the campaign. “One of our canvassers had a man

get right in her face and poke her and shout ‘baby killer’ … As soon as another man came along he backed off. “We’re not an abstract concept. I’m neighbour to lots of people, I’m mum to four kids, all of whom go to school,” said Ms Edwards. “I don’t think it’s a good thing to require

do please listen.” Days ahead of the referendum, seen by many as a modernising step for an increasingly liberal country in which the once powerful Catholic Church has lost a great deal of its influence, the mood has sharpened and debate has become increasingly contentious. Anti-abortion campaigners

Barclays clears another legal hurdle on road...

erected a huge No slogan in plastic cladding at a mountainside beauty spot, while graphic posters were placed near the family home of the health minister depicting his face alongside what appeared to be an aborted foetus. A raucous televised debate, in which both sides traded abuse and participants were jeered, led to complaints to the national broadcaster.

Deutsche Bank chairman under fresh investor pressure ahead of AGM

Continued from page 35 in jeopardy if its main operating subsidiary had been convicted of unlawful financial assistance — the practice of companies lending money to fund the purchase of their own shares. “I’m not sure anyone really had any handle on the possible costs or rulings of the SFO case,” said Peter Richardson, banking analyst at Berenberg. He added that the development was clearly a sign that the court thinks the UK SFO’s case against the bank “doesn’t seem to hold up to scrutiny”. Since he took over as Barclays chief executive in December 2015, Mr Staley has sought to clear up the non-core assets that were clogging up its balance sheet and the litigation risks that represented a barrier to rebuilding its dividend. Mr Staley was already feeling emboldened after the bank’s firstquarter results showed signs that his strategy of re-investing in the investment bank was paying off with a 48 per cent year-on-year jump in pre-tax profits at the unit. Coming only weeks after positive outcomes in two other major legal issues, Barclays’ hand has been strengthened as it attempts to bat away pressure from Edward Bramson, an activist investor who wants to shrink or sell its investment banking division. Earlier this month, Mr Staley survived an investigation by the UK’s two financial regulators into his attempt to unmask the identity of a whistleblower in 2016. The regulators backed the decision by the Barclays board to allow Mr Staley to keep his job, while fining him £642,430, or 14 per cent of his annual pay. Two months earlier, his bet that he could negotiate a lower fine from the US Department of Justice over mortgage mis-selling allegations by refusing to settle in late 2016 paid off when Barclays agreed a $2bn deal, well below initial demands. Yet Barclays shares were up less than 1 per cent on Monday, lagging behind the FTSE 100 index. The bank is still being investigated over its Qatari fundraising by the UK Financial Conduct Authority and the US justice department. It also faces a £1.5bn claim from the financier, Amanda Staveley, whose PCP Capital Partners put together a parallel stake in the 2008 cash call by Abu Dhabi investors. Analysts said there was also still significant uncertainty over the outcome of the SFO’s case against the bank. The SFO is “likely to seek to reinstate these charges,” according to Barclays.

Wednesday 23 May 2018

Move follows criticism of how Paul Achleitner handled exit of CEO John Cryan

NAOMI ROVNICK

D Emmerson Mnangagwa, right, is eager to end Zimbabwe’s isolation © AFP

Zimbabwe applies to rejoin Commonwealth 15 years after it left Mnangagwa promises free and fair polls and has invited monitors into the country JOSEPH COTTERILL

imbabwe has officially applied to rejoin the Commonwealth 15 years after it quit the organisation of former British colonies. Harare’s application is the latest step aimed at reversing the country’s long isolation during the rule of Robert Mugabe. President Emmerson Mnangagwa, who assumed power after Mr Mugabe was deposed in an army takeover last year, made the bid for a return to the Commonwealth last week, Patricia Scotland, secretarygeneral of the group of 53 nations, said on Monday. “Zimbabwe’s eventual return to the Commonwealth, following a successful membership application, would be a momentous occasion, given our shared rich history,” Baroness Scotland said. The application comes less than

two months before Zimbabwe is expected to hold its first elections without Mr Mugabe. Mr Mnangagwa, formerly a staunch ally of Mr Mugabe who served as deputy president, is pursuing a rapprochement with the UK government in particular. Britain has said it would support Zimbabwe rejoining the Commonwealth if fair elections were held. Baroness Scotland said the Commonwealth had accepted an invitation from Mr Mnangagwa to monitor the poll, which pits his ruling Zanu-PF against the MDC Alliance, an opposition coalition. An official date is yet to be set for the election, though Mr Mnangagwa said at the weekend that it would be held in July. Baroness Scotland added that reports from Commonwealth monitors would form part of whether the organisation would accept Zimbabwe’s application to rejoin. Zimbabwe left the Common-

wealth in 2003, after the organisation indefinitely suspended its membership in protest at violent repression of the opposition around a 2002 poll. Zanu-PF has a long history of ballot rigging, and western election observers were barred in the last years of Mr Mugabe’s presidency. The 94-year-old Mr Mugabe ruled with an iron grip from independence in 1980 until last year’s palace coup, which army commanders launched to stop his wife Grace from succeeding him. Mr Mnangagwa has promised free and fair elections and also invited EU election monitors into the country. Nic Cheeseman, a professor of democracy at the University of Birmingham and co-author of a recent book on election-rigging practices worldwide, warned that there was not much time ahead of polling day to observe effectively the poll and expose any manipulation.

US corporate bonds have worst start to year in decades Negative returns reflect rising interest rates and issuance by weaker borrowers ALEXANDRA SCAGGS

igh-quality US corporate bonds had their worst start to a year in at least two decades, as interest rates rose and companies continued to tap the capital markets in significant numbers. Investors holding corporate bonds with investment-grade ratings had lost 3.8 per cent by the end of last week, according to ICE BofAML Indices, as the Federal Reserve raised rates and shrank its presence in the bond market. A reduction in the supply of new corporate bonds, which many had predicted at the start of the year would prop up prices, has not been as sharp as expected this year, because while technology companies retreated, companies with lower credit ratings came to market in their stead. Without the tailwind of shrinking supply, investors have been hammered by the effects of rising US Treasury yields, said Peter Tchir, head of macro

strategy at Academy Securities. Negative returns have been most pronounced in the highest-grade corporate bonds, which borrow at rates closest to those on risk-free Treasuries and which, because of their longer average maturities, are most sensitive to interest rates. “The bulk of what’s driving this is the move in interest rates, which has been pretty extreme,” he said. Last week, the 10-year US Treasury yield climbed above 3 per cent to its highest level since 2011. Bond prices move inversely to yields. High-yield bonds, where trading is less sensitive to rates and more closely tracks perceptions of credit risk, had lost just 0.3 per cent for the year to last Friday. In investment-grade bonds, credit risk is seen as having declined modestly since the start of the year — although since a nadir in February, when the yield spread over Treasuries reached its lowest in nearly 20 years, spreads have climbed 25 basis points, according to

ICE BofAML indices. With wider spreads and higher Treasury yields coming simultaneously, the 100-day performance of US corporate bonds — that is, returns since midFebruary — has been the third worst of any period since 2000, JPMorgan strategists said in a note on Friday. Spreads have widened in part because there has been a shift in the types of companies selling investment-grade debt to investors. The tech sector’s bond issuance is down 81 per cent compared to this time last year, according to Dealogic, as changes to US tax law allowed them to tap their offshore cash for activities they would previously fund with borrowing. But borrowers in the food, beverage, retail and metals industries have all sold at least twice as much debt as they did last year, according to Dealogic. The overall decline in corporate bond issuance year to date — 8 per cent, according to Dealogic — has been smaller than expected.

eutsche Bank chairman Paul Achleitner has come under renewed investor pressure following criticism of how he handled last month’s replacement of the bank’s chief executive. Ahead of Deutsche’s AGM on Thursday, Hermes Investment Management called for Deutsche to plan for hiring a new chairman. The bank’s nomination committee should “start to consider plans for the succession of Paul Achleitner,” said Hermes executive director HansChristoph Hirt. “Paul Achleitner has not only overseen significant CEO and management board turnover during his six-year tenure but also a number of attempts to define and implement a value creating strategy for Deutsche Bank,” Mr Hirt said. “This included strategic U-turns, not least regarding both the bank’s retail and asset management businesses, and to date, a failure to move decisively on the troubled investment bank.” The bank removed John Cryan as chief executive less than three years into his five-year term, replacing him with retail banking boss Christian Sewing just as it was also heading into the final leg of a five-year restructuring plan. Mr Cryan was appointed to the top job at Deutsche in 2015 after the bank’s former co-CEOs, Jurgen Fitschen and Anshu Jain, stepped down following a period of investor unrest. Against this backdrop of change at the top, Deutsche has struggled to control its costs and reported its third consecutive annual net loss in 2017. It followed this up with a €120m net profit in the first quarter of this year, while admitting it would need to let more staff go to meet its 2018 cost-cutting target. At the start of Mr Sewing’s tenure, Deutsche also swiftly began to dismantle its long-held plan to become a leading global investment bank. “We ask whether the management board changes could simply mask an underlying problem, namely, the lack of an implementable strategy that creates value for shareholders and other stakeholders,” Hermes said on Tuesday. The investment manager, which in April advised and represented around 0.5 per cent of the voting rights in Deutsche, stands out among institutional investors for its willingness to talk openly about corporate governance issues. However around the time of Mr Cryan’s ousting, other shareholders also voiced concerns over Mr Achleitner’s stewardship of Deutsche. Several top ten investors in told the FT that they had become frustrated, and a senior banker close to Deutsche’s recent management changes said that investor pressure was likely to lead to Mr Achleitner’s removal within months.

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Swiss franc strength returns as eurozone political risk heats up Analysts watch for indications of central bank concern over stronger currency ROGER BLITZ

month ago, market talk was about the weakness of the Swiss franc. A euro was worth as much as SFr1.20, its cheapest rate of exchange since January 2015 when the Swiss National Bank abandoned the cap it imposed to limit the currency’s strength. It was a moment for the SNB to relax, no longer having to intervene in forex markets to temper a currency whose strength was heaping pain on Swiss exporters. Such a feeling may prove fleeting. The Swissie has strengthened against the euro by more than 2 per cent, an appreciation that has been mainly concentrated in the last five trading days. Analysts are watching for any indication that the SNB will fret once more about its currency. The reason for the Swiss franc’s new-found strength is politics, specifically Italy’s new coalition government of anti-establishment Five Star Movement and the far-right League. While Italian bond markets have felt the brunt of market reaction, currency traders appeared relatively unfussed about the implications for the euro — at least against the dollar. As Simon Derrick at BNY Mellon points out, the euro’s value against the Swissie is probably “the most reliable

barometer of currency-related risk sentiment within Europe”. In the two years after the SNB scrapped the cap, trading in the currency pair was largely benign until last year’s French election when Emmanuel Macron’s victory triggered the euro’s ascent against the dollar, the Swissie and other currencies. But now, the euro’s decline against the Swissie suggests Italian politics is “already challenging the [EURCHF] broad trend up from the time of the French presidential election”. Marc Chandler at Brown Brothers Harriman says the currency pair is showing signs of “elevated systemic risk”. The Swissie’s rise is taking place as speculators are building short positions in the currency. “The short-term speculative market got caught leaning the wrong way as political concerns about Italy surfaced,” he says. Changing tack would be a risk if investors think the euro is due for a bounce. The bout of soft eurozone data may start to fade, drawing a hawkish tone out of the European Central Bank. But the bigger worriers will be the policymakers. “The one thing that makes the SNB very nervous is European political uncertainty,” says Peter Rosenstreich of the online bank Swissquote. “Events in Italy will have the SNB policy strategy shift from relaxed to cautious.”

Sberbank sells Turkish unit DenizBank to Emirates NBD for $3.2bn Russian state-run bank plans to sell most of its European lenders as it eyes new domestic strategy MAX SEDDON

berbank, the Russian staterun lender, has sold its Turkish subsidiary DenizBank to Dubai-based Emirates NBD for the equivalent of $3.2bn. The bank said in a statement on Tuesday that it would sell its 99.9 per cent stake in DenizBank, which it acquired in 2012. Emirates NBD will take on DenizBank’s subordinated debt in the deal, a “locked box” based on the bank’s consolidated equity capital as of October 31 last year that will see it pay interest until the deal closes. Herman Gref, Sberbank chief executive, has said that the Kremlincontrolled bank intends to sell most of the European lenders it acquired during a buying spree in the early 2010s, before it was hamstrung by western sanctions. The bank is searching for buyers for all its foreign assets outside Kazakhstan and Belarus, according to a person close to Mr Gref. DenizBank, the largest acquisition, was a rare success among Sberbank’s European subsidiaries, which have struggled with restrictions on raising debt capital. “The decision to sell DenizBank is prompted by a change in Sberbank Group’s international strategy and will allow us to focus further on the development of the ecosystem of Sberbank,” Mr Gref said.

The Turkish lira’s recent sharp devaluation means the sale is worth less in dollar terms than Sberbank paid for it. But the bank insisted that the deal was profitable in rouble terms: Sberbank received Rbs200bn against the Rbs148bn it invested in DenizBank. Mr Gref told investors on Sberbank’s most recent earnings call that the bank would consider increasing dividend payouts — at present scheduled to hit 50 per cent of earnings by 2020 — if it succeeded in selling DenizBank. Sberbank said it would use the money from the sale to implement its new three-year strategy and “create a unique ecosystem of a new type in the Russian economy”. Mr Gref wants to diversify away from Sberbank’s core banking business — it has half of all retail deposits in Russia — and is launching ventures in ecommerce, technology and healthcare. “This is [a] landmark transaction for Sberbank, in our view, as it has got over its ‘empire-building’ phase and is refocusing on the domestic market,” Mikhail Shlemov, an analyst at VTB Capital, said in a note. “While the digital ecosystem is still received with a certain degree of scepticism, we note that the scale of the ecosystem investments (the largest being $500m into the Yandex.Market joint venture) is a much smaller and safer play, in our view, than the $5.5bn spent on M&A in 2011-12,” he added.

The Swissie’s rise is taking place as speculators are building short positions in the currency © Bloomberg

When quality is a liability ALEXANDRA SCAGGS

he siren song of late-cycle corporate leverage is getting louder, and we can see how it might be challenging for investors to resist. As covered elsewhere, bonds rated CCC or lower have returned 2.8 per cent for the year through Monday, according to ICE BofAML Indices. For high-yield bonds, the relationship has been straightforward: the higher the rating, the worse the returns. Investment-grade bond performance has been a bit more dispersed, with some minor outperformance from the AA category, which includes bonds from almost all blue-chip corporations (Microsoft and Johnson & Johnson are the only two left with AAA ratings). Even so, it is difficult to avoid the BBB-rated sector, since it makes up more than half of the investmentgrade debt market. Bonds with that tier’s lowest rating (BBB-) were 16 per cent of the market at the end of 2017, up from 11 per cent in 2012, according to JPMorgan. Wells Fargo credit strategists

don’t expect the corporate leverage buildup to reverse itself any time soon, even though many companies have newly accessible piles of cash after Congress passed the new US tax law. From a note earlier this month: While some expect the recent changes to the U.S. corporate tax code to encourage companies to moderate the use of debt, we do not share that opinion. At least, not yet. As a result, we expect the well-entrenched pattern of debt-financed corporate activity to continue for the foreseeable future. They seem to be right. So far this year, BBB-rated debt is the only tier where investment-grade corporate issuance as increased, up 26 per cent from this point last year, according to Dealogic. (To compare, A-rated issuance has declined 16 per cent, and AA-rated issuance has dropped 35 per cent.) There are many reasons this could cause trouble the next time companies go through a wave of downgrades. From JPMorgan, with our emphasis: First, BBB- debt is a larger part of the HG bond index. Second, cor-

porate leverage is higher now than it has been in many years. Across most rating buckets leverage levels are higher than in prior periods, not just the low rated ones. Third, the period of very low funding costs for corporates appears to be over with higher sovereign yields globally, driven in part by less QE and higher US government borrowing needs. Fourth, the size of the BBB market has grown much faster than the BB market (over the past 4 years, BBB debt in the JULI index has grown by $729bn (+42%) to $2.5tn, while the BB market has grown by $94bn (+19%) to $579bn. This makes it more difficult for the HY market to absorb newly downgraded bonds. The large capital structures of some of these issuers is another factor in this view. Fifth, the growth in overseas holdings of HG bonds, especially in Asia, where we believe there is significant sensitivity to ratings, and the small but growing share of the market in passive strategies both point to the potential for more rapid selling of newly downgraded HY bonds than in the past.

Demand for Italian stocks and bonds returns Wall Street extends rally, oil now above $80, pound loses momentum JESSICA DYE

hat you need to know • Wall Street extends rally with S&P 500 up 0.1% heading into the New York afternoon • Cautious trade in Europe strengthens, as investors watch Italian bond yields • Demand for Italian bonds returns • Oil posts new 2018 high at over $80 a barrel after further sanctions on Venezuela • Pound loses momentum despite hawkish comments from Bank of England policymaker • Turkish lira continues to hover near record lows despite pressure easing on EM currencies “Markets will probably remain wary of a Five Star-League government on concerns it may undermine fiscal discipline,” said Matteo Ramenghi, chief investment officer for Italy at UBS Global Wealth Management.

“Given the two parties have very different backgrounds, the government’s lifespan would be in question. A broad grand coalition technocrat government and repeat elections remain possible, but we believe probabilities of such outcomes have declined sharply.” Hot topic Attention remains on Italian politics, with the benchmark sovereign debt yield turning round as buyers emerge for the country’s 10-year paper. The yield on 10-year BTPs moved to trade down by 5bp to 2.32 per cent as investors sold the debt. During the previous session, when the selling was sustained, it crossed above 2.4 per cent for the first time since March 2017. Milan’s stocks are also finding support as investors continue to track the movement towards a populist coalition. The FTSE MIB is up 0.5 per cent, having touched its lowest level of the month. The main Milan equities index is failing to hold gains that took it up by

as much as 0.9 per cent. The euro is also losing momentum, nudging lower to $1.1780. Equities On Wall Street the S&P 500 is up a further 0.1 per cent, extending its 0.7 per cent advance for Monday, helped by signs the US-China trade war appeared to abate. Frankfurt’s Xetra Dax 30 is back from a public holiday and up 0.7 per cent, while the FTSE 100 is at fresh records, helped by the weaker pound. Asian equities lacked lustre after a stronger run over the previous session. Sydney’s S&P/ASX 200 index was the worst performer, down 0.7 per cent. In Tokyo, the Topix was off 0.2 per cent as the financial segment dropped 0.3 per cent. Sony was a notable faller after it announced it would buy EMI Music Publishing for $2.3bn to strengthen its content portfolio. In China the CSI 300 index of largecap stocks listed in Shanghai and Shenzhen was off by 0.4 per cent.

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Wednesday 23 May 2018

Private equity outperforms Public market for 11th straight year MICHEAL ANI

rivate Equity (PE) is dishing better financial returns globally, than its counterpart in the public market, according to the sixth annual survey by Ernst and Young (EY) in collaboration with the African Private Equity and Venture Capital Association (AVCA). As deduced from the survey, Private equity buyout funds in all regions delivered returns that beat Public equity markets by a sizeable margin, for 11 consecutive years (2007-2017). “The reason for this performance is not farfetched, given that PE is a long-term asset class, that has the ability to smooth out volatility in returns over time,” said Ijeoma Agboti, Managing Director and CEO at Lagos- Based FBN Quest Fund. “As such, it is expected that over the long term, PE investments, executed and managed by top quartile managers, are expected to outperform the public markets. “In addition, top PE managers are well known to apply active value creation strategies to their portfolio companies, enhancing the growth prospects and overall performance of the businesses they hold,” Agboti said in an emailed statement. Overtime, private equity has shown very unusual rate of return thanks in large measure to PE’s flexibility, its long-term focus and active effort to shape and improve investments, whether based on a debt-backed corporate buyout, or a custom-designed loan from a private debt fund. Industry estimates have shown that the year 2017 saw a ground breaking $621 billion raised in PE

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deals that surpassed the longstanding fundraising record of 2008, when some $557 billion was raised across all PE strategies and regions. Political uncertainty, weak currencies and the slowdown in growth of Africa’s largest economies did not hurt the pace of private equity exits in 2017, In Africa, the level of out-performance was the highest in North Africa at more than 99 percent and Southern Africa at more than 96 percent, excluding South Africa, which performed at 80 percent higher than public markets. Graham Stokoe, Africa Private Equity Leader at EY said despite the fact that currencies from key African markets have negatively impacted PE returns over the past few years; PE firms have been able to deliver relatively high exit volumes and performances over the last two years. “Exits to PE and other financial buyers continued to increase in 2017 at 37 percent and now represent the most common exit route. This is likely to be due to the large amount of capi-

PRIVATE EQUITY WORD FOR THE WEEK Brownfield: An investment in an existing asset, land or structure that typically requires repairs, upgrades and expansion.

tal raised by PE firms over time and PE firms needing to invest the capital raised. Corporates on the other hand, appeared to be less active in 2017,” Furthermore, the financial outperformance of PE demonstrates the power of positive equity. PE firms have supported African companies in growing faster than public companies.” Stokoe says. Looking forward, investment in fintech, education, consumer products and services, healthcare and energy is expected to increase. In a period of five years (20122017) the value of private equity funding in the West African sub-region rose to $10.7 billion with Nigeria accounting for 73 percent of the total value, according to the 2017 Annual African Private Equity Data tracker published by the African Private Equity and Venture Capital Association (AVCA). “Private-equity returns are tricky because investors do not put all their money in when they decide to invest in a fund, but when the fund manager needs it for specific deals,” a private equity expert who craved anonymity said. “Also, they can’t pull money out of a private-equity fund when they want; they must wait until the fund manager sell assets from the fund and returns profits, minus fees. And unlike stocks investors can only get into the funds

during specific fundraising window,” the expert added More recently, the Executive Director of the Nigerian stock exchange, Tinuade Awe disclosed that the exchange is working hand in glove with some private equity firms so as to expand the number of asset classes and the number of listed firms as part of its commitment towards deepening the Nigerian capital market by providing enough liquidity. “We are engaging with PE firms because we see that private equity firms have an exit strategy. Thus, rather than selling to another private firm, they can exit through the market and get better price discovery, build a good product so that people can point to what they have done” Despite fears in the minds of both foreign and domestic investors on the outlook of the Nigerian economy since the 2019 elections are already drawing near, Agboti noted that election uncertainties might not take its toll in the private equity space since PE players are long term focused. “Given the typical long-term investment horizon of PE funds, shortterm market fluctuations, such as those driven by election activity and other indirect shocks, are unlikely to have an impact on returns in the long run, and this is the timeframe that PE managers and fund investors should be focused on”.

Sony buys $2.3bn controlling stake with EMI MIKE OCHONMA

ony says it has agreed to buy a controlling stake in EMI Music Publishing for $2.3 billion (£1.71billion) as it looks to boost its music portfolio. The deal means Sony will indirectly own about 90 percent of the record label and some two million songs by artists from Queen and Carole King to Alicia Keys and Pharrell Williams. Sony said it was thrilled with the deal, which is subject to approval. The announcement comes as Sony unveils its mid-term plan. EMI, which has its headquarters in London, is one of the world’s biggest music publishing firms. Sony already owns 2.3 million music copyrights, including the Beatles catalogue. The Japanese tech giant’s deal, announced on Tuesday with the Abu Dhabi-based investment firm Mubadala, will mean EMI will become a consolidated subsidiary of Sony. Mubadala’s private equity arm has controlled and managed EMI Music Publishing on behalf of Mubadala and other third-party investors since 2012, Sony said. Before that, EMI was owned by Citigroup. According to Kenichiro Yoshida, Sony’s president and chief executive said, “We are thrilled to bring EMI Music Publishing into the Sony family and maintain our world number one position in the music publishing industry,”. Yoshida said the music business had enjoyed resurgence over the past couple of years, driven largely by the rise of paid subscription-based streaming services. “In the entertainment space, we are focusing on building a strong IP portfolio, and I believe this acquisition will be a particularly significant milestone for our long-term growth,” he said. Sony is expected to unveil a threeyear plan to move away from making any more gadgets and towards a bigger focus on gaming subscriptions and entertainment. EMI currently commands 15 per cent of the music publishing industry which with the current Sony ATV business would make the Japanese entertainment and electronics giant the industry leader with market share of 26 per cent, a company spokesman said.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: DAVID OGAR ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

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People & Perspectives

BUSINESS DAY

Indigenous African Corporations powering charge of regional M&A activity- Boston Consulting Group Between 2006 to 2007 and 2015 to 2016, the average number of intra-regional merger and acquisition deals each year jumped from 238 to 418, with African-led transactions representing more than half of all African deals in 2015; a sign that African businesses, led by African entrepreneurs, are overcoming longstanding geographic, geopolitical, transportation, and infrastructure barriers to drive the economic integration of the continent. A new report released in April 2018 by The Boston Consulting Group (BCG), “Pioneering One Africa: African Corporations Trail-Blazing Across the Continent,” captured similar sentiments and noted that while fragmentation in many forms remains a major problem for businesses in Africa, economic integration is not only taking place, but also gathering speed. Luis Gravito, BCG’s Nigeria Chairman and Senior Partner shared his views on the matter with BusinessDay’s DIPO OLADEHINDE. to major companies in the region. We did a lot of work to research data on 150 companies in particular.

evels of integration in Africa are far more advanced than expected Our latest research investigates pioneering and entrepreneurial African and non-African companies at the avant-garde of regional integration. We identify those with an exceptionally strong African footprint and analyse key success factors such as innovation, talent, and commitment to the continent. The starting point was the fact that we are dealing with a very fragmented continent which makes the entry barriers for businesses higher. However, throughout the research we have come to realize that levels of integration in Africa are far more advanced than expected. African businesses, led by African entrepreneurs, are overcoming longstanding geographic, geo-political, transportation, and infrastructure barriers to drive the economic integration of the continent. While fragmentation in many forms remains a major problem for businesses in Africa, economic integration is not only taking place, but also gathering speed with of course some disparities between the different regions. West Africa is the most integrated part of the continent. African entrepreneurs get innovative and morph into large, multi-country businesses in just a few years Understanding the primary success factors for the 150 African corporate entrepreneurs our report has identified. These African entrepreneurs have turned into large, multi-country businesses in just a few years, with totally innovative business models that adapt to the fast-growing, ever-changing business environment in the region and are blazing the trail

Luis Gravito Chairman, Senior Partner at The Boston Consulting Group

towards a more integrated Africa. Africa invests more in Africa, Africa trades more with Africa, and Africans travel more to Africa. Progress is in sight Despite challenges, Africa is making great progress in developing a solid integration between its regions and nations in order to create value and advance the development of the continent. A key way to pave the road to greater success is for companies to capitalize on the effort to overcome traditional challenges such as high logistical cost, infrastructure development acceleration and the challenges within the flow of goods and people. The outlook is positive and opportunities are wide open for investors to take advantage of Africa’s growth and different initiatives strongly driven by the governments to overcome the n°1 fragmentation issue.

Between 2006 to 2007 and 2015 to 2016, the average annual amount of African foreign direct investment that African companies invested in African countries nearly tripled from $3.7 billion to $10 billion. Over the same period, the average number of intra-regional merger and acquisition deals each year jumped from 238 to 418, with African-led transactions representing more than half of all African deals in 2015. Meanwhile, average annual intra-African exports increased from $41 billion to $65 billion and the average annual number of African tourists (Africans traveling in Africa) rose from 19 million to 30 million. African tourists made up more than half of all tourists on the continent in 2015 to 2016. Dearth of data bites The primary challenge for research in Africa is without a doubt data scarcity. We sent over 2000 surveys

Most significant research accomplishments The depth of our data has identified 75 pan-African leaders based in Africa and an equal number of multinational companies that have established impressive track records in Africa and are contributing to further integration. We believe this is currently one of the most relevant lists contributing to the One Africa story. The African pioneers companies come from 18 countries on the continent: 32 are based in South Africa, 10 in Morocco; Kenya and Nigeria are each home to 6, 4 are from Egypt, and 2 each come from Côte d’Ivoire, Mauritius, Tanzania, and Tunisia. The multinational companies are a global group, with France, the United Kingdom, and the United States most strongly represented. At the same time, a dozen multinational companies from China, India, Indonesia, Qatar, and United Arab Emirates are active across Africa. Their leaders tell us that, besides encouraging them to seek growth in new markets, a multi-county footprint enables them to mitigate the risk of volatility and instability in some African countries and to better understand the diverse cultural dynamics and customer needs underlying disparate consumption patterns, trade channels, and business environments across the continent. Criteria for selecting pioneer Nigeria companies: Dangote Group, Globacom, Guaranty Trust Bank, Jumia, Nigerian Breweries and United Bank for Africa Eight dimensions were selected to identify top com-

panies mentioned earlier; African Footprint: Companies with high number of African countries in operation. Greenfield Investments: Companies that made significant green field investments, based on: Value of investments in last 6 years Number of African countries invested in. Merger and Acquisitions deals: Companies with a dynamic merger and acquisition strategy, based on: Value of deals in Africa in last six years and number of deals in last six years. Brand recognition: Companies with well-known and most-desired brands in Africa based on: “Africa Consumer Sentiments “proprietary database and Existing rankings and studies on brands in Africa. Local innovation: Companies that innovate and adapt to the continent reality based on a survey sent to top executives in Africa. People advantage: Companies that attract and retain local top talent based on a survey sent to top executives in Africa. Local ecosystem: Companies that create a local ecosystem and have a social impact in the different countries where they operate based on a survey sent to top executives in Africa. Connect Africa: Companies that connect Africans by facilitating movement of people, goods, data and information. Upcoming report We are working on the Africa Consumer Sentiment Report 2018, a biannual research piece which aims to study consumer trends in Africa. In our previous 2016 edition, we polled over 11 thousands African consumers about their attitudes, budgeting and spending behaviors. The next coming research will provide a more detailed perspective into the African consumer of now.

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Wednesday 23 May 2018

Stakeholders canvass facilities management inclusion in school curriculum CHUKA UROKO

takeholders in the facilities management (FM) industry have canvassed the inclusion of the profession in school curriculum as a way of deepening its practice and ensuring a proper maintenance of all structures and enhancing life in the built environment. Expectation here is that the idea of maintenance culture, which is dying fast among the older generation of Nigerians, especially in the public space, will be inculcated in the young minds who would grow with it and practice it as a matter of course and with a new mindset. The facilities management as an industry is still new in Nigeria and, according to the stakeholders who gathered recently in Lagos to mark this year’s World Facilities Management Day (WFMD), the industry must be embraced by everyone for the built environment to reach its life expectancy and serve its purpose. “We request the government of Nigeria to incorporate facility management in the school curriculum for the purpose of developing a maintenance culture that will shape the future of our nation’s economy,” Pius Iwundu, president, International Facilities Management Association (IFMA), who spoke at the WFMD that

had as theme, ‘Enabling positive experiences,’ said. Duncan Waddell, chairman of Global FM, believes that facilities managers deliver exceptional customer experiences worldwide across multiple sectors, pointing out that WFMD was an important time for the managers to reflect on that. “FM directly impacts many industries, and there are examples in travel and tourism, residential, entertainment, sports and leisure, health and education, etc,” he said. Waddell was of the view that the often unexpected and disruptive influences in the global environment must be managed effectively to ensure stability and success in the sectors that rely on the results of the facility managers and their teams, explaining that this ensures that facilities meet high expectations to enhance life in the built environment. This year’s edition of the event was marked at Government Technical College, Agidingbi in Lagos, and Iwundu explained that the choice of that location was born out of the need to inspire more people. “We have been inviting schools to be in attendance. This time around, we thought that we should bring it to their doorsteps to inspire more because the number that we have been getting all the years that we have been inviting them was not encouraging,” he said, adding, “we have to collabo-

CIBN calls for urgent review of risk management by banks HOPE MOSES-ASHIKE

hartered Institute of Bankers of Nigeria (CIBN) has called on Nigerian banks to as a matter of urgency review theirriskmanagementprofileand migrate fully to Enterprise Risk Management (ERM) platform. ERM enable organisations deal with uncertainty and associated risk and opportunity, thus enhancing the brand value and profitability. Segun Ajibola, outgoing president/chairman of council, CIBN, made the call in Lagos at the 2018 presidential valedictory address on ‘Enterprise Risk Management and Bank Performance: The Nexus. “The extant risk management template should be subjected to periodic review to align the same with global best practices, given thefindingsthatERMholdsmajor implications for banks’ performance,” Ajibola said. More integration of ERM, he said, should be encouraged in the other financial institutions (OFIDs) that are purveyors of credit to facilitate improved performance in the industry. He challenged the board and management of banks to show total commitment towards the implementation of ERM in re-

spective banks. He recommended that regulatory bodies should ensure that banks and other financial institutions adopt ERM framework, and also pursue strict adherence to proper implementation and exposure, followed by necessary monitoring and supervision. In her opening remarks, Sarah Alade, former deputy governor, economic policy, Central Bank of Nigeria (CBN), said the size and complexity of banks and the volume of financial transactions theyhandlerequiredtheyemploy sophisticated risk management techniques and monitor rapidly risk exposures. Defining ERM, she said, it is a processthatenablesmanagement effectively deal with uncertainty and associated risk and opportunity, enhancing the capacity to build stakeholder value. “Because taking risk is an integral part of the banking business, it is not surprising that banks havealwayspracticeriskmanagement,” she said. Banks must understand how their various business components, some of which can be sophisticated and complex, interact in order to enhance their performanceandpositionthemselvesto participate more fully to the global economy, she said.

rate with the schools to enable us to inspire a larger number and the entire management.” The stakeholders were quite optimistic. They estimated that in 15- 20 years, the whole of Nigeria might be built up and it remained the responsibly of facility managers to keep it which is why facilities management must be embraced by everyone for the built environment to serve its purpose. “Nigeria has gradually moved and should continue to move away from state-owned and operated facilities and services in favour of outsourcing solutions; this is a practice that is now attracting investment and improving the efficiency and quality of facilities and infrastructure,” he noted. Oladeji Williams, director, Lagos State Infrastructure and Asset Management Agency, who was represented by Tope Bakare, said structures needed to be maintained such that they could stand the test of time. “It is unfortunate that the theme of this year’s WFMD is all about Nigeria’s poor maintenance culture. We want to ensure that facilities are well maintained by ensuring that FM is observed in all structures that we have. We don’t want to leave the structure to deteriorate and we start maintaining,” he said. “Even in Nigeria, we are still scratching the surface. There is still a lot to be done in ensuring that we imbibe that spirit of good maintenance structure.”

President Muhammadu Buhari (r), presenting an award to Winnifre Oyo-Ita, head of the civil service of the Federation, during the 17th National Productivity Day celebration and conferment of National Productivity Order of Merit Award in Abuja, yesterday. NAN

Kuru, AMCON chief, to speak at IoD Fellows’ luncheon

anaging director/CEO of Asset Management Corporation of Nigeria (AMCON), Ahmed Lawan Kuru, is to speak on ‘Determinants of Growth in Transition Economies’ at the Fellows’ Luncheon of the Institute of Directors Nigeria. The event, which also has the founder/chairman of Emzor Pharmaceutical Limited, Stella Okoli, as chairman, and former attorney general

Edo to sign human trafficking bill into law as donor conference holds in Abuja

ollowing the timely passage of the bill for the prohibition of trafficking in persons into law by the Edo State House of Assembly, the state governor, Godwin Obaseki, is set to sign the document and set the stage for a legal onslaught on perpetrators of the illicit trade in the state. The signing ceremony will take place in Abuja, Wednesday, on the sidelines of the international donor conference organised by Edo State government in partnership with the United Nations and other international development partners. The law, which is a product of series of consultations by the Obaseki administration, following observed gaps in the existing legal frameworks on human trafficking, also provides for the establishment of the Edo State Task Force Against Trafficking in Persons. The document, with Federal Government laws, adapted to deal with the state’s peculiar challenges, is made up of 80 sections. It will send offenders to a period of not less than five years imprisonment, among other provisions. Explaining the sudden drop in the numbers of victims of human trafficking, Obaseki said: “We have been very honest about this fight from the onset. We admitted that we have a problem that is claiming

a frightening proportion of our youth population and as responsible leaders and parents, we cannot fold our arms and watch it continue.” He added: “Our engagements with the international community, the traditional institution, the clergy, parents and guardians, trade and professional groups and the law makers, are paying off. According to Obaseki, Edo State has taken up the fight head on, with several of the state’s youth population lured into slavery in Libya, while thousands died either in the Sahara Desert or in the Mediterranean as they attempt to cross the sea to Europe. “Less than six months of our honest and strategic engagement of critical stakeholders like the traditional institution, the clergy, market men and women, students and youth, the figures of victims of human trafficking have ebbed and the incidence is losing popularity daily.” He further said that while the Task Force on Human Trafficking is combing the state for members of the ring perpetuating the illicit trade to arrest and prosecute them, the traditional institution headed by the Benin Monarch, Oba Ewuare II, has since placed a weighty curse on anyone that engages in the inhuman activity.

of the Federation, Christopher Adebayo Ojo, as special guest, is scheduled to hold May 24, at The Civic Centre. Bamidele Alimi, directorgeneral of the IoD Nigeria, said this year’s Fellows’ luncheon would have in attendance directors and executives from major industries in Nigeria deliberating on the Determinants of Growth in Transition Economies. According to Alimi, it will also serve as a platform for the directors and corporate

executives to network. Bennedikter Molokwu, chairman, Fellows’ Committee of the Institute, in reiterating the objectives of the luncheon, said besides bringing together business executives from different sectors of the economy, it was a platform to network, share experiences, gain new insights on key issues of importance to corporate Nigeria, as well as nurture an enduring class of fellows and distinguished fellows for the institute.

‘Infrastructure to reduce gridlock, raise property value’ … as Lagos to construct new flyover at Fagba-Iju road JOSHUA BASSEY

agos State government is taking further step in the effort to address the challenge of gridlock within the metropolis, as it plans to construct another flyover at Fagba intersection, near Iju, in Ifaiko Ijaiye area of the state. In addition to enhancing traffic flow, the proposed flyover is equally expected to boost economic activities and add more value to property around the Fagba-Iju-Ishaga axis, as people are likely to migrate to that area to seek accommodation. The proposed flyover will be the fourth of similar infrastructure undertaken by the state government within three years. Others already completed are the Jubilee bridges at Ajah and AbuleEgba, opened for public use in 2017 to mark the state’s 50th anniversary. The third is the Pen Cinema flyover, which is currently undergoing construction in Agege. The state governor, Akinwunmi Ambode, gave his approval for the construction on Tuesday after an inspection of the ongoing construction of Pen Cinema flyover. Ambode observed that there was the

need to holistically address the gridlock around AgegeIju axis to make Pen Cinema flyover more effective. “The Iju road is one of the major roads in Lagos. It has over the years served as a strategic growth pole in the socio-economic landscape of the state, but overgrown its present traffic carrying capacity resulting in the traffic challenges being experienced presently. “The proposed flyover bridge will be constructed concurrently with the ongoing Pen Cinema flyover and accelerated to minimise the inconvenience of the motoring and commuting public during the period of construction. “The bridge will have a dual carriageway separated by concrete median barrier for seamless flow of traffic into Jonathan Coker for vehicles from College Road/ Pen Cinema and vice versa for traffic from Jonathan Coker Road that are Iju or College Road bound,” Ambode said. The bridge, on completion, according to the Ambode, will add to improve socio-economic activities, enhance development and safety of the road users with consequent improved standard of living.

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Herdsmen killings: Catholic faithful protest in Lagos

… rain curses on killers of priests, others in Edo JOSHUA BASSEY & IDRIS UMAR MOMOH, Benin

agos, Nigeria’s economic capital, was literally brought to its knee Tuesday, as Catholic faithful in their thousands marched through the streets in protest against the spate of killings by suspected herdsmen across the country. The protest, which took place simultaneously nationwide, was called by the Catholic authorities in Nigeria and triggered by the massacre of two Catholic priests and 17 others in a church during an early morning mass in Ayar Mbalom community in Gwer East Local Government Area of Benue State on Tuesday, April 24. The two priests identified as Joseph Gor and Felix Tyolaha, and other worshippers killed were buried Tuesday in Benue. Suspected herdsmen armed with guns had reportedly invaded the church and shot their victims while other worshipers, amid confusion, sustained varying degrees of injuries. The attack was one in the series so far launched against innocent Nigerians, particularly in Benue, Taraba, Adamawa and Kaduna states by suspected herdsmen. The Federal Government and security agencies have made but little progress in bringing an end to the killings, leaving

millions of citizens in perpetually fear even as farmers in many communities in the middle belt now avoid their farms. A white reverend father, Eddie Hart Nett, who is stationed in Badagry, but joined the protesters to Ikeja, said the peaceful protest was basically to draw the attention of the federal and state governments to the growing insecurity in Nigeria. “We want to tell those in governmenttowakeuptotheresponsibility of protecting the citizens. That’s why they were elected, and we’re here to make that demand on them. It wasnot like thisin past, and we’re asking what is happening,what’sgoingoninNigeria,”the revered father queried. The protesters were, however, stopped at the entrance gate to Government House, Alausa, Ikeja, seen with placards with inscriptions such as “Life is sacred,” “FGN stop the killings,” “Make Nigeria safe again.” In the same vein, Edo Catholic worshippers on Tuesday invoked the spirits of late Archbishop Oscar of El Salvador, who was assassinated during the mass service in 1980 and Holy Innocent on the killers of two Catholic priests and 17 parishioners during mass in April 24, 2018 in Makurdi, Benue State. The faithful, who marched from St. Paul parish in Airport Road through King’s Square to

Holy Cross Cathedral at Mission Road for the mass, carrying placards of various inscriptions such as “stop this carnage, enough of blood shed in the land, we are tired of condolence messages, Catholic knights condemn killings in the country, stop rendering people homeless, stop invasion of farmlands, say no to church invasion and killings,” among others. Inhissermon,AugustineAkuebeze, the Archbishop of Benin Diocese, invoked the spirit of the late Archbishop Oscar of El Salvador who was assassinated during the mass service in 1980 to join the spirit other late Catechist, parishioners and the soul of the victim of terrorism to Almighty God to reward the killers of the priests. Akuebeze, who is the president, Catholic Bishop Conference of Nigeria, represented by Augustine Ehigie, Vicar-General, Archdiocese of Benin, also invoked the blood of Holy Innocent to join the bleeding of the perpetuators of the dastardly act. “We invoke the spirit of the late Archbishop Oscar of El Salvador who was assassinated during the mass service in 1980 to join the other late Catechist and other Parishioners and the soul of the victim of terrorism to Almighty God who sees all that is done in secret, will surely reward them in open.

Edo focuses on building sustainable healthcare system

do State governor, Godwin Obaseki, says the state government is determined to buildasustainablehealthcaresystem that will prioritise the revamp of primary healthcare institutions for optimum service delivery. Obaseki said this when he received the management team of 4 Breath 4 Life, Canada, who were on a courtesy visit to the Government House in Benin City, the state capital. The government is focused on fixing the healthcare system to ensure that structures are in place to sustain the reforms, he said, noting, “One of our key agenda is to fix the healthcare system. We are thinking through the challenges in the health care system

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I, formerly known and addressed as Miss Abdullahi-Lokoja, Binta Ajoke now wish to be known and addressed as Mrs Balogun, Abdullahi-Lokoja Binta Ajoke. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Ojo Atinuke comfort now wish to be known and addressed as Mrs. Owobu Atinuke comfort. All former documents remain valid. General Public please take note.

and determined to solve them.” According to Obaseki, “The health care system, worked effectively at a time, but failed later because we departed from the key building blocks. In Edo State, we are determined to fixing the problem by addressing the challenges with primary healthcare system. A part of the reforms is to equip the primary healthcare centres with qualified medical personnel.” The governor said a set of 20 primary healthcare centres were operating across the state, adding, “Inthenexttwoyears,thestategovernment intends to roll out about 200 primary healthcare centres.” Earlier, executive director, 4 Breath 4 Life, Canada, Olumide

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Oyefeso, commended the effort of the governor in revamping the healthcare system in the state. Oyefeso said the group was in the state to seek areas of collaboration with the state government to address maternal and infant mortality, explaining that Nigeria had one of the worst mortality rates in the world with more than 700 babies dying daily. He stressed, “Our goal as a group is to change the narrative and statistics as many of the deaths recorded at birth are preventable.” He appealed for a policy to ensure that only qualified medical experts attend to babies to ensure infant mortality was reduced in the state.

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Wednesday 23 May 2018

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A3 NEWS

BUSINESS DAY

Democracy can only thrive if judiciary Kale tells investors, ‘Nigeria’s fundamentals still strong’ dispenses justice fairly - CJN ONYINYE NWACHUKWU, ABUJA economy, which is Africa’s largest, emerged, foreign investment flows pacity, with many Nigerians at home and abroad distinguishing FELIX OMOHOMHION

hief Justice of Nigeria (CJN), Justice Walter Onnoghen, said on Monday that the entrenchment of the rule of law, being the corner stone of any democratic system, could only thrive if the judiciary dispensed justice fairly, timely and justly. According to Onnoghen, a weak judiciary promotes anarchy, impunity, poverty and instability. The CJN made these assertions at a day symposium for Judges and Jurists on Section 84 of the Evidence Act, 2011, organised by the National Judicial Institute (NJI) in Abuja. Onnoghen, who is also the chairman of the NJI, said the advent of technological development and the consequent evolution of paperless transactions had permeated every sphere of life, and the legal system was no exception, adding that, in the event of disputes involving transactions conducted through electronic means, parties were bound to rely on electronic evidence of such transactions. “The amendment of the Evidence Act, 2011 was in-

2019 elections: ECOWAS urges FG to increase women representation INNOCENT ODOH, Abuja

conomic Community of West African States (ECOWAS) has charged the Federal Government of Nigeria to give more women the opportunity to participate in the electoral process in the country, as the nation prepares for the 2019 general elections. CommissionerofSocialAffairs and Gender, ECOWAS Commission, Siga Fatima Jagne, gave this charge in Abuja during the first session of the ECOFEPA Regional Summit on ECOWAS Women’s Political Participation and Representation in Democracy and Governance in West Africa. Jagne revealed that Nigeria had the lowest representation with 6.4 percent in national parliaments in West Africa, adding that Senegal had the highest female representation of 41.8 percent. She said the statistics of female representation in the National Parliaments of ECOWAS member states as of February 2018 showed a regional average of about 14 percent parliamentary seats occupied by women in West Africa. According to Jagne, women representation will make a difference in the lives of people in West Africa. She stressed that the launch of the ECOWAS Gender Election and Strategic Framework would further deepen the women participationinpoliticsinWestAfrica. “It is one of the most important thing we have been working in West Africa. If you remember in the speech, we talk about this thing we have started since 2010, and it just finally coming into fruition. It is extremely important because we are at cross road in West Africa with a lot of problems and challenges.

tended to provide for the use of such electronic evidence in court proceedings. Prior to this amendment, the admissibility of electronic evidence in court proceedings had been shrouded in controversy due to the absence of specific provisions in the previous Act. “In light of the foregoing, this symposium shall serve to shed light on the grey areas of the Evidence Act, 2011 with particular regard to Section 84 of the Act,” the CJN said. The symposium, he noted, will contribute to the sustenance of excellence in the administration of justice in Nigeria, stressing the need for judges at all levels to appreciate how Section 84 of the Evidence Act was applied, and urged judges not to be in a haste in delivering rulings or judgments when issues pertaining to the non-compliance of Section 84 were raised. The judiciary, he said, must be seen as a bastion of hope and freedom for the common man and an uncompromisingly fair umpire in the eyes of litigants and the general public, adding that judges should strive to do everything possible to nurture, consolidate and develop the country’s nascent democracy.

igeria’s StatisticianGeneral told investors on Tuesday that those fundamentals that make Nigeria a good investment destination have simply not changed, despite the economicshocksandfragilegrowth still being witnessed. Kalespokeattheopeningofthe ongoing Direct Investors’ Summit organised by the Nigerian Investment Promotion Commission (NIPC) in Abuja. The summit, the first in series, seeks to highlight the numerous opportunities for investments in Nigeria, and facilitate the networking of new and experienced foreign investors with established local businesses. This initiative, organised by the NIPC, focuses on attracting direct investors to the key sectors of agriculture, transport, power, gas, manufacturing, processing and information technology, which are sectorswhencombined,accounted for about 50 percent of Nigeria’s nominal gross domestic product, andabout59percentoftheNigerian work force in 2017. In his presentation, Kale highlighted the good news that Nigeria’s

had exited its recent oil-price inducedrecessionandwellonitsway towards sustained recovery. NigeriahasseenitsGDPgrowth improve consistently each quarter since the third quarter of 2016. From -2.34% to -1.73% in Q4 2016 to -0.91% in Q1 2017, 0.72% in Q2, 2017, 1.17 percent in Q3 2017, 2.11 percent in Q4 2017 to end the year with 0.83 percent in 2017. Though the economy slowed down in Q1 2018, it recorded a strong growth of 1.95 percent, accordingtorecentnumbersreleased by the National Bureau of Statistics (NBS) on Monday. AlsocorroboratingKale’sviews, BismarckRewane,managingdirector,FinancialDerivativesCompany, in his own presentation said Nigeria’s economy had very strong fundamentals. However, Kale further told the investors that inflation had seen downwardtrendfor15consecutive months of dis-inflation from a high of 18.72 percent in January 2017 to a two-year low of 12.48 percent in April 2018. Healsonotedthatthetradebalance and balance of payments had turnedpositiveandgettingstronger. As these signs of recovery have

have started to return, he said, noting that in Q3 2017, when exit from recession was announced, significantportfolioinvestmentinflowwas immediately recorded. “It is a clear vote of confidence in the Nigerian economy postrecession that capital inflows have returned to 2014 levels,” he said. Highlightingthedevelopments in the stock market, he said the All Share Index continued to improve as many quoted companies published better financial statements comparedwithayearortwoearlier. “The fundamentals that make Nigeria a good investment destination has simply not changed irrespective of the economic shock in2014andthetemporaryrecession in 2016,” he said. “We are all aware of Nigeria’s vast potential. With a hard working population of over 198 million people,Nigeria,Africa’smostpopulous country and its largest market. Nigeriahasayoungpopulationwith a median age of 18.63 years. Furthermore, Nigeria is geographically well positioned and not susceptibletomanyoftheeconomy of the natural disasters that many other countries are prone to. We are rich in intellectual ca-

themselves among the best in the world,invariousareasofendeavour. Furthermore,Nigeriaisabundantin naturalresources.Thecountryisthe 8th largest producer of petroleum, with oil reserves estimated at about 36 billion barrels Nigeria also has the 6th largest deposits of gas with our natural gas reserves estimated at a minimum of 100 trillion cubic feet. Nigeria has over 34 discovered solid minerals, including significant uranium deposits, abundant arable land and over 44 exportable commodities. He said based on GDP (PPP), theWorldBankranksNigeriaasthe 21st largest economy in the world and the largest in Africa, with a PPP GDP of about $1.09 trillion. Nigeria’s population, currently estimated by the National Population Commission at 198 million, manifests a youthful population, with nearly 60% of the population between20-39years. Over the next decade, the UN projectsNigeria’populationtoreach 264million and by 2050, w ill be larger than the United States’. With such a huge population advantage, the country is by default a major consumption market.

Skye Bank offers customers lifestyle of luxury with Select Account

kye Bank customers have expressed delight at being beneficiaries of the bank’s priority account named the Skye Select Account. A statement from the bank quoted one Sylvester Nwanyawu, an Aba-based industrialist who operates a Skye Select account, as expressing his appreciation to the bank, said, “I was travelling with some of my business associates without knowing that being a holder of the Skye Bank’s priority pass card would give us a privileged advantage.” According to Nwanyawu, “Imagine just hanging out at the general waiting area around the airport gate for eight hours with thousands of other travellers. The wait would have made our stop at Amsterdam uninteresting and tiring.” Another Skye Select Account holder had this to say: “As a frequent flyer,” Rashidat Makanjuola, principal partner, ‘Events by Roshie,’ recounted her experience with Skye Select, “I feel pretty excited about the perks my Skye Bank priority pass affords me, especially in creating for me a goodexperienceeachtimeItravel out of the country.” In related development, the GroupHead,ProductandInnovationGroup,NdubisiOsakwe,while describingthefeaturesandbenefits oftheproduct,disclosedthat;“with a minimum opening and operating balance of N200,000.00, you are entitled to a free priority pass card, with free annual membership that also includes two free airport lounge usage each year, Zero monthly account maintenancefees,aMasterCardPlatinum Debit card which offers luxurious discounts and privileges as well as crossborderspending,youalsoget ahigherspendlimitwithyourcard across various electronic channels and enjoy preferential access at all Skye bank branches nationwide.”

R-L: Godwin Obaseki, Edo State governor; Johnson Kokumo, commissioner of police, and others, during the unveiling and handover of a new armoured personnel carrier by the governor to the police, at the government house, Benin City, yesterday.

Stakeholders urged FG to enact laws to protect people with disability SEYI JOHN SALAU

eople with Disability (PWD) have called on the President Muhammadu Buhari-led Federal Government to accord more rights by ways of laws to aid physically challenged people in the country. The concerned stakeholders made the submission at the Federal Nigeria Society for the Blind (FNSB) annual general meeting held in Lagos. Babatunde Awelenje, general manager, Lagos State Office for Disability Affairs (LASODA) in a statement, said PWDs need support from the Federal Government to handle peculiar issues relating to their challenges. “There is need for establishment of disability office at the federal level, and I believe the present administration is working relentlessly to ensure the passage of the said law; because there are certain issues relating to PWDs that can only be tackle

at the national level,” he said. Awelenje, who was a guest speaker at the FNSB 2017 AGM, said the issue of disability was complex, dynamic and multidimensional. According to Awelenje, Lagos has taken a proactive step by the enactment of the Lagos State Special Peoples’ Law and the subsequent establishment of an office for disability, saddled with the responsibility and implementation of the law. PWDs usually take laws into their hand and do not want to identify with their clusters, mostly because of their behavioural pattern, he said. “With our advocacy and sensitisation, the incident of lawlessness has drastically reduced. But, the freedom of association is voluntary and nobody can force PWDs to register with LASODA. But if you want to benefit from Lagos State government, the office must be able to identify and certify you as a person truly living with disability,” he said.

FG commits to float national carrier by December IFEOMA OKEKE & Agency Report

ederal Government on Tuesday restated its commitment to float a new national carrier by December 2018. Chidi Izuwah, directorgeneral of Infrastructure Concession Regulatory Commission (ICRC), gave the assurance in an interview with the News Agency of Nigeria. Izuwah said President Muhammadu Buhari had given the national carrier committee a timeline, which must be met, stating that a task force was created that would work intensively for the next six months. Izuwah, who is also a member of the Ministerial Committee on the Establishment of a National Carrier, said it would be private sector driven leading to the concession of the airports, adding that ICRC would look at the business case. “The committee has met and set up a plan. The plan

is to make sure that there is a business plan, which is the first thing if you want the private sector to participate. “You must let them know that if they invest in this business, they will make profit, our plan is to attract investors and request for qualification process, which is part of the ICRC guidelines for procurement. “Where we identify prequalified bidders, who can now bid, which will be a very competitive process all around the world, it is a very pressurised timeline I must say, but the committee is committed to be able to do that,” he said. It would be recalled that Hadi Sirika, minister for aviation, announced in March 2018 that the UK-based Airline Management Group, an airline group with keen strengths in start-up carriers as well as Aviation International and Tianerro FZE had been appointed as transaction advisers for the national carrier.

BUSINESS DAY

Wednesday 23 May 2018

BUSINESS DAY

Wednesday 23 May 2018

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BUSINESS DAY

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

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Appraising the trends in GDP and FDI inflows into Nigeria UJU IKEDIONU

ver the years, analysts have discovered that a positive relationship exists between foreign direct investment (FDI) inflows and Gross Domestic Product (GDP). In the past two decades, FDI has become a significant component of GDP and an important source of foreign capital for the emerging and frontier markets. This is mainly attributed to financial markets liberalization, economic and financial globalization. The International Monetary Fund (IMF) defines frontier markets as those countries closest to resembling emerging markets in terms of depth and openness of financial markets and access to international sovereign bond markets while emerging markets comprise countries closest to resembling advanced markets. FDI inflows are investment made directly by foreign investors in an economy, including transfer of funds to physical capital, techniques of production, managerial and marketing expertise, products, advertising and business practices for the maximization of global profits. Colossal gap exists between the developed and under-developed economies; this gap is seen in their various financial and physical assets that create wealth. Low investment depreciates capital stock, which in turn leads to low productivity and income. It therefore becomes pertinent for the under-developed economies to pave way for foreign capital to boost their GDP and enhance economic development. Examining FDI and GDP trends in emerging and frontier markets Since 1990, FDI inflow to emerging and frontier markets witnessed an upward shift. Morgan Stanley Capital Investment (MSCI)’s classification of economies into emerging and frontier markets was utilized by BusinessDay Research and Intelligence Unit (BRIU) to compile data from the World Bank. An examination of the data showed that from 2002 to 2008, FDI inflows witnessed an average growth rate of 24 per cent alongside increased nominal GDP within the same period. Specifically, the period between 2002 and 2003 saw a marginal jump in FDI by US$158bn to US$161bn in 2003. The upward trend in both FDI inflows and nominal GDP was sustained till 2008 with a value of US$681bn as total FDI inflows into emerging and frontier markets. The increase in FDI inflow according to Danubius University of Galati, Romania, in their research

work, was stimulated by the changes in government policies and strategies. With changes in policies, the emerging and frontier markets managed to attract important share of the total FDI, providing investors major opportunities to expand their businesses which further enhance their GDP. FDI inflow crumbled following the aftermath of the 2008/2009 global financial crises. By 2009, the FDI inflow to emerging and frontier markets crashed by 40 per cent from US$681bn to US$409bn. “The crisis went beyond affecting the financial sector to having negative impact on the real economy,” the United Nations Conference on Trade and Development (UNCTAD), declared in its 2009 investment brief. “The evidence of the negative impacts of the financial crisis on FDI was seen in the strict credit conditions and reduced corporate profits; which led to a decline in corporations’ capability to finance their foreign investments. The fear of risk reduced investors’ business confidence and corporations’ willingness to expand globally,” UNCTAD said. Subsequently after the 2008/2009 global crisis, emerging and frontier markets’ nominal GDP witnessed

significant increase up till 2014. Foreign direct investments also recorded significant increase between 2010 and 2012 but dropped slightly in 2012. It rose in 2013 but fell in 2014. From 2014 to 2015, the trend in nominal GDP and FDI inflow to emerging and frontier markets decreased simultaneously (due to weak commodity prices especially for the frontier markets) and both rose slightly in 2016. “Economic activity is expected to pick up the pace in 2017 and 2018, especially in emerging markets,” IMF’s noted in their January 2017 outlook. What drives FDI growth? The vast increase in the inflow of FDI to emerging and frontier markets in recent years is fuelled by many factors. The rise in multinational corporations, hunt for global profits, the economic and global capital markets liberalization have been the drivers of FDI in emerging and frontier markets. Research findings on the determinants of FDI inflow show that the cost structures, differential returns, market growth, government policies and institutional characteristics of host countries are of prime importance.

This is because companies wishing to invest in foreign economies consider favourable trade and investment regime, good infrastructure, property rights, political and macro-economic stability as well as an educated and committed workforce. Most of the determinants also depend on the capacity of the host countries to absorb investment opportunities, which in turn subject to their growth prospects and trade openness. Nigeria FDI Inflow: Value still below 2008 highs Since the advent of democracy in 1999, Nigeria has embarked on measures necessary to attract foreign investors. Such strategies to boost FDI inflow include revoking laws that are adverse to foreign investment growth, and signing investment laws and bilateral agreements with other nations. However, given that FDI figures were expressed in dollar, BRIU used the Central Bank of Nigeria (CBN)’s end-year exchange rate for the 11year period (2007 - 2017) to convert it into its naira equivalent. Nigeria’s real GDP recorded a steady increase from N43tn in 2007

up until 2015 (N69tn). Real GDP decreased to N68tn in 2016.The drop in real GDP could be attributed to the 2016 recession caused by crash in the global oil prices and its effect on exchange rate. The Nigerian economy in 2017 recorded a marginal recovery in Real GDP to N68.5tn following exit from recession in the second quarter of same year. There was an increase in the inflow of FDI to Nigeria from N498bn in 2007 to N609bn in 2008. Between 2008 and 2010, FDI inflow fell drastically to N108bn, having a contrasting relationship with GDP as the period from 2010 to 2017 exhibited a fluctuating trend. From N274bn in 2011, it grew to N311bn in 2012 before dropping to N199bn in 2013. The total amount of FDI inflow during 2014 was recorded at N381bn, which declined 25 per cent in 2015, increased by 12 per cent in 2016 and fell by 6 per cent in 2017. Nonetheless, FDI inflow to Nigeria never grew to a value as high as the N609bn recorded in 2008. How does FDI matter in the present economic space? Researchers observed that the main reasons for attracting FDI inflows are to bridge the gaps in national savings, foreign exchange, revenue and management. The most cited rationale of FDI to GDP growth rate is its role in filling the resource gap between targeted investment and domestic mobilized savings. When domestic resources (savings) fall relative to potential investment, FDI is seen as an alternative in filling up the gap. Also, FDI contributes to bridging the gap between the targeted foreign exchange (FOREX) requirements and FOREX liquidity generated from net export earnings and foreign aid. An inflow of FDI not only alleviate deficit on the balance of payment account but also eliminate the deficit over time, if the foreign investors can generate a net positive flow through export earnings. Foreign investors bring with them advanced management, entrepreneurship and technology and skills. These can be transferred to the local counterparts through training programmes. Furthermore, FDI augment the revenue of the host country. By taxing multinational companies, host nations mobilize public financial resources for development projects. FDI will prove very important in boosting the revenue profile of Nigeria especially with the current drive of the present administration to expand the tax base from the current paltry 6 per cent of GDP.

BUSINESS DAY

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NEWS YOU CAN TRUST I WEDNESDAY 23 MAY 2018

Opinion

Larry Ettah at UACN (1) OPEYEMI AGBAJE opeyemiagbaje@rtcadvisory.com

hen I met L a r r y Ephraim Ettah for the first time in 2006, he was Head of Human Resources and Group Executive Director at UAC of Nigeria Plc, the storied conglomerate that mirrors the history of the Nigerian nation. UACN Plc is one of those businesses whose history and evolution can be used to tell the stor y of the countries they are associated with. Examples may include General Electric, Cocacola or AT & T in the United States of America or British Airways in the United Kingdom. A regional example may be Wema Bank in Western Nigeria. At the time, what str uck me about Lar r y was that he had spent his entire working career in the UACN Group, having joined as a management

trainee in 1988. Yet he did not come across as the typical “closed company m i n d” y o u w o u l d f i n d with such career trajectories. He was fresh, inquisitive, informed, engaging and intelligent. In 2006, even though Larry, as usual the consummate professional would not let go of any information, I suspected a transition was already in play in the diversified conglomerate and Larry was about to take over the helm of the organisation. Even though he didn’t explicitly or implicitly reveal anything to that effect, I reflected carefully on our conversation and concluded that he was “preparing” for an imminent future! I had recently started my strategy consultancy firm, RTC Advisory Services Ltd (then know n as Resources and Trust Company Ltd) and had sent out unsolicited proposals to several institutions including banks and publicly quote d fir ms. To my pleasant surprise, one of the early responses was from Larry Ettah who invited me to discuss the proposal. As the meeting

p ro g re s s e d , i t b e ca m e clear w e had a share d passion for conversations around business strategy and the meeting seemed to me to have gone well. Remember I had never met this guy and I had no clear affiliations with him, yet here he was in Nigeria’s oldest conglomerate appearing to be quite interested in my two year old strategy firm. Soon I received an invitation to make a presentation at the company’s groupwide strategy retreat at IITA Ibadan on the economy and UACN strategy. I did not realise at the time that this was some form of “interview” but fortunately my colleagues and I took the opportunity quite seriously. As we waited at the venue for our turn, we observed a notable consulting firm founded and headed by a leading economist preceded us, and realized we were participating in a “beauty parade”! In the event, we had been over whelmingly ( b e t t e r ) p re p a re d a n d the retreat participants (reportedly) unanimously adopted our presentation

as a strategy template to proceed with in charting the group’s way forward. That encounter led to our receiving a retainer as strategy and economic advisers to the entire group which lasted the first eight (8) years of Larry’s tenure as Group CEO of UACN Plc! In spite of the effluxion of time, I have never ceased to be impressed by this initial set of circumstances, which are very uncommon in our clime-a CEO who appointed his firm’s advisers purely on merit and devoid of sentiments, “connections” or pay back! A few years later, in 2009 Larry Ettah was to propose my appointment as director to the UACN Plc board leading to my appointment as director of CAP Plc. Larry Ettah is an ethical, calm, sensible and professional guy who took decisions on merit and in the interest of the business, rather than based on personal calculations. There are not many like him in the Nigerian business environment! When Larry Ettah eventually took over as UACN CEO in January 2007, a

strategic transition was required in the business… UACN was a diversified conglomerate and there were limited commonalities in the wide range of businesses within the portfolio. Larry however saw a hint of an incipient and emerging food core within the disparate businesses in the group and sought to leverage that evolving trend. The company was also in need of more efficient business models and we continually examined strategic options for making the group more resourceful rather than consuming resources…we shared a strategic maxim, “resourcefulness not resources” and sought to make the UAC group more lean and agile! The group’s strategy however also had to take account of cash-rich subsidiaries which may not necessarily reside within the food core leading to a second corporate strategic transition in which the role of the UACN headquarters became like an investor, strategic orchestrator and manager of resources and outcomes. Larry Ettah had been

extremely well-prepared for the role of Group CEO-he had come into the company as management trainee straight out o f M BA c l a s s a n d ha d worked across the group in sales and marketing, foods businesses and human resources ; he had managed large parts of the group and had acquired extensive human capital management insights which had been significantly supplemented by h i s t h re e - yea r st i nt a s Group Human Resources Head immediately preceding his appointment as Group Managing Director. He had benefitted from extensive training through the UACN and Unilever ma na g e m e nt d e v e l o p ment process and had attended the highly-valued executive programme at the Ross School of Business at the University of Michigan where he had been exposed to some of the best thinking in strategy and management. And yet he was still relatively young, strong and vibrant as a 44-year old business executive. Few individuals have been better prepared for the CEO-Suite.

Digital and the evolving media scene CHIDO NWAKANMA Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@gmail.com.

he media would play a significant role in messaging and shaping choices as Nigerians prepare for the 2019 elections. What is unclear is what nature that would take and in what directions. The increasing fragmentation of media is making it difficult to arrive at clear-cut predictions. We examined last week the growth in the number of radio stations across the country. On the surface, that should make radio the dominant medium for messaging in the country, right? Not so, according to data

from last year published in January 2018. Every year, HootSuite and What is Social combine their resources to gather data and insights into the digital ecosystem. They look at digital across the world, regions of the world and specific countries. Digital and its evolution are subjects of interest for all engaged citizens across the world, given the rapidity of changes and in particular the impact of the technology and the products around it. They sur vey citizens. The results they bring forth for 2018 are provocative. The big players in digital are Google, Facebook and Alibaba. The issue of the moment is how to accelerate internet adoption in the developing world, with implications for the future of the net. Hootsuite predicts that the players would create globally scalable products that address the needs of the next billion as well as those of existing users. Have you noticed the aggressive ad-

vertising of Google in the country, offering a variety of products? Audio-visual content would grow on all platforms and devices. It is “more accessible to people with lower levels of literacy or fluency in foreign languages”. The next wave of developments would be voice control to replace keyboards or typing especially for search and social media interactions. Facebook keeps growing its numbers. The Facebook nation now accounts for 2.17b people, half the number of people on the Internet at 4.02b and a significant proportion (28.5%) of the world’s 7.59b population. There are 5.13b people using mobile to access the Internet. YouTube is next to Facebook globally, with 1.5b u s e r s w h i l e W hat s Ap p and Facebook Messenger both account for 1.3b users each. Instagram is at 800m. Africa accounts for 1.22b people with 435m of these as users of the

Internet. Hootsuite extrapolates to arrive at an Internet penetration of 34% for all of Africa. Active social media users grew 12 percent from 2017 to 2018. Across Africa, 52percent of users access the Internet via their mobile phones while 43percent do so on laptops and desktops. Digital in Nigeria presents instructive numbers. Hootsuite puts our Internet users at 94.8m at January 2018 against the figure of 100,234,283 recorded by the Nigerian Communications Commission for the same period. According to HootSuite, 19million people or 10% of the country’s population are active social media users. Of this number, 17m access their social media platforms via mobile while unique mobile users stand at 105m. Of interest is HootSuite’s data that 18million Nigerians actively use Facebook every month. The majority access it through their mobile devices. What platforms do Nigerians patronise? WhatsApp

and Facebook share the honours as the dominant social media platforms at 41percent. Instagram follows at 25 percent, sharing with YouTube while Facebook messenger is next at 24 percent. Others are Google+ at 15percent, Twitter, 13; Snapchat, 9; Skype, 7; Linkedin, 6; Pininterest, 4; and Badoo, 3%. Top of the mind awareness is one key metric people in Integrated Marketing Communication use readily. It is more so in advertising. According to HootSuite, the number one advertising medium in Nigeria based on consumer recall or “first awareness” is television. It scores 38 percent. Online and an unclear “other” combine to score 27 percent. In-store advertising is at 13percent. Press at eight percent ranks higher than radio at seven percent and posters at five percent. Television remains very strong even in the age of digital. Of devices people use to get their information, television at 84 percent is second only to the mobile

phone (all types) at 98percent while the smartphone is third at 56percent. WhatsApp has proven to be a disruptive medium in both the favourable terms in which techies use disruption and in negative ways. WhatsApp is now the leading connection platform for groups, ranging from old students to religious and neighbourhood. WhatsApp is the arena for Citizen Journalism of the vilest sort. It is common to read headlines such as this concerning the medium: “Seven dead in India after fake news spread over WhatsApp incites mob violence”. Please watch out for WhatsApp. Be media literate about the positives and negatives of this medium that is the number one messaging platform in our land. WhatsApp holds the first position also in Ghana and most of West Africa. In this new era, much damage is possible through careless deployment of messaging on the various social media platforms. Be alert.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08116759801, 08082496194. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 23 May 2018

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POWER

Why skepticism trail FG’s N72bn planned largess to DISCOs Page 4 finance people appointments

L-R: Ademola Adeyemi-Bero, managing director, First E&P Development Company; Odein Ajumogobia (SAN), former minister of petroleum resources and special guest of honour; Chizor Malize, managing partner/CEO Brandzone Consulting LLC; Ndidi Nnoli Edozien, Group Chief, Sustainability & Governance, Dangote Industries Limited; Dada Thomas, President, Nigeria Gas Association & CEO Frontier Oil and Gas, at the LightUpNigeria conference in Lagos recently.

Debrief

NGA to hold Business Forum on development of gas hubs in Nigeria Page 6 OPEC weekly basket price DAY

PRICE

18/5/18

75.2

11/5/18

73.5

4/5/18

70.75

27/4/18

70.92

20/4/18

69.5 Source: OPEC

As NLNG Train 7 FID dithers, Cameroon ships first LNG cargo FRANK UZUEGBUNAM

igeria’s neighbour, Cameroon, through its Golar project recently shipped its first liquefied natural gas (LNG) cargo. The $1.2 billion project is the second floating LNG facility to start production in the world after Malaysia launched its own vessel in 2016. Cameroon’s first LNG shipment was exported by Gazprom Marketing and Trading (GMT), which bought the entire output of the project for eight years, using the Galicia Spirit tanker. The first LNG was initially due

in the second half of last year before being pushed back to late April this year. However, it was not until May that a tanker docked to load about 138,000 cubic metres of LNG, according to market intelligence firm Kpler. The plans to build the NLNG Train 7 have remained on the drawing board for over eight years. Though partners in the NLNG said they hope to take a final investment decision (FID) on building the much awaited 7th train by the fourth quarter of this year, the entrance of Cameroon into the NLNG space should be a wakeup call. NLNG’s Train 7 is projected to increase LNG production at the

plant to 30 million metric tonnes per year, from its current capacity of 22 million MT/year from six trains. The company had said the project will create 18,000 new jobs for Nigerians. While the wait is on, competition has heightened even within Africa as other countries in the region are either pressing forward with their own LNG projects or working out alliances. A final investment decision (FID) for the Tortue development offshore Mauritania and Senegal, which includes a floating LNG production unit, is on the cards, according to project partner Kosmos Energy. “FID of the first 2.5 million ton phase is expected around the end

of the year,” Andy Inglis, Chief Executive of Kosmos, said. Woodlands-based Anadarko said its Mozambique LNG project has moved forward in the first quarter of 2018, meeting its nearterm marketing objective. Also Equatorial Guinea and Togo recently signed a cooperation agreement to facilitate the trade in LNG between the two countries. The new memorandum of understanding creates a framework for Togo to import LNG produced in Equatorial Guinea, a part of the LNG2Africa initiative, in which Equatorial Guinea is promoting the utilization of LNG within Africa, using gas sourced and processed in Africa.

02 BUSINESS DAY WEST AFRICA Outlook Ghana: Ghana to award nine new oil blocks off west coast

hana is set to award nine new upstream oil blocks for commercial exploration off its western coast beginning this year, the energy ministry said in a statement. According to the ministry, the West African country plans to award six of the nine blocks this year while the remaining three will be given out next year through a mix of open competitive tender and direct negotiations. The state oil company, Ghana National Petroleum Corporation, will acquire one of the blocks to explore in partnership with a strategic partner to develop its technical capacity and become an operator.

Ghana, which began commercial crude production in late 2010, currently produces around 180,000 barrels per day mainly from three fields offshore the western coast, including its flagship Jubilee reserves operated by UK’s Tullow Oil Plc. “This year’s licensing round focus would be on the western basin because of the existence of infrastructure, including two gas pipelines to the shore, three production facilities with a fourth FPSO in the offing by 2021,” the statement said. The government has also named a 23-member committee to oversee the allocation of oil blocks to local and international companies through evaluation and negotiation.

North Africa: North African production could double by year’s end

orth African oil and gas production has enough momentum that production could double by the end of the year, SDX Energy said. SDX focuses primarily on Egypt and Morocco. The company is a relatively minor producer, but an active player in emerging basins. Morocco is a standout in the region with its renewable energy ambitions, targeting 52 percent of its energy mix from low-carbon options by 2030. The country is on pace to put 2 gigawatts of solar and wind power on stream each by the end of the decade. SDX operates three concessions in Morocco, with a 75 percent working interest. The company’s drilling program

has been successful at seven of its nine gas wells drilled so far. In Egypt, Italian energy company Eni recently started production from a third unit started at the Zohr field, increasing its installed capacity to

1.2 billion cubic feet per day. The project is producing about 1.1 billion cubic feet per day and the acceleration follows a start date in December. For SDX, its operations are on pace for a

slight increase. In January 2017, the company paid $28.1 million to take over the Egyptian and Moroccan businesses of Circle Oil. Paul Welch, President and CEO said that, so far, net revenue and overall production are up considerably from last year. “As at March 31, 2018, we are well funded for our numerous work commitments this year with $29.3 million of cash, no debt and we remain on track to double our production by the end of 2018,” he said in a statement. SDX posted revenue to March 31 of $11 million, up 35 percent from the same period last year. It realized $59.34 per barrel for oil, up 33 percent year-on-year. Moroccan gas prices were up 8 percent from last year.

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oil

Brief

Kenya: Oil production on course after agreement on revenue share

enya will start the small scale export of crude oil from its fields in the far northern county of Turkana in June after an agreement on how to share the revenue, averting delays, the presidency said. Tullow Oil and its partner Africa Oil discovered commercial reserves in the Lokichar basin in 2012. Total has since taken a 25 percent stake. A row had broken out after President Uhuru Kenyatta cut the share of the Turkana county government to 15 percent and that of the local community to 5 percent, leaving the rest to the national government. He then met officials from Turkana at State House in Nairobi to strike a new deal, which will raise the county government’s share to 20 percent and cut the national government’s to 75 percent. “We now have an understanding that can put Kenya on the map of oil exporting countries,” Ke-

nyatta said in a statement. The deal will allow a long-delayed law on oil exploration and production to clear parliament, letting exports begin. “We will intensify our exploration efforts not just in Turkana but in the rest of the country now that we have a legal instrument that can help guide how oil and gas will be handled in our republic,” the president said. The deal was struck after the national government agreed to eliminate a cap on the revenue due to the county government and the local community, said a senior government official. Officials in Nairobi had proposed to cap the annual allocation from oil exports to Turkana, arguing that the local economy could not absorb a sudden influx of too much cash. “The clincher was the removal of the cap,” said Andrew Kamau, the principal secretary in the ministry of petroleum and mining.

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gas

ENERGY intelligence

Cameroon: Golar’s LNG project ships first cargo

The first shipment was exported by Gazprom Marketing and Trading (GMT), which bought the entire output of the Cameroon project for eight years, using the Galicia Spirit tanker, shipping data shows. The first LNG was initially due in the second half of last year before being pushed back to late April this year. In early May, the tanker docked and filled up with 38,000 cubic metres of LNG, before taking another 100,000 cubic metres on May 14, according to market intelligence firm Kpler. GMT said it had chartered two LNG vessels to haul supply from the plant. The Golar Maria tanker is converging on Cameroon to load the plant’s second cargo, according to trade sources and shipping data.

LNG Market: US LNG export reshaping global markets, government finds

xports of liquefied natural gas from the United States are expected to break the isolation of the North American market, a government report read. The US Commodity Futures Trading Commission released a market intelligence briefing on the US liquefied natural gas market. Two years ago, the United States transitioned

WEST AFRICA

Brief

he liquefied natural gas (LNG) plant developed by Golar LNG off Cameroon has exported its inaugural cargo, according to trade sources and shipping data. Successful startup is a crucial test for Golar, which aims to roll out similar plants in Equatorial Guinea with Ophir Energy and in Senegal-Mauritania with BP.

BUSINESS DAY

from an importer of LNG to a net exporter. All told, the LNG plants in operation or under construction represent about 13 percent of total gas production in the United States. “Over $30 billion in construction capital has been invested by the two firms with operational LNG plants,” Amir Zaidi, the director of the CFTC’s office of market oversight, said in a statement. “Further, significant investments in support of these plants have been made in new natural gas pipeline assets.” The CFTC’s report found that LNG is gaining a bigger market footprint and its US LNG exports that look to have the most rapid growth rate and the most competitive price. That growth means North America broke a land lock to gain a position in the global market.

Restructure strategy in gas sector, the way to go for West Africa KELECHI EWUZIE

est Africa region till date continues to grapple with the challenge of harnessing the enormous gas resources and potential of the region for the common good government, investors, and neighbouring states. Gas production in the West Africa region is mostly linked to the production of oil. This “associated gas” is separated from oil at flow stations and more than 70 percent of it is simply flared. Current estimates show that of the gas produce across the region, larger percentages are flared with Nigeria leading the pack. According to industry sector report, Nigeria flares a staggering volume of gas daily. Nigeria has the dubious distinction of being the world’s greatest gas flaring country. The gas flared daily is said to be sufficient to meet the energy requirements of a small industrialised nation. Those who know in the gas sector opine that the unfortunate state of affairs as it relates to gas flaring in Nigeria has led to limited commercial demand and unrealistically low gas pricing. On the export front, Nigeria is far from the major international gas markets, the sub-regional market is not attractive, hence, exports are limited to liquefied gas transported by sea, which is an expensive process. Analysts observe also that absence of necessary policies and fiscal incentives to encourage the development of the industry, especially in

the downstream sector has resulted in low liquid hydrocarbon fuel prices which make industrial and commercial enterprises, reluctant to invest funds necessary to convert their energy source to gas. The various actions by governments in West Africa in the past pose major investment disincentives leading to the flight of foreign investment from the region. According to industry watchers in the West Africa gas space, lack of infrastructure and the deterioration of existing infrastructure, political instability, insecurity and the break down in the rule of law, inadequate government funding necessary to attain planned growth and development of the industry among

other has stifle growth of the gas sector. West Africa as a region as a matter of urgency must strive to attain zero gas flaring status sooner rather than later earnestly promote the production and utilisation of her abundant gas reserves and to improve the business and political environment of the region in order to attract, and keep, both local investment and foreign direct investment. As is usually the case, there are many ways of achieving the desired objective. These are policy issues, which will gradually be resolved through much debate and consultation by government, technical experts and all the stakeholders in the industry. Investor confidence

must be restored in order to attract investment through business friendly policies, improved services, efficient administration of government agencies, improvements in the administration of justice system and the eradication of corruption. According to analysts, “What is less certain however is the manner in which the gas industry is to be structured as far as the local gas distribution is concerned. This is an area in which opinions differ and where several alternatives are available”. Capital investment facilities to deliver associated gas in usable form at utilisation or designated custody transfer points will be treated for fiscal purposes as part of the capital investment for oil development.

04 BUSINESS DAY WEST AFRICA ENERGY intelligence

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Why skepticism trail FG’s N72bn planned largess to DISCOs KELECHI EWUZIE

ike in previous occasions, the Federal government through it foot soldiers Babatunde Fashola, Minister Power, Works and Housing and Suleiman Hassan Zarma, Minister of State, Power, Works and Housing announced a N72 billion fund to electricity distribution companies. The ministers were categorical when they stated that the fund were to serve as a boost to electricity distribution companies to improve their network so that the massive investment can lead to economic growth and development of the country. Suleiman Hassan Zarma, Minister of State, Power, Works and Housing was specially quoted to have said that “the laudable project being executed by TCN and power generation companies will not lead to significant improvement in the quality of power supply to the people unless the distribution companies also invest in rehabilitation and expansion of the network”. Power sector operators see the federal government largess as a noble gesture, but are however skeptical about it not been just another policy statement by government with little or no will power to carry it through. Industry close watchers in the power industry acknowledge that the entire electricity sector is faced with huge revenue shortfalls. The implementation of cost reflective tariffs, access to long-term debt capital and equity injection, will still not address the revenue shortfall to the system in the short term. They insist that underpinning any debt or equity capital raise is a sustainable

and cost reflective electricity tariff and a long-term tariff path. Without cost reflective electricity tariffs, the electricity sector is not likely to attract and sustain the much needed investments. Zarma while speaking in Gombe during the commissioning of 1x30MVA 132/33KV power transformer at Gombe sub-station said that the invest-

ment would strengthen grid infrastructure for enhanced wheeling capacity that offers redundancy, consistent with the requirements of N-1 reliability criterion. He also disclosed that the federal government had resolved the lingering issues slowing the completion of the Dadin-Kowa Hydroelectric power station in Gombe state, revealing that the ongoing construction work on the transmission line will soon be completed. Details of the N72 billion funding by the Federal government would be a shareholder loan which the DisCos must be willing to match or it would be converted to equity. Report shows that in the privatisation terms signed by the DisCos, the government has 40 percent shareholding in them while the core investors of the DisCos maintain 60 per cent shareholding.

Under the new fund investing gesture by the federal government, the government indicated that the Transmission Company of Nigeria (TCN) would be the source of the facility as well as its manager. Babatunde Fashola, Minister of Power, Works, and Housing at different power sector occasions maintain the government’s financial facility would help the DisCos expand their networks to be able to take stranded electricity from the generation companies (GenCos) to consumers in the country. Despite regular assurances from Babatunde Fashola, minister of Power, Works and Housing of steady incremental power in the country, industry close watchers say it remains to be seen how Nigeria which is currently struggling to attain constant power generation of about 7000MW can leap frog to 100,000MW by 2030.

power

Uganda: China to help Uganda build nuclear power plants

hina will help Uganda build and operate nuclear power plants under a deal signed recently. Uganda has some uranium deposits and President Yoweri Museveni has said his government was keen to exploit them for potential nuclear energy development. Eight potential sites have been identified in the country’s central, southwest and northern regions that could potentially host nuclear power plants, the government said. It signed a deal with Russia last year to cooperate on nuclear power. China is already a major investor in Ugandan infrastructure projects and China National Nuclear Corporation (CNNC) signed a memorandum of understanding on May 11 to help Uganda build capacity “in the use of atomic energy for

peaceful purposes”, Uganda’s energy ministry said in a statement. Uganda’s energy needs are expected to jump in the coming years as it prepares to start producing crude oil in 2020 from fields in its west where reserves of 6.5 billion barrels were discovered in 2006. Co-operation between CNNC and Uganda will involve the development of nuclear power infrastructure including the design, construction and operation of nuclear power plants.

South Africa: Power Africa launches Power Project Procurement handbook

L-R: James Shindi, chief executive officer of Brevity Anderson Consulting; Maikanti Baru, group managing director of NNPC, and Henry Ikem Obih, chief operating officer(Downstream) NNPC, during the presentation of the 2018 Post Conference Report of the Nigeria International Petroleum Summit (NIPS2018) to the top management of NNPC recently by Brevity Anderson Consulting (the conference producer).

Wednesday 23 May 2018

ower Africa, cohosted with Cliffe Dekker Hofmeyr, launched its fourth ‘Understanding’ handbook at the African Utility Week in Cape Town, Understanding Power Project Procurement. The handbook aims to outline the principles of successful power project procurement in order to accelerate the critical planning within the African power market. Addressing a group of delegates at the launch, Mohamed Badissy, Senior Attorney for Energy and Finance, Power Africa and co-author, said they have been very happy to see the influence this project has had on utilities and bankers. Badissy hopes that the handbook is a “posi-

tive signal of a way forward for the market and guidance on how to achieve the scale of procurement that we know is all necessary for Africa to breach that energy gap and most importantly, it’s the start of a new conversation.” Badissy explained that a PPA should be the most “boring document” possible. “When you look at all PPAs from transactions that have all successfully closed, they look very similar; and when you look at the ones that have not closed you see the differences that have arised.” Power Africa has developed a series of ‘Understanding’ handbooks to showcase best practice around successful project development.

Wednesday 23 May 2018

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POLICY

BUSINESS DAY

Light-Up Nigeria Conference: Stakeholders harp on robust Nigerian energy policy FRANK UZUEGBUNAM

he Brand Innovation Conference organized by Brandzone Consulting LLC hosted its 2018 edition focusing on the theme “Repositioning the Energy Sector for Growth” with the hashtag #LightUpNigeriaConference in Lagos. The event in its 5th year, brought together corporations, policy makers, professionals, investors, academics and students across the entire energy industry value chain. In her opening remarks, Chizor Malize, Managing Partner, Brandzone Consulting LLC and convener, said the theme was selected to reflect the fact that there have been fundamental changes to the dynamics of the world’s energy industry, which the Nigerian local industry needs to align to. According to her, “the energy sector has a pivotal role to play in illuminating the nation. The sector is indispensable and crucial to Nigeria’s economic growth outcome”. Speaking further she asserted that the #LightUpNigeriaConference recognized the need to reposition the energy sector for continuous growth and advancement. She also noted that the energy sector requires more than ever before an effective integration of opportunities across the sector value chain, development of strong strategic frameworks around every tenet of business, consolidation of knowledge, skills, experiences and expertise to maximize the industry potential. Malize informed stakeholders that “the conference is designed to dissect emerging sector opportunities, issues and challenges inhibiting growth, and global innovation and opportunities that can catalyse growth for both the energy sector operations and the nation”.

Cross section of participants at the LightUp Nigeria conference

Odein Ajumogobia (SAN), former minister of petroleum resources and special guest of honour at the #LightUpNigeriaConference, in his brief keynote said there is a strong correlation between electric consumption and the growth of GDP in an economy. Considering the level of electricity provisions across the globe, Ajumogobia stated that the industry has a long way to go but believed a robust policy approach to repositioning the energy sector, had the potential of spurring economic growth. Giving the example of the Small and Medium Enterprises (SMEs), he was of the opinion that access to power for enterprises, was the catalyst to industrialization and increased economic activities in the country. Gbite Adeniji, Senior Technical Adviser to the Minister of State, Petroleum Resources, who represented the Minister, Ibe Kachikwu, lauded the organizers of the #LightUpNigeriaConference stating that the

objective of the forum aligned with the resolve of the Federal Government to alleviate Nigerians from energy dearth. Adeniji shared the key steps the government was taking to reposition the energy industry, which include; providing a robust policy framework, ensuring a conducive business environment, pushing a gas revolution, rehabilitating the existing refineries, addressing the Niger-Delta issues, entrenching transparency and efficiency and adopting stakeholder engagement in the policy and investment drive. He said the roadmap of the Federal Ministry of Petroleum Resources which is the “7 Big Wins”, was an aggressive framework of the government in leading an efficient energy industry. Adeniji assured stakeholders that the Federal Government was committed to energy security in the country. The conference also featured three plenary sessions, which focused on “Catalyz-

ing Development: Scaling the Energy Hurdle for Accelerated Growth”; “Driving Energy Availability: Optimizing Gas as a Bridge to the Nation’s Energy Need” and “Unlocking Opportunities in the Downstream Sector: Achieving Supply & Distribution Excellence”. The energy plenary explored the overall energy value chain, from oil and gas exploration, power generation and distribution, natural gas, renewable energy and sustainability. Speaking on this plenary were Ademola Adeyemi-Bero, Managing Director, First E&P; Ndidi Nnoli Edozien, Group Chief, Sustainability & Governance, Dangote Industries, Limited; Dada Thomas, President, Nigeria Gas Association & CEO Frontier Oil & Gas; Odein Ajumogobia (SAN), Former Minister of State, Petroleum Resources and Gbite Adeniji, Senior Technical Assistant to the Minister of Petroleum Resources and representing the Honourable Minister.

Speaking on the gas plenary were Gbite Adeniji, Senior Technical Adviser to the Minister of State, Petroleum Resources, Joe Ezigbo CEO, Falcon Corporation, Nkechi Obi, Executive Vice Chairman, Techno Oil Limited, Effiong Okon, Executive Director, Operations, SEPLAT Plc, Abimbola Banjo, Associate Director, PwC Nigeria and Mohammed Mijindadi, Director, Gas Power Systems (Nigeria) at GE Power. The Downstream Oil and Gas distribution and logistics plenary was led by Yomi Awobokun, chief executive officer, Enyo Retail Oil & Gas. Other speakers on the plenary include Gabriel Ogbechie, Managing Director/CEO, Rainoil Limited and Johnson Chukwu, Founder/ CEO, Cowry Asset Management Limited, asserting that Nigeria’s petroleum downstream sector needs to be deregulated and the industry needs to become more technology driven. The need to embrace innovation and modern systems such as Modular refineries was also emphasized.

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WEST AFRICA

ENERGY intelligence Brief AfDB approves $100m loan for Nigeria’s Indorama Eleme

he African Development Bank has approved a $100 million loan for Nigeria’s Indorama Eleme Fertilizer & Chemicals aimed at helping it boost fertilizer production, the bank said in a statement. The company, a unit of Singapore-based petrochemical producer Indorama, is seeking to double annual output of urea fertilizer from 1.4 million tonnes to 2.8 million

tonnes, the statement said. Once a net importer of fertilizer, Nigerian production has grown in recent years. In 2017, it exported around 700,000 tonnes of urea to markets in West African as well as North and South America. Indorama Fertilizer’s increased output will target the export market but also seek to boost domestic supply to drive down prices. Nigerian farmers still use much less fertilizer than their global and African peers due to high costs, leading to low crop yields that forced the West African nation to spend around $6 billion on food imports annually. The AfDB financed the building of Indorama Fertilizer plant via a previous loan in 2013. It went online in 2016.

Kyari, appointed Nigeria’s OPEC national representative

he Nigerian National Petroleum Corporation (NNPC) has announced the appointment of Mallam Mele Kyari, incumbent Group General Manager in charge of its Crude Oil Marketing Division, as Nigeria’s National Representative to the Organization of the Petroleum Exporting Countries (OPEC). The NNPC in a statement by its Group General Manager, Group Public Affairs Division, Ndu Ughamadu, said the ap-

pointment was made by Nigeria’s Head of Delegation to the OPEC Conference and the Honourable Minister of State for Petroleum Resources and Board Chairman of NNPC, Emmanuel Ibe Kachikwu. It noted that the position requires Mallam Kyari to lead Nigeria’s team to the OPEC Economic Commission Board which precedes the bi-annual meetings of the OPEC Ministerial conference. The ECB reviews the global oil markets and makes input from the perspectives of the individual member countries. The corporation further explained that Mallam Kyari may also be required to provide any support to the Honourable Minister of State for Petroleum Resources and the OPEC Governor in the performance of Nigeria’s roles and participation in OPEC matters.

Wednesday 23 May 2018

finance people appointments

NGA to hold Business Forum on development of gas hubs in Nigeria

he Nigerian Gas Association (NGA) Annual General Meeting and Business Forum will take place at the Expo Hall, Eko Hotel, Victoria Island, Lagos with the theme; ‘Gas Policy, Markets and Regulations: Catalysing the Development of Gas Hubs’. Koinyi Ajayi, Managing Partner, Olaniwun Ajayi LLP will be the lead speaker at the event. Among the distinguished professionals that will be speaking on the dynamics of the gas pricing mechanism necessary for creating the competitive markets needed for functional gas hubs include Wole Shonibare, Director, Energy Financial Solutions, Policy & Regulation, African Development Bank; Osten Olorunsola Former DPR Director & Former VP Shell Gas and Power; Mordecai Ladan, current Director, Department of Petroleum Resources; Fred Agbedi, Chairman House Committee on Gas. According to Dada Thomas, NGA President, “the Business Forum focus is to draw lessons for Nigeria in developing its domestic competitive gas markets and gas hubs”. The NGA in a statement signed by Frank Uzuegbunam, Publicity Secretary, stated that the forum will seek relevant answers to the following questions: What learning points from other countries can be applied towards creating a gas hub in Nigeria? What role should government play in the development of competitive markets and hubs? How can common regulatory mechanisms and key infrastructure be put in place to facilitate the development of gas

markets and hubs? What are the likely scenarios for gas hub development in Nigeria based on other nations’ experiences? The feature speakers to provide appropriate insight on the political will and necessary regulations to further safeguard the competition environment needed for hub development include: Layi Fatona, Managing Director, ND Western; Ed Ubong, Managing Director, Shell Nigeria Gas; Wale Shonibare, Director, Energy Financial Solutions, Policy and Regulation, African Development Bank; Tunde Bakare, Managing Director, Nigerian Gas Processing and Transportation Company. The NGA is the apex organisation representing the varied and numerous stakeholders in

the gas sector within the Nigerian oil and gas industry. It is a non-political association that was formed in 1999 to promote the development of gas in Nigeria for the benefit of the nation and the various stakeholders. The founding members include the Nigerian National Petroleum Corporation (NNPC), Shell Petroleum Development Company (SPDC), Nigeria Liquefied Natural Gas Limited (NLNG), Chevron Nigeria Limited, Nigerian Gas Company (NGC), Elf Petroleum, Mobil Producing Nigeria, Nigerian Agip Oil Company (NAOC) and Conoco Energy Nigeria Limited. Today, the Association’s membership consist of a variety of international and indigenous

companies as corporate members and individual members across the various sub-sectors and disciplines that make up the vast gas-value chain, starting from gas exploration and production companies (Upstream), to gas processing and transportation companies (Mid-stream), and including the various end consumers, ranging from power generation companies (Gencos), Gas Based Industries (Fertiliser, Methanol, Petrochemical, etc.), and Industrial and Commercial Consumers (Mini/Micro LNG, CNG/ LPG, etc.) The NGA is the largest gas-focused volunteer/ individual-member organization and the umbrella association and voice of the gas industry in Nigeria”.

07 WEST AFRICA ENERGY intelligence

Wednesday 23 May 2018

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marketinsight

Brent crude hits a new high at $80/b

rude oil futures hit a fresh near three-and-ahalf-year high, bolstered by geopolitical risk and the unexpected drawdown in US stocks. ICE July Brent crude futures traded as high as $80.18/b, up 90 cents.

ICE July Brent was traded at $79.95/b, up 67 cents, while NYMEX June WTI crude futures were up 65 cents at $72.14/b. US crude inventories dropped 1.404 million barrels to 432.354 million barrels the week ending May 11 as a result of increased exports, Energy Informa-

tion Administration data showed, which came as a surprise to the market where expectations were for a rise in stocks. US crude exports jumped by 689,000 b/d to 2.566 million b/d, a record high, leading to a draw in crude stocks, EIA data showed.

Since testing the high of $80.18/b, Brent fell back a little, but was still hovering close to $80/b. It is believed the current bullish move would benefit from a bit of a price correction to “flush out some fresh longs” and test appetite. Analysts say if Saudi Arabia and Russia do agree to fill the [supply] void left by Venezuela and Iran, we expect prices to retreat towards $75/b. The market is also still awaiting the full impact of US President Donald Trump’s decision to pull out of the Iran nuclear deal and re-impose sanctions. Total, for example, has already halted its plans to help develops Iran’s South Pars gas field as it seeks to clarify whether the investment can avoid falling foul of renewed US sanctions, the French energy major said.

oil markets amid soaring oil prices. “I talked to the executive director of IEA to reassure him of our commitment to the stability of oil markets and the global economy,” Falih said in a tweet. “To coordinate global action to ease oil market anxiety, I tele-

phoned a number of my ministerial counterparts today. Energy ministers contacted recently include those from the UAE, the USA, Russia, India and [South] Korea.” The ministers maintained “their commitment to security of supply” and said they would

OPEC Flakes OPEC says global upstream oil investment outside US needs to pick up

PEC said it is concerned about a lack of upstream investment in the oil industry outside of the US despite forecasting that the increase in 2018 non-OPEC crude supply would outpace global demand growth. In its closely watched monthly oil market report that largely kept its fundamental projections steady from April, OPEC

said non-OPEC spending in 2017 to bring new projects online was down 42 percent from 2014. It would have been lower without the contributions of US tight oil companies, who raised investment by more than 42 percent year-on-year in 2017, OPEC said. “Timely spending on project implementation is a key concern,” OPEC said, which in recent weeks has indicated it will continue with its output cut agreement and maybe even extend it past its expiry at the end of 2018 -- to encourage more upstream spending despite tightening fundamentals. OPEC has said new projects will be needed to fill a potential supply gap in the coming years, with demand expected to be robust.

OPEC Secretary General lauds reappointment of Russian energy minister

IEA in talks with oil producers, consumers amid rising prices he International Energy Agency is in discussion with oil producers and consumers amid rising oil prices, and it is ready to act if “necessary to ensure that markets remain well supplied,” Keisuke Sadamori, the IEA’s director for energy markets and security, said. “IEA is discussing and will discuss oil market conditions and outlooks with relevant stakeholders, both oil consumers and producers,” Sadamori said. Sadamori’s comments came after Saudi Arabian energy minister Khalid al-Falih said that he had held talks with the IEA’s Executive Director Fatih Birol and repeated the kingdom’s commitment to the stability of global

BUSINESS DAY

continue to monitor market conditions, the Saudi energy ministry said in a joint statement. Crude oil futures ticked higher during midafternoon trade in Asia, continuing to find support from supply concerns after having gained nearly 3 percent over the week, while market participants now look ahead for fresh cues to provide price direction. The IEA, whose mandate is to safeguard global energy security, warned of a potential supply shortfall from Iran and Venezuela could present a “major challenge” for oil producers in fending off sharp price rises and filling the gap, and reiterated its readiness to act if necessary to ensure a wellsupplied market.

he reappointment of Alexander Novak to the office of the Russian Energy Minister is particularly an acknowledgment of his role in structuring the OPEC and non-OPEC oil production capping agreement, Mohammed Barkindo, Secretary General of the Organization of Petroleum Exporting Countries (OPEC) said. “The reappointment of Alexander Novak as Russian Energy Minister by President Vladimir Putin is an acknowledgment of his sterling qualities and exemplary leadership he continued to display in the OPEC and Non-OPEC strategic partnership,” Barkindo said. Novak has earned the respect and admiration in the global oil indus-

try, Barkindo said. “He remains that strong, reliable and dependable bridge between OPEC and Non-OPEC participating countries in the Declaration of Cooperation,” the OPEC Secretary General added. Prime Minister Dmitry Medvedev suggested reappointing Novak as the Russian Energy Minister earlier at the meeting with President Vladimir Putin.

08 BUSINESS DAY WEST AFRICA ENERGY intelligence

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Wednesday 23 May 2018

talking points

In association with

Assessing FG’s implementation of ERGP power sector objectives ISAAC ANYAOGU

he Federal Government in February 2017 released what it termed an economic blue print for the nation called the Economic Recovery and Growth Plan (ERGP) which provides a medium-term plan for sustainable development of different sectors of the economy, including the power sector. Regarding the power sector, the objectives of ERGP are to overcome challenges relating to governance, funding, legal, regulatory and pricing issues across the Nigerian Electricity Sector Industry (NESI) value chain. The policy document like many from the Federal Government is not short on ambition. It aims to optimise the delivery of at least 10GW of operational capacity by 2020 by encouraging small-scale projects building capacity over the long term and investment in transmission infrastructure. A key policy objective of the ERGP with respect to the power sector is to improve energy efficiency and diversity the energy mix through greater use of renewable energy. While there have been renewed interest in ramping up renewable energy adoption in the country, it is not clear how much of this drive can be attributed to the policy. Operators have hailed the mini grid policy and it has begun to gain traction. It was enacted a year before the ERGP was released. Last year, it birthed two new solar power projects according to Babatunde Fashola, minister of Power, Works and Housing in a speech at the 19th edition of the monthly power sector operators meeting in Lagos. One of the projects that will be sited in Abuja would provide stable electricity to 145 households and five businesses by Havenhill Synergy Ltd. Fashola said there is another one scheduled for completion and commissioning in Kano which was not elaborated upon. A Spanish firm, ENAFRO, last year said it was bringing a €120 million solar electric-

ity project to the state. It plans to recoup its investments in the project within 20 to 25 years, subject to agreement by the state government. “Let me commend the Nigeria Electricity Regulatory Commission (NERC) for the issuance of regulations issued at our last meeting in Kano. It is beginning to bear the results of registration and licensing because the Vice-Chairman of NERC informed me that a solar-based mini grid facility will be commissioned in Kigbe community, Kwali Local Government, FCT Abuja,” Fashola said. The mini grid regulation contains a net-

metering for very small capacities (typically below 1MW); feed-in tariff for capacities up to 5 megawatts (MW) of solar, 10 MW of wind, 10 MW of biomass, and 30MW of small hydro; as well as competitive tender for capacities above these thresholds to be procured through the Nigerian Bulk Electricity Trading Plc (NBET). Other important objective of the ERGP is to facilitate private sector investment in generation, transmission and distribution, and improve access to electricity to all Nigerians. Not much has been accomplished on these objectives. Private investments into the generation, transmission and distribution have

stalled. The sector still lacks cost-reflective tariff and this is the biggest deterrent to new investments. On increasing rural electrification using off-grid renewable solutions, there is considerable progress in this regard. The Rural Electrification Agency is assisting industrial clusters in Lagos, Kano and Aba by providing power as well as to some Federal universities. The policy objectives of restoring financial viability in the electricity market, implementing a data-driven approach in power sector development planning and elimination of sabotage in gas and power infrastructure are largely mirage.