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news you can trust I * * WEDNESDAY 23 OCTOBER 2019 I vol. 19, no 419

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Banks must act now or risk becoming a ‘Footnote’ – McKinsey ENDURANCE OKAFOR L-R: J.O.J Okoloangu, Nigeria Deposit Insurance Corporation (NDIC) board member; Omolola Abiola-Edewor, executive director, corporate services; Umaru Ibrahim, MD/CE; Aghatise Erediauwa, executive director, operations; Adeyeye Enitan Ogunwusi, Ojaja II, Ooni of Ife; Adedotun Aremu Gbadebo, Alake of Egbaland; Ronke Sokefun, NDIC board chairman; Mudashiru Mustapha, board member; Garba Bello, board member; Okokon Udoh, board member, and Adejimi Adu Alagbado, Ogoga of Ikere-Ekiti, cutting the cake at the NDIC 30th Anniversay Dinner in Abuja.

maj o r i t y o f b a n k s globally may not be economically viable because their returns on eq-

With bet on Lekki Port, China makes biggest investment in Nigeria signing of $629m financing to hold today

See story on P.4

uity aren’t keeping pace with costs, according to a report from consultancy McKinsey & Co. It urged firms to take

Continues on page 4

Inside

UBA grows net profit By 32.3%, as gross earnings P. 2 hit N428.22bn

Wednesday 23 October 2019

BUSINESS DAY

news L-R: Jalo Waziri, MD, Central Securities Clearing System; Mary Uduk, acting DG, Securities and Exchange Commission (SEC), and Bola Ajomole, MD, Nigerian Association of Securities Dealers, during an interactive session with the Senate Committee on Capital Market at the National Assembly in Abuja, yesterday. Pic by Tunde

UBA grows net profit by 32.3%, as gross earnings hit N428.22bn BALA AUGIE

nited Bank for Africa Plc, the pan African financial institution with a network that spans 20 African countries, the United Kingdom, the USA and with presence in Paris, has announced impressive performance in its unaudited 2019 Third Quarter Financial Results, with significant growth in Gross Earnings, which rose to N428.22 billion, representing a 14.2 percent increase when compared to N374.8billion recorded in September 2018. UBA’s Profit before Tax grew by 24.2 percent to N98.2billion, up from N79.1billion in the same period of 2018. Similarly, its after tax net profit also grew significantly by 32.3 percent from N61.69billion

recorded in September last year to N81.63billion in the period under consideration. This profit performance puts the Bank’s annualised return on average equity at 20.6 percent. According to the report filed with the Nigerian Stock Exchange (NSE) on Monday, UBA’s net operating income improved by 11.6 percent yearon-year to N265.99 billion compared to N238.36 billion achieved in the similar period of 2018. Despite the double digit inflation rate in Nigeria(its largest market) coupled with uncertainties in the business environment in Nigeria and in some countries in the rest of Africa, UBA’s curtailed operating expenses as it only increased by 8.4 percent and this was largely due to regulatory costs.

The Bank continues to maintain a very strong balance sheet, with Total Assets of N4.96 trillion, an increase over the N4.87 trillion recorded in December 2018. Customer Deposits also grew to N3.37trillion. The shareholders’ fund remained very strong at N555.53 billion, rising by 10.5 percent and reflecting a strong capacity for internal capital generation. Commenting on the results, the Group Managing Director/CEO, UBA Plc, Kennedy Uzoka, said: “The resilience of our business model and our focused growth of earning assets have yielded a 10.8% growth in interest income. In addition to the commendable yield on interest earning assets, we also achieved

a 22.1% growth in noninterest income, driven largely by the increased penetration of our superior digital banking offerings, credit expansion, remittances and other lifestyle transactional services.” “UBA remains committed to its vision of becoming the undisputed leading and dominant financial services institution in Africa. We will continue to innovate and lead in all our business segments, whilst delivering top-notch operational efficiencies and best-in-class customer service. We are beginning to realise early gains from our ongoing Transformation Program and I am in-

Continues on page 4

PetroNor to acquire 12% of Aje field, double production STEPHEN ONYEKWELU

etroNor oil Exploration and Production (E&P) company has concluded plans purchase Panoro Energy’s stake in the Aje oil and gas field off Nigeria, as part of a bigger strategy to expand its acreage in Africa. The Oslo-listed company recently completed a merger with African Petroleum and will now pick up Panoro’s 12.2 percent interest in the Oil Mining Licence (OML) 113 that hosts the producing field for an upfront consideration of $10 million to be paid in PetroNor shares, a report by Upstreamonline stated. The sum can partly be paid in cash if the latter’s share price falls below $0.13. In addition, a royalty payment of up to $25 million is contingent on future gas production volumes from the field. The proposed deal is con-

…plans to eliminate gas flaring on OML 113 in 18 months ditional on both approval from the authorities and conclusion of a related pact to revamp the partnership structure on the licence with Lagos-based operator Yinka Folawiyo Petroleum (YFP), with a long-stop completion date of end-2020. This will entail the creation of a new special purpose vehicle, in which PetroNor and YFP will hold respective 45 percent and 55 percent stakes, to fund further development of the Aje field that was brought online in May 2016 from two wells tied back to the Front Puffin floating production, storage and offloading vessel. Under this pact, PetroNor will take on the role as technical operator to develop the next phases of the project aimed at doubling the field’s current production of about 3000 barrels per day of oil to between 5000 and 7000 bpd, as well as exploiting associated gas that www.businessday.ng

is presently flared for a targeted total output of 20,000 barrels of oil equivalent per day. Jens Pace, PetroNor’s chief executive said “this acquisition is wholly in line with our stated growth strategy in terms of acquiring assets that add production and material reserves and resources to the company.” PetroNor has been working with YFP on a revitalisation plan for the field where new oil production wells could be drilled to tap additional resources in the Turonian and Cenomanian formations, while a third phase would target development of the Turonian gas condensate reservoir. International oil companies continue to see and take advantage of Nigeria’s vast oil and gas resources as the current influence of indigenous players in the sector remains

minimal compared to the capacity of the international oil and gas companies (IOCs) that have been in operations for decades prior to the incorporation of the indigenous oil companies. “In fact, you can easily count the very active indigenous entities in the upstream sector. The reason for this can be linked to the level of capital involvement on the different value chains within the oil and gas sector of the Nigerian economy,” Temitope Samagbeyi, partner at Ernst & Young, a multinational consulting firm said. “Financing has been a major challenge; although there has been an increase in project funding from Nigerian banks in very recent years, indigenous oil and gas companies still complain of preference by the banks for quick returns and high-interest rates.”

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BusinessDay postpones states competitiveness & good governance award to 20th Nov.

usinessDay, West Afr ica’s leading provider of business intelligence & market-moving news regrets to announce the postponement of the States Competitiveness & Good Governance Awards from 24th October to 20th November 2019. The decision to change the date of the ceremony was as a result of the feedback from some state governors who due to their busy schedules will not be available for the initial date. The new date is aimed at ensuring the full participation of all dignitaries who are expected to grace the occasion. BusinessDay apologises to its guests for any inconvenience resulting from the date change, most especially to those that already confirmed their attendance for the previous date. The 2019 edition of the award ceremony will have Yakubu Gowon, former head of state as the special guest of honour while Yahaya Abubakar, Etsu Nupe will be the Royal father of the day. The BusinessDay good governance award is organised in a format that will take a pragmatic approach in acknowledging the best governors in the country, as the policies, actions, and inactions of state governments have a significant impact on the business environment

and performance of businesses, particularly the small and medium enterprises (SMEs) which are the engine room of economic growth. Based on verifiable criteria, gathered through voluntary disclosure and openly available data, BusinessDay seeks to rate governors on their performance over a period of a year in various aspects of governance: Fastest Growing State Economy, Best State in Tourism, Transparency in Governance, Best State in the ICT/Technology/Sport Development, Education Reforms and Development, State with the Most Improved Security, Ease of Doing Business and among others. In the past editions of the award ceremony, Kano, Osun, Kaduna, Ebonyi, and Abia states have been recognised for being the fastest-growing state economy, best in Tourism, the most improved state in Ease of doing business, improved State in healthcare development and state promoting made in Nigeria goods and SME development. Some dignitaries that have graced the BusinessDay’s States Competitiveness & Good Governance Awards include Yemi Osinbajo, Abdulahi Ganduje, Nasir El Rufai, Okezie Ikpeazu, and many others.

•Continues online at www.businessday.ng

Nigeria needs oil sector reform to benefit from Russia pivot to Africa ISAAC ANYAOGU

o counter the influence of China and the United States, Russia is strengthening ties with Africa through economic cooperation and military-technical partnerships, but the slow pace of reforms in Nigeria’s oil and gas sector has seen other African countries emerging winners. Russia’s trade with Africa includes food supplies, metals, machinery and equipment with the largest being investments in the energy sector. Trade between Russia and sub-Saharan Africa has risen from around $1.8 billion in 2010 to around $4.8 billion in 2018. Exports from Russia to sub-Saharan Africa came to total of $3 billion, while imports from sub-Saharan Africa came in at $1.7 billion. Nigeria Imports from Russia was US$1.02 Billion in 2018 while Russia Imports from Nigeria amounted US$33.19 million according to the United Nations COMTRADE database on international trade. Two of the biggest Russian investments in Nigeria the Aluminium Smelter Company of Nigeria (ALSCON) and the Ajaokuta Steel Plant are comatose.

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Since energy is the main focus of Russian investments in the African continent, Africa’s biggest oil producer stands in a pole position to attract major investments if it reforms the sector. Russian geologists are working in African countries including Ghana, Madagascar, and Libya and big oil companies such as Rosneft and Lukoil are involved in huge oil and gas fields in countries including Egypt and Mozambique. Meanwhile, Russian oil giant Lukoil is still trying to complete acquisition of Brazilian stateowned oil giant Petrobras assets in two major Joint Ventures (JV) Akpo and Agbami with a production capacity of 175,000 barrels per day, 200,000 barrels per day respectively since talks began last year. Analysts say a major difficulty in getting projects off the ground is the slow pace of fiscal and regulatory reforms in Nigeria’s oil and gas sector. This is worsened by Nigeria’s cavalier attitude towards foreign investors that has seen the attorney general imposing a $62 billion demand on International Oil Companies in back taxes.

Continues on page 4

Wednesday 23 October

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Wednesday 23 October 2019

BUSINESS DAY

news Banks must act now or risk becoming ... Continued from page 1

steps such as developing technology, farming out operations and bulking up through mergers ahead of a potential economic slowdown. “We believe we’re in the late economic cycle and banks need to make bold moves now because they are not in great shape,” Kausik Rajgopal, a senior partner at McKinsey, said. “In the late cycle, nobody can afford to rest on their laurels.” The decade since the global financial crisis has seen a wave of innovation in financial services, bringing new competitors from fintech startups to giants like Apple Inc. and Alphabet Inc.’s Google. Banks have pondered whether to compete with, partner with or acquire some of these newcomers. Some established firms have sought to rebrand as technology companies, in part to attract hard-to-get talent. In its report, the firm said banks risk “becoming footnotes to history” as new entrants change consumer behavior. Most recent attempts by banks to boost efficiency have been “business-asusual,” it said. Banks allocate just 35 percent of their information-technology budgets to innovation, while fintechs spend more than 70 percent, McKinsey said. Combined with regulatory factors lowering the barrier to entry -- like open banking and looser requirements for startups -- the environment is increasingly conducive

for newer firms to take share from banks. The report points to Amazon.com Inc. in the U.S. and Ping An in China as examples of technology firms that are capturing financialservices customers. To make matters worse for the old guard, the new players tend to go after the business areas that create the highest returns at banks -- credit cards, for example. Investors have taken notice. Globally, banks’ valuations have fallen 15 percent to 20 percent since the start of last year. In Nigeria the banking index has lost some 19 percent this year. McKinsey added that “the drop in valuation suggests that investors anticipate a sharp deceleration in earnings growth.” Lenders can cut costs and find funds for technology by outsourcing what McKinsey calls “non-differentiating activities,” including some trading and compliance functions. Banks “need to get much more comfortable with external partnerships and being able to leverage talent externally,” Rajgopal said. Another way to free up money: get bigger. Access Bank completed the biggest merger in Nigerian banking history in recent times when it merged with Diamond Bank. Rajgopal said he expects M&A to continue in the late cycle. “Going forward, scale will likely matter even more as banks head into an arms race on technology,” the report says.

Nigeria needs oil sector reform to benefit... Continued from page 2 “I think this visit to Russia by the president is a good thing as it will let the government here from investors what kinds of policies are necessary to attract investments,” says Chuks Nwani, an energy lawyer based in Lagos. Last year, a consortium led by international oil trading house Vitol which included Africa Oil and Delonex Energy, backed by Warburg Pincus and the International Finance Corp were also in talks to buy stakes in the Nigerian offshore fields held by Petrobras and its partners valued at $2.5billion. The talks didn’t yield a deal. Nigeria is the middle of rewriting fiscal terms for its oil assets after failing to enact a petroleum industry bill over a decade since the idea was first muted. Historically, fiscal framework in Nigeria has been rent, drawn from agricultural practice giving birth to terms like farm-in, farm-out. Rents are paid in the form of tax and royalties and Nigeria relies on the direct sale of crude to run its economy.

However, a sea change is ongoing in the oil and gas sector as depositional environment for hydrocarbon commonly found in Deltaic regions has now included inland basins and countries like Rwanda, Kenya, Ghana, and Tanzania are avid producers of oil and gas. The technology for drilling oil is also improving such that shale producers now lay ambush on oil prices as they prove more prolific in reducing production costs and enhancing speed to market advantages. To compound matters, the dynamics of distribution has changed too much that traditional buyers of oil and gas are now net exporters, with many closer to markets where they are needed. Yet, Nigeria continues to operate its oil resources the same way it did in the 1960s with vast oil assets lying fallow because the government lacks a coherent vision of how to make the commodity act as an enabler to the economy.

•Continues online at www.businessday.ng www.businessday.ng

Debt Recovery Drive: Ahmed Lawan Kuru (l), managing director/ CEO, Asset Management Corporation of Nigeria (AMCON), handing over copies of the AMCON Amendment Act 2019, which was recently signed into law by President Muhammadu Buhari to the Chief Justice of Nigeria, Justice Tanko Muhammad, at the Supreme Court, Abuja.

With bet on Lekki Port, China makes biggest investment in Nigeria AMAKA ANAGOR-EWUZIE, ODINAKA ANUDU & ENDURANCE OKAFOR

hina Development Bank and Tolaram Group, the parent company of the Lekki Port LFTZ Enterprise Limited, will sign a $629 million deal on the muchawaited Lekki Deep Sea Port in Lagos today. Sources tell BusinessDay that this will be China’s single biggest equity investment in Nigeria and is in line with its Belt and Road Initiative - a global Chinese strategy targeted at building infrastructure in 152 countries and international organisations. The deal, according to a source close to the Tolaram Group, is a major step towards the financial close on the funding for the construction of Nigeria’s first deep seaport project, estimated to gulp over $1.6 billion. Lekki deep seaport is jointly owned and developed by the Tolaram Group, China Harbour Engineering Company (CHEC), the Nigerian Ports Authority (NPA) and the Lagos State Government as equity investors. While China Harbour Engineering Company (CHEC) owns 52.5 percent equity, Tolaram Group owns 22.5 percent while the Nigerian Ports Authority and the Lagos State Government have

5 percent and 15 percent equity respectively. The port project is jointly financed by a consortium of six banks, which include the African Development Bank (AFDB), the European Investment Bank (EIB), Standard Chartered Bank (SCB), RMB, Africa Finance Corporation (AFC) and Standard Bank. Tolaram, which has the concession to build and operate the port for 45 years, appointed the China Harbour Engineering Company (CHEC), the world’s biggest marine engineering company, as the Engineering, Procurement, and Construction (EPC) contractor to oversee the design, construction and commissioning of the port project under the supervision of an American project management consultant known as Louis Berger Group. Lin Yichong, Chairman of CHEC is also expected at the signing ceremony today. “ This is a real game changer for us. Doing project financing of this scale, it is not easy to raise money for a factory. You need $30 million, $50 million. But you want to raise $800 million? That’s a whole different ballgame,” Haresh Aswani, Tolaram’s managing director for Africa, told Financial Times on Tuesday. The Lekki Deep Seaport will help in solving one of

UBA grows net profit By 32.3%, as gross earnings... Continued from page 2

deed excited about the days ahead,” Uzoka stated. Also throwing more light on the bank’s financial performance and position, the Group CFO, Ugo Nwaghodoh said “with the results

achieved in the quarter under consideration, the bank remains on track to deliver its earnings target for the year. We were able to grow the loan book by 14.7%, (well ahead of our guidance) focusing on growth poles of various economies

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Nigeria’s export problems and will be financed with $630 million from the China Development Bank, and $470 million in equity from the state-owned China Harbour Engineering Company, which has a 52.5 percent stake and will be responsible for building the port. Au t h e nt i cat i ng t h i s, Sekonte Davies, executive director, Marine and Operations of the NPA, disclosed at a stakeholders meeting in Apapa recently, that promoters of Lekki Port project, which is supposed to have concluded the financial closure of the port project on 21st of September 2019, shifted the date to 21st of October, 2019. He said upon completion, the port will help shippers to achieve economic of scale in shipping, which requires larger vessel to lower the cost of freight per Twenty-foot Equivalent Units (TEUs) that comes to Nigeria. “Shipping companies are building bigger vessels and the draft needs to be bigger as well to accommodate them,” he said. It was proposed that the multi-purpose port would cover area of 90 hectares with three container berths, long dry bulk berths and three liquid berths. Initially, the port will handle close to 1.5 million TEUs of containers annually, and this would be upgraded to 2.5 million

TEUs in future. The channel will be dredged to 14 meters depth, which will be deepened to 19 meters as traffic grows while the breakwater is 1.5 kilometers long. Already, the consortium developing the port is said to be working with Dangote Group to fix the port access roads. Nigeria’s Apapa and Tin Can ports have overshot their capacity, with about 5,000 trucks seeking access to the two ports in Lagos every day, according to a maritime report released by the Lagos Chamber of Commerce and Industry (LCCI). Nigeria loses N600 billion in customs revenue, $10 billion (N3.6trn) in non-oil export sector and N2.5 trillion in corporate earnings across various sectors on an annual basis due to the poor state of Nigerian ports, the LCCI report said. “Government is trying to ensure it decongests the ports, but it is just the sheer volume that is the problem,” Paul Gbededo, CEO of Flour Mills of Nigeria, told BusinessDay recently. “If we construct the roads, it makes orderly arrangements for trucks to enter, but it is still beyond the capacity. Technology needs to be employed and other infrastructures need to be deployed,” he said.

in which we operate. We have also developed new credit products targeted at specific consumer and SME market segments, and will continue to do so with strict adherence to best credit/ underwriting standards, as we strive to achieve the statutory loan-to-funding ratio threshold set by the

apex bank.” UBA is one of Africa’s leading banks with operations in 20 African countries. The bank also has presence in the global financial centres of London, New York and Paris. UBA provides banking services to more than 17 million customers globally, through diverse channels.

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Using distributional equity to empower the masses SMALL BUSINESS HANDBOOK

EMEKA OSUJI

hose who run the affairs of nation have got a great job. It is a privileged to be one of those fashioning out the way forward for one’s country. People whose job is simply to ensure that the nation’s resources are not only efficiently utilised but equitably distributed. The perennial contest between efficiency and equity in resource utilisation and the need to ensure they are properly balances is one of the greatest challenges facing public administration. Public policy design and implementation is a fascinating job indeed; but at the same time, a very difficult one. Leaders ought to enjoy the full support and sympathy of their countrymen, because they spend their days seeking out ways and means of improving the welfare of the people. Unfortunately, most leaders don’t enjoy that support because the socioeconomic condition of their people do not seem to justify their toil. Poverty and inequality get worse as governments announce measures to tackle them. And this is the reality of today’s leaders in Africa’s biggest economy and the most populous black nation. There is little or no connection between the leaders and those they lead; just as there is no connection between the growth of the economy (when it grows) and the living conditions of the people.

What is not in doubt is that as the economy progresses, the rich took it all, while the poor regressed further behind. This has amplified the trust deficit handing over the leaders, and between the leaders and their people. Today, what the world feared most is happening – a situation where more and more people are resorting to selfhelp as the best way to solve almost all their problems. And this is not a Nigerian phenomenon. It is a worldwide crisis, even if Nigeria, as in many things negative, seems to epitomise this problem. In 2014, the Holy Father, Pope Francis, said something very significant in his message to those meeting to discuss the world economy. It was during the World Economic Forum (WEF) that took place in Davos. He said, “I ask you to ensure that humanity is served by wealth and not ruled by it”. The Pope was verbalising his concern for the growing disparity in the access to world resources between the rich and the poor, and the growing emphasis of material acquisition as against the shared humanity of mankind. The holy Father’s message came at the time the world was jolted by a report on the worsening state of global inequality and misery by Oxfam, an international confederation of several organisations operating in over 94 countries searching for solutions to poverty and social injustice. The Oxfam report indicated that 85 richest people in the world owned as much wealth as half of humanity’s poorest people numbering over 3.5 billion. That report truly conforms with others that indicate that over the last ten years, inequality in the world has more than doubled. As if the bad new broken to the leaders at Davos in 2014 did not sink in, they came back in 2016 to continue their discussions of the affairs of humanity, with little or not improved data. They were

again confronted with the bad news on world inequality. This time however, the news was even worse. They were informed that one percent of the world now owns more wealth than the rest of the people in the world. That meeting rose without much more than platitudes on inequality and poverty reduction. Back home in Nigeria, the storm was still rising on the unimpactful economic growth the nation had witnessed over the years, which at a point averaged over 7 percent per annum; how millionaires without visible investments were being minted in the corridors of political power, while the masses groaned under poverty. Every one ought to know that extreme poverty is a recipe for disaster anywhere in the world. The consequences are too negative to contemplate. There is already a rising wave of tension all over the country, which continues to build up as more and more people find it difficult to feed themselves. However, much has not been achieved in terms of job creation. Social justice still shimmers in the distance as fewer and fewer people have access to the limited job opportunities. A winner-takes-all economy has but a little time before the days of anarchy arrive. The history of the world is replete with instances of nations that paid dearly because the elite wrongly thought that they could focus on themselves alone. All the efforts we make, governments, groups and individuals, including those of this column, to promote entrepreneurship and reduce poverty, are all in the bid to avert the looming danger. Governments exist to protect the people from one another and all forms of oppression. This protection is guaranteed by the existence of a functional judiciary, effective law enforcement and security agencies, equal opportunities and freedom from discrimination.

‘ Economic empowerment begins with distributional equity; not just in the allocation of financial resources but also in economic opportunities. By this concept is meant justice in the way the so-called national cake is shared

Nigeria has a major growth problem. It has been recording snail-paced growth over the past few years as the growth rate of the economy lags behind population growth rate. But that is not the major problem, after all we were all witnesses to years of massive growth that did not benefit the bulk of the people. There is no doubt that government has realised this and begun to take measures to improve things. This is why there are so many financing programmes (some say they are too many with unrealistic targets and conditions), targeting the poor. Unfortunately, due to many rigidities, including corruption, nepotism and incompetence, these efforts are yielding suboptimal results. Government, in a bid to reduce cost of governance, recently took measures to reduce travelling expenses of public officers, a move that is significant more in its symbolism than quantum of savings. Evidently, a lot more needs to be done to convince Nigerians that the source of the well-acknowledged high cost of governance in the country are about to be capped. Economic empowerment begins with distributional equity; not just in the allocation of financial resources but also in economic opportunities. By this concept is meant justice in the way the so-called national cake is shared. This is even more important in places where the sharing of national cakes takes precedence over the baking of the cake. This piece is largely excerpted from my book, “Leading Essays on Microfinance” to be publicly presented on November 8, 2019 at NIIA.

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

Lagos, the rains and road infrastructure

f late, in Lagos, the rains have been torrential with its attendant effects on the state of the roads and traffic gridlocks. The roads under construction are worse hit, as they are heavily flooded. Understandably, the ever mobile Lagosians are not pleased with the mostly rain induced traffic situation. Plausibly, when flash flooding occurs, one of the negative effects is that it washes away the surface of the roads, thereby making them almost impassable. This often results into avoidable gridlocks that make commuting a dreadful experience. Flash flooding – which is mostly a consequence of Lagos’ peculiar topography – is one of the factors responsible for frequent damages of Lagos roads. Fortunately, the ever-listening Babajide Olusola Sanwo-Olu, governor of Lagos State, responded by directing that palliative measures should be carried out to alleviate the sufferings of the people. Consequently, over 150 failed portions of roads across the state have been worked upon. But then, the torrential rains won’t let the respite last. In view of this, Sanwo-Olu has promised mass rehabilitation of roads immediately after the rainy season. He pleaded for time to ensure that the intervention would stand the test of time, as not much could be achieved while the rains still persist. Towards this end, two critical agencies of the state government, the Ministry of Works and Infrastructure as well as the Lagos State Public Works Corporation, have been working round the clock to make real the pronouncement of the governor. It will be recalled that in order to under-

score the recognition of the importance of free flow of traffic on the socio-economic development of the state, the Sanwo-Olu administration made traffic management and transportation the first pillar of its development agenda termed “THEMES”. Thus, one of the earliest tasks of SanwoOlu was to issue the very first executive order on indiscriminate refuse dumping, traffic management and public works. This is quite germane to the issue at hand. Granted that the government has the responsibility to ensure that the roads are motorable round the year, the people also owe the responsibility towards taking ownership of public infrastructure in their domain. This will ensure that development is extended to all parts of the state, since less is spent on avoidable repairs. Therefore, the appropriate question to ask is: After the government has achieved the rehabilitation of bad portions of the roads, what next? Are we going to take deliberate measures as a people and government to say never again shall we leave our roads to this level of deterioration? That, indeed, is the crux of the matter. By topography, Lagos State has a very high-water level, as the Ogun River and her estuaries empty into the Lagos Lagoon to further increase the volume of water the smallest state in the country could cope with. The state’s largely swampy parcel of land makes road construction and rehabilitation a little more challenging and costly. The everincreasing population of the State leads to increasing demand for property development for residential and commercial purposes.

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Many of such developments are on poorly reclaimed wetlands. Presently, new communities are springing up across the state, especially in Ikorodu, Epe and Badagry corridors where land is still available. The implication of this is that, instead of infrastructure development coming before properties are built, infrastructure come after communities have been founded mostly with little or no regards for Physical and Urban Development plans of the state. Thus, as pressure mounts on government to provide infrastructure in the new communities, the existing ones in existing communities are subjected to abuse, resulting in quick deterioration of such facilities and the need to re-fix them. This is the bane of the Lagos road infrastructure. We must, therefore, make concerted efforts to educate and enlighten our people on the dangers of turning the drainages into receptacles of refuse. For instance, the notion that the storm water will wash away refuse is wrong and misplaced. Irrespective of the velocity of the flood, it will not carry the refuse farther than the downstream. The moment the drainage channel is silted or clogged anywhere and inhibits the free flow of water, it stays on the roads for unnecessarily long time and affects the pavement of the road. In essence, our indiscriminate waste disposal is a major threat to road’s lifespan. The quest for land has also led many to compromise drainage channels and canal bank ways; thus, making drainage cleaning difficult. Also worthy of mention is alleged destruction of the roads by in-traffic- hawkers to slow

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ADESEGUN OGUNDEJI

down traffic to enable them ply their trade. It has been severally alleged that some hawkers dig the pavement of the roads at nights. Roads rehabilitated during the dry season have been found to develop craters overnight without any rainfall. This act of sabotage is part of the heavy price we all are paying with dire consequences for time and health management. One only hopes that appropriate security agencies will be on the look out to deal with such unlawful acts and bring the perpetrators to book. Evil triumph when evil doers are not brought to justice. Indiscriminate parking of vehicles on our roads is another threat to the lifespan of the roads because apart from inhibiting free flow of storm water into the drains, the portions of pavement that fall under the vehicles take time to dry, thereby weakening the asphalt. Therefore, it has become obvious that we owe ourselves the responsibility of helping the government to make life easier for us by playing our parts in the management of public infrastructure and utilities. For now, one hopes that the rains subside early enough for comprehensive road repair works to commence. But then, we all need to work assiduously towards preserving public infrastructure across the state. Ogundeji is deputy director, public affairs, Lagos state ministry of works & infrastructure

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BUSINESS DAY

Wednesday 23 October 2019

COMMENT CHARACTER MATTERS WITH DAPS

DAPO AKANDE

od created you to do something that nobody can do quite the same way that He knows you can. This may not necessarily be in a way that the world regards as the best way but in the way God in His wisdom wants it done. Understand this because it’s critical, your purpose can never be for your benefit alone.

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A successful life (2) God created us all to be a blessing to others. Like Ologundudu Abraham said, “If you fail to follow the plan, God can replace you. Go ask Saul, he is a witness.” I’m sure most of us wouldn’t find it too hard to name a couple of radio personalities in this country who everyone would rate as highly successful. What term, however, would be most appropriate to describe someone who works for one of the more popular radio stations in Lagos; is unceremoniously asked to leave after barely a month at the job and is subsequently told by his boss, the proprietor, that he sees no future in radio for him; but is by God’s divine providence now the proud owner of not one, not two but three radio stations! One of them even happens to be the first and only pidgin English radio station in a state, Delta State, where that is for all intents and purposes, the lingua franca. His destiny was not to remain a presenter or any manner of employee for that matter but to become an employer of men. He now finds himself advantageously positioned to propagate godly values in his own unique way. There are times when we must lose the valuable to gain the invaluable; after all, Saul and his family had to lose a donkey for him to gain a crown. This is the story of one of my elder brothers, Ben. Instructively, Jorge Luis Borges once aptly said, “a writer – and I believe, generally all persons – must think whatever happens to him or her is a resource. All

things have been given to us for a purpose and an artist must feel this more intensely. All that happens to us, including our humiliations, our misfortunes, our embarrassments, all is given to us as raw material, as clay, so that we may shape our art.” How bros Ben was able to raise the very substantial sum needed to pay for the first licence and subsequently, to set the station up is a story for another day but one thing I’ve discovered is that once it’s God’s plan, supernatural provision will just appear. Come what may, the vision must be realised. God smiled on him when he found himself spiritually aligned to God’s plan for his life. His former boss had inadvertently pushed him to his place of good success. This reminds me of my late father’s friend who my father always insisted was unfairly dismissed as the head of the Lagos State Development and Property Corporation (LSDPC) several decades ago. If memory serves me well, he was the pioneer head of the agency. Little did he know at the time that he was merely being pushed to his promise land. He would later thank his former bosses for doing him such a great turn by sacking him. This ebullient Niger Delta Chief would later become the doyen of the estate valuer’s industry in Nigeria. A highly celebrated and successful individual. Sadly, he too is late now. Much like in bros Ben’s case, they may have meant it for evil but God always meant it for good. Bros Ben’s radio stations have since won more awards than I’m sure he can

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The lesson that jumps right out at me from this story is this; as long as you know that you have a relationship with your God, no matter what happens, be rest assured that it’s part of His plan for you

count. The lesson that jumps right out at me from this story is this; as long as you know that you have a relationship with your God, no matter what happens, be rest assured that it’s part of His plan for you. Most of us, and I’m no exception, lose our heads completely when something contrary to our plan happens. We’re just so comfortable with where we are or with where we plan to be. Father Abraham was by all accounts a great man. If all life meant to him was riches, he was doing just fine where he was but one day, he was told to leave everything and everyone he knew without looking back and he did. Did he have his doubts? I’m sure he did. Was he afraid? I can bet my life on it that he was, yet he did it. He didn’t allow the fear to cage him. God may have been trying to lead you to a place of greater service to humanity which means a place of more usefulness to Him. Don’t allow the comfort and security of your present position cause you to miss God’s plan for you. God loves us so much that at times He forcefully yanks us out of our comfort zone. It may be painful and confusing but if we’re to get there and fulfil our destiny, we just have to learn to trust Him. Changing the nation...one mind at a time.

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

Non-profit: Raise funds when you are not desperate!

n over 20 years of my involvement in the social sector, I have seen people who started non-profits out of sheer enthusiasm to effect positive change in their community but abandon the good work they set out to do for many reasons, the common of which is lack of financial resources. I understand the frustration of being passionate about a social cause and lacking the resources to tackle it. The painful reality is that passion alone does not sustain development work. As with other institutions, finance is a critical element of a sustainable non-profit organisation. Money flows in from traditional sources like grants by donors and flows out to meet growing needs, from operational expenses to core activities. Yet, unlike other institutions too, the improbability of inflow makes it difficult for authentic non-governmental organisations (NGOs) to make a meaningful impact. While some development professionals have found a working system that ensures that the organisation stay financially stable all year round, a lot still struggle to make ends meet. Here are ways these set of managers can build financial capacity to do better! Plan Ahead: NGOs need to set very realistic and straightforward goals before embarking on any project or soliciting for funds: prioritising relevant activities, and establishing intended outcomes. Doing this

will give a sense of direction, helping everyone to focus on the main activities. After this, managers can then go-ahead to design the budget and adopt an approach to sources for funding from individuals and targeted donor agencies as well. This strategy may include maintaining a diverse donor base, identifying new donors, reconnecting with previous ones and soliciting for donations in kind. As much as donors have been a traditional source of NGO funding, the problem with relying on their generosity is the uncertain nature of this source of funding over time. What if the donor agencies decide that they have newer or more urgent issues to attend to? Or a major private donor company goes out of business? Adequate planning provides for these occurrences so that the organisation can better manage their resources. Collaborations/partnerships: Another means non-profits can maintain consistent cash inflow is through strategic partnership with the private sectors. More companies are embracing development initiatives because of the long-term positive impact it leaves on the bottom line. Buying behaviour keeps changing. Customers are now conscious of how their buying decisions affect the world around them, so they tend to patronise brands that demonstrate social responsibility in a manner that reflects their values. Brands that have noticed this trend adapt their marketing efforts to follow. A non-profit can work out a mutually

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beneficial proposal with these companies. For instance, one that tackles the issue of education for underprivileged children can partner with companies that support these causes to create back to school season campaigns. With the appropriate marketing and communication strategy, these non-profits can close in on receiving a certain percentage per unit of the item sold, while the business gains a strong positive brand perception and more revenue from increased sales. Sell products or render services: NGOs can assume financial sustainability from selling products or rendering services. Dependency on highly competitive donor-based funding puts them at a vulnerable position, where they are prone to being controlled by these agencies and even the quality of work they do may be affected. In light of this, some NGOs may be forced to operate social enterprises by the side, partnering with private organisations to implement corporate social responsibility initiatives as a form of rendering consultancy services or even operating a commercial venture altogether! Meanwhile, others include cost recovery components where beneficiaries pay a subsidised amount to cover the cost of the programs. Money generated from these avenues can then be deployed to fund core activities. Stay Visible: The internet provides an effective medium for non-profits to gain economic benefits by connecting them with

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OSAYI ALILE people who share in the passion, and who may later be converted to volunteers and sponsors. Managers should take advantage of the interconnectivity of the internet, consistently sharing stories in a manner that resonates with a targeted audience. Share your journey and ensure to always engage! Managers should decide on suitable platforms, the sort of content to share and how to share. Many people are willing to donate to charity if they see evidence of the good work that they do and social media presents a cheap platform to post these evidences, thereby serving as a medium where social capital is traded for financial gains! While a lot of activities typically compete for funds, prioritisation is key. You may want to run the non-profit like it is a business. Cut out unnecessary activities. Keep financial records. Stay on budget and most importantly as invest. Alile is the CEO ACT Foundation and consultant for Access Bank Plc on its CSR projects, Ms. Alile was the Executive Director of FATE Foundation, a leading private sector led not-for-profit organisation in Nigeria

Wednesday 23 October 2019

BUSINESS DAY

EDITORIAL PUBLISHER/CEO

Frank Aigbogun EDITOR Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

The Lagos-Badagry expressway

uring the campaigns for the 2019 ele ctions, th en can d idate Babajide SanwoOlu promised to deliver the Lagos Badagry road, a critical road network connecting the country to other ECOWAS states. However, since assuming office, nothing substantial has happened on the road. The rains have worsened an already bad situation and both residents and travellers have to put up with the chaos and bedlam on the road daily. Certainly, the government must be touched by the suffering of the people. The Lagos-Badagry expressway, a route which connects Nigeria to other West African countries through the Seme Border, and a major gateway into the country has been in decrepit condition and remained a death trap to motorists and passengers who ply the road. It is not only a gateway to the country, it also leads to the Lagos International Trade Fair, Alaba International Market, the Lagos State University, the ancient city of Badagry, and countless residential communities.

The incidences of trailers stumbling and petrol-laden tankers going up in flames have been routine activities. Robbery attacks thrive around FESTAC First-Gate and up to Agbara and Badagry, while commercial activities shrink. A journey of less than 30 minutes could take two hours and under limited choices, people grudgingly move on, wishing the government would respond accordingly. The Lagos state government began the construction of the road 10 years ago. On leaving office, former governor Babatunde Fashola, who began construction and expansion of the road to 10 lanes assured residents and road users that his successor, whom, he said, understood the project thoroughly, would complete the road. However, former governor Ambode abandoned the road. The only section of the road repaired thus far has been the section between Eric Moore and Okokomaiko. Also, the Federal Executive Council in 2018 approved a contract for the rehabilitation of the 46 kilometre section from Agbara to Badagry and to Seme Border. Months after, the signs of commitment have not trans-

lated to the passable roads that commuters dream of. The road is replete with different abandoned works even when both the state and federal governments have mapped out the aspects they would undertake. It is unfortunate the government allowed a major gateway into the country deteriorate to such a level. The state of the road continues to confirm our thesis that we are not a thinking society; and are only reactive rather than pro-active. While other societies have thought about their transport needs of the future and have designed effective transportation systems to accommodate the needs of their growing societies, we are stuck in the past and unable to maintain even the infrastructure of the past, built to support only a small fraction of our current population. Even our poor neighbours are doing far better than us. On crossing the Seme border, one is confronted with a society that works. The Benin republic end of the road is everything that the Nigerian end of the road is not: well-paved, excellent asphalted surfaces with absolutely no pot-hole on any section of the road. What is more, the Benin

republic road has a dedicated lane for bikes, barricaded with iron, stretching kilometres into the town. If, indeed, we still feel shame, we should be thoroughly ashamed of ourselves and what we have turned our country into. “Specifically, the ongoing 60-kilometre Lagos-Badagry Expressway project being executed by the state government must be completed as early as possible. The project has two major intermodal transport schemes – the Lagos-Badagry Expressway and the Light Rail Mass Transit with their accompanying infrastructure – 10 lanes superhighway taking off from Eric Moore interchange and traversing westward through Orile Iganmu, Alaba Oro, Mile 2, Festac, Agboju, Iyana-Iba, Okokomaiko, Iyana-Era, Ijanikin, Agbara, Ibereko and terminating at Badagry,” Femi Hamzat, Lagos state deputy governor said during the campaign. It remains to be seen whether the governor and his team will fulfil their promise. But with the deterioration of the road network all around the state and the inability of the government to arrest the rot, we fear it may just be another failed promise by the administration.

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BUSINESS DAY

Wednesday 23 October 2019

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Five principles for living beyond your means in infrastructure

FOLA FAGBULE

he business of building physical infrastructure is capital intensive. To be successful, any ambitious program for the consistent, sustainable development and maintenance of new and existing roads, bridges, electricity assets, seaports, airports, waterways, pipelines, railways, wagons and locomotives (among others) will inevitably require significant resources beyond the capacity of any single source of capital. Even at the best of times (when infrastructure assets are to be put up in wealthy, well-organised countries), the resources of the various governments or agencies in the country will be insufficient by themselves to maintain a successful development and maintenance program. Therefore, from the earliest times in modern human development, the proven means by which successful infrastructure financing programs are established has always been the creation of self-sustaining and credible frameworks for continuously raising capital from as broad a variety of sources as possible: both public and private. Whether it be historically important landmark transportation arteries like the Erie Canal (Eastern United States, 1821) and the Suez Canal (Egypt, 1869) or (closer to home) revolutionary developments like the ambitious colonial Nigerian railway system (from 1895),

the history of successful infrastructure development everywhere in modern times is tied closely to the evolution of sophisticated frameworks for raising diversified capital. In all three cases above, access to local and international capital flows significantly beyond the immediate means of the governing administration or implementing agency was essential to delivering the transformational infrastructure. So, how does a governing administration seeking to repeat such successes go about setting up its affairs? This is a particularly important question in the case of a government with development challenges entirely above its present means (as is currently the clear case in Nigeria), and desperately in need of an ambitious infrastructure roll-out and maintenance program. For ambitious governments aiming to live beyond their means in infrastructure development, five principles are worthwhile to observe from recent and distant history. Firstly, because resources are always finite, project prioritisation is critical. In practice, the most efficient means of achieving this is to apply discipline to resist political and parochial considerations in selecting the most important infrastructure works to focus on. This requires commencing every assessment of a proposed capital project with a clear-eyed focus on either the potential revenue impact (via taxes accruing to the public purse) from having a project completed and operational, or conversely, the reduced or avoided costs (to businesses and citizens) from having a project in place. As an example, a railroad connection between a seaport and an established inland trading location might rank higher on the implementation list than a new airline or office building. Secondly, just like in military warfare, capital intensive infrastructure is all about planning. Thorough advance

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How does a governing administration seeking to repeat such successes go about setting up its affairs? This is a particularly important question in the case of a government with development challenges entirely above its present means and desperately in need of an ambitious infrastructure roll-out and maintenance program

preparation for every contingency, prior to heavy deployment is an indispensable condition for success. In the case of economic infrastructure desired by a governing administration, this will include technical studies (into everything from site conditions and accessibility to economic viability), detailed evaluation of the legal and regulatory framework, and an Environmental and Social Impact Assessment. As an example of the interface between the two principles already listed above, a high priority project might also prove terribly daunting in the cold light of a proper plan; which might be a reason to shelve it, or to evaluate alternative strategies for achieving it. Which brings us to the third principle for living beyond your means, and one of the cleverest devices yet evolved for attaining ambitious yet critical infrastructure works: contracting for capacity using guarantees. In direct contrast to sourcing upfront all of the funding required for a project, a procuring government or agency might look only to provide operational performance-based guarantees to a private contractor that undertakes to raise capital and deliver the works. This is the concept behind power purchase agreements, shadow tolls, minimum revenue guarantees and multiple other such schemes. Every successful program for large scale infrastructure deployment in recent history has employed one or more of these methods for attracting risk capital and construction expertise from multiple diverse sources. It is a system that boasts the added benefit of encouraging a more market-based and efficient method of allocating risks between procuring agencies (governments) and implementing contractors. That being said, there is no system clever enough to succeed in the absence of procurement transparency,

which might be aptly referred to as the bedrock of civilisation in implementing public works, large and small. Thankfully, modern information and communication technology has now made absolute transparency possible in determining the winners and losers of all public sector expenditure contracting, and at an insignificant cost. The only question remains the political will to obviate the discretion of human officers, by using appropriate technology at every stage of the public procurement process. This is a question for a separate article. Finally, having followed all the principles above, the means by which infrastructure is paid for remains a critical matter to consider. Even where projects have been scientifically selected, properly planned and regulated, contracted using clever guarantees, and procured transparently; prompt payment still needs to be delivered as and when due for all obligations. This is where Africa Finance Corporation (AFC) is perhaps most useful to the project developer or procuring agency, as an infrastructurefocused financier that provides a broad range of solutions to meet payment obligations. From the project development expenses (essentially the costs of following all the principles laid out above), through provision of payment guarantees, debt, equity and other forms of liquidity, AFC is available (with its own funds as well as third-party partners) to assist ambitious African governments meet the important challenge of living well beyond their means in the business of infrastructure development. Fagbule is the senior vice president and head of financial advisory at Africa Finance corporation Fagbule, is Senior Vice President, Africa Finance Corporation. His Twitter handle is @ folafagbule

Empowering the girl child for success in a dynamic environment

thank Anglican Girls Grammar School Asaba Alumni Worldwide Association for this singular honour and privilege of not only, at very short notice, recruiting me to be the Chairman of this epoch making fund raising event but also at the same time extending an invitation to me to share my thoughts on the important topic of empowering the girl child for success in a dynamic environment. The importance of the female gender in the scheme of things I thought by now must have been a concluded and settled matter since agitations on this score go back some few years now. Various estimates put the female gender to at least 50 percent of the population, some say up to 60 percent. It is therefore obvious that you cannot neglect such an important and powerful group and still expect to make commensurate progress. It will tantamount to attempting to clap with one hand; a very worthless effort in deed. And woman power is well recognised by those who are conscious and enjoy discernment as most of my friends will readily refer to their wives as their boss. The power of woman is brought forcefully home to all when we recall the saying that when you educate a woman you educate a household; even a nation considering the strategic role women play in formation. Teach a child the way to go and then as he/she grows, he/she will never depart from it. My one concern now is that the effectiveness of the central role women are expected to play particularly at home is now being impeded as well as eroded as we transverse the digital age of high tech, robotics, artificial intelligence and as we struggle to come to terms with the intrusion of internet into all

things and all spheres of life. The reality is that most children now learn a lot from the internet which emphasises the point of the need to keep a keen eye on the sites our children visit. The challenge is for mothers of today to be intentional to ensure that these days of readymade kitchen that their wards and children are still put through the basics of home cooking, making up and tidying up the homes to ensure that they are ready for possible eventualities of life as they journey. But in spite of the dynamic environment we now live in, there are still certain aspects of life that have retained their pride of place in our lives if we are to remain useful and valuable members of the society; these are values. It is difficult from where I stand to negotiate and compromise such values as; honesty, truthfulness, hard work, industry, temperance, contentment and above all the fear of the Lord. So, we are challenged to pass on such values more by the witness of the life we live rather than by mere precepts. Since the year 2012, October 11 has been reserved as the International Day of the girlchild which aims to highlight and address the needs and challenges of the girl-child. This day has just been celebrated with the theme: “GirlForce: Unscripted and Unstoppable.” In 1995, almost 25 years ago before some of the girls of today were born, the fourth World Conference on Women made history for girl’s rights agenda in the world with the adoption of the Beijing Declaration and the platform for action. Also, it is on record that the United Nations adopted the Declaration of the Rights of the Child on November 20, 1959 which harped on the need for the girl child to be given the means for normal development

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both materially and spiritually. However, despite these efforts the records indicate that each year 12 million girls under 18 are married; 130 million girls worldwide are still out of school. And approximately 15 million adolescent girls 15-19 have experienced forced sexual intercourse. In Nigeria 39 percent of girls are married off before age 18 with 16 percent married before they turned 15, making Nigeria hold the record as having the highest prevalent rate of child marriages in the world. Another issue which affects the rights of the girl child is Female Genital mutilation. According to record just over one in four girls and women aged 15-49 years have under gone female genital mutilation. There is also gender discrimination on school enrolment in spite of 1948 Universal Declaration on Human Rights. Under aged street hawking is a universal phenomenon that is not only common to Nigeria but it is also practiced in both industrialised and developing countries of the world. Six out of every 10 children experience some form of violence. One in four girls and 10 percent of boys has been victims of sexual violence. What therefore is to be done? There is the need for the implementation of laws relating to the protection of the girl child in our environment and also for the enactment of other stricter laws in the light of contemporary developments. There is the need to eliminate all obstacles to girl child education in Nigeria to encourage them to stay at school until at the least the completion of junior secondary education. The technical Committee inaugurated by the Ministry of Women Affairs aimed at reducing child marriages by up to

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BONIFACE CHIZEA 50 percent by year 2025 and the National Strategy Document developed to ensure zero child marriage in Nigeria by 2035 should go about its assignment with all the seriousness it requires as it gives breadth to the carefully agreed strategies. The outstanding 12 states in the country yet to sign the Child Rights Act (2003) are invited as a matter of urgency to do so without much delay to give legal backing to the termination of marriages under the age of 18. Civil Society organisations are called upon to rise to the occasion by mounting pressure on government at both the national and sub national levels to adopt and implement protocols that have been signed into law for the protection of the rights of the girl child in every respect. Development partners and sundry donors are also requested to join in mounting requisite pressures for the protection of the girl child. There is the need for school administrators and related agencies to take up cases of sexual harassments with all the seriousness that it deserves by ensuring that perpetrators are swiftly brought to book. The rest of us are called upon to experience total reorientation on the critical values of girl-child especially as it relates to education and skills acquisition. Thank you all for your kind attention. Dr Chizea is a writer is a top-notch economic and business development consultant

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Wednesday 23 October 2019

BUSINESS DAY

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Brewers’ hunt for local substitute opens investment opportunity in sorghum production JOSEPHINE OKOJIE

orghum an important cereal crop is fast booming in the Nigerian market as brewers in the country are now using a larger percentage of the crop in place of barley for brewing beer and malt drinks. The high demand is creating an opportunity for entrepreneurs that can tap into the production of sorghum. Also, it will save the country billions of dollars that would have been spent on importation of barley malt and concentrates as the money will be retained in the economy and would help propel growth and development, even as it will drive down the cost of production for brewery firm. “The brewery industry is buying so much from sorghum farmers now than before,” Adamu Bature, secretary, Sorghum, Millet Farmers Association of Nigeria told BusinessDay

in a telephone response to questions. “Brewers make use of 70 percent sorghum as byproduct for brewing beer and malt. Nigeria Breweries fayrouz brand is 100 percent sorghum,” Bature said. According to him, the high demand from brewers shows that the crop has a huge industrial potential. Sorghum is also used in the food and beverage industry for producing biscuits and noodles. It is grown in all the northern states in the

country including Kogi and Kwara states. Experts say that entrepreneurs can tap into the production of sorghum to meet the growing demand from industries as they attempt to source locally. Nigeria is the natural habitat for many varieties of sorghum and the world’s second-largest producer and supplier of the crop, churning out 11 million metric tons per annum while demand is put at 12.5 million MT, leaving

a gap of 1.5 million MT, according to data obtained from the Federal Ministry Agriculture. “Nigeria Breweries funded sorghum research at the institute and developed a sorghum variety with high malting properties which can be us ed i n place of barley as a byproduct for brewing beer and malt,” said Ibrahim Umar Abubakar, director, Institute for Agricultural Research, IAR Zaria. “This will ensure that farmers have access to improved hybrid sorghum seeds, thereby increasing their yields per hectare,” Abubakar said. He noted that most brewers in the country are increasing their local sourcing for sorghum. According to the institute, two varieties of sorghum with malting properties have been released. “The CSR03H and CSR04H are the two varieties we developed with high malting properties and have been released officially,” said Daniel Aba

Experts call for healthy diet, zero hunger for Nigerians CHINYERE OKEKE

n commemoration 2019 World Food Day, experts in the agricultural sector have called for collective efforts and commitments to the realisation of healthy diets for Nigerians. In a keynote address to mark the 2019 World Food Day in Lagos, Babajide SanwoOlu, Governor of the state said the annual celebration being spearheaded by the Food and Agriculture O r g a n i s a t i o n ( FA O ) i s about raising awareness on issues related to food such as poverty and hunger and highlighting efforts being m a d e by g ov e r n m e n t s, institutions, organisations, and individuals to mitigate the negative effects on people. “The theme for this year’s celebration, ‘Our actions Our Future: Healthy Diet for a Zero Hunger World’ speaks to the need for a collective action towards not only increasing food production but also ensuring that adequate attention is paid to the quality of food being consumed,” said Sanwo-Olu who was represented by Idris Salako, commissioner for

Abimbola Okoya, executive director, BATNF; Chidi Ibe, technical committee member, BATNF Technical Committee; Wasiu Gbolahan Lawal, Lagos State Commissioner for Agriculture; Fatai Afolabi, technical committee member and Olayiwola Onasanya, permanent secretary, Lagos State Ministry of Agriculture during the 2019 World Food Day Lagos Farm Fair held recently in Lagos.

Physical Planning and Urban Development. He noted that the state is participating in the World Bank Assisted APPE ALS Project which is aimed at enhancing the productivity of small and medium-scale farmers and improving value addition along priority value chains, which include the poultry, rice and aquaculture value chains. According to the governor, the project will collaborate with AfricaRice for the development of Pure Ofada Rice strain as well as capacity building for seed out-growers and rice-based www.businessday.ng

products. Sp e a k i n g a l s o, Fa t a i Afolabi, technical committee, British American Tobacco Foundation (BATNF) said that the desire to help bridge the gap between farmers and their markets motivated the BATN Foundation to partner with Lagos State government to organise the fair. Afolabi said that the BATN Foundation has always identified with smallholder farmers and will persist to do all it can to foster agric enterprise by encouraging a commercial mindset in subsistence farmers and supporting them to run

their farms as sustainable agribusiness. In the same vein, Abimbola Okoya, executive director, BATN Foundation, noted that through its partnership with the Lagos State government the foundation intends to use the fair to provide a platform to expose farmers to more opportunities as well as enable the public access fresh and organic farm produce. “Since its inception in 2002, the Foundation has invested about N1.5 billion in supporting Federal and state governments as well as over 36,000 rural farmers in the production of crops like cassava, rice, and maize and aquaculture and livestock, with the hope of reaching a target of 62,000 farmers in 2022,” Okoya said. In his address, Prince Gbolahan Lawal, commissioner for Agriculture said that the World Food Day is a platform to highlight the importance of food and the role being played by all stakeholders. He noted that the efforts of government to ensure food security have resulted in a lot of innovations aimed at preventing food shortage in the state.

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a sorghum breeder at the Institute for Agricultural Research, Zaria. Sorghum is a grass of east African origin. It is the 4th most important cereal after wheat, rice, and maize and is used as a maize substitute for livestock feeds because of their similar nutritional values. “The stalk from sorghum can be used as livestock feeds while the grains are used for poultr y feeds production. It has high protein content than maize,” said Aba. Like shea nuts, sorghum has the potential to be a huge export earner for the country, but years of low investment, lack of government support and natural vagaries has limited the huge potentials. The inability of Africa’s biggest economy to sustain and improve its production of sorghum over the years has resulted in an average yield of 0.500 ton per hectare when other leading countries produce between 4.5 to 6 tons per hectare of

improved variety. Liman Mohammed, a sorghum farmer in Borno said “I have three brewery firms I sell to immediately after harvest. The demand is getting higher.” Most brew er y fir ms in the country are now supplying free inputs such as improved seed varieties to farmers and also giving them technical support in the production of the crop. Currently, a metric ton of sorghum sells for N900,000 at farmgate price while 100kg bag sells for N9,000. According to Danjuma Bunshak, a farmer, sorghum, grows all year round but mostly in December through January. “ There are various varieties of the crop. Some take 90days to grow, while some 45 days,” he said. Bunshak who is also a member of the National Association of Sorghum Producers, Processors and Marketers of Nigeria said that the association has been approached by the Chinese government to start supplying their market.

Nutritionists advocate daily fruit juice intake JOSEPHINE OKOJIE

xperts in food and nutrition have called on Nigerians to embrace daily intake of fruit juice as a way of boosting their physical wellbeing. The experts spoke at the maiden edition of the Chivita World Juice Day with the theme ‘Everyday Wellness Crystallising the Role of Fruit Juice,’ held in Lagos recently. “100 percent fruit juice plays a major role in boosting wellness and that its nutritional value is at par with that of fresh fruits and vegetables,” said Oluwatosin Adu, Associate Professor of Nutritional Biochemistry at the Lagos State University. “Consuming 100percent fruit juice along with foods rich in non-haem iron can help increase absorption of minerals. It helps consumers to achieve recommended potassium intake levels and support the maintenance of normal blood pressure,” Adu said. He added that pure fruit juice contains bioactive substance such as carotenoids and polyphenols, saying that flavonoid and phenolics found in fruits juice have been shown to modulate oxidative and inflammatory stress as well as microbial growth. Also speaking at the event, CHI Limited Nigeria Roy Deepanjan, chairman, CHI @Businessdayng

Limited Nigeria said fruit juice intake is an excellent way to achieve the recommended daily amounts of nutrients the body requires to meet its optimal health. Deepanjan stated that 100 percent fruit juice is an alternative to fresh fruits and vegetables known to contain essential nutrients, vitamins and minerals. “This is why nutrition experts recommend that we drink 1½ – 2 glasses of 100percent fruit juice every day,” he said. “Research indicates that countries that are low in consumption of natural foods and fruit juices also rank low in life expectancy. This is because fruit juice is a key component of the healthy living equation,” he further said. “Being the leader in the fruit juice category in Nigeria, Chivita has boldly taken up this public interest initiative to drive awareness for everyday wellbeing through fruit juice consumption,” he added. Deepanjan said that Chivita is not only committed to producing quality and healthy beverages, but also responsible in educating consumers about making the right beverage choices to ensure their overall health and wellbeing, which according to him, enables the organisation deepen the conversation of fruit juice consumption.

Wednesday 23 October 2019

BUSINESS DAY

AGRIBUSINESS ag@businessdayonline.com

International Breweries stimulates agribusiness with 40% local sourcing RAZAQ AYINLA

o i n g by hu g e foreign exchange annually spent on importation of barley malt for the production of beer and malt drink in Nigeria, International Breweries PLC, a subsidiary of AB Inbev Group, says it now source 40percent of its local raw materials. The organisation also notes that it has successfully stimulated the local economy and agribusiness with increasing demand for sorghum and other agricultural produce used to brew alcoholic and nonalcholic beverages in its plants located in three geopolitical zones of the country. According to an official statement made available to BusinessDay, there is a systematic move to increase on annual basis, the local sourcing of raw materials used by the brewery firm in such a way that the taste, quality, and premium of its alcoholic and non-alcholic

L-R: Fagoriola Josiah, standard officer; Isika Isimeme, senior standard Officer both of SON; Michael Daramola, legal and corporate sffairs director, International Breweries Plc; Garba Shitu Ahmal, zonal coordinator/director, Federal Competition and Consumer Protection Commission and Temitope Oguntokun, country lead -sustainability and stakeholder management, International Breweries Plc during a tour of the Gateway Brewery, Logbara in Ogun state recently to mark one year anniversary of the plant.

drinks are not affected and tampered with. In a factory tour o rga n i s e d by t h e f i r m, Michael Daramola, directorlegal and corporate affairs, IB declared that demands for sorghums and other agricultural products used in

production of beer and nonalcholic beverages are on the increase and several clusters of farmers across the country and foods and agribusiness firms such as Olam Nigeria are already benefitting. Although, Daramola assured consumers of beers

Oil palm farmer urges FG’s removal of tax on farm implements IDRIS UMAR MOMOH, Benin

obinson Imade, an oil palm farmer has appealed to the Federal Government to remove tax on farm implements to ensure the attainment of food security in the country. Imade who appealed during an interview with BusinessDay recently in Benin City also urged governments at all levels to give tax holiday as well as assisting farmers with fertilizers at subsidize rates. He said such incentives will not only encourage more people to embrace agriculture but to boost local production. According to him, federal and state g overnments should make it as part of its agricultural policy to give tax holidays to assist farmers, remove tax duties from farm implement and tools. “Governments should continue assisting farmers by allowing them to have access to farm machinery as provided by Agricultural Development Programmes (ADP) and FADAMA,” he said. “Before now, Federal Government used to give 100 percent free to palm oil farmer seedlings bought but

today the reverse is the case. Such incentives farmers used to enjoy are no longer there,” he further said. “The tax I pay on my farm despite its small size it is more than what my counterparts in Ghana will pay in a farm that is more than 10 times the size of mine. To encourage farmers, cottage industries or small scale industries governments should give incentives to farmers”, he advised. Imade, who is also a Benin based legal practitioner, called for the massive establishment of irrigation systems across the country to boost all-yearround farming activities. “Let us have a system for instance, where we can grow crops like maize, rice, and other arable crops allyear-round. It is happening always in the North because they have massive irrigation systems put in places where there is no water but they have water for their farms allyear-round” he stated. He, however, noted that if Nigeria is serious, focus and prioritize agriculture, recession will no longer be part of the nation’s economic challenge. He also urged governments to channel its economic diversification www.businessday.ng

to the exploration of the abundant solid mineral resources in the county instead of depending solely on crude oil. While lamenting the poor investment in the palm oil sector by government, he noted that Nigeria that used to be the highest producer of palm oil in the world is now in the fifth position. Imade who quoted the Central Bank of Nigeria (CBN) report noted that in the early 1960s, said Nigeria was the world’s largest oil palm producer with global market share of 43 percent, but today, it is the 5th largest producer with less than 2 percent of total global market production of 74.08 million metric tons. He also noted that the report put Nigeria with a population of 197 million people as the largest consumer of oil palm in Africa of approximately 3 million metric tons of fats and oils in 2018. He said oil palm accounted for 44.7 percent or 1.34 million metric tons while production at the same period stood at 1.02 million metric tons resulting to supply shortfall of 0.32 million metric tons, excluding the possible impact of palm oil exports.

and malt drinks brewed by the organisation that there would not be sudden removal of some foreign inputs in order to tamper with the taste, quality, and premium of its products, he however said there would be an increase in the local sourcing of raw

materials such as sorghum and others as part of corporate governance and desire to help Nigerian economy grow. Daramola, who explained that the factory tour was part of the activities to mark the first-year anniversary of the Gateway Brewery as the largest brewery in SubSaharan Africa, added that systematic increase of local source of raw materials would rather improve on brewery quality and processing, which ensure both the quality of products that get to consumers and the safety of its employees, contractors, partners on-site and its host communities. “We remain committed to adhering to the highest quality assurance processes to ensure we consistently produce international s t a n d a rd p ro d u c t s. We continue to invest heavily in our people and we have some of the best and committed talents to drive these processes,” he said. According to him, The Gateway Brewery is built on sustainability practices to

minimize negative impacts on the environment. “These actions help the plant to contribute to a better world by significantly reducing its carbon emissions, other greenhouse gasses, and air pollutants and NOX,” he said. While speaking on waste manag ement, he noted that there is a strict adherence to 100 percent waste segregation, effluent treatments, recycling of its bottles and by-product recycling as well as valuable and uncontaminated products like spent grains that are sold at cheap rates to the communities for animal farming. The brewer also shared some of its corporate social investment (CSI) initiatives to fur ther highlight its sustainability practices. These efforts are aimed at supporting the socioeconomic development of Nigeria through its initiatives in the on Education, Hea l t h, Emp ow e r m e nt, Infrastructure support, and Responsible drinking.

Oyo says committed to agribusiness REMI FEYISIPO, Ibadan

yo State government has reiterated its resolve to use agribusiness and the potentials to empower citizens and end hunger as the world celebrated 2019 World Food Day. Ojemuyiwa Ojekunle, Oyo State Commissioner for Agriculture, asserted the annual celebration of World Food Day organised by the state government recently in Ibadan, Oyo state. Ojekunle disclosed that to ensure food security, alleviate poverty and create jobs in the state. He added that the government has put in place mechanism for capacity building, empowerment, and rehabilitation of rural roads to spur agribusinesses growth as well as create jobs. “ There is no need repeating the fact that hunger is reigning especially among the common people and over time we have seen figures of people under the poverty net but the present administration came in with the resolve to alleviate poverty and hunger through

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the use of commercialized agriculture that will engage youths and put food on the table of the average citizen,” he said. “You must have seen the strides since the administration started, a l l e f f o r t s h av e b e e n geared towards securing lives and property of our people, create enabling environment for smallscale businesses as well as big-time investors to thrive while our youths will be gainfully employed,” he added. “Among other areas of interest, agriculture is the most viable and we are working hard to harness the potentials for these benefits as we are all going to benefit from it, this government is not for the wealthy but for all, that is why the governor insists on people-oriented policies that will benefit not just the common man, but all strata of the society,” he assured. He stated further that the present administration planned to industrialize Oyo State into a leading commercial hub through the agricultural revolution stressing that potential and @Businessdayng

opportunities in opening up around the state to the rest of the world in terms of investment in the agricultural sector were limitless. The Commissioner appealed to farmers in the State to brace up and increase their production because financial facility that would enable farmers meet government expectations has been put in place, enjoining all farmers and stakeholders to reciprocate the commitment of the present administration by keying into the economic recover y plan of the government in order to attain a zero hunger society with boundless employment opportunities. In his goodwill message, Seyi Makinde, State Governor, who was represented by his deputy Rauf Olaniyan promised his government would train and re-train youths and also empower them to reduce unemployment in the state. He urged the farmers especially youths to be hardworking as government has so many developmental programme in the pipeline for their development.

Wednesday 23 October 2019

BUSINESS DAY

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Wednesday 23 October 2019

COMPANIES & MARKETS

BUSINESS DAY

COMPANY NEWS ANALYSIS INSIGHT

EQUITY

Foreign stock investors return to Nigeria with caution as inflows hit year-high …foreign flows outweigh domestic participation for third straight month OLUWASEGUN OLAKOYENIKAN

ome foreign investors who abandoned Nigerian stocks are defying weak economic fundamentals to return to the country’s equity market, but it’s not all good as they are only pumping and dumping stocks. Foreign investment inflows into Nigeria’s stock market jumped 37 percent to N47.73 billion in September, the highest so far since June 2018. However, almost the same value of investment was taken away by the foreigners in the review month. Consequently, net inflows into the market, which stood at N5.98 billion in August, slumped to N1.01 billion in September. That’s the weakest in more than three years. “The foreign investors are adopting a cautious and active trading strategy,” said Gbolahan Ologunro, an equity research analyst at CSL Stockbrokers, the investment arm of FCMB Group Plc. “This strategy involves buying when there are opportunities in the market and cashing out almost immediately.” Nigeria’s economy continued to gasp for growth after it came out of a recession in 2017. The country’s stock benchmark index, the All Share Index (ASI), has dropped more than 16 percent since the start of this year after a 17.8 per-

cent decline recorded in 2018, creating good entering points for investors in fundamentally sound stocks. With foreign inflows of N34.92 billion in August 2019, foreign portfolio investment (FPIs) to Nigeria outweighed outflows of N28.98 billion for the first in one year prior to the period. The trend extended to September thereby flashing signs that the offshore players are taking advantage of

cheap valuations. “There have not been any fundamental changes to the weak appetite for foreign investors,” Ologunro said. “The foreign investors are looking for areas where they can see little opportunities and cash out after seeing mild gains.” Foreign participation continued to account for a larger chunk of portfolio investment in the Nigerian Stock Exchange (NSE) com-

pared with their domestic peers since July 2019. Specifically, the proportion of foreign participation to total transaction improved to 66.77 percent in September from 52.38 percent in the previous month, while the involvement of domestic players plunged to 33.23 percent from 47.62 percent within the same period. Consequently, the value of transactions performed

by foreign investors in the NSE increased by 47.8 percent to N94.45 billion in September, dwarfing those carried out by domestic investors which shrank by 19.9 percent to N47 billion in the same period. This brought the value of total transactions executed at the local bourse for the month to N141.45 billion, representing a 5.95 percent increase from N121.99 billion recorded in the previ-

ous month. “On a monthly basis, the NSE polls trading figures from market operators on their Domestic and FPI flows,” the NSE said in its latest FPI report published on Monday. “In September 2019, the total value of transactions executed by foreign investors outperformed transactions executed by domestic investors by 34 percent.” An analysis of domestic transactions reveals that institutional investors and retail investors executed the same share of domestic transactions in September. Retail transactions fell by 2.34 percent from N23.92 billion in August to N23.36 billion in September. However, the institutional composition of the domestic market declined more significantly by 30.81 percent from N34.17 billion in August to N23.64 billion in September. Over the last twelve years, domestic transactions decreased by 66.68 percent from N3.55 trillion in 2007 to N1.18 trillion in 2018 whilst foreign transactions increased by 97.88 percent from N616 million to N1.21 trillion over the same period. Total foreign transactions accounted for about 51 percent of the total transactions carried out in 2018, whilst domestic transactions accounted for about 49 percent of the total transactions in the same period.

BANKING

First Bank grows 9-month profit by most in 5 years SEGUN ADAMS

fter a decline in 2018, First Bank Nigeria Holdings (FBNH) Plc, the parent company of the Nigeria’s oldest bank, turned the corner as its 2019 nine-month profit recorded the fastest pace of growth within the last half-decade. The big lender on Monday announced that it made N51.84 billion in

profit, up 15.3 percent yearon-year from the same period in 2018, after profit in the third quarter of 2019 surged 76.1 percent from the previous year. The result was despite a decline in gross earnings which was weighed on by a slowdown in net interest income as FBNH was helped by growth in its non-interest income and lower impairment provision. The gross earnings

which grew 7.1 percent year-on-year in the third quarter of this year were not enough to prevent a 0 . 4 p e rc e n t d i p i n 9-month gross earning which stood at N439.85 billion. This followed a 10 percent decline year-on-year in net interest income in the third quarter which dragged net interest income in the 9-month period by 4.6 percent from its corresponding

2018 value. On the other hand, non-interest income surged 47.9 percent suppor ting a six percent growth year-on-year to N98.77 billion in the three quarters of 2019 combined. Operating income of the bank fell 1.4 percent to N310.21 billion in the n i n e m o nt h s o f 2 0 1 9 while operating expenses of the bank rose 18.4 percent to N221.74 billion.

The cost-to-income ratio of the bank as at the end of September is at 71.5 percent compared to 63.4 percent at the end of 2018 business year. In the 9-month period provision for impairment declined by 62.6 percent to N28.5 percent which saw the bank’s profit before tax increase to N60 billion, 16.9 percent more than it had noted in the same period of 2018. The value of the com-

pany’s stock remained unchanged at N5.30 per share after the close of business on the Nigerian Stock Exchange (NSE) on Monday. The stock has lost one-third of market value since the start of this year. Meanwhile, analysts at Lagos-based Chapel Hill Denham rate FBNH as a “BUY” with a target price at N6.91, which is an upside of 30 percent to Monday’s closing price.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Wednesday 23 October 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

TOURISM

Visit Naija to launch Cruisetopia 1.0 in Lagos SEGUN ADAMS

isit Naija is set to launch its inaugural tour tagged Cruisetopia 1.0 to promote and showcase the vast geographical, historic landmarks, and untapped potentials in the tourism industry in Nigeria. Cruisetopia is a day cruise tour organised by Visit Naija to educate Nigerians and tourists on historical and geographical sites across the country. Managing Director and Cofounder, Visit Naija, Raymond Maduagwu, explained that the inaugural edition of the tour is focused Lagos and was con-

ceived to showcase the beauty of the nation’s commercial hub to Nigerians, Africans & all who would love to experience the true beauty of the state through internal tourism. He said, “Having an unforgettable experience doesn’t have to be an expensive venture and Visit Naija is about to prove that with Cruisetopia as the fee is affordable for all. “It is a day-cation like never before in Lagos; you don’t want to miss out of this edition. Internal tourism is fast spreading within countries and Nigeria isn’t left out.” According to him, the tour promises to be exciting

and captivating activities like themed experiental tour of Nike Art Gallery, wild outdoor experience at Lekki Conservation Centre, Nature shots, comedy by the popular Funny Bone and Networking among others. “If you have been looking for a truly different kind of social experience in Lagos that will leave you not only entertained, edutained but refreshed? Or perhaps you had wanted to create a special time for your spouse, friends, family members, Teammates or that perfect place to pop the question? This is for you. Tickets are available on Afritickets and Nairabox,” he added.

L-R: Lawrence Chuku, representing the minister of transportation; Chinedu Elueazu, acting permanent secretary, ministry of youth development & economic empowerment, Rivers State; Dennis Okoro, director, MTN Foundation; Leslie Nyebuchi Eke, Eze Oha Evo III of Evo Kingdom, King, and Reginald Okeya, director, MTN Foundation, at the Two-Day ICT & business skills training organised by MTN Foundation in Port Harcourt recently.

CSR

Oando Foundation, Ovh Energy partner to upgrade learning infrastructure in Rivers KELECHI EWUZIE

etermined to improve infrastructural deficiencies in public primary schools, Oando Foundation (OF) has partnered OVH Energy, a leading downstream marketing company and licensee of the Oando retail brand to upgrade facilities in its adopted school in Model Primary School, Ekara Onne, Rivers State. The strategic partnership comes on the heels of both Organisation’s efforts to foster the United Nation’s Sustainable Development Goal Four (4) on Basic Education, aimed at holistic improvement of public primary schools to improve access to qualitative education and impact positively on learning outcomes while reinforcing commitments to improving access to basic education. Adekanla Adegoke says the Foundation leverages strategic partnerships with various

local/international organisations to mobilise resources to its adopted school communities. Adegoke opines that Oando Foundation partnered with OVH Energy to upgrade the school and has been equipped with several new units of furniture for pupils and teachers, provision of teaching and learning materials, renovation of a block of classroom and general repairs”. “OVH Energy had supported our work through the years and we believe that partnership is key to scaling education in Nigeria and we request all stakeholders - Government, businesses, communities and innovators to join us to transform lives through education”, Adegoke said. Speaking about the initiative, Huub Stokman, chief executive officer, OVH Energy Marketing Ltd reiterated the company’s commitment to enabling a serene and condu-

cive learning environment in its host communities. According to Stokman, “Education is a basic requirement for every child and the primary level is especially important as it lays the foundation for growth that is why we decided to embark on this project alongside Oando Foundation. This initiative brings us closer to our aim of delivering social value, building cordial and sustainable relationships within our areas of business operations. “We are thankful to Oando Foundation for the opportunity to leverage its platform and pedigree as an independent charity with a mission to improve the quality of teaching and learning in Nigerian public primary schools. We hope to continue more of these initiatives, confident that together with the government and other corporates, quality education will be achievable in Nigeria”, Stokman added.

Sagamite club announces business support initiative MICHAEL ANI

n a bid to empower youths as well as drive local business initiatives, a private socio-economic club in Ogun-state, known as The Sagamites Club, has announced the launch of its annual leadership conference and business support initiative for local businesses in and around, Sagamu, Remo, Ogun state. This prestigious club made up of business executives from across various sectors of the economy has taken it upon themselves to enrich their community and commercially empower its citizens. Speaking at the occasion, Seni Ayeni, President of the club mentioned that the main empowerment conference will hold on Sunday 27th October

and will involve mentorship sessions for youth in the environment. Business leaders in the private and public sectors that have been invited to share their career experiences at the event includes, Professor Toyin Ogundipe, Vice Chancellor University of Lagos, Tokunbo Talabi, Secretary to the government of Ogun State, Segun Ogunsanya, Managing Director/CEO, Airtel Nigeria Plc and Fatai Folarin CEO Deloitte Nigeria & West Africa. Furthermore, Ayeni disclosed that on the 27th October, the club would announce the award of its business support funds to 10 most qualified would-be-entrepreneurs, who will be selected based on merit and business proposition. Ayeni further said “it is a

privilege to support the lessprivileged; we are inspired by the fact that we are positioned to be of help in changing the narrative of our community youth, from the lamentation of unemployment and perceived laziness, 419ners and drugs-consuming youth, to that of powerfully and gainfully employed young adults”. At the press conference announcing this initiative alongside Seni Ayeni, President of the Club, were Col Duro Oyebanjo, Funbi Dawodu, Dimeji Oresanya and Prince Timothy Oke-owo, among other members. It would be recalled that the Sagamites club was founded in 1972 and has since then been a major force for good in the Remo community and indeed Ogun State.

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L-R: Gbemi Adelekan, director, Life Changers Foundation; Rashika Batohi; Amit Bapat, chief financial officer, American Express Global Business Travel Nigeria (AMESGBT); Claud Batohi, director, AMESGBT, and Dapo Oyewumi, director, Life Changers Foundation, at the 2019 Life Changers Foundation Walkathon “Walking for humanity to create awareness on poverty alleviation in the Land’ in Lagos.

L-R: Isidore Ogunjiofor, MD, Oriflame Nigeria; Carl Michael Gräns, Swedish ambassador to Nigeria Ghana and ECOWAS; Divinea Okwara, sales support and marketing manager, Oriflame Nigeria, and Kemisola Ajetumobi, executive director-No1 Leader, Oriflame Nigeria.

L-R: Adebukola Oladipupo, MTV Shuga actress; Bada Akintunde-Johnson, country manager, VIMN Africa; Georgia Arnold, executive director, MTV Staying Alive Foundation, and Anita Aiyudu Adesiyan, marketing and partnerships manager, MTV Shuga Naija, at the MTV Shuga Season 4 Premiere in Lagos.

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Wednesday 23 October 2019

BUSINESS DAY

BANKING CBN’s credit stress test show banks vulnerable to shocks above 100.00% in NPL Stories by HOPE MOSES-ASHIKE

he Central Bank of Nigeria (CBN) conducted a credit rust stress test for the banking sector at the end of December 2018, which revealed that lenders could withstand a shock of up to 75.00 per cent increase in the industry Non-Performing Loans (NPLs) as the Capital Adequacy Ratio (CAR) remained above 10.00 per cent. However, the industry was vulnerable to shocks above 100.00 per cent increase in NPLs as the industry CAR fell below 10.00 per cent. Similarly, the credit concentration stress test showed that the CAR of the banking industry fell below the 10.00 per cent regulatory threshold under scenarios 2 and 3 of the test. Under scenario 3, the CAR of the banking industry declined to (1.42) per cent, from the pre-shock position.

This implies a severe negative impact on the industry if the quality of the exposures to five largest obligors worsened. The breakdown of banking industry total credit by sector showed that the oil

IMF says CBN’s inflation policies the way to go

he International Monetary Fund (IMF)said the efforts of the Central Bank of Nigeria (CBN) towards controlling inflationary pressure is the way to go in bringing down inflation rate. Abebe Selassie, director, African department, IMF who said this at the ongoing IMF/ World Bank annual meetings in Washington, D.C. said adjustment to the very high inflation that seen on the exchange rate was still playing out. “I understand also there’s been some, you know, shocks related to food prices, and the like. I think, frankly, just keeping on what the Central Bank has been doing over the last couple of years, continuing to bear down on inflation, to make sure that it can gradually decline, as the way to go,” he said. Speaking during the African department press briefing, he said, “we don’t think that monetary policy is badly calibrated; far from it. So, I think just continuing, giving time for deflation to decelerate is what’s needed”. On fiscal policy, Selassie said it was important that the government increases non-

tax revenues to be able to invest in the infrastructure the country needs in building, expanding university education, expanding health service coverage. He stated that governments need a lot of resources to facilitate a lot of the investment that the government needs to make. “I think there’s also scope for reforms to make sure that you have a business environment that facilitates more private investments. And we discuss with the governments in trying to provide policy advice as much as we can”. Responding to questions on border closure, he said, “our understanding is that the border has been closed, reflecting concerns about smuggling that’s been taking place, illegal trade, not the legal trade that you want to facilitate. So we’re very hopeful that discussions will resolve the challenges that this illegal trade is fostering.” He said if the border closure was to be sustained for a long time it’s going to definitely have an impact on Benin and Niger, which of course, rely quite extensively on their big brother next door. “So, we hope that there will be a resolution to that”. www.businessday.ng

and gas sector accounted for 30.29 per cent, while manufacturing, government, general commerce, finance and insurance, and others accounted for 14.53, 6.02, 7.40, 6.42 and 35.34 per cent, respectively, at the

end of December 2018, according to the CBN’s Financial Stability Report (FSR) released last week. Analysts in the financial services sector had projected a further rise in the NPLs following the recent direc-

tives on Loan to Deposit Ratio (LDR) by the CBN. The CBN had directed all deposit money banks to maintain a minimum LDR of 60 percent by September 30, 2019 and subsequently increased it to 65 percent

with December 2019 as the new deadline. The focus of the LDR minimum is to promote consumer and mortgage credit to drive demand, the regulator explained. At the end of December 2018 banking industry stress test, which covered 21 commercial and 5 merchant banks, was conducted by the regulator to evaluate and determine the resilience of the industry to probable and adverse shocks, including credit, liquidity, interest rate and contagion risks. The report revealed that baseline capital adequacy ratio (CAR) for the banking industry at end-December 2018 was 15.26 per cent, indicating 3.18 percentage points increase from the 12.08 per cent recorded at the end of June 2018. The baseline banking industry NPL ratio was 11.64 per cent at the end of December 2018, showing a slight improvement of 0.81 percentage points from the 12.45 per cent recorded at end-June 2018.

Lagos commodities, futures exchange to partner with Ecobank for trade settlement across Africa

he Lagos Commodities and Futures Exchange (LCFE) has indicated its readiness to partner with Ecobank to enable the seamless settlement of trades across Africa as it starts trading in a few weeks. The Managing Director of the Exchange, Akin Akeredolu-Ale stated that the Exchange needs a bank that has the required African spread and superior technology like that of Ecobank that can support it to accomplish its mandate to formalize trade across the continent. He said the Lagos Commodities and Futures Exchange is determined to give Africa trade the needed structure that will enable everyone measure and determine growth within the continent both at national and regional levels. This he noted will position Africa to compete better globally. According to Akin Akeredolu-Ale, partnering with Ecobank will “enable us easily accomplish our vision of enabling trade across the continent. Ecobank had set up a technology that facilitates trade and currency exchange with its wide foot-

print across Africa and it is only natural for us to seek to partner with such an organization.” He enumerated the activities of the Lagos Commodities and Futures Exchange to include providing a trading platform for the exchange of agricultural, Oil and Gas, Solid Mineral and Currency commodities In his comment, the Managing Director, Ecobank Nigeria, Patrick Akinwuntan, stated that Ecobank’s unique and large pan-African platform positions the bank to support trade at all levels. According to Akinwuntan the Ecobank’s technology platform is designed to help unlock the opportunities of the continent, through standardisation across 33 countries, thereby fueling regional integration, trade and investment across borders. Akinwuntan praised the tenacity of the initiators of the Lagos Commodities and Futures Exchange in their quest to formally trade across the continent. He assured them of Ecobank’s support whilst also noting that relevant regulators will be carried along.

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In his words, Akinwuntan said “the need for a commodity Exchange is long overdue and we are confident of the capacity of the Board and Management of the Lagos Commodities and Futures Exchange to close this gap. Ecobank’s approach to doing business in Africa is to create a united and integrated platform that reflects the values of Africa as a whole whilst leveraging its diverse talents and resources to tackle its common challenges and realize its immense opportunities as one market. Further, he reiterated that “with a larger African footprint than any other bank in the world operating in West, Central East and Southern Africa. We are the only bank that spans 36 African countries, but operates a truly integrated African network. That is One unified integrated Ecobank Mobile Banking App, that works seamlessly across all 33 operating countries in Africa; One Ecobank Omni and Omnilite serving all Multinationals and SMEs in Africa; One Rapidtransfer app that breaks down country borders and allows the diaspora community @Businessdayng

send money directly to their loved ones, instantly and affordably across Africa; One Ecobank Online Banking platform that you can access easily whether you are in Abuja or Kinshasha.” Also speaking, Akintayo Dada, Executive Director, Corporate Banking said “Ecobank is determined as the pan-Africa bank to contribute to the development and advancement of the continent through financial integration with uniform world –class practices and proprietary technologies. “Ecobank offers a comprehensive suite of digital financial services to meet the challenge of modern banking across all its business segments, which includes Consumer, Commercial and Corporate Banking. We provide solutions that make banking more instant, affordable, convenient and accessible for everyone on the continent and beyond, from international corporations to the local consumer”. He stated Dada thanked the Lagos Commodities and Futures Exchange team for their trust in Ecobank and assured them of the bank’s support.

Wednesday 23 October 2019

BUSINESS DAY

Wednesday 23 October 2019

BUSINESS DAY

INTERVIEW

‘The best time to invest in real estate is when there is equity built into it’ Real estate remains the most viable and dependable investment asset class in Nigeria today; more so with the near-crash and uncertainties in the stock market. Investment advisors would readily advise potential investors, especially those with patient capital, to look the way of real estate. But they must be guided by observable fundamentals. In this interview, KOLA ASHIRU-BALOGUN, managing director, Mixta Nigeria, speaks on the best time for investors to move cash to the market. He also speaks on other issues including real estate and economy, the mortgage industry, and the recent double rating of his company by Agusto & Co and GCR. He speaks with CHUKA UROKO, Property Editor.

ith the economic slowdown and government inertia, businesses are just quiet. What is the current state of real estate market in relation to this state of affairs? It is still a tough industry business. Numbers don’t lie. The sector is underperforming. It is still in negative growth in terms of GDP. That is a pure reflection of how serious we have taken the industry. I think that, as a country, if officially we are in recession, individually, we are also in recession too. Individual or personal wealth is next to nothing at the moment. What makes my personal balance sheet is the money I have in the bank; my debt to the banks and my assets which include my house; when you look at all these, real estate asset today is zero and the money in the bank is also zero. So, Nigerians are technically in recession. This means that individual GDP has been going down in the past few months. However, I think there is a way forward. It is government that should drive the industry. They have started some positive things, but the challenge is that there are too many agencies of government that are working in silos or at cross purposes. They need to come together and focus on one thing, get it done and take on another. If government needs to build its tax revenue, it has to focus on two things. One is mortgages so that whether it is going through the National Housing Fund (NHF) or the Family Homes Fund (FHF), it should fund it and let people have access to them. You see, our problems are not insurmountable, but we need to make concerted efforts to deal with them. There are a lot more businesses coming into the affordable housing space in the country today. Money is no longer available at the top. It is now at the bottom. Today, we are doing more numbers than before because we are playing at the affordable space. And people are buying. Your sector recorded positive growth by the first quarter of this year, but went down again in the second quarter. What do you think is responsible for that? The answer is very simple. It was the elections. What really drives growth is the amount of money that the government is spending on construction. But when you look at construction activities in the country today, you find out that everything died down until the president inaugurated his cabinet. From 2018 up to May this year, there wasn’t any significant activity on both federal and state governments’ side. And there is only so much the private sector can do. If there is no significant activity from the public sector, the entire industry will come down. Some people argue that the President Buhari’s anti-business and anti-graft fight also contributes to the slowdown in the real estate market. How true is that? I think we need to sanitise our economy, but it doesn’t have to be so political. Real estate has always been a store of value and when you look at the performance in the stock market, you see that real estate is just the way to go. It is a safe place to store capital, but it is very unfortunate that people use this

people live in. This way, we can maintain the value of the house.

asset to launder money. I wouldn’t want a situation where the industry becomes a safe haven where people store stolen money. To that extent, the industry needs to be sanitized. What we want instead is a situation where people that earn their living should be able to buy houses and have a decent sense of belonging in society. A major drawback to the growth of the housing sector in Nigeria is mortgage. What do you think are the problems of the mortgage system in the country? The industry is fragmented. I am hearing of some recapitalization going on for them which is very positive because we expect to see a stronger mortgage institutions in the country. But one thing is sure- The business is difficult. Presently, the mortgage banks get their funds from the Nigerian Mortgage Refinance Company (NMRC) and even if they get those funds at 14 percent, there is no way a borrower can get a loan from them at 10 percent because they must still survive and make profit for their shareholders. What I think we should do is to understand that housing is critical and that is what I think will drive the economy. If that is done, then we find a way to drop the interest rate below 10 percent in order to make it attractive and even accessible. If you are able to drop that rate by way of investing what is used in building houses inefficiently, you would have done a lot of services to the people. You will be surprised at the number of mortgages that could be created for the people. When that is done, mortgage will not only be available, but also affordable. When that is done too, there will be more housing supply because more developers will build knowing that more people will be able to buy through mortgage. Government should get out of the business of building homes because they cannot do it right. They can’t be as efficient as the private sector operators. They should enable the market by finding a different way of supporting the mortgage industry. Government could decide to be creating just 100 mortgages and that will be much more than the whole mortgages created in the past 12 years. But do you think liquidity is an issue for the primary mortgage banks given that the NMRC has refinanced these banks to the tune of N18 billion as at December 2018? I don’t think the problem of the PMBs is capital. If you look at the commercial banks, for instance, they have money but are not lending because of the risk. The banks would not lend to somebody they are not sure will be able to pay back. Most of the PMBs would tell you they will not lend to borrowers outside Lagos, Abuja and Port Harcourt where you have more credible customers and understandable landlords. So, you see their market is very limited and narrow. Even in those markets, how many companies are there that the employees can comfortably take up mortgage at 21 percent per annum and be able to pay back. Such companies are very few because if you take out the oil and gas, and telecoms, nothing is left. Even banks employees cannot because the banks are not doing well at the moment. www.businessday.ng

How successful has this initiative been? This year alone, we have sold over 100 housing units under this product. If it were years back, we would have sold more. What we have seen is a reflection of what the economy says. We see it as a product that can drive our business going forward. If you cannot move in, you can generate income from it. Somebody who goes for this product may not necessarily be looking at the location but the cashflow in terms of return on his investment. What is his expectation? Apart from the returns, we also offer more things with those houses. For instance, for a N13.5 million house, we will be able to package National Housing Fund (NHF) for buyers. They are required to put down 10 percent equity which is N1.3 million. The remaining N12 million will be in mortgage. Depending on the number of years, that means a monthly payment of N100,000. The rent that I will be giving to you will be about N700,000. This means that at the end of each year, you have, at least, N500,000 in your pocket. This is not a bad investment and that is why I always tell people that the best time to invest in real estate is when there is equity built into it. There is opportunity in real estate. Forget the location thing. There is no perfect location. Once these homes are delivered, the prices will go up. So, now is the time to buy.

They really need to do something like consolidation in that industry. The property market has seen a fundamental shift in terms of project size. Developers are now shifting from mansions and duplexes to small-size apartment units. What is Mixta Nigeria doing in that space? I can say confidently that we were one of the pioneers of that shift. Incomes haven’t gone up, but costs have gone up significantly. So, we have to cut our coat according to our size and that is what we have been doing. Back in 2009, we did 3-bedroom apartments on 150 square metres of land but now we do that on 100 square metres and the clients are comfortable with it. Price is the key thing. We are reviewing some of our projects in such a way that we are selling our 3-bedroom bungalow for N15 million and in 2009, we were selling same size building for almost the same price. This is because income has not gone up. Ideally, I should be selling for N20 million to N25 million.

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Before now, if you gave that size of house to someone he would tell you it was too small, but no longer so. I think it is necessary now for us to adjust and cut down our excesses. We are now living in an entirely different world. What we need now is just a functional home so that as things improve and get better, we can move up. As a major player in this market, tell us about the different products and services you have for the different income classes in the market looking for homes to buy? When we design our products, we try and design for every income group including chairmen of companies, managing directors, managers, sundry employees and even people in small income groups. So, we have products at different prices to address the needs of these people. We have products from N6 million to anywhere around N100 and something million. But our N6 million product is land. In driving what we call our vision and what we really want to do, we don’t enjoy selling land to people and in 10 years the land is still fallow. We would rather sell land to people who can build on the land and move in there with their family

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in a few years. We have started designing houses which people can buy for the same prices they buy land in the neighbourhood. For instance, at the Beechwood Park Estate we are doing now in Lekki, our prices start from N13.5 million. This is the price of a 2-bedroom terrace house. We are also building 3-bedroom semi-detached house for N16 million. I can tell you that we are the only one selling that size of housing at that price within that location. Instead of buying land within the same location for N12 million and in the next five years ago, the land is still there, you can buy from us and even if you don’t want to live there, we can rent it from you and even give you two-year rent upfront. Two-year rent upfront; how do you recover your money? Once I get that commitment from you, all I have to do is to look out for another person who will take up the property. There is always demand for housing. What is required is knowing who the players are. I don’t want to build houses that are empty. I want to build houses that I see

Now, let us take you back four years ago to when you rebranded to Mixta Nigeria from ARM Properties. What has been the impact of this journey so far? We have become a bigger company in the sense that we have a wider operational base. We have subsidiaries in many African countries including Senegal, Core D’viore, Tunisha, Morocco, etc. We are planning to open offices in two more countries. What this wider operational base means for us is that it has given us the opportunity to attract more funding internationally than any other developer in Africa. Very few companies have the kind of footprint that we have. Also very few companies have experience in affordable housing than we have. That’s part of the benefits that we have. We have been able to attract better funding locally and internationally. Our expertise in execution is much better. We are not there yet, but the experience has been worth our while. The market has been much advanced. Some of the policies we have recommended to government are from what we have seen in other countries. We have told the Lagos State government, for instance, that they have to recheck their building guidelines and building permit processes. We have also suggested to them to come up with policies that address affordable and low income housing. They have listened to our recommendations. Recently your operations were rated by Agusto & Co and GCR. What fundamentals were they looking at? What Agusto & Co did was to revalidate www.businessday.ng

our rating while GCR retained its BBB- rating on us, meaning that we are the strongest real estate company in Nigeria at the moment in terms of investment grade level. This, for us, is quite positive. What does this rating mean to you as a company and also to the real estate industry in Nigeria? What this means to the industry is that there is still belief and confidence in real estate despite the negative outlook. It means too that as a company that focuses on fundamentals, our business fundamentals are quite strong. There might be external pressures that affect our businesses but for as long as we focus on affordable housing and for as long as we see opportunities within that segment, the business fundamentals are there. When we combine that with our asset base, we still believe that we are one of the few companies that have the largest land bank that we have. This is necessary for us because in this industry, we are not going to buy land today. All we have to do when there is need is to cut from what we have already, develop our product and sell unlike our competitors who have to go and acquire new land. That alone gives us a solid base that differentiates us from the rest of the real estate companies. So, it is quite interesting that both GCR and Agusto & Co maintained their rating on us. What the rating also does is that it gives investors more confidence in us. This means that we are capable of acquiring financial instruments and bonds that are issued in the market. We have been very active in issuing commercial papers in the market. We have not been able to secure long-termed funding, but if there is liquidity on the short term side of the market, we will be able to access it and roll it over a longer term instrument. When these two companies set out to access you as a company, what numbers were they looking at? They looked at our financials through the first half of 2019; they also checked the 2018 numbers. They looked at our sales; looked at what our industry is doing. But the rating was more focused on our company, on the financials and our performance. At the end of the day, that is why they are still able to maintain the BBB- rating by GCR and the same thing by Agusto & Co Now, do you have any plan to create a mortgage product that will enable low income earners to access your affordable housing at a cheaper rate? Well I don’t know about big companies and small people. I see everybody as a potential home owner. I think we cannot play in every industry much as we see mortgage as part of our value chain. We can only support it as we have supported the Family Home Fund (FHF) in terms of offering advice and providing part of our land bank to develop housing within the Lagos market. We really signed an agreement with the fund to build 5,000 housing units in Lagos. Once the federal government executes the agreement, we will start the project. I don’t think it is proper for our business to compete with those that support us. If you support them, they will succeed, but once you start competing, it becomes difficult. I

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don’t know how to do mortgages, but I know how to build houses. What does the market expect from you in the next 3-5 years in terms of housing delivery? I think we are quite confidence that because of programs like this, we would be able to attract a larger capital, and what that capital would do for us is to move the company to a different level that would enable us to built do a lot more units. We are partnering with mortgage institutions; we would continue to partner with the federal government and the state governments on housing to be able to build a lot more units. We need to be able to deliver 2,000 - 3,000 units a year. That is what we set out to do and I still believe we can achieve that. It’s been a difficult few years and the economy has been quite difficult.

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Wednesday 23 October 2019

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

Countries in Gulf of Guinea region bleed as fuel smuggling, fish poaching threaten economy … Nigeria loses billions of dollars annually AMAKA ANAGOR-EWUZIE

est and Central African countries situated in the Gulf of Guinea (GoG) region are presently counting their losses following the high level of waterway insecurity leading to the thriving activities of fuel smugglers and fish poachers on their waters. Findings have shown that many criminal groups are smuggling fuel from Nigeria to neighbouring countries, and these activities are posing threat to the nation’s economy, especially based on the fact that Nigeria relies on petroleum products as major revenue earner. Speaking at the recently held Global Maritime Security Conference (GMSC) in Abuja, Dirk Siebels, senior analyst at Risk Intelligence of Denmark, who spoke on ‘Future of Maritime Security: Trends, Emerging Threat Vectors and Capability Requirements,’ traced the link between piracy and

Source: 2019 Global Maritime Security Conference

other illegal activities on the waters including terrorism, illegal migration, weapon smuggling and marine pollution. According to him, in April 2019, there was crew kidnap from product tanker in the region; in May 2019, a product tanker was reportedly hijacked around Lome but the ship owner was later arrested and investigated for possible involvement in

fuel smuggling. “In September, there was also an attack on fishing vessel off the coast of Cameron where two crew members were kidnapped. We have to bear in mind that combating piracy is different from fighting fuel smuggling and solving dispute between fishermen. This is why we need actionable strategies to deal with the menace,” he said.

He pointed out that countries in this region must have a coordinated effort, coupled with transparent legal regulations to enable legal operations on the sea, adding that operators should cooperate with security agencies to enforce the law. In the area of illegal fishing, it is estimated that Nigeria, a country in the league of world’s biggest exporters

of crude oil, may be losing billions of dollars to illegal fishing yearly due to the activities of fish poachers on its territorial waters. Margaret Orakwusi, chairperson of Ship Owners Association of Nigeria, told newsmen that owners of fish trawlers in Nigeria only take 40 percent of what they should be getting while 60 percent is lost to illegal fishermen. Orakwusi, who said poachers steal the fishes in the water in a very irresponsible way, stated that these poachers also find markets for these products running into billions of dollars yearly. “How do we sit back and allow these poachers sell their products successfully. Where are they selling the stolen products? Where are they finding the markets for the products and what banking institutions do they use without being accused of money laundering?” she questioned. She further said that

Nigerians in fishing business tries to do things the right way by having their payment done into their domiciliary account in order to tell the history of the fund. According to her, the markets for the stolen fishes are in Europe and Asia. “It is an international conspiracy; if we are not able to face these poachers in the high sea, we should be able to force the financial institutions to be more prudent and ask questions in line with the law of money laundering.” While listing the fishes in GoG region to include Lobsters, Prawn and Sea Cucumber, she called for capacities to arrest these poachers. In Nigeria, she said, owners of fishing trawlers comply with international standards by analysing the water, date and freeze level and also allow the products to undergo in-house testing by the Nigerian Fishery Lab to certify their products.

LADOL seeks support, funding for local firms into sustainable value addition …Gets P4G award for Sustainable Special Economic Zones AMAKA ANAGOR-EWUZIE

my Jadesimi, managing director of Lagos Deep Offshore Logistic Base (LADOL) alongside Gail Klintworth and Robbie Marwick from Systemiq, have collected the P4G award for Sustainable Special Economic Zones (SSEZ). The award was given for LADOL’s effort in developing plans and partnerships focused on transforming special economic zones in Nigeria, Ethiopia and Kenya into vibrant hubs of low-carbon, sustainable and inclusive business and community growth. The award ceremony took place after Jadesimi presented LADOL’s past, current and future plans to the international audience of business leaders that attended the P4G acceleration workshop.

Amy Jadesimi, managing director of LADOL (m); Gail Klintworth (r), and Robbie Marwick (l) from Systemiq, when the trio collected the P4G award for Sustainable Special Economic Zones recently in New York.

“Sustainable Special Economic Zones can transform low income high growth countries into global industrial and technology power houses, creating millions of jobs in the process. The P4G platform is ideally suited to encouraging, incubating and launching these zones because it focuses on equitable partnerships led www.businessday.ng

by local entrepreneurs or governments,” she said. According to her, countries like Nigeria can make a huge contribution over the next decade, to achieve the Sustainable Development Goals, if the local private sector companies that are building capacity and adding value sustainably, are supported.

“This support must come in the form of financing. Nigeria has sufficient capital available locally to get the ball rolling and transform thousands of small to large companies into significant market players. However, both local and international funding is not yet going where it should to yield the highest return to investors,” she said.

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Jadesimi, who noted that sustainability, equals profitability, pointed out the need to see the shift in the global investment community towards sustainable investments as a preferred asset class. “We now need to see action in the form of new criteria for bankability and financial products that make it possible to directly fund sustainable indigenous private companies, from the smallest to the largest,” she said. Jadesimi however, urged P4G to support a universally accepted rating and benchmarking system for sustainability that will enable investors to include sustainability in credit rating analysis. “If sustainable companies do not meet the popular but highly restrictive and negative yielding definitions of bankability, this new benchmark would ensure that the right companies get funding and that their in@Businessdayng

vestors benefit from higher returns. Private indigenous companies in high growth and low income countries are suitable investment vehicles,” she said. She said LADOL has already started diversifying and targeting a range of clients from agriculture to general manufacturing and green energy companies. She however, added that the company wants to attract the brightest companies, people into LADOL to partner, engineer and manufacture new industrial solutions for the world’s fastest growing markets in Africa. “To benefit from AfCFTA, innovation must be done in our local markets - LADOL is investing in creating an environment where a wide range of local entrepreneurs, engineers and innovators can design solutions in Nigeria for Nigeria - let’s industrialise Africa,” she advised.

Wednesday 23 October 2019

BUSINESS DAY

MARITIMEBUSINESS SHIPPING

LOGISTICS

MARITIME e-COMMERCE

NCS puts January 2020 as timeline to commission Jos, Funtua Dry Ports AMAKA ANAGOR-EWUZIE

he Nigerian Shippers Council (NSC) is perfecting plans to commission two dry ports in Jos and Funtua between December this year and January 2020, Hassan Bello, executive secretary of NSC, has said. According to him, the Council recently had meetings with promoters of Funtua and Jos – and gave them timeline to work and see to it that things are done for the two dry ports to begin operations. BusinessDay understands that there are two applications for industries to be located near the Jos Dry Port. Meanwhile, the Shippers Council has planned to ensure that the port complies with the provisions of the International Ship and Port Facility Security (ISPS) Code. “We are talking with companies like Smelters to see what could be done. This whole idea is that we could reach Europe from Jos faster than South Africa. It is about five hours to Europe, Germany, and Britain and so on,” Bello said. Speaking with newsmen in Lagos recently, Bello said a lot of progress has also been made with Kaduna Dry Port amid slow movement of containers from the seaports in Lagos to the Kaduna dry port using rail. Bello, who stated that the Nigerian Railway Corporation (NRC) now takes containers from Lagos to Kaduna, said there is need for frequency and certainty as regards the capacity of the railway to move containers to the Dry Port in Kaduna. “Because it is a narrow gauge, we are worried about derailment and the speed which is 60 kilometer per hour (KPH). Many shippers and companies like Nokako and Orland Farms have

come into Kaduna. They want to use Kaduna Port, but the capacity of the rail has been a concern,” he said. He however, said the Nigerian Railway is making every effort to increase the number of containers being moved to Kaduna by rail on weekly basis. “Nigerian Railway has been very committed in taking containers to Kaduna Port. The Customs Service has upgraded their Command. Central Bank has recognised Kaduna Port in electronic Form M. Many banks and government agencies are now in Kaduna,” he said. Bello, who disclosed that Kaduna is witnessing a lot of export growth because of the dry port, listed cow horn, ginger, hibiscus popularly known as ‘Zobo’as agric produces that are being exported from Kaduna through the Dry Port. Meanwhile, Shippers Council is, in partnership

with the Commonwealth Investment and Enterprise Council as well as the NEXIM Bank, making plans to acquire the land adjacent Kaduna dry port for processing and packaging of agricultural produce for value addition. “We want ginger and zobo to be processed and packaged before being exported. This will mean employment for people and we are working with the Ministry of Finance on this. Kaduna will be a success story especially with rail coming on. We are also looking at Kano which unfortunately has not been able to do anything. This will decongest the seaports, bring shipping closer to the people and grow the economies where these dry ports are sited,” Bello said. On securing investors for the dry port projects, he said some dry ports like Jos are dealing with Chinese companies, some with the

NPA disowns NPACP, says it’s an unlawful group

Canadian investors like Isiala Ngwa. On volume of business in Kaduna, he said, though volume might be presently low due to the capacity of the rail, adding that the Council is making effort to ensure that shippers from Niger are moving their cargoes through the dry port. “We had meetings with Niger recently. They want their cargo to come, but they are looking at Kaduna. Already, the Kaduna State government has led a trade delegation to Niger – so that they will consolidate that,” he said. Findings show that the Kaduna State government has put in efforts in ensuring success of the dry port through infrastructure development such as roads, security, light, water and other infrastructure. In addition, the NSC plans to ensure Kaduna Port becomes ISPS Code compliant.

Hadiza Bala Usman, managing director, Nigerian Ports Authority (NPA), (m) receiving a portrait from Nkopuyo Abraham, pilot (2nd l) with Abiodun Ogunpitan (l), Otobing Ekam (2nd r) and Jumbo Hope (r), all female NPA pilots, when they paid a working visit on the managing director at the NPA’s Corporate Headquarters in Marina, Lagos recently. Pix by NPA MEDIA

AMAKA ANAGOR-EWUZIE

he Nigerian Ports Author it y (NPA) has disowned the Nigerian Ports Authority Concerned Pensioners (NPACP), describing it as a group that is not known to any Nigerian law. According to the NPA, members of this group, led by Charles Ayo Binitieare, former employees of the Authority, most of whom left the service between 2006 and 2007, have refused to belong to the recognised Nigerian Ports Authority Pensioners Welfare Association (NPAPWA). The NPAPWA is recognised by NPA based on the July 20, 2018 letter addressed to the managing director by the chief registrar, Federal High Court Lagos, A.A. Tahir recognising Umar Ali Imam as the authentic caretaker committee member to take charge of the association. “Even though the Authority has found this a legitimate ground not to have anything to do with the group, management has at various times in the past three years, given them audience and taken steps to address their complaints,” said Adams Jatto, general manager, Corporate and Strategic Communications of the NPA in a statement sent to BusinessDay. He listed the steps to include harmonisation of pensions ranging from 15 percent to 158 percent paid to all categories of pensioners including the 2006/2007 set; the increase of pensions to all categories of pensioners including members of the NPACP by

3percent, and payment of 18 months arrears of 3 percent increase from January 2016 to June 2017. He said the NPA ensures that its pensioners get their monthly entitlements, which runs into about N700 million on the 22nd day of every month. In addition, pensioners have access to the Authority’s medical facilities at no cost. In fact, the Authority only recently extended the opportunities for pensioners to attend referral medical facilities across the six geo-political zones of the country,” he said. Jatto said that the grouse was the outrageous proposal of NPACP that the 3percent increase was too little and should be raised. “Our position has also been validated by the National Salaries, Incomes and Wages Commission, which clarified that the constitution leaves the margin for increase of such remuneration at the discretion of the Authority.” “The NPACP is also claiming that the Authority increased the salary of staff in January 2018 and as such, pensioners should benefit. The correct position, which has been clarified by the National Salaries, Incomes and Wages Commission in a letter written to the Minister of Transportation on May 31, 2018, was that the Authority only corrected anomalies in its salary scale and not salary increment,” he said. He however, assured that the NPA is committed to the welfare of its workforce, serving or retired but will not allow itself to be stampeded by the NPACP or any other group.

VESSELS EXPECTED AT LAGOS PILOTAGE DISTRICT SHIP

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UNI SEA TOP ELEGANCE SAN BENEDETTO II FAN ZHOU 9 SANTY MEGA CARAVAN POOLGRATCH XIN SI LU SHIMEI FORTUNE NASCO PEARL SEASPAN LEBU ANL WANGARATTA ANL WYONG NAVIOUS DEDICATION SEASPAN DALIAN HAWK I ZIM KINGSTON MSK CONGO MSK CAPE COAST BROOK KOTA SURIA

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ALLRAY EKO/SUP 15/40FCL APS ENL 21000MT BLUE SEAS NOJ 4400MT BLUESTAR DAN.REF 758.611MT BLUESTAR GDNL 27379MT BLUESTAR DAN.REF 5775.125MT BLUESTAR DAN.REF 2568.273MT BLUE STAR DAN.REF 7228.925MT BLUE STAR DAN.REF 14783.951MT BLUE STAR GDNL 25000MT C.C NIG APMT 600FCL C.C NIG APMT 520FCL C.C NIG APMT 590FCL C.C NIG APMT 500FCL COSCO APMT 678FCL GOLDEN ABTL 47467.818MT LANSAL APMT 830FCL MAERSK APMT 520FCL MAERSK APMT 340FCL PEAK NOJ 10000MT PIL APMT 900FCL MOTOR VESSELS AWAITING BERTH AT LAGOS

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Wednesday 23 October 2019

BUSINESS DAY

CORPORATE GOVERNANCE

Corporate governance: Accountability and transparency in the boardroom OLAYIMIKA PHILLIPS

he corporate structure is perhaps the most innovative creation of law- it revolutionised trade and commercial transactions all over the world. Through companies, people can combine resources, pursue and realise set business objectives and limit their risks. Interestingly, the company remains a distinct legal person, capable of exercising all the powers a natural person could. As an artificial entity however, a company cannot direct and manage its own affairs. This, it can only do through natural beings. The shareholders who own equities in the company cannot effectively manage the affairs of their company due to their large numbers. Hence, they appoint a few directors to manage and direct the affairs of their company. By appointing the directors to manage the affairs of their company, the shareholders put the fate of their investments in the hands of these directors and they would typically have certain expectations from these directors. At the minimum, they expect the directors to be honest, truthful, open, transparent, accountable, responsible, just and fair in the management of their company. The interest of the shareholders is to after all maximise the value of their investments and a sound management by the directors would have this guaranteed. Experience has however shown that the interests of the directors are not necessarily always aligned with that of their appointers- the shareholders. Rather than uphold their fiduciary duties and enhance shareholders’ investments, many directors are keen on achieving their own self-interests at the expense of the company and the shareholders. Sometimes, the desire to build corporate empires, particularly where directors’ remunerations are tied to corporate results, drive directors to pursue short-term gains at the expense of sustainable corporate growth. At another extreme, they arbitrarily award salaries or out-of-pocket expenses to themselves or prepare false accounting statements to hide the true financial position

of the company. Embezzlement of the company’s funds and engaging in transactions where their personal interests conflict with those of the company, and making secret profits at the expense of the company are typical shenanigans many directors indulge in. The 2001 Enron corporate scandal in the United States (US) is the textbook example of directors abusing their position. The executives of Enron, one of the biggest energy companies in the US, connived with the company’s auditors to hide the financial troubles of the company. Incorporating unrealised future gains into current accounting statements and toxic debt through special purpose vehicles, they posted dizzying profits. The scandal eventually led to the insolvency of Enron. Nigeria has also had its own fair share of corporate scandals triggered by directors’ abuse of position. The 2007 scandal of Cadbury Nigeria Plc. is still fresh in mind. The then CEO and Finance Executive Director of Cadbury had also connived with Cadbury’s auditors to overstate the company’s financial position from 2002-2005 by over 13 billion naira. In the banking sector, banks’ executives have been removed by the Central Bank of Nigeria (CBN) while some are facing criminal trials for abusing their positions. These examples clearly demonstrate the attendant risks of weak governance. The mechanism in which a company is managed and directed is what corporate governance is all about. 21st Century development

has however shown that the interests of the shareholders are not the only paramount consideration in corporate governance. The interests of other stakeholders including customers, creditors, employees, the environment, host communities, government and the public at large have become relevant. This is largely because these stakeholders are also directly impacted by corporate actions. As such, weak governance, capitalistic shorttermism and profiteering may have adverse effect on creditors ability to recover, erosion of sustainable environmental practice, systemic decline in flow of foreign capital and ultimately corporate or economic disaster. Rather paradoxically, regulatory efforts to curb abuse of corporate powers are always after-the-fact, with the government and its agencies scrambling to save a crashing capital market or prevent run-on banks and systemic contagion, and in the process creating bigger problems by enacting laws born of emotional political reaction. Following the Enron debacle, the US Congress passed the Sarbenes-Oxley Act to ensure accuracy of financial reporting and to punish fabrication of accounting records. In Nigeria, the Codes of Corporate Governance issued by the Securities and Exchange Commission, the Central Bank of Nigeria, Nigerian Communications Commission, National Pension Commission, National Insurance Commission and the Financial Reporting Council of Nigeria are all tailored at ensuring that the affairs of companies are run in a transparent

and honest manner, enhancing market integrity, stakeholders’ confidence and above all, shareholders’ value. Companies, especially public companies, are required to comply with the relevant Codes and report compliance with the relevant regulatory body. The Codes recognise and restate the timeless fiduciary duties of directors to be loyal and transparent in the best interest of all stakeholders. To minimise the negative incentives which tend to drive abuse of powers, the Codes now require that boards must be comprised of uneven blend of executive and non-executive directors, such that non-executive directors are in the majority. The Codes also require the presence of independent directors who are neutral persons with no interest in or connection to the company. This way, the likelihood of corporate collusions at board level to pursue selfish gains, is significantly reduced. One consistent denominator in corporate scandals is the connivance between directors and the auditors to conceal a company’s true financial position. The Codes have sought to address this by clearly outlying the roles of audit committees and limiting the tenure of auditors, thereby forestalling unwholesome quid-pro-quo between directors offering security of tenure to auditors in exchange for concealment of misconducts. Importantly, companies are now required to put in place whistle blowing policies known to all stakeholders for reporting unethical or illegal activities and behaviours. The existence of

these policies is consistent with the need to ensure that illegal or unethical dealings by directors are reported to the regulators and reporters are adequately protected. Needless to emphasise, weak corporate governance is detrimental to the growth of a company, which in turn impacts the economic growth of a country. As a frontier market in need of constant foreign investments, sound corporate governance must be woven into the operational fabrics of Nigerian companies. To achieve this, directors must act transparently and honestly at all times.

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

Wednesday 23 October 2019

BUSINESS DAY

PENSION today

In Association With

CPS: As a contributor, make known your potential beneficiary

h e C o nt r i bu t o r y Pe n s i o n Scheme(CPS) by design from inception do not intend to make the process of assessment of pension benefits, either in life or in death cumbersome or difficult for the contributor or their beneficiaries. This underscores why Pension Fund Administrators (PFAs) and the regulator, the National Pension Commission (PenCom) continually educate and enlighten participants in the scheme on the need to regularly update their personal datas. While some issues may be easy for the contributor to resolve when alive, it will not be the same when he or she is no more and beneficiary will now be faced with the burden of resolving identity issues that may come up. The ongoing data recapturing in the pension industry provides a good opportunity for contributors to go and update their records with their PFAs, particularly letting their PFAs know who their beneficiaries will be in the event of the unexpected happening. This will not only help the contributors and their beneficiaries, it will absolve the PFAs the blame and accruable penalty from the regulator for mistakenly paying the wrong beneficiaries. According to the regulator, PFAs will henceforth be liable and pay from their statutory reserve fund in the event of payment of death benefits to wrong beneficiaries. PenCom gave the warning in a recent circular entitled: ‘Addendum to the Circular on Reversed Procedures on the Processing of Death Benefits’ and signed by Ehimeme Ohioma, head, surveillance Department in PenCom. The commission noted that the circular was issued to address certain challenges encountered by PFAs in the cause of implementing the procedures stipulated in the circular on Revised Procedures on the Processing of Death Benefits issued on October 3, 2018. PenCom therefore mandated PFAs to collect detail information of nominated parent/guardian of a minor beneficiary and request beneficiaries to submit Na-

tional Identification Number (NIN) slip/ card or any valid means of identification other than voter’s card. PFAs were also charged to play the role of a mediator in the event that they received two letters of administration or court orders from two named beneficiaries. The CPS as provided in the Pension Reform Act 2014 recognises the importance of the contributor, his contribution and what happens to him while in employment and in retirement. This is both alive and in death. With this realisation that there is life and there is also death, the CPS has taken care of the contributor, directly or indirectly, should either of the two happen as long as the person has made his contribution through his employer. Section one part 3 of the Pension Reform Act 2014 states that where an employee dies, his entitlements under the life insurance policy maintained under section 4(5) of this Act shall be paid by an underwriter to the named beneficiary in line with section 57 of the insurance Act. That, upon receipt of a valid Will admitted to probate or a Letter of Administration, confirming the beneficiaries under the estate of the deceased employee, the

Pension Fund Administrator(PFA) shall, with the approval of the Commission, release the amount standing in the retirement savings account of the decease to the personal representative of the deceased or to any other person as may be directed by a court of competent jurisdiction, in accordance with the terms of the Will or the personal law of the deceased employee, as the case may be. In another case where an employee is declared missing and if is not found within a period of one year from the date he was declared missing, a board of inquiry is set up by PenCom, which concludes that it is reasonable to presume that he has died, and in this case, the provisions of this section shall apply. When either of the two happens, the following process will be taken to pursue the benefit of the deceased. •The Next-of-Kin and/or employer should notify the PFA of death of the employee/retiree •The Next-of-Kin will also be required to provide a satisfactory means of identification such as current Driver’s License, International Passport, National Identity Card or letter of confirmation of identity

from his/her bank •A Next-of-Kin who cannot provide any of the means of identification stated above, may be identified by a 3rd party, who in addition to providing any of the satisfactory means of identification stated above shall also provide a sworn court affidavit identifying the claimant •The PFA will forward a Death Benefit Withdrawal Application Forms to the survivor to complete. The forms are also available in all its offices nationwide, and can be downloaded from its website. •The survivor will complete and return the Survivor Benefit Application forms to either head office of the PFA or to any of its branches nationwide. The completed application forms should be returned with a Letter of Administration or Will admitted to Probate and any of the listed documents below-Certificate of Death/Cause of Death; Certificate of Registration of Death; Police Report (if death is by accident); Burial Warrant issued by a Local Government Council; Evidence of Death/Burial issued by an Islamic Community Head or Judge of a Sharia Court; Evidence of Death/Burial issued by a Leader of a registered church; Copy of obituary poster (if any).

IS NOW RC634453

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

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This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme. If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

Wednesday 23 October 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Report shows majority of Nigerians rely on family support to survive risks …as experts recommend insurance protection Modestus Anaesoronye

study by the Centre for Financial Regulation & Inclusion and the World Bank to understand how insurance market development can contribute to sustainable and inclusive growth in Nigeria, shows that majority of the population depends on family for support when risks crystallize. Albert van der Linden, speaker/senior Research Associate, Cenfri who released the report at the Insurance Directors Conference organized by the Center for Insurance and Financial Management held in Lagos, said there are a lot of opportunities for enhancing individual and household resilience. According to him, less than 2 percent of Nigerian adults have insurance and most people rely on family and friends to cope with risk. Alternatively, they forego consumption or draw on savings, thus decreasing their resilience. The limited uptake he said is underpinned by low trust in insurers and a lack of awareness of insurance. Health insurance is the most popular, but at 609,000 adults, it serves only a fraction of the adult population. Other notable categories include life insurance (including compulsory group life), vehicle insurance (including compulsory third-party liability insurance) and endowment savings products. Insurance uptake is concentrated in urban areas, largely in the south and within specific target markets that are typically easier to reach. Almost half of the 1.8 million adults who have insurance work as salaried employees; and 65 percent of all those with insurance are male. Distribution is largely broker-driven, and most premium collection is done through corporate payments. Agent sales are growing, but agent distribution is limited to a few insurers that are proactively pursuing retail insurance. Bancassurance holds much potential

L-R: Ekeoma Ezeibe, council member, NCRIB; Eddie Efekoha, president, Chartered Insurance Institute of Nigeria; Layi Labode, baroyin of Egbaland, representing Adedotun Aremu Gbadebo Okukenu IV, alake and paramount ruler of Egbaland; Sunday Thomas, acting commissioner for Insurance; Funmi Babington-Ashaye, past president, CIIN; Muftau Oyegunle, deputy president, Chartered Insurance Institute of Nigeria, during the opening ceremony of the Insurance Professionals Forum held at Abeokuta recently.

given the large number of banked individuals without insurance, but there have not been any significant developments so far, partly due to recent bancassurance guidelines being perceived as restrictive. Opportunities for enhancing individual and household resilience: The diagnostic report identifies several opportunities for the insurance market to contribute towards the resilience of individuals and households: • Easy-to-reach target market. The formally employed market of 7.9 million individuals remains largely untapped (only 10.6 percent having insurance, 33 percent being women) and presents a ready distribution channel via employee groups. Voluntary group health presents

scope to deepen the employee benefits market for the growing middle class. The annuities market is growing fast on the back of pension’s market growth and is seen as a core growth area for many life insurers. • Aggregator-based distribution. To reach individuals in rural areas and the urban mass market, distribution through aggregators that have an existing relationship with clients is needed. Mobile distribution, bancassurance and retailer distribution all hold potential. In each case, however, several barriers would need to be overcome: the trust barrier on the demandside, a supply-side innovation-barrier and a regulatory framework largely orientated to broker distribution. • Takaful insurance.

Sharia-compliant insurance products hold potential to increase the penetration of insurance to northern parts of the country, but indications are that reach is still limited, largely due to distribution constraints in serving the northern regions and the limited availability of individuals that can serve on the requisite Shariah boards. • Microinsurance. Microinsurance is regarded as an opportunity for innovation, but overall market interest is lacklustre – understandably so, given the constraints in serving even the upper end of the retail market. Regulatory restrictions for that have held back the development of mobile money and the use of airtime to pay premiums prevent scale via mobile insurance distribution.

Allianz Nigeria pioneers free car service for Lagosians Modestus Anaesoronye

llianz Nigeria, local operating entity of global insurance giant, Allianz, has announced an ongoing promotional offer for the ‘ember’ months of 2019. This will see the company providing free car service for car owners in Lagos state. “Starting in September and through to December 2019, we are partnering with reputable auto garages to offer free car maintenance service in Lagos (oil change and oil filter change only) as a means of contributing to safe driving”, explained Walter Bossman, marketing & strategy chief at Allianz Nigeria. “The poor state of the roads coupled with the traffic situation in Lagos sometimes puts a lot of pressure on cars and drivers. The daily work commute can

easily turn into a nightmare, unless one’s car is well-maintained” he clarifies. The campaign is limited to Lagos State and is open to the general public save for employees of Allianz Nigeria. Entries will be accepted from September 9, 2019 to December 31, 2019 by 11.59pm. To participate in the campaign, interested car owners are to SMS the keyword ‘CAR’ to 08171140000 after which, the company will contact them. Uti Ellu, customer experience manager at Allianz Nigeria adds that a precondition for consideration of entries will be that all such entries are received through the dedicated number 08171140000. “We will contact drivers or owners of the eligible cars and recommend any of our partner auto garages nearest their location. No cash or other prize substitution shall be permitted.” she concluded www.businessday.ng

It will be recalled that the Allianz Nigeria had previously offered a Free Car Check initiative where free diagnostic car scans were offered to Lagos residents on a promotional basis. This latter initiative comes in the wake of the former to expand the scope of value offerings for road users in the thriving metropolis. “We aim to be the insurer of choice by providing real tangible benefits for everyday Nigerians beyond the borders of commerce. As a responsible corporate citizen, we are duty-bound to think of ways to give back to our host community. We are determined to follow through with similar initiatives that bring real and immediate value to the people of our host communities”. Owolabi Salami emphatically enthused. The Allianz Group is one of the world’s leading insurers and asset managers with more than 92 million retail and corporate

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customers. Allianz customers benefit from a broad range of personal and corporate insurance services, ranging from Property, Life and Health insurance to Assistance services to Credit insurance and Global Business insurance. Allianz is one of the world’s largest investors, managing around 673 billion euros on behalf of its insurance customers - while their asset managers PIMCO and Allianz Global Investors - manage an additional 1.4 trillion euros of third-party assets. Thanks to a systematic integration of ecological and social criteria in their business processes and investment decisions, the Allianz Group holds the leading position for insurers in the Dow Jones Sustainability Index. In 2018, over 142,000 employees in more than 70 countries achieved total revenues of 131 billion euros and an operating profit of 11.5 billion euros for the Group.

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Wednesday 23 October 2019

BUSINESS DAY

insurance today E-mail: insurancetoday@businessdayonline.com

NAICOM deepens shareholder’s knowledge on recapitalisation

Insurance companies urged to come together and invest in technology Modestus Anaesoronye

n the quest to embrace technology that will drive product distribution and access for increased penetration in the insurance industry, players have urged to come together and invest in the project. Experts who gave the advice at the 2019 Insurance Professional Forum held in Abeokuta, Ogun State said there in no reinventing the wheels, but that insurers should copy what banks did after their recapitalization in 2005. “After the recapitalization of banks, they came together and in invested in Unstructured Supplementary Service Data (USSD) as well as Interswitch, which has today benefited everybody in financial technology (FinTech)”. Discussing on the subtheme ‘Impact of technology on product development and market’, Yele Okeremi, speaker and joined by Femi Aderibigbe, with Yetunde Ilori, chairing identified embracing technology as not an option but a must to move the insurance industry forward. Tope Smart, chairman of the Nigerian Insurers Association (NIA) during the

question and answer session queried on whether or not insurers are ready to embrace technology. For him, the industry was not yet ready because, first of all, it must cure unethical practice and embrace professionalism.

According to him, technology cannot thrive in an environment where rates are brought down and unhealthy competition is raging. “Our business is very technical, and ethical practice is very key”, we need

isk Managers Society of Nigeria (RIMSON) will today and tomorrow hold its national risk management conference focusing on cyber security risks and how organisations can better prepare for it. Joseph Obah, RIMSON’s Media Consultant stated that the conference which focuses on the theme “Cyber Risks: Rising to the Challenge” will take place at Oriental Hotels, Victoria Island. The statement posited that the conference sub-themes include: Cyber Risks-A National

mid, which is the micro insurance aspect of insurance products. According to her, this should drive sales around the start-ups and small scale businesses that need insurance to protect their assets, activities and health.

L-R: Olusola Lanre, coaching Academy & Founder of the Life Coaches Association of Nigeria (LCAN); Modupe Wigwe, member, LCAN Board of Trustee and Enahoro Okhae, vice president LCAN, at the inaugural Africa Coaching Week

RIMSON builds capacity on cyber risks, invests new president Modestus Anaesoronye

to prioritize the issue of professionalism for us to get on track with technology, Smart said. Yeside Oyetayo, rector, College of Insurance and Financial Management said technology should look at the bottom pyra-

Action-plan; Artificial Intelligence and Liability issues; Data Protection & Privacy Regulation issues; Digital Marketing focusing Regulatory Challenges; and the role of Judges as risk managers in a Constitutional Democracy. Wole Oshin,GMD, Custodian Investment plc;, Kanayo Nwanze, former president of IFAD and current Co-chair Program Committee AGRA and Emmanuel Eze, executive director, System Spec Nigeria are among the speakers drawn for the conference. The statement further states that Raymond Akalonu will be invested as the 6th President of RIMwww.businessday.ng

SON on Thursday 24th of October at the same venue. Akalonu, a quintessential Risk Management professional takes over the baton of leading the Society from Engr.Jacob Adeosun who has served meritoriously. Adeosun is reputed as having implemented far reaching changes in the Society, making it the hub of risk management education in Nigeria. Risk Managers Society of Nigeria (RIMSON) was established in 1985 as an Association of corporate bodies and individual risk management professionals dedicated to the advancement of risk awareness and risk management culture in Nigeria.

he National Insurance Commission (NAICOM) is set to host an interactive session with shareholders associations with interest in insurance companies. The proposed meeting is part of ongoing recapitalization exercise in the insurance sector and the need to provide adequate information to all stakeholders. Acting Commissioner for Insurance Olorundare Sunday Thomas will be on hand to welcome delegates of the different shareholders associations to the session. The Director, Policy and Regulations, who is also Chairman of the Committee on Recapitalization in the Commission Pius Agboola will address the session to bring the shareholders up to date with the recapitalization roadmap. The session is being scheduled to hold on Tuesday, October 29, 2019 at the Civic Centre, Victoria Island, Lagos at 10am. This is part of measures being taken by NAICOM to achieve a seamless recapitalization exercise to the benefit of all stakeholders.

IGI explains turnaround plans, assure stakeholders of stability Modestus Anaesoronye

he Board and management of Industrial and General Insurance Company Plc (IGI) has assured its stakeholders, particularly her customers, shareholders, staff and other business partners, that IGI is applying the right strategies and moving in the right direction. The company said, there is therefore unassailable cause to be hopeful for a better future. It noted in a statement, signed by Steve Ilo, head, Corporate Communications Industrial And General Insurance Plc noted that

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the past years have been very challenging for IGI as a business. The situation has consistently defied operational initiatives and thus left the company sinking deeper and deeper. To arrest the situation, the Board of Directors launched a strategic and holistic turnaround programme early this year under a new management with a view to putting a sustainable halt to the company’s declining fortunes and restore growth while stabilizing its future. “The company hitherto has been overburdened with a bogus wage bill arising from a defective human capital deployment. Because this was no longer sustainable under the very difficult circumstance IGI @Businessdayng

found itself, the inexorable imperative was to undertake a proper review and adjustment of costs across board. This exercise prompted some tough decisions that are critical success factors.” “The company is working assiduously to meet the recapitalisation deadline of the National Insurance Commission (NAICOM). We are optimistic of eventual outcome and are encouraged by the level of our progress so far on the turnaround initiative.” We are aware of today’s realities in the Insurance industry which necessitate that companies return to the drawing boards to re-strategise in order to remain in business, the company said.

Wednesday 23 October 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

Case study: Your star salesperson lied. Should he get a second chance? SANDEEP PURI WEIGHING THE PROS AND CONS OF A ZERO-TOLERANCE POLICY. SIDDHANT’S HOME, THURSDAY NIGHT iddhant Kapoor rarely checked Facebook. As CEO of one of the largest pharmaceutical-marketing firms in Western India, he didn’t have time for social media. But right now, he needed to log on. He searched for the doctor’s name — Parasaran Srinivasan — and recognized the first picture that popped up. Just as he’d thought, they’d gone to university together in Mumbai. Looking at his old classmate’s page, he groaned. The pictures of Parasaran at a recent World Cup party confirmed that one of Novacib Labs’ top salespeople had falsified his sales report. Now he had to decide what to do about it. NOVACIB HQ, THAT MORNING SURPRISING NEWS Everyone at Novacib knew Siddhant hated getting emails with that little red exclamation mark. So when he saw both the red mark and the word “URGENT” in his inbox, his stomach dropped. The email was from Shraddha Pillai, Novacib’s regional sales manager in the Mumbai office. She’d kept her message short: “Need your advice on a potential ethical breach.” Siddhant canceled his next meeting and called her mobile. “Tell me what’s going on,” he said when she picked up. “I’m afraid we have an issue with one of our sales reports,” Shraddha said carefully. “What kind of issue?” “It seems that Uday may have intentionally falsified some information about his customer calls.” “Uday?” Siddhant made no attempt to hide his surprise. Uday Madhav was one of Novacib’s best salespeople. He routinely exceeded his targets by 10% to 20% and had earned the company’s top commission prize three times in the past five years. And he was a generous colleague. He often took new salespeople under his wing, sharing sales tactics and handing off easy customers. There was no doubt that the company’s targets were ambitious. Sales reps were required to meet with a minimum of 10 physicians and four retail pharmacies a day, allocating that time according to the potential of the target: 50% to platinum-class customers, 30% to gold and 20% to silver. The regional sales managers worked closely with the reps to coach and support them — but Uday rarely needed Shraddha’s help. In fact, he often served as a mentor to his more junior colleagues. “Could there be some mistake?” Siddhant asked. “It’s possible. But I know how seriously you take ethical issues. I

wanted to bring this to your attention right away.” Five years earlier, when Siddhant had taken the helm at Novacib Labs, its founder and outgoing CEO had given him a mandate: Grow the company by 40% and ensure that it remains the market leader. New competitors were popping up every day, vying to capitalize on the explosive growth in the Indian pharma industry. Siddhant knew that to accomplish his goals, he needed to be laser-focused on strategy. And by all accounts, he’d been successful. During his tenure, the company’s portfolio had grown from 22 brands to 46, and from 10 sales territories to most of Western India. That success, he believed, rested on Novacib’s new positioning — to customers and employees — as “the ethical pharmaceutical-marketing company.” Amid growing concerns that similar firms were bribing customers or overstating products’ benefits, this stance distinguished Novacib. Siddhant and his leadership team had even changed the firm’s tagline from “Health for everyone” to “Health with integrity.” Behaving ethically became part of Novacib’s story, and all employees were encouraged to share it, especially during sales calls. And the tagline was more than a marketing slogan to Siddhant. He’d always prided himself on leading a principled life. Shraddha was absolutely right that he would be concerned about false reports. To protect its reputation, Novacib had a zero-tolerance policy for ethics violations. But would sacking Uday really be in the best interest of the firm, Siddhant couldn’t help but wonder? He had always made or exceeded his numbers — and boosted the performance of his colleagues as well. “Siddhant?” Shraddha asked. “I’m still here,” he said. “Tell me exactly what happened.” ‘SOMETHING DOESN’T FEEL RIGHT’ Shraddha recounted what she’d discovered the evening before. “I was leaving the office last www.businessday.ng

night,” she began, “when I got a text from Uday that said, Baby still sick. Need to give wife a reprieve. I’ll make up the visits next week. Of course, I felt for him. I’d been in his shoes. The baby is just a few weeks old, and neither he nor his wife have slept much. He’s still been hitting his quotas, but he looks exhausted. “I decided to stay at the office to finish up my reports in case I had to cover his sales calls. And as I was looking over his activity, one date stood out: June 21. That was the day Argentina lost to Croatia in the World Cup. “I remember it well, because I had followed the match online. Dates don’t typically stick in my mind, but that day was depressingly memorable, not just because my team lost but also because I watched the game by myself. My family — like most of Mumbai — had skipped work to watch together. I hadn’t wanted to get behind, so I spent the day alone in the office. “I had spoken with Uday the morning of the game, and he mentioned that he was going to watch it. And yet his daily report listed the names of three doctors that he supposedly saw that afternoon. I texted him about the discrepancy — something like Sorry to bother you with baby sick. Can you resend your activity report for the week of June 18? Ten minutes later he emailed me the same information, so I texted again: Are you sure that’s accurate? He sent back a thumbs-up emoji.” She paused. “Go on,” Siddhant said grimly. “I’m not in the habit of tracking our salespeople’s whereabouts, especially in the case of Uday, who has always been a star performer. Normally, I’d give him the benefit of the doubt, but something didn’t feel right. I looked him up on Twitter and scrolled back to his tweets from June 21. He’d clearly been watching the game — at home. Then I tried one of the doctors on Uday’s report. Same thing: He’d been watching the game, too, not meeting with Uday. That’s when I started to panic.” Siddhant was starting to panic as well. Trust was essential to the

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company’s mission, and Uday’s actions were exactly the kind of thing that could undercut Novacib’s culture and reputation and breed resentment among employees. Siddhant recognized that Novacib was bound to encounter less-than-honest salespeople, but he was still having trouble believing that Uday would be the one to get into trouble first. At the same time, there was no denying his outsize contribution to the success of the firm — and how hard it would be to replace him. Shocked and angry, Siddhant wondered to himself, How could Uday have done this? NOVACIB HQ, FRIDAY MORNING NOW WHAT? The next day, Siddhant met with Bhavna Batra, Novacib’s human resources director, in his office. They dialed in Shraddha on speakerphone. “This is bad,” Siddhant began. “Last night, I confirmed another doctor listed on the report whom Uday couldn’t have met with that afternoon.” “Shraddha and I had a conference call with him after she spoke with you,” Bhavna said. “We asked him about the report, and he said he had met with the doctors he listed — but not on June 21. He all but admitted that he lied. I’m not seeing any option other than letting him go.” “I don’t understand why he didn’t tell anyone he was struggling,” said Siddhant. “He’s the first one to help his colleagues out; people would have jumped at the chance to return the favor.” “It’s definitely out of character for him,” Shraddha. “That’s why I feel strongly that we should issue a warning — especially with his being a new father. After all, he did meet with everyone he said he had. He wasn’t fabricating that.” “But he was altering the dates to meet his daily targets,” Bhavna countered, leaning toward the speakerphone. “That’s a serious breach, and we have to consider the broader impact of merely giving him a slap on the wrist.” She looked up at Siddhant. “When you brought me in after the rebranding, you asked me to help you build a culture of ethics and honesty. I’d be failing at my job if I advised you to let a transgression like this go. I recognize the value of Uday to our team, but our motto isn’t ‘Health with occasional integrity.’ We have to always do the right thing.” “I agree,” Siddhant said. “Integrity is our promise to every employee and every customer we interact with. If our people knew we tolerated this behavior after all the ethics training we’ve put them through, we’d look like hypocrites. We’d be hypocrites. And if this ever got out to our customers or the press, it could destroy our reputation.” “But how are we going to look to the rest of the team when we sack their beloved colleague with @Businessdayng

a newborn at home?” Shraddha asked. “And he’s such a strong performer! Think of the revenue hit we’d take. Are people actually going to care about three names listed for the wrong day on one weekly report? It’s not as if those call targets are tied to his compensation.” “It’s the principle of the thing,” Bhavna retorted. “And how do we know if this is the first time he’s fudged his reports? How can we trust him going forward? Are you going to check with his customers every week to confirm his reports?” Shraddha was silent on the line. Siddhant closed his eyes briefly. He knew she was right that the company would suffer if they fired Uday. He brought in over $250,000 a year, and he had built strong customer relationships that Novacib stood to lose if they sacked him. But Siddhant couldn’t shake his disappointment in Uday. Bhavna broke the silence. “You’ve addressed this issue repeatedly in our sales off-sites,” she said. “You’ve stated in no uncertain terms that you’d rather salespeople not meet their targets than fake their numbers. If you don’t take action, you’ll damage your credibility. I know it’s painful, but I think it’s time to put your money where your mouth is.” NOVACIB HQ, FRIDAY AFTERNOON A SECOND CHANCE? “Thank you so much for the baby gift. Did you get the thankyou note my wife sent?” Uday’s voice sounded tentative on the phone, the small talk forced. Siddhant had dreaded making the call, but before he reached a decision, he wanted to talk with Uday himself. “I did. Listen, Uday, I don’t want to make this any more awkward than it needs to be. I just want to hear your side of the story.” Uday repeated what he’d told Shraddha: that he had met with those doctors, just on different dates. That he shouldn’t have submitted the false report. “I made a big mistake, and I’m sorry. I was feeling the pressure with the new baby. I knew I wasn’t going to hit my targets, and I didn’t want to disappoint anyone.” Siddhant hated to hear Uday sound so dejected. But part of him still felt betrayed. He reminded himself that Uday could easily find another job, especially since Novacib had no intention of going public with the circumstances if they let him go. But Uday would be devastated nonetheless. “We need accurate data to grow this business, and we’ve been very clear about our ethics policy,” Siddhant said. “I wish you’d talked to Shraddha about the pressure.” “I know, and I’d understand if you have to make an example of me. But please believe me that it has never happened before and won’t happen again. Don’t people deserve a second chance?”

Wednesday 23 October 2019

Harvard Business Review

BUSINESS DAY

MANAGEMENTDIGEST

How to manage the emotional roller coaster of a job search REBECCA ZUCKER

M HAPPINESS

ost of us, at some point in our career, will conduct a job search — if not several of them. The process is fraught with ups and downs, not to mention the angst that comes with the uncertainty about the future of your career and livelihood. Here are a few strategies to manage the emotional roller coaster of the job search: — KNOW WHAT’S COMING: One week you have networking meetings and interviews scheduled, people are responding to your emails and you feel encouraged and hopeful. The next week you don’t, making you feel confused, frustrated or even helpless. Knowing from the start that you will experience these swings in activity and emotion can help prepare you to better handle them when they occur. — PROCESS YOUR EMOTIONS: Activities like meditation or journaling can help you process negative emotions as they arise — in contrast to avoiding, suppressing or ruminating over your emotions, which are corre-

lated to anxiety and depression. In addition, brief mindful meditation creates improved emotional processing and reduced emotional reactivity, and has been shown to enhance our emotional processing, even when we’re not meditating. — GET SUPPORT: Having someone to talk to throughout your job search, such as a career coach, therapist or a job-search work group, can provide muchneeded emotional support, be-

yond that of friends and family. An experienced career coach who is an expert in the job-search process can also help normalize what you are experiencing and feeling at any given phase of your search. A job-search work group can help you feel a sense of partnership as well as provide the help you need to advance your search. — ENGAGE IN ENERGIZING ACTIVITIES: Make sure your days include activities such as

exercise, listening to your favorite music or whatever revitalizes you. Your mood and overall energy level will show in your interactions with others, whether it’s a coffee meeting with a former colleague, a networking event or a job interview. Exercise, in particular, not only has a positive impact on mood, but also increases self-esteem, sociability, motivation and cognition. — PUT THINGS INTO PERSPECTIVE: It’s easy to feel power-

less or discouraged when things don’t progress in the job search the way we would like. Perhaps a contact hasn’t made an important introduction for you yet like she said she would, or a recruiter hasn’t gotten back to you in the time frame he initially indicated. Take a step back and realistically consider the big picture. Think about your contact’s other possible priorities: Chances are, your job search isn’t in their top priorities on any given day. Seeing this perspective can help depersonalize the situation and mitigate the negative emotions surrounding it. Feelings are temporary, as are many of the situations that create them. Seeing these challenges as impermanent is a key part of being optimistic, which is associated with higher levels of motivation, achievement, well-being and lower levels of depressive symptoms. Using the strategies above can help make the inevitable shifts between the highs and lows of the job search more manageable, as well as help you to stay motivated and productive for the duration of the ride.

• Rebecca Zucker is an executive coach and a founding Partner at Next Step Partners.

Community colleges need to evolve as students’ needs do uities, and requires asking questions about unequal student outcomes — recognizing patterns of inequity, incorporating teaching pedagogies that actively engage students, avoiding an automatic deficit view of students of color and seeing equity as a value to which all campus members aspire. Community colleges are full of potential. The strong history of community colleges as sites of innovation and nimbleness provides hope for a future in which these institutions will make an impact on communities and, most important, help change the lives of students and their families.

PAMELA EDDY WORK VS. LIFE istorically, funding for community colleges has lagged behind other institutions of higher education. This is despite the fact that, of students who completed a four-year college degree in 201516, almost half had enrolled in a community college in the past 10 years, taking courses as a dual-enrolled high school student, a fouryear-college student during summer break or a transfer student. Community colleges of the future must determine how to successfully walk a tightrope of paradoxes. For example, community colleges typically see upticks in enrollment during recessions and drops in enrollment during times of recovery. Leaders of such institutions must simultaneously deal with growth and reduction, abundance and scarcity, continuity and change, access and completion. Complicating this reality is an increasing divide — between community colleges in urban and rural areas, between needing to expand and needing to keep an eye on the bottom line, and between rich and poor students and institutions. In 2016 I launched a survey of 1,000 community college leaders across the nation. The survey asked them to identify the most pressing challenges facing community col-

Pamela Eddy is a professor of higher education and department chair in educational policy, planning and leadership at the William and Mary School of Education. leges, innovations underway and their willingness to take risks. Here are three main takeaways from the study: — SYSTEM CONSOLIDATION: State systems will continue to try to consolidate or merge colleges and universities to achieve economic efficiencies. Declines in high school graduation rates mean that regional four-year colleges are vying directly with community colleges for students. — CHANGING HIERARCHIES: Community colleges should emwww.businessday.ng

ploy networked leadership that builds on the collective. This approach provides greater leverage for change and nimbleness to address new challenges. Transformative leaders, in particular, can help disrupt current practices by questioning who is left out due to current policies or structures. Opening up the leadership pipeline to women and leaders of color is required for a school to mirror the student body and to build expanded connections. — EQUITY OR BUST: The U.S. is

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likely to become minority-white by 2045. Community colleges already enroll a minority of white students (48%) relative to students of color (52%) and are poised to provide a site of equity and opportunity. Despite the high availability of access to community colleges, Hispanics and blacks do not fare well in completing or transferring — lagging with graduation rates of 33% and 25.8%, respectively, as compared with their white (45.1%) and Asian (43.8%) peers. Building an equity mindset helps address these ineq@Businessdayng

Wednesday 23 October 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Nigerians move to decide ‘own’ automotive prototype …As NADDC flags off six weeks design challenge MIKE OCHONMA Transport Editor

s Nigeria works towards actualizing its dream of becoming the hub of advanced automotive manufacturing, the National Automotive Design and Development Council (NADDC) last Monday in Abuja, the federal capital organized the NADDC Automotive Design Challenge in a renewed strategic move to make it a reality. The NADDC Automotive Design Challenge which will culminate into the design of applicable mini taxi and mini tractor that will be tropicalised to the local environment is the brainchild of Aliyu Jelani, the Nigeria automotive design prodigy and current director-general of the National Automotive Design and Development Council to discover and promote automotive design capabilities among Nigerians which will in turn lead to the development of innovative transportation solutions for the country. Aliyu Jelani told an enthusiastic audience inside the conference and events hall of Fraser Suites, Abuja that includes Abubakar Malami, attorney-general and minister of justice, the Ondo state deputy governor, Osita Izunaso, chairman of the NADDC board, automobile assemblers in the country and representatives of the university community that for the 2019 Automotive Design Challenge, participants between the ages of 18 years and 40 years, He said that participants will be required to submit entries between October 21 and December 5, 2019 of their automotive designs and creative concepts through a dedicated NADDC online platform for assessment by a combined team of foreign and local experts. At the end of the six (6) weeks time frame allowed for the submission of entries to the NADDC, the winners will be attached to the NADDC to be part of the Council’s exciting research and development/product team. The NADDC DG said that Nigeria has no business being a dumping

President Muhammadu Buhari

ground for used and sub-standard vehicles despite all the potentials in terms of human and material resources that, the country is endowed with. According to him, Nigeria is on the march towards economic prosperity and that can only be achieved through meaningful developmental efforts and patriotic zeal of every citizen, He said that plans are underway to make locally-made vehicles readily available for Nigerians to buy and make payments in at least five-year installments against the backdrop of the recent allocation of N5billion by the President Muhammadu Buhari administration towards the car financing and acquisition scheme. According to him, in about three

months’ time, Nigerians will be able to put down 10% and drive off madein-Nigerian vehicles and pay over five years. He said: “Instead of continuing to be importing fully-built vehicles from overseas, we are working towards promoting and sustaining the production of vehicles in the country. “Today’s effort will give in the near future give make available brand new vehicles to Nigerians that would be fuel-efficient, very modern and it will create tens of thousands of jobs, grow the economy and also stop us from being a dumping ground for old and dilapidated vehicles’’. Jelani noted. At the last GITEX 2019 in Dubai, United Arab Emirates, the former design egghead with General Motors,

United States of America stated that his agency was collaborating with JAIZ, WEMA and Zenith banks with a view to providing single-digit financing for made-in-Nigeria vehicles. “We feel that with this scheme in place, Nigerians can now buy and drive new vehicles. Nigerians deserve more than that. On the prices of these vehicles, the D-G said the vehicles are cost-effective, affordable and in tune with the environment”. He said that the objective of manufacturing these vehicles locally in the near future is to make it to be cost-effective, affordable and very in tune with the environment and elegance. ‘’So we are looking at the price much, much lower than what we have today, probably between N3 million and N5 million”,Aliyu told the audience in Dubai. On his efforts towards making Nigeria one of the vehicle-manufacturing countries to reckon with, he said: “We as a government body, we encourage the private sector to produce vehicles in Nigeria through the National Automotive Industrial Development Plan, NAIDP that stands on five cardinal elements to help promote local production of vehicles. “Those elements include investment promotion, which is to work with the private sector and encourage and support them in bringing money into Nigeria to set up their factories. There is the infrastructure plan to provide the necessary infrastructure for the industry to set up and be sustained and the standards to make sure that the components that go into the vehicles meet minimum global standards. “We as well deal with market development. First, we promote the production and then work with stakeholders, end-users and the companies to help people to be able to buy these vehicles”. Another element will also be the training aspect where every year we train thousands of Nigerians on mechatronics so that they understand the new automotive technology and be capable of fixing and maintaining these vehicles professionally.

Jag Mk2 greatest British cars of all time, celebrates 60 MIKE OCHONMA

aguar is marking the 60th anniversary of the inimitable Mk 2 with a very special set of photographs that pay homage to the style, creativity and individuality of one of the world’s best-loved sedans. ‘Rooms by Rankin’ is a unique partnership between Jaguar and internationally renowned fashion and style photographer Rankin, designed to celebrate the character of three key models – XF, XE and Mk 2. For the third and final instalment, Rankin created ‘Period Drama’ for the Mk 2 – a bespoke, white-out room complete with a mesmerising pattern of black polka dots. Rankin said: “The Jaguar Mk 2 is a very special car – undeniably beauti-

ful and well-proportioned. I wanted to create something that celebrated the Mk 2’s form and its heritage, but also had a thoroughly modern edge to it. That’s why I chose to use polka dots.” On his thoughts about the design cues, Jaguar Design Director, Julian Thomson said, “Polka dots are perfect for the Mk 2. They can be wistfully nostalgic and they also have a modern currency that makes them a timeless classic. Rankin has managed to produce a truly standout creation. It’s elegant and has a captivating charm that we all appreciate at Jaguar.” The Mk 2 featured in the ‘Rooms by Rankin’ partnership is a Dark Blue 3.8-litre manual from the Jaguar Classic Collection. In addition to the active vehicle collection housed at its www.businessday.ng

Classic Works facility in Coventry, Jaguar Classic offers sales, servicing, restoration expertise and parts to keep these treasured classics on the road for future generations to appreciate. Launched in 1959 at the Earls Court Motor Show, London, the Jaguar Mk 2 became an overnight sensation with its daring design, graceful curves and powerful XK-

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derived six-cylinder engines, including the top-of-the-range 3.8-litre that delivered 164kW and a top speed of 201km/h. In addition to its supreme roadgoing performance, the Jaguar Mk 2 was extremely competitive on the race track, scoring countless saloon car victories in the hands of greats such as Roy Salvadori and Graham Hill. @Businessdayng

Race for 2019 NAJA’s Automotive/Transport Award begins MIKE OCHONMA

reparations for the 2019 Edition of the Nigerian Auto Journalists Association (NAJA), Awards slated to hold December 12, 2019 at the Eko Hotel and Suites, Victoria Island, Lagos. Just like similar awards organised by automotive journalists in other countries, the NAJA annual awards is put together to recognise corporate stakeholders organisations and other automotive products and ancillary products like tyre brands , lubricants and individuals that are adjudged to have relatively stood out among other competitors in their respective segments in the country’s auto industry within the year. The annual awards also remain the only authentic industry event in the country that involves all the motoring journalists in Nigeria drawn from the print, electronic and online media in the voting process. According to the organizers, one of the high points of the awards is in the Car-Of-The-Year (COTY) award category. Other segments of awards are Luxury Car of the Year, Heavy Duty Truck of The Year, Auto Plant of the Year, CEO Of The Year, Auto Personality Of The Year and CSR Company Of The Year, Pick-up of the Year, Showroom of the Year and many others. New additions to the awards segments this year, which include Super Luxury Car of The Year, Online Auto Marketing Platform of The Year and Motorbike Taxi Service of The Year. According to awards organizing committee, this year’s edition, just like the previous events will be honouring outstanding auto brands and models that have achieved extraordinary success in the last one year. He stated some award categories in the past editions may be dropped in this award due to dynamic nature of the market and present situation of Nigeria’s automotive industry. The awards provide the opportunity for organisations to gain competitive advantage by having their projects, initiatives, contributions, products and services recognized. NAJA Awards platform provides the ultimate platform for improving brand awareness, loyalty, just as he noted that some few more categories have been added to the list of awards due to changing times.

Wednesday 23 October 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

a-Kaduna, Lagos-Ibadan Yaris B-Dash ushers in Toyota’s latest design language Abujrail corridor to get more coaches soon- Amaechi

MIKE OCHONMA Transport Editor

fter a production run of nearly 10 years, Toyota has officially revealed the all-new fourth generation Yaris in both European and Japanese market guises. Set to go on sale next year, the latest iteration of Toyota’s Bsegment hatch, known as the Vitz in Japan, debuts the all-new GA-B version of the TNGA platform previewed last month, which has resulted in a 50 kg drop in weight over the old B-platform underpinned model. Measuring 3940 mm in overall length with a wheelbase of 2550 mm, height of 1500 mm and width of 1695 mm, the Yaris is 50 mm longer in wheelbase and wider by the same amount in width than its predecessor, but with a 40 mm gain in height and five millimetre lose in overall length, but according to Toyota, is 30 percent more rigid due to its new platform. As well as the new architecture, the Yaris also introduces Toyota’s latest design language, dubbed BDash that centres around five elements; Bold, Brisk, Boost, Beauty and somewhat oddly, Bullet. Boasting a more aggressive appearance than any past generation with rounded curves, wider wheel arches, a more pronounced grille, C-pillar profile similar to the C-HR and rear facia design that mirrors the crossover, the Yaris, in Vitz form, will also have the option of two new colours; Ice Pink Metallic and Coral Crystal Shine as well as six other hues contrasted with a white or black roof. Inside, the Yaris’ interior takes

MIKE OCHONMA

he federal government is addressing the deficit of passenger coaches on the Abuja-Kaduna rail corridor with the planned injection of more coaches, following the outcome of the recent visit of Nigeria’s Minister of Transport, Chibuike Rotimi Amaechi to China. Withatotalof20coachesexpectedto arriveintothecountryinsixweekstime, Amaechi said his visit was basically for two reasons among which were to get more locomotives and coaches. The minister said that upon arrival in six weeks time, it will be easy, may be one or two days to deploy some of them on the Lagos-Ibadan corridor, but for the trains coming to Abuja, it will take one week or two to get it here. According to Amaechi, ‘’To my surprise, the coaches we released two or three weeks ago to go to Kaduna arrived just within two days.

after that of the RAV4 and Corolla with a similar design and layout, highlighted by the freestanding touchscreen infotainment system, a brand-new digital instrument cluster, a model first teninch colour Heads-Up Display, upgraded materials and a model specific steering wheel that is smaller for claimed improved visibility. Depending on the model and spec, the Yaris has been significantly improved in the tech department with items on offer consisting of a wireless smartphone charger, ambient lighting and a heated steering wheel, while on the safety front, the Safety Sense suite of features includes Intelli-

gent Adaptive Cruise Control with Lane Trace Assist, a world first centre airbag, Rear Cross Traffic Alert with Auto Brake, Pre-Crash Sensing with Pedestrian Detection and Advanced Park Assist. Up front, the Yaris, in Europe, will be powered by a choice of three engines; a 1.0-litre threecylinder or 1.5-litre four-cylinder petrol, plus a 1.5-litre hybrid that is claimed to be closely related to the bigger 2.0-litre and 2.5-litre motors offered in the Corolla, RAV4 and Camry. No further details were revealed. In Japan, the Vitz will have the same choice of engines, but with the option of four-wheel-drive on the latter petrol, while a new E-

Four all-paw gripping system can be had on the hybrid. A total of three trim choices will be offered; X, the 1.0-litre only M, G and Z with the latter pair coming standard with a six-speed manual gearbox on the 1.5. A CVT is employed on the remainder of the Vitz range. Despite its availability in the key mentioned markets mentioned, it remains to be seen whether the new Yaris will come to Nigeria after the European model’s axing two years ago in favour of the Thai sourced version. All the text messages sent to Toyota Nigeria Limited to confirm when the new Yaris will be available in Nigeria were not responded to.

Uber mulls small loan advances to driver-partners MIKE OCHONMA

n what many industry followers may describe as a growing competitive strategy across the ride hailing markets, Uber South Africa has in mind to put cash in the pockets of its drivers who might need money to cover immediate expenses like insurance and repairs or just to better their finances. While Uber taxi service was launched in Nigeria in 2014, Uber started operating in South Africa back in 2013 when the company was in the middle of a global expansion, Uber at that period saw the good prospects that both Nigeria where patronage has grown exponentially and South Africa had to offer. Despite some resistance, drivers and their representatives estimate that since 2013, the service has grown to around 4,000 Uber cars in Cape Town alone. It seems that now the ride-hailing app is analysing offering loans directly to its drivers, according to a report from Recode/Vox . The news came out after the emergence of an in-app survey

sent to some drivers on a “new financial product” aimed at its drivers “in a time of need”. When filling out the survey, drivers were asked about the most important factors when deciding to take out a loan, if they had taken out a small loan in the past 3 years, and if they would be likely to take advantage of affordable loans provided by Uber. This would not be the first time www.businessday.ng

Uber ventures in the financial space, as it has some previous experience. It offered cash advance of up to $1,000 to new drivers in the United States in 2016 and they were not charged interest. The main point of the cash advance was to get people who were contemplating joining Uber to take the plunge. It has also offered leases on new

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cars to drivers and it currently offers a co-branded credit card with Visa and an Uber Cash digital wallet for riders. Even though it is unknown whether the financial loans will be interest-free, this possibility might sound enticing to drivers in need of money, as the loan options today in South Africa all charge annual interest that ranges from 8,5 percent to 23 percent. However, there is still no official indication of timing on small loans product offered to drivers, and Uber has not yet commented on the emergence of the survey’s existence. That survey made it clear Uber is exploring the option of offering financial loans, and thus getting into the small loan business for its drivers. It is still uncertain whether or not Uber will roll out small cash loans to its workers to help them with their financial needs whatever they might be fixing the car they use to work every day or to make ends meet. If it does launch its financial product, we don’t know anything about what the loans would look like such as the interest rate, the amount and the conditions. @Businessdayng

Rotimi Amaechi

So, we hope that when these trains arrive Lagos seaport, we should be able to get them fast. “We are expecting twenty coaches, ten for Abuja-Kaduna and ten for Lagos-Ibadan as a temporary measure, more will then arrive in the second batch as we complete Lagos-Ibadan,” Amaechi said. The minister while taking delivery of the new newly built trains in China, did a test run of the locomotives and motored cars. He confirmed that these trains were better improved and of higher technology than what obtained previously. He added that more trains are still being built for Nigeria and the next batch would be delivered as soon as they are ready. On maintenance, he said that every contract comes with a maintenance contract, while rail engineers from Nigeria are being trained in China to take over the maintenance from the Chinese. The reason for these maintenance contracts he said is that, “as Governor of Rivers State, I made sure that everything I did in Rivers State was maintained, I kept a maintenance contract going, what is happening there now, I won’t know. So when people ask me, what do you do about maintenance? The answer is, In all our contracts, you have a maintenance contract. Like now, the one for Abuja has expired and I’ve just directed them to renew the contract. Though I’m going to seek approval from both the President and the cabinet, but the Chinese should not leave the site for now.”.

Wednesday 23 October 2019

BUSINESS DAY

FINANCIAL INCLUSION

& INNOVATION

Is Nigeria’s extreme poverty population, bank charges a threat to financial inclusion? Stories by ENDURANCE OKAFOR

or Nigeria’s 94.4 million extremely poor people, having a bank account may be a luxury many cannot afford due to the cost of maintaining a basic savings account. To maintain a basic bank account in Nigeria, the account holder spends an estimate of N500 per month as Account maintenance fees, ATM card maintenance charge, SMS notification fee, stamp duty, and fees charged on transactions with other banks. “Is it not someone that has enough money that will be thinking of banking it? All I think of every day when I come to this park is how I am going to sell and use the money to buy food for my family. I pray God blesses me so I too can have a bank account,” a petty trader by the name Ajoke told BusinessDay at the busy Ojuelege under bridge. Available data from the World Poverty Clock analysed by BusinessDay revealed that that with the current level of Nigeria’s extremely poor people, the country has more people living in extreme poverty than India and China combined. The latest figures from the World Data Lab put Nigeria’s extremely poor people at 94.4 million, this is 54.6 million higher than India and China combined with 39.8 million poverty population. The World Bank defined the new international poverty line as $1.90 a day in 2015 from $1.25 a day previously used in 2008, indicating any individual who lives below $1.90 or less per day is poor. The same benchmark was regarded as the internationally agreed poverty line by the United Nations. “People will remain finan-

cially excluded because they are financially disempowered,” Yele Okeremi, MD/CEO of Precise Financial Systems (PFS), a Lagos-based financial software company said. “We still have a large population living below $2 a day, how do you want to include them financially?” he questioned. Checks by BusinessDay revealed that since 2015, Nigeria’s economy expanded by an average of 2 percent, a rate lower than the country’s 2.6 percent population growth rate. Meaning in the last four years, Africa’s most populous nation has been producing more people than it can feed. Most recent data by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning that as much 36.8 percent adults still lack access to financial services. “I opened an account last year, and the small money that was inside has been debited by the bank for different reasons and now there is almost

nothing in it,” a customer of a Nigerian tier-one lender said on the condition of anonymity. According to the World Bank, financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs; transactions, payments, savings, credit, and insurance -delivered in a responsible and sustainable way. “Access to a transaction account is the first step toward broader financial inclusion,” the Washington-based institution said. The Central Bank of Nigeria (CBN) plans to ensure that 80 percent of Nigerian adults are included in the financial net by 2020. The apex through its collaboration with industry stakeholders launched the National Financial Inclusion Strategy (NFIS) in January 2012 with the aim to help achieve the set target. If the industry regulator is going to achieve its 20 percent exclusion by next year, it would

have to bridge the current 16.8 percent inclusion gap. “Apart from encouraging the collaboration between the telecoms and banks, through mobile money to spur financial inclusion, there is a need to reduce the cost of financial transactions, as mobile money is more expensive than core banking,” Wale Okunrinboye, head of research at Lagosbased Sigma pension, said. According to Uzoma Dozie, the last Group Managing Director of defunct Diamond Bank, and Founder/CEO of Sparkle, for a large number of the country’s population to be financially included, “we would have to leverage technology, for millions of Nigerians to have access.” In the quest to achieve its set target, the central bank on the 5th of October 2018 released an exposure draft guideline in which it proposed Payment Service Banks (PSB) aimed at deepening financial inclusion. Since inviting Telcos and

other industry players to apply for the mobile money licence in more than a year ago, the industry regulator has only granted Approval-In-Principle (AIP) to Hope, Money Master, and 9PSB to operate as payment service banks. According to Oghogho Osula, financial expert and former MD/CEO of Coronation Trustees Limited, Nigeria has a large mobile market, and the huge number provides an opportunity to use it in deploying easy-to-use technology that can improve access to financial services. Data by Nigerian Communications Commission (NCC) analysed by BusinessDay revealed that the total number of subscribers per individual telecoms operator as of August 2019 stood at 176.89million. “With a very well-developed mobile market, and many tech-savvy consumers, there are exciting opportunities for mobile-based digital identity solutions in Nigeria,” Calum Handforth, Senior Consultant at GSMA said. As at the time Nigeria was considering the optimal approach needed to leverage new, innovative technology to deliver financial services to its people, the Central Bank analysed in some detail how to structure the guidelines and the regulatory environment to deliver the benefits on offer, without compromising the integrity of the financial system. Africa’s largest economy needed to see how the regulation of mobile money could evolve owning to significant volumes of currency that could be circulating in mobile wallets, and may not be visible to the regulatory authorities. As such it was clear that a better balance between the market and the regulatory structures was required.

Meanwhile, since then there has been an explosion in mobile money wallet usage in Kenya and other Africa peers, Nigeria’s CBN was rather focused on an independent bank-led model that would supplement and support the existing banking system. “The fundamental obstacle to the rapid expansion of financial inclusion in Nigeria is the failure of the private sector actors in the telecoms and financial services ecosystem to collaborate effectively,” an analyst said in a statement. According to the World Bank report, mobile money drove financial inclusion in Sub-Saharan Africa, as only eight countries in Africa which included Burkina Faso, Côte d’Ivoire, Gabon, Kenya, Senegal, Tanzania, Uganda, and Zimbabwe recorded 20 percent or more adult using only a mobile money account. Between 2014 and 2017, the World Bank noted that there has been a significant increase in the use of mobile phones and the Internet to conduct financial transactions which contributed to a rise in the share of account owners sending or receiving payments digitally from 67 percent to 76 percent globally, while developing countries recorded 57 percent to 70 percent. Globally, about 1.7 billion adults remain unbanked, yet two-thirds of them own a mobile phone that could help them access financial services, the study noted. It concludes that digital technology could take advantage of existing cash transactions to bring people into the financial system. “In the past few years, we have seen great strides around the world in connecting people to formal financial services,” World Bank Group President Jim Yong Kim said.

Over 110m mobile money accounts can be unlocked in Nigeria, others – UNSGSA

ore than 110 million mobile money accounts could be achieved in Egypt, Ethiopia, and Nigeria, the United Nations Secretary-General’s Special Advocate for Inclusive Finance for Development (UNSGSA) has said. The New-York-based institution, however, explained that for the figures to be achieved in the next five years, it will take a lot of collaborative effort. “The proliferation of mobile money is important for hard-to-reach populations at the core of the UNSGSA’s strategic priorities. The potential for its global growth remains significant,” UNSGSA said in its recent report.

The report stated that with the hard-to-reach at risk of becoming the ‘harder-toreach’, it will be essential for governments and the private sector to build a suite of public goods of ‘pre-requisites.’ In other words, the foundational necessities that will help enable the harder-toreach to enter the formal digital economy, the full suite of financial services should be provided in a very responsible manner so that access to finance, and its usage, helps people-and never harms them. “This means we should aim to mitigate the growing risk that comes with technological progress, such as fraud or the loss of data. As we have seen with our work on Finetch, technology could

bring the solution to address the risks created by technology,” it read stating that regulators could benefit from adopting regulatory technology solutions. With a target to include 80 percent of Nigeria’s adult population by 2020, the Central Bank of Nigeria has directed its focus to implement both mobile money and bank-led model in driving financial inclusion. The apex bank introduced Payment Service Bank (PSB) in 2018 to allow Telcos to have a share of the financial services industry to bridge the country’s financial inclusion gap. According to the UNSGSA, it supported Nigeria’s Central Bank “in the issuance of the payments bank regula-

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tion in 2018.” The foundation stated in its report that digital technology emerged as the main opportunity to expand financial inclusion more quickly, affordably and conveniently for people across the globe, and has been the constant thread throughout the advances that have been recorded. “These include digital identification, connectivity, digital and financial literacy, data privacy and cyber security, among others.” The provision of identification and other relevant documents are the bedrock for on boarding a customer in the bank. The lack of identity is one of the reasons why 36.6 million Nigerian are excluded from the financial cycle, BusinessDay survey has shown.

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According to Lanre Osibona, the Senior Special Adviser to the President on Information, Communication, and Technology over 37 million Nigerians have been registered under the National Identity Number (NIN). Nigeria’s current population is estimated by the United Nations (UN) to be around 201 million people; going by that figure, Africa’s most populous nation has about 164 million of its citizens without any formal means of identification, as compiled from BusinessDay’s calculation. “In some nations, financial exclusion is even on the rise. Technology-led innovation in financial services, Fintech, has the potential; to play a transformed role to combat exclusion,” UNSGSA said. @Businessdayng

The foundation, however, recommended that proper infrastructure and policies that will allow innovation to flourish are needed for Finetch to work for customers. In the coming years, rising inequality will continue to be a concern. In some countries, for example, women already encounter more difficulties than men in access and usage of finance, the report stated. “All of these challenges that confront us today could serve as catalysts for real change tomorrow. The next 10 years represents an immense opportunity to innovate and transform people’s lives for the better through inclusive finance,” the foundation said in its report titled: Financial Inclusion- Building on 10 years of progress.

Wednesday 23 October 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

People & Perspectives

PE firms in Africa should view climate change prism of opportunity, rather than threat

limate change poses an existential threat to our societies. Nowhere is this more apparent than in Africa – the most vulnerable continent to climate change, both in terms of impact and ability to mitigate damage. Africa’s private equity funds must become leaders in the global fight against climate change. While environmental, social and governance standards have become the norm for private equity funds, attention to climate change remains at a relatively nascent stage. Mounting global pressure is pushing climate action in the private equity space from an emerging trend to a fundamental expectation. Climate smart 1. Opportunity lens. Investors on the continent ought to view climate change through the prism of opportunity, rather than seeing it as a threat. There’s often a perception that opting for climate-smart investment strategies constitutes a trade-off with performance. While it’s true that investment performance in certain sectors will be inevitably impacted by the policy responses taken to curb or adapt to climate change,

Michelle-Kathryn-Essome, CEO, AVCA.

we are in the midst of an innovation cycle where transformative and sustainable business models are gradually replacing their predecessors. Sectors such as renewable energy, climate-smart agriculture or climateresilient infrastructure all constitute highly attractive opportunities in Africa. 2. Climate mandates. Institutional investors are increasingly asking fund managers to pay close attention to climate change at all stages of decision-making,

from the investment process through to operations and management. With climate change being gradually mainstreamed, private equity firms that take these considerations on board and demonstrate a willingness to engage on climate issues with their (potential) portfolio companies – whether in terms of measurement and monitoring, or impact of the business on the climate and vice-versa – will increasingly find themselves at an advantage

when engaging with institutional investors. Fund managers who establish their credentials as leaders in this space will be well placed to raise additional funds in the future. The $850 million recently raised by emerging markets renewables investor Climate Fund Managers – above and beyond an initial target of $530 million – is a testament to the attention climate-smart investors are attracting. 3. Risk mitigation. There is a growing global momentum for monitoring,

reporting and disclosure of climate-related risks and opportunities, with over 500 organisations having signed up to the Task Force on Climate-related Financial Disclosures’ recommendations. From 2020, the 2,300 members of the UN’s Principles for Responsible Investment – who collectively represent some $80 trillion in assets – will incorporate two key indicators from the task force into their reporting frameworks and from 2022 large asset owners in the U.K. will be expected to report on climate change risk by 2022, with this potentially becoming mandatory. This inevitably adds a new layer of reporting for private equity firms operating on the continent. But it also opens up an exciting opportunity for general partners to engage with their portfolio companies and help transform them into greener, better managed and ultimately more valuable businesses. CDC, for instance, has taken a highly involved role in helping investee company Jacoma, a Malawian farm, transition to climate-smart agricultural practices that allow local smallholders to manage resources better and protect themselves from extreme climate change.

Alignment These changes won’t happen overnight, and private equity firms will have to gradually go through a steep learning curve to meet these new expectations, but we’ve encouragingly already seen many players take steps in the right direction. Sharing of lessons learnt and best practice between firms that have developed a specific expertise in these areas and others will also play a key role in ensuring the industry is well positioned to on-board these developments. Private equity firms sometimes overlook climate risk because of relatively short holding periods. However, by developing a deeper understanding of a company’s long-term risks and opportunities and implementing resilience measures we believe they will improve the attractiveness of assets and therefore exit opportunities. As a key driver of growth in Africa, the African private equity ecosystem has a tremendous opportunity to contribute to the achievement of the Paris Agreement and be a leader in the global fight against climate change. And with more and more consumers, investors and governments shifting their focus to these areas, it makes perfect sense to do so.

Aruwa Capital Management launches $20 million co-investment vehicle for Africa MICHAEL ANI

ruwa Capital Management, a West Africa focused Private Equity co-investment vehicle, has completed its first investment, in Wemy Industries Limited, Nigeria’s first and only indigenous personal hygiene company. The investment which is worth $20 million hopes to close the gender equality gap to improve its representation of women in its workforce, including at the most senior levels, Aruwa said in a press statement. “We are very excited to be making this investment in Wemy Industries, a true pioneer in its industry and

local success story. Our investment will help them deliver the next stage of their growth trajectory,” Adesuwa Okunbo Rhodes, Founding Partner of Aruwa Capital Management said: “With the rapidly growing population across West Africa and increased usage levels across its product segments due to urbanisation, the Company is uniquely placed to take advantage of the strong demand over the short, medium and long term.” Wemy manufactures high-quality and affordable daily, disposable, personal hygiene products predominantly for women and infants, including sanitary pads, maternity pads and

baby diapers. Wemy has almost 200 employees and six production lines in its factory in Lagos State. The business is over 40 years old and was founded in 1978. Aruwa provides patient growth capital to companies in the lower middle market in West Africa, applying gender lens investing principles to its investment approach (ensuring the investment helps create positive social and economic benefits for women). As part of the investment in Wemy the business will be implementing an action plan to improve its representation of women in its workforce, including at the

most senior levels. “Following the re-introduction of Wemy’s Browns baby diaper range earlier this year, revenue for this financial year is 200 per cent higher than last. This investment is aligned entirely with our objective of promoting locally owned and driven industrialisation, investing in indigenous manufacturing champions in import dominated industries, helping create jobs, generates taxes, export revenues and fuelling economic growth.” “Also, in line with Aruwa’s gender lens investing strategy, 80 per cent of the Company’s products have a positive effect on women, from improved hygiene for

menstruating teenage girls in rural areas in Northern Nigeria and improved maternal health across the country. This investment ticks a lot of the boxes for us and we look forward to working with the management team for the exciting journey ahead,” he added. Paul Odunaiya, the Managing Director and CEO of Wemy Industries, commented: “I am very excited to be working with the Aruwa team, we have been working with their team in one way or another for the last three years and their dedication and vision entirely aligns with the values we also have in our company. From our experience with Aruwa over that time,

they have already shown us the significant values add they can bring through their deep relationships locally and their operational expertise.” “Our long-term focus is to be the leading manufacturer of personal hygiene products across West Africa. The completion of this funding process is the first of the many steps in the achievement of our objectives. The investment will enable us to increase our capacity significantly across all of our product lines and grow in both our domestic and export markets. The best is yet to come for Wemy and we are very happy to have Aruwa as our partners in that journey,” he said.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: SAMUEL IDUH ) 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

Wednesday 23 October 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 22 October 2019

Top Gainers/Losers as at Tuesday 22 October 2019 LOSERS

GAINERS Company

Opening

Closing

Change

STANBIC

N36.25

N37

0.75

CCNN

N15.85

N16

CUTIX

N1.31

N1.44

UACN

N6.4

UCAP

Company

ASI (Points)

Opening

Closing

Change

MTNN

N130

N129

-1

0.15

ETERNA

N3.15

N2.85

-0.3

0.13

CADBURY

N9.85

N9.6

-0.25

VOLUME (Numbers)

N6.5

0.1

MAYBAKER

N2.19

-0.19

VALUE (N billion)

N2.05

0.05

DANGCEM

N144

N143.9

-0.1

DEALS (Numbers)

MARKET CAP (N Trn)

26,365.83 2,780.00 694,019,668.00 7.827

Global market indicators FTSE 100 Index 7,212.49GBP +48.85+0.68%

Nikkei 225 22,548.90JPY +56.22+0.25%

Generic 1st ‘DM’ Future 26,877.00USD +80.00+0.30%

Deutsche Boerse AG German Stock Index DAX 12,754.69EUR +6.73+0.05%

S&P 500 Index 3,012.98USD +6.26+0.21%

Shanghai Stock Exchange Composite Index 2,954.38CNY +14.76+0.50%

12.834

Stock market closes in red as MTNN, Eterna, Cadury, others lose Stories by Iheanyi Nwachukwu

igeria’s stock market closed in the red on Tues day October 22 as MTNN led other value counters that occupied the losers table. Investors are expected to start pricing-in improved third-quarter (Q3) scorecards that have so been released by companies listed on the Nigerian Bourse. T h e Ni g e r i a n S t o c k Exchange (NSE) All Share Index (ASI) decreased by 0.09percent, while the Year-to-Date (Ytd) return stood further negative at -16.11percent. The All Share Index closed at 26,365.83 points as against the preceding day close of 26,390.08 points while Market Capitalisation closed at N12.835 trillion as against preceding day close of N12.847 trillion, representing a decline of N12billion. At the sound of closing gong, 12 companies

gained as against 13 losers. MTNN led the losers table after its share price dropped from N130 to N129, losing N1 or 0.77percent, followed by Eterna Plc which moved from a high of N3.15 to N2.85, losing 30kobo or 9.52percent. The share price of Cadbury Nigeria Plc was also down, from N9.85 to N9.6, losing 25kobo or 2.54percent. On the gainers table, Stanbic IBTC

occupied the topmost position after moving from N36.25 to N37, adding 75kobo or 2.07percent. It was followed by Cement Company of Northern Nigeria Plc which rose from N15.85 to N16 , adding 15kobo or 0.95percent. Cutix stock price rallied from N1.31 to N1.44, adding 13kobo or 9.92 percent. Volume traded increased by 182.29percent from

NSE approves listing of N16.5bn Primero BRT bond

he Nigerian Stock Exchange (NSE) on October 14 approved the listing of N16.5billion corporate bond by Primero BRT Securitisation SPV Plc. The Series 1, 17% Fixed Rate Bonds due 2026 is under its N100billion M e d i u m Te r m B o n d Programme. Dunn Loren Merrifield Securities Limited is the stockbroking firm to the Corporate Bond listing. Dunn Loren Merrifield Advisory Partners; Greenwich Trust Limited; and SCM Capital Limited are the Issuing Houses/ Financial Advisers. P r i m e r o B R T Securitisation SPV Plc is

a special purpose vehicle incorporated to issue securities and raise funds to facilitate the purchase of bus ticket receivables under a funding arrangement. It s s p o n s o r, P r i m e ro Transport Services Limited (PTSL) is engaged in the principal activity of passenger transportation business. In April 2019, Global Credit Ratings (G CR) accorde d a final public national scale long-term rating of ‘BBB(NG)’ to Primero BRT S ecur itisation SP V Plc’s N16.5billion Series 1 Bus Ticket Receivables Backed Bonds, under its N100billion Infrastructure B o n d P ro g ra m m e, w i t h www.businessday.ng

the Outlook accorded as Stable. The Programme was not rated but only the Series 1 Bonds. The rating expires in April 2020. PTSL operates the Bus Rapid Transit Scheme route (Ikorodu to Race Course) under an exclusive franchise with the Lagos State G ov e r n m e nt, s p a n n i n g around 35.5 kilometres. PTSL currently has a fleet of 434 Mass Transit Buses. GCR accorded a final national scale long-term rating of B+(NG) to the Sponsor in April 2019. The Series 1 Receivables Backed Securities constitute direct, unconditional, unsubordinated secured obligations of the Issuer.

245.853 million to 694.020 million, while the total value of stock traded increased by 474.75percent from N1.362 billion to N7.827 billion in 2,780 deals. The Financial Services sector led the activity chart with 467.716 million shares exchanged for N7.199 billion; followed by Healthcare with 28.537 million shares traded for N57million.

Alleged probe: Lafarge says not in receipt of any letter from SEC

afarge Africa Plc has that it is not in receipt of any letter from the Securities and Exchange Commission (SEC), that would warrant the Company to believe that an investigation has been launched against it. Lafarge in a notice at the Nigerian Stock Exchange (NSE) signed by Adewunmi Alode, its General Counsel and Company Secretary reacted to a newspaper report (not BusinessDay) on October 21, 2019 which alleges that the cement maker was being probed over allegations of poor corporate governance practices and abuses,

saying it was as a result of a petition written by concerned shareholders of the publicly – quoted company. “We write to formally notify the Nigerian Stock Exchange, our Shareholders and the investing public, that Lafarge Africa Plc is not in receipt of any letter from the Securities and Exchange Commission, that would warrant the Company to believe that an investigation has been launched against it,” the October 22, 2019 letter reads. Lafarge Afr ica share price was unchanged at N 15.15 per share at the close of trading on Tuesday at the Nigerian Bourse.

Airtel Africa partners Ecobank Group on mobile transactions

irtel Africa and Ecobank Transnational Incorporated (ETI), the parent company of Ecobank have signed a partnership which will allows millions of Airtel Money and Ecobank customers across Africa to improve their access to mobile financial services and carry out a variety of mobile transactions. This partnership, which is subj e ct to re gulator y approval in each market, as the Nigerian Stock Exchange (NSE) was notified will enable Airtel Money customers, through Ecobank’s digital financial services ecosystem, make online deposits and withdrawals, effect real time domestic and international money transfers, make instore merchant payments,

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and access loans and savings products amongst others. The partnership will also allow Ecobank corporate account holders to make bulk disbursements, such as payroll payments, directly into Airtel Money customer wallets. Additionally, Ecobank will be able to sponsor Airtel Money to issue both virtual and physical debit and prepaid cards to Airtel Money customers. R a g h u n a t h Ma n d av a, CEO for Airtel Africa, said: “This partnership is a further demonstration of A ir tel A f r i ca’s c o m m i t m e nt t o provide affordable, simple and innovative solutions for our consumers across Africa. We will continue to offer locally relevant M-Commerce solutions with partners like Ecobank in order @Businessdayng

to enhance the daily lives of our customers.” Ecobank Group CEO, Ade Ayeyemi, commented: “We believe that financial inclusion can ultimately contribute to economic development, collaborating with major telecommunications providers in Africa is therefore a key strategic driver towards closing the gap between the banked and the underbanked. Hence this partnership with Airtel Africa which makes Ecobank financial services available to any Airtel line registered on Airtel Money, in our markets where regulatory approvals are in place. This potential extensive reach will further provide convenience to customers, intra-country and particularly for crossborder transactions and remittances across Africa.”

Wednesday 23 October 2019

BUSINESS DAY

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Wednesday 23 October 2019

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Wednesday 23 October 2019

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MTN allows third party access to its mobile money API …opens up channel for developers to create integra-table tech solutions Jumoke AKiyode-Lawanson

he Access Programming Interface (API) platform for MTN’s mobile money platfor m (MoMo) has been opened up to enable access for developers and programmers innovate on the platform and develop products and other solutions that will create a w ider rang e of digital financial offerings for MTN’s customers. MTN Group announced on Tuesday that it granted third party access in order to further foster innovation and enhance financial inclusion. “ M TN i s i nvi ti ng d e v e l o p e r s a n d e n t re p re neurs, across five countries, to participate in the M o M o A P I Ha c k a t h o n . T h e Ha c k a t h o n , r u n i n partnership with Ericsson ( M T N ’s Mo Mo te ch n o l ogy partner), will give app developers based in Ghana, Uganda, Cote d’Ivoire, C a m e ro o n a n d Z a m b i a the opportunity to create innovative financial and transactional applications

using the MTN MoMo API platform,” the company stated. Serigne Dioum, MTN group executive for mobile financial ser vices, said: “Enhancing financial inc l u s i o n t h rou g h d ig i t a l technology is an essential element in supporting the continent’s realisation of some of the United Nation’s Sustainable Development Goals (SDG). We also see this as an opportunity for more tech developers, entrepreneurs and businesses to work with us in bridging the financial divide, whilst also creating ample opportunities for themselves.” Developers are required to create a mobile application that uses MTN MoMo APIs and the mobile application needs to target consumers, merchants or businesses. It is also mandated that the application is useful and usable in the market where the applicants have registered and can cover use cases beyond payment but must utilise MTN MoMo APIs.

According to MTN, the hackathon further illustrates the essence of the company’s ‘We’re G ood Together’ initiative, which celebrates the role that collaboration can play in ensuring that more people e n j oy t h e b e n e f i t s o f a modern connected life. T h e ra n g e o f s o l u t i o n s to nar row the financial services gap can only be a c h i e v e d t h ro u g h v a r i ous partnerships with entrepreneurs, developers, financial services providers, regulator y authorities, other mobile network operators, merchants, distributors, businesses and technology providers. To par ticipate in the challenge, MTN and Ericsson in each country will select 12 applicants. The preselected applicants will have two weeks to develop their ideas. After submitting a live demo of their application submission, finalists stand the chance to win up to USD2,500 and one team member will win a trip to Ericsson’s Innovation Lab in Sweden.

Alpha Mead, LASTVEB partnership to bridge real estate artisan skill gap CHUKA UROKO

oncerned about the widening skill gap in the artisan segment of Nigeria’s real estate industry, Alpha Mead Group has partnered the Lagos State Technical and Vocational Education Board (LASTVEB) intent on bridging the gap. The partnership wants to achieve this goal through the company’srecentlylaunchedCorporate SocialResponsibility(CSR)initiative known as Alpha Mead PATH. PATH is an acronym for Professionalism Acquired through Timely Human Development and, according to officials of Alpha Mead, the new initiative is aimed at demonstrating the company’s commitment to human capital development, business sustainability and economic prosperity of its chosen markets. Femi Akintunde, the company’s group managing director, explains to BusinessDay that the initiative seeks to address frontally the dearth of artisan skills in the market by mobilising and working with their employees to make technical education attractive again. “It is also aimed to increase employment opportunities for artisans and create sustainable wealth for this segment of the real estate industry,” Akintunde says, disclosing that the pilot programme was launched in Lagos recently with a two-day special training and mentoring sessions for more than 100 technical college students from Ikorodu, Ikeja, Ikotun, Epe and Badagry. Laolu Oguntuyi, director of Technical and Vocational Training at LASTVEB, commends Alpha Mead Group, saying the initiative is not just timely, but

also out to address fundamental gaps that the board has been looking to fill over the years. “I must commend Alpha Mead Group for the initiative because it speaks cogently to identify gaps we have been doing so much to bridge at the board. The difference between acquired skills and required skills is what is called a skill gap. And as a board, we have noticed these gaps and are making efforts to close them. “So, when a company like Alpha Mead Group, with over 12 years’ experience in the market across 11 countries approached us to collaborate in supplying that side of required skills that has been missing, we embraced it and that is why we had to bring in students from all our technical colleges in Lagos to be part of this,” the director says. Oguntuyi advises the students to take the opportunity seriously because they would need those skills to progress in their career and in life. “The world is now a global village. What that means is that there is nothing called local skill any longer. “There can only be one standard and that is what will be acceptable globally. I encourage you all to seize this rare opportunity to expose yourself to these international standards so you can be relevant in the market that is emerging globally,” Oguntuyi tells the students. Wale Odufalu, group executive director, corporate services of Alpha Mead, notes to the gathering that “at Alpha Mead Group, human and capacity development is dear to our hearts. We recognise that business success and sustainability can only happen when the right people with the right capabilities and

skills drive the process.

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Cititrust Holdings emerges Investment Holding Company of the Year at BAFI Awards Seyi John Salau

ititrust Holdings plc, a multis e c t o r i n v e s tment group, has emerged winner of the prestigious Investment Holding Company of the Year Award at the 2019 edition of BusinessDay’s Banks’ and Other Financial Institutions (BAFI) Awards, which held in Lagos on Saturday, October 19, 2019. The company beat some of Nigeria’s most iconic diversified business investment groups to clinch the award. Cititrust Holdings was recognised to have demonstrated strategic agility in long-term value creation across different sectors of the economy in a way that is sustainable for its non-

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operating business model. According to the award citation, the Awards Review Committee was impressed by its strategic vision, disciplined execution and solid competitive positions of its investee companies and subsidiaries. Receiving the award on behalf of the company, Yemi Adefisan, Cititrust’s group chief executive officer, expressed his appreciation to BusinessDay for the honour and dedicated the award to all its shareholders and investors across 11 African countries. Adefisan promised that the company would continue to improve on its services to win the award again. The group, which was founded in 2006, holds significant investments that

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cut across commercial and mortgage banking, asset management, stockbroking, and investment banking, currency trading, pension fund administration and insurance services. As a real sector investor, Cititrust’s portfolio includes investments in the energy, healthcare, telecommunications, engineering and construction sectors. Cititrust Holdings prides itself on its culture of integrity, innovation, vision, and value creation.

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Wednesday 23 October 2019

BUSINESS DAY

news

Allow new board to supervise NDDC forensic audit, Buhari advised INIOBONG IWOK

ollowing President Muhammadu Buhari’s recent pronouncement that a forensic audit would be carried out on the activities of the Niger Delta Development Commission (NDDC) from 2001 till date, Festus Masajuwa, a stakeholder from Niger Delta and public relations practitioner, says the move is commendable, advising that the newly nominated board should be urgently inaugurated to allow them preside over the audit on grounds of neutrality. Masajuwa recalls in a statement sent to the media that while receiving governors of the states that make up the Commission in Aso Rock, President Buhari had expressed disappointment at the Commission’s performance over the years, observing that what is presently on ground in the Niger Delta region does not justify the huge resources that have been made available to the interventionist agency over the years. The release quoted Buhari as saying, “I try to follow the Act setting up these institutions, especially the NDDC. With the amount of money that the Federal Government has religiously allocated to the NDDC, we will like to see the results on the ground; those that are responsible for that have to explain certain issues.” Masajuwa applauds the President for the investigation into the activities of the Commission and opined that it was much expected, because

the budgetary expenditures for projects are totally at variance with real projects on ground. He, alongside other stakeholders from the region, implored President Buhari to urgently forward the newly nominated board of the NDDC to the Senate for clearance and subsequent inauguration, saying that this will give credence to the audit and semblance of honesty. “We are therefore, calling on the President to disregard dissenting voices and baseless arguments being canvassed by some persons from the region and inaugurate the new board, to help supervise the audit,” he says. He points out that the new board comprised people with proven track records, who have distinguished themselves in their respective fields of endeavour. “With the wealth of experience at their disposal, their contributions will in no small way take the Commission to greater heights and endear the government to the mass population of the Niger Delta, which will evidently lead to greater transformation,” he says. He emphasises that there is the need to really find out why the region has remained under-developed despite huge allocations over the years, adding that “There is the need for the in-coming board to carry out the investigation since it has not yet been tainted in any way by the activities in the place. This, I believe will help them to unravel what has happened spanning from 2001 to date.”

Aviation minister declares state of emergency on Enugu Airport James Kwen, Abuja

inister of Aviation, Hadi Sirika, Tuesday declared a state of emergency on the Akanu Ibiam International Airport, Enugu, with a promise to temporarily relocate his office to the premises to see it fixed before April next year. The minister, who promised to directly supervise the rehabilitation of the airport to make sure repair works were done on it, announced that the new terminal building for the Murtala Mohammed International Airport in Lagos and the Aminu Kano International Airport in Kano would be ready before the end of the year. Sirika, who spoke while defending the Ministry of Aviation 2020 budget before the House on Aviation, said with the approval of N10 billion for the Enugu Airport by the President, the contractors were expected to mobilise to site as soon as possible, adding that the President had already directed all agencies associated with the smooth work on the airport to work together to ensure it was delivered on time. The rehabilitation work on the Enugu Airport will be done in such a way that the airport will be the best in the country, he said, adding that all houses

located close to the airport may have to give way for increased safety. He revealed that the Enugu State governor, Ifeanyi Ugwuanyi, had given assurance that he would provide support for the rehabilitation of the airport and asked the lawmaker to always visit the airport to access progress of work. The minister also said the delay in the completion of the terminal building in Lagos had been addressed with the approval of funds by the President, stressing that the private hangers that were also hampering the work had started giving way. Once the Ministry is able to complete the new terminal building, the old one will be replaced by a new structure, he said, and appealed to the Committee for their cooperation in the efforts of the Ministry to ensure the nation’s airports are safe. Speaking on the performance of the 2019 budget, the Minister told the lawmakers that only N7,330,178,427.45 representing 20.8 percent of the capital allocation to the Ministry was released, adding that so far N2,627,119,597.14 has been paid out from the released 2019 Budget, while some Certificates of Completion of Projects are being processed for payment. www.businessday.ng

Femi Taiwo, executive director, Leap Africa (l), with ‘Laoye Jaiyeola, CEO, Nigerian Economic Summit Group (NESG), after signing a Memorandum of Understanding (MoU) between NESG and Leap Africa to implement the NESG Bridge Fellowship at the Summit House in Lagos.

International ranking: South African universities leave Nigerian counterparts in the shade KELECHI EWUZIE frica’s most populous nation, Nigeria with 170 universities can learn lessons from South Africa university system that continues to top in Africa when it comes to global ranking of universities, figures from The Times Higher Education (THE) World University Rankings 2020 show. South African universities have in the last decade provided increased competition to Nigerian universities in international outlook, knowledge transfer and research. According to the latest THE World University Rankings, universities globally were assessed using performance indicators that are grouped into five areas – teaching, which has the do with learning environment; research, which assesses the volume, income and reputation of each citadel of learning. Other performance indicators include citations (re-

… in research, knowledge transfer, international outlook search influence); international outlook, this accounts for the number of staff, students and research carried out in each institution ranked, and industry income (knowledge transfer). In the last three years, figures from THE World University Rankings show South African universities outperforming Nigerian, a situation traced to the country’s recognition of education as a national priority. While South African universities like University of Cape Town ranked 136, Witwatersrand ranked 194, Stellenbosch University ranked 251 and five others ranked in the top 1,000 globally. On the other hand, Nigeria is feeling the squeeze as only Covenant University ranked 401, University of Ibadan 501 and University of Lagos 801 made the cut in the top 1,000 top universities. According to THE analysis

of international outlook, Covenant University, the highestranked Nigerian university, scored zero for the reason that there are no international students. The University of Ibadan had a 1 percent score on international outlook, which is a reflection of the number of international staff and students and research with a global outlook from any university ranked. Toyin Adeyinka, a graduate of International Law and Diplomacy, Witwatersrand University, South Africa, in a telephone interview with BusinessDay, says infrastructure, flexible course models and a progressive knowledge transfer approach are some of the positive indicators that give universities in South Africa the edge over her Nigerian counterparts. Adeyinka observes that while lecturers in Witwatersrand University are ever ready to encourage students

to project their on point of views in class, research work and assignments, the same cannot be said in Nigerian universities where lecturers frustrate the effort of students who go the extra mile to carry out wider scope of research. “Teaching system in Nigeria is flawed; there are not enough research facility to equip students to carry out proper research work,” Adeyinka notes. David Ibidapo, a doctorate student at Covenant University, Otta, Ogun State, says it is not surprising that the university continues to outperform other Nigerian citadel of higher learning in the area of ground breaking researches. Ibidapo says one model that has worked for the private university is in the area of grooming students right from their undergraduate levels on carrying out standard researches with zero tolerance for plagiarism.

Commonwealth finance ministers urge progress on taxing digital commerce to tackle debt Hope Moses-Ashike

ommonwealth finance ministers have recognised the potential of technology to improve debt transparency while urging closer collaboration to resolve tax challenges arising from growing digital commerce. Revenues from tax collection are important for maintaining debt at sustainable levels, yet can often be impaired by the digitalisation of trade in services, as this often results in countries being unable to determine when, how and where taxes on digital transactions should be collected. Ministers have therefore agreed that the Commonwealth should bring its powerful collective voice to ongoing discussions at the Organisation for Economic Co-operation and Development (OECD), particularly on behalf of small-

er states. International agreement on digital taxation could enable countries to benefit by taxing large tech giants, even if they do not operate within their jurisdictions. These decisions were made by ministers gathered in Washington D.C, USA, for the 2019 Commonwealth Finance Ministers Meeting under the theme ‘Preventing debt crises: The role of creditors and debtors.’ Commonwealth Secretary-General Patricia Scotland said: “The Commonwealth has a distinctive contribution to make by bringing together nations with developed and developing economies to agree on collective approaches and action towards a fair and equitable global system for taxing multinational businesses in a swiftly digitalising economy “We need a rule-based system that is inclusive, transparent

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and efficient so that all countries have a means of collecting revenue and are thereby able to avoid accumulating excessive debt. It goes hand in hand with accelerating the gains to be made by addressing climate change and making progress towards achieving the sustainable development goals.” The ministers saw global trade and geopolitical tensions as having ‘intensified,’ in a context where global debt has risen to an all-time high, estimated at $19 trillion. They stressed the need to make debt easier to manage for vulnerable countries, and for them to be eligible for periods of relief to stabilise growth during economic shocks. As seen in the past, disasters can push countries into taking on emergency loans to rebuild and recover. Such debt can easily become unsustainable for most low and middle-income countries, making them vulnerable @Businessdayng

to debt distress. Minister of Finance of Cyprus, Harris Georgiades, who chaired the meeting, said: “Disruptive technologies are challenging the financial system by increasing competition and reshaping conventional business models, thereby fuelling the creation of a whole new kind of financial ecosystem.” During the meeting, ministers also reviewed a suite of Commonwealth initiatives, including a disaster risk portal to offer streamlined and integrated information on available funds to respond to disasters, and a fin-tech toolkit to help banks leverage innovation in the financial sector. The Commonwealth gave a presentation on its flagship debt management system ‘Commonwealth Meridian’ which is used by 63 countries to manage their debt which combines to a total of $2.5 trillion.

Wednesday 23 October 2019

BUSINESS DAY

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Wednesday 23 October 2019

BUSINESS DAY

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Afreximbank catalyses African cotton sector with new initiative Hope Moses-Ashike

he African ExportImport Bank (Afreximbank) is developing an African Cotton Initiative (AFRICOTIN) to help catalyse the African cotton sector, Kanayo Awani, managing director of the bank’s IntraAfrican Trade Initiative, has announced. Speaking during the launch of the African Corner at the World Cotton Day organised by the World Trade Organisation in Geneva on October 7, Awani had said the initiative would involve upstream interventions boosting production of cotton on the continent and downstream interventions promoting and financing the consumption of cotton products, Afreximbank, explained in an emailed statement Monday. She noted that the cotton value chain provided income for millions of people in Africa, especially those living in rural areas, and represented an important source of foreign exchange for many countries. Afreximbank had a cotton pipeline of about €400 mil-

lion, she announced, including $195 million in textile and cotton Parks in Burkina Faso and textile and garments industrial parks in Nigeria. The African Corner, sponsored by Afreximbank, allowed the bank to showcase its support for the African cotton value chain and for the African fashion and design industry. The African Corner is a section of the WTO premises dedicated to African Cotton products and was designed to give exposure and recognition to African cotton and cotton stakeholders. The corner is also being used to develop collaboration with the private sector and seek investors for cotton-related industries and production in Africa. Observance of the World Cotton Day followed a United Nations resolution sponsored by Benin, Burkina Faso, Chad and Mali proclaiming October 7 as World Cotton Day. The four countries, also known as the Cotton-4, are co-sponsors of the Cotton Sectorial Initiative which aims to improve the international cotton trading system.

Hosting 2020 National Sports Festival, proof of FG’s endorsement of Obaseki – president’s aide

ormer Edo State commissioner for information and orientation, and current senior technical assistant on print media to President Muhammadu Buhari, Louis Odion, says Edo State’s hosting of the 2020 National Sports Festival is an endorsement by the Federal Government of the Governor Godwin Obaseki-led administration. Odion said this while addressing journalists in Benin City, the Edo State capital. According to Odion, “Edo’s hosting of the 2020 National Sports Festival is significant in the sense that it is happening two years after the return of the festival. It is a massive endorsement by the Federal Government on what is going on in Edo State. “The work at Samuel Ogbe-

mudia Stadium is world-class. I have also gone around, and I am impressed by what is going on in the place. I thought I was somewhere in Lekki when I was in GRA with the Skyscraper at the Secretariat. That place laid derelict for over four decades. The governor didn’t start by awarding contract. He went ahead to work on the monument which I am told will be put to use soon. “Late Samuel Ogbemudia started work on the project. It was later abandoned and Governor Obaseki came to transform the waste to wealth. It is something everybody should commend. If it was your money, you won’t allow it go to waste. That is the kind of value we want to see. There is value for money under Governor Obaseki from what I can see. I don’t toy with my words, anything I say I mean it.”

ICAO appoints AIB safety investigator as BAGAIA new helmsman IFEOMA OKEKE

he International Civil Aviation Organisation (ICAO) has appointed Charles Irikefe Erhueh, a safety investigator with Accident Investigation Bureau (AIB) Nigeria, as the new Commissioner of the Banjul Accord Group Accident Investigation Agency (BAGAIA). Erhueh was picked after a thoroughrecruitmentprocessinwhich variousapplicantsfromwithinand outside the member states applied for the advertised position. The BAGAIA is coordinated by ICAO to assist its member states, comprising of seven West African States namely Gambia, Ghana, Guinea, Liberia, Nigeria, Cape Verde and Sierra Leone, in the conduct of independent investigation of aircraft accidents and serious incidents in compliancewithinternationalstandards. With headquarters in Cape

Verde, the agency also promotes the use of a common set of regulations compliant with the provisions of Annex 13 to the Chicago Convention by its member states. This includes regulations for the protection of safety data with the purpose of accident prevention. Nigeria has been playing a leading role in the establishment of the sub-regional body although it is the only well established and properlyequippedaccidentinvestigation body in the region. According to Akin Olateru, Commissioner, AIB, “We are pleased to release Charles Irikefe Erhueh, one of our well trained safety investigators to serve at BAGAIA. At AIB Nigeria, we have been investing massively in human capacity development and it is our joy to share this with the aviation industry in Africa and the world. We are happy that he was picked out of several people that applied for the job. www.businessday.ng

L-R: Wisdom Chapp-Jumbo, communications officer, Women in Management, Business and Public Service (WIMBIZ); Tosin Adefeko, member, conference planning group, WIMBIZ; Frank Aigbogun, publisher/CEO, BusinessDay Media; Hansatu Adegbite, executive director, WIMBIZ; Mariam Shuaib, member, conference planning group, WIMBIZ, and Oghenevwoke Ighure, executive director, strategy, innovation and partnership, BusinessDay Media, at the visit of WIMBIZ team to BusinessDay head office in Lagos.

Nigeria’s indigenous oil companies seize onshore opportunities STEPHEN ONYEKWELU

… to grow production capacity by over 30%

t least three Nigerian oil and gas companies have in the last couple of weeks taken investment decisions meant to drive business expansion on Nigeria’s onshore oil assets and marginal fields. Seplat Petroleum Development plc leads the pack with the acquisition of Londonlisted independent exploration company, Eland Oil & Gas, to consolidate its position as the leading indigenous exploration and production (E&P) company in Nigeria. Eroton, one of Nigeria’s junior indigenous E&P companies, has put in place various ingredients needed to drill on the Akaso field in Oil Mining Licence (OML) 18, onshore Nigeria. San Leon Energy, licence partner, has confirmed it has been notified by Eroton that the drilling rigs needed to work on OSMU-1 are in place and expected to start in the

coming days. Similarly, a joint venture led by Green Energy has sanctioned the second development phase of its shallow-water Otakikpo oil field (OML 11) in the Niger Delta off Nigeria, according to London-listed partner Lekoil. “This acquisition signals the next step in our journey that will underpin Seplat’s ambition to be the leading independent E&P in Nigeria,” Bryant Orjiako, chairman of Seplat, says. The acquisition could raise Seplat’s oil production by 30 percent to about 64,000bpd by 2020, according to data from Bloomberg, although the deal would not boost Seplat’s gas production. For Eroton E&P, OMSU-1 is expected to take about 60 days to drill to a total depth of 11,900 feet and complete, with the well to target the E4500 and E3000 formations. San Leon

says the well is expected to be connected to the OML 18 production system. “Drilling the first new well of Eroton’s operatorship marks the start of a new chapter in the development of OML 18,” Oisin Fanning, chief executive of San Leon says. “Increasing oil production at the wellhead is an important step in increasing cash flow from the asset, and I look forward to providing shareholders with an update on the performance of this new well in due course, in addition to providing further information on further development activities,” Fanning notes. OML 18 is located in Rivers State and hosts the Akaso, Asaritoru, Awoba, Bille, Buguma Creek, Krakama, Orubiri, Cawthorne Channel and Alakiri fields. The Green Energy led joint venture has signed a memorandum of understanding

with Schlumberger and an unnamed major international oil company for an infrastructure-sharing and drilling programmed around a group of marginal field assets in licence OML 11 hosts Otakikpo. Given this, the joint venture has now secured a 20-year extension of the Otakikpo marginal field licence following a payment of $1 million to Nigeria’s Department of Petroleum Resources and is finalising terms with key engineering, procurement and construction contractors to determine cost and schedules so that financing can be put in place, London-listed Lekoil notes in a statement. Oil field services player Schlumberger, which has been enlisted as technical partner, has estimated that existing infrastructure could have capacity to produce 10,000 barrels per day of oil and up to 12,000bpd with debottlenecking.

Apapa: Fingers point at NPA, terminal operator as gridlock persists CHUKA UROKO

espite the determination of the Presidential Task Team (PTT) on Apapa Gridlock to end the congestion, chaos and gridlock on Apapa roads and bridges, the gridlock has persisted due to the action and inaction of the Nigerian Ports Authority (NPA), truck owners and drivers said. NPA is a Federal Government agency that governs and operates the ports in Nigeria. The major ports controlled by the NPA include the Lagos Port Complex and Tin Can Island Port, Calabar Port, Delta Port, Rivers Port in Port Harcourt, and Onne Port. The PTT, which was set up by the Federal Government under the chairmanship of the Vice President Yemi Osinbajo, has done well so far in taming the monster called gridlock in

Apapa. But sustaining this good record has become a big challenge for them in recent time. Gradually, the gridlock that had eased in the last six months is returning to the surprise and anger of many, especially motorists, Apapa residents and business owners in the premier port city. The presidential task team had alleged that their efforts were being sabotaged by security agencies including the army, navy, police and others who were part of earlier discredited and disbanded task forces on the Apapa gridlock. But a cross section of truck owners and drivers who spoke with BusinessDay Tuesday evening on Apapa-Wharf Road pointed accusing fingers at the NPA and one of the terminal operators, AP Moller. “We don’t have problem

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anymore coming to the ports because the roads are free. But entering the port is a huge challenge. NPA is not doing enough to make the port work. AP Moller is not just attending to trucks because they prefer to attend to barging agencies first,” said a truck owner who identified himself simply as Hafis. AP Moller is one of the terminal operators in Apapa ports. The operator has been severally qand variously accused of frustrating efforts at improving ease of doing business at the ports with its stringent and exploitative mode of operation. An official of BUA Group, who refused to give out his name said pointedly that AP Moller was a big problem as it sometimes shuts down its terminal and no truck would be allowed to enter for hours. “The call up system is work@Businessdayng

ing; once you have your papers, you can easily come out of your truck park which does not take up to one hour anymore; but to enter the ports is where there are issues, and this is why you see some trucks on the roads sometimes,” the official said. A truck driver who also spoke to BusinessDay noted that going out of Apapa has also become very difficult because of Nigerian Customs who have mounted another check point near the foot of the Ijora Bridge, stopping trucks and other vehicles and doing another round of examination. “Both NPA and the customs are agencies of the federal government and they are the ones sabotaging the work of the presidential task team which was set up the government. Why are they doing that?” wondered the driver who identified himself as Saheed.

Wednesday 23 October 2019

BUSINESS DAY

Wednesday 23 October 2019

BUSINESS DAY

UNDERCOVER INVESTIGATION (3) A reporter’s diary - Living with a ‘Mad’ cell mate, set up by Prison Warders, abducted by the Police In the third and final part of a three – part undercover investigative series, FISAYO SOYOMBO documents the soft side of his time in police cell and prison, and how prison, police and court officials conspired to abduct him after his cover was blown.

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“My body is rotting,” he screamed in a manner that broke my heart. “Please help me, please!” His pleas were loud, persistent and touching. “Help me out!!!” he would say. ‘Who is there to help me out? My body is rotting. Help me out! Help me out!!!

‘

MY CELL MATE ‘RUNS MAD’ Two of the next three days proved tumultuous, even for the police officers. It started over the night between Wednesday and Thursday, at about 1am. Three of us were in the entire cell, but only Uchenna and I shared the inner cell. Suddenly, he hit me in my deep sleep and asked me to look at a hole in one of the walls of the cell. “There’s an eagle in that place,” he howled, spilling a sachet of water in that direction. “Can you see it? That’s the eagle!” It marked the onset of a two-day turbulence in the cell. Uchenna sprang up and began sprinkling water in all three rooms of the cell, casting and binding, shouting and crying out prayers. “Jesus is here, Jesus is here,” he screamed at a time. “Leave this place, you demon! No space for you here. I am no longer with you. I’m a new man now. Jesus is here!”

Uchenna went on somewhat schizophrenically for the next six to seven hours, punctuated only once by the arrival of Sunday and Japheth in the cell. The police officers ignored him altogether, but we, the suspects, were worried; we weren’t sure if he had run mad or if he was pretending, to force an unlikely release. By Thursday, it had become so unbearable the officers had to handcuff his left hand to the gate of an inner cell. It was a big shock to find out he had disentangled himself in a matter of minutes. He was re-cuffed but he again freed himself; this time, I caught him. He had signaled to Japheth to help him fetch a sachet of water; with this, he greased his hand and the handcuff, and boom, he was free again. This time, the officers removed him from the cell gate and chained him in the inner cell proper, alongside his helper Japheth who was first blessed with a few smacks. Still, it didn’t deter Uchenna; it emboldened him to tacitly pray for the death of the officers, over the night. “Kill them all. Fire, burn you. In the name of Jesus. Fire, fire, fire, fire, fire, fireeeeeeeeeeee,” he yelled at one time. “Jesus is here. I need the fire from heaven, the fire from heaven, the fire from heaven. Jesus, release it on me now. You did not disappoint Elisha, Elijah… I need your fire now to quench and destroy all the people tormenting me. Die in the name of Jesus! You die! Dieeeeeeeee!!!” Japheth, on the other hand, was having a torrid time. The inner cell in which they were caged was mosquito-infested, due in part to the volume of water Uchenna had moistened it with. Even when he wasn’t caged, I’d furtively observed how Japheth frequently scratched his crotch re-

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gion with great discomfort, sometimes even peeping into his dingy briefs to catch a glimpse of what was going on down there. Now in that inner cell, it worsened. “My body is rotting,” he screamed in a manner that broke my heart. “Please help me, please!” His pleas were loud, persistent and touching. “Help me out!!!” he would say. ‘Who is there to help me out? My body is rotting. Help me out! Help me out!!!” Even though he had rebuffed my repeated warnings not to pass water on to Uchenna, I felt pity for him. I would later crawl over to the cell to hand him an anti-mosquito cream smuggled to me earlier in the day. It helped a bit but didn’t entirely solve the problem. It was such a relief to be taken out of the cell to the court on Friday morning and to Ikoyi Prison in the evening. When 46 new inmates, I think, arrived at the prison on Monday evening, I was stunned to spot Uchenna’s sparkling white teeth shining through from the crowd. He had become markedly lean and his laughter this time was shallow. How he got to prison, I still don’t know. THE SNIPER CHALLENGE IS REAL How many times have we read in the papers and on social media how someone committed suicide by gulping a bottle of the lethal insecticide, Sniper? It now appears many successful suicide attempts escape media notice. On Friday, while taking in some fresh air at the IPO’s office in anticipation of transfer to the court, a young man sped into the police station with a little note in his hand. He pleaded for a police report. His friend, an artisan in his late 20s whose wife had just been delivered of a second baby, had made an attempt on his own life, leaving a suicide note revealing his encounter with a diviner during which his struggles in life had been linked to a family curse. He wrote that he was leaving to escape the curse. Life hadn’t been completely snuffed out of him when he was found, but the hospital to which he was rushed demanded a police report to complement treatment. The guy who rushed in for the report owned the shop where the suicide mission was surreptitiously executed. I could sense from his eyes he thought he would be held liable should his friend pass on. Having obliged, the Police were shocked to see him again within 30 minutes of his exit. Well, the man died. His family, summoned, started arriving one

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after the other. “He’s a very foolish boy,” one of them, an uncle, said. “You have a wife; you have a baby; God just blessed you with another. You may not be making millions but you’re not begging or stealing to feed your family. Then you take your own life? He was extremely stupid!” After leaving the prison a week later, I scoured the papers for this story. To my surprise, it didn’t make it. CONGESTED PRISON CELLS I was less than an hour old in prison when I discovered stories of cell congestion were not made up. Sixteen of us, I think, were taken in that Thursday. As is the practice with fresh inmates, we slept in the welcome cell. The cell @Businessdayng

always had its own base members, the number usually hovering between 10 and 15. The tradition was that stale inmates slept ‘comfortably’; they didn’t have to shrink their bodies into narrow spaces, even though they slept on bare floor with or without blankets and bedsheets. Only the four most senior inmates slept on bunks bearing threadbare mattresses. After the stale inmates had marked their territory in the room, estimated to about 20 by 16 metres in size, the rest of us were arranged like logs of wood on a trailer. None of us slept face down or face up; we all slept on our sides, one’s head positioned in north-south fashion, the other’s positioned south-north. If an inmate turned sideways, the next complained. Therefore, from time to time, the Section barked out orders resolving arguments from such tussles. Little did we know we were lucky. The 45 inmates who arrived five days

later had no such luck; they sat down all through the night! With the total number of inmates that night trumping 60, there was no chance for sleep. Instead, they were arranged in long rows in which an inmate sat in between the legs of the one behind him, and opened up his own legs for the one in his front to sit. As I would later discover, more than 3000 inmates inhabited a prison built for 800; of a higher consequence, the number of awaiting-trial inmates usually hovered beneath or just over 2,500, proving the slow dispensation of justice is a major contributor to prison congestion. SUNKANMI IJADUNOLA… FROM BEATER TO PATRONISER Over the course of my seven days in prison, it was, quite simply, too easy for me to separate the corrupt warders, who were in the majority, from the clean ones. The corrupt ones were usually

pensive and jittery whenever they came in contact with me, and they were the ones who were most vicious during the initial attempt to unravel my identity. I could see the apprehension in the eyes of two of those filmed demanding and receiving bribes from me in court. The corrupt ones in the prison yard who didn’t appear in the videos were nevertheless furious, knowing it could have been them as well. The blameless ones wanted to know my mission quite alright, but they were calm and civil with me. No violence; their strategy was to engage with me and look out for any loopholes in my answers. Fair enough. Assistant Chief Sunkanmi Ijadunola, for example, the word in prison was that he was one of the numerous warders for sale. And, boy, was he vicious with the cane and, latterly, the stick! If he was the only warder on duty, he would surely have beaten me to death! No question. I remember he flogged me from his office to the records office and back to another office just by the prison gate, where an apparently senior warder appealed to him to stop the beating and remove my handcuff. Rather than accede to that request, Sunkanmi claimed the key to the handcuff was in his office. With his hands and that cane, he continued the beating until we were back in his office; and in his office, he fetched the stick once again and continued hitting the joints of my legs, elbows and shoulders. And in all that period, my two hands were still handcuffed to my back. By the time he belatedly lifted the handcuff, he and some warders had trumped up some allegations against me and had succeeded in making some inmates believe I’d come to film them and expose them to the world. They had also alleged that I was plotting a jailbreak. I had a gang, they said, and I’d come to study the prison’s security architecture, film it surreptitiously and send it to my gang so we could finally return to set inmates free. Even while the beating was going on, I found those claims so hilarious my inner laughter knew no bounds. All this was on Saturday morning. By evening when I finally revealed I was a journalist, I was stunned to see Sunkanmi transform from a ruthless beater to a barefaced patroniser. First, he asked if I would eat. He offered to buy the food but I knew it would be too dangerous to eat. With the offer of food rejected, he bought me a stone-cold bottle of Pepsi. When it arrived, I checked the www.businessday.ng

seal very painstakingly to be sure it hadn’t been previously opened. I drank it, knowing I could continue to endanger my life if I flatly refused every offer. In the six days that followed, Sunkanmi would buy me Pepsi on two more occasions. The arrogant man that he is, he just couldn’t bring himself to verbally apologise for his actions even though at least three other warders who didn’t lay a finger on me had profusely apologized for his indiscretion in taking the law into his hands. For Sunkanmi himself, the Pepsi was his way of saying ‘sorry’.

matter of days! But it wasn’t all gloom. One convict and an awaiting-trial inmate showed me compassion. “Bros, there’s a lot of sun here. Why not shift towards that side,” the convict told me as he swept the expansive ground. It was soothing in that moment, so I asked him for his freedom date, phone number and where I could find him afterwards. That day is faraway but when it comes I’ll find him. And I’ll hopefully be friends with him. The awaiting trial-inmate is now free; you already read about him in the preceding series.

issues ranging from politics to governance, love life, humanity and sex. No sooner had he left than Sunkanmi arrived. He stayed close to an hour. I jumped into the bathroom after his exit but before I was done, a third warder, Timmy, had asked after me. It wasn’t long before the strategy was laid bare before me: I was under house arrest by style. The plan was to take turns in engaging me, to such extent I couldn’t leave the cell without wondering who was already waiting for me. Still, I occasionally managed to wriggle my way out of the human cul-de-sac.

MOCKED BY INMATES Other inmates were still locked in their cells when Sunkanmi sent the Section of the welcome cell to fetch me. But at about the time he was completing the first round of beating, the convicted inmates were needed for a task. While they trooped out in their blue uniforms, I noticed from afar how they giggled and pointed fingers at me. I was sprawling on the ground with my hands chained back, but I looked at them eyeball to eyeball and listened to their snide remarks. “I thought he was gay,” one of them said. “I heard he came here to record the prisoners and expose them to the public,” remarked another. Some said nothing but cast nasty glances at me and made funny gestures. Still, I looked straight at them. I was full of pity for them, in fact. I knew I had committed no crime in practice, something not many of them could boast of. In the eye of the law, they were convicts, some left with many months to serve, others even years. They were stuck in there in the long term; I wasn’t. What irony that prisoners, convicted prisoners, were mocking a fresh inmate who would be granted bail and released in a

‘HOUSE ARREST’ IN PRISON Once the time came for me to admit I was a journalist, the warders huddled together to discuss their next line of action. I was isolated, like a bacterium from a colony, when I heard Sunkanmi scream from afar: ‘Hey, squat down there!” That bark, quite frankly, sums up the master-slave relationship that largely defines the handling of inmates, even awaiting-trial inmates, by warders. No inmate in his right senses, even if not yet declared guilty by the court, will approach a warder for a conversation sitting or standing. He first has to “squat down”! It’s the unwritten rule. The warders’ deliberation soon morphed into a full-fledged meeting. One after the other, they filed into a room, but the meeting had barely taken off when the Comptroller of Prisons, Lagos Command, phoned in. “What is going on at Ikoyi Prison?” I would later learn he had asked. He had received a call from Abuja — the offshoot of my support team’s activation of the Plan B reserved for the unlikely event that my cover was blown. Shocked that the matter had reached Abuja in a little over an hour, the warders started to become friendly and courteous, almost obsequious, with me. Sunkanmi withdrew his squat-down order, asked me to sit in his office, asked if I wanted to eat (which I politely declined) and sent an inmate to fetch me a bottle of Pepsi. “Fisayo the big man!” he would later exclaim. In the evening, after their apprehension had subsided, I was plucked from Cell D2 to the welcome cell. Their plan was to restrict me to that cell, and they were very strategic about it. Sunday morning, a warder whose name tag included ‘Ishiguzo’ was my first guest. I hadn’t even had a bath or brushed my teeth when he arrived. Ishiguzo engaged me for well over an hour — on

C O M M U N I C AT I O N B Y STYLE My first days in the welcome cell were hellish. No inmate wanted to talk to me or come near me. At night or during the day when no warder was visiting, I lay alone in a corner. But when I did, it was with my eyes open; I wasn’t sure no inmate was considering attacking me. I didn’t blame them; a few warders had made them believe I was in prison to record them and circulate their photos and videos online. Of course that was false. Soon, a lifeline presented itself. I noticed during Ishiguzo’s first visit how all the inmates listened in as we engaged. It became clear it was my clearest chance of explaining my mission to the inmates. From then on, whenever a warder showed up, I made sure not to always hand over the initiative to them. As the talks progressed, I always found a way to redirect them to my reason for coming to prison. On an occasion, I told them the real-life story of an acquaintance whose father died of heart attack, due to delay in the availability of an ambulance and the pot-hole ridden road leading to their estate in Ogba, Lagos. This was a stupendously rich man who carved out heaven for his family in that estate, but he was ultimately failed by his state. “No one — rich or poor, mighty or miniature — is immune from the consequences of a malfunctioning society,” I chipped in. “It’s the reason I’m here. If the criminal justice system works effectively, everyone — policemen, lawyers, warders, even inmates — benefits. If it doesn’t, we all lose someway — because we’re all in this vicious cycle together. The only problem is that rather than enthrone a society that works for all, too many want a society that works for them — at the expense of everyone else.” After hearing that, one warder

‘

I thought he was gay,” one of them said. “I heard he came here to record the prisoners and expose them to the public,” remarked another. Some said nothing but cast nasty glances at me and made funny gestures

‘

had not yet spent a full day at Pedro Police Station, Shomolu, Lagos, when I asked myself the question: “Who sent me?” But it was nothing new; I knew I would ask myself that question at some point during this investigation, and I knew too that it would not make me call it off. If you asked any hardcore investigative journalist, they would say the same of almost every daredevil story they have covered. As I lay in that warm cell in the wee hours of Tuesday July 9, it dawned on me that surviving the days ahead would require more than brawn. Five of us ‘suspects’ had crammed ourselves into that narrow, filthy cell, all wanting to get our bodies on that small mat but none fully succeeding. So, intermittently, one suspect pushed or snuggled into the other. The four of them were in deep sleep but I lay there wide awake. How could I sleep? To my immediate left was Uchenna, whose snores could dwarf the grunt of an elephant; and on my other side Austin, coughing so laboriously as though his heart was about to be flung out through his mouth, and in a manner predisposing cell mates to air-borne infections. The air was reeking of alcohol, too. Back in the evening, one suspect had tipped a policewoman to help him buy two sachets of gin that he didn’t down until just before midnight. I looked at the cell gate again and it was firmly padlocked. There was no escaping; this would be my home for a few more days.

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@Businessdayng

>>>

Wednesday 23 October 2019

BUSINESS DAY

UNDERCOVER INVESTIGATION (3) A reporter’s diary - Living with a ‘Mad’ cell mate, set up by Prison Warders, abducted by the Police <<<

be out of prison before the arrival of my people. And it worked. I stepped out of prison and had barely walked 50 metres when three gun-wielding policemen swooped on me, truncating my delirium at finally tasting freedom after eight dramatic days in prison that indeed seemed like eight weeks. One corked his gun while the other two hooked me by the waist. I was still figuring out the confusion when two plain-clothed officers stepped forward from the rear, bearing a handcuff. I knew them. Crime Officer Badmus and Inspector Obadiah from Pedro Police Station. I slid my hands into the handcuff and watched Badmus pay off the Ikoyi prison policemen. He made for the same rickety bus with which we went to court the previous week, while Obadiah frisked me and bundled me in. My lips were static but I started to pray in my spirit. What are they going to do to me? Kill me extra-judicially? Rope me into an existing crime in another police station? I was still drunk in thoughts when Badmus interrupted me with an instruction to Obadiah: “Search him very well to confirm he doesn’t have a phone on him.” It was then I knew I was in big, big trouble. Why the desperation to ensure I can’t reach anyone? This was a little before or after 5pm.

gave me a long, unusually emotive look, then nodded in affirmation. “You are right,” he said. This warder — I won’t name him — was once a victim. He narrated the experience. One of his children arrived at birth several weeks premature, requiring mother and daughter to spend extensive time at a hospital. He visited every day, before and after work. He soon noticed how quickly the baby ran out of drugs he paid for through his nose, how drugs that should last three days were gone in just over one. He observed the hospital keenly and spotted a disturbing trend: the hospital was redistributing the drugs bought by some patients, among those who couldn’t afford them! This warder was distraught; he told me he felt cheated. I apologized to him for the unpleasant experience, though this didn’t colour my knowledge of his aversion to my mission in the prison. So I asked him a question: “If I’d undergone an undercover visit to that hospital to expose the disguised robbery of some patients to treat others, would you have been unhappy with me, as you are now?” He went silent, but his eyes were latent with penitence. He didn’t have to say it; I knew I had just won a convert. THE THOROUGHBRED PRISON WARDERS On Sunday evening, some 24 hours after my cover was blown, I was summoned to the building housing some offices, including those of the Assistant Chief and the Chief. I was taken into an office I’d never really taken notice of, welcomed by a burly but innocuous-looking man, dark in complexion and spotting a noticeable belly. A warder I was seeing for the first time instructed me to hold the recording devices found on me. He held a regular camera opposite me, wanting to take pictures. I quickly posed for the pictures so we could get down to business. The dark man introduced himself as “Mr. John, sent from Abuja to Lagos with taxpayers’ funds” to investigate my matter. “I’m sorry for disrupting your Sunday,” I said. “You probably should be resting or relaxing with your family.” “Not a problem,” he answered with the kind of courtesy atypical of many of the warders I’d come across in prison in those three days. He asked to hear my side of events. It was unarguably the longest single conversation I had with anyone in prison. I explained

my interest in the criminal justice system and the justifications for my undercover method. “I wanted to experience what the regular guy gets to taste in police cell, in court, in prison,” I told him. “You’re never going to get this by talking to people; you have to taste it. And if the system is itself clean, no warder should lose sleep over my presence.” I told him some of my findings in undercover work, generally; I particularly recall saying how much it “grieves my heart” and “burns my skin” the extent to which Nigerians are short-changing their country for personal pecuniary reasons. “We’ll ruin this country someday if we continue this way,” I submitted. “We’ll bring it crashing to earth in a few decades.” John proved himself a rare breed, a cut above all other warders I encountered. I noticed how he listened to me carefully, urged me to take my time, asked not to be distracted when some warders thought we were taking too long, asked his questions politely, and repeatedly asked for a description of the warder who spearheaded the beating and the others who witnessed it. He also asked to know the officers in the bribery video seized from me. “I apologise for the beating,” he said at some www.businessday.ng

point. “That was an exception; not the norm. It is not in the character of the prisons service to take the law into its hands.” We discussed a few other things I’ll keep confidential — because he won my respect. Not to say he was perfect. Although he repeatedly said he was from Abuja, lodged in Lagos on taxpayers’ account, I found out John was actually based in Lagos; he is the spokesman of the Prison Controller in charge of Lagos. Still, he retains my respect with his calmness and professionalism. WHAT NIGERIANS CAN LEARN FROM PRISONERS I witnessed a few interesting developments in prison, the most significant being the impressive levels of tolerance level in the welcome cell. At the welcome cell, everyone made way on the floor at or about 4:45am for Muslims to observe their call to worship and the prayer proper. Just before 5:30am, the Muslim leader would begin winding down the prayers “so that our Christian brothers can take over”. Whenever the Muslims prayed, no one dared murmur, much less talk. And it was the same during the Christians’ praise and worship, sermon and prayers. If Nigerians generally had this

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level of tolerance for people of divergent faiths and ethnicities, our peace and unity would be impregnable and boundless. SHADILY RELEASED FROM PRISON, ABDUCTED BY POLICE My release from prison was complicated. The prison officials at Ikoyi desperately wanted my bail to sail through; the more I stayed, they reasoned, the higher the chances I could implicate them. But the ones in court, specifically the corrupt ones I filmed, preferred that I rot in jail. The latter group would then work closely with officials at the Magistrate Court, Yaba, to keep me back in prison. Therefore, what would have been a simple granting of bail was repeatedly frustrated. The court wouldn’t grant me bail after conditions had been met — until the intervention of senior judicial officers on Friday July 19. The court then granted me bail but a sinister plot was hatched. Some court officials, collaborating with prison warders in court, alerted the Police to my release date and time. They only contacted my legal team hours after they’d notified the prison of my impending exit. Then the prison itself fast-tracked my release; the strategy was for me to @Businessdayng

MIRACULOUS RELEASE The sun was starting to set when we arrived at Pedro, where my repeated pleas to contact my lawyer were rebuffed. “If you have a phone on you, bring it out and call your lawyer,” Obadiah said, knowing I didn’t have one. “It is not our work to give you a phone to make phone calls.” There were multiple signs that the decision was to commit me to cell that night. However, some 23 minutes before midnight, their hands were forced. I stepped out of the station in the most unpredictable of circumstances. What happened between my arrival at the station and my enforced release at about 11:37pm is only the stuff of movies. I’d watched similar plots unfurl in movies, without the knowledge it was possible in real life. It is an experience that cannot be sufficiently captured in journalese. You will read those details in a book — if I get the right backing and if I’m alive to tell it — but, until then, spare some thoughts — and prayers — for Nigeria. If I were a judge I would pronounce Nigeria’s criminal justice system ‘guilty as charged’, knowing, from this experience, that majority of its actors and gatekeepers are deserving of various lengthy times behind bars. Concluded

Wednesday 23 October 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

HENRY FOY IN MOSCOW AND NEIL MUNSHI IN LAGOS

ussia will host its firstever Africa summit on Wednesday as the Kremlin seeks to rebuild neglected relations and goes in search of new political allies and trading partners. A big geopolitical player in Africa during the cold war, Moscow has been vying with China, Europe and the Gulf states for influence and commercial opportunities in the resource-rich continent. In a charm offensive in the seaside resort of Sochi, President Vladimir Putin will welcome more than 40 African leaders — including those of Kenya, Nigeria, Ghana and South Africa — as he tries to sell Russia as a longstanding and dependable partner, in contrast to the US and the former colonial European powers. Commenting on Mr Putin’s African strategy, Irina Filatova, a professor of African history at Moscow’s Higher School of Economics, said: “Sure, Russians are foreigners, but they are different . . . There is a shared, common attitude to the west, which is that the global structure as it is today needs to be changed.” She added: “I don’t know how much Russia can afford to spend, but it definitely comes with less baggage. Smaller sums with fewer conditions are welcomed . . . But to what extent that is sustainableisatotallydifferentquestion.” Russian exports to African countries hit $20bn last year, roughly double the level of 2015 but paltry compared with China’s $205bn, and heavily reliant on arms and grain sales to northern states. During the

Putin seeks friends and influence at first Russia-Africa summit

Moscow to host 40 leaders from continent in pursuit of allies and trading partners

Russian president Vladimir Putin in Johannesburg last year with South African president Cyril Ramaphosa, who will attend this week’s summit in Sochi © AFP

two-day summit, Moscow will seek trade agreements and partners for its large energy, mining and defence companies “There is still a lot of scope for more growth. Egypt and Algeria alone account for two-thirds of Russian exports to Africa,” said Charles

Robertson, global chief economist at Renaissance Capital. “For African states, obviously any diversification of funding sources is good. Having companies compete against each other for investments is also positive. For African governments, the more people coming to

mine or explore for oil, the better,” he added. While Moscow lacks Beijing’s financial firepower, it has built influence from Algeria to Uganda by lending support to strongmen, managing natural resource projects in war-torn countries and building on

longstanding defence relationships. João Lourenço, Angola’s president, trained at a Soviet military academy in Moscow in the 1970s, while the flag of Mozambique bears a Kalashnikov rifle, the USSR’s most famous weapon. These and other cold war-era ties have already helped some Russian corporates tap into African opportunities. Russian aluminium producer Rusal owns bauxite mines in Guinea, while Kremlin-controlled diamond miner Alrosa has assets in Angola and Botswana. State-owned oil company Rosneft has interests in Egypt and Mozambique, and nuclear energy monopoly Rosatom has 15 projects lined up in Africa, though none have received final approval. Seeking to increase that footprint and turn political friendship into business partnerships, Russia in 2017 became a shareholder of Afreximbank, a Cairo-based trade finance lender, in a step that the bank said would “take advantage of the numerous opportunities for trade and development between Russia and the African continent”. Moscow hosted the bank’s annual general meeting in June which was opened by Russian prime minister Dmitry Medvedev. The bank is also co-organising the Sochi summit.

Bolivia’s Morales moves closer to Anduril says drone-killer is not first step to autonomous warfare victory as violence breaks out Controversial defence start-up says it is not developing weapons Opposition labels result ‘scandalous fraud’ after vote update suspended for 24 hours ANDRES SCHIPANI IN LA PAZ

olivia’s Evo Morales appears set to cling on to power and secure a contentious fourth term as president, triggering violent unrest and accusations of fraud after updates of a vote count were “inexplicably” suspended for 24 hours. By early Tuesday, Mr Morales was closing in on a surprising first round victory over Carlos Mesa, a former president. With 95.6 per cent of ballots counted, Mr Morales was ahead with 46.9 per cent compared with 36.7 per cent for Mr Mesa. If the socialist president wins by more than 10 percentage points, he would avoid a run-off, which analysts said he might lose against a united opposition. The opposition claims that the government tampered with the results to win another five-year term. The electoral authority froze the tally updates for nearly a day after it appeared that Bolivia was heading for a second round of voting. Mr Mesa, speaking on Monday from the opposition stronghold of Santa Cruz, said: “This government has raised an impossible situation, a situation of mocking

CAMILLA HODGSON

the popular vote. This is a scandalous fraud.” The Organization of American States, which called the result “inexplicable”, expressed “its deep concern and surprise at the drastic and hard-to-explain change in the trend of the preliminary results revealed after the closing of the polls.” Violence broke out in several Bolivian cities on Monday evening, with reports of protesters setting fire to electoral authority offices in Sucre and Potosí, and burning ballot boxes in Tarija. Demonstrators also gathered outside a La Paz hotel where the electoral body was counting votes, where they claimed fraud had been committed. Rival supporters clashed in the streets of La Paz, with riot police separating the two camps. “This is Bolivia, neither Cuba nor Venezuela!” chanted Mr Mesa’s supporters, referring to the leftwing regimes that are friendly to Mr Morales. Naira Suárez, who was clad in orange, the colour of Mr Mesa’s campaign, added: “We don’t want Evo Morales to stick to power at all costs to impose on us his socialist ideology. The results were clear.” www.businessday.ng

he Interceptor is a small black box with four propellers that spots drones and rams them from below, at high speed, aiming to smash them out of the sky. The “hard kill” Interceptor can be used together with a system of sensors and cameras to detect and attack drones to protect soldiers or critical installations. But its maker, the defence startup Anduril, insists that it is not the first step to autonomous warfare, where drones and robots fight each other without explicit human consent. “I can’t imagine a scenario when humans are taken out of the loop,” said Matt Grimm, one of Anduril’s co-founders and its chief operating officer, adding that he did not “accept the premise that the natural end is all out autonomous robot conflict.” Describing autonomous weapons as unattractive for logical, financial and ethical reasons, he said none of Anduril’s customers have asked the company to develop such tools. Nevertheless, the 18-month-old Anduril has raised eyebrows as a tech start-up that is willing to pursue the controversial government and military contracts that the rest

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of Silicon Valley is too squeamish to handle. The company was founded by 2017 by the then 24-year-old Palmer Luckey, who made hundreds of millions of dollars selling his virtual reality company Oculus to Facebook but then claimed he was fired for donating to a Donald Trump campaign group. “Everything we’re doing is in coordination with the US government,” said Brian Schimpf, co-founder and chief executive. Anduril’s work is “an extension of Department of Defense policy,” he added. “Most of the work we’ve done has been very defensive,” he added. Weapons are “not something we’re rushing into.” Before Anduril, Mr Schimpf spent nearly a decade at secretive data analysis company Palantir, including as director of engineering. He is one of several Anduril executives to have spent time at Palantir, a company that has been similarly criticised for working with the US government on projects that some say threaten people’s privacy. Both companies are backed by Peter Thiel, the billionaire co-founder of PayPal who was Silicon Valley’s highest profile supporter of Mr Trump ahead of the 2016 election. Only a handful of the projects that Anduril has worked on are publicly @Businessdayng

known. The company declined to disclose how many contracts it had in total, but said around half had been made public. It is best known for its Lattice surveillance system, which uses cameras and other sensors to track and interpret movement, and has been deployed by Customs and Border Protection(CBP) along the US border with Mexico. This year, the US Marines and UK Royal Navy signed contracts for the system, and CBP signed three additional contracts for Lattice, with a fourth pending. An information graphic explaining Anduril’s Lattice virtual perimeter wall system Anduril also works with the Pentagon on Project Maven, an initiative to develop AI tools for the military. Google chose not to continue working on the controversial project last year, following an employee backlash that saw dozens of workers resign on ethical grounds. Anduril’s Interceptor drones have been sold to several customers including the US defence department, and will soon be deployed overseas. Several countries have been looking at ways to tackle drones, with the UK government saying on Monday that “the counter-drone industry that will provide this equipment is small but evolving rapidly”

Wednesday 23 October 2019

BUSINESS DAY

NATIONAL NEWS

Noodle maker plans busiest port in west Africa Singapore-based Tolaram wins China backing for its biggest development project NEIL MUNSHI IN LAGOS

n the east side of Lagos, the company that turned 20-cent packets of instant noodles into a staple of the Nigerian diet is building the biggest port in west Africa with $1bn of Chinese money. Singapore-based Tolaram Group is set to close financing this week for what could be the busiest port in west Africa, a project it said would help transform Africa’s largest economy. It is also the biggest development Tolaram has ever undertaken, and a long way from its roots as a textile trader founded by Indians in Indonesia in the 1940s. It is being built on the back of a $450m annual business that has turned Indomie noodles into one of Nigeria’s national dishes and Tolaram into the largest food company in Africa’s biggest market, surpassing the likes of Unilever and Nestlé. “This is a real game changer for us, doing project financing of this scale . . . It’s easy to raise money for a factory — you need $30m, $50m. But you want to raise $800m? That’s a whole different ballgame,” said Haresh Aswani, Tolaram’s managing director for Africa and grandson of its founder. The new port will be financed with $630m from the China Development Bank, and $470m in equity from the state-owned China Harbour Engineering Company, which has a 52.5 per cent stake and will build it. Tolaram owns 22.5 per cent, the Nigerian Ports Authority has 5 per cent and Lagos state 20 per cent. The project is a new chapter for Tolaram. Mr Aswani’s father turned the company into an international conglomerate with textile factories in India, property interests in eastern Europe (including a luxury apartment complex in the former KGB headquarters in Tallinn), carpet manufacturing in China and a polymers plant in the UK. But it was Tolaram’s decision to begin importing Indomie to Nigeria in 1988, the same year Mr Aswani moved there, that transformed the company. Over the next two decades, it shed its other business, with the exception of the Tallinn real estate, to focus almost exclusively on Indomie. In 1995, the company entered a joint venture with Salim Group, the Indonesian company behind Indomie, and began manufacturing in Nigeria the next year. Growth came slowly — it took 13 years for revenues to reach $10m in Nigeria — before sales began doubling annually by the mid-2000s. Indomie is now in every corner market stall across Nigeria, and in most kitchen cupboards — a cheap, stomach-filling staple that is so ubiquitous it features in rap lyrics. However, Nigeria can be a fickle market. Government policies change quickly and can cripple businesses. In 2015, Abuja curbed raw palm oil imports, just after Tolaram had spent tens of millions on a new palm oil factory. After the oil price crash sent Nigeria’s crude-dependent economy

into recession in 2016 and the naira was devalued by roughly half, revenues slumped to “next to nothing”, which Tolaram weathered in part because its financing was in naira rather than dollars. “When you do business here you have to mitigate your risk, so you hedge, number one, and two, you try and get as much local financing as possible,” said Mr Vaswani. “Sometimes it’s at a high cost but if something goes wrong, it’s worth it.” Tolaram operates in nine countries, recently expanding to Egypt, and has plans to move into Ethiopia and Kenya. Nigeria accounts for $900m of the group’s $1.1bn of annual sales. Along the way, it has buried Nestlé’s Maggi noodles brand and now controls about three-quarters of Nigeria’s $600m noodle market. “One of the key factors for us to decide to go [into] other products was after . . . we beat Nestlé at their game, we realised we can take on multinationals and win,” said Mr Vaswani. The company has in recent years entered a series of joint ventures: a milk business with Denmark’s Arla Foods, cereal and snacks with Kellogg’s and, starting next year, dental care products with ColgatePalmolive. Now it is moving into infrastructure in a big way. The Lekki port is the anchor of an 800-hectare free economic zone the company plans to build. Tolaram said the project would allow Lagos to reclaim its place as the region’s top port from nearby Togo, a much smaller country that has focused on making its port state of the art and its regulations business friendly. But Daniel Clemenson, analyst at IHS Markit, said the Lekki port’s modernity will not matter if the government did not improve the surrounding infrastructure. At Apapa, Lagos’s main port, the roads are so shabby and processes so cumbersome that trucks can often wait a week before being allowed in to pick up goods. “Unless considerable development is undertaken in the surrounding areas I can only see this adding to the problem,” said Mr Clemenson. Mr Vaswani agreed that “roads are the main priority”, particularly the access road the project will share with its next door neighbour, billionaire Aliko Dangote’s massive new oil refinery. The government has promised to build three of the six roads needed for the project to work, Mr Vaswani said, and he thinks that it will build the other three. He said working with the government had not been easy. There were quibbles over the shares for both the state and federal administrations, and more than three dozen permits, which took years to resolve. “I will never deal with government again,” he said. “Give me the permits and just let me run the business.” This article has been corrected to change the name Haresh Vaswani to Haresh Aswani. www.businessday.ng

Wall St’s top cops defend new focus on Main St

SEC’s enforcement team have shifted from big corporates to cases that hit small investors KADHIM SHUBBER IN WASHINGTON

he US Securities and Exchange Commission has long been called the top cop on Wall Street, but in Donald Trump’s administration the regulator has struck a softer tone. The SEC has shifted focus since 2017 under the direction of chairman Jay Clayton, with blockbuster corporate fines giving way to cases in which Main Street investors have been bilked out of their savings. “Extracting large settlements out of big banks is not the only thing that we’re here to do,” said Steven Peikin, co-director of enforcement, in an interview with the Financial Times. “We are uniquely focused on things that affect retail investors,” added Stephanie Avakian, who leads the SEC’s enforcement programme alongside Mr Peikin. The change in priorities has come as the 2008 financial crisis has receded further into memory and the US economy has maintained a

decade-long bull market. In this relatively calm environment, Ms Avakian and Mr Peikin have abandoned the “broken windows” style of enforcement pursued by their predecessors. That approach, hated by the securities industry, punished even minor infractions in the expectation it would deter larger wrongdoing. Instead, they have emphasised the benefits of co-operation and sought to persuade securities lawyers that they are being “reasoned”, as Mr Peikin puts it. “We sort of resist the idea that any particular respondent can’t fight with us so we’re going to bully them,” he said. “We’re not chest thumpers,” said Ms Avakian, arguing their approach is more effective in resolving cases to the benefit of investors. This change in attitude has been combined with a shift in the sort of targets facing the SEC’s ire, even as the enforcement division’s overall activity has remained on a par with the final years of the Obama administration despite a fall in staff numbers.

Urska Velikonja, a professor at Georgetown University Law Center who tracks SEC enforcement cases, said there was a significant amount of continuity with the previous administration, but noted “fewer really large corporate cases” and more cases aimed at protecting ordinary investors. “[Their] primary focus is the perceived benefit to retail investors whereas [Mary Jo White] was more concerned with conflicted transactions and practices of financial intermediaries,” she said, referring to the former SEC chair from 2013 to 2017. The SEC’s enforcement regime since then has been marked by an aggressive effort to clean up the cryptocurrency market, largely taming an explosion in fraud linked to sales of digital “tokens”. It has also pursued overcharging by mutual funds as part of its “share class selection disclosure initiative”, which has pulled in $135m for investors and driven new public company actions in the first half of 2019 that “remained at near-record levels”, according to Cornerstone Research.

Israel’s Benny Gantz weighs possible route to power Third election on the cards if Netanyahu’s centre-right rival fails to build coalition MEHUL SRIVASTAVA IN AJAMI

enjamin Netanyahu’s decision on Monday night to throw in the towel on his stalled bid for a fifth premiership has opened up a possible route to power for his rival, the centre-right army-chief-turnedpolitician Benny Gantz. Israel has been in political limbo since an April election that saw both Mr Netanyahu’s Likud and rival parties fail to secure enough seats to form a coalition government. President Reuven Rivlin will this week ask Mr Gantz to try to find 61 members of the 120-seat Knesset to back his own bid for the premiership; if he fails to do so within 28 days, the country will be headed for an unprecedented third election within a year.

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With 33 seats for his neophyte Blue and White alliance, and potential anti-Netanyahu allies under his wing, Mr Gantz could conceivably form a minority government, with the support of the Joint List of Arab parties. But for the politician who began his campaign boasting about having bombed the Hamas-controlled Palestinian enclave of Gaza into the stone age, a third election may be preferable. “The question is whether Gantz will be strong enough and brave enough to come to us and ask us,” said Ayman Odeh, head of the Joint List. Split by infighting and hobbled by low turnout among their base — nearly 20 per cent of the Israeli population — the Arab parties of Israel have regularly found themselves sidelined, maligned @Businessdayng

and ignored. But, surprisingly, in September’s election the 13 seats garnered by the Joint List became a bulwark that even Mr Netanyahu, the four-time prime minister and masterful coalition-builder, could not surmount. The longest-serving Israeli prime minister’s race-baiting, anti-Arab campaign backfired, boosting Arab turnout — and even drawing in about 20,000 Jewish voters — leaving the Joint List in a position to deny him enough numbers to form a governing coalition. Last week, as Mr Netanyahu’s plans for a governing coalition fell into disarray and party infighting, Mr Odeh, the mild-mannered, socialist, Hebrew-speaking leader of the Joint List, held court in Ajami, an Arab neighbourhood in south Tel Aviv.

Wednesday 23 October 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Socially conscious products rise up exchanges’ agendas Environmental, social and governance issues weigh more heavily in investors’ minds PHILIP STAFFORD IN LONDON

etting out its three-year strategy this month, Euronext made a firm commitment that sustainable finance would be at its heart. The owner of six stock exchanges around Europe pledged to capitalise on the growing market for selling green bonds and to develop indices that respond to investor concerns about environmental, social and governance issues. For a fledgling business that accounts for just a small fraction of Euronext’s revenues, the promotion of ESG data and indices underscores how rapidly the issue has risen in top executives’ thinking. Stéphane Boujnah, chief executive, said asset managers no longer invested simply on the basis of yield and growth and were looking at corporate ethical standards. “The reality is that things have changed in terms of investors’ preferences,” he said. “As we are close to issuers we can play a role on this front. We want to be part of the standardisation of this new accounting language.” It is not alone. The London Stock Exchange has said it sees the ESG data it will inherit through its $27bn purchase of data and technology group Refinitiv as “a very attractive, very substantial” asset. Exchanges have begun to respond in earnest to investing that prioritises socially conscious issues, such as women’s empowerment or veganism. Investing in sustainable assets in five major markets hit $30.7tn at the start of 2018, up 34 per cent in two years, according to the Global Sustainable Investment Alliance.

Simon Puleston Jones, chief executive of WokenUp, a social network devoted to social and environmental issues, said it was in part down to the arrival in adulthood of “Generation Z”, a socially-conscious consumer audience. “2019 is the year that times changed. ESG is driving a world of impact investing. Market infrastructure needs to be part of that. If you’re going to be a financial services company in the 2020s you’re going to have to respond to this trend,” said Mr Puleston Jones, who was formerly the head of trade association FIA Europe. This changing investor mindset is now being felt across global capital markets. Money market funds focused on ESG rose 15 per cent to $52bn during the first half of 2019, after growing just 1 per cent through all of 2018, according to Fitch Ratings, the credit rating agency. In August the Dutch bank ING introduced what it called the world’s first interest rate swap with a credit spread linked to improvements in sustainability. Derivatives markets operators are now gearing up with their own futures, which act as a way for asset managers to hedge against risks in their portfolios. Lynn Martin, head of data at Intercontinental Exchange, said it was incumbent on exchanges like ICE to provide the tools. “A transparent and liquid futures market allows other areas of the market to grow,” she said. But for all the rush of activity on some western exchanges, the journey is only in its infancy. “There is still no international convergence on a reporting format and standard” says Nandini Sukumar, chief executive of the World Federation of Exchanges.

Arab youth vent their anger at broken economic promises

A Lebanese demonstrator hands out sweets at a rally in Beirut. Saad al-Hariri is offering the protesters pay cuts for top officials, a charge on the affluent banking sector and handouts for the poor © AFP via Getty Images

Lebanon promises fiscal reform to quell public protests Public finance woes threaten to worsen and set off the latest emerging market crisis JONATHAN WHEATLEY

treet protests in Lebanon continued for a fifth day on Monday, in a prolonged outburst of anger over years of economic and political mismanagement. As evening fell, they got their response. Saad al-Hariri, the prime minister, announced a package of sweeping fiscal measures including pay cuts for top officials and legislators, a charge on the affluent banking sector and handouts for the poor. “Frankly speaking, your protest is what made us take these decisions,” he said. “What you did has broken all barriers.” Lebanon’s fiscal troubles have been building for decades. The risk for investors is that they could yet escalate rapidly, making the country the latest emerging market to plunge into crisis. There used to be a veneer of stability. The central bank has pegged the currency to the US dollar for two decades and ensured that the supply

Unemployment and lack of reforms underpin protests in Middle East and north Africa ANDREW ENGLAND, MIDDLE EAST EDITOR

hen Lebanon imposed a fee on WhatsApp calls to boost government coffers, it was another example of Arab politicians misreading the public mood. Within hours, hundreds of thousands of Lebanese were on the streets, their disillusionment with their leaders exploding to the surface as mass protests erupted in Beirut and other cities. It was just the latest example of the rage simmering across the Arab world as ruling elites oversee rotten political systems that fail to deliver basic economic needs. Last month, it was the redeployment of a popular commander of Iraq’s counter-terrorism forces that sparked the worst unrest in Baghdad for years. Before that, it was a little-known contractor’s diatribes against Abdel Fattah al-Sisi,

Egyptian president, and allegations of corruption that provoked rare protests in one of the Middle East’s most oppressive states. The trigger points were different and each country has its own dynamics. But the roots of the anger are similar and echo those that fuelled the uprisings that rocked the Arab world in 2011: leaders failing to meet the aspirations of their youthful populations. Experts have long warned about the fragility of the status quo in the Middle East and north Africa, a repressive region blighted by rampant youth unemployment. Protesters in Lebanon, Iraq and Egypt all chanted similar mantras: regimes must fall. In Jordan, demonstrations last year forced the prime minister from office. In April, popular demonstrations toppled two veteran leaders within days — Sudan’s Omar al-Bashir and Abdulaziz Bouteflika in Algeria. Protests continue in the latter. www.businessday.ng

of dollars has been enough to pay for the imports on which the country depends. It has been able to do so thanks largely to dollar inflows from wealthy Lebanese and others overseas, who are attracted by high interest rates. But beneath the surface, the government’s finances are strained. It runs a budget deficit equal to 10 per cent of gross domestic product, consisting entirely of debt service costs — the rest of government maintains a primary budget balance. Public debt is equal to more than 150 per cent of GDP. The central bank may not be able to work its magic for much longer. Deposit inflows have slowed. Some importers have been unable to get the dollars they need. The government is preparing a eurobond issue of an expected $2.5bn to keep the show on the road. To ensure the deal’s success, Beirut will reportedly allow local banks to redeem dollar-denominated certificates of deposit (CDs) they hold at the central bank and use the proceeds to buy the new bond. It is no surprise that the govern-

ment expects local banks to back the deal; they already finance more than 80 per cent of Lebanon’s consolidated public sector debt. But another $1.5bn eurobond maturing on November 28 will return a lot of cash to potential buyers. So why allow the banks to cash in their CDs ahead of time? The worry is that exposure of foreign investors to that $1.5bn bond is greater than many had supposed, and that fund managers cashing in will be reluctant to buy the new bond. Signs of stress are growing. The cost of insuring Lebanon’s five-year debt against default, as judged by the credit derivatives market, has leapt by more than 60 per cent over the past six months. The big question is whether Monday’s package, yet to be approved by parliament, will ease market fears. Lebanon’s thirst for funding has been profitable for many in its banking sector and beyond. If the protests are not met with viable reform, the good times may soon be over.

Biogen to seek Alzheimer’s drug approval after breakthrough Shares jump 35% as company reverses course after abandoning treatment earlier this year HANNAH KUCHLER IN NEW YORK

iogen plans to apply for approval of an experimental Alzheimer’s drug that could be the first to treat the devastating disease, reversing course after abandoning the treatment earlier this year and sending shares up 35 per cent in early trade. The biotech company said a new analysis of a larger data set from its trial for aducanumab showed the drug had an impact on those suffering from the early stages of the neurological disease. Patients that received a high dose “experienced significant benefits on measures of cognition and function such as memory, orientation, and language”, the company said. They were better

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able to complete chores such as cleaning and shopping, conducting personal finances and travelling independently. Biogen stock plummeted in March when it and its Japanese partner Eisai said that they would stop the trial after a futility analysis conducted by an independent monitoring committee indicated the drug was not going to be effective. The end of the trial was a blow to patients suffering from the debilitating disease, with 5.7m people affected in the US alone. It was also seen as a sign that it was time to abandon the so-called amyloid hypothesis that memory loss is caused by a build-up of sticky plaques in the brain. Michel Vounatsos, Biogen’s @Businessdayng

chief executive, said Tuesday’s announcement was “truly heartening” in the fight against Alzheimer’s. “This is the result of groundbreaking research and is a testament to Biogen’s steadfast determination to follow the science and do the right thing for patients,” he said. “We are hopeful about the prospect of offering patients the first therapy to reduce the clinical decline of Alzheimer’s disease and the potential implication of these results for similar approaches targeting amyloid beta.” Since the trial was abandoned, more data has become available, with the data set now including 3,285 patients, more than 2,000 of whom took the drug for 18 months.

Wednesday 23 October 2019

BUSINESS DAY

ANALYSIS

Justin Trudeau to lead minority Canadian government Prime minister punished by voters as Liberal party loses 28 seats and its majority JASON KIRBY IN TORONTO

ustin Trudeau’s Liberal party survived a multipronged challenge from both the left and right in Canada’s general election on Monday but he will return to power as the head of a minority government. In what is widely considered a rebuke of his first term, Mr Trudeau’s Liberals won or were leading in 155 electoral districts, falling 15 seats short of winning a majority in the House of Commons. In the 2015 poll, the Liberals won a majority with 184 seats. The prime minister’s chief rival, theConservativepartyledbyAndrew Scheer, won 122 seats, which was an improvement on its 2015 result but short of what it had been expecting. A week ago, some polls had the Conservatives winning enough votes to lead a minority government. “The Liberals will be pleasantly surprised by this outcome,” said Nelson Wiseman, a professor of political science at the University of Toronto. “The Conservatives can only be depressed. A lot of people felt uncomfortable with Scheer, and Trudeau was the beneficiary of that.” The Canadian dollar was little changed at $1.3086 against the dollar, a three-month high. While the Liberals secured the most seats, the Conservatives won the popular vote with 34.5 per cent. The Liberals attracted 32.9 per cent, down from 39.5 per cent in 2015. During the campaign, analysts were uncertain whether rival leftleaning parties would split the progressive vote, paving the way for a Conservative victory. Mr Trudeau had hammered away at that message, which Jagmeet Singh, leader of the leftleaning New Democratic Party, repeatedly described as a campaign of “fear”.

The warnings, however, appear to have helped the Liberals. The NDP was held to 25 seats, a decline of 14 seats from 2015, while Canada’s Green party added just one seat to bring its total to three. The big winner of the night was the Bloc Québécois, the nationalist party born out of Quebec’s sovereignty movement in the 1990s, which had lost party status in 2015. On Monday the Bloc became Canada’s third largest party in the House with 32 seats, while its leader Yves-Francois Blanchet became the first Bloc leader to win a seat in the House since 2008. Astheleaderofaminoritygovernment, Mr Trudeau will have to maintain the confidence of the House to stay in power. If he loses a confidence vote, such as on his government’s first speechfromthethroneorbudget,the government would fall. However, no single party holds a clear balance of power with the Liberals, which will allow Mr Trudeau to work with different parties issue-by-issue to pass legislation. “The Trudeau government is going to keep on the track it’s been on as if it got a majority,” Mr Wiseman said. “You’ll see them looking to all the parties for support on different issues.” The 40-day election campaign was regarded as one of the ugliest and most bitter in a generation. Mr Wiseman said that meant that smaller parties would be reluctant to topple Mr Trudeau’s minority government. “Any party that forces an election right now would be punished by voters,” he said. Mr Trudeau came into the campaign battered by a series of controversies, including two separate rulings by Canada’s federal ethics tsar that the prime minister broke conflict of interest regulations.

WeWork and SoftBank: helical horror show

roliferating spirals drive a community mad in classic horror manga Uzumaki. SoftBank boss Masayoshi Son should take note. WeWork, a favoured investment of the Japanese tech group, is spiralling towards destruction. SoftBank has proposed a rescue valuing the equity of the US flexible offices business at $8bn, compared with $47bn in a recent financing. Such “down rounds” could leave SoftBank, a company with a risky financial structure, spinning in ever-decreasing circles too. It has proposed a $9.5bn package of debt and equity that would raise its stake in WeWork to up to 80 per cent. SoftBank has two aims: to avoid or postpone a writedown and to halt the drop in WeWork’s worth. Lex valued the company at no more than $3bn last summer, when bankers were readying figures of up to $104bn. At a $8bn valuation the loss attributable to the SoftBank group would be $3.6bn, according to Bernstein. This would consist of a $2.2bn hit on a direct investment and 51 per cent of a $2.8bn loss on the Vision Fund’s stake. SoftBank can probably forestall a writedown almost as large as its annual net income. ThebelttoSoftBank’sbracesisa$5bn

fundingpackageproposedbyJPMorgan Chase. Convincing wary debt investors willbetricky.Sky-highyields are needed to compensate for risk. WeWork’s founder Adam Neumann would lose control. Dual-class shares would disappear. Marcelo Claure, SoftBank’s chief operating officer, would become chairman. WeWork is estimated to be burning $2.8bn a year. The only way to extend its survival while it tries to make a profit on limited funds is to cut costs. This would be at the expense of growth, further diminishing its valuation. This is about to become SoftBank’s problem to solve. The toxic legacy is well deserved. SoftBank’s willingness to buy into glitzy propositions helped propel valuations for tech companies - some of them worthier of investment than WeWork - to unsustainable levels. The dip in valuations - notably at Uber, Slack and Wework - could create big problems for SoftBank. The group’s real cashflow is slim. Its historic profits have been underpinned by revaluations and a share of paper profits at companies in which it invests. Its own investors have only tolerated its heavy gearing because its investments were rising. WeWork shows Mr Son how painfully such spirals unwind. www.businessday.ng

Will Argentina be safe in the Peronists’ hands? Leftwing populists are poised to retake power. The priority is a swift renegotiation of the country’s huge debt pile MICHAEL STOTT AND BENEDICT MANDER IN BUENOS AIRES

he victor of this Sunday’s election in Argentina will inherit one of the world’s most unenviable economic messes. Inflation is running at 55 per cent a year, the economy is in a deep recession, poverty is rising, billions of dollars have fled the country, the peso has plunged and Argentina is unable to pay its $100bn foreign debt. It sounds an all too familiar story in a country that aspired to European levels of prosperity in the early 20th century but has consistently disappointed ever since. This time was supposed to be different, though: Mauricio Macri, scion of one of the country’s wealthiest families, came to power four years ago promising that his market-friendly policies and business savvy would finally put the Argentine economy right. But after a series of blunders that led to another IMF bailout last year, Mr Macri has achieved what few thought possible, according to a senior executive at an international bank in Buenos Aires: he will hand over Argentina’s economy in a worse state than it was when he inherited it in 2015 from Cristina Fernández de Kirchner, a leftwinger criticised by international investors for her repeated bouts of state intervention. Somewhat improbably against the dire economic backdrop, Mr Macri is running for a second term. But few even in his own team expect him to win. A national primary on August 11, widely regarded as a good barometer of sentiment, was won handsomely by the main opposition candidate, the centre-left Peronist Alberto Fernández, whose running mate is Ms Fernández de Kirchner. Mr Macri has since attempted to relaunch his faltering campaign under the slogan “#Sí se puede” (‘Yes we can’). But recent opinion polls — not always to be trusted — suggest that Mr Fernández’s lead may have widened. A final batch published before the election by the newspaper Clarín predicts that the Peronists will win by a crushing margin of between 16 and 22 percentage points, more than enough to avoid a runoff.

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Mr Macri has found himself under attack from both sides: liberals criticise him for not acting faster at the start of his term to cut Argentina’s bloated budget and for relying excessively on interest rates to bring down inflation in a country addicted to regular price rises. Leftwingers attack him as a man who governed for the rich. “The Argentine economy is rather like a sick man bleeding heavily in the street,” says Luis Tonelli, chair of the department of political science at Buenos Aires university. “There is no time to analyse his condition. You need to call an ambulance and start pumping blood into him before he collapses completely.” Market confidence collapsed after the August primary election result, principally because of investor fears that a Peronist return to power would mean a repeat of the interventionist, big-state policies first favoured by the populist general Juan Perón in the 1950s. Heavy falls in the peso and the stock market forced Mr Macri to reimpose the exchange controls he had scrapped amid much fanfare at the start of his administration. But $12bn had already fled the country since the primary and economists say Argentina remains vulnerable to a market meltdown unless the election victor acts quickly. “The agenda is the same whoever wins,” says one chief executive of a major Argentine company. “Exchange controls will have to stay in place, debt needs to be rescheduled and the market remains closed for now to Argentina and its companies . . . then there is high public spending, the budget deficit and runaway inflation: any economic programme has to lower inflation.” The most urgent need is to renegotiate Argentina’s debt, which shot up under Mr Macri’s administration, largely as a result of the record $57bn IMF bailout programme which he sought amid a currency crisis last year. “There is very little that a new government can do without a deal with the IMF and the rescheduling of [bondholder] debt,” says Eduardo Levy Yeyati, dean of the school of government at Torcuato Di Tella university in Buenos Aires. “Without this double deal, it is very hard for Argentina to grow.” @Businessdayng

The problem, Mr Levy says, is that Argentina needs a debt deal quickly to avoid running out of money, and private sector creditors are unlikely to agree to one unless they are offered generous terms. The fund, however, is smarting from the travails of its biggest-ever loan and is likely to press for bondholders to take sizeable losses to ensure that it is not accused of lending public money to rescue private investors. “It’s a Catch-22 with the timing,” says Mr Levy. The IMF has not made further disbursements on its loan to Argentina since August’s market crash. Its new head Kristalina Georgieva said last week that the fund remained “fully committed to work with Argentina” and was “very interested to see what policy framework would be put in place”. But with Mr Fernández the likely election victor, the fund is preparing for uncomfortable talks. The Peronist candidate has been sharply critical of the IMF during his campaign, alleging that it should share responsibility for the country’s plight with Mr Macri, and accusing it of facilitating capital flight with its record-breaking loan. “But nothing [Mr Fernández] has said so far indicates that it will not be possible to work out an agreement,” says an international financier close to the discussions. A wider concern among the business community in Buenos Aires is over the policies Mr Fernández may follow to revive the sickly economy. As cabinet chief under the 200307 Peronist presidency of Néstor Kirchner, Mr Fernández was known as a pragmatic moderate. He continued in the post when Mr Kirchner’s wife Cristina Fernández de Kirchner became president, only to resign over her decision to impose heavy export taxes on the country’s farmers. Mr Fernández has since largely stayed out of the limelight, juggling his time between working as a political consultant, a lawyer and a university lecturer, until Ms Fernández announced in May that she would run as vice-president on a ticket with him (the two are not related). The move was widely seen as a masterstroke, allowing Ms Fernández a partial return to power despite high voter rejection rates after presiding over a period of poor economic management and rampant public corruption.

Wednesday 23 October 2019

BUSINESS DAY

POLITICS & POLICY PDP sets up sub-c’ttees for Bayelsa guber election INIOBONG IWOK

h e P e o p l e ’s Democratic Party (PDP), National Campaign Council has set up eight sub-committees to strategise for victory in the forthcoming Bayelsa State governorship election. The Chairman of the Council, Bala Mohammed, governor of Bauchi State, approved the setting up of the sub-committees to mobilise for the mega rally and work towards ensuring total victory for the party in Bayelsa State, with Council’s Secretary, Senator Ighoyota Amori, expected to issue a statement on further details of the committees’ briefs later. The sub-committees are Council Advisory Board,

( C A B ) , w i t h G ove r n o r Ifeanyi Okowa of Delta State as chairman, while Secretary is Senator Biodun Olujimi; Secretariat, Chairman is Governor Ahmadu Fintiri of Adamawa State; Secretary, Malachy Ugwu; Security, Chairman, Governor David Umahi of Ebonyi State, while Secretary is Gurama Bawa; Women and Youths Affairs, Chairman, Governor Samuel Ortom of Benue State; Secretary is Udeh Okoye; Venue and Protocol, Chairman, Governor Bello Matawalle of Zamfara State, while Ibrahim Dankaba is secretary. The rest are Contact and Mobilisation, Chairman, Governor Darius Ishaku of Taraba State; Secretary, Emmanuel Ogidi; Strategy and Intelligence, Governor Emeka Ihedioha of Imo

State is Chairman, while Secretary is Victor Ebomoyi; and Publicity, Chairman,

Governor Udom Emmanuel Akwa Ibom State, with Kenny Okolugbo as secretary.

L-R: AbdulRahman AbdulRazaq, governor of Kwara State; Babajide Sanwo-Olu, Lagos State governor; Dapo Abiodun, governor of Ogun State, and Obafemi Hamzat, deputy governor of Lagos State, at the opening of COWLSO 2019 National Women’s Conference tagged: Unlearn, Learn and Relearn: 21st Century Women’s T.H.E.M.E.S Perspectives/Approach, at the Eko Convention Centre, Victoria Island, Tuesday.

Group urges patience with Sanwo-Olu over Lagos roads

civil society organisation, Centre for Dignity and Probity (CDP), has empathised with Lagos people over the poor condition of roads across the state inherited from the immediate past administration by the Babajide SanwoOlu administration. The civil society organisation is particularly pained by the anguish and agony that the people have been subjected to through endless traffic gridlocks which

have resulted in loss of man hours, stress, damage to vehicles, wear and tear of the human body as well as the security risk that the people have been subjected to of late. A statement from Bunmi Adeniji, the organising secretary of the group, expressed consciousness of the fact that, “We are still in the rainy season of which road construction and rehabilitation is being hampered by the weather condition.” It therefore, admonished

the government and people of Lagos to exercise patience and allow the rainy season to terminate before doing the needful with regards to the roads so that tax payers’ money is not frittered away for temporary relief which is not sustainable. The group expressed delight over the declaration of a state of emergency on Lagos roads by the Babajide Sanwo-Olu administration and called on all the contractors being mobilised

to ensure that the roads receive quality, public safety and convenience attention when construction and rehabilitation works begin. The organisation promised to interface as a monitoring eagle eye for the people on the road construction when it begins, while appreciating Lagosians for their patience, understanding and perseverance over the present state of the roads which it believes will soon be a thing of the past.

‘Strategic measures must be taken by FG to fight insecurity’ SIKIRAT SHEHU, Ilorin

biodun Alao, University lecturer and professor of African Studies at King’s College London, has said that most security challenges confronting Nigeria are the inevitable outcomes of accumulated neglect of the entrenched flaws inherent in our body politic. Alao, who is also the Programme Director, African Leadership Centre, School of Global Affairs, and Chair, African Community of Practice in the College, stated this yesterday while delivering the 35th University of Ilorin convocation lecture with the theme: ‘Issues and Thoughts on Securing Nigeria”. According to him, Nigeria now faces profound security challenges that threaten its existence, adding that “apocalyptic conclusions have been reached by some that the country is in the ‘Intensive Care Unit’. “The security problems facing Nigeria today fall under several headings: there is organ-

ised crimes, the best manifestation of which is kidnapping; there is religious radicalisation, exemplified by the activities of Boko Haram; there is the trans-human, represented by the so-called herdsmen controversies; there is the communal violence, typified by the various conflicts over land; there is one linked to youth vulnerability, associated with cultism; there is one connected with violent ethno-nationalism, illustrated with various secessionist agitations across the country, among others.” According to him, “Right from independence, we had a faulty understanding of what a ‘nation’ should mean, and we did not make any serious attempt to build cohesion among the various groups that came together to form the entity called Nigeria. “To further crown it, the ‘inheritance elites’ (by this I mean those who took over at the time of independence) had a narrow understanding of what national

unity meant.” Alao, had while maintaining that he doesn’t believe that the actions of these people were coloured by raw ethnic differences; opined that “I will argue that their actions were motivated more by economic fears, political anxieties and inadequate empirical information about each other, rather than hatred.” He explained that all the security problems are now suddenly emerging because the “structures of our foundations as a nation can no longer withstand the accumulated contradictions that had been heaped on it.” According to him, “Over the past six decades, there had been strings of scattered disenchanted operational bases that were latent across the country. It is the gradual unfolding of these that have now accounted for where we have now found ourselves. “So, instead of questioning ourselves as to why all these

are happening, we should, in all honesty, be asking why it took this long for the accumulated disenchantments to manifest in our body politic. “The sad reality now is that these problems will not disappear in a hurry. It will take some time before we can get out of this.” Speaking on the solution to the problems of Boko Haram; kidnapping, herdsman/farmers, the don said the first step was to embark on a comprehensive arms recovery exercise. “As we all know, there is a massive proliferation of small arms and light weapons across the country. “Federal government should protect both herders and farmers; prosecute attackers, before carrying out its National Livestock Transformation Plan. “Communal leaders should curb inflammatory rhetoric and encourage compromise. International partners should advocate for accountability and support livestock sector reform”, he added.

ICPC declares ex-presidential aide, Obono-Obla, wanted FELIX OMOHOMHION, Abuja

he Independent Corrupt Practices and Other Related Offences Commission (ICPC) has declared wanted the suspended Chairman of the Special Investigation Panel for the Recovery of Public Property (SPIP), Okoi Ofem Obono-Obla, due to his alleged repeated failure to appear before it to answer questions bordering on allegations of fraud and corruption. Obono-Obla is facing series of allegations leveled against him by members of the public on his role as head of the government panel on asset recovery. The commission in a press statement on Tuesday said it started to investigate ObonoObla after receipt of petitions accusing him of abuse of office, falsification of admission records, living above his income and collection of gratification from suspects under his investigation. The suspended chairman is also facing allegations of working outside the guidelines governing the panel by investigating unauthorised petitions and prosecuting

suspects without recourse to the office of the AttorneyGeneral of the Federation. The statement said ICPC had conducted series of investigations on the allegations with preliminary findings showing that some provisions of the Corrupt Practices and Other Related Offences Act, 2000 and extant laws of Nigeria had been allegedly violated by Obono-Obla. “Consequently, ICPC had extended several invitations to him, which he had failed to honour without giving any reason. Attempts to track and make him appear before the Commission also failed leading ICPC to contact other law enforcement agencies for assistance concerning his whereabouts. “One of such contacts has yielded results as records from the Nigeria Immigration Service (NIS) show that Obono-Obla had travelled out of the country. “The NIS records revealed that he left the country to an undisclosed location on 17th August, 2019, through the Murtala Mohammed International Airport, Ikeja, and has not returned two months after.”

Buhari’s nepotism further dividing Nigeria, says Akintoye INIOBONG IWOK

anji Akintoye, leader of Yoruba World Congress, has accused President Muhammadu Buhari of marginalising other sections of Nigeria through appointments in his administration, saying that the trend has further divided Nigeria since he assumed office. Akintoye, 84, a Second Republic senator, an Emeritus Professor of History, added that the trend had become glaring, while stressing that Nigerians elected Buhari to choose qualified individuals across the country to run his government. Buhari, who is from the ruling All Progressives Congress (APC), won a disputed presidential election in February and was sworn-in for a second term in May. However, he has continuously faced criticisms since he assumed office in 2015 over unbalanced appointments into his administration. Political leaders say the appointments do not reflect federal character and favours the Northern region.

Speaking in an interview with BusinessDay Tuesday, Akintoye said that the President’s action was a violation of the constitution and was affecting the unity of Nigeria. According to him, “Buhari’s appointments have really gone a long way to divide the country. By concentrating most of his appointments in a section of the country he has created anger, bitterness and hatred in the mind of a lot of people outside of his region. “He was elected to rule Nigeria, find the right individuals across the country to govern Nigeria; he was not elected to appoint people from his own part of the country alone. But by doing so he has further divided the country very badly,” Akintoye said. Speaking on the recent comment by some individuals and groups in the North that the region was not ready to zone power to the South in 2023, Akintoye stated that he was aware of such plan, stressing that it was now obvious that the Southern region would have to struggle to get power back from the North in 2023.

Wednesday 23 October 2019

BUSINESS DAY

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Wednesday 23 October 2019

BUSINESS DAY

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PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 259,480.15 7.30 -0.68 120 1,342,674 UNITED BANK FOR AFRICA PLC 194,936.70 5.70 -0.87 231 10,447,877 ZENITH BANK PLC 540,019.69 17.20 -1.43 264 12,427,977 615 24,218,528 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 190,245.05 5.30 -0.94 163 14,352,359 163 14,352,359 778 38,570,887 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,646,086.70 130.00 - 57 231,699 57 231,699 57 231,699 BUILDING MATERIALS DANGOTE CEMENT PLC 2,453,833.07 144.00 -0.69 53 1,724,671 LAFARGE AFRICA PLC. 244,033.10 15.15 - 37 211,585 90 1,936,256 90 1,936,256 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 304,225.84 517.00 - 10 7,117 10 7,117 10 7,117 935 40,745,959 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 2 30 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 0 0 2 30 2 30 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 2 30 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,417.35 54.95 - 17 26,782 PRESCO PLC 38,400.00 38.40 - 7 9,899 24 36,681 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 - 3 8,400 3 8,400 27 45,081 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 0 0 JOHN HOLT PLC. 214.03 0.55 - 5 22,920 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 41,054.47 1.01 -0.98 63 14,396,886 U A C N PLC. 18,440.30 6.40 - 41 334,745 109 14,754,551 109 14,754,551 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 11 75,770 ROADS NIG PLC. 165.00 6.60 - 0 0 11 75,770 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 - 6 102,471 6 102,471 17 178,241 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,986.09 1.02 -1.92 2 113,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 64,287.74 29.35 - 28 65,716 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 6 2,652 NIGERIAN BREW. PLC. 368,257.34 46.05 - 97 1,206,214 133 1,387,582 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 115,000.00 23.00 - 52 244,533 DANGOTE SUGAR REFINERY PLC 122,400.00 10.20 -1.47 56 1,196,482 FLOUR MILLS NIG. PLC. 61,915.73 15.10 - 27 165,889 HONEYWELL FLOUR MILL PLC 7,771.59 0.98 -1.01 10 468,500 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 39,344.16 14.85 - 9 17,665 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 154 2,093,069 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,500.29 9.85 - 10 14,336 NESTLE NIGERIA PLC. 967,040.63 1,220.00 - 29 69,671 39 84,007 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,390.46 3.51 -0.28 17 375,138 17 375,138 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 22,036.15 5.55 - 28 185,508 UNILEVER NIGERIA PLC. 153,391.64 26.70 - 20 176,623 48 362,131 391 4,301,927 BANKING ECOBANK TRANSNATIONAL INCORPORATED 130,281.81 7.10 1.43 43 682,954 FIDELITY BANK PLC 49,546.90 1.71 -0.58 97 25,427,667 GUARANTY TRUST BANK PLC. 774,040.01 26.30 0.19 234 13,589,085 JAIZ BANK PLC 14,732.12 0.50 - 13 1,257,917 STERLING BANK PLC. 51,822.75 1.80 - 64 7,199,013 UNION BANK NIG.PLC. 203,845.27 7.00 - 22 548,262 UNITY BANK PLC 7,364.28 0.63 - 0 0 WEMA BANK PLC. 21,987.45 0.57 -1.72 24 5,736,680 497 54,441,578 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,643.24 0.67 1.52 9 249,857 AXAMANSARD INSURANCE PLC 17,850.00 1.70 - 2 50,000 CONSOLIDATED HALLMARK INSURANCE PLC 2,682.90 0.33 - 0 0 CONTINENTAL REINSURANCE PLC 23,961.04 2.31 - 15 725,500 CORNERSTONE INSURANCE PLC 5,155.33 0.35 9.38 20 2,445,152 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,123.80 0.29 3.57 7 159,349 LAW UNION AND ROCK INS. PLC. 2,191.13 0.51 8.51 6 243,024 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 3 200,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 4 120,000 NEM INSURANCE PLC 10,983.45 2.08 -9.57 10 243,050 NIGER INSURANCE PLC 1,547.90 0.20 - 0 0 PRESTIGE ASSURANCE PLC 2,745.10 0.51 -9.80 9 585,175 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 1 9,400 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,282.48 0.32 -8.57 21 371,813 107 5,402,320

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,721.10 1.19 - 8 330,105 8 330,105 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,000.00 4.00 - 19 213,592 CUSTODIAN INVESTMENT PLC 36,467.56 6.20 - 8 120,178 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 33,268.55 1.68 -3.57 43 8,120,642 FCMB GROUP PLC. ROYAL EXCHANGE PLC. 1,029.07 0.20 - 2 260 379,662.63 36.25 - 11 6,778 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 12,000.00 2.00 -1.96 61 2,499,576 144 10,961,026 756 71,135,029 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 9.09 1 450,000 1 450,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 8,345.44 4.00 - 3 735 FIDSON HEALTHCARE PLC GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,653.61 6.40 - 22 645,982 3,778.26 2.19 9.50 10 343,184 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 702.69 0.37 -7.50 10 727,935 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 325.23 1.50 - 0 0 PHARMA-DEKO PLC. 45 1,717,836 46 2,167,836 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 3 22,696 3 22,696 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 486.00 4.50 - 0 0 TRIPPLE GEE AND COMPANY PLC. 292.02 0.59 - 1 1,800 1 1,800 PROCESSING SYSTEMS CHAMS PLC 1,127.05 0.24 4.35 5 427,400 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 1 70,000 6 497,400 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 2 30 2 30 12 521,926 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 3 900 CAP PLC 17,885.00 25.55 - 7 2,774 208,324.49 15.85 - 20 40,092 CEMENT CO. OF NORTH.NIG. PLC MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 30 43,766 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,307.33 1.31 - 13 249,291 13 249,291 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 3 610 GREIF NIGERIA PLC 388.02 9.10 - 1 5 4 615 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 47 293,672 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 2 65 2 65 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 200,000 1 200,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 3 200,065 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 1 40 1 40 INTEGRATED OIL AND GAS SERVICES OANDO PLC 43,509.94 3.50 - 46 1,015,824 46 1,015,824 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 8 1,570 CONOIL PLC 10,686.86 15.40 - 13 26,808 ETERNA PLC. 4,108.06 3.15 - 10 44,026 FORTE OIL PLC. 20,839.70 16.00 - 36 122,818 MRS OIL NIGERIA PLC. 5,166.13 16.95 - 3 615 TOTAL NIGERIA PLC. 41,829.09 123.20 - 18 2,802 88 198,639 135 1,214,503 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 294.09 0.25 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 5 69,886 TRANS-NATIONWIDE EXPRESS PLC. 393.83 0.84 9.09 1 100,000 6 169,886 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 2 20 2 20 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,452.98 1.18 - 0 0 7,862.53 3.50 - 0 0 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 41,042.18 5.40 - 2 5,020 2 5,020 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 211.68 0.35 - 0 0 LEARN AFRICA PLC 856.31 1.11 - 11 72,917 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 496.12 1.15 - 1 3,000 12 75,917 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 729.39 0.44 - 1 2 1 2

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BUSINESS DAY Wednesday 23 October 2019 www.businessday.ng

Can Boris Johnson ‘get Brexit done’? The UK prime minister takes his exit deal to parliament on Saturday, where approval will put him in a strong position to hold a general election Sam Fleming, Jim Brunsden & George Parker in Brussels

itting at the European Council’s round table for the first and possibly last time on Thursday night, Boris Johnson’s message to fellow EU leaders was a straightforward one: it is time to move on. The son of a former Eurocrat recalled his time at a school for the children of EU civil servants as he stressed his deep history with Brussels and emphasised that Britain would remain a close partner. But the UK, he insisted, simply didn’t fit in at the EU. “People were impressed by the oratory,” says one EU diplomat. But the burning question in the minds of the other leaders, among them Angela Merkel of Germany and France’s Emmanuel Macron, was whether, having sealed an agreement for the UK to quit the EU after 46 years, Mr Johnson would be able to convince MPs to back it. The prime minister is facing on Saturday a parliamentary battle that will define Britain’s fate for a generation. Allies admit the Brexit deal he secured at the European Council could be ripped up in the House of Commons less than 48 hours after it was agreed. “It’s going to be fucking close,” says an aide to the leader. Mr Johnson has been working frantically to assemble a crossparty coalition to back the new Brexit deal: he needs 320 MPs to win. Theresa May, his predecessor, tried three times to pull off a similar feat and failed, on the last occasion by 58 votes. He needs to simultaneously win the backing of hardline Brexiters in his own party who want a clean break with the EU, and some Labour MPs who want to leave but still maintain European-style protections for workers. A defeat would represent a stinging rebuke for the prime minister after the UK and EU pulled off what in many ways was an improbable last-minute deal finalised at Thursday’s EU summit. If the deal passes, however, Mr Johnson will present himself as the prime minister who was able to “get Brexit done”, encouraging large numbers of disaffected Conservative voters to return to the fold from Nigel Farage’s Brexit party. Mr Johnson hopes to press home his advantage with an election within weeks: “An election is coming before the end of the year whatever happens,” says another ally. Even the prospect of such a knife-edge vote seemed unlikely in the weeks leading up to the agreement, where the mood was largely one of gloom. Only nine days before the deal was reached, EU-UK relations were in crisis after Mr Johnson’s team leaked

Leo Varadkar with Boris Johnson at Thornton Manor hotel. The end result of the talks was that Mr Johnson agreed to erect a customs border in the Irish

details of a phone call with Ms Merkel and accused her of making a deal “essentially impossible, not just now but ever”. Instead, the UK and EU struck a pact that allowed both sides to claim their red lines had been met, while coming up with a solution for avoiding a hard border on the island of Ireland, the issue that has bedevilled Brexit. The deal places a hard customs border between Northern Ireland and mainland Britain — stoking the ire of Arlene Foster, leader of the Democratic Unionist party, which props up Mr Johnson’s government — while ensuring that Northern Ireland’s Stormont assembly has a veto over the arrangements. Instead Mr Johnson acceded to a concept which Mrs May last year warned could “never be acceptable to any British prime minister”. The compromise is far removed from the Johnson government’s opening offer in its Brexit talks with Brussels, which kicked off in late August and for a long time made little headway. During the early rounds of talks, EU officials complained that UK chief negotiator David Frost appeared to lack the wideranging negotiating mandate his predecessor, Olly Robbins, had enjoyed under Mrs May. One senior diplomat even labelled him at the time as a “postman” for Mr Johnson, relegated to delivering UK red lines. Graphic showing how MPs could vote on Boris Johnson’s Brexit deal. With 319 for the deal and 315 against Meanwhile, Steve Barclay, the Brexit secretary, went on an autumn tour of European

capitals that further dimmed the optimism of potential allies, as he spoke menacingly of the damage a no-deal Brexit would do to their economies. There was “a lot of disappointment with the tone”, says the diplomat. Behind the scenes, however, two developments changed the European Commission’s calculations about the potential for a deal. First, Britain began inching in the direction that would ultimately see it accept a regulatory and customs border between Northern Ireland and mainland Britain — the key concession that unlocked the deal. In early September, Mr Johnson had already mooted the idea that Northern Ireland and the Republic of Ireland could remain one single regulatory space when it came to food safety standards, meaning Brexit would put a border for sanitary and phytosanitary checks down the Irish Sea. On October 2, Britain extended the offer to all goods, conceding that regulatory checks on whether UK products met EU single market standards would take place on entry into Northern Ireland. To EU negotiators, this was the equivalent of crossing the Rubicon, because it meant the UK was accepting a major divide between Great Britain and Northern Ireland. The second factor was a sharp change in the UK political context, as Mr Johnson’s strategy of ruling out any Brexit delay and threatening Brussels with a no-deal exit dissolved. European diplomats point to the passage of the Benn Act, which compelled the prime minister to seek a Brexit delay if no deal was reached by October 19, as essential in building pressure on Mr Johnson.

The removal of the threat of a no-deal Brexit gave the EU confidence that it could play hardball and walk away from a bad UK offer. All sides agree that the key breakthrough came on October 10, when Mr Johnson met Leo Varadkar, the Irish taoiseach, at the Thornton Manor hotel, a Victorian pile on the Wirral peninsula in north-west England. The friendly talks at the supposedly neutral venue, popular with wedding parties, were far too convivial for the tastes of some Northern Ireland Unionists. The end result was that Mr Johnson agreed to erect a customs border in the Irish Sea. As soon as the UK made that step, recalls one diplomat, “we were willing to work something out”. Mr Varadkar emerged to declare the talks to be “very positive, very promising”. He had good reason to be happy. Mr Johnson’s plan removed the threat of a customs border on the island of Ireland, helping to safeguard the peace process. Although Northern Ireland would remain legally part of the UK customs territory, trade within the UK would for the first time be subject to internal customs checks. For his part, Mr Varadkar was now willing to discuss offering the Northern Irish assembly a democratic consent mechanism, a critical goal for a UK prime minister determined to dispel the notion of an unbreakable “backstop”. The meeting also clarified that the negotiations were no longer really about a backstop at all. The deal that Mrs May had negotiated on the Irish border was billed as an insurance policy if no other solution could be found. Mr John-

son’s negotiation, however, was about a system that both sides understood would be in place for the long term. Mr Varadkar’s reaction to the meeting made an immediate impression in Brussels, and the next day Michel Barnier, the EU’s chief Brexit negotiator, requested a mandate from national capitals to radically intensify negotiations. The EU team was clear that the starting point for talks should be an EU proposal from February 2018 to keep Northern Ireland in the EU’s internal market and customs union. The weekend negotiations were difficult, with Mr Barnier telling diplomats that British plans for ensuring the right tariffs were paid on goods were baffling and risked leaving the EU market open to fraud. As the UK moved closer to the EU’s demands, however, negotiators were able to begin a final sprint to resolve a series of issues, including the consent mechanism. Between 20 and 30 UK officials worked alongside EU counterparts on the fifth floor of the commission’s Berlaymont building in Brussels. The moves opened the possibility of a deal, but also broke the relationship between Mr Johnson and the DUP, which opposes any dilution of the union. The DUP was still deeply anxious about customs arrangements that would create a rift in the union. But Mr Johnson, desperate to conclude a deal, decided on Thursday morning at 6.30am — just ahead of the Brussels summit — to go ahead without them. The prime minister, fortified by a brunch of bacon and sausage rolls, headed for Brussels. At the summit that night, Ms Merkel was “particularly forensic” in pressing Mr Johnson on how he planned to succeed where Mrs May failed in getting his deal ratified, with the UK prime minister underlining his certainty that he can take Britain out, as planned, on October 31. According to one diplomat, Ms Merkel warned Mr Johnson not to ratchet up the pressure on MPs by claiming the EU would refuse an extension if the vote fails. She was saying “Don’t put words in our mouths”, says the diplomat. After Mr Johnson left the room, the other 27 leaders agreed that now was not the time to discuss how to handle any potential British request to delay Brexit further. But one may yet become necessary if the Commons arithmetic today fails to stack up for Mr Johnson. Mark Rutte, the Dutch Prime minister, used a Brussels press briefing to urge MPs to back the deal, calling it a “beautiful compromise”. “We really made a square into a circle,” he said. “I would say to the British House of Commons, what more do you want?” Additional reporting by Michael Peel

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