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NIRSAL’s claim of $373m funding to agriculture raises doubts ... Banks’ lending to agriculture yet to grow despite ‘support to the sector’ CALEB OJEWALE

he lack of funding, which remains an obstacle in scaling agricultural productivity to meet Nigeria’s food and industrial needs remains unsolved, despite the establishment of the Nigeria IncentiveBased Risk Sharing System for Agricultural Lending (NIRSAL) an agency meant to de-risk agriculture. Yet the agency claims to have disbursed multi-billion naira funds. Aliyu Abdulhameed, managing director of NIRSAL, according to an interview with Bloomberg in August, said his agency disbursed “$373 million to farmers in the past year”. The claim however appeared to be at variance with experiences of many people in the sector who continue to ask what purpose the agency is serving. BusinessDay reached out to the media unit at NIRSAL, with an email thread involving Anne Continues on page 39

Inside 2019: Senate passes Electoral Act, legalises P. 2 card reader

L-R: Peter Lewis, director of African studies, John Hopkins University; Doyin Salami, member of the Nigerian Economic Summit Group, and Zainab Ahmed, minister of finance, during a session on “Ending the Vicious Cycle”, at the 24th Nigerian Economic Summit in Abuja, yesterday.

Concerns mount over huge barriers to Nigeria’s 2020 financial inclusion target As CBN raises capital requirements of national MFBs to N5bn, state N2bn, unit N100m

Hope Moses-Ashike & Harrison Edeh, Abuja

he Central Bank of Nigeria (CBN) has increased the capital requirements of various categories of

microfinance banks (MFBs) in the country. The guidelines for the microfinance banks mandate that anyone operating a unit MFB should raise its capital to a minimum of N200 million, for a state MFB it

is N2 billion, and for a national MFB, N5 billion. The message came in a circular signed by Kevin Amugo, director, financial policy and regulation, CBN. The new minimum require-

ment takes immediate effect for new applications while existing MFBs are required to fully comply by April 1, 2020. However, to meet these requirements the MFBs are adContinues on page 39

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Wednesday 24 October 2018

Apapa: Where ‘okada economy’ thrives as other businesses die Chuka Uroko

ne of the intriguing contradictions that define Apapa, Nigeria’s premier port city, is that while businesses such as banks, oil servicing firms, maritime companies, sundry industries including schools are dying or relocating with grave implications to their operational costs, the informal sector dominated by commercial motorcycles ( ‘okada economy’) is thriving with the operators smiling to the bank daily. Ordinarily, Apapa is just an enclave and one of the 20 main local government areas that make up the island settlement or the city state called Lagos. But by accident of its location, Apapa is much larger than that. This is a port city that harbours Nigeria’s two busiest seaports - Apapa and Tin Can Island ports. Apapa’s economy, according to experts, is in excess of N20 billion a day. The two ports in the city account for about 75 percent of all the export and import activities that take place in Nigeria. In a well-planned and functional society where government is responsive and forwardlooking, Apapa’s economy could be in the region of N50 billion a day. But the city has been turned into a choking environment where the only industry that is thriving is ‘okada’ riding as other means of movement have been impaired by collapsed roads infrastructure, mindless and indiscriminate parking of trailers and tankers on all roads and bridges, making all routes to the port city what BusinessDay had described in an earlier report as “highway to hell”. Therefore, to get to office early and be useful to yourself and to the company you work for; to get to the ports and get your goods cleared, do your bank clearance, monitor the movement of your cargo, and eventually get out of the ports, the only means of accomplishing these is okada. “Every day I come out, I make about N5,000 just running within Apapa. If I get passengers going to Ojuelegba, Costain, CMS, and other places outside Apapa, I make

like N7,000 a day and my day starts around 6am everyday,” an ‘okada’ rider, who introduced himself simply as Hassan, told BusinessDay. Ismaila, a young man in his 20s, is another okada rider who operates in Apapa but instead of running short courses within the port city, goes to places like Ijesha, Lawanson, Surulere, Oyingbo and other far-flung areas, told BusinessDay that he makes between N7,000 and N8,000 everyday from this business. A resident who, craved anonymity, estimated that, in the last two to three years, the number of ‘okada’ operators in Apapa has increased by over 30 percent and the risk has gone up almost by equal proportion because, according to the resident, these operators are largely from a particular section of the country where education matters so little. “So, they are all illiterate bikers”, the resident fumed. Regrettably, while the city is recording these ‘positives’ from an industry that is not supposed to exist in the first place, quite a number of businesses that are actually contributing significantly to the economy are dying because of congestion and gridlock everywhere and anywhere in the city. In Apapa, the places that could be called the ‘Central Business Districts (CBD)’ are Wharf Road and Commercial Road where high net-worth firms and banks have their offices and branches respectively. A BusinessDay survey recently shows that most of the banks have either relocated or have the number of their branches reduced. On Wharf Road alone, more than 10 banks and two eateries have shut down their branches due to the pain and difficulty in accessing these branches, leading to loss of substantial customers in the area. Unity Bank, for instance, which used to have four branches, now has two, Ecobank with eight branches has reduced to four and Access Bank with seven branches also cut down to four. “You can’t compare the situation now and how it was before. No one has been to hell and heaven but

Continues on page 34

L-R: Muyiwa Akinyemi, general manger, corporate banking, UBA; Bankole Bernard, national president, National Association of Nigerian Travel Agencies (NANTA), and Samson Fatokun, area manager, International Air Transport Association (IATA), during a workshop on new generation IATA settlement system in Lagos. Pic by Olawale Amoo

2019: Senate passes Electoral Act, legalises card reader OWEDE AGBAJILEKE, Abuja

he Senate has passed the fourth version of the Electoral Act (Amendment) Bill, which seeks to improve the quality of elections in Nigeria. The bill legalises the use of smart card reader and any other similar technological devices in conducting elections as well as limit campaign expenses by candidates. It also provides a timeline for the submission of list of candidates and addresses noticed problems related to the omission of names of candidates or logo of political parties. If signed into law, it means card readers mean card readers would be used for accreditation of voters and eliminate the use of incident forms. Presenting the report at Tuesday

plenary, chairman of the Senate Committee on Independent National Electoral Commission (INEC), Suleiman Nazif (PDP, Bauchi State) informed lawmakers that the Bill was re-introduced following President Muhammadu Buhari’s decision to withhold assent to the bill. This is the fourth version of the bill passed by the National Assembly after President Muhammadu Buhari declined assent on three previous occasions in February, July and August this year. The report was signed by 10 out of 19 members of the committee. According to Nazif, Section 140 (4) of the bill prescribes a fine of N2 million or two-year imprisonment to the Commission’s official responsible for the omission of a party’s name or logo on the ballot paper. “Where the election is postponed

due to omission of a Political Party’s Name or Logo, the Commission’s officer responsible for such printing of Party names or Logo commits an offence and is liable on conviction to imprisonment for 2 years or a fine of N200,000.00 or both,” he said. Speaking after the bill was passed, Senate President Bukola Saraki urged President Muhammadu Buhari to urgently sign the bill into law once it gets to him. His words: “Let me congratulate all of us particularly the Committee on Electoral Matters for the hard work they have put in. We were able to achieve this. It looked almost impossible at a time. But I want to commend everybody for their effort in making this happen. And this will go a long way to improve our electoral process and further strengthen our governance.”

Nigeria’s drive to increase refining capacity runs into hitches, licences expire OLUSOLA BELLO & STEPHEN ONYEKWELU

he Federal Government of Nigeria’s effort to improve refining capacity through modular refineries now looks remote because 25 out of the 45 licences issued to companies to construct such refineries may have expired. Another 11 of such licences currently active may expire next year (2019) without any significant progress made by the promoters of the companies that got them. Of these numbers, only seven of the licensees, some of whose licences may expire next year, can carry out ground breaking ceremonies, have engineering, procurement and construction (EPC) contract terms agreed, source for equipment, do design engineering, because the Department of Petroleum Resources (DPR) has granted approval to construct (ATC) and do other necessary

things. Some of the licensees have the ATC granted but their licence to establish (LTE) has expired. This does not overshadow the effort of some private sector players in Nigeria who have been attracting foreign investment from various sources to fund the development of Africa’s largest crude producer’s refining capacity. And the latest in this light is Waltersmith Refining and Petrochemical Company Limited’s groundbreaking ceremony of its 5,000 barrels per day modular refinery in Imo State. In addition, Africa’s richest man, Aliko Dangote’s $14 billion refinery project, world’s biggest single location refining capacity of 650,000 barrels per day slated to come on-stream by the end of 2019, would quicken the process of making Nigeria a net exporter of petroleum products to neighbouring West African countries. Abdulrazaq Isa, chairman/CEO

of Waltersmith, said the modular refinery being built by the firm would create direct and indirect employment as well as reduce the demand for foreign exchange from the nation’s treasury to import fuel. “We see a big opportunity for a country that has a population of close to 200 million people, today, and we are producing and refining crude oil for the benefit of this huge population,” Isa told BusinessDay in a recent interview. “When you look at the Nigerian market it does not comprise Nigeria alone, we are looking at all of these activities benefitting the entire West African sub-region,” he said. African peers are also in the race to grow refining capacity and become net exporters of petroleum products. West and parts of southern Africa could see up to 1 million b/d of new refining projects come online in the next

five years, as the region is finally taking steps to reduce its reliance on imports for its fuel needs. Even if half of this capacity comes online in this period, the ramifications will not only be observed in the flows of refined products but also in the crude oil markets, as this region is a pivotal exporter of crude to the global refining hubs, analysts told S&P Global Platts. In Algiers, Abelmoumen Ould Kaddour, CEO of Algeria’s stateowned Sonatrach, said a refinery in Algerian capital, Algiers, would resume production by the first quarter of 2019 after upgrading completed, Reuters reported. Sonatrach will be a net oil products exporter within three years after buying Augusta Refinery in Italy, completing Hassi Messaoud Refinery and resuming production at Algiers plant. Nigeria’s four crumbling state refineries have continued to underperform, leading to higher

annual fuel-import bill and export of jobs, which could be reversed by creating an environment that enables private sector driven mini refineries. There are currently 40 modular refineries registered, 10 of which are in advanced stages of development and could be producing fuel as early as next year. The two leading projects of about 17,000 barrels a day each “have really started work,” Ibe Kachikwu, minister of state for petroleum, said in an interview with Bloomberg. “This is a country that needs products, refined products. This is a country that depends, despite the existence of these large-scale refineries, almost 100 percent on imported products. Now, you are going to have the first private sector owned refinery by an oil producing company that is providing its own feedstock and operating it as efficiently as it has operated its upstream business,” Isa said.

Wednesday 24 October 2018

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BUSINESS DAY

Wednesday 24 October 2018

Delegates and guests at a breakfast meeting on ‘Breaking Barriers to Implementing Nigeria’s Financial Inclusion Strategy’ powered by BusinessDAY Media at side event during the 24th Nigerian Economic Summit, themed ‘Poverty to Prosperity: Making Government and Institution Work’ held in Transcorp Hilton in Abuja. Picture by TUNDE ADENIYI

Frank Aigbogun, CEO/Publisher BusinessDAY Media Limited

Obadiah Mailafia, former deputy governor CBN

L-R:Ogho Okiti, President Time Economics with John Osadolor, director BusinessDAYMedia Limited.

L-R, Osea Brown, Editor, BusinessDAY Media Limited, Bred Tytel, deputy director Interimi Policy Advocacy and Communication, Billand Melinda Gates Foundation, Tijjani Mohammed, deputy director Program Advocacy and Communication, Billand Melinda Gates Foundation and Frank Aigbogun, CEO/ Publisher Business DAYMedia Limited.

L-R, Garrro Susan, Economic Expert US Embassy Nigeria, Obina, and Frank Aigbogun, CEO/Publisher BusinessDAY Media Limited.

A cross section of guests at the Breakfast meeting

Wednesday 24 October 2018

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Wednesday 24 October 2018

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Wednesday 24 October 2018

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BUSINESS DAY

10 BUSINESS DAY

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COMMENT SMALL BUSINESS HANDBOOK

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

he annual Nigeria economic summit opened on Monday in the capital city of Abuja. It is the 24th occasion the group of patriots, under the aegis of the Nigeria Economic Summit Group, a non-profit started in 1999, is calling out Nigerians to “come let’s talk about our country”. Well, some people say they are tired of talking and are quick to tell you that talk is cheap but action is pricy. By this they mean that we can talk all the way from Jerusalem to Jericho; without someone taking action the talk is wasted. They have a point. Many well-researched papers on some of the most debilitating problems of Nigeria are fast gathering dust in many executive offices and there is no plan to even read them again. Implementation is a national challenge but the society is evolving. It is not static and the Philistines we see

Wednesday 24 October 2018

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Poverty to prosperity: Making governance and institutions work today may not be there tomorrow. So let’s talk. Someday, somebody may implement. It is therefore with hope that someone is going to value the ideas that would come out of the summit that many of us welcome the theme of the summit–“Poverty to prosperity: Making governance and institutions work”. I must say that the brains behind the theme are very good. To be that apt in these days when limited intellectual exertion is the hallmark of leadership means some people put some thought into the theme. It captures the core phenomena that are central to the present pass into which we are. These core phenomena are poverty, prosperity, governance and institutions. If Nigeria could find answers to just any two of the four, I believe our economic transformation agenda will be fulfilled. Indeed, the theme of the conference captures Nigeria’s elusive search for economic transformation. Poverty Poverty, however defined, is a scourge. It is worse than a plague. Poverty is lack at the superlative degree. It manifests in hopelessness, ignorance, disease and powerlessness. It dehumanises and reduces a man to a pawn in the hands of his masters - the rich. Although poverty is a global phenomenon, it has made a home in Africa. When I was growing up, the nations that

‘

There are some villages in the Middle Belt where nobody sleeps at night. They spend more time waiting for terror than tilling the land. The point here is that you don’t plant cassava and harvest cocoa yam

’

came to mind when poverty was mentioned were not African countries. Our minds used to go to Asia and some parts of South America. Today poverty has become a medal (one of dishonour) that Africa is wearing. More pathetically, this medal of dishonour is worn unrepentantly, if not unashamedly, by the Giant of Africa, Nigeria the land of my birth. It hurts so badly because I know my honour as a person has something to do with, and is impacted by the honour of my country. Think of that! When you are being listed as a Forbes top rich person in the world, be aware that your own listing, coming from Nigeria, is read with pinches of several chemicals including salt. The world is aware that Nigerians are

very had working and many have made money going from grass to grace. However, they also know that most of the rich people in Nigeria neither have inventions nor factories churning out highly demanded goods and services. They are mostly people who won the contest for patronage and national betrayal. And there is no need to complain about these terms as to whether they are charitable or not. Just rewrite history and let the world think highly of us. Nigeria is now home to the largest number of poor people in the world. Bad news but not as bad as it ought to be, given what we have been doing. There are 87million very poor people among the nearly 200 million of us; ahead of India with a population of 1.4 billion. If we realize that more than half of us are unemployed, all technicalities considered, then that number may be low. I look at my own town and the villages around it, in the South East of Nigeria, where there are no industries, no employment and kidnapping is flourishing, and wonder how true it is that only 87 million of us are abjectly poor. What goes on in localities like mine is that “God raises” one rich man and he becomes the Jesus Christ of the place, carrying the troubles of the rest. The extended family system has helped to mask the massive unemployment there. But our people are tired of handouts. I think eighty-seven million may be small, if we take account

of the number of farmers who can no longer farm, and villages burnt down and the people transferred to IDP camps. There are some villages in the Middle Belt where nobody sleeps at night. They spend more time waiting for terror than tilling the land. The point here is that you don’t plant cassava and harvest cocoa yam. These may therefore be early days for poverty in Nigeria and there is no need to think of dooms dayers. When you continue to do the same wrong thing over and over again while waiting for a different result, you soon get mired in confusion. Being the home for the largest concentration of poor people in the world should worry any country. Especially if we realize that the country is not among the poorest in the world. So why does Nigeria have the largest number of the poor? That brings me to the nest element of the summit theme, prosperity. Nigeria has been a prosperous country, even at the height of its troubles, including the recession. What has eluded Nigeria is not prosperity but equity in the distribution of prosperity. The summit must have identified the reasons why Nigerians have no access to their country’s prosperity. I have no doubt that failure of Governance must be in the list.

maturity of many of the Nigerian state governors? Have many of them not demonstrated gross abuse of their presently limited police powers. The former governor of Imo State, Ikedi Ohakim, routinely brutalized Nigerian citizens for the filmiest reasons. He flogged people, like Samuelson Iwuoha, for their critical views of his government. At his order, his security details beat up an elderly Catholic priest, and, at another instance, a woman that was taking her children to church. Their only offense was that they did not get out of the way fast enough for the governor’s convoy. Ohakim, even told the woman she was lucky that she was not shot by his security agents. Shoot a woman for not readily scampering off the road for the governor’s convoy? Na wa o! Abi the governor na God? Despite a court order restraining him from demolishing the radio station, the Oyo State governor, Abiola Ajimobi, went ahead to demolish the Fresh FM because he was incensed by the radio station’s criticisms of his administration. The governor tolerates no media criticism, and therefore, harasses media establishments and punishes journalists for criticizing his administration. According to one Ibadan resident, “The demolition has more to do with political intolerance and a despicable attempt to gag the press than the enforcement of any building plan.” It boggles the mind to image what some of these governors will

do with a police force totally under their control. Experts of criminology postulate that policing should be local because the police tend to be most responsive and effective when they are drawn from the local population, and are therefore, conversant with the local terrain, language and culture. Ordinarily, the decentralization of the police should enhance the quality of policing across Nigeria. But, due to the Nigeria factor, hardly does any rule-of-thumb prevail in Nigeria. In spite of the advantages of regional/local police, what kind of policing can be expected from a police force that is under the command of a governor that thinks it is justifiable to shoot a mother in front of her children because she did not get out of the way, fast enough, for the governor’s motorcade or a governor that defied a court order and demolished a radio station critical of his policies? That police force will inescapably be corrupt, anti-people and globally notorious for its trigger-happiness and extra judicial killings, just like the present Nigerian Police Force. Until we restructure our collective attitude towards the rule of law, a restructured Nigeria will not significantly improve the Nigerian reality. Nigeria, for the most part, will remain what it is: a bastion of confusion, anarchy, social injustice and mass poverty.

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The limits of restructuring

TOCHUKWU EZUKANMA Tochukwu Ezukanma writes from Lagos via maciln18@yahoo.com

n my hometown, Ogidi in Anambara State, parlance, “akuku lue be onye ibilibi”- loosely translates to – “(when) a cliché gets to a crazy man’s house”. When a cliché gets to a crazy man’s house, it invariably takes a crazy twist. Like a cliché that got to a crazy man’s house, the talk about “restructuring”, has taken a wacky twist in Nigeria. Without an understanding of its meaning, or even, much thought to its significance, many Nigerians are singing its praises. They extol it, and tout it, as something of a panacea to Nigeria’s myriad of problems. An elderly politician recently summed up this sentiment when he said, “We are passionate about restructuring Nigeria, true federalism. By the time Nigeria is restructured, all the differences and all areas of conflicts that we are experiencing as a nation will disappear...” Restructuring, in the Nigerian

context, is so ambiguous that even those with an understanding of its meaning do not agree on its specifics. The earlier acidic debate on the essentials of restructuring between the Nigerian vice president, Yemi Osibanjo, and the former vice president, Atiku Abubakar, dramatizes the word’s lack of a précised definition. I am all for restructuring. However, I have never been enthused by the endless tinkering with the Nigeria constitution because our problems are not constitutional, they are attitudinal. The fundamental problem of the Nigerian society is lawlessness. Until we change our attitude towards the law, no constitutional arrangement will significantly improve the Nigerian situation; Nigeria will remain a disorderly country steep in corruption, social injustice, official brutality, mass poverty, etc. Apart from our ingrained propensity for breaking the law, a preponderant number of those feted by the Nigerian press and celebrated by the Nigerian society are law breakers: politicians and government officials that stole government money, wealthy criminals crowed as chiefs/kings and hailed as saviours of their people, pastors that pervert the Word of God and successfully fleece their congregation, etc. Not surprisingly, many Nigerians take pride in breaking the law because they subliminally associate it with power and pres-

tige. So, unlike in most societies of the world where a breach of the law is an aberration, and consequently, intolerable and deserving punishment, in Nigeria, it is normal. It is respect for the rule of law that is an aberration, a purview of the eccentric few. The constitution is the supreme law of the land. In a country with a culture of lawlessness, the constitution, irrespective of how exquisitely written and/or the ideals it encapsulates, will still be disobeyed and abused. Until there is an attitudinal shift: a drastic change in our attitude towards the law, no constitution can work efficiently in Nigeria. Restructuring – the devolution of more powers to the states – will not automatically elevate our societal morals and ethics. “Characters are not so easily changed as laws”. So, no matter the changes made to the constitution to restructure Nigeria, Nigerian tendencies and habits will persist. Nigerians will still thrive in lawlessness and its doppelgangers of corruption, theft of public funds, political intolerance, abuse of power, etc. And the country and the states will still be ruled by the same political class unrivaled in its record of official brutality, arrogance of power, and the looting and tearing down of the country. Consequently, Nigeria will remain an anarchistic and unjust country still plagued by most of its present maladies. With restructuring, police powers will be devolved to state governments. Have we not been appalled by the demonstrated political im-

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Wednesday 24 October 2018

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COMMENT CHARACTER MATTERS WITH DAPS

DAPO AKANDE 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

y ideas and positions on how to make our society are very simple. Why? Because I’m really not smart enough to think of ultra complicated solutions. Like I always say, why waste time conjuring up complicated theories when simple will do just fine. Steve Jobs, contrary to popular belief wasn’t an IT guru. He merely had an eye for aesthetically attractive gadgets but perhaps more revolutionary, he was fanatically driven to make hitherto complex devices simple; making them infinitely more user friendly. Once

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M.I.N.D.S: Manners, integrity, neighbourly love, discipline, success he arrived at what he wanted, he passed it on to his IT people to make it happen. We often feel like we haven’t achieved because we haven’t discovered a way to reinvent the wheel, whereas all we need do is make the wheel work better or more efficiently. Manners, so simple they’re often overlooked, pack enough punch to build up a society where they’re prevalent or to decimate it where they are not. To say ‘please’ and ‘thank you’ compels me to acknowledge the other. Either to acknowledge the fact that I need their assistance, even with the most mundane of things, such as asking someone to pass the salt on the dining table by saying ‘please’ or by acknowledging hence appreciating what they did for me by saying ‘thank you’. This shifts one’s focus from self to the other. They have a right to do or not to do. If I can’t appreciate this, then why would I see the need to say ‘sorry’ to someone I offend, inconvenienced or hurt? Saying ‘sorry’ indicates remorse for hurting another’s feelings or for doing that which is detrimental to their

‘ In better working

societies, individuals have come to realise, if they want the best for themselves, they must do what’s best for others too

’

interest. It means you recognise the need to assuage or sooth this hurt of a fellow sentient being. The thought process that takes place before those magic words are uttered automatically stirs up a humble disposition. Let’s be honest, if someone barks ‘please’ at you for something you have in your power to give or deny, will you really be moved to oblige his request? I don’t think so. In better working societies, individuals have come to realise, if they want the best for themselves, they must do what’s best for others

too. That way, it will eventually come around; which is why in such places, if you want to change lane while driving, you only need to indicate with your traffic indicator. The concerned motorist will automatically slow down for you to join his lane. Contrary to the conclusion of a typical motorist in Lagos, such a person is actually smart and not a ‘mumu’ at all. He is smart enough to discern the eventual outcome; when it comes to his turn you will do the same. They have learned to put the common good before selfishness and guess what? It works. Things work. I always tell my children that a society made up of individuals only after their own interests can never prosper. Interests will always conflict with each other so how can such a society progress? It’s impossible. You need continuous mutual cooperation and collaboration. In fact that’s what makes it a society. A society is not simply a large group of people who live in the same vicinity. Similar to the saying that courage loses its definition in the absence of fear, one can aptly say society loses its definition in

the absence of useful cooperation amongst the individuals. I will forever love this quote (which emblazons the very first page of my book, The Last Flight) by the Chinese artist and activist, Ai Wei Wei for its simplicity and absolute truth: “Your own acts and behaviour tell the world who you are and what sort of society you think it should be.” I think we would do well to remember this before we blame our governments for every problem under the sun. Yes, much of the fault is theirs but I think it’s just too convenient as they were born and bred among us. Are we really that different to them? Or have we just not had the opportunity yet? The last time I checked, orchards still produced oranges and not apples. For as long as we continue to blame others, we will never turn the spotlight on ourselves and therein lies the problem. Like I said, it’s just too convenient. Changing the nation...one mind at a time! Send reactions to: comment@businessdayonline.com

Executive leadership: Beyond lengthy work experience and executive presence JUDE ADIGWE Adigwe is a certified Human Resource Management (HRM) professional and is the Human Resources and Administration Manager at Sharemind Lagos

ukl and Van Fleet define leadership as “a process that includes influencing the task objectives and strategies of an organization, influencing people in the organization to implement the strategies and achieve the objectives, influencing the group maintenance and identification, and influencing the culture of the organization.” One word stands out and that word is influence. A leader is one who influences. At this point, it is paramount to ask two questions: who does the leader influence? Why does he/ she influence? The definition by Business Dictionary implicitly addresses these questions. According to Business Dictionary, leadership entails “establishing a clear vision; sharing that

vision with others so that they will follow willingly; providing the information, knowledge and methods to realize that vision; and coordinating and balancing the conflicting interest of all members and stakeholders.” A leader influences his/her followers because the realization of the vision will be through their efforts. The same dictionary defines an executive as a “person or group given the responsibility to manage the affairs of an organization and the authority to make decisions within specified boundaries.” Perfect examples of executive leaders are Chief Executive Officers (CEOs) and management boards. Executive leadership is beyond having lengthy work experience (which in most cases is highly specialized or in few cases, diverse), and executive presence, a concept Forbes defines as “the ability to project gravitas – confidence, poise under pressure and decisiveness.” Lengthy experience is easy to acquire by being on a job (or in an organization or through different organizations) over a period of time. It is crucial to quickly say that length does not imply depth and quality – it does not translate into eligibility for leadership roles. Competency on a job or different jobs does not necessarily imply leadership skills. Also, radiating an aura of gravitas does not mean

capacity for effective leadership. It is significant to stress that leadership qualities need to be acquired – this requires some level of training, mentoring and coaching. You prepare before ascending leadership positions and you continue honing your skills when you take the helm. Invest heavily in your growth as a leader because the company’s advancement depends largely on you…avail yourselves of the myriads of training programmes available for executive leaders. Furthermore, executive leaders must realize that having a clear vision and the ability to communicate it effectively to subordinates as well as convince them to buy into it is non-negotiable. Leadership at this level entails strategic thinking. Strategic thinking, according to Business Dictionary is “the ability to come up with effective plans in line with an organization’s objectives within a particular economic situation.” Also, there is the need for a capacity to grasp firmly the interrelatedness of the different units and departments with regards to how they fit into the big picture. This requires a genuine interest and a committed involvement in the operations of the company as well as a willingness to learn and gain insights reflected by occasional engagements with unit or department heads and line managers. Open-mindedness and some tolerance for dissent is essen-

tial too. Issues, the world over, are tackled and driven by perspectives. Multiple perspectives deepen insight and strengthen decision making. To dismiss this is to lose sight of what true leadership is. A listening ear and an open mind are indispensable to effective leadership. Of utmost importance is the need for emotional intelligence. Emotional intelligence, according to Psychology Today, is “the ability to identify and manage your emotions and the emotions of others…” This concept popularized by Daniel Goleman has four components: self-awareness, self-management, social awareness and relationship management. An effective executive leader understands that behind the numbers are humans, not tools. To get the best out of your human resources (i.e. employees) you must apply a great deal of emotional intelligence. Leading with high-handedness, arms-length and total emotional detachment usually inspires a culture of deception and sycophancy – you are told what would sound pleasant to your ears which most times is not the truth. This diminishes your capacity for handling the truth. I would be remiss if I fail to emphasize some of the nonnegotiable expectations of leaders (i.e. executive leaders). These expectations would be posed as questions. Who should con-

stantly be on the lookout for innovations in the industry? The leader. Who should read, learn, think and be more strategic? The leader. Who should work extra hours thinking of how to grow and advance the company? The leader. Who should never fail to live out the company core values? The leader. Who should never fail to abide by company policies and procedures? The leader. Who should be more responsible and accountable? The leader. Who should first take a pay-cut during an economic downturn? The leader. Who should be more emotionally intelligent? The leader. Who should be more performance-driven? The leader. These expectations posed as questions underscore the fact that leadership comes with huge responsibilities – it is not an opportunity to simply give instructions and enjoy perquisites (perks). It requires a clear vision, sharp focus and the capacity to communicate the vision effectively as well as convince others (i.e. subordinates) to buy into it. Also, it requires a capacity for systems thinking, strategic thinking, emotional intelligence – it requires integrity, responsibility and accountability. Lengthy experience and executive presence pales into insignificance when compared to the aforementioned qualities. Send reactions to: comment@businessdayonline.com

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Wednesday 24 October 2018

EDITORIAL PUBLISHER/CEO

Frank Aigbogun EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure GENERAL MANAGER, ADVERT Adeola Ajewole ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire DIGITAL SALES MANAGER Linda Ochugbua

Nigeria must do more to financially include its citizens

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

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

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

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

GM, BUSINESS DEVELOPMENT (North)

Bashir Ibrahim Hassan

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

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BUSINESS

Wednesday 24 October 2018

COMPANIES & MARKETS

DAY

SystemSpecs launches Remita SME Suite to grow businesses

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C O M PA N Y N E W S A N A LY S I S A N D I N S I G H T

Dangote Cement records marginal PAT growth over tough operating environment DAVID IBIDAPO

angote Cement Plc, a Nigerian multinational publicly traded cement manufacturer listed on the industrial goods index of the Nigerian Stock Exchange market (NSE), recorded a slow growth in profit after tax (PAT) as at end of 9 months 2018. According to BusinessDay analysis of financial report released by the company on Monday, the slow growth was affected by a massive decline in its finance income for the period, which reflects challenges in the foreign exchange market during the period under review. Meanwhile, foreign exchange gains during the period declined significantly by 90 percent causing lower finance income this year.

L-R:Ilias Aliyu, chief executive officer, Nigeria Customer Service Awards; Adedoyin Aiyedun, customer service manager, Leadway Pensure and Temitope Lasaki, customer service officer, Leadway Pensure, during the presentation of the award for Excellence Service Delivery in the PFA category to Leadway Pensure, at the Nigeria Customer Service Awards 2018, held at the Lagos Chamber of Commerce and Industry, Ikeja, Lagos, recently.

According to firm’s financial report, finance income declined significantly by 60.6 percent from N26.9

billion in Q3 2017 to N10.6 billion in Q3 2018. Components of firm’s finance income include interest

income which grew by 40 percent to N8.5 billion from N6.09 billion year on year. Meanwhile, foreign

Stanel Group CEO says Nigerian youths lacking in entrepreneurial spirit despite potential CHUKA UROKO

igerian youths have an important role to play in changing Nigeria’s economic narrative, but the vast number of them who make up to 50 percent of the country’s population are lacking in the spirit of entrepreneurship, Stanel Group CEO, Stanley Uzochukwu, has observed. In Nigeria, there exist up to 90 million potential youth entrepreneurs which, Uzochukwu notes, is an excellent indication of the immense development that can be achieved if these entrepreneurs are encouraged and supported appropriately to eventually elevate the economy and put the debt profile to rest. Possible sectors where youth entrepreneurship can thrive and be of benefit to Nigeria include agriculture as the first sector because, as an abundant natural resource in Nigeria, it has

contributed21.6 percent to Nigeria’s nominal GDP, provided about 30 percent of the jobs in the economy and if leveraged properly can double Nigeria’s revenue. “Stanel Group has been able to invest in this sector by creating a subsidiary called Stanel Farms that provides top quality farm produce and livestock products 20 percent cheaper than the market value. This subsidiary has been able to provide jobs for over 12,000 youths and ensure its customers employ healthy eating habits”, Uzochukwu disclosed. His views were contained in a speech he delivered at the celebration on the topic ‘Nigerian Youth Population, a catalyst for recalibrating Nigeria’s Debt Profile and Economy’ in which he highlighted the importance of the role of youths in Nigeria’s economy. He has been described as a true nationalist on a mission to incite a complete overhaul of the Nigerian

global image. He is also out to revamp the level of infrastructure in the country with strong passion for youths ranging from employment and empowerment to entrepreneurship. It does not come as a surprise that the Nigerian Society at the University of Sunderland, United Kingdom, specially invited Uzochukwu as guest speaker at their Nigeria @ 58 Independence celebration tagged ‘The Urgency of Prosperous Nation Building and The Risk of Rising National Debts: Could Youth Leadership and Restructuring be the answer?”. Uzochukwu sees the globalization of Nigerian music and film making arts, entertainment and recreation the second and final sector of the Nigerian economy , suggesting that youth entrepreneurship should leverage this. He believes that with more innovations like IrokoTv, the Nigerian economy will be on its way to doubling

revenue in no time. “Stanel Group hand has been investing in arts and entertainment by engaging youth ambassadors of this sector to promote its brand for a handsome fee. My speech is meant not only to enlighten but also motivate youths to begin looking into entrepreneurship in the course of uplifting their motherland and recalibrating the economy. Uzochukwu also attended the inaugural meeting of the International Advisory Board at the University of Oxford where he received Vice President Yemi Osinbajo and congratulated the Governor His Excellency Nasir El-Rufai, governor of Kaduna State, on his inauguration into the board. With the immense contribution of Stanel Group to the Nigerian Economy and his recent trip to represent Nigeria positively in the United Kingdom, Uzochukwu has proved himself a catalyst for Nigeria’s global image.

exchange gains during the period declined significantly by 90 percent causing lower finance income

this year. As a result, this slowed growth in profit by about 2.2 bps. BusinessDay analysis revealed that while profit from operating activities grew by 14.5 percent, profit slowed as PBT grew by 12.3 percent from N220.18 billion to N247.3 billion. Meanwhile profit after tax (PAT) during the period increased slightly by 2.6 percent from N154.12 billion in 9 months 2017 to N158.2 billion as at 9 months 2018. Dangote cement financials further revealed that gross profit for the period increased 15.6 percent recording a profit of N397.6 billion compared to N343.7 billion recorded in prior year despite cost of sales for the period increased by approximately 11 percent. Revenue collected during the period contributed largely to growth in gross profit as revenue increased by 14 percent from N603.5 billion to N685.2 billion.

CAT’s next generation excavators enters market STEPHEN ONYEKWELU

igeria’s heavy machinery market has received CAT’s three next generation excavators, introduced by Mantrac Nigeria Limited,the sole authorised dealer for Caterpillar Products in Nigeria. Of the 20-ton size class, the three next generation excavators from Caterpillar which include the 320 GC, 320 and 323 have been built to increase operating efficiency, lower fuel and maintenance costs, and improve operator comfort compared to previous models. “The new excavators offer unique combinations of purposebuilt features designed to match customers’ productivity and cost targets” a statement on CAT’s website said. At the recent launch in Lagos, Ahmed Ragab,managing director of Mantrac Nigeria Ltd acknowledged the that the 68-year-old partnership between CAT and Mantrac has continued to deliver excellent machines for wide and varied applications in all sphere, which led to the birth and development of these next generation excavators. In the 20-ton class standard, the new Cat® 320 raises the bar for efficiency with integrated Cat Connect Technology that advances productivity gains. Standard technology combined with lower

fuel and maintenance costs deliver low-cost production in medium- to heavy-duty applications. Designed for low-to-mediumduty applications, the new Cat 320 GC combines the right balance of productivity features with reduced fuel consumption and maintenance costs. The result is high reliability and low cost-per-hour performance. Delivering high production performance, the new premium Cat 323 boasts standard integrated Cat Connect Technology and the most power and lift capacity in the line. These features combine with lower fuel consumption and reduced maintenance costs to deliver maximum productivity at the lowest cost. At the unveil event, the New Generation excavator was driven and operated at the by a nine year old boy, Peremobowel Agama. Durable Cat engines provide duty-matched power ratings from 121 to 162 hp (90 to 121 kW) for the three new excavators.The efficient Next Generation machines consume 20 to 25 percent less fuel than the previous, corresponding models. New Smart mode operation automatically matches engine and hydraulic power to digging conditions, optimizing both fuel consumption and performance.Engine speed is automatically lowered when there is no hydraulic demand to further reduce fuel usage.

BUSINESS DAY

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Wednesday 24 October 2018

Business Event

SystemSpecs launches Remita SME Suite to grow businesses

mall and Medium-sized Enterprises (SMEs) across Nigeria, regardless of their structure or location, can now easily manage the most essential aspects of their business, ranging from funds collection to payments and payroll in a more convenient, data-driven and organised manner by accessing the Remita SME Suite. Remita SME Suite helps enterprises to reach immediate and larger markets; get paid easily for goods and services through multiple channels, including bank branches nationwide, electronic banking, debit/credit cards and mobile wallets; boost profit margins; seamlessly manage employee affairs; keep organisational and transactional records; and ultimately access SME loans. Speaking on the purpose of the servicewhichstraddleRemita’spay-

ment, funds collection and payroll capabilities,JohnObaro,managing director of SystemSpecs, said: “The Remita SME Suite would assist SMEstogrowandinnovateinasustainable and profitable way, which would not only drastically turn around the user SME for good but also position them to add greater value to the Nigerian economy. “With this service, more businesses would be able to scale to the next level and extend their frontiers of operation while also making profit. By so doing, they would be able to contribute even more to the advancement of our collective lot.” Available for signup on the Remita website, SMEs in any part of Nigeria would be able to receive funds from customers everywhere at any time of day, make payments from any bank account to vendors and suppliers without stress, and

manage payroll end-to-end – all on the same platform, at an affordable cost. Owing to their adoption of this service, forward-thinking small and medium-scale enterprises will position to attract opportunities for business expansion. Speaking on the technology that drives the service, SystemSpecs’ executive director/chief technology officer, Emmanuel Eze, said: “Based on several years of excellence, Remita continues to facilitate the transformation of the finances of thousands of businesses across Africa, managing their payment, collection and payroll processes in an integrated manner. “Remita is intuitive, userfriendly and deliberately built to suit the expectations of small and medium-sized businesses. It is targeted at meeting their needs just the way they want it.”

L-R: George Osadolor , winner, Heineken 192 Countries Campaign ; Aminah Jagun , assistant brand manager, Heineken ; Afolashade Adu, winner, Heineken 192 Countries Campaign ; Oladoyin Falodun, winner, Heineken 192 Countries Campaign, and Gregory Ayodeji, Winner, Heineken 192 Countries Campaign, at the Heineken 192 Countries European Experience in Barcelona.

US Morgan Staley’s vice chairman to visit Nigeria for investment talks HOPE MOSES-ASHIKE

arla Harris, vice chairman and managing director at Morgan Stanley, and also one of the most influential female black executives in the world is coming to Nigeria next month. The American will be in Lagos on November 9 for the Women in Investment Management workshop where the globally renowned speaker, author and singer will share her career experience as one of the few black women that have risen to the top of the investment banking and asset management profession globally. Harris will be joined by other

leading female executives in the investment industry as speakers at the November 9 event, which follows the Nigeria Investment Conference 2018 organised by the CFA Society Nigeria, holding on November 8. With the theme, “Let’s Measure Up”, the conference promises an impressive line-up of international and local speakers including minister of Industry, Trade and Investment Okechukwu Enelama; deputy governor, Central Bank of Nigeria Aishah Ahmad; former president and CEO of the African Finance Corporation Andrew Alli; president and CEO CFA Institute Paul Smith; chairman, First Bank of Nigeria Ibukun Awosika; managing director, EMEA, CFA Institute Gary Baker and president, CFA

Society Nigeria and Conference Host Banji Fehintola among others. “The most prolific sectors of the Nigerian economy are private-sector led. But why would anyone want to invest in Nigeria? How easy is it to do business in the country? Are current policies favourable to increasing capital inflow? With so much investment opportunities available in the country, why aren’t we seeing investors competing fiercely to exploit available opportunities? What has been done by the government to attract more Foreign Direct Investment, and what should we expect going forward. these questions are many more will be answered by leaders of the private and public sector, who will be speaking conference.

L-R: Lanre Yusuf, business manager, Akowonjo Business Unit , Ikeja Electric;Sule Suberu Odualabe, chairman , Agbade Oke-Odo local council development been attended to by Olajide Olawepo, US medical team leader, and Kayode Adeoti, MD, XT Monitor Limited, at the medical outreach organized for Ikeja Electric customers in Akowojo area in Egbeda, Lagos. Pic by Pius Okeosisi

Customer satisfaction earns Leadway Pensure two global awards FRANK ELEANYA

rive to ensure optimal customer satisfaction has earned Leadway Pensure, a pension funds administrator in Nigeria, two major awards at the Nigeria Customer Service Awards and the International Standards Leadership Awards. According to a statement from the company, the awards for Excellent Service Delivery and Most Outstanding Pension Funds Administrator of the year 2018 came after thorough evaluation of Leadway

Pensure’s processes, staff attitude, turnaround time, product knowledge and friendly ambience. The awards organizers generated the information through customer feedback and online poll. Winners of the Most Outstanding Pension Funds Administrator of the Year 2018 are usually companies that distinguish themselves in terms of compliance and conformance to standards. The criteria range from reliability, best use of technology, ethical standard and policies, communication with customers, responsive-

ness and customer satisfaction. “We are very happy to have received these local and international recognitions out of several PFAs operating in the country,” Ronke Adedeji, managing director of Leadway Pensure said. “From inception, we have demonstrated innovation and competence which have endeared us to forward-thinking individuals who are not looking for just another PFA, but are deliberate about their future and are determined to entrust that to a discerning PFA like ours.”

L-R: Fred Chiazor, director, scientific and regulatory affairs, Coca-Cola Nigeria; Babatunde Oguntona, guest speaker and professor of nutrition, FUNAAB (Rtd)/consultant, IITA, and Emeka Mba, public affairs analyst, CocaCola West Africa Business Unit, during the panel session by Nigeria Institute for Food Science and Technology in collaboration with Coca Cola Nigeria at the 42nd edition of the Nigerian Institute of Food Science and Technology (NIFST) conference held in Abeokuta, Ogun state

AAAN seeks transformation for female advertisers

he Association of Advertising Agencies of Nigeria (AAAN) and the Committee on Women in Advertising is set to hold its maiden edition of Women in Advertising Annual meeting. One of the objectives of the event is to transform female practitioners across Marketing Communications (Marcoms) industry into outstanding lead-

ers, who can contribute broadly to their firm’s success. The event will also create a platform to interact and provide professional guidance to female practitioners. The President of the Association, Ikechi Odigbo noted that the Association values the distinct nature of women and their unique ability to influence, strengthen and elevate the

advertising practice. He stated that the Association will continue to facilitate and promote equality and opportunity for women in the industry. According to the Chairman of the Committee on Women in Advertising, Tope Jemerigbe, the event will further encourage networking and growth with the involvement of women across level.

L-R: Jacqueline Jumah, managing director, INTERMARC; Fola Olufemi, software analyst, Aveda Technologies Limited; Dapo Fatokun, chairman, Nigeria Electronic Fraud Forum (NEFF); Salisu Kaka, assistant director, National Information Technology Development Agency ‎(NITDA); David Isiavwe, chief audit executive, Union Bank, and Mzukisi Rusi, head of solutions, Middle East and Africa, Entersekt, at the NEFF Seminar in Lagos...

BUSINESS DAY

Wednesday 24 October 2018

CityFile Edo: 8,071 benefit from CSDP/SEEFOR project IDRIS UMAR MOMOH, Benin

That poverty in Nigeria is not just real, it’s true. Here mother amidst dangers ahead, fends for family for daily bread. A common scene at Makoko Area of Lagos. Pic by Olawale Amoo

Economy loses N9.8bn to 196 truck accidents – FRSC ... as NUPENG expels 61 truck drivers

JOSHUA BASSEY

he Federal Road Safety Corps (FRSC) says about N9.8 billion has so far been lost to 196 road crashes involving articulated vehicles across the country this year. Boboye Oyeyemi, the Corps Marshal gave the statistics at the 2018 National Safety Training Programme for Petroleum Tanker Drivers (PTD) in Lagos on Monday. The training was organised by Lagos state branch of National Union of Petroleum and National Gas Workers (NUPENG). Boboye said that the loss involved the cost of other vehicles, lives and damage to the environment and roads. He, however, said that there was a slightreductioninthenumberofcrashesrecorded during the period, compared to previous years. According to Boboye, the agency recorded 282 accidents involving tanker drivers in 2016 and 240 in 2017. “We have an agreement with NUPENG PTD to organise periodic training programme for their drivers. This is very critical even though we have seen reduction in the traffic crashes involving tanker drivers. “We have recorded 196 this year and the economic value is about N9.8 billion loss, involving cost of other vehicles, lives, damage to the environment and to the roads. “NUPENG PTD is putting its best to set up capacity workshop for the tanker drivers. Once

they finished in Lagos, the other programme will take place in Kaduna and Warri and this is very impressive. “We are going to give our maximum support to NUPENG towards ensuring that the 4, 000 tanker drivers are fully trained,” he said. The FRSC boss also urged the union to carry out more visual tests on drivers, saying that it had been discovered that 30 per cent of commercial vehicle drivers had visual acuity challenges. “We encourage them on the visual acuity test. During the study carried out about three months ago,wediscoveredthat30percentofthecommercial drivers experience vision acuity challenges. “Wearing a pair of glasses is not a crime and will not result to loss of jobs but will improve their vision activity measure.’’ He observed that many of the people were hypertensive and with high sugar levels. He said that it was important for NUPENG PTD to ensure periodic medical examination for its drivers to ensure road safety culture in the country. Salmon Oniditi, president of PTD said that 61 members had been expelled due to misconducts, including fraudulent activities. According to him, those sanctioned will not be employed any longer in the industry because they pose danger to the progress of the union. “The development is imperative as the union will not want to be tagged as one involved in economic sabotage. “The offences vary from stealing of petro-

leum products, pipeline vandalism, product adulteration, petroleum products’ theft and illegal bunkering,’’ Oniditi said. He added that others vices included hijack of truck, manhole manipulation, constant shortage, sales of petroleum product and replacing with bad ones. He said the training which started three years ago had passed the test of time and equally led to reduction in accidents. Oniditi said the union had been constantly educating the members on how their contemporaries in developed country operated. He said that the union would also ensure the use of modern devices in motoring the members’ activities while on road, saying though, not a new method in most developed countries. He commended FRSC for its involvement and support in the training since inception of the programme. Oniditi urged members to always be professional in their activities and ensure that their quota contributed positively to national development. He also condemned a common habit among drivers whereby they remove speedometers from the dashboard of their truck in order not to know their speed. Besides, the PTD boss noted that the union would continue collaborating with the FRSC to ensure that petroleum tanker drivers did not become nuisance to the society.

Police to unravel killers of 2 priests in Abia

he police in Abia say they have commenced investigation into the suspected murder of two priests and a woman at Umuobia Housing Estate, Umuahia. GeoffreyOgbonna,thespokespersonofthepolice in Abia Stae assured on Monday that the perpetrators of the dastardly act would be unravelled. The deceased include Kelechi Iwuanyanwu, a pastor and founder of Winds of Glory, a new generation church located in Ohokobe-Ndume in Umuahia North local government area. Ogbonna was reportedly murdered in his

residence at the estate in the early hours of Sunday, October 14, along with his alleged mistress and woman leader of the church, Ruth Andrews and Kalu Ikeagwu, the assistant pastor. Their remains were recovered on Saturday by the police, following a report by Ikeagwu’s relatives and distraught members of the church. According to him, the remains of the deceased were found decomposing in Iwuanyanwu’s bungalow, situated in an isolated part of the estate. “We appeal to anybody with useful information that will help us to unravel the killers to

come to the command with such information,” Ogbonna said. He said that a team of policemen, led by Patrick Edung, a Deputy Commissioner Police (DCP) in charge of the state criminal investigation department, recovered the corpses while preliminary findings showed that the deceased were all macheted to death by their assailants. Ogbonna said that members of the church became apprehensive over the whereabouts of Iwuanyanwu, Ruth and Ikeagwu after they failed to attend services on October 14 and Wednesday.

bout 8,071 persons have benefited from the Community Social Development Programme/Edo State Employment and Expenditure for Results (SEEFOR) project, the government has said. The CSDP/ SEEFOR sub-projects the people benefitted from include electricity, boreholes, town halls, market shops, amongst others. Maryam Abubakar, the state commissioner for budget and economic planning who disclosed this to newsmen, said projects covered between January and September, 2018. Abubakar also disclosed that 1,399 people benefited from FADAMA/SEEFOR sub- projects in the period under review, 11 local development projects developed and implemented through FADAMA lll sub-projects, while seven community development projects were implemented through community-social development programme sub- projects. According to her, the CSDP increased the number of people with access to social services in rural areas and icrease the income of rural farmers. She added that a total of 9,000 youths were engaged in small public works under youth employment programme of the state government. The small public work, according to her, also awarded 59 roads contracts, trained 9,000 beneficiaries on money management and entrepreneurship skill, trained contractors on rudiments of small public works techniques and engagement of 59 graduates as small public works supervisors.

Adamawa: Flood victims seek help

ersons affected by recent flood disasters in Adamawa have appealed to the Federal Government to come to their aid to ease their hardship. Thousands of people in 18 of the 21 local government local government areas of Adamawa State between July and September this year lost their homes and means of livelihood to flooding. Majority of the affected communities were those located close to River Benue. Some of the victims are currently living as IDPs in temporary camps provided by state government across the state. In Fufore, Yola South and Girei local government areas, the victims said they lost almost all their belongings to the flood. John Garba, a rice farmer from Njoboliyo village in Fufore said he lost all his property in early August this year due to heavy downpour that caused the flood. “Following the heavy flood in August this year, I lost my house and three of my rice farmlands. “Since then, I and my family have been squatting in my neighbours’ house and had not received any assistance from anybody,” he lamented. Usman Barde, a large scale rice and maize farmer from Girei area, equally said that the flood had submerged his maize farms. “Last year, I harvested over five hundred bags of maize, but this year, due to the flood disaster, it will be difficult for me to harvest even one hundred bags ” Barde said. Also lamenting, Umar Hassan, a resident of Yolde-Pate village in Yola South said that the flood completely destroyed his house. Hassan said he had been forced to take refuge in one of the temporary camp set up by State Emergency Management Agency in Yolde-Pate and had not received any assistance from government. Reacting, Muhammad Sulaiman, executive secretary of Adamawa State Emergency Management Agency (ADSEMA) said a total of 357, 343 individuals, 7,893 Houses and 95,474 farmlands were affected. NAN

BUSINESS DAY

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Wednesday 24 October 2018

In Association with

Six banks qualify as domestic systemic important lenders A

Stanbic IBTC establishes entrepreneurship centre

Stories by HOPE MOSES-ASHIKE

here may not have been consistency in the number of banks qualified as Domestic Systemically Important Banks (D-SIBs) based on the CBN’s indicator-based approach, although the Apex bank holds the prerogative on which of the banks qualify using its supervisory judgment. The market data analysis by Afrinvest Securities Limited using the first half of 2018 financial numbers and applying the indicatorbased approach, suggests that only six banks with overall score above 5.0 percent recommended in the guideline will qualify as D-SIBs. These banks include FBN Holdings plc, United Bank for Africa (UBA) plc, Ecobank Transnational Incorporation (ETI), Access Bank plc, Zenith and Guaranty Trust Bank (GTB).

DIAMOND appears to be disqualiﬁed from the list based on quantitative measure; yet, the CBN holds the prerogative, based on the qualitative measure (supervisory judgement), to enlist or delist any D-SIB. Using the indicatorbased measurement approach of the Basel Committee on Banking Supervision (BCBS), seven banks were

designated D-SIBs at the end of June 2017. The Financial Stability Report (FSR) of the Central Bank of Nigeria (CBN) for June 2017, revealed that at the end of June 2017, the DSIBs accounted for N20.07 trillion (65.02%) of the industry total asset of N30.78 trillion. They also accounted for N11.63 trillion (64.53%) of total industry deposit of

N18.03 trillion and N10.19 trillion (64.04%) of the aggregate industry loans of N15.91 trillion. The D-SIBs were largely compliant with enhanced prudential requirements on capital adequacy and liquidity ratios during the period under review. The banks were subjected to enhanced supervision in view of the significant impact the failure of any one

promoting SME finance. As an implementing partner for the GPFI, the International Finance Corporation (IFC) was tasked with managing the initiative. Accepting DBN into the Forum, Chief Executive Officer, SME Finance Forum, Matthew Gamser, said, “We are proud to have the Development Bank of Nigeria join our network of 140 members who work to expand access to finance for small and medium businesses. It has been discovered that 200 million businesses worldwide need financing to invest, grow and

create new jobs.” “Founded in 2014, DBN focuses on alleviating financing constraints faced by MSMEs and small corporations in Nigeria through the provision of financing and partial credit guarantees to eligible financial intermediaries, on a market-conforming and fully financially sustainable basis. The bank supports inclusive growth and provides wholesale funding to fill identified enterprise financing gaps in the MSME sector. In 2017, the bank disbursed a total of N5bn to

microfinance institutions for on-lending to over 20,000 MSMEs across the country”, Gamser noted. Expressing delight on the announcement of DBN’s reception into the forum, , Tony Okpanachi, managing Director/CEO, Development Bank of Nigeria said, “We are excited to expand our knowledge of SME financing and believe participation in the SME Finance Forum member working groups will afford us with a plethora of networking and developmental opportunities.” DBN was conceived by

of them may portend for the stability of the financial system. Preventing further deterioration of the banks’ capita buffers was what preoccupied the mind of the CBN at the beginning of 2018. This necessitated an update of the guidelines to deposit money banks and the Merchant Banks (discount houses )on dividend payment. On the basis of a bank’s NPLs ratio and capital adequacy ratio (CAR) the CBN guided on positions that qualify banks and discount houses to pay dividend to their shareholders. The CBN on January 31, 2018, released an update on earlier issued circular (8/10/14) on internal capital generation and dividend pay-out ratio of Nigerian banks. The major focus of the circular is on the capital reserves of the banks as well as the proportion of non-performing loans, in a bid to forestall any threats to customer deposits in the system.

Development Bank joins SME finance forum

he Development Bank of Nigeria (DBN) has become a member of the SME finance forum, a global membership network that brings together financial institutions, technology companies, and development finance institutions to share knowledge, spur innovation, and promote the growth of SMEs. Established by the G20 Global Partnership for Financial Inclusion (GPFI) in 2012, the SME Finance Forum was set up as a knowledge center for data, research and best practice in

the Federal Government of Nigeria (FGN) in collaboration with global development partners to address the major financing challenges facing Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria. The bank is a wholesale Development Finance Institution (DFI) providing sustainable financing through eligible Participating Financial Institutions (PFIs), who in turn, lend to end-borrowers - Micro, Small and Medium Enterprises (MSMEs) for the development of that segment.

s part of efforts to encourage entrepreneurship and help build a vibrant and productive small and medium enterprises sector, Stanbic IBTC recently partnered with the Kaduna State government to establish the Kaduna-Stanbic IBTC Entrepreneurship Centre (KADSEC). The centre, which is in response to the needs and requirements of local entrepreneurs in the state, is expected to serve as an incubator that will nurture budding entrepreneurs and businesses to sustainable successes. At the launch of the centre in Kaduna, recently, Stanbic IBTC stated that the centre will provide services such as capacity building programmes for interested business owners/entrepreneurs, mentorship, on-site business management counselling, financial advisory, market development assistance, networking opportunities, provision of patronage linkages, export assistance, and easy access to loans from Stanbic IBTC Bank, among other services. According to the bank, young entrepreneurs and businesses often struggle because they lack the necessary support, in terms of infrastructure, capacity, advisory and access to finance, and also have the wrong notion on structuring of the business. This, he said, is expected to be addressed by the centre. “We are delighted for the opportunity to partner with the Kaduna State government to help nurture, through KADSEC, the innovative start-ups and early-stage enterprises in the state that have high growth potential,” the bank said in a statement. “The establishment of the centre is in line with our desire to help build a highly successful SME sector in Nigeria, one that can act as the growth engine for the economy. The Centre intends to engage and energise entrepreneurs by providing the right kind of support that is often lacking, in terms of business management, capacity building, advisory services and access to reasonable financing, in a way to increase the number and scale of enterprises supporting economic growth in the state,” it added.

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INEC asks CSOs, Nigerians to insist on passage of Electoral Offences Commission Bill JAMES KWEN, Abuja

he Independent National Electoral Commission, INEC, has called on Civil Society Organisations (CSOs) and Nigerians to insist on the passage of the Electoral Offences Commission Bill before the 2019 general elections. According to INEC, the Bill when passed and signed into Law will break the circle of impunity and restore integrity to the electoral process. The Commission had in January 2017 submitted the Electoral Offences Commission Bill which specified 19 offences including those bordering on voter registration, nomination of candidates, ballot papers and ballot boxes, impersonation and falsification of results. The Bill states that electoral offences may be committed by INEC or Security Officials, Political Parties and their officials, Candidates, Observers, Journalists/Media Houses or the general public, and can attract fines ranging from N5000 to N1 million and imprisonment for a period between 12 months and two years. Festus Okoye, INEC National Commissioner and Chairman Information and Voter Education Committee made the call for the passage of the Bill in a presen-

Yakubu, INEC chair

tation titled; “Securing a New Standard of Electoral Integrity for Nigeria” at Workshop organised by the Centre for Democracy and Development in Abuja. Okoye disclosed that INEC is working assiduously with the National Assembly for the purpose of introducing timeliness in the resolution of the pre-election disputes as the speedy and just dispensation of electoral justice

Oshiomhole will lead APC to victory in 2019- Ebegbulem JAMES KWEN, Abuja

imon Egbegbulem, Chief Press Secretary to the National Chairman of the All Progressives Congress, APC, Adams Oshiomhole has stated that contrary to insinuations from some quarters, his principal will lead the ruling party to victory in the 2019 general elections. Egbegbulem said APC under the leadership of Oshiomhole is in safe hands as the party marches sure-footedly to victory in the 2019 general election as this is the overarching mission of the National Working Committee, NWC, of the party under his leadership. He argued that, Oshiomhole did not become national chairman of the governing party to bring it down a notch from the pedestal of its 2015 electoral victory let alone to preside over its liquidation. The APC National Chairman Spokesman gave these indications Sunday while reacting to the suggestion in some quarters, especially by one of the presidential

aspirants on the platform of the party, Mumakai Unagha, that the APC cannot win with Oshiomhole. Egbegbulem noted that Unagha’s position as published on page 42 of Saturday Vanguard of October 20, 2018, “is unfair, denigrating and baleful of Comrade Oshiomhole’s persona and commitment to a rejuvenated winning machine that the APC typifies”. According to him, “the totality of Unagha’s claims, without necessarily addressing them one after the other, tallies with cooked-up narratives being sponsored by some influential stakeholders in their respective states that Comrade Oshiomhole is responsible for all the problems in the APC at the moment”. Defending Oshiomhole commitment to the viability of APC, the Chief Press Secretary said, “rather, his single-minded goal, from the outset of his declaration of interest in the position, was to deploy his capacity in helping to strengthen and reposition the party as a truly supreme and disciplined political entity.

breeds confidence in the electoral process and ensures integrity. He said INEC is piloting e- collation and transmission of results with the aim to improve the integrity of elections and eliminate as much as possible the human elements in elections. According to the INEC National Commissioner, “the introduction of the Smart Card Readers has domiciled voters to one polling

unit and eliminated the use of fake voter’s card in an election. “ Hopefully, the passage of the amendments to the Electoral Act will give legal backing to the use of the Smart Card Readers in the electoral process. INEC is therefore gradually deploying technology in the electoral process in Nigeria. “The Smart Card Readers have been enhanced and has the capacity to recapture those whose biometric cannot be read by the Smart Card Readers. “The Commission has devised the tracking of all its vehicles carrying sensitive materials from the Central Bank in the States to the various Local Governments. It is now difficult to to divert personnel and materials to the ‘ghost’ locations “, he said. Okoye who observed that securing the electoral environment has been a major challenge in the electoral process, said, “presently, there exists an inter -agency consultative committee on election security set up to assist in planning and deployment”. He noted that, “yet there are allegations of partisanship leveled against security agencies involved in electoral operations. INEC in the exercise of its constitutional and statutory powers is now vested with the responsibility of requesting for the deployment of relevant security personnel necessary for elections and assigning

them in the manner determined by the Commission in consultation with the relevant security agencies. “The overriding consideration is to secure the vote. INEC is determined to ensure that people vote in an atmosphere devoid of intimidation and other unwholesome practices. This is in accordance with section 29(3) of the Electoral Act, 2010 (as amended). We must design a new security protocol for all security agencies engaged in election security”. O n internal democrac y in political parties, he said, “INEC is resolute on its insistence that internal democracy must prevail in the management and running of the various political parties. INEC is resolute in ensuring that the votes of the people must count even in party primar y elections. “ We are clear on the fact that before a political party can activate section 31 of the Electoral Act, 2010 (as amended) relating to the submission of candidates, it must satisfy the mandatory provisions of section 87 that obligates that party primaries must be conducted either through direct or indirect elections. “ A ‘now show primaries’ or an ‘inconclusive primaries’ cannot generate or produce valid candidates that can be submitted to INEC in accordance with 31 of the Electoral Act as amended”.

Group says Aisha Buhari has redefined First Lady office …Rallies support for her

President Muhammadu Buhari support group, Re–elect Buhari Movement (RBM), has commended the changing face of the office of the First Lady. The RBM in a statement signed by its Convener, Emmanuel Umohinyang noted that though the office is unconstitutional, the wife of the President, Aisha Buhari has carved a positive image for the office in the last three-and-half years. According to him, this has positively impacted on nation’s image unlike the experience of the recent past. Specifically, Umohinyang noted that under the present administration, the office has complemented the office of the President instead of competing with it. “I think so far so good. In the past, Nigerians were not pleased with the operations of that office; I think it has been modified to the wife of the President under the present administration,” he said. According to him, “Be that as it may, I travelled to the village

recently and I saw the picture of the wife of the President on a ‘future assured banner’ and I was curious because I needed to know what the banner could be doing in my village. “I walked into the compound out of curiosity, only to be told that the woman who had displayed the banner got it from an event she attended in the South–South. Being a widow, she happened to be a beneficiary of Mrs. Aisha Buhari’s pet project. Imagine a widow who had lost hope now being empowered, being given money to start up a business to be able to fend for herself and children. “I was really touched by that woman’s explanation and how she came about the banner. It tells you that the ‘future assured programme’ has really gone far, traveled several kilometres away from Abuja where it was launched. The impact of a programme like this on the lives of people make it compelling to say if we had this type of robust programme, Nigerians would not have pushed for the scrapping of that office.”

The statement further read: “When you look at previous administrations, especially the recent past, you discover that, it was badly abused. The office was raised to a level that it was presumed that it was running at par the office of the President. What has happened under this administration is that the wife of the President, Mrs. Aisha Buhari has complemented her husband very well. “Recently, I read about the gigantic medical facility erected in Yola to provide health care to the poorest of the poor in the society. We now have a meaningful and purposeful First Lady office. “My appeal to the wife of the president is that she should continue her pet project even after the President has finished his term because of the impact on the widows, orphans and the poor. If you go to the website of that project, you will marvel at the massive changes that programme has brought to our people. When you have such an office, we should also support the wife of the President to do more.”

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Lai Mohammed is the high priest of APC cult of fake news –ACO INNOCENT ODOH, Abuja

he Atiku Campaign Organisation (ACO) has castigated Minister of Information and Culture, Lai Mohammed, for carrying what it regarded as fake news with international dimension against former Vice President and the Presidential candidate of the People’s Democratic Party (PDP), Atiku Abubakar. A statement issued at the weekend by ACO made available to BusinessDay described the minister as “ the high priest of the All Progressives Congress (APC) cult of fake news,” following a news story allegedly sponsored by the minister to tarnish the image of Atiku. “The attention of the Atiku Presidential Campaign Organisation has been drawn to a sponsored news story on Vanguard newspapers of Saturday October 20, 2018, with the headline ‘2019: International media query emergence of Atiku over suspicious source of wealth’. “In the said report, not one international media was quoted. Rather, it was the notoriously dishonest All Progressives Congress minister of information, Lai Mohammed, who was quoted alleging that that was what the international media told him. Quoting the said story, Vanguard reported as follows: “The minister said: “One curious issue that kept occurring was that anytime I spoke about how we have waged war against corruption, the

Lai Mohammed

journalists kept asking me a question. “They asked me: How can you claim to have succeeded in waging war against corruption, when one of the major contestants in the 2019 general elections is actually a man with stupendous wealth but cannot explain the source of his wealth?” The ACO in the statement expressed dismay at the minister’s statement saying “how anyone would take the word of a confirmed liar, as Lai Mohammed, for the Gospel truth is beyond us.” The ACO mocked the minister adding that to show how unreliable Lai Mohammed is, at the lecture in the Royal Institute for

International Affairs (Chatham House) with the topic, “Nigeria’s National Unity: Towards Participation and Shared Values”, which was his main reason for going to London, Lai Mohammed said: “we do not need to do anything extra because we have delivered on all our promises and Nigerians are quite happy and satisfied with the government”. The ACO wondered how the minister of information of a government that has turned Nigeria into the world headquarters for extreme poverty can make such claim adding that it’s beyond imagination. “Is Mr. Mohammed claiming

that his party promised and delivered poverty and Nigerians are satisfied with this world record poverty? If Lai Mohammed can lie openly at Chatham House in front of the international press and diplomatic corps, is it a big thing for him to lie about his accounts with the international media? “The true position of things is that ever since the emergence of His Excellency, Atiku Abubakar, as the candidate of the People’s Democratic Party after the elective congress of the party on October 6-7, the international media has been agog with praise for Mr. Abubakar and hope for a new dawn in Nigeria. “Reuters praised Atiku as having “long enjoyed support from the business elite in Nigeria’s commercial capital Lagos for his conservative-capitalist ideals”. They went on to further give him kudos for his record in office by saying “as vice president in a PDP administration from 1999-2007, (he) implemented a programme of liberalisation in areas including the telecoms sector,” the statement said. The ACO said further that the number one policy magazine in the world, The Economist, described Atiku Abubakar, “as a business-friendly candidate who will get Nigeria’s economy going.” “Not one single international paper, magazine, TV station or website has had anything negative to say about the Waziri Adamawa’s emergence. That lie only exists in the fallacious imagination of Lai Mohammed,” the statement added.

Labour Party NWC dismisses suspension by NEC, accuses INEC of interference JAMES KWEN, Abuja

he National Working Committee, NWC, of the Labour Party has dismissed the purported suspension of eight of its Members by the National Executive Council, NEC. Labour Party NWC debunked that, contrary to media reports, there was no NEC meeting where such action was taken but rather, the former National Chairman of the Party, A.A Salam gathered non - party members in his home town Minna and announced that there was a NEC meeting which suspended eight NWC Members. Ebere Ifendu, Labour Party National Publicity Secretary who stated this in Abuja while briefing journalists explained that, the composition of the party’s NEC according to Article 13(2) A; include the Presidents and General Secretaries of the Nigerian Labour Congress (NLC) and Trade Union Congress (TUC). Ifendu however said, none of the constitutional members of NEC attended the purported meeting by Salam,indicating that it had nothing to do with Labour Party whatsoever. “Of great concern to us is the fact that he claimed to have suspended 8 members of the National Working Committee. The purported suspension of the 8 NWC members is only a fiction of A.A Salam’s wildest imagination. “No responsible person can gather non- party members and claim to have sacked NWC Members and at the same time prolong his own tenure, knowing fully well that it has ended on the 10th October, 2018”, she stated.

Mixed reactions as Supreme Court shoots down Rivers APC guber strides But, chieftains say hope still plenty ahead IGNATIUS CHUKWU

he Supreme Court made a huge pronouncement that seems to put a cog in the strides of the Rivers All Progressives Congress (APC) to capture power in the state. Now, while there has been jubilation in two major quarters in the state, there has been coldness in one quarter. The social media space has been awash with jubilation by supporters of the Magnus Abe faction that was rejected by the national working committee of the APC as well as supporters of the ruling Peoples Democratic Party (PDP) who think the development may knock off Gov Nyesom Wike’s biggest threat, Tonye Cole. The main APC camp led by transportation minister, Chibuike Rotimi Amaechi, is trying to reassure cold members that hope was not totally lost. The Supreme Court on Wednesday, October 22, 2018, set aside the decision of the Court of Appeal in Port Harcourt Division which permitted the conduct of congresses by the APC in Rivers State.

The order of the Appeal Court issued on June 21, 2018 against the ruling of a Rivers State High Court was voided by the apex court on the grounds that the appellate court acted in bad faith. Justice Centus Nweze, in a judgment in an appeal filed by one Abdulahi Umar and 22 other aggrieved members of the APC, held that the Court of Appeal ought not to have vacated the injunctive order issued against the APC by the Rivers State High Court on the conduct of the congresses. Justice A. C. Nwosu of the Rivers State High Court had in an exparte motion filed by Umar, restrained the APC from conducting the congresses pending the determination of the suit instituted by Umar, complaining against their exclusion from the party’s congresses. But while the injunctive order of the High Court was subsisting, the APC went ahead and conducted the ward, local government and state congresses on May 19, 20 and 21. After the conduct of the congresses, the court of Appeal in a ruling on an application by APC seeking stay of execution of the High Court injunctive order and stay of pro-

ceedings of the main suit, vacated the injunctive order and refused to stay hearing of the substantive matter prompting Umar to complain to the Supreme Court. The Supreme Court in the judgment lambasted the Appeal Court for judicially indulging APC and vacating the injunctive order in the party’s favour when there is abundant evidence that the APC was in contempt of court. The apex court further held that the Court of Appeal ought not to have granted its discretion in favour of APC because the party was in grave violation of the order of the High Court. Justice Nweze said that the Appeal Court has a duty to protect a lawful subsisting order and ought not to have granted favourable judicial discretion for a party that willingly disobeyed a valid court order. “It is unfortunate and wrongful for the Court of Appeal to have entertained a party in contempt of a valid court order to the extent of granting judicial favour by way of staying of execution of an injunctive order when the party at the centre of the dispute was in gross contempt

of court. “It is a serious matter for anyone to flout a court order and in the instant case, it is clear that the respondent (APC) was in grave disobedience to 2 lawful court orders,” the court held. According to the court, it is sacrilegious, ill-fated and suicide mission for the Court of Appeal to have departed from various decision of the Supreme Court that any party in contempt of court ought not to be granted judicial discretion and in this matter Appeal Court is bound to follow Supreme Court final decision. He said, what is more, the refusal of the Court of Appeal to be bound by the final decision of the Supreme Court is a gross insubordination. The apex court therefore nullified and set aside the decision of the Appeal Court delivered on June 21, 2018. The APC chieftain, Ezechukwu Eze, reacting, said the ruling of the Supreme Court was not the final judgment on the matter. “It’s only a ruling on the interlocutory injunction that was set aside by the Court of Appeal. “The judgment on this matter is

still at the high court, so before the Court of Appeal there’s nothing. Our Party will simply get the judgment on this matter and proceed to the Appeal. Sen Magnus Abe is not even in contention of getting the ticket because he did not/ refused to participate in the Indirect Primaries as instructed by the INEC. So please disregard all what they are saying. What their faction is simply trying to do is to ensure we have no candidate to emerge from the APC, there is NO question of his name being substituted. The APC will head to court and retrieve the judgment from High Court and commence an appeal process.” The appeal had suffered some administrative setbacks as the Rivers APC had earlier cried out. The APC had raised alarm over alleged attempt by the judiciary to frustrate the appeal of the judgment handed down by the judge on October 10, 2018 in favour of Abe supporters. “Despite having entered an appeal and stay of execution of the judgment, the judge has frustrated every effort by the APC to obtain a certified true copy of the judgment to enable its legal team perfect the appeal process.”

Wednesday 24 October 2018

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Politics & Policy

APC threatened with implosion as more defections loom INNOCENT ODOH, Abuja

head of the 2019 general elections, the ruling All Progressives Congress (APC) probably faces another wave of defections, following the fallout from the largely acrimonious and confused primaries conducted across the federation by the party. The confusion started when the party’s headquarters and other stakeholders could not agree on one way to conduct the elections. While in some cases the party adopted the direct primaries in others it opted for the indirect, yet it inexplicably demonstrated lack of capacity to conduct both not even the consensus option worked for the party. The results of the primaries are causing serious ripples of indignation in the party and the aggrieved parties have already started renouncing the membership of the party. On Saturday, October 20, one of the prominent APC senators representing Kaduna Central, Shehu Sani, announced his resignation from the party following the failure of the party to submit his name to the Independent National Electoral Commission (INEC) as the candidate to represent the party in the 2019 election. While Shehu Sani was already basking in the euphoria of automatic ticket assured him by the party, the APC national headquarters sent an election panel that conducted primaries and elected an aide to Governor Nasir El-Rufai, Uba Sani as the winner in an election Shehu Sani did not participate in. Tendering his resignation an obviously disappointed Sani said “l had joined the APC and remained with it against all odds in the belief that it will constitute a veritable platform for the realization of those democratic ideals which I hold very dear, that honor and integrity will be the ultimate ethos of the party and, most importantly, that internal party democracy will always be the norm. However, only posterity can affirm the extent to which the APC has committed to and reflected these values. “As I exit the APC at this point in time, I wish to formally thank the party for availing me the platform upon which I am currently serving this country in the honoured capacity of Senator of the Federal Republic”. The Senator however, on Sunday, October 21 in his facebook page sounded optimistic that he will still contest the election under a platform he has not disclosed. His words: “This is to thank all my supporters and friends for the show of solidarity and assurances of support over my decision to exit the APC. “I assure you that in the next two days you will be informed of my new party. And be rest assured I will contest in the upcoming elections Insha Allah.” On July 24, 14 Senators and 36 members of the House of Representatives, dumbed the APC in the first major gale of defection to hit the

Oshiomhole

party. Then in early August, President of the Senate, Bukola Saraki, Governor of Kwara state, Abdulfatah Ahmed; Governor of Benue state, Samuel Ortom and Governor Waziri Tambuwal of Sokoko state among others dumped the APC. Later in September, the Speaker of the House of Representatives, Yakubu Dogara also left the APC for the PDP. Although the APC set up a panel to reconcile aggrieved parties, the recent primaries across the country further shattered any chance at reconciliation and deepened the crisis. In the states and the Federal Capital Territory (FCT), the issues are as controversial as the results that were churned out. In the FCT, 14 aspirants, who contested the ticket for the AMAC/ Bwari primaries on the APC platform for the House of Representatives had their hopes dashed when barely 24 hours to October 6, the final date set for the House of Representatives primary election, the direct primary option was imposed on the APC FCT chapter by the national election panel during a midnight meeting after they had earlier agreed for the indirect primaries. Despite protests by the delegates, the election committee headed by Benjamin Imeogu, insisted that the direct primaries option was non-negotiable because the directive came from “above”. Not even the warning of discrepancies that will arise in the event of the direct primaries issued by the APC FCT Chairman, Abdulmalik Usman could sway the election panel. There were reports of the guidelines being set aside, that accreditation did not take place, that voters stood in line for hours under the sun in vain. And at the end of the day the primaries did not take place in at least 80 per cent of the 22 wards in AMAC/Bwari but result was allegedly written in favour Lamorde, the

Sani

son of Hajo Sani, the Senior Special Assistant (SSA) to the wife of the President, Aisha Buhari. Even INEC officials were said to be complicit in the whole mayhem, as the choice of Lamorde was allegedly decided by the Presidency. They situation was so bad that in Bwari for instance, 401,000 votes were recorded for an aspirant against 161,000 total registered voters, which embarrassed the committee such that they withheld the announcement. According to one of the contestants to the position of the House of Representatives for the AMAC/Bwari Federal Constituency, who does not want to appear on print, the election was a charade and “absolute rubbish.” The contestant predicted that “APC might lose FCT if they are not careful. It is unfortunate that there was no election and at the end of the day a name was picked and presented as the candidate. They said that it was from the presidency that the name came. They said the so called winner is the son of Hajo Sani, SSA to First Lady. He did not even move around the wards.” On whether there was any form of compensation to the aggrieved considering the enormous resources and energy the other contestants invested in the flawed primaries, the source said “as I am talking to you now, they have not called us for any compensation. Before they call us to demand for money but now they don’t call us at all because they don’t care. FCT is the centre of Nigeria and is very sad that they can’t get it right; people are also said to have started working against the party. I am sure some angry people will leave the party but I will not leave because I am a loyal party member.” A public affairs analyst and the National Chairman of the National Unity Party (NUP) Perry Opara while reacting to the APC primaries averred that another wave of defection will hit the

party in the coming days. He said “in APC, it has already started, people are angry, there were parallel congresses and people are complaining, even serving governors are complaining bitterly, senators are complaining, so the implosion will soon come, watch out and see, before we start the campaigns, there will be more and more defections from the APC.” The confusion in the primaries extended to Adamawa state, where two of the contestants for the governorship ticket against the incumbent governor, Muhammed Jubrilla, lamented they were cheated out of the race in favour of the governor by the panel sent by national headquarters. Former Chairman of the Economic and Financial Crimes Commission (EFCC) Nuhu Ribadu, and the brother to First Lady Aisha Buhari, are crying foul following the confusion as election allegedly did not hold. This development elicited anger of the First Lady, who took to the social media to blast the APC leadership of Adams Oshiomhole accusing them of shutting out those who have invested their hard earned money. Also, incumbent senator representing Adamawa North, Binta Garba, was declared the candidate of the party, although, some of the aspirants alleged that no primary election was held. The APC charade in Zamfara was even more disturbing as INEC has insisted that since the party could not conduct primaries in various positions within the stipulated deadline, the APC might as well forget elections in the state. However, the party insists it will submit list of candidates and field candidates in the election. INEC’s position was supported by one of the governorship aspirants, Kabiru Marafa, who said that the APC does not have candidates in the state for the 2019 general election adding that no primaries were held. APC Chairman Adams Oshiom-

hole however, insisted that the party has candidates for various positions arguing that voting is not the only method of selecting candidates. He said “be informed that in spirit of due compliance with the law, we affirm we shall indeed be presenting candidates for governorship, National Assembly and state house of assembly in Zamfara state of the general elections before the deadline of such names which has been fixed by your commission on October 18 and in line with section 87 (6) of the electoral act 2010 as amended. “If you raise further objection after you receive our lists of candidates we shall be glad to clarify them.” Although Governor Abdulaziz Yari, also claimed that all primaries have been concluded in the state, INEC last Monday in a statement maintained that the APC will not field candidates for the 2019 general elections in Zamfara. The issue has become subject to litigation as a Zamfara state High Court reportedly issued an interim order restraining the APC and INEC from disqualifying the party’s candidates from the state. So whether INEC has complied with this order is yet to be ascertained at the time of writing this report. The APC nationwide confusion extended to Imo state, where Governor Rochas Okorocha through armtwisting tactic secured the APC governorship ticket for his son-in-law Uche Nwosu amidst bitter squabbles by other aggrieved members who are threatening to tear the party apart. The same unsavoury scenario was witnessed in Rivers, Ogun, Niger and many other states of the federation. The ruling party may have shot itself in the foot with these seemingly distasteful primaries. If another wave of defection hits the party as predicted, the ruling party would have been a shadow of itself before the 2019 general elections.

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Weaker palm oil prices crimp Presco, Okomu H1 earnings JOSEPHINE OKOJIE AND BUNMI BARLEY

resco Plc and Okomu Oil Palm Plc, Nigeria two biggest palm oil producers and listed on the local bourse have turned in lower corporate earnings in the first half of 2018 as against 2017. The lower earnings recorded in both companies was due to weaker palm oil prices and consumer demand as well as surge in smuggling. “Palm oil prices have been weak this year owing to the heavy imports from neighbouring countries and also low consumer demand,” Fidelis Olise, head of communications, Okomu says in a telephone response to questions. “Our lower earning in half year of 2018 is as a result of the influx of palm oil imports into the country under the ECOWAS Trade Liberalisation Scheme (ETLS),” Olise says. Okomu reported a decline in profit after tax of N5.9 billion for the period ended 30th June, 2018 from N6.2 billion over the same period in 2017, representing a five percent decrease. Also, Okomu reported earnings per share of 623 kobo for the period ended as against earnings of 654 kobo reported for the comparative

period in 2017. Globally, the prices of crude palm oil has been weak and has falling by 14 percent since the start of 2018 and at its lowest levels since 2015, Moody’s Investors Service says. This is also evident in the data from the Malaysian Palm Oil Council (MPOC) which shows that Nigeria’s export from Malaysia has declined from 156, 291 metric tons (MT) in the first eight months in 2017 to 134, 468MT over the same period in 2018.

This indicates a 14 percent decrease on a year on year basis and a 21,823MT decline. The MPOC attributes the decline in sales to high stock of crude palm oil available at local palm oil refineries. “Sales are down due to the lower volumes but more significantly due to lower unit sales prices. The average price attained has ranged fromN400,000 to N420,000 per ton,” Kenneth Crockett, chief financial officer, Presco Plc said in a statement.

FG launches NGAP on agric to boost productivity

Africa’s nutrition drive attracts $82m worth of investment opportunity JOSEPHINE OKOJIE

he quest to tackle Africa’s malnutrition challenges and ensure that households across the continent have access to affordable nutritious food has attracted $82 million worth of investment opportunity. The Global Alliance for Improved Nutrition (GAIN), a Swiss Foundation, and Royal DSM --a purpose-led global science-based company in nutrition, health and sustainable living –are co-hosting this drive to generate greater investments to improve nutrition in Africa. The investment opportunity which is currently being explored by over 60 fast-growing small and medium (SMEs) enterprises across the continent, often faced by the challenges of accessing affordable finance, would help in addressing the continents malnutrition problems. “Malnutrition is a massive problem in Africa,” says Lawrence Haddad, executive director, GAIN, who was awarded the World Food Prize says at the just concluded first Nutrition Africa Investor Forum in Nairobi, Kenya. “Businesses have to be part of the solution for malnutrition in Africa. The big problem most

businesses face, especially the small and medium-sized is that they lack access to finance,” Haddad says. “This is the first real effort within Africa to make it easier for businesses to provide nutritious food by making it more readily available, affordable and accessible,” he adds. W h i l e i t i s e a s y f o r l a rg e companies to attract investments, it is the missing middle for the small and medium growing businesses – that find it difficult to attract investment, experts. To address this, the first Nutrition Africa Investor Forum was held to meet this challenge by hosting a platform for over 60 companies from across Africa to connect with investors. Opening the forum, Jakaya Kiwkete, Former President of

“Our expectation is that there will be competitive pressure on unit prices for the rest of the year as importation of CPO has become attractive to some buyer due to availability of dollars at reasonable rates in the parallel market,” Crockett said. Presco’s half year financial statement shows that the company’s revenue declined from N12.8 billion in H1 2017 to N11.7 billion in the same period in 2018, indicating a 9

percent decrease. Similarly, profit after tax declined by 28 percent from N5.6 billion in H1 2017 to N3.9 billion in 2018. Earnings per share also declined from N6 in half year 2017 to N4 in the same period in 2018. Even the smallholder farmers are not spared from the weaker palm oil prices. “My palm oil trees fruited well because the weather conditions have been favourable but the issue has been the market. There is a lot of supply of palm oil in the market and prices have refused to rise since then,” Gabriel Ogar, a palm oil farmer at Okondi Local Government Area, Cross River state told BusinessDay. “I have about five hectares of palm oil trees waiting to be harvested but because of the unattractive price currently, I do not intend to harvest it. I am looking for a company that would buy from me,” Ogar said. According to experts, oil palm has the capacity to produce more oil than any other oilseed crop. About 90 percent ofpalm oil is used in the production of foods, while the remaining 10 percent is used by the non-foods industry. Foods like noodles, vegetable oil, biscuits, chips, margarines, shortenings, cereals, baked stuff, washing detergents and even cosmetics are made from palm oil.

JOSEPHINE OKOJIE Tanzania and a leading member o f t h e S c a l i n g Up Nu t r i t i o n (SUN) Movement working to end malnutrition across the world, encouraged greater public, private and third sector collaboration to address this pressing challenge for Africa, commenting. “The nutrition agenda is a key driver of development. Dealing effectively with malnutrition and its attendant problems is a cardinal development imperative,” Kiwkete says. Highlighting the importance of unlocking investments across the nutrition value chain, Fokko Wientjes, vice president, Nutrition in Emerging Markets says “With 30-40 percent stunted children in Africa there is an urgent need to make nutritious foods widely available, affordable but most importantly aspirational in the eyes of the consumer.” As part of this work, the GAIN also partnered with the UN World Food Programme to hold the first SUN Business Network Pitch Competition on the continent. The finals, held at the forum, saw 21 companies showcasing their work to tackle nutrition following national competitions in Nigeria, Tanzania, Mozambique, Malawi, Ethiopia, Kenya and Zambia involving 450 businesses.

he Federal Government has launched a National Gender Action Plan (NGAP) on agriculture as part of it efforts to support and empower women in the sector boost their productivity, a statement made available to BusinessDay states. Audu Ogbeh, minister of Agriculture and Rural Development, made this known at the launching of the document put together by the cuntry’s agricultural ministry and Synergos. According to him, the objectives of NGAP is to build the capacities of women farmers to transit from subsistence farming to medium and large scale farming while noting that women are good managers, and their commitment to the well-being of the family and the society cannot be over emphasized. Ogbeh started further that women remain the anchor of Nigeria’s agriculture, as they contribute immeasurably to the development of the sector as evidenced in various statistics has shown that women accounts for 70 percent of smallholder farmers that feeds the nation. The minister however acknowledged some challenges facing women in agricultural sector to include poor access to finance and farm input such as fertilizers, improved seeds, farm machineries, agro-chemicals, access to land, market access and in some cases insecurity amongst others.

Aisha Muhammadu Buhari , wife of Mr President, who was represented by Hajo Sani, Special Assistant to the first lady disclosed that educating a girl child is paramount for sustainable development of the society, and that when you educate a girl, you have empowered the child to be able to stand on her own. She said that launching of the NGAP will go a long way to uplift women from subsistence agriculture to commercial agriculture In his keynote address, Abudulkadir Muazu, permanent secretary of the Ministry of Agric who was represented by Watergire Brigh, director in the Ministry, disclosed that Nigeria agriculture and food industry are still unable to meet the demand of population of over 170 million both in quantitative and qualitative terms. He assured that the country is working to reduce its food support bill of over $11 million which is almost N1.2trillion yearly, so that local producers can take advantage of the opportunities in order to create wealth and generate jobs. Karima Babaginda, director of extension service in the Federal Ministry of Agriculture stated that the NGAP on agriculture is a framework for positive action which aims at ensuring that current sector policies actually yield tangible results each year. Babaginda added that it also aims to outlining rural concrete programmes and actions required for maximizing the potentials of many farmers including women practitioners in agriculture.

Wednesday 24 October 2018

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BUSINESS DAY

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Lagos to introduce use of plastic crates for fruits, vegetables in 2019

…to reduce post-harvest loss ANGEL JAMES

he Lagos state government is set to introduce the use of plastic crates for transit of fruits and vegetables in the state to help reduce post-harvest losses in the country. Governor Akinwumi Ambode of Lagos state made the disclosure at the maiden e dition of the Lagos Farm Fair organised by the British American Tobacco Nigeria Foundation (BATNF) held in Lagos recently with the theme ‘Our Actions are Our Future: A Zero Hunger World by 2030 is Possible.’ Represented by Tunji Bello, Secretary to the State Government, the governor emphasised that the state through the Ministry of Agriculture has developed initiatives aimed at addressing the need of diversifying the economy through the sector. “One of the measures we are putting in place is the encouragement of the use of plastics crates in place of raffia baskets for the carriage of perishable farm produce and this is expected to commence state-wide next year,” Ambode said. Ambode stated that the state is making efforts to ensure food security for the over 20 million people in the state adding that effects of climate change was threatening

increase in agricultural output. “ To d e ve l o p n e w f a r m i ng strategies and methods that can withstand the effects of climate change and apart from that postharvest losses and wastage is a key issue that must be addressed,” the governor said. A l s o, O l u w a t o y i n S u a r a u , commissioner for Agriculture, stated that the government is ready to overcome all challenges threatening food availability in the state, stressing that food production is a strategy government is using to tackle

Expert commends Unilorin’s new farm policy SIKIRAT SHEHU, Ilorin

n expert, Gbadebo Olaoye, a professor and renowned agriculturist, has commended the decision of the authorities of the University of Ilorin to make a large portion of its land available to interested staff and students of the institution for farming. Olaoye, who is the dean, Faculty of Agriculture, University of Ilorin, gave the commendation while speaking with journalists in his office recently. According to him, with that policy, the University has set another shining pace among its peers as he encouraged other institutions of learning to emulate Unilorin by introducing similar policy. He noted that such policy would go a long way in addressing the problem of food insecurity in the country. Olaoye paid a glowing tribute to Sulyman Age Abdulkareem, vice chancellor, University of Ilorin for not only conceiving the worthwhile policy but for also putting necessary machinery in place for its implementation. He confirmed that

some members of his faculty are involved in the implementation of the policy. The professor also expressed the belief that the policy, if and when embraced by all and sundry, would go a long way in addressing low revenue challenges of staff members many of whom he said, have indicated interest in taking-up the opportunity head-on. He further explained that the policy is capable of improving the livelihood of participants and also a source revenue generation for the institution as farm machinery and implements belonging to the school will be hired for cultivation. Olaoye pointed out that the implementation of the policy would also promote the relationship between town and gown, saying that communities within and around the University stand to gain a lot from the policy and its products. He also noted that nature has made things in a way that “when you derive benefits from an individual or organisation you will surely protect that interest” so that the derivable favour would continue to flow.

unemployment and encourage youth empowerment. “The global population is growing by the day and the task of producing enough food to meet the demand is high. Especially as Lagos has been projected to be the third largest mega city of the world, hence, agriculture plays a central role in strategically reducing hunger and poverty,” Suarau said. Abimbola Okoya E xecutive Director, BATNF said as a country, Nigeria ought not significantly affected by hunger because it is

blessed with arable farmland, fertile and suitable to grow food crops, and as one of the largest producers of cassava, yam, millet, sweet potato, cashew nuts and groundnut, but a significant portion of these are either wasted or lost due to poor agricultural practices or limited access to market. “The scale of rudimentary method of farming makes it difficult for these farmers to access credit facilities to upscale their production or compete in the modern food value chain. With poor access to infrastructure, inputs

and markets, they are one of the most vulnerable groups in the value chain,” Okoya said. “Hunger and malnutrition is not limited to the quality of food produced. People living with food insecurity lack a stable, reliable means of getting meals they need. This is often because of a loss of income. A business opportunity exists for smallholder farmers to raise their incomes by moving from subsistence to commercial agriculture, but they face several constraints,” she added. Okoya stated that the fair was to provide a platform to expose farmers to opportunities in the city without financial burden or risks, adding that it will help the public access fresh and organic farm produce, and encourage farmers to switch from low quality bulk produce to highvalue agricultural produce. She disclosed that since inception in 2002, BATNF has supported the Federal and State Governments in agricultural development programmes and has invested about N1.5billion in supporting rural smallholder farmers in the production of food crops, like cassava, rice and maize; and in aquaculture and livestock among others. “So far, we have reached over 36,000 farmers and by 2022, our target is to have supported 62,000 rural farmers,” she further said.

Extension services is crucial to agric development, says Salako

olaw ole Salako, vice c h a n c e l l o r, F e d e r a l University of Agriculture, Abeokuta (FUNAAB) says providing extension services to farmers is crucial in the development of the sector. Salako made this assertion while declaring open the Extension Orientation Workshop for the University Academic and Agricultural Development Staff in South West, Nigeria, organized by the Agricultural Media Resources and Extension Centre (AMREC). Represented by Professor Oluseyi Akinloye, dean, College of Biological Sciences (COLBIOS), the vice-

chancellor noted that agricultural extension is a source of information that plays an important role in attaining sustainable agricultural development. He said that a well organised extension system that is geared towards extension delivery in all aspects of sustainable agriculture and rural development would bring about food security, poverty reduction, rural empowerment and environment management. He added that it will also engender higher production which translates to higher incomes for farmers. Salako expressed disappointment at the weak link

between research and extension, which according to him, has kept agricultural extension in a struggling position to prove its relevance and importance to sustainable agricultural development globally. According to him, agric research and extension will help increase farmers production, adding that these institutions cannot operate in a vacuum, irrespective of how good they may be. He noted that government c o m m i t m e nt t o ag r i c u l t u re, research, extension, and good working relationship between research and extension agents as prerequisites for the success of the country’s agric sector. Also speaking, Dorcas Adegbite, director, AMREC, said the main objective of the workshop is to create more awareness on its responsibilities and activities of research and extension service which includes; facilitating development and release of improve technologies to address agricultural challenges and enhancing effective delivery on extension responsibilities of participants.

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Wednesday 24 October 2018

In association with E-mail: insurancetoday@businessdayonline.com

A Raven or a Dove?

Stakeholders seek better policies, conducive environment for insurance sector growth …believes insurance can reduce poverty, create wealth MODESTUS ANAESORONYE

nsurance industry stakeholders have called for a conducive environment as well as growth driven policies to enable the sector thrive and also surmount its present challenges. The stakeholders who spoke at the 2018 edition of the Nigerian Council of Registered Insurance Brokers (NCRIB) Conference/ Exhibition with the theme ‘“Insurance Industry: Survive, Thrive’, held in Lagos also underscored the need for operators to tackle their internal problems bothering on discipline and ethical issues to increase public acceptability and thrust. All of these they said are important in enabling the industry play its role of poverty alleviation and wealth creation for economic growth and development. Adekunle Oyinloye, managing director/CEO of Infrastructure Bank Plc who spoke at the event said for the industry to survive, thrive and attain its potentials, the government must be sincere in promoting a favaourable environ-

ment that will allow the financial services industry to thrive. Oyinloye believes that if there is proper enforcement on the side of government, operators will be able to enforce on their side, adding that the general implementation of insurance act has left much to be desired. He said some sections of the Insurance Act have been badly implemented while some have never been implemented at all, saying that there is need for adequate legislation and policy to create a conducive operational environment. To the operators, Oyinloye charged them to redefine their model of operations by embracing professionalism, good corporate governance and best practices as well as moving with the current trend of event in the world especially in the area of technology. Oyinloye charged operators to be proactive and professional in their approach to business, just as he urged the Chartered Insurance Institute of Nigeria (CIIN) to regulate, review and expand its curricular to meet the present need of the industry. He called on

all the stakeholders to fight for the survival of the industry. Tope Smart, chairman, Nigerian Insurers Association (NIA) who chaired the panel discussion also expressed worries on challenges facing the industry. Smart said “If you look at our environment, the environment is so harsh. Some of the policies of government are against insurance. If you critically look at the tax law, it will tell you that insurance industry is not favoured. A situation where the tax payable is based on gross premium without taking into cognizance other expenses insurance companies incurred is very abnormal.” “If you also look at ourselves too within the industry, talking about some of the things that is happening, we need to do a lot, we have all kinds of challenges within us. We have a market that is not disciplined. All these are threatening the survival of the industry. We need to look at all these and for us to survive and for us to thrive, we must address these issues urgently, Smart said. Iyalode Alaba Lawson, president, National Association of Chambers

of Commerce, Industry, Mines and Agriculture (NACCIMA) speaking on the theme “Grassroots Development & Poverty Alleviation: Insurance Option” emphasized the growing need for more information and awareness about the benefits of insurance. She called on everyone learned and unlearned, in the city or down at the grassroots level to be more enlightened about the need to be insured irrespective of means of livelihood. Abiodun Oladapo, chairman, SME Trade Group, Lagos Chamber of Commerce and Industry (LCCI) in his position called on insurance operators to do more in reaching out to people at the grassroots, noting many business had collapsed due to lack of knowledge on how insurance works. Menwhile, Shola Tinubu, president, NCRIB in his earlier remarks said the Council under his leadership has registered some modest achievements in various areas including giving more visibility to insurance brokers and promoting knowledge and competences through corporate visibility project and regular training progeammes respectively.

2015

L-R: Rotimi Edu, vice president, Nigerian Council of Registered Insurance Brokers (NCRIB); Bola Onigbogi, deputy president, NCRIB; Shola Tinubu, president; Lola Akande, commissioner for Women and Poverty Alleviation; Tope Smart, chairman, Nigerian Insurers Association(NIA) at the 2018 National Insurance Brokers Conference & Exhibition held in Lagos

nce upon a time, a man named Noah was in an ark and surrounded by a flood. In order to find dry-land, he let out two birds, a Dove and a Raven to explore the territory for some dry land in the midst of this flood. The dove played its part and did exactly what needed to be done. It flew as far as it could, within reason. It found land, picked up proof to show where it had been and came back to the comforts of home before got tired and gave up. The dove passionately explored the earth but usually returned to the known comforts of his home. It motivated everyone as it shared its stories and proof where it had been. The Raven, on the other hand, took a true leap. It went into unknown places, not sure of the future but hopeful it would be good. It was committed to exploring the unknown despite the lack of precedent and fear. He could get lost, fail on his venture or be consumed by the sea. Paradise could have been too perfect for him to leave. Or, maybe the adventure in front of him was greater than what he left, so he decided to go the journey wherever it led. Whichever the case, the raven’s owned his adventure. Whether you’re a Dove or a Raven whenever you travel to known or unknown territories, be sure to travel with CHI PLC’s Travel Insurance Cover. For more information visit www.chiplc. com/travel-Insurance or call 0700CHINSURANCE (070024467872623)

Wednesday 24 October 2018

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Pension Today

BUSINESS DAY

In Association with

RSA Fund 2 attracts 44% of pension assets …as active funds accounts for 75%

he Multi Fund Structure, newly released amended inv e s t m e n t guideline by the National Pension Commission (PenCom),which became effective July I, 2018 has begun to influence assets investment allocation by Pension Fund Administrators(PFAs). As at the end of August 2018, Retirement Savings Account (RSA) Fund 2 attracted 44 percent of total pension fund assets invested by the PFAs amounting N3.70 trillion, out of a total of N8.33 trillion pension assets in the industry. The information is contained in a document presented by Dapo Akinsanya, managing director/CEO, AXA Mansard Pensions Limited during the Maiden Retreat for Joint Committee of Establishment and Public Service of the Senate and House of Representatives Committee on Pensions held recently in Calabar. This was followed by Fund 3, which accounted for N1.96 trillion equal to 24 percent of total pension assets. While Fund 1 accounted for N4.5 billion, Fund 4, which is the retiree fund accounted for N629.05 billion, equal to 8 percent. This is as Closed Pension Fund Administrators accounted for N1.08 trillion, equal to N13 percent. Akinsanya speaking on Investment of Pension Assets in Nigeria said “The Pension Reform Act 2014 mandates every eligible worker to open a retirement

Source: PAL Pension

Aisha Dahiru, acting DG PENCOM

savings account (RSA) with a licensed pension fund administrator, into which regular monthly pension contributions will be paid. During the active working lives of such workers, these contributions are pooled along with those of other active workers into a fund known and managed(until 30th June, 2018) as the RSA (Active) Fund. Until the same date, the accumulated savings of contributors were transferred into the RSA retiree fund upon retirement from active fund. He further stated that with effect from 1stJuly 2018, the RSA multi-fund structure was introduced, which essentially reclassified the RSA active and RSA retirees fund into four distinct types categories based

on the age and risk profile of the contributors. As at the 31st August, 2018, the four RSA active funds accounted for 75.5 percent of all pension assets in the industry. In line with 7.3(a) of the guideline, the maximum exposure to variable income instruments by the Fund types are as follows: Fund I: 75 percent of portfolio value; Fund II: 55 percent of portfolio value; Fund III: 20 percent of portfolio value and Fund IV:10 percent of portfolio value. From the date of implementation of the multi-fund structure, the PFAs allocated contributors to various fund types: Membership of Fund I were strictly by formal request by a contributor; active contributors who

RC634453

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

“I will advise that this interface with the operators is more regular because it has actually exposed us to some of the difficulties the industry is facing, which if we had sat in the comfort of our chambers we would not have been able to know” were 49 years and below as at their last birthdays were assigned to Fund II; active contributors who were 50 years and above as at their

last birthdays were assigned to Fund III, and Fund IV was strictly RSA retirees only. PFAs are expected to invest in such a way that the actual exposure to variable income instruments in Fund I is higher than the exposure in Fund II. Likewise, the exposure in Fund II shall be higher than the exposure in Fund III. Accordingly, the minimum exposure to variable income instruments by Fund Type shall be: Fund I: 20 percent; Fund II: 10 percent; Fund III: 5 percent and Fund IV: 0 percent. The Multi-Fund structure is a framework that aims to align the age and risk profile of RSA holders by dividing the RSA Fund into four distinct Funds. The current RSA Fund has been sub-divided into three

separate Funds, while the RSA Retirees Fund becomes 4th Fund. The Multi-Fund structure provides more alignment between your retirement goals, risk appetite and age. Consequently, there will be a better chance for your pension assets to meet your expectations when you retire. An active contributor may switch from one Fund type to another Fund type within a PFA, once in 12 months without paying any fees (subject to a formal application). Any additional requests for switches among Funds within a 12 month period by the active Contributor shall attract a fee, of an amount not less than a minimum value, to be determined by PenCom from time to time.

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

BUSINESS DAY

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Wednesday 24 October 2018

E-mail: insurancetoday@businessdayonline.com

Royal Exchange positive AFDB launches $500m credit the future insurance deal with ATI Agency about …positions for greater market share

he African Development Bank (AfDB) and African Trade Insurance Agency (ATI) has announced the successful completion of a $500 million credit insurance deal structured to cover a portion of the Bank’s portfolio of non-sovereign operations in Africa. This transaction is expected to have an important demonstration effect to encourage similar institutions to invest more on the continent in the future. While ATI will be the direct insurer facing the African Development Bank, the transaction involves the participation of a number of Lloyd’s & Company private reinsurers who will share the risk on African financial institutions. This vehicle will enable many insurance companies operating outside Africa to participate in the financing of development in Africa for the first time. The deal is the second Balance Sheet Optimization transaction under the “Room to Run” initiative following the successful signing of the Synthetic Securitization transaction in September. The insurance will cover approximately 22 percent of the Bank’s $2.3 billion outstanding non-sovereign financial sector portfolio. Specifically, it will protect the Bank against the non-payment of loans made to approximately 30 African financial institutions. The portfolio spans the African continent, with exposure to financial institutions in all major regions of the continent, and is expected to release sufficient capital to create almost US$500 million of headroom for new lending. “This transaction leverages the Bank’s own capital to achieve more development and lending as it creates new pathways for collaboration between private insurers and the Bank in the development of the African

continent,” said Akinwumi Adesina, President of the African Development Bank Group. “This is a significant step towards enhancing Africa’s finance partnerships across the globe.” Adesina added that, given Africa’s endowment as a resource-rich continent with a strong economic outlook, the Bank had adopted more efficient and effective initiatives to bridge the existing development financing gaps. Launching the transaction at an event in London, Penny Mordaunt, International Development secretary commented, “This is a great example of how the City of London can partner with African institutions to mobilise more investment for developing countries and support the creation of the 18 million new jobs a year which Africa needs. This work is driving economic development abroad and supporting prosperity at home”. The transaction is also expected to strengthen the development of credit insurance markets in Africa. The experience and comfort gained in transferring risks between the African Development Bank, the African Trade Insurance Agency and the Lloyd’s reinsurers is expected over time to lead to thelengtheningofinsurancetermsand lower insurance and financing costs, leading to more trade and investment in, and among, the private sector and the African region. “With ATI’s insurance guarantees leveraging the balance sheet of AfDB and crowding-in new investments, this innovation provides a timely solution to the scarcity of trade finance that could create enormous impact across the continent. ATI’s commitment reflects the US$35 billion worth of trade and investments that we have supported in the past decade, which, thanks to this model, can now be more easily replicated, to the ultimate benefit of Africa” said George Otieno,

Stories by MODESTUS ANAESORONYE

Mohammed Kari, Commissioner for Insurance

chief executive Officer of ATI. RFIB commented, “RFIBs Political Risk & Trade Credit team (PRTC) are delighted to have been able to assist the African Development Bank and ATI in putting together this significant insurance-backed programme that will allow the Bank to facilitate further lending, promoting further development in Africa.” This landmark transaction between AfDB and ATI is one of several recent initiatives undertaken by the Bank under its “Room to Run” program that responds to the G20 and G7 call on the multilateral development banks (MDBs) to explore innovative ways to optimize their balance sheets to achieve the“Billions toTrillions” development agenda. Credit insurance is one of such instruments involving a specialized market with currently low penetration in Africa, but intent on playing a more active role.

igeria’s premier insurance and financial services group, Royal Exchange Plc is looking into the future with great optimism, having positioned for increased market share that will offer its teaming shareholders good returns on investment, even in the medium term. The Company believes that taking advantages of growth initiatives available in the industry while leveraging in technology will expand its revenue base and stronger bottom-line. Kenny Ezeanwani Odogwu, chairman, Royal Exchange Plc who disclosed the firm’s future growth plans during the Company’s 49th Annual General Meeting held in Lagos said “Royal Exchange continues to stay abreast with many of the initiatives mentioned above in our quest to grow market share and attain market leadership position.” Odogwu said the group is presently streamlining major components of her businesses, service delivery, processes and operations to deliver superior returns in the medium term to our shareholders through a digital transformation process we embarked upon recently. “This we believe will reposition our great company as not only a major industry player but as a potential game changer. To sum it up, your board is confident about the future of our company irrespective of the current challenges besetting the company in the short term.” On the Company’s agricultural insurance initiatives, he said “we are looking at ensuring our partnerships with government agencies, such as NIRSAL, as well as deepening our working relationships with relevant state governments and groups across the country

to ensure we take full advantage of the opportunities that arise in the agriculture space.” “Agriculture and retail insurance, we believe is the future of insurance and at Royal Exchange, we will continue to develop products and services to ensure that we remain relevant in this space.” Auwalu Muktari, group managing director/CEO of the Company said the board and management has very high expectation for 2018. “We remain resolute to bring in our best to the table even though various analysts’ expectations for economic growth remain modest. The focus would be on achieving long-term sustainable growth for our company through the deepening of our revenue base, improving service delivery support systems and at same time keeping a lid on our group-wide costs.” According to Muktari, “Royal Exchange Plc envisions a situation where the retail insurance market should be able to contribute between 50-60 percent of our revenues in the future, as the retail market is the future of insurance in Nigeria, considering the population of the country. He further said, “As a group holding company with five subsidiaries across the insurance and financial services landscape, it has become of vital importance that we seek to improve our efficiency across the group by leveraging on cost discipline, astute capital allocation and investments and deployment of operational know-how to make Royal Exchange Plc a leaner, faster, smarter and customer-centric organization”, Royal Exchange Plc in the 2017 financial year generated a Gross Written Premium of N12.8 billion as against the figure in 2016, which stood at N12.5billion. Net Premium Income for the period amounted to N7.1billion, while underwriting profit amounted to N7.6billion in the financial year under review.

CIIN exploring various options towards boosting insurance education …says infrastructure key in driving enrolment

ddie Efekoha, president and chairman of Council of the Chartered Insurance Institute of Nigeria (CIIN) says his administration will explore all available options towards driving the theme of his presidency, Which Is “Advancing Insurance Education and Professionalism in Nigeria”. Efekoha who made the disclosure during a maiden press briefing, coming precisely three months after his investiture as the 49th President and Chairman of Council of the Institute, said the governing Council has swung into action to ensure that this agenda is realized within a time frame. He further stated that his tenure will focus on his key mandate of advancing insurance education and professionalism to propel the insurance sector forward. Efekoha noted that the partnership programmes initiated with some tertiary institutions within and outside Nigeria

were beginning to yield results, as the Senate of University of Lagos had two week ago approved the Memorandum of Understanding (MoU) signed with the Institute to pave way for commencement of Masters Programme on insurance and risk management in the university.. He said that the programme when operational, will pave way for Nigerians to run their masters in insurance in the

country, instead of going to the United Kingdom. Efekoha further said that his administration will make CIIN examinations more accessible and affordable for students and will promote the emergence of a new generation of insurance professionals through a mentorship programme for young insurance professionals (MPYIP). He said the last October Diet of the CIIN held at the Insti-

tute’s College of Insurance in Asese Village, where the students had opportunity to loge in the College’s hostel and chalets to prepare for their exams. “We are aligning our vision with infrastructure development because this is key in achieving result, Efekoha stated. He pointed out that other effort to attract young professionals into the insurance profession is partnering NYSC, by visiting orientations camps and spreading the gospel of insurance, and that the institute will extend such visit to other orientation camps outside Lagos to achieve a national spread. This, according to him will afford the institute opportunity of recruiting professionals who are posted outside the state to embrace and make career in insurance. His administration will continue with the distribution of Insurance textbooks to States

of the federation where it has not reached, through their various Ministries of Education and also equip accredited insurance departments in tertiary Institutions. Efekoha further said the Institute is providing a platform called, Millennial Assembly for the young professionals to contribute to the development of the industry. He said the Institute is set to host the Millennials Assembly where the younger professionals and enable them to chart new ways for the industry. He said the institute has written to insurance companies to send two each of their staff within the age bracket of 21-30, noting that 31 companies had so far indicated interest to participate. He noted that the institute is mindful of the fact that the future of the industry rests on the shoulders of the youth, hence the institute has to prepare them for the jobs ahead.

BUSINESS DAY

Wednesday 24 October 2018

SHIPPING

LOGISTICS

MARITIME e-COMMERCE

NPA decries rising cost of cargo importation over war risk insurance premium ... Blames other agencies for lapses in cargo clearance Stories by UZOAMAKA ANAGOR-EWUZIE

adiza Bala Usman, managing director of the Nigerian Ports Authority (NPA) has raised alarm over the war risk insurance premium placed on vessels calling Nigerian seaports, following the high rate of pirate activities as well as the unrest in the NigerDelta region. According to her, the war risk insurance premium, has translated into high cost of cargo importation into the nation’s seaports as importers, who pay such premium, also increase the market prices of goods for the end users. Speaking while presenting a paper on “Driving the Change Agenda through Freight Forwarding at the colloquium held in Lagos recently in honour of Prince Olayiwola Shittu @68, Usman said that the NPA is collaborating with the Nigerian Navy and other agencies of government that are responsible for providing security

Hadiza Bala Usman, managing director, Nigerian Ports Authority (NPA) presents a plaque to Rear Admiral Obed Habila Ngalabak, flag officer commanding Western Naval Command, who paid her a courtesy visit at the NPA Corporate Headquarters, Marina, Lagos.

on the waterway. “One of the concerns that have bedeviled our ports is the high cost of bringing in cargo, which is attributable to the insurance policy that vessels have to take before coming into our waterways. The NPA, Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Navy are collaborating to deal with the security issues on our maritime

domain,” she said. Continuing, she said: “Currently, they have war insurance that the vessels have to take to enable them come into our waters and this translate into a high cost of importation of goods into the country. Usman further revealed that the NIMASA is currently deploying strong security architecture to address the issue of criminalities on

Ibidapo-Obe promises to support SIFAX’s planned investment in Gambia

luwasegun Ibidapo-Obe, Nigerian highcommissioner to The Gambia, has pledged to support SIFAX Group in the actualisation of its planned multi-million dollar investment in The Gambia. Ibidapo-Obe, who commended SIFAX recently during a courtesy visit of the Group officials led by Taiwo Afolabi, group executive vice chairman to the Nigerian High Commission in Gambia, assured that the commission will help in making the new business venture a success. According to him, the commission is already mobilising patronage in readiness for the commencement of the business, which is billed for next year. He however said that he was thrilled that SIFAX Group would be establishing a multi-million dollar busi-

ness in Gambia to aid economic integration of the sub-region. “It was heartwarming to hear that a Nigerian company is making waves in the international business circle and is happening during my tenure as the High Commissioner to The Gambia. I commend SIFAX Group for investing in this country to tap into its many opportunities. I also assure you that the High Commission will not only be willing to assist in making this business thrive, but to also make SIFAX brand, a household name in Gambia,” Ibidapo-Obe said. While thanking the High Commissioner, Taiwo Afolabi assured that SIFAX will fulfill the expectations and confidence of both the government and people of the Gambia. “I want to thank you for your warm reception and

promised support. I assure you that we will transform the Gambian economy with our investments. SIFAX Group is synonymous with excellent and innovative service delivery, and we will not renege on that,” he said. Recall that SIFAX recently signed an agreement with the government of The Gambia to build an inland container depot (ICD), which will help in decongesting the Port of Banjul and bring a more efficient system into the country’s port operations. Currently, SIFAX Group has taken possession of the land on which it plans to build the inland container depot in Banjul, Gambia. Report has it that contractors and equipment have been mobilised to the project site, which is projected to be completed by the first quarter of 2019.

Nigerian waters. “We hope that within the next four to six months, we will see reduced activities of pirates along the waterways especially in the Niger-Delta region. This is something that we are anxious to have and we believed that NIMASA with the support of the Nigerian Navy will deal with that,” she said. She however encouraged the Nigerian Navy and

the NIMASA to ensure that piracy threat is addressed through inter agency collaboration. On cargo clearance, Usman said that the greatest challenge at the port was to have agencies that are directly involved in cargo clearance play their respective roles seamlessly. “The NPA should not be blamed for lapses in cargo clearance because it takes more than NPA to see cargo out of the ports. It is only when cargo has proven to be righteous to border post rules, regulations and laws that it can be made available for maritime logistics,” she stated. The challenge, according to her, is to get all agencies come under the single window which the NPA is undertaking in collaboration with the Nigeria Customs Service (NCS). On other achievements recorded by the authority in recent time, Usman stated the NPA is also engaging other agencies who have a role to play in intermodal connectivity like using railways and inland waterways

to improve cargo delivery. “To underscore the passion we have in achieving this, the authority recently organised and hosted the International African Ports and Harbour (IAPH) Africa regional conference where ways of achieving hinterland connectivity, were discussed. She however lamented that seized cargo and detained containers in the port occupy space and impair the role of the ports as an efficient transit area, even as she advised freight forwarders to desist from contributing to the challenges of cargo clearance. “In order to execute its role of achieving the Ease of Doing Business and coupled with the expectations of the World Bank trade facilitation agreement, the NPA is collaborating with NCS to introduce the much awaited Single Window Platform, aimed at simplifying and harmonising formalities, procedures and the related exchange of information as well as documents between the various partakers in cargo clearance.

LADOL backs female entrepreneurs at UNGA week

ADOL Free Zone (LADOL), the sustainable special economic zone based in Lagos, has announced its support for ‘The WE Empower UN Sustainability Development Goals (SDG) Challenge,’ as one of its lead partners. This is in line with its commitment to the young entrepreneurs and the UN Sustainability Goals. Amy Jadesimi, managing director of L ADOL, was a member of the panel of the judges for The WE Empower UN SDG Challenge (WE Empower), where five female entrepreneurs were selected, from each of the five UN regions, as awardees of the first WE Empower Challenge. The judges convened with the awardees in New York City during the UN General Assembly in September, when the finalists gave dynamic pitches to the

chairperson of the event. The five awardees of the first WE Empower competition were Habiba Ali, founder, managing director/CEO, Sosai Renewable Energies, Nigeria; Hadeel Mustafa Anabtawi, founder, The Alchemist Lab, Jordan; Marijana Savic, founder and director, NGO Atina and Bagel Bejgl Shop, Serbia; Marta del Rio Villanueva, founder/CEO, Wasi Organics, Peru; Shimrit Perkol-Finkel, co-founder/ CEO, ECOncrete Tech Ltd., Israel. The competition aims to raise awareness of the valuable contribution women entrepreneurs are making and can make towards achieving the SD Gs by 2030, by building sustainable businesses and inspiring others to follow suit. It also supports the innovative work being undertaken by these entrepreneurs and provides

capacity-building training sessions and high-level advocacy opportunities to the awardees. “Women are not simply beneficiaries of SDG Goal five. They are also leading the achievement of all SDGs. If the world commits to gender equality, equal engagement in the workforce will add $28 trillion US dollars to annual global GDP in 2025. According to her, competitions like WE Empower can raise awareness of the great work female leaders are doing to support the Sustainable Development Goals and will encourage more to come forward and follow in their footsteps. “Congratulations to all the women who competed, to the five awardees and Habiba Ali. We look forward to seeing how LADOL can provide more support for her and other female entrepreneurs,” she added.

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Leadership

Wednesday 24 October 2018

SHAPING PEOPLE INTO A TEAM

Why climate change is pushing some business leaders to embrace regulation

MATT GITSHAM

lobal carbon emissions need to be reduced to net zero by 2050 to have a good chance of holding global average temperature rises to no more than 1.5 degrees Celsius, a level that would be disastrous, but not absolutely catastrophic for human civilization. So states a new report from the Intergovernmental Panel on Climate Change, which sets out the policy choices that governments around the world need to make over the next 12 years if they want to limit global temperature rises to 1.5 C rather than 2 C. If global temperatures rise more than 1.5 C, the risks of droughts, floods, forest fires, heat-related deaths and loss of agricultural productivity all worsen significantly. The response from political leaders to the report has so far been mixed. Some governments may be poised to revise their climate change targets in line with the call for net zero emissions by 2050. Others have been less enthusiastic. The Australian government has rejected the report’s call to phase out coal power by 2050. In the U.S., President Donald Trump’s response to the IPCC report so far has been to cast doubt on it. This follows his summer 2017 announcement that he was withdrawing the U.S. from the 2015 Paris climate agreement. Predictably, environmentalists, pro-environment politicians and countries especially vulnerable to climate change have reacted to all of this with distress. But perhaps a little less predictably, so have many business leaders. For example, many American CEOs spent considerable energy in the weeks leading up to Trump’s Paris announcement lobbying the president not to withdraw. Over 1,700 companies and investors have subsequently signed the We Are Still In statement, making public their commitment to uphold

the agreement. While it remains a widespread assumption that business leaders see government intervention in the economy and increased regulation as something to be avoided, a growing number of CEOs are actively lobbying for more ambitious government action on a whole range of social and environmental issues. Many businesses were actively involved in lobbying governments to reach an ambitious agreement on climate in Paris in the first place. Unilever CEO Paul Polman was one of many who worked tirelessly to push governments to tackle climate change head-on. Today, business leaders are calling on governments to create the policy frameworks necessary to achieve net zero emissions by 2050. What’s going on? Businesses aren’t supposed to want more regulation of their activities. This growing trend is the subject of a research program at Hult International Business School, where we have followed a number of CEOs and companies involved in such advocacy activities over the past few years. Part of what’s driving more ambitious corporate action to ad-

dress our social and environmental challenges is increased pressure and higher expectations from the rest of society. A number of CEOs are realizing that such expectations cannot be met by innovation and voluntary actions alone. The scale of today’s challenges requires government action, too — there are some ways in which public policy can drive change that cannot be achieved otherwise. In some cases, regulator y change can lead to direct commercial benefit, creating markets that didn’t exist before, or handing competitive advantage to those better able to capitalize on the regulatory change. For many companies, the right solutions are available for tackling social and environmental challenges, but they don’t become commercially viable unless regulatory change aligns commercial incentives with the right thing to do. As a result, some CEOs have started to overcome their fears that incompetent government meddling will get in the way of prosperity. There’s a growing recognition that ambitious government intervention has a crucial role to play in

both addressing global challenges and helping businesses succeed. So what have these companies learned about how to do this kind of advocacy well? Our research, as well as recent studies by others, including scholars at the University of Lugano in Switzerland, point to a number of key issues to get right. — Respect the leadership role of government, but be prepared to use your own voice and influence. Your business activities should be aimed at informing and supporting public policy. But that doesn’t mean you should be silent if a government isn’t acting in the public interest. — Aim for public policy outcomes that seek to effectively address social challenges. The aim should be to find solutions that address the problem and have consensus support, rather than making sure your own interests prevail regardless of the impact on others. This may sometimes involve accepting public policy initiatives that could result in a short-term hit to profits, because in the long run they are going to help solve the problem and maintain your business’s legitimacy. — Be inclusive. Traditional lob-

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

bying is done between government and individual companies or trade associations. But advocacy for more ambitious public policy is more effective if it involves more stakeholders. Above all, ensure that marginalized groups have a say in the process. — Consider joint advocacy with nongovernmental organizations. Unlikely partnerships between companies and NGOs can be more effective in influencing policymakers, as each side can compensate for the weaknesses of the other. Governments may distrust NGOs because they see them as purely motivated by ideology, and they may distrust businesses because they see them as purely motivated by profit. Joint advocacy can deal with these legitimacy questions. — Be transparent and truthful. Lobbying often happens behind closed doors, and the worst kind of lobbying in the past has been characterized by misinformation and misdirection. Public policy outcomes will be more effective if people know what different groups are calling for and if they trust the basis on which these positions are put forward. — Invest to be able to advocate from a robust evidence base, whether on climate, health or nutrition. — Make sure your external advocacy positions and internal policies are coherent and consistent. — Ensure you have the right skills and capabilities. Lobbying to persuade governments to introduce new regulatory measures often requires a distinct skill set. In fact, many companies have ended up hiring campaigners from NGOs to join their advocacy teams. Finally, this is a question of leadership. An effective lobbying approach requires a personal commitment from the executive team.

Matt Gitsham is an associate professor of sustainable development at Ashridge Executive Education, part of Hult International Business School.

Wednesday 24 October 2018

C002D5556

BUSINESS DAY

Mitsubishi Eclipse Cross SUV arrives Massilia dealership Stories by MIKE OCHONMA

he luxury segment is getting more exciting following the unveiling of the all-new compact SUV by Massilia Motors, sole distributor of Mitsubishi Motors in Nigeria. Known for its strength in Sports Utility Vehicles, the Eclipse Cross has been cratfed with a fusion of sharp coupe looks, dynamic SUV mobility and the brand’s styling signature, technology and driving confidence. The rear design is distinguished by the almost cubist styling created around the high-mounted, stretched rear lamps and a horizontally divided rear windows. It derives its name from the automakers popular specialty coupe model sold in the 90’s, while Cross is short for crossover. Being an intelligent vehicle, the human connectivity features of the Eclipse Cross such as Bluetooth, AM/FM/CD Touchscreen Audio system + MP3, Hands-free phone kit etc. are well pronounced just as in the cockpit, the Smartphone Link Display Audio system encourages new encounters on the road. The Eclipse Cross comes with a variety of seat materials such as standard fabric, high grade fabric with silver stitches and leather with orange stitches. The head up display (HUD) conveys vehicle information in full color above the meters for easy viewing. You can adjust image

brightness and display height to suit your preference and time of day. The combiner extends or retracts when you turn the ignition. After it’s unveiling inside the recently upgraded Massilia showroom in Ijora, Lagos, a tour of the facility was conducted with a stopover by the newly renovated state of the art workshop which boasts of epoxy flooring and updated car lifts amongst other things. For the local market which is the GLS CVT Gearbox 4WD (2.0 litre engine), it comes with other performance enhancing features such as the Super-All Wheel Control, which takes away worries in difficult in muddy, gravel or sandy terrains. Upon hard unintentional braking or acceleration around

a muddy turn, controls can be maintained without extra steering effort because S-AWC adjusts braking and coupling in the rear differential to improve vehicle performance. The forward collision mitigation System helps prevent a frontal collision or reduce damage if the collision becomes unavoidable. It responds to vehicles and pedestrians via camera and laser radar. The adaptive cruise control maintains a selected distance between your vehicle and the car ahead via radar for greater safety and peace of mind. It reduces driver stress especially during traffic jams on highways. You are also safer in your Eclipse Cross as it features the Lane Departure Warning. This

feature beeps and displays a warning if the vehicle drifts from its lane while the turn signals are not operating. For safety, comfort and driving ease at night, the automatic high beam activates high beams switch to low beams when vehicles are detected ahead and automatically switch back to high beams. You don’t have to remove your hand from the steering wheel to switch the beams manually. Other safety features of this award winning vehicle include the blind spot warning, active stability control (ASC) and hill start assist. If wheels lose their grip on slippery surfaces or while turning, ASC automatically adjusts engine output and applies braking force at the appropriate wheels to help

maintain control and prevent skidding. Some other exciting features include the reverse (video) camera for ease of mobility and comfort and the Mitsubishi trademark “paddle shift” which simulates a traditional automatic transmission by stepping the gear ratios up or down. When carrying the key, you can press a button on the outside of the front doors or tailgate to lock or unlock all the doors and tailgate, and press the engine switch in the cockpit to start or stop the engine. Speed is automatically maintained without keeping your foot on the accelerator pedal, allowing more relaxed driving on extended journeys. Pressing the brake pedal disengages the system. The rain sensor activates the windshield wipers automatically when moisture is detected on the windshield. With the auto headlights, the headlights automatically activate for your safety the surroundings becomes dark. The large, 4.2-inch liquid crystal Multi-information display in the center of the meter panel is extremely easy to read. It keeps you clearly informed of various useful information on vehicle status, your trip, external temperatures and more. Controlling the audio system is easy on the 6.1-inch QVGA touchpanel display, which can also display the views from the rear view camera. On the other hand, the USB port is conveniently located near the shift lever, allowing easy access from both front seats.

Bimmerfest motorsports Africa event ends in Lagos

nce again, it was all glitz and razzmatazz at the just concluded one day Bimmerfest by the BMW Club Nigeria. The highly anticipated 2018 edition of the gathering of local luxury car freaks of the Munich-headquartered automakers successfully ended on Sunday October 7, 2018 with all the benchmarks that are close to such spectacular event held in any part of the world. The BMW FESTIVAL (Bimmerfest) is one of the largest BMW automobile gatherings on the BMW calendar worldwide and a one stop shop to meet/network/ market to all the BMW automobile (car and bike) owners, asso-

ciates and lovers in Lagos. BMW Club brings few organizations that identify with performance to share in the annual celebration of luxury and excellence. The festival which kicked off exactly at noon on the Akin Adesola dual carriage street, Victoria Island, Lagos featured super cars, power bikes, quad bikes drag races, exhibitions and several other fun activities. The location was properly secured by security agents as officials of the state safety agencies were on hand to ensure a hitch-free event. While the racing exercise lasted, selected law enforcement officials ensured that non-participating cars do not make it into the lanes that were being used for

the races. Instead, those cars were diverted to alternative routes. The show started with the arrival of various cars; mostly BMW cars including the 3, 4, 5, 6 and 7 series were all made readily available for the event. The almighty Apina B7 also graced the event. The show officially kicked off after the BMW parade along the road mapped out for the car show with a procession of cars from the BMW Club Nigeria Members, BMW Club Ghana (who came all the way from Ghana to partake in the event) and powerbikes from various bike clubs (B.A.D Gang, 514 Ryders, ERMC). Immediately after that, the drivers of the various BMWs displayed diverse skills and stunts

with their automobiles. The stunts were amazing as they cooked up doughnut enough for everybody. The smell from the burnout of the vehicle tyres saturated the air. The event also featured mind-

blowing drag races. A lot of cars competed. There were also guest cars other than the BMW brand including the Dodge Challenger, Chevrolet Camero, Range RovContinues on page 30

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Wednesday 24 October 2018

Car designer, industrialist unveils Nigeria’s prototype Stories by MIKE OCHONMA mikeochonma@gmail.com

oming at a very critical time when the Federal Goverment is not concerned about the automotive sector despite the much talked about national automotive policy, at a time, when many industry players are capitalising on the reliefs granted to so called local assemblers, two Nigerians have taken up against all odds to crack their brains to come up with what they described as prototype made in Nigeria which was recently unveiled to the media in Lagos not long ago. These two Nigeria to watch out for in the future who went back to their design studio and started with what could be described as a caricature image of what turned out to be a very stunning design few weeks ago are Dapo Akintunde, an architect by training, is a car designer and founder of IVIXI Design, and Azuka Ijekeye, an industrialist, lean manufacturing expert and founder of Interstreet Messenger Limited. A very critical surgical look at the prototype presents a car design that reminds one of those golden age years of globalist car design. With its sharp headlights, defined front, jet-rocket propelled fins and jetson glasshouses, the design thinking is driven by many elements from the Nigerian life; this is a homegrown icon.

Just like the egusi soup, moi-moi and suya which are traditional local delicacies is a real solution to a myriad of Nigeria’s and West Africa’s social and transportation problems. Its bulk, size and truss mainframe is a protection against various rogue road bullies and against potential death from ill-managed haulage trucks and other abandoned forty-foot flatbeds that litters the roads with its inherent dangers. Apart from conveying people fron point A to B, it can better be described as the mallam’s store, the farmers’ utility van and the soldiers’ accompaniment. More interestingly, this is one prototype of a car that Taoreed the welder made so that Yinusa the other welder can fix it. It is designed in such an intelligent manner that, it cannot ne easily disfingured by the itinerant keke-marwa drive and the lawless okada rider. This car is tall for protection against its light weight composition, but its low center of gravity prevents any sort of tumbling. It parks the intel of 2018 super-vehicle as it will provide additional inverter capacity to supply its owner with electricity which is a scarce commodity to many West Africans. Its massive lighting system will provide illumination to protect the owner agaiants neighbourhood darkness, even as the body surfacing is as smooth as any product from the established car industries.

Speaking to BusinessDay on the sidelines during the eventful launch, the two eggheads behind the prototype model said that advanced thinking for societal development leads to massive employment generation for the teeming youth like Taoreed the welder, who has been the lead welder for the project.

For Idris, the body work specialist, there are millions like him wondering on the streets of Nigeria that have learnt their craft, but lack any platform to practice them. ‘’They are the ones that society has labelled as ‘Omota’ and ‘Agbero’. Working in the interstreet factory and making products such as the IVIXI

AIV banishes such demons’’. Despite all odds, both Dapo and Azuka have defied the general notion in Nigeria that an all-knowing, all-seeing government will create the enabling environment and the Interstreet Factory has indeed become the enabler that has given birth to the innovative car.

Mercedes-Benz injects double to truck line-up

eststar Associates Limited, owners of the Mercedes Benz franchise in Nigeria recently expanded its product line-up with the introduction of two new truck generations. The event which held in Lagos attracted not only hordes of motoring journalists drawn from both the print, electronic, online and the social media platforms, there were also guests and dealers of the Mercedes Benz brand that trooped in to witness the historic launch amidst back slapping and business networking. Addressing scores of enthusiastic audience that defied the perennial Lagos traffic, Thorsten Bauerheim, a Mercedes Benz official from Germany, stated that, it was a milestone to celebrate a great milestone of Mercedes-Benz Trucks. According to him, ‘’This year we are, the all-new

Actros and Arocs to this continent and especially to Nigeria. More than 120 years after Gottlieb Daimler invented the first truck and now, after over 20 years of the proven Actros - it is time to enter a new dimension of heavy-duty trucks in your market’’. He noted that, Mercedes is very proud to present the newly developed product range to the Nigerian buying public. He described the all-

new Actros as a synonym for efficiency and reliability and the all-new Arocs symbolizing reliability and robustness, worldwide but especially in Africa. Highlighting some of the unique selling points of the new trucks, Thorsten Bauerheim said that, the new trucks are not only beautiful with completely new, functional and aerodynamic cabins, the biggest change comes from inside.

Each piece is equipped with the new 6 cylinder inline engine in Euro III with an incredible torque and as new standard, our third g e n e rat i o n au t o mat e d transmission the Mercedes-Benz PowerShift 3. The Powershift 3 offers more comfort, faster shifting, efficient power transmission, better handling and above all less operational errors. Thus cutting down the wear and

tear and reducing maintenance costs. With the peculiarities of the Nigerian environment at the back of the automakers mind, couple d w ith the extreme local climatic conditions, the rough roads and heavy loads, and tough applications, coupled with the driver qualification put all together made the manufacturer invest a lot in research and development to bring to customers of Me rc e d e s- B e n z t r u ck s a number of economic benefits that will assist businesses in their transport needs. According to the company official, the truck stands for famous robustness and versatility, high residual values, low downtimes, high spare parts availability and user-friendliness that makes Mercedes-Benz Trucks worldwide, Africawide and in Nigeria known and valued.

All in all, this product is the real deal for the Nigerian Automotive Industry. Its authenticity shall spring forth sub-industries for thr various components including the drive-train and suspension, electronics, interior parts, lights, windscreen and mirrors, rubber and plastic parts amongst others.

Bimmerfest motorsports Africa event.... Continued from page 29

er Sports, Maserati, Ferrari 488, Mercedes Benz GLE64, S63 AMG, Mercedes GLE Coupe and Tiger Avon. Bi m m e r f e s t 2 0 1 8 i s sponsored by Motul, Tecno Mobile, H2Oh and Monster Energy while the official event partners are BusinessDay Media, Lagos State Sports Commission and Fame Limited. This event was powered by PowerHouseMedia -Extreme Entertainment. The vision of BMW Festival (Bimmerfest) is to be the largest hub/platform of exclusive motoring activities, ranging from autotainment, motorsports, lifestyle shows and road courtesy campaigns in Nigeria. It is an exclusive enthusiast organization operating under the guidelines of the BMW Clubs International Council, Munich and the Club is also a proud member of the BMW Clubs Africa.

Wednesday 24 October 2018

C002D5556

BUSINESS DAY

INTERVIEW ‘Mergers and acquisitions are strategic to economic growth, shareholder-value’ Recently, experts in mergers and acquisitions (M&A) gathered at the Lagos M & A Academy to update young professionals on trends in global M&A processes and practices. In a chat with BusinessDay after the event, Dayo Idowu, a DLA Piper Africa Partner and location head of the Finance and Projects practice at Olajide Oyewole LLP, spoke on key issues relating to mergers and acquisitions in Nigeria and the current state of the Nigerian economy. Excerpt: Let us in about DLA Piper. What informed the set-up of the M&A academy? LA Piper Africa is an alliance of leading independent law firms working together in association with DLA Piper, a global law firm with lawyers located in more than 40 countries. DLA Piper offers M&A Academies on a global scale. These events typically follow the same format and overall content, and are presented in different locations on a regular basis. The idea is to keep these consistent, in so far as possible to do so. The DLA Piper M&A Academy is a one-day seminar held at DLA Piper offices around the world aimed at junior and mid-level professionals who work in M&A transactional teams, Corporate finance, In-house counsel, Strategy departments of corporates. The Academy is designed to provide an overview of the key stages of the M&A process, the content of the documentation and the interaction between the lawyer, the financial adviser and the other main players in a transaction. The Academy is an important part of DLA Piper’s value added services offering to its clients. The M&A Academy has held in various jurisdictions including Southern and East Africa. However, this is the first time it will hold in West Africa. This year’s event is being hosted by Olajide Oyewole LLP, a member of DLA Piper Africa, an alliance of leading independent law firms working together in association with DLA Piper.

How impactful has your academy been since you started the programme? The programme has met with a lot of positive feedback from clients and the legal market in general. The programme has held in Southern Africa, East Africa, and this October, for the first time it held in West Africa, that is Lagos, Nigeria, We hope to hold more of such programmes and others, focused on other sectors of the economy. It is reported that many companies in Nigeria and agencies shy away from training their staff effectively. What could be the reason and how can it be changed? This is an area that businesses

and government need to pay more attention. Most developed economies put a lot of emphasis on training because this forms the bedrock of provision of quality service. In the legal market, even though Nigerian lawyers are generally reputed to be top notch even when rated by lawyers from other jurisdictions, it is quite obvious that there is still a dearth of talent at the junior level and most firms quite often struggle to attract and retain top quality associates. A key solution to this is for the implementation of a formal training programme to be adopted in the industry. This will be a condition for lawyers to practice in the market. The NBA could adopt such programmes as a mandatory continuing legal education policy, which will be required to be met by each lawyer prior to renewal of annual practicing certificates. Such programmes must be accredited by the NBA or at least there should be a guideline as to the nature of programmes that would qualify for example in terms of duration, quality of facilitators or instructors. How would you assess the M&A processes in Nigeria? Mergers and Acquisition (“M&A”) in Nigeria are principally regulated by the provisions of the Investments and Securities Act (“ISA”), the Securities and Exchange Commission Rules and Regulations (“SEC Rules”) and the Companies and Allied Matters Act (Chapter C20) Laws of the Federation of Nigeria, 2004 (“CAMA”). These instruments prescribe the broad framework for regulation of M&A and establish the Securities and Exchange Commission (SEC) which is the apex regulatory body in Nigeria for the regulation of mergers, acquisitions and all forms of business combinations amongst companies in Nigeria. Let us define some things for purposes of clarity. The ISA defines “a merger” as any amalgamation of the undertakings or any part of the undertaking or interest of two or more companies or the undertakings or part of the undertaking of one or more companies and one or more bodies corporate. The ISA does not define an “acquisition”, however the SEC Rules describes “acquisition” to mean where a person or group of persons buys most (if not all) of

This includes our annual secondment programmes under the DLA Piper Africa secondment programme, where our lawyers have the opportunity to go on secondment programmes at any of the DLA Piper offices worldwide.This year, 4 of our associates and senior associates have gone on secondment at various DLA Piper offices.

Dayo Idowu

a company’s ownership stake in order to assume control of the target company. The ISA defines “take over” as the acquisition by one company of sufficient shares in another company to give the acquiring company control over the other company. The ISA sets out three (3) categories of mergers namely small, intermediate and large mergers (based on turnover and/ or assets of the parties). The threshold for a small merger is a merger, whose value is below N1 billion of either combined assets or turnover of the merging companies. For an intermediate merger, the threshold between N1 billion and N5 billion whilst the threshold for a large merger is from N5 billion of either combined assets or turnover of the merging companies. Parties to an intermediate or large merger are mandated by law to notify SEC of, and obtain its formal approval to such merger. The SEC Rules further provides that the SEC will regulate acquisitions in both private and public unquoted companies. Can it be measured to have achieved its purposes? Definitely. In most jurisdictions mergers and acquisitions are strategic and usually done to enhance shareholder value. Some of the reasons and advantages are utilisation of synergies, economies of scale derived from sharing resources and services, growth or diversification in market share, structural and operational benefits resulting in cost reduction, tax benefits resulting from tax shields as well as monetary leverage.

In 2005, the Central Bank of Nigeria increased the minimum regulatory capital of banks in Nigeria i.e. shareholders’ funds. This resulted in a forced merger of various banks which led to about 25 remaining but much stronger and bigger banking institutions in terms of assets and capital. These banks were better placed to participate in the market including funding and participation on a larger scale than previously. For example in the oil and gas and power sectors, an area which Nigerian banks currently hold the largest share of participation. Prior to that, most big ticket funding were by foreign banks or on-lending by foreign banks through Nigerian banks to local borrowers. Over the period, your organisation has featured prominently as a top trainer of young professionals. What could be the secret behind this enviable trend? Training is a very critical part of our firm’s business approach. We believe that it is very important and is a differentiating factor of our firm. This includes our adoption of international standards even as a domestic firm. This is particularly so in view of our membership of DLA Piper Africa. This requires that all of our internal standards, processes and approach to doing business meets with international standards. This includes training, processes and systems, strict anti-bribery and anti-corruption standards. We have put in place a standard training and continuing education programme for all of our lawyers and non-legal staff requiring and providing for training year round.

What immediate impact do you expect after this year’s M&A academy? The programme is targeted at professionals who work in the Mergers & Acquisitions market. We expect that the participants at the academy will bring to bear in their day to day engagements the knowledge gained and the shared experiences of the facilitators as well as the participants at the academy. What in your opinion are the major challenges facing the Nigerian economy today? In my view, one of the major challenges is regulatory and policy uncertainty. Nigeria needs foreign investments and a major antithesis of this is policy or regulatory uncertainty. In 2016, a likely inadvertent misstep in the foreign exchange policy acted as a catalyst to the sudden and significant devaluation of the Naira. This led to major capital flight. A number of foreign investors intending to invest did a volte-face while others simply sat on the sidelines speculating on whether there would be further devaluation in order for them to acquire assets at a cheaper price. In addition, several investors spooked by the devaluation of the currency and further decline in the value of their assets, tried to cash out and repatriate their investments. Also, in the power sector, the lack of clarity regarding the solution to the liquidity crisis in the sector would further keep investors at bay. Similarly, payment/ credit enhancements to support projects such as the partial risk guarantees still remain a matter of debate. So, what the market needs is consistency and certainty of the regulatory environment which is a fundamental consideration for making an investment decision. It has been reported that there has been a rebound after the last economic recession. Have you seen any significant improvement in Nigeria in line with this

claim? Indeed, based on statistics as well as deal activity in the market, it is clear that there has been a rebound in the past 18 months. The increase in oil prices from its low of about $28 in 2016 to over $80 in the past few weeks has had a positive impact on the economy. It is a known fact that oil still forms over 80% of government revenue and over 90% of foreign exchange earnings, hence, the rebound in oil prices has provided enough buffer for the government to intervene in the foreign exchange market to keep the exchange rate relatively stable. In 2016 when foreign reserves dipped well below $30 billion dollars, it was difficult for the government to carry out the sort of interventions it currently does now that reserves have been over $45 billion. In addition, inflation has come down from the highs of over 16% to the current rate of just over 11%, which is also having a positive impact on the economy. As we move towards an election year which areas of the economy should we expect some lull and where can we look at as possible action spots? In the recent years, typical before most elections in Nigeria, is flight of capital by foreign investors. We expect that a number of investors in the short term debt capital market and those in the equity market will exit the market before the elections possibly due to anticipated or perceived risks and uncertainties. Typically, most of such investors generally return after the elections in view of the attractive returns on investment. In addition, the recent increases in the U.S Fed Funds rate may exacerbate the capital flight as a number of investors may exit emerging markets to invest in the perceived ‘safer’ investments in the U.S with considerably attractive yields in view of the rate review. However, as investors flock into that market, yields start to decline and price goes up, investors may start to return to the emerging markets. Hence, as we move towards the end of 2018 into an election new year, I see a decline in the debt and equity capital market, also, there might be some delays in infrastructure projects due to investors apathy to commit to such projects just before an election.

32 BUSINESS DAY Financial Inclusion

& INNOVATION

C002D5556

Wednesday 24 October 2018

Supported by:

‘Banks likely to lose market share if they fail to partner emerging businesses’ The Chief Executive Officer, Diamond Bank Plc, Uzoma Dozie, in this interview explains how banks are likely to be out-innovated or lose their market share if they fail to partner with emerging businesses to deliver superior services to customers. He explains the importance of partnership between telcos, fintechs and banks in order to continue to deepen banking penetration. DIPO OLADEHINDE was there. Excerpts: How did you feel about the recent Central Bank of Nigeria fine on the bank with respect to MTN Nigeria? hen you are in the battlefield, you expect injuries once in a while. And that was the way we saw it. We didn’t quite understand the basis. As an organisation, we always try to do things in line with corporate governance. We are always compliant. Basically, we didn’t understand the basis for the fine. We have responded to our regulator to look at it and look at the information again. The central bank has stated in one of their press releases that they have gathered more information and that they are looking at it. We have to continue moving, you can’t allow that to stop your operation. Fortunately, we have capacity to absorb that it does not affect the day-to-day running of our services to our customers. We would not allow that to distract us.

How did your customers react to the news of the fine? We have customers that are informed and we also have the ones that are going about trying to make their dreams come true in Nigeria. We have about 15 million customers. Those people don’t have the luxury of reading newspapers. We also have a relationship with MTN in terms of providing services that help transform people’s life. So, the development didn’t impact on the brand. People are now more informed and they can take informed decisions. In my opinion, our customers believe that this is an issue that has to be resolved and that their monies are safe. The Monetary Policy Committee (MPC) at its last meeting raised some concern about the economy. What is your take on that and what do you think the government should be doing to avert another slide into recession? This is talking to all stakeholders in every sector of the economy: private sector, public sector, regulators even foreign investors as well. Of course, Nigeria is no longer isolated from activities in the global economy.

Of course, with the increase in interest rate in the United States, it means there is going to be pressure to retain foreign investors in Nigeria, which we depend on. In terms of what we must do, firstly is that we must ensure there is stability – financial stability and stability in our oil production. But then, there is another thing – the rule of law, which is very key. We must ensure there is transparency and reduction in corruption. And that’s one of the reasons why Diamond Bank is really driven on digital. Digital means pure transparency and means audit trail. Imagine if Nigeria has invested in technology, look at Nigeria Interbank Settlement System payment platform, look at the Bank Verification Number, you can even look at the fact that people are using their mobile phones to drive their businesses and so on. You can see the potential. So those are the things we need to do. So, those are fundamentals. If there is transparency, trust, reduction in corruption, despite concerns of elections, people will still bring money in. Of course, people are still going to bring in money during election. So, it is about ensuring that there is stable environment for people to continue to do their business and money will keep coming in. KPMG’s recent 2018 customer survey rated Diamond Bank as one of the top five SME Customer Banks in Nigeria. Can you speak more on the bank’s focus on SMEs and what are its long-term plans for SMEs in the country? Yes, you are correct. That space is our major focus area for us in the bank, and we have deployed a lot of resources towards growing that SMEs space. We call it emerging business in Diamond Bank. And that’s because if you look at the economy, 70 per cent of impact in the economy is coming from small and medium scale enterprises (SMEs). So, we deploy a lot services. Now, we are on a growth trajectory. What do they require? Access to finance, access to market, capacity building, networking. And so, we have deliberately tried to ensure we meet those needs. And again, another

products or services into cash. But if you are an SME and you are in a business, all I need is to take your cash register, look at your pattern of payment and lend you based on how your money comes to you. That challenge is being addressed by our cash flow lending.

Uzoma Dozie

challenge in that sector is lending which is why our collaboration with Women’s World Banking is what we are using now to make sure we meet the needs of companies and individuals in that sector. So, we are now using the cashflow lending type of proposition to attack that sector. What does this do for us? We are still having collateral, but they are more flexible. We have three focus areas we lend to – agriculture, education and health. So, if I come to your hospital and you don’t have collateral, you have equipment that I can use as collateral. If you are school, there are computers in the school and other things. Normally, the traditional kind of lending you will not use such things because those things you may feel you may not be able to realise. But what the cashflow does for you is we look at the pattern of your business and how your cash actually flows. So, we are deploying a lot of that strategy to make sure we give them financing. Then in terms of capacity building, because what you find out from SMEs is that they need knowledge on how to run their businesses. We have an alliance with Lagos Business School through their Enterprise Development Centre. And over the years, we have continued to train entrepreneurs, supporting them with education on how to run their businesses, giving them skills that we belief they require to run their businesses. Now, beyond that, what we used to do was

also to go round and educate our SMEs. That’s part of our non-financial services. We educate them on how to run their business. We have an SME zone in Diamond Bank where our customers can go and educate themselves on different things – human resources, financial management and all of that. We believe once we can spread the SMEs training all over the country, it would really give us the edge that we require to grow that sector of the economy. You talked about lending to that critical sector of the economy, but most SMEs have complained about accessing loans from banks as well as the high interest rate. How is Diamond Bank mitigating pains for the SMEs? They complain about collecting money from banks is because of security. Indeed, you have to be sure that whoever you giving money to would pay you back the money. Of course, if they don’t pay you back, your final way out is the security and many of them don’t have. This is why I explained what we are doing with Women World Banking to ease that challenge. So, we are lending based on your cash flow. The only challenge with that is that because we need to see the cash flows, it’s not available to new businesses. So, because I don’t know your pattern of payment. I don’t know how your customers pay you and how long it takes you to convert whatever

Can speak about your half year 2018 financial results that were released few weeks ago and what expansion plans the bank has for the future? We have started transformation. What it means is that we are diversifying our portfolios. If you look at our portfolio today, you will find out that our assets are actually skewed towards oil and gas. With the slide in oil prices few years ago, it meant we had to reclassify and restructure some loans out there. One of things we’ve done even before I got here, was that we have started lending into retail space and focus more on corporate clients that had a value chain and are actually into retail business, like telecoms, manufacturing, like the Dangotes of this world. What that meant was that you will see that our asset portfolio has been dropping because we are not lending billions into that space anymore. We are now focusing on driving retail business, the SMEs. Up to June this year, we have done more lending to small businesses than we have done in the last three years together. That is the focus of the bank. If lending is small and the duration is much shorter, it means that every month people are paying back. Until we build that critical part which is what we are trying to build. How you judge us is the transaction income coming out of that and the people we are beginning to lend to and even the platform we are building so that we can have access to more people. So, we are trying to build a more sustainable business that is bullet proof to shocks in the macro-economy. If we have another shock to the country again, if the economy is shocked by one per cent, ours should be 0.2 per cent because we have diversified our business base. That is what we are trying to do. And we know that it’s workable because what you see is the final number which is oil and

gas, non-performing loans. What you don’t see is the engine. In terms of liquidity, we have over N800 billion of retail deposits that is driving the lending portfolio. We want to diversify that so that we can actually access more people. We’ve also come out of West Africa. We don’t think there is enough opportunity there, we were just deploying capital that were not giving returns like we have in Nigeria. We have also sold our United Kingdom office. Because of the drop in foreign currency, trade businesses have dropped, so we’ve diversify from that. Those incomes we’ve made from trade business; we’ve now replaced it with retail type business. We can see that that is working. Our lending to retail space is not only growing, but NPLs from those segments are actually much lower because we have learnt from previous lending as well. And that is the whole idea. These have enabled us to manage our capital and we are pursuing a national license, which will mean our capital adequacy ratio will be much lower and we can now focus on improved profitability and leveraging on technology that we have invested in. You talked about transformation and my worry is you seem to be signing a lot partnership with foreign organizations. You made mention of MTN. How would shareholders benefit from majority of these? If you look at what is going on in the world today, you will find out that banks are under attack. This happens every day. People are beginning to either do those things themselves or people are coming into your space. If it is transferring dollars to Nigeria or lending, many people are doing it. The point is, what are you going to do as a bank? There is a capability that banks have that other people don’t have. For instance, Flour Mills said the other day that they want to issue their own commercial paper to raise N70 billion to refinance their loans. It means that your current business model may no longer be sustainable in the nearest future. We have this philosophy that says Continues on page 33

Wednesday 24 October 2018

C002D5556

Financial Inclusion

& INNOVATION

BUSINESS DAY

Supported by:

Digitization, financial inclusion key drivers for capital market growth - Stakeholders MICHEAL ANI AND DIPO OLADEHINDE

takeholders in the Nigerian capital market have expressed the significance of market data as an enabler in transforming and deepening the Nigerian capital market. Speaking at the third edition of the Nigerian Stock Exchange (NSE) Market Data workshop with the theme “Digitization, Disruption and Financial Inclusion”, chief executive officer of NSE, Oscar Onyema said over the past few years, the finance industry in Nigeria has experienced tremendous transformation caused by disruptive technologies, with the Nigerian customers becoming accustomed to the digital experience offered by companies such as Google, Amazon, and Facebook with the use of smartphones. The NSE boss said research has proven Smartphone penetration in Nigeria is estimated at 28 per cent, with 76 per cent of in-

ternet traffic routed through mobile phone. “In response to the exponential growth in mobile phone operation by an exploding young population, banks are adopting new technologies with customercentric focus to make financial services more inclusive and to provide a superior customer experience in the access and use of capital,” Onyema told the audience. He explained that in the capital market eco-system,

digitalization is fast gaining momentum, as purpose built solutions are being developed to reduce redundancies, cut costs and increase efficiencies for greater transparency and alpha returns. According to Onyema, the overall participation of the Nigerian capital market in the fourth industrial revolution is far less than that of our counterparts in developed and emerging economies.

“To ensure that Nigeria remains a globally competitive investment destination, we need to deepen the collaborative effort among market stakeholders to determine which emerging technologies to pursue within our markets and local context”, he said. He noted that this year’s theme provides a unique opportunity to assess these three key areas of digitization, disruptive technologies and financial inclusion, to proffer

solutions for the challenges facing the capital market. Also, the acting directorgeneral of Securities and Exchange Commission (SEC), Mary Uduk, said that SEC, the Central Bank of Nigeria (CBN) and other sister regulatory agencies, have made important contributions to the progress of financial inclusion through valuable guidance and active involvement in the National Financial Strategy (NFS) aimed at reducing adult exclusion from financial services to 20 per cent by 2020. She however, said that although the challenge of financial inclusion is significant, we have a variety of powerful tools to drive progress; saying among the most promising is digital finance. Uduk stated further that NSE is poised to contribute to and share even more insights in the collaborative quest to make the Nigerian economy, a financially inclusive one. She added that financial inclusion is an integral part of inclusive growth strategies and should be closely integrated into macro-eco-

nomic and financial policies, using digitised finance mechanisms. “When financial systems become more inclusive, they help broaden financial markets and make policies more effective. By bringing more sections of the population into the formal sector, the effects of marketdeepening initiatives are better expanded”, she said. Uduk pointed out that when the economy is more inclusive, the gains are less elusive, saying that the market is deeper, vibrant, and more effective. On his part the Senior Special Assistant to the President on ICT Mr Olarenwaju Osibona lauded the NSE for hosting the Market Data workshop, which was geared towards harnessing the possibilities of deploying technology and innovation for the markets. He assured stakeholders that the Federal Government was working assiduously to reposition Nigeria, as a strategic nation utilizing the fourth industrial revolution that is driven digital technology.

ample, what we found is that it is not about opening bank accounts, but about giving people incentives to save. As a bank, we are not going to open branches everywhere, MTN has branches everywhere. So, today, on our Diamond Y’ello, we have almost three million customers which we would not have ever had. We would have waited for when we open those branches to get to those places. But if you have an MTN line, you can open an account on your phone. What has also helped that Beta customers is the fact that MTN has agents as well that can go to the customers and pay them when they need. So, what you need to drive financial inclusion is technology. The telcos have it, while the banks have the expertise. So, what is needed is that collaboration.

You put your defenses round where your transactions are. Twenty years ago, if you go to a branch, you will see armored vehicles and lots of policemen, in order to protect the money. Today, a lot of those things are not necessary because people are doing their transactions electronically. So, cyber-security is very important to us at Diamond Bank. Not only do we have in-house security, we also outsource security as well because security involves experts. We have experts that keep checking our systems against vulnerabilities. Technology also gives security. For example, BVN is more secured than my signature. Anybody can forge my signature, but nobody can forge my BVN. So, we are making sure that we are building that trust on all our channels. We have even gone one step further by using robotics to ensure that the back office is moving at the same pace. So, working with Deliotte, we have automated one of the most complicated automated systems and our customers are enjoying successful transactions.

‘Banks likely to lose market share if ... Continued from page 32

beyond banking, we have to do more for our customers. Now am I going to lend to all kind of persons or how can we partner to deliver the outcomes. That is because people don’t care about banking but outcome. They want to go to the movies, they want to make phones calls, they want to buy a house. So, if you want to talk to someone, you need to buy airtime. So, we decided to partner the telcos. So, the future for any business is the platform and you must do things to drive people to your platform. So for collaboration for a people business, you look at platform capable of delivering services. You look at the quality of your collaboration, number of people on the platform and the quality of partnership. So, we are in that business of partnering with people to ensure our platform is robust and we are able to do more for our customers. We believe that Nigeria has a huge population of men and women. We partner with the Women World Banking with a vision to get sizeable number of

women globally financially included, we partner together Nigeria is a big market. To reach more people, we need technology to do that. There are many financial and nonfinancial partnerships that we are beginning to establish because we know that the future businesses are sharing and collaboration. So, no man is an island. If you are in business that is connected to the world, not connected for others to benefit maximally from, you cannot be a one stop shop for people. I want people to know that either through my mobile phone or myself they have a gateway, they don’t have to go to too many places. That is why we are on this journey. It is just like small businesses, nobody is going to give you money if you have not gotten yourself in a position to attract advisory services and how to position yourself in the market. People won’t give you money because they would say you won’t know how to deal with it because there is no market. For us, if we don’t build a platform people can connect wherever they are in the world. That is

what we are building because that is what our customers demand. We are in mobiledriven economy. You talked about mobile economy. If you look at a country like Kenya, the Telcos are the ones driving mobile money. In Nigeria, you discover that it is mostly the banks that do that. What is Diamond Bank doing in respect of financial inclusion? Do you think the banks or telcos should drive financial inclusion in the country or partnership would be the best one? It is definitely partnership and not about capability. You should also look at how telcos became the dominant financial player in the case of Kenya you sighted in terms of transfer payment. At a time, the banking industry was backward then in Kenya, and so the only people that could do anything then were the telcos. People also forget that government was also a major shareholder in Safaricom. So, they had the regulation that allowed it to happen. But in Nigeria, things are completely differ-

ent. Our payment platform is more advanced than even Kenya. Ours has been real time online a long time ago. It meant that there was no place for mobile money. Mobile money is a glorified transfer system. So, financial inclusion won’t work with bank alone because we are not going to go to many places. Telcos can never provide the sophistication. Banking is about trust, managing risk, convenience. So, the only way to be competitive is partnership. So, beyond the telcos, you need other people who have developed other business solutions in the world to be on the platform. Telcos cannot provide full digital services without banks. It is that partnership that will allow you to achieve what you have set out to achieve in that sector. So, the fintechs are very important. If you look at Diamond Bank, all our foray into financial inclusion has been through collaboration with fintechs. Telcos cannot provide full digital financial services without a bank. On our Beta proposition for ex-

But if we are all moving into technology, we also need to look at the vulnerabilities, which is the question of cyber-attacks. What are the defense mechanism to ensure that customers are protected?

BUSINESS DAY

C002D5556

Tax Issues

Wednesday 24 October 2018

Business implications of Excess Dividend tax in Nigeria WOLE OBAYOMI, head of tax, regulatory and people services, KPMG in Nigeria CHIMA AZUMARAH, senior adviser, tax, regulatory and people services, KPMG in Nigeria Introduction

xcess Dividend Tax is an anti-avoidance tax on dividends distributed by a company, where the company either has no total profits or the total profits are less than the dividends paid. The enabling provision in section 19 of the Companies Income Tax Act (“CITA”), 2004 (as amended) was applied to treat dividends distributed by the appellant in the recent judgment of the Federal High Court (“FHC”) in Oando v. Federal Inland Revenue Service (“FIRS”) (Appeal No. FHC/L/6A/2014) (“Oando”) from retained earnings as its total profits for the relevant years of assessment Analysis and interpretation of Section 19 Section 19 of CITA provides that “…Where a dividend is paid out as profit on which no tax is payable due to: (a) no total profits; or (b) total profits which are less than the amount of dividend which is paid, whether or not the recipient of the dividend is a Nigerian company, is paid by a Nigerian company, the Company paying the dividend shall be charged to tax at the rate prescribed in section 40 (1) of this act as if the dividend is the toaatal profits of the company for the year of assessment to which the accounts, out of which the dividend is declared, relates.” On the face of it, there is no ambiguity about this provision as it seeks to limit a company’s ability to declare dividends in a year of assessment to which the accounts from which the dividends declared relate in two situations, namely: •where the company has no total profits at all. •where the company has total profits, it is only entitled to declare dividends up to the amount of its total profits and no more. Where a company elects to declare dividends in (a) above, or dividends in excess of its total profits in (b) above, the dividends will be taxed as if it were its total profits. In essence, a robust interpretation of Section 19 should not have led to the controversy arising from Oando vs FIRS if both the Tax Appeal Tribunal and the Federal High Court had painstakingly analysed and interpreted the provision, especially in the context of the key issue before them for determination. The key issue was whether Section 19 should be applied to tax a company’s dividends as total profits in any year of assessment where it has no total profits, or the dividends exceed its total profits, if the dividends are declared from: (i) profits that are exempted from tax by CITA, such as export earnings, or franked investment income (as was in the case) in Sections 23 and 80 of CITA, respectively, or any other legislation, such as the profits of a pioneer company under Section 16 of the Industrial Development (Income Tax Relief) Act. •profits declared from retained

earnings, such being trading profits of previous years on which income tax has been paid. It is instructive to note that reference in Section 19 to “profit on which no tax is payable” suggests that the provision is not intended to apply to profits on which tax has been paid. And it can inferred that the provision is intended to ensure that companies pay taxes to the government in any year of assessment where they declare dividends from the trading results of the related financial year. Oando Plc vs. FIRS – facts and decision Oando Plc (“Oando) paid dividends to its shareholders in 2004, 2005 and 2006 financial years, when its total profits were less than the dividends paid out for these periods. The FIRS raised additional assessments on the Company for the affected years, and being dissatisfied with the FIRS’ position, Oando challenged the FIRS’ additional assessments at the Tax Appeal Tribunal (TAT) in Oando Plc vs Federal Inland Revenue Service (2014) TAT/LZ/011/2012,012/2012 and 013/2012). The TAT ruled in favour of the FIRS on the ground that section 19 of CITA applies in any year the dividend paid is higher than the total profit, regardless of the period to

the source(s) of dividends and does not by any means exempt dividends from any source from taxation, and that its application in this instance will not lead to double taxation. Matters arising The first question to address is the issue of the precedence of Section 19 above Section 80 on the basis that, historically, Section 19 was enacted and incorporated into CITA later than section 80. By overriding Section 80 in the case, the judge has, by implication, nullified section 80 wherever section 19 applies. Thankfully, this cannot stand as the law leans against “implied repeal” of legislation. Had the legislature intended to repeal Section 80 or subordinate it to Section 19, it would have done so directly either in 2004, when the Companies Income Tax Act was re-enacted, or in 2007, when it was amended. While we acknowledge that Section 80 predated Section 19, the reasoning and the conclusion of the court are not sustainable. The reality today is that the principal legislation, embodying the two provisions enacted at different times has, subsequent to the introduction of Section 19, been re-enacted as Companies Income Tax Act, Cap C21, Laws of the Federation of Nigeria, 2004.

Company A

Total Profit Tax paid Dividend paid from current year profit Dividend paid from retained earnings Additional tax (excess dividend tax) payable

ria Limited V FBIR (1988) as no more than an income being taxed twice in the hand of the same beneficiary. Having suffered withholding tax at source, Section 80(3) exempts dividends from further tax in the hands of the recipient. So, if Oando, as an investment holding company, redistributes previously taxed dividends earned from its subsidiaries to its shareholders, should it be subject to additional companies income tax at 30% on the basis of Section 19? And where it is so taxed, would the result not be double taxation of the same income? And does this not defeat the purpose of Section 80(3) which clearly exempts the dividends from further tax? In our opinion, the answers to these questions point to nothing else other than double taxation. We are convinced that in the absence of any apparent contradiction between both sections 19 and 80, Section 19 can be given effect to by excluding franked investment income from any dividend that may be liable to excess dividend tax, where any such dividend or the profit from which it was appropriated is not otherwise tax-exempt. Lastly, could it really be said that Section 19 does not look at the

Company B

2016 N 30,000,000 9,000,000 20,000,000

2017 N 30,000,000 9,000,000 20,000,000

2016 N 30,000,000 9,000,000 Nil

2017 N 30,000,000 9,000,000 20,000,000

Nil

20,000,000

Nil

3,000,000

which the dividend relates. Dissatisfied with the ruling, Oando appealed the decision of the TAT to the FHC to address the following issues: •whether the provisions of Section 19 of CITA can be applied to dividends paid out of retained earnings that had been taxed in prior years; and •whether Oando was liable to pay additional companies income tax on retained earnings constituted by dividends earned from investments in its subsidiaries (i.e., franked investment income). The judge held that Section 19 was applicable on the dividends paid out by Oando in the referenced periods and that there was no double taxation, and thereby upheld the additional notices of assessment raised on Oando. In coming to this conclusion, he gave precedence to Section 19 above section 80(3) of CITA on the ground that Section 19 was enacted later in time (section 19 was introduced into CITA by Finance [Miscellaneous Taxation Provisions] Decree No.30 1996, while section 80 was introduced in the Companies Income Tax Act Cap 60 Laws of the Federation 1990), and constitutes the new legal order in conformity with changing times and circumstances. The judge further said, most curiously, that section 19 does not look at

Thus, the two provisions are now of equal standing and Section 80, being sequentially after Section 19, should actually override Section 19 assuming, but not conceding, that there is a conflict between the two of them. Indeed, the basis of applying the principle of precedence in interpreting two legislative provisions is not applicable in this instance in the absence of a conflict between the two provisions. Section 80(3) provides that “Dividend received after deduction of tax…shall be regarded as franked investment income of the company receiving the dividend and shall not be charged to further tax as part of the profits of the recipient company…” When this is juxtaposed with Section 19, we see an exception in Section 80 to Section 19, rather than a conflict. Hence, there is no reason why the two provisions cannot co-exist. Section 19 is not intended to apply to income that is specifically exempted from tax by any law since the law will not give anything with one hand and take it away with the other. By this, Section 19 will continue to serve as an antitax avoidance provision as intended by the law and applied to clear instances of tax avoidance, which a statutorily exempted income is not. Regarding “double taxation”, the phrase was defined in Delta Oil Nige-

source(s) of dividends and does not by any means exempt dividends from any source from taxation as the judged posited? If the statement of the judge were to be correct, it means that Section 19 will be applied to tax a company in the following examples: •Where a company distributes dividends from retained earnings made up of profits after tax in prior years. Indeed, the judge said that retained earnings, being a source of dividend paid, is inconsequential in the application of section 19. But where this happens, it means that if a company had paid tax on its profits in a particular year and transferred its post-tax profits to retained earnings, it would be liable to companies income tax again on any dividend it distributes from the retained earnings in any subsequent year of assessment in which the dividends so distributed exceed its total profits. Surely, Section 19 could not have been provided in the law to work such a hardship on tax payers •Where a company enjoying pioneer status that entitles it to income tax holiday distributes dividends from its pioneer profits earned during its pioneer period when it is tax exempt. Surely Section 19 could not have been enacted to negate or undermine the benefit of income

tax exemption during the pioneer period granted to such company by the Industrial Development (Income Tax Relief) Act (Cap 17, Laws of the Federation of Nigeria 2004). While the intent of Section 19 as an anti-tax avoidance provision is to ensure that a company does not pay dividends in the absence of total profits, it is not, and cannot be the intent of the draftsman of the law to deny a company, that has deferred the distribution of its after tax profits as dividends in prior years, the right to distribute the profits when it chooses to do so in future without further tax thereon. Anything to the contrary is punitive, which is not the way tax law operates or should be interpreted and applied. Implications of Oando case for businesses To appreciate the business implication of the judgment, let us consider the following scenario involving two different companies. In 2016 financial year, both companies (A and B for this purpose) had a total profit of 30 million Naira each. Company A paid a dividend of 20 million Naira from its 2016 profits while Company B transferred its profits to retained earnings. In 2017, both companies, again, made a total profit of 30 million Naira each, Company A declared a dividend of 20 million Naira while Company B declared a dividend of 20 million Naira from its current year profits and another 20 million Naira from its retained earnings. Applying the FHC judgment in the Oando case, the tax impact of the above scenario is shown in the Table below: From the table above, it is clear that Company B got punished for deferring payment of dividends from its prior year profits even though the profits being distributed were from retained earnings which had earlier suffered tax. Companies in Nigeria, as in other countries, are typically funded partly by equity investment by shareholders, in return for which they expect to be paid dividends as returns on their investments. However, in view of the FHC ruling on the application of Section 19 of CITA, companies must pause, and carefully compare their proposed dividends with their total profits before approving the dividends. For various economic reasons, a company may defer payment of dividends from its profits to the future. For instance, a company may want to reinvest its current year profits in order to generate more profits which, ultimately, should lead to more tax revenue for the government. Additionally, there might be cash flow concerns which could restrain companies from declaring dividends. However, with the FHC judgment, companies may be motivated to distribute all their after tax profits up to the amount of their total profits for the year as dividends, even if they have to borrow to do so, rather than keep them in retained earnings, to avoid being taxed on the same profits Reproduced with permission from Daily Tax Report: International, 181 TMIN, 9/18/18, and 182 TMIN, 9/19/18. Copyright 2018 by The Bureau of National Affairs, Inc. (800-3721033) http://www.bna.com”

Continues on next edition

Wednesday 24 October 2018

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LegalPerspectives

With

BUSINESS DAY

Odunayo Oyasiji

Trademark

rademark simply refers to a sign or design which is specially made for the identification of a product. It is meant to distinguish and identify the source of the product that carries the mark. Trademarks are often used by companies. The sign is always openly displayed on the product so as to quickly create an awareness of its source to the buyer. Trademarks are often registered so as to prevent any other person or company from using it. Its registration vests the person or company with the right to take legal actions against any form of infringement/use without permission. In essence, it is an asset of the company. A symbol® is usually used to bring to the attention of the world that the trademark is registered. The law that regulates trademark in Nigeria is the Trade Marks Act. The agency that is in charge of trademark registration in Nigeria is Trademarks, Patents And Designs Registry, Commercial Law Department, Federal Ministry Of Industry, Trade And Investment, Abuja. Section 9(1) of the Trademark Act provides for registrability of trademark. It states that – “In order for a trade mark (other than a certification trade mark) to be registrable in Part A of the register it must contain or consist of at least one of the following essential particulars - (a) the name of a company, individual, or firm, represented in a special or particular manner; (b) the signature of the applicant for registration or some predecessor in his business; (c) an invented word or invented words; (d) a word or words having no direct reference to the character or quality of the goods, and not being according to its ordinary signification a geographical name or a surname; (e) any other distinctive mark:” Sections 3 and 4 of the Act makes it clear that a trademark must be registered in order to enjoy its exclusive use. The sections read “3. No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark; but nothing in this Act shall be taken to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof. 4. A trade mark must be registered in respect of particular goods or classes of goods, and any question arising as to the class within which any goods fall shall be determined by the Registrar, whose decision shall be final.” The procedure for the registration of trademark is stated below1. Search is conducted to ensure that the trademark presented does not infringe on an

existing trademark. 2. If the above comes out positive, then the trademark is presented for filing. 3. An acknowledgement letter is then issued by the trademark registry after the filing. 4. The trademark Registry will shortly after the acknowledgement letter issue an acceptance letter. 5. The trademark is then published in a trademark journal. 6. A trademark certificate will also be issued. The requirements for the registration of trademark are listed below1. Logo 2. Applicant’s name 3. Applicant’s contact details 4. Power of Attorney appointing an agent to conduct the registration on behalf of the applicant. It must be noted that Section 23(1) of the Act states that “the registration of a trade mark shall be for a period of seven years, but may be renewed from time to time in accordance with the provisions of this section.” The foregoing shows that the initial or first registration is valid for seven years. However, the registration can be renewed after the seven years period. Section 23(2) of the Act further provides for the period of validity of the subsequent registration. The section states that such subsequent registration shall be valid for fourteen years. PATENT Patent has to do with an invention. It refers to the right granted to an inventor to enjoy the exclusive right over his invention for a period of time. The inventor can then focus on reaping the economic benefit of his invention. The law that regulates this area in Nigeria is Patents and Designs Act. The body that is responsible for registration of patents is Trademarks, Patents And Designs Registry, Commercial Law Department, Federal Ministry Of

Industry, Trade And Investment, Abuja. Section 1 of the Act describes what can be eligible for registration. Basically, patents are granted for inventions that are1. New- it means not an already existing invention. It must be novel. 2. It must be capable of being used in some kind of industry. 3. It must not be against public policy or morality- the registry can on this basis reject the registration of such patent. 4. Patents cannot be obtained for plant or animal varieties, or essentially biological processes for the production of plants or animals (other than microbiological processes and their products). 5. Principles and discoveries of a scientific nature are not inventions for the purposes of this Act. Section 2 expressly shows that patent in an invention is not automatically conferred on the inventor (like in the case of copyright). Therefore, an inventor must register the invention for him to enjoy exclusive right in his invention. Section 2(1) states that “Subject to this section, the right to a patent in respect of an invention is vested in the statutory inventor, that is to say, the person who, whether or not he is the true inventor, is the first to file, or validly to claim a foreign priority for, a patent application in respect of the invention.” The registration of a patent confers some rights on the inventor. These rights are stated in section 6 of the Act. The benefits that flows with the registration of a patent are – 1. Exclusive right to use the invention. 2. The person can also authorize others to use the invention. 3. The person can institute an action against anyone that uses the invention without permission and can claim for damages.

4. The person can sell it and make money from it. Section 7(1) provides for the validity period of a registered patent i.e. such registration is valid for twenty years. Section 7 (2) of the Act also provides for the expiration of a patent in a situation where the required annual fee is not paid.

The procedure for registration of patent in Nigeria is expressly stated in Section 3(1) of the Act. For purpose of clarity, it is best to reproduce the section3. (1) Every patent application(a) Shall be made to the Registrar and shall contain(i) the applicant’s full name and address and, if that address is outside Nigeria, an address for service in Nigeria, (ii) a description of the relevant invention with any appropriate plans and drawings, (iii) a claim or claims, and (iv) such other matter as may be prescribed; and (b) shall be accompanied by(i) the prescribed fee, (ii) where appropriate, a declaration signed by the true inventor requesting that he be mentioned as such in the patent and giving his name and address, and (iii) if the application is made by an agent, a signed power of attorney (so however that, notwithstanding any rule of law, legalisation or certification of the signature of the power of attorney shall be unnecessary).

Case Update FHC/ABJ/CS/1217/2017

Nigerian Communications Commission V. Private Networks Nigeria Limited

What to note :

This is a status update about an ongoing matter before the Federal High Court, Abuja Judicial division. It is in no way a comment on the matter itself.

Facts

PNN entered into an agreement with NCC for PNN to capture and transmit the specified biometrics and personal information of existing mobile telephone subscribers in North-Central zone of Nigeria comprising Benue, Kogi, Nassarawa, Niger, Plateau, Kwara States and Federal Capital Territory on behalf of the NCC with payment sum for each data captured specifically fixed in the agreement. PNN reportedly captured 4,105,165 subscriber data records and transmitted them to NCC. NCC initially informed PNN that only 1,738,731 data records were valid while 2,366,434 were invalid because of format and other data entry issues and requested PNN to correct the errors and resubmit them. PNN did the correction and re-submitted 2,236,720 corrected data records to NCC. NCC had paid a total of N229,555,445.96 to PNN leaving a balance of N227,621,419.04. Dispute arose due to non-payment of the balance. Hence, by

consent of the parties, the Chartered Institute of Arbitrators (UK) Nigerian Branch appointed Chief Akingbola Akinola (Chartered Arbitrator) as the Sole Arbitrator to determine the dispute between them. The Sole Arbitrator published a Final Award dated 10th November, 2017 which awarded in favour of PNN the sum of N227,621,419.04. NCC applied to the Federal High Court to set aside the Final Award. However, the Court in a Judgment dated 6th day of July, 2018 delivered by Honourable Justice Nyako refused to set aside the Arbitration Award but only set aside part of the Award relating to post judgment interest.

Status

Further to the above, the judgement creditor (PNN) applied to the Court for a Garnishee Order Nisi against the judgement debtor (NCC) attaching the Commission’s account with the Central Bank of Nigeria to the tune of ₦234,193,048.18 (Two Hundred and Thirty Four Million, One Hundred and Ninety-three Thousand, Forty-eight Naira and Eighteen Kobo). Honourable Justice Binta Nyako granted the order Nisi on October 15, 2018 and adjourned the matter to November 19, 2018.

BUSINESS DAY

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Wednesday 24 October 2018

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INSIGHT

Ikpeazu: Promoting private sector investment to grow economy … as Aba hosts 1st economic summit GODFREY OFURUM

rivate sector investment enhances economic growth, promotes competition, entrepreneurship and innovation. It also reduces unemployment, particularly among youth, through the encouragement of entrepreneurship. In a market-based economy, private firms create job opportunities, drive up workers wages due to competition and reduce income poverty. In growing Abia economy, the state government is encouraging private sector participation to produce essential goods and services in largescale production, help to keep the price of essential goods and services down and thereby increasing the real effective incomes of poor people. Trade and commerce comes naturally to the people of the South East and particularly Abians, and that is why it is featuring prominently in Governor Okezie Ikpeazu’s economic blueprint, the “Five Pillars” of economic development. In drafting the “five pillars,” Governor Ikpeazu in conjunction with his economic team, considered those economic activities that the people of the state do better than others in Nigeria, those things that the state has both comparative and competitive advantages over other, and trade and commerce is one of those activities. Aba, the commercial hub of Abia State, has one of the largest concentrations of micro, small and medium enterprises (MSMEs) in Nigeria, and a bulk of this number is engaged in leather works, steel fabrication and garment making. It is Ikpeazu’s belief that a robust MSME can lead to massive wealth creation, when properly incubated and supported, hence the need for private sector participation. To attract fresh investments, the state government established an investment house known as OneStop-Shop to remove bottlenecks and improve ease of doing business. And that move, by the state government to catch the attention of investors is yielding fruit. To provide a more conducive environment for investors, the state under Ikpeazu, has gotten approval from the Federal Government to

BUSINESS DAY

Okezie Ikpeazu

establish a free-trade-zone, the first in the entire South-East region of Nigeria to be known as “Enyimba Economic City.” Enyimba Economic City, to be sited in Ukwa area of Abia State, about 30-minutes drive to Port Harcourt, Rivers State, is estimated to provide about 60,000 jobs. Chinenye Nwaogu, senior special assistant to Abia State Governor on Small and Medium Enterprises, explained that the license of the facility has been issued and approved, while payment for the license fees has been processed. According to him, with that Free Trade Zone, Abia State Government, would have opened Aba and Abia State to the world. “There is also a nexus in Azumini, Ukwa East Local Government Area to the Atlantic ocean, which has been added to the Free Trade Zone, consequently that will be the only route that the South-East region would have to the Atlantic Ocean.” He urged Ndi-Igbo in Diaspora and other investors to come and invest in Aba, stressing that the best place to invest is in a free trade zone, because of the enormous privileges that is conferred on it. In his words, “This is wonderful that it has happened in the life of the administration of Governor Okezie Ikpeazu. And we will devote a lot of effort, to ensure that those who participate in the summit will have a full grasp of what Enyimba Economic City offers to investors and the residents of Aba. “We have said it that on completion that Enyimba Economic City, will create about 60,000 jobs within

one year and enormous industrialization and economic development will also take place in Aba and its environs. The key anchor tenant, Ruyi Group of China, the largest textile manufacturing company in the world, has already signed a memorandum of understanding (MoU) with the State Government. This is as Ruyi has also signed an agreement with Geometric Power Limited, promoters of the independent power plant at Osisioma, Aba, to revive plant and provide uninterrupted power in the area. Abia State government intends to also replicate the ongoing Ariaria power project, which is expected to provide uninterrupted power in the Ariaria business corridor, in other markets in Aba. In another intervention, the Ford Foundation and Fidelity Bank plc, through the intervention of the State Government, in September 2018, jointly launched a N400 million quarterly revolving loan for shoemakers in Aba. Governor Ikpeazu has also approved the sum of N2 million to formalize businesses of artisans and other entrepreneurs, whose businesses were not registered with the Corporate Affairs Commission (CAC). The Governor wants to use the window created, by the federal government, through the policy of ease of doing business, to formalise the businesses of artisans in Aba. It is estimated that about 80 percent of people, who live in Aba are entrepreneurs and more than 70 percent of these businesses are not registered, hence the intervention of the Governor to formalise those businesses. Recall that the Vice President Yemi Osinbajo, in one of his recent visits to Abia State, commissioned the Abia Investment House, a-one stop shop, established by the Abia State Government to improve ease of doing business in the state. The one-stop shop was designed to host the Inland Revenue Service (IRS) and its partners’ to create a friendly environment for investors and other patrons, who would come into the state to do business. It is the dream of the state government to rank among the top 10 States in the ease of doing business in the country.

Working with world leaders to create employment in Africa MICHEAL ANI

frican youths are beginning to create better job opportunities for themselves and their community at large. They are now taking a bold stand in their various countries, solving problems that exist as a challenge to the world economy. They are raising their voices to influence new market strategies, foster economic development, and policy change in the world. They are expanding their network and services to create productive growth and investment opportunities across Africa. The CEO and founder of Outsource Global, Amal Hassan, met with other world leaders at the 73rd United Nations General Assembly (UNGA) on September 25, in New York, the United Kingdom, Canada, Ghana, and Rwanda co-hosted the event titled “A Call to Invest: Investing in Jobs for Young People in Africa.” This was brought about to deliver more jobs for the millions of African youths entering the labour market. It also aimed at increasing private investment in Africa, working with international institutions, and G20 members to implement agreed on actions to improve the business environment. Job creation for youths is a major problem in most developing countries. Giving a case of Nigeria, who has an estimated population of over 195 million, the general unemployment rate is at 18%, while 33.10% of youths are unemployed. Between now and 2035, Africans will have to create 18 million new jobs every year to keep pace with the rapidly growing population. The reason is not far-fetched from the fact that, the problem of unemployment is more complex in Africa than other parts of the world. The CEO, Outsource Global, a leading Nigerian technopreneur who is passionate about fostering economic development through growth-enabled career path for knowledgeable customer service, legal practitioners, medical record professionals, and data analyst positions talked on ‘How to deliver a new approach that raises ambition and meets the scale and complexity of the challenge’. She shared practical knowledge and innovative ways of solving the unemployment challenges in Africa. As a promoter for youth empowerment and community development, Amal Hassan has been able to

R-L: Amal Hassan, CEO & founder of Outsource Global, Amina Mohammed, deputy secretary-general of the United Nations.

create employment opportunities for over 700 youths, and women in particular across major cities in Nigeria. She is partnering with global investors and leaders to increase access to economic opportunities create lasting jobs that will reduce the rate of unemployed youths in Nigeria, and bring about sustainable development growth across Africa. The event was a closed-door roundtable meeting bringing together key international actors such as; Antonio Guterres (Secretary-General of the UN), Amina J. Mohammed (Deputy Secretary-General of the UN). Theresa May (Prime Minister of the United Kingdom), Paul Kagame (President of the Republic of Rwanda), Nana AddoDankwaAkufo-Addo (President of Ghana), Paul Kagame (President of the Republic of Rwanda), Uhuru Kenyatta (President of the Republic of Kenya), Bill Gates (cochair of the Bill and Melinda Gates Foundation), Kristalina Georgieva (CEO of the World Bank), among many others. Through investors’ support and integrated strategies in creating jobs for young people in Africa, the defining challenges of youth unemployment will be suppressed. Also, having the right partnership and combination of policies implemented can benefit mutual interest and boost the global economy. However, world leaders must take advantage of the huge investment opportunities in Africa, come together to foster innovative ideas, and provide lasting solutions to the challenges identified. This will, in turn, bridge the wide gap between Africa and other continents of the world.

LCCI, Promosalons, 18 Nigerian food firms at SIAL Paris 2018 CYNTHIA IKWUETOGHU

he new edition of The Salon International de l’Alimentation (SIAL) that is, International Food Exhibition 2018, which commenced October 21, to end October 25, in Paris, is being attended by 18 Nigerian companies from the food sector. This is according to the press release from the exhibition organised by Promosalons Nigeria in conjunction with Lagos Chambers of Commerce and Industries (LCCI) and signed by Akin

Akinbola, CEO, Promosalons Nigeria, Cameroon and Gabon. Some of the companies include: Marshall Biscuits Limited; Nkiruka/ Iruka Industries Nigeria; Snomanec International Ltd; Rosewell Industries Ltd; Glister Success; Annabelles; Sunny Black Communication, and Donchinel Options. Others are Ekulo Group of Companies; Fareast Merchantile Company Ltd; Josein Holdings; Delifrost; Xo Wine; Drinks and Foods Warehouse; Next Cash and Carry; Charvet Nigeria;

U.B. Ugobest International, and Promasidor Nigeria. The highlight of this year’s expo, ‘bringing together the world’s food industry in the French capital, for sharing the solutions of today and tomorrow’ is to be represented by over 119 countries, 7,200 exhibitors and 21 products, as stated by Akinbola in the press release. With the Nigeria’s population estimated at over 180 million and the decline in crude oil prices, which has been the mainstay of the nation, the Federal Government is making

concerted efforts towards diversifying the sources of revenue from crude oil towards other sectors with food processing and agriculture as top priorities, he stated. The CEO added that professional, researchers and food production companies seem to have their work cut out for them as they need to engage in innovative and transformative activities to develop, adopt and engage in latest food technological services. This is because consumers are drawn by the diversity and attractive-

ness of the products available (at the best prices), which is why professionals, researchers and food production companies have to tailor their products and services towards adapting, and learning how to respond to the everevolving needs of today’s consumer, the CEO explained. According to the CEO, SIAL Paris 2018 will demonstrate how this biennial trade show has indeed developed into the food industry’s front-line event, that is, how to discover today’s food trends and explore tomorrow’s innovations.

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Wednesday 24 October 2018

National Assembly to mount pressure on Buhari over PIGB signing MICHEAL ANI

he National Assembly will continue to mount pressure on President Muhammadu Buhari to get his assent on the Petroleum Industrial Governance Bill (PIGB), Bukola Saraki, Senate president, said. “The resolution by the legislature to mount pressure to ensure the bill gets presidential assent has become necessary, given its importance to development of the oil and gas sector in Nigeria,” the News Agency of Nigeria quoted Saraki saying at a dinner held at the ongoing 24th Nigerian Economic Summit in Abuja on Monday. The PIGB is a fraction of a more comprehensive Petroleum Industry Bill (PIB) that was first formulated in 2003, aimed at reforming the petroleum industry. In May 2017, the eighth Senate led by Saraki passed the PIGB into law after a clause-by-clause consideration and amendment of the report by the chamber. The bill was later harmonised and passed by the Senate after the House of Representatives passed its own version of the bill The PIGB is expected to achieve among the following, creation of an efficient and effective governing institutions with clear and separate roles for the petroleum industry; establish a framework for the creation of commercially oriented and profit driven petroleum entities to ensure value addition and internationalization of the petroleum industry; promote transparency and accountability in the administration of petroleum resources of Nigeria; and foster a conducive

business environment for petroleum industry operations. The new bill gives legal backing to the possibilities of regulated pricing with the creation of the Petroleum Equalization Fund (PEF). The regulatory commission is empowered to determine fair pricing for petroleum products, while the equalization fund will be used to set a uniform fee all over the country. On July 3, 2018, the PIGB was sent to the President for approval. However, President Buhari has withheld assent on the bill, citing constitutional and legal flaws in the bill. He identified the provision of the PIGB permitting the Petroleum Regulatory Commission to retain as much as 10 percent of the revenue generated as one of the reasons why he declined assent to the bill. He noted that the provision unduly increased the funds accruing to the commission to the detriment of the revenue available to the federal, states, Federal Capital Territory and local governments in the country. The bill is yet to be assented to by the president and cannot become law until the president inks his signature on the document. The Senate president said it was unfortunate that the bill had not been assented to, adding “we took it as a responsibility to drive that bill to a level it has never been in a decade. “We passed the governance bill and it went to the executive. What I expected considering the kind of work that was done was for both arms to seat down, because the issues that were raised are not issues that are not surmountable.

L-R: Peter Tarfa, director of climate change, Federal Ministry of Environment; Justine Leigh-Bell, director, market development, Climate Bonds Initiative; Victor Nkiiri, capital markets specialist, Financial Sector Deepening (FSD) Africa, and Tumi Sekoni, associate executive director, FMDQ OTC Securities Exchange, during the Maiden Investors’ Capacity Building and Training Session held in furtherance to the recently launched Nigerian Green Bond Market Development Programme in Lagos, Nigeria.

Osinbajo decries over $8bn annual spend on cars, despite auto policy HARRISON EDEH, Abuja

ice President Yemi Osinbajo on Tuesday said the over $8 billion Nigerians spend annually on importation of used cars had fuelled workers overseas while millions of Nigerians remain unemployed. Osinbajo, while speaking at the 19th edition of Abuja Motor Fair, informed that the Federal Government and the Nigeria Automotive Design and Development Council (NADDC) were working on developing three auto industrial parts in Kaduna, Oshogbo and Nnewi as part of efforts to end the importation of used “old, unsafe and

polluting” cars. Osinbajo, who was represented by the director-general, NADDC, Jelani Aliyu, noted that facilitating component production was essential to creating the supply chain for the local production of vehicles and the after market sector. He said: “We are working with development stakeholders such as Bank of Industry, the Anambra State government to strategise in kicking off the auto industrial part in Nnewi very soon. We are also engaging other international partners; we have met with a number of Chinese, Thai, Vietnamese and Malaysian parties that could also be potential stakeholders and technical partners for

this project.” Osinbajo, while emphasising the importance of the automobile industry for the Nigerian economy, also said the Federal Government, in collaboration with NADDC, was training over 3,200 youths in mechatronics, through the N-power scheme, to develop highly skilled Nigerians for the automobile sector. On the issue of substandard automobile parts in the country, Osinbajo also informed that the NADDC was building three components testing centres in Lagos, Enugu and Zaria, to ensure vehicles components produced locally or imported met minimum standards. The Vice President, how-

ever, urged all automobile manufactures in Nigeria to introduce electric vehicles into the Nigerian market. “Almost all manufacturing countries have developed electric vehicles and phasing out the production of petrol and diesel vehicle, Nigeria cannot be left behind. “We must adapt the electrification of vehicles, the usage, development, production and maintenance. We must encourage the sales and production of electronic vehicles, we must train our youths on how to service and maintain this new technology. “We at the government are ready to work with you on this opportunity,” he said.

National carrier project take-off date to be announced soon Obaseki counts gains of Edo Innovation Hub as world marks Devt. Information Day IFEOMA OKEKE

inister of state aviation, Hadi Sirika, has reaffirmed that all hope is not lost on the establishment of national carrier in Nigeria, having unveiled “Nigeria Air” in July. The minister said: “The suspended national carrier would be activated as soon as possible, although the December 24 earlier given for its take-off is no longer feasible.” The minister, who made the declaration while receiving the United Arab Emirates (UAE) ambassador to Nigeria, Fahad al Taffaq in his office, said the suspension was only in the interim and that a new pronouncement would soon be made on the project,” according

to a statement by James Odaudu, deputy director, media and public affairs to the office of the minister. According to the minister, it is inconceivable that Nigeria, with its population of over 180 million people, would not be a major player in the aviation industry, noting that even the country’s geographical location has made it a natural hub for air transportation and ancillary businesses. Nigeria and UAE, he said, have had a long-standing relationship politically and businesswise, especially in the aviation sector, and hoped that the new envoy will use his presence in the country to further boost these relationships. He also stressed on the need for Emirates Airlines to increase its daily flights

out of the Nnamdi Azikiwe International Airport, Abuja, to complement the support and patronage that Nigerians had given it and asserted that government was doing all that was necessary to provide the conducive environment that airlines need to thrive. Fahad Al Taffaq had earlier told the minister that he was at the ministry to reaffirm his country’s continued cooperation with Nigeria in the area of aviation where both countries had enjoyed a long-standing relationship. According to Al Taffaq, it was in view of such a relationship that the UAE has approved the extension of its tourist visa to six months while on a visit to the country, meaning that Nigerian tourists could stay for up to six months.

CONRAD OMODIAGBE

do State governor, Godwin Obaseki, says thousands of Edo people have benefited from the series of training programmes designed to equip Edo youth with in-demand Information and Communication Technology-based skills in a fast-changing world that places huge premium on solution offerings that rely on technology. Obaseki, who said this in commemoration of the World Development Information Day, marked on October 24, each year, explained that in less than two years into his administration, the state had successfully plugged into the global technology ecosystem, with thousands of Edo people

making the desired impact and taking their share of the gains that abound. The United Nations General Assembly explained that “Information and Communication Technologies have the potential to provide new solutions to development challenges, particularly in the context of globalisation, and can foster economic growth, competitiveness, access to information and knowledge, poverty eradication and social inclusion.” According to Obaseki, “World Development Information Day is a day for stakeholders in the information and communication sector to take stock of their activities and set new targets. “I am delighted at the prospect of having millions of Edo people join the global army of techpreneurs

through our empowerment initiatives at the Edo Innovation Hub.” He urged leaders across the world “to replicate the Edo Innovation Hub model which has set Edo State on the path to becoming the Silicon Valley in South-South Nigeria.” The Edo State government-backed Edo Innovation Hub is a cluster for innovators and inventors in Benin City, and is priming youth to evolve and strengthen the technology ecosystem in the state. The facility houses the South-South Innovation Hub ad has two halls, five training rooms, six fullyfurnished co-working spaces, four rooms with a total of 100 computers, offices, conference rooms, outdoor workspaces, among others.

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BUSINESS DAY

NEWS Concerns mount over huge barriers to... Continued from page 1

vised to explore the possibility of mergers and acquisitions and/or

direct injection of funds. Meanwhile, there are mounting concerns that Nigeria will not be able to progress on its financial inclusion target by 2020, except it tackles inflation, infrastructure deficits, human capital, geopolitical uncertainties, misguided government policies, as well as remove some other barriers, Obadiah Mailafia, a financial analyst and former deputy governor at the Central Bank of Nigeria (CBN), said on Tuesday. Mailafia was speaking at a special session on financial inclusion organised by BusinessDay, titled, “Breaking the Financial Inclusion Barrier,” on the sidelines of the just concluded Nigeria Economic Summit (NES#24) in Abuja. The Central Bank of Nigeria (CBN) in July this year stated that Nigeria was

not on track to meet the 2020 targets set out in the National Financial Inclusion Strategy (NFIS) of 2012. The impediments to achieving this target have been listed as economic constraints, insecurity issues in the northern part of Nigeria and obsolete strategies, among others. Initially, the NFIS defined 15 targets for channels and products, as well as 22 key performance indicators (KPIs) related to these targets, but Nigeria still lags across all these measures. The National Financial Inclusion Strategy (NFIS) Redraft identified five crucial priorities to increasing financial inclusion in the country, with emphasis on creating a conducive environment for the expansion of DFS, enabling the rapid growth of agent networks with nationwide reach, reducing KYC hurdles to opening and operating a bank account, creating an environment conducive to serve the most excluded

and driving adoption of cashless payment channels, particularly in government-to-person and personto-government payments. Mailafia alluded to these factors and listed factors critical for Nigeria to deepen financial inclusion to include creating access to and depth of credit, credit intermediation, including interest rate spread and costs of monitoring by banks, among others. Quoting recent World Bank data, Mailafia said as much as 54 percent of the worlds’ population lack access to financial services of any kind. For developing countries it is as high as 70 percent. According to McKinsey, 2.5 billion people and over 200 million businesses are excluded from access to banking and other financial services. Mailafia further raised concerns that credit access barriers, which continue to prevent optimal access to banking services heightened by hidden charges, ATM withdrawal charges, email alert fees and what

L-R: Heather Akanni, project coordinator, Agricultural Quality Excellence Award (AQEA); Uba Tanko Mijinyawa, senior special assistant to the Kano State governor; Alaba Lawson, national president, Nigerian Association of Chambers of Commerce, Industry, Mine and Agriculture (NACCIMA)/chairman, organising committee; Ayoola Olukanni, directorgeneral, NACCIMA, and Akeredolu Olayinka, representing minister of agriculture, at a press briefing to announce the Agricultural Quality Excellence Award (AQEA) in Lagos, yesterday. Pic by Olawale Amoo

NIRSAL’s claim of $373m funding to agriculture... Continued from page 1

Ihugba, current head, corporate communications, and her predecessor Innocent Azebeokhai. For over two months, there has been no response, not even to a follow-up yes-

terday, requesting certain clarifications. However, in 2017 when NIRSAL claims to have made its $373 million intervention, lending to the private sector only increased marginally by 0.03 percent to an average of 3.29 percent for the year. The agency has embarked on signing of MOUs with financial institutions, without empirical proof of the outcomes. It has also been embarking on ‘numerous projects’, the most recent being a scheme for transportation of agricultural produce, partnering with bodies such as the National Union of Road Transport Workers (NURTW) and Nigerian Association of Road Transport Owners (NARTO). The multiple activities, many sources say, are in a bid to deflect public attention from the possibility that NIRSAL may be failing in its core mandate of getting banks to lend more to farmers. Data from the National Bureau of Statistics (NBS) on Banking Sector credit to the private sector shows that between 2015 and 2017, agriculture got an average of 3.36 percent of total credit. Agriculture got 3.54 percent of bank credit in 2015, and in 2016, decreased when it got 3.26 percent. However, in 2017 when NIRSAL claims to have made its $373 million intervention, lending to the private

sector only increased marginally to an average of 3.29 percent for the year. BusinessDay reached out to Kabiru Ibrahim,nationalpresident,AllFarmers Association of Nigeria (AFAN), to get some perspective on NIRSAL’s multimillion dollar support to farmers. Ibrahimhoweversaidtheagencywasinthe best position to clarify which farmers it provided the funds, and where they are located, a query the agency has been unable to provide response to. “Find out from the charter establishing them if lending directly is part of their obligations,” said Ibrahim. According to him, “They are meant to de-risk by getting banks to give out loans to farmers. If they have given millions of dollars to farmers, through whichbanks?Ordidtheydoitdirectly?” Frans Ojielu, global financial advisor, ICMG Commodities, also told BusinessDay, “I know what they are supposed to do is de-risk, and not direct lending. What they are saying now, we need to validate it maybe it is a special intervention.” According to industry experts, the agency in suggesting it had committed $373million into agriculture last year alone, will by definition of its mandate, suggest agribusiness investments had failed to the tune of at least that amount. NIRSAL would have stepped in to repay financial institutions that provided funds to agribusinesses that were somehow unable to repay their loans. This however does not appear to be the case. “They can only say that to uneducated people,” said Emmanuel Ijewere,

vice president, Nigeria Agribusiness Group (NABG), responding to claims that NIRSAL has been providing funds. Ijewere explained that NIRSAL ought to be an insurance agency that offers banks the guarantee needed to lend to agribusinesses in the country, a mandate that appears to have failed so far. The need to curry political goodwill, appeal to public sentiments and accolades, according to multiple sources, has seen NIRSAL portraying itself as a lender, when it should be operating from another direction in the value chain. In one of its FAQs on its website: How does NIRSAL de-risk the agric value chain? It was stated that; NIRSAL is able to de-risk the agric value chain by putting in place transparent mechanisms that enable it to identify, define, measure, price and share agribusiness credit risk with banks by providing guarantees for agric loans to finance projects that are verified to be feasible, viable and potentially impactful. Vague as the comment seems, nothing in it suggests the agency would be in the business of disbursing funds. The CEO of a popular, fast-rising agribusiness company, speaking on the condition of anonymity, said it has been difficult to determine what exactly NIRSAL’s mission is. “We have been discussing with them for a long time on how we can implement yield insurance for our different projects across the country, but little progress has been made,” said the source, who wondered why NIRSAL is leaving its core functions to become a lender.

he called ‘other frivolous fees’ remain some other critical challenges. But for Nigeria to further progress in bringing in the financially unincluded into the net, technology would serve as a key catalyst, Mailafia said, as broadband service in the country expands and is estimated to reach 30 percent by 2018. “Government will have to leverage on the power of technology to achieve greater financial inclusion,” he noted. In his welcome remarks, Frank Aigbogun, publisher, BusinessDay Media, told the gathering that the discussions on financial inclusion and fostering a way forward could not have come at a better time. Aigbogun suggested to the telcos to assist in ensuring those at demographically disadvantaged regions, basically in rural business and within certain financial ranges do their financial transaction at zero cost to facilitate inclusion of more people into financial nets. Also speaking, Ola Bello, a participant at the breakfast session, raised concerns that non-functional data base for Nigerians remains a major inhibiting factor to facilitating greater financial inclusion. “If we do not buckle up on the issue of having a harmonised data for all Nigerians, it would be difficult for us to make any meaningful headway in our journey to financial inclusion. We know that many young people are already doing something in the financial inclusion space and many cash transfers are going on in the space, but the demographics of the spread remain a source of worry because of improper data of the populace.” Relating the new Central Bank Policy on Micro-finance Bank to impact on financial inclusion,Taiwo Joda, managing director of ACCION Micro-finance Bank said, “There are more fundamentalissuesthatneedtobeaddressed.The overridingissueisonfinancialinclusion and harvesting more Nigerians into the financial system.” According Joda, “Micro finance bank walk on two legs which are: Financial sustainability and social sustainability. You cannot drive financial sustainability without social sustainability. The new guidelines are focused more on financial sustainability, as laudable as that may sound, every owner of a micro finance bank is looking at returns on investments because they are business people. “For instance, if I have to invest in share capital of N200 million to establish a micro finance bank, as a minimum capital requirement to set

up a micro-financial bank, I am not going to put it in a rural area where the economy does not support a return on investment that would encourage my investments.” While suggesting ways to facilitate financial inclusion through the platform of the micro-finance banks, he said. “The key questions we should be asking is how do we unbundle the micro-finance bank? For instance, when we have a rural micro-finance bank operating in a rural area, I don’t need N200 million. If I apply, I should be allowed to do it because of the type of services I deliver there without necessarily tying me to a capital base.” He noted that Kenya and Tanzania had done some measure of categorisation of the micro-finance banks focusing on specifics such as Education, housing sector among others.” He suggested that the first thing to do is to focus on the unbundling the licensing pattern of the microfinance bank in the country. “This implies categorisation of the functions, hence by implication, those who want to be a unit, state and national micro-finance bank can pay up the required capital, but the CBN can create another layer of categorisation that allows and drives financial inclusion in the rural areas.” The microfinance sub-sector was established to provide financial services for the rural poor and pursue poverty eradication. In pursuit of the objective, the sub-sector had been contending with challenges as inadequate capital base, weak corporate governance, ineffective risk management practices, dearth of prerequisite capacity and mission drift. The CBN said institutions that meet the capital requirements, as well as demonstrate the existence of strong corporate governance in their operations would be allowed to open account at the CBN office within their state of operation. Such institutions, the CBN said, would also be channels for micro funding activities of the CBN and the Development Bank of Nigeria (DBN). Speaking on government’s effort on providing credible data, Seyi Adenmosun, head, operations at the National Identity Management Commission said, “Over the last two years, there has been a harmonisation committee set up by the office of the Vice President. In partnering with NIMC, the World Bank and the French Development Bank came together to fund an eco-system approach to data gathering.”

Apapa: Where ‘okada economy’ thrives as Continued from page 2

from this experience, we can liken the situation to hell. Apapa used to be a place for good businesses” said Ruwase Babatunde, president of Lagos Chamber of Commerce and Industry (LCCI), adding, “people used to come from all over Lagos to do business in Apapa due to the opportunities it offered. The problem has been the same over the years and it is an issue of bad roads as well as corruption,” Babatunde added. What is happening in a Apapa is a reflection of the situation in the larger economy where the informal sector is almost three times the size of the formal sector. It is estimated that the informal sector operators constitute 67.54 million of Nigeria’s 81.15 million workforces and their annual income is also estimated at N81.048 trillion. That is quite huge and exciting, which is why the mortgage sector and the pension commission are looking to that sector intent on leveraging it for growth. Butanalyststhinkdifferently.“Thisis notaviableoptionformortgagegrowth. By its very nature, the informal sector

does not exist in government books. It only exists in terms of enabling people. It is good for an economy to have it because it means some people are employed and are making money to meettheirbasicneeds,butnoneofwhat theymakeiscomingtothegovernment because there are no records, no taxes and no revenue to the government”, Paul Onwuanibe, CEO, Landmark Group, explained to BusinessDay. “The income of the informal sector cannot be measured, and because of that it cannot be controlled, crystallised orgrown.Somepeoplewilltellyouthey want to work with the informal sector, which they find difficult because the sectorcannotbecountedornumbered. It is extremely risky to work with them because of the downsides in business activities,” Onwuanibe added. That ‘okada’ operators are the ones driving Apapa economy is, therefore, risky and counter-productive, and the government at both federal and state levels have to live up to their responsibilities in lifting the status of this port city to its deserved status as the hen that lays the golden eggs enjoyed at Alausa in Lagos and Aso Rock in Abuja.

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FINANCIAL TIMES

World Business Newspaper

Erdogan claims ‘savage’ Khashoggi killing was planned in advance Allegations by Turkish president directly contradict Saudi government’s account LAURA PITEL

urkey’s president has alleged that journalist Jamal Khashoggi was killed in a “savage” pre-planned murder at the Saudi consulate in Istanbul, directly contradicting the Gulf kingdom’s account of the commentator’s death. The accusations by Recep Tayyip Erdogan are the most detailed to be made in public by Ankara since Khashoggi’s disappearance this month, significantly raising the pressure on the Saudi royal family as it hosts a high-profile investment conference. It also puts the spotlight back on the Saudi leadership after a week in which it attempted to draw a line under the disappearance. Khashoggi’s killing has triggered more international condemnation of the Gulf state than at any point since Crown Prince Mohammed bin Salman took de facto control last year. “We have strong evidence in our hands that shows the murder wasn’t accidental but was instead the outcome of a planned operation,” Mr Erdogan said in speech to members of his parliamentary party. “Khashoggi was murdered in a savage manner.” The Turkish president said that investigations showed the killing was planned several days in advance. He said that a team of 15 people had begun arriving in Istanbul the day before Mr Khashoggi’s disappearance. Three of them scouted out a forest and a city 55 miles away, where police later began searching for Mr Khashoggi’s body, he said. In a sign of the delicate regional power dynamics at play, Mr Erdogan stopped short of directly accusing the Saudi leadership of murder. But he raised a series of questions that he demanded Riyadh must answer. “People who had qualifications

Saudi King Salman (R) and his son Saudi Crown Prince Mohammed bin Salman (2-R) give condolences to Salah Khashoggi, son of killed Saudi journalist Jamal Khashoggi © dpa

related to the incident gathered in Istanbul,” he said. “Why did they come to Istanbul? What instructions were given to them and by whom? We need to know.” Saudi Arabia said on Tuesday that it was taking measures to reveal the truth and would “hold to account those responsible whoever they are,” in a government statement following the weekly cabinet meeting chaired by the king in the capital Riyadh. Mr Erdogan urged the Saudi leadership to “work hard to reveal the names of those involved from bottom to top” and called for 18 people arrested in Saudi Arabia last week in connection with the killing to be put on trial in Turkey. But he said he did not “question the sincerity” of King Salman, the country’s ruler, whom he repeatedly described

Netflix secures $2bn from bond investors to back expansion TV streaming company prepares fresh push into original content ERIC PLATT AND ANNA NICOLAOU

etflix has secured billions of dollars of orders for its latest bond offering, suggesting debt investors are willing to foot the bill as the streaming television and movie company aggressively expands its own programming. The order book for the $2bn deal was already fully subscribed on late Monday evening, well before banks leading the sale were set to close books later on Tuesday, according to people

with knowledge of the deal. Reed Hastings, chief executive of Netflix, has already turned to the $1.3tn high-yield bond market to pay for original programming, such as Stranger Things, that has helped attract millions of new subscribers. Netflix said it would pour up to $8bn into content this year, although some analysts think the number could hit $13bn. John McClain, a portfolio manager with Diamond Hill Continues on page A5

as the custodian of Islam’s two holiest mosques. Nor did he mention Prince Mohammed, despite the drip feed of leaks suggesting an organised Saudi plot. Instead, the Turkish president sought to ratchet up the pressure on the Gulf state by laying out the unanswered questions. He asked why the consulate was only opened to Turkish police days after the disappearance for an investigation and added: “Why has the body still not been found?” Mr Erdogan had hitherto maintained a careful public stance towards Riyadh. Turkish officials say that the country is reluctant to lead a lone charge against a regional heavyweight. Instead, the Turkish president had sanctioned the drip-feeding of details from the investigation to local and international media in the hope of

stoking international outrage at the Gulf kingdom. He welcomed Saudi Arabia’s acknowledgment over the weekend that Khashoggi had died, which contrasted with its previous insistence the journalist had left the building safely. But he warned that Riyadh’s attempt to blame rogue officers “will not satisfy us”. He made no mention of an audio recording that purportedly exists of the moment of Khashoggi’s death. Nor did he repeat the lurid details about Khashoggi’s alleged dismemberment that have appeared in local and international press. Mr Erdogan’s attempt to turn the screws on Saudi Arabia came as the head of the CIA, Gina Haspel, was due to arrive in Ankara. She was expected to review the evidence gathered by

Turkish investigators, according to media reports. A central plank of Turkey’s strategy has been to persuade the US to join the international outrage against Riyadh. The US is Saudi Arabia’s most important international backer. Donald Trump and his son-in-law Jared Kushner have invested heavily in the relationship with King Salman and his son, Prince Mohammed. Mr Trump has adopted a shifting stance towards the scandal. Having initially appeared willing to accept Saudi claims that “rogue” killers were responsible for the journalist’s death, he later appeared more sceptical. After Saudi Arabia claimed that Khashoggi had died in a fist fight gone wrong, the US president said that he was “not satisfied” with the explanation.

Democrat Jon Tester battles Donald Trump under Montana’s big Incumbent senator derides president’s candidate as ‘all hat, no cattle’ DEMETRI SEVASTOPULO

ick Ringsak took the stage at the Finlen Hotel in Butte and told the assembled Democrats he had voted for Donald Trump in 2016. But the Vietnam war veteran said this year he was supporting Jon Tester, the Montana farmer and Democratic senator who has become one of the president’s top targets in the midterm elections. Flanked by two dozen veterans at the hotel in the historic copper mining town, Mr Ringsak recalled how Mr Tester had once driven 240 miles to Butte from his farm in Big Sandy and spent hours discussing veteran issues with him before he had even

entered the US Senate. “For somebody who has not yet been elected to office to call up and say I’d like to talk about programmes for veterans was amazing,” Mr Ringsak said. “Jon has been working for veterans before he was even sworn in and he has never stopped.” Mr Tester hopes veterans — who make up 10 per cent of the population in the “big sky” state — will help him beat Matt Rosendale, a former Maryland property developer backed by Mr Trump, who won Montana by 20 percentage points in the presidential election. The Cook Political Report recently changed its rating on the race from “lean Democrat” to “toss

up”. Republicans are pouring lots of money and energy into a few conservative states in a bid to preserve — or even expand — their 51-49 Senate majority by ousting Democrats such as Mr Tester. Mr Trump is leading the charge. Hours after Mr Tester left Butte, the president landed in Missoula for his third Montana rally this year. Speaking at the airport, he invited Mr Rosendale on stage and described Mr Tester as a liberal who had opposed both his Supreme Court picks and the Republican tax cuts. “He talks like he’s from Montana and he votes like he’s Nancy Pelosi,” Mr Trump said at the rally.

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Dream of universal internet access remains far off

Netflix secures $2bn from bond... Continued from page A4 Capital, said he expected Netflix to continue to tap the corporate bond market in the years to come. “They are going to persistently come to market and that’s OK as long as every dollar they are borrowing is creating more than that in value,” he said. “That is certainly the case for them. It makes sense for them to tap the high-yield bond market. Borrowing at 5, 6 or 7 per cent is a much cheaper cost of funding.” Netflix was poised to raise the capital in both euros and dollars, with the US dollar-tranche of the bond offering expected to price with a yield of roughly 6.25 per cent, according to people familiar with the matter. The US dollar notes mature in 10.5 years. The euro tranche is expected to price with a yield of 4.5 per cent, according to a person familiar with the matter. Earlier this month Netflix said it signed up nearly 7m new customers last quarter, well above analysts’ estimates, and forecast that it would add a record 29m subscribers this year. Although Netflix shares have fallen about 20 per cent from the record set in July, they remain up more than 50 per cent this year. Netflix forecasts it will use up to $3bn in cash this year, a sum Mr Hastings insisted will reap long term benefits. “You’re using the word loss and I think you mean investment,” he told analysts on a call this month. “We definitely hope that they’re not turning into losses. A track record would show that those investments have turned out to be very successful for us.” The company unveiled 676 hours of programming in the third quarter, a company record and more than double from a year ago, according to Cowen & Company. The rapid pace at which Netflix uses up cash has been a focus for investors, particularly as other highly valued tech companies such as WeWork and Uber test the junk bond market. Christian Hoffmann, a portfolio manager with Thornburg Investment Management, said the group of sub-investment-grade companies had so far won the backing of bond investors because of their sky-high equity valuations, even as they lacked “robust credit metrics”. “Most companies that burn cash and have high leverage, the market normally shies away from,” he said. “But that is not the case here. Some investors feel supported by the loan to value argument.” Analysts with rating agency S&P Global last week upgraded their view of Netflix, lifting their rating one notch to double B minus. Rival agency Moody’s said it believed Netflix would top 200m subscribers by the end of 2021 and that it would stop bleeding cash within five years as its margins rise. Moody’s rates Netflix Ba3, three notches below investment grade and equivalent to S&P’s opinion.

Wednesday 24 October 2018

Lack of progress in reducing costs helps leave millions offline, survey finds CHELSEA BRUCE

L Paul Biya secured 71 per cent of the vote in Cameroon’s election, according to the country’s constitutional council © AFP

Paul Biya declared winner of Cameroon’s disputed presidential poll Veteran ruler grabs 71% of vote in election marred by violence and disruption NEIL MUNSHI

resident Paul Biya has been declared the winner of Cameroon’s disputed elections two weeks after a vote marred by violence, boycotts and unrest, extending his 36-year rule over the central African nation. Mr Biya won a landslide 71 per cent of the vote, the constitutional council for the majority Frenchspeaking country said on Monday, in a poll marred by a violent separatist crisis in Cameroon’s western anglophone region that disrupted voting for roughly a fifth of its 24m citizens. The declaration of victory came days after Cameroon’s constitutional council, widely viewed as being under Mr Biya’s control, dismissed 18 petitions calling for a rerun of the election. Maurice Kamto, a former minister in Mr Biya’s government,

also claimed victory following the October 7 presidential vote. His home was reportedly surrounded by troops on Monday. The ruling party and the council have defended the election process but many in Cameroon and in the international community view the vote as neither free nor fair. Critics charge that Mr Biya, who will begin his seventh term as president, allows the façade of multiparty democracy in order to gain cover for his authoritarian rule, while cracking down on opposition leaders who could pose challenges to its authority. On Sunday, the home of Kah Walla, an opposition politician who has run for president in the past, was surrounded by the security forces, she said, while internet service was reportedly disrupted in parts of the country, including the biggest city, Douala. Ms Walla said the security forces

— who were not aggressive — seemed to have been sent “to stop me from leaving the house”, though neither she nor her political group had announced plans to attend protests against the regime. There were reports of other opposition figures being detained or put under de facto house arrest, while a number of journalists, including one for Reuters, were also detained. On Monday, troops were deployed in major cities and opposition rallies were banned, according to Associated Press. “The population is extremely unhappy, people are scandalised,” Ms Walla told the Financial Times by telephone. “I think we’re entering a state where clearly the people are against the current regime and . . . we’re definitely going to . . . organise and protest and do what is necessary to bring an end to this regime.”

Dyson chooses Singapore for first electric car plant Country chosen ahead of UK because of proximity to existing production hubs PETER CAMPBELL AND MICHAEL POOLER

yson is to build the first of its electric cars in Singapore, choosing the country over the UK and China to manufacture the product that the engineering brand hopes will come to define its business. The vacuum maker had shortlisted one of its British sites where the car is being designed as a possible factory location, but opted for Singapore to be closer to its existing production hubs and its potential customers. The privately owned group is planning to break into the automotive industry with a series of electric vehicles, using its existing knowledge in batteries and electric motors to give it the edge over established manufacturers. It plans to invest £2bn in the scheme, with £1bn into battery technology and another £1bn into the

development and construction of the vehicle itself. The company stressed that Britain’s impending departure from the EU, a move supported by founder Sir James Dyson, was not a factor in its decision, which was announced on Tuesday morning to staff by Dyson chief executive Jim Rowan. “You can’t bring Brexit into the discussion,” Ian Robertson, a nonexecutive director on the operating board of Dyson, told the Financial Times. Singapore has trade agreements with China, the largest electric car market in the world, and Japan, and a pending free trade deal with the EU. “Our existing footprint and team in Singapore, combined with the nation’s significant advanced manufacturing expertise, made it a frontrunner,” Mr Rowan wrote in an email to

staff on Tuesday morning. Its high cost base is offset by “great technology expertise and focus”, he added. Dyson already manufactures its electric motors in the island country with assembly of its appliances such as hair dryers and vacuums in Malaysia and the Philippines, having ceased UK production more than a decade ago, although Britain remains its global headquarters and where it conducts much of its research and development work. The company has spent £200m in the UK at its Hullavington site in Wiltshire, the former air force base that houses 400 staff working on the cars’ designs and engineering. Dyson would not confirm the scale of its investment into its new facility in Singapore, its fourth location in the country.

Mantrac Nigeria unveils three Next Generation CAT excavators in a grand style

n its bid to facilitate more efficiency, drive better effectiveness, increase profitability and easier methodology in achieving great results in the applications industry, Mantrac Nig. Ltd recently unveiled three Next Generation CAT excavators at Oniru Private Beach. Speaking at the event, which was well attended by the captains in the industry, the managing director, Ahmed Ragab used the opportunity to recognise the presence of Caterpillar, a great partner for the past 68 years in the outstanding journey of delivering excellent machine for wide and varied applications in

all sphere, which led to the birth and development of the Next Generation Excavators. According to Ragab, Next Generation Excavator is a new series of excavators christened 320GC, 320 and 323 with an enhanced operating efficiency, lower fuel and maintenance costs and improved operator comfort, compared to previous models. He said, “the novel excavators present unique combinations of purpose – built features expressly designed to match customers’ productivity and cost targets.” This new series boast the industry’s highest level of standard factory – equipped technology to

boost productivity. All models come with the famed integrated CAT connect technology for operating efficiency by up to 45% over traditional grading operations. In order to demonstrate its easy to operate features, the New Generation Excavator was driven and operated by a-nine-year-old boy, Master Peremobowel Agama, at the event. During the unveiling demonstration, which was led by a team of product expert from Caterpillar, various prizes were presented to trainees, including CAT Android phone, which was presented to Timothy Zekeri as the winner of Mantrac Excavator training.

ack of progress in reducing internet access costs in lowand middle-income countries means the UN’s sustainable development goal of providing universal affordable internet access by 2020 is unlikely to be reached, according to FT analysis of a new report published on Tuesday. The Alliance for Affordable Internet, an initiative backed by governments, non-governmental organisations and big technology companies such as Facebook and Google, said that more than 2.3bn people — roughly 30 per cent of the world’s population — live in countries where a monthly mobile data allowance of 1GB is unaffordable, costing more than 2 per cent of the average person’s salary. “It’s now impossible for the UN’s target to be achieved,” said Dhanaraj Thakur, research director at the World Wide Web Foundation, a campaign group set up by web inventor Tim Berners-Lee. “Our latest analysis shows it’s most likely to happen in 2043.” Growth in the number of internet users has slowed dramatically over the past few years, in part due to a lack of affordability. Last year, when the cost of mobile broadband access for low- and middle-income nations fell by just 0.51 percentage points, the number of web users increased by less than 6 per cent, according to data from the International Telecommunication Union. ITU also found a direct economic benefit to being online, with a 10 per cent increase in the share of a population accessing the internet on mobiles equating to a 1.5 per cent increase in GDP over a seven-year period. But progress has slowed, particularly in Africa. In two-thirds of African countries for which the ITU has recent data, fewer than 1 in 4 people were online. Last year, across Africa, 1GB of mobile data cost almost 9 per cent of an individual’s monthly income on average according to the Alliance for Affordable Internet. Costs were highest in Zimbabwe, where a 1GB monthly mobile plan — enough for less than 40 minutes of internet access a day — would cost over 30 per cent of an average person’s salary. Meanwhile, almost two-thirds of the 3.4bn people currently living offline are in Asia, with 1.5bn in China and India alone, according to Internet World Stats, a data website. Last year, the cost of 1GB of mobile data in India fell from 2.7 to 1.5 per cent of average monthly income, bringing the plan within the Alliance for Affordable Internet’s 2 per cent affordability threshold. In China, the same plan costs, on average, 2.8 per cent of people’s incomes. Mr Thakur said the Indian government’s “push to reduce barriers to entry, and promote a competitive environment in the market were key reasons for India’s success”. The Alliance for Affordable Internet’s report also underscored how geographical barriers can prevent people from gaining internet access. According to the report, the cost of an internet connection per person in a small country like Fiji, with an archipelago of islands and low population density, is seven times higher than the cost of providing access in a large coastal country with high population density, such as Thailand.

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Nigeria faces missed opportunity as demand for plastics rises STEPHEN ONYEKWELU

espite being Africa’s largest crude producer, Nigeria has become the biggest market for import of plastics in primary form as petrochemicals set to drive oil demand. Petrochemicals are components derived from oil and gas that are used in daily products such as plastics, fertilizers, packaging, clothing, digital devices, medical equipment, detergents and tyres. They are becoming the largest drivers of global oil demand, in front of cars, planes and trucks, according to a major study by the Paris-based International Energy Agency (IEA), ‘The Future of Petrochemicals published October 5. Demand for plastics, the key driver for petrochemicals from an energy perspective has outpaced all other bulk materials (such as steel, aluminium, or cement), nearly doubling since 2000. Advanced economies currently use up to 20

times more plastic and up to 10 times more fertiliser than developing economies on a per capita basis, underscoring the huge potential for global growth. “Nigeria spends about $11 billion on imported petrochemical related products in a year. You can understand why Dangote Industries is building one of the largest petrochemical complexes in the world in Nigeria,” Emmanuel Anyaeto, director/CEO of California-based Integrated Gas and Energy Services, LLC, said in an interview In the years 2008 to 2015, imports of plastic raw materials increased annually by 7.20 percent from 464 kilotons to 754kt. This makes Nigeria, together with Algeria, Africa’s largest importer of plastics in primary forms, according to Europe Plastics and Rubber Machinery (EUROMAP), an umbrella organisation of the powerful European plastics and rubber machinery industry, which accounts for some 40 percent of worldwide production and 50 percent ex-

port volumes. With about 70 percent of raw materials imported (mainly from the Middle East, Europe and Asia) and only 30 percent produced locally, the Nigerian market has great potential for exporters of plastics in primary forms. The per capita consumption of plastics in Nigeria has grown by about 5 percent annually over the past ten years, from 4.0 kilograms in 2007 to 6.5kg in 2017 and is estimated to be 7.5kg in 2020. Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then. They are also poised to consume an additional 56 billion cubic metres (bcm) of natural gas by 2030, and 83bcm by 2050. “You know that oil production does not employ a lot of people. However, if you utilise and process it into refined and petrochemical products such as

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BUSINESS DAY

Delta chamber of commerce revives moribund trade fair programme MERCY ENOCH, Asaba

elta Association of Chambers of Commerce, Industry, Mines and Agriculture (DACCIMA) is making good her plan to revive the moribund trade fair programme, as it is now out for the 2018 edition of the fair billed for November 15 - 25. DACCIMA is organising the 11th annual trade fair in collaboration with the Delta State government through the Ministry of Commerce and Industry. DACCIMA believes that trade fair 2018 is the veritable opportunity for manufacturers and distributors to

showcase their products to the discerning consumers in the state, even as it said the fair promised to be a 10day of brisk business and B2B for investors wishing to do business in the state. A statement signed by the chairman, publicity subcommittee and the chairman, 2018 Trade Fair, Iwemdi Nwaham and Okiemute Dukuye, stated that the fair would hold at the Delta State Trade Fair Ground, Osubi, near Warri. According to the statement, the theme of this year’s fair is, “Boosting Nigeria’s Economy Through Entrepreneurial Initiative”, saying that it is a golden opportunity for Delta State

to showcase the wonderful works of the current government of the state under Governor Ifeanyi Okowa. The statement further urged Deltans to partner with DACCIMA to parade the numerous testimonies of the state and the various achievements of the job creation programmes of the state government. Earlier in the year, while honouring some prominent business men in the state for their role in sustaining the economy of the state, the state chairman of DACCIMA, Emma Avworo had assured that DACCIMA would revive its trade fair program that had been moribund.

Ogun government debunks rumoured demise of Shonekan RAZAQ AYINLA, Abeokuta

gun State government on Tuesday evening denied the rumoured demise of Ernest Shonekan, former head of Interim National Government of Nigeria, saying the rumour was far from being the true. BusinessDay reports that the news of the death of former Head of Interim National Government who succeeded ex-military Pres-

ident Ibrahim Babangida in 1994 after the Military Government had failed to hand over government to MKO Abiola, acclaimed winner of 1993 presidential election, adjudged to be most credible, freest and fairest election in the country. Although, attempts by several journalists in Abeokuta, the country home of Ernest Shonekan, whose mansion is a stone throw from Ogun NUJ Secretariat, Iwe Irohin House, along the

popular Oke-Ilewo road in Abeokuta to confirm the authenticity of the news were futile as nobody could ascertain it, the call from Ogun State government showed that the man was alive. A telephone call from the Secretary to the State Government, Taiwo Adeoluwa, on Tuesday evening indicated that the former Head of Interim National Government was well as the government said, “It is a lie from hell. Baba is alive.”

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Economists see budget deficit exceeding N4trn in 2018 DAVID IBIDAPO, IFEANYI JOHN & BUNMI BAILEY nalysts say Federal Government’s estimation of 2018 fiscal deficit is more of a fairytale than a realistic projection. Nigeria expects to have a budget deficit of around N1.95 trillion, but analysts foresee a significant underperformance in actual revenue generation and a wider deficit than is currently estimated. Afrinvest in their 2018 Banking report released last week forecasts that actual budget deficit for 2018 will reach N4.4 trillion. This will represent an increase by 131.5 percent above budget estimated deficit of N1.9 trillion in the approved 2018 budget. Although N4.4 trillion is quite an enormous deficit, it is not so far off the actual budget deficit Nigeria suffered last year. In 2017, the actual deficit was around N3.34 trillion according to Nigeria’s minister of budget and national planning, Udoma Udo Udoma. The projected deficit in the 2017 budget was only N2.36 trillion. Projected revenue was N5.08 trillion but only N2.71

trillion was actually generated in 2017. Afrinvest sees a repeat of this revenue underperformance in 2018. A scaring analysis of the projected fiscal deficit by Afrinvest shows that a N4.4 trillion budget deficit will account for 48.3 percent of total budget, which sits at N9.1 trillion compared with Federal Government projected deficit that accounts for only 21.4 percent of total budget. This will also push up fiscal deficit as a percentage of total FGN revenue to 61.1 percent higher than 27.22 percent projected and an increase from 46.34 percent observed in 2017. Ibrahim Tajudeem, head of research, Chaphill Denham, explained, “There is a high probability that the actual deficit will be higher than what the government is targeting, and that is already reflected in the planned borrowing. However, it is unlikely it could be as high as N4.4 trillion.” BusinessDay analysts expect that financing a N4.4 trillion fiscal deficits may mean the government raising more funds in the international market or sourcing domestically. If more exter-

nal borrowing is explored, it will increase the external debt stock of the government, putting the country’s financial health in jeopardy and if borrowings of such magnitude is sourced locally, it will result to crowding out of the private sector putting upward pressure on interest rates. Afrinvest expects the N4.4 trillion fiscal deficit to be funded through monetary financing. Monetary financing simply means that there will be direct central bank funding of government expenditure, as the central bank through open market operations will purchase the debt securities issued by the Federal Government. Earlier last week, the Senate approved the issuance of $2.8 billion in Eurobond on the premise of a budget deficit of N1.9 trillion. The earlier approved 2018 budget stipulated revenue generation from two major sources - crude oil proceeds to account for 41.6 percent and taxes, independent revenues and recoveries to account for 40.5 percent of government estimated budget revenue of N7.2 trillion.

WIMBIZ shortlists 50 speakers, moderators for 2018 annual confab FRANK ELEANYA

ounder/publisher of Genevieve Magazine, Betty Irabor, and Omobola Johnson, partner, TLCom, and many others have been shortlisted for the upcoming Women in Management, Business and Public Service (WIMBIZ) annual conference. The conference slated for November 2018, focused around the theme “Unstoppable You: Reinvent and Reinvigorate” aims at empowering participants to believe in themselves and build businesses that are sustainable and stand the test of time. Organisers of the programme revealed in a statement that this year’s conference, which is the 17th edition has an unprecedented number of moderators and speakers. The 50 members’ ensemble consists of the notable personalities across different industries. The moderator list for the various sessions include Bunmi George, founder Shredder Gang; Chiadi Ndu, founder BTH Integrated Service; Didi Akinyelure, journalist, Reuters Business; Enahoro Okhae, principal strategist, Simeon;s Pivot; Ihuoma Onyearugha, director, Medical and Human Resources at Chevron Nigeria Limited; Laure Beaufils, deputy High Commissioner, British Deputy High Commission Lagos. Others are Owen Omogiafo, executive director, Transcorp Hilton; Oyiza

Salu, head of HR, GTBank; Rasheed Jaiyeola, founder, Bukka Hut; Simon Kolawole, founder, the Cable Newspaper; Nkem Begho, managing

CHANGE OF NAME

I, formerly known and addressed as miss Odupaye Oluwafunmilola Oluwabukola now wish to be known and addressed as Mrs. Nelson Oluwafunmilola Oluwabukola. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Silifat Bisola Semilu now wish to be known and addressed as Silifat Bisola Falomo. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Obianeli Chidi James now wish to be known and addressed as Obianeli-Obi Chidi James. All former documents remain valid. General Public please take note.

CORRECTION OF NAME

This is to inform the general public that my name was wrongly written as Chidiebere Christen Ibara instead of my correct name which is Mbara Chinemere Christen. All banks and genral public please take note.

CONFIRMATION OF NAME

This is to inform the general public that Kelechi Nwazuoke and Kelechi Jecinta Ogbonna refers to same and one person. All former documents bearing any of the two names remain valid. General public please take note.

director, Futuresoft; Steve Babaeko, founder, X3M Ideas; Taba Peterside, CEO, Emerging Africa Group, and Toyosi Olatunji, managing director.

CHANGE OF NAME

I, formerly known and addressed as miss Oyedeji Oluwaseun Ajoke now wish to be known and addressed as Mrs lhekuna Oluwaseun Ajoke. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Ngerem Onyinyechi Stella now wish to be known and addressed as Anyamele Onyinyechi Stella. All former documents remain valid. General Public please take note.

CHANGE OF NAME

I, formerly known and addressed as Akintunde Folashade Florence now wish to be known and addressed as Omoyefa Folashade Florence. All former documents remain valid. General Public please take note.

CHANGE OF NAME

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CHANGE OF NAME

I, formerly known and addressed as Iquo Praise Inyang now wish to be known and addressed as Iquo Praise Akpotegwa. All former documents remain valid. General Public please take note.

Wednesday 24 October 2018

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A10 BUSINESS DAY NEWS NESG: Experts call for massive reform in civil service INNOCENT ODOH, Abuja

xperts have called for comprehensive reforms in the Nigerian civil service to make it more efficient and result oriented to drive government development policies in order to transform the economy. This was the crux of the second plenary session of at two-day Nigeria Economic Summit, organised by the Nigerian Economic Summit Group (NESG), which commenced in Abuja on Monday. One of the panellists, Tunji Oloopa, a professor of Public Administration, lamented that the crisis that hit the civil service started when the nation balkanised from four regions in 1966 to the 36 states that the nation now had, which bloated the service to about 600 percent because of oil revenue. “Between 1966 and 1970, Nigeria’s regional structure multiplied from four to 12, later 19, later to 21 and now 36 states. The federal civil service in terms of institutional expansion grew by 600 percent from what it was

in 1966,” Oloopa said. He said it was at that time that the nation needed to have done institutional rationalisation, but the successive military regimes avoided the much needed reforms for fear of labour union backlash, but instead compounded by sidetracking the civil service and were creating their own structures, which created parallel civil service. He lamented because the military refused to downsize the service by 1999, 70 percent of federal expenditure was going to overhead. He urged all stakeholders to change the service for the better, saying, “We need to get the basics of the public service right. Let me tell you as an insider, except for few agencies that have reformers who utilised knowledge to initiate what we call in literature pockets of effectiveness. For example, what Akunyili did in NAFDAC and what Ifueko did in FIRS, in the mainstream civil service there are still issues. “So, we need to do a functional review and basic house keeping to re-establish the basic management system in each MDAs.

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AfDB headlines strong performance ahead key investment forum

head of its maiden African Investment Forum next month, the African Development Bank (AfDB) has continued to see another year of sustained indicators, underlined by a stellar Triple A rating by all three major agencies and sharply increased earnings. The inaugural Forum takes place November 7 – 9, 2018, in Johannesburg, South Africa, offering a platform for sourcing funding for bankable African projects, brokering infrastructure deals and providing innovative financial solutions. The event will attract key global companies, financial players, and public officials who will address the continent’s critical infrastructure investment gaps. The bank’s performance and ratings are based on the solid support from its shareholders, including in the form of strong callable capital. Net operational earnings for 2017 showed a 63-percent jump to $597 million from $109 million in 2016 – capping a fiveyear upward trend from 2013.

In projects performance, the bank disbursed a record $5.1 billion to projects and programs across Africa in 2017, an increase of 14 percent over the previous all-time high of $4.5 billion in 2016. The bank’s financial performance and overall achievements across other key metrics like volume of new development assistance, disbursements and governance, were excellent in spite of a well-recognized difficult operating environment. “Of all multilateral development banks, African Development Bank operates in the most challenging ‘operating environment’ defined by rating agencies as a reflection of the risks associated with the countries of operation,” senior vice president, Charles Boamah, noted. The bank’s core agenda targets lifting out of poverty 38 African countries considered as the continent’s most vulnerable and least developed. Since its founding in 1974, the bank has invested a total of $45 billion in operations across Africa with significant focus on the LDC countries.

Wednesday 24 October 2018

I’ll campaign for Sanwo-Olu to win 2019 election - Ambode JOSHUA BASSEY

utgoing Governor Akinwunmi Ambode of Lagos State has dismissed the insinuations he may not fully support Babajide Sanwo-Olu’s campaign after he (Ambode) lost the All Progressives Congress (APC) governor ticket to SanwoOlu in the October 2, primary election. Ambode said on Tuesday that he would campaign vigorously for the APC’s flag bearer to ensure that the party secure victory in Lagos and continue the legacy of progressives in Nigeria’s richest state. The governor also assured of commitment to seeing to the success of President Muhammadu Buhari in February 2019 presidential election. To douse tension on the rumour that has been making the rounds that the Lagos State House of Assembly was planning to impeach Ambode, the speaker of the House, Mudashiru Obasa, had dismissed the rumour, adding however, that whether or not the governor would be impeached before serving out his tenure in May 2019, would depend on his

actions. But Ambode, who spoke with journalists at the Presidential Wing of the Muritala Mohammed International Airport, Lagos, after he accompanied President Buhari to perform the official commissioning of the new Economic Community of West African States (ECOWAS) Seme-Krake joint border post in Badagry, said it was important for the APC to retain leadership positions in Lagos and at the federal level and therefore would support the man he lost the primary election to. “I am committed to ensuring that the APC wins the governorship election come 2019. We support the candidacy of Babajide Sanwo-Olu and we would make sure that APC retains Lagos State and the centre,” Ambode said. The governor, who also pledged commitment to the re-election bid of President Muhammadu Buhari, said: “I have just accompanied Mr. President to the Nigerian-Benin Border Post. What we have commissioned today is a joint border patrol post between Nigeria and the Republic of Benin and it is called Semo-Krake Border Post.

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Golden Guinea, Pabod know fate as court decides N10bn suit on ‘Eagle Stout’ trademark IHEANYI NWACHUKWU

he duo of Golden Guinea Breweries plc and Pabod Breweries Limited will today know their fortune as the Federal High Court (2) sitting in Port Harcourt, Rivers State, decides on the N10 billion lawsuit filed against Pabod Breweries by Golden Guinea Breweries, a company listed on the Nigerian Stock Exchange (NSE). Golden Guinea approached the Federal High Court demanding for general damages in the sum of N10 billion from Pabod Breweries, a company AB InBev has controlling equity, the former saying the company infringed on its trademark for the production of Eagle Stout. Golden Guinea, which is at the concluding stage of rolling out its brand of

drinks, has a licensing agreement with Holsten Brauerei AG of Hamburg, Germany, Golden Guinea Breweries to produce and market ‘Golden Guinea Lager Beer,’ ‘Eagle Stout,’ ‘Bergedorf Premium Lager’ and ‘Bergedorf Malta.’ Golden Guinea Breweries wants the Federal High Court to declare that as the proprietor of the trademark “Eagle Stout” registered as No. 21153 in class 32 at the Nigerian Trade Marks Registry Abuja, it is entitled to the exclusive use of the mark for the production, sale and distribution of the product in the Nigerian market. Aside the N10 billion general damages being demanded by Golden Guinea Breweries (the plaintiff) from Pabod Breweries (the defendant), the plaintiff is also asking the court to order for aggravated damages in the sum of N10 million as contained in the suit num-

ber PHC/PH/CS/647/2016 at the Federal High Court at Port Harcourt. In the Writ issued by Omolola Aderolu of Johnson Bryant on behalf of Golden Guinea Breweries Plc, it asks the Court to restrain Pabod Breweries whether jointly or severally and all persons on whose behalf the defendant is sued whether by themselves, their director(s), officer(s), servant(s), agent(s) privies or any of them or otherwise howsoever from producing, importing, selling, or offering for sale or supplying products known as “Eagle Stout” pending the hearing and determination of the substantive suit. Golden Guinea Breweries listed on the NSE on January 1, 1979. Its production was shutdown in 2003 following a fire outbreak, which affected its boiler. Pan Marine Investments Limited

is currently the core investor in Golden Guinea Breweries and it has intensified efforts to bring the drinks back to their consumers. Among other demands, Golden Guinea Breweries also asks the Federal High Court to order the destruction of all infringing “Eagle Stout” products, in the possession/custody or control of Pabod Breweries, the sale, distribution. Golden Guinea is also asking the court to order for the obliteration of all marks upon oath, all containers, cartons, show cards, display matter, signboards, advertisements, circulars, notepapers, business cards, letter-heads, stationery, labels, wrappers, photocopies or other printed materials or other products, papers or marked articles bearing the market/name “Eagle Stout” in the possession/custody or control of Pabod Breweries.

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Ikoyi Baptist Church business fair to empower MSMEs, others

o empower businesses of different sizes, especially Micro, Small and Medium-scale Enterprises (MSMEs) to move to the next level, have access to new markets and become equipped with adequate capacity to thrive in today’s business world, Ikoyi Baptist Church holds its annual Business and Career Fair from October 26 – 28, at its premises in Ikoyi, Lagos. This was disclosed at a press conference to announce the annual event, where the church’s commitment to the advancement of the society through different initiatives was also mentioned. In its third year, the 2018 Ikoyi Baptist Church Business and Career Fair (IBCBCF), themed “Making Impact in the Marketplace,” will feature about 100 different organisations exhibiting different products and services, insightful business panel discussions, direct sales opportunities, masterclasses for adults, business awareness sessions for teenagers and children, business innovation challenge, among others. Starting 10am each day with an exhibition to last the duration of the programme day one would close with An Evening with the CEO, a session to interact directly with Yaw Nsarkoh, executive vice president, Unilever Ghana. It would be an opportunity for upcoming entrepreneurs and business executives to gain useful in-

sights into the running of a multinational ethically and acquire the requisite knowledge to transit from operating from small scale to becoming global. “It is clear that most of the exhibitors on board for this year have done so early enough, with a clear understanding of the value the IBCBCF offers MSMEs,” Uwemedimo Esiet, chairman of the planning committee, said. “Attendees and exhibitors are free to come with their children of all ages, because we lined up various highly engaging programmes for the little jewels. Guided by the importance of teaching them financial literacy from a tender age, a number of fun-filled sessions have been set up to teach children the basics of finance management and cultivate in them a financially responsible lifestyle. “We are glad to provide a platform that helps businesses reach more customers, extend their market reach and value proposition, while also acquiring new skills and knowledge to remain relevant well into the future,” Esiet said. The pastor of the church, Oluwasegun Adeleke, said, “This is one of the avenues where we are contributing to the growth and rejuvenation of our country. Our commitment in this regard is unwavering as we remain committed to projecting the values and virtues of faithful stewardship and fruitfulness based on Biblical principles.”

Edo canvasses more roles for women in politics, governance

L-R: Olajide Kumapayi, business manager, Ikeja Business Unit; Ibrahim Zungura, area F commander, Ikeja Police Command; Kola Adeshina, group managing director, Sahara Power Group; Biodun Sanusi, member, GRA Ikeja Residence Association; Ahmad Ibrahim, representing the commander 9 Brigade, Nigerian Army, and Anthony Youdeowei, CEO, Ikeja Electric plc,during the official commissioning of the Ultramodern Ikeja Electric PTC Undertaking office in Lagos. Pic by Pius Okeosisi

Health scheme: Lagos adopts new technology to aid citizen’s access JOSHUA BASSEY

head of the expected roll out of the mandatory Lagos State Health Scheme (LSHS), the government is adopting a technology-based application to ensure easy access of the scheme by the residents, especially underprivileged households. The LSHS, which may be launched before end of the year, is a statewide health insurance initiative targeted to ensure that all residents have access to quality, affordable healthcare services. The scheme covers treatment of common adult and childhood ailments, maternal and child services, preventive healthcare services, selected

non-communicable diseases and surgeries. Jide idris, the state commissioner for health, said on Monday that the technology, ‘CarePay,’ an ICT mobile platform would aid the administration of the scheme and served as a digital health exchange - connecting the three important stakeholders in healthcare: payers, healthcare providers and the users or beneficiaries. According to Idris, the CarePay platform “will guarantee ownership of all data generated and ensure that these data can be used to make informed decisions.” He said one of the objectives was to demonstrate how digital mobile solutions could be utilised to improve

decision-making and transparency, reduce transaction costs, and increase access especially for poor households. He said in collaboration with the state ministry of health, PharmAccess Foundation Nigeria, a non-governmental organisation dedicated to healthcare in Africa, the scheme would mirror the LSHS benefit package, provide payment mechanisms and interact between patients and providers. He said the proof of concept had 153 families (659 enrollees) in two facilities (one private provider and one public provider) in Alimosho Local Government Area of the state. “Having run for a period of twelve months, the

pilot witnessed the 659 beneficiaries, whose premium was paid for by PharmAccess Nigeria, received access to free healthcare for the duration of the pilot. “The results of this pilot show that the scheme is doable and is a step in the right direction towards achieving Universal Health Coverage (UHC) for the residents of Lagos State.” Providing more insight, Peju Adenusi, the general manager, Lagos State Health Management Agency, said the scheme was a mandatory pre-paid health plan for all residents aimed at achieving universal coverage and providing financial protection against catastrophic health care spending.

overnor Godwin Obaseki of Edo State has made a case for more roles for women in politics and governance, arguing that a society that does not open up the space for women to contribute to nation building harnesses only half of its potential. Obaseki made the submission while declaring open the 2018 Annual National Women Conference organised by the Committee of Wives of Lagos State Officials (COWLSO), with the theme, Strengthening Our Collective Impact, held in Lagos State. The governor noted, “If only one segment of the society is allowed to actively participate in politics, the society cannot realise its full potential. Our country stands to benefit a lot more when both segments of the society play active role in political development.” He described the gathering as fantastic and a powerful network with capacity to provide a common ground that connects government

and the people. “The gathering is powerful because it serves as another opportunity for government to reach its people, interact and get a fresh perspective on what is happening around. What you have is a very powerful network and a lot of us from other states are quite envious of what you have done,” he said. He maintained, “What is also significant is not just that you get together, and you have conferences but between your conferences, you take time out, gather resources and intervene in society. I have seen your activities particularly in the area of health care and in other areas, affecting the most vulnerable in the society.” He continued, “You serve as an inspiration to a lot of us. Many states are now copying what you are doing. I recall last year, the governor of Jigawa State did say that as soon as he gets back home, he will ensure that he institutes this sort of initiative. This idea you have incubated in Lagos State has gone places.”

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Wednesday 24 October 2018

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NEWS YOU CAN TRUST I WEDNESDAY 24 OCTOBER 2018

Opinion

Nigeria’s underperforming economy OPEYEMI AGBAJE opeyemiagbaje@rtcadvisory.com

igeria’s economy grew by a measly 1.5% in the second quarter of 2018, ending June. It was the second quarterly decline in output growth-from 2.11% in Q4 2017 to 1.95% in the first quarter of 2018; and down to 1.5% in the second. The fact that oil prices averaged $75 per barrel in that quarter yet growth remained so weak, confirms that the problem with the Nigerian economy is not oil prices but poor economic policy and management. Since our Buharian recession ended in Q2 2017, growth is yet to recover averaging merely 1.49% in the last five (5) quarters while population growth is around 2.8-3.0%, a sure recipe for increasing poverty, underdevelopment and misery! It is now a notorious fact that Nigeria’s exit from recession had little or nothing to do with the quality of economic policy or management but was simply a result of higher oil prices and

production-in Q2 2017 when we exited recession, oil output surged from a decline of -15.6% to a growth of 3.53%, a percentage swing of 19.13%, while the non-oil sector grew marginally by only 0.45%; in Q3 2017 oil output grew by 23.03% while the nonoil economy contracted by -0.76!!! It was not so different in Q4 2017 and Q1 2018oil output grew by 11.2% and 14.77% respectively, while non-oil output managed only 1.45% and 0.76% growth respectively in the two quarters. The data until Q1 2018 was unambiguous that our exit from recession was driven solely or at least almost entirely by higher oil prices and production. A more curious development however emerged in Q2 2018-growth of oil output went negative again (-3.95%) while the only reason Nigeria did not return to recession was because mercifully, non-oil output growth increased to 2.05%. If you combine the negative total GDP growth trend (i.e. declining GDP growth rates for two consecutive quarters in spite of growth remaining positive) with the fact of negative oil sector growth (in spite of recovering oil prices) then the conclusion that Nigeria’s risk of a second recession is significantly high, is inescapable! Official data suggests

that oil production declined from 2 million barrels per day (bpd) in Q1 2018 to 1.84 million bpd by the second quarter; and we know production declines could not have been due to sabotage of oil production as the Niger-Delta has been quiet, which raises the question, “is Nigeria having problems selling its oil?” The performance of sectors has also been discouraging-of the nineteen (19) major sectors we reviewed, only six (6) performed better in Q2 2018 than in Q1. These six were construction (-0.54% to 7.6%), transport (14.4% to 21.76%), information and communication (1.58% to 11.81%), Utilities (8.01% to 8.91%), accommodation and food services (0.25% to 2.43%) and arts, entertainment and recreation (0.30% to 3.48%). On the other hand, agricultural growth rate declined from 3% to 1.19%; crude petroleum and natural gas declined from 14.77% to -3.95%; solid minerals sector growth declined from 26.29% 2.86%; manufacturing declined from 3.39% to 0.68%; finance and insurance worsened from 13.30% to 1.28%; and other sectors including administrative and support services, public administration (government), education and health also recorded declining/

...revenues are performing at about half of government’s projections; budgeted expenditures are consequently not realised; government’s fiscal deficits are large, growing and increasingly unfunded; government is massively crowding out the private sector from banks’ borrowings; the country’s total debts has reached N22trillion... and debt servicing now consumes 75% of actual revenues, higher than capital expenditures

poor growth trends. Beyond the short term, long term sector trends are mostly weak or deteriorating-the average growth rate in agriculture, solid minerals, accommodation and food service, finance and insurance, administra-

tion and support services, public administration, education, health, arts/entertainment/recreation and other services have faired badly since 2014! Within manufacturing, virtually all sub-sectors are performing woefully including oil refining, cement, food/beverage/ tobacco,textile/apparel/ footwear, wood and wood products, pulp/paper/paper products, chemical and pharmaceutical products, non-metallic products, plastic and rubber, electrical and electronics, basic metal/ iron/steel and motor vehicles and assembly. There are some positive economic data to be sure, especially in relation to levels of inflation (declining) and foreign reserves (rising until recently) but not sufficient to impact employment, consumer purchasing power and overall quality of living of most Nigerians. Moreover capital markets, GDP per capita, unemployment, poverty and literacy data all heavily offset any positives from declining inflation and rising reserves. I’ve recently reviewed the projections upon which the Brookings Institution based it’s prognosis that Nigeria is heading towards being the poverty capital of the world – as India is projected to steadily reduce its population of people living in

poverty, Nigeria and Democratic Republic of Congo continue to see their poverty headcount rising with Nigeria’s poor people overtaking India’s around 2017 and reaching over 100million people in short course. It’s a tragedy of unimaginable proportions in the making! As I was writing this, I saw Businessday’s editorial of Monday October 22, 2018 titled, “Can Nigeria avert a fiscal crisis?” the precise point I was going to end this article on! My short answer to the newspaper’s question is simply, “No! At least, not under Buhari’s economic management!”-revenues are performing at about half of government’s projections; budgeted expenditures are consequently not realised; government’s fiscal deficits are large, growing and increasingly unfunded; government is massively crowding out the private sector from banks’ borrowings; the country’s total debts has reached N22trillion ($71billion) growing by $4.4billion in 2017 alone (!) and debt servicing now consumes 75% of actual revenues, higher than capital expenditures; and government is seeking to borrow $6billion more from China! It would all be funny if it wasn’t so tragic! The next time oil prices dip, Nigeria would be essentially bankrupt!

Unsustainable debts of our states: Their Excellencies or prodigal sons?

FRANKLIN NNAEMEKA NGWU Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum.

sing the recent report from National Bureau of Statistics (NBS), Nigeria’s debt level is rapidly rising and looks unsustainable. As at June 2018, our total external debt is about $22.08 billion. Adding the domestic borrowing of N15.63 trillion shows that we are heading to a frightful direction. More worrisome is the exponential borrowing of the present PMB government. Just within three years from 2015 to 2018, our external debt has increased by more than 100% from $ 10.71 billion in 2015, $11.406 billion in 2016, $15.047 billion in 2017 and now $22.08 billion! The uncontrollable way we are borrowing seems to suggest that we did not learn anything from the hard-earned debt relief of $18 billion achieved under Former President Obasanjo’s regime. It is important that we remember that the exponential way we are presently borrowing was the same

way we borrowed from 19711981 that led to the debt quagmire which President Obasanjo regime fought hard to resolve. With the fall in oil prices from 1982 and consequent fall in revenue, Nigeria could not pay back her debt. In addition to unpaid interests on the loans, default fines were imposed resulting in a long and complex debt crisis that continued till 1998. With a debt burden of about $36 billion as at December 2004, President Obasanjo lamented that the debt level was unsustainable. In our 2018 budget, while our expected revenue is about N7 trillion, servicing our debts will take about N2.014 trillion! I mean debt service not repayment of capital. This shows that we are using almost a third of our total revenue to service debts alone! And when your observe that while only N2.87 billion is budgeted for capital expenditure and N3.513 trillion for recurrent expenditure, one might begin to think that we are borrowing mainly for consumption and profligacy. While there is nothing wrong in borrowing for a government, firm or individual, what is wrong and very sad as it is in our case is when there is little or no evidence to suggest prudent utilization of the borrowed funds. And most sadly, this is the case not only with the federal government but also with majority of our states! In addition to the huge monthly

allocation they get from FAAC, a look at the unbelievable debts of the states gives impression that we seem to have prodigal sons

as their Excellencies! Focusing on the whooping N3.48 trillion domestic debts owed by the states, majority of the top borrowers such as Lagos, Delta, Osun, Plateau, Rivers, Kogi, Ekiti, Akwa Ibom, Cross River cannot be said to be significantly different from other states in terms of infrastructural or human capital development. While Lagos is the highest with about N517 billion of domestic debt, Anambra is the least with only about N2.6 billion. Lamentably, while our governors move in long convoys with unquestionable display of opulence, Peter Obi maintained a very prudent government while in office and achieved visible and verifiable infrastructural and human capital development of Anambra state. Of the 36 states and the FCT, only seven states can be described as fiscally sustainable as they are able to maintain reasonable revenue level to meet their monthly recurrent expenditure commitments. They include Rivers, Ondo, Edo, Lagos, Bayelsa, Delta and Akwa Ibom. According to BudgIT, about 18 states were unable to meet their monthly recurrent expenditure from January to June 2018. These include Abia, Adamawa, Bauchi, Cross River, Taraba, Ekiti, Gombe, Imo, Zamfara, Jigawa, Kogi, Kwara, Nasarawa, Sokoto, Ogun, Osun, Oyo and Plateau. Not only are they unable

to meet their monthly recurrent expenditures, Osun, Cross River and Ekiti are described as being in serious financial crisis. Expectedly, they have borrowed beyond their capability that the burden of repayment of capital and interests creates a huge financial challenge irrespective of their IGR and FAAC allocations. This is the reason why many states notably Osun, Kogi, Ekiti and many others owe workers salaries of many months. A more disturbing aspect of this precarious situation of our states is the lack of innovation and strategic thinking on the part of our Excellencies. While almost all the states in Nigeria are littered with both natural and human resources that can turn the financial crisis into surpluses, our Excellencies mainly borrow more to see them through their tenures. A most disappointing example of gross lack of financial management is Cross-River State. While its 2018 budget is estimated at N1.3 trillion, the net inflows from January to June 2018 can be described as insignificant, N22.40 billion from FAAC, N18.10 billion of IGR and N878.99 million from VAT. Interestingly, while her external debt was valued at $167.92 million and domestic debt at N25 billion as at 2017, the domestic debt has astronomically increased to about N125 billion as at June 2018.

As we prepare for 2019 elections, it is important that we ask our potential governors serious questions on their financial management capabilities. Given the litany of natural and human resources across all states in Nigeria, the only reason why we have such unsustainable debt level with little to show for it is the absence of effective and prudent leaders. With governors proficient in wealth creation and management, every state in Nigeria should be able to boast of about $500 million of savings or investment fund. Kenya, a country of about 48 million people exports close to $1 billion worth of flowers and vegetables to Europe every year with over 600, 000 direct and indirect jobs created. This is the same with Ethiopia with a flower industry currently valued at over $225 million. I am talking about ordinary flowers for showing love, hate, sympathy or condolence! Denmark, a country of about 5.7 million produces and exports about 30 million pigs every year valued at about $2.7billion. Luxemborg, a country of about 600,000 people has a GDP of about $72 billion which translates to a GDP per capita of about $120,000 as compared to Nigeria’s GDP per capita of less than $3000. Where there is a will and love for the people, there will be a way and progress!

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Ghana Office: Business Day Ghana Ltd; ABC Junction, near Guinness Ghana Limited, Achimota – Accra, Ghana. Tel: +233243226596: email: mail@businessdayonline.com Advert Hotline: 08034743892. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Anthony Osae-Brown. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.

WEST AFRICA

ENERGY intelligence oil

gas

power

Wednesday 24 October 2018

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BUSINESS DAY

POLICY

Ghana: Energy Ministry charged to review dormant oil agreements Page 2 Analysis L-R: Luis Bertran, Secretary-General, International Gas Union (IGU); Joe Ezigbo, MD/CEO and Co-Founder, Falcon Corporation Limited; Audrey Joe-Ezigbo, Executive Director/Co-Founder, Falcon Corporation Limited and Current President, Nigerian Gas Association (NGA); Patrick Olinma, Executive Director, Asset Management & New Energies, Total E&P Nigeria Limited and Gwueke Ajaifia, General Manager, Gas Department, Total E&P Nigeria Limited, at the NGA International Gas Conference, held recently in Abuja

Debrief

Solutions to Nigeria’s electricity problems invite all sources of energy mix Page 6

OPEC weekly basket price DAY

PRICE

19/10/18

78.85

12/10/18

81.43

05/10/18

83.17

28/9/18

80.64

21/9/18

76.71 Source: OPEC

Nigeria’s December crude loading emerge, swap deal extended FRANK UZUEGBUNAM

s crude buyers wait for December export programmes to unfold, offers for Nigerian cargoes edged higher, although traders said the recent burst of buying activity appeared to have fizzled out almost immediately. After a burst of activity, driven in part by Indian demand, spot trade has cooled off somewhat, sources said. The December programme is due to emerge later this week but almost 20 cargoes of November-loading Nigerian crude was still available for sale. The Nigerian National Petroleum Corporation (NNPC) is yet to issue its monthly official

selling prices. However, snippets of Nigerian December crude loading programmes reveal the Qua Iboe stream will load eight cargoes of 950,000 barrels each, equal to 245,000 barrels per day in December, down from November’s 253,000 bpd rate. Glencore has offered an early-November loading cargo of Qua Iboe at a premium of around $1.70 a barrel to dated Brent, above recent indications of closer to $1.60-1.65 while ENI was said to be offering Bonga at similar levels. Meanwhile the NNPC said it has extended its crude-for-product swap contracts, the country’s main avenue to meet the bulk of its fuel needs, until June 2019. Nigeria’s premium motor spirit (PMS) consumption is roughly 40 million litres per day. Its 445,000

barrels per day refining capacity have been underperforming for years, making Africa’s biggest oil producer almost wholly dependent on imports to meet its domestic petroleum products’ needs. NNPC’s swap contracts currently account for about 70 percent of the country’s imports while 30 percent is done through the spot market, one of the sources added. The swap contracts, known as Direct Sale Direct Purchase, came into effect in July last year and were due to end after one year. They were already extended once earlier this year to December. NNPC paired up foreign trading firms with local partners to do the swaps. The following is

a list of the 10 DSDP groupings: Trader/Refinery Local partner(s) Volume (minimum expected) Trafigura AA Rano 33,000 bpd; Petrocam Rainoil/Falcon 33,000 bpd; Crest Mocoh Heyden 33,000 bpd; Cepsa Oando 33,000 bpd; Sahara SIR 33,000 bpd; Mercuria Matrix/Rahmaniya 33,000 bpd; Socar Hyde 33,000 bpd; Litasco MRS 33,000 bpd; Vitol Varo 33,000 bpd; Total Total 33,000 bpd. The total for the 10 groupings is 330,000 bpd. Also, the state-oil company is separately in advanced discussions with some of the swap contract holders to invest in rehabilitating its refineries. Two consortiums were picked earlier this year but ironing out the financing of the projects has been slow.

02 BUSINESS DAY WEST AFRICA Outlook Brief Egypt: Public prosecutor accuses 3 oil executives of embezzling nearly $1bn

gypt’s public prosecutor has charged three executives from a private petroleum company with embezzling nearly $1 billion from corporate funds. The firm’s former deputy chairman, Mohammed Mahfouz al-Ansari, and two other officials face a criminal trial on charges that they manipulated the company’s books and sent about $960 million into personal foreign bank accounts between 2011 and 2015. The firm, then known as Tri Ocean,

has since been renamed Mog Energy. The source did not name the other two executives. Tamer Mostafa Ragheb, the current deputy chairman of Mog Energy, was questioned during the prosecution’s investigation, the source said. Ragheb’s statements to investigators led them to believe that the three defendants transferred over $18 million to personal bank accounts in Doha and Dubai between February 2012 and September of that year.

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oil

Ghana: Energy Ministry charged to review dormant oil agreements

resident Nana Akufo-Addo launched Ghana’s first-ever oil and gas licensing rounds bid evaluation and negotiation (LRBEN), with a warning to dormant investors in the oil sector that their agreements risked being terminated. He urged oil companies that currently had contracts that were docile to form partnerships with stronger companies to become vibrant and, by so doing, prevent an abrogation of such agreements. Akufo-Addo, who expressed worry about the slow pace of exploration in the country’s existing oil fields, charged the Ministry of Energy to critically review existing operations in the industry, including petroleum agreements that were dormant, to determine oil fields that were sub-optimal. “The Ministry of Energy will engage with the operators, after the review, on the adoption of best methods for increasing oil recovery rate. For petroleum agreements that are dormant, the ministry will encourage the

operators to consider inviting stronger partners to join them or risk the termination of these petroleum agreements should they persist in failing to meet their minimum work obligations,” Akufo-Addo said. While indicating that the last oil discovery and the last exploration well drilled were in 2014, he said that meant the pace of oil exploration had slowed down considerably in the country. “Given that production

is taking place at a faster rate than reserves are being added, we need to reverse this state of affairs immediately, especially in today’s oil market environment where crude oil prices are in the $70–$80 per barrel range,” he said. “With the resolution of the maritime boundary dispute with Cote d’Ivoire and the prevailing transparent regime for allocating petroleum rights, many -opportunities now exist for Ghana

to reverse the slow pace of oil exploration,” President Akufo-Addo noted. The oil and gas licensing, which is a bidding process for the country’s oil blocks, is to ensure transparency and increase revenue from the petroleum sector, among other things. It is also expected to attract the best companies in the oil prospecting business around the world to improve standards and create more avenues for employment.

Libya: Hariga oil port operating normally following protest

ibya’s eastern oil export port of Hariga was working normally a day after a protest at its gate, port workers said. Dozens of tribesmen staged a demonstration at the port’s gate in protest against the appointment by the internationally recognised government in Tripoli of a government minister, a member of the powerful Obeidat tribe told Reuters. A port worker confirmed the protest at the gate saying the tribesmen had not entered the port compound made up of an export terminal and storages in the eastern city of Tobruk. Hatem al-Oraibi, spokesman for a parallel government based in eastern Libya, had alerted reporters in a news chat room to “reports of a closure of

the Hariga oil port by a protest of the Obeidat tribe”, according to a screenshot. State oil firm NOC, to which the port belongs via its AGOCO unit, denied in a statement that a protest had taken place at the port. The port, which is linked to the Sarir oilfield, has been hit by closures in the past caused by protests such as guards complaining about delays in receiving their pay. The tribesmen had protested against a decision by Tripoli to appoint Ali Essawi as economy minister, the member of the Obeidat tribe, Tareq Abdel-Fattah, said. Libyan prosecutors had in 2011 named Essawi as the main suspect of the killing of Abdel Fattah’s father, Abdel

Fattah Younes, a former top rebel commander during the uprising against Muammar Gaddafi in 2011. The Obeidat tribe now plans to organize a gathering of tribes to discuss “decisive measures” against Essawi’s appointment, Abdel-Fattah said, without giving details. A Libyan court in 2012 had dropped the case against Essawi and other suspects. But he re-emerged into the spotlight when Tripoli-based Prime Minister Fayez appointed him as economy minister this month. Khalifa Haftar, a top commander whose troops control the east, ordered a new investigation into the killing of Younes which caused deep rifts in the rebel camp which

later took over the oil producing country. Libya is divided into rival

governments. The internationally-recognized one is based in Tripoli. The east is run by a

parallel administration which set up its own central bank and NOC branch.

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ENERGY intelligence

Global LNG: Asian spot prices fall for 4th week on new Australian supply

a second weekly drop amid high inventory, weighing on LNG prices as many contracts are oil-linked. Japan’s Inpex offered four spot cargoes over the second half of October through November from its giant Ichthys project in northwestern Australia, in a sign that it may be ramping up production, two industry sources said. It was not immediately clear if the cargoes were sold, but Inpex was due to load its first LNG cargo from the long-delayed project this week after earlier selling its first

WEST AFRICA

Brief

sian spot prices for liquefied natural gas dropped for a fourth week in a row, trading at their lowest in two months, amid increased supply courtesy of a new project in Australia and expectations of more from the United States. December spot LNG LNG-AS fell to $10.40 per million British thermal units (mmBtu), the lowest since midAugust. November cargoes were valued at below $10 per mmBtu, trade sources said. Oil prices are set for

BUSINESS DAY

condensate cargoes, sources have said. Angola LNG and Sakhalin LNG each offered a cargo for November though details of the buyers were not immediately known. Chinese buyers were still largely absent from the spot market, traders said, as they look towards longer term supplies ahead of winter. Unipec Asia, the trading arm of Chinese oil major Sinopec, is in talks to buy more LNG from the Exxon Mobil Corp-operated Papua

New Guinea project, possibly for a period of three years, sources said. “Everyone is worried about a winter shortage,” said one major LNG buyer in China, adding this is driving Chinese companies to lock in term supply ahead of winter when demand typically surges. Chinese gas distributor ENN Energy Holdings has begun operations on the first phase of its Zhoushan liquefied natural gas import terminal, aiming to ramp up winter supplies in eastern China.

Italy: Eni to try to repeat huge offshore Mozambique discovery

ni, which earlier this decade led the discovery of an estimated 85 trillion cubic feet of natural gas in Mozambique, signed an accord in Maputo that will allow it to begin exploration work in a previously unexplored area in the country’s deep waters. The contract involves rights for exclusive exploration and development of the offshore block A5-A which are deep waters of the Zambezi basin. In bidding, Eni was named as operator and awarded a 59.5 percent stake, South Africa’s Sasol received a 25.5 percent and the Mozambique government held onto the rest, Eni said. It is a “completely unexplored zone” with water depth ranging from 984 feet to nearly 6,000 feet, Eni said. The Mozambique National Petroleum Institute added that Energy ministry officials also planning to sign another contract with South Africa’s Sasol for exploration in another offshore area known as PT5-C. Eni led the discovery of 85 trillion cubic feet in natural gas in deepwater Area 4, originally announced in May 2014. In December 2017 Eni sold a 25 percent indirect interest in Area 4 to ExxonMobil in a trans-

action that included a payment of $2.8 billion. At that time, Eni East Africa was renamed Mozambique Rovuma Venture, owned by Eni and ExxonMobil, both with an equal 35.7 percent stake, and China’s CNPC, with a 28.6 per-

cent stake. According to the terms of that accord, Eni continued the upstream operations and an LNG project while ExxonMobil would lead the construction of all future LNG facilities to process and export the gas.

As for Sasol, it has participated in the Mozambique energy industry for well over a decade when it developed the Pande/Temane natural gas project in partnership with the State and the International Finance Corporation.

Report: Sustained China-US trade war could result in 2 percent rise in global LNG prices

sustained US-China trade war into the next decade may increase average global LNG prices by 2 percent, Christopher Goncalves, BRG Chair and Managing Director said. “If US steel tariffs, which affect the cost of new liquefaction facilities, and Chinese retaliatory tariffs on US LNG imports remain in place into the next decade, worldwide average prices will go up 2 percent,” Goncalves said at the CWC LNG Asia Pacific Summit in Singapore. The impact will be particularly felt during the peak winter demand season, he added. If both tariffs remain in

place over 2020-25, US LNG exports and China’s LNG imports

could both decrease significantly, Goncalves said. US exports to Europe might decrease by 7.7 Bcm/year, and exports to Asia by 11.3 Bcm/year, he added. China’s LNG imports could be cut by 5 Bcm/year, but compensated partially by additional pipeline imports of about 4.4 Bcm/year from Central Asia and Russia, he said. China has imported nearly 50 bcm of LNG in 2018 to date, according to S&P Global Platts Analytics, while the US has exported more than 20 bcm over the same period. “There is a lot of speculation about who wins and losses, but

everybody is impacted and you will see distortions and cost increases across the board,” he said. China last month imposed retaliatory tariffs on an additional $60 billion worth of US imports that included a 10 percent tariff on LNG, effective September 24. The latest tit-for-tat escalation in the trade war between the two countries came after the US said it would impose a 10 percent tariff on an additional $200 billion worth of Chinese imports from September 24, and will further lift the duty to 25 percent from January 1, 2019.

04 BUSINESS DAY WEST AFRICA ENERGY intelligence DRC: Democratic Republic of Congo signs joint deal with developers for Inga 3 project

he government of the Democratic Republic of Congo (DRC) has announced a $14 billion joint and exclusive development agreement with a consortium of Chinese and European developers to construct the Inga 3 hydroelectric dam. The Chinese consortium is led by China Three Gorges, alongside a European consortium, led by Actividades de Construcción y Servicios (ACS) of Spain. This announcement follows years of delay for a controversial project that has collapsed and been revived repeatedly over the last decade. The approved construction bids were submitted more than 18 months ago, and the DRC government recently announced that it had relayed the responsibility of securing funds to the Chinese and European companies. The DRC has struggled to

mobilise the required financing for what would be among the largest single investments on the continent in one of Africa’s riskiest countries to invest. Earlier designs of the Inga 3 hydroelectric project, set to generate nearly 5GW in installed capacity, have already been subject to multiple revisions. The project proponents recently suggested further revisions to the project design to produce up to 11GW of power, which would require significant additional infusions of capital for engineering redesigns, project feasibility studies and mitigation measures. The new suite of required studies for the proposed redesign would significantly increase the project’s costs and financial risks. The adverse impacts of the project would correspondingly increase, threatening to degrade the important ecosystems of the lower Congo basin, displace more than ten thousand people, and still not bridge the energy poverty gap experienced by millions of Congolese not connected to the national grid.

Mozambique: Mozambique approves Integrated Master Plan for electricity infrastructure

he Mozambican government approved the Integrated Master Plan for electricity infrastructure for the period 2018-2043. This ambitious plan is aimed at increasing the country’s capacity to generate, consume and export electricity over the next quarter of a century, the Mozambique News Agency reported. Expected to cost in the region of $34 million, the master plan seeks to ensure a diversification of energy sources including hydropower, natural gas and coal. Of the budget, $18 billion will be invested in energy generation, while the balance will be directed towards transmission and distribution. The document envisages a rise in installed generation capacity from the current 2,638MW to 17,720MW. Mozambique’s electricity

demand is expected to reach approximately 8,000MW, ten times more than current levels (excluding the power used by the MOZAL aluminium smelter on the outskirts of Maputo). The integrated master plan predicts electricity exports to other members of the Southern African Development Community to rise from the current level of 1,500MW to 7,000MW. Addressing media after the weekly meeting of the Council of Ministers, the government spokesperson, Deputy of Culture and Tourism Minister Ana Comoana said the projected electricity transmission line from the Zambezi Valley to Maputo “will be determinant for the viability of the production plan.” The Council of Ministers also approved the National Electrification Strategy for 2018-2030, which is intended to ensure universal access to electricity by the cut-off date. Currently, about 28 percent of the Mozambican population has access to electricity. This is expected to rise to 38 percent by 2020 and to 100 percent in 2030.

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power

ABB to sell Power Grids business

BB is exploring a sale of its Power Grids business, representing a U-turn by Chief Executive Ulrich Spiesshofer who defied activist shareholders to keep the unit two years ago. ABB is examining various options for Power Grids, its second-largest but lowest-margin business, three sources said, with a decision likely by early next year. Credit Suisse and investment banking boutique Dyal Co, led by former Goldman Sachs banker Gordon Dyal, are advising ABB on a deal for the unit, which analysts estimate could be worth around $11 billion. Management and advisers are examining how Power Grids could be separated from the rest of ABB’s business, which runs from industrial robots to power transmission equipment, before the Swiss company’s board makes a decision. “The price will be decisive. If a sale creates no value for ABB there will be no deal,” the source added. Spiesshofer in October 2016 rejected calls from Cevian Capital, ABB’s second-largest shareholder, to separate Power Grids, which sells equipment like substations and transformers to utilities. Cevian had argued that the unit lacked synergies with the rest of ABB’s business, and that the company’s conglomerate structure made it too complex to run efficiently. Since then Power Grids has only slightly improved its perfor-

mance. Its relatively low profitability compared to other divisions has weighed on ABB’s share price, which recently fell to its lowest level since December 2016. Power Grids employs 36,000 people and had sales of $10.4 billion last year. It had an operating profit margin of 9.7 percent during the second quarter, a decline of 40 basis points from a year

earlier and outside its target range of 10 to 14 percent. If a deal is approved, ABB could concentrate on more profitable areas like electrification and automation. The company could also be interested in buying General Electric’s power conversion unit, the first source said. Infrastructure funds, which normally invest

in public assets like toll roads and airports, are interested in acquiring a stake in Power Grids, while industrial companies including possible bidders from Asia could also enter the bidding, a second source said. ABB had been in discussions with China’s State Grid on the unit in the past, but no deal ever materialised, another source said.

Wednesday 24 October 2018

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BUSINESS DAY

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ENERGY intelligence

Energy efficiency as catalyst for sustainable energy ISAAC ANYAOGU

aris-based International Energy Association (IEA) has released its 2018 report on energy efficiency and posits that efficiency gains alone could allow the world to extract twice as much economic value from the energy it uses compared to today. If the principles of energy efficiency are integrated into national policies and drive corporate operations, IEA believes it would reduce energy bills for consumers by more than $500 billion dollars per year, lower energy imports and cut air pollution in cities which is a key issue for many countries. It said a global effort to deploy the right energy efficiency policies could, on its own, see greenhouse gas emissions peak quickly and then fall even as the global

economy doubles between now and 2040. The report sets out a vision for 2040 with 60 percent more building space and 20 percent more people, and double global GDP, while using only marginally more energy than today and cutting greenhouse gas emissions by 12 percent. Delivering this vision requires an immediate step up in policy action. For example, countries would need to continue to push up the efficiency of both cars and trucks, building on the progress made in recent years. Another priority is the efficiency of air conditioners, as highlighted in the IEA’s recent report The Future of Cooling. This demonstrated that air conditioners could be twice as efficient as they are today with the right policies in place. Global investment in energy efficiency will need to rise significantly, but this investment will pay back threefold through energy savings

alone. IEA’s report comes in the wake of the new report by the Intergovernmental Panel on Climate Change (IPCC) that reminds us that global greenhouse gas emissions need to peak quickly and then decline for the world to meet its commitments under the Paris Agreement. Energy efficiency and bioenergy – two areas where the IEA has been shining a light recently – are both critical to this effort. For this to be effective, governments and businesses would need to drive the initiative. The report outlines a global strategy focused on what governments can do to capture the economic, social and environmental benefits of enhanced energy efficiency. Three key actions were identified as capable of delivering the most positive impact. This includes improving the efficiency of buildings and industry. It also highlights the importance of ar-

eas such as aviation and shipping, where energy efficiency is becoming increasingly important. Fatih Birol, the IEA’s Executive Director, said while various countries are endowed with different energy resources – whether it is oil, gas, wind, solar or hydropower – every single country has energy efficiency potential. Efficiency can enable eco-

air conditioners could be twice as efficient as they are today with the right policies in place. Global investment in energy efficiency will need to rise significantly, but this investment will pay back threefold through energy savings alone

nomic growth, reduce emissions and improve energy security. Birol said the study shows that the right efficiency policies could alone enable the world to achieve more than 40 percent of the emissions cuts needed to reach its climate goals without requiring new technology. This is due to the critical importance of energy efficiency in building a secure and sustainable future, the IEA considers it the ‘first fuel’ and facilitates the exchange of best practices among advanced and emerging economies.” However an analysis of recent trends shows that energy efficiency policy efforts have weakened in recent years. Fewer new standards and policies were introduced in the past two years. This has contributed to the acceleration in energy demand growth that was observed in 2017. This is why it is calling on governments including Nigeria to enact the right kind of energy efficiency policies.

06 BUSINESS DAY

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ANALYSIS

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ENERGY intelligence

Solutions to Nigeria’s electricity problems invite all sources of energy mix STEPHEN ONYEKWELU

abatunde Fashola, Nigeria’s minister for Power, Works and Housing had raised some dust when he said Nigeria’s electricity problems cannot be solved by magic foreshadowing need to explore an all source energy mix strategy to solve Nigeria’s power challenges. To put this in context, Fashola had allegedly said a serious government will fix power in six months. But, the 55 year-old minister and former governor of Lagos State has denied this. “I have

heard that I said that electricity problem will be solved in six months. I have never made the statement,” he had told the Nigerian Television (NTA) shortly before the first anniversary of the Buhari administration. Two matters arise from these accusation and denial. The first is that Nigeria’s electricity problem has resisted past attempts to solve them. The second, which is a corollary to the first is that the solutions of the future will have to avoid the pitfalls of the past, as it sifts noise from substance in the power sector. Following from the second matter that has arisen

from this line of reasoning, Nigeria needs a mix of energy solutions that exploits all available energy sources ranging from coal, gas to renewables. Coal continues to power bigger economies such as South Africa’s. Eskom in Lephalale Limpopo, South Africa, October 07, brought unit two of its Medupi Power Station online to produce power, the national power utility announced in a statement on October 09. The second unit was loaded to 400MW of power. It is the fifth of six units at Medupi to be synchronised to the national power grid.

Once completed, Medupi power station is expected to consist of six units, with an installed capacity of 4 764MW. The first unit of the coal power station, near Lephalale Limpopo, went online and into operation in August of 2015. Coal then remains an important energy source. Global demand for gas fired power plants is growing too but with uncertainties linked to gas demand, this forecast rides on wobbly edges. In a long-term outlook published in June 2017, Bloomberg New Energy Finance predicted that gas’s market share in global power generation will drop from 23

percent in 2016 to 16 percent by 2040, and that gas-fired power generation capacity will start to decline after 2031. BP has highlighted “risks to gas demand” as a key uncertainty, including the possibility that consumption plateaus by 2035, “squeezed out by non-fossil fuels.” The energy transition is “fundamentally a force that cannot be stopped,” Royal Dutch Shell Chief Executive Officer Ben van Beurden said last year. “It is both policy and public sentiment, but also technology that is driving it.” Oil demand will probably peak in the 2030s or 2040s, he said, while “gas will not peak

before the 40s if not in the 50s.” Nigeria needs innovative, clean energy solutions to accelerate its economic growth. Nigerian small and medium enterprises that improve energy access through off-grid energy solutions spanning solar, wind, hydro, biomass and gas technologies are receiving attention. Investors are putting money behind off grid solutions (powered by the sun, water and geothermal sources) to Nigeria’s power challenge. An estimated $410 million (N25 billion) worth of funding has gone into the Nigerian off grid space this year, data compiled by BusinessDay show.

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Wednesday 24 October 2018

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marketinsight

Brent oil rises back above $80 as Iran sanctions

rent crude oil prices rose back above $80 a barrel as markets were expected to tighten once US sanctions against Iran’s crude exports are implemented next month. Benchmark Brent crude oil futures were at $80.26 a barrel, up 48 cents, or 0.6 percent, above their last close. US West Texas Intermediate (WTI) crude futures were at $69.60 a barrel, up 48 cents, or 0.7 percent. The US sanctions on the oil sector in Iran, the thirdlargest producer in the Organization of the Petroleum Exporting Countries (OPEC), are set to start on November 4. The United States under President Donald Trump is trying to reduce Iranian oil exports to zero to force the country to renegotiate an agreement on its nuclear programme. US Treasury Secretary Steven Mnuchin said that it would be harder for countries to get sanction waivers than it was during the previ-

OPEC Flakes OPEC, allies could sign ‘open-ended’ cooperation deal in December

ous Obama administration, when several countries, especially in Asia, received them. OPEC agreed in June to boost supply to make up for the expected disruption to Iranian exports. Fatih Birol, executive di-

rector of the International Energy Agency (IEA), said that other producers may struggle to fully make up for the expected Iran disruption, and that oil prices could rise further. The US rig count is an early indicator of future out-

put. With activity increasing after months of stagnation, US crude production is also expected to continue to rise. In addition to the potential for rising oil supply, the ongoing Sino-American trade dispute is expected to start dragging on demand.

sector, the ministry said in a statement. Luaibi is the oil minister in an outgoing government led by Prime Minister Haider al-Abadi. Luaibi had issued a decree transferring the ownership of nine state-owned oil companies, including state oil marketer SOMO, from the oil ministry to the newly-formed National Oil Company which he also

heads. Luaibi took the decision in his capacity as National Oil Company chief, not minister, according to a statement by spokesman Asim Jihad. The Iraqi government recently named Luaibi as head of the new National Oil Company, which is to serve as an umbrella organisation for state oil firms. The positions of company chief and minister are not related, but Luaibi currently holds both. Parliament voted in March to establish the company, which is meant to manage Iraq’s upstream operations, freeing up the ministry to set plans and strategies for developing the sector.

PEC and its allies could sign a new, open-ended cooperation agreement on December 7 in Vienna, and form a new secretariat for non-OPEC members seeking to work with the group, Saudi energy minister Khalid Al-Falih told Russian news agency TASS. “I hope, when we meet on December 7 in Vienna we will be able to sign it,” Al-Falih said in an interview, noting that the pact would go into effect from January 2019. “It will allow us to intervene to rebalance the market in any appropriate time from January onward,” he said. OPEC and a group of non-member oil producing nations initially agreed in December 2016 to jointly curtail oil production in order to ease the global supply glut in the market and raise prices. As oil prices shored up this year and concerns loomed over supply shortages due to production de-

clines from some producers, OPEC agreed in June this year to raise crude output. This would be achieved by cutting down the group’s conformity with production quotas back to 100 percent, from an overcompliance of as much as 150 percent. “We have proved to ourselves that we can work with Russia and keep the markets balanced whether there is the shortage or oversupply,” AlFalih said. “So I want to emphasize that given the success of two years coordination between KSA and Russia, we need to establish the framework for the long-term coordination,” he added.

OPEC fails to deliver pledged oil output boost

Iraqi oil minister reverses state oil company ownership transfer raqi Oil Minister Jabar al-Luaibi has reversed his decision to transfer the ownership of nine stateowned oil companies from the ministry to the newly formed National Oil Company, the ministry said. The move would enable the incoming government of Prime Minister-designate Adel Abdul Mahdi to make its own decisions in the oil

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The nine companies included in Thursday’s decision are SOMO, the Iraqi Oil Exploration Company, the Iraqi Drilling Company, the North Oil Company, the Midland Oil Company, Basra Oil Company, Dhi Qar Oil Company, Maysan Oil Company and the Iraqi Oil Tankers Company. Prime Minister-designate Adel Abdul Mahdi, who is tasked with forming a new government months after a political deadlock following a May election, called on officials in the outgoing government to refrain from signing urgent contracts, making nonessential hires, or other key decisions. It was unclear if his statement was related to Luaibi’s decision.

he Organization of the Petroleum Exporting Countries and allies agreed in June to boost supply as US President Donald Trump urged producers to offset losses caused by sanctions on Iran and to dampen rising prices, Reuters reported. Saudi Energy Minister Khalid al-Falih said OPEC and non-OPEC would pump roughly an extra 1 million barrels per day (bpd) following the June agreement. OPEC says it is on course to do so, although it has not given a timeframe. “It is a work in progress,” OPEC Secretary General Mohammad Barkindo said earlier this week. The internal document prepared by OPEC’s Vienna headquarters for a technical panel meeting showed that OPEC members, excluding Nigeria, Libya and Congo pumped an extra 428,000 bpd in September compared to May. The OPEC and non-OPEC technical panel called the Joint Technical Committee reviews

producers’ compliance with their oil supply pledges. Top exporter Saudi Arabia pumped most of the extra oil, raising output by 524,000 bpd in September compared to May, the document showed. Other increases came from Iraq, Kuwait and the United Arab Emirates. Iran, facing US sanctions on its oil exports from November 4, cut production by 376,000 bpd in September versus May, and has said OPEC and Saudi Arabia are not able to make up for a total loss of its exports. “There is no spare capacity,” Iran’s OPEC governor, Hossein Kazempour Ardebili, said last month. Among other OPEC members, production fell by 189,000 bpd in Venezuela and by 17,000 bpd in Angola.

08 BUSINESS DAY WEST AFRICA ENERGY intelligence

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Wednesday 24 October 2018

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Gas diplomacy heats up as buyers, suppliers juggle interests STEPHEN ONYEKWELU

as is fast becoming a critical piece on the chessboard of energy security as both global buyers and sellers seek strategic realignments to access and sustain supply of the cleaner fossil fuel, this could mean new markets for Nigeria, too. Market dynamics are changing fast and gas has occupied a prominent place in geopolitics across the world. Gas does not meet the entire energy requirement of many countries, but these nations and others still rely on each other for gas supply and are compelled to cooperate. So, gas provides an energy alternative for the countries that are dependent on oil only. Global gas demand will grow at an average rate of 1.6 per cent a year, reaching just over 4,100 billion cubic meters (bcm) in 2023, up from 3,740 bcm in 2017, according to the Paris-based International Energy Agency (IEA) annual gas market report titled: Gas 2018. In recent times some instances where gas demand and supply has reared up its head in determining geopolitical and diplomatic decisions are Pakistan-Saudi Arabia-Iran-United States of America axis and Germany-Russia-USA. In the case of the first axis, Pakistan is one such country which once heavily banked on oil to satisfy its energy appetite, but started gas imports during the tenure of previous Pakistan Muslim LeagueNawaz (PML-N) government. For decades, Saudi Arabia is considered to have influenced Pakistan’s foreign policy in return for providing Islamabad with vital oil supplies. After the current Pakistan Tehreek-e-Insaf (PTI) government took the reins of power, Imran Khan, prime minister of Pakistan also visited Riyadh, which tried to use oil diplomacy

to keep Pakistan away from Iran. Soon after the premier’s visit, Saudi authorities rushed to Pakistan where they offered investment in an oil refinery and oil supply on an extended credit facility. Energy experts say in order to avert external influence, Pakistan should go for other fuel sources and learn from the experiences of European countries which have switched to alternative energy resources. Russia, an oil and gas-rich country, has been supplying gas to Europe since long despite fierce opposition from the United States. Now, it is working on a new gas pipeline through the Baltic Sea and has got the backing of European economic power Germany.

European countries have dismissed the US opposition, arguing that they need gas to feed their economies and Russia is a big supplier. Donald Trump, the US President has made a verbal assault on Germany for supporting the Baltic Sea pipeline deal with Russia, believing Berlin would become a “captive of Russia”. Trump was of the view that Germany would be paying billions of dollars to Russia for the gas purchase. Again, Nigeria may miss the opportunity to grab major diplomatic alignment despite its large gas reserves. Africa’s largest crude oil producer has been unable to add new trains to its liquefied natural gas (LNG) plant. The units that freeze natural

gas into liquid form for export on ships are known as trains in the natural gas industry. Big ticket projects like Olokola LNG, Brass LNG and the NLNG’s Train 7 have been unable to reach final investment decision by the stakeholders. The OK LNG project was stalled because all the international oil companies (BG, Shell and Chevron) withdrew from the project, with only the Nigerian National Petroleum Corporation left. The Brass LNG project, which was designed to produce 10 million metric tonnes per annum, was to be built by the NNPC, Total, ConocoPhillips and Eni Group. But ConocoPhillips withdrew from the project in 2013.